Philosophical question regarding Asset Mix approaching "fat fire"

[DrRoy]

#1 for me. Feels very good in a market correction.

 

[ncbill]

mo money, mo problems.

 

[Koolau]

mo money, mo problems.

What was that quote? "I've never been in any situation where having more money (mo money) made it worse."

 

[pb4uski]

Guilty as charged... except that hoarders, while unable to let-go, generally don't think of their possessions as testaments to their worth. Or maybe they do? Is there a Hoarders Forum, that one could join?

I don't distinguish between principal and interest or gains. The IRS cares, but I don't care. Any "gain" is immediately rebaselined as the full running amount. If my stock in Acme Widgets triples, then I don't look at the gains as extra, or something to spend, or some nice but peripheral bonus, whereas my original stake in Acme was somehow core. They're all fungible and indistinguishable.

As FIRE people, we spend our lives, or at least our adult lives, accumulating. We add to our portfolios. We save a little, or we save a lot. We invest aggressively, or conservatively. We time the market, or we do not. We diversify, or we concentrate... or anything in between. Yes? But the universal and underlying thing, is that we shepherd and husband our portfolios to grow. Or at least after the latest bear-market is over, they grow. Well then, are we supposed to one fine day, reverse the switch, from "grow" to "shrink"? Do we anti-save, taking from the portfolio, where earlier we always added to it? Huh? I can't wrap my head around that. I can't fathom, why we'd have saved-saved-saved, only to subsequently un-save. If I were going to spend anyway, why did I save in the first place? Why didn't I just spend, as I went along... especially when I was younger, more vigorous, more keen on travel or costly hobbies or just impressing you-know-who with bling?

No, by my reckoning, savings are a one-way street. We save, period. We don't spend - not unless tragedy or dire need overcomes us.

Ah, ha. Guilty as charged.

Not picking on you, but an extreme aversion to spending money that one diligently saved. FOR THEIR RETIREMENT is in my opinion a form of mental illness. OTOH, a slight aversion is normal.

I concede it is very hard to shift from saving to spending. The longer that we have been retired the easier it is to believe that we won't outlive our money and end up a financial burden to our kids and we have opened the spending spigot more and even so, out NW is still rising but at a much lower rate of increase.

 

[Diogenes]

Not picking on you, but an extreme aversion to spending money that one diligently saved. FOR THEIR RETIREMENT is in my opinion a form of mental illness. OTOH, a slight aversion is normal.

I concede it is very hard to shift from saving to spending. The longer that we have been retired the easier it is to believe that we won't outlive our money and end up a financial burden to our kids and we have opened the spending spigot more and even so, out NW is still rising but at a much lower rate of increase.

The savings wasn't necessarily for retirement. If somebody saves for 4-5 years to buy a car, to pay cash instead of taking out a loan, then it would be somewhat odd, to ultimately pocket the money, instead of spending it on the car. That's because the money was earmarked for a particular purchase. The purchase might get delayed, say because of supply issues or price-pressures or availability, or maybe a hot new model is coming out next year, whence the consumer seeks to wait.

But honestly, I was never particularly aiming for retirement itself. "Saving for retirement" is the white lie that we tell ourselves, to motivate ourselves to save, and perhaps to account to others, for why we're doing the saving. "I'm saving my money to eventually become a billionaire" is neither socially acceptable, nor even a reasonable goal. So, we suppress it. But the reality, or at least my reality, is that retirement is a felicitous byproduct of the saving and investing. It wasn't the explicit aim. By way of analogy, if you plant a bunch of tree, a felicitous byproduct might be stabilizing the soil and preventing erosion... nice, but the original aim was to improve aesthetics and to have more privacy from neighbors.

So, if we earmark a budget for retirement, the task becomes, how to manage that budget, to make the money last. But if the purpose of the money is the money itself, then retirement is a handsome perk, but neither necessary nor sufficient. What is necessary, is to reimagine ourselves vs. our money... how we identify with it, and it with us.

 

[Gumby]

Nope. I saved specifically so that I could retire. I made decent money while I was working and the work was not bad at all, so there would have been no point to saving if I did not plan to retire.

 

[pb4uski]

The savings wasn't necessarily for retirement. If somebody saves for 4-5 years to buy a car, to pay cash instead of taking out a loan, then it would be somewhat odd, to ultimately pocket the money, instead of spending it on the car. That's because the money was earmarked for a particular purchase. The purchase might get delayed, say because of supply issues or price-pressures or availability, or maybe a hot new model is coming out next year, whence the consumer seeks to wait.

But honestly, I was never particularly aiming for retirement itself. "Saving for retirement" is the white lie that we tell ourselves, to motivate ourselves to save, and perhaps to account to others, for why we're doing the saving. "I'm saving my money to eventually become a billionaire" is neither socially acceptable, nor even a reasonable goal. So, we suppress it. But the reality, or at least my reality, is that retirement is a felicitous byproduct of the saving and investing. It wasn't the explicit aim. By way of analogy, if you plant a bunch of tree, a felicitous byproduct might be stabilizing the soil and preventing erosion... nice, but the original aim was to improve aesthetics and to have more privacy from neighbors.

So, if we earmark a budget for retirement, the task becomes, how to manage that budget, to make the money last. But if the purpose of the money is the money itself, then retirement is a handsome perk, but neither necessary nor sufficient. What is necessary, is to reimagine ourselves vs. our money... how we identify with it, and it with us.

Sounds like a big rationalization to me

If the purpose of money is money itself then it's more like hoarding I guess. Not sure what else to call it.

 

[Koolau]

I saved for several reasons. I never wanted to be without an emergency fund - one big enough to buy/replace/refurbish just about anything. More important was to fund retirement. Full disclosure: The idea of "having" a set amount of money (at one time it was a million dollars) was also a goal I've always wanted. I have, of course, upped that figure a bit but YMMV.

 

[audreyh1]

Nope. I saved specifically so that I could retire. I made decent money while I was working and the work was not bad at all, so there would have been no point to saving if I did not plan to retire.

Same here. No question all that careful saving and investing was for financial independence so that I could live off investments and retire asap.

 

[Diogenes]

Same here. No question all that careful saving and investing was for financial independence so that I could live off investments and retire asap.

No doubts here about the value of financial independence! Where I personally struggle is drawing the implication from FI to RE. That is, upon reaching FI, with some comfortable margin, what prompts us to make the leap into RE? Or did we aspire towards FI in the first place, starting in our early youth, deliberately to accelerate passage to RE, as soon as possible?

 

[audreyh1]

I had places to go, things to do! I relished making that leap.

 

[Koolau]

No doubts here about the value of financial independence! Where I personally struggle is drawing the implication from FI to RE. That is, upon reaching FI, with some comfortable margin, what prompts us to make the leap into RE? Or did we aspire towards FI in the first place, starting in our early youth, deliberately to accelerate passage to RE, as soon as possible?

I started toward FI for the sake of being Financially Independent! FI allows not only early retirement but all those other freedoms I've touched on. I wanted the freedom to jump from a j*b I loved to ER when my j*b changed.

 

[TickTock]

Where I personally struggle is drawing the implication from FI to RE. That is, upon reaching FI, with some comfortable margin, what prompts us to make the leap into RE?

Having control of your time. Not having to stay quiet when the megacorp bigwig sends you an email with two of your superiors cc'd stating that you are two weeks late on a weekly update and 'this is your last warning' when both of those reports were delivered on time. Whatever individual motivation a person has.

From reading your posts, it seems to me that you aren't interested in RE, or R(etirement) at all. No problem with that - but why are you hanging around an ER board?

 

[Diogenes]

From reading your posts, it seems to me that you aren't interested in RE, or R(etirement) at all. No problem with that - but why are you hanging around an ER board?

I am involuntarily retired. FI enables me to not fret about job search, and/or to accept a measly part-time thing as being sufficient. As I'm fond of saying, the only difference between retirement and unemployment, is that retired people have more money.

There is also a paradox, or irony, or however we choose to dub it. I was far keener on retirement a decade ago, than I am now. Maybe midlife crisis? Work felt drab, exasperating and taxing, having done it for a couple of decades (I started early). I was desperately itching to exit the workforce. Well, time passed, and the older version of me, who theoretically is better positioned to retire, is far less keen on it. In a way, it might be better to temporarily retire in middle-age, then to un-retire into old age.

Lastly, there's the question of what the money is for. For decades, it was "to retire". Now I'm realizing that there are other motivations and considerations, even if hypothetically the money could be use to generate an income that obviates W2 work...in other words, retirement.

 

[RetiredHappy]

It appears to me that you have nothing to retire to, hence you prefer to keep working. In fact, everyone of those "older" colleagues of yours have the same problem. They can afford to be retired but have chosen to continue to work since they have nothing to retire to.

 

[flyingaway]

Our current focus is how to spend money. I have not calculated asset allocation ratio for quite some time. It is what it is. Most are index funds, some bonds, some CDs. If I am not on travel, I am planning for travel.

 

[Koolau]

Having control of your time. Not having to stay quiet when the megacorp bigwig sends you an email with two of your superiors cc'd stating that you are two weeks late on a weekly update and 'this is your last warning' when both of those reports were delivered on time. Whatever individual motivation a person has.

From reading your posts, it seems to me that you aren't interested in RE, or R(etirement) at all. No problem with that - but why are you hanging around an ER board?

FI (Financial Independence) is good enough reason to hang around here. I became FI (partly through hanging out here.) I wasn't ready to Retire Early - until the DAY I WAS ready. Then, the issue of FI had long been answered. So, I had no hesitation to FIRE the DAY after (wait for it) Labor Day and be gone by that Friday.

Take care of FI first - then worry about when to RE.

 

[Diogenes]

Take care of FI first - then worry about when to RE.

If FI were a religion, I'd be High Priest. No worries there. The worry obtrudes upon pondering the consequences... because those aren't necessarily financial. They entail basic questions of self-conceptualization, what we desire out of life, our place in the world, our quest for this-or-that.

As others have noted, reaching FI changes one's attitude about work. Work becomes optional. Patience wanes. Management notices the lack of desperation, observing how their power attenuates. At my former employer, we cashiered the former CEO for mismanagement and incompetence. The new CEO was a "turnaround specialist". Initially, he and I got along swimmingly. Later, he noticed that I'm a bit withdrawn, maybe downright cynical. We had some heartfelt chats, and not long thereafter, I got my cardboard box. Being a principal in the company, I self-escorted out the door. The head of HR gave me a hug. So, in the morning, I was sitting my office, feet on the desk, nursing a cup of coffee, staring out into the cube-farm and wondering what the kiddoes were piddling-with. By 5 pm, I was.... RE.

 

[RetiredHappy]

If FI were a religion, I'd be High Priest. No worries there. The worry obtrudes upon pondering the consequences... because those aren't necessarily financial. They entail basic questions of self-conceptualization, what we desire out of life, our place in the world, our quest for this-or-that.

As others have noted, reaching FI changes one's attitude about work. Work becomes optional. Patience wanes. Management notices the lack of desperation, observing how their power wanes. At my former employer, we cashiered the former CEO for mismanagement and incompetence. The new CEO was a "turnaround specialist". Initially, we and I got along swimmingly. Later, he noticed that I'm a bit withdrawn, maybe downright cynical. We had some heartfelt chats, and not long thereafter, I got my cardboard box. Being a principal in the company, I self-escorted out the door. The head of HR gave me a hug. So, in the morning, I was sitting my office, feet on the desk, nursing a cup of coffee, staring out into the cube-farm and wondering what the kiddoes were piddling-with. By 5 pm, I was.... RE.

You have difficulty in RE because I believe you are still stuck in fourth stage of grief: denial, anger, bargaining, depression and acceptance.