Living with Parents to Save Money and Accelerate Financial Independence

I was watching the video below from the Techlead where he explains why he is moving back in with his parents. Most people think that poor losers live with their parents, but this guy is a millionaire, and he seems to be providing very logical reason why you should live with your parents. 

This video reminds me of me. I personally live in my mother basement even though I am in my thirties and earn a six figure salary. I continue to live in my mother's basement because I couldn't justify any reason to move out even though I can afford to move out. I currently own an investment property, and if I moved into this property, I will not be able to collect rent from the tenant, which will cost me more than if I rent. Rent costs about $1700 per month. Spending this much on rent seems like such a waste. My mother even wants me to live with her and I help out with paying the bills. 

I also don't believe that moving out increases independence. Rather, moving out decreases independence because it reduces your wealth. A reduction in wealth reduces financial independence. 

Nevertheless, I will admit that living in your mother's basement is terrible if you want people to respect you. People look down on me and no one wants to date me. Recently I was dumped by a woman, and although she didn't give me a reason for dumping me, I have a bunch that me living in my mother's basement strongly  influenced her decision. 

However, if I move out because I want others to like me or I want to get a date, I feel like this is no different to buying a Ferrari for the exact reasons. My logical brain tells me that moving out in order to gain respect and love is pure consumerism.

So I have a dilemma in that I would like to be loved,  but at the same time I don't want to be a conformist, I don't want to be a victim of consumerism, and I want to be authentic and true to myself and my values. It feel like such a disappointment that the price of love is conformity.

Could Laziness be Good?

There is a common belief that laziness is a mark of failure and that you must be productive and work all the time. This results in people being very busy and using busyness as a status symbol.

Personally, I don't mind being lazy. I believe in freedom. I believe in antiobligationism. I believe in minimizing obligation so that you give yourself freedom to do what you want. If that is being lazy, there is nothing wrong with that. We all need rest, and sometimes sitting down on the couch and watching some Netflix is quite relaxing and enjoyable.

In my opinion, there is a cult of busyness in America and around the world. We fill our lives with obligations e.g. mortgage, marriage, minors, and materialism just to fill the void, and these financial and non-financial obligations enslave us and deny us our freedom, which includes the freedom to be lazy.

The idea that laziness is evil can be found in how "sloth" is seen as a sin. Sloth is one of the Seven Deadly Sins. Those who accept the idea that sloth is sinful have been brainwashed into a slave mentality by those above them. Think about it this way. Many people I know are eagerly living the American Dream, which involves marriage, mortgage, minors and materialism. They are up to their eyeballs in debt, they buy cars, houses, and they have children, which are expensive luxury goods. As a result, they work like slaves. Who benefits? It is the bank who collects the interest payments and fees, the businesses who sell the daipers, etc. In other words, it is the shareholders who collect their dividend payments who benefit. Many people I know who live off shares (i.e. living off slavery) pretty much never work. They might work part-time or do some casual freelance work, but otherwise they're on permanent vacation, relaxing at resorts or taking it easy. The question is who has been brainwashed here?

Assertiveness

If they criticize your clothes, tell them that you decide how you dress, and if they want you to wear something else, they will need to force you, and you are willing to kill them before they force you to do anything.

If they criticize what you say, tell them you can say whatever you want. If they want you to say something, tell them you are gonna have to make you say it.

Whenever they criticize any action, whenever they recommend you behave in a certain way -- always attack back.

Talk slowly. Don't smile. Do what you want. Don' t budge. If what you do is met with resistance, keep doing it. Look them straight in the eye and force it through.

Human Cattle Are Victims of the Conformist Consumerist Narrative

Don't be gullible. Don't buy into the conformist consumerist narrative that, to be a normal person, you must get married, get a mortgage, and have children.

Of course you will be fed the lie that if you have a spouse, a mortgage, and children, these status symbols show that you have conquered in life and have dominated, but in reality these expenses are huge (it costs $400,000 to raise one child) and you will be in debt up to your eyeballs. You will be forced to work a 9 to 5 all day and every day until you are very old, and then you retire and shortly thereafter you will die.

Even if you think you are lucky because you have found a spouse who financially supports you, being financially independent on someone means that you are their slave. There are many women who marry rich men only to find that they are financially dependent on the man. They spend no time at work thereby having no skills, which means if the man leaves them, they become unemployed and on the streets, which means they endure any abuse the man imposes on them.

Just like a cow in a dairy farm exploited for its milk and slaughtered thereafter so too human cattle are fed the narrative of marriage, mortgage, and children, and rather than giving up milk they give up their labor, their time, their effort, their freedom, their lives.

Work hard. Invest for yourself. Retire by 35. 

Only Passive Income Can Break the Shackles of the 9-to-5

I am trying not to feel any emotion at work. I just need to remember that I am there only to make money. All I need to do is survive. I just need to do what they say. It will only be about five more years and then I think I will retire. My manager doesn’t seem to speak to me much, but this is nothing unusual. He is that sort of person. It doesn’t really bother me that much. If I get no work, I can always find things to do.

I don't want a promotion. It's more effort than it's worth. For the same reason, I won't try to change jobs. Going to interviews and writing up a resume is just too much for me. I will just go to work and avoid trouble. I will move where they move me. I will dedicate the rest of my years in this job trying to risk manage everything. That is, I will imagine every possible way things can go wrong and I will take action to make sure it doesn't happen. That's what everyone else seems to do anyway. There is definitely a risk-averse culture in my workplace.

For about a year now, I’ve been saving up cash because I figure I’d want to buy a house or maybe I’d want to run an online business. However, I’ve found recently that an online business is just hard. I think it’s because I work all full-time and when I’m not working I’m just tired, so it’s difficult. I will keep trying to find a way to make money online, but so far the only thing that has proven itself is investments in ETFs, so this week plowed about $35,000 into ETFs. In particular, I am investing in ETFs that pay very high income. I am going all in on passive income. I see passive income as the only reliable route to freedom, and there is nothing I want more than freedom right now. I have even borrowed money from my margin loan account into order to invest into these ETFs. I am not concerned about borrowing money to invest in ETFs. I figure that I have so much money in my superannuation fund (retirement fund) now that I can afford to carry around debt until I am sixty or whenever I get access to my superannuation. When I do get this superannuation money, it should be over $1 million, which will easily pay the $50k or so worth of margin loan debt I will have.

The bottom line is to keep doing what I’ve always been doing, which is to go to work, to work hard and avoid trouble. I will be thrifty. I have allowed myself to spend my passive income and a little bit of my salary (about 15%), but that is it. It will not be too hard now because I am producing quite a bit of passive income. Over time, as my passive income increases, it will get easier. I really have little to be concerned about. Everything will take care of itself if I follow the system.

If there is anything wrong with me it is that I am too polite, and I will need to be careful I don’t give away my money to others. I must not allow myself to be manipulated. I will need to be strong. I love to talk about investing. It really is my only passion. Of course, talking about money is dangerous.

Anyway, I have a purpose and a system now. I go all in passive income. As time goes by, my passive income rises and my life gets more comfortable. Once it starts getting really comfortable, then after about 2020 I will start to semi-retire, which I suppose will mean I will take longer holidays off from work. I will not be afraid of taking leave with half pay. Maybe by then I will hate my job so much I will just quit. I don’t know. We will see.

Nine-to-Five Workers Are Free-Range Slaves

Man, I hate my job. It really is painful. The main problem is that I am just bored. I also hate the idea of being tied down to something for the rest of my life. I feel like my whole life is being taken away from me. I thought at first maybe I need to get a new job. Maybe I need to do extra study and start applying for another job, but the more I think about it the more I realize that doing this will only push me deeper into the nine-to-five world that I hate. I need to escape. I know for sure now that my dream is to become a digital nomad. I am happy to work but I want to work from my laptop, and I want to be able to work from anywhere where there is internet connection.

The pain I’ve been suffering at work seems to be ramping up. I seem to be getting more work, but for some reason I just feel really unmotivated. People I work with are also just plain annoying, and the fact that I’m stuck with them makes my life even more difficult.

At work today I was thinking about financial ratios. For example, there is the price-earnings ratio, which is the price of, say, a business divide by its earnings. If someone wants to buy this business, they can quickly assess whether the price it is selling for is worth it.

Another ratio or index I thought about was what I call the “freedom index,” which is the ratio of passive or semi-passive income to "active income." I'm not too sure if "active income" is a real term, but it is the opposite of "passive income," that is, you have to work for active income whereas passive income is income you don't have to work for e.g. a savings account pays you interest without you doing any work.

Suppose currently I earn about $10,000 per year in passive income and I earn $75,000 per year from my job. This means the ratio of passive income to active income is 13% The higher the number, the freer you are. The lower the number, the more you are subject to wage slavery.

The more I think about it, the more I realize that we are not free. At least, most of us are not. Many slaves in the past were confined and exploited like today's cows, chicken, and pigs in CAFOs. However, slaves revolted. As a result of this slave rebellion, most of us think we are free when in fact we are merely free-range slaves. We think we are free, but with the mortgage, car payments, and other debt, we have little room to move.

I need to replace my active income with passive income or at least semi-passive income that can be earned on a laptop so that I can become location independent.

I don't know exactly how I will become a digital nomad, but I know I will need to move gradually. I don't think I can just quit my job tomorrow. I am currently doing further study, but I am thinking of just quitting. I have an exam soon. I'll finish that off and rethink. I feel now that studying is really just a waste of time, so after this exam I might just put further study on hold. I will continue to save up and invest, but I will focus on build up my knowledge of ecommerce. I will slowly transition so that I move away from my nine-to-five and towards a location independent lifestyle.

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.

Cheap Houses (~$50,000) in South-East Asia

The Christmas and New Years holiday is coming to an end. I had some minor surgery yesterday and so had permission from the doctor to take today off to recover, but tomorrow I will need to go back to work. I am dissatisfied with my job at the moment. I'll try to fix this problem by finding a new job. I haven't been applying for job for about a year, so getting back into it is difficult, but I am motivated by the desire to leave my old life behind and try something new.

Most people think they need $1 million before they can retire. They base it on the assumption that they would need to earn about $50,000 a year to have a reasonable retirement. In order to generate $50,000 per year from an investment that provides 5% per year, you'd need $1 million. But saving $1 million could take decades. Assuming you earn the average $50,000 per year, and then assuming that after deducting taxes and living costs you can save $30,000, then it will take you 33 years to save up $1 million (assuming, for simplicity, your savings produces no interest). In other words, you need to slave away for 33 years! I have gone through only four years of full-time work and I'm ready to throw in the towel!

There needs to be a better way.

One solution is to retire in South-East Asia. A normal two-story house with three bedrooms in an east-coast city in Australia will cost about $500,000. With aggressive saving, this will take about 15 years to pay. With a mortgage that adds interest charges and other fees, it may take longer, say, 20 to 30 years to pay off your mortgage.

However, according to the YouTube video above, a normal two-story house with three bedrooms near Chiang Mai, Thailand costs around $30,000 to $50,000. That is ten times less! Therefore, instead of working 20 to 30 years before you can afford retirement, you can afford retirement after two or three years of aggressive saving!

According to JC, there may be laws in Thailand or other Asian countries that prevent foreigners from owning real estate. Another option may be, instead of using your savings to buy a house, to put it inside a savings account in Australia (or the US or Europe) and then transfer the interest income to Asia to pay for the rent. This will often work because interest income on savings accounts tend to more or less be the same as as rental yields. Renting may be a safer option because, if you live in Chiang Mai for a while and don't like it, renting provides you with flexibility to move away whereas buying real estate normally comes with massive moving costs. If you have equity in your home, you can convert that into an income stream by renting the house out. This rental income stream, in addition to stream of income from interest on savings, can be combined to fund living costs in Chiang Mai.

What this means is that, for me, I could retire right now, even though I am still in my late twenties. For those who don't have any money, all it takes it two or three years of aggressive savings before you can afford to retire in Asia. There is hope.

Escaping Full-Time Work

Sick and tired of watching advertisements on TV, I now resort to making good use of the broadband plan that I have with my ISP and watching mainly YouTube videos on my television. There are ads on YouTube, but they don't seem to be as offensive as the ads on mainstream Australian TV (e.g. those annoying X-Factor ads where someone sings wells, there is a standing ovation, people start crying, etc).

One of the people on YouTube I watch is George Hemminger. Here is a video of him talking about how he doesn't work full-time because he is unable to.

 

I have a full time job now but always wonder whether I can do it for the rest of my life. I am almost 30 now, and most people retire at about 60, so it's another 30 years of full-time work. I've been reflecting on this topic for a while now and I don't think I have the energy to do it. Luckily for me, I don't have wife, children, mortgage, or even a girlfriend. I barely even have any friends. It's not something I deliberately set out to achieve, but just a by-product of being introverted or shy.

I have no plans to get a big mortgage or a wife or children, and I still work full-time, even though I question whether I want to do it. I suppose it's the fear of no longer earning an income that keeps me working.

My hatred of being a full-time employee relates to lack of freedom. When you are an employee, you have to go to work and do what the boss tells you to do, and it's that constant subordination that wears me out. I think one of these days I should start my own business, but I'll need to save up some money first.

Many people think that in order to start your own business you must have a really good idea. Even though I have no experience in running my own business, I doubt this is true. What is wrong with taking an existing tried-and-tested business model, e.g. starting a milk bar, and doing that? Some people will say that if you don't invent anything, you will compete with many others. For example, if you invent a cure of AIDS, you will have exclusive monopoly rights granted by patent law and you can make huge profits, but if you start a milk bar, you will compete with all the other milk bars out there and make almost nothing. While I agree that monopolization can be highly profitable, I don't agree that just because you start a mainstream business (e.g. a cafe or a milk bar) that you cannot make any money. You will just not make as much money. If there is no money to be made from e.g. opening a cafe or a milk bar, why do cafes and milk bars exist? There must be some profit. Furthermore, even if you are an employee, you are not inventing anything. You go to university just like millions of other people out there and when you leave and apply for jobs or apply for promotions within an organisation, you are competing. You are competing on basic things like communication skills, writing skills, stakeholder management skills, and so forth.

Debt is slavery; capital is freedom

I would like to talk about the importance of investment income, e.g. dividends on shares. In these tough economic times, many stock market investors are starting to realize how important dividends are. When I talk about dividends, I am referring to shares or stocks, but I also value income from other types of investments, e.g. interest from term deposits or bank savings accounts and rental income from real estate.

A bird in hand

Why focus on income? Why not focus on capital gains when investing in shares? Income you receive when you buy shares is a tangible sum of money that you receive from the company, a signal from the company that they are financially secure. Capital gains, on the other hand, is normally out of the hands of company management and is the result of complex external forces. A company can be poorly managed yet still have massive increases in capital gains.

If you invest in shares and get double-digit capital gains every year, just before you retire you will be sitting on a comfortable nest egg, but then the stock market crashes and you lose everything. If you invested in shares that had negligible capital gains but paid out double-digit dividend yields (e.g. some utility and telecommunications stocks pay high dividends) then even if share prices go down, you still would have received regular income for fifty years that went towards improving your standing of living. Income is safer. When a company pays you regular income, it is a signal from them that they are profitable

Freedom

There is also another reason why I believe income investing is important, and that reason is because income investing gives you freedom.

When we look around, we see people working hard to earn income. We see the Aussie battler working 60 hours a week as a garbageman to pay off the mortgage and feed the kids. We see the laborer toiling away in China assembling mobile phones for $100 per month. There are a small number of people who love their jobs, but surveys show that for the vast majority of us, work is painful. Why do we put ourselves through this torture? Why don't we say no? The answer is that most of us are wage slaves. We work because we have to pay off debt. If it is not credit card debt, car payment, or mortgage debt, it is to feed the kids or to feed yourself. When I talk about debt in this blog, I talk about more than credit cards and mortgages. I use the broad definition of debt, which is the "future obligation to pay." That is, having children puts you into debt. If you are born and you need to eat, you are in debt. Because we all need to eat and because we all need shelter, we are all from the moment we are born denied freedom and we become wage slaves.

"The rich rule over the poor, and the borrower is slave to the lender." Proverbs 22:7

Debt is the currency of slaves. If you earn $100 per week and you owe $100 a week, you will always be a slave. But if you earn $100 per week and you owe $99 per week, there is hope for escape. You can invest $1 per week in shares that pay high dividends. You keep working and keep investing and over time your shares will generate $99 per week, which means your shares can pay off your debt, and you are a free man.

With regards to my own life, I am at the stage now where I am still working and investing, hoping to one day generate enough income from my investments so that I can cover the costs of living. This attitude towards life is not easy. The cost of living can change, and income from investments is not always predictable, but nevertheless it is better to attempt to escape from slavery than the be picky about the minor problems associated with living as a free man.