Posts in category "philosophy" - page 2
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4% Rule In Indian Context
I have already written a few posts on 4% rule, but some readers were not sure if it really works in Indian context. We don’t have the equivalent of the Trinity study (which resulted in the 4% rule) done here in India. Or at least I am not aware of one. For those of you who don’t know the Trinity study, I will brief you on it. Basically the study found that if you withdraw 4% from your retirement account every year after accounting for inflation your retirement fund should last 30 years or more. But the study was done in the US using bond, inflation and equity market data from 1925 to 1995. It is really not a rule as much as a thumb rule. While I don’t have the luxury of such nice data for India, in this post, I will attempt to use some crude data loosely based on the same notion.
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My Thoughts On Early Retirement
This is a continuation of my previous post regarding email conversations I had with a reader of my blog. The reader wanted to know if they can retire early given that they have already achieved financial independence. I am republishing our conversation in the hopes that it will help some of you. It is not about my replies which are probably not as useful, but more about the reader’s dilemma and may be others have better advice which you can leave in the comments below. So without much ado, here is the conversation with some information redacted to protect the privacy of the reader.
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Changes After Retirement
It is interesting how things change after you have achieved some goals. Take for example my goal of early retirement. When I was still in the journey of accumulating wealth to eventually retire, I was hell bent on learning everything about investments and stocks. At the time I started with the basics like having adequate insurance and emergency funds etc. Then I taught myself about asset classes, asset allocation and rebalancing. Next I moved on to learning about macro economics, market cycles and behavioral economics taking several classes on Coursera, EdX and Udacity. Eventually took a class in accounting and finance as well. The hope was that I will eventually be able to analyze businesses and invest in stocks directly.
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I Give The Worst Advice
What many people don’t know is that I perhaps give the worst advice. The reason is not that I don’t want to give good advice or intentionally give bad advice. It is just that I don’t know what is a good advice for you. At best I can give advice based on my experience if I have already experienced it, for example early retirement. Or I can tell you what I would do if I were in their situation. Now, unless the person asking for advice is exactly like me, thinks like me and is in the same path in life as me, my advice probably won’t do them much good. This has always been my biggest worry anytime some asks for advice. And advice people ask.
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Downside Risks And Consequences
For every decision we make, there is a possibility of some upside and downside risk. Take for example the decision to eat that yummy cake. Well, the downside risk is clogged arteries and heart attack perhaps. Or may be there is an increased chance of becoming diabetic. These are all long term risks right? So who cares. What about the upside? Well you get to enjoy the food and put your mind in a blissful state and you are in good mood perhaps for the rest of day at best. The upside is really short term. Now the question is whether I should have the cake or not. How do we go about it? One way is to consider the short term and long term consequences. But is so hard to visualize something that will happen far into the future. Why can’t I enjoy now? May be I won’t live that long to see the ill effects of my actions. That is one aspect of risk.
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How Much Money Is Enough
When it comes to money, everyone has a different opinion about how much money is more than enough. Some may never reach the point of having enough money by anyone’s definition. These are usually low skilled people who earn very little. For them, there is no question of saving or excess money. If they earn well, they eat well that day. When they cannot, they have to go empty stomach for the night. And on the other extreme we have people who are extremely rich by any standard. These are the Bill Gates of the world. They do not really need to work or earn more irrespective of how much they can spend. And then you have a wide spread in-between.
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More Resources On Stoicism
A while ago, I wrote a post on Stoicism. The reason I wrote the post is because a few people ask me for resources on Stoicism and I don’t have anything handy. For a while now, I have been collecting some resources (mostly videos), that I wanted to share with the readers of my blog. I could not list out all the resources in the previous post, so I am continuing it with this one. Before I start, I want to let you know that I don’t think Stoicism is better than any other philosophies. I am not recommending that you follow or understand it. If you are curious, then these resources may help you. If you already like a philosophy, you should just stick to it.
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On Meditation and Equanimity
A couple of habits that I have been trying to inculcate for a while are meditation and equanimity. While I got a little better when it comes to equanimity, I have not made even the slightest progress when it comes to meditation. It is not like I have started trying meditation in the recent past. I have been trying it for a really long time. But just on and off each time not able to make any progress and eventually giving up. I know there are different forms of meditation. I tried a couple of them including focusing on breathing, and trying to empty the mind. Neither helped. I was never able to see inside myself nor could I get any insights into the true nature of reality. Of course meditation needs a lot of practice. May be I am doing it wrong. I have no idea.
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What Is Stoicism
When I interact with folks who read my blog, a few of them eventually ask me about Stoicism. It is either to know what Stoicism is or it is about resources related to it so they can also follow Stoicism. The funny thing is that I don’t have any formal training nor did I read any books on the topic. It just so happened that one day I chanced upon some videos on Stoicism and loved the concept. Then I started reading about it in a few blogs, listened to a few audio books and watched some videos. I never took any notes or kept the resources handy. So every time some one asks me for the resources, I just had to tell them that I don’t have any. I want to change that with this and some upcoming posts.
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Not Thinking Clearly
A couple of weeks ago I wrote a post on why one should avoid unforced errors (a situation you are completely in control and you make a mistake). So I thought about the unforced errors I made in just one aspect – stock picking. And boy there are a ton of them. But before we get to those mistakes, I had also finished reading (or rather listening to) The art of thinking clearly. An excellent book on all the biases we fall prey to. So I thought I should give a name to my biases and delusions as I tried my hand at stock picking. If you don’t know, I performed very poorly at picking a stock and the story is available on one of my previous posts if you are interested.
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