Investment wimp

I am the biggest wimp about finances. I am good in saving money and living on very little, when I have the will and motivation. However, I am terrible in investing.

Ten years ago, I had a job with almost non-existent retirement benefits. In fact, for the first four or five years of working with a PhD-degree and my then-employer, I did not have the right to open a retirement account. 

Later on, to supplement the measly retirement plan, I started my own after-tax investment portfolio with a discount brokerage. I invested in biotech stocks, which after a few years plummeted (imagine a stock going from $165.00/share to a few of cents/share). 

Today, I still have the account, but after losing thousands of dollars on picked by me stocks, I bought a few Vanguard ETFs (e.g., VYM, VNQ, VTI) that should yield some dividends. The invested capital is small; however, if I am suddenly out of job, I would access this account without a penalty fee (unlike the pre-tax retirement account).

In my spare time (think "cooking time"), I perch my laptop on the kitchen counter and listen to financial podcasts with the hope of wising up about investments, while chopping veggies. For the past months, the most frequent lessons have been these from the BiggerPockets (BP) podcasts.

The BP guys are doing their best to educate people like me about real estate. Here is an example: the financial basics when considering a rental property. I even became a member of the BP community. I even tried to connect to my local real estate enthusiasts (...no response from them, though).

I have listened to the podcasts for hours, but I am still paralyzed with fear and indecisiveness since I have very little money saved. Anyway, compared to my failed biotech socks, learning about real estate is not the worst investment of my time.

Other financial/independence podcasts I tune to are these:
Financially Blonde
Radical Personal Finance
Mad Fientist

What do you listen to?


   

Early retirement resources

 

This is where most of my retirement years will be spent!

Here are the links that relate to the post on early retirement and may ease your transition into a life beyond the 9-to-5 life sentence and everyday anxiety:
 

• madFIentist, check out his resources page (by the way, almost all links below came from the YouTube channel of madFIentist; great job, FIentist).

• jlcollinsnh, The Simple Path to Wealth, with its cool manifesto.

• Frugalwoods, read the tidbits of everyday frugal life.

• 1500 Days to Freedom, track their ongoing effort to financial independence.

• Brave New Life (my favorite), read a story that may inspire you.

• Early Retirement Extreme

• The Simple Dollar, with its hodgepodge of articles on various topics on saving, frugality, and investing

• Mr. Money Mustache, already discussed in a previous post.

• Street Smart Finance

• The Millionaire Educator, check out the recommended tech guide.

• FinancialMentor, try all the 80 financial calculators.  

• Afford Anything, women can also write great blogs on finances (thank you for the inspiration, Paula). 

• Read the classics from the guy who started the website Get Rich Slowly. 

• Go Curry Cracker  - an entire encyclopedia on how to navigate through retired life and not pay taxes.

P.S. After compiling the list above, I found a more comprehensive list of sites that will (a) educate you financially, and (b) get you inspired to act.

Money, anxiety, and freedom

Most of our worries and troubles originate from money problems. I have read books and magazines on how to become financially stable/independent. I have also listened to countless financial advisers and gurus on YouTube and TV to find the road to financial freedom. From these wasted hours, I have boiled everything down to this list:

1. Too little or too much money = pathology. Extremely rich and extremely poor people are prone to get into similar troubles (e.g., drugs, self-inflicted diseases, mental problems, crime, etc.). 

2. However, it is also possible for money to equal freedom, except for the obsessed with money people, for whom money equals slavery (there is no a wealth limit that is satisfactory to such people). 

3. The best way to make money is to become an entrepreneur. The perfect case is when your business is also your passion. 

4. You could be financially stable, and even financially independent, as an employee, if your salary is good, and you are prudent about spending and wise about investing. 

5. If you do not know anything about investing, it seems that it is best to invest in stable companies that pay dividends.
 
All other financial advice is maddening, since the “gurus” calculate that you and I will work for 40+ years, and promise that we will achieve a consistent 7% return on our investments from now on! The reality is that very few of us would like to work until age of 65, and the stock market will not bring anything close to a 7% return in the future.
If we go back to the anxiety part in our financial situation, I like Chip Conley’s formula:

        Anxiety = [powerlessness] x [uncertainty]

According to this formula, one can tackle anxiety by acquiring at least a smidgen of power (in this case, by saving like crazy) and eliminating some uncertainty by putting together a series of plans for financial stability (plan A, B, C, etc., since at least in my case, plan A is rarely achievable).
 
How to accomplish this? I found useful leads and inspiration in the blog of Mr. Money Mustache, a guy who retired at age of 30, and now advises hopeful retiree-wannabes on how to accomplish the same. The study of financial independence is in fact a quest for happiness, according to his philosophy, which is briefly summarized in this YouTube talk: Mr. Money Mustache Interview - Early Retirement Made Easy.