You Save 100% of Your Salary? What if You Die Before You Retire?

I probably shouldn’t do this, but I told someone recently that I save 100% of my salary and live off dividends. One of the argument he used against this is that, if you save up a considerable amount of money, you deprive yourself while you save and there is a chance that before you retire, you may die, which means you never had the opportunity to enjoy spending the money that you saved.

This made me think about why I continue to live a minimalist lifestyle and live off dividends.

If you die with lots of money saved up, you could have enjoyed that money. However, for many people, freedom is so important that it’s not the spending of money that makes them happy but the holding of money. This applies to me as well. I love to hoard money not because of what I can buy with it but because of the freedom and autonomy it gives me.

If I had, say, $1 million then according to the 4% rule I can spend $40k per year forever. I never need to work ever again so long as I’m satisfied with a $40k per year lifestyle. There is no need to suck up to some boss, and I can do jobs on my own terms and live according to your own rules. I continue to work, but I do the work that I love. That is freedom, and I care about that more than some shiny Ferrari.

You enjoy your work when you’re not dependent on it

In my opinion, you enjoy working when you don’t care if you’re fired. If something at work bothers you, you simply ask your manager if you can be transferred elsewhere. If for some reason you are fired, just shrug and walk to a job agency or find a new job yourself. Because you live off your investments, it doesn’t matter if you’re unemployed. You don’t work to feed yourself because other people feed you.

However, if you’ve never saved up any money, if rather than living off dividends you have massive debt and spending obligations, you are then dependent on your job, and dependency is slavery.

Slavery has not been abolished. It has evolved.

Embracing Laziness

It is easter and I have not been out of the house. It is cold outside, so I just don’t feel like going out. I don’t have many friends, so I am rarely invited places, and even if I am invited, I often reject the offer because I consider it a hassle to go. It is paradoxical because I feel mild loneliness but at the same time I am repulsed by humanity.

When I talk to colleagues at work, they always talk to me about their latest weekend adventures, e.g. skiing or hiking in the mountains, going to music festivals, etc. Now that I am in my early thirties, many people my age are married and have children, so they do family activities, and there some DINKs as well who spend their free time holidaying or playing with their dogs.

Meanwhile, the way I live now in my early thirties earning six figures is no different to the way I lived when I was a university student, that is, with my parents mostly staying at home indulging in electronic entertainment. Now that I am older, I am less ashamed of my lifestyle, and there is a rebelliousness in me now. I want to defend this lifestyle.

Some things have changed. Rather than read books from the library, I read ebooks now. I still watch YouTube, but I prefer higher quality films and shows streamed via Netflix. I am still an avid reader of everything on the internet.

I still travel. About a year ago I travelled by myself to Bali, and I met some girls while travelling and have mostly kept in contact with them. When I travelled to Bali, I was strongly encouraged by my manager to travel because I had too much annual leave accrued. I have heard people telling me it’s illegal for an employer to force employees to take annual leave, but I sometimes don’t mind having my hand forced in certain situations.

Upon reflection, I am quite lost in my life because I don’t really know what to do. My main focus has always been on freedom and autonomy by living off dividends, and when you have the freedom to do what you want, oftentimes you don’t know what to do because nothing seems to provide any significant happiness, and I suspect nothing will. Nevertheless, having the freedom to be able to experiment with different activities is in itself satisfying.

I feel that my career has stagnated. I received a promotion about three or four years ago and since then I have applied for a handful of jobs with more responsibilities, but I haven’t been successful. I will continue to apply for promotions or better jobs, but I see it as just a chore. I feel like I am just going through the motions, and I show up at work because I have nothing else to do in my life. If I stay home, I would just sit in a room all by myself whereas work does give me companionship because I am around people, and I talk to them. I admit that the connections you make with colleagues at work are not as deep as, say, the connections you make with a spouse or family member, but I have learned to appreciate the benefits of superficial relationships now. Greater connectedness to others exposes your vulnerabilities, which invites conflict, and often when others reveal themselves too much, what they expose is quite vulgar. The interactions at work are sanitized by HR guidelines, anti-discrimination legislation, fear of authority, etc, and these forces seem to do a good job at making socializing at work more pleasant. Many people complain about “political correctness,” which to me is roughly defined as “restricting behaviour to minimize offending others.” I personally love political correctness. Why would anyone want to be exposed to an environment in which they are bombarded with people, ideas, conversations, etc that are offensive? You can grow a thick skin, but at the end of the day, everyone is offended by something. Blocking offensive communications is not about being afraid of truth. The truth is that there are many out there who only want to offend others without any regard for truth or logic. Trolls don’t just live on the internet.

I now have a desk with a window view facing the city, so I can see skyscrapers and busy streets below, and often I love staring out the window at people walking on the streets. There is a homeless woman who sits on the street at the bottom of the building opposite mine, and I see her all the time, and I often think about her life and how she ended up where she is. We all live together in this city but we all go through different paths in life.

Because work for me has become very comforting and pleasant, I spend a lot of time at work. Often I am not working hard enough during the day, so I need to stay back to catch up.

I will continue to live off dividends. I believe it is the best way to live. Everything I earn from work, I invest, and I live off my investments. This ensures that I am not dependent on work. Even if I am fired, it does not matter because I already live off my investments. I can work how I want to work. If I don’t like where I work, I simply move, and I am very happy to hire career consultants or other professionals to help with the move. If all efforts to move to a new job don’t work, it doesn’t even matter. I can travel to Thailand and start my own online business or I can freelance. I have layers upon layers of backup plans for everything.

I will always work because I love making money and growing my investments. My investment portfolio is like a child to me. I love watching it grow. I love protecting it by diversifying government bonds or gold mining ETFs into it. It is a beautiful child (in my opinion), and unlike a human child, my investment portfolio pays me money in the form of dividends. I love to work, but I don’t like to work hard. I hate pushy people and unrealistic deadlines. I want to enjoy my work. I want to work with people I get along with. I don’t think the job I do right now is the perfect job for me, but I am hopeful I will land in that perfect job one day.

Trump Inflation Will Hurt Families

Many people complain that government spending and debt was high under an Obama Administration, but government spending and debt will still rise under a Trump Administration.

Whereas the Democrats tax and spend, the Republicans will spend and spend.

Trump will increase government spending with a massive government infrastructure program. He will also lower corporate and income taxes.

Lower taxes and higher spending means more money going out and less coming in. You don’t need to be an accountant to know that if there is more money going out and less coming in, you need to either go into debt or print more money.

Either way, the amount of money in circulation will increase, which will cause inflation (see “Investors are betting that Trump will be the inflation president“).

This is very bad for families because although money can be printed from thin air, value cannot be. The more money there is, the more inflation there is, which means the cost of living is higher, and families tend to spend a lot.

Thankfully, I am am single and childfree. No wife and no children means I don’t need to spend much money. I only feed one mouth rather than three to five.

My recommendation to others is to live a minimalist lifestyle and invest your money in assets that go up with inflation (e.g. stocks, property, gold, and inflation-indexed government bonds). The breadwinners in families with massive costs of living will need to slave away in a desperate attempt to keep on top of the inflation that will ravage their household finances.

Investing Under a Trump Presidency [Podcast]

I am certainly not a Trump fan. I actually find the man quite disgusting, and I watched in horror as he was elected President of the USA. That being said, the stock market boom following his election has increased my net worth considerably, and I expect more gains in 2017. However, there are significant risks involved in investing in American equities at this time, so while you should be exposed to the market to capture all the gains from this bull market, you must be prepared to exit the market quickly once it is clear the boom is over.

Other topics discussed in this podcast include Wall Street’s complete takeover of the White House as well as reasons why residential real estate is a bad investment.