the dollar journal

Where are you and where are you going?
take2
Posts: 317
Joined: Wed Jan 09, 2019 8:32 am

Re: the dollar journal

Post by take2 »

All excellent places. My DW is from Hungary and I think Budapest is one of the most beautiful cities in the world. Lake Balaton is also lovely, but nicer in the summertime.

I did a long weekend in Cornwall about 5 years ago which was amazing, but was in June with great weather. Suspect in the winter it’s fairly different.

I’ll be interested to see whether you like the UAE. Given your post above re: issues in Denmark the UAE may serve as a better home base. Another long term option could be Portugal given their friendly (lack of) crypto taxation. Enjoy!

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

@take 2

Thanks!

UAE felt weird to me, but maybe it was just the thought of everything being build and run by foreign workers that don't see their family and from what I've heard sometimes must give up their passport to employers (slavery basically). Budapest was indeed awesome and beautiful. I love traveling while reading up on history and visiting the historic places meanwhile.

Yeah Portugal seems nice in both regard to taxation, culture and temperature, but I do love my home country (unfortunately) so I don't think I'll be moving.

Next up I'm going to the black sea.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

What are the odds of me reading this post in a 100 years? :?: :idea:

If I read this on 26-11-2121 I will go celebrate that I made it

I would love to see 100 more summers

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

2021 goals:
  • Financial goals:
  • Achieve $30,000 stock dividend goal - Achieved. Looks like it's gonna be around $36,xxx.
  • Achieve spending below stock dividends (!) - Not achieved. Spending was around 38,000 as I decided to just go crazy :!:
  • Achieve $40,000 real estate fund dividend - Not achieved. Closer to $24,xxx.
  • Achieve first direct real estate investment - Achieved. Great to finally cross it off my list after talking about it for years.
  • Become fully invested (= no cash) - Not achieved. I sold some positions in November & Decembers for new projects in 2022.
  • Health:
  • Every day either do 8,000 steps, 100 push ups or 5k - Not achieved.
  • Try to minimize sugar, fast food and calorie intake - Not achieved. I did have one month though without any sugar/processed sugar. Felt great.
  • Adventure/the important stuff:
  • Publish one hobby project each month - Not achieved. But I still did a lot of different projects during the year.
  • Do 1 big trip to either Australia or the US - Not achieved. I blame Corona for now.

herp
Posts: 171
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp »

$38k! You spendthrift, you ;)

What did you spend money on this year?

Can you share some details about your first direct real estate investment? I have zero plans to go down that route, but I'm still curious.

What kind of hobby projects did you do this year?

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

@Herp

Yeah, I know! Lifestyle creep and frivolous spending due to paper gains is real. I used a lot more money travelling and staying at expensive hotels. I also spent a lot more on misc. purchases for lunch and takeaway compared to other years.

While I find ERE "technology" and what others are doing on this forum to be cutting edge within personal finance and super exciting, I guess I'm not exactly ERE myself. I don't regret travelling and experiencing awesome places, but I guess I could have gone without the additional spending on food.

Looks like my SWR for 2021 was 0.68%. As long as it is under 1% I am happy and won't be too concerned with my spending.

I lost $144,030 in January, but during the month NW decrease peaked at $300,000.

My biggest challenge right now is day-to-day execution to achieve long-term goals, ie being happy, eating healthy, consistent workouts, screen time, not doing a lot of small purchases.

I'm using my time to sleep in, read books, walk and plan new investment projects. Sometimes I wonder if this type of life contains enough purpose for me. But then again, it might have been a problem I've always struggled with,.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

i'm taking some big risks atm

if they pay off the reward will be great

if shit hits the fan I've also always had in the back of my mind that I can just go ERE and live a happy and worry-free life.

herp
Posts: 171
Joined: Sat Apr 08, 2017 1:11 pm

Re: the dollar journal

Post by herp »

What kind of big risks did you take?

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

TSLA went from $0 to $1 trillion in market cap in 20 years. S&P 500 went from approx. 1,000 to 4,000. That's around a 8.7% return, however, it's only 6.7% when adjusting for inflation. That's a lot lower than the 10%+ historic return one would have expected.

There are significant learnings from looking at this 20 year period in my opinion;

1) A loooot can happen in 20 years, but it's not a long time - at least that's how I feel in the sense that years pass quickly.
2) Based on 1) it does not make sense to give any attention to anything happening right now. Russia invades Ukraine? Doesn't matter in 20 years. Fed hikes the rate 50 bp? Doesn't matter in 20 years. S&P 500 drops 50% in two weeks? Doesn't matter in 20 years.
3) According to 2), pattern trading or trading based on current news doesn't make sense.
4) We can't know the outcome of the future. We don't know which company is gonna perform like Tesla or Apple in the next 20 years. We don't even know which index is gonna perform in the next 20 years. However, the most widespread investment paradigme currently believes that indexing is the shit - but we don't know for sure. In 20 years another investment paradigme may have taken the scene.

So looking at a 20 year period basically solves some of the short-term problems within investing because a lot of fluctuations really doesn't matter. But a lot of other problems arises since we don't know anything about the future.

If we were to increase the scope to say a 100 year period, nearly all our trouble disappear - financially and otherwise - because we will all likely be dead :lol: That's a bit depressing.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

Based on above, my take is that index investing is the least worst investment method, but I won't regard it as the holy grail of investing. I will make use of it to some extent until something better comes along.

So maybe 80% allocated to direct indexing and 20% to stock-picking, of which most is right now TSLA. I am still a 'belieber' of TSLA like all those other crazy people :lol:

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

herp wrote:
Sat Mar 26, 2022 1:03 pm
What kind of big risks did you take?
I did exactly the opposite of what has been advised on this blog.

(and suffered the consequences and will be possibly suffering the consequences)

(reasoning was that capitalism rewards risk)

(my NW is higher now than ever though, but could quickly come down if these rate hikes causes a large crisis)

(causes daily headaches for me just thinking about taking these risks, which I could have totally avoided by not taking risks)

To be continued......

MBBboy
Posts: 212
Joined: Sat Jan 01, 2022 12:11 pm

Re: the dollar journal

Post by MBBboy »

The ~10% historical return you are referencing is actually a nominal number, so once you take out historical inflation of 3%, it's basically on track with the numbers you talk about over the past 20 years.

You're completely right about ignoring the short term headlines though. This was a fun read on the same idea: https://www.collaborativefund.com/blog/ ... cial-news/

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

@MBBboy

That's a really good blog post. And yeah it seems you are right about the real return being around 7%.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

I feel like it was extremely obvious that the bubble was gonna burst eventually for hyped stocks from 2020 onwards (ZM, Peleton, Roku etc.). They all had products that are easy to mimic, huge losses and 100+ x revenue valuations. From what I can read a lot of especially new investors got hurt by the bubble bursting in the last few months, while if you stayed clear of those stocks it hasn't actually been that bad.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

Feels like I've won the game because I have hit sub 1% SWR even with a rather inflated level of expenses compared to my initial target expenses.

But from the outside I really don't come across as successful. There's a huge discrepancy in how I feel and how others view me, because I don't have a job and I don't do a lot of stuff - only what I really want to. It's hard to even explain to 99% of people what I am doing (in their eyes who I am) because I really don't do anything in particular.

It's a huge problem so I don't really like to talk to strangers these days. Huge problem #2 is to remain sub 1% SWR while taking huge risks.

User avatar
Lemur
Posts: 1612
Joined: Sun Jun 12, 2016 1:40 am
Location: USA

Re: the dollar journal

Post by Lemur »

@thedollar

I reconcile this by not caring too much what other people think of my life on this pale blue dot....Don't worry about how others view you - believe me they're not thinking about you all that much. We're all pretty much tiny footnotes in each others lives.
It never ceases to amaze me: we all love ourselves more than other people, but care more about their opinions than our own - Marcus Aurelius
Walking the road less traveled is often a lonely experience, but ultimately rewarding, and if you're on the path long enough you're bound to bump into some fellow travelers. I understand this feeling - the forum helps fill the gap but it would be real nice if I could philosophize ERE concepts with someone in real life. I find it difficult - the gap in thinking is wide and ERE can be a bit out there.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

@Lemur

Yes, I would love not to care. I would love to say that I don't care what other people think. But the reality is that I do care to some extent.

I guess it takes practise like everything else.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

Not looking much at my investments these days, but I know the are on the decline. Maybe -10-20% YTD ?

I hope the stock market keeps declining because I sold my house and will get some liquidity to play with/invest in September or October.

It feels like the market is constantly testing investors with these fluctuations. Those who become fearful and and sell will suffer the consequences. It's like this every time and I think it's the same this time around with all the fear starting to spread. Don't be fooled.

thedollar
Posts: 256
Joined: Tue Feb 21, 2017 4:07 am

Re: the dollar journal

Post by thedollar »

I've lost a lot of money lately.

September: -$181,662
October (so far): -$88,234

My personal NW topped out at 5.7m late last year.

I have around $1m in cash right now and waiting to deploy if asset prices crash. Also quite bored these days.

zbigi
Posts: 977
Joined: Fri Oct 30, 2020 2:04 pm

Re: the dollar journal

Post by zbigi »

thedollar wrote:
Sun Apr 24, 2022 1:07 am

4) We don't even know which index is gonna perform in the next 20 years.
We know a little bit, thanks to demographic trends, which don't change that quickly. So, if a country is rapidly getting old, it will soon have much less consumers, much lower worker base (so, higher labor costs for companies) and higher taxes to fund the retirees. Ceteris paribus, such index will perform much worse than the index of an economy which doesn't have such problems.

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