Questions for the early 'retirees' on the board

[alwaysinvert]

I am currently struggling a bit with the decision of either going to school (late, I'm in my mid 20s) or just keep on managing the money I have earned over the last few years (+$1.5m, mainly through online poker, so I am no stranger to mentally strenous work with volatility and a fair amount of lonely work). The only thing I am truly interested in pursuing at this point in time is investing. I have had pretty good, market-beating, results over the last few years but am of course a novice compared to most of you. Sadly, at this point there is pretty much no possibility legally to try my hand at managing other peoples' money.

 

I am asking to get some wisdom about the obstacles and routines of only investing for a living from some more experienced people on the board. Do you have an office away from home? Regular work hours? Are there some people who have had to go back to regular work because it was too taxing? All input is welcome.

[roundball100]

It must be terrible to be faced with such choices so early in life.  Usually fate is so cruel only much later in life.  But more seriously: what would you study if you went back to school, where would you choose to go (why), and what would you hope to gain?  These would seem to be important questions. 

[twacowfca]

I am currently struggling a bit with the decision of either going to school (late, I'm in my mid 20s) or just keep on managing the money I have earned over the last few years (+$1.5m, mainly through online poker, so I am no stranger to mentally strenous work with volatility and a fair amount of lonely work). The only thing I am truly interested in pursuing at this point in time is investing. I have had pretty good, market-beating, results over the last few years but am of course a novice compared to most of you. Sadly, at this point there is pretty much no possibility legally to try my hand at managing other peoples' money.

 

I am asking to get some wisdom about the obstacles and routines of only investing for a living from some more experienced people on the board. Do you have an office away from home? Regular work hours? Are there some people who have had to go back to regular work because it was too taxing? All input is welcome.

 

Please tell me three things you enjoy doing very much, now or in the past, things  you did very well! And I will tell you what you want to know.

[CONeal]

This might be helpful if you want to invest for a living.

 

http://www.cornerofberkshireandfairfax.ca/forum/general-discussion/tips-for-investing-full-time/

 

 

Since I started the thread I'll followup by saying that I was able to do it for 4 months and decided to go back to work.  The main reasons was damn I got so bored during the day.  The field I'm in is pretty much chaos 9-5.  Didn't really realize how much I would miss it.  Also, with a few opportunities popping up I wanted to take full advantage of them thus I needed incoming cash flow to pay the bills.

 

Will try to get give another go later.

 

If you are single, it may sound crazy but girls will be turned off by you telling them what you do if you invest full time.  The few I encountered understood is as "he's unemployed"

[alwaysinvert]

It must be terrible to be faced with such choices so early in life.  Usually fate is so cruel only much later in life.  But more seriously: what would you study if you went back to school, where would you choose to go (why), and what would you hope to gain?  These would seem to be important questions.

I guess I would study econ and/or business, but since the prospect of later taking a job at a firm instead of striking out on my own in some manner doesn't strike me as particularly compelling, I'm not sure what that would give me, really. It's kind of my last shot at living the 'youth' life to go to university and it's quite cheap as long as I do it in this country and finally it might open some doors in the future. However, I feel a bit past the point where school work is rewarding to me (I have had one term at uni, so I speak from experience). The decision not to go to school is really already 90% made, but if someone thinks that's utterly stupid I'm all ears.

 

If you are single, it may sound crazy but girls will be turned off by you telling them what you do if you invest full time.  The few I encountered understood is as "he's unemployed"

Hehe, tell me about it. Somehow, poker doesn't cut it either :D

[Cardboard]

Honestly, I can't see one "investing" full time based on my own experience. At times, there is just absolutely nothing to do. Of course, you can keep on searching for better ideas to replace your already good ones, reading more, but it gets difficult after a while. You simply need to let time work for you.

 

Maybe that it would not be so hard if I had just invested before. But, when you work 50 to 60 hour weeks and find a way to cram in there 20 to 30 investing for years, then the adjustment to investing alone is difficult. Plus, I am not sure how you can fit investing into 8 to 5 type of schedule. Sometimes you find an idea or more that you need to research with intensity, then you get back to doing nothing. You have earnings season with its conference calls, tax season, annual reports time and maybe spending 1 to 2 hours a day watching news, news related to your stocks, scaning a few ideas, but the rest or the schedule is very erratic.

 

One big difficulty for me also has been to not watch too much quotations, especially after getting an IPhone. It does not make me sell or buy based on small movements, but it sure does irritate me if things go the wrong way. When I had a full time job, I would see the futures in the morning and my stock quotes at night. Sometimes I would check them at lunch.

 

The ongoing pay also gave me piece of mind. You will likely find out that even at $1.5 million that there is little cash coming out with any regularity. A portfolio of stocks may yield you $20,000 a year in income and maybe less so you will need some recurring capital gains to feel well. If not, you will hate depleting your precious capital and it may make you nervous especially during downturns or after making a big purchase like a car or home. It sounds like a big sum, but it isn't available for spending when invested.

 

Now, if you are managing others people money it will be different. You will need to do marketing or find new clients and there will be some administrative workload. On the other hand, if you have less ambition and just run a small partnership without pushing for new money, you may get into boredom again.

 

Right now, I am looking for a new venture to get me away from just investing. Real estate may be a good fit since you have to go in the field (not just sit at your desk all day long), there is some physical work if you are inclined to and it is similar hunting work as investing. I have other ideas too, but the bottom line is that I need something else. Finding something part time that fits with the investing "schedule" is hard although.

 

Oh! and the other big issue is social acceptance as some touched upon. My close friends have no problem with it, but try explaining what you are doing as a 25 year old investing full time to uncles, neighboors and others. To them investing is pretty much gambling or being a trader. I was in my early thirties so I can only imagine at 25! They won't tell you, but they will also think that you are doing nothing, maybe that you are selling drugs for a living... 

 

Cardboard

[alwaysinvert]

Thanks, Cardboard. That's some great thoughts. On working hours and all that you said it better than I could. At the moment I am stretching to find interesting investments, but on the other hand, running out of things to read is not going to be an issue anytime soon.

 

I've never had a regular paycheck so that won't suddenly strike me as stressing, although I do agree with you that the fact that I need to make capital gains to make ends meet is a problem. The way I figure is if a couple of years down the line I realize that I need a regular job to make ends meet in the cash flow department that won't be the worst thing in the world.

 

Adding knowledge is better done now than later, and if doing this full-time for a while will earn me one or two percentage points extra per year in the long-run, it will have been a wise decision, at least financially.

 

Doing some other non-stock market related business ventures would suit me fine, too, but I haven't really found anything that great to do yet.

 

As for the opinion of relatives (except for immediate family), I have already been a bum to them for a couple of years so stating 'investor' as profession wouldn't really change anything. Although since they pretty much all are professed socialists, it could yield some hilarious results :D

[moore_capital54]

You will find that if you do not live your "youth" now you will forever wonder whether you fully enjoyed what the world had to offer in those finite years. To be your age, and be as wealthy as you are, I would definitely suggest taking the university route, only for the thrills.

 

I can tell you that at my age now with all my millions of dollars I would give about half or even more just to be in your position and go back to high-school or university. Those were the best times of my life, and where I met my wife.

 

Money isn't everything in life and generally someone with your skills will do great with money so you don't need to worry about getting started as an investor. And as some of the wiser posters said, a good investment generally involves buying and then waiting for many years at times.

 

Just my two cents!

[Rabbitisrich]

 

If you are single, it may sound crazy but girls will be turned off by you telling them what you do if you invest full time.  The few I encountered understood is as "he's unemployed"

 

That's why the term "family office" was created.

[Rabbitisrich]

Alwaysinvert, have you circulated around various investment related conferences? Perhaps consider offering your free services to a reputable fund. It's an unorthodox path, but you have a rather unconventional story. It's a good way to network and even if you don't take a job with another firm, you at least introduce yourself to people who might be useful contacts in the future.

 

You can invest from anywhere that offers an internet connection! Travel, eat great food, meet good folks, and develop your family office at your leisure.

[Parsad]

I am currently struggling a bit with the decision of either going to school (late, I'm in my mid 20s) or just keep on managing the money I have earned over the last few years (+$1.5m, mainly through online poker, so I am no stranger to mentally strenous work with volatility and a fair amount of lonely work). The only thing I am truly interested in pursuing at this point in time is investing. I have had pretty good, market-beating, results over the last few years but am of course a novice compared to most of you. Sadly, at this point there is pretty much no possibility legally to try my hand at managing other peoples' money.

 

You already know what you should be doing full-time...playing poker!  Why can you not manage money?  What legal obstacle is preventing you from doing so? 

 

The other question is do you really want to manage other people's money?  It comes with a whole host of challenges that you don't experience managing your own money!

 

I am asking to get some wisdom about the obstacles and routines of only investing for a living from some more experienced people on the board. Do you have an office away from home? Regular work hours? Are there some people who have had to go back to regular work because it was too taxing? All input is welcome.

 

Regular hours and then pretty much into the night and weekends...office both downtown and at home (I work from home or a Starbucks on Fridays  ;D )...never, ever too taxing and absolutely love every aspect of it!  I couldn't dream of anything better.  I've been very fortunate because our partners, who are all individual families or trusts, fit in perfectly and understand the culture of our funds.  Made a ton of great friends as well...both from our funds and this board!  Cheers!

 

 

 

[rijk]

if you can make $1.5 million in a few years with online poker, why would you do something else?

 

there seem to be more value investors with a poker background, why is online poker so luctrative?

 

regards

rijk

[username]

As a private investor in his late 20's, I say take the university route.

Wouldn't recommend doing both seriously (that's what I did), as you would have no time for socializing.

Apart of that "social time value", I'm also quite sure you would put into use the skills and mindset you get from formal education.

Being a bum to your relatives is no problem. But try to explain to your girlfriend's parents what you do...

 

Also, do you think about pursuing a financial related degree, or something more general that could give you also an edge as a poker player?

[FFHWatcher]

I am with Sanj regarding managing other people's money.  Only do that if you truly need the money (ie. generated from fees) to live off of.  There is pain in managing your own money when it goes down in value but it pale's in comparison to losing other people's money.  I found it really tough as a financial advisor (not a money manager) and that was the main reason why I exited the business after only 13 years.  It is easy when the market goes up 8-10%/yr (ie. the 1990's) but when was the last time we saw that? 

 

I have been retired for 5 years and I spend too much time watching stock quotes. I have done a few different projects but nothing that earns an income.  I help my brother with his business but I haven't charged him yet and may continue to do that part-time.  I keep coming back to investing in businesses as I don't really have any sort of 'passion' that I want to put 100% of my energy into, besides investing.  I love it and I can spend hours and hours per day reading about investing, reading about businesses, comparing them, etc.  I have a lot to learn and I am starting to put together a clearer framework as to how I plan to improve my skills.  I look at it as going to 'University' but I am doing it myself and it is highly specialized in the area I enjoy. 

 

If you plan on managing your own money intensively, than I would recommend that you set it up like a professional.  Have regular hours, have a regular desk, wear something besides your pajamas, have a business plan, have files, have a process, have checklists, keep accurate records, pretend you have a boss looking over your shoulder analyzing your work, pretend you have to submit your work to Buffett and Munger for analysis and review before you invest in anything.... Be a professional and hold yourself up to very high standards.

 

Find hobbies that having nothing to do with investing and make sure you have several 'other' interests where you ignore investing completely for many hours/day. 

[Hielko]

I have an online poker background as well, but can't say I made close to 1.5M yet, so at the moment I'm still playing poker and trying to find good investments to put my excess cash to work. About what you should do; you should ask yourself what you enjoy doing most, and try to make that happen. I don't think you really want to retire, just make sure you are doing something you want to be doing.

[original mungerville]

In general, I would say play poker, invest, socialize, exercise, contribute to your community, learn something new every year, and of course, when in doubt, f*ck.

 

I agree with Sanjeev's comments. I would definitely not base my decision on what a girl would think or her family that's for sure anybody - do what you want to do. Decisions should be mainly internal not externally based. (By the way, a girl would think making 1.5 million playing poker and then investing it pretty cool if you ask me.)

 

Also, you can get involved in school part-time, but live full-time in residence and invest/play poker while others do their homework. That way you get some of the education and all of the socializing. But only sign up for courses of great interest. There are of course other ways to socialize other than school - eg, hang out in a ski/climbing resort and/or travel and invest your money. Also if the idea is to get a formal education, a couple of years of business/economics courses part-time over a couple years in residence partying and then the CFA route and then complete the biz degree part-time at the same time as when you complete the CFA.  You don't get the benefit of additional social interaction FOR  the last half but its an important external qualification that can also fundamentally help a bit with investing.

 

 

 

 

[onyx1]

I am currently struggling a bit with the decision of either going to school (late, I'm in my mid 20s) or just keep on managing the money I have earned over the last few years (+$1.5m, mainly through online poker, so I am no stranger to mentally strenous work with volatility and a fair amount of lonely work). The only thing I am truly interested in pursuing at this point in time is investing. I have had pretty good, market-beating, results over the last few years but am of course a novice compared to most of you. Sadly, at this point there is pretty much no possibility legally to try my hand at managing other peoples' money.

 

I am asking to get some wisdom about the obstacles and routines of only investing for a living from some more experienced people on the board. Do you have an office away from home? Regular work hours? Are there some people who have had to go back to regular work because it was too taxing? All input is welcome.

 

Are you interested in investing or building wealth? 

 

If you are in it for the intellectual challenge of investing, you can enjoy the process with a small or large portfolio, and you can do it fulltime or part time. As long as you keep your expenses under control, you can continue on for years doing what you are doing now.

 

But if you are interesting in building wealth over your lifetime (and you have many years to go!), then I believe you are best off finding a way to leverage your considerable talents through employment or the ownership of a business.  In order to build wealth with $1.5mm you need to keep expenses under $30,000/year and that may be incompatible with your lifestyle especially if you plan on having a family.  Game theory talents go a long way in the fields of money management, real estate, financial trading, and any number of other businesses.  Combine these talents with good ethics and the ability to get along with others, with the considerable leverage and scale afforded from a larger organization, and you will build wealth at a much faster rate than growing your personal portfolio. 

 

When you build enough personal wealth that this is no longer the case (as I did when I was in my late 40's) you can walk away if you choose and live a life of complete freedom.

 

 

 

[CONeal]

I agree with Sanjeev's comments. I would definitely not base my decision on what a girl would think or her family that's for sure anybody - do what you want to do. Decisions should be mainly internal not externally based. (By the way, a girl would think making 1.5 million playing poker and then investing it pretty cool if you ask me.)

 

Someone that you have met for 5 minutes and you pop up and say "Hey I have 1.5 million."  I'm sure your realize your mistake when she switches from $2 beer to $8 fruity drinks.  :D

[alertmeipp]

... 1.5millions from online poker and at mid 20s...

 

When did u start playing it? If you feel that's sustainable, keep doing it, why change if things work?

 

Everything I think I could "retire" and manage my money, stock falls and I realize I need the steady income and sitting around at home all days doesn't improve my result. It may allow me to jump in quicker when I get an new idea. But most of the time, I just invest/trade the same dozen stocks - so I just need to spend time following them or doing new DD.

[alwaysinvert]

I am currently struggling a bit with the decision of either going to school (late, I'm in my mid 20s) or just keep on managing the money I have earned over the last few years (+$1.5m, mainly through online poker, so I am no stranger to mentally strenous work with volatility and a fair amount of lonely work). The only thing I am truly interested in pursuing at this point in time is investing. I have had pretty good, market-beating, results over the last few years but am of course a novice compared to most of you. Sadly, at this point there is pretty much no possibility legally to try my hand at managing other peoples' money.

 

You already know what you should be doing full-time...playing poker!  Why can you not manage money?  What legal obstacle is preventing you from doing so? 

 

The other question is do you really want to manage other people's money?  It comes with a whole host of challenges that you don't experience managing your own money!

 

I am asking to get some wisdom about the obstacles and routines of only investing for a living from some more experienced people on the board. Do you have an office away from home? Regular work hours? Are there some people who have had to go back to regular work because it was too taxing? All input is welcome.

 

Regular hours and then pretty much into the night and weekends...office both downtown and at home (I work from home or a Starbucks on Fridays  ;D )...never, ever too taxing and absolutely love every aspect of it!  I couldn't dream of anything better.  I've been very fortunate because our partners, who are all individual families or trusts, fit in perfectly and understand the culture of our funds.  Made a ton of great friends as well...both from our funds and this board!  Cheers!

 

Online poker has gotten a lot less lucrative in the last 2 years or so. People I know who made loads of money when I also did are barely winners now (poker bots and the art of finding easy targets have been refined to an almost crazy extent), so going back to playing online is not really a live option. I do however still go and play live games from time to time. They can never yield the same hourly wage because they are imminently slower, but they will probably always be soft for someone like me. Going full-out live pro would however force me to move far away from here and it's not really appealing in terms of social life and working hours.

 

Even pooling money from family and friends and managing it for a fee is not really legal here. Providing financial advice or assistance requires registering with our SEC and that is really costly.

 

Thanks for all the answers! I will answer you back during the day.

[alwaysinvert]

if you can make $1.5 million in a few years with online poker, why would you do something else?

 

there seem to be more value investors with a poker background, why is online poker so luctrative?

 

regards

rijk

There was a huge boom in 2003-2004 which lasted until about 2009-2010 and everyone with some brains who applied themselves could make good money. Not so much anymore, both because the boom is over and has been replaced mainly with sports betting and because many countries have taken legal action to restrict the market.

[dcollon]

Slightly off the direction of this thread, but thought some might like the attached

So_Much_for_Snap_Decisions-_WSJ.pdf

[triedtestedand]

Try a bit of volunteering as well ... that's always good for perspective, and also way to find new interests that might develop into something further.

[alertmeipp]

if you can make $1.5 million in a few years with online poker, why would you do something else?

 

there seem to be more value investors with a poker background, why is online poker so luctrative?

 

regards

rijk

There was a huge boom in 2003-2004 which lasted until about 2009-2010 and everyone with some brains who applied themselves could make good money. Not so much anymore, both because the boom is over and has been replaced mainly with sports betting and because many countries have taken legal action to restrict the market.

 

My little advice to you: always remember Rule#1 all the time, the hard part for you will be keeping and growing what you have. You can't imagine how hard it is to make that 1.5m back if you ever lost it. Good luck!

[alwaysinvert]

I am with Sanj regarding managing other people's money.  Only do that if you truly need the money (ie. generated from fees) to live off of.  There is pain in managing your own money when it goes down in value but it pale's in comparison to losing other people's money.  I found it really tough as a financial advisor (not a money manager) and that was the main reason why I exited the business after only 13 years.  It is easy when the market goes up 8-10%/yr (ie. the 1990's) but when was the last time we saw that? 

 

I have been retired for 5 years and I spend too much time watching stock quotes. I have done a few different projects but nothing that earns an income.  I help my brother with his business but I haven't charged him yet and may continue to do that part-time.  I keep coming back to investing in businesses as I don't really have any sort of 'passion' that I want to put 100% of my energy into, besides investing.  I love it and I can spend hours and hours per day reading about investing, reading about businesses, comparing them, etc.  I have a lot to learn and I am starting to put together a clearer framework as to how I plan to improve my skills.  I look at it as going to 'University' but I am doing it myself and it is highly specialized in the area I enjoy. 

 

If you plan on managing your own money intensively, than I would recommend that you set it up like a professional.  Have regular hours, have a regular desk, wear something besides your pajamas, have a business plan, have files, have a process, have checklists, keep accurate records, pretend you have a boss looking over your shoulder analyzing your work, pretend you have to submit your work to Buffett and Munger for analysis and review before you invest in anything.... Be a professional and hold yourself up to very high standards.

 

Find hobbies that having nothing to do with investing and make sure you have several 'other' interests where you ignore investing completely for many hours/day.

What you do seems to be exactly the route I am trying to take and I truly share your passion for reading. And as for going to 'university' I also share your contention that it's better doing it solo than in actuality, at least if learning is the primary objective.

 

Although setting up things in a professional way with office and all that is a cost issue, too. I would either have to move to a bigger place where I could set up a home office or rent an office somewhere. While, I am 'rich' I really can't afford unnecessary costs so that would be something I would have to think about even if it would be ideal to do it that way.