Hitting Critical Mass and then dealing with those feelings of Surreal

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backofbeyond
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Hitting Critical Mass and then dealing with those feelings of Surreal

Post by backofbeyond » Fri Jun 28, 2019 11:03 am

Critical Mass is referencing when your investments are so huge that your wages and corresponding spending habits seem insignificant by comparison. As you can imagine, this subject isn't one that you normally broach with others for obvious reasons. So I'd like to get feedback from other bogleheads that may feel the same as I do.

Unlike many of you, I don't have a high paying job, I'm a first line supervisor with the Government, coming up on 30 years. However, I have always maxed out contributions in my TSP and then again with Roth IRAs when they first came out. Since I have a very secure job, I ended up putting all my contributions in stock indexes (ok, a few individual stocks but don't judge). I also recently sold some Real Estate that I held for 25 years and have all that sitting in a money market, waiting to be invested in the G fund. Overall I sit at 25% G fund/money market and 75% highly diversified stocks. Anyway, I'm now approaching the $2M mark. To me this is simply amazing, just the thought that I have that much actually saved. It doesn't seem real and yet when I look at my Personal Capital Summary, there it is in black and white. :shock:

For the most part, I consider myself a true Boglehead. I'm thrifty, save, invest and am diversified. However, when I happen to glance at my balance and how much my portfolio has increase or decrease in just one day, it seems unreal. A 1% change in the S&P amounts to around $20,000 dollars give or take. That's 4 months' worth of take home pay! Just seems so surreal.

So this is starting to impact my life in unusual ways. For instance, as I'm looking over the menu, I may WANT the Prime Rib but in days gone by, I'd order the cheaper cut. Now I look at the price difference, of say $8 dollars and think, I made $25,000 in the market today, and I'm worried about $8? Really?

Now of course there are days when I lose that much or more, but my point is that my frame of reference seems to be all jacked up now. I also realize if it bothered me, I could simply stop looking at the balance so much but that seems rather financially immature. Specifically, the movements up and down doesn't matter to me, as between SS/FERS and my wife's pension, we will have all of our necessities covered plus a generous cushion for luxuries such as international travel. So my portfolio is the cherry on top.

Curious if I'm the only one that is having difficulties with this? If you experienced this feeling, how have or do you deal with it? I'd love to hear some specific examples. Also sorry if this has been discussed before, but I didn't know how to data mine the search button for similar threads.
The question isn't at what age I want to retire, it is at what income. - George Foreman

livesoft
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by livesoft » Fri Jun 28, 2019 11:05 am

Donating to charity is not a bad way to deal with. Also worrying about one's health can take your mind off the prime rib.
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HomeStretch
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by HomeStretch » Fri Jun 28, 2019 11:18 am

There have been a couple times in life where spouse and I have really noticed a sense of peace with our financial situation:
- first job salary that adequately covered rent/car loan/student loans,
- when our salaries increased enough to make our home mortgage in a HCOL area feel affordable and we stopped having to choose between groceries and a much-needed house item, and
- in the last couple years when we realized our portfolio had grown to “enough” where a job loss wasn’t going to derail our ability to live in retirement (just less discretionary spending). Spouse used to have outsized fears about this that used to lead to thoughts of “Will we end up homeless”.

We deal with it by ignoring the daily market noise as best we can.

We have allowed some minor lifestyle creep like ordering the prime rib if we want it. We try to keep the creep minimal for now.

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Sandtrap
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Sandtrap » Fri Jun 28, 2019 11:23 am

Here you go:

Investing Behavior Pitfalls
https://www.bogleheads.org/wiki/Behavioral_pitfalls

j
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firebirdparts
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by firebirdparts » Fri Jun 28, 2019 11:24 am

I had an uncle like you, worked and saved his whole life. Had those thrifty habits that never die. He and his wife went on vacation one year and she said “we’re wealthy now, let’s act like it. When we go in a restaurant I want you to order the most expensive thing on the menu.” So the next morning they go into a restaurant for breakfast. When the waitress came over he said “bring me fifty dollars worth of scrambled eggs.”

Just kidding. All I have to add is yes I think about this. I do not worry about money much. you are a better investor than I am.
A fool and your money are soon partners

Laika
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Laika » Fri Jun 28, 2019 11:34 am

Over the last 10 years, I too have experienced times during which my investment gains completely swamped my middle-class income and spending (and quite the opposite!), and wondered what it meant. But then I remind myself that:

* Most of the biggest gains were speculative and could evaporate just as easily as they came.
* That nothing else in life is guaranteed either, and the risks elsewhere can be much, much worse.
* That just as I hit my own "critical mass" I'm also getting much nearer to the end of my human capital.
* That it's still not enough for me to flip through "Architectural Digest" without painfully noting that those oh-so-perfect dream-homes-of-the-stars remain out of reach.
* That it doesn't automatically resolve the "one more year" syndrome, or make retirement decisions any easier, or vanquish all financial concerns.
* That the factors within me that led to massive savings make it difficult to switch to net spending.
Last edited by Laika on Fri Jun 28, 2019 11:44 am, edited 1 time in total.

dcdowden
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by dcdowden » Fri Jun 28, 2019 11:42 am

On the one hand, it is nice to know that we can splurge any time we really want and have the wherewithal to withstand financially stressing events. But we still hate to just waste money on stuff that we don't really need or even want. All I have to do to put things in better perspective is look at some of the huge yachts in Ft Lauderdale or Miami to realize that we are not even close to being in that league of wealth. There is a huge difference between being comfortably wealthy in the top 5% (Net Worth > $2.5M) and the Mega Wealthy top 0.1%.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Shallowpockets » Fri Jun 28, 2019 12:02 pm

It is unbelievable that my assets increase since being retired by a greater amount than my gross income used to be.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by RadAudit » Fri Jun 28, 2019 12:18 pm

livesoft wrote:
Fri Jun 28, 2019 11:05 am
Donating to charity is not a bad way to deal with. Also worrying about one's health can take your mind off the prime rib.
Good start.

The potential list is definitely easily expanded -

DW's health and longevity related expenses - housing, etc.
The kids - what if there current situation explodes and they come back to roost?
The grandkids' educational expenses -because you know the kids aren't saving enough to pay for it.
Etc.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Dandy » Fri Jun 28, 2019 12:23 pm

If you are frugal, live below your means and save a decent amount for retirement for decades it can be very hard to change that approach/mindset. I used to fret about small expense adds like you mentioned. But the main reason you saved and invested and lived below your means was to provide security and to enjoy life later.

I retired in 2008 (really bad timing) and no jobs were available. I worried about small change expenses. But, decided that I had a nice nest egg and that I would gradually increase our standard of living. An extra vacation each year, season ticket to the local playhouse, gifts to our children/charity, etc. Still get caught up in small expense decisions e.g. buy gas for 5 cents more per gallon close to home or travel 3 miles? Old habits are hard to brake.

I did decided on cars to opt for better safety vs just cost. I would feel like a jerk if I (or others) got hurt or worse because I tried to save money and not factored in safety in the buy decision. I can afford it so protect life and limb. KIds are grown, house is paid for, income almost equals current expenses and you can't take it with you. So, I say start small and get used to a bit more luxury, entertainment, etc. It would seem to be small risk that a life long frugal person will suddenly turn into a spendthrift. More likely they will die with a fortune unspent.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Toons » Fri Jun 28, 2019 12:24 pm

Critical Mass
Affords One,,
Many Options
In Life
One Of Which Is To
"Give Back"
In some fashion with your time or
Money
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

Oakwood42
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Oakwood42 » Fri Jun 28, 2019 12:34 pm

Shallowpockets wrote:
Fri Jun 28, 2019 12:02 pm
It is unbelievable that my assets increase since being retired by a greater amount than my gross income used to be.
awesome

w33ps
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by w33ps » Fri Jun 28, 2019 12:50 pm

This seems like one of those good problems. I don't really have any advice for you and I hope to one day have this issue. Congrats!

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Spinola
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Spinola » Fri Jun 28, 2019 12:55 pm

Congratulations :sharebeer , that is not a bad problem to have.. I wish I could share my experiences with this, but I am not quite at your level yet. If I were, I would be retired already. My only advice is to stop worrying and enjoy life. If market swings are keeping you up at night, maybe you should re-evaluate your risk tolerance and adjust your AA to be slightly more conservative at this point When do you plan on retiring? Maybe add some bonds to your portfolio, CD ladders ?

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by jeffyscott » Fri Jun 28, 2019 1:23 pm

backofbeyond wrote:
Fri Jun 28, 2019 11:03 am
...as I'm looking over the menu, I may WANT the Prime Rib but in days gone by, I'd order the cheaper cut. Now I look at the price difference, of say $8 dollars and think, I made $25,000 in the market today, and I'm worried about $8? Really?
Spendthrift :!: For less than that $8 differential, you can get an entire Little Caesar's hot and ready or a Whopper, Thickbuger, etc. :happy

We're retired, never had huge incomes and we don't have a huge portfolio by the standards of this board (it's even smaller than yours), but we can easily have daily, weekly, monthly portfolio value fluctuations that exceed our annual spending. And besides that, our normal spending has so far been met by pension income alone and don't really expect that to change.

But we're not really holding ourselves back from spending. Similar to what another poster said, we're not going to spend money on things we don't even really want, just for the sake of using it on something. For example, restaurant dining experiences do not appeal to us at all.

I do feel ridiculous at times, e.g. not gonna to buy the ice cream brand that we like best, when it is $4.39 for a 3 pint container, we'll get it when it's on sale for $3.75.

OTOH, we have a child going through a difficult financial period and are able to offer her a substantial (to her) "line of credit" to help her out, with no impact on us continuing to do whatever we want.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Dottie57 » Fri Jun 28, 2019 1:47 pm

The only time I felt the same as OP is when I asked for a portfolio review to see how far from retirement I was. A burden was lifted when the realization hit that I could retire from a miserable work life. Kept working for two more years until megacorp paid me to leave.

dknightd
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by dknightd » Fri Jun 28, 2019 1:59 pm

You can afford prime rib every once in a while. You might also be able to afford retirement . . .

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by LeftCoast » Fri Jun 28, 2019 2:03 pm

It's great when your hard work pays off. I worked hard for 35 years to hit Critical Mass. When I hit my number, I retired and never looked back. What is surreal is that our assets have kept growing. I'm still passing up the Prime Rib, but only because I'd rather have salmon. Good luck to you!

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backofbeyond
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by backofbeyond » Fri Jun 28, 2019 2:33 pm

OP here.
Thanks all for the enlightening and often funny replies.
Much appreciated!
The question isn't at what age I want to retire, it is at what income. - George Foreman

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by rj342 » Fri Jun 28, 2019 3:36 pm

Nowhere near your kind of critical mass at age 54 -- and recently finding BH making me see where I'm well behind the curve w 401k (however better situated than probably 80+% of the US wrt retirement) and some mistakes made.

However some smaller milestones, in spite of taking a nontrivial hit to income I may not fully recover:
- House paid off three years ago.
- Wife (52) retired last year from public school w 28 years in. Getting pension check now but will work a few more years teaching parochial school.
- Are now ballpark $1M net worth (not counting the modest LCOL house)-- my 401k plus looking at her pension as a 40 year annuity w $600+k NPV
- Although 401k not where it should be, seeing in my modeling that it is big enough that impact of a 1%swing in avg return over next 10 years is
somewhat more significant than any feasible change I make to contributions form here on out - or even *stopping* contributions. So maybe not quite to 'escape velocity'. but getting close.
- Not FIRE yet, but almost to that weaker cousin where a bigger employment setback, or period(s) of unemployment should not be catastrophic to retirement plans. Looking forward to getting where I may still need to work, but dont have to count on max income FT job.
Hope to be there by 59-1/2. Not really 'early', but beats heck out of 67 or 70.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by 123 » Fri Jun 28, 2019 3:52 pm

I know the feeling. I do all the household finances. With a bunch of accounts I feel surreal when I can't do much to make a significant change or move the needle on anything unless it's for $100K or more. Some years back I realized that the days of purchasing 100 shares of something are long gone, it's usually got to be 1,000 shares or more to be worth the bother. But I can't resist being a frugal shopper, that's part of how we got where we are (and hope to stay). I shop the sales at the grocery store, it makes no sense to pay full price for lots of stuff when most of it goes on sale every few weeks.
The closest helping hand is at the end of your own arm.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by 7eight9 » Fri Jun 28, 2019 4:18 pm

123 wrote:
Fri Jun 28, 2019 3:52 pm
I know the feeling. I do all the household finances. With a bunch of accounts I feel surreal when I can't do much to make a significant change or move the needle on anything unless it's for $100K or more. Some years back I realized that the days of purchasing 100 shares of something are long gone, it's usually got to be 1,000 shares or more to be worth the bother. But I can't resist being a frugal shopper, that's part of how we got where we are (and hope to stay). I shop the sales at the grocery store, it makes no sense to pay full price for lots of stuff when most of it goes on sale every few weeks.
You could always try purchasing 100 shares of Berkshire Hathaway Inc. Class A (BRK.A). That might be worth the bother. :happy
I guess it all could be much worse. | They could be warming up my hearse.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by IngognitoUSA » Sat Jun 29, 2019 4:57 am

Yes it is very surreal when your boss spends a lot of time explaining why I got a 3% raise rather than 4%, difference of $1-2k per year. Meanwhile I am thinking my $6-7 MM NW fluctuates $10-50k daily.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by epictetus » Sat Jun 29, 2019 7:00 am

also keep in mind that we have been in a bull market for almost 10 years.
when your stock allocation goes down 50% the numbers will look different.
that will be surreal in a different way
Focus on what you can control

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Richard1580 » Sat Jun 29, 2019 7:48 am

I stopped viewing it as money a long time ago. To me they are just numbers on a screen - not unlike a computer game. Granted, when they go down dramatically (2008) it can be depressing. Not unlike "A thief has stolen your +10 Axe of slaying and half of your gold." Just keep playing.

Once I realized that our retirement would not be impacted by a market drop of 50%, I stopped worrying.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by samstar » Sat Jun 29, 2019 8:03 am

.......
Last edited by samstar on Thu Jul 11, 2019 2:09 am, edited 1 time in total.

alibaba123
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by alibaba123 » Sat Jun 29, 2019 8:47 am

When does one reach critical mass? Is there a formula/consensus?

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by privatefarmer » Sat Jun 29, 2019 8:49 am

epictetus wrote:
Sat Jun 29, 2019 7:00 am
also keep in mind that we have been in a bull market for almost 10 years.
when your stock allocation goes down 50% the numbers will look different.
that will be surreal in a different way
why does this get mentioned so often? the market fell by 20% last december...

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by lomarica01 » Sat Jun 29, 2019 1:54 pm

as others had said great problem to have. For me it has taken a while for it all to sink in after retiring at 54. We realized it makes sense to start making withdraws sooner rather than later as the RMD's would be much bigger than we would want and of course we would be much older and not really need or want to spend the money then. Paying more in taxes in retirement than when working is what is surreal to me, did not anticipate that 20 years ago.

Some changes we have made, paying for tasks I do not want to do anymore housecleaning, yard work, home improvements etc..., gifting to our son, more travel, more generous with gifts, buying a car with cash and not even getting excited about it, setting up a Donor Advisor Fund.

But what is also surreal is still looking for bargains at the grocery store, reusing some plastic ziplock bags, and a few other things that are literally pennies on the dollar but I have concluded this is just human nature and that is fine.

So just enjoy this next phase of your life, you have earned it.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by jeffyscott » Sat Jun 29, 2019 2:22 pm

lomarica01 wrote:
Sat Jun 29, 2019 1:54 pm
We realized it makes sense to start making withdraws sooner rather than later as the RMD's would be much bigger than we would want and of course we would be much older and not really need or want to spend the money then. Paying more in taxes in retirement than when working is what is surreal to me, did not anticipate that 20 years ago.
Due to maxing out Roth conversions in the 12% bracket, we are paying what seems to me to be a lot in taxes. But still at a lower rate than we would've paid on all the contributions. After many years of minimizing taxes by maximizing contributions to retirement accounts, it's a little disconcerting to be taking voluntary action to increase our current income taxes to the point that they represented 37% of all our spending last year. This after having achieved $0 in Federal income taxes (and about $500 state) during my last two years of work.
But what is also surreal is still looking for bargains at the grocery store, reusing some plastic ziplock bags, and a few other things that are literally pennies on the dollar but I have concluded this is just human nature and that is fine.
Glad to know I'm not the only one :sharebeer . Some of that, like reusing bags, is also about not wasting natural resources and trying to slightly reduce the amount of material that we put in our garbage cart.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by sergeant » Sat Jun 29, 2019 2:59 pm

We're at critical mass and 10k to 30k daily swings are common. DW still has no interest or real comprehension of our net worth. She is planning our trip to Italy which we will take after she retires in the Fall. She was surprised when I told her she could spend up to 30k. To her that's 1/3 of her yearly income and a lot of money. To me it's a daily swing of our portfolio.
Lincoln 3 EOW! AA 40/60.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by dknightd » Sat Jun 29, 2019 3:31 pm

alibaba123 wrote:
Sat Jun 29, 2019 8:47 am
When does one reach critical mass? Is there a formula/consensus?
I don't think there is a formula or consensus. For me when earnings or losses in my investments were bigger than my contributions I figured I was close. If my earnings or losses were bigger than my annual spending I decided I probably did not really have to work anymore if I did not want to. I'm between those 2 numbers (unless we have a really good or bad year). I'm taking my chances and retiring. You only live once, and I'm tired of working for money. I have about 15 times my annual spending, that plus SS, I think will be enough. Wish me luck.
The general consensuses, if there is one, says you should have 20-30 times your annual salary. But those numbers usually neglect SS, and are often generated by people who want to retire "young".
It is a complicated problem - the earlier you retire the more money you need - but the longer you work the less time you have to enjoy what you have saved up for. There is no simple answer!

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by LatentStoic » Sat Jun 29, 2019 3:46 pm

DW and I are both 53 with a financial profile quite comparable to the OP and others on this thread, and so on the one hand it seems like I should have little hesitation about walking away from long megacorp career at 55. But then I re-read some Bogleheads threads on whether or not to self-insure the long term care risk (keenly in my mind due to Alzheimer’s / dementia history in my family, while also having no children of our own), or threads about navigating health insurance during that potentially daunting stretch of no more employer subsidized health care (or at least not as well subsidized) until age 65 Medicare eligibility, and I find that keeps me plenty grounded. And wide, wide awake rather a surreal sensation.
Aphorism still under construction.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Watty » Sat Jun 29, 2019 3:48 pm

backofbeyond wrote:
Fri Jun 28, 2019 11:03 am
If you experienced this feeling, how have or do you deal with it? I'd love to hear some specific examples.
My net worth was a lot lower than yours when a couple of things happened at about the same time;

1) I realized that I had enough that if I got laid off and never worked again I had enough to pay for a frugal bare bones retirement and would not go hungry or have to depend on my kid to support me. It would not be how I would want to live in retirement but I have traveled enough to realized that even a lower middle class US lifestyle is better than probably 90% of the people in the world live so reaching that milestone was surprisingly satisfying.

2) My annual 401k savings ended up being on a fraction of what my portfolio would gain or lose each year.

3) I had one year in my early 50s when I went to three funerals of people I knew that were about my age. I was not real close to any of them but when you start seeing coworkers and neighbors die it does get you thinking.

I ended up doing a few things;

1) I cut my 401k contributions back to be just enough to get my employers match.

2) I started traveling more.

3) At times at work I set boundaries and occasionally said "no" to non-emergency things that would impact my personal life.

4) When all the "ducks were in a row" I retired when I was 58.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Broken Man 1999 » Sat Jun 29, 2019 3:57 pm

OP, I know exactly what you mean about the swings becoming surreal.

What has really become surreal to me is to see the not at all small withdrawals for expenses we have made, and then realizing after removing those funds I see I have more money than I started with despite withdrawals we have made.

Of course this won't last forever, but it is nice to see those growing balances, for sure.

Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven than I shall not go. " -Mark Twain

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by peterinjapan » Sat Jun 29, 2019 4:10 pm

I've got a large enough portfolio that I was down $100k in two days in the February 2018 VIX-tantrum, and am up or down $15k pretty much weekly, so the depression is real. You see so many posts here that make Bogleheads looks like Zen Masters who never experience the slightest concern about their portfolios, but I'm pretty sure there's a lot of "mask-wearing" going on.

When things are down, I try to take some action that takes my mind off the paper loss. I do extra exercise so I live a long time, or if I think my company will have difficulties, I try to do some extra work to bring in income to the business.

When things are up, I congratulate myself on my true genius as an investor.

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steve roy
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by steve roy » Sat Jun 29, 2019 4:12 pm

If your assets are allocated the way you want them to be, stop looking at your investments.

You'll brood less over market fluctuations when you're not looking at how they're impacting your stocks and bonds. And it's pretty simple to not look once you train your mind to do it. I look at Vanguard funds on a semi-regular basis, but avoid looking at my investments.

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Bogle7
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Lifestyle creep

Post by Bogle7 » Sat Jun 29, 2019 4:26 pm

We are solving the "problem" with a bit of lifestyle creep.
1. Buy meat from a local butcher who only brings in locally sourced cows, chicken and pigs. The prices are 2x the local supermarket, but the quality is so much higher. This works out to about an extra $15/week.
2. Buy better wine. Used to look at $15 as the max. Now it is $20.
3. Fly business class to Europe once a year. But, we are playing the points game so these tickets are only about $1500 more than economy.
4. Ignoring how much the paper New York Times costs for home delivery.

We are actually dining out less as we really enjoy cooking at home. And, we subscribe to 4 cooking magazines.

The really weird action we have recently taken is: tracking spending. In 35+ years of marriage, we have never tracked spending. Now, at ages 70/61, we have just started doing this.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by randomguy » Sat Jun 29, 2019 4:47 pm

livesoft wrote:
Fri Jun 28, 2019 11:05 am
Donating to charity is not a bad way to deal with. Also worrying about one's health can take your mind off the prime rib.
Buying the prime rib seems like a better solution.:) Seriously the OP has to decide what he wants to do with money. Want to retire? You can do that. Want to eat prime rib? You can do that. Want to give money to charity? You can do that. Might not be able to all 3 for another 3 years though:)

People talk about lifestyle creep as if it is a bad thing. It isn't. There is no virtue in living cheaply. You just want to make sure you are spending money were it matters to you. Maybe you are maxed out but it sure sounds like 8 bucks on a piece of meat will make you happier.

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FIREchief
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by FIREchief » Sat Jun 29, 2019 4:48 pm

OP - the true luxury of your situation is that you can, for the most part, just stop thinking about money. If you're ordering the Prime Rib because you really like Prime Rib, then enjoy!! OTOH, if you're now going through a mental process evaluating the cost difference, etc., then just order like you always have. Easy for me to say, because I've never really liked Prime Rib (or eating out at restaurants - too much noise, too many people, uncomfortable chairs). :twisted:
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by sergeant » Sat Jun 29, 2019 5:04 pm

FIREchief wrote:
Sat Jun 29, 2019 4:48 pm
OP - the true luxury of your situation is that you can, for the most part, just stop thinking about money. If you're ordering the Prime Rib because you really like Prime Rib, then enjoy!! OTOH, if you're now going through a mental process evaluating the cost difference, etc., then just order like you always have. Easy for me to say, because I've never really liked Prime Rib (or eating out at restaurants - too much noise, too many people, uncomfortable chairs). :twisted:
Unless it's on an annuity salesman's tab! :wink:
Lincoln 3 EOW! AA 40/60.

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FIREchief
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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by FIREchief » Sat Jun 29, 2019 5:14 pm

sergeant wrote:
Sat Jun 29, 2019 5:04 pm
FIREchief wrote:
Sat Jun 29, 2019 4:48 pm
OP - the true luxury of your situation is that you can, for the most part, just stop thinking about money. If you're ordering the Prime Rib because you really like Prime Rib, then enjoy!! OTOH, if you're now going through a mental process evaluating the cost difference, etc., then just order like you always have. Easy for me to say, because I've never really liked Prime Rib (or eating out at restaurants - too much noise, too many people, uncomfortable chairs). :twisted:
Unless it's on an annuity salesman's tab! :wink:
touche' :beer Actually, those free meals are usually in a quiet back room where only the jester crook host does much talking and there aren't a lot of people in the room. I have actually noticed when I've excused myself for a few minutes for a trip to the bar restroom that the regular restaurants are often very loud and "busy."

Back on topic.... "Critical Mass" doesn't even enter into enjoying a free high end steak. Equally affordable for all situations!
I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Pu239 » Sun Jun 30, 2019 12:39 am

backofbeyond wrote:
Fri Jun 28, 2019 11:03 am
Critical Mass is referencing when your investments are so huge that your wages and corresponding spending habits seem insignificant by comparison. As you can imagine, this subject isn't one that you normally broach with others for obvious reasons. So I'd like to get feedback from other bogleheads that may feel the same as I do.

Unlike many of you, I don't have a high paying job, I'm a first line supervisor with the Government, coming up on 30 years. However, I have always maxed out contributions in my TSP and then again with Roth IRAs when they first came out. Since I have a very secure job, I ended up putting all my contributions in stock indexes (ok, a few individual stocks but don't judge). I also recently sold some Real Estate that I held for 25 years and have all that sitting in a money market, waiting to be invested in the G fund. Overall I sit at 25% G fund/money market and 75% highly diversified stocks. Anyway, I'm now approaching the $2M mark. To me this is simply amazing, just the thought that I have that much actually saved. It doesn't seem real and yet when I look at my Personal Capital Summary, there it is in black and white. :shock:

For the most part, I consider myself a true Boglehead. I'm thrifty, save, invest and am diversified. However, when I happen to glance at my balance and how much my portfolio has increase or decrease in just one day, it seems unreal. A 1% change in the S&P amounts to around $20,000 dollars give or take. That's 4 months' worth of take home pay! Just seems so surreal.

So this is starting to impact my life in unusual ways. For instance, as I'm looking over the menu, I may WANT the Prime Rib but in days gone by, I'd order the cheaper cut. Now I look at the price difference, of say $8 dollars and think, I made $25,000 in the market today, and I'm worried about $8? Really?

Now of course there are days when I lose that much or more, but my point is that my frame of reference seems to be all jacked up now. I also realize if it bothered me, I could simply stop looking at the balance so much but that seems rather financially immature. Specifically, the movements up and down doesn't matter to me, as between SS/FERS and my wife's pension, we will have all of our necessities covered plus a generous cushion for luxuries such as international travel. So my portfolio is the cherry on top.

Curious if I'm the only one that is having difficulties with this? If you experienced this feeling, how have or do you deal with it? I'd love to hear some specific examples. Also sorry if this has been discussed before, but I didn't know how to data mine the search button for similar threads.
If a $20k daily swing amazes you, consider what a $100k swing would feel like. Some people have this 'problem'. Then again, don't count all your chickens until they're hatched. Hopefully you have many years still ahead. It's a great feeling knowing you have 'enough'.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by gd » Sun Jun 30, 2019 6:18 am

I respect my frugality, thank it for its service, them move on. I started with lots of charitable donations, but tapered off for various reasons not relevant here. Stuff that I used to spend a lot of time on, such as operating low-end old cars, was an easy target by buying new moderate cars that were practical for my life. I work one indulgence at a time, focusing on situations where I get high value out of the expense. E.g., I get no value from expensive restaurants, food or coffees hops and still never use them normally, but will without guilt if it facilitates visiting an unusual location or meeting people. I don't think twice about an airline ticket, but still won't pay extra for a few hours of larger seats. I drink cheap alcohol, but pay double for carefully-chosen organic milk to promote better dairy practices. I increased activity in a very expensive hobby, which had the side benefit of being able to say "$50? Pffit, I spend 10x that on my hobby last week without even thinking about it." Growing old enough to anticipate death or impairment at any time tends to help the process along.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Carol88888 » Sun Jun 30, 2019 6:51 am

When I was first starting out investing every unanticipated expense like replacing a vacuum cleaner caused me a lot of anguish because it was less money to invest. A big veterinarian bill - same hand wringing.

But now I feel like I have more than achieved more than I hope and one of greatest benefits is just being free of distress to handle these minor "catastrophes" without thinking about it.

Also, I have been able to give money away to friend in dire straits. Nothing drives home the feeling of abundance more than realizing that one can comfortably do this.

I like to eat in restaurants but if I don't eat at home to balance it out, the pleasure of it wears off.

I am going to be traveling outside of the country this year but it is the first time in over 10 years that I have done this. It's almost like I have to take the trip so that I don't regret not taking it down the road. (But actually I might be just as happy staying here - if that makes sense).

My suggestion is to go slow and savor what you have earned. But as to that extra $8 for the meal - I say enjoy!

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by jeffyscott » Sun Jun 30, 2019 8:08 am

Carol88888 wrote:
Sun Jun 30, 2019 6:51 am
I am going to be traveling outside of the country this year but it is the first time in over 10 years that I have done this. It's almost like I have to take the trip so that I don't regret not taking it down the road. (But actually I might be just as happy staying here - if that makes sense).
Oh, we feel exactly the same, very ambivalent regarding international travel. Thinking about doing it next year, by which time it will have been almost 5 years. Have the same feelings that we probably should do it, but then again if we feel kinda "meh" about it, why go through all the hassle? We enjoyed aspects of our 3 trips to Europe, but don't feel the way some seem to about travel, it's not the be all and end all of life for us.

We also now have a powerful gravitational pull exerted by a toddler grandchild who lives about 7 hours away. That's a frequent trip, about every 6-8 weeks.
Time is your friend; impulse is your enemy. - John C. Bogle

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Barefootgirl » Wed Jul 03, 2019 6:03 am

I was raised in a near poverty situation. I therefore decided to study really hard and work really hard and make the kinds of sacrifices to ensure it didn't happen to me as an adult. One day, after many years of that hustle life, I woke up and found myself a millionaire and eventually, more than a millionaire.

To me, this does not feel like a blessing or surreal. I was told that if I did W, X, and Y, that Z would happen and so it did. This was supposed to happen because I followed the plan.

What I did not count on were the staggering amounts of : take your pick: <manipulation, rigging, political shenanigans, etc.> that can turn markets on their heads, dragging the rest of us down, down, down.

I've come back from two of these big downturns, not sure what will happen in a third, but I have become more defensive, for sure.
How many retired people does it take to screw in a lightbulb? Only one, but he takes all day.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by TomatoTomahto » Wed Jul 03, 2019 6:50 am

peterinjapan wrote:
Sat Jun 29, 2019 4:10 pm
I've got a large enough portfolio that I was down $100k in two days in the February 2018 VIX-tantrum, and am up or down $15k pretty much weekly, so the depression is real. You see so many posts here that make Bogleheads looks like Zen Masters who never experience the slightest concern about their portfolios, but I'm pretty sure there's a lot of "mask-wearing" going on.
Yeah, there’s a lot of “whistling past the graveyard” on BH.

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Bluce » Wed Jul 03, 2019 10:00 am

backofbeyond wrote:
Fri Jun 28, 2019 11:03 am
Critical Mass is referencing when your investments are so huge that your wages and corresponding spending habits seem insignificant by comparison. As you can imagine, this subject isn't one that you normally broach with others for obvious reasons. So I'd like to get feedback from other bogleheads that may feel the same as I do.
. . . . .

Curious if I'm the only one that is having difficulties with this? If you experienced this feeling, how have or do you deal with it? I'd love to hear some specific examples. Also sorry if this has been discussed before, but I didn't know how to data mine the search button for similar threads.
I reached CM about 5 years ago at age 63-64. I've lived well below my means my entire life, thanks to my late parents who were young adults during The Depression, and then WWII came along which was another hardship because many things were rationed like gasoline, sugar, etc. I doubt there are very many living Americans today who viewed the world -- and money -- like they did. We are spoiled with material excesses.

And this is all a bit different for me than you, as I have no pension to rely on, only SS. I'm self-employed, still working, will be 69 next month. I still work because I enjoy it, and when I run out of work (like now) I feel like a bum. I don't think I'll ever retire until I'm physically unable to work. Plus, I have a REAL hard time imagining drawing from my portfolio.

However, since reaching CM:

- I bought a Corvette
- I bought a whole-house automatic generator
- I tip waitresses way more than I used to, probably 25-30% (I eat out 5-6 times a week)
- I used to order only once every 2-3 months from Amazon because I don't like using my credit card every month. Now I place an order with them 1-2 times per month (FWIW, I've never paid any interest on credit cards).
- When I go out for a good dinner with friends, we hold nothing back! We order whatever the hell we want.

That's my story and I'm sticking to it. My goal of being the richest guy in the graveyard seems to be working out well. :shock:

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Re: Hitting Critical Mass and then dealing with those feelings of Surreal

Post by Abe » Wed Jul 03, 2019 11:19 am

To the OP. When you spend you entire life scrimping and saving, it's hard to break that habit. I know because I've got the same problem. When I was young, I remember seeing people who had more than I ever dreamed of having, yet they lived a frugal lifestyle. I remember thinking, "if I had that much money I wouldn't worry about spending". Now I am in the same boat and I am doing the same thing they did. I don't know what the answer is. I don't think I'll ever change. I've tried but I always go back to my frugal ways. As other have said, it's a good problem to have.
Slow and steady wins the race.

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