3 yrs to FI: ertyu's journal

[mountainFrugal]

I do not envy grading exams, but student feedback sounds good. Any open-ended feedback that you will use going forward?

[NewBlood]

I have started asking myself questions I was too exhausted to ask in the past. I'm having, "oh, yeah, -that- is something i used to be excited about that i never actually did anything to pursue, wasn't it?" types of thoughts more often. I'm noticing the many ways in which I'm assuming my own incompetence and I'm telling myself X activity can't possibly be for me because I'd certainly be bad at it. And so forth. So, the process of psychological manure excavation many report upon quitting is churning along, albeit in a muted manner.

- Slowly, I am taking steps to improve my life, but as of now these steps are small and isolated either in time or from each other, rather than being part of a well designed system.

Hey ertyu! How is the part-time teaching life treating you? Are you feeling any progress on the above?

[ertyu]

I've been knocking arbout on the forum but it's a long time since I've done an actual update so here goes a short one:

- Now completed an almost full year at this job. "Appraisals" coming up next week. Expect to receive a modest $100/mo raise as per the payscale of my company.

- On the whole, I am doing well in this job. For the first time in my life, I am working a job I can actually work - I get tired in the course of the work day some days, but I can get out of bed and show up without banshee-level insanity screeching, the desire to escape, and so forth. Another forumite experiencing the same thing might be @oku with his library job vs. office job which generates intense unpleasant feelings. Anyway, the experience of not actively hating my job remains a curious novelty, even a whole year in.

- The extra time has mostly gone into emdr/focusing/vipassana meditation/etc. I'm starting to realize all these modalities point to the same place in the last instance. I've been OK. Same same (cravings, aversion, fear, etcetera), but different. We continue.

- The low level of my earnings is generating some anxiety. So far at this job, I have saved 8k USD, on track to be 10k by the end of the academic year. Savings rate isn't very meaningful, but basically, one year at this job is paying for approximately 1 year living on savings in my home country. Stash is now 260k eur, with another 6k eur + 2.3k usd in immediately available cash, and I suspect I will forever remain anxious that it will not be enough.

- Do I return to home country to visit Trash Place during the summer? I haven't been there since 2021, and I worry that the condition of the place may be deteriorating. I also haven't paid property tax etc. on it. I don't much feel like going, but it seems like it might be a good idea. Getting more serious about the repairs trash place needs is probably a good idea - or is it, just geopolitically? The bombed out buildings in Ukraine didn't look much different from what you'd see around you in my home town. It isn't hard to imagine war as a real possibility for my country of origin. Also, there's the plane ticket cost. And the fact that over there, there's no AC. What would you do?

- While this job is alright, it keeps feeling precarious, temporary. My life feels precarious. I don't have any bright ideas about what I'd do if for one reason or another, this job were no longer an option. I don't have goals, or something I'm working towards, or a view of what viable options look like for me beyond the immediate present - I'm not sure this is a problem, but I am recognizing it as fact. The world feels too precarious geopolitically to make plans -- or maybe it always was and it is only now really sinking in, as my 42 y/o ass steadily approaches middle age. I also feel like my stash is not enough to make plans, in the sense of "FI in terms of freedom-to random life experiments" that was discussed elsewhere on the forum, I believe @AH's journal.

Let's see how this entire thing shakes out.

[Dave]

On the whole, I am doing well in this job. For the first time in my life, I am working a job I can actually work - I get tired in the course of the work day some days, but I can get out of bed and show up without banshee-level insanity screeching, the desire to escape, and so forth.

...

While this job is alright, it keeps feeling precarious, temporary. My life feels precarious. I don't have any bright ideas about what I'd do if for one reason or another, this job were no longer an option. I don't have goals, or something I'm working towards, or a view of what viable options look like for me beyond the immediate present - I'm not sure this is a problem, but I am recognizing it as fact. The world feels too precarious geopolitically to make plans -- or maybe it always was and it is only now really sinking in, as my 42 y/o ass steadily approaches middle age. I also feel like my stash is not enough to make plans, in the sense of "FI in terms of freedom-to random life experiments" that was discussed elsewhere on the forum, I believe @AH's journal.

Let's see how this entire thing shakes out.

I am very happy to hear that you found something that is more sustainable for you - that has to feel incredibly good after the past series of jobs you've endured. I know all is not perfect, but that is a very big positive.

Seemingly random question, but on the second paragraph I quoted...and I have no idea how far down the vipassana path you've gone, but do you think you are in dark night of the soul territory (in the Daniel Ingram, pragmatic dharma sense of the phrase)? I did a meaningful amount of vipassana a number of years back had what I consider to be dark night of the soul experience. I do not know your broader life nearly well enough to assume anything at all, just asking the question, as this second paragraph struck me that way.

Plays into the whole "Better not to start, once begun better to finish" Buddhist phrase sort of thing.

[loutfard]

- Do I return to home country to visit Trash Place during the summer? I haven't been there since 2021, and I worry that the condition of the place may be deteriorating. I also haven't paid property tax etc. on it. I don't much feel like going, but it seems like it might be a good idea. Getting more serious about the repairs trash place needs is probably a good idea - or is it, just geopolitically? The bombed out buildings in Ukraine didn't look much different from what you'd see around you in my home town. It isn't hard to imagine war as a real possibility for my country of origin. Also, there's the plane ticket cost. And the fact that over there, there's no AC. What would you do?

It seems like you're mentally juggling a few questions at a time:
1) Is minimal maintenance on Trash Place a good idea? property tax, "broken windows" style preventative technical maintenance: against roof leaks, pipe freezing, ...
2) Is a thorough renovation of Trash Place in the light of ERE/geopolitical risk/potential structural construction issues?
3) Is spending a lot on travel a good idea in the light of ERE?
4) Does the answer to 3) change for travel to my native area?
5) Can I survive summer without AC? Would this make me very uncomfortable?

May I suggest:
1) Pay for the lowest effort way to get this done. Find someone trustworthy to live at the place. No rent or super low, just utilities and actually living there. If my experience is anything to go by, some trustworthy locals in VLOCL areas will not be interested in very cheap, but jump on free.
2) If your "tenant" from 1) has the ambition and ability to actually improve the place, pay them for materials. Give them some medium term security in exchange.
3) Except to Russia, Belarus or Ukraine, this can make a lot of sense. Travel to a very low cost of living corner of Europe might be possible in a fairly frugal way.
4) Possibly. Your call.
5) Most of Europe is eminently survivable without AC.

[okumurahata]

@ertyu,

This is proof of how there is always a way out. In hindsight, it was the right decision to be willing to change, @ertyu. Following your example, I won’t lose hope and will keep rowing until I can jump to another boat.

You mention that you feel your stash is not enough to make plans. What would be your desired amount at this current moment? Now that you have a better work situation, would you retire once you reach that figure?

[delay]

- Do I return to home country to visit Trash Place during the summer? I haven't been there since 2021, and I worry that the condition of the place may be deteriorating. I also haven't paid property tax etc. on it. I don't much feel like going, but it seems like it might be a good idea. Getting more serious about the repairs trash place needs is probably a good idea - or is it, just geopolitically? The bombed out buildings in Ukraine didn't look much different from what you'd see around you in my home town. It isn't hard to imagine war as a real possibility for my country of origin. Also, there's the plane ticket cost. And the fact that over there, there's no AC. What would you do?

If you call your place "trash", don't pay tax on it, and keep postponing repairs, that's three clear signs that you're not cut out to be a home owner. That happens a lot, it's quite common to get attracted to real estate for the wrong reasons! I'd learn the lesson, sell the place, and forget about real estate as an investment option.

[disk_poet]

@ertyu: Thanks for the update. I am still very impressed you made that change and it is working out. The change in relationship to work sounds great.
Makes me feel there is hope that change can be achieved.

Doing the math it sounds like your almost FI (if one defines it at 30x expenses) if you’d move back to your place, no? Fo from my outside perspective it seems like:

- You’ve almost reached some level of FI
- You made a big positive change

Sounds like a great achievement.

I get the geopolitical anxienty. Being based in Europe and knowing the history I am anxious too. I’ve always wondered why pre-war societies would seem so oblivious to danger but given that I feel to have no other options than doing what I am already doing I feel like I understand it a bit better now. We never know the future, even though we’d like to pretend we do.

[ertyu]

Seemingly random question, but on the second paragraph I quoted...and I have no idea how far down the vipassana path you've gone, but do you think you are in dark night of the soul territory (in the Daniel Ingram, pragmatic dharma sense of the phrase)?

Thanks for chiming in, Dave, excellent point. I did read the Daniel Ingram book and, at least in my estimation, I believe I'm unlikely to be advanced enough. Right now what's happening in my meditation is almost overwhelmingly psychological manure bubbling up as a ball of energy, then after ive been with it for a while, dissipating and floating away. I also emdr-move my eyes back and forth while I'm at it. Sometimes this results in intense emotional release but this is happening less and less. I'm not going to declare myself "done" because itense bawling-grade stuff is still happening; rather, more and more often, instead of on individual traumatic events, what comes up is e.g. the overall pervasive sense of sadness due to, say, childhood neglect. I'm having the sort of experiences which sound like, "I was working on what keeps me succumbing to cravings for sugary food, and my mother came out of my left lung, going, 'well, I still got what I wanted' at my father." Bonkers, in other words, unless you've been there and it's happened to you. Still very "they're not getting enlightened cause they're all doing therapy" realm, though.

As for me, I'm very happy just doing therapy. I like the lightness and ease in my body that the "bubbled-off" stuff leaves. I like, in the course of my daily life, feeling a bit less tormented and just ... ok. At peace, even if my work often leaves me with sadness to carry around. Also, I'm still a monkey getting hung up on bullshit and doing its monkey mental and emotional stuff, lest anyone assumes I've turned into some sort of zen ubermench or some such.

I think what you saw in that paragraph was part me grappling with impermanence, and part me grappling with having grown up during the peak poverty/collapse period of the post-soviet years and my lifetime of experience having my life always happen on some sort of visa, first student, then a work visa. Or maybe just a regular old school midlife crisis coming up, I'm certainly getting to the right age : But still, I continue. I go where the meditation takes me. I'm not doing concentration meditation nor pure vipassana where (at least according to Ingram) I perceive the world vibrating faster and faster. Mostly it's like, "oh, my X group are Y angry rants are in my upper back, huh" sorta stuff haha. Where each time my tether to such rants is weaker and they seem less solid.

I'd very much love to hear about your dark night of the soul experience and what made you identify it as such, if you feel like sharing, either here or via DMs. If not, also good

What would be your desired amount at this current moment? Now that you have a better work situation, would you retire once you reach that figure?

.

Excellent question. Basically, the withdrawal rate I've decided is "safe" is 2% for a couple of different reasons. I've mentioned them elsewhere but the gist is, I believe the 4% historical figure was obtained on the basis of American data from a very exceptional period: the growth of the American economy, after WW2, from one of many powers to the only industrial power left standing, and finally, the predominant world power. Wade Pfau, analyzing data from stock markets of other countries, has established that based on those stock markets only, the SWR for 25 years was 1.5 - 2%. Currently, 2% of 265k is 442 euro per month, which is doable but very tight - especially given that I'm from a periphery European country where living standards, wages and prices/COL are likely to be rising faster than the western average as my country (hopefully) converges on the core-EU. Also, as opposed to many others, my erratic international work history means I'm not eligible for an "old age" / social security type pension in any country. In other words, that 442 euro per month is -it-: no state pension or other pension of any type.

442 euro per month is pretty much only doable in my home town. I'm unlikely to be able to live even in the traditionally "cheap" areas of Europe like Spain, Portugal, and Italy, let alone travel South East Asia marveling at how cheap it is to only spend 2k per couple per month for a middle class lifestyle. So, the long story short answer is, I do not want to stop working now because if I do, my life immediately becomes narrowed to my hometown and I'm trapped. I spent some time there for COVID; it's constricting after spending all my life since age 16 studying and then working abroad.

As for "what's the minimum number where, if someone to magically magick it into your brokerage account, you stop working tomorrow," 600k eur is a definite yes, 400k is probably more like it. My ideal pipe dream situation, which I am unlikely to ever afford, is to live in a small apartment in the hipster part of a western european town with many coffeeshops and a thriving cultural scene. But I'm envisioning more of an 1.2m for that

[ertyu]

If you call your place "trash", don't pay tax on it, and keep postponing repairs, that's three clear signs that you're not cut out to be a home owner. That happens a lot, it's quite common to get attracted to real estate for the wrong reasons! I'd learn the lesson, sell the place, and forget about real estate as an investment option.

All three "signs" you pointed at have actual explanations which I won't go into (e.g. the appartment is called Trash Place the way a raccoon is a trash panda and the way to be "the trash of the thing" == to be a fan. Think "millenial who spends too much time online" language -- it's also called Trash Place bc it is a former hoarder home where a dude died, with all that entails.)

It is also not an investment property. I bought it, essentially, to go there to die. It has a large balcony which overlooks the whole city, so I was thinking that with limited mobility, it would be nice to sit there and still feel "outside." You can see the seagulls eat pigeons they've hunted on the roof opposite and be in touch with nature, etc.

That said, I don't think declaring what someone is or isn't cut out to be is helpful, especially when you do so based on limited information. This suggests immutable characteristics which are personality traits -- someone is inherently incompetent at this. How does this square with the forum's values of continued personal growth? What sort of attitude towards the self and one's skills do you think a comment like this engenders in those hearing it?

@ertyu: Thanks for the update. I am still very impressed you made that change and it is working out. The change in relationship to work sounds great.
Makes me feel there is hope that change can be achieved.

Thanks for the kind words! What the change took for me was being fired from 2 jobs in a row, spending about 1.5 yrs unemployed for covid, going back to work in 2021, spending 2 years at yet another job an still ending up miserable, and finally letting go in the face of terror and accepting a huge pay cut. I did it kicking and screaming, and I'm still worried about money, so idk if I'd pitch myself as a role model -- but yes, there is at least one aspect in which the current job is working out. As a result of not being a neurotic disaster all the time, my overall self-efficacy and level of optimism has improved.

As per traditional ERE philosophy, my anxiety about money is caused by relying on a single income stream - the one that comes from my employment. I still estimate myself to be a WL3.5 - 4-ish, and rely too much on that one source and not enough on yields and flows from a stable network of activities. I guess if I'm to be taken as an example of something, it's that.

I get the geopolitical anxienty. Being based in Europe and knowing the history I am anxious too. I’ve always wondered why pre-war societies would seem so oblivious to danger but given that I feel to have no other options than doing what I am already doing I feel like I understand it a bit better now.

There's not knowing what else to do, there's a much higher level of religiosity which encouraged trusting God, there's just the magnitude of the change of upending your entire life and abandoning all your property etc. It's the natural tendency to be in denial when faced by overwhelming threat and hide your head in the sand - the freeze response. But also, we don't know that they were calm, it's just how it seems to us. When I read history, I'm always amazed by how easy they seem to have been to rise to rebellion and war, and how common it wouldve been for them to be subject to one military skirmish or another. I guess what's important is to remember is that those who made it were those who were the first to go. Towards the end of ww2, ships with jewish refugees were turned back from the US. So I've always cultivated the mentality, be the first to go.

[disk_poet]

As per traditional ERE philosophy, my anxiety about money is caused by relying on a single income stream - the one that comes from my employment. I still estimate myself to be a WL3.5 - 4-ish, and rely too much on that one source and not enough on yields and flows from a stable network of activities. I guess if I'm to be taken as an example of something, it's that.

Thanks for explaining that. I guess you're not counting investment returns as an income stream?

Also, as opposed to many others, my erratic international work history means I'm not eligible for an "old age" / social security type pension in any country. In other words, that 442 euro per month is -it-: no state pension or other pension of any type.

Not sure if this is applicable but in Germany if you leave the country and you paid into the state pension as part of your employment you can get that money back as far as I know. Not sure how other countries handle this but maybe it applies to you.

There's not knowing what else to do, there's a much higher level of religiosity which encouraged trusting God, there's just the magnitude of the change of upending your entire life and abandoning all your property etc. It's the natural tendency to be in denial when faced by overwhelming threat and hide your head in the sand - the freeze response. But also, we don't know that they were calm, it's just how it seems to us. When I read history, I'm always amazed by how easy they seem to have been to rise to rebellion and war, and how common it wouldve been for them to be subject to one military skirmish or another. I guess what's important is to remember is that those who made it were those who were the first to go. Towards the end of ww2, ships with jewish refugees were turned back from the US. So I've always cultivated the mentality, be the first to go.

That makes sense to me. Just to be clear though I didn't mean to imply people were calm and oblivious more than if I look at photographs and certain actions it may look that way. I didn't mean to paint them as oblivious people who didn't know what was happening. It's more me that is oblivious to their situation in some way.

[zbigi]

Excellent question. Basically, the withdrawal rate I've decided is "safe" is 2% for a couple of different reasons.

Have you considered just slowly eating through the principal? What's the point of dying with all that money anyway? Assuming you don't want to live longer than e.g. 100 years old, your withdrawal rate could be much higher. It's really surprising for me that such an obvious idea is rarely discussed in FI forums, and everybody focuses solely on safe (perpetual) withdrawal.

[ertyu]

Have you considered just slowly eating through the principal? What's the point of dying with all that money anyway? Assuming you don't want to live longer than e.g. 100 years old, your withdrawal rate could be much higher. It's really surprising for me that such an obvious idea is rarely discussed in FI forums, and everybody focuses solely on safe (perpetual) withdrawal.

Trinity study and related literature assumes a drawdown period of 25 years (meaning, a standard retirement rather than an early retirement) and defines "failure" as capital depletion -- the "eating away" of the principal is assumed. It also uses American data which is exceptional bc America (top power) + oil-fueled/cheap energy post-war growth. The situation becomes even more dire if you account for the possibility of degrowth over the next 40-50 years.

I am, however, a fatass, so I will accept an argument based on longevity.

[guitarplayer]

The good news is that each year that you still work, you can subtract 12k or 8k from the 600k or 400k, respectively - because you will be one year older so it will converge rather quickly. This is my personal back of the envelope theory, is that if extreme early retirement is maybe hard, less extremely early retirement is disproportionately less so.

[ertyu]

The good news is that each year that you still work, you can subtract 12k or 8k from the 600k or 400k, respectively - because you will be one year older so it will converge rather quickly. This is my personal back of the envelope theory, is that if extreme early retirement is maybe hard, less extremely early retirement is disproportionately less so.

Good argument. I buy this argument Again back of the envelope, 8-10 years for the numbers to converge, if we assume (+8/12) addition to savings per year coupled with (-8/12) per yr reduction in needs. Which checks out with what we know from the withdrawal rate literature: basically the most solid way to assure success is to postpone that start of withdrawals.

Not sure if this is applicable but in Germany if you leave the country and you paid into the state pension as part of your employment you can get that money back as far as I know. Not sure how other countries handle this but maybe it applies to you.

Doesn't apply bc I've mostly worked in developing countries and I'm also from a developing country, so none of these places have social safety nets to speak of or tax treaties with each other. But it would if a citizen of a developed country worked in another developed country.

[2Birds1Stone]

Small correction, the Trinity Study assumes a 30 year draw down. It also assumes 1% annual fee on portfolio and a 50/50 allocation (where more comprehensive and thorough literature shows a much improved success rate with higher ie 60/40-80/20 allocations).

At 42 years old and still working, I would be much more worried about looking back 20-30 years from now and realizing that I was afraid for nothing and squandered the remaining years away worrying about the minutia of WR calculations vs. figuring out what I want out of life.

[fingeek]

https://portfoliocharts.com/2024/04/01/ ... ortfolios/

This is worth a read if you haven't already. It's lots of good data for various countries, and makes a few suggestions on SWR further down

[ertyu]

At 42 years old and still working, I would be much more worried about looking back 20-30 years from now and realizing that I was afraid for nothing and squandered the remaining years away worrying about the minutia of WR calculations vs. figuring out what I want out of life.

Valid, and an excellent callout. Thank you.

https://portfoliocharts.com/2024/04/01/ ... ortfolios/

Thank you for reading and chiming in with a useful resource, I am off to read that.

[jacob]

If you're worried about oversaving or undersaving (or one more year syndrome), you definitely want to play around with this: https://engaging-data.com/will-money-last-retire-early/

The US-centric (at least historically, less so these days) FIRE movement has ended up focusing on DIY approaches to early retirement planning that mostly focused on using broad market focused mutual funds because that was what was popular when it replaced the "dotcom-stonks always go up at 10-12%/year" thinking that dominated the 1990s. (For fun, check out early retirement books from the 1980s and 1990s. Here the idea is: Ann&Bob wants an income of $40,000/year in retirement. They have a portfolio of $500,000. Therefore they need to invest aggressively at 8%/year." Someone with more money/desire for less income would simply invest in safer securities. There was no concern about portfolio failure.

Whereas now, the paradigm is "total return indexing" and all about failure and the many ways it can happen like sequence of return, statistical, external, ...

I suspect "internet"- or "movement"-advice can easily end up with a very narrow path-dependent focus in terms of goals and concerns. For example, someone investing in RE is probably not focused on whether their spending is 2% of their NAV or even what their total rent income is but rather whether their cashflow exceeds their spending.

There is a product that solves all this. It's called an annuity. The reason that they never got popular is that the fees are high (>1%) and people have been trained to hate fees to the point that they're rather DIY according to the dictates of the internet than pay any fees. With an annuity, you pay for a lifetime stream of inflation-adjusted income, just like social security. Last time I looked, payouts are to the tune of 4.5%/year for a 50yo male. It's contingent on the insurance company not going bankrupt (like other financial institutions, there are state guarantees) but you can always have several annuities from different companies. This will fundamentally take the issue (and the money) completely out of your hands.

Add: I'd be remiss if I didn't mention the other two alternatives for "belt&suspender"-preferences, namely the (good?) old Permant Portfolio (see https://www.amazon.com/Permanent-Portfo ... 1118288254 and perhaps Harry Browne's original, tons of online commentary). But also https://www.amazon.com/Worry-Free-Inves ... 130499277/ + https://www.amazon.com/Risk-Less-Prospe ... 006ES4HS8/ might bring you some peace of mind. I've mentioned the last two books a few times on the forum before. They come from a completely different mindset than "VTI & chill".

[delay]

That said, I don't think declaring what someone is or isn't cut out to be is helpful, especially when you do so based on limited information.

You asked "What would you do?", so I tried to put myself in the shoes of the post. To me it radiates "I will procrastinate on this subject for as long as I live". So I wrote what I would do in that situation. Apologies if that was not helpful.

With an annuity, you pay for a lifetime stream of inflation-adjusted income, just like social security. Last time I looked, payouts are to the tune of 4.5%/year for a 50yo male.

That seems quite generous! Over here 100,000 euros gets a 50 year old male 312 a month, or 3.7%, and there are no options that correct for inflation. If inflation halves the value of money in 20 years, at his 70th birthday the 50 year old male will have the purchasing power of 156 a month.