Early Retirement Extreme Forums

Found in White Belts Journal:

http://www.cook-greuter.com/Cook-Greute ... 5B1%5D.pdf

What an interesting read...smiled a few times reading this. I feel like I'm reading my autobiography or something. My mind has been at this Individualist – Pluralist Stage cold-war for a while now.

Interestingly, one teacher I had in College was instrumental in my own ego development. It is likely he has passed away by now (he was 85 years old with Cancer) and through a google search, interestingly, I can not find much information about him. But he introduced our class to the concept of metacognition.

https://cft.vanderbilt.edu/guides-sub-p ... cognition/

Thinking about your thinking...and from that point on I started questioning everything. It was probably those lessons that opened my mind to possibilities of things like ERE or not following the 'conventional' wisdoms but still keeping my rationality intact to not fall down things that don't make sense (deferring to the Experts...but maybe that is the 4th stage talking).

The move from being unconsciously embedded in a cultural surround to having a perspective on it can be both liberating and confusing.

Your telling me...

Stage 4/5 persons become interested in watching themselves trying to make sense of themselves.

I literally sometimes cast myself as a ghost...viewing myself from a 3rd person perspective...and ask why I just did that thing or why I let this or that get to me mentally in a positive/negative way. Or how some things that might be a huge stressor to me would be no problem to another individual or vice/versa. Too many variables; not enough data.

Monthly Update Time

October 1, 2021

Net-worth:
$479k (Down $38k)

A point on the financials - I'm including a calculated tax liability now that I was not previously. I took my long-term capital gains multiplied by 15% and my short-term capital gains and multiplied by our marginal tax rate of 22%. This was worth about $8.7k. The other $30k drop in net worth was due to 2 things: 1.) General market going down (like my international ETFs due to the China Evergrande situation) along with some of my individual stocks and 2.) I made a big blunder on my options trading and lost $13k on short options between Moderna and Walmart.

That hurt and has me reconsidering my trading strategy. I always knew one big swing downward would really mess me up but did not think a drop of 20% on one underlying was gonna happen in such a short time frame (5 days). Moderna short puts were free money until they were not. In hindsight - this was always a risky bet. Moderna YTD is up 226.50%. I should've figured this was a bull trap but I got greedy and like what always happens when I start getting too confident in my trading, I slowly ratchet up the aggressiveness ... and then I get burned.

My exit strategy is usually to roll out the option and maintain the delta - but this downswing was so quick and dirty that my usual exit strategy did not work. I was margin called and I could not roll out because I did not meet the collateral requirements. So I had to sell some of my long-term positions to free up cash. And at that point I accepted my loss, realizing how ridiculous the situation was, and decided not to roll out, accept my loss, and move on. In fact, if not for this quick thinking, I would've been down even more.

I've a few other short puts still open that I'm carefully watching and hoping will close out soon. I think the debt ceiling is a real risk for October.

But like all things in life. I will recover. I just about wiped out all my options trading gains this year on this one bad day. Maybe YTD I'm up $1-$2k or so? Will have to wait until my charts update....

Physical Health / Diet: Basically the same. I've maintained my weight loss for a long-time now. At 175lbs. I've recently started cutting calories again to make the next push to 170lbs.

Mental Health: Neutral. Despite the bad trade, my mood wasn't bothered too much. I've been here before. Usually I learn something, change my methodology, and get right back to slowly accumulating profitable trades. I think I really need to have a set risk/reward ratio. And a better exit strategy. There is a way to calculate this...Anyway what happens to some inexperienced traders is they start "revenge trading." to recover their losses. I'm experienced enough to avoid this.

Job: Okay as it is ever going to be.

Gardening: Only things left growing is watermelon. They won't be big. The leaves developed some odd fungus issue and I never bothered to take care of it.

Reading / Other: I've been reading a final book in a fiction series. https://en.wikipedia.org/wiki/The_Labyrinth_of_Spirits

Goals: Regarding the no-buy year:

Go figure my bike and my chair break during this. My chair I managed to fix though with some strange engineering.

Household spending came in at $2,355 for this month. This has been our lowest spending in quite a while I take it. Annualized that is $28,267.80. Dividing by our investments of $479k, we're at a 5.9% SWR. We've more accumulation to do. My Spouse is holding on to a lot of cash thankfully but is waiting until next year to invest to max out the retirement accounts for the tax benefits.

A few surprises:

1.) Gas was $83.13. Not bad considering all the driving I did this month but was higher then I thought it would be. I am commuting to work once a week now.

2.) Groceries came in at $618.72. This was much higher then I expected.

3.) Any other frivolous purchases came from my Spouse's recommendations that I don't feel are worth debating about. But the great part is - no fast foods this month at least on my end. If my Spouse wanted anything, it was up to her with my offer to drive at least. Her fast food spending reduced as a result but that came with an increase in groceries I think lol. At least the latter is cheaper. I also did not purchase energy drink unless they were on sale at the grocery store...which is sort of a gray area on the no-buy year. But I think the point of the exercise is different...and I'm trying to formulate what that exactly is and what I'm trying to gain from this. Because its not all monetary the more I formulate these thoughts.

My comfy chair is lashed together with a trucker's hitch.

@Sky

I found a way to stabilize my chair by drilling then screwing a 1" thick piece of plywood from a pallet sitting in my backyard on the side that was leaning over. That solved it. The chair broke when a plastic piece broke off somewhere.

Regarding my recent update

1.) I'm adjusting my options trading to put credit spreads (and thus defining risks) on the riskier plays like Moderna. And overall minimizing position sizes on one underlying. I'm going to stop trying to aggressively grow my portfolio with short options but instead see if I can use it as a supplement to generate some small cash flow and use it to add to my long positions. Going into 2022, my goal is to not take short-term capital gains taxes from shares - only from options premiums with the tax liability set aside as a cash allocation. Occasionally this will happen though when I sell a covered call on an overweight position which is fine.

2.) To follow that point, I'm back into some long stock positions and I'm screening for value plays now...I think growth is getting riskier and more volatile for my tastes these days. I'm looking at LYB at the moment. It came up on a screener with the following criteria:

Dividend Yield >0%
PE under 10
Market Cap > $10B
EPS Growth Next 5 years: Over 15%
Current Ratio Over 2

3.) Tracking my spending down to a penny in September made me realize we're pretty good already at not being your average American consumer but we gotta try to get to a more ERE level type spending on food. I can't only blame my carnivore of a Spouse lol - I haven't been good myself either (I am more of a carb/sugar zombie) so I've been digging into some resources again. Here are some older ones:

viewtopic.php?t=3403
https://wiki.earlyretirementextreme.com/wiki/Food
http://www.drmcdougall.com/pdf/Advanced ... t_3-13.pdf

Watching the video from Jeff Novick in the first link was really helpful. The visual helps. I'm already a bean/lentil/rice enthusiast and have long mastered this art but even I get tired of this combo occasionally and the reverting to junk foods commences. I personally ate no fast foods in September but I still drank a lot of diet sodas...so far this month that has continued but I started buying the store brand $59 2L vs the $1.99 regular branded ones. It is a start at least. I cut out the sparkling waters and don't actually miss those. Maybe I can get that same way with sodas too.

Instead of a focus on what I am losing, I can instead look at what I have to gain. What I don't do is purchase whole wheat grains, tomato cans/sauces, frozen veggies, and the like. I need to expand my horizons here and I think just knowing more recipes and varieties of things to eat in a ERE spending type way can really help us achieve our goal. Being able to quickly prepare food might be a motivator as well - hate to admit but sometimes I just get lazy to even cut vegetables.

So again, for October, tracking everything down to the penny. I want to make a dent in the food budget this month. Maybe target $400 or less. We're at $168.11 already for October.

https://books.leannebrown.com/good-and-cheap.pdf We have made a few recipes from this. We have a low level goal to get through all of them before next summer.

@MountainFrugal

This is excellent. Thanks for sharing.

Investments: Recovered a little bit with profits on AMD naked puts and now I'm in the green on naked puts for PLUG & CRSR. Once these are closed out (hopefully soon), I'm out of the naked put game for a long while. I need to recalibrate and I'm continuing to revisit less risky options strategies. For example, I repurchased AMD at $100 a share and I wrote $111 covered calls on AMD before earnings; aiming to close out early. If CC closes early I profit, if not and AMD runs up, I profit again anyway...stuff like that. Can always roll if necessary or let shares called away and sell puts.

Food: Doing very well. Its almost Saturday and we normally do our once a week grocery shopping but we're still filled with staples...almost not required to shop again. My son still likes to drink milk but we can reduce the quantity that we purchase because I'm going to eliminate or significantly reduce my own milk consumption. Quick research shows that adults need calcium in the 1000-1200mg range daily and I think I can get this through other things I regularly consume such as oats, leafy greens, sardines, and cheese.

Job: I can't believe it but this hellish project might be coming to an end for me. My contract is up by end of the month and I may or may not get extended. Crossing fingers and hope that I'm not extended and tossed on the bench. Normally this would be a "bad" thing as consulting utilization is important for all sorts of metrics (https://www.thebalancecareers.com/staff ... ms-1286921) but for me, I want to take the time to choose the right project, mentally recover, maybe use some of my built up PTO... Now having led a project (with minimal resources and no oversight basically), I've a much better idea of what to look out for and also how to manage a project from the get go if I end up in another lead roll. So as hellish as this project has been, I've takeaways.

In a strange way, I think this stressful project influenced me to get really aggressive in my speculative investing this year...a quiet desperation of trying to growth my way out of the problem. In hindsight - just reducing my food budget by $100 a month is the equivalent of $30k at 4%. Hard to get that return even with a portfolio like mine without taking significant risk. I would've been better off focusing on these strategies...and instead of mental energies on speculative investing...I could've put mental energy into better managing my project. Or getting another job but I decided to stick it out because of the challenge, despite the stressfulness, I was building skills.

I think this sounds like "well duh" in hindsight but I can only think clearly now that the contract is almost up and I'm actually in a comfortable spot with it. When bad things happen (job is stressful, market is down, other things), our character really gets tested...that is where the learning happens as they say.

Some key points, from my experience, on leading a project...

1.) Know what your customers problems are and what they're looking to have solved. That is your focus and nothing else should matter. Don't mistake the forest for the tress. Which reminds me - let your people handle the trees and you focus on the forest.
2.) Have a short-term plan (what do I need to solve now), a medium-term plan, and a long-term plan. You've to stomp on the Goombas to get to Bowser.
3.) If something you believe is going to take 2 weeks to solve, tell your client/customer you'll need 3 weeks. Always build in slack. Murphy's law applies.
4.) When mistakes happen, don't dance around. Just be candid, own it (even if it not your fault sometimes...life is not fair anyway), and explain how you will fix it and prevent it from happening again. You'll build respect this way.
5.) There are some thing that will simply be out of your control - accept this.
6.) Leverage other people and try not to always go it alone. Learn to delegate and place trust in your people...even if they're incompetent sometimes. They aren't going to learn anyway if you don't place this responsibility on them.
7.) Don't stress out over known unknowns. Just keep reading and you'll find the answers you're looking for...or reframe the problem.
8.) If your customer is not angry with you, or your client is not angry with you, you'll probably doing way better then you think. Avoid imposter syndrome. In fact, sometimes this negative feedback can be appreciated because it will push you in the direction you need to go. Silence can be worse sometimes. If you're not getting feedback, it may be best to just ask for it.

Goals: Continue with successful diet. Don't lose every tennis match this month lol. Don't blow up my account on margin and write out a good strategy. Continue to teach Son how to swim and ride a bike. For swimming, he has gone from scared to not having his feet touch the bottom to being in the swim lane with floaties...Bike riding is interesting and hard to teach ever since we crashed a few months ago.

I'm happy to say that lately I've a lot of life goals that are not centered around work and that has done wonders for my mood. Instead I have focused on my tennis game, physical health, and teaching my Son stuff rather than ruminating about my job.

^^ From my August goals

1.) Oops lol. That was recent.

2.) He did it today! That was a great moment. He can balance and ride his bike consistently. Spent the past weeks with my son basically bailing off the bike after pedaling for a few seconds or so. Took a while to build that confidence.

Wish I watched this sooner: https://youtu.be/imPQ3lysWnU

because initially I went the training wheels route that came with the bike I bought him last year but he had to unlearn that because those training wheels teach the wrong coordination / motor patterns or what have you. Should've done the hold from behind / under armpits method from the beginning. But you live and learn.

This is one of my top 5 YT videos of all time. I re-watch it once a year or so for inspiration. Just re-watched based on your post.

Relevant for your son's new achievement:
https://www.youtube.com/watch?v=9PzoxTgfRO0

"Thumbs up everybody, for Rock and Roll!"

@MountainFrugal

Nice. It brings me a lot of joy to see my son overcome an obstacle or learn something new. Kids in his age range tend to be very fearful of new challenges ... (I mean some of it is logical - falling off a bike sucks or potentially drowning). Their brains are ripe to teach emotional resilience and we have some control here (minus genetics) where we can install confidence & self-esteem depending upon how we teach them. It did not help that 2 months ago my son and I had a bad crash on a hill so it took a lot of patience to get him back up.

But what I try to do is teach him to fail gracefully...let me explain. Because I've recognized lately that I suffer from a great deal of perfectionism which has permeated throughout every area of my life.

I believe this issue is a great source of my own distress. I didn't realize that "perfectionism" was really the center of my own emotional problems until I started reading the recent links on ego development. Now it all makes sense - I procrastinate tasks to rationalize the fear of failure (my ego - I did not really fail if it wasn't my best effort or I did not do the things to begin with). Also a source of a lot of anxieties. Even when I'm doing well and my managers and client say I'm doing well...my journal entries include things like "don't get fired this month." I was a straight 'A' student in school namely due to the way my Father taught me - which was basically succeed and get all 'A's' or you're a failure and didn't try hard enough. I can succeed at something at work and I say to myself "oh well anyone could've done that or I should've had that done sooner or this way would've been more efficient." Accounting can be filled with people like me - it is binary a lot of the times. The numbers either tie up or they don't. Or a policy / regulation is either internally controlled or it is not.

Where I was going with this is that parents tend to subconsciously teach their kids the way there parents taught them - I'm on the lookout for these as I raise my own son. My Father was not always bad. A fallible human who was not perfect by any means. He was great at teaching us to not quit at things but teaching his kids how to handle failure was not his forte though lol. You either completed a task perfectly or you were a failure...and if you quit he made no effort to bring you back up - just called ya a quitter and left it at that. Like that was suppose to motivate you to rise up or something? lol. My dad is 100% a machist.

We need to give ourselves credit for effort and that is what is becoming my philosophy on teaching my son things. Like, yes it is great to have goals but the goals need to be flexible. And it is okay to fail - failure is a part of life. Just do your best, inch by inch, and you'll eventually succeed. Or not - which is okay too you know? A lot of unhappiness is due to unmet expectations. So set them accordingly.

A quote to live by:

Nelson Mandela once said, “I never lose. I either win or I learn.” I consider these among a select group of words I live by. Losing is not final; it represents the opportunity to try again with more knowledge than you had last time.

And another great talk on perfectionism btw:
https://youtu.be/NpVfwjFX3Tg

Hi Lemur,

I can relate to dealing with perfectionism - I only realised that it was behind quite a lot of my issues in the last couple of years. And can look back and see how I was inadvertently taught that. It made me really happy to read about you consciously trying to teach your son something else.

What you said about effort made me think of growth vs fixed mindset. In case you haven't come across it I think you might find it interesting.

Thanks for the video - started watching and enjoying it so far. And thanks for sharing your journal.

@Asush - I read about the fixed vs growth mindsets a few years ago. If I recall, those readings helped me overcome some corporate social anxieties as I came to accepted exposure & pain as part of the process of growing. I became better at conference calls, meetings, and presentations. In my current role, I lead a group of 20-40 individuals or so on a weekly basis. I'm sure without the growth mindset, I would've never thought myself capable of doing this. 3 years ago I would've told you I never would've been able to perform in that environment.

Speaking of which...a matter of job politics today. The long-awaited grand finale is almost here. My contract is up October 25. I am set to either extend for a few more weeks or be pushed to a new project. This is a day I've been dreaming about since day one. My performance review was updated. I got an 'Average.' . In an inflated performance review world where employers are really afraid to get rid of people and are generally understaffed, this is not a good thing actually but it is what it is. Nothing I've not felt before.

From a mere observer standpoint, I find this quite funny as this year was the hardest I've ever worked for the firm and this work was the most "impactful" I've ever done in service to the government. So objectively...I should've got the 'average' last year and the better performance review this year for developing a product (that works btw! ) with limited resources but the performance reviews themselves are so subjective.

The reason being was simple...I declined additional work a few months ago because I felt this project was enough in service to my 'work-life balance.' It was a precarious situation - I recall telling myself that I needed to learn how to say no and not try to please everyone. Today, I do not regret this decision as my expectation was met - I knew this would come back to bite me in one form or another. My coach says you've to learn how to strategically decline additional work - maybe I wasn't strategic enough lol. Perhaps too blunt or I pissed off the wrong person. Who knows. Regardless...it felt good to stand up for what I really felt and wanted. The Great Resignation they say .... everyone is so understaffed so managers are pushing the people below them to their limits. And they wonder why they can't find enough people to work? This race to the bottom is something else.

A perfectionist would've let this depress them but since I've come to accept reality better, I'm okay with this. I was not a 5/5 star performer compared to my peers if we're going by the firms objective measures. This environment runs people into the ground...I am a personal witness to my colleagues putting in 50-70 hour weeks. If they want the gold star in return for no life outside of work - that is on them. I hope they think it is worth it because I sure don't.

Ironically, I am stepping up a little bit this month and the next though by putting in 45-50 hours though . I volunteered to help with some business writing so I can just keep some good graces up. When I feel the good graces meter is getting a little low, I do things like this to perk it back up for a while. Technically this is a clueless thing to do but politics are at play here. I still want to keep my job.

I just find it so hypocritical that large firms like mine will say they cherish work-life balance but then when you go to defend your WLB you get a lower performance review at best or retaliation at worse.

It is what it is. With that being said, the firm / system is doing exactly as it is designed. It is pushing those type A, perfectionists, go-getters to the top as it should. I've no qualms about that. From a owner perspective...this is exactly what you want because people are always expendable as long as you can find someone else or keep filtering for people willing to slave it up. I just don't like the WLB hypocrisy I guess.

This year has made it official - I've nearly completed my transformation from the clueless to the loser. The latter feels much better TBH. I don't think I could ever be 100% a loser because I still take too much pride in my actual work (I like to do a good job the best I reasonably can ... regardless if there is a reward... with the definition of reasonably being very flexible if that makes sense). My next project will be new and exciting though so I am looking forward to doing something different (I've done the same type of work for almost 3 years now) but can't wait to see what the NPCs have in store for me....

Strange day. Was my last day on the project but felt like a normal day. I ran all my meetings and everything.

Even stranger - I'm not even sure if I've been extended or not or put on a different project. Complete radio silence from my managers. So weird.

You would think being in an environment where the employer is dying for human resources that they would keep everyone billing / utilized as much as they could - especially a consulting firm! But I've always been a weird case.

Let us see how this one plays out.

In other words...might be time to update the resume and do unemployment insurance FIRE math or something. Just in case. I could also be catastrophizing again. I'm sure there are some behind the scenes things going on. This is the drawback of not being involved in the workplace politics and behind the scenes work - you've no influence in this arena. And no one owes you anything either.

I guess you should have worked those 12 hour days.

Getting fired is the freedom to fail forward for a 20% raise somewhere else.

@Sky - Consulting is a special kind of hell.
@MI - This is true. Especially in this labor market. I could probably make an exit to industry and make more tbh. I’m just not motivated to jump for salary … trying to find a job where I can make what I do now but have most of it automated. Hence why I stick to data work…I’ll find this unicorn and coast eventually.

I can say one good thing about consulting - I have been stressed and anxious but never bored.

1.) Invested $30k on General Mills.

2.) Silence is deafening so I sounded some alarms this morning. The good news is I discovered that my employer is negotiating with the client on a temporary extension to perform transition work and potentially train my replacement. I am to bill on a day to day basis until told otherwise. My client likes me though so they want me to stay much longer but my employer wants me on a different project.

So this is a good thing as far as continued employment is concerned. I really don't want to leave my employer yet. I have tons of PTO saved up and November-December is looking pretty relaxing ...

But what does Lemur want? Meh...Lemur always has a hard time with this because he doesn't really like this work (and consulting in general) and managers pretty much dictate what he does 8 hours a day (but most of the time not more then that because I'm not exactly a 'team player' either). I am involved in some extracurricular business writing at the moment but that was a choice. No regrets there. I was happy to help out this particular manager as I was treated well on previous work with him.

But as evident, Lemur is so used to working and worrying about his work that when he doesn't have work (or the thought of not even having work?) he starts catastrophizing. Every time. Even bizarre that I'm aware of the problem but have had no good answer to it. Lemur is good at what he does and as long as he has a marketable skill, he should have more confidence that the checks will keep coming in. In a final analysis, I should probably take some time to psychoanalysis why I am like this.

I do need to be a little bit more proactive when it comes to my main source of income though. Like I'm financially independent to an extent...but I want no interruptions. I am almost there*

I don't post memes much but it is too relevant.

Good news. We signed a new 1 year contract extension.

Still waiting to see if I am able to work on a different project though...I hope so. I really wanna get out of this environment. I want to say at this point if they keep me on this client/customer, I'm just gonna bounce but it is a bit easier said then done. The grass is not always greener I think. And I'm a dog with no bite as I've complained about leaving this job all of 2021 at this point lol.

Anyways...end of week I'll do another monthly update post. The no-year spending is somewhat tracking but food costs were really high this month. Lots of stress eating I think. Especially sugary foods. I think the feeling of colder weather is making me eat more too as per usual; I seem to have a trend of overeating/weight gain approaching and into winter and then drop it off in Spring/Summer. Surprisingly - despite all the bad foods I've been consuming this month my weight actually hasn't changed and I'm still maintaining a healthy BMI. Periods of bingeing followed by periods of not being able to eat due to stress. I have been just far too neurotic lately and perhaps even dealing with some functional form of depression. This reminds me...I need to get back to exercising. That was probably keeping my problems at bay but I've been so wrapped up in my job, I have not been doing my runs, calisthenics, etc.. occasional Tennis though.

Regarding the topic of no-year spending. It makes no sense to think of those terms; this should just be a habit anyway. Just like healthy eating is. We've never been ones to mindlessly consume (except bad foods) or when we don't have a creative solution to a problem. Occasional spending on 'experiences.' Also gas costs are getting higher. I know the ERE solution here is to ride a bike or walk to work. I mostly work remote except i do have a almost 140 mile round-trip commute once a week (yikes...)

I found the topic on the lower heating bill interesting but our rent/utilities are a fixed rate with my Sister but so cost wise it wouldn't matter. But we actually keep the temperature off unless it dips below 60F.

I usually wear a jacket inside.

Lastly...financials should see an uptick. We have had some market recovery, I've had a few good options plays since the Moderna blowout, and my Spouse has unloaded another bucket load of cash into the brokerages. What would I do without her?

One last random piece because I look forward to these to keep my sanity up. I don't think I've ever mentioned once in my journal ...maybe I did once. Did you know that Lemur is a huge fan of MMA? Looking forward to this card! https://en.wikipedia.org/wiki/UFC_267

There is a dissonance between your being comfortable with the inherent long volatility of consulting and the insistence of being short volatility in the market. One is robust, the other is not.

Consider that you could lower your heating bill by building a house on top of a volcano but ask whether it would be wise to do so.

UFC 268 is just as stacked next week! Should be a fun couple weekends of fights.