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peteyperson
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Joined: 26 Nov 2002
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PostPosted: Tue Feb 01, 2005 10:28 am    Post subject: Reply with quote

Hi Rob,

I believe it was Charlie Munger who said, "Don't waste your time with people whose ideas you immediately know to be stupid."

I've had plenty of occasion to get mad at a poster who said something offensive or something I just completely disagree with. This happens in real life too where there is often no recourse, the person is spoiling for a fight but you are not going to give them one. But that doesn't make you feel any better about it. What I've had to learn is that one doesn't get happy by continually fighting with these people, it just makes you miserable and distracts you from what matters most. So I now try to quickly move past non-constructive discussions like the ones you highlight (rather than keep fighting back against them which only encourages the other person to continue). I too hate to feel I've lost, to back down, to feel I cannot win the argument, the deck is stacked against me, so quit instead. Everything inside me fights against that. But once again, it goes nowhere good. If someone else wants to live their life that way, fine, I choose not to. You should too. I and others won't continually get drawn into a discussion about lies, false profits and the like because it does not move things on, it only repeats what has gone before where there can be no happy ending. I prefer to keep learning and keep productive.

As to the context of the original post, retirement, I do not think that we are that much apart though I look forward to consider more your perspective on that part of your book. I will certainly let you know what I think. To me it is just really very simple, one can have an increasing level of personal & financial freedom, of financial independence, but one cannot have true financial independence until one can cover all essential expenses in full from investment returns alone. If you must rely on paid work to pay for essential expenses, you are not independent. Non-essential expenses, everything from a vacation to a trip to the movies are spending choices we make along the way. We may decide to perform paid work in order to afford such "luxuries" but one chooses to work in order to choose to afford those items. I do not think that makes one less independent. It can be said that one chooses to work in order to pay for essential living expenses and this is true up to a point, but one really doesn't have a choice there.

Certainly one can enjoy working in a different vocation or for oneself and enjoy more personal freedom from no longer having a boss or doing what one always wanted to do but never dreamed was possible. But I would classify personal freedom as distinctly different from financial freedom. I have worked for myself and I felt more freedom than I did working for someone else, but it did not make me any more financially independent than before. I still needed to work in order to pay for essential expenses. This I believe goes back to your post on the Fool about the cost of luxuries and having different FIRE budgets for different levels of financial independence achieved. I am therefore a little surprised that you have a POV which seems at odds with that approach.

I haven't posted much on the REHP boards for a number of reasons. Firstly the number of off-topic posts to on-topic posts makes it difficult to separate the wheat from the chaff. Secondly, I have made a home elsewhere. Thirdly, whilst other message boards certainly have their own peccadilloes, the discussions tend to be broader, more data-based, more holistic. I find the Fool is instructive for discussion on individual stock investing and I enjoy other boards on a wide range of topics. I still find it valuable to me.

Petey
hocus2004 wrote:
Petey and I have been exchanging e-mails for a number of years. We have a relationship off of these boards. He sent me an e-mail yesterday monring asking to see a copy of my book and I will be putting one in the mail to him today.

In that book, there is a section discussing the question of how the word "retirement" needs to be redefined. I have discussed this concept in brief on the boards, but I discuss it with more depth and context in the book. My suggestion is that Petey read that section of the book when he obtains his copy. Perhaps I will persuade him and perhaps I will not. Perhaps he will write a response to what I say in the book that will persuade me. Either result is evidence of a learning experience.

I obviously believe strongly that the word "retirement" needs to be redefined. Otherwise I wouldn't be making the case that it needs to be redefined in the pages of a book that I am trying to sell to the ouside world. I would like Petey or Karma or any other poster to tell me what I should do in the circumstances I am in. I believe that the word "retirement" needs to be redefined, that it does not make sense for people to seek after "retirement" early in life so long as we continue to define "retirement" as a withdrawal from life itself, a preparation for death. Intercst does not agree. Intercst has shown a willingness to launch a Campaign of Terror against anyone who questions one of his Sacred Nonsense Dogmas, whether it be the Sacred Nonsense Dogma that changes in valuation have zero effect on SWRs or the Sacred Nonsense Dogma that anyone who does anything other than watch television in retirement should not be permitted to post at any of the boards, or any of the others. What would you have me do?

When did you last post to the Motley Fool board, Petey? It's been a long, long time, hasn't it?

I wonder why.


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peteyperson
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PostPosted: Tue Feb 01, 2005 10:29 am    Post subject: Reply with quote

Perfect UncleMick!

Trust you to cut right to the core of the point! LaughingLaughing

Petey
unclemick wrote:
Ben Franklin

And, and - Does anybody remember the old E. F. Hutton brokerage ad about the young guy and old guy out on a dig?

If you are FI - you can call what you do - anything you want.


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peteyperson
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PostPosted: Tue Feb 01, 2005 11:20 am    Post subject: Reply with quote

Rob,

I believe I have covered most of your points in my other reply.

I do disagree that one never achieves financial independence. Essential expenses are not a choice, but all other expenses are a choice. True, life without the niceties is not that nice.. but those are still individual choices, each and every one of them, each time you reach for your wallet.

If one never achieves financial independence that would be a pretty sorry state of affairs. What you are talking about is the endless list of wants. If someone is chasing after the consumers' dream of being able to buy anything, one will still run out of options. One can only own so much before it becomes more clutter than enjoyable. One can only eat so much food in 5* restaurants. And so on. How much one requires for our consumer appetite to be sated depends on the individual (or whom they are with Laughing ). But to suggest one never achieves financial independence is to confuse a want or a desire with a need. I may reach FI when I can cover all my essential expenses at a basic level of existence, but I may choose to continue working because a happy life for me contains more than just that. This is then a fair trade-off - my time for more stuff. I am still financial independent for my essential needs, I just desire more than the basics and work for that. This is different from needing to work to pay for all your expenses. Again, I am surprised at you on this point. You were ahead of me but now seem to have regressed! Wink

One could argue (as I think you just have) that one isn't truly financial independent until one can afford all that one desires too, but then how long is a piece of string? Laughing That is not a helpful way to go about things. One does eventually make the trade-off when one realises the more we want, the longer we must work to have the ability to fund those wants both during accumulation & in the distribution phase. Thus having a double-whammy effect on future planning. Eventually we realise we're working many extra years to afford "stuff" that perhaps is not all that important to us. Often it is stuff that we thought we wanted but really was compensating us for doing the work. Sans work, reduced wants. We are then more likely to give more thought towards what we really get the most out of from money and get the best bang-for-the-buck in our financial planning.

Petey
hocus2004 wrote:
When you are talking many hours a week of paid work, I'm not so sure. It all comes under the banner of doing what you want to do during retirement But the bottom line is being FI and staying that way without the need of any paid work.

I agree with the statement re "doing what you want to do." The idea of doing what you want to do with your life makes a lot of sense to me.

The artificial definitions of "retirement" and "financial independence" being employed here do not make sense to me.

It seems to me that what you are saying is that someone is "financially independent" when he has no possible need for any additional money. I don't see how I could ever achieve that state, short of dying and being put six feet in the grouns. If I were to win $10 million in the lottery today, I would expand my "needs" to find ways to make good use of the money. I would set up foundations, build an addition to my house, make plans to travel more than I do now, etc. My life would be better. But I would be no more "financially independent"than I am today. It is hard for me to imagine any circumstance in which I would have zero interest in having more money. Money does wonderful things for people. Wouldn't I always want more money, if for no other reason to give it to other people?

If I agreed with the notion that, once a person no longer absolutely "needs" more money, he has achieved complete financial independence, then I would have "retired" years sooner than I actually did. It costs very little money to keep body and soul joined together. People in third-world countries live on far less than the amount that I had coming in through my investments on the day I handed in the resignation from my corporate job.

If retirement is something that you achieve the day you do not "need" more money, most of us living in one of the industrialzied economies of today are able to achieve it very early in life indeed. If retirement is something that you achieve only when you do not want any more money, most of us never achieve it. The old defintions of the words "retirement" and "financial independence" just don't make sense in today's world, a world in which middle-class workers are able to make enough money to enjoy lives better than what is involved in barely keeping body and soul joined.

I never want to spend only what I need to spend. That would be a lifestyle that just doesn't appeal to me or my family. I hope never not to want more money. Money does too many good things for me ever to not want more of the stuff. So I just have no interest in pursuing outmoded approaches too retirement or financial indepdence.

For me, the thing that matter is the thing that you focused on when you referred to "doing what you want to do." That is a goal that makes sense to me. That is the goal that I made the center of my Retire Early plan. I didn't want to retire from life altogether. I wanted to retire from the thing I didn't like--dependence on a corporate paycheck--while retaining access to all the things that I did like. I think that is an approach that makes sense, and judging from the reaction that I have heard to the idea when I proposed it in my "Secrets of Retiring Early" report and in posts that I put to the boards prior to May 13, 2002, there are a whole bunch of others who find a good bit of appeal in that approach as well.


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hocus2004
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PostPosted: Tue Feb 01, 2005 11:21 am    Post subject: Reply with quote

I believe it was Charlie Munger who said, "Don't waste your time with people whose ideas you immediately know to be stupid."

I don't believe that intercst's ideas are entirely stupid, Pete. The reality is that that is part of the problem. If his ideas were entirely stupid, they would not be so dangerous. Say that intercst said that the SWR for a 74 percent S&P allocation was 15 percent. If he said that, people would see right off that he is talking nonsense and pay no further attention to his words.

It's not like that. SWR analysis is a useful tool. And the conventional methodology is a methodology that was employed by a lot of smart people. Bernstein described the Trinty study as "breakthrough" research, and I think he is right about that. What is dangerous about intercst is that he took a powerful tool and a once-credible methodology and used them for purposes of personal ego-gratification. He uses these tools not to help people learn what the historical data says re SWRs, but to restrict the scope of board debate in our community.

If what he were saying were "stupid," there would not be so many taken in. It is clear that a good number of smart people have been taken in by intercst's SWR claims. This can be verified by making reference to the Post Archives. Intercst is not stupid. He is just smart enough to be truly dangerous, in my view.


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hocus2004
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PostPosted: Tue Feb 01, 2005 11:34 am    Post subject: Reply with quote

I've had plenty of occasion to get mad at a poster who said something offensive or something I just completely disagree with.

What you are talking about here is personal tiffs with other posters, Pete. Do you seriously think that this is my problem with intercst? I sure hope not.

What do you think would happen if intercst were to say that he would permit me to post at the Motley Fool board without him and his Goon Squad disrupting the threads? I would start without too many supporters there, right? But I would win supporters over time. The reason is that there are a number of posters there to this day who have an interest in the subject of early retirement. If I am permitted to post about the subject matter of the board without my threads being disrupted, I can start at zero and within a year will have lots of people reading my posts because of the content.

It is not that I am special. It is that the topic is special, and I possess a strong desire to write about the topic, and people love it when I do. I am just the messanger. But the message I have to bring to people is a most exciting one indeed.

The last thread that I put up over there wasn't even an SWR thread. It was a thread in which I announced that once a week I would be putting up a non-SWR thread that would be on the topic of early retirement. There were threats made against me on that thread This issue is not just an SWR issue. Intercst cannot permit me to post of any subject relating to the subject of early retirement without his fantasy world (that he "invented" the concept of early retirement) crashing down around him.

Keeping up that fantasy world does not just require that he smear me. It also requires that he smear JWR1945. And FoolMeOnce. And Wanderer. And BenSolar. And JammerH. And a whole bunch of others. Intercst needs to smear anyone who offers any significant insights on the subject of early retirement. These discussions are NOT just about SWRs. They are about whether the rest of us are going to be left in peace to explore what it takes to retire early, to share ideas with each other and to learn together. So long as interest is among us, we will not be free. That is why I want him gone, not because of some silly little personal tiff.

JWR1945 has proven beyond any reasonable doubt that intercst got the number wrong in the study. That's nice. But proving that was not the reason I brought this to the table. I knew all along that intercst got the number wrong in the study. So having that proven doesn't help me much. What I want is to go to the next step, and then the next, and then the next. I want to learn new stuff, stuff I don't know today. For that to happen, I need everyone in the community who has something to offer participating on discussions of all the issues. I need to get you back to the SWR board. I need to get Wanderer back. I need to get raddr back. I need to get BenSolar back.. And on and on.

We are a community, Pete. This is not the intercst show and this is not the hocus show and this is not the JWR1945 show and this is not the PeteyPerson show. This is a community show. I know some things about early retirement as a result of research I have done. But there are things that I can never learn by sitting in a room reading books or putting together my own budgets or whatever. There are things that I can only learn through interactions with hundreds of people coming at this from different perspectives. To do the work I do in the best way that it can be done, I need a community of people to work with.

I knew all this back in 1999, Pete. The extent of the success of the REHP board was a surprise to me, but the fact that it was successful was not. I didn't put up posts in those days in random order. I did all sorts of tests to figure out what post would do the most to build the community and so forth. I was building a community that I wanted to see last for at least another 20 years, if not a lot longer than that.

I cannot allow one puffed-up ego case destroy all that, Pete. I cannot. What we built together (you were one of the pioneers, as I recall) was something magical. We were showing people a new way to manage their money, a way that works. People loved us for that and they gave back to us in spades for having gone to the trouble. Seeing that interaction was a magical experience, one of the best experiences of my life.

There is a great need for the type of community we built together, Pete. We are going to need to rebuild it, this time on more solid ground.


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hocus2004
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PostPosted: Tue Feb 01, 2005 11:58 am    Post subject: Reply with quote

I and others won't continually get drawn into a discussion about lies, false profits and the like because it does not move things on, it only repeats what has gone before where there can be no happy ending.

I of course would like to see you help out, Pete. I of course accept that it is entirely your call as to whether you do so or not. Each poster has to make up his or her own mind on that one.

I do not agree with you that there can be no happy ending. I find it very easy to imagine the happy ending. Just think for a moment where this community would be had we never once heard the name "intercst." If that sounds one-tenth as exciting to you as it does to me, you have a good idea where I hope to be taking this.

The internet discussion board is a new communications medium. As such, it doesn't get much respect. That is probably the biggest obstacle in my path. People understand that deception is wrong, that is not a hard one to get across. What I struggle with is that people do not appreciate the extent of the damage done by the deception in this particular case. People say "it's only a discussion board, who cares?" I take strong exception to that attitude.

Discussion boards, properly administered, are a powerful communications tool. I could write a book on this subject, so I had better resist the urge and keep this part brief. The bottom line is that you can do things on a discussion board that you cannot do with a book or a television show or a magazine. You live in England and I live in the United States. And we are in regular communication re the topic of early retirement. What do you think are the chances that that would have happened without the invention of this new communications medium? The chances would have been zero. Discussion boards matter. Big time.

Intercst is a product of the old internet discussion board culture. The reason why this medium gets so little respect is that everyone who has gone on a board has come into contact with the intercst-type poster from time to time. The usual response is to conclude two things: (1) These people don't know what they are talking about; and (2) These people are incredibly rude.

But intercst is not at all a good representative of this community. Not at all. Most of the people in this community do know what they are talking about. Most of us are not rude. Truth be told, intercst would not have turned out so bad if other community members had gone to a little trouble at an earlier time to rein him in. Intercst could have been saved. He paid the price that those who govern through fear often pay. His followers were too afraid of him to help him out when he most needed to be told a hard truth. That's water over the dam. The point here is that the rest of us are not like intercst. The rest of us get along pretty darn well and engage in some pretty darn exciting learning experiences, thank you very much.

So I believe that there is indeed going to be a happy ending. For all sorts of reasons. One is that the people now in the community want the nonsense brought to an end. Another is that the new people who will be joining us in months and years to come don't even know who intercst is and they are going to think that we are flat-out nuts not to have done something about him in all this time. Yet a third is that companies like Motley Fool want to make a profit from discussion boards and the way that Motley Fool is doing things today ain't the way.

Motley Fool promises people who agree to pay $30 that they will be protected from intercst-type posters. Why do you think they do this? It's because they have done market research showing that this is a big issue with their potential customers. Motley Fool needs to honor its promises to its customers if its discussion board business is to survive. I believe that Motley Fool will be helping us re this matter in days to come.

I believe that there will be a happy ending, Pete. I can't say when it will happen. But the work that we do here is just too important for there not to be. The intercst era, our era of deception and intimidation, is gradually drawing to a close. The community era, our era of learning together, is just now being born. Perhaps it is not yet time for a big celebration cigar. But I don't think that any of us need to be too down in the dumps about any of this either. We are getting where we need to go by the slowest route imaginable,. But we are getting there all the same. We just need to hang on a little bit longer and aim not to lose anyone on any of the sharp turns that seem to come up from time to time.


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hocus2004
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PostPosted: Tue Feb 01, 2005 12:14 pm    Post subject: Reply with quote

If you must rely on paid work to pay for essential expenses, you are not independent.

There is no such thing as absolute independence, Pete. Say that I had held off on handing in my resignation for long enough to save another $250,000, so that I would not have needed the $10,000 that I count on earning from my writing business. Would I be 100 percent independent then?

I say no. If I had that $250,000 in some form of investment, I would be dependent on that investment coming through for me. I guess you are saying that that would be better. But I don't see why. The $10,000 income expecation is a mimimal one. It is entirely possible that I will earn a whole bunch more than that. It could be that I will earn $20,000 per year, or $30,000 per year, or more. I view my writing work "investment" to be a high-growth-potential investment. It could be that I am going to see a signifcant return on it. Can you say that about the TIPS that I own? Can you say it about an S&P index fund purchased at August 2000 (the month I "retired") prices?

We are all dependent on something. I am dependent on earning $10,000 from my writing work, and some others are dependent on earning $10,000 from their investments. I find no fault with the choices of those others. I find it hard to understand why some find fault with the choices I elected instead.

What I really don't get is what people would have me do other than what I did. The idea seems to be that I should have remained at a job that I did not like for many years longer just to make these people with old-fashioned views of what constitutes "retirement" happy. Why? Why should I even care what they think?

It would take someone saving $50,000 a year five years to save $250,000. And what would he get for it? I guess you would say that he would be "free" to drop the writing job. He would indeed be free to drop the writing job, but since attaining the ability to do the writing job was the entire reason he started his Retire Early plan in the first place, he would be a damn fool to give up on that dream just when he had finished the work needed to make it a reality.

What is it you would have had me do? Are you really saying that I should have given up five years of my life just to satisfy some quirky desire that some have for me to play semantics games? This I do not get. I constructed my plan because I wanted to live a dream, and when I had the money needed to live the dream, I commenced doing so. Outside of the semantics games, which don't impress me even a little bit, I don't see what is so wrong in doing that.


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hocus2004
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PostPosted: Tue Feb 01, 2005 12:26 pm    Post subject: Reply with quote

One cannot have true financial independence until one can cover all essential expenses in full from investment returns alone.

Why? What difference does it make whether it comes from investment returns or from something else? I do not see why there is such a big hang-up over this aspect of things.

If a martian came down from Mars and handed me the money I need to live my dreams, I would take the money from the Martian, you know? I wouldn't say "Oh no, kind and friendly Martain, that's not the way that some people on a discussion board want me to do it, I am afraid that I will have to turn you down and stay at work another five years to make those people happy. Thanks, anyway."

Is there any real person who would give that little speech? I seriously doubt it. If you give that speech, you must not care about your dream very much. I care a good deal about my dream. So I will go about achieving it through any means available to me that works. No one is saying that my approach doesn't work. All that I am hearing is that it does't satisfy some silly demand for semantical purity.

I don't care, you know. I think people are wrong about the semantics point. I don't think they have spent enough effort thinking through what it means to "retire" and what it means to win "financial indepedence." But the real bottom line is that I don't care about the semantics point one way or the other enough for it to cause me to stop giving people good practical advice on how to realize their dreams.

The approach that I am describing allows some people to live their dreams years earlier than the approach being put forward by the semantical purists. That's good enough for me.

It works. That's the bottom line. The conventional idea of retirement doesn't work so hot. That's sort of the reason why we all meet together at these boards, you know. Early retirement, that's what we are supposed to be about, is it not? Something different, right? Something that perhaps requires a little bit of rethinking of some old and not terribly effective ways of thinking.


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hocus2004
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PostPosted: Tue Feb 01, 2005 12:34 pm    Post subject: Reply with quote

This I believe goes back to your post on the Fool about the cost of luxuries and having different FIRE budgets for different levels of financial independence achieved. I am therefore a little surprised that you have a POV which seems at odds with that approach.

I don't see any conflict, Pete.

There are of course different levels of financial independence and it is of course better to have attained a higher level rather than a lower level. I hope to be more financially independent five years from today than I am today, and I hope to be more financially indepedent 10 years from today than I am 5 years from today. I hope to just keep going up, up, up, and seeing my life get better, better, better.

I don't see any conflict between wanting my life to get better over time, both in financial ways and in non-financial ways, and in deciding to retire from corporate work at the stage in my life when I became financially able to do so. The two things mesh in my mind without any problem.

In August 2000, I had gained enough financial independence to retire from corporate work. In the future, I hope to attain even higher levels than that. I don't ever intend to stop until the day they put me six feet in the ground.

Why should I? What purpose would be served? What would be the point?


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karma
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PostPosted: Tue Feb 01, 2005 12:41 pm    Post subject: Reply with quote

Quote:
If you are FI - you can call what you do - anything you want.

And if you are FIREd, when someone asks you what you "do", you can say anything - "gainfully unemployed", "financial advisor" (for 1), self-fulfilling prophet".

karma


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hocus2004
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PostPosted: Tue Feb 01, 2005 12:53 pm    Post subject: Reply with quote

One does eventually make the trade-off when one realises the more we want, the longer we must work to have the ability to fund those wants both during accumulation & in the distribution phase.

Your phrase above "the longer we MUST work" gives the game away for me. Using the word "must" suggests that there is something not enjoyable about the work experience. I found a good number of things not enjoyable in working for a large accounting firm. I don't see anything unenjoyable in writing non-fiction books and promoting them. It has been my dream to do that since I was about 15 years old.

Say that my early retirement dream was to sleep late. Would you say "Oh, if you actually go ahead and live the dream, you would come to like it so much that you would come to be dependent on sleeping late. In order to truly retire, you must give up all the things that make you happy. Perhaps some others can be permitted to sleep late during retirement, but not you. That's out for you. No sleeping late for those who enjoy sleeping late!"

This is crazy talk. Obviously those who enjoy sleeping late should sleep late when they become free to do so. Similarly, those who enjoy writing non-fiction books should write non-fiction books.

Now, it so happens that writing non-fiction books brings in a little bit of money in the right circumstances and sleeping late does not. Too bad for those cursed with sleeping-late genes, I guess! People with those genes have to work longer to retire early.

Each of us seem to get lucky in some ways and not in others. Some are lucky to make a killing in stocks. Some are lucky to get ahold of TIPS when they are paying 3.5 percent real. Some are lucky to want to do things in retirement that bring in a little spending money. Some are lucky to like the idea of living overseas where costs are often lower.

There are all sorts of possible ways to retire early. Not one. It sounds to me that what you are really saying is "intercst didn't do it your way, so your way is not so good." I'm not impressed with that argument., It may not be so good for intercst and it may not be so good for you. It works fine for me and it works fine for the scores of people who wrote me e-mails thanking me for telling them about the option. So I am just going to continue doing that.

I don't say that there is not a good discussion to be had here. The meaning assigned to words does often matter in the long run. There are times when semantics make a difference. When a point is being made that is all semantics and with nothing of any practical significance to back it up, I think that is a sign that that point needs to be reexamined.

I think that is where we are with the "retirement" thing. Your way is the conventional way, Pete. I understand that. But the conventional way was developed at a time when retirement was something that you did at age 65 hoping to live to see age 70. That's not where we are today. So I think that we need to be a little open to the idea that this word needs to be redefined a bit so that it makes sense once again.

When you put the word "early" in front of the word "retirement," you change the concept in a fundamental way. That's what I am saying. What you and intercst are describing is the old vision of "retirement." We need a new vision. The old rules don't work.


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karma
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PostPosted: Tue Feb 01, 2005 12:56 pm    Post subject: And now, a little change in direction - maybe Reply with quote

We seem to have gotten completely off into the definition of FIREd, which is fine, but I would also like to explore some other stuff. From the first post in this thread:

- Do you think you'll want to do stuff like volunteer work or some other goal-oriented objective?

- Do you think you might want to do lots of travel (do it when you are younger rather than older is my advice)

- Do you think that leisure-time activities such as golf or bridge might take up a majority of your time?

- How do you feel about housework? Wink

- Are you enjoying/do think you will enjoy retirement? (Personal comment - I'd only go back to having a boss if some held a gun to my head)

- Do you enjoy lots of solitary activities? I know I do, but I am also an introvert (that's the "books" comment).

- If you are an introvert, do you make a push to integrate with other people - as in volunteer activities or other actions? We appear to be coming full circle.

- And finally, do ever worry that you are spending too much time on message boards?

Maybe I should go make dinner or something. Smile

karma


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hocus2004
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PostPosted: Tue Feb 01, 2005 1:02 pm    Post subject: Reply with quote

Do ever worry that you are spending too much time on message boards?

A big "Yes!" to that one, Karma!

Heaven help us all!


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ben
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PostPosted: Tue Feb 01, 2005 2:09 pm    Post subject: Reply with quote

A goal oriented objective? Flying certificate, dive instructor, financial advisor degree, language studies, fittness instructor education are already on my list (and yes I already do a bit of dipping into most of these to check if my interest is still there).

Travel: I will travel to meet my friends all over the world more than travel to see new places. Also: I will have 2 home bases: Thailand AND Scandinavien home country.

Golf maybe(had a few beginner lessons), bridge no - try black jack! Cool

House work: no thanks - but it MIGHT be a job in FIRE bad market times to do it myself rather than pay $100/mth when living in Thailand.

I will truely enjoy retirement! Ii am a rare combo of extrovert and introvert. I can spend a whole weekend with books and internet and the next weekend is all party-harty!

Message boards are good... and most of them free.... at first.... like the kids getting drugs offered at school... Twisted Evil



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peteyperson
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PostPosted: Tue Feb 01, 2005 7:13 pm    Post subject: Reply with quote

Hi Rob,

I think I would separate out the financial requirement from the choice. I wouldn't have you work an additional five years.

You are dependent on the $10,000 in investment return, but at some point one will be unable to work and you will then have to be dependent on the investments to deliver. In truth financial systems are not likely to just shutdown and stop functioning. Diversify certainly but lets not lose all hope here! Smile Put another way, you'll always be dependent on something be it income from a job or investments. Moving on..

You've made a choice to write, which I understand completely. You may or may not be able to return to your old job at the same rate of pay. Your skills may get rusty. So now you are embarked on a new journey which may or may not deliver the required annual income supplement. You think this is low risk because your writing will earn it's keep. Excellent. Okay. What happens if that doesn't work out? And what happens if you have to return to your old job only to discover that you can't. What then happens if your new job at a lower payscale is now breakeven salary and you cannot save anything from the job? Well you'll be completely reliant on your investments growing to reach your FI target. Now I know what you're going to say - what is the difference between being reliant on investments to grow to reach a FI target and needing them to grow in order to fund living expenses in FIRE? I would say the difference is that with adequate diversification, a 2% dividend stream and some cash put aside, one can afford to ride out return bumps in the road. You aren't dependent, reliant on smooth returns each and every year to get the results you need. In contrast, compounded returns over time completely determine when you will achieve FIRE if you have to return to a downgraded job. You'll be sitting getting more frustrated waiting for investment results that get you where you need to go and the earlier you quit, the less you have and the more you need high levels of compounding. In this scenario, staying on a handful more years would have ultimately provided a lot more freedom to develop whatever someone wishes to do over a longer timeframe. The flexibility is there which won't be otherwise.

So I didn't expect you to stay in a job you disliked. But we all make concious choices in life and each choice typically comes with consequences. I hope things work out for you, but it is a different path you've taken which may or may not work out. It is largely untested after all. The level of income achievable is untested. Last time round your costs consumed most of the income the Soapbox piece brought in. This is what you told me. One alternative route might have been to stay on, but to work on a book in your spare time. A bit like a second job until you are finding some success and money is coming in from this second job. Then you could phase out the main job. You might not be able to build-up much of a track record of writing royalties to rely upon there being an ongoing revenue stream rather than a brief success from one title that catches some initial interest. I'm certainly not saying I have the answers here, Rob. I've experienced best laid plans not working out and having to go backwards because my assumptions were too optimistic, so I have some personal experience in this area. As such, I would be careful when going down such a route and especially if there existed the implicit suggestion to others that this might be one way to go. I think it is quite risky.

Petey
hocus2004 wrote:
If you must rely on paid work to pay for essential expenses, you are not independent.

There is no such thing as absolute independence, Pete. Say that I had held off on handing in my resignation for long enough to save another $250,000, so that I would not have needed the $10,000 that I count on earning from my writing business. Would I be 100 percent independent then?

I say no. If I had that $250,000 in some form of investment, I would be dependent on that investment coming through for me. I guess you are saying that that would be better. But I don't see why. The $10,000 income expecation is a mimimal one. It is entirely possible that I will earn a whole bunch more than that. It could be that I will earn $20,000 per year, or $30,000 per year, or more. I view my writing work "investment" to be a high-growth-potential investment. It could be that I am going to see a signifcant return on it. Can you say that about the TIPS that I own? Can you say it about an S&P index fund purchased at August 2000 (the month I "retired") prices?

We are all dependent on something. I am dependent on earning $10,000 from my writing work, and some others are dependent on earning $10,000 from their investments. I find no fault with the choices of those others. I find it hard to understand why some find fault with the choices I elected instead.

What I really don't get is what people would have me do other than what I did. The idea seems to be that I should have remained at a job that I did not like for many years longer just to make these people with old-fashioned views of what constitutes "retirement" happy. Why? Why should I even care what they think?

It would take someone saving $50,000 a year five years to save $250,000. And what would he get for it? I guess you would say that he would be "free" to drop the writing job. He would indeed be free to drop the writing job, but since attaining the ability to do the writing job was the entire reason he started his Retire Early plan in the first place, he would be a damn fool to give up on that dream just when he had finished the work needed to make it a reality.

What is it you would have had me do? Are you really saying that I should have given up five years of my life just to satisfy some quirky desire that some have for me to play semantics games? This I do not get. I constructed my plan because I wanted to live a dream, and when I had the money needed to live the dream, I commenced doing so. Outside of the semantics games, which don't impress me even a little bit, I don't see what is so wrong in doing that.


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peteyperson
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PostPosted: Tue Feb 01, 2005 7:16 pm    Post subject: Reply with quote

Yes, yes, and you've taken a risk to try this something different.

That is fine. That suits you and I'm certainly not knocking that. But we also talk in more general terms & in general I think it is a risky idea. You leap out of something that would have gotten you to the touchdown and instead opt for a slower train to China which may or may not arrive at the destination.

Petey
hocus2004 wrote:
One cannot have true financial independence until one can cover all essential expenses in full from investment returns alone.

Why? What difference does it make whether it comes from investment returns or from something else? I do not see why there is such a big hang-up over this aspect of things.

If a martian came down from Mars and handed me the money I need to live my dreams, I would take the money from the Martian, you know? I wouldn't say "Oh no, kind and friendly Martain, that's not the way that some people on a discussion board want me to do it, I am afraid that I will have to turn you down and stay at work another five years to make those people happy. Thanks, anyway."

Is there any real person who would give that little speech? I seriously doubt it. If you give that speech, you must not care about your dream very much. I care a good deal about my dream. So I will go about achieving it through any means available to me that works. No one is saying that my approach doesn't work. All that I am hearing is that it does't satisfy some silly demand for semantical purity.

I don't care, you know. I think people are wrong about the semantics point. I don't think they have spent enough effort thinking through what it means to "retire" and what it means to win "financial indepedence." But the real bottom line is that I don't care about the semantics point one way or the other enough for it to cause me to stop giving people good practical advice on how to realize their dreams.

The approach that I am describing allows some people to live their dreams years earlier than the approach being put forward by the semantical purists. That's good enough for me.

It works. That's the bottom line. The conventional idea of retirement doesn't work so hot. That's sort of the reason why we all meet together at these boards, you know. Early retirement, that's what we are supposed to be about, is it not? Something different, right? Something that perhaps requires a little bit of rethinking of some old and not terribly effective ways of thinking.


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peteyperson
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PostPosted: Tue Feb 01, 2005 7:31 pm    Post subject: Reply with quote

I completely agree with the concept of increasing levels of personal and/or financial freedom. And one can branch off when one feels okay to do so. When one has enough behind us to be okay, to survive, to get by at least. But then, we're really saying we have reached bare bones FI (ability to fund essential expenses specifically from investments), we've quit before we're got an acceptable level of expenses covered but we're got enough. Or we've quit before we can cover essential expenses and we plan for a new work "role" that will plug the gap to cover essentials & also supply for non-essentials (the niceties). Of course either scenario makes adding to savings more difficult if income levels have fallen with the change of career. We're trying to do a lot with what income we can now bring in to make things work. That's a choice. An acceptable risk if that is what you want enough. The desire makes it an acceptable risk. But that doesn't mean it is wise or prudent. Yes it may break down the barriers of what is conventionally thought of as acceptable and I'm all for that. I don't like to conform to set ideas either.

So it is one way to go. It's somewhat of a " life's a journey and I'm going down this path and I'm going to make it work " statement. And I dig that. But it is not for everyone. Most people need more security than that, particularly the ladies. Women tend to be more cautious investors, more cautious planners. I think it would be a hard sell.

Petey
hocus2004 wrote:
This I believe goes back to your post on the Fool about the cost of luxuries and having different FIRE budgets for different levels of financial independence achieved. I am therefore a little surprised that you have a POV which seems at odds with that approach.

I don't see any conflict, Pete.

There are of course different levels of financial independence and it is of course better to have attained a higher level rather than a lower level. I hope to be more financially independent five years from today than I am today, and I hope to be more financially indepedent 10 years from today than I am 5 years from today. I hope to just keep going up, up, up, and seeing my life get better, better, better.

I don't see any conflict between wanting my life to get better over time, both in financial ways and in non-financial ways, and in deciding to retire from corporate work at the stage in my life when I became financially able to do so. The two things mesh in my mind without any problem.

In August 2000, I had gained enough financial independence to retire from corporate work. In the future, I hope to attain even higher levels than that. I don't ever intend to stop until the day they put me six feet in the ground.

Why should I? What purpose would be served? What would be the point?


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peteyperson
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PostPosted: Tue Feb 01, 2005 7:38 pm    Post subject: Reply with quote

The problem with the non-traditional way is that one can easily quit with inflated ideas of what is possible income wise, then get stuck and have to go back where the options are not as expected. This changes the whole financial scenario you both get into and are left with after the dream dies. The dream may not die, but if it does..

In that scenario one is then stuck working for many years not able to accumulate enough to finish what you started. The little foray has come at a dramatic cost. When you're 65 and still working because plans didn't work out, unable to quit because you don't have enough, then you'll regret taking the leap in the non-traditional way. It is a little like how we hear only about the successful actors & actresses who made it, nothing of the thousands who didn't, survived on minimal wages for decades hoping upon hope things will change. Forever playing catchup when things don't work out and they have to start over. Going for the dream is good, heady stuff. But it is risky. Most people need more assurance than that and yes that means most will not try for their dream. Which is worse? I don't know.

Petey
hocus2004 wrote:
I think that is where we are with the "retirement" thing. Your way is the conventional way, Pete. I understand that. But the conventional way was developed at a time when retirement was something that you did at age 65 hoping to live to see age 70. That's not where we are today. So I think that we need to be a little open to the idea that this word needs to be redefined a bit so that it makes sense once again.

When you put the word "early" in front of the word "retirement," you change the concept in a fundamental way. That's what I am saying. What you and intercst are describing is the old vision of "retirement." We need a new vision. The old rules don't work.


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peteyperson
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PostPosted: Tue Feb 01, 2005 7:44 pm    Post subject: Re: And now, a little change in direction - maybe Reply with quote

Too much time on message boards. Today, yes. Taking a break tomorrow!

What I expect I want to do including writing, travelling, living in different countries, living cheap and doing what I enjoy. I like my books and my TV series I can buy on DVD box sets, but other than that I'm a fairly low maintenance guy.

I will probably want to volunteer but it will be on my terms. I may choose to fit it in within my travelling. Travel two years, then do some volunteering for year and so on.

I used to be introverted. I think I'm naturally that way but I make an effort to socialise. People tend to find me friendly and chatty so they tell me. I'm not wholly comfortable in a large group socialising. I much prefer one-on-one time to groups.

Petey
karma wrote:
We seem to have gotten completely off into the definition of FIREd, which is fine, but I would also like to explore some other stuff. From the first post in this thread:

- Do you think you'll want to do stuff like volunteer work or some other goal-oriented objective?

- Do you think you might want to do lots of travel (do it when you are younger rather than older is my advice)

- Do you think that leisure-time activities such as golf or bridge might take up a majority of your time?

- How do you feel about housework? Wink

- Are you enjoying/do think you will enjoy retirement? (Personal comment - I'd only go back to having a boss if some held a gun to my head)

- Do you enjoy lots of solitary activities? I know I do, but I am also an introvert (that's the "books" comment).

- If you are an introvert, do you make a push to integrate with other people - as in volunteer activities or other actions? We appear to be coming full circle.

- And finally, do ever worry that you are spending too much time on message boards?

Maybe I should go make dinner or something. Smile

karma


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peteyperson
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PostPosted: Tue Feb 01, 2005 7:48 pm    Post subject: Reply with quote

Party harty. Yeah I can see that in you, Ben! Laughing

I also have an interest in learning how to fly. No idea why! It's one of those crazy, totally impractical, never be able to afford my own plan so why the hell do it? I think it is the challenge of the thing. It is the difference of the thing versus more regular life experiences. It's totally different. So a mix of holistic and fun reasons really.

The travelling and hooking up with people around the world. Yeah, I can see myself doing that. Sort of developing friendships as I go that may fall under that banner. I think that naturally flows from talking with likeminded people. You're on the same page and you know what the real deal is.

Petey
ben wrote:
A goal oriented objective? Flying certificate, dive instructor, financial advisor degree, language studies, fittness instructor education are already on my list (and yes I already do a bit of dipping into most of these to check if my interest is still there).

Travel: I will travel to meet my friends all over the world more than travel to see new places. Also: I will have 2 home bases: Thailand AND Scandinavien home country.

Golf maybe(had a few beginner lessons), bridge no - try black jack! Cool

House work: no thanks - but it MIGHT be a job in FIRE bad market times to do it myself rather than pay $100/mth when living in Thailand.

I will truely enjoy retirement! Ii am a rare combo of extrovert and introvert. I can spend a whole weekend with books and internet and the next weekend is all party-harty!

Message boards are good... and most of them free.... at first.... like the kids getting drugs offered at school... Twisted Evil


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