When I started this blog way back in January of 2013, I was transparent with investments. I thought it was silly to share my journey to financial independence without sharing the obvious metric, net worth. I love playing with numbers, so writing these updates was enjoyable. I’ve decided to stop them now though for two reasons.
1. I’m no longer relatable.
My investments have done very well. Before I knew what an index fund was, I picked individual stocks. And because I’m a nerdy techy, I happened to pick the ones that have done really well. I’ve owned Google, Amazon, Facebook, and Tesla for years. I’ve outperformed the indices by a large margin. Was it luck or smarts? Probably mostly the former; I was interested in the right things at the right time. But being an average human who got very lucky isn’t a bad place to be. I won a very slow version of the lottery.
I also took some big swings by investing in SpaceX and Impulse Space. Those are doing great as well.
Side note: The cost of owning individual companies is that you feel like you have to pay attention to them. I spend too much time doing that. I’m slowly moving to index funds. Slowly…
2. I’m no longer anonymous.
I intended to always be anonymous, but then we were outed after a podcast we appeared on went viral. The podcast host begged for a photo and eventually I gave in, thinking nothing would come of it. And then this happened:
I didn’t think anyone read Yahoo! news. But it turned out that 99.99% of the people I know do in fact read it. We got a load of interesting text messages:
Dude, you have a million dollars? I saw you under the hood of your car last weekend!
Ummm. You dress the opposite of a millionaire.
Can I have some money?
Answers:
I’m wealthy because I work on my car.
Clothing? The only thing I care less about than fashion is the Earthworm Olympics.
No.
Oof. The bigger out net worth grew, the less comfortable I felt sharing it.
And while most humans are good, the ones that aren’t ruin it for everyone else. There are some wackos out there.
But I still want to talk about money. So I’ll post here from time to time about what I’m doing. Just no more specific numbers.
72(t) Madness!
The hopeless optimizer in me always wanted to get the most out of my investments and minimize taxes. 401(k)s were always the first place I put money. Late in my career, I would become a contractor and I took saving to the next level with a self-directed solo 410(k). I put exotic investments into these accounts including the two private companies I already mentioned. So now, Mindy and I find ourselves with outsized 401(k) balances. The solution is to execute a 72(t) to get at the money before we’re old and crusty. I have found:
- 72(t)s are still exotic. You will find little help executing one from your broker.
- I’m at Vanguard and executing this from a rollover IRA. I did find someone at Vanguard who was helpful, but it took a looooong time.
- You don’t want to mess it up. There are nasty penalties if you screw up your calculations.
- Gemini, Google’s AI assistant, was very helpful with the research. To be clear, don’t trust everything AI tells you. I double and triple checked everything Gemini told me. On the flip-side, I used Gemini to double-check everything I had discovered. Gemini knew more about how to execute a 72(t) at Vanguard than most of the people at Vanguard.
The account I will execute the 72(t) against has about $1,000,000. My annual 72(t) withdrawal will be around $60,000.
F.O.O.L.I.S.H. Funding: Buy, Borrow, Die With A Couple Stock Sales
I have been using a simple version of the Buy Borrow Die strategy to fund our F.O.O.L.I.S.H. Project. Here is how our version works:
- First, you need investments in a standard brokerage account. The bigger your number, the better! This doesn’t work from a 401(k) or Roth account. Note that MMM-Pete wrote about this type of borrowing here.
- Borrow money against the account. At Robinhood, I’m borrowing at 4.5%, much less than a construction loan or mortgage. It’s also much less hassle. Be very conservative. You don’t want a margin call. Also, the rate is variable, so be prepared!
- I’ll pay some of the money back with proceeds from our home sale this summer.
- In the years to come, I’ll slowly sell off stocks to pay down the loan.
This strategy punts the tax bill down the road and also minimizes the total amount of taxes we’ll have to pay.
But I’ve also sold Tesla shares to help pay for the project (note that this is in violation of my own strategy).
Tesla Troubles?
!!Nerd Alert!! If you don’t care about Tesla’s autonomous driving efforts, please skip to the next section.
I bought a Tesla Model Y back in 2023 mostly to keep track of FSD (vehicle autonomy). I had a lot of Tesla stock and since Elon had bet the company on a robotaxi network, I wanted to pay close attention to FSD progress.
Back then, FSD was terrifying. The car would accelerate towards humans and execute dangerous maneuvers regularly. Today, it works much better. I engage it in Costco parking lots on Saturday afternoons without hesitation. I NEVER would have done that two years ago. In the past 6,000 miles, I’ve had to intervene once.
As good as FSD is, it’s not good enough to work without a human behind the wheel, ready to take over. If the car loses its little mind only once every 6,000 miles, this is an incredible technological achievement. However, it also has to be much better to function without a safety drive.
I believe that consumer vehicles with the current version of the FSD software (14) and hardware (4) will never be able to operate autonomously. The compute is maxed out. There aren’t camera cleaners. There are no anti-glare measures for the front facing camera. Note that the few robotaxis that Tesla operates have these features.
Tesla will eventually solve autonomy, probably with version 15 of the software (arrives in 2027) and version 5 of the FSD hardware (arrives in 2028). The new hardware will have more computing power, upgraded cameras, and most likely, some of the other features that are already appearing in Tesla’s robotaxis. So Tesla’s large scale robotaxi story gets pushed back until at least 2028.
I wouldn’t worry about Tesla’s slow progress if it weren’t for Waymo. Waymo is currently doing over 70,000 rides per day. When will Tesla’s robotaxi fleet match that? And when it does, where will Waymo be? Waymo is a subsidiary of Google. I would not want to compete with Google.
Tesla has a lot going for it including a best selling car, an extensive charging network and energy storage products. However, the current sky-high valuation only makes sense if you think Tesla succeeds in its robotaxi efforts. The question that I’d love to know the answer to is this:
If Tesla doesn’t get a big robotaxi network (10,000+ cars without a human safety monitor) going until 2029, is the company cooked?
I have no idea.
Going Quickly To Go Slow
Our house is almost done. After that, I’ll be officially done with home construction projects for a while. I’ve been working on houses almost continuously since 1998. Back then, I didn’t know how to do much of anything. Now, I’ve remodeled loads of kitchens and bathrooms, built a fancy deck and pergola, installed solar panels on two houses, replaced windows, finished a basement, installed an ERV, and designed/installed a 5-zone heated floor system. It’s time to take a break. I’ve been moving fast for a long time. Instead of swinging the hammer, it will be fun to get back into music and learning Spanish. And even just doing nothing.
One More California Adventure
Next week, I’ll head to California to pick up Older Daughter from college. We’ll drive up the coast from San Diego to San Francisco before heading to Yosemite. After that, we’ll stop in Jackson Wyoming.
I love road trips; peaceful alone time, listening to an audio book with an ever changing view.
If you have any suggestions for me or are around and would like to hang out, let me know!
Life is good.
More 1500 Days!!!
You can also find me (and the dinosaurs) at:
- YouTube: My channel is mostly devoted to home improvement, but I have some other material coming up soon too.
- Instagram: Pretty pictures of dinosaurs, sunsets, and nail guns!
- Twitter: Spontaneous, often insane, ramblings
- Coworking space: On the surface, MMM HQ is a coworking space. Look a little deeper and you’ll see that we’re really building community. The members of MMM HQ are some of the finest people I know
- Buying a Tesla? Use my referral code to get some perks!
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