Hi dear readers,
my last post FIRE is DEAD sprinkled many interesting discussions in the comments area, and in my personal inbox(ex).
Thank you so much for raising the debate to such high quality! I’ve received many personal messages and emails, some just to thank me, others to show me aspects I might have missed, and one (user FIREstarter on MP Forum) who just asked me a simple question:
have you come to a conclusion for yourself, at least somehow? The conclusion in the blog post is more of a cliff-hanger 😉
I replied to this message with a quick “flow of consciousness” / “word vomiting” as I usually do, even for writing my posts. But I thought maybe I was not clear enough with my conclusions and I wanted to add a short appendix to that post. And here I am.
Promised, this is going to be a quick one 😉
“But RIP… don’t you want to share “that”? 😉 ”
Oh, yeah, of course! Ben Felix liked and replied to my twit about the old post, and he said “I also involuntarily read my portion of the dialogue in my own voice 😀 ”
Which means I’m here to announce my first book: “How to spend 1 Million CHF by asking Ben Felix to read the audiobook version of this book“. Ben Felix will be the audiobook narrator, and the book contains just the sentence “in a 2013 paper, Eugene Fama, and Kenneth French…” repeated a thousand times. Regret nothing!
Ok, back to the main question: what are my conclusion on the death of the 4% rule?
Preamble: I’m on a lifelong mission to try understand more about the world that surrounds us, and the universe that lies within us. The more I expand my understanding, the more I discover I know nothing and the more I realize it’s hard to have an opinion about anything.
One thing only I know, and that is that I know nothing.
The strongest opinions I have are those against people who have strong opinions, certainties, and who navigate simplistic maps without knowing territories.
I’m here to destroy your certainties, to add complexity to your models, to ask you (and myself) tough questions, to try to teach you how to live with an opinion and its opposite both in your brain, to tell you that everything is 100 times more complex than how your brain craves to simplify.
That’s why I seek questions, rather than answers.
Judge a man by his questions, not by his answers.
I’m probabilistic thinker as well. I don’t like to decide between black or white. It’s always a spectrum that spans over many shades of grey.
“Yes RIP, but you said this was ‘a quick one’. What’s your opinion on the death of the 4% rule?”
There’s no way I can overestimate the complexity of the problem we’re trying to “solve”, or at least to “face”.
My conclusion is, as always, “don’t draw any conclusion” 🙂
“Ok, RIP, but what’s your plan? how are you going to change it with this new evidence?”
And I’m not talking about finances here. My finances are already there!
I’m working on the psychological aspects.
I’m convincing myself that I will never be in dire need of money, I’ll never be homeless, I’ll never lack food. I’d go even further: I’ll never experience a lack of small luxuries I and my family like.
I now need to convince myself of that.
My “scarcity mindset self” always fears of one day being broke, homeless, and in poverty. Things that will never happen to me and my family no matter how bad I screw it because I’ve developed above average skills that will prevent me from having huge financial problems in life. Even if I lose everything, I can rebuild most of it – if not more – in less than a decade.
As a paradox, the only things that could send me into darkness are my fears and anxieties themselves! Fear of falling into poverty, and anxiety in anticipation of what would happen in that case. They could keep me slave of unhealthy behaviors (like working a job I hate just for the money) and a roadblock for an intentional and free life. In this context, fear and anxiety are self fulfilling prophecies.
So if I can convince myself that I’m “already there”, no matter what the 4% rule says, I won’t need any 4% rule.
More than focusing on finding the perfect SWR and optimize my investments, I should be doing exercises like:
- Fear Setting to get to know my fears, as a first step to fight them.
- Fear Rehearsal to experiment small doses of them, and fight the associated anxiety…
- …Which in this case could be Seneca’s Voluntary Poverty exercise, to become friend with the money-related worst case scenario.
- And at the same time I should work on increasing self confidence, that I can place myself wherever I decide to be in the money spectrum 🙂
Which means I can already focus today on what I love. Enjoying freedom. Maybe taking some steps on the Power levels of the More to That’s money spectrum, and try to leave an impact in my family, my communities, and maybe even above.
All of this to say that “the 4% Rule doesn’t work anymore, but if you’re FI according to the 4% Rule you don’t need any rule to grant you Financial Independence: you’ll never have financial problems, not because of the 4% rule but because you fucking ROCK!”
“Awesome. So, RIP, you’re behaving like a Financially Independent person, working on your passions, and not caring about an income?”
I’m not there yet, but it’s not money that’s lacking. It’s the confidence that I will never lack money that’s lacking.
Last Friday (3 days ago, the day after I published my last post) I accepted a new job offer for what it seems another “dream job”.
Let’s see how it goes! 🙂
I’ll go back to work in September, still 3+ months before re-plugging myself into the system… Well, I’ve never really unplugged, let’s be honest.
Of course I’ll keep you all posted on this 😉
“RIP! You’re a lie! You’ll never “retire”, why the hell are you blogging about it at all??”
I don’t agree with you, my dear friend.
Because what you might see as a descent into Scarcity, I see as a climb into Power 🙂
- I’m taking my time: 5 months off, last time I worked a single day in July it was 2016.
- I’m picking a position that I really like: developer/researcher for an academic institute in Artificial intelligence!
- I’m not letting compensation be the main driver, even though the offer is very good for the position: ~75/80% Hooli total compensation!
- I’m getting out of giant corporations and back to academia-like environment, suspiciously following LivingAFI work history.
- I’m able to work when I want, from where I want, with a coworking space rented for me in case I want an office.
And in case I discover that even in such amazing conditions I don’t like to work with computers anymore… then I’ll shrug, quit, and move on 🙂
Ok, I buy it. But you have to promise me that in October you’ll ask a 80% work reduction and in January you’ll consider a team change!
– Mr. DIP
Haha sure I’ll do. Plus, a sabbatical month in July 2021 to not break the strike for sure! 😀
Have a nice week!