Since my previous posts in this diary, I've been quite busy as I've been training. So I've had very little time to manage this site and keep an eye on the stock market. Given the current market craziness, it was better to stay quiet anyway, on low-risk assets and take a step back. So there wasn't much to say or do on the subject of investments.
The training I'm currently undergoing was to be the final stepping stone to my future life of financial independence. The aim was to lay the foundations for my next secondary occupation, one that would replace my current lucrative activity. However, I have to say that I was soon disillusioned, as soon as I started the course. One of the good things about the many years of hardship I've endured in the professional world is that you can sense relatively quickly when something is heading in the wrong direction. Once again riveted to the school benches, listening attentively to the precepts of our teachers, I soon became increasingly aware of a sort of stench with contours that were well known to me: that of the Rat-Race. The more the courses went on, the more I saw the old familiar patterns falling into place: consume => work => consume, etc...
I mistakenly thought that turning one of my passions into a sideline was going to change the game. And yet, as I should have remembered, the Western world feeds on the Rat Race. It's everywhere, even in the things we hold dear. So I decided to cut my losses while there was still time. At this stage, I've only lost a little time and money. If I had persisted, I would have lost even more, but above all I would have had the feeling of selling my soul to the devil, by letting the Rat into my own territory. Being around it at work is one thing, letting it into your home is quite another.
So I'll have to revise my copy. Fortunately, this doesn't change my plans in the slightest. I still think I can become financially independent in the short term. It's a matter of months. On the other hand, this concept of an "accessory" activity enabled me to diversify my financial income, occupy part of my new available time, maintain an important social network and preserve a positive public image. Even if today's world seems to have become much more tolerant of many societal issues, being a young annuitant is still not for everyone. The value of work is still very strongly anchored in our society, particularly in Switzerland. Not to mention the fact that, for most people, a forty-something who no longer works must have done something illegal, won the lottery or received a very juicy inheritance.
Anyway. I'm going to have to sort this out somehow. The simplest possibility would be to reduce my activity rate even further. Of course, it's also the one that motivates me the least, since I no longer have any interest in my job, even at a small percentage. But maybe it's a necessary step before moving on...
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If it's not the most exciting, the most original, or even the most authentic in terms of fidelity to a certain vision of the young annuitant, part-time work has often stood out, in the course of my many reflections, as the most pragmatic and straightforward solution (easily justifiable in the eyes of others, allowing you to enjoy the benefits of salaried employment, etc.).
Although I adopted this solution a long time ago, it's not unusual for me to doubt that it's a satisfying path. I often let myself be seduced by the idea of a reconversion, a sideline... with the feeling that, each time, it's a case of embracing the Rat Race even more.
So I'd like to thank you for your message, which is admittedly not very optimistic, but which has the merit of being honest and critical in that, like so many others, you don't dangle the liberating prospect of an independent or ancillary activity in front of you. So I think it's admirable that you're not only capable of realizing this, but above all of renouncing this path when it doesn't seem ideal.
Jérôme, I'm disappointed for you. The project was thought through, weighed up and matured, and yet you weren't able to fully realize it. At the same time, I praise your honesty, but also, and above all, your lucidity in making the RIGHT decision. I made the connection and remembered a quote that went something like: "Everybody knows how to buy stocks. Selling, only a tiny fraction of people know how to do it, the successful ones." To your credit, you've managed to "cut your educational stance"! The next step will be better, because it's more experienced, and will bring you closer to your project!
Thanks AGU. I like this idea of cutting the educational position 😉
Next step cut the work 😉
Thank you Intermezzo for your message. I've already adopted part-time work and it's not satisfactory. For the time being, in the short term, I can't see any other solution than to reduce the working hours even further, for want of anything better.
Hello Jerome,
I don't know what kind of ancillary activity you're thinking of, but it must be possible, once you've freed yourself from financial pressure (the need to earn an income from a professional activity of any kind, to ensure the - more or less high - standard of living you've set for yourself), to have an activity in which there's no pressure: if you feel like it, you work; if you don't, you take time for something else. Of course, if you have customers, they expect a service within a reasonable timeframe, so you have to serve them, with the risk of no longer being totally in control of your schedule. But it must be possible to have an activity that allows you to control your time, according to your aspirations at the time (for example - among many others - it's all the rage, for better or for worse: creating a training course - with no time pressure - and selling it automatically; the job is to create, not to sell, and there's no pressure to create, because you can take your time and adopt the rhythm you want; counter-example: coaching, where you have to be there for the customer and follow him).
Hello Laurent. Yes, there are certainly many avenues, but in the end I always come back to my foundations: this blog and my investments. Maybe there's something to be dug out there too.
The quest for happiness is definitely a difficult one, and one that constantly changes as we evolve. What makes us happy at 20 is very different from what we aspire to at 40 or 60.
Something I've been doing for several years now: jotting down activities in a notebook as new ideas for possible after-work activities come to mind.
I certainly won't put them all into practice, but it will give me a pool from which to draw ideas when the time comes. To each his own, but here are just a few of the projects in my notebook: looking after my grandchildren, having a vegetable garden, founding an investors' club, re-watching every episode of Columbo, writing a book, auditing finance courses at uni, having a chicken coop, playing ping-pong, breeding pedigree cats, attending shareholders' meetings, fishing, taking cooking classes, keeping elderly people company and taking them for walks, and so on.
The most important thing is to have projects and dreams. As you can see, I'm aiming for 100 small activities rather than one big one. Most of them aren't about making money either, but about doing things I enjoy. I also don't rule out a small one-off job that would give me more social contacts and help me make ends meet.
mdr frérot, I see we have certain projects in common 😉
yes, I also do this for leisure, and I have no worries about it, I'm spoilt for choice and that's what's always motivated me to reduce my working hours.
it's more this little one-off job that also allows me to maintain the social network I was looking for through this last project, but I'm going to find another solution.
Hello Jerome,
I'd like to hear from you when THAT day comes. I'm talking, of course, about the day you stop working. As I understand it, your income will mainly consist of dividends and real estate income. Even if you keep a small sideline with an income of 1000 or 2000 chf per month, how do you think you'll be able to get past the long-toothed vampires (I'm talking about the taxman)? Even with the status of "not for profit" or with an ancillary activity, your real estate income and/or dividends will no longer be taxed as they are now, because it seems that the tax authorities will consider this as professional income. The criteria that apply (number of transactions, etc...) which mean that this is simply added to your current income will no longer be valid. In short, my question is: how can you be sure that the tax authorities won't treat you as a professional for real estate or dividends, even if you have a non-profit status or a small ancillary activity?
It's a question that's already been raised a few times here. The truth is, I don't expect to make it between the drops; I've already taken that risk into account.
For real estate, I'm already taxed on rental income and I don't sell, so there's no problem. I'm already taxed on dividends.
On the other hand, if I make a lot of sales of securities, the taxman might consider me a professional securities trader, because the capital gains could sometimes exceed 50% of my gross income. In that case, I'd have to pay tax on my capital gains too. This remains conditional, as each cantonal administration has a certain latitude of interpretation and my own situation is not necessarily black and white. In any case, capital gains are only a small part of the equation. In any case, even if I were to be taxed as a pro, I've counted this line in my budget. Remember that work is also taxed, even more than capital...
I believe, without being certain, that the taxman could pass you off as a real estate professional even if you don't make any sales (the criteria as an employee no longer being applicable). This would mean paying AVS, etc. on top. (source: a trustee in Lausanne)
I've also already taken into account social security contributions. If I have to pay them on the property, no problem, I'll no longer be taxed as a person without gainful employment, which in the end is even better for me (it was also one of the arguments for maintaining a small ancillary activity).
Good morning,
Switzerland, France, Belgium, other countries... I read your posts regularly and follow your progress towards liberation from this rat race constraint of having to earn a living through hard work:
I wonder, in your reflections on your future place in the world, what's preventing you from assuming, in the eyes of the world, whatever its perception, what you've managed to achieve and your liberation. What's preventing you from freeing yourself from the imprisoning and alienating gaze of others?
The rat race is a prison that I abhor, but personally, I hate living and choosing according to the gaze of others just as much.
What are the real risks, after all, of putting down and imposing what you have managed to achieve, of freely disposing of your time? Knowing full well that an investor's activity, even at the level you've reached, requires time for research, etc. and can take up a large part of your time (I'm there myself, but much less advanced than you)...
You've worked very hard to get out of a prison, and the success you've achieved is fabulous and exemplary, and I'd be remiss if I didn't give you some advice: don't fall into that other prison, just as violent and alienating as the first, which is the gaze of others.
Kind regards
Terry
You're 100% right. I have to say that if it were up to other people's opinions, my choice would already have been made. But a secondary activity would have enabled me to keep the social aspect of my work. It would also have diversified my income. In short, it would have been a smooth transition from the traditional working life to that of an annuitant. It's not that easy to change over 20 years of Rat Race. It's a noxious form of imposed addiction. I'm going to have to find another way to wean myself off, because the other way would only have prolonged the addiction.
Let's just say that Social + Work don't really mix anymore with the virus.
Frankly, it's a good thing I'm telecommuting at 100%, because when I look at the list of constraints for those who have to return to our offices, I tell myself I'm not looking forward to going back at all!
Those who missed the working atmosphere during the lockdown must be pretty disappointed these days, even in the offices!
Although, you seemed to have had enough of telecommuting compared to the office... is that still the case?
I've been back in the office for a long time now. Telecommuting didn't last very long for me.
In true Covid fashion, the experience was very inconclusive: children on their backs, spouse present, endless telephones, e-mails and videoconferences, not to mention the kids' education to be provided at the same time. It was a real ordeal. I have no doubt, however, that if you're alone at home, it's a pleasure.
"We both (Charlie Munger and Warren Buffett) insist on a lot of time being available almost every day to just sit and think. That is very uncommon in American business. We read and think "
- Charlie Munger
Excellent!
I had read your JDB n68 at length before writing to you, and had taken note of this key sentence that stopped me in my tracks and made me think:
"I've already turned this question over in my head several times. Announcing that you've become an annuitant at such a young age raises a lot of questions, jealousy and mistrust. "He's going to screw up, he must have ripped people off, he's a cheapskate who lives close to his pennies, he won the lottery, he must have inherited a fortune, etc.". In the world of the Rat Race, no one can imagine that you can become an annuitant by living normally, just by following an intelligent investment method, patiently, over many years. The other option is to declare yourself an "investor". Here too, the door is open to criticism and jealousy. If you invest, you're bound to be a selfish bird of prey, who's also bound to fail like everyone else.
In short, the truth is sometimes hard to hear for some people."
However, I kept telling myself that, for my part, once I've achieved financial independence, if I'm successful enough to do so, my choice would be to invest and develop in this field on a full-time basis, as the activity and learning involved in this discipline is so multi-faceted, infinite in its possibilities, networkable (I've started to establish a small network with competent, highly experienced people (sometimes from 15 to over 20 years old), quick to share via social networks. Possibility of traveling for AGMs, family business visits, network meetings, investment clubs, self-development work to get to know oneself even better and take into account one's cognitive biaix, etc, etc, etc....
But that doesn't mean you can't work at your own pace and free up the time you need for every conceivable activity.
For my part, I've never been overly subject to the social gaze or its constraints: which is why I've never made a career for myself, so much so that I've criticized the questionable organizations and practices in the companies where I've worked (a bit like the Maverick who 30 years later is still a captain instead of an admiral), and so much so that I've given up personal relationships. I'm not saying it's the best choice, because it's also worth an immense amount of loneliness, but in the end I can look at myself in the mirror every morning. It's a personal choice: I'd rather face jealousy, critical judgments, hatred etc. than make a difficult choice at the "risk of succeeding", including in my family, who don't really understand what I'm doing.
Well, you know all that, Jérôme, it's really just a question of sharing.
Basically you're right, and indeed I know that only too well. But it's good that you're sharing it, hearing it from someone else's voice is always useful. I'm going to have to take this step anyway. The last step is often the hardest. That's why an intermediate step would have been useful, at least from a psychological point of view. I'll have to think about that for a while...
Sometimes when I wonder what I'd like to do later in life, I wonder what I'd do with a lot of money in my pocket.
In most cases, whether I have one euro or 100 million in the bank, my projects remain the same...
The same goes for me, and that's a good sign.
This means that 1) you can become financially independent; 2) more importantly, you can stay that way.