I read an article a few years ago discussing how this mentality has shifted. Over many decades during market downturns most people panicked and wanted to sell stocks, so the job of advisors was the caution patience and try to keep their clients from making a bad decision. Now during many market hiccups there can more more buying activity by individual investors even as major hedge funds actually trim some of their holdings. So in some respects that traditional model has flipped. I'm not sure if that would hold true in a major, longer term bear market, but it holds true for most of the minor drops along the way.

 

Yeah I think it's because of all the resources available to us these days online and in books. We're all way more educated now and more prone to buy when things are at a discount vs panic. Also the proliferation of the boglehead mentality is pretty widespread and powerful.

 

For all the budding Warren Buffets TVT is a real thing once you hit your financial independence number (whatever that is for you) I am now completely passive in the S&P 500 and the MBCBP holdings and I watch the number tick up from my favorite pass times. If you enjoy life in front of a screen reading SEC filing great but don't forget to live life. Health scares happening around you are a great motivator and reminder. This applies to the $$$ chaser in the airplane too. Sappy old guy advice I know but... this is the internet and I'm tired of yelling at clouds so now it's uninvited rocking chair wisdom. You're welcome.

 

Since this thread is now just drifting in the financial wind, what do y'all saaaaavy investors think about alternatives? Like real estate syndications, venture capital, startups, etc.? Scared of them? All in on them? Just don't like em? Somewhere in between?

 

Health scares are actually my biggest motivator to reach financial independence, especially in a health dependent career like ours. Also why the HSA is my favorite investment vehicle. Everything in life is about balance. Reading 10Qs/10ks is enjoyable for me doesn't take all day and there is still plenty of time to do other things.

Also just to clarify for all, SPY and Chill/Bogleheads 3 fund portfolio etc are exceptional hands off ways to build wealth over the long term if you are not interested in buying smaller companies with a strict value approach. My main point was to challenge the common notion that it's difficult for a small individual investor to beat the market. That nonsense is spouted by Wall Street Firms and ETFs who want your assets to increase their AUM.

On Wall Street the business plan is to maximize AUM and thus maximize revenue from fees. That's why everyone moves nearly in lockstep with certain stocks to avoid the career risk of being on the wrong side of a trade.

The beauty of being a small individual investor is you only answer to yourself. The huge blessing of being high income Delta pilots is our 18% DC plus Brokeragelink allows us to quickly build up AUM that are more than what alot of prominent Hedgefund investors have. Compound that at 15%+ a year and the results are eye-popping. Heck, compounding at 25% IRR, half of early Buffet or Greenblatt returns leads to generational wealth after just 10 years. Likely in the future we will hear of pilots that built $30m+ portfolios

 

There’s really no reason for a health issue to scare you financially if you’re a pilot at Delta. Go read our disability guide. Health issues that result in loss of medical will land a pilot (who had been diligently saving and living below their means) in a LTD safety net that more that adequately meets financial needs until age 65.

 

Curious what people consider as their "financial independence number" I've always said 17 Billion. Anything more would be unnecessary.

 

My "FU money" in today's dollars is around 12.5M investment assets with a paid off house.

Like if I had that much, with enough in a non retirement account to get to the age I can start using my 401k without penalty, that's $500k using the 4% draw number often used. Add in another $30k in tax free VA disability and another $40k in military retirement I can do quite well on that.

If $12M+ were to pop into my account today (it's nowhere near that much) I'd retire tomorrow. If $20M showed up my retirement would be legendary.

But, GM went bankrupt when I had a ton of GM stock from selling them a patent. So there's no real chance of hitting my FU, Im out number barring another patent taking off or hitting the lottery. As is the case for a lot of us lost decade guys who hit 40 with under $100k in retirement/investment accounts.

 

Here's what I used as a gauge...

Netbenefits has a net worth calculator and it gives your gain in last 90 days. (roughly a quarter year worth of net increase) My desired salary at retirement divided by four should be larger than this number. It also gives you the % gain and mine is around 5% in the last few times I checked which is great considering annual gains are roughly 4X that. If it's 2-3% and the 90 day number works you are home free IMHO. I will continue to work (as far as Delta is concerned) until 65 but mostly for healthcare and the savings/investment opportunity. I see myself bidding RES again at some point and dropping availability. My "practice retirement" has been ongoing since some big Covid gains when people panicked out of the market and I bought cheap. If you have some liquidity, the next downturn could be your freedom. Not advice, just an anecdote.

 

2.5 mil is where I start feeling secure. That gives you $100k /yr at a 4% withdrawal rate. It's plenty to cover my living expenses if the job were to disappear tomorrow. At 5 mil I start treating the job like a hobby and try to drop everything to fly once or twice a month when I feel like it, seniority permitting.