Retirement endgame

[Nuuka]

How have you dealt with the tax issues regarding cryptocurrencies?
[/quote]

I keep records of all transactions from which I produce annually statement for the taxman. I also keep list of cold storage arrangement and keys in hand written notebook (in case I die suddenly so my offspring can find the crypto assets).

I operate my crypto assets in well regulated jurisdictions.

[Nuuka]

Voluntary retirement insurance savings:
This is a government regulated tax-shelter for retirement savings. Depending on the starting year this allows cumulated savings to be pulled-out monthly Already earlier than the normal retirement age.

I made windfall with one particular stock. I opened retirement insurance savings for both of us with the windfall. My initial investment grew about one third by the time when I started pulling it out couple years ago.

These retirement insurance savings allowed me to go part-time work almost two years ago. Going part-time was a huge relieve in stress. Quality of life increased big-time.

[Nuuka]

Mandatory national retirement savings:
State-run mandatory retirement saving system that takes a fixed % of your salary and invests it to pool. Records of your salary are kept over your work life. Your retirement pension will be certain % of your sum of annual salaries, corrected with some inflation index correction weight for each year. Typically retirement pensions are 45 ... 55% of inflation corrected salary level if you have full work years 40+. Retirement age is 63-69. You have to apply for the retirement. Based on your birth year you have a earliest retirement age. If you delay your retirement start you gain some bonus.

[2Birds1Stone]

Quite the monologue here.

[Nuuka]

Well, what can you expect from a teacher?

[Nuuka]

When I was 40 and just read YMOYL in the heat of the moment I thought to retire at the latest by age 50.

Why did it not happen? The biggest reasons were
- was married and that means a lot of dependencies
- we had small children to take care of, pay for their daycare, schools, cloths, hobbies, and fund their studies
- we had to move to a bigger house to suburb to have own rooms for the children
- then we needed two cars because we both worked and needed to drive kids to daycare and school.
- savings were gone and mortgage came in - thus no investment capital

[Nuuka]

After buying the house and cars, I was very low on free capital to invest. So I started to study derivatives: call and put warrants (options) were the easiest for me to understand. With these warrants it is easy to have gearing over 10, so you can control stocks with less than 10% of the capital that is required with direct buying of stock. Also you can short stock with put warrant: Put warrant increases in value if stock falls. Warrants have time value and some time limit. Time value is controlled with Black-Scholes formula. Downside of warrants is that you can lose all your warrant invested capital if the underlying stock moves against your position for as little as 8-10%.

That time 1999-2005 was the internet and mobile phone boom and telecom companies did extremely well. I was following one perticular stock in message boards such as Silicon Investor very closely. I was able to anticipate stock movements pretty well for a few years time and was able to make good trading profit with warrants. Most of this windfall I invested in voluntary insurance savings as I explained a few postings earlier.

Then I was promoted to managerial position 2006 and I was not able to follow telecom newsflow anymore real-time because I had meetings all day. That turned to be poison for trading warrants. I did not catch strong down move 2007-2008 and that wiped out all my telecom invested capital. Same happened again a smaller scale few years later and then I had to give up trading warrants since I understood that its not going to work if I am in managerial position and tied in meetings most of the workday.

[Nuuka]

Through hunting I became interested in outback trips and gold digging. Not very succesful in finding gold so I bought some nuggets of gold from other oldtimer gold diggers.

Being curious I started to study gold mining and gold history and its role in monetary system history, gold as investment and started following gold bug forums in internet. Then I started to slowly to invest to mining stock and some to physical gold as SHTF insurance.

[Nuuka]

I got exposure to cryptocurrencies via gold bug forums, especially Max Keiser kept posting blockchain news. It took a few years till I met one blockchain expert on a conference trip. He told some interesting views where the world is going to and blockchain’s role in it. I found supporting views by Alistair McLeod whom I follow. After returning home I studied if there were any blockchain companies to invest in, and indeed found one which I then invested in via OTC exchange. After that I bought in bitcoin, ethereum, litecoin. That time was crazy with ICOs (initial coin offerings) and I invested to several ICOs. It was and it still is interesting to read white-papers descibing ICOs. Luckily my ICO investments were small so I didn’t burn my fingers there too badly.

Currently I hold positions in bitcoin and one altcoin. I still have ICO coins but many of them have died. For bitcoin my strategy is to hodl (i.e. not to sell under any circumstances) expecting good times.

[daylen]

A blockchain expert is the last person I would trust for information about the future.

[Nuuka]

Question: How do you recognise goldmine? Answer: there is a hole in the ground and there is a liar standing by.

[daylen]

I'll settle for the left over dirt.

[Nuuka]

After turning 50 my YMOYL dreams of early retirement had been shattered as impossible.

So I started to rethink the life ahead. I started to develop idea to keep building wealth YMOYL way but to start optimizing my quality of life. That meant to look into my use of my time. So I started to break down my use of time in categories and analysing different attributes of each category. I went even deeper into looking into my work what roles and responsibilities I had and whether they added value or not. For example I realised that answering to all emails didn’t add value, since it just got me deeper engaged into someone elses processes i.e. doing someone elses work. I also moved answering the email to afternoon, so that I always started the day with my own work processes.

I started to plan to go for 4 day week in order to take friday off and have long weekends. It was not easy but eventually I asked my workplace medical doctor to write a letter of recommendation for shortened workweek because of medical reasons. They were stress related somatic symptoms, and they were real. With this recommendation I approached my bosses and their hands were tied and they had to accept 4 day week. Since I was in a critical management position I was even assigned a shared personal assistant secretary for one day a week which was of great help to me. She started to take part of my email load. Of course my income dropped 20% but I didn’t mind since I wasn’t using the lost income anyway for other than saving.

I was on 4 day week for 2 years and after completing my 4 year management position term I further reduced my weekly hours.

Often people ask me how am I doing since I left management position. I just say that I am working now part-time in teaching my favorite subjects, that I am working on my personal backlog of things to do. Many people have said that they wish if they could go part-time as well.

[Nuuka]

Since I started to work part-time, I had the question of what would I do with the time. There I looked in my time usage categories and their value to me in increasing my quality of life (QoL). So what I came with was something like this
- spending time at the cabin for improving the place, gardening, doing hobby car restoration and maintenance
- healthy excercises such as swimming, walking, forest work, firewood chopping etc
- sleeping enough so that I feel at peace with self and feel clear in my mind
- studying investment opportunities in blockchain and crypto
- rebuilding my student time audio hifi gear
- collecting vinyl record classics

I am still spending time on these but I can change allocation if I find better QoL value proposition.

[Nuuka]

Health as an asset:
When I took management position in 2006 I was shocked by the bad shape things were in my unit. Within the first two years I had to cut 30% of the staff and slim down the curricula 25%. I had to develop and take into use course planning system and resource planning and allocation system. After 3 years I got promoted one layer up in management while still holding the original level as well. After additonal 4 years there was a reorg and I got rid of the lower layer but my upper layer tripled in staff for four year term. This additional 2/3 was in bad shape but fortunately they had budget, so was able to take into use my course planning and resource management systems without any layoffs. There were huge fights of budget and one part of the level organisation wanted out to become independent and they continuously sabotaged my work when possible not leaving any record and thus getting caught. All this had effect on the stress levels, and I developed various somatic stress symptoms from sleeping disorder to high blood pressure.

With 4 day week I was able to finish my rest 2 years as manager but towards the end of the term I chose to do what I liked to do and left unpleasant tasks undone which of course was noticed by my bosses and colleagues. However, they were not able to blame and punish me openly since I got doctors paper providing me with shield. Of couse I noticed that things started to bypass me and I lost part of power as manager.

I actually started to heal only after about six months after completing the admin after I started working just a few days a week. It was the cabin and gardening that started to get life into me after all this stress and subsequent vacuum.

[Nuuka]

Relationships:
My by far most important relationship is with my wife and children of course. We do have good relations and no stress is coming with the exception of typical worries of my children getting on with their lives.

My father passed away some time ago. Mother is still alive. My siblings have caused me stress big-time when there was my father’s inheritance execution.

In my work I don’t have any personal friends. I used to have one trusted colleague but his contract was not renewed at one point. Generally I am in good relations with everybody at work. Some people still hold grudge over the decisions I had to take when I was in management but it is slowly being forgotten since they have new managers to blame.

I have one good personal friend from my time as student. My wife has also one best friend from her school time. We meet monthly with these two best friends over dinner.

[Nuuka]

Plans for after retirement:
My wife and I plan to start snowbirding in Southern Europe over the winter months.

[Nuuka]

I will tell you one true story from my worklife experience before I had any exposure to financial independence. It is a story of character building and integrity.

So I was working in an engineering company in my early thirties (I think I was 33). There was a reorg and two departments were formed from earlier 4 departments. The departments were of size about 60 employees each. There were two interim period managers invited, with promise of open call for permanent managers to come in two months time. As interim manager I was one and my colleague W was the other one. When interviewing the big boss asked if I am available to be dept head. I accepted. So did W in his interview. What happened was that W got Software Dept and i got Harware Dept. We were both Software guys so it meant that I was out of my comfort zone. i felt a bit cheated since I didn’t know the names of the departments and who were invited as interim managers when I accepted the offer as interim manager.

Then I decided to bite the bullet and started as manager for the Hardware dept. I knew nothing of the hardware and managing the department was very difficult since I did not know what to do. The first weekend I had terrible feeling of having chosen wrong course of action and I had urgent urge to quit. But I managed to get over the weekend and kept biting the bullet and managing the department as blind movie director in Woody Allen’s classic movie. Time passed and then the open call came in two months. i decided not to apply permanent position because I thought that I am not the best person to run the department since I didn’t know the business of hardware. What happened was that the Hardware dept manager position went to an outsider and Software dept went to my collague W. Everybody was happy.

But what happened was a suprise to me since my collagues started to ask me why did you quit? I didn’t myself think that I quit but some of my collagues thought so. That started to bother me and then I started to wonder that did I actually quit. To gain internal balance I decided that I would never quit again. Instead I would get myself rather fired than quit. With this resolution I managed to come over the dilemma and get into mental balance.

At age about 52 I met one of my old high school time friend who was taken down from management position and assigned special duties. He was very depressed and soul searching. He said he didn’t like the management job but the way they treated him was devastating to him as he lost his face so to speak. After I told my story (of better for one’s soul being fired than quitting) he became much more upbeat and left with good mood.

I stuck with my decision for not to quit during my difficult 12 years of management position.

[Nuuka]

What Financial Independence means to me? To me it means to be debt-free. Not only in monetary meaning, but also favour-wise, and corruption-wise.

Let me explain these two latter concepts:
- Favour-wise means that if you go ask for favour from somebody, and it is granted to you by somebody. This will mean that you now own a favour to this somebody. Depending on the value of the favour your oblication is of comparable value. Over time the value may increase or decrease considerably. Now what owning a favour means that you are in dept. You are no more FI.

- Corruption-wise: You participate voluntarily or involuntarily in any wrong-doing, cheating, look something through-fingers, or turn blind-eye to something crooked, without whistleblowing it. It means that you are now hostage of the wrongdoers. They can blackmail you to continue wrongdoing or to do something worse by threating to disclose you to your bosses or to your spouse, children, etc.

So where is the threshold of value of favours, or severity of corruption? I have kept principle “do not allow anybody get reason to call and wake you up in the middle of the night, and ask you to do something, and you are obliged to listen”. In other words: you should live your life so that you can say to anybody calling in the middle of the night “please do not ever call me in the middle of the night”, and hang up.

Question: Why I use “middle of the night” in my definition? Answer: It represents the most inconvenient time.

You can think living below the favour/corruption threshold as comparable to having FU money.

[Nuuka]

Lets make an example. You are a billionaire and you have a helicopter and licence to fly it. You have been drinking at your residence and decide to fly a little with your helicopter. You manage to get up 2 meters (6 feet) and turn your helicopter to its side and part of the propellers fly hundreds of meters and break neighbours walls and windows. They call police which comes in 30 minutes.

You are luckily not hurt but a little shaken. After initial shock you contact and make a deal with your pilot that he was flying the helicopter and you were there as passenger. Police comes, both tell the same story. Police goes away. Yellow press makes some stories of the incidense. Couple months pass. Police and aviation people close their books. You are still billionaire.

But you are no more FI. You own a lot to your pilot. You will always own a lot to your pilot. He can call you anytime and ask for favour. And you have to obey.