Weekend Brain Food IV and rumblings

Doubling wealth versus Creating just enough wealth


FIRE concept seems to advocate creating just enough wealth so that we can do nothing (sing Bruno Mar's The Lazy Song) and simply enjoy life.

Just for fun...
Try tabulating how long it takes for you to double your wealth. Do it till the point which you find it's "just enough". Then do some deep reflections on how you did it.

(Congratulations if your starting figure falls beyond this table.)

1000
2000
4000
8000
16000
32000
64000
128000
256000
512000
1024000

Reflections...

1) Do you earn far more than your spending?

2) Does your earning increase yearly? By how much?

3) Do you generate any side income?

4) Do you trade securities / assets to generate income?
No? Only rely on dividends by buying but not selling?


Here comes the trick question:

Are you confident in doubling your wealth for x years to come? (Even if a recession strikes.)

No?

Then what makes you confident on a "just-enough" FIRE?

Yes.

Then why are you settling for "just enough"?


Think about it... Doubling our wealth is like the 'mean', FIRE is like the 'end'.


As I ruminate how youth passes by ever so quickly, I come to realize that first we find solace in having meaningful relationships with family and friends; then we find security and fulfillment in life from our capability in "work" through building our skills, mindfulness, and character, achieving personal goals etc. With those in place, we may naturally find our wealth - both tangible and intangible.


Once we FIRE due to tiredness, we switch over to the side of consumerism. We stop wanting to better ourselves. We stop wanting to contribute more. We stop wanting to achieve more. The wheel (will) to double our wealth stops.


There is also another school of belief that instead of chasing wealth, we should learn to attract wealth. In another word - don't be too desperate for money. I will leave this for another day's debate.


stones stack
Photo by Deniz Altindas on Unsplash

When we want to double our wealth we need to look at these 4 elements - hard work, patience, luck & discipline. 

Hard work - You probably have an idea how hard work should be like when you did the reflection exercise above. Are you working hard enough? We know we will harvest what we sow.

Patience - Stay invested in growth and dividend stocks in the market. Always maintain a certain percentage of cash as warchest for deployment in the big crash.

Luck - Beyond our control, sorry. Eh wait, we can look at luck as opportunities. And opportunities only knock for the prepared.

Discipline - The will to stick to doing something even when the going gets tough and stay consistent about it. Things like saving, investing, trading, paying off debts, learning... all require our discipline.

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Ok back to weekend brain food. Below are some recommendations for the bored minds. Fewer links this week as the very first one is quite a heavy read. :)

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The Human Side of Investing

- Uncle8888's blog, excerpt from Robert Huebscher

"One of my favorite adages is this one: Never forget the six-foot tall man who drowned crossing the river that was five feet deep on average. The important thing to remember about investing is that it is not sufficient to set up a portfolio that will survive on average.
The key is to survive at the low ends. It is the “I know” school who concentrate and leverage and so forth, who got into trouble in 2008. It was leverage in particular that prevented people from making it through the low points, and that is what we must do.
In particular, most investors ignore the possibility of extreme outcomes – the so-called back swans, the things that have never happened before, or happened so infrequently that they are dismissed."


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"My biggest takeaway is that the key leap wasn’t in discovering that the sounds came from a radiator. The lesson is that acting like it comes from a radiator completely solves the problem."


A story that pointed out our quirky psychology. She didn't learnt how to "let go" in her meditation. Yeah, we don't need meditation to "let go" of some things.


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The Most Important Number


This is related to what I talked about on wealth above.

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11 Skills That Millionaires Master - Valuetainment



Check out some of the other valuetainment videos, there's some pretty neat stuff to learn.


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Comments

  1. Girls can just married well and your husbands do heavy lifting of financial and retirement planning. You can just need to spend wisely your own money and keep it safe and invest safely. Your money is for safe keeping. That is hallmark of good husband who care and provide for the family. Their job! They choose to marry. LOL!

    ReplyDelete
    Replies
    1. Hi Uncle8888,

      That is like telling someone - you got to invest well, then the dividends will provide for you for rest of your life. Haha.

      Nowadays many women marry but still cannot FIRE hor.

      Delete

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