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Often it’s easier to see something reflected through other people’s eyes than it is to see it in oneself. A couple of PF posts that resonated with some of what I am doing.
Both of them were by Philip Brewer, whose review of Jacob’s book Early Retirement Extreme brought out this key nugget:
Instead, develop the skills to do many ordinary things yourself. It doesn’t take nearly as much effort to develop and maintain a basic level of competence as it does to become good enough at something that you can do it professionally.
Now I’m a great fan of ERE, but I hadn’t spotted that in reading his blog, intellectually at least. And I’m far too tight to buy the book, since my library doesn’t carry US PF books. Practically, I was already following the lower specialisation path.
I am an serviceable carpenter, but not a cabinet-maker, and entirely self-taught to boot, apart from what I observed from my Dad many decades ago. That’s enough to save a few hundred pounds on making cold frames, though they’re hardly good enough to sell. And yes, I know every half-competent allotment holder does something similar, though I venture that even my substandard handiwork is better than about half of what’s out there However, my requirements were on a much larger scale.
That leads to one of the key things about living simpler, or differently, or extreme early retirement. It was reduce external dependencies, or put another way, increase self reliance.
The modern world is one where there is a high degree of specialisation and inter-dependency. It gains richness and variety in doing that. For instance, making Christian Louboutin high-heeled shoes is a seriously specialised job and you probably need a marketplace of hundreds of millions to be able to get enough demand, far more than the catchment area for a village cobbler.
Now it’s clear that Louboutins are in a different league from the functional products of a village cobbler, but all that specialisation does have its downside too. It sets us in a rat-race by definition, because all this dependency means that you have to persuade others to do things for you. Most of us aren’t beautiful enough or persuasive enough to do that without money, so we have to suck it up to The Man to get the money. Robert Heinlein wouldn’t have approved – specialisation is for insects.
It doesn’t have to be that way. Much of the battle here is to reduce consumption. The obvious implication is a reduced standard of living, well it stands to reason, duh. And yet funnily enough, yes, one’s standard of living does fall, but in no way does it drop in proportion to the difference in the cost of the excess consumption. The aim is to consume smarter at the same time – buy much less, but buy better. We’re talking scaling down and trimming the excesses, not living in communes or doing a 1970s Felicity Kendal. I choose my excesses rather that simply following the herd to go for excess in all things as instructed by those nice advertising people.
Buy secondhand rather than new – much of advertising is aimed at the “you need it now” brigade. There’s very little that you need now – you need the air for your next breath now, but some consumer item will probably be cheaper and better next year. If you can wait for the item to come on ebay at the right price, you’ll get far more bang for your buck. Obviously, if fashion, or things like the latest iPhone matter to you, then this won’t be a recipe for a happy life. I don’t get to see a movie until a few years after its out and it is on terrestrial (non-pay) TV. It doesn’t really matter to me – if it did, I could pay, but I choose not to. I spent some of this afternoon shifting about 20 rounds of wood from where a tree-surgeon had cut down a pine tree. Why? because I’d like to do the same for my gas bill as I did to my electricity bill.
The Rational Optimist disapproves of self-sufficiency in a big way, but there are some things that make self-sufficiency hard to argue with, provided it can be achieved with a modest amount of effort. One of those things is the 50% tax rate on nearly all purchases. Don’t believe me? Think about it.
If I buy my cold frames from a store, I have to pay 20% VAT on the product, plus 20% tax (I have driven my income below the 40% tax rate using AVC contributions, otherwise I would be paying 70% tax on purchases) plus 11% National Insurance on PAYE on earning the money to buy this. Thus I have to earn twice as much as the product costs. So for everything you see in a store, double the price to account for the tax you pay on the money to buy it.
That is why doing something for yourself often pays well – your hourly rate is double what it is when you earn money to buy the same thing, for the simple reason you aren’t taxed working for yourself. That’s where the basic level of competence works – I am sure I take longer to construct something out of wood than a craftsman, but as long as I am having a good time doing it then typically it costs less than half as much to do it in raw materials than it would be to buy. Plus I know how to service it. When I installed my Freesat dish out of scrounged bits it took me longer than an aerial installer would take, because he does it every day and has the workflow perfected. But it was a lot cheaper; though it should be noted I had the specialised knowledge from work.
As a society we have learned incompetence in doing things for ourselves – this Popular Mechanics from the 1930s shows how much has changed – I wouldn’t know how to go about half of this, and I am reasonably practical.
Some of the skills have been made redundant by increasing reliability and performance. I don’t need to know how to change piston rings, for instance – my car is coming up for 110,000 miles and still gets away with the annual service and MOT, something that was unheard of 20, 30 years ago. That is good. But some of the craft projects showed just how much people did for themselves, compared to now.
Some things that are obviously going to eat up money in future are energy costs, simply because we have only so much fossil fuel energy available and the demand is going up due to the increasing number of people wanting to live a Western lifestyle. I’ve already seen that – I have forced my electricity consumption down by more than half over the last six years but the total price I pay is still the same. Anticipating the same effect with gas, I aim to use this piece of equipment
to reduce my heating costs. It is a seriously low-tech piece of gear, a cast-iron box with a pipe out the back, into which you stuff wood and set fire to it. Compared to the gas central heating it’s a right PITA to use. But you can’t argue with the price of fuel – basically the cost of petrol for the chainsaw, though eventually we will be using biomass willow growing on a local authority allotment they couldn’t rent out because it regularly gets flooded with runoff from a road. You wouldn’t want to eat veg from there, but the willow likes water. If you keep your eyes open though, there is plenty of wood to be had for the asking as long as you are prepared for the grunt on carting it off and sawing it/axeing it up.
Now it’s obvious to me that fuel is going to go up in future. And in the general theme of becoming less dependent, not wanting to be taxed at 50% on needs and preferring to spend my money on stuff I really can’t do for myself, I want to get out of the money economy as much as possible for this necessity. That means some capital expenditure (log burner, chainsaw, chainsaw PPE) in return for reducing my long-term financial risks of being fleeced for power. My gas and electricity bills are about £800 together. I had to earn £1600 to be able to pay that. Some of that should be going to my retirement savings, not equally split between EDF and George Osborne’s war chest, thanks all the same.
The second post that tickled me was Change Your Life with Storytelling. I haven’t actually got to grips with this one yet, and this post highlighted that maybe I ought to. The narrative of what I am doing in life has an awful lot of what I am trying to get rid of, and arguably it doesn’t have enough of what I am trying to get more of. If I put my mind to it, it is still hard to picture where I want to be, and that may well incapacitate my ability to make that happen, because I can’t picture it. I feel I am in a mapless territory, and perhaps that needs to be addressed before I can unleash the power of saving to create and image a different, better, life.
Of course that may all be a load of metaphysical bollocks – such is the human condition that it is hard to separate the variables at times