You know, when I first started writing this blog, I was hoping to find other cops and people in similar professions that were in the FI space. I was also hoping to convince other people in such jobs to consider this FI thing if they hadn’t yet. So far, I’ve met 2 other cops in the FIRE world (you know who you are) and I think I’ve convinced exactly zero people to embark on a quest of fun deprivation and existential crisis. Probably has something to do with my lack of trying to sell it.
Another factor is my reluctance to prescribe anything for anybody. Perhaps I see too many shades of gray (more than 50) in everything, and therefore find it hard to recommend all people do one thing. Plus I’ve been wrong, a lot. That said, If I’m consistently anything, it’s stubborn and a sucker for lost causes. We’ll have another go: I’ll go out on a ledge and say some people may benefit from doing what I accidentally did:
Diversify your income and investing.
Well no shit, right? There’s some pretty common advice that your 401k should not hold your employer’s stock. Bet that’s a bitch when your company constantly knocks it out of the park, but totally makes sense. Before indexing became in vogue, the general consensus was to at least invest in a sector different from the one in which you work. Now we all just invest in everything and call it good. Yeah, yeah. Whatever.
There’s all this talk about diversifying your investments, and occasionally about diversifying your income by getting a side hustle or some bullshit. But what about choosing a profession which is not positively correlated with the market?
I did this by accident.
Sometime around my senior year of college I was like “oh shit, better get a job.” Before then I’d been going to school interspersed with service in the Army. Since I was in the national guard, I’d do a semester, then get activated or sent to training for a few months; bouncing back and forth this way for like six years. A few times I’d serve for a year straight, and even went to school for 2 semesters in a row a few times. (If you’re doing math, you may think I did 4 years of school between 2 years of service; actually it was more like 50/50 as I figured out how to hack my undergrad down to 3ish years)
I figured I’d just keep stringing together army gigs after I graduated. But back in ‘aught Six, things were looking bleak in the military world. Our funding for training was drying up, and the wars seemed to slow a tad. I thought ahead, and when considering the general length of our conventional involvement in conflicts, l just couldn’t imagine the wars going on too much longer. Boy, was I wrong about that one! 1
*This is what AI thinks, as I asked for conventional involvement. If you consider advisors and stuff, we were in ‘Nam for nearly 20 years, and we’re still in Iraq. And other places. ‘Mericuh!
Anyways, when looking at history and my unit’s shrinking budget, I figured I best get my ass a real job. Luckily, I was only a year from graduating with a highly marketable liberal arts degree 🙄, so the world was my oyster. Plus, back in 2007, the economy was set to launch to new heights. What could go wrong?
Yeah, so that happened.
I looked at my options. I planned on staying in the National Guard 2, because blowing up shit is fun, and so is jumping out of planes. Due to our high optempo, there were three classes of guys in our unit; college kids (thanks GI Bill), public servants, and guard bums. This was out of necessity, as any normal company figured out ways around the laws protecting our civilian employment when we were gone for 3-9 months every year. Unlike the private sector, the lawyers wrapped up academia and public service in oodles of civil service regulations, which keep part-time soldiers from getting fired.
Guard bums were the guys who’d used all of their education benefits up, and would string together deployments and training to fund their life. In between stuff they’d either live off savings or string together odd jobs.
Guard bumming had been my plan, but I assumed this lifestyle would eventually take a hit whenever the wars wrapped up. This left me the fire department, the cops, or maybe Starbucks. Word was that hippie coffee company was grounded in something called “values” and wouldn’t fire us if we were gone all the time (That’s right people, before barista FIRE there was barista soldier). I like hippies, and had been one before the war started. And I was/am addicted to coffee. But damn, that didn’t seem like a sustainable business plan. Surely they couldn’t last much longer 3.
(Hope you’re sensing a theme here.)
I applied to a bunch of fire and police departments. After a stint as an EMT, I thought the hose jockey life was not for me, but that’s another story. I went with the first department that hired me.
This was all a long way of saying I didn’t purposefully choose to diversify my income and investments. Hell, I didn’t really like being a cop for the first few years, until I was thoroughly institutionalized in the underworld.
Like most, I put my head down and got to work. There was plenty to do. According to the crusty old timers, crime was up. This meant more opportunities for overtime, part-time, and special details (all = more money).
Some years later I found this FIRE thing, and learned all sorts of fun things about the stock market. As you all know, we make money off the market when stuff gets “better”. Lot of ways to define better. Is a more addictive cell phone game making things better? Probably not, but it is making me more money. Maybe I should say as companies get better at making money, we make money off that thing. Something something, economics. Cue graph which we’ve all seen a bunch:
Yeah, things just keep getting better. Mostly. Us investors are definitely getting that money. The more I learned about my profession, the more I came to realize how uncorrelated crime is with the market. Crime goes up, crime goes down. Shit happens; if anything it’s more correlated with the weather. If you dig deep, it’s effected by lots of shit which is only loosely tied to the economy. Hey look, another graph:
Weirdly, crime goes up a little with increased market returns in low income areas, while the inverse is true in high income hoods. None of this really matters, as actual police deployments are based on fear of crime, not actual crime. Despite the fall of crime in the last few decades, fear of crime remains high. My theory is that this has something to do with the media. Fear of crime does seem to increase when the market goes down, though this hasn’t been examined thoroughly.
Luckily I’m not writing a freaking peer reviewed article here, so I’ll just rely on my anecdotal evidence: Economy bad – – >voters freak out, get scared of lots of stuff, including crime – – > voters bug local politicians, who have little immediate control over wide variety of socio-economic factors. Oh hey, guess what most cities spend most of their money on, and therefore do have control over? Time for another graph:
*Austin had the prettiest one I could find, but this is pretty typical
You guessed it, shit rolls downhill and the cops are sent to clean up the mess. Even if the mess is really just people freaking out about crime which is not any measurably different from when things were all hunky-dory.
I started putting all this together during grad school, as I pursued yet another degree with little monetary value. I realized that I had stumbled into diversifying my income and investments:
Market go up= my investments make more money
Market go down=City acts like drunk dude at strip club: Makes it rain.
Either way, I win. At that point, I knew that I probably wasn’t going to stick around policing forever, so thus necessitating reducing it further.
Investments-make money when things go right
Job-makes money when shit goes wrong
This has become a de facto strategy for me. My executive protection gig is another example; rich people get scared when shit happens. They hire more of us. We sure saw increased work after stuff happened last year. Fear of violence is like inflation-it’s sticky. Once you hire people to protect you, it’s hard to justify getting rid of them. Especially if you read the news.
This holds true for my possible future career as well. Do you think people will need more or less therapists when shit gets fucked?
I’m not saying this has been my sole reason for career choices, or even one of my primary ones. But it’s something I like to keep in mind; I’d prefer not to only make money when things are good. My investments already do that.
What to do
Look, I’m not telling you to quit your job and go be a cop.
Well, actually, it can be a lot of fun despite all the terrible mental and physical trauma. So if you’re stuck in a souless job that you hate, maybe you’d enjoy hating police work more? I’m just saying that perhaps this idea of seeking employment which benefits from downsides might be something to consider. And if you’re already in a profession with such alignment, good for you!
But then, I’ve been wrong before (see 1, 2 & 3 ), and I’ll for sure be wrong again. I’m definitely wrong about something right now, though I’m not sure what…yet. Which makes life fun! Hope your downsides lead to as many upsides as mine have 🙂.
I’m retired police from NY. I went to college not sure of what I wanted to do. A friend was graduating the NYC Police Academy and showed up one night on the street corner where we were all hanging out drinking. He told us about some police exams that were being given in the near future so some of us thought why not? We had nothing else going on. I took a few and did well. It took a couple years to get hired but I became a cop. I didn’t love my first dept so I left to go to another one which happened to pay more, so that was a home run. I started saving and working as much overtime as I could. I was basically doing The FIRE thing without knowing it. All I knew was I could retire with a good pension and medical benefits after 20 years. I enjoyed being a cop most of the time until I didn’t. So I retired at 49. Now I just play around with my investments and go out to lunch with friends. Most of my old friends never got on board with FI and are still working and trying to keep up with the Joneses. When people ask what I do now my response is usually, ” Some days it takes me all day to do nothing.” Anyway, I’ve been enjoying this blog. Keep writing!!!
PS: Now you know 3 of us.
Thanks for commenting, so happy to find another cop who’s figured this stuff out! Impressive you were able to do it without the FIRE blueprint. And it’s always good to run into somebody who didn’t want to do the job since before they can remember. Nothing wrong with that, but sometimes people like us who came at it sideways seemed in the minority. Really like your response as well, I will definitely be stealing it in the future.
I worked in law firms for most of my career. I distinctly recall when I discovered how large law firms hedge good and bad market cycles. In positive market cycles, groups like mergers and acquisitions, corporate, real estate, and others do well. But the bankruptcy folks, for example, bite their nails, waiting to maybe get canned for not having enough billable hours. In bad market cycles, it’s the reverse. Then there were groups like the litigation folks, who could have business all the time. This all limited the max upside for a law firm, but made for a more sustainable all-weather firm. And I, in an ancillary position, benefitted bigly from that.
I wonder, did the bankruptcy and mergers people know they were hedges against each other? Can’t help but respect such firm’s foresight. Limited upside would seem better than large downside risk. I’ve thought about doing the same thing with this new sector I’m getting into; if I could get over the sham-wowiness of it, I could do coaching during good times and hedge that with trauma therapy during bad times. But in reality, I’ll probably just do whatever is fun and doable for less than 20 hours a week.
Many of those who’ve practiced long enough realize that they might be in a group intended to be a hedge. That said, you’ll lose shockingly few bets that a lawyer will “get it” if you bet against them “getting it.” So, I suspect that when picking out an area to practice in, your average lawyer never thinks for a moment about business cycles and merrily rolls along . . . until he or she doesn’t. As for you probably not hedging in your new sector, given that you hold 52 cards and two jokers, that sounds like a great and fun plan.
In a similar way my wife and me were hedged for the good and bad times. She worked in the government with the golden handcuffs pension. When the economy got bad her government agency was in high demand
I worked in high tech companies, in the back office, that were always a gamble of making it. In the end none of them ever got the brass ring and most are now gone.
She had 1 company for 26 years. I had 13 companies over 31 years. She left work with a pension a couple of months back at 50. Today was my last day of work a couple days shy of 55. I always thought I would FIRE sooner but I will definitely take 55 as a success
Thanks for continuing to show us the other side after taking the FIRE walk. Not many bloggers do
Congrats Vader!! I know it’s been a long road for you. FIRE at anytime is a success, glad you and Padme are embarking on this new adventure. I really hope you end up publishing your writing, and will be interested if you do some other side of FIRE reporting as well.
Sounds like you had quite the team effort in diversifying the volatility of your respective career fields. I bet that in itself would be quite the thing to read about.
My income and industry is also super sensitive to the economy. A huge fear of mine ever since I got into construction was: what happens after this building is built? That fear has always driven me to save money. I’ve always been amazed by the fact that, if you save enough, long enough, another income stream is created from capital gains and dividends, which can be taped into or diverted into further savings. My wife works in the service industry for a big company, who’s pretty steady and not as sensitive to the economy as construction, I don’t see it as a hedge, but it is diversification.
Interesting takes between good times and crime. That’s something my non-law enforcement mind wouldn’t think to put together. If there’s one thing that this world will always have to deal with, it’s crime and criminals, and society will (hopefully) always be willing to pay someone to reign it in.
Thanks for dropping by Noel!
Perhaps this is boiling it down too much, but it would seem there is great upside to any profession which builds things-physical, digital, or the like. I have yet to come across an industry in this vein which is not correspondingly volatile. While making things better has brought us to this point in civilization, there is no actual true need for things to move in this direction. Such work captures the best part of us, but my limited view only can see ways to monetize this realm which rely on capturing prospective customers’ desires.
Those of use who work in fields which attempt to counter entropy have less upside, but I suppose our limited volatility is the main one. People tend to want to quell their fears before their desires;maintenance fields therefore have a more captive market.
Probably too simplistic of an assessment, but I’d sure be interested if there are any fields which build things that lack such downside risk.
Dark and funny. I just realized what’s so entertaining about this blog: it’s like if Dashiell Hammett wrote a self-help book.
That’s one of the best compliments I’ve ever had Brian, thanks!! Speaking of Hammett, a close friend of mine takes the occasional contract from Pinkerton. We’ve had some interesting times together; his life makes mine look boring.