… today’s post is hot off the presses from our hotel room in Osaka, Japan, thanks to an unexpected surge in blog traffic. Warning: contains a healthy dose of sarcasm…
On a hot and steamy summer day 41 years ago, a young woman gave birth to a strikingly handsome and moderately intelligent baby boy. (That was me :P ) My Mother was 16 years old. High school is a luxury that few single mothers can afford.
A few years later my Mom got her GED, finished night school for nursing, and got married. 3 more beautiful and intelligent children followed. That is a lot of mouths to feed when the economy is down and it is hard to find work. I remember my teacher calling the class one-by-one to the front of the room so she could fill out a survey on parental employment. I barely managed to mutter “unemployed” from under my breath.
While I was doing my walk of shame, my future wife was watching her parents’ marriage fall apart. Divorce in 1980s Taiwan was much like divorce in 1950s America, and the burden fell heavy on women and children. Winnie would spend the next 2 1/2 years living in an orphanage while her Mom worked to get their life put back together. To this day, nobody knows where her father disappeared to.
Fast forward to high school graduation. Nobody in my extended family had been to college, but it seemed the ticket to a better life. I graduated 4 years later with ~$40k in debt. The second half of my Senior year I used credit cards to buy ramen. Adjusted for inflation and interest rates (my loans were 7-8%), in 2015 I would be in the top 5% of all graduates for debt burden.
What does childhood on the edge of poverty and burdensome student loans have to do with anything? If two kids with the odds stacked against them were able to overcome life’s challenges, then most anybody can.
Some people thrive on jumping out of airplanes, climbing untamed mountains, or riding wild rapids. These same activities would stop the heart of many an avid Scrabble player and crochet aficionado. Perception of risk varies widely… as every extreme sports fan knows, more than one person has died with knitting needles in hand.
This same risk spectrum exists in finance. Even the words we use belie our assumptions. Someone whose preferred method of saving for retirement is to hoard cash under their mattress may be labeled as “conservative”, whereas an investor with 100% of their assets in equities might be called “aggressive.”
These word choices are unfortunate. Obviously if I don’t enjoy jumping out of airplanes into the rapids of a high mountain river in a kayak, then I must be conservative… I wonder how many investors have been led astray by nomenclature.
This is all vary strange, because I enjoy jumping out of airplanes and riding wild rapids. But when it comes to our retirement I’m extremely risk averse.
I’m not alone. Nobody wants to be destitute in their old age, so like bad television news we focus on the negative, the failures, the worst case.
“Is the 4% Rule unsafe?” “What does safe mean anyway?” “Should I work One… More… Year…?” “Should I go for a 3% withdrawal rate?” “Do all of the very vocal & very risk averse people in some online early retirement forums know something I don’t?”
Probably not.
Instead of focusing on all of the potential failures, just for fun let’s look at what happens when everything goes right. What would have happened if we had retired in 1982?
It has only been 4.5 months since GCCjr entered the world, but he is already excited to embark on his first International adventure. He does have two passports after all.
For the past few weeks, he has been practicing his exploration skills as we walk around Taipei. He has become increasingly comfortable sleeping in his stroller in strange and noisy places, and is equally happy with a picnic in the park or lunch from a street cart. Formal dining is still a bit pretentious and boring, however.
He is becoming quite the socialite, and loves flirting with the staff at coffee shops and restaurants. He is content to sit and people watch for long periods as long as he is being held, whether it be by Mom or Dad or a total stranger. Dogs, fire alarms, honking cars, and big crowds don’t faze him in the least. (See Winnie’s Instagram which features a GCCjr photo a day.)
GCCjr thinks he is ready for a travel trial run. For a first passport stamp, we are headed to Kyoto, Japan in 2 weeks for 8 days .
“If you haven’t got your health, you haven’t got anything” – Count Rugen
Eat well. Exercise. Brush your teeth. Cultivate a positive outlook. Get plenty of rest. Everything in moderation (including moderation.)
Along with a regular medical exam, these preventative practices are the foundation of a strategy to live a long, healthful life.
We do a respectable job of taking care of ourselves. Vegetables are eaten in abundance. With no car, walking and biking helps us build both health and wealth. (Recently I’ve increased the intensity by strapping an 8 kg little boy to my chest.) We have no employer imposed requirements or deadlines, so distress is low and eustress is moderate.
We also practice awareness, paying attention to our bodies. I’m fairly certain that when I can easily bike 900 km up and down mountains that I’m unlikely to have cardiac problems.
I wanted to throw up. My body flashed hot and cold, and I could feel the blood thumping in my temples like giant drums. My thoughts raced like wild fire, a tempest out of control.
I kept thinking about what I could do with the $1,000 I had just lost in the stock market. I could have paid down more of my student loans. I could be that much closer to eliminating the PMI on my mortgage. I could just have it in my bank account as an emergency fund.
It would take me weeks of work to regain that money after taxes and normal cost of living. What was I thinking putting my money in something risky like stocks? Stupid, stupid, stupid!
player and crochet aficionado. Perception of risk varies widely… as every extreme sports fan knows, more than one person has died with knitting needles in hand.
