Great Importance of Stability

[Craig]

Just an observation ... as I look at these boards, and consider folks I have known over the years, the great importance of stability cannot be overestimated.

Folks that are able to get careers in situations where they can stay employed for many, many years, and especially build government / military pensions are usually in great shape. Those pensions are a very big deal now ... private employer pensions are not only very unusual, they are also not dependable.

Folks that can get and stay married for their lifetimes, with productive, working spouses are in much better shape. Nice hedge for hard times, and loss of jobs.

If you're able, and have the capital, drive and skills ... owning your own, successful business, and having a productive spouse is very good. Try to have lots of customers ...


Unfortunately, for the vast majority of folks, jobs are no longer stable, divorce is way too common, and starting and owning a successful business is a real challenge. Those folks are not on these boards, because they are unable to generate sufficient capital to reach FIRE.

Just an observation ... stability is so key, and unfortunately, it is becoming less common in our society.

 

[haha]

Unfortunately, for the vast majority of folks, jobs are no longer stable, divorce is way too common, and starting and owning a successful business is a real challenge. Those folks are not on these boards, because they are unable to generate sufficient capital to reach FIRE.

Just an observation ... stability is so key, and unfortunately, it is becoming less common in our society.

Excellent points, Craig. There is a lot of survivorship bias seen here. Sometimes we think "If I do this and this and that, I will retire early and well off." And some will. It is for the most part from this population that we are drawn. But some will get waylaid by divorce, by illness, by chiildren with special needs being born- the list of things that can make it hard is long.

Not to mention that not everyone could stay sane with a 30 year government or similar career.

Ha

 

[Jay_Gatsby]

On the other hand, playing it safe does not usually lead to significant success.

 

[Notmuchlonger]

Or perhaps people had those hardships and still managed to overcome. Just because someone is successful doesn't mean they didn't have their fair share of rough roads and hardships..

 

[CuppaJoe]

Although you are soooo right, Craig, speaking as an unstable risk-taker, I must add:

Never underestimate the power of a bull market.

 

[Marquette]

While staying married is a significant factor of both my long-term happiness and shot at ER, I'm going to shoot myself if I'm still in this job 2 years from now, much less 30.

 

[Moemg]

It's nice if it happens but actually I owe my financial success to being a single Mom. The responsibility of having two kids to raise and put thru college made me buckle down and start saving .

 

[Salaryman]

So true. Many of my friends' resumes show a lot of movement from firm to firm, not always by choice.

Just went thru a merger where 50% of the staff was 'transitioned'. Those that made the cut look 5 to 10 years older.

Stability in work and life is a wonderful thing, unfortunately not so common these days.

 

[Texarkandy]

Not to mention that not everyone could stay sane with a 30 year government or similar career.

Ha

24 years & 3 months into my govt career (28 w/my 4 years mil) & I'm barely hanging on as regards the fed-up/burnt-out factor.

(say what you want about govt employees & their stable salaries/benefits/pensions - as far as I'm concerned I've earned every dime of it!!!)

 

[BunsGettingFirm]

I have read that government service tends to attract technocrats who are brilliant, political, but not much in terms of empathy. I can tell from talking to one colleague in government service who obviously relishes the minutiae of political intrigue, I'm not ready for 30 minutes much less 30 years of government service.

 

[Walt34]

Luck definitely has a role I think. When I got divorced there were no children, therefore no child support, which meant I could buy a home on my own, and I still had time to financially recover. Several I know had 20-year marriages that dissolved and they're losing half of their pensions earned during the marriages. "It's Cheaper To Keep Her."

Some couldn't take the strains and bailed at the 20-year mark, taking a heavy hit on their future incomes. They'll be able to buy food and keep a roof over their heads but not much more unless they're working.

 

[haha]

Luck definitely has a role I think. When I got divorced there were no children, therefore no child support, which meant I could buy a home on my own, and I still had time to financially recover. Several I know had 20-year marriages that dissolved and they're losing half of their pensions earned during the marriages. "It's Cheaper To Keep Her."

Some couldn't take the strains and bailed at the 20-year mark, taking a heavy hit on their future incomes. They'll be able to buy food and keep a roof over their heads but not much more unless they're working.

Very true. Luck plays a big part. Stability is good, and when you have it you do better. But you can behave very well and still get clobbered on the Wheel of Fortune.

My brother is a teacher. Say you have three divorces, and lose half your pension once, and 1/3 the other two times. So you are left with (1/2*2/3*2/3)= 2/9 of your pension. Add in some child support and things are not looking too good for your Golden Years. In case you think this is an unusual result, talk to some male teachers or cops!

Incidentally, my bro has had 3 divorces but his ex's were less effective and he is still in pretty fair shape. Currently he has a GF, who I believe will stay in that status. (Until something doth them part, I mean.)

Ha

 

[ziggy29]

I have read that government service tends to attract technocrats who are brilliant, political, but not much in terms of empathy. I can tell from talking to one colleague in government service who obviously relishes the minutiae of political intrigue, I'm not ready for 30 minutes much less 30 years of government service.

I suspect these days, it's more likely to attract people who want job security, a pension and great benefits. Fulfilling work and even their base pay might be secondary considerations in some cases.

 

[Kwirk]

I have read that government service tends to attract technocrats who are brilliant, political, but not much in terms of empathy.

I worked in a federal medical facility. There were problems and there was dead wood but the empathy and devotion that I witnessed was often staggering. I think some of the clinicians work there because they would otherwise go broke giving free care to the disabled and indigent.

 

[rogersteciak]

Unfortunately, for the vast majority of folks, jobs are no longer stable, divorce is way too common, and starting and owning a successful business is a real challenge. Those folks are not on these boards, because they are unable to generate sufficient capital to reach FIRE.

Just an observation ... stability is so key, and unfortunately, it is becoming less common in our society.

I've been in both stable and unstable job situations. On the surface, stability might seem to be perferred because its predictability about the future is the next best thing to having a crystal ball (which is much harder to come by ) about where life is headed.

But when life becomes too easy, it also drives people to become much more lazy and political in their nature (i.e., "fiddle while Rome burns"). Ideas are not evaluated on their merits, for example, but rather by who are behind the ideas. People keep their heads down and don't make waves. There is nothing wrong with these kinds of environments because it doesn't make sense to rock the boat when everything is going well (i.e., if it ain't broke, don't fix it).

In turbulent job environments with uncertain outcomes (e.g., startups), on the other hand, people have a tendency to work as a team because their financial success is dependent on cooperation and making sure the right things happen. Organizations tend to be flatter and no one is in a "sacred cow" position. You are constantly challenged to either pull your weight or find another job. There is no place to hide in these environments. No one is allowed to "retire on the job" as they might be able to do in more stable environments.

While turbulent job environments are more stressful, they also produce the need to find ways to have more stable finances. I didn't really focus on my personal finances enough until I became a contractor. Because contracts have to be renewed regularly by both parties (employer and contractor), there is no sense of any long-term stability from job income. I was motivated by my fear of potential poverty to discover the alternative of paying myself first and living well below my means. I achieved FIRE as a result.

 

[BunsGettingFirm]

Roger, well said. This was exactly the reason I chose to join a startup. Unfortunately, once it got bought and people go the pay off, things quickly devolved to the don't rock the boat mode of operation.

 

[armor99]

For myself.... life itself is all about risk. There is risk just getting up in the morning and driving to work. There is simply no way to guarantee almost anything in life. But on the other hand... I tend to believe in the power of probabilities. Why There is a little place in the desert called Las Vegas that was built off of probabilites in the houses favor. And I am not talking much... maybe 8% or less.
And it is much the same in the risks that you take in your own life. I have watched my folks and others literally conserve themselves right into the poor house. People that are absolutely convinced that saving $.20 on a bag of chips is going to get them to retirement, and then completely ignore their life savings sitting in a bank account for 20 years earning a tiny .1 % interest.
To make it, you are going to have to do some financially risky things in your life. That might mean changing jobs a few times, or investing in something that might be more volotile than average. Everyone has their own "pain" threshold when it comes to this sort of thing, and to each his own. But this much is certain... no one (other than the extremely weathly) every got richer by not investing in anything.
Anything can happen tomorrow. Another depression could come and wipe out all of my 401k savings. But this is just not likely to happen that way. If you take any 30 year period on the stock market, it outperforms any other investment over that same 30 year period. Will this always be true? No one really knows.... but show me an investment that has done better over a longer amount of time, and that has a longer history, and I would gladly jump at it. I think this is really what retiring early is all about. Exploit all of the small gains that you can make along the way and slowly over time, (just like the casino in Vegas) and the house is almost certain to win.

 

[CitricAcid]

If you take any 30 year period on the stock market, it outperforms any other investment over that same 30 year period. Will this always be true? No one really knows.... but show me an investment that has done better over a longer amount of time, and that has a longer history, and I would gladly jump at it.

Starting your own company and having an IPO?

But back to the stability vs. risk debate, I feel it is all about personal preference. I can definitely see myself running my own business, but I just don't really know what I would do (kind of a big deal there...) or anything, just I would take the risk and trust myself that in any given situation I will act or react given the best of my abilities/knowledge at the time. To me, it is trust in yourself that gets people through risk, even though it seems that your own merits and your success seem disjointed so often.