Successfully retired at 39. Then investment fail.

[AWOL Geordie]

Hi Jacob and everyone else.

I've been following this excellent site for years. It inspired me to live a minimal life and save hard for ER. I pulled it off at 39 only to have the dream dismantled 18 months later. I do not want anyone else to make the mistakes I made in losing $250,000.

I have to start from scratch at 41 and I'm currently looking for work again (as a maths teacher in Asia). It is very very disappointing to have freedom taken away once you made it.

My errors were classic and easy to avoid.

It's a bit long to post here but please follow the link:

http://www.awolgeordie.com/2014/10/how- ... ntaur.html

Please comment. I'd be interested to hear this community's thoughts. How can I recover? What to do? I will continue to live by the tenets of minimalism (as once you start you can't go back). I can still fit everything I own on the back of my motorbike.

Best wishes
Steve
PS. A Geordie is a native of Newcastle, England.

[George the original one]

It is rough, but you have the skills and time to do it again, possibly faster than you did the first time because of experience.

[Dragline]

Very sorry about your experience. I think you have the wherewithal to get back up, too.

I'd recommend that you read the book referenced in this article: http://www.businessinsider.com/what-i-l ... ars-2014-9

The most important lesson to learn here is the psychology of why it happened, and this book explains it from the perspective of someone who also went through it. BTW, the article doesn't do the book justice -- its way better and in more depth than what is described, but was a convenient link to grab.

[AWOL Geordie]

Thanks folks. That was an interesting article and I'll certainly have a look at the book.

[almostthere]

It takes a certain amount of bravery to publically admit these mistakes. I admire you for that.

I agree with GTOO, you have the skills to do it again and probably faster.

[jacob]

Wow, that sucks! I'll just add to what has already been said in that if you have a demonstrated ability to save large amounts of money, you can do so again or alternatively just earn-as-you-go since you also have the ability to live well on little. The knowledge you have is worth a lot.

One thing you need to do differently this time is to spend much more time educating yourself on investing and paying a lot more attention doing it. Ensuring a lifetime stream of cash is not something anyone can expect to spend a couple of hours on reading a website or a couple of books and then proceed to forget about forever. I tried to make that point in the ERE book. What works now will probably not work 10 years from now. This is very very important and most people/books would rather tell you to just follow their plan but reality will always find a way to thwart it. Basically, FI is not a case of accumulating a bunch of money and reaching some goal line. It's just a transition between working for money and then working to have your money work for you. Now the latter generally requires a LOT LESS effort, but it still requires some.

[JamesR]

Wow, that is a brutal story. Sorry about that, at least it's a learning opportunity and you could get back to ERE in a few years, especially if you can find a way to earn a british salary while living in Thailand. Or perhaps go back home for a couple of years of focused earnings/savings before going back to Thailand? That's kind of what I'm doing right now (starting from scratch).

By the way, I want to point out something that I noticed in your story. It seems like the real mistake you made was trying to avoid risk. You originally kept your money in a savings account, and then you switched to a 100% capital guarantee. In both situations you lost money because you were trying to avoid risk, one was slow, the other was fast. I think you wrote the story like that because you sort of realized this?

[AWOL Geordie]

Excellent replies. Thanks again. Food for thought.

Yes, another mistake I failed to mention is that I wanted to invest and forget. As Jacob points out this is a flawed approach.

Life goes on. I guess I'll grim and bear it and start again.

One reason I posted here was to help others avoid the same mistakes. There are lessons to be learned here.

[Sclass]

Awwww man! This sucks!

You can make it back. Surely you're a lot better now at accumulating wealth than you were at 20. I have two friends who made and lost millions only to make it back in a fraction of the time. In my friends words, " it took me less time because I knew exactly what to do."

His leveraged real estate empire consumed itself in the late 80s.

A little creativity can go along way. Your ability to sell your lifestyle info online is a good indicator that you can fast track your recovery.

A school buddy of mine got hit in a currency exchange Hedgefund ponzi scheme. I can still remember the night he bragged to me he was doing 25% a year with his guy. (25% is some magic number to hucksters...guys like Madoff use this figure). My ears perked up and he said he only takes $250k min investment. My buddy got his dad and siblings in. At the time he thought I didn't make the cut. I put it out of mind till it made headlines when the ponzi scheme was busted. Reminded me of your story.

I got taken in the REFCO scheme. Commodity Hedgefund went down because somebody embezzled the collateral bonds used to back the futures contracts. I read about it in WSJ and choked on my cereal one morning. I had only invested 5% of my net tho (my rule). I later learned the same guys who didn't go to jail on that one did the same thing to John Corzine's fund in nat gas a few years back. It literally was the same team who were still free using the same dirty trick.

No fun. I've been reading Jesse Livermores biography and it was amazing how many times he came back. Sometime in less than a month (starting at zero). Good luck and keep fighting. Make a plan. Get a stake (faster than earning it yourself). Go get your $250K back.

[Carlos]

Thanks for sharing what must be a tough story to relive. Sorry you got scammed.

Have you thought about opening a business giving motorcycle tours of SE Asia? It's something you clearly love and if you have the passion, experience and language skills (Thai at least) it could be a good lifestyle business for you.

[AWOL Geordie]

Thanks lads.

Sclass - there are so many scams around - I had no idea. Since posting about it I've met dozens of regular folk who've been scammed too. Some real horror stories. Easy pickings for the sharks in suits. And these sharks in suits are subhuman scum. They utterly destroy people's lives. I'm lucky that I'm only 41, in good health and qualified enough to bounce back. Many folk aren't so lucky.

Carlos - a Singaporean friend asked me to run motorbike tours. I haven't done it yet as I simply love riding on my own - free! I like to feel that (elusive) sense of freedom and I find it in running and motorbiking. Additionally, I love maths and I do enjoy teaching it to poor kids out here. I continued to teach part time even during retirement (for something to do) and I'm glad I did as that extra income is now critical. I think I'll continue to stay here and teach part time.

Once you've tasted freedom it's hard to go back to the plantation. An ability to live on a reduced income provides an opportunity to vastly reduce workload. I guess I've just lost my cushion but I can live with that. The Buddhist mantra of live for today has become a strong force in me that I think many of us neglect. We sacrifice today's happiness by stressing about the past or future.

Dunno where I'm going with this - just thinking out loud.

[BPA]

Oh no. I am so sorry that that happened to you.

All of my savings are in my mortgage (as I pay it down) and in the commuted value of my pension. I am a little terrified to invest on my own and my stomach dropped reading your story.

Wow. I feel so bad for you, but I am impressed at your taking of responsibility.

[AWOL Geordie]

BPA

Just bear in mind nothing in life is certain. The house could be knocked down. Insurance might not pay up. Pension funds are ponzis. Debt-based money systems I feel are partly to blame for all the uncertainty. Life is one big lottery. I was a Royal Navy Submariner for 10 years and I'm supposedly due a small pension when I'm 60. However, spiraling government debt does not bode well for the future.

Perhaps I'm just jaded at present. I need a massive revaluation of where I'm headed.

[BPA]

I hear you! There are many reasons why I want to take my commuted value instead of a pension and some people think I am paranoid for worrying that governments won't meet their pension obligations. My pension is a government one.

The good thing about ERE, of course, is that it motivates us to become more self-sufficient and frugal.

Good luck on your regaining FI journey.

[dot_com_vet]

So sorry to hear this happened to you. And thank you for the taking the time to write about it.

A neighbor had his pension tied to company stock. The stock tanked recently, and the pension now evaporated. He's older and ready to retire, and he has no time to make it up.

At least you're relatively young. Can this be a multi-year tax write-off?

[WYOGO]

My condolences for your loss. I learned some time ago that there is nothing on this earth with regard to the affairs of men that is perfectly safe and sure. Adaptation is the key to survival in a changing and uncertain world and you are certainly demonstrating incredible resilience. May peace and prosperity attend your way in the journey onward and upward.

[frihet]

I feel your loss.

That blog post was deep. It contained so much wisdom and could be read on many levels. The wisdom of economics, carried you into the wisdom of spirituality. Which is no different from the wisdom of life itself. Let that wisdom carry you and I'm sure your life from now on will be in the right direction. ERE or not.

Hang in there and BE free.

[Hankaroundtheworld]

Lots is already said above, and I feel with you. I noticed that you are a good writer, I really felt those emotions while reading your story, may be you can do something with that skill as well moving forward.
You're right, there are many scams.... I felt for 2 in my life, with one (put in 50k USD), it took me 10 years to get 35k USD back of it ....and stupid as humans can be (you're right, it might also be greed), i trapped into another one for 80k USD, and that one is still frozen, waiting to get something back, if ever ...and it is all the same stories again, the lies, the promises that you get back something, the stupid move to believe a financial advisor (he is probably laughing his ass off ...)... all so recognizable, but we still make those errors (and hopefully learn from it)
Anyway, you seem to be a strong person with the right attitude to life, and I fully trust you'll find your freedom again. All the best !

[RayinPenn]

I've observed that are so many people that would either outright steal or steer the unsuspecting into high commission low yield investments that I trust no one. My solution is:
1) I do my own investing.
2) I keep it simple by buying low cost index mutual funds and some blue chips
3) I diversify by holding both stocks and bond funds
4) I buy what I understand and prefer stocks with dividends

Lastly and most importantly I do not chase returns..if looks to good to be true it generally is.
Read this: http://www.transparentinvesting.com/upl ... estory.pdf

I know it's hard but I'll bet you will surprise yourself in what you can achieve...

[iceet]

Thanks for the blog, it was moving.