BPadvertisementfrom

  • Subscribe to our RSS feed.
  • Twitter
  • StumbleUpon
  • Reddit
  • Facebook
  • Digg

Friday, 2 December 2011

From Walden Pond to quant trading

Posted on 13:20 by Unknown
True story. Theoretical physicist saves enough money during 5 years of postdoc to retire -- living entirely from investment income at $7k per year of expenditures (budget).

I simply saved more than three quarters of my income for five years. The math works out. If you save 83% and spend 17%, you need 25*0.17/0.83 ~ 5 years of savings, where 25 is the inverse of 4%, which is a safe withdrawal rate for at least 30 years.

While enjoying frugal living and retirement in his mid-30's, this former physicist starts a widely followed blog and authors a book: Early Retirement Extreme (ERE).

How does this story end? With the hero living a quiet Walden-esque life of contemplation and home cooked meals? No, of course after a few years he un-retires to join a fund as a quant trader/researcher!

What I like to do is solving impossible problems. Or just “hard problems”—problems that people don’t want to wrestle with. I did this in physics and learned a lot. I realized that I wouldn’t learn very much from solving a similar problem in physics and that’s why I quit physics. The challenge would not have been the same. Fortunately, I realized this quickly and I had the money to quit or “retire from my career“.

ERE is another one such “hard” problem solved (it’s only hard, because it’s somewhat out-of-the-box and thus more a question of shifting your perspective than it being any kind of technical challenge). I’ve written enough material here on the blog and in the book to show you how it’s done. I have the same problem with ERE. The challenge is gone for me. Many others are currently on the road towards financial independence and this is exciting for them but for me it’s just vicarious living. Becoming financially independent, the subject of this blog, is a period of transition and obviously one can only transition once. This is why fresh blood is needed.

[Uhh, part of the challenge is maintaining the minimalist lifestyle, well, for the rest of your life...]

... So what am I going to do now? Well, yesterday I got a job offer as a quant trader/researcher. I took it! I think this fulfills all my criteria. It’s a hard problem, it requires no marketing, no politics, no self-promotion, and no management. As far as I can tell, I’m safe from the Peter principle and can focus on research and development without worrying about suddenly finding myself having to sell or manage my stuff.

When I told this story to my wife she thought perhaps the job offer came from a rich former colleague in physics, who did it just to test him (i.e., f#ck with him) and throw a monkey wrench into the ERE equilibrium! ("Ha ha, Buddha came down from the mountain for chump change!") I won't be surprised if in 10 years this guy is complaining that his second home in the Hamptons is too small ;-)
Email ThisBlogThis!Share to XShare to FacebookShare to Pinterest
Posted in careers, happiness, hedonic treadmill | No comments
Newer Post Older Post Home

0 comments:

Post a Comment

Subscribe to: Post Comments (Atom)

Popular Posts

  • PhD Comics: the movie
    PHD Movie Trailer from PHD Comics on Vimeo . I met Jorge Cham , the cartoonist who draws PhD Comics, a few years ago at Sci Foo. Cham was ...
  • Finding the Next Einstein
    Duke researcher Jonathan Wai interviewed me for his Psychology Today blog, Finding the Next Einstein . Below are my answers to two of his q...
  • Beanbags and causal variants
    Not only do these results implicate common causal variants as the source of heritability in disease susceptibility, but they also suggest th...
  • Sitzfleisch
    Freeman Dyson reviews the new biography of Oppenheimer by Ray Monk. I discussed the book already here . NYBooks : ... The subtitle, “A Life ...
  • A blog is born
    Raghu Parasarathy , a biophysicist at U Oregon, and my correspondent in this previous post on faculty blogging, has decided to try it out. ...
  • News from Microsoft Research Faculty Summit 2013
    Measuring the maximal commuting subset of observables uniquely determines the pure state of a quantum system (recently proved Kadison-Singer...
  • Talk cancelled
    This talk has been cancelled, for complex reasons that I will not discuss.
  • East Asian sociopaths?
    Some would assert that CEOs and other people in leadership positions are often warm sociopaths . Interestingly, it is claimed that there is ...
  • Swedish height in the 20th century
    Average height of Swedish military conscripts during the 20th century. Looks like an increase of roughly 1 cm per decade or about 1.5 SD in ...
  • The differences are enormous
    Luis Alvarez laid it out bluntly: The world of mathematics and theoretical physics is hierarchical. That was my first exposure to it. There...

Categories

  • ability (2)
  • academia (9)
  • affirmative action (8)
  • ai (13)
  • aig (1)
  • alan turing (3)
  • algorithms (2)
  • alpha (2)
  • american society (54)
  • art (3)
  • ashkenazim (1)
  • aspergers (4)
  • athletics (6)
  • autism (4)
  • autobiographical (13)
  • basketball (4)
  • bayes (1)
  • behavioral economics (4)
  • berkeley (5)
  • bgi (24)
  • biology (23)
  • biotech (6)
  • bjj (5)
  • black holes (4)
  • blade runner (2)
  • blogging (3)
  • books (5)
  • borges (2)
  • bounded rationality (10)
  • brainpower (57)
  • bubbles (3)
  • caltech (14)
  • cambridge uk (1)
  • careers (18)
  • charles darwin (1)
  • chet baker (2)
  • China (25)
  • christmas (1)
  • class (2)
  • cognitive science (35)
  • cold war (1)
  • complexity (1)
  • computing (9)
  • conferences (4)
  • cosmology (4)
  • creativity (3)
  • credit crisis (10)
  • crossfit (5)
  • cryptography (2)
  • data mining (4)
  • dating (2)
  • demographics (1)
  • derivatives (5)
  • determinism (1)
  • digital books (1)
  • dna (4)
  • economic history (5)
  • economics (38)
  • econtalk (2)
  • ecosystems (1)
  • education (5)
  • efficient markets (8)
  • Einstein (2)
  • elitism (14)
  • encryption (1)
  • energy (1)
  • entrepreneurs (3)
  • entropy (1)
  • environmentalism (1)
  • eugene (3)
  • evolution (19)
  • expert prediction (6)
  • fake alpha (2)
  • feminism (2)
  • Fermi problems (2)
  • feynman (7)
  • film (9)
  • finance (42)
  • fitness (3)
  • flynn effect (1)
  • foo camp (1)
  • football (5)
  • france (1)
  • free will (1)
  • freeman dyson (2)
  • fx (2)
  • game theory (1)
  • geeks (2)
  • gender (4)
  • genetic engineering (15)
  • genetics (79)
  • genius (24)
  • genomics (2)
  • geopolitics (7)
  • gilded age (13)
  • global warming (1)
  • globalization (23)
  • godel (2)
  • goldman sachs (2)
  • google (4)
  • happiness (2)
  • harvard (8)
  • harvard society of fellows (5)
  • hedge funds (4)
  • hedonic treadmill (1)
  • height (2)
  • higher education (38)
  • history (8)
  • history of science (12)
  • hormones (3)
  • hugh everett (2)
  • human capital (34)
  • humor (1)
  • income inequality (21)
  • india (2)
  • industrial revolution (1)
  • innovation (38)
  • intellectual history (10)
  • intellectual property (1)
  • intellectual ventures (1)
  • internet (4)
  • iq (16)
  • italy (4)
  • james salter (3)
  • japan (4)
  • jiujitsu (8)
  • keynes (1)
  • kids (13)
  • lewontin fallacy (1)
  • lhc (1)
  • literature (12)
  • luck (1)
  • machine learning (8)
  • malcolm gladwell (1)
  • manhattan (2)
  • many worlds (10)
  • mathematics (14)
  • meritocracy (7)
  • microsoft (2)
  • mma (10)
  • monsters (2)
  • moore's law (1)
  • movies (9)
  • MSU (18)
  • music (5)
  • mutants (2)
  • nathan myhrvold (1)
  • neal stephenson (1)
  • neanderthals (2)
  • nerds (3)
  • net worth (5)
  • neuroscience (7)
  • new yorker (1)
  • nicholas metropolis (1)
  • noam chomsky (2)
  • nobel prize (2)
  • nsa (2)
  • nuclear weapons (5)
  • obama (7)
  • olympics (4)
  • oppenheimer (7)
  • patents (1)
  • personality (9)
  • philip k. dick (1)
  • philosophy of mind (2)
  • photos (40)
  • physical training (13)
  • physics (73)
  • podcasts (10)
  • political correctness (6)
  • politics (4)
  • pop culture (2)
  • prisoner's dilemma (1)
  • privacy (2)
  • probability (5)
  • prostitution (2)
  • psychology (25)
  • psychometrics (31)
  • qcd (1)
  • quants (9)
  • quantum computers (2)
  • quantum field theory (3)
  • quantum mechanics (18)
  • race relations (10)
  • real estate (1)
  • realpolitik (6)
  • renaissance technologies (1)
  • research (3)
  • russia (2)
  • sad but true (2)
  • sci fi (8)
  • science (42)
  • sec (1)
  • security (5)
  • silicon valley (6)
  • singularity (1)
  • smpy (1)
  • social networks (2)
  • social science (12)
  • software development (2)
  • solar energy (1)
  • sports (13)
  • startups (19)
  • statistics (16)
  • success (2)
  • taiwan (1)
  • talks (16)
  • teaching (2)
  • technology (34)
  • television (2)
  • travel (24)
  • turing test (1)
  • ufc (8)
  • ultimate fighting (1)
  • universities (33)
  • university of oregon (6)
  • usain bolt (2)
  • venture capital (3)
  • volatility (1)
  • von Neumann (10)
  • wall street (2)
  • war (1)
  • warren buffet (1)
  • wwii (3)

Blog Archive

  • ►  2013 (134)
    • ►  August (10)
    • ►  July (15)
    • ►  June (22)
    • ►  May (20)
    • ►  April (21)
    • ►  March (18)
    • ►  February (14)
    • ►  January (14)
  • ►  2012 (222)
    • ►  December (17)
    • ►  November (19)
    • ►  October (20)
    • ►  September (25)
    • ►  August (19)
    • ►  July (18)
    • ►  June (16)
    • ►  May (20)
    • ►  April (16)
    • ►  March (18)
    • ►  February (20)
    • ►  January (14)
  • ▼  2011 (144)
    • ▼  December (20)
      • Finding the Next Einstein
      • Merry Christmas, 2011
      • Tropical xmas in southern China
      • Asian admissions, statistical prediction, and all ...
      • BGI photos: December 2011
      • Season's Greetings from BGI
      • National Review: Applying While Asian
      • Human capital, globalization and physics 101
      • Future vol
      • Borges: A poet never rests
      • The Deal: The debate over elite schools and elite ...
      • Gracie Breakdown: UFC 140
      • Equilibration in progress: legal services
      • Snap Crackle Pop: UFC 140
      • Differential validity of the SAT
      • Jim Manzi: How elite business recruiting really works
      • Borges' The Witness
      • I, quant
      • From Walden Pond to quant trading
      • "I'm not Asian"...
    • ►  November (16)
    • ►  October (25)
    • ►  September (23)
    • ►  August (21)
    • ►  July (26)
    • ►  June (13)
Powered by Blogger.

About Me

Unknown
View my complete profile