Freed by 50

As someone who is firmly entrenched in “the boring middle” I can attest to the fact that it is a well named stage of FIRE. I am incredibly bored. My debts are paid, my investments are automatic, my mortgage balance is slowly and steadily coming down, and despite the recent market fluctuations, my investment accounts are slowly going up. But I’m not doing much of anything, and it is booooooorrrrriiiiinnnngggg!

The allure of the lottery is not in winning the lottery, which almost no one does, and those that do win have had mixed results. When you play the lottery, you’re buying a shot of hopium (a false sense of hope), that gives you an opportunity to briefly dream about what your life will be like when you win. Enter moonshots.

Moonshot investments aren’t meant to be crazy. You don’t cash out your whole 401k and put it in crypto because that one guy that time did it and retired a week later. But I feel there is a place in your portfolio for a small percentage of more risky investments. Should these investments pan out, you may find yourself up hundreds of percents. However any money put in moonshots needs to be money you’d be ok losing entirely.

Moonshots are important during the boring middle because they give us something to track, and they give us hope. We can look at our investment in them and dream of what we’ll do when they pay out. They’re a welcome distraction from the set it and forget it approach that is highly effective, but extremely boring. I don’t expect VTI to suddenly triple in a month, but the $500 worth of Polkadot I bought a couple of years ago was up 700% when I cashed out half.

I do not think it is appropriate to invest in moonshots until your financial house is in order. All of your debts but your mortgage should be paid. You should be automatically investing a significant portion of your income into retirement accounts. There shouldn’t be any other places where this money would be better allocated. I personally try to keep my moonshot budget between 1% and 3% of my total overall investment account value. And funny enough, I spend more time looking at the couple of thousand dollars I have invested in moonshots than I do checking up on the hundreds of thousands of dollars in broad index funds.

To date, here are some moonshots I’ve taken, the reasons, and the outcomes:

Crypto: I allocated roughly $1700 between Polkadot, Bitcoin, Loopring and Cardano between 2020 and 2021. For a while there, I was doing pretty good. I bought in after a large crypto crash, and at its peak, I was up to about $3700. Today, after cashing out enough DOT to cover my initial buy in, my account has about $980 in it. I’m definitely down on this one.

Hylion: Before I knew what a SPAC was, before I ever looked at r/wallstreetbets, I found this promising company looking to revolutionize the trucking industry. I read up on the company that was to be formed, the founder’s story, and did a fair amount of research about it. Had I known it was a darling of r/WSB at the time I would have known what I was in store for. I put $500 into the company that merged with Hylion and today it’s worth $48. I’m still holding this as a reminder not to do it again.

Wish: This was just straight gambling. I watched Wish bounce up and down for weeks before trying to time a valley trying to make a quick buck. I timed it alright. It is still digging deeper into that valley. $500 became $180. I sold it at a loss to buy Amazon after the split.

CloudFlare: I’m in tech. CloudFlare is a major underpinning service of the internet. When there’s a ton of sites down one day, it’s usually either CloudFlare or AWS. At one point I was up almost 120%. Tech is beaten down right now so I’m only up 25%, but this is something I will hold for a long time. $500 well spent.

Virgin Galatic: I bought in after the IPO at $10 and saw my $1000 go as high as $7000 before Richard Branson started using this stock to keep his other businesses solvent. I’m currently even due to some dollar cost averaging, but I plan to hold this for a very long time. If I ever see it at $70 again I’m cashing out my initial investment though.

Lucid Motors: I want to see this company succeed. I have made three separate purchases of this stock and today I’m pretty much even (slightly red). This is partially because I want to see my moonshot pan out to the tune of a Lucid Air Dream in my driveway, and partly to recapture my missed investment in Tesla when it was originally $27 and I decided to pay for my honeymoon in cash rather than take the risk.

Delta/United/JETS: If I learned anything in 2008 it was to invest in “too big to fail” companies when things go wrong. With Delta and United beaten to death by Covid in 2020, and JETS being an index fund of many US airlines, I figured this was a no-brainer. I spread about $8k between these stocks and even today with them down quite a bit from where they were in 2021 I’m still up about 100% on the individual airlines and 50% on JETS.

United States Oil Fund (USO): Remember when the price of oil went negative in 2020? That was CRAZY! I saw this as a massive opportunity to jump into the oil market. USO looked good to me so I made three separate purchases as it dropped. Today I’m up 324% on enough of an investment to more than cover all the failed moonshots listed here and then some. The price of oil continues to go up, along with this stock, so I’m not quite ready to sell, but it’s highly likely I do sell in 2022. The main reason; owning this stock is entering into a partnership, and as such you need to wait until late May every year to receive the K-1 documentation to complete your taxes.

I’ve probably learned more about investing, gambling, doing research, and the importance of safe investing from the moonshots listed here than I have in decades of set it and forget it investing. Yes I’ve lost some money. I’ve gained some money as well. I definitely made some stupid decisions along the way. But we learn from our stupidity. I’m not likely to touch a stove that burned me again, just as I’m not likely to throw $500 at a SPAC because MarketWatch and Motley Fool colluded to pump the stock (I’m totally just kidding! Kind of.).

It’s important to distinguish between taking a moonshot, and simply gambling. Hylion and Wish were stupid gambles where I was convinced I could make a quick buck. Almost everything else has been either a buy and hold forever play, or an investment in a sound industry that’s down for silly reasons. All the while I’ve been investing heavily in my retirement and individual investment strategies without ever wavering from my plan. If anything, though, taking these moonshots has kept me interested and engaged during an otherwise boring middle.