The Education of Axel Heyst

Where are you and where are you going?
jacob
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Re: The Education of Axel Heyst

Post by jacob »

AxelHeyst wrote:
Sat Apr 30, 2022 1:55 pm
But maybe there isn't! Maybe the most rational conclusion, if I put in enough effort, is that there *is* no strategy that I can have a reasonable expectation of preserving my wealth. It's just gonna be a crap shoot because this century is going to be totally bonkers. Am I really going to be able to come to that conclusion after dumping thousands of hours into learning about this stuff?
Asset management is not a strategy, it's a process. Since the world is complex, we don't control the outcome 100% (input is not strongly coupled to output like in mechanical engineering), emphasis is on doing things for the correct reasons rather than on what resulted. It's better to be good than lucky. The process does of course need to have positive expectation values. The problem is that we don't exactly know what the distribution of the potential outcomes is. Techno-optimists think it's going to be a repeat of the 20th century. Doomers think it's going to look like the fall and decline of the Roman Empire. As such there also needs to be a consideration for different potential distributions of the outcomes. This is why getting locked-into a strategy is risky and this is why it's all about understanding the process in relation to a given distribution. It should always match. When the distribution changes, you have to change your process. Because investing is a process.

I'd also suggest shifting the perspective from one of "net worth growth" to one of "care taking". Wealth flows to where it's treated best. Just like "gardening strategies" will change under "climate change", so will the strategies for taking care of wealth insofar the investment climate changes over the centuries or decades. As such it's better to think of the process as flying "drone" or at least a "guided missile" than a ballistic cannon shot.

candide
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Re: The Education of Axel Heyst

Post by candide »

I was not familiar with Selco. I tried googling "Selco wealth" and nope; there Selco Credit Union. Next, "Selco prepping." Ah. . .

If the U.S. does have civil war, I think the best hedge is to get the hell out. Your current activities are much better than any research and bet sizing with paper assets, or hoarding I can do with physical goods. It's also better than any kind of Patriot prepping one can do -- score yet another one for the cosmopolitans.

Short of that, this looks like an emergency fund. Six months to two years of JAFI sounds like a the right amount, and it probably should not be counted as part of an FI portfolio. Over five JAFI here seems to be overkill in that eventually if stuff stays bad this long the situation starts bending into catabolic collapse, with some kind of relief coming from giving up some level of complexity.

To defend the FI portfolio over a medium term: the wealthy have to have some way to extract wealth. That is about as first principle as you can get about civilization. I could absolutely see the day that this goes back to a system of noble "titles." Until then, the main mechanism of extraction is equities and debts. And for now, you're allowed to get those. If large portions of the political class start selling out all of their shares, then the jig will probably be up. I don't think the rights of small holders would be respected in that world, etc, etc. . . That is a situation out of our hands.

Until then, though, I would argue there has to be some kind of abstract and fungible token that can used to "be rich." There is a sequence to survive inflation. The spice must flow. The wealthy must stay wealthy.

Now, under this theoretical set up, there might not be a sequence to "get rich." For example, all the good deals could theoretically be in privately held businesses or government scams and the wealthy are just holding on to their equity positions because their cost basis is so low and the capital gains tax would be so high, but that's just at the extreme. I'm still willing to play in the public markets as long as the politicians and billionaires are in them.

tl:dr Maybe prep until you have 5X JAFI in your hoard, if you want, but then invest until we become an officially feudal society (or AI just steals all money from everyone everywhere one day).
Last edited by candide on Mon May 02, 2022 7:20 am, edited 1 time in total.

horsewoman
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Re: The Education of Axel Heyst

Post by horsewoman »

Thank you for mentioning Selco! I've just started to read his book/essay, very interesting. As you can imagine, SHTF-discussions are a thing here on our farm in Germany right now with Russia on the war path. Very valuable to get first hand information.

AxelHeyst
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Re: The Education of Axel Heyst

Post by AxelHeyst »

jacob wrote:
Sun May 01, 2022 8:49 am
Asset management is not a strategy, it's a process. ..... As such it's better to think of the process as flying "drone" or at least a "guided missile" than a ballistic cannon shot.
Thanks, this was really helpful for me to hear. I've at least got the drone out of the box, assembled, charged, and in the air. That's better than it still being in the box on the front porch in a sketchy neighborhood (attempt at drone metaphor for being all cash??). Every book I read, analysis I do, cognitive exercise I run, is part of the process. Right. The unconscious belief that I had to dial everything in for one cannon shot was causing me to shy away from the process. How do you eat an elephant?

And thanks for the further thoughts candide. For what it's worth, my investing goal is 'prevent wealth destruction'. Care taking, as Jacob said. My goal at the moment doesn't even involve being technically FI in terms of living off the stash, since my ideal lifestyle will incidentally generate income in excess of expenses. I suppose this is part of my wealth gardening process/approach. After this period of no income generation ends, my method of combating inflation will be to trim my cash buffer and live off of earned income.

shelob
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Re: The Education of Axel Heyst

Post by shelob »

Hey, I just read a bit through your journal, and I have to say that I disagree with the notion that you've done less (investing-focused) reading/research than I. The opposite is true, it's prohably just been a different focus. And your overall life web has much higher tensegrity than mine ;)


If I ever end up living in a RV/TT/on a boat/... , I'll probably name it Serenity too. I agree about the importance of stories. It's why I want to write novels (despite the currently massive and disheartening difficulty of integrating that want (need?) into my life.)

Congratulations for everything you've achieved!

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Re: The Education of Axel Heyst

Post by avalok »

@AH I empathise deeply with the dissonance regarding investing when future expectations are unfavourable, at the least being one of increased chaos. I do not see the status quo surviving the next century 100% intact, but then I am aware of my own biases to underappreciate the track record resilience of markets and present institutions. It took me a while to realise it is easier to support more extreme* forecasts because, being absolute, they are clearer visions. The future will almost certainly be messier (meaning more complicated) than any human can envision. That said, I have found it is one thing to appreciate your beliefs about the future may prove wrong, and another to then comfortably invest in a system you see serious instabilities in. All this to say you're not alone. :)

Which leads me to also thank @jacob for the above; I took it as reassurance that the pursuit of better understanding is worthwhile (something I do not doubt regarding downshifting skills, but do for financial investing). The drone analogy brings to mind a pilot: checking their position and correcting their flight path regularly to ensure they arrive at the intended destination.

(*) For me, extreme includes techno-optimism

AxelHeyst
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Re: The Education of Axel Heyst

Post by AxelHeyst »

I spent the past two weeks outside of Tagounite, Morocco, at a workaway. I stayed at Said's place. This documentary is about his story. I'm really glad I went. I made mud bricks, learned to cook tagine, and helped to rescue a donkey from a shithole. Here's a post on it.

Image

Image

Image

I'm now in Essaouira, catching up on the internet (no wifi at Said's and I intentionally didn't get a Moroccan SIM) and planning my next move. I think I'm ready to move on from Morocco soon. I've got a better sense of how to find workaways with skill acquisition as the primary goal, and so I'm just taking the time to line up workaways in Europe and the UK over the next several months. I've got to do the Shengen Shuffle, and only have 34 days left in Shengen between now and the end of August, so I'm going to chill here till I've got that sorted.

I've gotten my head turned by sail hitching. The original idea for this trip was that it'd be the last time I flew, so I'd take one or two years to 'see it all' and then go back home and not travel internationally again. I've since read up on, and talked to people who've done, sail hitching.... and I think I might be done with flying already. It just changes my itinerary a bit, because apparently you typically travel in a westerly direction. My original idea of circumnavigating the globe in an Easterly direction doesn't make sense if you're going to be sailing it.

My plan now is to go no further than Central Asia (and maybe not even that) between now and November-ish, and then get a spot as unskilled crew on a sailboat to cross the Atlantic. Depending on, y'know, stuff, I'll either get on to S America from there, or maybe back to the US and then overland home. That puts me back home by early next year, for a total of about a year away.

Later, since I'll be missing Australia, NZ, and all of SEA, and also possibly furtherest south America, I might make a trip out of a Pacific passage, and actually plan the trip from the beginning with sailing as the primary means of travel when overlanding won't do. But that'd be years in the future, I think.

I'm still burning a little over my TTM5k target ($415/mo), but I can see what I'm doing 'wrong' / how to adjust. Just need a few more steps up the learning curve of getting the experience I'm looking for, at the burn rate I'm looking for, and I'll have it.

My 'travel anxiety' I wrote about before is almost gone here. I feel pretty comfortable even wandering around totally and obviously lost.

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Re: The Education of Axel Heyst

Post by jacob »

AxelHeyst wrote:
Wed May 18, 2022 8:26 am
It just changes my itinerary a bit, because apparently you typically travel in a westerly direction. My original idea of circumnavigating the globe in an Easterly direction doesn't make sense if you're going to be sailing it.
There are four combinations (warm tradewinds within 20degs of equator, cold westerlies at around 50degs latt) x (pleasant running, unpleasant beating). Out of those warm + running is the most pleasant and cold + beating (also going west) is the most unpleasant. As volunteer crew, it might actually be easier to get on one of the unpleasant routes, like e.g. someone did an easy sail from SF to Hawaii for their vacation and flew home---they now need someone to embrace the suck and get the boat home to SF.
AxelHeyst wrote:
Wed May 18, 2022 8:26 am
My plan now is to go no further than Central Asia (and maybe not even that) between now and November-ish, and then get a spot as unskilled crew on a sailboat to cross the Atlantic.
IIRC, the most priced skill in cruising crew is engine mechanics and advanced first aid. The least priced is cooking and "entertaining". For cruising crew, there's really not much to the actual sailing part, e.g. "pull that line as fast as possible" or "keep the wheel pointed that way".

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Re: The Education of Axel Heyst

Post by 7Wannabe5 »

I enjoyed your post. I think you should adopt the expression "Easy as getting a donkey out of a shithole" for future use. Is Said concerned about the heat becoming increasingly worse with climate change?

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Re: The Education of Axel Heyst

Post by chenda »

Sounds like a great summer you have planned! :)
7Wannabe5 wrote:
Wed May 18, 2022 9:18 am
"Easy as getting a donkey out of a shithole" for future use.
I wonder if that's easy or hard ? I have little experience with Donkeys nor excrement extraction...

Edit: I've just read the blog post and I'm now up to speed on donkey extraction :)

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Re: The Education of Axel Heyst

Post by AxelHeyst »

@jacob thanks that's good to know.

@7, The main concern is lack of water. Rainfall has decreased, and also they built a dam which really hurt the area. It's an extremely arid location, so a few more degrees temp increase doesn't make the same kind of difference that it does in places that have humidity and can thus have killer wet bulb days. I also think the projects for temp increase is mostly in areas that aren't already hellishly hot - places already super hot are mostly going going to have more days/yr that are hellishly hot. And everyone is already used to it, unlike, say, Seattle.

The irony is the number of workawayers who fly to and from Morocco on 8€ Ryanair flights to help Said make a handful of mud bricks...

Looks like I'm headed for the Pyrenees next near Toulouse. My workaway 'resume' feels like shooting fish in a barrel. They also sail, so I ought to at least get some more information and maybe some contacts.

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Re: The Education of Axel Heyst

Post by AxelHeyst »

The skills-forward failure mode of ERE
A half baked idea I'm working on. Mostly just new framing for the same themes I ramble about here in my journal. It's kind of a mess, I'll be hammering it into shape in the near future.

I read JMG's Wealth of Nature. He talks about the three economies:
  • The Primary economy is non-Human nature. The wealth of nature is the 'services' and products of nature, which includes forest air filtration, fossil fuels (in the ground), biomass, minerals, trees, etc. The input to the Primary economy is basically just sunlight.
  • The Secondary economy is the product of human labor, with the wealth of nature as the input. This includes things like food, cars, buildings, clothes, eyeglasses, fossil fuels (at the gas station), solar panels, etc.
  • The Tertiary economy is the financial world of symbols and social constructs. Fiat currency exists here (I'm pretty sure), as well as debt, mortgages, bonds, etc. You can't eat anything in the Tertiary economy, although we use the tertiary economy to buy things in the secondary economy.
And then this:
Greer, wealth of nations, epilogue, paraphrasing probably wrote: The secret of monastic traditions success was poverty. The amount of effort you don't put in to maintaining some standard of living can be put in to other things.
And then this:
One way to understand ERE (elephant and the blind men) is that it's a three legged stool of FI stash, practical skills, and social capital, with all three being equal redundant backups to each other. In practice, the most common failure mode is that people focus on the FI stash, and skills and social capital are backups that get the attentional leftovers. You could call this 'financial-forward' ERE. It's also 'tertiary-economy-forward' ERE.

So, one way to frame what I've been driving at with axelERE is that it is Skill-forward ERE, with the FI/financial stash as backup that gets the attentional leftovers. This is a description of a failure-mode of ERE, not some ideal recommendation or new idea. It's just thinking through an emphasis on a different leg of the stool. I think a number of folks around here are skill-forward ERErs, and also maybe a good number of early days folks were as well.

One thing about skillforward ERE is that it really drops emphasis on RE. In fact, it rather explicitly embraces a lifestyle of fruitful labor, with no end in sight. I think it's easy to get into the headspace that if you are FI/RE, you are magically isolated from having to engage in the Secondary economy because you've purchased access to it with your Tertiary wealth. skillforwardERE keeps at least one foot firmly planted in the Secondary economy.

The main thing about skillforwardERE, though, is that it vehemently rejects bullshit jobs, or useless toil (William Morriss). Ongoing bullshit work has no place in it, after the initial FU stash has been built up. To outline the hypersophisticated strategy:

.Get an FU stash by whatever means necessary. 5-10 years CoL bare minimum.
.Stop doing anything that is bullshit, and devote all attention to skills and social capital in the Secondary economy, skills that ideally don't dead end inside industrial consumer society. That is, things that are useful. Gardening, making stuff (that ought to exist), fixing stuff, etc.
.Earn >=1 CoL, incidentally if possible, with as little distraction from skill development as possible if not.

It's easy to write it out, but doing it at the level that I'm thinking about is the rare thing. This is where Greer's point about monasticism resonated with me. When you cut out the stuff you don't need, to a level that most people think is radical, you have an enormous amount of personal resources available to do anything else with.

Most of us develop skills in between jobs, family, non-skill focused hobbies, and doomscrolling. We observe our skill acquisition progress, see it going basically nowhere, and double down on the FI stash because that's realistically the only thing that's going to win us our freedom.

But this is like saving 10% of your income and concluding that retirement is for lucky crypto bros, isn't it? What if we flipped it and put in 4, 6, 12 hours of enjoyable effort into activities that actually build practical skills? And what if we approached with with the thought that it's the only thing that's going to save us?

FIRE is about achieving the freedom from having to w*rk.

The way I'm thinking about it, skillforwardERE is about achieving the freedom from having to participate directly in industrial consumer society. (Yes, complete freedom from industrial consumer society is basically impossible. I'm talking about achieving as much independence from it as possible. I appreciate the nuances here, but let's not get too distracted by that for the moment.)

---

This notion of being a super competent badass isn't the point in and of itself, it's a side effect of the strategy of axelERE. The practice... And the principles, are to try to decouple self from ICS (industrial consumer society) a much as possible.

If decoupling is the aim, massive upskilling is required. This gives a more credible Why to skillwork than #renaissanceskillzbro. This is a common trope on theforums - you can find it in my own journal - a sort of vague, unguided hand wavey intention to work on skills of some sort, but it's unfocused.

But make the aim 'decouple my life as much as possible from ICS', which breaks down to 'how to secure the flows necessary to my life without involving ICS', and this gives a more clear direction to it. And 'get hyperskilled' is an emergent attribute.

--

TradERE (the FIRE failure mode of ERE) is strategic collapse prep in middle class FIRE drag. It makes sense even to people who don't think everything is going to (or ought to) collapse.

axelERE chucks the drag. It only makes sense to people who think everything is going to, or ought to, collapse, but are unsure as to the specific timing.

TradERE as it is commonly practiced assumes things are going to mostly hold together, but has #skillz as a backup in case the tertiary economy evaporates.

axelERE assumes the tertiary economy is going to evaporate, but maintains a financial wealth portfolio a) in case the economy doesn't evaporate and b) in order to fund the primary focus of postindustrial skill building and system construction (including social support networks). *The primary purpose of the axelERE portfolio is to fund the runway out of industrial civilization; to fund the lifeboat flotilla construction efforts; to fuel the journey all the way to the end of the offramp. To achieve escape velocity, with the knowledge that it might not be possible or likely to achieve escape velocity in one generation.

The portfolio serves to keep the process afloat, the momentum going, through the learning curve and through the inevitable failures. The back to the land and degrowthers and permaculturalist movements are full of stories of people who set off with big dreams bit very thin margins, made inevitable mistakes, and didn't have enough buffer to survive (on their terms; they burnt out and had to go back to industrial consumer society in some way).

sky
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Re: The Education of Axel Heyst

Post by sky »

It seems like land ownership becomes key in accessing the products of the primary and secondary economy. Then one gets caught in land use regulation and potentially mortgage financing.

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Re: The Education of Axel Heyst

Post by theanimal »

I love the donkey story.

I had something similar happen to me on a much smaller scale in the Arctic. One morning I went out to the outhouse and took a glance down the hole. At the bottom was a baby snowshoe hare hopping around, probably no more than a month old and the size of a tennis ball. I figured it was a goner as I didn't really have any long tools that I could scoop it out with. An hour later or so, I had the realization that I could fish it out. I fashioned some rope to the end of a plastic grocery bag and tossed an apple slice inside the bag. This was when I was working with some grad students capturing snowshoe hares for research purposes so I knew their tastes well. I lowered the bag into the hole and waited for a couple minutes, perched at the edge of the toilet seat above. After some further attempts to jump up the walls, it wandered close enough to the bag to get a whiff of the apple and immediately hopped in to investigate. I yanked the bag up, let the lil baby hare out and he started hopping and feeding as if nothing had happened.

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Re: The Education of Axel Heyst

Post by AxelHeyst »

@sky Not getting tripped up in land use regulation and mortgage financing issues, and possibly avoiding traditional land ownership altogether, are skills that I assume need to be highly developed for this failure mode of ERE to work. I don't intend to imply that skillsforwardERE means, or inevitably leads to, homesteading or back to the landing. I assume there are many different actual paths of how to apply skillsforwardERE, including but not limited to paths that involve land ownership.

Edit: also, I'm shorthanding it skills forward. Maybe more appropriately I'd shorthand it 'skills plus social capital forward', but to be concise I'm including social capital and social skills under the umbrella term of practical skills.

jacob
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Re: The Education of Axel Heyst

Post by jacob »

FWIW, see https://en.wikipedia.org/wiki/Three-sector_model

When politicians talk about the service economy or bringing manufacturing back, this is what they mean.

The next step (4th stage) would be the virtual internet-economy. This is where Randers (2012) thinks the first world is going to end up. We'll be sitting in our tiny apartments playing virtual games and eating basic sustenance while thinking we're doing well because our NW keeps going up even if we can't afford to move out. Basically, the first three economies have been solved at a minimum level but will go no further for lack of a more concentrated energy source. Also see, viewtopic.php?t=12305

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Re: The Education of Axel Heyst

Post by AxelHeyst »

I feel like the most appropriate thing to respond to my mess of a post with is that I'm just rephrasing ERE in needless complication and maybe just still unintentionally trying to justify a lack of effort in managing financial wealth/investing. I still insist that what I'm trying to solve for in good faith is underemphasis on skill work, and a curiosity in how far a dedication to becoming a hypercompetent badass can actually get you. Eg sky's point about land regulation is a good one, and I'm just assuming that at a certain level of appropriate competence it's a solveable issue...

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Re: The Education of Axel Heyst

Post by 7Wannabe5 »

Another thing to consider is that work on the borderline of the primary and secondary economy is generally very dependent on physiology. That’s why, for instance, gender discrepancy is usually more pronounced at that level. Also, age and general health become factors. In “The Permaculture Handbook”, Peter Bane writes about how ideally you need 3 adults to get even a moderately sized suburban permaculture project started: 1 to bring in the money from outside employment, and two to work together on the project. IOW, a very large investment of human capital towards what is likely to be modest return in terms of conventional yields.

My father had the ultimate salaryman sort of career, and I remember him feeling bad about the change of social security age from 62 to 67, saying “I can take an afternoon nap at my desk, but some poor guy working construction at my age is going to suffer.”

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Re: The Education of Axel Heyst

Post by Western Red Cedar »

@Sky and AH - I haven't read the JMG book referenced above, but it seems like what you are describing above with the primary economy is the concept of ecosystem services. There is an emerging field of economics attempting to place value on the services that environmental systems provide humanity. This moves beyond the "recreational economy" and looks at things like the role wetlands play in water filtration (this becomes particularly apparent when you have major flooding in areas like the Houston suburbs).
AxelHeyst wrote:
Wed May 18, 2022 5:25 pm
I'm just rephrasing ERE in needless complication and maybe just still unintentionally trying to justify a lack of effort in managing financial wealth/investing. I still insist that what I'm trying to solve for in good faith is underemphasis on skill work, and a curiosity in how far a dedication to becoming a hypercompetent badass can actually get you.
One of the most intriguing facets of AxelERE from my perspective is that you are pursuing skill development as a nomad. I think reliance on the financial leg of the ERE stool is common because it feels like the path of least resistance based on where an individual is at when they discover FIRE or ERE. Particularly if they start with FIRE and slowly move up the WL scale. Most of us already have jobs, and we catch a glimmer of light in the cave.

Most people I know and who I follow online that gravitate towards skills rather than finances in their path to freedom are in a fixed location. They have their own tools, and are working on their own projects. Working on their own vision.

The model of jumping from project to project in different locations seems relatively novel. I think you've described some of the challenges with that on a couple of the projects in terms of work styles and personalities. It seems to fit well with your web of goals though, and is a particularly resilient strategy when one is attempting to learn the trades from a novice/amateur/intermediate level.

sky
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Re: The Education of Axel Heyst

Post by sky »

There is another aspect to FI beyond cash, skills and social capital: it is choosing the right strategy or method. Financial strategy, housing strategy, transportation strategy, location strategy, etc. As a bundle, "lifestyle strategies".

Someone who reads the ERE book and chooses the right lifestyle strategies can accomplish FI without any great level of skill or social capital. But the skills and social connections add resilience and may add meaning to life.

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