AxeHoles!

A while back I wrote about the motivating power of fear. I’ve written some other posts on the subject, too (see here and here . . . and ad nauseum occasionally in my Money, Man! series of posts.. 

I never wanted to be motivated by fear. Even after realizing its somewhat perverse “benefits.” 

But the brain has a mind of its own. 

So, here I am, still prey to its arbitrary and capricious whims. And those aforementioned “benefits” were no less benefits based on their origin. 

Down town

I’ve thought about this a lot recently. Why? Well, my biggest fear going into my first year of FIRE was sequence of returns risk. For good reason, too. And as it’s turned out, it’s been . . . uuummm . . . an eye-watering a suboptimal year for investors. Perhaps you also have had a seemingly permanent wince face this year noticed, too. As mentioned in a recent article in The Economist, titled, “Rising interest rates and inflation have upended investing“ (subscription may be required) “. . .  as of mid-October [2022], a 60/40 portfolio of American equities and Treasuries had had its worst year since 1937.” 

This is not to mention inflation. Worldwide, it’s multiples higher than it’s been in decades. 

I’ve also recently consumed content from carefully curated sources that I respect in which it’s argued that the world is entering an economic and financial regime vastly different from that of the last 10 years. And maybe from the last 40 years for that matter. Those theses are sound and backed by compelling evidence.

There’s a paradoxical situation in the labor market. In the United States at least. That’s because notwithstanding this rough environment, overall unemployment rates have been super low. And yes, I know that that’s been a significant contributing factor to the rough environment. 

But layoffs have begun. Mass layoffs in some cases. The tech sector seems to be at the leading edge of this trend, with some businesses axing more than 10,000 employees and/or more than 10% of their respective staffs. 

T’wit, Twitter

No company has been more in the news for this and other reasons this year than Twitter. For those Dear Readers who’ve been living under a rock or those reading this blog post far from the original date of publication, Twitter this year was bought—after an absolutely bananas series of events—by . . . uuummm . . . eccentric billionaire/business mogul Elon Musk. 

Now, I like Twitter well enough and get some value from it. But if it disappeared all of a sudden, I wouldn’t be able to care less. 

Regardless of my personal feelings about Mr. Musk (I find him mostly noxious), he’s got a proven track record as a successful businessman as to his companies Tesla and SpaceX. So, when he finally bought Twitter, I was curious to see whether he could turn the company into a money-spinner or if he instead essentially decided to light $44 billion (the purchase price for the company) on fire would flop.  

I’m not prepared to make a bet yet. But the early signs tilt toward the latter.

A Musky stench

Musk has since infuriated many people. Maybe none more so than Twitter’s employees. After firing about half of the company’s workforce, he asked employees to commit to a “hardcore” culture, and work “long hours at high intensity,” or resign (to be fair, with a severance package). Those employees had about one day to decide. Unsurprisingly, thousands of them flipped Musk the bird and voted with their feet. 

I suspect that many of those remaining are staying either because they’re waiting on another employment opportunity, or are financially strapped and find themselves thinking they have no other good option. 

I’m all for working hard. I did it my whole career. And I’m on board with new management coming in and radically changing an organization’s direction. I experienced it first-hand. When it went well, remarkable positive changes resulted. 

I’m also not reflexively opposed to layoffs. A struggling business might be struggling because it has too many (underperforming) employees. Layoffs can address those challenges. After all, a business that goes out of business ends up employing no one. 

Another recent column in The Economist, titled, “How to Do Lay-offs Right,” (subscription may be required) does an outstanding job of addressing layoffs generally, and the recent wave of layoffs specifically. Tl;dr: Mr. Musk seems to have decidedly not done layoffs right. 

Were I a Twitter employee under Mr. Musk’s reign, I’d be fit to be tied with him. Were I a Twitter employee under Mr. Musk’s reign and feeling unable to leave, I’d also be fit to be tied with him. But also, with myself. Because I’d recognize that I was maybe in my predicament because I hadn’t gotten to FU (&$(> flute you] money status. 

Making the moats of things

And here’s where the fear factor in my journey comes in. I wanted to reach FI for many reasons. But none were greater than my wanting to build a financial moat around me and The Family so that were I or The Missus to have experienced all that Twitter employees have experienced under Mr. Musk, I or The Missus not only could tell Mr. Musk what he could do with his ultimatum, but resign at a time wholly of our respective choosing.

A minimum amount of FU money allows for that action. But FIRE status potentially allows one to take that action forever. 

That distinction makes all the difference in the world for me. 

With merely a minimum amount of FU money, one ultimately will have to face the music and find revenue sources anew. A job being one prominent and likely one. Maybe by way of enjoyable (self-)employment. But maybe instead formal employment in a job and/or for an employer not to one’s complete liking. 

FIRE money potentially obviates all that. Maybe that’s not critical for some of you Dear Readers. But it sure was for me. 

For several reasons, I took a part-time job earlier this year, my first year after FIREing. I suspected I’d like it, and I do. It’s my version of funemployment. I know from experience, however, that developments that happen in the course of business—management changes being maybe the most prominent—can instantly put a hard stop to the “fun.” 

I’m consequently prepared for such a development. But unlike almost all of my coworkers, if that happens, I can say, “Hasta la vista, baby!” and bolt, with the financial consequences being of all but no concern. Of all the reasons that reaching FIRE status has made me happy, none is greater than this.

And in the end . . . 

I’m not gonna lie. It’s not only a powerful position to be in, but a fantastic-feeling one as well. I think everyone should aspire to it to the extent they can. The sacrifices required to be able to walk out on a dime are worth it. The alternative is for sure no fun.