Tuesday, April 28, 2009

income vs. income

I recently read a blog called "eary retirement extreme"
this is the personal views and ramblings of a young person who lives in california.
i described this person as a hippy.
this person claimed that he didn't need to work more than 3 hours a week as a copy-editor because he worked for a few years before and saved all his money by never having expenses.
with all his savings he put it all in the stock market, and taking advantage of the tax breaks and his no-cost lifestyle, he feels he never has to work again.
he is now free to write his blog, work on some sort of book, he claims to be in the process of operating a 'startup' that has yet to produce anything specific. he likes to ride his bike and read books and generally not work a typical 9-5 life.

now, i don't live a typical 9-5 work life but i think that there are some people who excel with that structure as they have a large support network that allows them to maintain a personal balance of healthy diet, regular exercise and interacting with loved ones.

My point is that we have individual work context that make certain hours either easy or difficult. and if people find living a 9-5 schedual too hectic to maintain that healthy balance, they are free and in fact should try to find an alternative way to earn an income that restores that balance.

That last part, about restoring a natural balance is the key difference i have with this blogger and all ideologically blinded people whom I refer to as 'hippies'

from what i have understood, the hippy believes that much if not all of the consumerism and labour that has come to comprise and dominate our society is fundamentally flawed, ignorant to reality of humanity and unsustainable.

As a consequence, the hippy will seek not to engage in employment. Time and labour are what we exchange for money in a capitalist society (according to the 'hippy Confucius', Karl Marx). From his persepctive, the life of the hippy is of such a fine and intangible quality, that exchanging the time and labour of the hippy for employment income is a losing trade.

This hippy has used his wisdom to take advantage of the unsustainable and erratic society's economy. Because the hippy believes it is clever, it can use the basic principals of capitalism (investment and return) to his advantage. He can earn money without sacrificing his time and labour and now money has no meaning to him. he has no need for material goods and he does not need to consume.

These behaviours have the consequence of making the hippy feel as though they are very helpful to their environment. They demand less of all the bad things and they do not participate in the slave/master wage/labour economy, except on the master side.

I suppose i have no problem with earning income off an investment, that's what all of us want to do when we retire. I also don't have a problem with people who 'retire' early, even when they're in their twenties.

The problem i have is with someone who considers himself to be a source of information and insight actually just taking flawed principles of academia, investing and work, and reducing his future employable potential to such a low point that it's as if he was never employed to begin with. This person then goes on to argue that his example is one that people should model, and people thank him for showing them 'the truth about work'.

I believe so strongly that this person not only has made factual and logical errors, but is ultimately making moral errors, that i was willing to post comments on his blog about how his ideology was too rigid, was not realistic and contradicted the experience of the vast majority of the world.

Though, he initially responded on his blog with a comment about me being a banker and having my tie cut the blood to my brain and not being able to farm on my own and not understanding the value of being thrifty and being brainwashed into being a mindless consumer.

I was pleased to see that this person was willing to engage and debate my ideas on investment, and in this context employment income.

I responded with my belief that when you are young, and energetic and able-bodied, you should always do your best and work your hardest to have a professional attitude about your employment career. Even if you are able to live off only your investments, this is something you should only ever want to do for an extended period of time if your are old or injured in some way!

The reason i believe this attitude, of always wanting a good career you enjoy that can pay you well if you put the hard work in, is not only from my personal experience, but the experience of everyone i've ever known or read about who: is a)wealthy b)successful c)truly happy, fufilled and considered wise by all that know them; or any of the above.

The unforeseen benefit of having that attitude and putting in the effort is all the social connections we make through seeking a career. I believe that human beings are instinctively highly social creatures and that the more socialized a person is, the happier they are. I know the economy and family are much different for this generation than say 50 years ago, but having that ambitious attitude is not a work ethic common just to the WW2 generation in North America. that is the spirit that has driven ambitious people to create and build throughout the history of human experience worldwide. The greatest thing about our society is that young men were told (right or wrong) that they had to go and fight and die to protect that same freedom for their children and their grandchildren. They actually did just that so that we can all enjoy the same freedom and safety to pursue our ambition now.

Sadly, the wealth for society that was created through this waging of war and collective value of merit and achievement being rewarded in money, created a glut of people who were raised with too much of everything. In essence too much success too early in life. In my view, this is a phenomena of human behaviour consistent across societies across the ages. It's the rich kids, and middle class kids, who grow up never knowing the true hardship involved in creating stability in an inherently unstable world, that end up hating it the most. For they are the ones who have always been able to take it as granted. This sense of entitlement, falsely instilled in them since birth, creates a sub-culture of extremists. People who are so utterly convinced that the world that gave them everything is of such a ruddy and unsustainable nature it is best if everyone were to follow their lead, and simply walk away from everything, let the grasses and weeds retake the office buildings and live our lives as simple farmers, who have the internet.

I posted these thoughts with a perhaps more glib tone and they were posted on his website.
Yet something strange seems to have happened. I don't think this hippy enjoyed reading my notes. In fact, i'm pretty confident he hating seeing any criticism of himself or his selfish and sheltered ideology and lifestyle so much that he was willing to take down my posts. which he did.

He recently posted a blog talking about how he gets the occasional commentor who extols the 'duty of work' and 'duty to sacrifice' (i think he was referring to my comments). He comments that he considers these both protestant and collectivist ideas. Interesting point (not really)... Yet he goes off on more thought-garbage as to why not working is superior to working.

My fundamental point was not that you need to stay at your job if you hate it. you should quit your job if you look big picture and you say 'i hate this'. but you should always try to earn the most employment income you can that will still bring you satisfaction. The reason is simple: you don't know what the future will bring, what if you get sick? what if you need to be able to earn money if someone else you care about gets sick and needs money, too? You need employment because you cannot predict the future and your experience, skills and ability may be all that you have to get out of unforeseen trouble. That second last point, about trying your best, is where i'm critical of the hippy.

The hippy talks about working hard to lift weights, fix his bike, go for bike rides, write a blog, try to write a book. but all these things won't help him if he is trying to maximize employable income. the hippy is taking a passive role in his life and allowing the stock market and his ability to keep his costs at nothing to justify his 'environmentally sustainable' life.
But the hippy is investing nothing in his own productive capacity. He believes he needs only 3 hours a week of copy-editing. He is blind to the real opportunity to enhance his quality of life in the future and the quality of life of others by volunteering more often and trying to find gainful employment in alternative fields.
the fundamental point is simple: if you're young, you need to work. hard work is it's own reward. It is it's own reward because you never know what will happen in life and you never know what wonderful opportunities you could encounter when you are pursuing a career. conversely, if you never seek real employment, or do so without consistent, determined effort, you will never have the opportunity to know what opportunities you could have had....

The hippy doesn't want me to post those types of ideas or opinions, that's up to him. But it's ironic and very revealing that a hippy, who is all about his gay freedom of expression and shitty bongo music and being dirty and having ugly dreads and all that crap. he'll take down my opinions like's he's dick cheney, karl rove and big brother all rolled into a bong. just for the simple reason that i am so completely opposed philosophically to his philosophy.

that to me is the saddest form of hypocrisy (we all have some hypocrisy) but that is just so intellectually bland it makes me sad for humanity that people actually like the ideas this person is promoting. If enough people out there enjoy his stuff enough, he may even publish his unfinished book and make lots of money and have the last laugh. I remain skeptical it ever sees the light of day. I hope there are people on the internet who are able to see the underlying reality behind people's arguments (mine included)

He posted other responses to this blog post on my comments about 'hard work' and 'sacrifice', but not mine.
The link to his blog post about my comments (which he removed):
Here is a copy my response to this blog. maybe it was too harsh for the famously conservative internet blog forums.

"I'm going to suggest that there is a genetic reason why hippies are the way they are and refuse to recognize that they have lived a totally sheltered life.
But first, i'll just comment on the paradox of a subculture of upper-middle class, predominantly white, 2nd or 3rd generation westerners extolling the virtues of their choices. Then, before the facts, condemning virtually every principal, practice and value that their ancestors stood for (right or wrong) and which makes their sheltered universe possible to this day.
highlight this with the further paradox of now arguing that their lifestyle is something they must be given the freedom to choose without criticism (in fact, you think you should be praised) while they condemn people who seek a career on purpose as some sort of slave to a machine which has told them they have to do this even if they hate it.
yet many people actually like, and love, their jobs. they remain at their jobs because they have come to love their coworkers/employers and have come to be valued by their company (this doesn't always happen, but it's wrong to deny this positive symbiosis does actually happen regularly in our society to the benefit of many- think medicine and the sacrifice doctors and nurses must make- yet most love their jobs)
It makes me think you probably just lack sufficient levels of testosterone.
not because i think of you as less masculine (though you did just compare yourself to a housewife), but because i have read studies that show a correlation between men who prefer not to be aggressive when pursuing a career or some sort of material enhancement in their quality of life (lifting weights, an unpublished book full of your unrealistic ramblings, and an as yet un-started start-up don't count) and lower, naturally occurring, levels of specific forms of testosterone.

these same studies (they were reported on several major news outlets (not fox) so that's how i remember them), maybe you saw one in your scientific journals, showed that men who had higher normal levels tended to be more aggressive in pursuing a career they were interested in and seeking to 'get the most' out of their experience ie. being open to taking new opportunities as they arise.
men with higher natural levels of testosterone also took more risk, more frequently with their equity investments.
lower testosterone males tended to be methodical and slow moving in their equity investments.
the study was also done to include investment advisors and portfolio managers and it concluded that their respective testosterone levels were similarly correlated to the other test subjects. testosterone is not correlated to stock market performance, unfortunately.
what it all says to me (and i've been called a hippy and a corporate shill probably by the same person....) is that i should more than likely (not to conflate correlation and causation) give up. a hippy will likely never see the validity of a logic that is outside the domain of what they are willing to do with themselves. if they lack real ambition to have material improvement in their life, it's not so much a debate about the right choices to make, it's just the obvious choices that we are always predisposed to making.

I was born and raised orthodox (much different than protestant) and my parents were refugees fleeing communist Albanians. i suppose that's where i get the idea of sacrifice from (though my family (of remote farmers) fled so they wouldn't be forced to sacrifice to the state...). But my parents could have been happy when they came to the west, living off welfare, working only for the bare necessities and making sure i got to go to school on government aid and i could have just grown lettuce in the back yard while lifting weights.
we wanted more for ourselves because this place, Canada or America, provided countless opportunities we never had before, provided we were willing to work for them. Now, this is not an advertising pitch called the American Dream. it's something people with ambition have called drive.
you give the example of a hunter/gatherer society. they don't need to work once they have their food and shelter because that's all they need. while this is true, life in a state of nature is short, hard and brutish. the average lifespan is 35. why would any high-functioning adult spend his entire productive life, knowing there were simple things that could be substantially improved (medicine, literacy,) choose instead to just hunt and fish forever? its because trying to actually improve things, and not being a total dick about it, is a full-time job that takes empathy, commitment and sacrifice. The idea that you, more than some other westerner, are somehow more in touch with reality or nature is a total lie and you are spreading a false doctrine that is infiltrating the minds of susceptible youth who could otherwise be doing something worthwhile for their community.
if you really wanted to make the world better and feel responsible for that in some way, end this blog and volunteer at a hospital, soup kitchen, elderly residence or street kid centre. I'm sure those people would get much more entertainment value out of your ideas than the value anyone else gets.

traineeinvestor makes a good point."


  1. I took your comments down not because I disagree with you, but because you were being disrespectful and making personal attacks. Your first comment was borderline, but I let it go through because you obviously had something interesting to say. However, after that you became abusive and obnoxious and I simply put you on the blacklist. I'd like to keep a somewhat civilized tone on my blog, but you are of course free to keep whatever tone you want on yours. If you want, we can discuss my dreadlocks (I have a buzz cut) on _your_ blog; and if you are willing to follow common and "famously conservative"net standards, I will let you comment on my blog again.

  2. Thanks. I'm not really interested in posting on your website anymore, but I do appreciate your response here. I don't believe my comments were any more abusive or disrespectful than the comments you gave to me, or that i received from others. I do think my ideas are at a polar extreme from yours.
    Now, I admit, I'm the type who likes to make fun of hippies (thanks for sparing the world another set of dreadlocks) and I did purposely try to insight reaction. But I did this because I am strongly convinced that the underlying philosophy behind a great deal of what you are promoting, and what 'hippies' believe, is fundamentally incorrect.
    Behavioural psychology and behavioural economics have studied the relationship in men, between economic activity and normally occurring levels of testosterone. I believe it is fair to say that there is an underlying sociobiological disposition for different people to value and prioritize different things and behave accordingly. Debate at that point becomes irrelevant and I hope that I can offer you any investing tips you find useful on your journey through life.

  3. I'm not sure you completely get my "philosophy" (did you read through my 400+ posts?). To make the point again.

    I find that material wealth has diminishing returns beyond a certain level of consumption which for me is above the hunter-gatherer level but also below the desire for 5 bedrooms and a TV in all 3 bathrooms. Qualities that are admirable such as working hard to go from scratch to indoor plumbing, a scientific understanding of diseases, and civilized society become less admirable when taken to the extreme when hard work is being done to go from 2 bathrooms to 3 bathrooms. This material improvement, if having the choice between 3 bathrooms instead of 2 when it comes to sitting on the throne can be considered an improvement, comes at the expense of health, lack of autonomy, lack of time, lack of political involvement, and blah blah blah.

    In other words, the pursuit of happiness through material wealth is no longer happiness-efficient beyond a certain point and may even be detrimental. Drive and ambition is good but not beyond the point when one should have realized that enough is enough.

    The second point is that not everybody functions most optimally and does the best work by being employed by someone else. I do see that this holds for a majority of people but not all. On the whole I seem to make more of an impact teaching people how to fish on my blog (so they tell me anyway) that feeding people fish in a soup kitchen.

    In terms of testosterone, I think it would be hard to make conclusive statements for individuals. For instance, my investment strategy is riskier than yours. Like you I have pursued a career in several different countries. I used to be a scientist which is about as competitive (obviously mentally rather than physically) as pro-sports in terms of elimination of who makes it to the next level. Usually the cut is around 50%. I made the cut to grad school, I made the cut to complete my PhD, I made the cut to get my first research position, I made the cut to the second; only about 6 in a 100 gets that far. At that point, admittedly I decided that I did not want to fight the remaining other 5 guys for the top spot. Many leave before that and find something easier, but it is really more fun to be a little fish in a big pond rather than the other way around. The easy way out would have been to go for engineering rather than one of the hard sciences.

    Being employed is not the end all. Being productive is. I know a dot com millionaire that spends his time developing scientific codes unpaid merely because it pleases him. These codes are useful to other people despite nobody paying him. But nobody needs him. Similarly, apparently my writings are useful to people. If I can get people to spend their productivity on something better than extra bathrooms (3 bathrooms will support more than 25 people without wait times), I think I have done something as worthwhile as a personal financial advisor who tells people to balance their stock/bond portfolio according to a 1-Age in percentage. Also, employment or pursuing a career is not the only way to get connected or involved. The computer programmer above is now connected to the scientific community and does valuable work. Similarly with my non-profit work I am now connected outside my field of specialization. This makes me much more efficient at networking than those (the majority, really) who mostly interact with their colleagues.

  4. Gah, I meant nobody pays him ;-P

  5. sadly, the hippy has only confirmed my point.
    the things he rejects are of such a broad social nature that debate is not possible on a rational level. This leads me to the idea of different sociobiological systems and their feedback mechanisms (hippies only like other hippies).
    Normal, hard working people, don't dream of bathrooms and televisions as much as financial security and the ability to build and transmit wealth from one generation to the next. Bonds are an excellent tool for this task.
    This requires serious commitment, often entailing short-term sacrifice, and is wholly predicated on a belief that the future should provide the opportunity to improve one's quality of life. A hippy uses his counter-culture ideology to stereotype all consumers as people who mindlessly over-consume without thinking about those people who are driven by the opportunity a marketplace provides to enhance the quality (not quantity) of one's life.
    Sadly, since the dawn of human history, you will always have to pay (and sometimes quite dearly) for quality.

  6. this blog is such a waste of my time.
    Jacob makes sense and clearly you need a life.

  7. Just another haters blog.

  8. I was curious to read the rebuttal to Jacob's lifestyle. After reading the entire thing, I can unequivocally say BIGINTOBONDAGE, you are a brain dead moron at best, or a brainwashed drone at worst. What a worthless rebuttal.