Ambition vs Contentment

According many, you must constantly strive to better yourself. Always be ambitious.

You must increase your income, increase your wealth, increase your muscle mass, burn more fat, date younger and more attractive women.

It doesn’t matter what the goal is. The point is that you must always be better. You must always work at improving yourself.

Then there are those who are happy with what they have. According to them, you must be grateful and content with what you have. Many religions promote this view. For example, the Bible teaches that you are not to grumble. Philippians 2:14 says the following: “Do all things without grumbling or questioning.”

So what should you do?

As with many things in life, the answer is in the middle.

If you are ambitious and if you always try to make more money or buy a bigger house, you may never be satisfied with what you have, and the stress and anxiety of not having enough can damage you.

That being said, if you are completely content, you are idle, and you do nothing. This is the fastest route to depression.

The solution that works for me is to always be working at improving yourself but to work slowly. Take your time and learn to enjoy the work you do.

Even if you retire by age forty, chances are you will discover that sitting by the couch doing nothing is no way to live. You need something to keep you occupied.

The best analogy is driving. There are times when you need to get somewhere by a certain time. You are stressed, you drive quickly. Chances are you scream and become frustrated with slow drivers. Compare this to driving on a weekend, say, to visit a relative. You have all the time in the world. You can relax, drive safety, and enjoy the song on the radio.

That is how life should be. Relax, go slow, and enjoy the journey.

What To Do If You Hate Your Boss

I don’t like my job, but I think this is due to the fact that I don’t like my manager. He always complains and sighs loudly. Our team has been busy lately. It is clear that he hates his job and doesn’t want to be there. He has a mortgage, a stay-at-home wife, and a child. Whenever I go to his desk to talk to him (e.g. about work that he gave me) he would often just brush me away, telling me he is too busy to talk. I find this annoying. He also seems to give me the silent treatment sometimes. I’d say something and he would just stare blankly at the computer screen. I’m not sure if he heard me or not. All this reminds me of a bad relationship.

Usually when my manager is upset, I’d think carefully and try to figure out why he was so unhappy. I’d ask myself whether I was to blame. Did I do something wrong? Am I not working hard enough?

Lately I have come up with a hypothesis that my manager is just naturally unhappy. It’s just the way he is. To be honest, I have no idea why he is not happy. I imagine he just hates his job and he is trapped.

I then asked myself why I should care if my manager is unhappy. Is it my problem if my manager is unhappy? Some people might say the following: “It’s important to make your manager happy. If you’re manager is happy with you, he will promote you. If you’re manager is not happy with you, he will fire you.”

This may be true, but given there is so much stress in my job, I am not sure if I want to be promoted. If I get promoted, I’ll get more money, but I will also get significantly more stress, so I don’t know if it’s worth it. Furthermore, as you earn more, you get taxed more, so as you get promoted, your growth in salary is quite low compared to your growth in stress, and my overall gross income is almost six figures, so I’m getting taxed quite a bit.

It just seems so much easier to earn money by saving up and investing in dividend-paying stocks rather than pleasing and sucking up to my manager just to get a promotion. Pleasing my manager seems so hard and so stressful. I also feel like a prostitute.

It’s not that I hate the job I have now. I don’t mind it that much. I just hate the people I work with. If I had a new job, e.g. if I were a teacher, I may love the job but I could also be working with bad people. There may be a bad principal at the school or maybe the students are monsters.

At the end of the day, no matter where I go, something is not going to be right. We don’t live in a perfect world, so I need to change my mindset. Happiness is a choice. If you choose to be happy, you will be happy.

I remember when I was in university applying for jobs and going to interviews. I was in so much pain because I really hated looking for a job. I hated interviews. I hated rejection letters. It was so painful. But after a few job interviews, I became numb. I started to see job hunting as a job in itself. It was just a matter of looking online for jobs, applying for them, practicing at home for an interview, showing up at an interview, and that’s that. The more I looked at it as a set of actions that I just needed to do, I became like a machine. It’s like the movie The Terminator. In this movie, the Terminator had a job. He had to protect someone (or, in Terminator 2, kill someone) and he would just do it because he was a machine who did what he was programmed to do. Likewise, the more I looked at myself as some machine that just did was I needed to do, emotion just washed away. I felt nothing. I already knew that I needed to look for a job, and through experience I learned what the process was: look for jobs online, apply, practice, and show up at the interview. If I failed, ask for feedback and learn your lesson next time. The process was easy. All I needed was action. I simply do what I need to do. Worry, anxiety, or any other emotions were irrelevant and useless. What matters is action.

This is how I should view my current situation. Sure my manager is acting like a child. Sure he is ranting and raving about how busy he is. Sure he is unfriendly and grumpy. But who cares? How does that affect me? How does that impact on what I need to do, which is to do whatever work I need to do? My job is simple: I show up at work, I receive work, and I go through the to do list and do the work. Emotion means nothing. Action is everything.

Is it Time to Buy Oil?

The price of oil has been plummeting. The idea is that many oil extraction investments have been built using borrowed money. In order to pay off the interest on this borrowed money, oil must be sold regardless of how cheap oil has become.

oil vs asx vs dow as at 26 jan 2016
Oil (blue) vs Australian stocks (green) vs US stocks (red), Source: Yahoo Finance

Yesterday I watched as oil prices went up about 8% as there was a rebound. I was tempted to buy oil ETFs (ASX:OOO) with my margin loan account, but I eventually decided not to. I am on the fence about buying oil ETFs at this time. 

The reason why I am entertaining the thought of buying oil ETFs is that I believe that what goes down must go up. Oil cannot stay cheap forever, and it cannot go down to zero. The further it goes down, the gains you can make when it goes up will be much greater because you’re rebounding from a lower base.

“The best time to buy is when there is blood on the streets”

~Baron Rothschild

I am often a very inconsistent investor. I have moments when I’m very bullish and I want to buy oil ETFs or leveraged ETFs, but there are also moments when I am very bearish as well. In fact, about five or six years ago I was quite bullish. I pumped money into shares. Thankfully my intuition was correct and the market did go up. However, now I am starting to get bearish, and I am thinking about buying government bonds.

While I often have moments of extreme bullishness and extreme bearishness, I tend to buy and hold rather than sell. I buy many risky investments when I feel confidence and I buy many defensive investments when I am fearful, and because I rarely sell anything, my overall portfolio is quite moderate and somewhat resembles most balanced funds.

Buying oil ETFs won’t make you much in dividends or passive income, but because oil has been falling so much, my belief is that buying massive amounts of oil ETFs at a time of crisis can result in massive returns. History shows that those who buy during crises can make a killing. Oil is simply too important for our global economy. It is used in just about everything. It is therefore highly unlikely demand for oil would suddenly drop. I predict a period of deleveraging soon, and after there has been sufficient deleveraging, we will enter a phase of leverage again when investors take on more debt and start pumping money into assets such as oil. Oil may go down further, but I am confident that with patience it will go back up again. That’s just my opinion.

How to Live Off Dividends

It’s the Christmas season now. My family does not really celebrate Christmas. I remember being really disappointed not receiving any presents when I was a child because my parents were always busy and didn’t really think about Christmas. Over time, I began to accept this as normal, and now that I am an adult, it doesn’t bother me at all. There is definitely something wasteful about Christmas. People suddenly splurge on toys, clothes, and gadgets. They eat large amounts of food. Then when January comes around, they are back at work slaving away. Chances are their bellies are bigger, and when they get their credit card bill, they realize their debt is bigger as well.

For me, Christmas in 2015 has been a spartan and minimalist Christmas. I remember my previous Christmases. I would buy all sorts of presents for family and friends, and I’d usually have a credit card debt in the thousands, but nowadays I usually use a debit card to make purchases. I do have credit cards, but I pretty much only use them for emergencies or online or foreign purchases. Even when I use my credit card, I pay it off maybe within a few days.

During past Christmases, I would always dread going back to work the next year. When everyone winds down at work, it’s a nice feeling. Office Christmas parties, Christmas decorations, and so forth set a nice and relaxed atmosphere, and I look forward to having time off to relax.

However, during the holiday period, and especially during the new year, you think about the year that has ended and naturally you think about your life. You think about your career and whether you’ve done the best you can. It can be stressful.

This year is different for me mainly because my dividend investing has gotten to a point now where I can live off dividends. When I started working, I was saving about 85% of my take-home pay and living off just 15% of it. I invested in shares, managed funds, or ETFs that pay high income. As time goes by, the amount your investments pay you will rise, and when they reach a point where they are equal to your expenses, you are a free man because you are no longer dependent on your job. If you quit, you can live off your investments.

“Although freedom does not guarantee happiness, it is the best assurance we have for obtaining happiness.”

~ Andrew Perlot

Every man should strive for freedom, and the easiest and simplest way I know of obtaining freedom is to build passive income.

I am going to lay down below the steps I took to live off passive income. Most people should be able to do what I have done.

Save 85% and create two separate bank accounts

As I have said earlier, living off dividends starts with saving up about 85% of your income. I recommend setting up two bank accounts. Talk to HR and ask them to send 85% of your income to one bank account. The other 15% will go to a separate bank account.

Having two bank accounts is an excellent system to separate your “spending money” from your “investing money.” Spend only from your spending account. Use your investing account for investing.

Live with others to keep costs down

Living with others can be tough, but it is the easiest way to save significant amounts of money to allow you to hit your 85% savings rate. Accommodation is the biggest expense most people face, so it makes sense to hit it hard. Most people focus on trying to save money on small things like coffee (see David Bach’s latte factor) or discount vouchers for t-shirts!

In my opinion, don’t bother with the little things. If you want to have a soy latte, drink it! So long as you are spending 15% of your income, you’re fine.

Living with parents is the best policy, in my opinion, especially if you get along with them. If this is not possible, then renting with others is also another option. You can even buy a house and then rent out spare rooms to bring in rental income. All these three options should cost approximately the same (although living with parents could be free depending on how generous they are).

Related reading: How to Live with Annoying People

Save money via abstinence, not discounts

When trying to save money, most people make the mistake of trying to look for discounts. For example, when buying jeans, they look for jeans that have 50% off, or when they travel to Thailand they look for airfares that are 30% off.

An even better strategy is to just not buy the jeans in the first place and not travel. Discounts often lure people into spending more than they otherwise would. Often discounts are fake, that is, an apple may be $10 but be 50% off, and so the discounted price is $5, but in reality that apple only cost about $0.50 and the retailer made a $4.50 profit. In other words, forget about the percentage discount and think about the actual price.

Basically the only necessities in life are accommodation, clothes, transport, internet, and food.

Do not conform. Rebel against society

If you’re living with your parents, driving an old car (or taking public transport), watching YouTube rather than cable TV, then many people will think you’re weird. They will put you down and try to persuade you to conform. Try to resist. Don’t conform to society. Do what you want to do. Also remember that this is not permanent. As your savings go up, your dividends will go up, and your standard of living will go up, but this will take time.

If you must, borrow from yourself

Spending only 15% of your income might be difficult, and you may run out of money when you need to spend on something you need.

If this is the case, one option is to borrow from your own savings. This is where setting up two bank accounts is a great idea. You transfer money from your investment bank account into your spending bank account. You then keep track of how much money your spending account owes to your investment account. The aim is to pay yourself back as quickly as possible.

Invest for income

Invest in a variety of assets that pay high income, e.g. ETFs, shares, and managed funds. If you’re unsure where to go, sign up for an online broker and buy shares in banks. Banks typically pay high dividends. As of December 2015, shares in Australia’s ANZ bank provide a dividend yield of 9%. I recommend using Bloomberg to find the indicated dividend yield of an investment.

IMG_20151228_191209

Diversify your investments and always direct dividend payments to your “spending account.” This means that over time, the amount you have to spend increases, which should motivate you to keep saving up.

Invest 100% of your income

Once your passive income from dividends (or other sources) is high enough, talk to HR at work and direct 100% of your salary to your “investing account” so that you are living off passive income. This may be difficult to do, but just remember there is no rush. Once the 15% you get from your salary seems like a small amount compared to your passive income, this is a good time to cut it off completely so that you can actually live off dividends.

 

Cruelty is Natural

“Why should man expect his prayer for mercy to be heard by What is above him when he shows no mercy to what is under him?” ~Pierre Troubetzkoy

I remember having lunch with my dad a few days ago. I was talking to him about why I didn’t eat meat. As far as possible, I wanted to reduce the suffering I cause on other beings.

My dad, a meat eater, naturally defended himself by saying that animals eat each other in nature, and so it is natural for animals to kill and eat each other, and so we should kill and eat animals. But I reminded him that throughout history humans have fought against each other. We humans have tortured each other, and we have also raped, enslaved, and murdered each other. If nature is a guide for how a man is to live, why shouldn’t I murder another human and steal his belongings? Why shouldn’t I hold captive an attractive woman for my own pleasure?

I do believe that my dad is right though that cruelty is natural. We see it everywhere in different forms and different magnitudes.

Those who are strong take advantage of those who are weaker. This is a law of nature.

If you don’t like this law of nature, which I don’t, then there is a two-step solution:

1. Become strong.

2. Use your strength to protect the weak.

The first step is important. If you’re not strong enough to protect yourself, you will be exploited.

In today’s society, money is power, and debt is slavery, so try to focus on working hard, keeping expenses low, and keep savings high. Aim to produce passive income that sends cash into your bank account without you having to lift a finger. Try to minimize your debt as much as is reasonable.

Once your passive income exceeds your expenses, this means if you lose your job the next day, you can live off passive income. You are no longer dependent on your job. You can continue working, of course, but there is no stress. You don’t have to kiss the boss’s ass. You can take it easy at work. You have no credit card, car payments, or mortgage to pay. To minimize the risk that your investments fail, you have diversified your investments, making sure you have multiple streams of passive income. As they say, many streams form a river.

Once you are free, then life becomes serene and somewhat boring. You’ll probably feel the need to have more. You’ll want to work more, invest more, and produce more passive income to increase your satisfaction. Then you realize that you are similar to the average wage slave who borrows more and more just to buy more and more, thinking it will give happiness, but humans are strange in that they adjust to what they have and keep wanting more.

I suppose this is why it’s important to pursue some big goal, some unwinnable war that will give you meaning and purpose in life. For me, it’s reversing the natural law that the strong must be cruel to the weak. The strong can also protect the weak.

For others, it may be some other unwinnable goal.

For a long time I have been exploited by those above me. Many have cheated me, including trusted friends and even close family. I’ve been through a lot, but I try not to let these experiences bring me down. I understand that it is natural for others to cheat and lie. Even friends and family will do it. You need to accept it and expect it. You need to learn to live in the world, so you need to learn how to adapt to reality. This is essential if you want to build passive income and escape from wage slavery and become financially independent.

But once you are free, once you are lying on a deckchair by a pool in a beach resort thinking about your life, once you realize that your wealth and power enables you to exploit other beings for your own benefit, think about your own struggles. Think about what it took, the hard work, the difficulties, the loss of innocence upon realizing how cruel those above you can be, and then use your power to reverse this law of nature. 

Reach out to others out there to help them avoid exploitation. Encourage them to break free from their shackles.

How to Live with Annoying People

You must always have a way of getting out when things go wrong.

When most people try to save money, they look at small expenses such as coffee. According to David Bach’s “latte factor” concept, by skipping your daily coffee, you save about $4 per day, and this adds up to about $1000 per year.

While I do not disagree that skipping your daily coffee can help you save, I’d rather put my effort into actions that have a bigger impact. The biggest expense that most people face is accommodation, i.e. putting a roof over your head.

My recommendation for those who want to save money on accommodation is to live with other people. Either buy a house and rent out spare bedrooms to others (e.g. via Airbnb) or rent with others. Another simple way to live with others is to live with your parents. By living with others, costs are spread out.

However, living with others is not easy. That being said, if someone wants to pay more money to live by himself, I have nothing against this because I know how bad it can be to live with other people. For example, today is a Sunday, and I live with my parents. Today I was at home in my bedroom on my computer. My mother was in the living room. She is screaming something to my grandmother, arguing about food. I could not concentrate at all.

My recommendation to those who live with others to save money is not necessarily to move out. Rather, the answer can be as simple as getting out of the house.

Annoyed that my family were making too much noise, I had a shower, got dressed, grabbed my laptop, hopped into the car, and drove to the local library. I am typing this blog post right now in the local library.

Like I said, living by yourself is fine. It makes sense to have your independence and privacy. However, living with others can save you a considerable amount of money. It can be annoying, but the annoyance can be mitigated to some extent simply by removing yourself from the house most of the time.

Driving out of the home when the family goes crazy, in my opinion, highlights a fundamental law that all freedom extremists must be aware of: always have an exit plan. No matter where you are, no matter what relationship you have with anyone, be it a professional relationship or an intimate relationship, you must always have a way of getting out when things go wrong.

Be free.

 

Don’t Bite the Hand That Feeds You

Don’t bite the hand that feeds you. Instead, lick it, and suck on it lovingly, even if it’s stained with shit. If you don’t suck it, you won’t be fed.

This expression really illustrates how soul crushing the 9-to-5 is. You can’t object to whatever is paying your bills or your mortgage. You got to kiss ass. You got to kneel down and submit just like the slave you are.

But what if, instead, the hands that feed you are rivers of cash from passive income? What if you lived off dividends from shares, rent from real estate, interest from bonds, revenue from ebooks?

If hands offer you food, then eat, and if those hands abuse you, you are free to refuse their feed.

You can also bite back.