The Speculator and the Investor

Call me naive - but up until now I hadn’t cognitively assigned meaning to the differences between being an Investor or being a Speculator.

Generally speaking, the speculator investing for appreciation and the investor investing for cash flow.

I guess to me it was semantics as to whether I wanted to grow the money at a faster rate or a slower rate.

Up until recently I had been fully on the grow it forever train. However as I find myself, I realize that I am HEAVILY biased towards freedom.

Present day me shudders at the idea of having to drive down town to go to a box to work. Present day me cringes as the idea of sitting down with a team to have lunch. The idea of having to work late and miss my children’s game - ugh.

This used to be the reality of day to day for me, but - where there’s a Will there’s a way.

I now live a life where I get paid to not leave my house (or work from anywhere in the world). I can exercise, have a mid day shower, see my kids games, whatever.

Sometimes living the life you want to live, costs more money.

Cashflow that is present in day to day life affords you options. I’ve lived life thus far just growing wealth, not needing it in day to day life. I’ve enjoyed what I’m doing, my routine and didn’t need anything from that growing money.

Cue - the Investor. Investing to have cashflow and some appreciation. The point where I am at in life is I want to start increasing my cashflow to cover the costs of some of the things I want to do in day to day life plus buy me some options.

I guess I need to now shift gear from solely a speculator to marginally an investor for cashflow.

Ignoring the mathematical reasoning for tax deferral - I’ve always been a bit perplexed as to when I want something in a tax sheltered vs non tax sheltered account. The point in life of where I’m at makes it crystal clear. The time value of money is increasing to me and the shackles and chains that come with a government approved tax deferral account now seem repulsive. (Tax deferral usually coming with penalties of withdrawing “early”). Different countries have different rules.

I like freedom, at this point in life, I want max freedom also with what I do with my money. The shift from - grow money forever without using it is now shifting towards using it and with that comes my disapproval of having money tied up.

Now asking myself - what amount of money do I need in day to day living to live a maximum-happy life? Really on introspection it is an amount of money that will afford my family to go on an international holiday twice per year and maybe a car payment. At this point in time that is all I need.

So $25,000 for vacation and $6,000 for car payments. So $31,000 to be living maximally.

I’ll work towards trying to cut unnecessary household costs as well as looking at pooling money together to put into cash producing asset. If it was to solely come from investments it would be about $600,000 of investment yielding 5% per year. (31000/0.05). If i can cut out an unnecessary 1k per month in household spend that would be over 10k towards my 30k goal.

Switching gears!