Ask HN: How have you achieved financial independence?
I know this is a niche question, but have you reached a point where you have enough passive income to not to have to work for a living?
If so how did you accomplish it?
My favourite Dr. Who quote: "Work for? I don't work for anyone. I'm just having fun."
Describes me, even though I receive money every month. My expenditures are considerably less than the money I receive every month by having fun. If I didn't receive money, then I would be in trouble, so I don't really qualify for your question, but I'm having fun so I'll answer anyway.
Step #1. Reduce my expenditures below what most people consider reasonable. I lived for more than 5 years on less than $10K a year. It was much easier than I thought. I discovered that spending more than this amount of money, I was no happier. Who knew? What really counted was having so much more income than outgo that money became completely irrelevant to me.
After I did that, I stopped worrying about working. There isn't a job in the 1st world that pays less money than I'm comfortable with. I started taking jobs that interested me instead of jobs that paid me money.
Then I got married. That threw a monkey wrench into the works! But I'm slowly working thought that ;-)
Honestly, people tie themselves to a grindstone to make as much money as possible because they think it will remove stress and give them a nice life. I don't think that works most of the time.
Insurance is my main hedge against these risks. I try to follow a healthy lifestyle as well. I used to keep fish and it's amazing how much longer fish live when they aren't stressed. I try to replicate that. Finally I try to buy long term, low risk investments (like government bonds) with my excess cash. However, I keep a few years worth of money available in liquid assets for things like disability.
Probably the biggest risk is getting a mental illness that isn't covered by long term disability insurance. I have no idea how to deal with that one :-( All of my skills to live simply may be useless if I lose the mental ability to use them.
I have had a reverse path - I spent my early career working for a research lab, where the the work was immensely intellectually satisfying and fun for the most part. However, the pay was so ridiculously low that my industry salary was a few integer multiples of my researcher pay.
(Maybe a mod could move it over - if that works, this reply can be deleted)
I work as a software developer on contract to an English company. We spent 2 years in London, before moving back to Japan. Before that I worked as an English teacher in the high school in this city. Before that I was a software developers for 20 years or so.
I actually started in research labs too. I worked my way through school (or rather, I got free tuition because my father was a prof, and I paid for my other living expenses by working for various departments while I was in school). I didn't always have this idea of living cheaply... I had a house, a car, 2 dogs, the works...
I've had a few times in my career where I absolutely hated my job. One day I just quit. I had no prospects and no idea what to do. I was just done with the place I was working at. The next day, not knowing what to do, I started fixing some bugs on free software projects. I just kept doing that every single day, 12 hours a day, 7 days a week for 8 months. It was at that point that I realised that I liked programming ;-)
I've been very, very poor a couple of times in my life. Once in my early twenties I spent a few months in London. I had enough money for either meat or beer, so I became vegetarian (which lasted... until I got married ;-) ). I remember being happy every day despite being unbelievably poor. There were a couple of times that I ran out of money on a Thursday and was unable to eat until I got paid on a Monday. That taught me the importance of budgeting ;-)
Other times have been like I described above. I got paid a good salary as a programmer, but was often unhappy. I decided to quit my job (or the companies I worked for decided to run out of money) and I took a sabbatical to write free software.
One day I met a guy who suggested I go teach English in Japan. I only meant to go for a year in order to learn Japanese and improve my presentation skills. I stayed for 5 years.
At that point, I asked my wife, "What should we do? Do you want me to make a lot of money? I'm sure I could as a programmer. Or we could open a brewery. Or I could become a tour guide. Or I could..." And then it dawned on me. I could do anything because we had learned over the years to live on tiny amounts of money.
It's freedom more than anything else. These days we spend quite a bit more than we used to. My wife even has a car (bleh...). Getting the balance right is tricky ;-)
LOL!!
So... now that you're back in the black are you enjoying beef and beer again - just as god intended??
I too live extremely cheaply, but my girlfriend has way more expense than me (still reasonable, but too high in my book).
We are not married, but we spend a lot of time together and I am a little afraid that this difference in how we spend money will be a problem.
How did you manage it?
My very first step was to have her create a save account where she deposit each month a little bit of money, after I explained her the why she need one she started to accumulate money pretty quickly and in a very disciplinate way, all those money however disappeared when she bought a new house (but I believe it is fair).
I was lucky/fortunate in that my wife and I both have a similar outlook when it comes to financial planning. We both want to achieve financial independence before the traditional retirement age and as such, we keep track of our expenses to ensure we're saving enough each month.
Before we got married, we sat down and talked about these things, a lot. Each relationship is different, but in my opinion, if you're in a serious relationship, openness and honesty are pretty important. Talking about future goals, plans, etc. can go a long way.
I.e., if you spend hours (or days!) comparing prices when purchasing lower value items, you value your time at exactly zero, and it might actually be easier to make (!) money vs spending less. Maybe your girlfriend actually prefers living a little?
I'm not saying to throw your money away on useless stuff (I don't), but at a certain point, it gets tiresome. I've known a guy who, when he was thirsty, refused to purchase a small bottle of water for like €1.5 because he considered it a ripoff, after which he promptly asked a friend if he could drink from his bottle. Honest to god, I hope you don't mean living cheaply in that way.
In the end, it's about finding a balance. Too much spending, and you won't have enough to invest. Too little, and life won't be much fun, 'cause frankly a lot of fun things cost money. I spend about the same (probably a bit more) as some of my friends in terms of monthly burn, yet I make 10x their salary. I consider that frugal, but I live well.
Also, there's no point living cheaply if you don't know what to do with the extra money. Know where you're headed, i.e. financial independence, buying a house, etc
The gains you make from that will save you a ton of money during a lifetime. Don't ignore large potential savings by penny-pinching on the small stuff. Heck, if you do this, you can ignore the small stuff.
If you sum up all the bargains of a lifetime, it will be huge.
The important part is to be very up front and honest with each other. The finances will work or they won't, and if they won't then the relationship will not work. Full stop. You can't live a life with someone who has fundamentally opposed financial opinions. If you want to save 80% of your income and she doesn't care if you have $50k in CC debt, there is no way to make that work. Even separate accounts won't work because once you're married new debt is joint debt (usually) and new assets are joint assets (usually).
Trying too hard to change someone's behavior is an easy recipe for resentment, especially in the turf war that naturally ensues when you start living together. Just as you see her as undisciplined, she could also be afraid that you'll be overly rigid and not allow her to enjoy life in the way she's used to. Once you've made your point about something like this, I think it's usually better to back off and leave making the change up to the person themselves, unless they specifically ask for your help. Being too pushy can also cause the other person to dig in, a counterproductive result.
This means zero other expenditures: you need to already own all furniture and appliances you want, and you can't have a method of transportation other than a bike and feet. There will probably be random other expenses like light bulbs, repairing a flat bike tire, etc., but it seems to be possible. Did I get the math right, or am I forgetting something (like an uncovered expense, or that you can totally have a car as long as it's electric or so)?
I think I spent around 500€ per month like this on average. But I have some friends with a more radical approach, which inspired me translate a Dutch website about living with money into English: moneyless.org.
As a side effect, I'm making some money with this specific site (but not with Hitchwiki or other community oriented projects). Together with a few more websites this is making me enough money from adsense and affiliate marketing to do whatever I want without caring too much about spending.
These days that is building up my fintech startup B2B Pay (Techstars Barclays TLV 2016) and spending time with my family.
At this point, if I needed something specific, I'd just put up a poster, a neighbour probably has it in their basement and wonders how to get rid of it.
I'm on ~7000€ a year, and that includes health insurance, replacement of broken cheaper things (spare parts for the bike, clothes..) and also the occasional splurge like cinema or eating out. A car would not be possible, but if I need one I can either ask a friend or rent. A car is a liability in most European cities too. I could go down some in expense if I needed to, but then it would be less comfortable.
You can track your cash flow for a year and see for yourself where your money goes and what is essential.
OTOH, pre-ACA you could go without and not pay any penalties if you were feeling lucky (I wasn't, and glad I didn't because two surgeries in that time would've cost me around $50k I didn't have).
I assume "a $18k deductible" means "you pay the first $18k of costs yourself". It almost doesn't seem worth having insurance anymore at all at those rates. Is this normal for the country where you live or are there any particularities?
Or copays. I pay $20 to see my general practitioner, $30 for specialists, insurance covers whatever else is left to cover. If I have a surgery (happened two years ago) then I hit my deductible and my medical is mostly free the rest of the year (some things I still had to pay a portion of).
It's all about little things that add up. If you go to Starbucks 5 days a week, that could easily cost you 1k a year. I mostly buy clothes at thrift stores, you can find furniture/kitchen appliances/etc on Craigslist. Instead of going out, buy a six pack and have some friends over. Another big killer is driving. I live in quite a bike unfriendly city so my car expenses are more that I would like them to be, but insurance + regular maintenance + unscheduled maintenance + car payment + gas really adds up.
Other random expenses do come up, so I budget for them. I make sure I have about $2k/year to spend on things I can't account for. Some years you go over, and some years you barely need to tap into it.
This isn't to say I don't spend money on things though. If I want something I will buy it, I'm just conscious about how much I'm spending.
If you are interested in learning more about this kind of lifestyle, Mr. Money Mustache is a good place to start. http://www.mrmoneymustache.com/category/mmm-classics/
All that being said I realize I am in a very fortunate position. I don't have student loans, I have a well paying job, no disabilities, etc. Some people are in situations that make financial independence very difficult to achieve.
Edit: And (3) a lot of the advice is the same old thing rehashed in a different way (never lease a car! index funds!); (4) A large part of his income is from shilling credit cards and other financial services
Arguments like point 4 are sort of silly to me. Most of what he preaches he was doing well before he had a blog that could be monetized. Also, he seems to be pretty up front about commissions on the "MMM recommends" (though he could be more explicit about referral v non-referral links).
When you have children, it gets even worse on that front. :(
The bright side is that it's still possible to achieve if both of you have the discipline: http://www.mrmoneymustache.com/
Started a fintech startup three years ago and we are close to a liquidation event that would net ~1.5M€ pre-tax.
Right now, though, I have less than 10k€ in my bank account. Would be also really curious to hear how to convert that money into sustainable passive income.
Spending 3k€ per month for the next 30 years would be about 1M€. Seems like having <5M€ is far from the "go bananas" type of wealth, but it can definitely be enough to achieve FI.
Achieving ~4% annualized ROI after tax and inflation seems plausible in the long term: https://www.reddit.com/r/financialindependence/wiki/faq
2% just means you need more money saved, not that you need to actively run a business into your 80's to continue feeding yourself.
Curious to hear other opinions.
No asset is "risk-free" but it's certainly possible to get risk-adjusted returns of 4% in the stock market. Even if you include 2008, you would average 4% over any 30 year period.
At a minimum, you can get ~2% in treasuries. There are even savings accounts offering 1% returns.
Definitely worth checking out: http://betterment.com/invite/seanhess
(disclosure: that is my invite link which gets me free months without fees. I do love the service a lot).
http://www.wealthify.com/ https://www.nutmeg.com/ https://www.moneyfarm.com/uk/
There's https://www.yomoni.fr/ in France too
That is only withdrawing the principal without taking into account the real interest/yield rate you can make off the investment. That money would probably last longer or yield more for the same time period.
In fact, as you point out it can last indefinitely with an after inflation and tax ROI(real yield) of 4% which converts to ~3k/mo. You would have to plowback excess returns on good years and withdraw part of the principal on bad years. Plus readjusting your expectations from time to time.
One of the best investments you can make is to get a financial education. You don't need to get a pedigree to show on your job interview, you should go only after the knowledge which will be cheaper.
And lastly a diversified mix of stocks, long term bonds and short term notes will earn you that passive income. Now that you are young take a little more risk and shift your allocation gradually towards short term debt as you age.
[0]: https://index.barcap.com/Benchmark_Indices/Aggregate/Bond_In...
Put half of it in a low fee index fund, and half in stocks you believe in. Those stocks are higher risk, but can have a much higher (or lower) return than the index, i.e. risk 20% of your capital for a potential 50% gain. You can add bonds to the mix if you want.
If you're looking for stock tips on the internet, then yes, half in picked stocks is quite risky. If you're willing to put in the work to do the research by plowing through SEC filings, reading annual reports, trying out the product the business is selling, in sectors you know and understand (i.e. tech for us) and you have common sense, then it's quite reasonable. You won't always get it right, but you can at least do better than others who haven't done their homework. That also means saying no to 90% of the stocks you could invest in.
My line of thinking has been that in order for the 4% to be meaningful, you need to start with at least a million. Saving a portion from the salary and getting 4% annualized growth just wouldn't have ever achieved the type of financial wealth I had in mind. YMMV.
But now I feel like the time has come to diversify and start reducing the risks. Going from 20$ to 10$ per ETH definitely hurt.
Hard to say what I would be saying had I lost everything though. It's easy for me to rationalise the decision now that it paid off. And yes, we have to remember to look at the graveyard too.
The non-linear utility of money puts an interesting twist on things though. The effort and risk one should take to achieve additional wealth seems to reduce logarithmically after a certain point. I guess that point seems to be further for me than most people, but I feel it's close now.
I do get what you are saying, but I think this is over-simplifying things. There were a lot of interesting facts and conclusions available to be made early on about the possibilities.
Again, extremely hard to say what the odds of failure still are and were in the past. And hard to say what my stance would be had I lost the initial investment. It's easy to rationalize the investment in hindsight.
You don't have to liquidate your entire stake. Heck, you could keep a full 100k in Ethereum—if it has a run-up on the scale of Bitcoin, you'd be making millions. But you wouldn't have all your eggs in one basket.
I definitely understand the desire/impulse to make big bets, but as with any gambling operation it's important to consider when you cash out. Right now you're betting $1m on the potential to make $50m, when you could have a guaranteed $900k with the potential to make $5m.
So someone who sank her entire life savings into LTC a couple years ago, would sound more worthy than this person.
And, depending on how credulous the reader is, someone who went into debt to buy a few lottery tickets, and was lucky enough to win, could trump both of them.
I didn't have any debt at that point and the traditional model of saving portion of salary and getting 4% annualized growth wasn't going to achieve the wealth I had in mind. So cryptocurrencies seemed like it had the huge upside potential I wanted and the worst-case scenario would have been that I'd lose the initial 20k€. I'm fairly opportunistic and risk-seeking. YMMV.
Hard to say what the probability of failure (ie. Bitcoin collapsing or the value of Ethereum being far less than the pre-sale price) has been.
For example, in Belgium, stamp duty (a transfer tax) upon acquisition of a property is 10%. It takes a long while before you generate that back in rental yields.
I assume renting out would only be worse with the additional risk of having bad tenants.
This helped a lot https://www.khanacademy.org/economics-finance-domain/core-fi...
Here in Finland, the status quo seems to be that you obviously save for your own apartment as the first thing. From purely financial gains perspective, I couldn't find the rationale.
Haha. I did the same except with only 30€ worth of BTC, now worth ~15K€ in ETH. If only I had had slightly more balls at the time…
Similar opportunities will come in the future.
For example, I'd pay (1M€ - 20k€) x 34% = 333k€ of taxes on capital gains. I'm not sure how the taxation works if you try to dodge it by relocating to a more tax friendly zone. I've heard some horror stories about Finnish companies moving to Estonia for tax benefits only to be taxed with fines for the gains that the company made while it located in Finland. Would the same rationale apply for personal capital gains?
You can freely trade between cryptos, for example between BTC and ETH, without triggering the capital gains. The moment you leave cryptoland, I believe they use the first-in-first-out (FIFO) principle to calculate the profits.
You can leave most countries without realising the capital gain, even if you've built it up within a country. This is why certain people move to a country without capital gains tax to sell their company. Obviously I don't know Finnish tax law, but within the EU it's generally the case (for now). Have it checked by a _GOOD_ tax lawyer, if that's what you want to do.
Building up capital is important - once you have it there's a lot you can do.
Another interesting discussion is the ethical side of things. I do feel some obligation to pay back to my home country for things it has provided (free education, healthcare, etc.), many of which were financed with tax income.
But paying the whole amount from current and future gains would be tad too much. Also, would it be possible to achieve higher and more direct impact with dodging the taxes and distributing that money via philantrophic means? Just some questions I'm thinking about in the whole picture.
2. Always give back. For example, I gift €X,000 every year to local good causes. Yep, I get a 45% tax deduction for it, but I also use it as a way to give back. You’re not going to spend one euro to save 45 cents in tax, if it's not something you believe in.
You can also give back by investing in Finnish companies.
3. If you’re interested in Belgium (low cost of living, high quality of life, free health insurance, relaxed society, high taxes but not on capital), I can intro you to my tax lawyer. He’s awesome.
I'm really curious about your story. Would you be interested in continuing this discussion over email?
Do you happen to have an example of this?
Note: this does not apply to Americans, because they are taxed based on citizenship, not residency. But even within the US you can save taxes by moving states (i.e. by being based in Texas or Seattle when selling your company, vs California). I believe Mike Arrington did this.
Another example: - http://newsfeed.time.com/2012/12/10/cest-it-aint-so-gege-fre...
>Speculation is rampant that the move has allowed Depardieu to shift his legal residence to Belgium to dodge the 75% tax on income over $1.27 million that Socialist President François Hollande will apply as of 2013 as part of his response to France’s debt crisis.
Two things stand out:
1. Depardieu is avoiding a hit on his future income. The story is from 2012 talking about a future French tax hike in 2013. Avoiding tax on past income i.e. unrealized capital gains would be much harder I believe.
2. The story doesn't mention capital gains at all. I'm specifically interested in cases where people have successfully avoided a capital gains tax.
This is a relevant article: http://www.bloomberg.com/news/articles/2001-07-22/if-youre-w.... It's from 2001, but still relevant today.
Another article, specifically on Belgium: http://www.bespaarbelastingen.be/algemeen/belgium-tax-haven/
Third: http://www.wealthprotectionreport.co.uk/public/704.cfm
This law does not just apply on the disposition of shares, but on nearly all types of assets, with the exception of property.
First I started with consulting, then slowly started developing different apps/products/services, and funded the development from consulting/contracting income. Soon the products themselves gave me 2-3k/month, and I didn't need to do that much consulting any more. As Bitcoin came, I already had some money to invest. I lived very frugally, and invested heavily in Bitcoin when it was around $10 or something. Also I have invested in stocks/ETF:s/etc all the time but those play pretty minor role. Mostly got one thing right.
By living off 50% of my paycheck, I can invest 50%. This roughly means for each year I work, I have one year saved up. However, after saving up many years, interest of interests have accumulated, so the first year I saved gives me more free years when I choose to "spend it". That's how I think about it, for the math, safe withdrawal rate etc. reddits r/financialindependence has a lot of resources. Most can achieve FI on modest income, so as a developer it should be double-doable.
TL;DR = spent 20h/week for 2 years building a product that people wanted. But there are a lot of juicy insights etc in those links.
I still spend most of the day in front of the computer. The only difference is that I wake up and finish when I want. I work on my personal projects (without aim to make money), which I find more interesting than doing commercial CRUD apps.
My decision was largely influenced by a Danish guy living in the USA, who wrote this blog: www.earlyretirementextreme.com
I'm making roughly $2k/month with books and workshops. The marketing and content producing takes about 2h/day on average. It makes my life a lot easier and less stressful.
But rent alone is $3500 in this stupid city (San Francisco). So I still need a day job for now.
My point exactly.
But I also think you don't need to live in one of the most expensive cities of this planet. A few lifestyle changes should be acceptable, though. I would say if you spend more than $50k/year it should be possible to have quite a good life with some modifications.
You can read tens of life stories centered around early retirement/ financial independence there.
I.e, best way to see yourself through a Tech downturn without taking a severe hit to your wealth.
I say this because I've had recent experience with people losing huge amounts of their wealth, and almost going bankrupt during the Oil price crash.
For instance I know Oil workers who had most of their wealth in oil company shares, a house in an oil related city and lose their oil industry job.
I'd imagine their are lots in tech that are the same, large amount of Tech shares, a house in the Bay area and a job in Tech.
Anyone got any tips on diversifying for a downturn? What shares (if any???) are likely to do well if Tech has a bad patch.
I'm not financially independent though, so take my advice with a grain of salt.
That said, disclaimer, I'm not financially independent. I very much need my job, as I have a mortgage and student debt from law school, plus a child and probably having 1 more in the next couple of years. I'm nearly certain I'll never be financially independent, since I'm really trying to set that up for my children instead. I have no idea what college will cost in 15-20 years, but I see the direction it's headed and my financial plans are more around making sure they come out of school debt free. My folks did that for me, but then I was dumb enough to go to law school in 2005. I really can't complain, I have a pretty solid career doing fintech and data for a large company, but it's one major expense I could have avoided and been okay - although it does check the "advanced degree" box. I have some side projects and more coming, but if I make a few dollars there, it goes directly to my kids' savings. I do have US and EU passports, so there's potentially that option for retirement with affordable healthcare and housing, but that's projecting years down the road.
Passive-income-wise, market forces will eat away at passive income. Easy ways to make money are copyable; or the customers will catch on and figure out how to lower their expenses and cut you out. (Think about how everyone stopped paying for CDs.) Those who do make passive income keep it a secret because they don't want competition!
The other thing that helped was buying some income property when I was younger. Getting rent money from tenants every month is wonderful.
I did it by putting large amounts of my income into low cost index funds focussing on various sectors, and some specific shares that I thought would do well.
All my dividends get reinvested. I'm in the UK, and I've taken full advantage of the tax free savings scheme, currently allowing about 15000 GBP a year to be put into stocks and funds with no tax to pay on dividends or gains.
There have been market downturns during the time I've done this (started around 2005). Generally, during a downturn, I scrape together as much spare cash as I can and invest it in things that seem cheap. April 2015 to April 2016 was something of a downturn, for example, and I ploughed extra money into the markets while prices were low.
Also, the % that you're pulling out of stocks should be determined by looking at, say, a 30 year window, not a very recent one. That is, if your savings can sustain a 2% withdraw every year, taking into account inflation, then take out 2% every year. Some years this will be less that your cap gains and some years more. The key is making a long term outlook.
FWIW, these are some very brief thoughts of mine on investment: https://github.com/nickgieschen/investingguidelines
I hear this sort of thing a lot, and in my experience, everything already being priced in isn't true (both of dividend stocks, and stocks not paying dividends). This relies on the efficient market hypothesis being broadly correct, and based purely on my own experience, it isn't.
My findings are very much based on my own experience, but I have had no small success simply reading the news and seeing that a company is doing well or is looking at a brighter future, and buying shares in them and making a nice profit on it out of both increased share price and increasing dividends. The EMH suggests that it shouldn't work; that by the time I get round to buying the shares, the efficient market has priced all that in. But it just doesn't seem to be true, in my experience.
The reason I believe this is not related to stock picking working for me.
I believe it because the market is not efficient, and dividends being priced in relies on an efficient market. Any success I have in stock picking relies on this inefficiency; it's just a symptom.
I personally value dividend paying stocks more highly than non-dividend paying stocks. A history of dividends makes the stock appear more valuable to me (given that the majority of companies are rubbish at investing in themselves, giving me the money and letting me reinvest it myself is preferable). If they just went ex-dividend, that's a excellent very fresh data point that makes the stock look more valuable to me.
The company has less cash ex-dividend, so as a matter of fact is worth a bit less.
No, but that variation caused by going ex-dividend clearly is.
In my experience, people think they're far better at stock-picking and investing than they really are. Have you calculated your actual, after-all-expense returns? Because if you are consistently beating the market, risk-adjusted, start a hedge fund. I'm only half joking.
It's important to interpret EMH "realistically", in that prices, on average, will reflect all relevant information. But it obviously doesn't occur instantaneously or perfectly. Everyone who has traded stocks has a few wins. The question is whether you can garner an advantage consistently.
Yes. I very rarely sell, so I can see it clearly, and the purchase costs listed in the interface include the purchase commission (I buy in lumps of 1000 GBP, so take a hit of about 1% on initial purchase). Holding charges comes out to a couple of hundred a year, which comes out of dividends.
In one account, I invested gradually over three years, from April 2012 to March 2015. That's up on the order of 50% as I look at it today - looking at it this very second (it's a little rough as I reinvest the dividends, which count as fresh purchases in the accounting - it's up exactly 46% if reinvested dividends are considered to be fresh money). Some of the early purchases are up 100 to 200 percent, later purchases less so. There are some losers in there as well. I have sold only once at a loss in that lot; some BP shares that I changed my mind on. All other losers are still in the mix, and I leave my worthless shares in KAZ there to remind me of my losses. Big winners - ARM, Nokia, a global smaller companies fund. Big losers - KAZ, Bonmarche Holdings, Tesco.
Another account that I opened (because I didn't want to exceed the government insurance limit) and placed money into for the last 15 months or so is currently up 20%. I've never sold anything from that. That is principally US and Japanese index funds, although some ARM in there is up 70% thanks to Softbank buying ARM.
An earlier investment from about 2009 (which was nothing but safety) is up a little over 50% today, but that really was safety. Likewise never sold anything.
I have done this by doing absolutely nothing special. Absolutely nothing. I simply took the common advice; low-cost index funds. I also read the news and sometimes buy into companies with brighter futures. A couple of years ago I read many articles about how GSK and AZN had been through tough times and were coming out of it. Bought some shares. Worked out well. That's all I do. For as long as I can remember, ARM has had nothing but growth in the news. Bought into them repeatedly.
I have significant advantages over hedge funds; they have to trade. I can sit and do nothing for month after month, and when I suffer a 20% drop, I can continue to sit still and do nothing. If anyone wants to pay me to tell them when I buy something, knock yourself out :)
"The reason I believe this is not related to stock picking working for me."
So it seems we agree that my stock picking success is not evidence for my beliefs on dividends and stock pricing.
Companies that pay dividends plan ahead for distributions. So they have the cash reserves to pay dividends even in a recession. Which is great because you get a payout but you don't need to liquidate your holdings at a discount.
The idea is just to reduce expenses a ridiculous amount and invest everything in the stock market + rentals. I should reach my goal by 40 - 45.
$300k is still $16,000/mo net, worst case scenario. $40k is like $3k net, best case.
So, unless it's impossible to live in SF for less than $13,000/mo, SF wins.