De-Identifying With Your Profession

I've been questioning my sense of identity recently, and the foundation for that questioning was thrown in sharp relief this weekend. A lot of my personal self-worth is tied up in my job and my relative position within the job, and I've had some recent experiences that show me just how unhealthy that is.

Basically, if I had a good day, my ego would get puffed up with an inflated sense of self-worth. If I had a bad day (whether it was my fault or not) I'd feel bad about myself and wonder where I went wrong and what I could do to get back in the good graces of anyone who seemed anything less than 100% thrilled with me. This would seep into the rest of my life.

This last weekend drove the point home. I got a phone call that reinforced my importance to the company. A phone call a few hours later left me in despair. I have the same job today that I had on Friday, but over the weekend I went through an emotional boom and bust cycle.

The reliance on a profession is a terrible base for self-identity, because professions are so subject to the influence of others' whims. Since I'm not my own boss, the decisions my immediate bosses make about my life have an incredible effect. But those decisions are based on factors almost totally, like 98%, out of my control. If I base my self-worth on those decisions, I'm only setting myself up for disappointment.

But I think we're all more or less under that delusion. Our economic value to the world is encouraged as a form of self-identification. We get it as kids with the question, "What do you want to be when you grow up?" and we see it in TV shows and movies when a job is the focal point of the hero's story. A lot of hobbies are essentially jobs in disguise, and a lot of creative encouragement and artist celebration is essentially just job celebration. "Look how important they are. You want to be important too, right?" or "Your current job might not fulfill you but maybe this other one over here will, so you'd better get cracking."

Which is not to say there's no joy in jobs or any kind of job stand-ins. It's the self-identification that's risky. And the sheer fact of the collective effort at this form of self-identification should give us pause. Why so much effort?

One reason I save money is to further distance myself from my profession and to emotionally insulate myself. I want to be able to walk away should someone ever truly emotionally destructive appear at my job.

But should I ever really reach some kind of financial independence where I could leave my job, I'll have to go through a final de-identification, because, despite everything, I do identify with my job and my profession. The day I leave it will be a very strange day. After all, I moved across the Atlantic ocean for it, and that fact certainly means I'm more vulnerable to major identity disruption by disturbances to my professional life.

But I've left parts of myself in the past before, and I'll have to do it again. We all will at some point.

This is the part where I should offer an alternative for healthy self-identification, but I can't. Any external base of self-identification also opens you up to disappointment and forced reappraisal. Some kind of internal mental work has to be done over time, but what shape that takes is individual.

Net Worth Update: March 2019

Our net worth increased by 1.31% to $47,396. In euros it was up 2.34% to 42,037€.

We had some expenses that were unavoidable. We had to pay our quarterly taxes in Germany, and we had to buy some new glasses for my wife. She also took a vacation to the U.S. that cost a bit of money.

The stock market was a big tease this month. In the final weeks, our portfolio experiences wild volatility. One day jumped a lot, and then the next fell a lot. Nothing to be done about it. The market feels very sensitive right now, and I wish I could say that I can resist it, but on big down days it's hard not to feel personally stung. That's especially true if the weather is bad, which it often is in Germany.

I'm noticing a trend in our early year savings rate. Usually, in the first few months of the year, there are a bunch of expenses and adjustments that eat into our ability to save. The German social security and health insurance adjust, and we have to make our new - usually - elevated tax payments.

Lastly, whatever costs for vacations and things like that tend to cluster around this time of year as we make final decisions about what we want to do with our free time in the summer.

We're going to continue having to make big spending decisions over the next few months, so I'm expecting our savings rate to be depressed for a bit. I have gotten some extra work at my job, which will help elevate my earnings, so I'm hoping that can offset some of our savings inefficiency.

Net Worth Update: February 2019

Our net worth increased in February by 7.6% to $46,785 and by 7.77% to €41,075.

That's a surprisingly good result when I consider how little savings I really did. Remember, last month, we had to buy some expensive stuff that would be paid for with the money from this month and March. So I was expecting a basically flat value from January to February.

The main factor was the performance of the stock market, whose rising tide lifted all long boats, including mine. Although I'm still at an un-realized loss, it's a much smaller loss than before. The turn-around from Christmas to now is wild, and it's hard to know what to think.

I also achieved the spending requirement for a mid-tier credit card, and I received the point bonus for it. I value the points at 1¢ a piece, so that provided part of the boost.

I also stuck €500 into our savings account in Germany. We have some upcoming expenses of varying values - and not a small amount of uncertainty what those values will ultimately be - so having some extra cash on hand is always a good idea.

Out of Levers at my Current Job

I've hit a kind of mental stumbling block recently. I've run out of levers to pull at my job.

What I mean by "levers": when I look at my budget, I see places where I can focus to save more. By making a choice over here, I can cut our grocery bill. By doing x I can cut the electricity bill. If x then y. Onwards and onwards.

With a career, there are similar levers to pull. I can network. I can work harder or smarter. I can simply be better at a given task.

When thinking about levers, the basic concept is that with the effort, one should expect to see some result, and the result should ideally scale with the effort at a minimum.

At my job, I earn a salary and then additional money from some extra work that sometimes comes my way. I don't get to decide when I get this work, and the value that I get monetarily is highly variable. But I get this work because I'm reliable and have given a lot of effort when I've been given the opportunities to do it. In this case it's "if x then maaaaaybe y".

This December, I earned the most money from this extra work that I may ever earn from it from one assignment. And it was exhausting. My wife says that when I began, my stress level jumped up, and it didn't come down for months. I put so much effort and personal pride on the line for this extra work, and there's no moving up from here. I know what kind of additional extra work I'll get this next year, and it's not like I'll be rewarded with more pay as a consequence of my previous efforts. I got the money, and now it's on to the next thing, and the next thing doesn't reflect the previous effort I've given at all.

I find this incredibly frustrating, and I don't know what to do about it. On the one hand, I could change jobs, but due to the homogenization and unionization of this particular industry in Germany, it is unlikely that the situation will be meaningfully different elsewhere. Most likely, I'd just find myself in the same or worse situation. At the very least, at this job, I get the extra work, but I've gotten to this point after years of credibility building.

Starting elsewhere, I'd be beginning all over.

Not to mention, moving is expensive. I'd need a guaranteed upgrade to make it worth it. But again: the homogenization in the industry makes that unlikely. Where I am now has a funny balance of decent pay and relatively low cost of living. I could try for the same job in one of the larger German cities, but the COL would jump.

In summary: I've run out of levers at this job. I don't think I can push harder and make more money from it. There has to be some kind of paradigm shift to resolve this inner turmoil of mine. Some ideas:

• Drastically reduce spending. Go total LeanFIRE on our current circumstances.
• Find a side hustle. That's currently hard for me because I'm on a visa, and starting side businesses in Germany requires entering into the bureaucracy. This will be a better possibility once I get the German equivalent of a green card and get my permanent residency.
• Change careers. Not sure what that would be, and I'm not sure if I'd want to do it in Germany.
• Enter into a similar career within the same industry that might lead to better future opportunities. It's very risky in this particular industry.
• Take it easy and enjoy the work/life balance I have and be more cautious on how much personal stake I take in my job.

Some comments about the second and last points. I have a colleague - also an immigrant to Germany - who does his job but who has officially refused to take any of the extra work. Instead, he's built up a portfolio of rental properties that he owns and manages.

It's obvious that those properties are what he really cares about professionally-speaking, but he puts in his time at our employer and keeps his personal investment low. Meanwhile, he puts in back-breaking work on the properties. Those levers make sense and justify the effort: make an improvement on one area, and he can raise the rent or sell the property for more later. If x then y.

I used to resent him for his lackadaisical attitude towards the job we share, but maybe he has the right idea. Or at least, there's part of his strategy that I should adapt and adopt. Namely, I should back myself out of so much personal investment in the job. They aren't going to meaningfully reward me for anything beyond a certain point, and I need to find that point and live there.

And I need to develop something on the side. I don't know if rental property is that thing, since the American tax consequences might be awful (sigh), but I need to explore.

Finally Got Denied a Bank Account

We applied to a different bank, and we were denied. The only plausible reason I can think of is that it's because we're Americans. We'd been lucky since moving here, since until this denial, we'd never been denied much of anything.

I guess we should count ourselves lucky that our current bank accepted us at all (even if they are now jacking up their fees). The FATCA continues to complicate the lives of those of us living abroad.

January 2019 Net Worth Update

Since December 26, our net worth rose 17.5% to $43,488. In EUR it rose 17.3% to €38,114. Here's what lead to that result.

In December, I received an elevated payment from my employer due to some extra work I did. This essentially doubled my salary for the month. This money went various places:

• I paid off a medical bill that I'd been paying monthly. I'm hoping to reap a tax deduction from it.
• I bought some stocks.
• We bought a new iPhone when my wife's five and a half year old phone died after a tragic meeting with some water.
• We bought some furniture.
• We bought a coffee maker.

Now, you'll notice not all of this is savings. Sometimes it feels right to spend money. I'm not Early Retirement Extreme. But there's some logic here.

Telephone use is broadly tax deductible in Germany. I'll be able to deduct the cost of this phone over the next three years. Meanwhile, I'm hoping to keep it in our household for at least six or seven. This is one of those areas where we're willing to occasionally spend some money, so we did. The only thing I regret is that I made the purchase using an American credit card when the exchange rate made the euro unusually strong against the dollar, and it's unlikely to reach that rate again before I have to pay the card off.

As for the furniture, this particular upgrade was something we'd contemplated for several years. It wasn't excessively extravagant, but it was unusually expensive for us. I think we're done though with any other major home upgrades for a while, so I don't foresee any other such purchases in our immediate future.

The coffee maker will undoubtedly save us electricity (already shown in my electricity tracking spreadsheet), and it wasn't all that expensive. We'd been making coffee using a pour over method that required water heated on the stovetop. Once poured, the coffee would cool down quickly. The new maker uses less power to heat the water to begin with and then delivers the coffee into a thermally insulated carafe. The coffee is still warm in the late afternoon, meaning less coffee needs to be made in a day, thus saving electricity and grounds.

Note: it's funny what cultures are willing to spend money on. Coffee making in Germany, and likely in Europe as a whole, is an activity where people will spend hundreds of euros on a coffee maker. Some friends of mine have a coffee maker that's just under €1000. Ours was around €55. But the idea of convenient instant coffee is very pervasive here, and if you're not into instant coffee, then that often means a push button machine that takes coffee pods or grinds the beans on demand and coughs up a single cup of coffee.

Stocks did well this month, which boosted our numbers much more than our savings alone did. I don't know what to think of the stock market right now, so it's entirely possible that when I write this update for February, we'll have suffered another major drawdown. The last year has taught me to not get used to up days too much, because they reverse abruptly.

Forecast for the next few months: since I bought everything on credit cards, I'll be paying those off from our cash flows in February and March. That will impact those months' savings rates, but the cards will be fully paid off on time, and since this is a new awards credit card, we should see the bonus hit in February.

There are also some bureaucratic costs that we'll unfortunately have to pay because our tax statement from the government is taking so long to get back to us. It's easy to wander into those when you're a foreigner living abroad and don't entirely understand the system.

Opportunity and Worry

Big market falls like what happened in December feel like great security buying opportunities. And they are. In my backtests, the difference in performance was stark if you bought right before a crash or well into one (buying in 2007 vs. early 2009 for example).

But here's the catch: you have to be able to survive a bear market and hold your positions. I'm not referencing margin calls or panic induced selling.

No, I mean getting fired from your job and selling just to pay the bills. Recessions are high risk for employees. A recession will happen again, and unemployment will shoot upwards. Absent an MMT-style jobs guarantee, unemployment doesn't stay low forever:

I am unlikely to lose my job in the case of a recession, but that doesn't mean it's guaranteed that I won't. Therefore, one set of thoughts I'm balancing is my desire to buy all these cheap securities while questioning whether I have enough cash sitting around to deal with any unexpected surprises. Every working person will have to balance it for themselves and their own situation.