Author Topic: I can't out-save the Big Ball of Money  (Read 7080 times)

acanthurus

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I can't out-save the Big Ball of Money
« on: December 13, 2015, 08:38:18 PM »
So I call my stash the BBOM. And I've had as my goal for years now for my annual savings to exceed the annual return on the BBOM.

And it just doesn't happen anymore. The first time I "lost" to the BBOM was 2013 - of course because the market was up 30% and my job paid 40% less than it does today. But today, even if I net just 6% nominal, I can't beat it.

This big ball of money dwarfs all my efforts of job hopping and salary negotiation and getting better at what I do, because the better I am at all of that, the better it gets. And while I improve linearly, that mother fucker compounds.

It's badass and all, but also demotivating a little? Like all the hard work I put in doesn't matter as much anymore?

Do I FIRE not with a bang, but a whimper?




okits

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Re: I can't out-save the Big Ball of Money
« Reply #1 on: December 13, 2015, 10:18:58 PM »
Congrats on your BBOM!  I understand the effect you're describing, and I love it.  It's like a third income earner in our family, pulling the load with DH and myself.  When the BBOM has a good year, the results are damn exciting.  YTD our BBOM is in the red, and so our 2015 results seem tepid without that big gorilla putting its muscle into things.

So even though the BBOM has a bigger effect than you do, mathematically, your contributions matter (and may be more consistent - portfolios do have down years.)  Think of it as having a Mustachian spouse; two of you stashing makes it go way faster.  And with this BBOM "problem", hopefully it means you are in sight of the finish line (or, at least, have a pretty satisfying NW.)  I hope you can be excited for the gift (BBOM) your past self has given you, and think of yourselves as a team, getting you to your goal more quickly.

DesireeD

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Re: I can't out-save the Big Ball of Money
« Reply #2 on: December 14, 2015, 10:41:39 AM »
I am so calling my stash big ball of money now! Thanks for that:)

Adventine

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Re: I can't out-save the Big Ball of Money
« Reply #3 on: December 14, 2015, 10:44:55 AM »
I like it too! Adopting "Big Ball of Money" for my stash, which is currently fluctuating by a value higher than my employee salary :D

BarkyardBQ

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Re: I can't out-save the Big Ball of Money
« Reply #4 on: December 14, 2015, 10:48:17 AM »
Personally, I like Ginormous Head of Cabbage.

Dicey

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Re: I can't out-save the Big Ball of Money
« Reply #5 on: December 14, 2015, 02:43:00 PM »
I love it when my investments make more than I ever did in a month.

This is the reason I encourage people not to pay off their fixed rate mortgages at the expense of saving and investing for the future.

Once you get a decent-sized BBOM, as they sing in "Master of the House" from Les Miz, "Jesus! It's amazing how it grows."

RFAAOATB

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Re: I can't out-save the Big Ball of Money
« Reply #6 on: December 14, 2015, 03:40:38 PM »
For the record, can you give me the income/investment and stash growth numbers just to picture this better?

Unfortunately the biggest number I noticed is when the market went down last summer and in a week I lost enough from my retirement to cover a month's income.  My response was bemusement over $5,000 disappearing and wondering when it will come back.

arebelspy

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Re: I can't out-save the Big Ball of Money
« Reply #7 on: December 14, 2015, 04:09:42 PM »
To me it's even more motivation to add the the BBoM--because you aren't in a race against it, you're adding TO it.  Like a snowball rolling downhill, adding even a tiny bit more push each year still speeds it up even more.
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JAYSLOL

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Re: I can't out-save the Big Ball of Money
« Reply #8 on: December 14, 2015, 04:23:38 PM »
I love hearing stories like this, although I'm not there yet, my stash is more like small ball of loose change earning an hour or twos pay each month :/

Gyosho

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Re: I can't out-save the Big Ball of Money
« Reply #9 on: December 15, 2015, 07:18:36 AM »
I started tracking my salary and net worth in 2002.

Since then, my salary growth has averaged 3.97% a year (what can I say? I'm a state employee).

My net worth, though, has grown an average of 17% a year.

This produces a great Excel chart as a visual - the salary slowing plodding upwards, but above it the net worth exuberantly increasing by leaps and bounds.

grettman

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Re: I can't out-save the Big Ball of Money
« Reply #10 on: December 15, 2015, 09:20:49 AM »
It is fascinating (and scary) when the big ball of money can LOSE almost half of my annual salary in a given month (August).

dude

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Re: I can't out-save the Big Ball of Money
« Reply #11 on: December 15, 2015, 01:02:04 PM »


Do I FIRE not with a bang, but a whimper?

Like the Eliot reference!  With this year's returns, my contributions are FAR exceeding any market gains!  Have $31k/year going to 401k (and around $6500 going to an after-tax account).

marty998

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Re: I can't out-save the Big Ball of Money
« Reply #12 on: December 15, 2015, 01:07:13 PM »
It is fascinating (and scary) when the big ball of money can LOSE almost half of my annual salary in a given month (August).

Not to that extent yet but yeah my BBOM is shrinking faster than I can add to it as well!

Gone Fishing

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Re: I can't out-save the Big Ball of Money
« Reply #13 on: December 15, 2015, 01:08:21 PM »
I just hate not being able to maintain my balance with contributions.  During 2008 and 2011, my portfolio was almost flat given I could almost replace the losses with contributions.  Not anymore!  Also going through a little withdrawal not getting one of those big 20-30% years, but it was bound to happen at some point.

steviesterno

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Re: I can't out-save the Big Ball of Money
« Reply #14 on: December 16, 2015, 06:01:16 AM »
i like this Big Ball of Money idea and I'm borrowing it. finally starting to see where the market can make in a day what I do... which is fine because I'm still working that day. Hopefully this year get to the point where it does what the wife and I both do in a day.

Cougar

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Re: I can't out-save the Big Ball of Money
« Reply #15 on: December 16, 2015, 11:05:52 AM »

 same boat.

 even if i tripled my take home, it would still be more important to manage my investments and i'm going to go fire on that performance over my saving now.

acanthurus

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Re: I can't out-save the Big Ball of Money
« Reply #16 on: December 16, 2015, 05:27:34 PM »
For the record, can you give me the income/investment and stash growth numbers just to picture this better?

Very roughly gross annual income of X, liquid investable net worth approximately 10X.

Of gross annual income, 0.2X goes to taxes and various payroll deductions. 0.4X gets lived on. 0.4X gets saved. 

So I'm at a 50% take home savings rate and 25x annual expenses saved (so right at FI for a 4% SWR).

If investments net 6%, I have to live off of 0.2X gross income to match it and save 0.6X. I've done that before and it's cutting to close to the bone, some of the things I was doing affected my health. 0.4X is much much more comfortable and healthy. 


CCCA

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Re: I can't out-save the Big Ball of Money
« Reply #17 on: December 17, 2015, 12:24:26 AM »
I like the idea of the BBOM as well! 


Our 'stache (BBOM) is now large enough that as long as the market returns around 6% or more, market returns add more than our savings but they are close. 


I did a few calculations (0.069 cubic inches and 1 gram per dollar bill).  If we made a literal ball of money from our BBOM out of 1 dollar bills, our BBOM would be a sphere about 4 and 1/2 feet (1.4 meters) in diameter and weighing 2800 lbs (1300 kg). 

maizefolk

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Re: I can't out-save the Big Ball of Money
« Reply #18 on: December 17, 2015, 01:19:37 AM »
I did a few calculations (0.069 cubic inches and 1 gram per dollar bill).  If we made a literal ball of money from our BBOM out of 1 dollar bills, our BBOM would be a sphere about 4 and 1/2 feet (1.4 meters) in diameter and weighing 2800 lbs (1300 kg). 

The BBOM, can't out save it, can't outrun it.


acanthurus

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Re: I can't out-save the Big Ball of Money
« Reply #19 on: December 17, 2015, 10:57:31 AM »
To me it's even more motivation to add the the BBoM--because you aren't in a race against it, you're adding TO it.  Like a snowball rolling downhill, adding even a tiny bit more push each year still speeds it up even more.

I think of it EXACTLY like a snowball, getting bigger and picking up speed as it rolls downhill. And I'm in a race with it. Except I help it out along the way by packing it with even more snow, and then it picks up more on its own, and I know I'm not going to win this race. I'm not supposed to win this race, I don't want to win this race, I hope there's never another year where I win it again.

But the excitement of a big year end bonus, hitting my savings goals, getting a pay raise and a new job - those have all faded. That first year when I saved 50% it was a big deal. I went into overdrive and I made it to the point where for a consecutive 13 month period I saved 70% of my *gross* income. It was like crack and I was addicted. Now... meh. 50% net is good enough.

To put things in perspective, I've job hopped, gotten laid off, and hustled for more money each time. Base salary is almost 60% higher than it was in 2012. I turned every bad situation into a better one for more money but it's been stressful. The things I want now... a shorter commute. A good dog. Maybe even a motorcycle. The fire for FIRE is fading I guess now that I'm technically FI.

Is this a mid-FI crisis?

acanthurus

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Re: I can't out-save the Big Ball of Money
« Reply #20 on: December 17, 2015, 11:03:09 AM »
I like the idea of the BBOM as well! 

Our 'stache (BBOM) is now large enough that as long as the market returns around 6% or more, market returns add more than our savings but they are close. 

I did a few calculations (0.069 cubic inches and 1 gram per dollar bill).  If we made a literal ball of money from our BBOM out of 1 dollar bills, our BBOM would be a sphere about 4 and 1/2 feet (1.4 meters) in diameter and weighing 2800 lbs (1300 kg).

I love thinking about it as a big ball o' money, but calculating out the size and weight of the ball is even more awesome :) There should be a website this. Visualize your own BBOM in various currencies, denominations, heck even commodities. The Big Gold Nugget. The Zimbabwean Dollar of Death. I need to go talk to some web dev friends...

snacky

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Re: I can't out-save the Big Ball of Money
« Reply #21 on: December 17, 2015, 11:14:46 AM »


I did a few calculations (0.069 cubic inches and 1 gram per dollar bill).  If we made a literal ball of money from our BBOM out of 1 dollar bills, our BBOM would be a sphere about 4 and 1/2 feet (1.4 meters) in diameter and weighing 2800 lbs (1300 kg).

switch it to Canadian - first enjoy the number increase thanks to the exchange rate, then calculate the weight of x number of dollar coins (loonies) melted into a ball.

https://en.wikipedia.org/wiki/Loonie

this is my new way of calculating my savings. their weight in loonies.