Accidentally work-optional (part 2 of 3)

Hey {{first_name|Investor}} -

I ended up in an emergency room during a business trip abroad. That was the week I started wondering what the job was costing me.

Then I did nothing about it. I went back to work, because that's what you do, and because I was deep enough into a 996 schedule that thinking past the next sprint felt like a luxury I'd get to later.

Note: 996 is startup shorthand for 9am to 9pm, 6 days a week. It's a schedule with no room in it for large questions, which may be part of how it survives.

Then I got laid off, the same month I turned 40.

I ran my numbers properly for the first time in my adult life about a week after that. Which is the strange part, because I'd been tracking balances for years. I'd just never once asked the actual question, the one about whether I still needed the paycheck.

I didn't. I'd gone past $2M without ever checking whether it meant anything.

Last week I wrote about $500K at 37, where compounding starts out-earning your savings rate. Today is $2M at 40, the number I turned out to be sitting on when the decision got made for me. Next week is where that's left me, at 42.

I went from $500K to $2M in a little over two and half years, and I passed $1M somewhere in the middle without registering it. Two things did that, and only one of them was investing.

The market did a lot of it. I was concentrated in the right themes during two of the strongest years the index has had. A childhood pastime (*cough* Pokemon cards) became an investable asset. And a few private investments worked in my favor. I'd be lying if I called that a plan.

The rest was income. I was at a well-funded crypto startup that paid generously, in salary and in tokens. A big paycheck landing on a small fixed floor is the fastest way I know to move a number, and it's the part that usually goes missing when people tell these stories.

A million dollars is the number everyone celebrates. It's also, for a 40-year-old, a number that quietly doesn't work.

Run it at the rate I use, which is 2.5%. $1M gives you $25,000 a year. Even at a more conventional 3% it's $30,000. That's a life, technically. It's a much smaller one than I'd spent 16 years building toward.

$2M at 2.5% is $50,000, or $60,000 at 3%. The gap between those two sets of numbers is the gap between getting by and having an actual choice.

The total was only half of what decided it.

Here's the arithmetic I wish someone had put in front of me at 32.

By the time I ran it, the $2M was split almost evenly. Half in an IRA, locked until 59 and a half without a penalty. Half in a taxable brokerage account I could sell out of on any given Tuesday.

The taxable half is the only half that mattered that month. I was 40, so a million dollars spread across the nearly 20 years between me and penalty-free access is about $51,000 a year before you count any growth on it. Which turned out to be enough.

I'd like to tell you I engineered that balance. What actually happened is that the concentrated positions lived on the taxable side, and 2023 and 2024 went the way they went. The half I could reach grew faster than the half I couldn't, and that accident is most of why the layoff landed as an inconvenience instead of an emergency.

The lesson survives either way. Net worth told me I'd done fine. The reachable half told me whether I had a choice.

None of these got made when I needed them. Every one had been made years earlier by a version of me who had no idea she was building an exit, which is the useful part for you, wherever your number sits today.

1. Where the money lived.
I'd spent my 20s and early 30s sheltering everything I legally could, because that's the advice everyone gives. It shrinks the tax bill beautifully. It also builds a cage around the money right when a 40-year-old wants out.

What saved me is that I kept feeding a taxable account anyway, mostly because I wanted somewhere to hold conviction positions without touching retirement money. The reason was wrong. The result was a bridge.

Fund the taxable account in the same years you're funding the sheltered ones. You're buying the ability to act early, and that ability can't be bought retroactively.

2. That part of the portfolio produced income.
I didn't sell anything to fund the first stretch. I had severance, and the active options sleeve I run alongside the long-term holdings covered the rest.

That mattered more than I'd given it credit for. A portfolio that only grows forces you to liquidate at whatever price the market happens to offer on the day you need money. A portfolio with a piece that throws off cash lets you choose when to sell, which is most of what safety actually means.

3. How low my fixed floor was.
Every recurring obligation you sign moves your date further out.

I spent plenty in my 30s, mostly on travel, good meals, and time with people I like. That kind of spending leaves you with memories and no monthly bill. What I skipped was the category that raises your floor forever: the bigger place, the nicer car, the subscriptions that renew quietly for a decade.

Experiences cost money once. Commitments cost money every month until you cancel them, and by then they've already moved your date.

Take your fixed monthly costs and multiply by 480. That's the portfolio those commitments alone require at a 2.5% withdrawal rate. Most people have never run it.

4. Health insurance.
The line item the FIRE spreadsheets tend to skip, and in the US it's often the largest new cost the month after you leave. I'd priced it about a year ahead, and it changed my target by more than any market assumption did.

Price yours before you build a plan around a number that ignores it.

5. Who knew, and what I'd told them.
I'd been quiet about the trajectory for years, which meant the decision stayed mine once there was a decision to make. That sounds soft next to the other four, and it mattered more than I expected. Advice arrives with a lot more force when people know the balance.

My income didn't go to zero. I'd assumed it would, which is the conservative way to plan and a bad way to predict. Work I actually wanted to do started producing money faster than I expected.

Spending changed shape rather than shrinking. Commuting, convenience, impulse purchases that were really just fatigue management. A lot of my cost base turned out to be the cost of tolerating the job.

And the part I underestimated: the identity wobble. I'd spent 16 years being someone with a title, and then it was taken rather than handed back, which is its own particular flavor of strange.

For a while I couldn't answer "so what do you do" without a small internal scramble. That passes. It also lasts longer than you'd guess.

Leaving the country came about a year later. I spent that year working on my own projects and, mostly, getting used to the fact that nobody was expecting me anywhere.

That gap turned out to matter more than I gave it credit for at the time. Every big call I made in the first few months was a reaction to the job I'd lost. The decisions I still stand behind came later, once I'd stopped being someone recovering from something.

Going nomadic was one of the later ones. The logic was simple and a little morbid: I'm relatively healthy right now, and health is the resource with the hardest expiry date on it.

So the plan became a new international base every few years, starting while moving is still easy.

The financial case for it is weaker than the internet suggests. Living abroad saves me roughly 20% against my US baseline. I had no intention revisiting my college days being cramped in a 20 bunk hostel room. Safety has become a larger priority, so I will pay more to be in nicer neighborhoods and amenities. The bigger numbers you see quoted usually assume you'd relocate somewhere you have no actual intention of living.

The exception was health coverage, which came down by about half once I was insured internationally. That single line item did more for the math than the cost of living did.

None of this felt like a decision, because it wasn't one. Somebody else ended the job. What I'd built years earlier decided whether that was a crisis or an exit.

That's the part I'd want you to take from it. Most people get handed their moment, in a reorg or a diagnosis or a bad quarter, and what happens next is settled by choices they made long before, mostly without knowing they were making them.

So run your numbers now, while nothing is forcing you to. I went 16 years without doing it properly and got lucky that the answer was good.

Next Thursday: what happens when the math stops being the hard part, and the questions I'm sitting with now that I don't have clean answers to. That one is mostly thinking out loud, which is the honest version of where I am.

Stay disciplined,
Koh

Disclaimer: Nothing in this email, the Reset and Invest newsletter, the Make Your Own Alpha book, or any course or digital product from Starshine Media LLC constitutes investment advice or a recommendation to buy or sell any security. Numbers and observations are as of publication. I may hold positions in companies discussed. Always do your own research and consult a licensed financial advisor before making investment decisions.