On Pressure

Okay kids, raise your hand if you’ve ever felt pressure. I don’t mean the pressure in your gut that you occasionally get, then you rip ass and feel good again. I mean mental pressure, especially in the world of personal finance. Who here has dealt with snide comments about your real or perceived wealth? Who’s been subtly or not-so-subtly encouraged to pay for nights out or chip in more than your fair share once it’s known you have a positive bank account balance? Who’s dealt with people saying “I don’t know how you do it, I’m swimming in credit card debt/student loans/mortgages; I can’t save a penny!” Now put your hands down, I can’t see shit through my computer monitor.

Reddit

I found an interesting post on Reddit a while back about handling social pressure from friends and family. Like me and you, the author is seeking financial independence, and has started to come across some hostility from others:

I’ve been investing for over 10 years now, and I’m at the stage where my efforts are starting to pay off. But with that payoff, comes a new set of challenges:

• The friends that I have who aren’t fiscally responsible see me as being a cheapskate, since I’m not always buying new clothes, cars, and taking expensive vacations. Clearly I’m retarded because I’m not living life.

• My rich friends tell me that I worry too much, or I’m stupid because I didn’t make as much as they did as quick as they did.

• My parents, who aren’t financially savvy at all, are making some statements that I’m their retirement plan and that I owe them for my success. Except that I would be destitute if I had listened to them, and hadn’t taught myself from assorted books and resources like this sub.

Fun on SeekingAlpha

This little gem of an exchange occured on my last Premium article of Lithia Motors (LAD). If you can’t read the article, I basically said I wasn’t impressed with the company due to them terminating the dividend during the recession. Some lovely chap commented on my article, and this exchange happened:

[Commenter] If this isn’t the silliest article I’ve ever read on SA, that’s only because I’ve read so many such articles here. The author is visibly straining to find something bad to say about LAD. So what does he come up with? After conceding the enormous and consistent capital growth and share price over a 20 year period, of which the latest earnings and economic conditions (low oil price favouring the car industry) only augur acceleration, he finds that “what really concerns” him is that seven years ago in the midst of the Great Recession the company briefly suspended its dividend. Horror of horrors. To be sure, behind this particular silliness lies the general silliness, often voiced on SA, that retirees need dependable dividends, even if a consistently growing non-dividend company can return ten times as much in the increase of the share price. This investment fallacy has been refuted numerous times, but if a person needs the psychological comfor t of regular dividends paid out by the directors, rather than managing their surging stock by themselves to take whatever income they require, no further arguments will suffice. Even still, we’re talking about a company that suspended its dividend once in what – 40 years, or is it 60 years? The author then feels unsure about the company because it is family-run, while admitting that family-run companies are sometimes excellent, and presenting no data whatsoever on the performance of family-run versus non-family-run companies. A careful reader will find this article if anything a ringing endorsement of a great company, if that is the worst a hostile writer could find.

 

Author’s reply » I appreciate your commentary on my “silly” article. It’s always nice to see people who disagree with me. I’m young, only 23, and really like to be challenged on my views while I’m still mentally flexible enough to change them. I personally only wish you would have given me more specifics on how to improve my form of analysis, rather than generally critiquing me and my investment philosophy.

Since I detect some hostility to me and my views, I would like to ask you to consider this: maybe my investing goals and criteria are different than yours? Maybe I need/prefer the immediate income and don’t want to rely on what I view as the comparative hassle of capital appreciation or selling shares? I’m not here to debate the merits of MPT or total return or DGI, but I do have a certain preferred way of investing. And thus, I view investments a certain way.

My article is not meant to say “Oh wow, LAD is the worst/best company ever for all investors of any stripe”. It is meant to say “Hey, it may be good for others, but it’s not for me”. Maybe you personally agree with me, maybe you don’t. I take it you don’t. That’s fine. But like it or not, not all investors invest the same way as you, and many invest the same way I do.

If LAD works for your investing goals and objectives, great. For me, it doesn’t. That’s all there is to it. All the best.

 

[Commenter] Hi. I’m sorry to pillory your article, but I’m afraid this is going from the comical to the hilarious. Your main “concern” in the article is that once in a 70 year history, in the midst of a recession the likes of which had not been seen in 80 years, LAD briefly suspended its dividend. And why are you so concerned? You explain in your article: “As someone who wants to live on dividends as part of an extreme early retirement, that doesn’t appeal to me at all.” Now you tell us you’re all of 23 years old! Well, at least we now know what you meant by “extreme”. You then announce that you don’t want to debate the merits of various investing strategies, even though that apparently is the heart of the matter. To be fair, you are not the first person to speak of general investment strategies as if they were private religious convictions. Well fine, if you don’t wish to debate it, I’ll just tell you my opinion: if you are 23 years old and are shunning an outstanding high value and growth company because it once briefly suspended its dividend during a historic recession, your strategy is foolish. The only question worth discussing is why SA publishes such silly articles by know-nothing 23 year-olds, and what can be done about this policy. You shouldn’t feel insulted. You have virtually no experience and little understanding, yet you chose to “instruct” a readership – the average member of which has far greater knowledge than you – with a particularly silly article. So why not take your lumps, instead of asking for charity because of your age? If you want tutorials there are better ways of obtaining them. Article writing should be for those who have real insights to impart, whereas the sample above wastes people’s time.

 

Author’s reply » Thanks for your reply. I disagree with what you said, including your points about me “asking for charity” (how in the world did you reach that conclusion? Saying my age explains my investment viewpoint. If I wanted pity or emotional support, I wouldn’t have submitted an article the first place.) and your comment that I shouldn’t be insulted, then turning around and saying I am a “know-nothing”, with “little understanding” of investing and who should be banned from SeekingAlpha for “wast[ing] people’s time”. No need for personal attacks.

Beyond that, your point is noted. I am sorry you feel my article is not “up to your standards”, and that I disagree with you that this company is an “outstanding” investment. But that’s the way the world works. All the best.

 

[Commenter] I think it’s cowardly and disingenuous to get a comment deleted and then reply to it. As for whether SA should publish articles by 23 year olds who reject a company because it doesn’t fit their “extreme early retirement” “strategy”, we each have our own views.

The good news is that each of his comments were reported and deleted for being abusive.

But look, my point in sharing this exchange is not to seek sympathy or pity or whatever. Of course I was pissed, and re-reading these posts got me all pissed all over again. It’s another example of how those who seek to better themselves, and more specifically, dividend growth investors, are often viewed as the enemy.

So What’s Going On?

It’s pretty clear that there is some form of hostility between seekers of early retirement and the rest of the world. We’ve all seen it in some form or another. The sly comments, the subtle encouraging to pay more for something. The implication that we’re cheap or miserly for not going out and buying the fanciest doohickey we can afford or going on vacations every month. God knows I have. The question is why? Why do people give so much of a shit about what others do with their money? What does it matter to that prick of a commenter what stocks I choose to invest in, or what criteria I use to make that decision? What does it matter if that guy on Reddit goes on expensive vacations or not? Well, I see there being several main causes to this hostility.

Shame – Years ago, I had a friend. Let’s call him “Bob” for privacy. Bob and I were best friends. He was the first person I met when I changed middle schools. We were both quiet, smart, and hated gym class. That was a good enough foundation for a solid friendship, one that lasted for quite a few years. And like most friends, we hung out and played video games and shit. The thing is, we weren’t from the same economic background. I was upper middle class, he was definitely lower middle class. My family had a really nice house in a nice neighborhood; he had one step above a trailer park. At first, I was okay with him coming over. It’s whatever, right? But I began to realize that he never invited me over to his family’s place. We would chill at school, or at my house, or some other place, but never at his house. I thought it was a bit odd, but it never clicked until after he graduated high school. By that time, we had drifted apart. He was joining the military, and he gave me a box of Legos. Stopped by his family’s new apartment, picked them up, and said our final goodbyes. It wasn’t until he closed the door behind me for the last time that I realized: he was ashamed. He was ashamed of his life. He didn’t have as nice a car as me, or as nice a house, or fancy toys. I felt so sad when I realized that. I had known him for six years, and I never thought about it. I had never, never, brought up money or anything like that with him. I had never judged him or commented on anything that brought that up. He was my friend, and I liked him for him. Not because of his house or clothes or whatever. He was just a nice guy, and we got along well. That was an eye-opener, that day. Even if we don’t think of it or realize it, the way we act or what we own can cause people to judge us. Bob was ashamed that he didn’t have as good a life as me, and I wouldn’t be surprised to learn it helped end our friendship. I can’t help but wonder if people don’t like us as seekers of financial independence/early retirement because they’re ashamed that they don’t make the income we do, or have as much investing knowledge as we do. Is it that which causes some pressure, some hostility? I think so.

As an aside – Yes, “Bob” is a real person, not some allegory I made up. I stalked him on Facebook a while back. I sent him a friend request again, but he denied it pretty quickly. He’s now an officer in the Navy, serving on a submarine. Doing pretty well for himself, I gathered. Even if we aren’t friends anymore, I’m happy for him, and hope his life turns out all right in the end.

Jealousy – Oh, that’s here too. I’ve personally noticed jealousy too, in my life. Look people, I know I am extremely fortunate. I’ve had a blessed life. I have perfect parents, ones who took care of my every need. They started me on my investing road, and ensured that I would get my degrees debt-free. I was lucky to play my cards right and eventually end up with a solid, extremely secure six-figure job as a software developer. I’ve been lucky in choosing good investments and maintaining a high savings rate, such that I’m worth nearly $150,000 at the ripe old age of 23. I am truly in the 1% for the life I’ve lived. I know I’m exceptionally privileged and fortunate to be where I am now. I certainly didn’t end up here all on my own. Hell, I don’t like even talking about it, because I know people have worked harder than I have to get where they are, and I don’t want to come off as humblebragging or whatever. I’m pretty damn insecure about it (no shit, right?), and I only bring it up now to make a point.

Some people, when they get a whiff of my financial state, just see that “23, rich, must be a spoiled shit”. Although I had a good start in life, people don’t see that I had to work too. Yeah, I had a lot of scholarships, but if I didn’t work hard, I would have lost them all. I put in the work for my master’s degree, and I still worked quite a bit to avoid debt and put money in the market. I earned the job I have with the research and work I did at grad school. No one could have taken those tests for me, or done that research for me. I did the research into stocks to invest in; you’ve probably seen that my analyses aren’t the easiest or most superficial. But people don’t see that. They don’t see that yes, I got a good start, but I acknowledged and ran with those opportunities to make something of myself. I didn’t work alone, but I didn’t have everything handed to me either. But try telling that to half the people out there who just assume that I’m some spoiled, entitled trust fund baby.

People just see what they want to see. They don’t want to see the work we as FIREseekers do to have six-figure net worths, how hard we save and scrimp to put money away every month. What we sacrifice and deny ourselves just so we can reach FIRE before 65, 55, 45, 35, whatever timeline we chose for ourselves. They just see the result, and quite often assume that it’s from inheritance or luck or some act of God. They want to be us, and thus they are jealous of us. No matter if you’re worth 4 figures or 7, the fact that you’re actively working to better yourself makes a lot of people uncomfortable. They see their fancy possessions and their massive mortgages and their 14 credit cards with five-figure balances, and they sit there and wonder how we did it. Even if they read and learn, they often just sit there on the same path they’re on, utterly convinced that we’re using some sort of financial witchcraft to do well, wondering why God won’t bless them like he so clearly did us. And then they get pissy that the Big Man hasn’t automagically wiped away their debt or let them win the lottery. Then they get mad at us, because something went wrong on their end but clearly not on ours. Come on, I’m sure you’ve all seen the comment sections of Yahoo Finance or CNN or Bloomberg. There is a lot of hostility towards people like us, dear reader. Comments like “Oh, it must be nice to have your parents pay for everything” or “Must be nice to put money into savings rather than pay for the kids’ school”. Stupid-ass comments like that only get in the way of you making your own fiscal future. You’re jealous of us because we’re breaking the chains of consumerism and materialism and choosing to make money with our money. You want to be us, but you can’t or won’t put in the work to become us. That, my friend, is the root cause of jealousy.

Anger – And closely related to the above, anger. People get awfully pissy if they feel you’ve one-upped them somehow. Remember the “keeping up with the Joneses” concept? Goddamn, people get angry if you buy a nicer car than them, or a bigger house, or go on nicer vacations, or whatever the fuck the current measure of “success” is. And heaven for-fucking-bid you have a higher net worth than they do. We’ve see the hatred of the 1% by the majority. Occupy Wall Street, all that. There’s often this implicit assumption that the wealthy, in order to become and stay wealthy, have to screw over other people. It’s like that thing with crabs in a bucket. Even if one crab manages to start climbing out, the others will pull it back down again. There’s like this certain thought process of “How dare you exceed your allotted limit?!” Like, people get so freaked out that others begin to rise above them, that it becomes much easier to tear down the other person and sabotage them rather than emulate or copy them. It’s like hard work doesn’t have a place in certain groups. And if you dare to break the mold, watch out.

Ignorance – These guys, I actually can respect. They don’t hate us because of laziness or envy. They just don’t get why we do what we do. It may confuse them or seem pointless to them. They prefer to YOLO it, spending money on having fun and enjoying themselves while they’re still young enough to do everything they want. If that’s the way you want to live, whatever. God knows I sympathize more than I want to. Just don’t expect me to subsidize your retirement if you choose not to contribute to your 401(k) or whatever. You had your chance to save.

In Conclusion

Okay, I really got into rant mode here. Sorry about that. Of course, I should clarity I’m not talking about those people who due to exceptionally shitty luck, can’t invest to our level. This was more directed to the average working American with two cars, a nice house in Suburbia chock full of electronics and fancy furniture, a gold Amex, and two kids in private school. People who could do something to fix their situation, but just won’t. The ones who would prefer the complain instead of DO.

There’s a lot of reasons for this pressure, and it’s not really a good thing. But at the end of the day, it’s not really worth thinking about too much, is it? I am not blind to the irony of dedicating a blog post to thinking of why others give a shit about stuff that doesn’t concern them. Each person has their own goals and needs and priorities.  Mine just happen to be financial independence. If it is someone else’s too? Great, support ’em! If it’s not and they’re curious about it, teach ’em. If it’s not and they don’t care, fuck ’em. And if they try to get in your way, just ignore ’em. We have more important shit to worry about. And always remember:

 

 

Mark out.

Have you ever experienced jealousy, resentment, or hatred from others on your journey to financial independence?

Image source is available here.

Tags: i-very-mad, investment-philosophy, pressure