Rat race escape plan

[qlai]

What happens in the rat race is that we just keep spinning our wheels - earn more, spend more (aka hedonic treadmill)

I have come up with (yet another) genius solution!

1. Let’s say you have a “stable” stream of income from job, business, or trading.

2. You open individual trading account.

3. You make a promise to yourself that you will only allowed to keep profits in the trading account (above initial investment plus some margin) if they exceed some large number, let’s say $1M - the FU money (FUM), whatever it may be for you.

3. Anything below the the FUM must be LOST as to not generate any additional income! For example, if by the end of December you have accumulated 10k, you must make a YOLO bet which would either go to ZERO or have 100:1 payout (OTM options come to mind)

Note: there’s no requirement to wait till the last moment. You can make as many reasonable speculative bets as you wish throughout the year with money earned so far on the trading account, you just not allowed to keep less than FUM by Dec 31.

 

[cesfx]

I see no escape plan tough, what I see is a bigger wheel, with a more complex race where one gambles the return and get nowhere.
I am all for escape plans from the city rat race, 1mil would do, until then the plan is to get that mil.
Most people love the greedy race and hate boredom...

 

[newwurldmn]

I see no escape plan tough, what I see is a bigger wheel, with a more complex race where one gambles the return and get nowhere.
I am all for escape plans from the city rat race, 1mil would do, until then the plan is to get that mil.
Most people love the greedy race and hate boredom...

Assuming you have decades of working life left,

the best escape from the city rat race is to change your perspective on the value of your work. If you can’t then find another line of work.

there is very little spiritual value in trading for a living; I think that will matter a lot in your final years.

 

[zghorner]

step 1: stop buying stupid shit especially stupid shit you have to make payments on
step 2: buy spy with all the money you save from not buying stupid shit

rat race eliminated.

 

[cruisecontrol]

What happens in the rat race is that we just keep spinning our wheels - earn more, spend more (aka hedonic treadmill)

I have come up with (yet another) genius solution!

1. Let’s say you have a “stable” stream of income from job, business, or trading.

2. You open individual trading account.

3. You make a promise to yourself that you will only allowed to keep profits in the trading account (above initial investment plus some margin) if they exceed some large number, let’s say $1M - the FU money (FUM), whatever it may be for you.

3. Anything below the the FUM must be LOST as to not generate any additional income! For example, if by the end of December you have accumulated 10k, you must make a YOLO bet which would either go to ZERO or have 100:1 payout (OTM options come to mind)

Note: there’s no requirement to wait till the last moment. You can make as many reasonable speculative bets as you wish throughout the year with money earned so far on the trading account, you just not allowed to keep less than FUM by Dec 31.

View attachment 257442

Needs proofreading, does not make any sense as written. I think you meant above when you wrote below, and more when you wrote less?

I think what you are trying to say is that you allow your wealth to reach a fixed maximum size, and any extra cash is used to buy lottery tickets. This way you have constant spending until you get lucky and your wealth jumps instantly instead of having a gradual ramp.

It isn't clear why having a jump is more desirable than a gradual ramp. I can mostly think of reasons why it would be worse. You don't have time to properly adjust to your new wealth and thus are less able to handle it properly. It's well known that lottery winners often go broke in a short amount of time.

If you like the idea of living with lower means, or having constant spending, you can just spend less or give more to charity. I don't really get the idea of pouring a whole bunch of cash into ultra high variance bets, or wanting to either be stable OR insta-rich. Actually this is the exact opposite of what I do. I enjoy becoming slowly and steadily richer over time.

 

[Magic]

@qlai

When you lever up a strategy, discretionary or otherwise, beyond what the edge can mathematically support, you are widening your short-term distribution of outcomes and lowering your average terminal outcome. As time --> infinity all your equity paths will converge to the average outcome. Think lottery tickets.

Your idea is throwing away long-term expectancy for a shot at some short-term gratification. Everyone has their own utility function so feel free to do that. Wealth will concentrate towards individuals who utilize time horizon (requires patience) and who optimize sustainable capital growth. Once you can afford to start backing down variance without dragging your distribution of future equity paths below a favorable outcome that usually makes sense to do so as well.

A lot of the financial advice out there gives a crude enough approximation to get people in the ballpark without having to get into the math. I.e. invest income in SPY, don't touch the principal for early years, and then rebalancing into bonds as you age. Most common investing advice actually leaves young people a under-utilizing risk, but I suppose it's best to err on the side of caution for people who aren't wired to manage this stuff.

 

[cesfx]

Assuming you have decades of working life left,

the best escape from the city rat race is to change your perspective on the value of your work. If you can’t then find another line of work.

there is very little spiritual value in trading for a living; I think that will matter a lot in your final years.

I totally agree, thanks for your opinion.
Having lived the first half of my life in a small town surrounded by nature, and the other half in a big city surrounded by opportunities, greed and racers, my perspective changed a lot over the years, and not just about work.
I see no spiritual value in money.
I also see trading/investing as a way to buy more time versus running another type of busy hands-on business, and helping people in need whilst living the present where I feel like I belong (not a city), my spiritual goal.

 

[Nobert]

you must make a YOLO bet which would either go to ZERO or have 100:1

It's irrational to make YOLO while each crisis presents dislocations that provides opportunities of making 1000% - 5000% per position in 12 moths.
Gave a look only to March lows (so far found 3 cases like that) & now as writing this, wondering how many of those there was during 08 or 00.
One could even make chart, corrections including. Probably would be a downwards trend.

quick shot with windows paint

Assuming you have decades of working life left,

the best escape from the city rat race is to change your perspective on the value of your work. If you can’t then find another line of work.

there is very little spiritual value in trading for a living; I think that will matter a lot in your final years.

Have you found yours, an activity like that ?

 

[newwurldmn]

Have you found yours, an activity like that ?

yes. I left Wall Street and bought a small manufacturing firm.

making money isn’t a sin. The purpose of a business to to find profitable ways to add value to society.

 

[ElCubano]

I became a minimalist. End of rat race. I have not had a car in 3 years. Just now I purchased a truck for under $3k, ride my bike everywhere and live like a Cuban hippy. House is paid for and have one income property. Peace