Are you ready to live your best life in the YOLO Economy (You Only Live Once)? I sure as hell am! I believe the YOLO Economy is here to stay for the next 10 years. Everybody get excited!
When September 11, 2001 happened, I had just moved to San Francisco from Manhattan as a 24-year-old. The event was traumatizing, especially because I was at the top of World Trade Center North Tower hosting a Latin America conference that January.
9/11 reminded me again that life was fragile and uncertain. When I was 13, I had experienced similar trauma when a friend had died in a car accident.
By age 22, I had already decided I needed to save and invest as much money as possible to be free. A career in finance was not sustainable due to the long hours and constant stress.
The Decision To Live The YOLO Lifestyle
Then on November 26, 2008, there was a terrorist attack at the Taj Mahal Hotel and Oberoi Hotel in Mumbai, India. Just a month earlier, I had been staying at the Oberoi Hotel for an Indian Investment Conference my firm was hosting at the Taj!
When I saw the events unfold on TV, I remember asking myself, “Is death catching up to me?”
I didn't want to go to India that year because I had already been with a client several years earlier. Back then, it took 24-hours to get to Mumbai from San Francisco. Further, I didn't want to be away from my girlfriend for that long. I had an engagement ring burning a hole in my pocket since the spring. I wanted to propose!
But my big boss in Hong Kong insisted I go because we were just launching our new India research and banking initiative. If I had died in Mumbai before being able to propose I would have been pissed.
When you compound 9/11 with my close call in Mumbai and the subsequent Global Financial Crisis, I really wanted to get the hell out of finance once things recovered. It felt like spending a career trying to make money and helping institutional clients make money wasn't the best use of time. So in 2012, I left.
Preparing For The YOLO Economy
I've been living the semi-YOLO lifestyle since 2012. The lifestyle entails doing exactly what I want to do when I want to do it. It is mostly because of living this lifestyle since a relatively young age that I feel rich. Yes, I gave up a crapload of money to be able to live free. However, the freedom has been worth it.
It is obvious the YOLO Economy will be here for quite a while. The daily messages of death from the doomsday media since 1Q2020 should have done something to change the way you want to live.
In my newsletters and with my posts, I've done my best to stay positive during these difficult times. But man, the mass media has a great way of beating us down IF we pay attention to it!
The YOLO Economy has the following attributes or desires:
- More flexible work locations
- More flexible work hours
- A more purposeful and interesting job
- An increased amount of wealth due to increased savings and investments
- Less patience to deal with work and social BS
- More desire to spend more of your money before you die
- A permanent desire to live better with the money you have (nicer home, better travel, etc)
- An increased occurrence of highly speculative assets rising and falling
The best time to work could really be right now given the flexibility and higher pay. Let's now discuss how you can live your best life in the YOLO Economy.
Living Your Best Life In The YOLO Economy
Here are some things I think you should do to live a better life. It is now more acceptable than ever to do these things. This acceptance is one of the key benefits of the entire world going through a pandemic together.
1) Look for a new job already.
If you are bored with your job, don't believe in the company's purpose, or don't like your colleagues, you owe it to yourself to find a new job! The economy is rebounding and companies will eventually find it extremely difficult again to find high-quality talent. As a result, more work perks will be offered. Be bold in your job hunt and in your demands!
Many publicly-listed companies have much larger hiring budgets because many companies are trading at all-time highs. Further, private companies are cashed up because the amount of funding available is at all-time highs.
If you are happy with your job and don't want to move, then by all means be more aggressive in asking for a raise and a promotion. The job market is hot and there is more flexibility for employees than ever before.
You don't have to follow my path and leave work altogether. If I was 34 years old today, I would be ecstatic at all the new opportunities that are becoming abundant in the YOLO Economy. Although, if you're thinking about retiring early, definitely go through my pre-retirement checklist so you do it right!
2) Calculate your Boot and spend it.
So much money has been made since the pandemic began. Your Boot is the amount of EXTRA money you've made thanks to the pandemic.
Take a moment to calculate your investment and net worth returns since January 1, 2020. Now take 13.4% off those gains (ex. 30% return in S&P 500 – 13.4% = 16.4%). The difference is the boot. The 13.4% comes from taking 10% from 2020 and 3.4% after a quarter in 2021 to get to a 10% return for the year.
If we assume the S&P 500 would have returned 10% a year had there been no pandemic, then any excess gain is a bonus. That bonus can and should be used guilt-free to pay for a better life.
The other portion of the boot is the amount of extra savings you have accumulated thanks to the lockdowns. Compare the difference in savings between the start of the pandemic and your normalized savings pre-pandemic. That difference should also be freely spent.
Using the boot is a great way to revenge spend. It is also a way not to let the pandemic defeat you mentally. As an optimist, you must always look at how bad things can help us keep moving forward.
In my case, I'm using the boot to get back to early retirement life again. I've always had trouble spending lots of money since I was a kid. But not any more! When economies fully open, I am spending my boot on first-class flights, the best meals, hotels, and entertainment, new sports equipment, massages, coaches, and maybe even a new car.
3) Build an online platform to make money and share your voice.
A part of the YOLO Economy means being able to do your work in more flexible locations thanks to the internet. I clearly remember the immense joy of earning $1,000 when I checked my phone at the top of Santorini, Greece in October 2011.
A UK-based advertiser wanted to advertise something on Financial Samurai and I obliged. Just 30 minutes after I put up the ad, he Paypaled me the funds. I ended up ordering another over-priced Mythos beer while overlooking the crater because I felt so rich.
The money was completely unexpected on my hike up the hill. Further, the ease at which the funds were made helped give me the courage to leave my job the next year.
There is special joy in making money from your website while exploring new places. It's all about being able to do two enjoyable things at once. This way, you feel like you're not really working. The joy of making money on your own is at least 5X greater than being able to work from your laptop for another company.
Making Money On Your Own Is Addicting
First of all, it is satisfying knowing that if you didn't build your brand or your business, nothing would have happened. Second, you have more flexibility making money from your website than you do for an employer who allows you to work from anywhere.
Once I was paid the $1,000, I turned off my phone and drank more beer. Yum! If I was working for a company, I would have likely had to keep my laptop or phone connected for hours that day.
Another benefit of having your own online platform is that you can speak your truth. It feels great to share your thoughts about issues that are meaningful to you. If you grow large enough, you might even have the ability to positively affect change.
Having an online platform is key to benefitting from the YOLO Economy. If you can work remotely, it's easier to start your website because your employer can't track everything you're doing anymore.
Perfect! Just be smart and use your personal computer to setup and work on your side business to keep it on the down low. Some companies track browser history and usage on company devices.
4) Be properly invested in the YOLO Economy.
If there is really going to be a boom for years to come, you want to be properly invested in the YOLO Economy so that your net worth continues to grow.
Calculate the percentage of your net worth that is invested in risk-assets like stocks, real estate, art, collectibles, cryptocurrencies and more. If you believe in a bull market because everybody will be spending a lot more money to live a better life, then you want more exposure not less.
Here are my suggestions for how much risk exposure you should have by age:
20s: 100% of net worth exposed to risk assets
30s: 90% of your net with exposed to risk assets
40s: 80% of your net worth exposed to risk assets
50s: 70% of your net worth exposed to risk assets
60s: 60% of your net worth exposed to risk assets
At 43, I have about 85% of my net worth exposed to risk assets, maybe more if I include this website. My website helps give me more confidence to invest at this stage because it is a cash cow.
Since college, I've always been hunting for unicorns too. Books-A-Million was my first hit. VCSY was my second. Tesla was my third. Even if my unicorns blow up, I've still got 80% – 90% of my investments in less volatile assets.
If a recession eventually comes, at least we'll find solace knowing that everybody else investing in the YOLO Economy will have taken a hit as well. That's the beauty of continuing to all be in this together.
5) Find the right, leveraged YOLO job.
Step one to benefiting from the YOLO Economy is changing jobs if you aren't happy. However, to fully take advantage of the YOLO Economy, you also want the right job to gain the most amount of wealth.
In my opinion, there is no better YOLO Economy job than being a Venture Capitalist. You get to risk other people's money, get paid a handsome salary while you wait, and earn a good percentage of your client's profits if the investments hit big. If the investments all turn out to be duds, you don't have to pay your clients back. Further, there’s no need to grind and build anything! The risk/reward ratio is the best there is.
Another great job is being a hedge fund manager, although it is more stressful than being a VC. For example, despite Melvin Capital being down a whopping 49% in 1Q20201, the owner was still able to buy a $44 million mansion in Miami!
How sweet is that? Even a donkey can do better than a -49% loss. But a donkey like me still can't afford a $15 million beachfront property, let alone a $44 million mega-mansion.
You don’t want to be the reporter reporting on the YOLO Economy. Instead, you want to be the VC or hedge fund manager making bank from the YOLO Economy!
You must find a job that takes full advantage of people with money to burn, who don't care if you actually burn it! There's a reason why things like NFTs are gaining so much popularity. There is more money out there than we know.
Bonus: Run a 7-minute mile or less
Given we're all going to be more active and free, it behooves all of us to get back in fighting shape. Being able to run a 7-minute mile should do it, regardless of your weight.
The fitter we are the healthier we will feel. The healthier we feel the greater our endurance and self-esteem. If we get really fast, our anxiety about getting crushed by a coronavirus will likely go down. Therefore, our mental health will likely improve as well
Your goal should be to feel as healthy has possible in the YOLO Economy so you have desire and ability to do as much as possible. If you don't want to be able to run away from an angry bear, at least run a 7-minute mile for your children and loved ones.
Finally, there's another benefit of being in great shape. You have less of a chance of going to the hospital and dying from COVID!
Life Will Be Wonderful Again
Most of us have permanently decided we are going to live it up with the one life we've got. We will spend our Boot, do more meaningful work, and find ways to help others along the way.
My true hope is that all of us reprioritize the things that mean the most to us during the YOLO Economy. Chasing prestige and status is a low priority in the YOLO Economy. Instead, we should work on improving our health, our relationships, and our purpose.
Having enough money to do what you want will always be a necessity. Therefore, we must continue to save and invest wisely to develop that valuable passive income. However, there will come a point where we have to ask ourselves how much money do we need to truly be happy. I found my enough back in 2012 before I had children. Today, I have found my enough again with a family.
The goal is not to win a financial argument or have the most amount of adoration. The goal is to live a wonderful life! Only you can decide whether you are living one or heading towards one. At least consider taking a well-deserved sabbatical to reassess your life.
2020 derailed my YOLO lifestyle. But at least I'm wealthier and my family is safe. I'm not letting the next few years screw things up any more! Instead, I will focus on doing what I want for the rest of my life.
Recommendation Before You YOLO And Leave Your Job
If you plan to quit your job you might as well try to negotiate a severance. A severance package provided my wife and I years of financial runway after we left our jobs. As a result, we didn't feel stressed or rushed to do something new.
Check out, How To Engineer Your Layoff: Make A Small Fortune By Saying Goodbye. The book has been refined over the years and was recently updated for post-pandemic life. I literally wrote this book to help everyone who wants to YOLO to leave in a financially better position.
I was able to negotiate a severance package worth six years of normal living expenses. As a result, I was able to travel to 20 countries for a year and pursue my passion of writing on Financial Samurai. The safety net was a huge catalyst for me to quit my boring job and live life only terms!
Readers, how do you plan to take advantage of the YOLO Economy? How long do you think the good times will last? How geared are your investments to the YOLO Economy? YOLO stands for You Only Live Once.
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