Today I just want to discuss why I am pursuing FIRE – it is about amassing as much money as possible in the least amount of time so that I can have my FREEDOM. It is the FREEDOM that I am after (not the money in and of itself) – the freedom from modern indentured servitude to the capitalists of today’s society.
I don’t blame the capitalists – I actually admire them for all their accomplishments from the risks that they had taken. The outcomes of great entrepreneurs like Bill Gates, Elon Musk, or Jeff Bezos completely justify their wealth that have amassed. Also, they are proven capital allocators – I would rather have them manage capital than the government – the least efficient capital allocator among institutions.
Today – I want to talk about the urban myth that lead to a GUARANTEED PATH TO A SUCCESSFUL MEDIOCRITY – Personally, I have been following this path – brainwashed by my parents and the societal norms.
If you have been told below four things and have been following below four commandments religiously (I had been guilty of this – I am trying to break out of this VERY HARD, but the momentum of mediocrity is quite strong), you should take a pause and think about your trajectory and future.
First RULE: INVESTING IN STOCK MARKET IS THE ROAD OF JUST LOSING A LOT OF MONEY
Many of our parents have lost a lot of money playing in the stock market and they are looking out for us when they are telling us this advice. Also, they tend to be a bit too optimistic on real estate investing. Key is that their approaches to investing to stocks and real estate have been extremely different. Stock = trading / real estate = buy and hold. Stock markets have created enormous wealth – as shown by S&P. They are blips through crises, but buy and hold approach would have created a lot of wealth. Plus stock market is liquid – you can stay invested and have the optionality to take your money out for emergency.
Second RULE: STARTING A BUSINESS LEADS TO LOSING A LOT OF MONEY
Capitalists have become capitalists because they started business. Also, you don’t have to quit your day job to start a business. you can start a small business that is capital-light. Like a website (this website makes no money right now sadly, but maybe one day!), online shopping, etc. Or you can set up your own mini-watch dealing business – I invest in watches. I would like to depreciate it to save money. It is not there yet, but who knows? Idea is that optionality on anything to develop into something material is free, but can change your life, little by little.
Third RULE: STABLE JOB IS THE BEST THING IN THE WORLD
Stable job is great – so long as you can leverage that cash flow to invest more aggressively and successfully. This is why companies with stable cashflows trade at higher multiple – the predictability itself is valuable, but it gives the management team opportunity to invest with long-term horizon and follow through.
However, stability kills that alpha – that low chance opportunity that you can make life changing money. also humans are very different from businesses in that we do not live forever. I want to have the optionality for life-changing money so that I can enjoy my life earlier. I like on 5 year plan, but NOT a succession of many many five year plans. Life is too short.
Fourth RULE: IT IS GREAT TO FIND A JOB THAT LETS YOU WORK INTO 60S / OLD AGE
intuitively, I don’t want to work in my 60s or later – I want to enjoy life. Your goal should not be to find a job that will “let you” work in your 60s, but to find a job that will allow you to retire and enjoy the fruit of your label in your 60s and beyond. I want to be aiming for getting my own Porsche 911 Targa in my 60s. I don’t know if I will get there, but it is just way more exciting goal than hoping to keep working in 60s
ARE YOU FOLLOWING THOSE FOUR RULES TO ACHIEVE SUCCESSFUL MEDIOCRITY?
Just take 5-10 mins to think about it – is that what you want?
Working for a great company with stable job is great – but have you ever worked for yourself?
