Fear of Being Fired and Fear of the Future

Today is Sunday. Last night I stayed up until three in the morning. I woke up today at nine, which means I got six hours of sleep, which is not good. It would explain why I feel so horrible today. I don’t want to sleep in because I know I’ll have trouble waking up early tomorrow for work. I know poor sleep increases cortisol and destroys muscle. I had a lunch catch up with a friend booked in today, but I didn’t feel like going, so I texted him and told him I was busy. I didn’t get into the detail. He seemed cool with it.

It’s all hitting me, I suppose–my girlfriend ignoring me, my career completely stagnating, my lack of sleep, my lack of good friends. I’ve recently been mulling over in my head a new income goal. I currently earn $80k a year in income. About $5k of that is from investments (conservative estimate) and $75k is from my salary. I aim to increase gross income from all sources by $5k per year. This means next year I should be earning $85k and the year after that I’ll be earning $90k and so forth. I can increase my income by getting promotions or progression at work, but if that fails (and it probably will) I can save up more and rely on investment income. I am also going to get serious about starting a side business on the internet so I can earn money online. I need some goal to keep me motivated otherwise I will start to get lazy and depressed.

I’ve heard rumours at work that senior management will fire a few people in the next few weeks. Supposedly they have a few people they want to target. I can only hope I don’t get fired, but even if I do get fired, it’s not like I love my job or anything. I’m not fully certain what I’ll do if I get fired, whether I’ll hunt for another similar job, start over and do something completely different, or fly over to Asia and retire. There are always options, I suppose, so I don’t have too much fear, and I do have savings. I’ve always been paranoid about the future. I avoided marriage, mortgage, and children for this reason alone. This is the thing about the future: it is always uncertain and scary. You want to give yourself the best opportunity as possible to tackle the future. That means you need good health, no debt, and no massive obligations or commitments.

My Strange Relationship with God

Last night was horrible. I woke up in the middle of the night and suddenly felt pain in my tummy. This pain kept me up for about an hour. During this time, as I lied in bed, I kept thinking about what could possibly be wrong with me. I have been coughing like a madman, so I’ve been taking codeine linctus. Of course, too much codeine can cause liver damage, so perhaps this is the problem. Another possibility was an overdose of protein powder, which does damage to your liver and kidneys. I normally drink a scoop of protein powder just before I go to bed.

Regardless of what caused this pain, I suddenly felt vulnerable. This was how easy it was to be struck down with a serious illness. What will happen to me? Will I be on dialysis for the rest of my life? Is this punishment from God because I have become too proud and arrogant? Is this God’s reminder to me that He is in control of my life? My mind was then filled with thoughts of dying alone. I was actually afraid of dying alone, and I suddenly thought about the girl I’m currently dating, and I felt a desire to be with her for the rest of my life. At least then I’d have someone to look after me if I ever had a debilitating kidney or liver problem. I’d have someone to caress me while I was sick. I didn’t want to be discarded in the corner of some hospital all by myself.

Feeling alone in the dark, by myself, with my thoughts, and with incredible pain in my belly, I actually started praying, as I always do when disaster strikes. It seems to be a predictable pattern: disaster strikes, I turn to God, He saves me, and I turn away again.

And just like clockwork, when I woke up today, the pain was gone. It was a Monday, and I dragged myself to work. Having had insufficient sleep, I trudged through the day feeling depressed, wishing five o’clock would finally arrive. I deliberately chose to do easy work because I was drowsy. I made a few mistakes at work. I don’t think my manager is happy with me. There are times when he has confidence in me because I do work hard and try my best, but a good reputation can be destroyed so easily. It is embarrassing. Sometimes I feel like jumping off a cliff because I am so ashamed of my incompetence. I honestly don’t know how I even got my job or how I even keep it. I sometimes get the feeling that it was a mistake or a fluke that I am even employed. But maybe not. I do remember, during the last year of university, I was job hunting, and I hated it. I was stressed out with interviews and writing resumes. I prayed to God. I asked Him to give me the job of my dreams and if He did, I promised I would sponsor a child on World Vision. I got that dream job and hence five years later I still sponsor a child on World Vision.

I suppose this is why I am so grateful for being employed, why I try to work so hard, and why I save money so aggressively. I feel as if I don’t deserve anything. I don’t deserve any of the money I earn. I don’t deserve the health I have. I don’t deserve the job I have. That is why I must constantly go to the gym, why I must eat healthy, why I must save up as much as possible. I know that, just as God can give me everything I have, He can take it all back with the flick of a finger. And I need to be prepared for that. This is why I am always on edge, why I stay away from debt, stay away from a large mortgage, and refrain from committing to a long-term relationship or to getting married. This is why I am a commitment phobe. How can you commit to anything if the future is so uncertain?

I don’t even consider myself religious. I don’t tell people I am religious, and yet God is so real to me when there is trouble in my life.

The Girlfriend Allowance

I’m feeling excited, not because it is almost 2015 but because it is looking likely that I will very soon have a girlfriend! It’s not certain but it is looking likely.

Having been single for the last few months, it is refreshing having a girlfriend again, but I do remember much of the negatives of my previous girlfriend. I remember the arguments, the whining and complaining, and the constant put-downs. Maybe it’s my fault for being too much of a beta male and not manning up. Either way, it was a bad experience, and I need to learn my lesson.

Something I will be implementing with my new girlfriend is a “girlfriend allowance.” After we are in a relationship, or maybe once we date a few times, I will ask her for her bank account details and will direct a certain amount of income from my investments straight into her bank account. One option is to plow money into a high-yield ETF or managed fund that pays monthly distributions (e.g. APN AREIT Fund, Firstmac High Livez, Aurora Dividend Income Trust, or Betashares Australian Dividend Harvester Fund). Another option is to borrow money, buy a small apartment, and ask the property manager to rent the apartment out and send all rental income to my girlfriend’s bank account. Either way, money will be sent automatically into the girlfriend’s bank account every month. I will probably aim to provide about $500 to $1500 per month.

I have never done this before, so I have no idea what the results will be, but I think paying a girlfriend allowance will help the relationship significantly.

One of the problems with many girls is that they are influenced by mainstream culture, which gives people certain impressions about how girlfriends should behave and how boyfriends should behave. There are all sorts of rules, rituals, and customs. For example, when it is Valentine’s Day, you must buy a flower and chocolates. When there is an event, you must bring along the girlfriend. You must shower the girl with gifts. There are all sorts of duties that the girlfriend expects from you. If you are a man who wants to engage in these activities, a girlfriend allowance may not be necessary. If you don’t want to engage in these conformist social customs, you will not meet the girlfriend’s expectations and she will start to resent you. She will then start to complain, whine, and give you passive aggression.

This is where the girlfriend allowance comes in. If you are paying a girlfriend allowance, then you can afford the freedom of doing what you want. You are no longer shackled to the duties and obligations of “boyfriend services.” If, for example, you do not buy the girlfriend a gift on Valentine’s Day (because Valentine’s Day is an embarrassing marketing scam), she may resent you and may consider dumping you. However, if you are paying her a girlfriend allowance of $1000 per month, she will need to consider whether dumping you is worth sacrificing $1000 per month.

In my opinion, a girlfriend allowance will also allow you to enjoy higher quality “girlfriend services.” She will treat you better because she knows that if she does not treat you well, she will lose the allowance and it will be snapped up by another girl. In labour economics, this is the theory of the efficiency wage. A girlfriend allowance is effectively a girlfriend efficiency wage. A girlfriend allowance will ensure that you receive high quality and efficient services from your girlfriend.

Paying a girlfriend allowance will also reduce the likelihood that she will dump you. For some men (at least for me), it is expensive, time-consuming, and just plain difficult to get a girlfriend. A girlfriend allowance makes it more likely that you will spend more time with your current girlfriend rather than spend time hunting down girlfriends at nightclubs, bars, online, or via friends or family.

A girlfriend allowance will also provide the girl will more confidence and assurance in herself. If you are willing to pay a girl money, she feels she is worth it. Once a woman is at the receiving end of market demand, a price on her services will increase her morale, and she will want to treat you better.

A girlfriend allowance also recognises the fact that being a girlfriend is quite expensive. Girls are required to buy appropriate clothes, use make-up, perfume, shampoo, and have gym membership. Attractive girls also tend to have specific diets. Looking good comes at a cost.

Another good argument for a girlfriend allowance is that love is too difficult to maintain. Love is fickle and temporary. In a normal relationship, the bond is sustained by love, but love wanes over time. As the girlfriend gets tired of you, her attraction for you will also drop. The excitement and novelty of being with other men will tempt the girlfriend (or wife). Although love is difficult to maintain, the girlfriend allowance is not. The girlfriend allowance (as I will implement it) is a set value of income-producing assets whose rental or dividend income is directed into the lady’s bank account automatically every month by the fund manager or property manager. It is set-and-forget. You only need to reconfigure it once you break up with the girlfriend and need to distribute that income to someone else (or yourself if you are single). Maintaining a relationship on love requires constant effort and work. It is like having debt over your head or being bossed around by a bad boss. A girlfriend allowance, on the other hand, requires nothing.

To conclude, although the girlfriend allowance or girlfriend efficiency wage seems to make sense, theory does not always align with practice. I will update you all on how things go.

Love and Frugality

Last night I watched a romantic movie called Before Sunrise. It is about a young boy and girl who meet on a train, get off at Vienna, and spend the night in the city before they need to separate from each other the next day. I thought the movie was absolutely beautiful and I suppose by watching it I feel great loss that I never really fell in love with anyone. I’ve been on quite a few dates (most of which are first dates) and had one relationship that lasted for a year, but otherwise I’ve lead quite a simple life. I would love to fall in love like they do in the movies.

Of course, the frugal side of me tells me that just because something is glamorized in a movie it doesn’t mean I should follow it. Movies, TV shows, books, and other forms of art have a way of making you desire things more and creating greater expectations. Greater expectations normally lead you into spending more money than you otherwise would.

Saving up money is simple. You simply don’t spend much. Of course, if it were this simple, why are most people living under enormous debt? I think it is because most people have high expectations. An average person may earn $50,000 per year, but if his expectations are such that he needs to spend $50,000 per year in order to afford the things he feels he needs, he will not save anything. However, if his expectations are lowered. If he were to suppress his desires such that he can live on $10,000, he’d be able to save much more.

Where do expectations come from? There are two sources: internal and external. Expectations can come from yourself when you tell yourself that you need something or that you don’t need something. But expectations can come from others: friends, girlfriends, TV, movies, salesmen, etc.

When we talk to ourselves, we can try to convince ourselves that we don’t need something that we may desire. To react to external influences, we can avoid friends who spend more than we do.

To suppress feelings of love or desire, it is probably best if I avoid romance movies or books. If I keep watching these movies, I desire more.

The point I am making is that love is the tool that other people use to make you desire something, and desire leads to greater expectation, and this normally leads to greater spending. Marketers try to make you love a product so that you buy it. Women try to make you love them so that you spend money on them. It is sad then that in order to be successfully frugal that you must suppress your love. They say love is a beautiful thing, and it can be, but when I look at all the examples of love in the real world, I have trouble separating acts of love from acts of greed, envy, or hedonism. From one perspective, love is beautiful, but look at a different perspective and love is also vile or vulgar.

Can I live a life without love or desire? I doubt it. I am willing to spend money to pursue love, but it must be controlled.

Reduce Spending vs Increase Income

I currently aim to save 85% of my after-tax pay (as recommended by Early Retirement Extreme). I try not to tell too many people in real life about my high savings rate, but back in the days when I was more naive, I’d talk about my savings rate all the time, and one common response I hear is the recommendation that I should be focusing on increasing income rather than reducing spending.

My response to this recommendation is: why not do both? Why not increase income and reduce spending at the same time? Why assume that you can only do one or the other?

While I recommend increasing income and reducing spending at the same time, I recommend you put more effort into whatever gives the biggest bang for your buck. In other words, do what gives the greatest return on effort.

For example, when I graduated from university and started working, I was earning only $40,000, and four years later that has approximately doubled. I have received only one promotion. I am on a fixed salary with zero bonuses. I get paid the same amount regardless of my performance. I don’t consider this to be spectacular, but I have been saving approximately 80% to 85% during that time, and adding my salary plus my passive income from investments, my total income today puts me into a higher tax bracket whereby I pay approximately 40% on income tax. In other words, due to progressive income taxation, higher income is rewarded with higher taxes. I am a big fan of progressive income taxation mainly because it earns government significantly high tax revenues while also reducing the gap between rich or poor, but there is no disputing that for some people progressive income taxation reduces the incentive to work hard because once you are at a certain income, effort is not sufficiently rewarded.

This is why I prefer to save. Saving is easy. One very easy way to save money is to automate. For example, talk to HR and ask them to send 85% of your income into a separate savings account. All this will take about one hour. Assuming you earn an average salary of $50,000 and pay zero tax, you will be saving $42,500 per year. In other words, one hour of work will give you are return of $42,500.

Now suppose I were to try to increase my income. I’d have to search for jobs, catalogue my skills and achievements, update my resume, write a CV, talk to referees, apply for the job, talk to the relevant contact at the firm, practice for the interview, go to the interview, and follow up after the interview. All this will take maybe 50 hours and even then there is no guarantee I’ll get this job, and even if I do, the increase in salary is only about $10,000, and that is not counting taxation.

Which gives the better bang for your buck: one hour of work yielding $42,500 or 50 hours or work yielding $10,000? This is extreme example, but I think it illustrates my point.

Everyone is different. For those working in jobs that pay performance bonuses (e.g. real estate agents), a structure is in place that rewards hard work, so there is no question that you should be working hard at achieving these performance targets. Furthermore, while automatically saving 85% of income is easy for some, if your circumstances are such that you must spend a lot (e.g. you have a mortgage, children, or expensive housewife) then you may have no choice but to focus on increasing income rather than reduce spending.

The bottom line is that is does not matter whether you make money by making money or saving money (“a penny saved is a penny earned”). What matters is that you devote your limited time and efforts to whichever area provides the greatest return.

The Benefits of Casual Relationships

I’ve been single for a few months now since breaking up. When the relationship ended, it felt like a huge weight was off my shoulders. The mistake I made, I think, was not really understanding myself and thinking that a normal relationship was for me. Now I am starting to think that I should not be in a normal relationship because I don’t want the commitment, the obligation, the expectations, the effort, and the drama. It is better to be in a casual relationship.

Luckily for me, there are a number of websites on the internet that cater to casual relationships. In fact, the internet caters to all sorts of types of intimate relationships. I love internet dating. Using friends or family for dating is horrible because, if things go wrong, your relationship with your friends and family can suffer. Dating someone at work is even worse because, if things go wrong, you will continue to see her again and again.

In fact, I believe that even friendships with colleagues shouldn’t go too far. This is a mistake I have already made. I became good friends with a work colleague, he behaved badly to me, and now I distance myself from him, but he is needy and keeps pursuing me. I am reluctant to be frank with him and tell him to piss off because I don’t want bad blood with anyone I work with. After all, he might be my boss one day.

A website I enjoy using for casual relationships is whatsyourprice.com. The idea behind this site is simple: you offer to pay money to women in order to buy a first date. For example, you see the profile of a girl you think is nice, you offer her $100 for a first date. She can accept, reject, or counter the offer with an offer of her own. What I find is that, when you are willing to pay money to women, suddenly they are very keen to see you.

Different dating websites attract different types of girls. One of the benefits of WYP is that the girls here seem to be interested mainly in casual relationships. Supposedly, girls on a mainstream site like eHarmony are all looking for marriage, so if you are not interested in marriage, it is best to avoid this website.

Some people say that paying women for relationships is a waste of money because girlfriends are free. However, I disagree. With traditional dating, you must engage in the entire courtship ritual, e.g. show interest in her, flirt, talk to her, act witty and confident, dress well, ask her out on a date, touch her appropriately, and then after a few dates there may or may not be sexual intimacy. By the time you reach the third date, you will have spent thousands of dollars on gifts, restaurant bills, clothes, and so forth. If the relationship goes well, these costs don’t disappear. They stay high. If you marry, expect the costs to skyrocket once you start paying for engagement rings, marriage ceremony, mortgage, and children. So whether you go with a girlfriend/wife, sugar baby, escort, or prostitute, you will end up paying the same in the long-run. The difference is the level of honesty. The girlfriend/wife will expect you to waste money on gifts in order to prove your earning potential whereas the escort/prostitute will just send you an invoice. Prostitution and marriage are both mechanisms that facilitate the exchange of money/power and female intimacy. Whereas prostitution is subject to market forces, competition, and efficiency, marriage is subject to high entry/exit costs, vendor lock-in, inflexible contracts, and a reliance on old-world customs and rituals rather than an efficient price mechanism.

For young men out there, I recommend they try seeking casual relationships online. Set a certain budget for “female intimacy,” say, $500 per month and then keep track of how much cash you hand over to the girl. If you are poor and cannot pay much, simply seek out older or bigger girls. The reality is that highly cashed up men tend to seek out thin and young girls, resulting in price bubbles. Older and larger girls are more reasonably priced. Over time, if you save up and invest in income-producing assets, your total income will rise, and your budget for female intimacy should also rise.

One additional point I’d like to emphasise is if you do decide that mainstream dating and marriage is not for you and you end up seeking more “market-based” solutions, I recommend keeping it to yourself. Don’t tell your friends, your family, or even the girl you are in a casual relationship with. Just give her cash and tell her it is to help her with her living expenses. I do not recommend honesty in real life when it comes to paying for female intimacy. Right or wrong, there is too much stigma in this area. If you don’t believe me, read up on the following people: Craig Thompson, Eliot Spitzer, and Tiger Woods.

Thoughts on “Early Retirement Extreme”

I love listening to podcasts when I’m driving, exercising, or stretching. It’s free education and entertainment. A recent podcast I’ve listened to that I feel I need to write about is one on the Survival Podcast featuring Jack Spirko interviewing Jacob Fisker of Early Retirement Extreme.

I have always been fans of both Jack Spirko and Jacob Fisker, so having these two together in a podcast is brilliant. Basically, Spirko is a “modern survivalist” who works to set up a homestead in the country where he can take refuge in if there is ever some disaster scenario. He focuses on self-reliance, independence, frugality, and being prepared. Even if nothing happens, it doesn’t hurt to be prepared.

Jacob Fisker of ERE, on the other hand, is different. Whereas Jack Spirko works outside the system (or “off the grid”) in order to free himself from it, ERE is about using the system to your advantage, i.e. applying capitalism to achieve freedom (or as the ERE website sometimes says, taking advantage of “rentier capitalism”).

Fisker’s story is remarkable. He takes retirement to the absolute extreme. Mainstream retirement advice is that you save up 5% or 10% of your income and then over forty years or so, assuming some wildly optimistic rate of return and then harnessing the power of compound interest, you will retire when you are incredibly old and frail with an income that is about $50,000 a year.

ERE, in a nutshell, states that you save up to 85% of your income and then retire within five years. Because you are saving up in five years, compound interest does not matter. What is remarkable about Fisker is that he was able to retire at age 33 after saving 85% of his income with an income of only $25,000. He achieved this by e.g. not having a car and walking to work (walking about five miles back and forth).

Suppose the typical person earns $50,000, and assuming zero taxation (for simplicity), then in five years, assuming you save up 85% and assuming zero rate of return on your savings (again for simplicity), you’d have a little over $200,000 saved up. Assuming a rate of return of 5% on the savings if invested in a mixture of cash, bonds, stocks, REITs, etc, you’d be earning about $10,000 per year or about $800 per month.

Can you live off $800 per month? In a country like Australia or even the United States, I think it’s highly unlikely. Maybe you can buy a place in the country and scrape by, but I’m not too sure.

However, in a country like Thailand, $800 per month is more than enough.

JC of Retire Cheap Asia is a retirement consultant who lives in Thailand. He advises expats from America and other developed countries on how to retire in Thailand. According to him, the minimum amount you need to survive in Thailand is $500 per month. At $500 per month, you live a very rough and bare life. However, if you have $1000 per month, you live a life of luxury. An income of $800 per month achieved through five years of Early Retirement Extreme would afford you a comfortable existence in Thailand (see Retire Cheap Asia Retirement Income Categories). This applies not just to Thailand but other countries like Cambodia, Philippines, and maybe even Belize and many others.