I’ve recently pulled back on reading and posting on FIRE blogs, except for a few I consider close friends. The more I study the reality of the interdependence of the financial system the more the concept of financial independence becomes a joke. The financial independence “movement” is simply a loose collection of narratives, all claiming some basis in fact, but in fact the basis is just narrative. The interesting thing is people base their realities, and the security of their futures on narratives and folk lore. As an aside I grew up on the south side of Chicago and in the winter they would open the hydrants around the park and the park. The park had been graded to form a shall bowl, so H2O in a big bowl plus a Chicago winter = instant hockey rink! In the summer the park dried out and we played baseball. This will eventually get somewhere.
I read Doc G’s posts sometimes at Diversfi and his story is a case in point. He’s a smart guy, quite entrepreneurial and managed to turn primary care into a near 1M/yr producer being a provider to nursing home patients. He lived on half and soon enough had a pile. He branched into side gigs including Hospice medical director and started a blog and a pod cast and a career in speaking. I was reading how all of that has virtually vanished for him. The nursing home practice is gone, the Hospice gig is gone, his partner in the podcast has other plans. Doc G is a smart guy and will no doubt survive, but the point is just because you write a narrative, a reality does not materialize. His narrative was not independent. It was entirely dependent. Dependent on the continued Hospice employment, on the continued podcast. Furthermore his “independence” is dependent on the performance of the economy. Doc’s in his mid 40’s and has another 45 years of expenses to cover.
I wish Doc well in his endeavor but it occurs to me he has an opportunity. Suzie O published a podcast with Paula at “Afford Anything” about the danger of “financial independence” and the FI world lost their minds! The very idea their independence could be threatened was anathema. Yet in Doc G’s story we see exactly how dependent we are, how in no time the narrative of our tycoonery can be blown away. The illusion of independence is the core narrative being sold in FIRE land.
In hockey to win, you have to learn to skate to where the puck is going to be, not to where the puck isn’t or was. You have to be where the puck is going to be and then put the puck in the net in a spot where the goalie isn’t, using velocity, acceleration, rates of change, probability, finesse, and brute force.
I have a friend who went to Chautauqua and heard JL Collins. He was all about buy my book! He was also all about “don’t review my book unless you’re going to give me and it 5 stars!”. He was prominently featured in this stupid documentary Playing with FIRE along with Vicki Robbin and half a dozen other FIRE movers and shakers as THE GURU’s. As I study real finance Guru’s these “luminaries” aren’t even smoke on the water.
Buffet says: “USE PASSIVE!!” Buffet is sitting on 100B dollars. If USE PASSIVE is the way to go why isn’t that 100B in VTSMX? I own BRK by the way. Munger has a few B. Munger owns 3 stocks. Not 3 funds, 3 stocks. Buffet made his dough by buying low and selling high. Buffet tells you to buy VTSMX. Why would he tell you to buy VTSMX and not own VTSMX himself? Why does Munger not own VTSMX? What is the present day value of VTSMX that would be all time high. Buffet doesn’t own VTSMX because he’s waiting for it go go low before he buys it (this is called timing). Buffet knows how to skate to where the puck will be. He’ll be there to buy you out when you will be forced to sell low. I own BRK for this exact reason Buffet knows where to skate and when to pounce. Munger knows to put his money in 3 winners not 2997 losers. One of those winners is BRK. Munger skates with Buffet. If you’re not predator, you’re prey. JL Collins knows this. He’s not a great guru he sells books to prey. Vicki Robbin is the same. She’s not a guru she’s a promoter. She’s the fisherman you are the fish.
Doc G with his recent reversal of fortune can become the voice of reason based on experience in this space. The voice of the reality of how dependent your “independence” really is. In surgery we have a saying: whip it out and someone is going to come along and cut it off for you.
Investing is not all gloom and doom nor is it all happy days are here again. Investing is about learning to skate to where the puck is going to be, against a very predatory competition who’s desire is to buy low when you are forced to sell low. Investing is dynamic and nuanced and success is hidden from view behind the narratives. Do not be complacent Buffet is waiting to eat your lunch.