RFS' Journal

Where are you and where are you going?
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Re: RFS' Journal

Post by RFS »

@ Egg- Hi Egg! Jesus, that sounds crazy. Why are the prices that high? Also, are y'all seeing inner-city gentrification like the US? After WW2, you couldn't use a VA loan to renovate an existing house, so many people moved out to the suburbs, where the new construction was. This happened just as legions of building ordinances made it illegal to build human-scaled, mixed-use, walkable and overall pleasant neighborhoods. As a result, millions of people inhabited incredibly shitty landscapes that promoted only sedentary living and depression. Now there is a high demand and shockingly low supply for pre-WW2 urbanism, which is available mainly in inner cities here. Since the UK seems to have different development patterns, is that going on at all?

While it is crystal-ball peering indeed, I think the values will drop just about everywhere in the US. Many Americans treat their houses like a get-rich-quick scheme with no risk. The speculation comes in different forms, ranging from flippers to people who do cash-out refinances on their second homes. They think they will never have to truly pay their debts back, because the value of the home will keep going up until they sell. This financial hoodoo makes prices rise completely out of alignment with local people's incomes, until the music stops.

@MEA- Totally! You make the big bucks in real estate by being right before everyone else. I think there are trade-offs with being first in to gentrifying neighborhoods, though, especially if you're house hacking, that is up to each person decide on. For example, some neighborhoods in West Atlanta are at way earlier stages, but many of them feel way too dangerous to me. I think there's a quantitative cost and a qualitative cost to weigh in all investments.

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Re: RFS' Journal

Post by Cheepnis »

Just wanted to pop in to say I like reading your updates and I've put numerous books you've recommended onto my reading list.

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Re: RFS' Journal

Post by RFS »

May 2020 Update
Net Worth: $176k (the inheritance hit.)
- I'm roughly 50% short-term t bonds, 45% cash, and 3.5% equities. I think we'll see deflation eventually, and at that point I will plow my money into equities.
May Spending: $670
Savings Rate: 78%

I'm currently getting pre-approved for my first house hack. With real estate, there is a part of me that wants to buy everything in cash. But I also realize that insane long-term inflation is coming (or that the trend of inflation is continuing.) Therefore, it might make more sense to use long-term leverage on a property at a fixed interest rate, especially if you're using the property to generate income.

I originally thought about buying every 12-18 months with an FHA loan, living in it for a year, refinancing the property out of the FHA loan, then buying the next one with an FHA loan, since FHA loans require less cash for the down payment. I think this strategy only works in a period of rising home prices, though, and I wonder about the future of cities. Especially now that there's a convergence of people realizing they can work remotely, underfunded pension obligations, rising taxes to cover city services, and numerous postmodernist baristas trying to influence public policy. Do I really want to own several leveraged properties in these areas? It's hard to say. Now that my financial position is better, and I see employment as another leg in the investment strategy (thank you, classical_liberal and Gin+Juice!), I'm not as gung-ho. The leveraged real estate is efficient, but not the most resilient strategy.

I'd definitely like to own my primary residence and hack its costs, though, so I'm focusing on getting my first deal. One of Atlanta's public partnerships pays a 3.5% grant towards downpayment and closing costs for certain first-time homebuyers. I looked through their list of participating lenders, checked their Zillow reviews, called 5, narrowed it down to 2, and applied to get pre-approved.

I'm planning on buying a single family home with section(s) that can be transformed into their own space (basement apartment, attic conversion, etc.) This gives the most options, quantitatively and qualitatively. I can rent out the rooms now, but if I want to live there later with a future wife + kid(s), we could have our own space, but also an income-producing element that drastically lowers costs.

Also, I have to recommend the Waking Up app by Sam Harris. He's so good at explaining the benefits & function of Vipassana meditation that I happily pay $10/mo for it. I've been meditating almost every day since March, and the benefits are amazing, even though I still suck at it.

I used to think meditation was about getting into "the zen" and not thinking thoughts, but the practice is noticing that you're lost in thought, then coming back to your breath. If you practice that enough, you start noticing when you're lost in thought in the rest of your life. And there is a huge difference between "I'm anxious" and "I'm noticing that I feel anxiety right now." Noticing my thoughts and emotions when they arise, instead of being lived by them in that moment, has given me what feels like a form of psychological freedom. I've never been as calm and able to control my mind (and this is just after 3 months of practicing!)

@Cheepnis- thank you for popping in, I really appreciate that! I like reading your journal, too (especially about that stoicism!)

Beautiful Boy, David Sheff
- I think about this book every day. David Sheff gives you his soul, and about a difficult topic: his son's meth addiction.

The Good Gut, Justin & Erica Sonnenburg
- There's an exploding field of research about our gut microbiome, and how it affects almost everything in our body. Rather than reading the book, I would try to find a podcast. This book was written by academics and seriously drags at some points.

Surviving Auschwitz, Primo Levy
- David Blaine was so entranced by this book that he got Primo Levy's holocaust number tattooed on his arm. When he was asked at a party what he learned from the book, he said “everything."
Last edited by RFS on Fri Feb 18, 2022 3:40 pm, edited 1 time in total.

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Re: RFS' Journal

Post by RFS »

Net Worth: $184k
- Less than 5% of my net worth is in equities. Almost all of my money is either in short term t-bonds or cash, since I think deflation will eventually hit stocks. Reading The Intelligent Investor has made me consider shifting to 25% equities, though. I don't think it's unreasonable to rule out a scenario where the Fed permanently outlaws deflation in equity markets. My current allocation isn't hedging me against inflation at all!

Spending: $977 mo/avg.
- I bought my first bike- a Trek Verve 2! After taxes and a helmet, it came out to almost $800. I was kicking myself for not buying it used, but I think the costs are tiny compared to the benefits it will bring. Any tips on bike security would be appreciated! I've been thinking of buying 3 u-locks in hope that cutting each of them will be perceived as too arduous a task. However, I'm sure there is an easier way.
Savings Rate: 69%

COVID has shifted my focus on being resilient, rather than highly efficient. I've read plenty of Jacob's recommendations about society's failing institutions, but I was in denial until the virus pulled back the curtain (maybe I'm still in denial, albeit a little less.) One thing I've thought about is adjusting my house-hacking strategy.

This strategy consists of using owner-occupant financing, which features fixed 3-3.5% interest rates and low down payments, to buy one property and rent out the units I'm not living in. I could refinance into a conventional mortgage after 1 year, then find another property and use the owner-occupant financing. Rinse and repeat.

I now see this as a highly efficient strategy, but not the most resilient. Instead of getting highly leveraged, it may be better to buy a place that can be hyper-productive (large lot/backyard with sun for gardening, good location for car-free living, workshop and/or deep pantry storage space, etc) and focus on minimizing cash outflows. As the world becomes increasingly weirder, I'm becoming more wary of debt.

The counter-argument is that massive inflation is certain (which I believe is the case), and that it's best to invest your paper for inflation-adjusted income. Leveraged real estate would be ideal for this.


Never Split The Difference
, by Chris Voss
- This book is as good as everyone says it is. It's not a list of BS, big-balls in the 80s on Wall Street negotiation tactics. It's a philosophical framework based off of Amos Tversky and Daniel Kahneman's behavioral research. Here's an excerpt from the book:
Kahneman later codified his research in the 2011 bestseller Thinking, Fast and Slow. Man, he wrote, has two systems of thought: System 1, our animal mind, is fast, instinctive, and emotional; System 2 is slow, deliberative, and logical. And System 1 is far more influential. In fact, it guides and steers our rational thoughts.

System 1’s inchoate beliefs, feelings, and impressions are the main sources of the explicit beliefs and deliberate choices of System 2. They’re the spring that feeds the river. We react emotionally (System 1) to a suggestion or question. Then that System 1 reaction informs and in effect creates the System 2 answer. Now think about that: under this model, if you know how to affect your counterpart’s System 1 thinking, his inarticulate feelings, by how you frame and deliver your questions and statements, then you can guide his System 2rationality and therefore modify his responses.
I think about the tactics from this book every day. I couldn't recommend it more!

Thrawn, by Timothy Zahn
- This is awesome, high-level fiction set in the Star Wars universe.

C-Mass, by Paul Wade
- The author's prose could be best described as "douchebagian" but this was an informative as hell read. I've been doing bodyweight-only training for the last 5 months, and while I would like to get my hands on a barbell again, I'll be incorporating calisthenics A LOT more into my training.

A $500 House in Detroit, by Drew Philp
- Hell yeah. The neighborhood this book takes place in sounds a bit like an ERE-enclave, minus the huge savings. Everyone is resourceful as hell and finds ways to make it using little to no money.

The Husband's Secret, by Liane Moriarty
- I realized that almost everything I read is by men, and that I don't read a lot of material from a woman's perspective. This book is written from the perspectives of Australian Housewives, so I decided to try it. Liane Moriarty's books have been turned into TV shows (she wrote Big Little Lies), and I see why. She writes incredible novels. They're based on the presupposition that everyone is deeply flawed- her books remind me of the show Arrested Development.

Recovery: Freedom from Our Addictions, by Russel Brand.
- If you like beautiful writing and discovering patterns of behavior driven by unconscious fears, this is the book for you.
Last edited by RFS on Fri Feb 18, 2022 3:44 pm, edited 3 times in total.

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Re: RFS' Journal

Post by Kriegsspiel »

RFS wrote:
Sun Aug 09, 2020 4:04 pm
Net Worth: $184k
- Less than 5% of my net worth is in equities. Almost all of my money is either in short term t-bonds or cash, since I think deflation will eventually hit stocks. Reading The Intelligent Investor has made me consider shifting to 25% equities, though. I don't think it's unreasonable to rule out a scenario where the Fed permanently outlaws deflation in equity markets. My current allocation isn't hedging me against inflation at all!
I think his concept of staying between 25-75% equities seems pretty sound. I do that myself. And really, if stocks get broke in half, you're only down 12.5%.
One thing I've thought about is adjusting my house-hacking strategy.

This strategy consists of using owner-occupant financing, which features fixed 3-3.5% interest rates and low down payments, to buy one property and rent out the units I'm not living in. I could refinance into a conventional mortgage after 1 year, then find another property and use the owner-occupant financing. Rinse and repeat. I now see this as a highly efficient strategy, but not the most resilient. Instead of getting highly leveraged, it may be better to buy a place that can be hyper-productive (large lot/backyard with sun for gardening, good location for car-free living, workshop and/or deep pantry storage space, etc) and focus on minimizing cash outflows.
Something I've been kicking around for a while is the idea to slowly live-in flip a series of houses in a neighborhood or small town. Ideally gut flips with very low acquisition cost, where you could put in very basic but functional fixtures (Formica, not marble), big insulation, and put in some appropriate-tech type stuff like solar water heaters, rain barrels, gardens, etc. Then repeat the process after a few years.
As the world becomes increasingly weirder, I'm becoming more wary of debt.
Keep in mind that nobody will make you take out a shit ton of debt. You still have the option to buy a cheaper house with a small mortgage that you don't have any trouble at all paying. I do feel you though; I've always had an instinctual aversion to it and never had any "real" debt.

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Re: RFS' Journal

Post by Smashter »

You're rocking it! What's new on the job front? I'd love an update on how you're liking teaching. I'm fascinated by how covid has effected the student/teacher dynamic, especially in the lower grades.

I just checked out "recovery" from the library based on this rec, looking forward to diving in. It seems right up my alley. Thanks for the mini review, keep em up!

Interesting you like "never split the difference" so much. I might need to re read it. It didn't click with me. This could be because I had to read it for work (I'm in sales)and I went into it with the wrong mindset.

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Re: RFS' Journal

Post by RFS »


Net worth: $186k
Income: $5k
Spending: $2.1k
Savings Rate: 58%

Here's September's spending:

I'm debating whether to join a nearby gym that offers unlimited jiu jitsu (boxing, kickboxing, and muay Thai classes too) for $150/mo. Years of Joe Rogan's podcast has made see BJJ as a vehicle for personal development. I have to be fully present and dissolve my ego in order to improve, all while vigorously exercising and learning how to kick someone's ass. Sign me up, baby!

Plus, gyms where people exercise together, like CrossFit or MMA gyms, are excellent for building social capital. Especially for the people who become assets to the gym's community- the ones who go consistently, are coachable, show good sportsmanship, etc. A lot of business gets done at the gym!

For spending reductions, I'm about to get a liability-only car insurance policy, which will drop my insurance payment from $170/mo to around $60/mo.
Smashter wrote:
Mon Aug 10, 2020 5:36 pm
You're rocking it! What's new on the job front? I'd love an update on how you're liking teaching. I'm fascinated by how covid has effected the student/teacher dynamic, especially in the lower grades.
Thanks, Smashter! Teaching is going well. As a profession, it fits really well with my personality- I took Jordan Peterson's personality assessment a few years ago, which says that I am in the 98th percentile for extroversion. This means if there are 100 people in a room, I will be (temperamentally) more extroverted than 98 of them. I also scored exceptionally high in compassion. Thus, I really like working with, helping, and getting to know people.

While that's still good, I'm not sure how much I like this particular school. I have to work with shitty pre-made lesson plans, which has been even more painful than expected. They're bought by school boards, who are concerned primarily with ensuring that nobody, not even someone who thinks Harry Potter was created by the devil, could possibly be offended or upset. Thus, the instructional materials are boring as hell. It's madness! I think I may switch to a different work environment (specifically stage 2 described inSet for Life, where you find a scalable opportunity- one that usually has a lower base pay, but higher upside/earnings potential.)
Smashter wrote:
Mon Aug 10, 2020 5:36 pm

I just checked out "recovery" from the library based on this rec, looking forward to diving in. It seems right up my alley. Thanks for the mini review, keep em up!

Interesting you like "never split the difference" so much. I might need to re read it. It didn't click with me. This could be because I had to read it for work (I'm in sales)and I went into it with the wrong mindset.
I'm glad you ordered Recovery! There's a bit in the book about addiction appearing as either a short term-grifter, like an alcohol or heroin addiction, or a long-form con man, like codependency, workaholism, sex addiction, etc. Since the latter is often sanctioned by society, because everyone is on the spectrum of addiction, the con man victims don't get access to the 12 steps, which is incredibly sad. Everyone could improve their life with its principles! Let me know how you like it.

As for NSD, it took me several attempts to read it. I think it's like rich food- you have to read bits at a time, so it can digest properly. It helped me to read it for about 30 minutes a day, then read the good parts aloud to another person and talk about. When I did that, the information in there seemed like a golden treasure chest containing incredibly insightful principles for approaching communication. There are some MONEY passages in there that are useful for every single relationship you have. Try it again brother!
Kriegsspiel wrote:
Sun Aug 09, 2020 4:45 pm

Something I've been kicking around for a while is the idea to slowly live-in flip a series of houses in a neighborhood or small town. Ideally gut flips with very low acquisition cost, where you could put in very basic but functional fixtures (Formica, not marble), big insulation, and put in some appropriate-tech type stuff like solar water heaters, rain barrels, gardens, etc. Then repeat the process after a few years.

Keep in mind that nobody will make you take out a shit ton of debt. You still have the option to buy a cheaper house with a small mortgage that you don't have any trouble at all paying. I do feel you though; I've always had an instinctual aversion to it and never had any "real" debt.
That's not a bad idea! It mitigates the risk of cascading failures within your ERE system, too. I do remember reading about Boris Berezovsky in Once Upon a Time In Russia, though- specifically how he built a massive business empire by loading up on long-term debt, knowing that the rubles he would pay back later would be massively devalued. That's one argument for long-term leverage in some inflation-adjusted income assets (like real estate.) Although, 2020 is not the same as the early 90s. Who knows how long this global debt bonanza will continue?


- In order to help my brain calm itself in the evening hours, I have turned to the reading of fiction (sometimes I can't help myself and will read some ERE, or a Charles Hugh Smith book, and then my head will spin.) What's been working for me is to split up my reading into ½ nonfiction, ½ fiction. One of the fictional authors I can't stop reading is Timothy Zahn, who, even though I have said this before, is a serious badass. His writing is incredible.

- See above commentary.

, Melody Beattie
- I decided to order this after reading Recovery. It is a fine book, one that revealed a series of truths that I had been ignoring, at my own peril, since I was a teenager. I think about it every day.

- This book will help add a layer of nuance to your thoughts on just how phenomenal moving around and exercising is! I was deeply moved by some sections.
Last edited by RFS on Fri Feb 18, 2022 3:45 pm, edited 1 time in total.

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Re: RFS' Journal

Post by RFS »

Net worth: $189k
Spending this year: $11.2k ($933/mo avg.)
^ This has been a spendy year! I bought my first bicycle, joined a martial arts gym, and am generally living what feels like a fancy first-world life (I have Spotify Premium now, pay for The Waking Up app, buy the most lavish foods from Aldi, etc.) I have to have a surgery in December, which will cost around $2k, so I believe that I will end the year between $13-$14k spending. Yikes!

In other news, I joined the Jiu Jitsu gym. Training has become one of my favorite things to do! A whole new world of vigorous exercise, bonding with teammates, and developing your full potential through struggle is lurking behind the door at your nearest dojo. The main benefit, though, has been in the ego department- this sport has taught me more about ego in 30 days than years of books and podcasts. It's even changed my FI pathway (I think- more on this later.)

In some sports, like football, you can dominate with size and strength alone. I played in high school, and I remember one coach, a morbidly obese southern man with almost an entire can of dip packed into his mouth, lecturing us about the realities of a sport where you run full speed at someone and smash their body with your body.

"FOOTBALL IS PHYSICS," he would shout in a profoundly southern drawl. "IF YOU GOT TWO THINGS COMING AT ONE ANOTHER, AND ONE OF THEM IS BIGGER THAN THE OTHER, THEN THE BIG ONES GONNA WIN" (for those of you wondering if the Deep South is like everyone says it is, let it be known that this quote was spoken in my first period weight training class. This class was exclusively for football players, held at the football complex that recently underwent a multi-million $ renovation. The chemistry lab at the school has bats hanging from the ceiling.)

In Jiu Jitsu, size and strength aren't as important. When the Gracie family was creating Jiu Jitsu back in the day, there were 3 sons: George, Carlos, and Helio. George and Carlos were complete studs- muscular, strong, and quick. Helio, on the other hand, was the tall, lanky, unathletic black sheep. Guess who became one of the best grapplers of all time, because he had to rely less on his strength and more on his technique?

It's all in the technique. Your hips turned just a few degrees too much, or your hand centimeters away from where it's supposed to be, can make the difference between easily sliding out of a submission, or tapping because your arm feels like it's about to be snapped in half. The moves are designed to work on someone twice your size, too. Thus, every dojo is filled with nerdy-looking people who, despite being 50 lbs. lighter than you, can kick your ass. There's always going to be someone with better technique than you. And that someone, especially at the beginning, is everybody. The only way to improve is to check your ego.

Checking the ego in this controlled environment, for 3-5 hours a week, lead to noticing the ego in other realms of my life. I realized that my ego is way bigger than I thought- while I don't have a truck-nuts-on-the-hitch kind of ego (I think), many of my thinking patterns are predicated on wanting to be perceived in a certain way by others, or trying to prove to myself that I'm "the man." Rather than operating on the internal scorecard, I was falling prey to the ego- the side of myself that is made entirely of bullshit and will never be satisfied.

Around this time, I decided that I'm not signing a teaching contract at my current school for next year. But when I sat down with my journal to plan what to do next, it felt like my brain was made of mud- I couldn't see my thoughts clearly at all. The only thing I could see was a feeling of generalized anxiety. I blew it off the first couple of times, but then I noticed it was a pattern. It was a classic case of information overload- there was simply too much shit coming into my brain between the phone, RSS feeds, etc. Even though I'd read about this several times, ranging from Cal Newport's books to MMM's blog, I had decided to learn this through the pain route!

In an attempt to free myself from this seemingly constant anxiety about my future, I decided to eliminate all unnecessary internet activity and check my phone twice a day only. Even on the first day, I could see noticeable reductions in my internal chatter and anxiety. 3 days in, I felt like I had been injected with some kind of alien drug for calmness. Thoughts I hadn't even conceptualized began bubbling up into my consciousness- like the realization that my ego was even manifesting itself in the pursuit of FI. Rather than operating on the internal scorecard and listening to myself, I had let my future plans be driven by the ego, and thus all of them had one theme in common: full-time work, nose down to the mothafuckin' grindstone, so you can save up money, get there as fast as humanly possible, and ultimately showcase material success.

When I limited my inputs, and gave myself the space for my true feelings to arise, I realized that I am entangled in the beginnings of burnout. I've been going pretty hard for about 5 years- each year in teaching, I've had some type of certification program, coaching, leadership program, new course to teach, etc, and have just been working incredibly long hours in general. I wouldn't change any of this, because it's provided me with career capital. There are a lot of people now that can vouch for me being a competent person that adds value! But, I feel tired. My emotions, the feelings of anxiety, were trying to alert me to the fact there was incongruity between my future plans and how I actually feel.

So, I am thinking of embarking on some sort of mini-retirement at the end of this school year. I'm not exactly sure what this will look like, but I've always wanted to learn how to surf. I'd like to keep training jiu jitsu, too, and maybe try to ultralearn a language.


Thinking In Bets, Annie Duke
- This should be required reading for us ERE-minded people, or anyone that assumes risk consistently. It has completely changed the way I think about making decisions.

The 4-Hour Body, Tim Ferriss
- There's all types of quality information in here. The thing I like the most about reading Tim Ferriss, though, is that he truly leaves you with an impression that the status quo about nearly everything is horribly, terribly wrong, and that it should not be listened to under any circumstances.

Star Wars: Choices of One, Timothy Zahn
- I can't stop, and I won't stop.

The Fish That Ate The Whale
, Richard Cohen.
- This is one of my favorite nonfiction books of all time. It's about a Jew that immigrated from Russia when he was 10, and was what I like to call a "rat king" (someone who slithers in the sewers of the global economy, seeing opportunity in the sludge.) When he was a teenager living in Alabama, he noticed that the men from United Fruit were keeping the green bananas, but throwing away the ripes- the ones that were 1-3 days from going bad- because they would rot by the time they got to the cities on the East Coast. This rat king, Samuel Zemurray, bought the ripes and sold them to shopkeepers up and down the railroad line. He saw the opportunity where nobody else did, took advantage of it, and became one of the most powerful men on Earth.

As an added bonus, Richard Cohen's writing is incredible. The book is scattered with quotes like this:
The Chairman of the board was Daniel Gould Wing, who descended from an old New England family. The president of the First National Bank of Boston, Wing looked askance at uncredentialed, ill-bred strangers who wandered in off the street. To him, Zemurray was still Sam The Banana Man, the fruit jobber from the docks. He already knew what Sam could teach him about the business: nothing.

Wing welcomed Zemurray without looking up, greeting him, as Thomas McCann characterized it, "frostily at best." Zemurray waited as the board went through its tasks. When it was finally his turn to speak, he chose each word carefully, explaining his ideas in the thick Russian accent that he never could shed. It was the accent of neither the Russian bourgeois or the peasant; neither the voice of Tolstoy nor the voice of Khrushchev. It was the voice of the Jewish Pale of Settlement, the Yiddish-inflected voice of our grandparents, the fruit peddler, the street haggler, the Yid.

When Zemurray finished, Wing smiled and said "Unfortunately, Mr. Zemurray, I can't understand a word of what you say."

The men at the table started to laugh. Zemurray's pupuls narrowed to pinpricks, his hands turned into fists. He muttered, then stormed out. Perhaps the board members believed Zemurray had been chased away, was fleeing back to New Orleans. In truth, he had only gone to retrieve his bag of proxies. Returning to the boardroom, he slapped them on the table and said "You're fired! Can you understand that, Mr. Chairman?"

What followed was the sort of graveyard silence in which each board member recalculated his own prospects.

"You gentlemen have been fucking up this business long enough," Zemurray told them. "I'm going to straighten it out."
Last edited by RFS on Fri Feb 18, 2022 3:45 pm, edited 1 time in total.

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Re: RFS' Journal

Post by Cheepnis »

I have no idea how similar they are, but I went to a muay thai gym for a few weeks back around 2014 sometime. It was probably just that gym but the people there were way too hardcore and giving me some serious wacko vibes. I decided to quit when this one kid (I say kid, but we were right around the same age) hit another guy in the face. The session was over, we were all packing up getting ready to leave except this kid-dude. His disposition was always very intense and angry, he never talked to anybody. We're all packed up and KD is still going around in a fighting posture taking jabs. Most everybody was annoyed by it and this one guy slapped his jab away, which apparently pissed him off so he punched this guy in the face. Commence short brawl. I wasn't into it.
Star Wars: Choices of One, Timothy Zahn
- I can't stop, and I won't stop.
Can't stop, won't stop! Yes :lol:

Do you have a recommendation for a good relatively short (2-3 books) star wars spin-off? I don't care if it's cannon or not. The this-is-TOO-MUCH entry barrier of Star Wars fiction has kept me out of it even though I'd probably eat some of that shit up. Any good suggestions?

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Re: RFS' Journal

Post by RFS »

Damn, Cheepnis! That was definitely the gym. I think BJJ (on average) attracts a different type of person than Muay Thai, since there is no head trauma in BJJ, but nevertheless the right gym should feel feel like a sanctuary where rituals of respect are embedded into almost everything. My teammates feel like a family to me. If there's a local BJJ gym in your area, I highly recommend it! Especially if there are online reviews where people call it things like "my home away from home."

As for the book, I feel you brother. The same thing was intimidating to me, but look no further than here. If you decide to read it, let me know how you like it :P

Net worth: $192k
Total spending: $14k ($1.2k/mo)
- To me, this feels like rock star spending. I have a car, rent a place in a massive metroplex, train jiu jitsu 4-5 days a week, eat ridiculously lavish foods from Aldi, pay for a meditation app, and have Spotify premium. I even spent $200 eating out this year!

This year, I started meditating for 10 minutes first thing in the morning. Tim Welch & Sean O'Malley harp about it on their podcast all the time, which intrigued me. I was the kicker on my high school football team, and I remember how insanely hard it was to keep the emotions in check during high-pressure situations. In MMA, where someone is trying to separate you from your conciousness, often in front of massive crowds and with careers on the line, Sean's ability to remain ice cold before the fights was (and is still) incredibly impressive to me. I downloaded the Waking Up app, which they recommended, and have meditated each day since March.

After about 90 days, I started noticing these little flickers of awareness. I go on walks with my Mom, who is a wonderful person, but still a boomer that has been deeply conditioned by consumerism. When she would say something that irritated me, I wouldn't be lived by the emotion and act on it. Instead, there was a moment of noticing my reaction, which gave me a second to decide if I wanted to act differently. In nearly all areas of my life, I got better at avoiding unnecessary scraps.

About 6-8 months in, I started noticing when entire narratives were running rampant in my head. I would be in one of those moods where you're terribly depressed about something- the kind of depression where you feel stuck and like there's no hope for your problem- then suddenly become aware of the story playing out in my mind. The thing is, when you become aware of what's in your mind, it doesn't have the same power over you. It merely becomes an appearance in consciousness, not reality. To give a weird jiu jitsu analogy, it's like being in a chokehold by thought demons, then impressively escaping out of it. But before amassing thousands of reps in meditation, where you simply notice your thoughts and return to your breath, you don't have the tools/muscle memory to escape from said choke.

I still supremely suck at meditation; I am a white belt in the truest sense of the word. But the way practicing has enabled me to control my mind has been truly indescribable. And, as Sam Harris says, the quality of your mind is the quality of your life. I appreciate the present moment now, and am better able to make decisions in real-time because of awareness. It's powerful. In the introductory course, Sam Harris said that meditation was the most important thing he ever learned, and I understand that now.

BOOKS READ (December)

Timbaland: Emperor of Sound, Timbaland
- This is one of those books in a big font that you can read in 2 days, but it has changed the way I listen to and appreciate music. Now, I notice the production of the track much more- the strings, the basslines, all the little details that give the songs their magic, and I think about how much it helps establish the song's feel, and what the artist is trying to convey. Plus, there are some serious insights in here about being an artist and collaborating with others! All on top of learning about the creative impulses that created some excellent songs.

The Disaster Diaries, by Sam Sheridan
- I loved The Fighter's Heart and The Fighter's Mind, but I hesitated to read this book for a while because it didn't seem interesting. Holy shit was I wrong! This is an excellent book.

Never Grow Up, by Jackie Chan
- I listened to the audiobook version of this, so I cannot attest to reading this. But wow, Jackie Chan is such a badass. I only knew the American movies Jackie Chan, and was therefore not aware that this man is quite possibly the greatest stuntman of all time. In Police Story, he slid down an 8-story pole, going through 6 layers of glass, then fell through the roof of a store, and then immediately jumped up and began fighting (and then passed out afterwards and had to go to the hospital.) And that's just one of them. There's a compilation on YouTube with some of his craziest stunts with trap music playing in the background, and it doesn't even look out of place because he's kicking so much ass (the pole jump is at 2:01.) It was fascinating to learn about the life of this man (many good lessons, too.)

Living a Life of Inner Peace, Eckhert Tolle
- This man is a genius.

George Lucas: A Life, by Bryan Jay Jones.
- Say what you want about George Lucas, but he is a creative visionary that changed the filmmaking industry. Even at 600 pages, this thing was fascinating to read and never dragged! It helped me learn a ton about the history of filmmaking, and George Lucas himself is an interesting man (a bit of a rebel, too. He was always interested in avant garde, abstract films that had no chance of being commercially successful, and at one point him and Francis Ford Coppola created a hippie filmmaking commune to circumvent the studios from interfering with their creative vision. After Episode IV: A New Hope, he bankrolled each Star Wars movie himself.)

Living In The Long Emergency, by James Kunstler.
- Jesus Christ. This book seriously impressed the notion upon me that the cheap oil age is coming to an end. After reading this, i don't think I will live in a giant metroplex.

- By top books, I mean the books that are sticky. The ones with ideas that you think about every day. Even if I had only read these 5 books, it would have been a wonderfully insightful year of reading.
1. Recovery, Russel Brand
2. Stillness Is The Key, Ryan Holiday
3. Never Split The Difference, Chris Voss
4. The Good Gut, The Sonnenburgs (the book itself is written by academics and drags, but the information itself is incredible.)
5. Thinking In Bets, Annie Duke

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Re: RFS' Journal

Post by RFS »

Net Worth: $192k
- All but $8k of this is in cash equivalents. I'm still trying to figure out how to properly invest my money for inflation-adjusted income. I know for sure that I'd like to purchase my residence and make it hyper-productive as an inflation hedge- positioned for bicycle transportation, a separate unit that can be rented out, highly insulated, a Dervaes-style backyard food system, etc. Basically a mechanism for lowering costs. I also need to disconnect my income from my time, though. Thus far I have thought of real estate bought in cash. BUT, with 25% of all US dollars in circulation being printed last year, I am becoming more open to using leverage responsibly (I have yet to figure out exactly what the definition of "responsible leverage" is.)

Spending: $1.4k
Housing: $550
- I currently rent a room in Atlanta.

Food: $310 (!!!)
- $270 went to groceries, and $40 went to 2 containers of protein powder (I've got 2-hour jiu jitsu sessions 5 days/week, and like to bike, walk, and run for leisure, so I am eating a lot!)
I saved all the receipts for this month. Here's everything broken down by category:

Nuts: $80.62
Meats (Mainly eggs and fish) : $61.50
Vegetables: $49.95
Fermented Foods (Kombucha): $23.60
Oils: $9.45
Seasoning: $8.00
Legumes: $7.00
Sweets: $6.00
Fruits: $2.00

Here's everything I bought:

While this is not the highest level of ERE skill/involves money, I gotta figure out how to simplify the diet. I could go with less almonds and more legumes, but I feel way better when I limit the carbs.

Transportation: $230
Car Insurance: $150
- Got this lowered to $96/mo for semi liability-only insurance (I got the coverage for if an uninsured person hits me.)
Gas: $70
- My work recently became on-site/not remote (I am a teacher, and the school systems out here have been repeatedly pushing back the return date each month), so I just moved back to the city. Before, I was living with my family out in the country, driving a fair bit to BJJ, the grocery store, and a hiking trail. Gas should be lower this month.

Health/Fitness: $205 (15%)
- Health Insurance: $55
- Pharmacy: $15
- 3 month supply contact lenses: $190

Since I heard Matt Maruca's excellent podcast with Paul Chek about light, and how contacts block several types of light that need to hit your eyeballs for good health, I only wear these during BJJ. I've thought about getting LASIK to eliminate this cost, but the thought of something going wrong with my vision for an elective surgery is pretty damn terrifying.

Misc: $75
- BiggerPockets membership: $30 (canceled this.)
- Cell Phone: $20 (US Mobile, baby. Although the data hasn't been working for a few days lol.)
- Shipping costs: $16 (returned a Christmas gift.)


Instead of signing a teaching contract for next year, I have decided to go on an adventure as Yvon Chouinard defines it- an experience where you return a different person. In August, I am going to South America for an ayahausca retreat. I've been interested in this medicine for years now, feel the calling, and and I think doing the work will yield some serious benefits.

From there, I would like to go somewhere in Central America and learn how to surf, ultralearn Spanish, and practice BJJ. I'm open to South America as well, but Central America seems more exciting to me, I think from reading about it in The Banana King (plus, that climate!) I'm not sure where I'll be going, so any suggestions for cities would be well appreciated! So far I have thought of these places:

- Puerto Vallarta, Mexico
- San Juan Del Sur, Nicaragua
- Bocas Del Toro, Panama

To generate income, I was thinking of teaching English online through an online platform. I've been teaching for a few years now and am quite good at it, so I know I could slay the game and eventually charge a higher-than-usual hourly rate.

After this, I plan to move to Greenville, South Carolina, in November. If I choose to work again in education, there are always openings in the middle of the year, and the schools are desperate for people at this time. I think it would be fairly easy to acquire some kind of work. From there, I can pursue house hacking and making a property hyperproductive.

With the rapid acceleration of remote work, I think that places like Greenville will be the beneficiaries of the changes (as opposed to big cities like Atlanta.) Greenville is compact, close to the incredible hiking spots of the Appalachian Trail, has a multitude of affordable properties, excellent climate, a business-friendly political climate, and good urbanism for a southern city (they had a Dutch mayor in the 70s that said "WTF?" and started an urbanism movement that is still going strong today.) There's a bike trail that goes through the entire city and out into the boonies- in fact, you can even access a giant state park directly on the bike path! Since 99% percent of my trips are either to the workplace, jiu jitsu gym, grocery store, or hiking trail, this would be huge for me.


Flow: The Psychology of Optimal Experience, by Mihaly Csikszentmihalyi.
- WOW! I thought I already knew the contents of this book, which could be simplified down to "flow good," but this book was way more than that. It gave me a ton of thought material for structuring my life activities to create flow states. Plus, it is beautifully written. This is an EXCELLENT book, especially for the ERE-minded [by this, I mean people who have to figure out how to structure their own life in the absence of 60-80 hour workweeks.]

Star Wars: Outbound Flight, by Timothy Zahn
- At this point, I have grown to fully trust Timothy Zahn as a novelist. This man is like a literary drug dealer to me. If his shit is available at the library, I will be in line. Let me say no more.

The 3 Questions, Don Miguel Ruiz (& The Mastery of Self, by the same author.)
- I couldn't put either of these down. They're both deep dives into controlling the ego and living in the present. Just attempting to internalize the ideas in these 2 books have reduced my sense of anxiety by around 25-30%. This man's books are seriously powerful. If I had read these when I was 18, years of misery would have been shaved off my life!
Last edited by RFS on Wed Feb 10, 2021 5:52 pm, edited 5 times in total.

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Re: RFS' Journal

Post by theanimal »

Sounds like a fun trip! Please keep us updated. Are you concerned about cartel activity in Puerto Vallarta? Things appear to be very lively there lately..

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Re: RFS' Journal

Post by Western Red Cedar »

@RFS - Glad to hear you are planning on taking a daring adventure. I've been doing a lot of trip planning and thinking about this kind of stuff over the past few weeks so I'll offer my thoughts.

In terms of Central America, keep an idea of the months you plan to be there and projected weather, particularly as it may affect the surf. I've been to all three of the places you mentioned and all were solid (Bocas was at the tail end of a 9 month trip and DW was really sick so I didn't really experience it).

Mexico - a major benefit is the exchange rate right now. You could probably score some great deals due to the pandemic if you're traveling later this year. You also get a free, six month visa on arrival. If you're studying Spanish, the accents in Mexico and Guatemala tend to be fairly "neutral" compared to Nicaragua.

I'd add Puerto Escondido to your list. I was only there for a few days but spent a week in a small village down the beach called Zipolite, and another week in Oaxaca (the City). Puerto Escondido was a major surfing destination and I hung out with a lot of cool surfers there. The city had a nice vibe, but I really liked the other two. Aside from the surf, Oaxaca was the home of Maria Sabina, and that scene might correspond well with your adventures in S. America:


https://timeline.com/with-the-help-of-a ... 1f866bbf37

In addition to Puerto Vallarta, there are other options north and south of there that might be slightly cheaper - between Mazatlan and Zihuatenjo. I took surf lessons from a professional in a small village called San Blas, which was my stopping point between Mazatlan and Puerto Vallarta. There are probably a lot of options up and down the Pacific Coast.

Nicaragua/San Juan Del Sur - The beach here was beautiful. This is also a really cheap country. As mentioned above, the Nicaraguan accent is pretty strong and they speak quickly so it might not be the best place to pick up Spanish.

On the plus side, it is close to a beautiful spot - Isla de Ometepe. Granada is also nearby and a beautiful colonial city. You are also close to the Costa Rica border if you want to explore south from San Juan del Sur.

Bocas Del Toro/Panama - I don't have too much to offer here, but I think one of the downsides is that it is a bit more isolated. You do have options for some regional travel along the Caribbean coast in Costa Rica.

If you're really into learning Spanish and willing to put the surfing on hold, Guatemala is one of the cheapest and easiest places to do so. The people there are really friendly and the scenery is beautiful. Xela is a larger city popular with Spanish students, but not as pretty as Antigua. Lessons and lodging will be more expensive in Antigua. I spent a few weeks studying in Xela and then went to San Pedro at Lake Atitlan for a couple weeks to study there and watch the World Cup. There are a few different communities around the Lake, but San Pedro was the cheapest, and had a backpacker/hippie vibe. If you end up in Guatemala, Semuc Champey was really beautiful and unique.

If you're using a BJJ gym as a filter, that will probably narrow down your choices. I think you'll be solid wherever you decide to go. It's really easy to hop on a bus and check out a different city if you want to change things up.

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Re: RFS' Journal

Post by RFS »


Net Worth: $195k

INCOME: $3.1k (all from full-time salary job.)
- Ayahausca: $1.7k (includes retreat and airfare to get down there. I've got to find a room for one night in the city I'm landing in, then take a taxi to the retreat center, so I believe all-in costs will be $1.8-$2k.)

Everything else: $1k
- Housing: $550
- Transport: $246
- Food: $260
- Misc: $10

Atlanta has really grown on me! I'm enjoying life out here. I believe this is because of how I'm living, though, and less because of Atlanta.

For one thing, my life is highly regimented. Taking Jordan Peterson's Personality and Its Transformations class helped me learn that I'm temperamentally high in neuroticism as a personality trait, so filling my life with routines- making it predictable- dramatically raises my sense of well-being. I've got routines for meditation, practicing Stoicism, reading/expanding my brain, exercising, eating, working, seeing friends, almost everything! Wherever I am lacking in my life, it is almost always because I have not created or optimized a routine to grow in that area. This notion is freeing as hell! If you want to get better at anything, all you have to do is set aside time and consistently practice it.

Second, I recently read Hamlet's Blackberry, by William Powers, which has helped my mind begin the slow, arduous march back to pre mobile-phone eras of focus and stillness. Earlier this year I started limiting inputs and saw my anxiety drop tremendously (like I had been injected with some kind of opiate), but I got a little too un-reflecty upon moving to the city and failed to maintain this marvelous habit. This book helped me understand something I was acting out, but wasn't conciously aware of.

Mainly, it revealed to me that my brain perceives having my phone with me- even if it's turned off or on airplane mode- as being connected to almost everyone on Earth, or what he calls "the crowd." Even if it's off, my brain subconsciously knows that I can simply press a button to be instantaneously connected. In short, the crowd is still with me. And this is particularly problematic, because the crowd must be withdrawn from at times in order to think, act, and ultimately live as a sovereign individual.

Reading this has resulted in having my crowd-connecting devices- my laptop and my phone- physically away from me. Left at home, put in a drawer, just away, so that the crowd isn't there, and I'm able to retreat into a sense of actual disconnectedness and thus consequently provide my brain with the solitude it needs. I can't describe to you exactly how much this has changed my life. I feel like I can think again. And this is just at the beginning stages, where my phone still beckons to me like Sauron's eye when someone puts on the ring.

Anyway, sometimes I think of just staying here, mainly because I'm already here, it being a short drive to my family's place, the kick-ass climate, and I'm already enjoying the fruits of getting to know people. For example, I was talking with one of my training partners at the gym, and we got on the topic of work. He's a property manager for a giant real estate company here, and I told him about my house-hacking goals.

He said to me "If you need anything done on a house, let me know. Roofing, appliances, flooring, electricity, plumbing, siding, whatever it is, I have good guys that I've made money over the years, and they owe me favors."

Hot damn! These moments make me not want to move somewhere else and start over again, but I know I can thrive anywhere! It seems that the trick is joining a few urban tribes, providing value, and talking to people you meet when you're walking the dog (these 3 things have seemed to work for me so far.)

I could move somewhere like Louisville and purchase a house in a transitional neighborhood for $50k, or I could stay here and use some serious leverage to purchase a $150k+ property, but lower my housing expenses/outflows to $0 through house hacking. But then I'm tied up in the devil's snare of consumer finance- the mortgage- in a big city that makes 0 sense to live in unless your job is nearby, in a time where all the white collar workers of America are working remotely + housing bubble 2.0 (which I think the government will allow to pop eventually, so that the Blackrocks and hedge funds of the world can buy up foreclosures again and rent them out.)

@Western Red Cedar- Wow, thank you so much for this information! Incredibly helpful. I'm reading Ultralearning by Scott Young right now, which has lit a fire in my belly. I originally was adamant about Spanish-speaking countries because I already know a bit of the language from taking the classes in school, but reading about the rapid pace at which people have become conversationally fluent in Young's book has opened up almost the entire world to me.

Have you been anywhere on the Atlantic side of Brazil? I've been looking at Florianópolis, one of the reasons being the time zone (I am thinking of teaching English online to kids in China to pay the bills, and the peak hours for EST is 6-9 am, which is pretty damn early. The Atlantic coast of Brazil is 2 hours ahead, so the peak times would be 8-11 am, which would be infinitely better. Also, the hiking and surfing looks insane!) This is, of course, assuming that the travel restrictions will be gone by August.

@theanimal - Thank you, sir! I was not aware of cartel activity, but I appreciate the heads up :shock:


The Madness of Crowds, Douglass Murray
- I remember hearing Jordan Peterson talking about critical theory in 2016, specifically saying that it was coming to schools and workplaces. He was right- my workplace has become inundated with critical theory, and it is straight-up alarming. We spend a lot of time now in meetings and various "professional development" sessions where you cannot say what you think, and you even have to look bought in, or else you will be branded as a racist, sexist, transphobe, etc. Anyway, this book, which is beautifully written, helped me understand exactly what is happening.

Fortitude, Dan Crenshaw
- A decent read! This book attempts to answer the question "Given that we are constantly moving the goalposts for what constitutes equality, and thus creating the perfect conditions for social madness, how should one conduct themselves?"

Early Retirement Extreme, Lord Jacob
- It's like fine wine, this thing gets better over time!

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Re: RFS' Journal

Post by ertyu »

curious about your ayahuasca experience, if it will prove transformative and if yes, how. looking forward to hearing about it.

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Re: RFS' Journal

Post by Western Red Cedar »

I haven't made it to South America yet but hope to correct that next year. A family member on the West Coast taught English online for a few years when her kids were young so she could stay home with them. She usually worked from 4 am to 8 am each day. I can see why you want to look at different time zones.

DW is actually thinking about doing the same thing on our travels to pick up some extra income. I'm assuming we'll probably wait until we are in Europe or Asia just to deal with the time zone issue. You can always consider living cheaply somewhere for a few months to focus on language and surfing, then moving to an area that is more compatible for teaching online.

I'll be interested to hear about your experience. Curious about the tax implications for that type of setup (I'm assuming it is exempt if you meet the foreign earned income exclusion requirements).

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Re: RFS' Journal

Post by RFS »

Net worth: $200k
Spending: $1.4k (same as February.)
Income: $3k

Today's journal is split up into 3 sections: MINDSET, MONEY, AND MEXICO.


Six weeks ago, a girl was kicking my ass at Jiu Jitsu (this is one of its more humbling elements) when I felt the sensation of my rib snapping in half.

In a split second, my instructor was standing over me. “What happened?”

“Professor, I think I broke my rib,” I said. “It felt like it just snapped in half.”

His eyes widened. “RFS, go home right now,” he said. “Ice your rib. It is probably not broken. But if you have trouble breathing, go to the hospital.”

The hospital?! Jesus Christ. I had visions of a punctured lung filling up with blood. I went home, applied the ice, and immediately got on Google to see what might have happened. According to the interwebz, I had likely either bruised my rib, pulled some cartilage off the ribcage, or fractured it.

“Rib injuries usually take 1-3 months to heal,” said one website. “Don't even THINK about getting on the mats until at least 6 weeks!” said another. “There's always some tough guy that thinks they're good after 3 weeks, then they come back and re-injure it.”

My last sports injury was at football practice in the 11th grade. I was battling another person for the starting position, and an ego-driven anxiety about falling behind overtook me. I won the job, but at a huge cost. I came back too early, with a severely limited range of motion in my leg. Even worse, I started training like I was protecting my body, rather than entering the zone. I improved very little my senior season, due entirely to a lack of mindfulness.

This time, reading The Daily Stoic is helping me approach the situation correctly. I've only been reading for 1 year, but the more reps you get, the deeper those thoughts seep into your mind. I still get those ego-driven anxieties sometimes and lose touch with what my body needs, but I'm able to notice that voice quickly, recognize that it isn't true, accept my fate, and focus on what I can control.

This led to consistently doing yoga again, which has immeasurably benefited my life. A friend introduced Breathe and Flow to me, and I was deeply impressed by their technical knowledge and overall skill as instructors. I'm doing one class every day, and it is a life-changer. Yoga not only polishes the spirit, because it's hard and you have to overcome resistance, but it also stretches out your body and seems to erase some of the muscle pain generated from running, biking, lifting weights, sitting in a chair, etc.

It also extends your range of motion dramatically, which adds a whole new level to whatever sport you play. For BJJ, if you have a better range of motion and overall knowledge of your body's limitations, that will translate to conceptualizing and executing escapes, submissions, transitions into more advantageous positions, etc, during your rolls. You'll be infinitely more dangerous on the mat.


Hristo Botev posted a thread linking to Radigan Carter's writings (thank you, Hristo!), and I read every single one of them. He has a unique perspective that changed the way that I think about navigating the Fed. Here's a bit from his dispatch titled “From World War 1 to Bitcoin.”
“For the big four central banks of today, the Federal Reserve, Bank of England, Bank of Japan, and European Central Bank they will never have the problem the Reichsbank President had being limited to money creation by the size of bank note and speed at which the printers can run.

Today, they simply enter ones and zeros into a computer to create trillions of dollars, yen, pounds, or euros.

When you hear the Federal Reserve Chairman saying the Federal Reserve is providing liquidity to the market, that is exactly what they are doing. Trillions so far this year.

When they do that, it makes the dollars in all of our bank accounts worth less. This is why people today buy assets at any price, whether stocks or real estate, and count on the central bank to keep markets trending higher and inflation positive to increase the value of their assets over time.

Of particular note on the Weimar republic is the rate of inflation in those five years.

In 1918, $1 equaled 4.2 German marks
By 1923, $1 equaled 4,200,000,000 German marks

That is not a misprint.

4.2 billion marks to the dollar from 4.2 marks five years before. And people think bitcoin at $500,000 is crazy with a Federal Reserve hitting a trillion on the keyboard?

In 1923, to curb inflation, the Reichsbank issued a completely new currency, called the Rentenmark. The Rentenmark was backed by land, dubious at best, since swamp land in Bavaria wasn’t really a liquid form of collateral to back a currency. But at this point in time you had retired Prussian military officers buying baby diapers to sell on the street because they held their value better than their pension, so after five years of violence and starvation, people didn’t care about swamp land backing a new currency, they were just desperate for stability.

The Reichsbank set the exchange rate at 1 Rentenmark = 1,000,000,000 German marks.

The same bankers and politicians which caused the hyperinflation then turned around and five years later annihilated everyone by revaluing the currency. The bankers and politicians wiped out teachers, retired military officers, wealthy industrialists, foreign speculators. Everyone.

With central banks currently working on their own digital currencies, no idea how they end up pegging a digital dollar to a current dollar, but in a world where the US dollar and treasuries are held as reserve assets by nations for global trade and by people who don’t trust their own currency all over the world, what happens to all those dollars and treasuries once the central banks of the world are more closely coordinated and the world is on digital currencies?

What are the odds the US dollar, currently accounting for almost 70% of global trade settlement, while US GDP only accounts for about 20% of world GDP gets to keep that advantage after Bretton Woods 2.0?

Depending on how Bretton Woods 2.0 and digital currencies are implemented, all those dollars and treasuries held overseas which the US has been exporting since 1974 when Saudi Arabia started pricing oil in dollars will be coming back to the United States.

An easy way to wipe out that debt and dollar inflation would be through some kind of conversion rate to the new digital dollars. Bitcoin provides a way for me to sidestep that very real risk and be outside central bank digital currencies which are coming as a reality sooner than we think.

Remember, governments will always do what is best for the majority to maintain social stability, and the majority of Americans don’t have bonds or even dollars. For those of us who have wealth, fact is we will always be out voted, are in the minority, and need to manage risk accordingly instead of ignoring possibilities.”

Here's the theory behind his own portfolio:
I like Chris Cole’s approach on balancing assets that do well during the business cycle with assets that do well during times of volatility. Matches up very well to the overseas process of balancing efficiency with durability.

Looking at 150 years of monetary and conflict history, the changing geopolitics and demographics, and investing and money, I see three main possibilities I need to be ready for in the future.

Possibility 1: Business Cycle continues
Central banks around the world continue to successfully suppress volatility, life is pretty good even if everyone agrees everything is expensive and most my peers live in debt. I brunch on the weekends, get a dog, buy an expensive house because the Fed is suppressing interest rates, grill in the backyard, and maybe put in a swimming pool with low interest rates to have pool parties with lights strung in the trees, blankets in the yard, and enjoy life.

Possibility 2: Deflationary Volatility
Central banks are unsuccessful at continuing to suppress volatility, there is a liquidity crisis and everyone around the world now needs dollars to pay debts and meet business obligations, the Federal Reserve is unable or unwilling to meet the demand. This causes the value of the dollar to go higher as everyone now needs dollars. Businesses fail, state pension funds are insolvent, foreign countries currencies fail as they are unable to maintain their dollar reserves or pay back their dollar loans as the dollar climbs higher. The stock market continues to sell off with people needing to sell at any price for dollars. With so much of the market now being in passive funds we all watch as the market falls -60%, there are massive protests in the streets as people lose jobs and the out of power political party promises the next new deal.

Possibility 3: Inflationary Volatility
Central banks are unsuccessful at continuing to suppress volatility, there is a liquidity crisis and everyone around the world now needs dollars to pay debts and meet business obligations, the Federal Reserve is able to meet demand and floods the world with as many dollars as required (March 2020). Asset prices roar back from the initial crisis as everyone now has more dollars than they need and trusts the Federal Reserve’s ability to hand out dollars like Oprah hands out Pontiacs, so everyone rushes to buy more stocks and real estate as central banks inflate the price of real assets. This leads to lower interest rates over time as a rise in interest rates can cause a shock of deflationary volatility, so central banks continue to provide liquidity causing market dislocations as the value of currencies decline. Everything becomes more unaffordable for the vast majority of people from health care, housing, education, even food as prices soar and central banks say they are only meeting dollar demand for world markets.

So what is my simple solution for these three very different and complex possible futures?

My investment theory for the Florentine Portfolio is: A portfolio of diversified assets which do well if the business cycle continues, do well if we get inflationary volatility or deflationary volatility, and is simple enough I can automate it and rebalance once a year to minimize my mistakes and maximize the opportunities to win while enjoying my life.

I had a lot of conversations with Chris Dorsey talking through specifics on assets and finally settled on only three within the portfolio.
Equities (70%)
This will be a mix of 35% total US market index fund (FZROX) and 35% total international ex-US index fund (FZILX)

Gold (25%)
GLD is used for modeling purposes, has the longest data set, but I am using PHYS because better tax treatment and held by Royal Canadian Mint.
Gold performs well during inflationary volatility since value of gold has done well traditionally against inflation. From Rome, to Florence, to Weimar it has thousands of years behind it. Some will say it has lost it’s shine as an inflationary hedge with so much money creation being electronic, and that may be valid, but it is still the only form of money that is scarce and not a debt issued by a government. When you own gold, it is your money. Like a world without aircraft carriers flying the stars and stripes, I hope I never see the day where I really need this, but since inflation is a possibility, I must have it.

Bitcoin (5%)
Has performed well over the last decade, no one is quite sure what it really is, some people love it, others hate it. Since I am really covering my bases with business cycle continuation, inflation, and deflation with the other assets, this is me taking a shot at trying to maximize an opportunity with a completely non-correlated asset to the other assets held in the portfolio.
I am currently much heavier than 5% on bitcoin in my other accounts. At some point in the future I expect to put that liquidity to work in productive assets, so having a 5% bitcoin allocation as part of a complete and separate portfolio is appealing to me so I always have some exposure.

Cash (not shown)
I personally have one year of cash that I do not include in my investment portfolios, but is present for deflationary shocks which is why long treasury bonds were deleted out of the portfolio. I am also looking at IVOL, as a way to maybe add exposure to steepening yield curves as a way to have additional cash on hand for buying depressed asset prices during deflation, but have not made a decision on that. Still studying.

What about real estate?

Chris and I talked about this, and I am intentionally not including real estate. Chris made an excellent point that helped me realize when I buy a house at some point in the future, I am going to be ridiculously overleveraged then to the business cycle and not need additional real estate exposure in this portfolio, which is why it is not represented here.
When I decide where I want to live, I will do a VA-loan, and be like 10x leveraged the business cycle in a real estate asset I am living in.”
Note: In the following article, he wrote “I have decided to delete the entire bond position out of the portfolio, and instead of being concentrated in US equity small cap will be split 50/50 US total market and world market (mix of developed and emerging markets).”

I'm thinking of setting up my portfolio similarly. I'm 26, and when I consider my investing timeline comparatively to someone in their late age, I think I might be missing the big picture by waiting for the perfect deflation moment.

Also, another financial stroke of luck has befallen upon me: my grandparents, through frugal living, built up a small portfolio small apartment buildings that are owned free and clear. I now co-own these properties with my uncle, who has been managing them for the last 10 years, is an incredibly intelligent and experienced businessman, and, best of all, doesn't need the money. This will net me anywhere from $6-$9k/yr in income. I feel like the luckiest man in the world!

It's not all gravy, though. They're all Class C properties that are relatively management intensive and require serious know-how to run. When something happens to my uncle, I'm responsible for managing the business. So now, I have a whole new set of responsibilities to learn. I will also co-own it with my cousins when something happens to him, who are all bad with money and in struggle mode. It will be an interesting realm to practice mindfulness, stoicism, good decision making, etc.


Because of Western Red Cedar's helpful comment about the ease of traveling to Mexico for US Citizens, I will be headed there from July-November. I'm trying to decide between Puerto Escondido and Mazatlán, and I'm leaning more towards Mazatlán. The foreigners-to-Mexicans ratio will be lower there (more Spanish), and there is an incredible BJJ gym there close to the neighborhood I'd stay in. The BJJ gym in Puerto Escondido is pretty far away and would be a pain in the ass to get to- I'd have to get a bicycle or moped.

Mazatlán is in Sinaloa, as in the Sinaloa cartel, but from my research, a lot of expats live there, the police take petty crime seriously because the economy relies heavily on tourism, and it seems to be like most American cities- if you exercise common sense and don't tempt people, you will most likely be OK.

I live in a neighborhood of Atlanta where people's eyes widen in fear when they find out, but I feel safe there (granted, I live on a good street, don't flaunt wealth, don't stray into areas of the neighborhood that I don't know well, and never walk around at night, but I wouldn't walk alone anywhere in Atlanta after dark.)

I know Mexico is a different setup, though. Any insights on this would be appreciated.


Hamlet's Blackberry, by William Powers
- I wrote about this in my previous post. If you feel at all frazzled by the onslaught of technology in our age, read this book. It is one of the most important books I have ever read. Plus, it's a joy to read- William Powers is a skilled writer.

UltraLearning, by Scott Young
- Hell yeah. Like ERE, it's a book about principles and strategy. Ultralearning is Scott Young's first book, and it drags at times, but I still highly recommend it. After reading this and Flow, you will think differently about how to structure your life.

The Shallows, by Nicholas Carr
- This is another selection from the Punkt Library, all of which have been grand slams. The author noticed that his ability to focus deeply had diminished tremendously over the last decade. He asked "what if my internet use is literally changing my brain?" This required a deep dive into neuroscience, which he breaks down quite well- the man is a skilled journalist.

The answer to his question is disturbing, but simultaneously hopeful. I remember sitting down as a kid and reading Harry Potter for hours, and I know there's no way in hell I would be able to focus like that now. Reading this book has helped me change my behavior, so I can get back to that level of focus and thinking.

@ertyu- I will let you know! My August retreat was cancelled due to COVID, but the retreat center is going to try and re-schedule for October.

@WRC- I will for sure let you know about the tax setup! I think any income will be excluded as well, but we'll see. Also, thank you for the idea on potentially not working at all. That may be the move.
Last edited by RFS on Sun Apr 11, 2021 6:33 pm, edited 4 times in total.

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Re: RFS' Journal

Post by Stasher »

Recently with my dividends paying back into my accounts I have been looking at some diversity mix to my index funds... XAW , VCN and ZAG (I am Canadian). Thank-you so much for sharing that section from your reading, can you share the link here as I am VERY interested. I was looking at BTCC-B.TO as a bitcoin etc and will add PHYS to this list now.

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Re: RFS' Journal

Post by RFS »

Hey Stasher, you're welcome! The first quotation is from World War 1 to Bitcoin, the second is from The Florentine Portfolio.

Western Red Cedar
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Re: RFS' Journal

Post by Western Red Cedar »

Glad I was able to help. Hopefully I didn't deter you from other exciting opportunities in S. America.

I think using the same precautions internationally that you would use in a major US city is a good rule of thumb for staying safe. After 1.5 years of globetrotting I returned to the US and noticed that I felt less safe in large US cities than I did in international cities.

It seems like you are leaning towards Mazatlan, which is a solid choice IMO based on your interests for the trip. I haven't been there since 2008, but remember it fondly. It has a fairly large historic district which is a nice feature in a destination/beach town. It is much larger than Puerto Escondido, and will have more amenities and housing options. You can always stay for a couple months, and get feedback from other foreigners about different options in Mexico if you want to change scenes. Staying in one place is generally cheaper, but you could easily hop on a bus or take a short flight after a couple months to try out a new gym and city elsewhere in Mexico.

If you do end up staying in Mazatlan, I would put a trip to Barranca Del Cobre (Copper Canyon) on your radar. I spent a month in 2008 traveling down the coast from Hermosillo to Puerto Vallarta, with a detour to Creel and down into the canyon at Urique. Copper Canyon was definitely a highlight of that trip. The bus ride from Mazatlan to Los Mochis isn't too far and the train ride from Los Mochis to Creel is amazing. Loads of good mountain biking and hiking near Creel. Cartel activity is higher in and near the canyon, so keep that in mind, but you can get a sense of safety from folks at the BJJ gym. If you stay on top of the canyon, there are a lot of tourists so you'd should be fine.

Christopher McDougall's Born to Run is a fun read about the indigenous communities (Tarahumara) in NW Mexico and certainly worth checking out if you are heading in that direction.

Kerouac also spent some time there and wrote about it at the end of On the Road. I have this photo hanging on my wall among a large collection of travel photos:


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