My name is UTMT and I’m an addict.
Well at least I think I am. I’ve self diagnosed myself as having an addictive personality. But what exactly does this mean, particularly with respect to my finances? Well here is what wikipedia says about addictive personalties:
An addictive personality refers to a particular set of personality traits that make an individual predisposed to addictions. Addictive behaviours are defined by the excessive, repetitive use of pleasurable activities to cope with unmanageable internal conflict, pressure, and stress.
Now before I reveal my addictions to the world what about that unmanageable conflict, pressure and stress? Well I’m incredibly lucky in the sense that I have a great family, wonderful wife, lovely home and I’m in good health. In ‘developing’ world terms I have nothing to stress. However I’m a ‘developed’ world kid so I naturally have beef with my world.
The thing that saps the life out of me, that causes me unmanageable pain is knowing that I am spending the best years of my life in the office, answering to incompetents and bureaucracy. I’m well paid compared to the average person so I shouldn’t complain, but I do. The simple fact is that if I was paid a lot less I would simply quit and go do something enjoyable instead.
The high salary I receive is a doubled edged sword. It is offering me an opportunity to achieve a situation where I answer to nobody ever again in a few short years time. Without the current salary I would most likely already be a yoga instructor, bike mechanic, beach bum or some such other ‘job’ I’d much rather be doing with my time.
However the very same salary will one day free me from the need to work and give me optionality over my life.
I’m not alone, both Ermine and TEA have already done it. I’m a few years younger than them so unless I get fired, I have a risk free trade sitting in front of me:
Give it X1 more years and you free from this forever!
My Addictions
When I start enjoying a new activity I quickly become obsessed. I tend to get obsessed with everything I enjoy. Alcohol, gummi bears, recreational drugs, cycling, photography, running, work, music and money (amongst many other things) have all made the endorphins flow through my brain at some point in the past and gripped me like crack cocaine.
As my long suffering wife will attest, I’ve been addicted to all of the above at some point. I’ve fallen out with some, replaced others and learned to live with many of them. The point is I take things to the extreme.
Addiction: A Force for Good
Over the years I’ve learnt to harness my addictive personality traits for good. As Chinese philosophy will tell you, every yin has it’s yang and I’ve found that by allowing certain addictions to bloom (those on activities that bring positivity to my life) they quickly overwhelm any addictions that bring negativity.
Addicted to Sport
Ensuring I have a sporting addiction running hot means I’m motivated to keep eating healthily and not drink too much. I used to be big into football and then running before injury forced me to seek other thrills. I shortly after discovered long distance cycling which suits an addictive personality perfectly.
I also go through phases of yoga (my wife discovered my secret sessions with my other woman Esther long ago) and swimming when other commitments prevent me from spending hours out on the bike. For a few years now I’ve also harnessed an as yet untapped attraction to martial arts. I can easily see myself obsessing over the subtleties of Thai Chi , Wing Chun or something similar at some stage in the future.
The point is that if I’m not exercising, getting fitter, striving for more performance from my (mainly mediocre) body then I rapidly go the opposite direction and turn to pizza and alcohol to please my soul in the evenings.
While I’m exercising I cook fresh food and avoid binges on sweet fatty junk like the plague. I’ll research the sh$t out of techniques to help me improve. I’ll live like a monk, what ever it takes to satisfy my addiction. For example I’m not a competitive cyclist (i.e. I don’t race) but despite this I am still a little OTT with my cycling behaviour:
- I regularly get up at 5am to cycle to the train station (the very long way) before work
- My bike tool rack looks a little bit like this
- I have a spread sheet that has every run/walk/cycle I’ve done since 2001 (including gym sessions)
Addicted to Money
In much the same way, my journey to financial fitness (and ultimately financial independence) stops me splurging money on endorphin releasing things like shiny fast cars, rolex watches and expensive beach holidays.
Warren Buffet was renowned in his younger years for obsessively collecting things such as bottle tops. Now I don’t claim to be anywhere near as good as him at collecting money but I’ve always collected things and sometimes wonder if this is a common trait amongst financially savvy/motivated people.
As a child I collected beer mats, empty beers cans, milk bottles and badges amongst other things. As a young man in my twenties it soon became shares, savings and investments though I wasn’t necessarily conscious that I was collecting ‘money’ until about 9 years ago.
Like most of the population I have the weak gene that urges me to buy things online as soon as I identify a need or (more usually) want for something.
Addicted to Future Possibilities
Over time I’ve learnt to use my addiction/obsession with achieving financial independence to question every purchase and delay gratification where possible. Over the last few years this behaviour has turned from developing some good habits (save more, spend less) to more of an obsessive compulsion towards FI.
The idea of creating a ‘passive’ income that allows me to retire seriously early (around the age of 40) is one that has gripped my addictive personality hard. The possibilities that this goal will open up to me are merely acting as fuel for this FIRE.
What are you addicted to?
Notes:
1I’m still negotiating with MRs UTMT what our target FI income is!
My name is Brodes and I’m addicted to buying shares too. Once upon a time I was addicted to rock climbing.
Some call it addiction, some call it focus. Perhaps the difference it whether a positive outcome is immediately obvious. A person who saved obsessively for 10 years and has half a million pounds in shares is probably called focused, and respected for his/her dedication. The same person 9 years previously may well be seen as addicted and deprived of the normal comforts. A loser even.
Regarding the amount of money required for FI. I have a non-earning (although very hard working) wife and two young girls. Personally, my ‘never earn money again’ number is £3k per month in passive income. That leaves a margin of safety and some spare change for saving and or reinvestment. Hopefully about £500-900 per month. Ideally I would like most of that monthly 3K to come from investments outside a pension wrapper.
I’m not totally sold on the 4% rule. I think market valuation is the primary factor in the safe withdrawal rate. Instead I plan to stay addicted until the net dividends hit 36k per year. As of today, that works out at about £850k. That number will change for sure!
Stay addicted!
Brodes
Brodes,
Buying shares is not such a bad addiction to have, assuming you buy the right ones 😉
Just wondering if your £3k is a net number or pre tax? While it’s nice the NISA limit was recently bumped up to £15k it would be nice if it was higher still. I’m currently trying to balance income investments in my NISA and capital growth investments in my taxable account and then keep my eye on capital gains/allowances.
Depending on your age it might be worth considering AVCs into your pension at some stage as the tax breaks can be huge, particularly if you’re a higher rate tax payer. Of course the big snag is the money is locked up until you’re 55.
Good luck!
I’ve never had much luck with a ‘growth’ investment style. Many moons ago (I’m late 30s) I stumbled across the Motley fool’s HYP approach (Thank you TMFPyad!). I’ve been running that strategy since. I have also leveraged it around 30% with a mortgage, which is a bit of an experiment. I’m a bit heavy on tobacco, pharma, and non-cyclical consumer goods but I think the stability of those sectors offsets the volatility caused by the leverage.
Right now I divide spare capital between re-investing in shares, making additional salary sacrifice contributions to my work pension, and slowly repaying the (fixed rate) mortgage. Right now the pension is around 15% of my total investment assets. I don’t want the pension to become too dominant in case the government decides to delay access until too late. Since i joined the workforce the date of access has moved from 50 to 57. Hopefully it won’t move much later…
The 3K per month is net. Under the current tax rules basic rate tax payers don’t pay an tax on the dividends they receive. So a (retired) married couple can easily receive 36K without paying a penny. Or the non-working partner could hold the shares, although there are other issues with that arrangement. If you have the shares in ISA/NISAs then so much the better – less record keeping and reduced risk from changes in tax law. By the time I’m FI most of the shares will be in NISAs.
Brodes
Addictions are fine as long as they’re good for you, ie exercise, healthy eating and investing!
My last obsession wasn’t good for me (video gaming, leading to not enough sleep and repetitive strain injury) – I’m over that and now enjoy it in moderation.
I currently don’t have any obsessions, although perhaps I check the value of my portfolio too often! That can’t be good for me, especially with the markets as they are now!
Weenie,
Video gaming isn’t a great one as it can be such a drain on time. Glad you’ve got it under control 😉
Great article. I’m trying to harness my addictive personality! Theres so many things to do / see / read that unless i have some reference point, i stack up addictions / obsessions, hitting them as hard as i can for a week, a month, a year until something draws me onto the next one but keep coming back to them regularly, so i have a large range of interests. Over the last two years, having clear short and long term goals to keep me focused and develop good habits has helped a lot. Its also helped me dump some of the less useful things i’ve been doing with my time.
Having nailed my FI strategy from a reducing spending, paying off debt, investing point of view, earning more and time efficiency techniques are my newest obsessions to bring forward my FI date.
Good luck with FI, i came across from monevator, so will be checking out the rest of your site.
Sean,
Welcome aboard good ship Money Tree. It’s funny that you mentioned time efficiency techniques….i was drafting a future post on this topic yesterday!
“Addiction” is a pretty strong word to use particularly in relation to some of the substances/activities you mention. As someone with an alcoholic brother whose very real addiction has damaged the lives of those close to him (along with his own) I twinged a little at your reference. Physical addiction like alcoholism is just not on the same level as “using/doing/enjoying a little more than is good for us”. I would rather call what you describe as having a “driven” or “obsessive” personality and this is often leads to success in life rather than down into the despair of true addiction. But I’m being over sensitive and I take your point. 🙂
Cerridwen,
Sorry to hear about your brother. I certainly don’t mean to over dramatise my experiences. I have also witnessed close hand the devastating destruction of unabated addiction. However, I can definitely feel the seed of true addiction in my personality. What I was trying to convey in the post was that I feel I’m lucky in that I am able to recognise this weakness in my personality and harness it for good.
Fun post, UTMT, although I agree with the previous poster that addication maybe is a bit too strong! 🙂
I’m definitely addicted to future possibilities! And to being able to do what I want, i.e. freedom.
UTMT,
Hi, my name is Jason. And I’m a dividend addict. 🙂
(Crowd: Hello, Jason).
Personalities that are prone to OCD behavior can be used for good or evil. I’ve been a witness to the evil aspects, as my own mother was a hardcore drug addict. I guess she passed on some of those behavior aspects to me, but I used them for good. Nature vs. nurture, maybe?
I hope you continue to use yours for good. 🙂
Best regards.
Hi Jason,
I think you’ve hit the nail on the head in that most of how we behave is a mix of both nature and nurture. Having read through many of the posts on your site some might say you’re pretty extreme in your behaviour. However being addicted to dividends is not a bad thing at all.
PS: Funnily enough my wife has OCD. One of the things that REALLY does her head in is that the condition isn’t called CDO*.
*She seriously can’t comprehend how the doctor that discovered this condition couldn’t come up with an acronym where the letters are in alphabetical order!
@UTMT, I’m addicted to freedom. I believe we in the FI community are not “normal”. Most people around me, including my wife and kids don’t understand what I’ve achieved. I don’t really understand it because isn’t freedom the natural state for a human being to be in ? I’m also obsessive about exercise. I walk 3 hours a day and do weights 5 days a week. Because I work from home this is easy for me to schedule. The walking is Utopia, listening to music, financial podcasts, documentaries etc I’m 48 but still fit into my student clothes. That’s another thing I noticed about the FI community, because of the self discipline and delayed gratification type personalities they tend to be fit & healthy. Like I said we are not “normal”.
@Brodes, looks like your running a strategy similar to mine, I’m generating about £18K pa net income with a combo of HYP, dividend ETFs. Will probably hit £24K next year, I’ve got lots of cash on the side-lines, waiting for a more deeper market correction. I really need top buy a BTL for some diversification and fixed income when rates rise.
Jon,
It looks like your well on your way if you’re hitting £18k pa net and are perfectly set up with cash on the side to buy the next big dip, congratulations.
May I ask what kind of work you’re in? Unfortunately working from home is frowned upon in my line or work which is a massive pain. Hearing of your 3 hour walks and regular workouts makes me very jealous! If I were able to work from home this interim period before I reach FI would be so much more enjoyable as currently I am always trying to find time to exercise without offending either work or more importantly family!
@UTMT, i’m in Field Sales so I’m either on the road, typically 2 days per week or work from home, maybe in the office one day a month for meetings. My story is slightly different from other investors in that I joined a USA start up pre-IPO and made my money when they floated. However, I knew nothing about investing, passive income etc so I just left my money in building society deposit accounts earning 6%. I didn’t buy flashy cars or a bigger house (prob a mistake in view of property inflation). When interest rates collapsed I read multiple books on investing, Motley Fool, Money Week magazine, Monevator etc. I started seriously investing 4 years ago. I have cash on the side lines which I’m deploying when stock valuations make sense. After graduating in late 1980’s I worked in a company office (cubicle slave) for 3 years but I just couldn’t cope – it was like coming into prison at 9am and being let out at 5pm, so I got a job in Field Sales. I worked for the USA start up for 10 years + and was travelling all over Europe and the USA and had complete control of when I travelled and who I visited. Having control makes a big difference. I could never work in an office, if I need to go to the dentist, hairdresser make personal calls, I can do that with complete freedom. If my company told me I had to work in the office, I would quit today. The only reason i’m still working is because I have total freedom at work and that is the most important factor for me, the flashy cars and the big houses are irrelevant, they don’t make you happy.
Jon,
Field Sales sounds great in terms of lifestyle/not being chained to a desk all day everyday, unfortunately I’ve never been a great salesman.
Your IPO involvement sounds like it was a good gig. Full control over work schedule, lots of travel and a nice big pay day at the end of it! Congrats!
Hi,
My current job enables me to work ‘freely’ relatively. I can work in the office or home or ‘in location’. Although its about to come to an end and I will be back into the ‘office prison’. I too find it harder now to be in an office all day after being spoilt by this freedom, it is hard to get back into the office – the 4 walls just drive me mad now. Getting another job in my line of work that will let me work from home is getting harder. Employers are worried you are not earning your keep! Its a driving force behind becoming FI.
My passive income isn’t there yet. I would love to earn 18k pa net that would set me up nicely. Last year I reached 10k pa GROSS, although some of this is income I cannot readily access and it fluctuates too much to be steady. I have bought a BTL which is now starting to make a good dent on the passive income and so I will have to put up with the ‘office prison’ for a few more years to reach my goal. I am still formulating my plan for FI as it evolves over the years. I have only recently started to focus on this in an ‘addictive’ way 🙂
Good Luck – happy FI!
SparkleBee,
£10k is no mean feet, even if it is gross. Hopefully you’re able to plough that back in to your investments to grow your money tree between now and when you escape the office prison?
When I see an over-categorised bike tool rack like that I start to reflect on the effects of the modern corporate workplace on peoples personalities.
Some of the places I’ve worked at have definitely encouraged behaviour on the ASD scale, not that males working in tech need a lot of encouragement. It does seem to gradually fall away, whether due to ageing, burn out or increasing independence I don’t know, I’m just glad to have left it behind me.
BTW I think the pedal spanner on the top left belongs with the wheel spanners on the middle right but I’d need to run a card sort experiment with a least 6 people to be sure 😉
Nathan,
You’re 100% correct about that pedal spanner. Safe to say that this isn’t my tool rack but one I found on the internet when I wrote the post. I’ve just checked and the aforementioned spanner is in fact next to the lock nut spanners on my rack 😉
Oh what an honest description of this facet of your personality!
I personally (and rather simplistically) think addictions are a form of barrier we put up to sabotage connecting with people, although we don’t realise this most of the time. It is also about self control; compulsion is the shunning of self control.
Paradoxically, I think it’s good not to be too self aware as that keeps obsession under control somewhat. A bit like Taleb’s anti fragile thesis. Occasionally, you won’t feel like eating and can skip the odd meal, but it should be random or so your body gets a wake up call and breaks to the routine make you feel alive.
I am really enjoying these posts, thank you! : )