The Urban Hermit

Yesterday I was very busy. I arrived at work early at six in the morning to get more work done. All in all, I am happy with my job now. I enjoy the work. I have recently signed up for Netflix. Watching YouTube videos is great, and I have learned a lot from watching YouTube videos, but there is so much hate and negativity on YouTube. Dealing with the trolls on YouTube is quite draining. I am hoping the world of Netflix is more civilized. I will still continue to watch YouTube, but I will try to get into Netflix more.

My intention is to become an urban hermit. I am not a hermit who goes out into the wilderness to live. That may come later. For now, I need to earn money, so I need to work, and I don’t know how to earn money if I’m out in the wilderness. I need to be among society for now. However, just because I live among society, it doesn’t mean I need to be fully connected with society. I can erect emotional barriers to protect myself from the negativity of humanity.

I am blessed in that I am happy with my job right now. Only two months ago I was miserable because I had a horrible manager. I was extremely depressed, and I even thought about just quitting. But everything is working out now. I simply spoke to my manager’s manager and told him that I wanted a change, and then all of a sudden I was put into a different team. Sometimes you just have to ask and you will receive. Even if things go bad where I am now, I can just try to move again, and even if that doesn’t work, I can just retire and live off my meager dividends.

But for now, I am happy to work, and I enjoy working. I try to stay away from the office gossip and politics. I hate that. I just do the work, and I like to be around positive and friendly colleagues. Outside of work, I am happy to just eat, sleep, read, exercise at the gym, and watch YouTube and Netflix. I don’t mind being alone. I don’t mind isolating myself. Even something as simple as watching YouTube or Netflix gives me so much joy. I have recently realized that people set standards for you. They tell you to get a girlfriend, get married, get a mortgage, get a car, get a house, and have children. Obviously you’ll be working hard like a slave, and you’ll enrich your bank, real estate agents, and even your wife. Everyone else benefits when you’re a slave. But I will just say no to all this and live my life. If I just make money and then use that money to block everyone else from my life as much as possible, then that’s it. I have total peace and quiet. As an introvert, that is appealing.

Assimilation - Being Socially Acceptable

Just as organizations have PR divisions dedicated to making sure the organization presents a socially acceptable image to the public, so too I am starting to believe that an individual needs to do the same.

For example, I do not make it a secret on this blog that I would love to one day save enough money so that I can live off my savings. I have found that if I tell people this, I come off as lazy. Maybe I am lazy. I certainly don't enjoy working. I believe that deep down everyone values laziness and idleness but for some reason there is a social expectation that you must be busy and you must work (read In Praise of Idleness). Certainly if everyone were to stop work, society would not function. Who would grow the food we buy to eat to survive? In terms of ensuring society continues to function, people need to work, but it's a question of degrees. That is, do most of us work too much? Is social expectation excessive? All you need is a small house in the country to put a roof over your head and a bit of savings to ensure you can afford to buy food for the rest of your life. But why is it that people think they need more than food and raiment? Why is it that people think you need to get married, have children, get a mortgage to buy a mansion, get a luxury car, and go on an overseas holiday every year? Instead of enslaving yourself for four to five years, you're enslaving yourself for forty to fifty years.

I have found that telling others that I want to retire early not only makes me seem lazy but it also opens me up to ridicule. People also think that because I am saving up like crazy to retire early, I must have a lot of money saved up and therefore I have people asking to borrow money. The risk of outright theft, blackmail, and torture are also very real. It just makes no sense to tell anyone anything.

That is why I am keeping things secret. Instead of telling people I have savings, I tell them I am in debt. What do I do when I have enough savings to retire? I will not actually retire but will have a socially acceptable story, e.g. I will go back to university to study, but what I will actually do is study part-time and online, studying subjects I am interested in. Because I intend to study part-time and online, I should have a lot of free time to spend on leisure, as I will be retired.

Less Work, More Holidays

Whenever I speak to people, I make no secret about the fact that I hate my job. It is not really the work that bothers me. Rather, it is the fact that I have to work for a boss. I have to report to a boss, update him on what I'm doing, and endure his speeches on how I should be doing my job. Because my dissatisfaction comes from being averse to being subjugated, I simply cannot go back to university and study a different course, as my father has suggested to me. I need to do something different. If I want to be my own boss, one option is to start my own business, but this option has its challenges. Will I have enough to money to start my own business? How much does it cost to run a business? What sort of tax and compliance processes do I need to follow, and are they burdensome?

The more I think about it, the more I realise that I probably need to start taking more holidays. Less than a month ago, I turned 29. I am almost thirty, almost sort of reaching the middle of my life, and I when I think back on my life, I realise that I really have not done much. I have been overseas but only twice. Most people go on a foreign vacation ever year. I have been reluctant to go on holidays because of the costs. I believed it was more sensible to save the money.

Given how stressful my job is, I believe it is best if I start taking holidays. It is not just my career where I am facing crisis. There is also chaos in my family life. Going to a different place and leaving your old life behind is a great way to clear the mind.

I will still continue to save money, mainly because I want to invest the money to make more money. One day I may be able to save up enough money to be able to be on holidays for, say, six-month periods at a time. When I come back to Australia, I can work part-time, and when I feel like it, I can just get back on the plane and get out. I am starting to realise that one of the greatest freedoms is the ability to just get out. I pity those who have committed too much into wage slavery, the people who have a mortgage, two children, and a car loan to fund. I have none of these, but pressure from friends and family to be normal is really starting to ramp up. It's as if all of society is trying to set a trap for me. I've reaches a point in my life where I need to make a fundamental decision about whether I want to embrace the culture of wage slavery or the culture of freedom. What is most cruel about life is that the price of freedom is a decade of wage slavery.

Too much holidaying can be unhealthy. I could get bored. I just don't know. I need to give myself the flexibility to move in and out of holiday mode and work mode.

$75,000 is Enough

They say that freedom from poverty is the ability to walk into a public square and feel no shame. I remember on Friday having lunch with friends from work and feeling ashamed because I earned less than they did. They also spoke about how inadequate they felt because they did not earn as much as others, but when these people reminded themselves that I earned less, they suddenly felt better about themselves.
The problem is that there is no objective definition of how much income is enough--until now. According to a Wall Street Journal article that cites a study by Daniel Kahneman, a Nobel prize winning economist, the perfect income is $75,000 per year.

My goal is to earn $75,000 by age 30 and $100,000 by 35. I am currently 27 and earn $60,000, consisting of approximately $55,000 salary and $5,000 investment income. It would be nice if I could get a promotion and earn more, but I am finding that I am just not good enough to get a promotion, which is disappointing. They say you should never give up on yourself, so I will keep trying to get a promotion, but my experience of modern capitalism is that hard work is not always rewarded in the workplace. In my opinion, this is a strong argument as to why you should aim to just have fun in life. If you work really hard and put off leisure, there is a risk that you will throw away your whole youth all for a higher salary that your employer may not even give you. Keeping this in mind, I believe it is essential that you diversify your sources of income. I have come to rely less on work to increase my income, now relying almost exclusively on my investments. My goal to getting $75,000 by 30 and $100,000 by 35 is entirely based on the pessimistic assumption that my employer will give me no promotions and I will remain on the same payscale forever.

Spend Less vs Earn More

In this blog I speak a lot about investing and personal finance. Investing is not a precise science as there are so many market uncertainties. For example, it's hard to tell if the US dollar is going to keep going down or whether it will strenghten in the fiture. These uncertainties are what I love about investing.

I consider investing to be a hobby. I do it in my spare time and I find that it is a lot of fun. Someone once said to me, "Dude, why do you spend so much time studying investments. You should be spending time increasing your income instead." My friend, in my opinion, believed that work and investing is a trade-off. If you do more of one thing you must do less of another. I think this is wrong. My response to his comment is that I do spend time increasing my income. I do try to do the work I need to do at work to the best of my abilities. I don't study investing at work. Investing to me is leisure, so I do it at home after work or during the weekends. It does not interfere with work. If I weren't studying investments at home, I'd probably be doing some other leisure activity, e.g. watching reruns of Survivor or Shaytards.

Some people argue that saving money, investing and so forth is a waste of time because you should be focusing on improving your career, getting promotions, and so forth. Everyone has his own preferences but personally I find saving money and investing to be a lot of fun. The investing is certainly more fun than saving money, but saving money and investing as a whole is more fun and certainly more easy than working hard.

Working hard actually involves hard work! If you listen to all the career gurus, they will tell you that doing well in your career requires major analysis on office politics. You've got to do all sorts of difficult things like networking and watching what you say, making sure that give good impressions to others, and so forth. Some people are naturally good at this. I am not. You can call me old fashioned but I believe that you go ot work to simply do the work you're given. If you are given X then you do X to the best of your ability. There is no need to go beyond that. There is no need to stay back at the office just to show off to the boss. There is no need to set up coffee with every single person in your division to expand your network. There is no need to walk around the office and volunteer to do everything and find that with so much work to do you are overloaded and cannot cope. Like I said, for some increasing your income is easily, but for me it is difficult. Furthermore, because I work for the government, our pay structure does not include bonuses and other complex incentives structures that reward you for hard work--nor should it be because working in government is not really about hitting certain KPIs, as what is good for the organization is public welfare, not something measurable like profit or stock price appreciation.

Saving money and investing is simple. In fact, saving money is very simple because you don't do anything. If you want to advance in your career you usually have to do something, e.g. impress your boss. To save money you have to not do anything. The less you do, the more you save. If you spend your free time going to bars, pubs, casinos, movies, nightclubs, and so forth, then you will pay big. But if you don't do any of these things, you don't pay anything and you save money. Some people are what I call active savings in that they save money by aggressively trying to find hihg-value goods. These are the people who will not buy a coffee because $3 for a cup of coffee is not good value because you can make your own coffee for 50 cents. These are the people who are happy that they spent $5000 on their wedding because the average price for a wedding is $30,000. Active savers spend a lot but whenever they spend they save a lot of money. This is not me. I am a passive saver, which means that the way I end up saving money is simply by not buying things. The active saver will be happy if he spends $5000 on a wedding rather than $30,000. A passive saver will not get married and ends up paying nothing. I am not saying that I don't value marriage or leisure. I am just lazy, but this laziness has its benefits.

Defensive Socializing in the Workplace

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Economics is Useless

I recently had lunch with a work friend. During this lunch he asked me what my career plan was. I told him that my plan was to just stick with the job I have. I wouldn't say I love my job, but it's reasonable. My friend and I both work in public finance. He told me that he is keen on going to university to do a masters and then working specifically in health and education, areas he is interested in.

Personally, I am not really interested in going back to university because I feel like I have been in university for a long time. I spent a lot of time in university studying economics. Many people have the impression that you do in your carrer what you study in university. For physicians, lawyers, and accountants, this may be the case, but even though I studied economics in university, I find I do not use what I learned in university in my career very much. In fact, most people who study economics, I find, do not use economics much in their career other than those who work in economic forecasting or economic consultancies like Access Economics. The reality is that there really is not much job opportunities for economists, and studying economics is not really a good career move. I studied it because it was an interesting discipline. Furthermore, many work colleagues who have studied economics are keen on moving to other areas. I know one colleague who works in the public sector who is keen in studying graduate medicine because she believes that economics is a dubious science (it's called the dismal science for a reason). Economics can hardly be called a science in the same way that physics is a science. In physics, almost everything can be proven with a laboratory experiment. In economics, it's very difficult to do laboratory experiments, so economists resort to econometrics to prove things. Having studied it for a long time at university, I find econometrics to be highly questionable. It's not uncommon to see one economist using econometrics to prove one thing and then a month later find another economist using econometrics to prove the exact opposite. Economics has transitioned from an honest science into a tool of propaganda. If politicians want to implement some policy, they usually pay off some professional economist to produce some report filled with mathematics and statistics to provide ammunition in favour of the argument. Economists will only be useful so long as the public is duped or amazed by their impressive numbers and formulae.

It's easy to understand how a physician, an engineer, a lawyer, an accountant, or even a prostitute is useful in the labor market. Not so for economists.

This is why I am thinking about a career change. I need to ask myself what is it that I have a passion for. One thing I am passionate about is investing. I would love to be a financial adviser. Useful professionals like physicians and lawyers actually fix people's problems. If someone is sick, they see a physician and the physician helps fix the disease. If someone has a legal problem then they see a lawyer. But nobody has "economic problems." However, people do have problems with personal finance, e.g. where do I put my money, how do I minimize tax, how do I buy shares, and so forth. In order to fix these problems you do not go to an economist! Rather, you see a financial adviser who probably has a background in accounting or tax law. I would like to see myself in a role where I can actually help people and be useful.

Coffee at Work

In a previous blog post titled Frugality at Work, I claimed that being frugal made it difficult for me to behave normally at work. I have discussed this idea with friends, family, and strangers, and I have taken steps to address the issue.

I have noticed that many people at work bring their own lunch. The economic recession may the reason for this. There are some people who always eat out, and in order to still have lunch with them I normally eat my meal either before going out with them or after. When I go out to lunch with then I usually only drink a cup of coffee, usually a latte or a flat white (even though the two are quite similar). A cup of coffee costs about $2.80 to $3.00 per cup, increases my concentration, and provides lots of antioxidants. Normally my friends pay about $10 or $15 for a full meal, so I do save quite a lot of money by only drinking coffee. I prefer to just have a coffee at a cafe or restaurant instead of bringing my own lunch. The reason is because many restaurants or cafes actually do not allow you to bring in outside food.

Sometimes I wonder whether paying $2.80 per coffee is a good deal. You can easily make your own cup of coffee with your own machine or even just make instant coffee, and the overall cost is probably a few cents per cup. Nevertheless, I understand that I am paying not really for the coffee itself but for the atmosphere, the warmth, the environment, etc. It's also a great way to socialize rather than just staying at your desk and eating all by yourself. Walking to the restaurant or cafe gives you exercise and fresh air as well.

Frugality at Work

Last Friday, three other co-workers invited me out to lunch with them. We went to a restaurant and ate. To convince the restaurant that I was not a parasite using up their space without paying, I purchased a Coke Zero to drink with my sandwich. While I ate the sandwich, everyone else ate lasagne, chips, and lettuce purchased from the restaurant.

Even though I saved money by not buying food from the restaurant, I felt as if I was not fitting in to the organization's culture and that this might have adverse long-term effects. Everyone else had plates, cutlery, and fine food while I was eating a simple sandwich prepared from home.

This issue applies not only to the food I eat at work. I am frugal in many other ways. For example, I wear a $30 wristwatch and I have a $500 suit that's slightly too big for me but I am reluctant to change it because of the costs.

Over the weekend, in order to save money, I usually just sit at home and read things on the Internet. I also exercise. On Monday, when I return to work, co-workers usually ask me, "What did you do over the weekend?" I usually tell them I did nothing and they usually have a look of disappointment on their face. Conversations are harder to sustain when you seem like a boring person. I have thought about inventing stuff up and lying to co-workers, telling them that I go rockclimbing, bushwalking, etc. However, being a Christian I remember that the Bible says, "Lying lips are an abomination to the Lord." I therefore have to be honest.

Why You Should Do What You Love

Many teachers tell students to do what they love as a career. There are those who do not believe this, thinking that doing what you love may not pay well and that enduring the pain of doing something you hate can be worth it if it pays well.

I would just like to say that I have heard of a finance executive who worked in a stressful job in their 20s and then when he was 30 he had a heart attack and died. Many people say, "No pain, no gain." Since work stress leads to heart disease and diabetes, pain from career stress will have no gain. In fact, there is a cost of pain. Medical studies have shown that stress increase blood pressure as well.

By definition, something that you love doing is not stressful, which means that you can go on making money without chopping off years from your life expectancy.

It's important to remember that poverty can be stressful as well, so if you are young and you are starting from scratch then you may need to do something stressful to build up enough capital to cover necessities like food and clothing. You may need to work at McDonald's flipping burgers for a while and putting your income aside into a bank savings account until the interest from that account covers your food cost. Then you can be certain that you won't starve to death and you will have the freedom to pursue a better career.

As Stocks Plummet, My Career Flourishes

I have got a job offer! Let's just say I got a full-time job as an economist at a government department. This job makes sense since I studied economics at university. I'm also very happy because, as you may tell from reading this blog, I have a strong intrinsic interest in economics, finance, markets, and investments. I am therefore doing what I really love.

The bad news is that the last time I checked the ASX200 it was 5283. Now that is low! I remember last year it peaked at about 6400. I don't even want to think about how much money I have lost. All I know is that it is in the thousands. Some people are worse off since they are highly leveraged. But otherwise, I have no debts and no worries. Looking at things from an optimistic perspective, I could say that my investments are just undervalued at the moment and that this current depression is a good opportunity to pick up shares when they are cheap. What a pity the stock market starts to tank right when I don't have enough spare money lying around to invest. In a way I'm happy because I do believe that for a long time the world stock markets were booming too much, especially in Australia. This leads people to believe that the stock market can only go up forever and so people leverage and invest. This drives prices up and creates a bubble. The recent volatility hopefully will pop that bubble completely, allowing me to invest in a bubble-free environment where I can buy mutual fund units for a fair price.

Sticking with the optimistic tone, I am not too worried because I only have about $25,000 invested in shares. The rest of my net worth is in my car, in bonds, and in cash. Some people have millions of dollars in the share market. Any slight day-by-day tremor sees their net worth fluctuate by tens of thousands. But they don't seem worried. They understand that higher risk can lead to higher return.

My Dream Job As a Writer

I wish I were a writer. I am not a writer right now because I don't think writing is an easy career. It is a fun hobby but I have heard many horror stories of writers trying to get their books published.

The reason why writing is hard I think is very simple: how can books compete with TV and the Internet? TV and Internet offer a barrage of high-quality entertainment at low or no cost. It will be very hard for any writer to compete against that. Plus being a writer is not particularly hard. Being a dentist is hard because you need good grades to go to dental school. However, just about any bored housewife can start writing. All you need is a computer with a word processor and even if you don't have that then pen and paper will do. As a result, the supply of writers is much higher than the demand, which ensures intense competition among suppliers.

I hope one day I will be able to make a transition into a career as a writer once I am financially secure. I will write what it is I want to write about, and even if it fails to be profitable I can still live off my investments. What I would absolutely hate is to write about someone just because I think it might be popular. I want to write what I want to write about and if a publisher thinks one of my many pieces could be a commercial success, together we can take the risk and see whether the investment pays off.

I don't necessarily have to write fiction. I can write a non-fiction book that teaches other people things. I can also write for websites and newspapers. The possibilities are endless.

What is the Easiest Job?

Even though I plan to be a millionaire, I must admit to everyone that I am quite lazy. I think many people unfairly criticize laziness and turn it into a moral issue. Christian theology has labeled sloth a sin, so that may be the basis of this stigma of laziness. In fact, I believe that a person who works hard, that is, he sacrifices himself and undergoes excessive and needless pain and suffering, is really just crazy. Why suffer from more pain than is necessary? Some people say, "No pain, no gain." Many people say thing, but why is this true? Why must something be painful for it to be profitable? Can't there be painless profit?

Since I am lazy and since I want to avoid pain, I would like to know what sort of career is best for lazy people. I would imagine that a job as a security guard might be luxurious. You get paid to stand around. Things might get stressful when you find yourself in an altercation with a trespasser. What about a job as a teacher? I'm sure easiness of a job is subjective. For me personally, if I were a teacher I would rather teach younger well behaved children rather than older, louder, and rebellious teenagers.

Top 10% Trader So Far

I am playing a simulated trading game at Trading Places. You buy and sell imaginary shares on the Australian Stock Exchange. Traders who make the most money will get job interviews at JP Morgan and presumably will get a job there.

I gave it a try and to my surprise I am ranked in the top 10 per cent. My rank is 365 out of a total of 4445 traders. Among students in my university I am in the top 5 per cent! We still have 45 days of trading left.

My strategy was pretty simple. Since brokerage cost is a massive $50 per trade, I decided I wanted to buy shares in companies I could really trust. BHP Billiton (BHP) and Commonwealth Bank of Australia (CBA) are the two largest companies in Australia, so I put much of my money into these companies. However, in many other traders were likely to invest in these companies so I needed something different to differentiate myself from others. I chose Wesfarmers (WES) because it is quite a big and successful company. I have also read about this company's excellence in business ethics, and also I purchased Wesfarmers right after its stock price dipped, so I hoped I had picked the trough. My risky bet was on Sonic Healthcare (SHL). This is one of Australia's best medical diagnostics companies. I figure that in these tough times investors might flock to the health sector in the hope of finding a safe haven. After all, people will always get sick, and Australia's population is aging.

BHP and CBA are going strong. Wesfarmers is looking okay. Sonic is not. There are still 45 days left, so anything could happen.

By the way, I am not an expert day trader, and I don't recommend this sort of speculative day trading for most people, especially if you are using real money and especially if you are using a lot of your own money.