What finally worked for me is listening to history audio books/lectures.
It takes my mind off of real life things, and since it's just audio there is no light involved. History is perfect because there aren't many conceptual hurdles to understanding the material that would require really intense focus. I start to drift off after 30 minutes to 1.5 hours very consistently. It's also easy to find new listening material since there's practically an infinite amount of it.
As a bonus, I've learned a lot about history this way.
Something that's never made sense to me about stocks:
Unless you're extremely wealthy, any money you are able to save (outside of retirement money) is probably money you are going to want to use for something to improve your life in the semi-near future. Buying a house or car (or just a better one) for example.
With that assumption in place, under what circumstances does investing in index funds make any sense whatsoever? The entire market crashes on occasion due to herd mentality, and yet even given that level of risk index funds still take many years to appreciate in value significantly. It seems like an absolutely terrible place to put money that isn't specifically intended for retirement or something like a 529 plan.
It's pretty popular in the Financial Independence crowd, where the goal is to get enough money to be able to live on interest alone. It's not for the extremely wealthy, rather the somewhat high-income middle class. You can even make it work with less income if you can manage to cut your expense.
Most people adjusts (ie: increases) their spending when they get additional income, but it doesn't have to be that way. In the end it's a lot about trade-off, like for exemple do you prefer stuff like going out to restaurant, owning a car, etc.
The FI crowd is 90% expense management and 10% investment. It seems like most folks there have a goal to stop working but are willing to do that and live like a pauper the rest of their lives. If that works for them, great, but I'd much rather work at a job I love, make very good money, and enjoy my life, rather than "retire" at 35 and live on $24k/yr in interest for the rest of my life.
I'd love to see a Financial Independence plan around growing [a] business(es) and retiring early but not crazy early (40-55) and living on a substantial middle/upper-middle income for several decades.
I've read some of those web sites and they're insufferable. Buy a house in cash so you have no payments, shop only at Goodwill, collect rain water for drinking, and never, ever get sick, and you, too can retire at 40!!
Sure, there are people in the FI crowd trying get by on $15k a year. Not my cup of tea, but if they're happy that way I say more power to them. But the community is a spectrum -- there's also a fairly large contingent (composed mainly of doctors, engineers and other high-income workers) whose savings at early-retirement time seem to cluster around ~$3M, allowing for retirement spending of $90-100k. That buys a solid lifestyle by almost anyone's standards. Obviously, that's predicated on having a high-earning career and taking saving seriously, but it's totally doable in 10-20 years.
Do-able? Maybe. High-earning is an understatement though. If you want to reach $3M in 20 years, you'd need to save about $100K per year, assuming, say, an annually compounding 4% interest rate across your savings and investments. A lot of people who might consider themselves high-earners don't even make that much in a year, let alone are able to save it.
Even assuming you're a gambler and put all your savings into stocks and get that mythical "steady 7%" return, you need to set aside $75K every year to reach $3M in 20 years.
I'm not claiming to be the world's best saver, but I think I live frugally enough, and after 20 years into a fairly good tech career, my savings is an order of magnitude+ less than that.
I don't think a 7% interest rate is unreasonable. One of the advantages of planning on early retirement means that you can take on a lot more risk with your investments, eg. putting everything into stocks (which isn't really "gambling" -- over long periods they've only ever gone up). If the markets are totally hammered the year you want to retire, no problem -- just keep working a few more years until they recover. And saving $75k a year is also quite reasonable if you have a high income, like a doctor or well-compensated engineer. I’m only a couple years into my career and am supporting my wife and kid, but we’re on track to save a bit more than that this year.
Of course, the lifestyle choices we make aren’t for everyone, and that’s fine. But they’re also not totally crazy. We can save that much still live about as well as the median American, and a lot better than the median human.
> I'd love to see a Financial Independence plan around growing [a] business(es) and retiring early but not crazy early (40-55) and living on a substantial middle/upper-middle income for several decades.
That's roughly my plan. My goal is to achieve financial independence, but my wife and I will continue working even after that. FI just gives us the freedom to do work the way we want.
My current projections put us at retiring roughly when we hit 40.
I just started my own business, which I hope to grow into a indiehacker/lifestyle type business; not a rapid growth startup. Just something I like working at and that earns a reasonable income.
All that said, I'm not sure why you think $24k/yr is a pauper lifestyle. In fact that's roughly our yearly expenses once we achieve "initial FI" * . That's in Southern California, and we hardly live like paupers.
By the way, I never got involved in the FI "crowd". I read through /r/personalfinance in the past, and check it occasionally. It's definitely very heavily expense management. Makes sense, since most people are really bad at expense management. And there is definitely not a lot of discussion about where to draw the line between cutting expenses and having fun. I can imagine that FI specific communities would be much worse in that regard.
But I think all of that is driven by the fact that these communities are composed of, well, everybody. And most everybody can only dream of maxing their IRA. For people in the HN crowd financial management is quite a bit different. We need advice on what to do after we max our 401k! (HINT: Start your own company and do a solo 401k). I think a lot of us are also very privileged already in what work we do. If you're a programmer, you can generally find a programming job you life that pays very well. For most everybody else, finding a job you life is either rare, or would mean taking a massive pay-cut. So while most people dream of FI being an escape from work, I think a lot of the HN crowd is like me; dreaming of FI as just ... freedom. Freedom to take a year off and work on a startup. Freedom to work for a local company for $150k/yr instead of working for Google to earn that fat $300k/yr.
EDIT: * Forgot to clarify that "Initial FI", for us, occurs after our house is paid off so $24k/yr is without a mortage. I editted out long-winded sections of my original comment and forgot to clarify :P
Yeah, same here, mortgage is huge in these expensive areas. But having the house paid off is part of our FI plan. That's probably not true of the more hardcore FI crowd. They believe, rightly so, that stocks are better investments than a house and that a mortgage is basically just free investment money. I don't disagree, but I want to own a home ... just cause. So our investment portfolio is definitely real estate heavy :P I sort of balance it out by having less in bonds and more in stocks compared to the Boglehead's advised ratios (I don't see the value in having bonds for an FI plan anyway, but perhaps I'm just misunderstanding something?).
EDIT: See my edit above; I realized I forgot to clarify that my $24k/yr figure was excluding mortgage.
Borrowing on your home to invest is just a terrible idea. You may see higher returns on the aggregate in the market but doing so is a good way to lose your home. Too much risk and like you, I think the small spread (and it is very small) between your mortgage and market returns doesn't even cover the risk premium of the potential to lose your home.
The idea isn't to borrowing against your home to invest.
Rather, the idea is that after you have your mortgage, you put your extra money towards your stock/bond investments rather than putting extra money into the mortgage to pay it off early.
This is because the interest on your mortgage is quite low compared to the long-term stock market returns (7-8% after taxes/inflation). So your dollars are more valuable there than spent paying off your mortgage.
In other words, if you take two people, each buys the same home, but one pours all their extra money into their home and the other pours it into the stock market, in 20-30 years the one who poured all the extra money into the stock market would have a much higher net worth.
I don't think real estate/paying into your mortgage is risk-free. I'd say it's about as risky as long term investments into the stock market.
Over all of recorded history, the stock market has gone up 10%/year on average (not accounting for taxes/inflation).
The common rebuttal to that is that past performance is not an indicator of future performance.
Sure, but then you have to apply the same logic to the supposedly "risk-free" real estate. I think it's just as likely that your house becomes worthless as the stock market no longer giving 10% returns.
My more general argument is that for all intents and purposes the stock market is a gauge of the overall economy. If suddenly the stock market stopped returning 10%/yr the economy as a whole would be in serious trouble. No investments, real estate or otherwise, would be safe. Your stocks would be as worthless as money stashed under a mattress.
That's my logic, at least. Of course, as I said, I don't follow that logic personally. Not that I don't agree with it, just that I'm willing to sacrifice financially in exchange for the satisfaction of owning our home.
I'm afraid your logic is a bit flawed here. The home value increase or decrease does not factor in when considering your mortgage. Your mortgage continues to exist no matter where your home value goes.
You have to pay that same mortgage even if the market tanks and your home becomes worthless. Even in the case of just "letting it go" the bank will take your worthless house and will still come after you for what remains on the mortgage.
That is why putting money into your mortgage is a "risk free" investment at 4% (or whatever your rate is).
If you borrow against your home to invest you don't lose your home if the investments tank, you only lose your home if you can't make the loan payments.
Yes, but lets hope your income is not based on investment success and that your job is still safe even in a market crash. Of course, if you have a steady, locked in income from a very safe pension or trust fund, then go ahead and borrow on your home. You don't have to worry about losing it in that case.
But you only have to go back to 2008-2009 to see how well that worked out for a very large swatch of the American populous.
Where are you "multiple hours" away from work (presumably in a place that doesn't have salaries close to what you make now) and still paying $2k/mo+ in housing?
That's one way of doing it, but there's no one-size-fit-all solution. Some do what you said and just stop spending anything. Not everyone retires either, it's just that they do work they like because they can afford it rather than having to.
It's really a personal experience, I know myself I don't feel like my life is missing anything even if I'm putting money aside to my future. I'm still traveling at least once a year, and I eat pretty good food all the time. At the same time, I don't have a car and rent one whenever I need one.
What confuses me most is how people expect to pay for healthcare costs, which keeps going up. I'm an independent contractor and it costs me 1k a month. More than double with family.
Personally, if I was dependent on my assets for the income I use to eat, I wouldn't want those assets to be ones that can wildly swing in value.
If I had enough other investments that the stocks were just icing on the cake that wouldn't be an issue, but that kind of goes back to my point of being extremely wealthy and having truly extra money you can park in risky stuff.
I'm not sure if my original post just wasn't clear enough or something. Retirement is great, my point was about non-retirement money.
Building capital for a business is exactly the kind of medium-term goal I was referring to, where you wouldn't want it getting spoiled by a market crash at the wrong time.
Numbers. It's all about how you feel about that risk of crashing vs the potential payout.
Say I'm squirreling away $5k a year for a new car in 4 years. Every year I put in another $5k, so by the end, I've put in $25k.
If I put that in a typical savings account, I earn 0.1% and come out $50 ahead. Effectively 0, or losing value once you throw in inflation.
Go with stocks, at a 5% return, I end up with over $27k, and at 8% I have over $29k. It's also true that I could lose value, and that's the gamble.
So it's a matter of your comfort level, obviously, and if you can't afford to lose the money, don't invest. But in many many cases, the reward outweighs the risk.
I view it that I'm much, much more likely to get a return > 0.1% than experience a loss over 5 years, and I'm willing to accept the risk.
The issue is that even after dramatic crashes my impression is that stocks generally beat bonds long term. That means that if one person put all theirs in stocks and the other in bonds the one in stocks is likely going to have more money later, even if the market crashed a few times in between.
I agree with your point entirely, but my point is that most people don't just sock money away for decades if it isn't specifically retirement money. Usually it is saved for some medium-term goal, which stocks could potentially spoil. Aside from that risk, why even deal with the psychological effect of that uncertainty for a paltry gain?
Most people can't come up with $2k in case of an emergency. Most people are living paycheck to paycheck. Don't be most people.
There is a compromise between living for the moment and living for the future. If you are saving for a house then you can move those investments to a less risky investment option but still a better return than bonds or interest. Keep your medium-term investments separate from your retirement account. I have short term, long-term non retirement, and long-term retirement accounts.
The gain isn't paltry. The difference between a 2% rate of return and a 5% rate of return for $5k initial + $50/month over 30 years is around $22k. If you do $200/month it's $59k.
I have about two years of experience with both Angular 1 and React. What was truly astounding to me was how while Angular required months of continually poring docs and Stack Overflow threads for every new thing I wanted to do, React took all of a week or two to get pretty comfortable with, and after that minor investment of time I was rewarded with dramatically increased development speed.
I will never go back to using a framework with an approach like Angular. Trying to abstract away the browser environment and have developers learn a whole new set of APIs with nearly the same level of complexity is just a fundamentally bad idea.
JSX doesn't do any abstraction. Unless you're using React Native, you're writing HTML, just that JSX turns it into `React.createElement(...)` calls.
The VDOM is kind of an abstraction, as React Native can use the same reconciler as React, but the React (web) VDOM is just a tree of HTML DOM nodes that gets diffed against the component rerender output and the changes are applied to the DOM.
Ummm.. kabes is right. React is an even bigger abstraction on the browser than angular 1 is. Its just that with React the abstractions are mostly opaque - and with Angular the abstractions are not so opaque ( and maybe sometimes leaky! ).
I think you got that backwards. React's abstractions are transparent, as in the developer doesn't need to "see" them or be aware of them. Your existing web dev knowledge largely applies.
> I think you got that backwards. React's abstractions are transparent, as in the developer doesn't need to "see" them or be aware of them.
He doesn't have it backwards.
He means they're "opaque" abstractions, in the sense that they're the opposite of a "Leaky Abstraction"[0]. A leaky abstraction is one wherein the abstractions below it "leak" up and you have to keep multiple abstractions in your head at once. This happens more with Angular than React.
I see what you mean by calling it a transparent abstraction though, since React's abstractions get out of your way and let you directly think about the lower level. This doesn't really fit with the Leaky abstraction analogy though, but it's a great point.
Only a year or so into my career I started getting pain in my upper right back from using a mouse. I tried various adjustments to my desk/chair setup but eventually it got to the point where I couldn't use the mouse with my right arm anymore without unbearable pain and it would linger when I wasn't working.
I was able to solve the problem completely by starting to use a trackball with my left arm. I still use a mouse with the right when precision is necessary but 90% of the time I use the left and trackball.
During high school I became aware of community colleges and it actually occurred to me that all the homework and stress involved with maintaining a high GPA simply wasn't worth it. I took easy electives and barely passed everything else.
The solution is to use a boilerplate/generator. I've used one for every JS project I've started in the past two years.
The main benefit is that you get something that already has the whole development/test/build workflow set up, with your framework of choice. Then you can tweak things as necessary.
Since all of the processes should be able to be run through a small set of CLI commands, there isn't much mental overhead switching between projects.
As a counter-example, before I knew about Aspergers/high-functioning autism I was always frustrated and confused about my social difficulties. I forced myself to join social groups and do public speaking in an attempt to improve, but nothing made any difference at all.
I learned about Aspergers in my early 20s and very quickly a lot of my problems made sense. I stopped worrying about the social difficulties and started focusing on building skills where the condition would not hinder me. This is actually why I initially looked into computer programming.
I briefly contracted there and it was obvious to me that this would happen.
The platform they built is really amazing, but there was no sense of how they could start making money in any reasonable period of time considering their costs. I'm sure everyone who was working there will be fine as they had some tremendously talented engineers.
My biggest issue with it is that they made a great demo yet they didn't really have a useful framework. They kept things hush hush for too long , with a lot of teasing and by the time they released something, people moved on.
Compare to what ionic did, and i'm not a big fan of it, but the ionic team demonstrated the usefulness of their framework quite fast with concrete apps.
As for making money obviously, you make money with consulting, cloud services,tools for professionals and co, but you need a community at first place. Famo.us never had a one.
That said, they were in fact making an effort to increase adoption with initiatives like Famous University, famous-angular and various project demos and usable widgets.
The answer to why they struggled to increase adoption so much isn't that clear to me, but what I do know is that they had a lavish office in an expensive part of SF, free food and a relatively large, well-paid staff.
I feel like a tremendous factor behind the numbers for middle-tier schools is simple geography. For example, I make more than double what many of my college friends who I consider at least equally as smart and motivated as I make, and it's pretty clear that the only reason is I chose to move to California whereas they stayed in Nevada.
Colleges in sparsely populated areas will probably always have dramatically lower numbers given the tendency of graduates to stay close to home, regardless of the actual quality of education. The salary numbers should take the region of a former student's job into account in some way.
Does your comparison with your friends take location into account? E.g. if you're in SF and they're in Reno, then expatistan[0] claims your costs are 57% higher.
Cost of living is hard to account for; it's definitely not just some percentage multiplier. For instance, my cost of living went up by about $5K/year to move to Manhattan (rent went up by a lot, which was partially offset by no longer having transportation costs). But my salary went up by over $100K. Yet a cost of living calculator says that Manhattan is significantly more expensive, and that an, e.g., $200K salary is only "worth" $114K in low-cost areas like Reno, which practically speaking, isn't true for me at all. I'm saving more money per year than what my post-tax salary in Reno would be in its entirety, which itself is an unlikely situation because the Big 4 don't have offices in Reno and I suspect there aren't a huge number of well-compensated developer jobs there, even at the $160K or so level that would yield the same savings left over as a $200K job in NYC.
You're always better off making a given salary in a higher CoL area than the equivalent salary in a lower CoL area, because not everything scales linearly with CoL (e.g. ordering goods off Amazon, or going on vacations), and your higher salary thus gets you more purchasing power on lots of goods and services.
>even at the $160K or so level that would yield the same savings left over as a $200K job in NYC.
200k in NYC has an estimated 82.7K tax burden and 160k in Reno has an estimated 50.3k tax burden.[1] That means that you only have about 18k more in NYC. So something is messed up for your calculation unless you are living on <=18k in NYC.
Indeed, not to mention things like sales tax! I recently moved from Canada to the UK, and the VAT being 20% compared to 13% in Ontario is a little jarring sometimes.
I lived quite far from school in my middle and high school days. It meant an hour long bus ride both ways (plus a 1.5 mile walk from the bus stop), and having to wake at 5AM to get ready.
The only way I had any free time was staying up late, which occurred every single school night. I got horrendous grades because focusing was impossible.
I actually blame this single circumstance for a large share of my life problems. It forced me to work my way up from a crappy community college after high school, and everyone I encountered just sort of assumed I was mediocre.
It takes my mind off of real life things, and since it's just audio there is no light involved. History is perfect because there aren't many conceptual hurdles to understanding the material that would require really intense focus. I start to drift off after 30 minutes to 1.5 hours very consistently. It's also easy to find new listening material since there's practically an infinite amount of it.
As a bonus, I've learned a lot about history this way.