I was a young man in 2008 when the Great Recession occurred. I remember the news coverage of the firms that fell. The fear that radiated from those losing homes because their adjustable rate mortgages rose while they lost their jobs. Nothing felt stable, yet life carried on. The stock market, back then was not a big part of my life. I was disconnected from it. While I owned a few stocks in 2008, I felt disconnected from the markets. The stock market was for other people. It was for rich people. Old People. Middle aged people. It wasn’t for me; not then. I do remember thinking how lucky I was that I didn’t own a home or have much invested in the market at the time. I felt like I’d somehow dodged a bullet. Though the carnage did touch me. I lost my job. Unemployment peaked to 10% in 2009. The industry my career was rooted in was smashed to a pulp, barely kept alive by government spending.

When I think back to this time I’m filled with relief. A gratitude almost that things could have been worse for me, but weren’t. I did lose my job and moved to San Diego for work when things didn’t work out here in the Bay Area, a decision which changed my life.

While I avoided the life changing pain that many felt during that time of the Great Recession, I recognized it. It seared itself into my mind, the possibilities of what can happen when ‘those in control’ become greedy. I saw how de-regulation contributed to the crash. I remember how the richest of us were bailed out, while the rest of the country, “the 99%” if you remember, were left to pull themselves up by their boot straps because that’s capitalism.

This past week I moved some money out of equities and into bonds. The move, while not part of my regular rebalancing plan, just felt right. There is a lot of talk in the personal finance realm about creating a personal investment plan. Something to read and remind you of why and how you invest, so when the markets are crashing…or you feel the urge to tinker. You have a reminder.

These written plans are great for when stocks are crashing or you read something and get some FOMO, and feel the urge to change your plan.

But what about when things are going extraordinarily well? I mean big picture well, like the last few years.

There is a strong current these days, a fear of missing out, or better put by Alan Greenspan; an “irrational exuberance” that is the spending of the American public and the bull market that follows spending. The animal spirits are strong. It’s easy to get rich when everything is going up. Easy to get greedy.

I have a plan to stay diversified. Rebalancing once a year. I have a set allocation that I plan to keep my portfolio aligned with. It’s good not to tinker with investments. Yet, I tinkered. I pulled some cream from the top and stuffed it away for a rainy day, on a feeling. This goes against how I invest. It’s very likely that I will lose money because I did this. I feel some regret over it, I hope to get it off my chest by admitting it to you, dear reader.

Things are going good right now. Almost too good. So good that I have the surreal feeling that at anytime something bad is going to happen just to even things out. How long can this party last?

I feel as though I’m in a casino and on a hot winning hand. Everyone is winning around me. The party is raging. Laughs. Drinks. Music. Dice. I’m simply putting some chips into my pocket and hoping to forget about them. I have no idea when the party will end. I do not know if it’s 9pm or 2am.

Plans

“Plans are worthless but planning is everything.” Eisenhower famously said after the war. He knew a bit about planning as supreme commander of Allied troops in Europe during World War Two.

This bit of advice has stuck with me over the years since I first encountered it. I use it often when explaining to my peers at work about the need to change course or adapt when conditions have changed. In construction, every building built has a plan in place before a shovel hits the ground. A schedule is made and a budget created with the planned schedule. Then the work starts.

What people forget is that schedules and plans are dynamic. Plans become living things when action starts.

Almost immediately after the start on every construction job something goes wrong right away. A permit from there city is late. A different condition is discovered when the digging starts; dirty soil, buried fuel tanks, a high water table. The weather might stop work. The owner might change his mind on design. A subcontractor might not have enough manpower to meet schedule.

When that something happens that is not part of the plan, a change must occur to the plan. Sometimes plans account for changes and unknowns, but once those unknowns are known, they must be factored into the course.

Everyone hates change, especially so when they have become emotionally invested or attached to a plan. And this is the danger.

Can you imagine latching onto a FIRE Number created 10 years ago? Inflation must have surely changed annual spending for most of us. This would result in a higher FI Number.

To blindly march forward simply because a lot of time, money, and effort was spent developing a plan is at best foolhardy, and at worst idiotic.

FIRE is a project. A plan must be developed. A sequence of events to be executed in a schedule like fashion. You can even forecast out, creating a potential time frame for how long it might take to FIRE. During the first few days of discovering FIRE things can be very exciting; figuring out your number, dreaming of what you will do with all this time, learning about asset allocations and strategy. This is where emotional attachment to the plan can happen. You set course and take off. Your destination is years out so after some time the excitement wears off. If you are doing it right, you sort of forget about FIRE as your saving money habit gets ingrained into nothing out of the ordinary and other things in life take your attention.

I’ve made many changes to my financial plan over the years.

I changed my FI Number twice. I’ve changed my asset allocation. I’ve even changed my plans post FI (really I’m not settled on one).

Realizing that I’m content is the biggest driver to my change in plans. We have a good thing going right now. Happiness is not something out there that I will discover once I’m no longer working. My children are thriving, doing much better than I was ever doing at their age when it comes to school and goals.

If things are going good, if things are not broken, why fix it? Just because I made a grand plan a long time ago when I was unhappy, must I stick to that plan? Just because you can do something, does that mean you should do it?

Regret

What about regret? I do wonder if not making a major life change right now will lead to regret in the future. I wonder if I’m frozen in fear of change. Past regret has a powerful ability to shape your future. I’m reading a wonderful book called The Power of Regret by Daniel Pink. It’s really making me think about my past decisions and the decisions I’m making today. It’s making me think about how I lead others at work and how motivation works.

There are so many roads my life could have taken. Things I could have said or done differently. I think about those roads not taken often enough. I’m where I need to be at the moment and I’m happy for the decisions I’ve made that put me in such a fortunate spot.

A fascinating element to regret that Pink demonstrates in his book is that humans have the ability to create ‘counter factual realities’. Meaning we imagine alternate realities based on past decisions. There are two ways in which we do this.

1. If only thoughts…self blame, sadness.
2. At least thoughts…comfort, gratitude.

The most powerful are the if only regrets. These cause the most uncomfortable feelings in us. And they have the ability to shape our behavior so that we do not repeat the same mistakes. I’ve known this for some time, but it emphasizes that screwing up is the best way to learn.

When I think of my plans and the changes that I’m making, my future regret weighs heavily on my mind. What will I think when I’m an old man? Will I regret not retiring as soon as I could? Will I regret not saving more money so that I could have more options? FIRE is much easier in accumulation phase and when you have years to proverbially kick the can of decision making down the road.

At my stage of things, having hit my FI Number, I’ve decided to take some risk off the table. My retirement date is not too far out. I’ve recently purchased a subscription to Projection Lab and have a few plans I’m playing with. All of them would be classed under “Chubby FIRE”. We also now have some pretty tempting stock options to consider that are a few years out.

I’ll share the plans:

1. Retire in 2028 – move abroad to Spain on a non-lucrative visa

2. Buy a blue water sailboat in 2028. Retire in 2035 when the kids are out of the house and sail off.

3. Retire in ~2030. Ease into retirement with really long vacations in the summer and winter.

Or Plan B. Get fed up at work and quit any day. My wife might not like the shock of me doing something like that, but it’s certainly in the cards.

With all of these plans, we are de-risking a bit. If the market takes a major crash in the near future or we go into some stagflation-esque scenario, do I want be filled with If Only regret or At Least regret? At this point I have the ability to play it safe. Which is why I’ve taken some assets out of equities and into bonds.

I see what’s going on around me and sometimes can’t believe my eyes.

It’s just incredible to bear witness to the burden the American economy has been saddled with and how it keeps trucking forward. Unpredictable tariffs. Fuel supply shocks. An unpopular war of our own making. A reduced immigrant workforce. Huge tax cuts for the rich and bond market disruption. Any one of these things could have rightfully been the cause of bear market and recession. But they weren’t. Not even combined do they seem to be slowing this train down that we are all passengers on. In fact, this train is speeding up.

What’s keeping the train’s wheels on this train track? My non-economist mind has it’s money on the American consumer’s need to spend. And the tech companies ginormous spending spree on AI (which is now consisting of borrowing money to spend).

I’ve heard it all before, all the bearish talk that has filled my news feeds since 2014. We’ve had a few bear markets since the long bear market and Great Recession of 2008/09. A few corrections. Some shocks to supply. Even a failed rebellion to subvert our peaceful transfer of power. All of this feels very similar to 2006. The feeling that we’ve left the problems of the dot.com crash behind, an unpopular president, an unpopular war, high interest rates, de-regulation at break neck speed…what happened last time the people who were supposed to be responsible weren’t responsible?

Announcing here that I’m taking some out of the game feels as if I’m somehow trying to predict a crash or recession. I’m not. Just like you, I have no idea what is in store. I would not be surprised to see this invincible economy keep on trucking forward. The market making new highs, for a few more year at least. What would a 20 or 40 percent decline in your portfolio value feel like right now?

Seneca, the Roman philosopher wrote while trying to console his mother after exile: “Never have I trusted Fortune, even when she seemed to offer peace. All those blessings which she kindly bestowed on me – money, public office, influence – I relegated to a place from which she could take them back without disturbing me. I kept a wide gap between them and me, with the result that she has taken them from me, not torn them away. No man has been shattered by the blows of Fortune unless he was first deceived by her favors.”

When Seneca wrote about “Fortune” he always capitalized the word. He spoke of Fortune as if it were a person, a goddess, a trickster, a smart, respectable enemy. People speak of the stock market in this way.

I’m getting lost again in Seneca’s letters, his Tranquility of Mind holds exceptional wisdom for me, as he tries to ease the mind of his friend Serenus. Quite an intriguing thing to read something from 2,000 years ago. Knowing that humans back then were worried and pained by the loss of material items somehow makes me feel better. Those people, so long ago, worried so much, and now they are gone; did it matter they worried and cared? They could never have known that their writing and thoughts would carry on for some many years after, and help random people, like me, who are suffering from the same things. And it wasn’t just in the west, eastern philosophy is full of non-attachment strategy, even more so than the dead philosophies of the classics.

Over the years I’ve grown quite attached to my portfolio value. Yes, it’s paper money. It fluctuates up and down like an ever churning sea. Yet I see this value as having been nurtured by me over the years. A product of my discipline and research. Like a fruit tree or plant that I’ve taken care of and watched blossom and produce fantastic results beyond my wildest dreams. Did I truly have a hand in its outstanding growth? Not really. I don’t control the markets. I don’t control company policy and profit or spending in this country. I’m just here, witnessing it all. Fortune having gifted me magnificent returns and the means to invest.

What do I have control over?

Very little. I can though control how much attachment I have towards a given plan. I can think about past regrets.

“We should also make ourselves flexible, so that we don’t notion our hopes too much on our set plans, and we can move over to these things to which chance has brought us, without dreading a change in either our purpose or our condition, provided that fickleness, that fault most inimical to tranquility, does not get ahold of us.” – Seneca On The Tranquility of The Mind

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