|Jun 19||Public post|| 1|
Hi everybody! Welcome to the 7th edition of my newsletter "Free As A Bird".
The name of the newsletter represents us - we want to be free. Free to choose how we spend our lives.
Did you check out my latest blog post?
You can read it below or by pressing on the tweet.
I recommend you to read it if you want to reach financial independence faster.
As probably many of you know I love Naval Ravikant.
Have you seen the podcast he had with Joe Rogan?
So many epic quotes in there:
“Desire is a contract you make with yourself to be unhappy until you get what you want.”
“We like to view the world as linear.
8 hours of work, 8 units of output
Doesn't work that way.
The world is highly asymmetric. “
“What you do.
How you do it.
Who you do it with.
Are way more important than how much work you put in. “
I could go on and on, but…just watch it!
As I told you in the last newsletter, I’m only checking my investments once a month.
The reason to why I do this is to update my monthly net worth on my blog.
A rough month in many ways!
Net worth June 2019
How was your month?
My portfolio was down 4,2 % in May.
In numbers this means -$7,897 less than last month.
This doesn’t bother me at all!
Because, as J. L. Collins says, “The market always goes up!”
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Articles I Read This Week That Got Me Thinking
This is what makes investing so tough.
You can be rewarded in the short run for things that don’t matter in the long run, and you can be punished in the short run for things that do matter in the long run.
You can be wrong even when you get it right.
Ben Graham once said, “In the short run the market is a voting machine, but in the long run it is a weighing machine.”
But just how long is the long run?
Whatever the market says it is.
For example, if a group of investors with sufficient money want to pay 50 times earnings for a stock, then that’s what the stock will sell for.
This is why being right is overrated, because not only do active investors require having to know more than the market, but they also need a positive risk premia as well.
As I have stated before, “Don’t pray for alpha, pray for beta.”
FIRE – WHY I WANT TO HAVE THE OPTION TO RETIRE EARLY by Time In The Market (14 min read).
Life to me is about finding a way to be content.
I really don’t believe that my career is key in that journey for me.
I don’t mind it right now but from an early age, I understood the risks that come with depending on my work to fill that void for me.
On top of that, I began to understand the risks that came with not having many options.
More importantly, I want to have the option to say no to things when they get crazy(I’ve maintained a 40hr max work day even in my role).
In the end, I don’t want to be killing myself with stress due to layoffs or being dependent on checks when I’m 50 and it’s harder to find a new job.
And maybe, most importantly to some, I want to have the option to quit and retire early when I just don’t want to do it anymore.
I don’t know when that’ll be but I know that if I continue down this path, that option and more will be open to me and I like that.
Here’s how 5, 10, 15, 20, and “25 times expenses” portfolios performed over various time periods.
I assume each portfolio is invested entirely in the S&P 500.
I love this table. Let me tell you why.
As you know, my goal is to save up $600,000 using the 4 %-rule aka. 25x expenses portfolio.
From the table we can read that I’m pretty safe if I do save $600,000.
But what If I only saved 20x or 15x expenses?
20x expenses is $480,000 and 15x expenses is $360,000.
I think it’s pretty sick that I would have 63 % probability to succeed over a 30-year period if I only save up 15 x expenses ($360,000)!
I mean, noen of us pursuing FIRE would stop earning money completely, right?
Would love to hear from you what you think about the table.
Anyone feel to retire earlier on a “smaller” portfolio after they’ve seen the numbers in this table?
Why or why not?
Please comment below in this newsletter!
Quote that got me thinking
This is actually a quote by Morgan Housel.
But I loved it so much that I had to show it to my followers on Twitter.
This is a perfect example on how much the compound effect matters in the long run.
Buffett would be a “nobody” without compounding.
If you haven’t seen the quote, what’s your thought on this?
Have questions, comments or suggestions? I would love to help you.
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Thanks for reading,
Route 2 FI