Theology

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Chance Doesn’t Exist

Posted on by David

Sorry I haven’t posted for a while. We had a sickness go through the home and I just didn’t feel like writing. This post is way more esoteric than the usual “how to save money” article, but it’s something I’ve been thinking about lately. Statistics are 100% true but only under the variables at which they were measured. Any application or inference drawn from a statistic is by definition false, because not all the variables can be accounted for. The application may be useful, but it’s not true like the statistic itself is. This is because chance doesn’t exist.

When a study is performed or survey is conducted, a specific group is sampled. The facts about this group are compiled into statistic. These statistics are true for that specific group at that specific time. The design is usually that the sampled group is representative of the whole and therefore applications drawn from that statistic may be useful for the whole. But since not everyone is sampled, the resulting statistic isn’t true for everyone. It is only true for the sampled group. It is only true for that specific group at that specific time. This means it is not 100% true for you now.

A Coin Flip

Here’s an example of what I’m saying. Statistically a coin flip is 50-50 heads or tails. If someone flipped a coin 100 times and got 50 heads and 50 tails you’d say that makes sense. Someone will then say, based off this statistic, that a coin flip has a 50% chance of landing on heads and 50% chance of landing on tails. But that’s not true.

The reason it’s not true is because chance itself is not a factor for causing a coin to flip or land. The factors include: your thumb, the amount of force you exert upon the coin, the angle at which you flip it, the density of the air it’s falling through, whether there’s a sudden gust, etc. All of those are variables affecting the process of flipping the coin.

We call it chance because we don’t know or account for all the variables (and sometimes we can’t even know them all!), but all those variables are deterministic in nature. Meaning if the variables are controlled for, the outcome is determined. If you are able to flip a coin with the same amount of force, at the same angle through air which has the same density etc. you will get the same result every time. This is because nature is deterministic.

Stanford coin flipping machine
Coin flipping machine – Source: Stanford

In fact researchers at Stanford actually did this (Source). They built a machine that could flip a coin with repeatable force and angle and found that “With careful adjustment, the coin started heads up always lands heads up – one hundred percent of the time. We conclude that coin-tossing is ‘physics’ not ‘random’.”

So does that mean that you can’t use a coin flip to make a 50-50 choice? No, it works fine. Because humans are good at introducing extra variables into their actions, it’s a good approximation of chance. It’s close enough that it’s useful, but it’s not explicitly true that if you flip a coin it will have a 50% chance of landing on heads or tails. This is because chance does not exist. The world is deterministic.

80% of Students Change their Major

Another example is the statistic that about 80% of college students change their majors at least once sometime before graduation. This statistic is 100% true, for those specific students at that specific time. Roughly 80% of the people surveyed changed their major at least once. But there’s no true application that can be gathered from it. You could say that based on past results a college freshmen is likely to change his major, but you cannot say to that college freshmen that he has an 80% chance of changing his major.

The reason you can’t say that is because chance isn’t a factor of collegiate study decision. The factors include: interest, drive, stick-to-itiveness, finances, input from friends and family, etc. If this freshmen loves his current chosen field, and has the drive and financial abilities, He is likely to stick with it. He does not have an 80% chance of switching majors. Whereas someone who doesn’t have an interest in college and just signed up for whatever program their parents recommended is much more likely to switch majors.

What we call chance is just our inability to account for all the variables.

A quick sum up (so far)

These two examples have two entirely different sets of variables so their outcomes are going to be different. But still their outcomes are based on the variables affecting the mechanisms (factors) that drive results. The issue is that chance doesn’t affect results because chance isn’t a mechanism that drives results. What we call chance is just our inability to account for all the variables.

Statistics may be true, but the applications drawn from them are not. They have varying degrees of usefulness. Consider the application that if you flip a coin, you will get a random 50/50 result. That application is not true, but it is very useful because empirically the answer usually comes out close to 50/50.

The application drawn from the statistic that 80% of college students change their major, that you have an 80% chance of changing your major, is less useful. It’s not entirely un-useful, but the mechanisms that drive collegiate study decisions are much more varied than a coin flip. And there are many more variables that come into play.

Covid-19

Let’s now look at an example that is very applicable to everyone currently: Covid statistics. Why do some people catch Covid and some don’t? Why does Covid affect some people so badly while others are completely asymptomatic? We don’t know a lot of the variables that surround Covid infections, but we do have lots of statistics.

In the US 1.7% of Covid cases resulted in death. What application can you draw from that? If you said, “If you catch Covid 19 you have a 1.7% chance of dying from it” you have missed the point. The only helpful applications we can draw are that Covid is more deadly than other similarly contagious viruses that have lower mortality rates.

Saying that if you catch it you have a 1.7% chance of dying from it just isn’t true. It also isn’t helpful since it ignores all the variables at play. Early in the pandemic the mortality rate was higher, implying that a given person is less likely to die from Covid now than they were in April of 2020. We also know that variables of age and health are big factors. A young healthy individual is much more likely to survive Covid than an old fat one.

But either way neither one has a “chance” of dying of Covid because chance never killed anyone. There are factors behind death and those factors are affected by many variables. Many of those variables are still yet to be pinned down. For example there are healthy young people who have died of Covid and unhealthy old people who have been asymptomatic, and we don’t know why.

Purity of Science

What we do know with 100% certainty (assuming the statistical data collection methods are true) is that 1.7% of Covid cases in America have resulted in death. We also know that the world is deterministic. If the same variables affect the same situations the results are the same. This is why Physics is considered a pure science. There are relatively few variables. We know that if something with a known mass is launched from earth at a known force and angle, it will land at a known location. It’s very reproducible.

Biology and medicine are less pure sciences because they have more variables. If you set up the same experiment with two different people, you can have wildly different results because the human body has millions of mechanisms that are each affected by millions of variables. Social sciences like psychology or sociology make biology look like a pure science because of their massive amount of variables. But like anything else in this world, there is still no chance. The absence of chance is what makes science possible. The fact that the world is deterministic makes experiments repeatable. We may not be able to account for all variables, but we can draw inferences from them. We just need to be clear that the inferences are always untrue. They may be useful, but they are always untrue.

How does this relate to FIRE?

FIRE utilizes a lot of statistics. The 4% rule is based on statistics, the believe that the stock market will produce an average annual gain of 7% is based on statistics. The average retirement age, income, cost of living etc. are all based on statistics. These statistics may be true, but the applications drawn from them are not. They may be useful, and you can use them as guidelines to model your financial independence plans after, but everyone is unique.

The trinity study gives investors a certain chance of surviving their retirement even though chance doesn't exist.
Safe withdrawal rates as a function of portfolio allocation Source: Early Retirement Now

According to the Trinity Study, if you have a portfolio of 75% stocks and 25% bonds and you withdraw 4% of your portfolio per year and increase with inflation, you have an 88% chance of your money lasting 50 years. But as I’ve been saying, that conclusion is false because chance doesn’t exist. The Stock Market has its own factors that affect how it produces returns. Also we as investors have our values and variables that affect the mechanisms by which we spend money.

If you are already good at adjusting your spending for when times are tough, a stock market correction early into retirement won’t affect you as much as it would someone who can’t reign in their spending. What I’m saying is you don’t have a “chance” of things turning out a specific way. You have control over it. Obviously there are things outside of you control, but nothing is outside of control. The universe is deterministic because God is sovereign. Control what is in your sphere of influence and leave to God all that isn’t (and all that is as well).

What do you think? Was this post too esoteric? Should I have stayed sick longer? Let us know in the comments below!

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Ten Lessons I Learned Growing Up With Little

Posted on by Courtney

I suppose an introduction is required. My name is Courtney, and I’m David’s wife. We’ve been married for almost 7 years, and we have a little boy who was just born this year. Quarantine babies, am I right? We make a pretty good living right now, but when we were newlyweds we lived off of David’s graduate student salary. It put us below the poverty line, technically, but I felt richer than I ever had before. My parents were missionaries for most of my early childhood, and then they just had my dad’s pastoral salary with all three of us kids. We had very little.

Living off of that small amount is what taught me the following ten lessons, which I think could be valuable for you too.

Learn to do it yourself if you can

I learned this very early from my dad. When we first moved overseas, the house my parents were given by the mission had a lot of work that needed done. Subfloors were rotten, closets needed built, kitchen cabinets needed installed, and the house needed a water heater–to name a few things. We lived way out in the absolute middle of nowhere, so hiring professionals would have been incredibly difficult and incredibly expensive. So instead my dad buckled down and learned to do everything he could. He had help when it came to the technical aspects from people who came down from the States, but he soaked up everything he could and was never merely a bystander in the process. Even now, when he and my mom have far more disposable income than they had ever had in their lives, my dad still does most of the work on projects around the house. For example last year he and my brother put a new engine in an old Miata my dad had bought off of Craigslist! 

My dad learned how to do these things out of necessity, but I also know that a job well done brings him a great sense of pride and fulfillment. That’s the lesson I’m currently taking from learning to do things myself. I can afford nice store-bought bread, but the sense of accomplishment I get from making a loaf of bread, and having it come out of the oven perfect and fluffy, can’t be bought. I’m not advocating that you have to be able to fully build, wire, and plumb your own house (unless that’s what you really want to do), but I am saying that you should learn all you can. It can save you a lot of money, give you a great sense of accomplishment, and be a fun talking point. 

Things taste better when you’ve worked hard for them

I will be honest, gardening is not my favorite thing. Every year as a teen I would dread the days mom would send us outside to pick green beans. The plants are itchy on bare legs, hide a million bugs that are just waiting to jump on you, and seem to have a never-ending supply of beans that you have to search and search for. Seriously, no matter how many times you turn the plant to a different side, there’s always some you missed. It was always worth it though, because eating something you worked for is so satisfying. I find the same thing to be true with home cooking. Homemade cheesecake tastes better than store-bought because of all the effort that went into it. The fortunate thing here is that not only does it taste better, it’s usually cheaper too. Also, if you’re making it yourself you can add more sugar to ensure it tastes better!

Second hand does not mean subpar

When I was young shopping at thrift stores was embarrassing. I know thrifting is less embarrassing now than it was 20 years ago, but I can’t tell you how much I wished that I could own anything new. Finally, for my 16th birthday my aunt gave me a gift card for Old Navy. I was thrilled, and immediately bought myself a new pair of jeans (which basically used up the whole gift card). Then the next week when we were at the thrift store I found the exact same pair of jeans–for one dollar. I learned my lesson right there. Even now I hardly ever buy anything new, because I know Craigslist, Facebook Marketplace, or the thrift store will likely have what I need. Buying used doesn’t mean having to buy old or broken and just “making it work”. The furniture in my son’s bedroom is in great shape and cost less than $150 for a solid wood dresser with a hutch, a bedframe, and a nightstand. That’s less than if I had bought cheap particle board furniture from Walmart and if I didn’t know it was 20 years old I’d never have guessed!

You’re not saving money by buying something on sale if you wouldn’t have bought it otherwise

This is pretty straightforward. If you buy something just because it’s on sale, but don’t actually need it, then you’re not saving anything at all. This isn’t to say it isn’t a good idea to occasionally buy toilet paper or other necessities when they are on sale. But if you buy the cute dress you find on sale even though you have plenty of other dresses that you’ve never worn hanging in your closet, you’re wasting money.

A lot of the things that we “can’t live without” we could not only could live without, but genuinely don’t need

I, like many housewives, have watched my fair share of HGTV. I really enjoy seeing a house transformed, and also seeing all the cool new gadgets and interesting features that can be added to a home. What always bugs me though, is when people call things like heated floors “must haves”. It’s OK for these kinds of things to be goals, but I think as a society we need to get away from the thought of gadgets and accessories being things we need to have rather than what they are–luxuries. We don’t need these things to survive, and not only that but we don’t need them at all! I really enjoyed the car we had when we were first married that had heated seats. But when we were looking for another car and found a reasonably priced one without heated seats, I was fine with that. Because heated seats are a luxury, and I don’t need them. 

Anything can be a luxury if you consider it so

And yet luxuries are nice! I don’t think anybody wants to live in the absolute most Spartan fashion. We all like a little something that makes us feel like we are living “the good life”. Unfortunately a lot of people take this desire too far, and end up with maxed out credit cards and luxury vehicles they can’t afford. Instead of spending a crazy amount of money in order to feel like you’ve made it, I would recommend that you reframe your thinking. 

While we lived overseas, my parents made it explicitly clear that we were not to drink the tap water. I think it had something to do with bacteria in the water that our guts were unable to tolerate, but honestly I was pretty little and all I took from their lesson was that tap water was off-limits. When we moved back to the United States, my dad made a big show of pouring himself a glass of water from the sink. My siblings and I were amazed! What a luxury to be able to drink the tap water without boiling it. In fact, I thought it was so much of a luxury that I was later found washing my hand in the tub so as not to waste the drinking water. 

What a simple thing, but it made me feel like we were living large. This kind of attitude is something we should try to cultivate. Make your morning cup of homemade coffee special by having it in a comfy seat at a time where you won’t be bothered so you can really enjoy it. Make a regular night at home fancy by popping popcorn, turning down the lights, and enjoying a movie. Little things can be luxuries if you allow yourself to luxuriate in them.

Things are nice, but don’t make your happiness contingent on them

We moved a lot. Like, a lot a lot. By the time I was 12 we had moved 15 times. When you move that often, you have to condense your belongings drastically. My parents couldn’t afford to ship heavy furniture overseas, and weren’t willing to waste valuable space on a giant stuffed animal collection. I got really used to getting rid of toys and clothes, even ones I still liked, because it wouldn’t fit in our new home or we didn’t have space to bring it in the first place. 

When my great-grandmother passed away, my grandma decided to move to my home town to be closer to my parents. We went down to help her downsize, as she was going to be moving from a 2 story, 5 bedroom house (plus full walk-in attic and basement) to a ranch with 2 small bedrooms. My mother went through the house with her systematically, trying to find things she could part with, but it was like pulling teeth! She’d ask if she could get rid of a dutch oven that was full of dust on a shelf my grandmother couldn’t even reach, but grandma would say, “Oh I can’t get rid of that, so and so gave it to me at my wedding.” 

I was fortunate to learn that things don’t bring you happiness at a young age. My grandma, while not having fully attached her happiness to these things, was definitely emotionally attached to them. She had a very hard time parting with them, because she had a sentimental attachment to everything she’d ever owned, even if she’d never used it! Being emotionally attached to things is a big problem, but attaching your happiness to them is even worse for you. Having a hard time getting rid of things can be overcome, but if you attach your happiness to having those things it becomes almost impossible. After all, how can you stand to get rid of it if it will make you unhappy? You not only are unhappy about losing it, but you can easily allow that unhappiness to sour whatever caused you to lose it–even if it was a happy thing that caused it! Even if you really want a baby, you can easily become angry towards them if you have to sell a sports car you had attached your happiness to just to afford the child. Or maybe you get a great new job opportunity, but you have to downsize from your beautifully decorated house and get rid of many of your favorite furnishings. It would be easy to begin to resent the job if you had elevated those things in your life so much that they dictated your happiness.

The thing is, at the end of the day these are all just things. You are allowed to like things, and you are allowed to be made happy by things. But you can’t allow those things to dictate whether or not you are happy. 

Living on less can make your relationships stronger

This one is counterintuitive, I know. Money is the number one reason for divorce, so I recognize that things can go the other way. But when you don’t have much, all you have is each other. If you allow having little to teach you to work together instead of allowing it to tear you apart, the bond you build is going to be incredibly strong. David and I had very little when we were first married, and we were immensely happy with each other. I think our relationship was built on a very solid foundation because it was founded on our love for each other, not the things we had. It was a lot of hard work, but in the end it paid off with a relationship that can weather just about anything.

Being generous does not require a big income

One of the biggest impressions my parents made on me has to do with donating. My dad is a pastor, and for most of my childhood my mom didn’t work. But every first Sunday of the month my mom would write a check and put it in the offering plate, same as everyone else. They also supported ministries in the area, including nonprofits that helped out single mothers. Even though they didn’t have much, they still made sure that they were donating where they could. This made a big impression on me. Even when you don’t feel like you have a lot, helping your fellow man is important! There are a lot of ways you can be generous, even if you don’t donate to charity in the traditional way, and you don’t even have to have a dime to do some of them.

A grateful attitude makes much of little

And conversely, an envious attitude makes even much feel little. Desiring what others have instead of being grateful for what you already have sours you to anything that isn’t the thing you want. Let’s look at a Bible story for this one. How about King David and Bathsheba? We know from the Bible that David had at least 7 wives before he met Bathsheba, but it wasn’t enough. He couldn’t just be happy with what he had, he wanted more! And in the end, it ended up costing him greatly. He became a murderer, and lost the son he and Bathsheba had. This envious attitude only leads to hurt and loss. On the other hand, when you are grateful for what you have, it doesn’t feel so small. I was grateful for the clothes, toys, and games I had, and I never felt like I had too little. But an honest recollection makes it clear to me that I didn’t really have all that much. I knew plenty of kids that had more, and were unhappy with what they had. There can be joy even in little; find it!

David’s Note:
Courtney and I have been married for 7 years and it’s still crazy how much we think alike. Even though we grew up on different continents, we have the same philosophy of life. Our foundation for all of life is the belief that the Bible is the Word of God. Because God created both mankind and money, if you take these ten lessons to heart it will help make life so much easier. But it’s not just money, God has provided wisdom for all manner of life: first of which is how to know Him personally.

Hopefully you are able to get something out of these ten lessons. Let us know which ones you liked most in the comments below!

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Why You Shouldn’t Retire Early

Posted on by David

I know that “you shouldn’t retire early” is a strange thing to say on a FIRE blog, but hear me out. The FIRE movement has gained a lot of traction in recent years because of the obvious allure of leaving the workforce at a young age. Quitting at 40 and never having to slave away for the Man again is an exciting thought. But people focus so much on the RE part that they forget the true meaning of FI. FIRE is more than just saving money to be able to retire early, it’s a way of living and thinking that allows you to spend money on what’s important to you rather than on things and keeping up with the Joneses. For some people this leads to retiring early, but it doesn’t have to.

Early retirement is just one way to use your savings, and I’m here to try to convince you that it’s not even the best way.

Purpose is what makes life worth living

The main tenet of FIRE is that you can use money to buy freedom. That can be seen most vividly in quitting the workforce, but early retirement in and of itself shouldn’t be the only goal. We’ve employed FIRE strategy to allow my wife, Courtney, to be a stay at home mom, or to not have to works nights or weekends.

Whatever you do find purpose in it. I work as an electrical engineer. I enjoy engineering, it’s a lot of fun, but I went into engineering because it paid well. My job is enjoyable and I like the people I work with, but I wouldn’t go to work every day if I didn’t get a paycheck. Currently the purpose of this paycheck is to support my family, but I plan to continue working after reaching FI. There are just too many charities to support. I would also like to be able to support a few missionaries full time.

Man was meant to work

One of the big issues with the FIRE movement is that mankind was meant to work. The desire to do something meaningful with our lives is a fundamental characteristic of humanity. Work doesn’t have to be grueling or even profitable to be meaningful, but working is embedded into our nature. When God created Adam, He gave him the job of tending the Garden of Eden. Genesis 2:15 says, “Then the Lord God took the man and put him into the Garden of Eden to cultivate it and keep it.” It wouldn’t have been a hard job as the world was perfect, but it was still a job, and it was still meaningful.

Work doesn’t have to be grueling or even profitable to be meaningful, but working is embedded into our nature.

Working was part of God’s original design. There is no arguing with that. It wasn’t originally designed to be exhausting work, but it was meant to be work. It wasn’t until Adam sinned that God cursed the world. In Genesis 3:17-19 God says, “Cursed is the ground because of you; in toil you will eat of it all the days of your life. Both thorns and thistles it shall grow for you… by the sweat of your face you will eat bread.”

But even now with the curse in effect, work is still part of God’s plan and still intended to be meaningful and fulfilling. Solomon, the wisest man who ever lived said, “I have seen that nothing is better than that man should be happy in his work, for that is his lot. For who will bring him to see what will occur after him?” (Ecclesiastes 3:22) Denying a basic characteristic of humanity because you don’t like your job is foolish.

Retiring can lead to death

A 2016 study from OSU that followed roughly 3000 retirees’ health from 1992 on found that the age of retirement was directly correlated with lifespan. The range of retirement ages in the study was 53 to 79 with the average at 65 years old. They found that retiring one year later was associated with a 9% lower mortality risk, and specifically that delaying retirement age from 65 to 66 resulted in an 11% drop in mortality rates.

This study corroborates past research and makes practical sense. Work keeps your mind and body active. It also helps keep you socially engaged. For most people, the majority of their social life is structured around work. When they leave the workforce they leave behind their friends and daily structure. They develop more sedentary lifestyles, and no longer have a ready source of mental stimulation. More importantly, they often leave behind their purpose.

Work for fun, not for money

So am I saying that all this FIRE stuff is bunk and you should just live it up now and work your 9-5 job until you die? No, of course not! The problem is that our definition of work has been tainted by the Fall of Man. We think of work as toil and pain that we perform grudgingly because we need the money. But that’s not how it was originally intended. Adam didn’t need money; he didn’t even need to tend the Garden. The trees were already there and they produced fruit on their own. The purpose of tending the Garden was to have something to enjoy and fulfill him.

If we worked for the joy of it rather than just for the paycheck, we get that joy and fulfillment that comes with a hard day’s work without feeling like we have to do it just to survive. You’ve heard the old adage: “Do what you love and you’ll never work a day in your life”. While that’s terrible advice to give an 18 year-old deciding what major to enroll in, there is some truth to it.

That’s where FIRE comes in. When you are in the wealth accumulation stage of your FIRE journey, work hard at a job that pays. Save what you can in order to reach financial independence. After that keep working, for the fulfillment and joy and meaning it brings. FIRE gives you the opportunity to do what you love, because you’ve saved enough to be free from working just to survive.

Why keep working if I can retire? The answer is two-fold.

First off, man was designed to work. Not working ignores a fundamental part of what makes us human. It’s like ignoring the fact that sweet food brings us joy or need human interaction, it rarely turns out well. There’s a reason depression is more of a problem in developed countries. Having something to work towards gives us something to live for. Personally some of my happiest days are the ones I spend hauling furniture and helping people move, and the most depressing days are the ones where I sit around doing nothing or watching TV. Meaningful work is an incredibly powerful source of happiness.

Secondly, having extra cash you don’t need is great for those less fortunate than yourselves. Imagine how much good you could do in this world if you could donate your entire paycheck to charity. For example sharethemeal.org says for $0.80 you can feed a child for a day. feedthechildren.org says for $34/month you can provide food, water, and education to third world countries. onetreeplanted.org will plant a tree for $1. Not to mention all the good you could do in your own family or community.

But, I hear you about to say, what if I hate my job?

That’s alright, the point of FIRE is that you don’t have to work a job you hate, because you don’t have to work for money. Once you’ve reached FI you can leave that job to pursue something else. That something could be another job, or you may volunteer for a charity, or learn an instrument, or start a business. The possibilities are endless because you don’t have to work for a paycheck.

Don’t just rot away in a cubicle, get out there and work hard at something you’ve always wanted to do, and if you work hard enough at it, someone might pay you for it. Elon Musk “retired” (read: was fired) from PayPal in 2000 and when eBay bought it in 2002, Musk ended up with $180 million.

In his 2012 commencement speech to Cal Tech Elon Musk said, “Going from PayPal, I thought, ‘Well, what are some of the other problems that are likely to most affect the future of humanity?’ It really wasn’t from the perspective of what’s the … best way to make money.” He decided the big problems to solve were sustainable energy and space travel so In 2002 He founded SpaceX and in 2003 he founded Tesla.

Elon Musk is a perfect example of this mentality. He had more than enough to retire and sip cocktails on the beach forever, but he knew that he was driven to work and that there were problems that needed to be solved. And since he didn’t need to think about the “best way to make money” he could focus on trying to good in the world even if it wasn’t profitable. And as icing on the cake, Tesla and SpaceX are both successful companies and Musk is the richest man in the world.

What else is there?

If you work your dream job, you shouldn't retire early.
Source: xkcd.com

When you don’t work for money you can really focus on working for good

All of this isn’t to say I haven’t entertained the idea of retiring early. But, again, if I did it wouldn’t be to sip cocktails on the beach. It would be to pursue something else. For example I’ve always wanted to publish a video game and the current indie scene is ripe for making games. I’ve also considered writing a Biblical commentary or other theology book.

Whatever your hand finds to do, do it with all your might; for there is no activity or planning or knowledge or wisdom in Sheol where you are going.

Ecclesiastes 9:10

Solomon said whatever work you do, do it will all your might. While you’re still working towards financial independence, that will most likely be your day job. But after reaching FI the sky’s the limit. Find the next goal/adventure to work towards. Retire early if you want, but never stop working!

What do you think? Is it worth working to do more good in the world? Let us know in the comments below!