FI or bust; FBeyer.

[FBeyer]

Are there any other sites that you visit daily besides farnamstreet?

I'm on a very low information diet now but still find myself consuming more noise than I would like. It may just be due to the nature of the beast, much of the internet is just noise anyways. I have been debating whether or not severely limiting my internet usage (a handful of days a month) would help things. Right now, I average about 2 or so days a week where I use the internet. Though I don't know... I haven't come to a conclusion yet.

I'm still in the teething stages of the information diet.
The basic goal is to read things with the intention of learning something very specific. For all that matters I could read on the internet all day as long as it follows a chain of actual needs.

Farnamstreetblog is the only thing I read without a clear intent of learning something.
However! There is a bit of dissonance to my info diet project since I work in Pomodoros. Those 5 min breaks between work sessions often get filled with youtube videos of people who talk about battling procrastination, motivation, anti-burnout, and accelerated learning of all kinds.

My biggest info sins are chess.com (because I play correspondance), these forums, youtube and farnamstreet.
I DO go on stats.stackexchange because my work 'demands' it.

So in other words: My info diet is not particularly well off at the moment. I have simply narrowed the range of sites I visit down, which has taken the worst sting out of wasting time, but it is by no means close to where I'd ideally like to go.

I have observed something strange though. Since I visit these forums and farnamstreet, I am mostly confronted with a lot of stuff perspectives that I am not used to, and so my interest is CONSTANTLY piqued. The unintended information I am getting is of a much higher quality, but none the less, it distracts me from what I really should be doing. Farnamstreet and the ERE forums have simply made it easier for me to make excuses to myself about why I'm wasting time.

Thus, I really should stop visiting ERE and farnam altogether and keep it to once per week say. I am completely unable to stop using the net, I need it constantly for my work.

[FBeyer]

I also think it's appropriate to have a good-enough criterion. If one really wants to shave off every single bit of lard from one's existence, I think one would then also spend an inordinate amount of time worrying about needless waste of time. This could then potentially lead to irritation that there are still areas that could be improved.

It is not worth replacing overconsumption of information with constant irritation about small amounts of overconsumption of information.
If you spend a little time here and there, fuck it. If it has a measurable impact in the long term, then do something active about it.

If one turn everyday life into a high-performance pursuit, one puts unnecessary stress upon oneself.
We optimize our life to enjoy it, not because the optimization is a source of happiness in itself.

[FBeyer]

THIS!
This is what is wrong with the world today:
http://site.mansionathletics.com/lib/00 ... 150018.jpg

[vexed87]

Head harness...

I just started laughing like a mad man in a quiet office, got a few funny looks. Thanks for that.

My fitness comes from cycling everywhere which is basically free. I also just started the insanity exercise dvds that seem quit popular on here. All you need is a bottle of water, a screen and pair of trainers. My friends are all recently getting into fitness, funny how they all say I need to start using this equipment or that supplement. Despite not buying anything extra and using the world as my gym, my muscles (legs at least) still beats theirs, both in appearance and performance.

...head harness, it just looks so dangerous.

[FBeyer]

The reason I even found that image is because I was writing a piece on how our expectations of what works and what does not are so heavily influenced by advertising. More is always assumed to be more. The instinctive reaction when one sees someone who is in shape, is to assume that the fit person own a well equipped gym, rather than a kettlebell, a block of magnesium and a boat load of determination.


Edit. The weighted glove is a real nice touch too. So is the the chalk stand. A chalk stand? Really? Why don't you just buy a bucket if you insist on avoiding a plastic bag? At least the bucket can be used for something else than just holding magnesium. And last time I checked, a bucket had plenty of space for two-handed dipping without the need to advertise that particular quality.

My this-is-crap-o-meter is really in the red these days. Either I'm waking up to how surreal the world is, or I'm just grumpy.

[vexed87]

The superfluous equipment makes me anxious as it introduces unnecessary complexity to what should be a simple, get fit through functional exercise. I don't know what drives people to make these purchases (chalk stand?!), maybe these suckers value aesthetics more than money in their pocket?

I must admit, in the past I have fallen prey to equipment marketing, I have bought TRX imitations, medicine balls, pull up bars with the best intentions of using them to inspire a new healthy home exercise regime, but these are now collecting dust. It has only been the introduction of building exercise into my daily routine that has been effective. I'll keep them with the hope that some day soon I'll make use of them, or if I haven't unboxed them by next year they are going to charity.

I think most people are just trying to buy their way to fitness, and the marketers are only to happy to sell you their wares.

[FBeyer]

Minimalism and decluttering had an unforseen side effect for me. I clean up a lot more!
When you throw away all your shit, everything that you are finally left with, will naturally find a space in your home where it quite simply 'belongs'. With fewer possessions, it becomes immediately clear when something is not in its place, because it LOOKS out of place. Then you'll most likely put it back.
I don't think it ever takes more than 5 minutes to completely put everything back in place in the evening, before we tuck our daughter in, but I still find myself putting things back in place during the day. This way I am now putting things back in place, maybe 4 times a day, rather than just once.

That was really not the intention when paring down my possessions so now I'll have to learn NOT to put things back in place until it's time for bed.
I'm usually someone who lives in a big mess at home. Odd that I am now someone who declutters.

In the same vein, using habitica.com to manage my TODOS and daily tasks means that I am now staring at a stupid pixelated app 8 times a day to check off things rather than just do it once per day. It somehow draws attention, merely by existing.

It's funny how simplifying one's life often leads to simple diversion of attention, rather than actual simplification. I reckon the actual simplification sets in once those idea have become habits or a fundamental philosophy, rather than something you spend mental resources on.

This then distills down to the essence of simplicity; simplicity is getting the results while spending fewer resources getting them.

[vexed87]

There seems to be a constant stream of stuff into my house, so clutter is a serious issue, I like to blame SO for the accumulation of tat, but it's my fault too as I have very limited dedicated storage space. Don't even have a bookshelf/case. Just cardboard boxes

[FBeyer]

I found that I am the only one who's attitude towards purchases has fundamentally changed. My GF is with me to some extent, but she hasn't internalized the idea of not owning shit to the same degree I have.

When our apartment was cleaned of shit, it was me who dug everything out, moved the furniture about, hauled shit to the dumpster and rummaged through construction materials and old dusty cardboard boxes. I hoisted shit down the stairs and hauled bags of recycled clothes to donation centres. I was the one who underwent the mental process of reflecting on my former purchases and why I chose to keep those things, and how liberating it was to get rid of it.
I have a feeling she merely threw stuff out because I was doing the same, without reflecting on it, and thus not learning anything substantial in the process.

she didn't go all the way either. She has thrown away some of her unused clothes, but she didn't want to touch our kitchen stuff, our decorations or ANYTHING related to sentimentality at all.

I got rid of almost everything that wasn't of any use to me anymore, and I'm still eyeing stuff to give away.

She still wants to buy toys and multicolored tutu skirts for our daughter, I'm the one who points out that the little one doesn't play with toys nearly as much as board game stuff, kitchen utensils and our furniture.

If you draw a Venn diagram of what you buy children under the age of 2 and what they play with, I'll wager the intersection of the two is VERY small.

In short: Decluttering and paring down your possessions is very much a mental journey. If one has never reflected on the difference between the price on a price tag and the total cost of bringing that thing into your home, one cannot be expected to tame one's purchasing habits.

[FBeyer]

I guess most learning experiences are best retained when you've suffered a little through them...

[FBeyer]

I did the clever thing yesterday.

I scheduled a Financial-Independence-expectations meeting with my GF.
We adjusted our 'future' budget to something we find very tolerable. I pointed out that our savings rate would then be about 63%

After discussing a bit back and forth I booted up portfoliocharts.com and went to the firetime calculator.
First I punched in:
20 large cap value
20 europe
20 international small
30 5 year treasuries
10 gold.

We both watched the firetime spread converge to something nice.
Then I altered the savings rate from 50 to 63 and the words out of my GF's mouth was: Fuuuuuuuuuuck...
The next thing I said was: now do you understand why I am so adamant about cutting costs?

Given that I've been talking about cutting expenses for the last two months, she now has the mantra imbedded in her head. Now she understands why.

--------------

I am restudying The Intelligent Asset Allocator. I have come to accept that my studying habits for the last 8 years have been very work intensive and not nearly as result intensive as one would think. Basically I have spent a lot of time getting nowhere. So now I'm studying the book rather than just reading it.
Given that I have studied, mesocopic experimental physics, theoretical chemistry, high-performance computing and now statistics and X-ray Free electron laser photophysics I have added another layer of complexity on top of my studies.

I have therefore throttled back a bit with regards to reading new info on investing. I reckon I need to learn how to learn better before I tackle the knowledge that will supposedly buy me bacon and whisky for the rest of my life.
So the order of operations is now:
1) Get a hold of my mentality, my outlook and my life philosophy.
2) Once that is rolling I need to get a hold on proper didactics.
3) Then I need to understand investing.

So far the plan is thus to study stoic philosophy then mathematical didactics, then start from the Boglehead's and see where I want to go from there.
The next financial step might in fact be to understand Danish taxation laws more than I need to know more about investing...

------------

Kettlebells are doing 'wonders' for me. The apartment where I live actually has a small gym floor in the basement so I am 4 minutes away from my gym. I'm losing weight almost instantaneously, even though that was not really the idea. I will let the cast iron determine how I end up looking. As long as I'm strong and fit I don't care about the aesthetics. But... Since I read a cruiser to work for 80 minutes every day, adding KB swings on top means that I am running out of notches in my belt.

I have NO problems with my leg strength or my aerobic fitness, but my grip is giving out after about 5-6 minutes of swings. I'm looking to find out how to buff my grip even further, 'cause right now it's holding me back quite a lot.

GF got so jealous of my immediate gains that she ordered her own set of kettlebells, so now we're almost a 5 KB household.

------------

My Information diet is going swimmingly. It's incredibly liberating not to read the news or any kind of social media.
I am now strictly doing a TODO every evening. The list has 3 or 4 things i MUST do the next day.
So far I've done all those things for 11 days straight.
As long as I am not abusing habitica.com, it seems to be a very good way for me to keep track of what I should be doing.

------------

I unplugged the TV.
The 2 year old took a single day to adjust, now she wants to read all the time.
Win-fucking-win!!!

In case you're wondering: UNPLUG YOUR FRAGGIN' TELEVISION! DO IT NOW!

------------
http://www.amazon.co.uk/Guide-Good-Life ... +good+life
Stoic philosophy really rings a bell with me. 'Negative Visualization' has immediate impact.
The effect really is staggering. So far I'm about 40% through the book and I find it incredibly applicable. Maybe because I have lived like that for some time, maybe it's because I recognize so much from modern Mindfulness.

------------

My PhD schedule until June looks like it's absolute crap.
I will need stoic fortitude to endure.

Merry festive times and Happy New Year all you Pagan, (possibly) filthy atheist, money grubbing, cheapskates reading this.

[FBeyer]

I've started playing with the Pixel calculator on portfoliocharts.com

It's instructive to plot 100 Stocks and watch the red spots, then plot 100 gold and watch the green spots. It reminds me why a diversified portfolio probably should have a little bit of gold, in case you want a bit of balm against market crashes.

[Tyler9000]

I did the clever thing yesterday.

I scheduled a Financial-Independence-expectations meeting with my GF.
We adjusted our 'future' budget to something we find very tolerable. I pointed out that our savings rate would then be about 63%

After discussing a bit back and forth I booted up portfoliocharts.com and went to the firetime calculator.
First I punched in:
20 large cap value
20 europe
20 international small
30 5 year treasuries
10 gold.

We both watched the firetime spread converge to something nice.
Then I altered the savings rate from 50 to 63 and the words out of my GF's mouth was: Fuuuuuuuuuuck...
The next thing I said was: now do you understand why I am so adamant about cutting costs?

Given that I've been talking about cutting expenses for the last two months, she now has the mantra imbedded in her head. Now she understands why.

That totally made my day! It's exactly how I hoped people would use that calculator. Thanks for sharing.

[jacob]

Nice! It's always very interesting to me exactly how to produce an epiphany in people. Originally for me, it was the realization that I could invest at higher rates than the 2% interest my bank paid on my savings. Raising that to 4% almost did it. When I wrote the book, I figured a parameter plot of savings rates and working years would do it---because after all, everybody understands such plots, right? With DW, the epihany happened when she made her own "spreadsheet" of the standard kind that projects income, expenses, savings, and passive income.

In general, to understand anything, the person has to be capable and ready. I think as outside "influencers" we have to focus on capable ... and then wait on ready?

[FBeyer]

Construction:
I patched up the front door so it's no longer drafty. The effect was immediate, as in within 30 minutes the hallway felt warmer. I fixed other stuff in the apartment as well, and it really reminded how nice it is to build things. I'm quite certain I'm going to run a small construction company at some point in life. If I can't buy a farm with a wood shop, I'll have to make due with patching up small stuff and installing dry wall.
Almost every constructions site in Copenhagen has an open container with all sorts of old furniture and doors thrown out. I'm seriously considering salvaging stuff and building recycled furniture from it. For sale of course.


Reading:
I'm done reading the Intelligent Asset Allocator and I'm re-reading The Four Pillars of Investing. I'm contemplating how much I should read up on value investing. I understand the merits of value investing, but if I plan on indexing my investments, how useful is a thorough knowledge of value investing really?
I know that all knowledge is ultimately useful, but I want to focus on what is most important first.
Portfolio strategy so far: probably up to 10--12% gold, value investing split between large cap and small cap. International diversification as much as taxably comfortable. approx 25 % bond exposure. Thus, 10% gold, 25% short-term bonds, 65% stocks. Stocks are probably split like a coward's portfolio in 21/21/21 segments between US large cap value, small cap value, Int'l value, Europe. The pixel chart from portfoliocharts.com shows me that after 10 years the portfolio is yielding the expected 4% or more, unless I start investing right at the begining of an oil crisis, a crash, an IT bubble or right as the world's banking system goes to pot...

HOWEVER, all this value investing might yield a lot of unwanted capital gains, so this is all very academic until I've talked with an investment/tax lawyer.

Portfolio Planning:
I guess I'll be starting my investment this year so I'll need the necessary knowledge to build an outline of a portfolio and start value averaging into the portfolio over time.

The rough outline so far is to save about 23 years worth of expenses, then rely on the bat-shit crazy unemployment benefits for a few years and then drop out of the financial support system, since the returns from the portfolio can most likely fill in the remaining 2 years of expenses in the portfolio to reach the 'magical' 25 years worth of savings.

I reckon we'll keep about 2 years worth of expenses in cash to buffer bear markets. I want to work on the side, consulting or construction. I like to do math, programming and building, just not every day. Even modest amounts of work, like a month or so, should cover 1/3 - 1/4 of living expenses for a year.

Danish taxes, as always, is the biggest hurdle I have to cross right now.

The FI Budget:
I can't decide whether our FI budget is robust enough to handle up/down swings. Mostly I imagine that we'll probably find more and more excuses to go hiking all over Europe/the US, so we'll need a travel budget. I guess any work I do would go into the travel budget in case we don't need to money to weather an extended bear market.

Housing:
GF is still looking for apartments to swap. I'm starting to think it's absolutely doable soon. If only I could get her to declutter, then moving would probably come automatically once we see how much surplus space we have.
We are actually considering buying an 'owned' apartment in case the market crashes significantly. Currently we live in a type of apartment where prices are regulated, rather than being sold at market price. We might indebt ourselves, but the added price of re-selling the apartment later should most likely recoup the cost. We'll have to check up on what kinds of loans are available in order to assess whether it's a plausible strategy.

Being a carpenter really helps my outlook with regards to housing. If it's crap, I'll just fix it myself and sell it. Luckily the Danish government already thought of this, so naturally I have to pay taxes off of work I do in my own home... Yes, you read that right.

[FBeyer]

I'm finding portfolio theory to be intensely interesting. The combination of pattern searching, correlation matching, bear market protection, diversification etc plays exceedingly well into my board gaming/data analysis/programming interests.

Unfortunately portfoliocharts.com already exists, otherwise I would have built my own, advertised and monetized it
Fortunately portfoliocharts.com exists and shows me with great and unnerving clarity, that no matter what kind of portfolio I build, solid CAGR does not manifest itself until after about 8 years. Almost every portfolio has a tremendously bumpy birth.
Stick with it, believe it, and if you're going though hell... Keep going!

I just realized I should probably know something about dividend investing as well as value investing.

I could probably write a ten page essay on children and frugal living, and why it's important not to have kids before you're FI. I might write a piece on that once I gather my thoughts.

So with regards to ERE:
I've now contributed a total of 17000$ to my GF's mortgage from November to January (the tax legal maximum in Denmark).
Since I still owe her rent for all of 2015, she's getting more money still.
We could potentially be looking at paying off more than 44000$ dollars in about 8 months. Not that we can sustain savings like that, we just haven't spent any money the last 5/6 years so we might as well put it to good use.

This also means that I will probably start building my portfolio some time after summer. By that time I have a cash buffer for value averaging, I'll be about 4 investment books smarter and I'll most likely have a better idea of what kind of portfolio I want to build and what kind of portfolio my GF wants to build.
I'll most likely be kind-of heavy in stocks, she'll be heavy in super-duper-lazy safe investment, with a minimum of stocks for good measure. I'm fine with working after FI. I can't imagine NOT making money somehow, so it's all good in that regard.

Coming up until summer: Study Portfolio construction, Value Averaging, Bear market protection, Stoicism, How I Found Freedom in an Unfree World, Your Money or Your Life, Fail-Safe Investing and god damn Machine Learning and Generalized Statistics.

[Tyler9000]

Just wanted to say that I find your financial education journey particularly fascinating. I've always struggled answering the "where do I start" question, but you seem to be setting a pretty darn good example.

I'm finding portfolio theory to be intensely interesting. The combination of pattern searching, correlation matching, bear market protection, diversification etc plays exceedingly well into my board gaming/data analysis/programming interests.

I think there's something to that. I certainly share the same systems-thinking proclivities, and suspect it's a common trait among ERE types. When building a robust system is simultaneously fun and stimulating, that's a particularly productive intersection of opportunity and motivation.

[FBeyer]

Just wanted to say that I find your financial education journey particularly fascinating. I've always struggled answering the "where do I start" question, but you seem to be setting a pretty darn good example...

Thank you.

If I am setting a good example, it means I'm doing something unusual in regards to what you have observed before. What is this difference then?
I only know of one way to start something new: go absolutely crazy with information, pile on knowledge, start sorting the heap, and start asking questions.

[steveo73]

I just browsed through this journal and we have some similarities. I love the idea of having a life philosophy and basically just living in sync with that. My take is that your life philosophy should include spending and investing.

I also love that stoicism book and I am a big fan on index investing and simple living.

[Noided]

@ FBeyer

I am finding similarities with your thought process and evolution too. Actually, I finished reading "Four Pillars of Investing" yesterday and I have "The Intelligent Investor" in the shelf. I am also kind of reluctant to spend quite a few hours reading on value investing since I am more inclined towards a Permanent Portfolio. I guess learning doesn't hurt, but maybe right now I should focus on other things.

On dividend investing: You and I are from Europe, so we have acess to "accumulation ETFs" that don't distribute dividends. I don't know about Denmark but in Portugal the dividends are highly taxed, so I would prefer to defer the payment of those taxes to when I am selling some ETF shares to fund my early retirement. Because of this I am also reluctant to study much about dividend investing.