Hello from Clark

[clark]

Hi everyone,

My name is Clark, and I work as a musician in the US. For certain privacy reasons, I would prefer not to reveal personal details about what kind of music I play and who I play for, but I would like to talk a bit about how I came upon this site.

I was originally quite spendthrift, but then I married a very frugal wife, who reined me in quite a bit. I went from a savings rate of about 0% to well over half of our income. As our cash reserves increased I began to think about how to invest the money. Soon I came across MMM, which blew my mind, and after tearing through that site in a matter of weeks, I ran into the ERE site.

At first, ERE seemed too austere to me, but as I read the book, a few things stood out to me that eventually drew me here from MMM:

1. The emphasis on the philosophical underpinnings of the ERE concept. After a few months of reading the MMM website, I felt like I had internalized most of the concepts (although I haven’t put them all into practice). But with the ERE book, I still feel like there are many concepts (such as the web of goals, understanding flows, and so on), that take months to even understand on a most surface level, let alone internalize. I find it quite a pleasure to think about and try to implement these deeper concepts.
2. The pessimism, or at least neutrality. I tend to be quite pessimistic by nature, and while the optimism of the MMM and Bogleheads forums can be helpful for me at times, I can’t help but be skeptical of it. As such, the “hedged nature” of the ERE idea appealed to me greatly. I also often feel that behind this techno-optimism is a kind of rigid and politically-correct dogmatism, which makes me uncomfortable. I like having my beliefs challenged and I don’t want to be a part of a group where everyone must make certain assumptions, even though those assumptions may not be correct. I like that the ERE forum does not have a politics section and that discussions on economics tend to be free of preconceived political notions. It makes things a bit more like a Socratic dialogue.

The one thing I have trouble with here is that I’m definitely an INFP, and while I'm good at reducing my desires to the point that I don't have anything that I want to spend money on, I don’t have the drive to mastery that so many of you INTP types do. So the idea of mastering economics and investments to the point where I can strike out on my own, so to speak, seems incredibly daunting to me. I agree with this forum’s general skepticism of 100% index funds, but I wonder at what point you can be sure that you have the confidence to invest on your own in a way that won’t put you greatly at risk.

I’m also not that adept at learning the kind of skills that MMM is famous for (my brother, who is an INTP, is the one who got those genes). The skills I’m good at learning (foreign languages, music, etc.) are not the things that bring in the big bucks. So sometimes I wonder if I’m not the right type of person for these types of forums. It is perhaps this question that drew me out of lurking and got me to post this intro.

Are there any other INFP types here, and how do you deal with these issues?

[mountainFrugal]

Welcome Clark. I think you are in the right place. There are many different approaches to ERE. See @jacob, @theanimal, @ego, @7wannabe5 (and many others!) for very different takes and life stages. ERE as philosophy allows one to design your own adventure. I look forward to following along.

[daylen]

INTJ's are generally the types with the lowest time discounting meaning that they treat a year, five years, and ten years from now similarly. In part this tends to push them towards not wasting much time with respect to skill mastery and contingency patching. INTJ's are the types that dominate forums like this one. INTP's like me mostly just nerd out in the background. I like to think that any type, including INFP's, can find a home here. Welcome!

[JenDuck]

Hi Clark! Also new here. I am INFJ, which I think also leaves me with a bit of a struggle compared to the INTP types. I am very much an idealist and big picture person and can get frustrated by too many processes/minor details. My skills are similar to yours and it takes a good deal of effort to shift towards more hands on practical skills, like engineering and so on, but I've done it with effort.

A long-winded way of saying that all sorts of types of people are here along for the journey . I'm interested to see what different insights you might have.

[AxelHeyst]

Welcome Clark. The ideal Renaissance Human is adept in many categories, very much inclusive of the arts and humanities such as music and language. For various reasons this forum tends to be STEM and so-called practical skills heavy, but I think that's not by intent or desire. It might be appropriate for you to work on increasing practical skills, but know that most of us engineer types around here have realized it's important to work on some of these things like music or art or social graces that don't come naturally to us. Maybe you can help bring Balance to the For(um).

[clark]

Thank you for the replies!

Yes, daylen, I meant to say INTJ. Sloppy work on my part! I should have proofread before I sent the message.

A lot of musicians (who are often INFP types) that I know are simply babes in the woods when it comes to finances, and end up living paycheck to paycheck right up through their 60s. I was lucky to get a hold on my finances in my late 20s and avoid the pitfalls that so many others fall into.

Since buying a house (with cash of course), I worked very hard to become proficient in understanding building science and doing as much home repairs as I could up the point where it was either illegal (electrical work), or could have major implications for my insurance if I did it wrong (roofing and woodstove installation). I suppose an eventual goal would be to have your house be such a small part of your net worth that you actually don't need insurance and can afford to try doing everything yourself, but I'm not at that point yet.

Financially, I have tried to read a number of books on more basic investing concepts, from the Bogleheads stuff to the Permanent Portfolio and its variants (I have not looked into individual stock-picking at this point). I have reached the point, however, where your I realize that your investment decisions can't come from following the crowd, but from a sold enough foundation to give you an opinion on where the economy is going long-term. And that's where my lack of confidence that I can really know these things comes into play.

Interestingly enough, in the music world you often have two very different ways of playing an instrument (say the Russian school or the French school for violin), whose respective practitioners will insist that the other side is wrong, and yet both schools produce world-class musicians. But when you're learning an instrument, you have to stick to a single school until you've perfected that way. (caveat: there are also many other ways of learning an instrument that will lead you to a dead end)

This makes me assume if there are multiple "correct approaches" to investing in today's economy (and many wrong ones, too!), and that solid learning and proper implementation of one (well-founded) theory of investing is better in the beginning than reading a bunch of contradicting investing opinions and trying to sort out which is right and wrong.

Yes, AxelHeyst, it seems like my "Renaissance Man" skills would have been very helpful for socializing with aristocrats in a 19th-century drawing room, but not so much today! Anyway, I do enjoy browsing this forum to learn what I am relatively weak at, and I hope my perspective can also help others!

[jacob]

Also see viewtopic.php?t=10072 J+G is also in the music industry.

[Jean]

I wish you a warm welcome. It's a really good thing that artist get into ère, because i think it will make more people bé more conscious about why they consume.

[Lemur]

FWIW nothing wrong with going the index fund route. Perhaps may even be preferable. I myself am slowly transitioning back to a bogleheads style because I want to focus my mental energies elsewhere (like I’ve been in the philosophy rabbit hole for a while ). And longevity research…

You’ll learn here that financial capital is one of the many capitals and building a resilient system requires one to generalize in many other forms of capital.

[clark]

Yes, Lemur, I've decided that for the time being, it's probably better for me to simply track my investments to what Vanguard Target Retirement funds are doing. The saying "a little knowledge is a dangerous thing" is so appropriate to the investing world, and I find it's best if I stay very humble about my lack of knowledge for the time being and go with "expert opinion," so to speak. I also agree that financial capital is just one form, and that the ERE approach is not to just revolve your life about "when am I going to FIRE already."

However, I completely agree with Jacob's opinion that if you are going to put so much money into something like investing, you should know what you are doing. I don't want to just say "put it all in VTSAX and forget it."

The question is: what is the best strategy to learn this field? My own perspective from successfully learning various foreign languages is that you remember what you actually use in conversation, and you generally forget what you merely read in a book. So my key strategy was always to find ways to use what I'd learned, no matter how limited, and then gradually build onto that knowledge.

So how would that work in the world of investing? What I am imagining is, for instance, when you learn about TIPS, for example, you then go and actually buy some TIPS at auction, and you're forced to learn everything about them. Or perhaps you dedicate a small portion of your net worth to picking individual stocks (value investing style) and you see over the next 5 years whether or not your concepts about their valuation are accurate or not.

Has anyone learned the world of finance in this manner? I say this because I see a lot of people here trying to learn investing through learning books like Bodie's Investing, and while I greatly admire this approach, I wonder if in my case it will lead to knowledge that I will actually retain.

[jacob]

Has anyone learned the world of finance in this manner? I say this because I see a lot of people here trying to learn investing through learning books like Bodie's Investing, and while I greatly admire this approach, I wonder if in my case it will lead to knowledge that I will actually retain.

The point of reading a [textbook] is not to retain the trivia. You will not be quizzed on drawing the efficient frontier or write down the definition of cross elasticity. Bodie gives you a framework or a map you can use to learn the territory.

The map lets you know what you know and more importantly, it lets you know what you don't know. It'll give you the context to evaluate other strategies which you gets from other books, magazines, and personal practice.

Conversely, if you learn one single strategy, there's a risk that this one strategy becomes your entire lens. A man with only a hammer thinks the entire world is a nail. While this [mono-perspective] can be a great strength due to the confidence it lends, it can also become a weakness. It literally becomes inconceivable that their strategy could stop working and once it does, "hammerheads" have no idea what to do or where to look. The only answer is to hit harder.

In practice, I've seen very few voluntarily manage to finish Bodie or one of the other books in the investment curriculum. This leaves most online investment discussions at the "my strategy can beat your strategy"-level. It frankly seems like a much more time-consuming way to get any insight that way than reading the [damn] book.

Philosophically speaking, academics and most retail investors, especially those with a STEM background who are used to there being a computable answer, take a [hard] modernist approach. They believe strategies can be ranked and that academics are working towards an ever better theory using math and scientific methods. With this mentality, all one has to do is to learn "the best strategy" which has been "proven by Nobel prize winners". They'll argue endlessly about who has the best statistics and investment science. The lazier kind will try to skip the theory in favor of a strategy they can learn in an afternoon or two.

Practioners take a somewhat [softer] postmodernist approach. Here everything is an opinion and as far as debating goes "money talks, bullshit walks". Arguments are settled with trades rather than words. From the modernist perspective that's a very alien approach. If two postmodernists disagree, they won't start an argument. Rather they'll try to ferret out how the other might trade their idea ... and then sneak away to put on the opposite trade. Postmodernists don't spend time disagreeing. They bet. If they're still talking, it's to learn more about what kind of position you'll take, and once they don't feel like they can learn anything more about you, they'll stop talking. They're not interested in being right as much as they are in making money. This also makes them very fluid in terms of changing their mind.

[clark]

Thank you, Jacob, for taking the time to write such a detailed reply. I appreciate you contextualizing the investment curriculum for me. When it's understood more as a framework on which you hang the information you later receive, its value becomes much more apparent.

I am guilty of repeatedly flip-flopping between strategies mainly due to my lack of background knowledge. There's often an ideology behind every investment strategy and I finding myself tilting toward a strategy based on my feeling about that person's overall worldview at the moment. Leaving everything in cash, Permanent Portfolio, Bogleheads, and on through the popular investing strategies. And this process has been going on for many years, so it's probably preferable that I simply just read the books and figure out the map for myself so that I can judge investment strategies for myself, instead of relying on blind faith in the person (and the person's ideology) creating the strategy.

I will definitely re-start my study of the Investment curriculum. Thanks again!