Precious Classes from My Eighth 12 months of Freedom

Mad Fientist: Hey, what’s up, everyone. Welcome to the FInancial Independence Podcast.

So three years in the past in 2021, I made a decision to cease doing my annual updates. And should you’ve adopted the podcast for some time, yearly since I left my job in 2016, I’ve carried out an annual replace speaking about what I realized over that final yr.

And when it bought to 2021, I felt like I used to be actually simply dwelling regular life, and I used to be losing interest making the annual updates as a result of I didn’t actually suppose a lot had modified. And I didn’t know if I used to be really giving any kind of significant recommendation to anyone by simply speaking about what I had been doing for the previous yr.

So I made a decision to cease doing them and it’s wonderful how a lot has modified since then.

So one, I don’t have all of it discovered and I’ve realized so much over the past three years, so I figured I may share what I’ve realized over these final three years and possibly begin doing these annual updates once more if I proceed to be taught issues, however I’ve additionally realized that issues are going to get actually bizarre with AI over the following decade, and content material goes to have the ability to be created instantaneously by computer systems.

And actually the one factor I’ve is my human story. And that’s crucial factor. And my distinctive experiences that I can share and the teachings I be taught by way of really dwelling this kind of way of life.

So each of these issues mixed made me notice that, Hey, I ought to possibly do one other one in every of these at the very least. After which possibly persevering with to do these in future years if I’ve some fascinating issues to share.

So anyway, so that is my eighth yr of freedom put up, and I can’t consider it’s been eight years. That’s completely insane, and it was really August 1st that I left my job, however I’m not likely on schedule today, and so that is over a month late.

However hey, higher late than by no means.

Anyway, I hope you take pleasure in it, and that is priceless classes from my eighth yr of freedom.

So the largest factor since 2021 is actually that I really feel like I’m really utilizing cash for the primary time. My total life has been saving cash, investing cash, hoarding cash just about.

And I don’t suppose I’ve ever even tried to make use of it as a result of utilizing it was all the time the final resort. And if I used to be utilizing it, that was a mistake as a result of now that cash can’t develop anymore. And it’s been an enormous psychological shift to now attempt to use it after I’ve simply spent my entire life accumulating it. It’s been numerous enjoyable and I’ve a article popping out quickly, if I can get round to writing it, speaking about studying easy methods to spend and really having fun with it whereas I’m studying easy methods to do it. And I feel that’s been the largest change. And significantly we purchased a home final yr. Our final home, I feel we offered in 2014 and we’ve simply been renting ever since and renting has been nice.

However now that we now have a son and we need to cool down and we don’t need to have to maneuver yearly if we don’t need to. I do know my spouse by no means needed to maneuver yearly, however I used to be all the time eager to strive one thing new. However now that we now have a son within the image simply having a steady place that we are able to put all our stuff, and as dad and mom on the market know you could have a ton of stuff whenever you get a child, as a result of grandparents simply preserve shopping for them stuff.

So we determined to purchase a home and that’s been a terrific buy. And that is really the third home we’ve owned. We owned a home in Scotland again in 2005, after which we purchased a home in Vermont in 2011. However that is really the primary home that I’ve loved proudly owning.

For anyone on the trail to FI on the market who’s like me and was similar to very motivated to get there as rapidly as potential, I don’t suppose I ought to have owned homes again then, as a result of any surprising bills that got here up, I’d stress about them and yeah, proudly owning a home is nothing however surprising bills. So I feel yeah, if I used to be doing it once more, I’d in all probability hire more often than not that I used to be on the trail to FI after which purchase after as a result of now I can really take pleasure in it and I’m having fun with it. It’s a luxurious. It’s a splurge and it’s a terrific splurge as a result of I’m speaking to you from my good residence studio that I’ve spent months and months designing and constructing. And I like it a lot. And yeah, if I used to be as tight with cash as I used to be again in my FI days, I wouldn’t have this studio. And I’d have been stressing about all of the surprising bills which have already popped up over the past yr and a half.

So homeownership has been wonderful. And once more, should you would have informed me this eight years in the past that I’d need to be a house owner once more after the horrors of my earlier two homeownership stints, I’d have stated you’re loopy, however that simply reveals how a lot adjustments as you become older and as your priorities change.

And the opposite massive factor that I’d be stunned about again then that I’m loving now could be stuff. So though I simply was speaking about being overwhelmed by an excessive amount of child stuff, shopping for stuff for the home has been numerous enjoyable. And it provides to my every day pleasure. So yeah, I didn’t suppose stuff really elevated my happiness, however it actually does.

And I feel it’s primarily as a result of I’ve gone so lengthy with none great things. In order we had been renting, we might all the time have furnished leases. And since we moved so usually, I hated packing up packing containers and transferring. So I simply restricted the quantity of stuff I had. In order that was, that simply meant that we used, all of the rental home’s kitchen stuff, and no matter TV was on the wall and sound system was there, we simply used that.

However, now that we now have our own residence, and we all know we’re staying right here for some time, I purchased good issues that I actually do take pleasure in. So something from, the espresso grinder that I’ve talked about many occasions on this present and different reveals, to similar to very nice mugs, to a terrific sound system for the TV and audio system in each room that make music sound so good and I can simply flip it on immediately and simply have music following me round the home.

After which clearly the studio is simply kitted out with every part that I’ve ever needed. Talking of the studio, I’ve set it up in order that I can do a video from right here now. So in order for you these podcasts to be in video type sooner or later, go to madfientist.com/youtube and observe me there. And if I get sufficient YouTube followers, I’ll begin to make the efforts to do video, which might require me to really bathe earlier than recording these, which immediately, that didn’t occur so I’m glad this one’s audio, however. If I get sufficient followers on YouTube, then I’ll begin doing these in video and I’ll provide you with a bit of tour of my residence studio, which is unbelievable. So go to madfientist.com/youtube to observe me on there.

So these are two massive adjustments, my love of residence possession and love of stuff.

However going again to the preliminary level the place I’m really utilizing my cash for the primary time, I noticed that’s a giant mistake I made on my journey to FI was simply disregarding the truth that really at some point you’ll spend your cash and should you’re not likely training easy methods to spend it you’re not going to be that good at it.

So this has been like a 3 yr journey of attempting to get higher at spending cash and attempting to reframe it as one thing that does get used and you employ it to extend the happiness in your life. And the one factor I preserve saying to myself is one thing that I heard within the Die With Zero podcast that I printed just a few months in the past with Chris Hutchins.

And that’s when Invoice Perkins stated, when’s the occasion? And I preserve saying that to myself in my head, as a result of that’s true. When’s the occasion? As a result of even should you don’t spend your cash, you’re going to provide it away on the finish of your life. So there’s a celebration in some unspecified time in the future and any individual who’s going to learn from it.

So you may both use it throughout your life and provides it away throughout your life or on the finish of your life, it’s all going to be given away and any individual goes to have a celebration and it might be a charity, it might be your heirs, if you wish to be part of that occasion, then it is advisable determine easy methods to spend it or give it away throughout your life.

And that’s one thing I’m actually centered on.

So in that very same kind of vein as, utilizing cash for the primary time, I really feel like that is the primary time I’m appreciating all my previous investments. It seems like all my investments are actually paying off. So for instance, like to purchase this home I used my portfolio to do it and that was simply eye opening since you’re saving for FI and it’s all simply this theoretical factor.

It’s not such as you impulsively take out all of your cash, give it to the FI particular person they usually provide you with all the liberty. It’s not such as you’re really utilizing it to purchase freedom. You might be clearly, however you’re not clicking a button to do it. It’s only a theoretical factor like, okay, yeah, my checking account says I’ve this a lot in it, so now I don’t need to work anymore.

However it doesn’t actually really feel such as you’re using that cash. Whereas after I purchased the home, I did simply try this, which I clicked a button and just about purchased a home, which is a loopy transaction that I’m going to put in writing an article about sooner or later as nicely. Hopefully subsequent yr. Trigger it was simply essentially the most insane wonderful monetary transaction I’ve ever accomplished in my life.

So anyway, in order that was like the primary time I used to be like, Whoa, okay. So yeah, I did save up amount of cash and it may be used to purchase wonderful issues like this massive stone home within the countryside. However I additionally really feel like, different investments are additionally paying off. So my concentrate on well being over the past decade and now I’m in my early forties and I nonetheless really feel like I’m 20 and I’m very grateful for that, particularly having a bit of toddler to chase after and choose up and throw round.

So I really feel like, yeah, these previous selections are beginning to bear fruit and, like my friendships I get to go residence to the States and see some nice mates that I’ve had for many years. And we choose up precisely the place we left off. And it’s we’ve simply by no means stopped hanging out, which is unbelievable.

My 22 yr funding in my relationship with Jill has made it potential. best human to ever exist in the complete historical past of humanity. In order that funding is paying off in methods I wouldn’t have even imagined. And so it’s making me consider my future investments. And now the cash funding is all on autopilot and locked down, and I’m not nervous about that, it’s specializing in these future investments.

So once more, sustaining well being. In order that’s an enormous focus as a result of I’m an older dad, however I don’t need to act like one. So I need to be enjoying ice hockey and snowboarding with my son and hopefully doing it for the following 40 years quite than simply the following 10 or 20.

So well being is a big focus. And I do know that funding pays off, however it’s some of the necessary ones, in order that’s the one I’m specializing in most.

I’m attempting to consider methods to extend the funding in my friendships that I’ve constructed over the previous few a long time and determining ways in which possibly cash can assist that by possibly, renting an Airbnb the place my mates stay for a month and simply being there quite than simply coming into city for per week and seeing everyone rapidly, similar to really dwelling there for a bit of chunk of time yearly in order that we are able to simply choose up the place we left off and proceed to construct these relationships that I worth a lot.

After which the largest funding, investing in my son, which has already paid off in so some ways and has been the largest present of FI, having the ability to be there and spend all this time with him and all this high quality time as he’s been rising up and to be there for all the massive milestones. So to proceed investing in him and having fun with each minute of it alongside the way in which.

So once more, it’s occupied with ways in which cash can contribute to that and assist that. So quite than focusing solely on the cash funding, I’m once more, attempting to reframe it and take into consideration how I can use cash to extend these different investments which can be way more necessary on the finish of the day and are those that basically deliver numerous happiness.

And the opposite massive factor that I’ve been pondering so much about over the previous few years is one thing I feel the pandemic taught me, and that’s, there’s a danger to placing issues off. And I feel again pre pandemic, I all the time simply thought yeah, I can save all this cash after which in just a few years I’ll do that.

However the pandemic confirmed us that, this era of well being and peace and free journey, we’ve taken it with no consideration as a result of it’s all we’ve identified and that’s not assured to proceed.

So after I take into consideration whether or not we must always make a journey to the States this spring, or if we must always simply put it off to the summer time or fall. I’m much less inclined to place issues off today.

And I feel, yeah, the pandemic was the factor that basically introduced that to the forefront of my thoughts. We had been trapped in Scotland for a few years and I couldn’t see my household and mates and I couldn’t do the issues that I needed to do and we couldn’t journey freely. In order that’s been one other motivation to make use of my cash extra now, quite than letting it sit there and accumulate extra in order that I may use extra later.

So these are the true massive issues which have been on the forefront of my thoughts over the previous few years, since my final annual replace, and it’s a large mindset shift. However it’s one I wanted to have, and I’m glad that I’m having it, and I’m glad I’m within the place that I’m in to take pleasure in it whereas it’s taking place.

So numerous the long run content material I’ve goes to be primarily based round that. So once more, I’m going to have a giant article about studying easy methods to spend, as a result of I’ve realized, I feel my listing is as much as 14 issues which have actually been useful in that regard. So I’m going to publish that quickly, hopefully. I’m additionally going to do a Excellent Life model 2.0. I’ve a put up known as The Excellent Life that I wrote even earlier than I reached FI and I haven’t learn it as a result of I need to learn it proper earlier than I write this new put up, however it’s going to be humorous to return to that and see how completely different I’m dwelling life now than I imagined I’d have lived it again after I wrote that article and it’s going to be enjoyable to put in writing a brand new model of it to see what the long run good life goes to be trying like now that we are able to construct precisely the life we wish. And I really feel like we’re doing that and we’re getting very near our preferrred way of life, however right here we’re eight years in and nonetheless experimenting so much and nonetheless attempting to determine it out. So it’s, yeah, it’s positively not as simple as you assume it could be.

So the one different minor factor I needed to talk about is inventory selecting as a result of, it’s apparent what the downsides to inventory selecting are whenever you’re flawed, you lose cash otherwise you make much less cash than you’ll have should you weren’t attempting to select particular person shares, however I simply needed to the touch on two success tales which can be nonetheless not preferrred. So even should you choose the correct inventory, there’s two examples I’ve for you. And the primary is I purchased Nvidia again in 2012. So for anybody on the market who is aware of what Nvidia inventory has carried out since then, that was very early and that cash would have grown to an insane amount of cash had I held on to it.

However, that’s the issue with selecting particular person shares.

Again then I used to be a software program developer and I may see that graphics had been going to be extra necessary in future years. And I assumed, okay, investing in one of the best graphic processing unit producer would make numerous sense.

So I invested and positive sufficient, I feel it went up possibly 20, 25 p.c and I offered it and I assumed I used to be a genius and yeah, trying again on it, yeah, it was funding, no matter. However had I not offered it, it could be up 1000’s of p.c. So though it was a hit. There’s nonetheless numerous remorse there trigger I offered method too early.

In order that’s one instance of inventory selecting going proper, however nonetheless feeling like a failure and one thing that it is best to have carried out higher.

And the second instance might be across the similar time, I feel. Apple was buying and selling at round its money worth. So ignoring all of the mental property it had and all of the merchandise and every part, it simply was just about buying and selling for what the money it had readily available was.

So I had some cash mendacity round at the moment and I used to be like okay, I don’t see anything good to put money into, so I’ll simply put it into Apple. And so I’ve simply left it there and the dividends have simply been reinvested up till not too long ago. I turned that off as a result of I used to be like, that is simply getting too massive of a bit of my portfolio.

This was in a taxable account too, which is foolish again every time I did that. So I’ve this large unrealized capital features, so I’d ideally not promote it, as a result of I’d pay numerous tax on it. And but it’s simply changing into an more and more greater and greater a part of my portfolio. So though I would like my little enjoyable portfolio dimension to be 5%, Apple alone is already greater than that, not even together with, Apple’s. Portion of all of the index funds I personal.

So anyway, in order that’s one other instance of inventory selecting going proper, however then ending up in a kind of troublesome scenario the place a single inventory is now an even bigger proportion of my portfolio than I would like it to be, but when I used to be to pare it down, then I’d be hit with numerous capital features taxes.

So there’s simply two examples.

As a result of like I stated initially of this, it’s simple to see how inventory selecting is dangerous when it goes flawed trigger you lose cash otherwise you make much less cash than you would have. However when it goes proper, there’s nonetheless issues. And that’s why I’m so glad that almost all of my portfolio is index funds that I plan to by no means promote.

And that simply makes life a lot simpler. You simply let it preserve compounding. It retains doing its factor. You’re not switching out and in. You’re not watching it. It’s simply rising. And it’s only a a lot simpler option to make investments. And it’s little doubt it’s going to be extra helpful than me attempting to select shares, even when I choose winners, which once more, I don’t all the time, these are two examples of winners, however even then it comes with issues.

So anyway, that’s what’s been taking place with me for the previous few years.

Count on some extra detailed and actionable posts about a few of the subjects I’ve mentioned immediately arising. Perhaps not this yr, possibly early subsequent yr. However should you’d favor these updates to be in video type within the subsequent few years, then simply head to madfientist.com/youtube to observe me there. And if I get sufficient subscribers there, I’ll simply begin doing them there.

However yeah, I hope you’ve been doing nicely, and one different factor that I’ve been occupied with over the previous few years is simply how grateful I’m for the Mad Fientist and for you. It’s wonderful that I can simply go months with out publishing something, after which I ship out one e mail and I get all these beautiful replies and options and clever folks to speak with. And it’s unbelievable. It’s simply one other funding that appears to now be paying off.

So all these previous selections of placing the reader and listener first and never attempting to promote some rubbish factor that you simply don’t want or attempting to place advertisements everywhere, i’m blissful I made these selections as a result of now I really feel like I’ve constructed up this relationship with you guys and I’m so grateful for it.

So thanks for listening, thanks for all of your suggestions and for being form web folks, as a result of I’m undecided who else on the market can ship out an e mail to 100 thousand plus listeners or readers after which simply get all these good replies and not one of the regular web rubbish that I feel lots of people need to take care of.

So thanks for listening. I hope you loved it, and I’ll catch you within the subsequent one.