The other day I re-read one of my favorite books “Zen And The Art Of Motorcycle Maintenance”.
It’s a deep book about living more in the present. To slow down. To be more “here”.
I just want to start with a quote from the book that still stands out.
It’s about two climbers that experience their climb in two totally different ways.
“To the untrained eye ego-climbing and selfless climbing may appear identical. Both kinds of climbers place one foot in front of the other. Both breathe in and out at the same rate. Both stop when tired. Both go forward when rested. But what a difference!
The ego-climber is like an instrument that’s out of adjustment. He puts his foot down an instant too soon or too late. He’s likely to miss a beautiful passage of sunlight through the trees. He goes on when the sloppiness of his step shows he’s tired. He rests at odd times.
He looks up the trail trying to see what’s ahead even when he knows what’s ahead because he just looked a second before. He goes too fast or too slow for the conditions and when he talks his talk is forever about somewhere else, something else. He’s here but he’s not here. He rejects the here, he’s unhappy with it, wants to be farther up the trail but when he gets there will be just as unhappy because then *it* will be “here”.
What he’s looking for, what he wants, is all around him, but he doesn’t want that because it *is* all around him. Every step’s an effort, both physically and spiritually, because he imagines his goal to be external and distant.”
The quote reminded me of how I live my own life and how often I haste forward, not stopping to enjoy where I already am.
My own journey to financial independence sometimes feels like a sprint.
Sometimes I ask myself why I’m checking my stock account every month. I mean, if I’m never going to sell my stocks, then why am I checking into them so often? What do I expect to see?
I know the stock market goes up in the long run. Then why don’t I trust the process?
Checking into my stock account to often is a way to trick myself into believeing I got control.
But remember this: the stock market will behave in the exact same way if you log into your account every day, every month or once a year.
A positive consequense of checking your account less often is that you reduce the probability of seeing “red” numbers.
A stock that has an expected ROI of 15 % with a 10 % volatility per year, has a 93 % probability success rate in any given year.— Route 2 FI 📈 (@Route2FI) July 24, 2019
The success rate is 54 % on any given day.
If you know you're not selling in the next year, then why the heck are you checking your stocks daily?
From the tweet above you can see the probability rate in the table below. You significantly increase your probability of seeing positive green numbers in your portfolio by not checking your stocks so often.
Why is this so important? Because science has shown that the more often you check into your stocks, the more likely you are to change your intial investment strategy based upon how your portfolio performs.
Humans are not robots. To some level the numbers in our portfolio affects us.
You’re not constantly checking how much your house/apartment is worth, so why would you behave any different with stocks?
I’m going to end this discussion here by setting a new goal for myself:
-In 2020 I’m only allowed to check my stock account every quarter. In other words only 4 times/year.
What Will Change When I’m Financial Independent?
In the last post I stated that I’ll be financial independent in 2 years and 8 months.
At that time I expect my stock portfolio to be worth $500,000. Which means I could safely withdraw aprox. $1,667 using the 4%-rule or $2,084 using the 5%-rule.
But as you know I won’t stop working completely. What I want to do is to change working forms. Lately I’ve been thinking on starting my own one man consulting firm.
I can still work in the engineering field, but I choose when and where to work.
To me this will be ultimate freedom. Why?
-I will still use my brain solving interesting tasks
-I can work part time
-I can work from anywhere I like
-I am my own boss
-Take vacation whenever I like
My plan is to not withdraw any of my funds, because I still want compound interest to work fully. You may ask, why don’t you just switch to working for yourself today?
Because I’m scared of taking big risks. Starting your own consulting firm involves a huge risk with potential upsides/downsides.
I like the thought of being financial secure before I leap into the consulting world on my own.
Zen And The Art Of Enjoying Your Journey To Financial Independence
Back to the intro. Do you ever feel like you’re here, but not quite “here”?
You’re always looking forward to the weekends, to the vacations, to christmas to the day your financial independent.
You’re looking forward to the future. When you’re on a hiking trip you want to reach the top as fast as possible. To see what’s there. But when you’re at the top you don’t stop and enjoy it fully.
Your mind has already started to think about the next goal. The next top. The next high.
This is similar to financial independence. You reach milestone after milestone.
$50K. $100K. $150K. $200K. $250K…
It’s never enough. Same goes for salaries. There’s always a higher level.
As a person achieves more success, the expectations and desires rise. The result is that we never feel satisfied, and don’t increase our happiness level.
After making my first $100.000 in stocks, a number I had previously thought was significant, I started thinking $100.000 is really not all that much in the grand scheme of things, and it is not something that is worth celebrating.
The outcome of this is that no matter how pleasurable/disappointing a situation is, we return to a happiness “set point”.
My net worth goal for FI is $500K USD. But this is a mean goal. Mean goals are often only a means to a larger, more fulfilling end goal. It’s not an end goal.
Ends goals are our ultimate destinations. Ends goals reflect one’s personal values and are often feelings.
Maybe I’ve focused on the wrong things all along? It’s like I am obsessed by this net worth goal, and I should focus more on my end goals.
My ends goals are to be happy, feel like I’m important to someone, contribute to the world and to be healthy.
I can achieve my end goals regardless of tangible outcomes or any other factors outside of my control (net worth goal).
So why don’t we all just stop chasing money?
It’s a simple answer: Money doesn’t buy happiness, but everyone likes to find it out for themselves.
Have questions, comments or suggestions? I would love to help you with your FI-journey.
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