Decentralizing FI for strategic reasons?

[7Wannabe5]

I suppose it comes down to temperament

Yeah, the notion of a 5 year moonshot is more in alignment with the type of Renaissance Soul known as the Serial Master. For the type of Renaissance Soul who is more like a Plate Spinner or a Sybil or a Generalist's Generalist, the availability of Moon Shot option is of little value, because "Why in the heck would I want to devote myself to just one thing for 5 years straight?!?!" Some of us only (if ever) achieve mastery at anything by looping back around to recurring interests throughout our life and/or accumulating the hours relatively slowly in several realms at the same time. So, finding one realm of current interest that also makes money as part-time endeavor is not such a big deal.

Also, hustling for money is kind of like dating, even if you are happily married, if you lose your dating skills, you will eventually tank your marriage. Just like how any purely passive investment plan will eventually tank (but you might be dead first.) Of course, being an active investor is a type of hustle, but it also requires some number of average hours per week, so it's really no different than hustling at any other form of self-employment for money, except for the fact that it is at the far end of the spectrum of Size of Initial Capital Investment in Business, so more likely to succeed with conservative management.

OTOH, it has been my experience that when my need to make money rises to above having to work for money more than a flexible approximately 16 hours/week, it will interfere with my preferred lifestyle of many simultaneous bouncing rubber ball type shots. Due to my current inability to come up with creative frugal solutions to the lifestyle constraints imposed by my chronic disease, that is my problem, But, maybe,just maybe, even this constraint will eventually force some creative solution *

*Optimism is to a large extent its own reward

[Dave]

Appreciate the ongoing commentary here, good stuff.

You sneaky SoB, going from 10x v 50x to 10x v 100x...

Hahaha, you caught me .

Nah, I reread what I said and I wasn’t very clear there. Embedded in the $750K-1M comment was supposed to be a note that I was taking 50x of a somewhat higher level of expenses than the originally assumed $7.5-10K, given that something unforeseen could come up and drive up expenses. I was trying to highlight that laying a low multiple on a low level of annual spend is doubling down and is meaningfully less robust than a higher multiple on a higher base - basically what you said in your post about the absolute level of spend, and I agree with your commentary around that.

Yeah, in talking it about I think we mostly agree here. Despite your comment about my last paragraph, I pretty much agree with the rest of what you say. This is a very conservative place, but that conservatism is at times applied more to the stash than other considerations like ongoing work/skills or the value of life energy/time. Despite my comments and belief that many would be served best by just getting to ~25x+, I walked away fairly early because I valued my freedom much more than stacking up more $ - “safety” - and like your comments I assumed I would be able to support myself if my efforts failed. That’s a really interesting way to point out how we are guaranteed losing time today for a chance at future security, and how social conditioning teaches out to fear loss of money but not our time.

Regarding some of the other comments on having time to pursue certain activities (moonshots), I personally did not have a lot of leftover energy after my job to dive deeply and energetically into various pursuits to push them to the level where I could receive market rate pay on said activity. Maybe that's a personal failing or a poor job fit that really drained me. I definitely know there are plenty of people like @theanimal mentioned that do so, but I didn’t have it in me. Even things I really liked - this was part of why I left. This one might just vary by person and life circumstance. I know a lot of people who are wiped from their day job and after exercise, preparing and eating dinner, some chores, and reading, there isn’t a lot of gas left in the tank.

[jacob]

Yeah, the notion of a 5 year moonshot is more in alignment with the type of Renaissance Soul known as the Serial Master. For the type of Renaissance Soul who is more like a Plate Spinner or a Sybil or a Generalist's Generalist, the availability of Moon Shot option is of little value, because "Why in the heck would I want to devote myself to just one thing for 5 years straight?!?!" Some of us only (if ever) achieve mastery at anything by looping back around to recurring interests throughout our life and/or accumulating the hours relatively slowly in several realms at the same time. So, finding one realm of current interest that also makes money as part-time endeavor is not such a big deal.

Yeah.

The way I'm presenting the argument is that money is a hard constraint that buys time. There are projects are we can measure these projects as 1, 3, 1, 5, 5, 10, 3, 15, ... dividing by a thousand hours. I can currently afford 150 in those units so THAT price is not an issue.

But there's also another cost and it isn't all about cost ... there's a vector ... in terms of producing other kinds of flow..

Also, hustling for money is kind of like dating, even if you are happily married, if you lose your dating skills, you will eventually tank your marriage. Just like how any purely passive investment plan will eventually tank (but you might be dead first.) Of course, being an active investor is a type of hustle, but it also requires some number of average hours per week, so it's really no different than hustling at any other form of self-employment for money, except for the fact that it is at the far end of the spectrum of Size of Initial Capital Investment in Business, so more likely to succeed with conservative management.

Not having to stay sharp for employment or hustling may affect /effectiveness/. This is definitely something that concerns me, expending time---I have some 30-50 years left tops! I sometimes suspect my best years are behind me. I still think the ERE book is my best work and that is almost 15 years ago now. OTOH, the ERE forum has had more of a material effect in terms of changing hearts and minds than the book itself did---quality over quantity---so maybe I'm still a slave to conventional gauges of success. And ultimately one-dimensional measures are simplistic at best. Still, I'd like to make a least one more difference. Better two.

...

And I think it comes back to the J&G point of ... "do you like you money-making activity" or does it suck away your soul energy? In particular, how does it integrate with your WOG. When I wrote ERE I was in a state of tension of leaving the cave of my career. I previously remarked (on the madFIentist podcast) that I could never write "like that" again. I think there's something to that.

OTOH, something something about not being able to cross the same river twice.

So journey-something-journey-something ... all this might be clearer in retrospect.

[Ego]

I sometimes suspect my best years are behind me. I still think the ERE book is my best work and that is almost 15 years ago now. OTOH, the ERE forum has had more of a material effect in terms of changing hearts and minds than the book itself did---quality over quantity---so maybe I'm still a slave to conventional gauges of success.

Strong disagree. Changing hearts and minds is not a conventional gauge of success. I've always felt that you put the theories out, now if you shift to showing rather than continuing to tell, you would explode.

Embrace the kookie Scandinavian astrophysicist schtick, come up with a few "does it spark joy" sound bites, publish the free e-book "How to Early Retire for Extreme Dummies" and start doing television interviews in your Refrigerator Wear suit discussing how much joy you feel using your dumpster dived squeeze bottle bidet in the winter. You would kill it.

[7Wannabe5]

I also strongly disagree. At this juncture, I've read or watched just about everything there is to be found on the topic of resource depletion and/or the metacrisis, and "bottoms up" solutions, such as offered by your work, are scarce as hen's teeth. Not to mention the fact that you also simultaneously produced the best theory level lifestyle design and/or personal finance book. You should be very proud of your accomplishment, whether or not you are happy to rest upon your laurels.

I know you hate marketing, so Ego's suggestion may not appeal, but my independent thought, as somebody very likely less wise but still at least one phase of life crisis older than you, is that you might try doing something (or have something happen) that will take you out of your comfort zone. Maybe ask yourself whether there are any "rules" you are still living by or values you are still promoting or truths that have shifted under your feet. Question how you self-describe. Deconstruct towards reconstruct.

[Ego]

Mid-run thought. The truest signal of dedication to something is ones willingness to sacrifice for it.

[bluecollarmusician]

What an absolutely wonderful discussion.

That and a great belly laugh @the dumpster dived squeeze bottle bidet.

As one of those sort of typically "stuck" at WL5, I would have to agree with OP that decoupling FI as a goal in itself while focusing on skill development might be a more effective way to move from the "Tier 1" to "Tier 2." Constraint (in this case financial) likely would benefit creativity in discovering your skills as well as driving lifestyle design. It also reinforces an internal identification with the personal identity that believes that you "do things differently" from the norm. Getting comfortable with being viewed as downright "nutty" is a key component, as the majority will be operating > N-2 if you are aiming for WL6+

When many reach WL5 the focus has been FI or RE rather than reduction of consumerism as an end goal. At that point, acquiring $ capital is easy (and well understood) so the incentive to start from 0 in developing other forms of capital is low- (because it's so easy to just make more money.). At that point, when $$ is well solved, reduction of resource use feels (or can feel) like a step back- when really it is just decoupling further from the system. But it's a big sticking point. Additionally, it's possible to operate at WL5 and to the casual observer you are still living the TAL.... i.e.you might seem quirky to some folks, but they are mostly at arms length anyway.

Regarding creative output and doing your "work." As a lifetime creative artist (I'm a musician)- a lesson I learn over and over again- you don't know your best work when you are doing it. I mean sometimes, in the middle of something you have a sense of it- but it is wrong as often as it is right. The best thing I have learned is just get up and keep doing- try not to judge- just keep slogging away. Retrospect is indeed powerful.

[7Wannabe5]

Mid-run thought. The truest signal of dedication to something is ones willingness to sacrifice for it.

True, but kind of tricky. Martyrdom is not a good look on anyone, and sacrifice will often lead to resentment (which is frequently misplaced.) If you are really dedicated to something, it won't feel or vibe like "sacrifice." For instance, I don't read AxelHeyst's experiments in walking 20 plus miles into town from his project as "sacrifice." It's more like I envy his ability to do that, because I know what I would do with that level of youthful vigor restored*. Questioning whether the "sacrifices" inherent in working for "other" for 40 hrs/wk for 40 years in order to buy more stuff/services/security is in true alignment with values is the benefit of Your Money or Your Life level and up personal economic awareness.Etc.

Or, maybe you are saying the same thing and I'm not grokking.

*It's more difficult to imagine what I might do if I had Jacob's level of brain power, because I have to use the brain I have to do the imagining.

[AxelHeyst]

In a sense... Jacob, wasn't your path to ERE FI-decentralized? You figured out postconsumer praxis for reasons related to worldview, and then at some point realized "oh hey look at that I'm FI". For you, FI wasn't the carrot, was not the initiating incentive... It was the ground score you picked up along the way.

Is FI-decentralized actually the most OG way to run ERE?

I completely agree that in theory, the best way to run ERE is to just blast out FI ASAP and then you've got the rest of your life to skills up and spin up a really nice WoG. But, not only does that seem to be pretty rare, it's not actually how you (Jacob) did it. And maybe it's because it's almost impossible not to have FI take over your imagination if you set that up as a central component of your strategy.

Again, this whole thread is really about what's the best way to get to WL7/Tier 2, assuming one has good, authentic reasons and isn't just ladder-climbing. It's a little distracting to use the term semiERE because we all have preexisting notions of what that means, such as the idea that semiERE rejects FI.

[jacob]

In a sense... Jacob, wasn't your path to ERE FI-decentralized? You figured out postconsumer praxis for reasons related to worldview, and then at some point realized "oh hey look at that I'm FI". For you, FI wasn't the carrot, was not the initiating incentive... It was the ground score you picked up along the way.

I was figuring things out as I went along. Also my particular trajectory was influenced by serendipity and constraints. I consider those to be chokepoints or bottlenecks without which things could have gone very differently. I've highlighted them in bold.

2000: Started living on $6000/year due to new worldview. WL1-4
2004: Moved to the US and started investing in stocks. Met DW.
2005: Incidentally FI after raising yield beyond 2% on a savings account, visa conditioned on continued employment with sponsoring employer, but still enjoyed my career.
2006: Rapidly losing faith in career. Married DW. Gets job offer from Canada but due to marriage decided to stay in the US.
2007: No longer stuck in visa limbo, started ERE blog
2008: Was suggested I write a book. ERE blog gets vastly more interest than my physics job. Began to question career choice. Signed up for CFA. Part time job as copy-editor just to do something differently. Realized physics job was a dead-end. Volunteered for a non-profit startup. Interviewed with a few investment companies/banks but then the credit crisis and a hiring freeze happened.
2009: Applied for internal staff position grinding databases. Instead withdrew application and retired because FI. Developed WL6-7 theory while working on ERE book.
2010: Published ERE book.

Basically, I played the cards I was dealt to the best of my ability. The fact that I came to the US on a J1 visa limited my optionality and opportunity to contribute. I spent longer in physics that I should have given my increasing cynicism about the field. It's conceivable that had I been able to switch career, things would have turned out differently.

Add: It would be interesting to be able to play out different futures and "there by the grace of god go I"-scenarios to figure how the outcome robustness of a given strategy or doctrine.

[7Wannabe5]

Again, this whole thread is really about what's the best way to get to WL7/Tier 2, assuming one has good, authentic reasons and isn't just ladder-climbing.

Yes, but it seems like there are at least 2 or 3 different ways to get stuck. One would be inability or lack of desire to reduce spending. Another would be inability or lack of desire to earn median income or above for at least 5-10 years of one's adult life* (me, maybe Jean, a few kids still in their 20s on this forum, who else?) A possible third would be inability or lack of desire to develop wide range of skills towards improving resilience and/or quality of life, although this would not likely be independent of the other two.

*Of course, this might be construed as being stuck at Level 0 rather than the Level 5 of (1) or (3.) So, in order to differentiate those of us with this problem from others who might identify as semi-ERE, as leading representative, I will suggest that we henceforth be referred to as The Lollipop Gang.

[loutfard]

Yes, but it seems like there are at least 2 or 3 different ways to get stuck. One would be inability or lack of desire to reduce spending. Another would be inability or lack of desire to earn median income or above for at least 5-10 years of one's adult life*

I am at "inability to reduce spending". My wife doesn't want to go along any further on cost cutting for now. We live in a relatively expensive house by local standards. Our earnings are clearly above median and slightly above average.

[7Wannabe5]

@loutfard:

The Friends and Family section of the forum has a number of threads addressing the getting spouse on board issue. My suggestion would be to figure out how to drop your end of the rope.

[loutfard]

@loutfard:

The Friends and Family section of the forum has a number of threads addressing the getting spouse on board issue. My suggestion would be to figure out how to drop your end of the rope.

Thank you for your suggestion. I had started that a few days ago. Still need to follow up more closely.

Do you suggest to give up on the general subject area, or move towards much more of a listening approach?

[jacob]

It occurs to me that the carrot of FIRE is very distracting. The problem is that it is at WL5 ish. So if it really is the carrot of FI that attracts you to ERE, well, you get the reward at WL5. And then for most people there is no other visible carrot. The reasons for going on to WL6 or 7 or whateverthehell 8+ is are... opaque, fuzzy, even repellent to some. So you get the carrot at WL5, and then you're good, and you're basically done.

I'm trying to reread this because I still think I'm missing your point.

Part of why WL5ish became dominant was likely the "failure-mode" [of ERE] made possible by extremely high incomes over the past decade. The tech-bro invasion. This resulted in the "save 50% of a six-figure income and learn enough frugality to live like a normal person (median) to FIRE in 17 years". This eventually took over much of the personal finance space and given that ERE historically "recruited" mostly from the personal finance space and not, say, the sustainability space, the prepper space, or even the philosopher space, the FIRE sentiment is simply in the water now.

The trilemma that people solve is: "median lifestyle, <15 years of lifetime work, median income" ... and ERE used to solve it with "median income and <15 years of lifetime work", whereas the FIRE community at large solves it with "median lifestyle and <15 years of lifetime work".

The answer, thus, is ... you can.

Note that the overlap is in the <15 years of lifetime work. The difference is that ERE is throwing human capacity into generalization (for me personally, see my life trajectory, this was the only choice I had) whereas others throw it into specialization conditioned on high income. The former is certainly more resilient, but that later is more normal and normal is of high concern in most circles.

IOW, in order to people to drop their 150k jobs and amazon delivery service, ERE or its replacement has to present something that LOOKS more appealing to careerists than "consumer success". That's difficult. The un-consumer aesthetics Ego suggested is going to backfire spectacularly. I used to not care what ERE looked like, but I've learned the hard way that "appearing normal to normal" is more effective than appearing "worse than normal to normal". I don't know what "appearing better to normal than normal" looks like. When most of consumer society fantasize about it, they think about more travel and more restaurants, IOW spending their entire life around what they currently consider rewards/recreation.

On a side-note I think minimalism had something of the right idea with its Scandinavian designs of "white/beige despair",carry-on lifestyle, ... I can for sure say that I minimalism system of handtools and refrigiwear, although more capable, does not impress in the same way.

When it comes to "breaking through" to the greater society, I think the importance of aesthetics has been hugely underestimated when it comes to ERE. For pretty much every "mainstream exposition", journalists and writers are either looking for 1) a freak to present a freakshow; or 2) someone who looks like the normal definition of success, i.e. "doing 1/6 better than average".

[zbigi]

When it comes to "breaking through" to the greater society, I think the importance of aesthetics has been hugely underestimated when it comes to ERE.

Not just in breaking through IMO, but in its core design as well. Most people want beauty and style in their life. When they hear that ERE means living in a house filled with haphazard, mismatching collection of other people's discarded furniture, most of them prefer to work more years (traditional FIRE) in order to avoid that. Ditto for eating the same cheap thing most days, hunting for matching clothes of the right size through thrift shops, never going to cafees, fixing up your house yourself instead of using a professional (often leading to subpar visual efect -> lack of beauty/style) etc.

[jacob]

Not just in breaking through IMO, but in its core design as well. Most people want beauty and style in their life. When they hear that ERE means living in a house filled with haphazard, mismatching collection of other people's discarded furniture, most of them prefer to work more years (traditional FIRE) in order to avoid that. Ditto for eating the same cheap thing most days, hunting for matching clothes of the right size through thrift shops, never going to cafees, fixing up your house yourself instead of using a professional (often leading to subpar visual efect -> lack of beauty/style) etc.

With ERE people have to create their own style whereas consumers just hire out the problem (comparative advantage again) and buy the Target/Ikea-style.

In terms of core-design, I note that ERE1 has no mention of style-capital(*) (and also no spiritual-capital) as I (myself) didn't really need them for ERE1. They are, therefore, rather undeveloped. We have had a bunch of "how to buy a nice suit" discussions on the forum, but I don't recall a single "how to create a nice home" on the forum. Nice in the sense that it appeals to normie-values instead of "eccentric geniuses".

(*) For lack of a better word.

I think it is a worthwhile discussion to have. There are certainly things that I could do in terms of color coordinating our furniture (replacing everything with stained pine) and picking a Zuckerberg uniform. This has just been very low on my list of priorities due to me not being "most people". Yet, they are technically problems that only have to done once before they become a permanently solved problem.

[xmj]

This thread is full of great ideas. ERE as a side-effect of a well-designed web of goals is something that rings close to heart - I'm working on this at the moment.

Also, the aesthetics part is something I've found severely lacking before.

In Where You Stand Versus Sit, Robin Hanson writes:

Where they stand depends on where they sit.

Expanding on this a little, the argument for down-shifting from upper-middle class aesthetics towards more randomized thrift-shop finds isn't, in all honesty, too appealing. Thus you'll encounter more reluctance from WL5 types making bank, especially when the down-shift visibly harms your social position and thus access to jobs, friends, and mates. Clothing *is* and will remain class signalling, and while still reliant on markets you may not want to intentionally harm your starting position.

On the other hand, "mismatching of other people's discarded furniture" is much less of a big deal, as many people do get to inherit some ancestor's well-made solid wood furniture.

[jacob]

On the other hand, "mismatching of other people's discarded furniture" is much less of a big deal, as many people do get to inherit some ancestor's well-made solid wood furniture.

It also depends on the eye of the beholder. For example, given my experience/interest in furniture making, Ikea-style furniture makes my eyes bleed.

Without introducing too much color-theory, status for upper-middle class consumers is essentially measured by [the positional goods one buys. Whereas status for ERE comes down to the demonstrated complexity behind one's choices. Random furniture or clothes from a thrift store shopping spree = bad. Deliberate coordination + personal creation with multiple stories about the various channels from which a given solution was achieved = good. E.g. this piece was from a trip to Germany. I modified this sweater with ... This table used to be a desk before cutting and adding ...

But for ERE it takes one to know one and therein lies the problem.

So I think in order to actually communicate style as widely as possible, it has to have a simple structure. Not a complex structure. Why? Because the predominant structure of society, based on industrialism, IS a simple one where everybody is the same, e.g. business casual = slacks + collared shirt. A the core design of ERE is complex by construction. In order to appeal, it therefore has to be simplified in order to be understood. In that way it's a bit like a sculpture. While Michelangelo may see David in the raw rock ... stone has to be removed before everybody else see it as something different than a rock. (I'm not saying this to be trite. This is literally something I've never given much thought.)

[Ego]

journalists and writers are either looking for 1) a freak to present a freakshow; or ...

And then in the midst of the freakshow the camera focuses in on the freak's most freakish characteristic. The audience grows quiet, waiting for the next utterance of the freak. That is when he clears his throat and slowly says something so piercing that it cuts to the very heart of what the normies have felt all along but were unable to articulate. It is at that moment that a spark ignites. Neurons connect. Wires are crossed. They are changed forever. Unable to go back to who they were the moment before they encountered the freak. They realize with blinding illumination that when they are seen from the vast scale of human history, they are the freaks.

Krishnamaruti did not try to fit in or look normal. Einstein embraced his freak. Gandhi shed his suit for robes in order to convince those wearing suits.