10 Questions with Mr. Tako Escapes

Today is the 45th edition of our periodic guest post series called 10 Questions. We have a list of 17 questions we pose to fellow financial bloggers, and they are free to pick and choose 10 or answer all of them. Let us know if you would like to be featured in a future edition of 10 Questions.

Today we feature Mr. Tako from Mr. Tako Escapes. As Mr. Tako explains on the blog, “tako” is the Japanese word for octopus. Octopi are amazing creatures, known for their escape abilities. Just ask Inky. Oh wait, you can’t ask him because he escaped from the aquarium and went back to the ocean. Well played Inky.

Just like Inky, Mr. Tako escaped. Not from a glass tank, but from his job. He managed to accumulate $2,000,000 in 14 years without making big money. Impressive.

I really like the last line on this page. Mr. Tako knows how to live:

Financial independence is only just the beginning…

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Tell me about your blog and why it’s great.
We prominently feature octopi. Personal finance with tentacles, that’s financial tentacle­porn people! We’ve got to compete with Mr. 1500 and his duct­-tape bra after all!

I’m too humble to say “my blog is great”, but I do offer a different perspective. Many personal finance blogs trumpet the exact same advice: Pay off debt, invest in your 401k/IRA, and save lots. That’s actually good advice. I did all those things myself, but those are the BASICs. The ABC’s and 123’s. Nothing wrong with the basics, (a lot of folks need to learn those too) but if someone really wants to retire­ early, you might want to take a slightly more advanced course.

At Mr. Tako Escapes, we’re going to cover things like stock investments, REITs, discounted cash-flow, early retirement with kids, investing in preferred shares, creating float, and focusing on business returns (not market returns). That, and tentacles.

Tell me how you’re going to change the world with your blog (dream big or don’t dream at all!).
We don’t plan to change the world. Far from it. Some of the stuff I know, I’m don’t want to be widespread knowledge. If everyone knew it, those delicious market beating returns would dry up!

Screen Shot 2016-04-22 at 11.00.17 PMMy main intent with Mr. Tako Escapes is to document how to become financially independent for my 2 boys. They are 10 months and 2 years old right now. I could die at any time, and I don’t want my boys to grow up to be financial bozo’s. So, I’m writing it all down. Originally I had planned to write them a series of letters. In my head, I imagined when they were old enough they would have a read from good old Dad. Then reality hit like a bag of bricks: It’s 2016, nobody writes letters anymore!

If the internet wants to come along for the ride, you’re welcome to join us. Hello? Internet? Anybody there? Bueller…Bueller?

I’ve noticed you seem to hold a lot of individual stocks in your portfolio, why is that?
I could spend a week writing about this, but I’ll try to condense it down. We do hold index funds in some of our accounts, but in general it boils down to an experiment I performed many years ago. I divided my portfolio into two chunks. Stock Funds and Individual Stocks. I left the funds alone for 10 years, and I occasionally made trades in the individual stocks, as I saw fit. After 10 years it was very clear – the value of the individual stocks was double that of the funds.

Meanwhile, the funds were barely worth more than what I started with. True story.

Like Warren Buffett and many other great investment minds, I believe the Efficient Market Theory (EMT) is bunk. Some of the time, the market prices assets appropriately. Much of the time it does not. Think about it: Humans are irrational, emotional beings. At times they will make decisions that have nothing to do with the net present value of an investment. Hell, most people who invest don’t event know what NPV is! Shocking, I know! It’s been proven to me many times over in my investing lifetime, and I’ve beaten the market (on average) over the last 10 years.

When you buy into an index fund, you are essentially saying “The market is efficient, and I cannot beat it. Therefore I will accept market returns”. Mr. Tako isn’t looking for irrational market returns – I’m looking for exceptional business returns.

What goals do you have for your blog, short and long term?
In the short ­term I’d love it if the blog could at least pay for the hosting fees. We’re still a very new blog, so we don’t have that kind of massive traffic like 1500days does.

Long­ term, I hope to work in my little haberdashery and develop superior duct-­tape bra technology that will out-­innovate Mr. 1500.

1500 Days is about early retirement. Do you have early retirement dreams? At what age do you think you will retire?
It’s winter now in the Pacific Northwest. I dream of somewhere warm. I would like to travel again some day, but with one infant and one toddler it’s a distant dream.

You could say I retired at the end of November, 2015. I was 38 at the time. It was silly for me to try to keep working at the highest paying, highest stress job I could find. I would rather be a stay-at-­home Dad and spend time with my sons. I intend to work on a few small projects (like Mr. Tako Escapes) and I might start a few small businesses for fun in my ‘early retirement’. I seriously doubt I’ll go back to 8­-to-6pm slavery. I just don’t fit there anymore.

If blogging isn’t your full time gig, what is?
You could call my full­-time gig being a ‘stay-­at-­home Dad’. The small demons I call “my children” take a lot of time and care. Most of my spare time is spent cleaning up the foul liquids they excrete.

What is the best money management or investment tool you have come across?
My blog doesn’t have the traffic to get hooked ­up with the big money making affiliate programs like Personal Capital or YNAB, so I can’t recommend them (yet). My own brain, and a spreadsheet are typically what I use.

How do you handle people with different views on money, ie spendy people?
I kindly ‘nod’ and acknowledge their different perspective on life. I’m sure they’ve got it all dialed-in how they want it. There’s so many different ways to get through life, it wouldn’t make sense to judge the lives of people with different money views. Treat others how you would like to be treated.

Did you grow up with money? How did your money situation growing up influence you?
I think I grew up middle class, but we were taught to save like nobody’s business. My parents were always talking about how we didn’t have enough money, but we were always fed. Mostly, that food we grew, caught, or killed ourselves. It just took effort, not money. I don’t think I really ate beef until I was in college.

Despite the frugal lifestyle, my parents were big purchasers of luxury items – fairly nice houses, airplanes, and boats. We pinched every penny to make those things happen. I remember spending my summers chopping wood. Yes, the whole summer. Year after year. It was hard work to save those dollars.

I think my parents wanted me to learn the value of hard physical work, but instead it had the opposite effect. I resolved to use my brain to earn money­ instead of breaking my body trying to save a few pennies. So yes, it had a HUGE impact on me. I’m still a big saver today, but I discard the need for the toys of middle class life (and the excessive efforts required to attain them).

Did your parents teach you about money as a kid? How so?
No, they didn’t. But I paid attention and have a great list of things NOT to do.

What is your favorite style of beer – and what is your favorite beer in that style?
This will probably make me really unpopular: I gave up drinking several years ago, and haven’t touched a drop since. Back when I did drink beer, I was partial to Black Butte Porter from Deschutes Brewery.

We notice a lot of frugal people are into board games – what is your favorite?
Oh man Mr. 1500 ­ this is your most difficult question yet! Mr. Tako is a major board game nerd. I have tons of favorites: Power Grid, Cities and Knights (Settlers of Catan expansion), Puerto Rico, Dominion, Ticket to Ride, 7 Wonders, Agricola, Glory to Rome, etc, etc. I don’t think I could pick just one.

What is the best thing you’ve read lately?
I’m currently reading “The Innovators Dilemma” by Clayton Christensen. It’s a pretty good book so far. The main focus is about well run companies that fail to hold onto their market leadership.

It looks at “disruptive technology” and why so many companies miss out on new waves of innovation. I think it would be right up Mr. 1500’s alley.

Thank you, Mr. Tako, for taking time out of your ocean adventures to answer our questions. Keep up with him and his cephalopod life at www.mrtakoescapes.com.

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11 Responses to 10 Questions with Mr. Tako Escapes

  1. Really interesting to hear that you had two separate portfolios, one with individual stocks and the other with stock funds – and that the one with the individual stocks outperformed the other. It’s a topic I have been reading up on lately (I recently sold my business so I am planning my investment strategy) and there is a lot of conflicting information out there – and some FI bloggers with very strong views about the subject 🙂 So I am also doing the same thing: one portfolio with individually selected stocks and bonds (70/30) and a second portfolio with ETFs. I will then compare them for a few years and see how it goes. Might pop over to your blog to compare returns in a couple of years time 😉
    Mrs Smelling Freedom recently posted…Financial Independence: Am I there yet?My Profile

  2. Tawcan says:

    Great interview. Very cool to hear you thought on buying individual stocks. I’m mostly individual stocks right now with small amount of ETFs. Plan to increase the ETFs portion in the future.
    Tawcan recently posted…When You Have That Epiphany…My Profile

  3. Love the board games, Mr. Tako!

    The Green Swan

  4. Believe Fire says:

    Wow, accumulating 2 million in 14 years is quite the accomplishment! I respect your decision to no longer drink, but sounds like you were doing it right when you were. Love Deschutes!
    Believe Fire recently posted…10 Reasons Why You Should Retire in Cuenca EcuadorMy Profile

  5. Yes, I used to love Deschutes! The food was really good at the brew pub too!
    Mr. Tako @ Mr. Tako Escapes recently posted…The Clothes For Financial IndependenceMy Profile

  6. Mr. PIE says:

    Can’t agree more with the “things not to do” lessons
    Must be Ten things, twenty or thirty or more in that bucket
    Even a book…
    Mr. PIE recently posted…Cognitive Distortions on the Path to Wealth – Part IMy Profile

  7. Pingback: Games Millionaires Play - Mr. Tako Escapes

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