Life Traps Analysis from WSP

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prognastat
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Re: Life Traps Analysis from WSP

Post by prognastat » Wed Dec 26, 2018 3:46 pm

I mean I can definitely understand it's not hard if you are of above average intelligence, our household is in the 90th percentile for income and we aren't near that dedicated as my average week is only 45-50 hours and I could work far harder working more hours and/or improving my skills outside of work to improve my prospects for promotion/increasing income if I wanted to or I could put that same effort towards building alternate sources of income.

If I was willing to deal with the stress of working 80 hour weeks and dedicating almost all my time towards improving my income I could probably double my income pushing our household into the 95+ percentile. So I could say it's relatively easy considering I manage to reach 90th percentile with just average dedication and could be 95th or higher if I had superior dedication.

I also understand though that I'm not the norm and that this path isn't available to most people.

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Jin+Guice
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Re: Life Traps Analysis from WSP

Post by Jin+Guice » Wed Dec 26, 2018 9:50 pm

I think you are arguing 2 slightly different things. Prognastat is saying that WSP isn't robust, in that it's simply not possible for as many people to do it. This is hard to argue with and important to many here. I would add that it's also not a resilient approach, which is also important to many here.

Seppia is saying that from the individual perspective this argument is irrelevant. Saying something isn't achievable for most people doesn't rule out any individual person. If YOU really want to do it and YOU possess the discipline and drive to do so (characteristics that it could be argued YOU control, though this is a different discussion), it is very likely that YOU can do it. Not everyone, but anyone. Furthermore, while ERE is technically achievable by almost all first world residents, most have a difficult time doing it. It turns out that it likely takes discipline and drive to do this too, given the current environment. Does this make them the same? I don't think so, but that doesn't invalidate Seppia's argument in my eyes.

Neither of you is wrong, you're just saying different things, both of which are important points.


[quote=Seppia post_id=167119 time=1527544188 user_id=520
So I guess what I'm trying to say is that what I like about WS is the renewed focus on the "let's kick some ass" part of life
[/quote]

I like this about it too. I do miss having a job where I really wanted to go in and kick ass. I watched the Danish ERE doc last night and you can really see that when Jacob does this shit he is kicking ass. I hope to find something I feel like that again.

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BRUTE
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Re: Life Traps Analysis from WSP

Post by BRUTE » Wed Dec 26, 2018 10:41 pm

+1 Seppia

brute really thinks DLj and many other humans here are deluding themselves when they think "many humans could do ERE". being in the 50 income percentile might be easier than being in the 95 percentile, but brute is quite convinced that 95% of humans couldn't do ERE for any meaningful definition of the word "could". it's just harder to measure those impossibilities than it is to measure income, so it seems approachable.

it's not even one of those "any human could be president, but not all of them at the same time" situations. living on 1 jacob requires certain qualities that 99% of humanity does not possess - either they are innate, or 99% do not have the capability to acquire them otherwise. just as most humans are unable to acquire the abilities to be in the 95 income percentile.

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Re: Life Traps Analysis from WSP

Post by prognastat » Thu Dec 27, 2018 10:33 am

@BRUTE

Here I see a difference between could and would. Sure possibly not even 5% of people would do ERE, but up to about half of them could. If we lower the savings rate some from 75% which would extend the accumulation phase beyond 10 years then an even larger percentage could. On the other hand being in the 95th percentile even if every single one of them started following WSP guidelines isn't something more than 5% could ever achieve.

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Re: Life Traps Analysis from WSP

Post by 7Wannabe5 » Thu Dec 27, 2018 11:15 am

@jacob:

Well, I already admitted that I am only almost smart enough to be a quant-lol.

However, I would note that if goal of aspirant WSP is achieving net worth of $1,000,000 in 10 years, then this is an example of a model run over time. Of course, if any probabilistic functions are assigned to the model then it the model could be run over “times” or standardized population.

Also, I might suggest that the bond market commodifies uncertainty in time demarcated packages, not time itself.

Anyways, it is clear that WSP is nothing beyond an elaboration of aspect made clear in more generalized ERE paradigm. Obviously, one could attempt to follow this elaboration for the purpose of further shortening full time work life rather than increasing ultimate net worth spending, and that would be my intention.

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Jin+Guice
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Re: Life Traps Analysis from WSP

Post by Jin+Guice » Thu Dec 27, 2018 12:36 pm

I've read the WSP blog in the past and have been giving it another go. As noted by many others this is a pretty good blog worth reading some small % of articles from, but not an excellent life changing blog, unless you wish to replicate, fairly closely, what the blog writers are doing. I also think WSP is not really out of line with ERE, with the exception of the overt sexism, their favor of outsourcing instead of insourcing and their opposition of frugality. These are important aspects of ERE, but unless you insist on following WSP to the letter, I don't think they are as important for achieving the goals of WSP. I would say the same thing for index investing (which as least Jacob rejects) and FIRE. Just as WSP frivolously dismisses frugality, which could in fact aid them in their ultimate goal of financial independence, not many here are into working 80 hours a week at some hyper-career, which could shorten the time to financial independence.

In terms of Wheaton level, WSP is on the same level as standard FIRE. Follow this script to achieve this goal, which has worked for many (including the blog writer) in the past and is likely to work if replicated in the future. Any deviation is stupid. Success is likely but not guaranteed. The time scale isn't even that different. MMM's time scale is 17 years from zero to FI and, if I'm reading it correctly, WSP is just north of 15-20 to FatAsFuckFI. Both paths claim that the normal middle class path is inherently flawed and that there is a much better way of doing things. Both seek freedom through generating passive income sources found after retirement from a compressed but multi-decade career. Both are broad in intent (theoretically both are about designing a good lifestyle) but narrow in scope (lack all but the smallest trace of the philosophical underpinnings of ERE). ERE trumps them both because it is more robust, covers more dimensions and is more thoughtful.

WSP also presents a counter-point to the low impact life many of us want. It's not obvious to me that being an elite powerbroker with access to the social circles, influence and places that provides is necessarily better or worse than living a life of enlightened austerity. They are just different and I know which one I personally prefer. That doesn't mean I have nothing to learn from someone pursuing a different path.

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Fish
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Re: Life Traps Analysis from WSP

Post by Fish » Thu Dec 27, 2018 1:16 pm

BRUTE wrote:
Tue Dec 25, 2018 9:54 pm
brute is definitely interested in what Fish has learned. what are some of the concepts he thinks would mesh well with high-income ERE?
For me personally, what stands out most is their attitude towards work(*). Many of us are drawn to FIRE because we aspire to quit our jobs. In contrast, WSP appears to be cold and rational in its "follow the money" approach. Their life plan from age 22-30 (with 60-70 hours/week devoted to income generation) seems awful to me... but they're not complaining about it. Career is just a means to the FI goal. It's not pertinent whether one likes it or not (though maintaining a positive attitude makes it a lot more tolerable).

(*) For the ERE attitude towards work see the Work, is it so bad? thread.

I was raised with values which emphasized the importance of "enjoying" work. After all, if a person is going to do something for 40+ years they may as well like what they are doing right? While this might help with occupational longevity this kind of constraint could also result in career and wage stagnation. For me, this meant intentionally avoiding management and WSP makes me question the wisdom of that decision. Maybe "enjoying work" is one of those newfangled values (like "childhood") that deserve some critical examination.

By contrast, the WSP approach to choosing a career is to 1) filter for high income, then 2) select based on aptitude. If you can be really good at doing something, you should do it without regard to whether you "like" it or not. Competence leads to promotions and salary growth. WSP also mentions being Pareto-efficient with time and effort at work; they recommend doing the minimum it takes to be in the top tier; this conserves resources for building up a side business. Investment banking compensation is performance-based with annual bonuses potentially equaling or exceeding base salary. Since that's a winner-take-all environment, it is critical to be in the top tier. For occupations where compensation is less influenced by performance (i.e. most of us here) I think their advice would be to seek promotions to increase base salary, then do the minimum to remain above-average while channeling energy into the side business. (There is a side business right? Otherwise the best alternative is getting a 2nd job or busting 60-70 hour weeks chasing a 5% pay raise which is rather unfortunate.)

So to summarize, WSP has 2 ideas regarding career: 1) you don't need to like your work, 2) do what you're good at. (The part about being Pareto-efficient is simply applied common sense.) They also emphasize taking personal responsibility for outcomes, but the concept of agency is not new to us. However, is any of this particularly actionable? It would have been fantastic advice around age 18-20 but it's not life-changing at age 30+ when the dust has already settled. Still, I find it a useful perspective. What I take away from it is that assessing satisfaction with one's present situation is largely wasted brainpower and the more important question to ask is what can one be doing in the present to advance their goals.

I'll end this post with this quote from Jacob from another thread. This is something I'd like those with complainypants comments about WSP to consider. I acknowledge there are valid criticisms with their advice, and there might not be a whole lot to be learned, but if you're getting zero value from WSP, you *might* be missing out. Many of you have the right idea and are sifting for useful nuggets of information in this hot steaming pile of controversy.
jacob wrote:
Wed Jun 13, 2018 8:52 am
When I was a young and naive blogger, I figured I could just concentrate on having good ideas and those who read them would pick them up without bias like good scientists so to speak. Like, "that an interesting idea/way of life... let me think about how this could be useful for myself". Whereas in reality it's more like "that doesn't look like the way I've been doing it ... and I don't understand how it works ...there's probably a catch ... I'm guessing it's an awful way of life/unhappy person/...".

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Re: Life Traps Analysis from WSP

Post by suomalainen » Thu Dec 27, 2018 1:49 pm

Based on this
Fish wrote:
Thu Dec 27, 2018 1:16 pm
I'll end this post with this quote from Jacob from another thread. This is something I'd like those with complainypants comments about WSP to consider. I acknowledge there are valid criticisms with their advice, and there might not be a whole lot to be learned, but if you're getting zero value from WSP, you *might* be missing out. Many of you have the right idea and are sifting for useful nuggets of information in this hot steaming pile of controversy.
and this
Fish wrote:
Tue Dec 25, 2018 2:35 pm
I would prefer to explore and discuss whether there's anything of value in the WSP ideas that can benefit ERE adherents.
it sounds like @fish isn't really looking for a fulsome consideration of whether WSP has beneficial ideas, but rather is looking for validation/confirmation bias. No judgment here if you find some WSP-ideas useful to you. But I don't think it's a threat to your consideration of those ideas to hear that some "complainypants" do not find those ideas useful*.

* For transparency, my biases are that 1) I'm old, so my die was cast long ago and WSP seems to be targeted to a demographic of which I am no longer a member, 2) I've already reached high income and therefore have experienced diminishing marginal returns in the revenue generation side - does WSP even consider this? 3) culture is HUGE and as I'm saturated by that culture, having worked for wall street for 12 years, I don't need any more of it. YMMV, but don't dismiss my opinions as "complainypants" because I have different circumstances and preferences than you.

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Fish
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Re: Life Traps Analysis from WSP

Post by Fish » Thu Dec 27, 2018 2:49 pm

@suo - I chose my words poorly there and expressed a sentiment that I regret and would like to take back. What I was trying to do is influence the conversation to go below the surface to seek value, which is very difficult when the natural tendency is to debate details which from my perspective add very little value to the conversation (but that of course is subjective).

After considering what you have said, I acknowledge the value of constructive criticism and it is helpful when a fellow forum member gives serious consideration to new ideas and reports they have found nothing useful. It was inappropriate and dangerous to attempt to stifle this part of the conversation. If I am testing the null hypothesis that WSP=useless and attempting to bump up the signal/noise ratio by requesting that those with WSP=useless observations to not bother reporting (and not allowing them to question the validity of the WSP=useful observations), that is basically asking for confirmation bias and thanks for pointing that out. Critique on.

Edited to add:
suomalainen wrote:
Thu Dec 27, 2018 1:49 pm
2) I've already reached high income and therefore have experienced diminishing marginal returns in the revenue generation side - does WSP even consider this?
Yes, the WSP standard advice for the 30+ crowd that missed the boat is to maximize free time to start a side business. Or to just coast to 2M in net worth if that is enough and there is a clear path; there is no need to take risk. They do still recommend the biz just to get over the insecurity of having not having enough money saved up; apparently having business income cover lifestyle expenses is a huge confidence boost for FI.

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Re: Life Traps Analysis from WSP

Post by suomalainen » Thu Dec 27, 2018 3:15 pm

Fish wrote:
Thu Dec 27, 2018 2:49 pm
Yes, the WSP standard advice for the 30+ crowd that missed the boat is to maximize free time to start a side business. Or to just coast to 2M in net worth if that is enough and there is a clear path; there is no need to take risk. They do still recommend the biz just to get over the insecurity of having not having enough money saved up; apparently having business income cover lifestyle expenses is a huge confidence boost for FI.
Meh, dialing down my sure-thing salary* to start a side business again runs into marginal utility problems. In other words, the anxiety of "insecurity of having not enough money saved up" < anxiety of "starting a side business that *has* to make money". But again, this is just personal preference. In no way do I recommend anyone do anything the way I do it. It's your life - go ahead and try what you want.

The one criticism I have is cultural: the WSP playbook works/worked for this person; good for them. But it seems to me that they are not interested in teaching others (broadly) any good life skills. It seems to me that they are blogging solely to find an ego boost by 1) encouraging those that are already in the IB-pipeline to follow their path (i.e., gaining followers) and 2) instigating envy in everyone else, thereby salving their fragile elitist egos. In terms of something @jacob pointed me to once, they are sociopaths. This culture of envy / always comparing yourself by "how hard you work" / always comparing yourself by how much money you were paid last year is such a terrible creature of wall street. Why would you want that in your life? It's like recommending someone read a lifestyle blog that's just one page that reads "Be a huge douchebag." There are plenty of other places to learn good life skills without having to trudge through the bro-sexist bravado dripping from every page.

Anyway, like I said, just one guy's biased opinion. YMMV.

* I acknowledge that my opinion here might be skewed due to the high-income thing.

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Re: Life Traps Analysis from WSP

Post by jennypenny » Thu Dec 27, 2018 4:01 pm

suomalainen wrote:
Thu Dec 27, 2018 3:15 pm
In terms of something @jacob pointed me to once, they are sociopaths...
I hadn't seen that before. It's like that Paul Graham article about nerds, where I'm profoundly struck by the truth in it, only to be followed up immediately by an overwhelming sense of grief.

Sorry for the OT ... resume discussion of broFIRE.

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Re: Life Traps Analysis from WSP

Post by suomalainen » Thu Dec 27, 2018 4:07 pm

@jp yeah, sorry, I'm one of the MOPs that ruined everything. Par meet course.

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Re: Life Traps Analysis from WSP

Post by TopHatFox » Thu Dec 27, 2018 4:27 pm

This is pretty interesting: https://dqydj.com/net-worth-percentile- ... ed-states/

Looks like for all US households of all ages, 1M puts you in the top 10%, 2-3M puts you in the top 5%, 10M in the 1%, and 40M in the .1%. I guess billionaires are in the .00001%?

Interestingly the income distribution seems to be wider (going from 0K/yr - 1M+/yr) even though the net worth distribution gets to top 10% at 1M, so I guess people aren't saving a large percentage of their income no matter their income.

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Re: Life Traps Analysis from WSP

Post by EdithKeeler » Thu Dec 27, 2018 8:05 pm

Meh, dialing down my sure-thing salary* to start a side business again runs into marginal utility problems. In other words, the anxiety of "insecurity of having not enough money saved up" < anxiety of "starting a side business that *has* to make money". But again, this is just personal preference. In no way do I recommend anyone do anything the way I do it. It's your life - go ahead and try what you want.
Funny, I had that exact thought today. I was looking at my pay stub and thought, wow, I made that much this year. And immediately started calculating how much I’d have to work if I wanted to match salary (not even benefits!) if I wanted to make a living as a chef/farmer/fiber artist/hot dog stand owner/ dog walker or any of the other weird things I day dream about when I think about maybe quitting and doing something else right now.

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BRUTE
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Re: Life Traps Analysis from WSP

Post by BRUTE » Thu Dec 27, 2018 10:32 pm

prognastat wrote:
Thu Dec 27, 2018 10:33 am
@BRUTE

Here I see a difference between could and would.

[..]

On the other hand being in the 95th percentile even if every single one of them started following WSP guidelines isn't something more than 5% could ever achieve.
what is the difference between could and would? surely learning a bunch of math and putting on a suit is doable by 50%+ humans. or, even easier, learning to type a bunch on the computer and make websites - which apparently puts one in the 95th income percentile in 2018.

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Re: Life Traps Analysis from WSP

Post by prognastat » Fri Dec 28, 2018 11:08 am

@BRUTE
Even if 50% learn a bunch of math and put on a suit/learn to code still only 5% percent can reach the 95th percentile

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Re: Life Traps Analysis from WSP

Post by 7Wannabe5 » Fri Dec 28, 2018 1:29 pm

Relative status acquisition is limited by definition, so question would be is it easier for a person of median income =median spending to reduce spending to 1/4 median income/spending or to increase income to 4x median income/spending? Also, is there any individual capable of earning approximately $200,000 per year while only spending approximately $12,500/year?

You could also approach the challenge in an iterative manner. For instance, first thing each morning calculate how much you spent or earned the day before and then either go out that day and earn 4x more than you spent previous day or spend less than 1/4 of what you earned or both. All long term contracts and major depreciations would have to be included at daily rate in calculation. By this method limiting factors might best be isolated and determined.

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Re: Life Traps Analysis from WSP

Post by EdithKeeler » Fri Dec 28, 2018 1:46 pm

what is the difference between could and would? surely learning a bunch of math and putting on a suit is doable by 50%+ humans. or, even easier, learning to type a bunch on the computer and make websites - which apparently puts one in the 95th income percentile in 2018.
I read stuff like this and shake my head. I wonder how much contact you have with people different from you.

I don’t mean this as a dig, but just.... 14% of Americans are functionally illiterate. About 30% of Americans have only basic reading skills. The numbers are estimated to be HIGHER for innumeracy, but I couldn’t find any concrete figures.

I mean: I don’t disagree with you on principle: people should be able to learn math (and reading!) and get good jobs, but... well, they aren’t. And can’t, unless something significant happens with education.

Some of it’s geography—I deal with people mostly in the south, where it’s worse, but it’s not limited to the south. People can’t understand percentages I give them for tax figures. I deal sometimes with small business owners who are clueless—one woman owned a small company that made and sold “homemade” lasagnas and meals. She had no concept of cost of goods sold; I asked her the price of her ingredients and she just kept reiterating “I sell them for $25.” But what does it cost you? What do you spend for ingredients? No clue.

And I’m not dealing with meth heads and convicts—these are regular folks for the most part, and they are not stupid. But the idea that most of them could learn some more math and take a coding class and start saving 50% of their income.....

Anyway. I just don’t see it happening.

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Re: Life Traps Analysis from WSP

Post by jacob » Fri Dec 28, 2018 3:08 pm

@EK - You're looking for this one? https://nces.ed.gov/pubs2014/2014008.pdf

Exhibit B-3 for the numeracy level description and Fig 2-B for the result.

Result: 30% of Americans do not know enough math to understand what this sentence means, because they basically don't know what "30%" means.

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Re: Life Traps Analysis from WSP

Post by EdithKeeler » Fri Dec 28, 2018 3:14 pm

That’s it! Thanks, Jacob.

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