Early Retirement Extreme Forums

@slevin

I agree that the onus of understanding new roles lays with the cog-maker. But disagree that that the creative edges abound with opportunity for personality type bla bla that isn't particularly creative. Most people are like this. Provide an interesting task/goal with bounds, which aligns with personal ethical beliefs, and let me make a solution. This probably summarizes the average participant in "the Great Resignation" very well.

At the level of or meaningful contribution to some goal there is a huge chasm. Extreme specialized expert, and very general "labor". Ex a campaign manager and the volunteer stuffing the envelope. An accomplished generalist does not have the super selective skill set of a campaign manager (and probably doesn't want that), but certainly does not feel fulfilled stuffing envelopes either.

Hi @Jin+Guice, how's it going?

I remember you were in the music industry. Do you know of any online platforms or apps that are particularly suited for online music collaboration?

I am thinking for example, one person records one track, then another one takes a turn and records on top of it, some music gets created. So not necessarily writing music but playing. Might be a fun activity along the MMG's except that there is not much mastermind put to it and it is more for enjoyment.

@guitarplayer: That is achievable with email if everyone has their own recordings setup. There can be some file/ alignment issues, but I'm happy to help facilitate and participate if people are interested.

@guitarplayer, there is one online community that comes to mind: ccmixter.org. As a listener, I have enjoyed some of their creations. Check it out!

Great, thanks! I like the layout of the website, not too fancy. Will look it up.

Brief lyfe update:

I realized that I don't have that much interest in learning how to time stocks, so I'm going to implement a GB portfolio. I'm also working on buying a tiny house, with the hope of reducing recurring monthly expenses to $0 (I may also buy land eventually, which will necessitate taxes, but otherwise)....


I changed my monetary strategy. I calculated recurring monthly expenses and then set a 60% savings rate (this gives me more than enough to pay 1.5x current monthly expenses at 3% SWR by 65) and then figured out what that was weekly. Once I make that much money every week, I can buy whatever I want, which is usually nothing, so I end up saving way more. I stopped budgeting a few years ago, which has been mostly great, but I would get stressed about eating out or arbitrarily buying something I wanted. It's fun to have to earn the money you spend every week, it feels much more immediate. I also make way more than I need. Knowing where the bar is makes me feel like I can do whatever I want and also quit my job if I want to.

What I was looking for is knowing what the actual trade offs between keeping my job and discretionary expenditures are. Right now I can afford to go out for food, buy drinks and buy more stuff than I would ever want to, but if the job gets stressful enough that it' not worth that, I'll leave.

I started pedicabbing. Current alternate income streams are: stagehanding (could transition in to sound engineering in a year or two, I think); syrup factory and pedicabbing. Pedicabbing is the only one that is worth it, so it's the only gig I'm actively doing. I'd like to pick up a remote job as well, preferably PT and analytic.

I also moved into a cheap apartment that I found through a friend. I'm currently looking for a mobile tiny house to buy or possibly looking at buying a completed skoolie.

I changed my monetary strategy. I calculated recurring monthly expenses and then set a 60% savings rate (this gives me more than enough to pay 1.5x current monthly expenses at 3% SWR by 65) and then figured out what that was weekly. Once I make that much money every week, I can buy whatever I want, which is usually nothing, so I end up saving way more.

I think it would be interesting to consider a variety of strategies that might motivate those of us who are free to adjust our work on a weekly or even daily basis, as opposed to the usual 40 hours/week until FIRE. In particular, how the motivations to work more to save more with spending already effectively minimized are different than the motivations to spend less to save more with earning/working level already effectively maximized.

@7w5: Yes I am constantly kicking myself in the struggle of easy vs interesting money. Easy is winning for now.

black_son_of_gray wrote: ↑

Tue Jul 30, 2019 7:28 pm

So beyond maybe 5-10x expenses, which essentially provides a buffer for the relatively predictable inertia of the near-term, I'm not sure having more money is particularly useful (or rather, its utility drops off with predictability, which is to say rapidly after about 10 years). More useful, rather, seems to be getting involved—actually participating—in the systems that are important (e.g. gardening, developing a community, creating something of value that others might find value in as well), rather than repeating some mantra of "financial independence" as being an end goal, an "answer". That way, when things veer off in unpredictable ways, you'll see it in the system immediately—because you're part of it—and will be able to refit your curve and keep on going. But what do I know, anyway? The view from where I'm sitting is pretty foggy.

From: viewtopic.php?p=194073#p194073

classical_Liberal wrote: ↑

Thu Jul 28, 2022 4:06 pm

@J+G
Regarding my point above. What I was really trying to get across is that I think its a bad strategy to separate financial NW from personal system. However you choose to invest financially, it should be in sync with everything else you have going on. To view a financial wealth management strategy separately from the rest of your life means a lack of integration. The financial strategy should serve to help "plug holes" or "grease the wheels" of everything else in totality. Put another way, unless you plan to live off a SWR of purely financial assets in the near future, why is SWR important to you?

From: viewtopic.php?p=260753#p260753

Semi-ERE Investing for the Financially Uninformed

I'm having some friction in my personal finance system. While I'm not planning on retiring, I've still been trying to get to FIRE. The problems I thought I was dealing with are 1) unstable expenses, mostly in housing and 2) no investment strategy, due to a lack of knowledge.

While talking to my MMG, @WesternRedCedar referred me back to the above reply @c_L gave me several months ago. I remember reading it then and not knowing how to take the advice. Rereading that post, I realized that I had a third problem.

I've been approaching investment like I'm still pursuing traditional FIRE, but the truth is I'm not. So my strategy (or lack thereof) doesn't make any sense for my situation. This doesn't solve my above problems, but it does turn them on their head.

I'm almost definitely going to earn my annual survival CoL working the minimum amount of hours that work with my life (around 10/ week). I could just call it and declare myself retired, but I'm not comfortable earning that little money with nothing saved.

While I'd love my savings to also be generating at least my survival CoL for redundancy, I don't have confidence in my investing abilities to do this, even at a very low SWR. So what is my savings actually doing for me? It's a stack of FU money that means I can leave a bad situation at any time.

Enter that BSOG quote above. For an investor who is confident in their strategy, it makes sense to analyze savings in terms of returns. But I don't. What I have is a pile of money that I'm trying to safe guar. And as BSOG points out, there's not a lot of value in having more than 10x expenses saved up in this case, as the risk of losing it is starts to outweigh the benefit of extra $$.

So who cares?

What I've realized is that there's no need for me to save more money. This doesn't mean I'm going to stop saving money, it just means that I don't need to sacrifice to get more money. I've been working a job I don't really like that pays well. What I've realized is I don't need to anymore. If a better opportunity comes along I should just take it, putting very little emphasis on renumeration.

So what?

First of all there is kind of a perverse effect happening. Because I can't motivate myself to spend time learning how to invest, my perceived utility of earning extra money decreases. So if I learned to invest successfully, thus making that money more secure, I would be more motivated to earn more money and stay in a high-paying job I dislike longer. Wtf?

Part of this makes sense, bc the utility of future money increases as I decrease the perceived risk of losing it by increasing investment skill. However, that's not what I'm thinking about. The actual decision I'm making is that as I get closer to my arbitrary goal of hitting 33x expenses, that goal becomes more attractive in my mind, whether or not I'm actually getting a return on that money. Grind for 3 years. No thanks. Grind for 9 months, ya probably.

This is the exact sort of thinking I started writing to warn against. The truth is that security is an illusion and the fact that I'm still planning to work 25 out of the next 30 or so years in some capacity, means that emphasizing trying to hit that 33x number any time soon is an expensive fallacy.

So if you're in a similar situation, where semi-ERE sounds attractive, but you still don't feel good about your investment strategy, I think it makes sense to look at your stash as more of a pile of FU money than a pile of future earnings. And how many years of FU money are actually valuable to you? Maybe I was the only one making this mistake though?


@Crusader mentioned another interesting point in our chat. Semi-ERE drastically reduces the risk of portfolio failure. Employment adds another income stream which is likely uncorrelated (though not perfectly uncorrelated) with paper assets. More importantly imo, it adds an income stream that most of us are much more experienced with exploiting. Bc there is an extra income stream, SWR is now much higher and more risky investments can be made.

Put another way, bc employment is continued, a portfolio can more easily weather market downturns without selling assets while they are depressed. An investor can also buy more assets while they are cheaper. Additionally, as long as some control of income is available and the semi-EREer can get income higher than CoL before their portfolio depletes, risk of failure is eliminated.

If you're in my position as a low knowledge and unconfident investor, leveraging this will be hard, but if you're a more experienced investor...





For the record:

Reasons I'm still saving money:

1) I save money incidentally. The point of the above realization isn't that I can start blowing money, it's that I have more freedom from the need to earn it. Right now I'm paid more than I spend and I don't want to increase spending because I can.

2) I don't feel comfortable saving no money. Probably just a hold over from watching the net worth increase and never decrease. Will have to deal with this at some point.

3) Old age retirement. At some point I might have to stop working bc I am old or not make as much $$? I'm still planning to have at least 33x survival CoL by the time I'm 65.

4) I have access to easy money right now with my current job.

5) Taxes. Savers credit means I'll probably always save at least $2k.

6) Still hoping to learn to invest some day. I want some dry powder if I ever get there.

7) Cash on hand to take advantage of pie-in-the-sky investment opportunities and possible land/ tiny home ownership.

Reasons I'm still working my current job:

1) No obvious better employment opportunities.

2) Earn >2x survival CoL in ~6 hours/ week (this is the minimum shift for my job).

3) Recently got moved to another hospital which is a much better work environment and earning super easy $$ rn.

Great revelations!

I actually worked about 20 hours a week from May to October. But those 20 hours were FUN! I liked going in, learning a new trade (bartender), and had fun with the customers, made new friends. It gave me about 50% savings rate, covered the most of the rest of my year. Eventually it became, well, not exciting, not really disliking either. I quit.

6 hours a week not really disliking? I'm not sure I'd do that, maybe if I was really bored, and could meet some cool people for out of work activities.

@crusaders point is very valid from a FIRE perspective. I've argued it before.

I do think that "going back to work" after FI/FU (or semi-ERE) is different than, going to have some fun and get paid for doing it. Something the ERE 2 folks might not quite realize if they never reached at least FU funds. My chess game went WAY up while bartending thanks to a chess club that met at my bar.

Sorry to say I will be in Mexico during Marti Gras again. Three years in a row I missed it! I have to make it a priority in the future. Your welcome to come down and hang out with me for a bit if you want (see travel thread or text me)

Take care man!

Jin+Guice wrote: ↑

Sat Dec 24, 2022 1:58 pm

While I'd love my savings to also be generating at least my survival CoL for redundancy, I don't have confidence in my investing abilities to do this, even at a very low SWR. So what is my savings actually doing for me? It's a stack of FU money that means I can leave a bad situation at any time.

What you are describing is something that is traditionally called and "emergency fund":
https://www.bogleheads.org/wiki/Emergency_fund

Reading your post, I get the impression that you are simply approaching the traditional financial planning model, which is: work until you can, and when at some point, you cannot, some kind of social security (state pension or otherwise) takes over and that's it. Except that you are creating your own pension stash, and your cost of living is low so you can tolerate working <10 hours a week.

And this is all great if this is what you want to do, but for me, this wouldn't cut it, because it's one thing to have FU money, and a completely different thing if you have money that will allow you not to work ever again, unless you choose to. What's worse, you seem to have a great gig going on with your current job (not in terms of interest, but in terms of money/effort). So, finding that kind of a job will take some time (and time is money). And there is another variable, which is how long you'll need this job for, until retirement. Someone in your position that is 18 years old might do different planning than someone who is 64 years old.

The other concept that I think is worth mentioning is age. Someone who is 18 years old should be able to take on more risk than someone who is 64 years old (and wants to retire at 65). If you are young and have a stable job, that allows you to take on more risk (same if you have low expenses). Alternatively, you can take on more risk by job hopping (while having a good emergency fund).

Just some food for thought.

@Crusader- That's true only if the financial aspect was the only skillset/focus point outside of J+G's skillset in the music biz. The "Renaissance" aspect of ERE (Emergent Renaissance Ecology) is the difference that makes this strategy different than a traditional personal finance approach. If J+G was following a traditional financial approach, he'd be reliant on the job and worrying about finding a job if he were to lose his 10/hrs a week of work because he'd have little to zero other skills and lack the ability to produce or source anything for himself.. The job is the only thing that makes the lifestyle function, so any change in status threatens the whole system. However, the beauty of ERE is that the financial component is only one part of the pie. Other forms of capital are used, such as social and decomposer capital (via dumpster diving etc) in J+G's case, which make the plan far more resilient. If the financial leg is lost, there aren't the same disruptions to the system, as other forms of non-financial capital can be tapped.

classical_Liberal wrote: ↑

Sat Dec 24, 2022 8:51 pm

I actually worked about 20 hours a week from May to October. But those 20 hours were FUN! I liked going in, learning a new trade (bartender), and had fun with the customers, made new friends. It gave me about 50% savings rate, covered the most of the rest of my year. Eventually it became, well, not exciting, not really disliking either. I quit.

6 hours a week not really disliking? I'm not sure I'd do that, maybe if I was really bored, and could meet some cool people for out of work activities.

I'm pretty sure that I want to work most of the years I'm able to, but for like 6-20 hours a week. It helps me organize my week and free time. It helps me have a sense of purpose and accomplishment. It helps me get social time. I get that it isn't true for a lot of people, it's just one way of doing it.

classical_Liberal wrote: ↑

Sat Dec 24, 2022 8:51 pm

I do think that "going back to work" after FI/FU (or semi-ERE) is different than, going to have some fun and get paid for doing it. Something the ERE 2 folks might not quite realize if they never reached at least FU funds. My chess game went WAY up while bartending thanks to a chess club that met at my bar.

This is def the goal for me moving forward.

Crusader wrote: ↑

Sun Dec 25, 2022 12:31 am

Reading your post, I get the impression that you are simply approaching the traditional financial planning model, which is: work until you can, and when at some point, you cannot, some kind of social security (state pension or otherwise) takes over and that's it. Except that you are creating your own pension stash, and your cost of living is low so you can tolerate working <10 hours a week.

Yes, in this way I think FIRE compresses traditional retirement in the other way, work for fewer years, full-time, to retire sooner. My goal with semi-ERE has always been to highlight and explore the vast landscape in between the goal posts of working 40 hours a week for 5 years or 5 hours a week for 40 (this is the example from the ERE book).

theanimal wrote: ↑

Sun Dec 25, 2022 9:58 am

The job is the only thing that makes the lifestyle function, so any change in status threatens the whole system. However, the beauty of ERE is that the financial component is only one part of the pie. Other forms of capital are used, such as social and decomposer capital (via dumpster diving etc) in J+G's case, which make the plan far more resilient. If the financial leg is lost, there aren't the same disruptions to the system, as other forms of non-financial capital can be tapped.

I think this is another advantage of ERE and something that the BSOG post I quoted emphasizes. With semi-ERE you can more quickly focus on exploiting non-financial forms of capital and their flows. With a stack of 5-10 years of FU money (or in reality, probably less) you've got your own air mask on and can weather changes in the financial landscape until you adapt to the new reality.

I'm going to follow your journal a little more closely and read some of the backlog that I missed.

I'm in a similar position with work - since learning about my ADHD I have come to recognize that having some sort of structure in my life is really important, which work can provide. It also gives me time for social interaction, which is harder to come by when the adult world is at work most of the time. I have recently been entertaining the idea that I might be happier in a career that I enjoyed than I would being financially independent and sitting at home all day.

I don't like the term semi-ERE. It implies that you're just half-assing ERE and I have come to prefer Mike Hoag's term FREE (Financially Resilient Economically Empowered). I'm interested in what semi-ERE looks like at a high level. Looking forward to catching up on your journal and dialoguing more with you on this topic.

I'm glad you found this discussion helpful!

I think doing semi-ERE at a high level looks a lot like doing full ERE at a high level. Personally, it allowed me to focus on higher WL stuff without achieving the corresponding WRs in the OG table (but pretty much all of the other stuff from the other tables).

Like I said in the post, I would define semi-ERE as doing anything in between "working 5 hours a week for 40 years" and "working 40 hours a week for 5 years." Semi-FIRE might be a more accurate term, but I was inspired by ERE so I'm calling it semi-ERE. Not to be a total bully, but I'm fine with people using the terms "polyamERE" or "non-monoga-ERE" synonymously with semi-ERE, especially if either one of those makes them feel like they are doing it with their whole ass.

Lol at PolyamERE.

I would agree with you. Only thing is that I think there is a danger of being lost in theory. When I look back at the first year of my ERE practice, it was very much about me obsessing over Wheaton Levels, yields, flows, Web of Goals, etc. I did not do nearly enough building of practical skills that could save money and generate income. Going forward it will be very important to me to bring it back to earth and ask what tangible changes this is bringing into my life.

Interesting journal. I think I see some similarities in our current situations.

I have a 'good' job which could be considered heaven-sent in my environment of perma-workers (to use jacob's analogy), but the problem seems to be that in my head I went beyond thinking that perma-work (as understood by e.g. salary men) could 'fulfill' me or this is a final step, next being a rise and/or project change.

I was considering taking a year off and try to divide the one-big-income stream into several income streams (by learning things other than my day trade [while e.g. simultaneously teaching the day trade?] and also other type of streams, e.g. meeting new people). The worst thing that can happen is that I will have to come back to my current situation with a 15-20% cut in FU money and a mild depression). Is it worth it? I don't know and probably nobody will tell me.

One thing that is keeping me from biting the bullet is that I have problems with consistency (keeping a budget is a second-nature to me so don't rule me out just now okay), and I think that I might be playing games on myself so that I think the problem is in the day-job while in fact it's somewhere else (if I cannot do something for 5 days straight for one hour then how exactly is job THE problem?).

The other thing is that during weekends/free time I seem to have a 'clearer' vision, feel more inspired (I know, I know, motivation-driven action bla bla), I'm more inclined to do chores that often lead to picking up old projects etc... but I still feel that to think that this will last while polyamERED is kind of stupid.

It's fine. EVERYTHING IS FINE.

I started writing about semi-ERE over 4 years ago and, in that time, I've articulated most of what I originally had to say.

I think it's worth restating one of my main inspirations for starting to write about this subject.

While on this forum, I read several journals of people who had high-savings, had high-savings rates, had high-income and hand no debt, yet still felt trapped in their jobs.


I'm rearticulating something that I said to them, as well as to myself.



I'm throwing out a couple of numbers (which I'm pulling from googling shit as I type, all numbers are for the US of A) to make the story more interesting, but this is a story and a feeling, perhaps some heuristics, but definitely not a set of well researched exact parameters to live your life to.




If you have no debt (<25% of American households have no debt), have income above the median income (individual: $31,133; household: $70,784), have expenditures in the bottom 10% (harder to google, I think this is between 1 and 2 JAFIs aka ~$8-$16k... would love to see a table of annual individual consumer expenditures by percentile or decile, if anyone can find one), have >10 years of expenditures saved, managed to have a savings rate of 50%+ (pretty much only FIRE people) AND you can avoid behaving like a complete and utter jackass who completely stops doing most of what got you into the above conditions... you are probably going to be fine. Like with whatever investment/ income/ retirement scheme you pick, you are probably not going to run out of money unless you stop exhibiting the tenacity, thoughtfulness and flexibility that got you where you are*.



*I know a lot of us are preparing for peak oil and climate change. But like, if you are effectively richer than 90-95% of people you are around with a more robust strategy than 99% of them, I think the most likely failure scenarios are theft or a massive natural disaster, neither of which are likely to be mitigated by having an extra year of savings in the bank or by reducing SWR by 0.3%.

Jin+Guice wrote: ↑

Tue Jan 03, 2023 2:47 pm

... would love to see a table of annual individual consumer expenditures by percentile or decile, if anyone can find one),

Fish wrote: ↑

Tue Oct 08, 2019 8:24 am

Thanks @Fish!

I'm really glad to have this table bc it's the most extreme metric. 2016 JAFI is $8,103, which puts you right around the 5th percentile of consumer expenditures*.

To restate, I think a fairly average ERE person has or had income in the top 25% of their peers, has expenditures in the bottom 20-45% of their peers (2-3 JAFI), has 10+ years of savings and has or had a savings rate of 50% or higher.

*But possibly like 3rd percentile, I think moving a few percentage points here actually gives a high emotional impact bc of being so close to the boundary.