Financial Independence Daily FI discussion thread - February 07, 2020

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• Daily FI discussion thread - February 07, 2020
• FIRE & the Pursuit of Happiness
• Weekly FI Frugal Friday thread - February 07, 2020

Daily FI discussion thread - February 07, 2020 Posted: 07 Feb 2020 12:09 AM PST Please use this thread to have discussions which you don't feel warrant a new post to the sub. While the Rules for posting questions on the basics of personal finance/investing topics are relaxed a little bit here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Have a look at the FAQ for this subreddit before posting to see if your question is frequently asked. Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]

FIRE & the Pursuit of Happiness Posted: 07 Feb 2020 07:38 AM PST TL;DR: What do you think the implications are of the U-shaped happiness curve and Financial Independence? Today I was reading about the U-shaped happiness curve as we age in populations across the world and thought of FIRE. https://imgur.com/a/DZ2xq2E (Happiness - Source 1) *edit: Potentially misleading graph. Do note though: In the seven data sets, they studied the size of the drop, in well-being to the low point in the late 40s is equivalent in magnitude to the influence of a major life event like unemployment or marital separation. https://imgur.com/a/hvamxFT (Despair - Source 2) Is Happiness U-Shaped Everywhere? Age & Subjective Well Being in 132 countries (Source 1) Paper Conclusion No ifs, no buts, well-being is U-shaped in age. In this paper I undertook what Deaton (2018) called a "daunting task" of drawing systematic comparisons across data files and countries of the relationship between well-being, variously defined, and age. Averaging across the 257 individual country estimates from developing countries gives an age minimum of 48.2 for well-being and doing the same across the 187 country estimates for advanced countries gives a similar minimum of 47.2. The happiness curve is found in 132 countries. I started to wonder if there were any implications of the happiness curve and Financial Independence. Such as: Does declining happiness as we enter our careers prompt us to reflect on what changed and drive us to figure out a way to recover the halcyon days of our 20's? What is the cause of the U shape curve? Does pursuing FIRE blunt the effects? Is it our environment. People becoming unhappy from the mounting stress of growing responsibilities at work, home with children and aging parents? Being depended on in multiple areas of life. Is it biological? They way she goes with aging? Interestingly enough it seems this U-curve is reproduced in other great apes. Would this data replicate in FIRE cohorts? Likely not if it results from the environment, very likely if the effect results from biological changes in my opinion. Should we consider this when taking in case studies of people who work hard in there 30's/40's to FIRE and report back much happier? What if their happiness would have increased whether or not they ever FIRE'd due to aging out of the bottom of the U-curve? Some highlights/low lights (source 2): Snippet: Krueger (2017) found evidence that prime-age men and women age 25-54 were significantly more tired, sad or stressed than was the case for younger or older groups. The differences were especially marked for those not in the labor force.Kruger argued that one factor that likely contributes to the low level of emotional well being of prime age, NLF men is the relatively high amount of time they spend alone. Prime age, NLF men, he found, spent nearly 30 percent of their time alone, compared with 18 percent for prime age, employed men and 17 percent for prime age, employed women. Snippet: The lack of social cohesion made it harder for the weak and the vulnerable including those going through what looks like a very natural midlife nadir of happiness. Social cohesion matters for health. Socially isolated people are more likely to smoke, drink, overeat, and engage in other health-damaging behaviors. As a rough rule of thumb, Putnam notes, if you belong to no groups but decide to join one, you cut your risk of dying over the next year in half (2000, 331). Snippet: We know from happiness research that relative things matter. People compare themselves to others. Luttmer (2005) explored whether individuals feel worse when others around them earn more (2005). That is, do they care about their relative position? The answer was in the affirmative; higher earnings of neighbors are associated with lower levels of self-reported happiness. An increase in neighbors' earnings and a similarly sized decrease in own income, Luttmer found, have roughly the same negative effect on well-being. Snippet: The finding of a dip in well-being in midlife likely adds important support to the notion that being in one's forties and fifties exacerbates vulnerability to disadvantages and shocks. That is people with disabilities, less education, broken families, lost jobs and so on are likely also to get hit hardest by the effects of aging. Some might face downward spirals as age and life circumstances interact. Many will not be getting the social/emotional support they need, because midlife is the worst time to present vulnerability. They will be dealing with shame and isolation, in addition to the first order effects of whatever they are coping with in normal times at a midlife low is tough and made much harder when combined with a deep downturn and a slow and weak recovery. Snippet: People are struggling. Those in middle age in the years since 2008 were most vulnerable to a once in a generation financial shock especially if they were poor and with low levels of education. The crisis suddenly created frailty in downtrodden communities which simply exposed underlying problems with deep roots in the long decades before. It seems it is normal to have a midlife dip in well-being, but for many, especially those with the least skills, with little social support and few if any savings, that was too much to bear when a giant downturn came along. Snippet: Being middle-aged, especially with low levels of education, is tough these days. Unhappiness and age (Source 2) I thought thinking of FIRE in this context was relevant and interesting, apologies if people believe this is not related enough to FI, I finally worked up the courage to make my first post to FIRE after being part of the community for 6 years Does the FIRE community think pursuing FI might prevent the U-Shaped Happiness curve in their lives? **Edit: Forget to include the podcast link that led me to read the papers: peak-misery-and-the-happiness-curve ~ 9 minutes shout out to user Bigfoot722 for pointing this out submitted by /u/VeritasAnteOmnia [link] [comments]

Weekly FI Frugal Friday thread - February 07, 2020 Posted: 07 Feb 2020 12:09 AM PST Please use this thread to discuss how amazingly cheap you are. How do you keep your costs low? How do become frugal without taking it to the extremes of frupidity? What costs have you realized could be cut from your life without pain? Use this weekly post to discuss Frugality in general. While the Rules for posting questions on the basics of personal finance/investing topics are more relaxed here, the rules against memes/spam/self-promotion/excessive rudeness/politics still apply! Since this post does tend to get busy, consider sorting the comments by "new" (instead of "best" or "top") to see the newest posts. submitted by /u/AutoModerator [link] [comments]

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