Author Topic: Half mustache?  (Read 3469 times)

uranor

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Half mustache?
« on: July 03, 2014, 10:46:38 PM »
Hello,
I am new to the forum, but discovered that I have been a mustachian all my adult life, as I went through the blog archive; or at least half mustachian? I have the savings side, but I fear that I am missing the investing half.  I'd like this community to provide some advice. Perhaps it requires a case study, but would like to keep it simple for now and see what I get.

I have a relatively high income, about 90k/yr, single, no debt and a frugal lifestyle. Therefore I have saved a lot, in the last few years. My net worth is approximately 300k, of which approximately 120k is in cash, the rest is invested. I never bought a house, as I thought in my case the economics did not make much sense due to instability at work and other issues, such as immigration, but that is a long story. I am now permanent resident and going on citizenship very soon.

Few interlocked issues are making my investment decision hard. The main issue I need advice on is how to allocate the 'stash: why so much cash? I simply did not know of an investment strategy that made me feel cozy. It did not help that I started investing in the stock market in 2008 (through the company 401k). I did not know anything about investing at that time, so I trusted the financial advisers, who gave me the usual run-of-the-mill directions, which I followed, not knowing any better. The result was poor, also due to the terrible timing: the image of the 100-ton weight falling on my head in the form of 45% loss and subsequent roller coaster comes to mind. The best outcome of that experience has been that I decided to learn: I have read books and got myself a financial education. Finally, just last year, I started investing on my own. So far I have invested in index fund ETFs and few stocks of major corporations that pay dividends. The returns I am getting are much better than the money I (still) have invested through the "professionals."
My dilemma is the following: I understand that the best option for people like me is to invest in index funds, but we are in a bull market.. I also know that timing the market is only a matter of luck, not skill, and is risky at best. Yet.. should I buy funds now that we know we are in a market high, or should I spread the buys in the next months (years)? I hate taking unnecessary risks and playing lotteries, in fact I very much agree with Buffett on this: "I'll take the gift of a lottery ticket, but I'd never buy one."
On the other end, every additional month the cash stay unused, inflation erodes a little more of it, although we are in a low inflation cycle. I already have a "high-yielding" (0.75 APY) savings account, but it is still well below even the low inflation rate (~1.7% ?); this is not to mention the loss of opportunity.

The other issue is the following: should I fire my money managers? The money they allocated "only" made 15% last year (on a roughly 25% S&P 500 surge though) and this year we are in the 1% range, while the market has at least 5% YTD gain. Clearly an index fund would have done better (surprise!), and I am not counting their 2% fees. I would feel however very dumb if I made a mistake in allocating the funds myself: I have just been lucky this last 18 months?

Finally, the instability at work continues: I have no doubts I can find another job, if it is needed, that would even pay better, but now I live in a small town and my commute time to work is 5 minutes (by bike!) Another job would likely be in a large urban area which I hate. In fact, my tolerance for the cubicle life has become so low that I fear snapping at any time even as it is. The uselessness of a life spent writing progress reports for projects nobody really cares about is really crushing me. I need an out, as quickly as possible. I do have an alternate job on weekends that I love, which however pays little (25k/yr when full time?)

So, please chime in if you understand what is going on; I admit it is not straightforward!



gimp

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Re: Half mustache?
« Reply #1 on: July 03, 2014, 11:20:08 PM »
Absolutely fire your money managers; they're doing worse than index funds, and they always will, and they're going to charge you a shitload on top of that.

Index funds will be a roller coaster, yes, but in the end I'd rather take the roller coaster than the teacup ride. :)

A lot of people do invest in chunks, instead of dumping it all in at the same time. You can consider this... sort of an automatic rebalancing, if that makes sense; if prices go down, your next month's investment buys more stock.

Now, the job thing... yeah, it's often hard to find something you love that also pays well. So it goes. For some people, it's a hobby, a side job, a changing of your day-to-day at work. For some people, it's drinking. But seriously, it's a hard question to answer.

darkadams00

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Re: Half mustache?
« Reply #2 on: July 04, 2014, 12:03:03 AM »
Top half, bottom half, middle half w/ upper and lower quarters trimmed off, left half, right half....too many choices if you can only have a half mustache.

As to the job, be careful of "grass is greener" syndrome. One caveat to this forum and the overall "early retirement" perspective is that the yearning or even obsession with getting out of the workplace seems to completely demoralize some people towards their current job. After some time surrounded by ER thought, all they can do is think about finishing work and getting to the "good life." At times I feel like I'm listening to the same voices that I heard in college--just x years, y months until graduation. I understand the rationale, but I have seen college students miss or marginalize the fun of learning, earning, playing, and socializing all at the altar of "get me the heck to that diploma and some real money." Life comes once and, for most people, takes quite a while. Once a student finishes college, those particular experiences will never be available again in exactly the same way. While you're working, you're facing options that should bring you enjoyment. Seek those out. There's always some negative aspect, but you can control that. I work in a field that, in some companies, would be soul crushing to me due to environment, schedule, management, etc. Instead, I searched until I found a company that absolutely rocks (for me)! At the same time, my two most recent project managers in the same company stated in clear terms (breakroom conversations) that they strongly disliked their job at best and absolutely hated it on most days. Knowing these guys, I have to think that a big part of that is not the company or job--it's their perspective.

I think some folks in the workplace start their ER discussions at "job-glass half empty" and within a short time end up with "job-glass has only two drops left." Too much job depression going around in my book.


uranor

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Re: Half mustache?
« Reply #3 on: July 04, 2014, 08:13:23 AM »
The "greener grass syndrome" is definitely something to be watched carefully. I often remind myself about how my grandparents lived through a World War and the stories they told me. Such as when grandma lived in a glorified hut and had to cook food inside a tomato can because they did not have a pot. Things improved quickly, thanks to their resiliency and hard work: this is why I got to start much better than they did.
I think however that the career I am in is simply not well suited to my personality. I always had doubts about getting into it: although it is something I do well, the environment of government funded projects has many issues. Without digressing too much, the main problem is that the system ends up torpedoing every good initiative, through politics, jealousy, and short term thinking (the neologism "Dilbertesque" comes to mind?) In this environment, in 10 years, I have not seen a single project come to fruition or producing something even remotely useful. Not just the projects I worked on (that would be a hint to leave): I am talking every single project I have known of. Yet we go on relentlessly, running ever faster, hopping from one guinea-pig wheel to the next. I know I am not the only one to think this: everybody in my team I have talked to thinks the same, more or less, by their own admission.
So, I am looking for better opportunities, but it is not easy. Once the thinly veiled corporate marketing is pierced, one finds out that most companies that would even consider hiring you, do essentially the same kind of job and heavily depend on the government (whatever happened to capitalism?!)
I had started thinking about ER well before MMM blog even existed. So my life journey got me here, not the other way around. The main benefit of this blog is that it renewed my hope that I can make it, if I focus.
Thanks for the comments: I will definitely remind myself not to be a "complainypants" every morning as I trim my mustache. :)

jk

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Re: Half mustache?
« Reply #4 on: July 04, 2014, 08:28:11 AM »
You hit the nail on a very pertinent subject for myself.

I will date myself here but when i was a teenager there was a song with a hook of "working for the weekend".  I hated that flipping song even at that young age and thought I never want to be in that position where I am only looking forward to the weekends.  Well over the past 6 months that has become my attitude.

Not much has changed about my job and its responsibilities since i got focused on the financial goal of being able to comfortably walk away from it on a day of my choosing.   But I have noticed a big change in my attitude towards this job.  When I truly look at my situation objectively however, it really isn't bad at all.   As a matter of fact it has lots of advantages that are there for me to take advantage of if only i will.  I have the ear of the CFO; have a lot of flexibility in assignments, its located in a part of the world that is very interesting and was always a dream of mine to work internationally; I really enjoy the cultural adjustment and living outside the USA "bubble".

It seems to me that what occurred over the past 6 months is my blinders went on concerning the opportunities at work and the focus has shifted to getting out of here.   That would probably be well and fine except I am at least 5 years away from that point. 

I am thinking now that this whole FIRE idea is correct and for me but I need to take a step back, continue to follow the guidelines, set everything up financially so it is all automatic, but get back to really smelling the roses of everyday work life as it is presented to me now.  Not how it will be 5 years down the road.   

Whether the "blinder syndrome" is common with folks once they see the FIRE light or something affecting only a few I would be curious to know.

 

Wow, a phone plan for fifteen bucks!