PoorButWealthy's Journal

Where are you and where are you going?
PoorButWealthy
Posts: 27
Joined: Mon Oct 02, 2017 12:11 pm

Re: PoorButWealthy's Journal

Post by PoorButWealthy »

@Bankai: I've read some parts of HIFFIAUW. It's an interesting book and it contains interesting contemplation and thinking. However, at this stage in the ERE-process, I find the book to be quite “basic” and I would recommend the book for people who are more in the beginning of the ERE / "maximal freedom" / "escaping plato's cave" process. Nowadays I'm much more interested in much deeper (i.e. fundamental) psychological and philosophical reading, contemplation and reflection.

Time to do an update, it has almost been a year since I last updated the journal.

7/2019
Savings rate of net income: 79%

8/2019
Savings rate of net income: 81%

9/2019
Savings rate of net income: 83%

10/2019
Savings rate of net income: 83%

11/2019
Savings rate of net income: 80%

12/2019
Savings rate of net income: 76%

1/2020
Savings rate of net income: 80%

2/2020
Savings rate of net income: 81%

3/2020
Savings rate of net income: 85%

4/2020
Savings rate of net income: 80%

5/2020
Savings rate of net income: ~85%

As usual, the savings rate of net income has been stable at around 80% and monthly spending is about 700-900 USD. Nowadays, it requires absolutely no effort from my side to “achieve” this level of spending and to be honest, I've been quite (or even maybe too...) lazy when it comes to further optimizing my spending. During the past five or so years, pretty much everything related to money has already been to a large extent optimized and mentally automated (i.e. some kind of habit formation / mental models / heuristics). This is one of the reasons why I don't find the concept of personal finance that interesting anymore, as there's very little to be done anymore. The marginal utility of time invested in personal finance development has decreased so much that I rather spend my time doing all kinds of other stuff that I find interesting and meaningful. However, on a side note, I've cut my food bill by 150 euros this month and will continue to do so in the future. I've finally found a sustainable way to reduce my huge food bill without compromising the quality and nutrition of the food. As we all know, this is a big deal when it comes to calculating the required "ERE stash" (i.e. 1800 euros saved per year and thus a reduction of 45 000 euros in the "ERE stash" when utilizing the 4%-rule). With time, I think I can shave off another 50-100 euros per month of my food bill, but that remains to be seen.

When it comes to work, it's pretty much "same old, same old". Still working the same job that I've been working for over two years. I received another pay-raise (5%) a couple of months ago, which is again a great demonstration that "office space syndrome" is real thing... I work in a field and position where volatility / uncertainty / crisis / chaos increases the value of my labor and my leverage in the work place, which is quite nice during these Corona-times. In a sense, my job is quite anti-fragile and I try to be as anti-fragile as possible in all aspects of life. Furthermore, I've decided that I'll resign no later than end of 6/2021 from my current job. There will be no "one more year syndrome" for me. Enough is enough.

As discussed in earlier posts, I've been extremely interested in psychology / human nature / biology / philosophy / first principles etc. for a long time, but the interest (or obsession?) has been growing quite rapidly in the past few years. The interest began maybe 6-7 years ago, i.e. about the same time as I got serious about FI / ERE, and when I was in a very bad place mentally. Looking back, I had quite certainly a somewhat serious case of a mixture of generalized anxiety disorder, obsessive compulsive disorder etc. I still have a small amount of all of these, but nowadays I can "override" them very quickly when they appear in my mind, as I know where they are coming from and what they are all about. These "issues" will probably never disappear completely and they will always be in the background of my mind to a certain degree, but that's fine. Long story short, this very difficult 3-5 year time period radically changed me, i.e. my personality, identity, thinking, priorities, values, life philosophy etc. This change was possible due to the fact that I couldn't run away from the pain and suffering (e.g. with medication or something else that would just numb my mind), but took it fully in, tried to understand what it was all about and very slowly worked through it. In a sense, it was something like an intense self-made and self-learned ("trial and error") psychotherapy that lasted for years and years. However, I would not recommend this approach for anyone who is suffering from some kind of mental health problems, as it's quite a "risky" strategy (e.g. risk of health related problems, loss of working ability, loss of relationships, going literally insane etc.). On the flip side, this kind of dramatic "shotgun in the face" / "give me all the pain and suffering there is" approach made it possible for me to truly learn what was going on and to understand where all these problems and suffering were coming from and where they were rooted. Moreover, this approach resulted in that my former artificial and somewhat "trauma"-based identity was by and large destroyed and a more authentic identity formed and is still very much developing. All in all, it has been quite a ride, but I would not change anything and I'm grateful for everything I have gone through. To me, just one day of truly authentic existence is much more valuable than 100 years of living in "the illusion".

It's quite interesting that I wrote the paragraph above about a year ago, but I wasn't yet ready to publish it, as these kind of topics and issues are not easy to share and contemplate in the public. However, today as I publish this text, there's no fear or insecurity or shame or whatever in my mind that's preventing me from doing it. In a sense, I just feel a kind of freedom telling the truth. It's not good or bad or anything in between, it just is what it is.

To summarize, I have woken up psychologically from an "illusion", I'm soon (semi) financially independent (at the age of 30) and I can live the rest of my life true to myself. To be honest, I have no clue what my future will look like and what I'll do post 6/2021, but that's the way it should be. A true artist doesn't plan beforehand their next painting, they just paint whatever comes to them. Can it get any better than this? Remains to be seen.

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Egg
Posts: 187
Joined: Sat Oct 04, 2014 10:59 am

Re: PoorButWealthy's Journal

Post by Egg »

Congratulations on your sheer consistency in such aggressive saving. (Semi-)FI by 30 does indeed sound like an excellent starting point. Now for the real challenge of making the most of it!

Also, not to play the sceptic, but let's say you're currently living on 800USD per month on average. If you don't know what you want to do after 'pulling the trigger', how do you know that will be enough? Obviously, there's loads of great and interesting stuff you could do at that spending level but, if nothing else, that limits where you can live without doing some kind of paid work (at least of the accom-for-limited-work kind). Did you already decide to stay where you are currently based?

Frita
Posts: 513
Joined: Thu Mar 15, 2018 8:43 pm

Re: PoorButWealthy's Journal

Post by Frita »

Congratulations on shedding an illusion that was holding you back! That can take a lot of time and work. We don’t talk much about the spiritual/psychological/emotional aspects of ERE on the forum; however, that is what I find to be more challenging than saving money, living frugally, etc.

ertyu
Posts: 932
Joined: Sun Nov 13, 2016 2:31 am

Re: PoorButWealthy's Journal

Post by ertyu »

Frita wrote:
Sun May 24, 2020 2:35 pm
the spiritual/psychological/emotional aspects of ERE on the forum ... that is what I find to be more challenging than saving money, living frugally, etc.
Aye. And not just more challenging, more important and foundational. But that might just be my infp-ness shining forth. no spreadsheet or plan would stick if the psychology isn't sorted out. i too have found that the real struggle and work is inside, on myself.

PoorButWealthy
Posts: 27
Joined: Mon Oct 02, 2017 12:11 pm

Re: PoorButWealthy's Journal

Post by PoorButWealthy »

@egg: Well, first of all, I think the blog post "One more year before comfort" by Jacob (http://earlyretirementextreme.com/one-m ... mfort.html) answers your question at least partially. Moreover, I think Jacob's quotes “spending money is a failure to solve problems by smarter means” and “spending money is a failure of imagination” also have a lot of truth in them.

What happens after 6/2021 (or earlier) when I quit my current "career path" is something that is not determined by the concept of money (or prestige, status, society's expectations etc.) or the limitations that money installs on a human being. What happens is determined by what "emerges" from my creativity / sincerity / obsession / passion [on a side note: I've been pondering for a while on what's the difference between obsession, passion and addiction, and the more I think about it the more I come to the conclusion that they are all rooted in the same place of the human psyche]. What I'll do in the future has nothing to do with money. Sure, money might come as a side-effect from living authentically, but otherwise money is a useless concept in the reality where you have enough money. Let me explain this in another way: when you have enough to eat, you rarely think about food; when you have enough of sex, you rarely think about sex; when you have enough dopamine in your brain, you rarely think about ways to artificially increase dopamine (e.g. coffee, nicotine etc.). The need and urge for more than what's enough is probably an addiction. The hardest part regarding all of this is to truly internalize what's enough. In a sense, “you know it when you know it”, i.e. you can feel it in your gut and bones. For me, it took over 5 years of intense psychological work to internalize what's enough.

When you're living a life true to yourself, you don't really think about money, as long as you have your basic needs met (shelter, food, some social interaction etc.). All I need is to have my very basic needs met so that I can live an authentic life. When you're immersed in a life that truly captivates you, money is the last thing that you're thinking about. Money is just a tool that makes it possible to live an authentic life. That's the only value of money. Warren Buffett and Charlie Munger aren't rich because they have a money addiction. They are rich because money is a side-effect of their passions and obsessions. The world tends to reward mastery. World class mastery in any given field or activity tends to be rewarded with money. And the only way to achieve world class mastery in anything is to follow your true interests and obsessions and forget about the (extra / "more than enough") money.

It should be borne in mind that the mathematics behind ERE / FI are very different in Finland than in the U.S. In Finland we have practically free (top-notch) universal health care, unemployment and other social benefits are generous and the social “safety-net” is very wide. So, in a sense, every Finnish citizen is already “financially independent”, as everyone is entitled to at least 1000-1200 euros (depending on the cost of rent and other factors) of benefits per month combined with free health care. For example, I have bought “insurance” against unemployment, which will pay me about 2000 euros per month (after taxes) for almost 2 years after I'm unemployed. This insurance costs me under 100 euros per year, i.e. it's insanely cheap. After this insurance pay-out runs out, I will receive at least about 600 euros per month from the government for the rest of my life (assuming that the country doesn't go bankrupt...) if I remain unemployed and if I choose to accept this benefit. Pretty sweet, eh..?
“Did you already decide to stay where you are currently based?”
I haven't decided anything about anything. What happens in the future, happens. However, at the moment, I'm very happy with my apartment and the location where I live [on a side note: I have traveled a fair share during my life and I pretty much hate it]. I cherry picked and bought this apartment about 3 years ago after doing intense research and optimization on location, environment, future price appreciation potential and probability, the physical condition and cash-flowing assets of the housing company etc. Moreover, I renovated the whole apartment from floor to ceiling mostly by myself in the evenings after work and weekends (i.e. sweat equity), which makes this apartment somewhat special to me. The CAGR of the apartment's price has been about 5% and I think there's a high probability that it will remain in the 3-6% range over the long-term.

PoorButWealthy
Posts: 27
Joined: Mon Oct 02, 2017 12:11 pm

Re: PoorButWealthy's Journal

Post by PoorButWealthy »

@ertyu and Frita: Yes, indeed. Money solves one's "money problems", but nothing else. This is why money is such a dangerous trap, as many (or most?) people truly believe that money or financial wealth will solve all of their problems and provide them "happiness" and "peace". What a joke! Sure, money might solve some problems, but then again the human mind will generate new "problems" to replace the old ones very quickly. It's a never ending game. But when you understand this game and the illusion of a "carefree" life, it stops bothering and tormenting you.

Frita
Posts: 513
Joined: Thu Mar 15, 2018 8:43 pm

Re: PoorButWealthy's Journal

Post by Frita »

Well said, PoorButWealthy! Money seems to be an equal opportunity trap in that it sucks in folks at all socioeconomic levels. Then throw in additional externals like careeerism, materialism, and consumerism that create and reinforce the do loop...I find the oddest thing about stepping off the hamster wheel is the relative lack of company.

From what you describe, Finland has built-in safety nets that I can only imagine. At least in the countries where I have lived (Mexico, US, Guatemala), being poor (and even being content with what you have) is viewed negatively. The US has more opportunity and safeguards that allow one more personal choice than the other two with a similar difference between Mexico and Guatemala. What I am trying to say is that Finland has mechanisms in place that one can more easily ask, “Who do I want to be? How do I want to live?” Even then, it sounds like there is still the significant inner work.

Anyway, I am rambling. I enjoy reading about your journey.

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Egg
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Joined: Sat Oct 04, 2014 10:59 am

Re: PoorButWealthy's Journal

Post by Egg »

PoorButWealthy wrote:
Wed May 27, 2020 9:58 pm
@egg: Moreover, I think Jacob's quotes “spending money is a failure to solve problems by smarter means” and “spending money is a failure of imagination” also have a lot of truth in them.
I agree that creativity can substitute for money in many cases. Let's hope you don't run out of either (no snark intended).

Two questions:

1) If "enough" is only a state of mind for you, rather than a financial number, why even consider waiting another year?

2) I infer "yes" from your previous answer, but do you consider that you are living a life true to yourself/authentically right now?

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