Does being full-time investors help you getting better return?

[james22]

4 hours ago, SharperDingaan said:

There's a lot of joint travel in the go-go years... then a temporary bump when grandma goes cruising/coaching with 'the girls' after grandpa croaks out.  Lower travel costs the older you get.

 

 

Most retirement research assumes that retirees spending from a portfolio will seek to maintain a "real" inflation-adjusted standard of living throughout their retirement, just as they implicitly would have if their portfolio had been paid out as a steady pension with an annual cost-of-living adjustment.

 

However, despite the simplicity of this assumption, retirement research has increasingly shown that retirees actually experience a decline in real spending through their retirement, as the early "go-go" years transition to less active "slow-go" years and then finally wind down in a series of "no-go" years with little discretionary spending.

 

https://www.kitces.com/blog/estimating-changes-in-retirement-expenditures-and-the-retirement-spending-smile/

[SharperDingaan]

17 hours ago, 73 Reds said:

So I'd ask whether the issue of Canadians going elsewhere, if true, is a bit more complicated than just cost.

 

It's very much a generational thing, and which immigrant generation you are; once it becomes your generations 'norm', nobody really questions the why any more. However, as the various generations move through life; norms and approaches change.  

 

For many newer retirees, it's a lot logistically/financially smarter to simply AirBnB vs own a cottage/home in a 2nd country. It's also a lot smarter to spend time with cousins/family who remained in the home country, refreshing family links that grand-kids might use later. As you also aren't tied to any one spot ... you can also travel around a bit. 

 

The approach radically changes things. Fly vs drive to the destination and the game changers are flight times/lay-over location, not the cost (assumes extended time in XYZ at living costs that are a lot lower than in Florida). Sure, not everyone can still fly ... but if that's you; you also aren't stuck with the operating costs of that 2nd cottage/home in Florida that you aren't using.

 

Live in Toronto ? fly/cruise to Argentina/Chile/South Africa/Australia/NZ in November, stay there for 5 months and come home; enjoy endless summer while keeping your Canadian health care. Similarly fly/cruise to an India/Asia for 5 months and enjoy time with the extended family of your generation. Live in Vancouver? use Lima (Peru) as your gateway to S America, and LA as your gateway to Sydney. Different strokes.

 

Nothing wrong with Florida, but in today's world there are many other options, and many that are better. Florida tourism isn't likely to suffer for a while, but all good things eventually come to an end.

 

SD  

[73 Reds]

40 minutes ago, SharperDingaan said:

 

It's very much a generational thing, and which immigrant generation you are; once it becomes your generations 'norm', nobody really questions the why any more. However, as the various generations move through life; norms and approaches change.  

 

For many newer retirees, it's a lot logistically/financially smarter to simply AirBnB vs own a cottage/home in a 2nd country. It's also a lot smarter to spend time with cousins/family who remained in the home country, refreshing family links that grand-kids might use later. As you also aren't tied to any one spot ... you can also travel around a bit. 

 

The approach radically changes things. Fly vs drive to the destination and the game changers are flight times/lay-over location, not the cost (assumes extended time in XYZ at living costs that are a lot lower than in Florida). Sure, not everyone can still fly ... but if that's you; you also aren't stuck with the operating costs of that 2nd cottage/home in Florida that you aren't using.

 

Live in Toronto ? fly/cruise to Argentina/Chile/South Africa/Australia/NZ in November, stay there for 5 months and come home; enjoy endless summer while keeping your Canadian health care. Similarly fly/cruise to an India/Asia for 5 months and enjoy time with the extended family of your generation. Live in Vancouver? use Lima (Peru) as your gateway to S America, and LA as your gateway to Sydney. Different strokes.

 

Nothing wrong with Florida, but in today's world there are many other options, and many that are better. Florida tourism isn't likely to suffer for a while, but all good things eventually come to an end.

 

SD  

Indeed, there are many more world-wide options available today for folks everywhere, which perhaps explains why there are so many South Americans/Asians/Europeans who spend time and buy residences in Florida.

[Junior R]

7 hours ago, SharperDingaan said:

 

It's very much a generational thing, and which immigrant generation you are; once it becomes your generations 'norm', nobody really questions the why any more. However, as the various generations move through life; norms and approaches change.  

 

For many newer retirees, it's a lot logistically/financially smarter to simply AirBnB vs own a cottage/home in a 2nd country. It's also a lot smarter to spend time with cousins/family who remained in the home country, refreshing family links that grand-kids might use later. As you also aren't tied to any one spot ... you can also travel around a bit. 

 

The approach radically changes things. Fly vs drive to the destination and the game changers are flight times/lay-over location, not the cost (assumes extended time in XYZ at living costs that are a lot lower than in Florida). Sure, not everyone can still fly ... but if that's you; you also aren't stuck with the operating costs of that 2nd cottage/home in Florida that you aren't using.

 

Live in Toronto ? fly/cruise to Argentina/Chile/South Africa/Australia/NZ in November, stay there for 5 months and come home; enjoy endless summer while keeping your Canadian health care. Similarly fly/cruise to an India/Asia for 5 months and enjoy time with the extended family of your generation. Live in Vancouver? use Lima (Peru) as your gateway to S America, and LA as your gateway to Sydney. Different strokes.

 

Nothing wrong with Florida, but in today's world there are many other options, and many that are better. Florida tourism isn't likely to suffer for a while, but all good things eventually come to an end.

 

SD  

Asia you could pretty much find something for  $500 to $1200 cad a month....better fruits and vegetables 

 

 

Sydney and nz is nice but rent is higer 

[UK]

On 9/6/2024 at 8:12 PM, MMM20 said:

I'm in my mid-30s and "retired" 5 years ago, giving up a $300-500K/year job that wasn't worth it b/c the opportunity cost was too high. I've had health scares so I’m probably more aware of my own mortality than the average mid-30s guy. That was part of it. I also didn't fit in in the corporate world so I knew pretty early on that I was prob on the ~8-10 year plan. I'm convinced I wouldn't have had the ability or conviction to identify and buy/hold a couple of big winners and compound at ~25-30% (with a lot of luck!) since then if I still had that job. But I have little kids and spend most of my time with them so I guess that's not "full time investing" anyway. It can be hard but a better kind of hard. It works for me. Find what works for you.

 

Thanks for sharing!

[writser]

I also had quite a good job but quit when I was 30 and am 'retired' for about a decade since. Some random thoughts:

 

1. Investing full-time is lonely. You have to be 10.000% sure you will not miss working with colleagues and can handle the stress of pissing away a ton of money sitting alone behind your computer all day feeling like an idiot. I would actually say you kind of have to enjoy the latter  .  If not, well, you might make money but you will be miserable.

 

2. It really helps if you have some (preferably real life) friends and connections who are in the same boat so you can vent your frustrations, share some ideas, have a lunch every now and then when everybody else is working. Again, don't end up lonely and miserable.

 

3. If you have a relationship and/or kids: make sure your partner is on board, _really_ understands what you are doing. Discuss beforehand how you manage household costs and chores, raising kids, when you are going to pull the plug, what your expectations are, etc. Doing it alone is probably easier (going broke sucks a lot harder if you have a family, moving to Thailand is a lot easier if you're single) but there's a much higher risk of becoming a miserable loner.

 

4. I'd strongly advise you to have some hobbies (and especially sports or physical stuff) that keep you grounded in the real world, allow you to meet some new people and stay mentally healthy. Physical suffering helps to cope with mental suffering  .

 

5. The market is highly efficient,  don't expect to gain 10% alpha just by spending some extra time. Barely beating the market is already quite the accomplishment. For your retirement plan assume you don't beat the market (and certainly don't assume you will make 15% p.a. for the rest of your life).

 

6. Following up on that, if you have stashed away just enough money for a retirement (I guess $500k - $5m, depending on where and how you live)  then yes, your returns will probably be a bit better when you quit your job but financially you are almost certainly better off working. Don't underestimate the value of an increasing fixed income stream, both financially and psychologically. Withdrawing your living costs from your investment portfolio sucks.

 

7. That said, yes, your returns should be better when you spend more time. Apart from becoming a better investor there are also pockets of the market where you can basically convert extra time into money, i.e. providing liquidity in illiquid stocks, quickly interpreting news in pre- and post-market, certain special situations, etc.

 

8. Keep detailed track of your results and (even more importantly) your thought process and the valuation of the things in your portfolio. Write stuff down for yourself, on forums, on Twitter, or on a blog. That way you keep yourself accountable, you allow others to spot mistakes and when things go south or unexpected developments occur you are "anchored" much better and you will know what to do and it will make it easier to do the right thing. I firmly believe in: "you can't borrow confidence".

 

That was a lot of rambling. To conclude: my main advice would be to think "will this make me happier" rather than "will this make me more money". And if that's a question you have any doubts about then the answer is probably that it will not make you happier.

 

It’s not about the returns, it’s about how you enjoy spending your time.

Edited September 8 by writser

[UK]

41 minutes ago, writser said:

I also had quite a good job but quit when I was 30 and am 'retired' for about a decade since. Some random thoughts:

 

1. Investing full-time is lonely. You have to be 10.000% sure you will not miss working with colleagues and can handle the stress of pissing away a ton of money sitting alone behind your computer all day feeling like an idiot. I would actually say you kind of have to enjoy the latter  .  If not, well, you might make money but you will be miserable.

 

2. It really helps if you have some (preferably real life) friends and connections who are in the same boat so you can vent your frustrations, share some ideas, have a lunch every now and then when everybody else is working. Again, don't end up lonely and miserable.

 

3. If you have a relationship and/or kids: make sure your partner is on board, _really_ understands what you are doing. Discuss beforehand how you manage household costs and chores, raising kids, when you are going to pull the plug, what your expectations are, etc. Doing it alone is probably easier (going broke sucks a lot harder if you have a family, moving to Thailand is a lot easier if you're single) but there's a much higher risk of becoming a miserable loner.

 

4. I'd strongly advise you to have some hobbies (and especially sports or physical stuff) that keep you grounded in the real world, allow you to meet some new people and stay mentally healthy. Physical suffering helps to cope with mental suffering  .

 

5. The market is highly efficient,  don't expect to gain 10% alpha just by spending some extra time. Barely beating the market is already quite the accomplishment. For your retirement plan assume you don't beat the market (and certainly don't assume you will make 15% p.a. for the rest of your life).

 

6. Following up on that, if you have stashed away just enough money for a retirement (I guess $500k - $5m, depending on where you live)  then yes, your returns will probably be a bit better when you quit your job but financially you are almost certainly better off working. Don't underestimate the value of an increasing fixed income stream, both financially and psychologically. Withdrawing your living costs from your investment portfolio sucks. Adding alpha is very difficult.

 

7. That said, yes, your returns should be better when you spend more time. Apart from becoming a better investor there are also pockets of the market where you can basically convert extra time into money, i.e. providing liquidity in illiquid stocks, quickly interpreting news in pre- and post-market, certain special situations, etc.

 

8. Keep detailed track of your results and (even more importantly) your thought process and the valuation of the things in your portfolio. Write stuff down for yourself, on forums, on Twitter, or on a blog. That way you keep yourself accountable, you allow others to spot mistakes and when things go south or unexpected developments occur you are "anchored" much better and you will know what to do and it will make it easier to do the right thing. I firmly believe in: "you can't borrow confidence".

 

That was a lot of rambling. To conclude: my main advice would be to think "will this make me happier" rather than "will this make me more money". And if that's a question you have any doubts about then the answer is probably that it will not make you happier.

 

It’s not about the returns, it’s about how you enjoy spending your time.

 

Very good post! Nothing to add:)

[Seoshin]

6 hours ago, writser said:

I also had quite a good job but quit when I was 30 and am 'retired' for about a decade since. Some random thoughts:

 

1. Investing full-time is lonely. You have to be 10.000% sure you will not miss working with colleagues and can handle the stress of pissing away a ton of money sitting alone behind your computer all day feeling like an idiot. I would actually say you kind of have to enjoy the latter  .  If not, well, you might make money but you will be miserable.

 

2. It really helps if you have some (preferably real life) friends and connections who are in the same boat so you can vent your frustrations, share some ideas, have a lunch every now and then when everybody else is working. Again, don't end up lonely and miserable.

 

3. If you have a relationship and/or kids: make sure your partner is on board, _really_ understands what you are doing. Discuss beforehand how you manage household costs and chores, raising kids, when you are going to pull the plug, what your expectations are, etc. Doing it alone is probably easier (going broke sucks a lot harder if you have a family, moving to Thailand is a lot easier if you're single) but there's a much higher risk of becoming a miserable loner.

 

4. I'd strongly advise you to have some hobbies (and especially sports or physical stuff) that keep you grounded in the real world, allow you to meet some new people and stay mentally healthy. Physical suffering helps to cope with mental suffering  .

 

5. The market is highly efficient,  don't expect to gain 10% alpha just by spending some extra time. Barely beating the market is already quite the accomplishment. For your retirement plan assume you don't beat the market (and certainly don't assume you will make 15% p.a. for the rest of your life).

 

6. Following up on that, if you have stashed away just enough money for a retirement (I guess $500k - $5m, depending on where and how you live)  then yes, your returns will probably be a bit better when you quit your job but financially you are almost certainly better off working. Don't underestimate the value of an increasing fixed income stream, both financially and psychologically. Withdrawing your living costs from your investment portfolio sucks.

 

7. That said, yes, your returns should be better when you spend more time. Apart from becoming a better investor there are also pockets of the market where you can basically convert extra time into money, i.e. providing liquidity in illiquid stocks, quickly interpreting news in pre- and post-market, certain special situations, etc.

 

8. Keep detailed track of your results and (even more importantly) your thought process and the valuation of the things in your portfolio. Write stuff down for yourself, on forums, on Twitter, or on a blog. That way you keep yourself accountable, you allow others to spot mistakes and when things go south or unexpected developments occur you are "anchored" much better and you will know what to do and it will make it easier to do the right thing. I firmly believe in: "you can't borrow confidence".

 

That was a lot of rambling. To conclude: my main advice would be to think "will this make me happier" rather than "will this make me more money". And if that's a question you have any doubts about then the answer is probably that it will not make you happier.

 

It’s not about the returns, it’s about how you enjoy spending your time.

This is lovely and a good advice for me entering my 30s soon.

[pricingpower]

On 9/8/2024 at 6:27 AM, writser said:

1. Investing full-time is lonely. You have to be 10.000% sure you will not miss working with colleagues and can handle the stress of pissing away a ton of money sitting alone behind your computer all day feeling like an idiot. I would actually say you kind of have to enjoy the latter  .  If not, well, you might make money but you will be miserable.

After about 5y in a similar situation I switched up to working out of a coworking space while kids are at school, was kind of surprised at how nice a change it was to be around other people even if not interacting much.  

[linus_md]

On 9/8/2024 at 12:27 PM, writser said:

5. The market is highly efficient,  don't expect to gain 10% alpha just by spending some extra time. Barely beating the market is already quite the accomplishment. For your retirement plan assume you don't beat the market (and certainly don't assume you will make 15% p.a. for the rest of your life)

I think this is a good point. It would be interesting to consider the reverse. Instead of becoming a full-time investor, becoming a no-time investor and sticking with an index. 

 

But depending on the portfolio size even a small alpha could mean a good hourly salary.

[Munger_Disciple]

On 9/8/2024 at 3:27 AM, writser said:

I also had quite a good job but quit when I was 30 and am 'retired' for about a decade since. Some random thoughts:

 

1. Investing full-time is lonely. You have to be 10.000% sure you will not miss working with colleagues and can handle the stress of pissing away a ton of money sitting alone behind your computer all day feeling like an idiot. I would actually say you kind of have to enjoy the latter  .  If not, well, you might make money but you will be miserable.

 

2. It really helps if you have some (preferably real life) friends and connections who are in the same boat so you can vent your frustrations, share some ideas, have a lunch every now and then when everybody else is working. Again, don't end up lonely and miserable.

 

3. If you have a relationship and/or kids: make sure your partner is on board, _really_ understands what you are doing. Discuss beforehand how you manage household costs and chores, raising kids, when you are going to pull the plug, what your expectations are, etc. Doing it alone is probably easier (going broke sucks a lot harder if you have a family, moving to Thailand is a lot easier if you're single) but there's a much higher risk of becoming a miserable loner.

 

4. I'd strongly advise you to have some hobbies (and especially sports or physical stuff) that keep you grounded in the real world, allow you to meet some new people and stay mentally healthy. Physical suffering helps to cope with mental suffering  .

 

5. The market is highly efficient,  don't expect to gain 10% alpha just by spending some extra time. Barely beating the market is already quite the accomplishment. For your retirement plan assume you don't beat the market (and certainly don't assume you will make 15% p.a. for the rest of your life).

 

6. Following up on that, if you have stashed away just enough money for a retirement (I guess $500k - $5m, depending on where and how you live)  then yes, your returns will probably be a bit better when you quit your job but financially you are almost certainly better off working. Don't underestimate the value of an increasing fixed income stream, both financially and psychologically. Withdrawing your living costs from your investment portfolio sucks.

 

7. That said, yes, your returns should be better when you spend more time. Apart from becoming a better investor there are also pockets of the market where you can basically convert extra time into money, i.e. providing liquidity in illiquid stocks, quickly interpreting news in pre- and post-market, certain special situations, etc.

 

8. Keep detailed track of your results and (even more importantly) your thought process and the valuation of the things in your portfolio. Write stuff down for yourself, on forums, on Twitter, or on a blog. That way you keep yourself accountable, you allow others to spot mistakes and when things go south or unexpected developments occur you are "anchored" much better and you will know what to do and it will make it easier to do the right thing. I firmly believe in: "you can't borrow confidence".

 

That was a lot of rambling. To conclude: my main advice would be to think "will this make me happier" rather than "will this make me more money". And if that's a question you have any doubts about then the answer is probably that it will not make you happier.

 

It’s not about the returns, it’s about how you enjoy spending your time.

 

Excellent post! Thanks for sharing your experience.

[Charlie]

On 9/8/2024 at 12:27 PM, writser said:

It’s not about the returns, it’s about how you enjoy spending your time.

 

+1

 

I would do the 20 punch card model from Buffett and in the other time you do 

what you enjoy most in life. Live life to the fullest. 

[villainx]

I wish I could be a full time investor but don't have enough money to do so.

[rkbabang]

On 9/5/2024 at 10:21 PM, Spekulatius said:

It seems to me that if you retire early, one of the most logical things to do is to move to a low tax lower cost state. There are a lot of states where you can own a home and pay $3K in taxes and pay less than 5% income taxes or even zero which goes a long way to reduce your cash outlays without lowering your standard of living.

If anyone follows this advice, which is logical, please don’t continue to vote for the exact same policies and types of politicians which made the state you are fleeing from a high tax state, because that is exactly what most people do and it is anything but logical.