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How My Investing Changed After Financial Independence


For the first decade or so of my working career, I shoveled money into mutual funds and didn’t put much time or effort into thinking about other options. However, after realizing we were actually financially independent, my investing has changed as I added different asset classes for a variety of reasons.

Five years into my career, I invested in a small craft brewery, and that would be my only “alternative” investment before reaching financial independence.

I didn’t even add bonds until roughly halfway through my 13-year anesthesia career.

However, since realizing we were truly financially independent late in 2014, I’ve changed up the way I’ve invested additional money. I’d like to share how and why my investing has changed.




How My Investing Has Changed After Financial Independence


I’ll start by saying I believe in the effectiveness and simplicity of a three fund portfolio or any variation on it.

Buy a few index funds (US stock, international stock, bonds), rebalance occasionally, and reap the rewards. It’s simple and time has shown how well it can work.

My portfolio essentially has a four fund portfolio as the foundation. I’ve added a REIT index fund as the “fourth fund.” I’ve also sliced and diced a bit, breaking the US stock into different funds and doing the same with the international allocation.

Tax loss harvesting, which is worth $1,000 to $1,500 a year, is one reason for mixing things up. If I own a fund in my taxable brokerage account, it’s best not to hold the same fund elsewhere.

I’ve also exchanged funds numerous times, so I now own both Vanguard’s S&P 500 fund and their Total Stock Market fund even though their performance correlates almost perfectly.

I’ve also bought into the idea that small value stocks may deliver a higher return over the very long run. That has not been the case over the last decade, but that’s actually a small window in the grand scheme of things. I’m counting on mean reversion to kick in at some point.

I’ve also tilted toward emerging market funds as part of my international allocation in hopes of possibly eking out a slightly higher return there. The increased volatility is one price you pay, but that also means more potential losses to harvest.


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If You’ve Won the Game…


I recently read Dr. Bill Bernstein’s The Investor’s Manifesto. Dr. Bernstein, a retired neurologist, financial historian, prolific author, and manager of ultra high net worth investors, is famous for saying “If you’ve won the game, stop playing.”

What he means is, if you have all the money you need to live the life you want, why not dial down the risk and shift your investments to safer, less volatile assets, i.e. more bonds and fixed income instruments, and a lower percentage of stocks.


“If you’ve won the game, stop playing.” -Bill Bernstein, MD


Suze Orman, who doesn’t understand the FIRE movement and is worth tens of millions of dollars, has been known to be invested almost completely in zero-coupon municipal bonds.

She won the game decades ago, and she stopped playing.

Meanwhile, Coach Carson‘s alma mater, Clemson, was up 52 to 7 over the Georgia Tech Yellow Jackets at halftime in a recent duel on the gridiron. Clemson kept playing, winning the game 73 to 7. Four players threw passes that were caught by 17 different receivers, and 11 players recorded rushing yardage.

Even the esteemed Dr. Bernstein has been known to say that if you’re winning the game by a large margin, as in your annual spending is 2% or less of your total assets, there’s really no reason to quit playing. You can afford to give up a lot of points and still come out victorious.


Keep Playing


When I left my W-2 job in 2019, I found myself teetering on the edge of that 2% mark. It’s true that if I just put all of our money in a safe investment that could keep up with inflation, we would have about 50 years without money worries, as long as our spending assumptions prove to be true.

I would also be giving up the opportunity to potential to see our nest egg compound over the years, most likely doubling at least a few times over those same 50 years if I were to remain invested in assets more likely to appreciate, like stocks and real estate.

I decided I’d keep playing the game, allocating about 5 years worth of living expenses to bonds, and continuing to invest the rest more aggressively.


How My Investing Has Changed


Like Clemson, I’ve started spreading the ball around a bit more with the income I’ve earned since becoming financially independent.

My investments in alternatives have increased from one small investment in a brewery to about 40x that amount invested across a variety of real estate and startup investments.

I’ve got debt investments in a second brewery and in a fix-and-flip home lender.

We bought some lakeshore property, thought we might build on it, but decided to sell it instead for a tidy profit.

I started my crowdfunded real estate investing with small investments, like $500 apiece in Fundrise and Diversyfund. I’ve seen several deals go full circle with Republic Real Estate, Alpha Investing, EquityMultiple, PeerStreet, and the now-defunct RealtyShares (and with no unpleasant surprises, thankfully).

There are two ground-up construction projects in Texas that I’m participating in via Crowdstreet. I’ve also invested in real estate funds from both DLP (Dream Live Prosper) and Origin Investments.

I’ve even got some income-producing farmland, two acres in Arkansas obtained on the AcreTrader platform.

Early in 2020, I invested in shares of a high-end condominium in Miami via Compound, a company that was later acquired by Republic.co, a mature startup that, among other things, helps other startups connect with investors around the world.

See here for an update on my various real estate investments and their performance.

I was given an opportunity to invest in Republic itself, an opportunity that would not have been possible if I hadn’t shown faith in Compound prior to the company being acquired. I jumped at the opportunity; Republic.co is like a much better Kickstarter with some serious vetting and the possibility for investors to have real equity in the small percentage of companies that pass their due diligence process.

Not only do these investments add a new level of diversity to my portfolio, but they are also rather fun to collect, are creating different post-FI income streams, and I’m learning a lot in the process, too.

Yes, each of these investments carries a degree of risk, some higher than others, and all of them higher than Ms. Orman’s muni bonds. I’m also able to make these investments with money above and beyond what I need for my family to be financially independent.

Altogether, I’ve allocated about 20% of my portfolio to alternatives (including real estate). That percentage may grow for two reasons. One, if these investments outperform our combined stock and bond allocation, there will naturally be a higher percentage than before in the alternatives. Two, we can better afford to take additional risk as our nest egg grows relative to our needs.

If all of these “alternative” investments were to go to zero, which I’d venture to guess is statistically impossible, we would not be destitute. In fact, we’d still be just fine. We’ve still got the modified four fund portfolio with about 40x our annual expenses to fall back on.


Why Keep Playing?


Clemson kept playing because they want to win another championship. They were able to get valuable gametime experience for many of their athletes, and the margin of victory will impress those who vote in the polls and for the final playoff seedings, assuming they continue their winning ways.

I keep playing because I’m no longer playing simply for myself.

Yes, I believe we have beyond enough for my wife and me, but there are others who could benefit from a growing pile of money.

We do have children, and likely, they’ll someday have children of their own someday. I hope that by the time my wife and I move on from this earth, our boys (then men) will have reached financial independence on their own, but if not, we should be in a position to leave something of a legacy if that’s what we choose to do.

Additionally, my website has a charitable mission, and we’ve been able to donate hundreds of thousands of dollars in online profits. We’ve made grants to hundreds of charitable organizations while continuing to grow a donor advised fund that will benefit charities we choose for decades to come.

If the Giving Pledge accepted people like me with a single digit number of millions, I’d sign it. By continuing to play the game, maybe we’ll have enough someday to qualify for a signature. I don’t know that I’d want to give it all away, but the pledge only requires you give away half of your accumulated assets.

I’m game for that.



Has your investing changed as your wealth has grown? Do you believe in continuing to play the game, even when it’s clear that you’ve won? 


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27 thoughts on “How My Investing Changed After Financial Independence”

  1. Pingback: Top 5 Reasons You Shouldn’t Listen to a Word I Say - Passive Income MD
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  4. Saving 50% is tough to do for most people unless they are single and have few expenses. I think that most married couples can do 20% as a reasonable goal. I have not really looked air alternative investments, but probably should.

    • It depends largely on the household income. For some, it’s easy to save more than half in a dual high-income household. For others (i.e. when I was a single resident), saving 20% would have been challenging.


      • You mentioned investing in pre IPO? How do you do that? Can we still get into republic deal or is that only for compass investors? Thank you so much!

  5. Great article, thanks for sharing.

    My two favorite parts:
    1) It’s okay to keep playing. This is a lovely evolution of the FI/RE mindset. Finding things to invest in after FI can keep you sharp, give you purpose, and develop your passion.
    2) You’re limiting this to 20% of your investments. This is brilliant. Peel off a portion of your assets (that you wouldn’t miss if they were gone) and use them to better your life and others.

    Well done. 5-stars

  6. As a tech alumni part of this post is painful and I long for the days of Paul Johnson. But I agree with the end point.

  7. i don’t think it’s possible to “stop playing.”

    with perhaps $100 TRILLION in u.s. gov’t off balance sheet liabilities coming up over the next 10-15 years or so, in the form of entitlements, the impossibility of raising rates without bankrupting the gov’t and so on, there is no such thing as safety. TIPS are paying a negative rate, and linked to an index that certainly doesn’t reflect MY cost of living. The idea of avoiding risk is a chimera.

    so i think all i can do is accept that there is no avoiding risk, and pursue a number of independent, hopefully low-correlation strategies, hedging the greatest risks and hoping for some returns along the way.

    i’d be very interested if you can tell me how to “Stop playing.”

  8. Thanks for sharing these ideas. I listened to Bill Bernstein interviewed by Ben Carlson during the Covid bear panic. Bernstein’s voice, face, and words radiated calm. He had enough calm leftover to comfort his listeners. That’s what I want for my future.

    Beyond core stock index ETFs, I’ve found reward in individual stocks to satisfy that urge to research and take on different risk. Certainly individuals are not diversifiers, that’s OK if my core index are sufficient.

  9. Really enjoyed this. We’re only two years post FIRE but find a mix works for us best. Different levels of risk and types of exposure, stocks/shares, property, P2P etc. Especially geographical. Being in the UK, a lot of people can be too heavy FTSE/sterling so I’m deliberately balancing that. Especially since we spend about 1/2 our time travelling!

    There’s something about investing money in something below inflation that just feels wrong. I’m lucky enough to have a defined benefits pension due at 60 which more than doubles up to provide income security. So I figure it’s like having a large chunk invested in bonds already.

    We don’t have kids so our intent is to use our money before we go – both on those we care about and charities etc. That’s why I love that you donate half your income from this site – that’s so powerful. It may just be the one reason I look into growing my own site as defn something I’d like to be able to do. Inspiring, cheers.

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  11. Beautifully written! This aligns exactly with how I’ve been thinking about my own investments. I dipped my toes into passive real estate this year when I got a little closer to FI, hitting the Coast FI mark. Hopefully the extra risk will translate into some more returns, while the proportion of it remains small enough to not derail our lives.

    • Thanks!

      That’s a great way to look at it. Might boost your returns, but the worst case scenario won’t ruin you, either.

      Congrats again on “Coast FI.”


  12. This was a great post Leif. And considering where interest rates are, fixed income is likely to be a more risky asset class than equities over time considering you would likely be under earning inflation in most fixed income strategies.

    It makes sense for many people to diversify out of equities into real estate and alternatives once they have enough liquid assets.

    • Thanks, EC!

      Looking into different asset classes has expanded my knowledge and given me a more diversified portfolio. I know that investing shouldn’t be exciting, but I think it can be a little bit fun.


  13. Taking some risk off the table is a safety net and a smart decision. Bonds may lose purchasing power over time depending on inflation, but not sure there is a good alternative for short term needs and therefore I allocate a percentage as well.

    Like you, I don’t think I will ever exit the game like Suze. Investing is my favorite hobby. I have too much fun playing it.

    • It’s a tough spot for an investor to be in with bonds offering negative real returns.

      I listened to an Animal Spirits podcast with Simplify’s Paul Kim talking about how their funds manage downside risk with options. SPYC is 98% S&P 500 and 2% options to reduce tail risk.

      Interesting concept, and apparently backtests show that it could work well. You do lose a bit of the upside when stocks rise — it’s essentially paying an insurance premium with the purchase of those options.


  14. I am following a similar path as you Leif. I am in the Grey zone between having so much money you can do absolutely nothing and still come out okay (like Suze) and criteria for lean FIRE.

    I have not stopped playing the game even though I probably have won it for what I need because I just want to add a few more layers of safety to it especially seeing first hand what a black swan event like covid can do.

    I have a discretionary % of my net worth that I put into speculative things and hopefully one or more will work out but if not it won’t impact my future much.

    I am a big fan of mailbox money cash flow and that gives me a bit more confidence to play the game longer as I have now built that up to my annual household expenses with no need of touching principal.

    • I love me some “mailbox money,” too, as long as it’s reasonably tax-efficient.

      Dividends from stocks and funds do not fit that bill, nor do bonds (except munis that have low returns). Like you, I’ve been exploring real estate to scratch that itch.

      The Origin fund I invested in doesn’t aim for sky-high returns, but the plan is for stable, nearly tax-free (when the fund is mature) distributions of about 6%, plus capital appreciation in the 3% to 5% range.


      • Is the Origin fund you refer to the income plus fund? I am invested in it (a little over $600k) and a huge fan of it.

        I like the open ended fund setup and they even have a DRIP style reinvestment option which I currently take advantage of.

        • Yes, that’s the one — I should get my first distribution next week.

          I got in shortly after the NAV was lowered ~ 7%. I’m not doing the DRIP, but I may add in more periodically as cash flow permits.


      • Hi there PoF!

        I am hopeful you’d be willing to clarify this statement:
        “I love me some “mailbox money,” too, as long as it’s reasonably tax-efficient.

        Dividends from stocks and funds do not fit that bill, nor do bonds (except munis that have low returns). “

        Would you feel the same way about dividends if your blog income were lower? While I don’t love paying taxes on dividends while I am still earning decent active income, I see paying them as a necessary evil as I transition slowly away from full time work. Eventually when I stop earning regular income, the tax treatment on dividends is actually pretty appealing until they reach very high levels, well beyond what I will need to live off of. I am missing a piece of the puzzle here?
        Thanks for any further insight…

        • You’ve got it right. 2020 is the first year I didn’t have multiple six-figures in clinical income, so dividends have been painfully tax-inefficient for the last decade or so. Early on in my career, I didn’t have a brokerage account, so I only received dividends in tax-advantaged retirement accounts.

          If my total taxable income were under $80,000, dividends would be tax-free (under current tax code) since I am married and we file jointly. In that case, the tax-inefficiency of dividends is a non-issue.


  15. I guess I spend about 1% of my financial assets to live per year. My net worth has continued to increase even after retirement because I keep playing the game. I think a lot of folks do not realize how much your net worth will increase even without a paycheck.

    • I actually thought of you while writing this post!

      It was your question to Bill Bernstein at the WCI Conference in Park City where he said you could be 100% invested in stocks with a withdrawal rate so low, validating the feelings I had on the subject.

      He stated something similar in The Investor’s Manifesto. It’s a subtext to the more famous quote about why you should stop playing the game, but it’s an important distinction.

      Glad to hear you’re continuing to see success!



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