Bankai's Journal

[Bankai]

I assume paid off mortgage when calculating how big the stash needs to be. So it's half of the value of our flat plus 28x the average of all other expenses from last 24 months (for 3.5% wr).

[fingeek]

Interesting... Do you also take into consideration the likelihood of downsizing when older and releasing a bit of equity? I've recently added 10% of house equity into net worth with this reasoning

[Bankai]

Yeah, especially considering that we don't plan having children and so leaving inheritance won't be a priority. But I see it more as one of the backups in case plan A (28x expenses & paid off property) fails, along with cutting expenses, state pension, renting out spare bedroom & possibly receiving inheritance.

Speaking of cutting expenses, here's our spending divided into needs and wants. On average, 25% of our spending is on wants, so there's some scope to trim if needed, but it's pretty tight already (this will change once mortgage is paid off as needs will go way down):



OK here's the same chart excluding mortgage payments - looks better with wants at 35% so much more scope to chop if big bad bear comes:

[mountainFrugal]

I really like this visualization! Thank you for sharing. I will do something similar for my expenses going forward. It is really cool to see it over this time frame.

[Bankai]

1) Health

Roughly on track - eating healthy and exercising almost daily, although as I'm currently on holiday I did have some sweets, as well as some alcohol over last few weeks. Planning to go back to more strict routine once I'm back to work.

I also went on a full day hike few times lately. I really enjoy wandering around in highlands with barely any other humans in sight.

2) Relationships

After many conversations with DW she finally quit her work in public sector. Since then her recovery is gathering pace, although it's still likely to be a few months before she's in shape for longer trips/looking for a job etc. The last few months were hard both for her for obvious reasons, and for me as I was stressing about her health and our future. Multiple years of expenses saved helped to an extent, but it's still a stark reminder that money is nothing without health. Fortunatelly, as DW's recovery progresses, my stress levels go down.

I'm playing board games (online) weekly with a group of friends. Other that that, DW, work and occasional hike with a friend, I don't have much contact with other people.

3) Work

The bigger the stash, the lower the motivation. Very nice weather over last few weeks doesn't help either. On the other hand, rationally I realise it's a good job, fully remote, with above average pay and good boss/coworkers, so there's really nothing to be unhappy about, other than the fact of having to work. Still on track to close 'work' chapter within the next 2 years, although it depends on what income will DW be able to generate.

4) Time allocation

Continue my daily reading about investing and I'm getting a better idea of how I want to structure my portfolio.

DW thinks I need some hobbies for pure pleasure/stress reduction. I'm not sure I'm able to have a 'hobby' - the problem is if I like something, I tend to go all in, and if I don't, I don't want to spend any time on it. Whereas the idea of a hobby assumes spending some time here and there. Seems too causal for me - I'm more of a 'all or nothing' type of person.

5) Money

Expenses in Q2 were £3,396 or £1,698 per person (1.07 JAFI annualised). Excluding capital part of mortgage payments, expenses were £2,736 or £1,368 per person (0.86 JAFI annualised). There were no unusual expenses; alcohol, eating out and clothing picked up somewhat as places reopened.

SR: 84.5%. Individual SR won't be relevant going forward as I'm the only earner currently, so will be covering full household expenses. Household SR should be c. 65-70%.

NW: £181.2k (+12%). Ridiculous growth continues - NW grew twice as much as my post-tax earnings in Q2. Most of that was due to investments as growth stocks resumed their, well, growth. I also updated the value of our flat to reflect RE inflation since the start of pandemics. Buying this flat was by far out best financial decision so far, with over 150% profit on our deposit in 3.5 years (compared to renting).

As I'm getting closer to my number, I'm allocating less to growth and more to 'neutral' (world index) and alternatives. Soon I'll also start building positions in gold and cash. I'm also seriously considering a tiny allocation to BTC & ETH - price is well off recent peaks and appears to be consolidating, which is usually not the worst time to enter.

[fingeek]

"All or nothing" with new hobbies, or should I say, obsessions! Yep, guilty here too... Nice progress!

[Bankai]

1) Health

I have spells of 2-4 weeks of working out almost daily interwoven with similarly long periods of doing nothing. I tried various approaches to motivate myself/remove obstacles, but just can't find any consistency. I've also been eating a bit more junk, but I still keep processed junk at <10% of calories and my weight is consistently c. 2kg below what I consider a perfect weight, i.e. mid-point of a 'healthy' BMI range. I also walk 10k+ steps most days, although this too starts to become difficult as with days shortening, my only opportunity is to go on a lunch break. And it often rains, so there's very little appeal to leave the flat.

Overall, it feels like I'm doing the bare minimum to keep roughtly on track/in shape.

2) Relationships

DW's slowly recovering and now able to go for longer walks - a few km is possible with some breaks in between. It's still way too early for her to be looking for a job or anything like that, but we went for a 2-day trip lately and she's been feeling great on 1st day, although some exaustion kicked in on 2nd day. I'm very happy with the progress she's making and the future definitely looks brighter now than just a few months ago.

I continue weekly board games online with a group of friends. I also got back in touch with my cousin from Poland and we've been talking on skype every couple of weeks or so. He's very bright, about a decade yourger and INFJ same as my wife, so the conversations are very interesting. I was finally able to meet some friends IRL again, which felt great after not seeing some for many months due to obvious reasons.

3) Work

This is what I wrote 3 months ago:

"The bigger the stash, the lower the motivation. Very nice weather over last few weeks doesn't help either. On the other hand, rationally I realise it's a good job, fully remote, with above average pay and good boss/coworkers, so there's really nothing to be unhappy about, other than the fact of having to work. Still on track to close 'work' chapter within the next 2 years, although it depends on what income will DW be able to generate."

The situation changed somewhat. Work has been hectic over the last couple of months. Our small team of 4 is a person down, we're still interviewing for the replacement and it's likely to be another couple of months before the new person starts, and then another few (at least) before they get up speed and start contributing meaningfully. At the same time, we're dealing with multiple projects that all require our input/regular meetings etc. At the same time my wage doesn't look that great anymore - the big carrot which convinced me to take this job 2 years ago - a nice annual bonus - never materialised as the company made a loss last year due to covid. It's now profitable again, but bonus is never guaranteed and the earliest I'll get one (if at all) will be spring/summer time. We also have taxes going up in the UK and inflation forecasted to hit 5% in a few months.

With all this and encouraged by many articles about 'the great resignation' I've read lately, I decided to apply for a job in another company. It would be a lateral move into exactly the same role as my current one, but with potentially better money. I've not heard back from them yet, but I'm in a very small niche so would be surprised if they didn't at least invite me for an interview as I 'tick all the boxes'. Unless they decide I'm overqualified and would rather take someone more junior. Either way it's outwith my hands now, so will see what happens next.

4) Time allocation

Lately my 'web of pleasant distractions' consists mainly of watching a lot of anime. I'm usually too knackered after work to do much else, especially that with DW's condition, most house chores are on my head. I still read about investing most days, but cut down on active trading - since there's no point doing it half-assed (risk : reward is really bad if not able to commit 100%). I still have a few individual shares, but moved all proceeds from recent sales into active funds.

I started learing Italian but only managed a few weeks before giving up due to lack of energy. I think this needs to wait until next life (after work).

One thing I'm quite happy with is that I explore more. One of my goals for this year was to explore music, cinema, books etc. outwith what I normally listen to/watch/read. It's been good - I came across some cool bands I'd normally not give a go, and read some interesting stuff. Definitely will continue on this path.

5) Money

Expenses in Q2 were £3,876 or £1,938 per person (1.22 JAFI annualised). Excluding capital part of mortgage payments, expenses were £3,216 or £1,608 per person (1.01 JAFI annualised). Nothing really unusual in expenses, just 2 trips, a fee for antivirus and some eating out.

SR: c.80% if I paid only my half of expenses, c. 60% as is with me paying for all expenses as DW doesn't currently have an income. This is still pretty strong for a 1-income household on only just-above-average income.

NW (end of Sep): £191.7k (+5.8%). The growth is mainly driven by stock market going up, up and up. I now reached a point where all my future contributions will be going into a world tracker, gold or cash. I also once again didn't pull the trigger on crypto, despite being very close (again). There's something in me that stops me from doing it. It could be superhuman insight. But more likely just a lazy chicken. It would never be a significant amount anyways so it's not like I'm actually missing out much. Unless it actually take over the world.

[guitarplayer]

It's crazy how easy it is to end up with some processed junk in one's mouth, I recently realize. Where I live vast majority of food is organic and we pride ourselves with providing a 'healthy diet', and still when I had this wrap for lunch today, all the organic unprocessed stuffing (other than canned beans and tomatoes) was enclosed in a wrap that came in a plastic bag. Right, it says 'organic', but the process of making it - I don't know. Happily, I could fix myself a huge salad from raw organic produce and front load with that.

Spot a nice day and go climb a munro!

Good to read DW is getting better and about keeping in touch with the cousin.

I don't know if this will come useful for you, but I have recently started sending an electronic newsletter to my parents and siblings, coinciding with my journal monthly summaries on the forum. Last year I realised that I am rubbish at staying in touch with them, and given that my life is diverging Ere'sque, I figured I better give them heads up so they are not to shocked when we meet and I open my mouth. Quietly hoping this will nudge them my ways, too (not that they are anti-ERE in the first place).

Fingers crossed with improvement of the work situation.

[Bankai]

Yeah, slipping back into eating junk is just so easy. It's best to win this battle in store since you can only eat what you bought (kinda). It's actually been somewhat better over the last couple of weeks, still not 100% clean but progress is progress.

I did actually go on a hike last month, here are some pictures I took (not the best quality as they were taken with my low-end phone):







Work got a bit less hectic lately, which is good, but doesn't change my view that it's time to move on. I applied with another company but didn't hear back from them and it's now 5 weeks. I suspect they had someone internally lined up for the role and only advertised externally to 'tick the box'. Oh well, there will be other jobs.

[Bankai]

2022 Update

It’s been a while so about time to update my journal. Rather than doing one monster post I’ll post each section separately as I write it, hopefully over the next few days.

1) Health

One of my goals for this year was to work out regularly – I managed 5 spells of over a month of regular workouts each time, however on every occasion the emerging habit was stopped by something happening – usually illness or a holiday during which I didn’t exercise and then wasn’t motivated enough to go back to it once the interruption was gone. This tells me I need to try harder to actually maintain the habit during tougher times as it’s easier to keep going, even in a reduced capacity, than to stop and restart. This is what James Clear recommended in Atomic Habits anyways.

I’m toying with the idea of signing up for either martial arts or a climbing gym. I have a small home gym which is more than enough for what I usually do, but lately, I’m not motivated enough to actually use it, so perhaps having an external structure would help. I’m also planning to renovate the office/home gym room this coming year, and maybe I’ll be more inclined to use it when it looks nicer (we never made any amendments to that room after we moved in 5 years ago and it was children’s room before so it’s very tired-looking).

I did a few hikes but wasn’t consistently walking anywhere near the 10k recommended. It was much easier to do while working in the office as I’d walk 7k there and back and often another 3k on my lunch break, while now I need to get out of the flat to do any steps at all, which is not that easy in winter with the only possibility of a walk during the week being my hour-long lunch break. So that’s another one I need to approach differently to get where I want to be. So far I came up with going for a walk first thing in the morning – I’ll give it a go next week.

Diet-wise, I’m loosely following intermittent fasting. I start work at 8 am but have my first meal no earlier than 11 am and most of the time at noon during my lunch break. I also consistently do not eat at least a couple of hours before bed. If for any reason I’m hungry while trying to fall asleep at night, I just drink a lot of water to trick my body. I don’t measure how long my feeding window is but I’d estimate it to be between 9-11 hours. Not exactly the perfect 8 hours but much better than what I was doing before.

We’ve also continued with the WFPB diet, although we did have some sweets/snacks and alcohol every once in a while. The few times we went to restaurants this year I usually had issues with digestion afterward, so I’m planning not to eat out at all in 2023. Good for expenses too.

I had a covid but it was almost a non-event. Being treble-vaxed and otherwise healthy probably helped.

On the positive side – I maintained (what I consider) a perfect weight of just under the mid-point of a healthy BMI range and finally sorted out my sleeping routine - I go to bed around midnight and get up around 7.30.

Last but not least, mental health. Overall, I’ve not been feeling great this year. A few things contributed to this. Firstly, my wife’s chronic illness is stressing me out quite a bit. It’s a low-level, constant stress similar to the one caused by work. We’ve set things up so that she has optimal conditions for recovery, but it still took me a long time to accept that there’s nothing more I can do. My default is, if there’s a problem, what can I do to fix it, but obviously this doesn’t apply to someone else’s illness. So it’s been pretty much constant exercising of my stoic muscle.

Secondly, work. After a few hectic years, this one has been reasonably quiet, but also not challenging or interesting at all. I’ve reached a point where I don’t learn anything new and any tasks are just repetitions of what I’ve already done many times. My motivation, therefore, is very low, and combined with a lack of development/progress opportunities, I feel like I’m wasting my time there. So that adds a different level of stress/dissatisfaction.

And thirdly, as mentioned earlier I’ve slipped in my healthy habits quite a lot this year. The ones obviously good for mental health – exercise, walking in nature, healthy eating (although this one just occasionally). I’ve been also writing a journal, but quite infrequently.

So taking this all together, the way forward seems to be to get back to daily exercise habit – I’ve managed over a month on five occasions last year but this is clearly not enough for a habit to solidify, so the aim has to be 2 months at the very least. Next, get out and walk every day. It doesn’t need to be 10k each day – it’s especially difficult to pull out in winter when it’s still dark when I start work and already dark when I finish – but aiming for 10k on average over the whole year should be doable. Next, increase the frequency of journaling to daily and also start a separate gratitude journal – there are an awful lot of great things happening but lately, I’ve focused way too much on negatives. And finally, get to the next level of healthy eating by purging the last remaining snacks, drinks, and restaurant food, taking it from the current 8.5/10 to the perfect score.

We also started practicing OM chanting, which is a form of meditation – it’s still early days but hope this will also help in the long run.

More to come.

[guitarplayer]

Hi, nice to see you back @Bankai!

Looking forward to future updates. I am curious about all the rest and also I wonder how's it going with investing, I remember you were pretty invested in investing! For sure you will include in one of the forthcoming updates.

[fingeek]

Nice update, and nice to see you back yep!

"At least" thinking vs "if only" thinking comes to mind. It's definitely a thing with perfectionist mindset that we can get too stuck by failing to hit 100%, and in fact 80% (or even 30% sometimes) is at least better than nothing - similar to your comments about doing an activity under reduced capacity instead of skipping it.

Would love to hear if you have a plan for no challenge/interest work - I have the same problem, and this last year or two I've been focusing on building my challenge/interest on my own projects (and frankly just slowing down a bit to try and be a bit more in the Now)

[Western Red Cedar]

Beautiful pictures upthread! I really like the contrast in colors on the first and third photo.

I think it is wise to focus a lot of energy on physical and mental health. It is easy on the FI journey to optimize for finances, but prioritizing health is just as, if not more important in my opinion. In terms of James Clear's recommendations, I found developing identity-based habits quite effective. Identifying as the type of person who doesn't miss workouts (whatever routine you set up), or the type of person who quickly bounces back after an illness, worked well for me. Never missing two in a row is a bit more practical for those with a lot of commitments. Ultimately, knowing yourself and how you respond to different types of structure/environments is critical to make the habits and practices consistent and enjoyable.

Incorporating my workouts as a break from work (on my lunch break) worked well for me. I took daily walks for an hour for about six years on my lunch break, then transitioned to lifting weights midday for a couple years, with occasional bike rides when the weather is nice. It is something to look forward to as an escape from work and a nice transition from sedentary, intellectual work. I've also found that I am pretty happy to work out for 45-90 minutes if I make the effort to go to the gym, but I'm less motivated to work out that long when I'm at home. Others I know are happier and more consistent when they can work out at home.

Best of luck in the new year and keep us posted as you find something that works for you.

[Bankai]

@guitarplayer

Ha! Investing is going well, investments not so much!

@fingeek

Absolutely! Very often it's (way) more important to do the right thing than to do it right. The compounding effect of a hundred pushups and squats each day vs. a solid 2-hour weightlifting session only done every couple of weeks.

@Western Red Cedar

Yes, health is for me THE most important thing, the foundation everything else is built upon. Much harder to enjoy anything in life when health is gone.

I too find JC's identity-based habits effective, but they do require some upkeep in terms of 'mental game' (regularly talking to oneself 'I'm a runner/lifter/writer') and I've not (yet) been able to build one 'for life' using his methods. This could have more to do with me than his method though.

[Bankai]

2) Relationships

As an INTJ, I spend most of my time in my head (vs. being present in the moment). This tendency only grew stronger over the last 3 years as I moved from full-time office work to full-time work from home. Before, I’d sometimes have multiple conversations with various colleagues about non-work related topics each day, and we’d go out for drinks or food once a month or so. I was never a big fan of going out for food, but I miss the conversations - they almost never happen anymore as everyone is now working on their own and only meeting for a few short calls each week. I spend maybe a couple of hours a day talking with DW, I meet with friends every few weeks and talk to my family in Poland every month or so. Overall, my social life is limited and only revolves around a small group of people most of whom I’ve known for decades.

I believe the current situation (WFH and greatly diminished social life) plays to my strengths (introversion) but actively hinders any attempts to address my weakness (introversion). I don’t want to look back at my life in a few decades and conclude that I spent it living in my own head instead of engaging with the real world. I spent the last decade (I found the ERE blog in Dec2012) reading, thinking, saving, investing, and engaging with my web of pleasant distractions. Over the next decade, I want to spend less time playing single-player games (in my head or on solo activities) and pivot more towards multiplayer games. This means going out and spending time outside my head and apartment, engaging with other humans in the real world.

I’m not going to set any specific goals for this purpose, but I’ll remind myself daily to keep this in front of my mind.

[kane]

I sure can relate. A few years ago I thought that remote-only job would be a dream come true for multiple reasons... and as they say 'do not wish for something, as it may be given to you' My social activities are kinda similar to yours and for the first time in my life my introversion stops me from doing useful things (go out, do things via multiplayer mode) rather than enable me to do more useful stuff (reading, thinking etc.).

It's probably a similar transformation as I feel that my F stat is more and more boosted by T stat; I know that feelings are important and they are indicative of what I truly feel about something, but they are best treated with T sauce. Maybe in the end something similar will happen to I stat?

[oldbeyond]

If they’d offered more online only degrees back when I graduated high school, I think I’d be in a deep hole by now (even if that would have been a dream come true in the short term back then). Even with partial WFH and a family, I have to push back against the built-in drive towards isolation. I think it’s easy to equate “lower social needs” with “no social needs” and build an identity out of it. That does not seem to work out too well, usually.

[Bankai]

Yeah, I think there should be a big flashy warning displayed for anyone taking an MBTI (or any other personality) test. Too easy to interpret 'preference' as a fixed set-in-stone quality.

'Oh, I'm an introvert so I don't need other people'

'I'm a thinker so I don't need to care about feelings'

Perhaps a better way to look at one's 'type' is 'OK so these are the things I'm already inclined to/good at, but the flipsides might be my weaknesses, maybe I level them up next'

[Bankai]

3) Work

In contrast to the previous few years, the work has been unusually quiet. Part of it was due to most projects wrapping up, and part was my team's core activities being less demanding. Most of the time, unless I find myself something to do, I only have enough work for maybe half of my day. Other teams in my area appear to be in a similar situation.

I got a nice pay rise (well, it seemed nice when it was awarded but then inflation went into double-digits) and a good bonus, so considering a fairly light workload, I can't complain about my compensation. The problem is, it's boring and I'm not learning anything new anymore since I joined the team 5 years ago. I could keep doing online courses and improving my coding skills (or branch out into different languages), but that's also boring, plus the company I work for is quite bureaucratic and set in their ways of doing things. I applied for some other jobs and got 2 job offers, but the conditions weren't a sufficient improvement to tempt me to jump ship.

So, I'm still in the same place, working with the same data and solving the same problems, just with less work and more money. You might say, this is an ideal situation for an accumulation phase, and perhaps it is. But I'm reaching a point where I just want out. After working for 15 years straight I'm yearning for some free time to figure out what I want from life and do that. My current plan is to keep looking for a new job but if I can't find a substantially better one, I'll just quit after the next bonus is paid and take some time off. This could be a year or more, depending on how I feel and if I can generate some income by other means. Or, it could be forever if the market stages a spectacular recovery this or next year. For now, I canceled my monthly investments and reduced my pension savings to the minimum level required to get a full employer's match, and am accumulating cash with the purpose of having c. 1.5 - 2 years of expenses in cash by late summer. This means if I quit in the summer I hopefully won't have to sell any investments until early 2025.

[Bankai]

4) Money

Headline expenses for a couple were £19,950. Actual expenses (excluding the capital part of mortgage payments) were £16,770 for a couple or £8,385 per person. In 2022 $JAFI was $9,880 and the average £/$ exchange rate was 1.237 making £JAFI £7,987. We, therefore, spent 1.05 JAFI per person.

There was one 'true' one-off expense - my citizenship application which all in all cost c.£1,500. Other non-essential expenses were:
- a week in Spain and 2 local trips for £1,650
- new mattress £600
- new smartphone £350
- new fridge £350
- laptop repair, ram upgrade, new mice and keyboards £250

NW is down c. £4k on 12 months ago, despite investing £35k of new money in 2022, and I'm now much farther away from FI than I was this time last year. This is obviously due to stocks getting decimated last year. The flip side is that valuations look much more reasonable and with inflation going down for 5 or 6 months in a row, the worst is likely behind us. There are many more negatives though. The worst in my opinion is the very dangerous geopolitical situation and the (now obvious) end of the unipolar world we blissfully enjoyed for the last 30 years. Decoupling and rolling back China, which is what the US is determined to do, is not going to be easy and will likely not succeed. The fight for new global order, of which the war in Ukraine is just one of the first steps, is likely to take a decade or more (as it did historically). How will this affect asset prices and returns? My guess is: not in a good way. Still, global equities tracker seems like at least a reasonable option, regardless of who wins the new world war.