《Your Numbers with Market Investing》

This is the number one difference between people who retire early and those who wait until social security, people who retire early know and learn how to invest.

When I first did the math on compound interest I was floored. The idea that I'd make more money during retirement than during my working years seemed counterintuitive, but the numbers were right there.

There are only 2 ways you can affect this number:

1. Make more money
2. Spend less money

That's really all that it comes down to. The savings rate calculation we looked at is based entirely on these two numbers (spending/savings). The less you need, the less you'll need to save. Lowering expenses and earning money in retirement are two very clear ways to reduce the time until you are financially independent. Making more money and spending less while investing is the key to achieving financial independence sooner.

The art is not in making money, but in keeping it.

The fastest way often means removing excess from your life that isn't increasing happiness in proportion to the amount spent. Beyond that, it's about understanding how much you need to save to live the life you want and making a plan for it.

《Saving Money is a Hike》

When working towards retirement and financial independence, your savings rate is one of the most important numbers. The more you save each year, the faster you'll be able to retire – that's obvious

You're starting with a time period of based on just your savings rate. Saving this much isn't a sprint, or even a marathon but a hike. Depriving yourself for a few months, only to be exhausted, or spend more the following months, isn't going to have a positive impact. Pace and progress are the keys.

Instead, make changes that make your life better, and that you look forward to week after week and year after year. If you're spending money on something that brings that kind of joy into your life, that's well worth it.

Find a way to enjoy saving the same way you'd enjoy a hike. Make it effortless, make it relaxing, make it feel right.

You could be reading this and think "there's no way I could save up!". I know when I was growing up, at times many people were scrapping to make ends meet, and saving was the last thing on their mind. 

For those reading in that situation, I empathize with you but struggle to find the best advice. You know your situation better than I ever could, as well as what you could do to make it better.

《Don't assume financial independence means retirement》

There are 2 small stones on my mind, each engraved with a single word. One says, “Imagine.” The other says, “Create.” Those two words have made all the difference for me. I believe that success is limited only by our ability to imagine what we want and to lead ourselves to it.

Financial Independence (FI) is different from retirement. Think of financial independence as the amount of money you'd need in order to never need to work again. Retirement (RE), on the other hand, generally means not being employed, but being self-sufficient.

It's possible for people to be FI but continue working – you see it all the time. From CEOs of companies to quiet employees who have saved huge amounts to bloggers talking about retirement (well, some – not me). There are also people who are retired, but who may need to return to work someday down the line when their savings run out, or if social security fails.

To be FIRE (financially independent + retired) is an aim with the goal of minimizing stress from external sources. It does rely on stock markets to perform in a similar pattern to the last 100+ years, but aside from that, it's not based on too many assumptions.

My personal withdrawal rate I use for calculations is somewhere between 3% and 4%. The fewer unknowns in your life, the higher your withdraw rate can be. When I say unknowns, I include many things that are notoriously difficult to plan for: your health, insurance, home situations, family health, changes in your spending, lawsuits against you – anything that could throw a wrench in your plans.

《Doing vs Thinking》

On a sheet of paper draw a vertical axis and a horizontal axis meeting in the middle creating 4 quadrants. In these quadrants we’re going to place activities throughout the day based on two criteria: how much thought is involved and how much action (doing) is involved.

• Top left: “Think” – These are actions that are high in “thinking” but low in “doing” (reading, math). These require you to generate your own thoughts but don’t require any action on your part. They’re one way.
• Bottom right: “Do” – These are actions that are high in “doing” but low in “thinking” (running, yard work). These require your action to get them done.
• Top right: “Burn” – These are actions that are high in “thinking” and high in “doing” (playing a sport, building something, working through the night, taking care of family). This doesn’t necessarily mean you’re running around. Your “doing” could mean focused work.
• Bottom right: “Space” – These are actions that are low in both “thinking” and “doing” (social media, sitting on a beach).

Why challenge yourself if you don’t have to?

For people with that mindset I say the same thing: try giving yourself a little more space. You can start small – an hour a week to do whatever you want. If you can’t find an hour to keep yourself occupied then that’s its own problem. In that case, you can research new hobbies (think) or make a personal goals list to get yourself excited.

Do not confine yourself to one type of action. If you’re feeling burnt out, exhausted, or just not enjoying yourself, you have the option to change what you spend your time doing.The more you do, the more you’ll discover what it is in life that you truly enjoy.

《Save for the future》

If the thought of saving  money sounds exhausting, focus on what you can control – what you’re invested in today, how you earn that money, and how you spend it.

Phase 1: The Basics – $0 to $100K

Work and get the salary paid
Invest in 1 or 2 index funds

Phase 2: Growth – $100K to $1M

The amount you invest in a bond fund will depend on how long you have until retirement. If you’re more than 5 years out from retirement, you could skip that step altogether. Once you’re closer, a major market correction could delay your retirement date. At that point having some part of your portfolio in bonds can help.

Your goals during this phase: 

Learn how to optimize your portfolio for fees, while keeping an eye on diversification. 

Learn how to use bonds to normalize your returns – even if you don’t actually start investing in them yet.

Stick with it

Investing isn’t like buying a lottery ticket. It’ll take years – decades even – to grow your wealth. By investing in index funds (and thousands of different stocks), you’ll get there eventually.

The sooner you can internalize that, the less you’ll try to chase speculative investments and the better you’ll position for long-term investment growth.

Phase 3: Retirement – $1M and Beyond

Once you’re about 5 years away from retirement, it’s a common approach to start making a few changes:

Lower your risk by moving slightly more money out of stocks and into bonds.

Optimize your taxes and daily spendings

By investing in the entire stock market (in the US and internationally) you’re already investing in everything! 

Ditch (捨棄) your financial advisor

Your goals for this phase: 

Understand how much you’re paying in fees and optimize it 

Figure out how you’ll withdraw funds from your accounts in a tax-optimized way

《How to Develop Persistence》

Calvin Coolidge:

“Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are all powerful.”

1. Decide what you want to accomplish and set goals 
2. Prepare for Obstacles and Setbacks 
3. Take the first step 
4. Review, reevaluate and revise 
5. Garner support (爭取支持) and encouragement 
6. Maintain focus 
7. Enjoy! The greatest feelings of accomplishment derive from knowing you've overcome obstacles and conquered adversities to achieve your goals. 

《馬太效應》

勝利不是平均分配，而是贏家全拿。

簡單來說，馬太效應就是好的越好、壞的越壞、多的越多、少的越少的一種現象。勝利的果實並不是平均分配給每一個參賽者，而是贏家全拿。最早提出這個概念的是羅伯特‧莫頓（Robert Merton），他發現研究論文的聲譽，都被「較知名」的學者拿走了，而沒沒無聞的學者，即使貢獻一樣大，仍很難獲得名氣。

莫頓發現，不論在哪個領域，一旦在某方面取得些許優勢，就有很大的機會進一步取得壓倒性的優勢，並引用《聖經‧馬太福音》裡的一段話：

「凡有的，還要加給他，叫他多餘；沒有的，連他所有的，也要奪過來。」

 

大富翁這個簡化的金錢遊戲，就具有馬太效應的特色。

 

真實世界的金融操作，似乎也存在著馬太效應。請檢視一下你周遭的朋友，真正在股市裡賺到錢的，十個人之中，可能不到兩個人。賺錢的總是極少數，大多數人都是賠錢收場，甚至黯然退出。另外，我們也可以從「我如何在股市或期市賺到一億或一千萬」這類的書籍大賣得到佐證，因為這表示大多數人的操作成績乏善可陳。

 

至於金融操作為什麼會有馬太效應，各家說法不一。有的人主張優勢來自於對風險的承受能力，審慎而老練的大戶，較能夠長期的把風險管理工作做好，從而有長期的獲勝機會；反之，過度槓桿操作或沒經驗的生手很容易被收割出場。

資金薄弱加上風險控管失當的人，容易以失敗作結，尤其是在市場有大波動時；而他們所損失的錢，在零和遊戲之下，就進了那些風險控管比較好、資本比較雄厚者的口袋裡。

這些贏家賺了錢之後，承受風險的能力又更上一層。因此，無限玩下去的結果，就形成了強者越強、弱者越弱的局面，最後是大多數人賠錢、少數人賺錢。

 

總之，我們只要知道短線操作的結果是大多數人賠錢、少數人賺大錢，這就夠了。

 

現在我們再回頭看看期貨或股市短線操作是什麼樣的遊戲：它是零和遊戲，而且只有少數人賺錢（或大多數人賠錢）。如果你選擇去玩這樣的遊戲，其下場可想而知！除非，你是那少數人之一。

 

經過上面的說明，我們總算知道，為什麼玩低買高賣賺價差的遊戲，是那麼的困難：零和遊戲加上馬太效應！