14 Sep 2013, 12:30pm
personal finance reflections:
by

10 comments

  • September 2013
    M T W T F S S
    « Aug   Oct »
     1
    2345678
    9101112131415
    16171819202122
    23242526272829
    30  
  • Archives

  • being in the rat-race made me spend badly

    Okay, this doesn’t apply to everyone – maybe you are King Rat and have this taped. But it made me, unwittingly, spend badly on stupid things 1. I was lucky – I was raised to not spend more than I earned, and I was lucky enough to start work in a more paternalistic age so the whole pension thing was set on the right track for me. I therefore simply ended up stuck in the rat race earning money to spend badly, which stopped me saving enough to get out of the rat race. As opposed to owing shedloads of money and all the hurt that goes with that.

    I was set on this train of thought by Monevator’s How to Make Easy Money post. Which, fair enough, is about making easy money. A common theme in personal finance is that you improve your financial situation by making more money. Monevator’s gently steering you into the direction of honest money-making in the Ayn Randian version of delivering value to your fellow-humans rather than the get-rich quick of P.T. Barnum. Making more money didn’t work for me to accumulate financial assets until I wanted a way out. Reducing spending did the job fine. 2 I have less income now, below the full-time national minimum wage 3. But I have control of my time, and I have a much better quality of life as a result. Something about not being in charge of my own time encouraged me to spend unwisely.

    Working makes many people spend unwisely, of course, in two ways. One is that there is a steady income, so your decisions are made in an endlessly static present. Presumably this explains why interest only mortgage owner-occupiers find themselves surprised to be 50 without a stake in their home. I have some sympathy for the young who may go IO because they have no experience of the toxicity of UK housing, but by the time you’ve got to 50 there’s no excuse…

    The other factor is that they spend as distraction from the experience of working. I watched some colleagues come back from their summer holidays and immediately book their next year’s summer holiday, “to have something to look forward to”. That was probably the sort of spending that limited my savings, until the external shock of the credit crunch and some nutty management behaviour then focused my mind to stop doing that and get my head round the saving lark.

    Trends in the world of work are running away from me, promoting an extroverted ideal

    In reading Quiet: The power of introverts in a world that can’t stop talking I discovered another possible reason why the way of working was becoming tiresome. I had previously put it all down to changes in The Firm, but I see there were wider changes in the world of work that were unfavourable to me. The workplace is increasingly being designed for extroverted and collaborative working – qualities organisations now prize in people is ‘team player’. I do my best work on my own. It’s not that I can’t collaborate, but I find the jabber of all the interaction counter-productive. However, the world of work is being cast in the image of extroversion – the massive increase in the number of meetings, the open plan offices, the hot-desking, and oh, the endless interruptions and meetings and all-hands events.

    Take communications – the  move to people having always-on mobile phones. It still to this day strikes me as bizarre that people go around their business willingly packing a device that interrupts their train of thought on a sporadic basis. If I ran a software coding joint I’d seriously consider asking people to check their mobiles in at the door ;) Of all the engineering jobs I’ve ever done, software coding is one where if you have an interruption to a critical point, you lose hours if not half a day to pick up the thread again. A mobile phone is a weapon of productivity destruction in that sort of task.


    Sherry Turkle’s TED talk “Connected but Alone” touches on this in business, as part of her more general talk about how many humans, it appears, use mobile technology to make themselves feel connected to the hive-mind because they are scared to death of being alone with their own thoughts. I don’t understand how one can feel that way, which perhaps is why I and quite happy without a mobile phone always to hand. Unless I am going somewhere and expect to want to arrange things at the last minute with someone, in which case they are a great tool for addressing that requirement ;)

    The current flavour of the month in software design is the highly collaborative Agile development, with its Scrum meetings – every flippin’ day, and the grand Scrum of Scrums, what the hell is it with people nowadays that they confuse talking about things with action? This is what it’s like in a typical scrum meeting, with a tip of the hat to Wikipedia’s explanation:

    During the meeting, each team member answers three questions:

    • What have you done since yesterday? less than I’d like because meetings took up so much time
    • What are you planning to do today? catch up with the stuff I missed yesterday and am missing right now
    • Any impediments/stumbling blocks? TOO MANY BLOODY MEETINGS stop flapping your lips people and git back to work for God’s sake. Talking about it ain’t gonna get it fixed…

    Paradoxically the little and often rinse-repeat-recycle approach of Agile can work very well when I am on my own – I developed a microcontroller product on my own, but using that methodology with a customer and we both managed to feel our way towards what the customer actually wanted to do with their device. Things I thought really mattered to them they didn’t give a toss but technically trivial mods to the user interface made a big difference ot how they liked it. However, in a development team Agile consumes time and nervous energy, but presumably everybody else gets a big rush from feeling connected.

    I don’t get people that run instant messaging and Facebook all the time either. And email – open it in the morning, do your stuff and then close the darn thing, so that the “you got mail” message doesn’t break the train of thought. Twitter and IM have no place in the creative workplace either, IMO. Everybody else, it seems, thought differently.

    So the world of work was moving away from matching my temperament. It seems a bit sad that business is embracing methodology that disenfranchises / plays to the weakness of a third of the workforce 4, and cuts itself off from analysis and considered action, but that’s the way things are shifting. I guess optimising the workplace to  the majority makes some sense. However, it makes the workplace more stressful for the remaining third. Indeed there’s some evidence that introverts respond particularly badly to observation – annual appraisements I found fine, but justifying my existence quarterly with modern performance management did me in, though looking back at the results they weren’t that different. It was the process I couldn’t stand.

    What’s with that improving finances making less money then?

    It’s not because I make less money that my spending has improved. I designed my target spend rate to be about twice elective spend in the last three years at work. To start off with I didn’t spend that much because I was still shellshocked from the transition. It takes a very long time – months and maybe years, not weeks, to get your head round living from the return on capital as an ordinary grunt who has always lived off income. Then I started to find that exiting the rat-race is changing me. I have become more opportunistic and flexible. While working not only did recreation have to fit in time-wise with work, but I craved control over things, and to make things happen exactly how and exactly when you want them is costly. I go with the flow more now.

    I take more time to try and think laterally now, can I achieve what I want to do with something I already have? Do I actually really want this – I try and imagine what it would be like to have whatever the item or experience is and look back. More than half the time the answer is no, this is a desire that is being induced by advertising. It’s often something I can do with what I already have. That has two rewards. One is saving money and not consuming more resources, but often the greater reward is in turning over the grey matter and thinking laterally.

    Sadly that’s only rewarding because I have the choice. While I was saving hard and working I felt I had to do more with less, which is enervating and leads to frustration. Choosing to do more with less is rewarding, because there is always the implicit backstop – if I really want to do this and buying something is the answer, then I can do it. My tastes are not so extravagant that I can’t afford them ;) However, if I take the extra time to make sure they are my tastes, I get to save money too, relative to the original projections when I was working.

    An example – I don’t need a better trail camera. I need to fix the one I have and then use my brain to establish what success looks like. Consumerism is rarely the answer

    Let me take an example. A stoat killed some chickens a while back. Now the offer was made to trap it, but I don’t really want to charge around killing my totem animal. I have a high regard for Mustela erminea, and they do a good job in the hedgerows killing mice and rats. Plus we are not very far from sandy heathland, and a gamekeeper advised us that there will be a massive pool of stoats there. I quite like the idea of a massive reserve of stoats…

    To deplete a population of stoats you have to kill at least 2% of the population, monthly 5 I’m just not prepared to be part of that.

    Personal biases aside, one should think carefully before fiddling with a natural balance of predator and prey, after all the stoats are thinning out the rabbits and stoats don’t eat veg but rabbits do. We go and upgrade the chicken wire around the remaining chickens (a stoat can get into a 1.5cm hole or more), kick ourselves for keeping these a bit too close to the hedgerows – stoats don’t like crossing open ground 6. And I am after a picture of the stoat when he tries again, now we have targeted the electric fence to stoat height.

    I have a trail camera. I believe their main use is for Americans to attach to trees so they can get an idea of where deer run in the night so they can go shoot them, because deer are creatures of habit. In the UK we call these nature cams because it’s not so encouraged to go around blowing away critters, and also because UK hunting and shooting traditions tends to be more focused on tracking skills than hardware IMO ;)

    someone who's meant to be there. I don't  totally approve of the method of tackling the gate, which is why it hangs a bit, but I can understand the temptation ;)

    someone who’s meant to be there. I don’t totally approve of the method of tackling the gate, which is why it hangs a bit, but I can understand the temptation ;)

    I use mine as a security camera to look for humans – similar size to a deer. I mainly get cats ;) Fundamentally, however, these things are very hit and miss. The Chinese chunder these things out from Shenzhen in the hundreds of thousands, so you have the usual problem with Chinese electronics – they just don’t last, often for design flaws.

    I get my trailcam out. Battery life had been falling and the clock wouldn’t keep time between the frequent changes of battery, so I opened it up and observed that the Chinese firm had soldered in a watch battery, which was going to last all of about two years. Then corrode and spew gunk all over the circuit board, making it leaky hence the crap battery life and clock problem.

    Built-in obsolescence, Shenzhen-style

    Built-in obsolescence, Shenzhen-style

    I unsoldered this bastard, cleaned the board with alcohol and swapped the battery for the  memory supercapacitor they should have used in the first place. It’s twice the price but lasts for decades, recharged from the camera battery. No future leakage and the clock holds time again. So I go looking for stoat

    Stoat in lower RHS. Some people find it hard to see him so I've highlighted it in red

    Stoat in lower RHS. Some people find it hard to see him so I’ve highlighted it in red

    And find one. This shows what’s wrong with trail cameras – you get the whole soot-and-whitewash effect because it’s basically a point and shoot camera being used at close range. As demonstrated millions of times every day on Instagram and Facebook, an on-camera flash used at close range really sucks because the light falls off very rapidly with the square of the distance. Then of course you’re trying to take a photo in the night – pretty much all products that claim to let you see in the night over-promise and under-deliver. Mammalian night vision is pretty good, so even trying to match it is a big ask. Like all other photography, you can spend loads and loads on tiny camera improvements, whereas what you really want to do is get the light right. If I want to improve the results from a trail camera I should take the money I’d spend on a slightly better one and use it to buy some infrared LEDs and construct myself a slave flash to fill in the shadows.

    Nevertheless, for a few hours I thought to myself

    ‘hey – I know what. This camera is shite, I can rush out and BUY something better’

    Whoa. I now have the time to research, and understand. I’m using something designed to get big animals at a longer range. A stoat is only a foot long. I can’t buy anything better. I could make something better. I could put an IR beam round the chicken house and trigger a camera or use a Raspberry Pi and camera module to do this. Getting a better picture of a stoat needs creativity and activity on my part. It is not just a matter of going out and buying something, despite what the ads tell you.

    The other problem is that I probably don’t need a better picture of the stoat. I need IR video of him, so I can understand his modus operandi, how he thinks. A stoat is a worthy adversary, wily and persistent. However, this camera is telling me something, which is that his visits are becoming less frequent 7. Presumably the improved stoat-worthiness of the chicken pen denies gratification and a hefty zap to the snout from the electric fence offends…

    The right solution is often not buying something. It’s often about doing something different.

    Retirement transforms you. Otherwise you wither and die…

    It is more time that gives me the opportunity to spend less. That’s counterintuitive if you extrapolate from elective spending while working. I spend £x with two days leisure time a week, so obviously it’s going to be more with seven days of leisure time a week. Not so fast…This may well be the case for those who need lots of external stimulation, and perhaps it is the general experience. But it hasn’t been mine.

    Everybody thinks about less money in retirement, and more time doesn’t get so much as a how do you do. More time enables me to work for me. I can think about what I want to achieve, research it, and consider if spending more money will give me enhancement of quality of life. Sometimes it will. I will probably shift up a notch in the quality of wine I drink, because the experience is improved notably as you get away from the low end. I don’t need to go mad and only drink wine that’s more than a tenner, but I want to go upmarket a bit. I probably want to spend about two and a half grand on a Hameg oscilloscope. I still want that drill press. But I didn’t need a new trail camera to know what my stoat is up to. I needed to take time to think better ;)

    For me most of the joy to be had in the world is in being creative, to find my own answers to problems, and poking my nose into interesting corners of the world to make stuff happen. That means where I spend money I want to be spending on tools and not solutions, invest in improving my skills and understanding. It means thinking more and spending less on obvious ready-made solutions. Very often the journey is more interesting than the destination. It means embracing serendipity, it means being actively curious. I can remember a time when this was the default mode…forty years ago ;) It’s far more powerful and involving with adult resources. Keynes was right with Economic Possibilities for Our Grandchildren, but I needed to buy myself out of wage-slavery first. It’s like somebody has gone into the world and turned up the interestingness level to 11 from about 3. The world didn’t change. But I did…

    One of the amazing things now is that you can get a half-way working knowledge of a lot of the issues on something with a quick search of the Web. The last time I had this much time to be able to recreate was probably at primary school, though first year at university runs a close tie. Compared to then the big change is the ease of finding information wrought by the Web. Yes, an awful lot of it is garbage, but once you’ve told Google you never want to see results from ehow, from springerlink 8 and a few other trash sites then the ease of getting oriented in anything still fills me with wonder.

    This is actually getting even better now – for instance Greg has just reported the Feynman lectures are online. I still have my copy of one of the Feynman lecture books from university – they were fearsomely expensive then, but his engaging writing was worth spending the money even though it was a non-core item on the booklist. There are many online courses available for free at places like coursera. It seems a peculiarly harsh twist of fate that now, just as the cost of really turning up to university is becoming an unaffordable luxury for the young, the people who really need it to get a job, it is becoming almost free for anybody who doesn’t actually need a ticket at the end of it :(

    Some people retire and focus on what they lost – their income, their sense of meaning, their place in the world, and they atrophy. I was perhaps lucky, not only in being introverted, but I was also a wreck when I left. The only way was up. I didn’t anticipate a second childhood with the benefits of adulthood, but I sure as hell am not going to pass up the opportunity to repossess some of the wonder at the workings of the world. To do that well I must be in the world but not of it – as an interface to life consumerism sucks. It makes you focus on the minutiae of product differentiation rather than the big picture – you are taught to care about the difference between Nike and Adidas or Pepsi and  Coca-Cola and all the other things you are meant to care about which don’t amount to a hill of beans once you have Enough. I used to go through too many gadgets because I was too harried to really learn to work with the ones I had.

    I am the adaptable and superior being compared to a consumer product, so why on earth I expected to sort everything out with a new product still makes me shake my head a little bit in retrospect. Raptitude nailed the issues with I don’t Need Stuff any more, only Things. I don’t have his Zen-like decluttering urge, and indeed I do collect some useless junk, because I want to scavenge it for bits and materials. But there’s something to be said for his angle on

    If I take it into my home, I should provide a place where it’s properly, officially away, or I shouldn’t pretend I have any business owning it.

    even if I need a better junk box for the Things I can scavenge to make stuff out of ;)

    It takes time to learn how to use a new consumer item, be it an iPad, a musical instrument or a video camera. It take time to evaluate your requirements against all the things that could meet them. It takes time to get yourself to interesting places that aren’t the ones everybody else is gawking at. And it’s this time that the rat-race robs us of. There are whole industries designed to manufacture novelty that people can chase after en masse – step forward fashion, a lot of what Hollywood makes, Sky Sports, i-anything. An awful lot of it is designed to be disposable, providing the hit of novelty on its way to landfill. I want a lot less of that. It appalls me how badly a lot of things are made – I’ve slowed the increase in landfill from my own consumption by fixing some things – this camera, a CD player, a car battery charger, coffee grinder, a Kenwood chef, but some things are just hopelessly shoddily made and aren’t even worth attempting to repair.

    Britain is far richer that it used to be, so why are we so stressed and unhappiness seems to abound? We are surrounded by stupendous availability of knowledge for free, and opportunities previous generations could only dream of. I suspect it is because the pace of change has been raised, and though in theory we are rich enough to take more time to handle the change well and take advantage of the far wider range of opportunities presented to us by that increased level of change, as a society we didn’t go that way.

    We chose to keep the working hours the same, and take the extra money. Indeed, families with children did even worse – they decided that they would increase the number of hours that the family unit worked outside the home in return for more money.

    The rat-race has got a lot to answer for. We didn’t need to design it the way we have, but globalisation will probably mean it’s stuck where it is.

    Notes:

    1. I don’t mean ‘made’ as in The Man held a gun to my head and said ‘spend your money on shit so you hafta keep working for me’
    2. making more money works for other people – take RIT, ERE or Mr Money Mustache for example
    3. I’m not saying you can have a great time earning just NMW. Because I can’t turn a return on cash I live on it and reinvest ISA income.
    4. Quiet: The power of introverts in a world that can’t stop talking, Susan Cain, Penguin 2012 p.3. She’s talking about Americans, the ratio on introversion to extroversion may be higher than 1:2 in other countries, particularly Asian ones (ibid, p.29)
    5. Barlow, N. D., and Mandy Claire Barron. Modelling the dynamics and control of stoats in New Zealand forests. Department of Conservation, 2005. For some reason the people of New Zealand, admirable in many ways, have a really bad attitude to the humble stoat. Let’s face it, Homo sapiens is an introduced species that has caused far more hurt to NZ wildlife than Mustela erminea, they could do with chilling a bit IMO ;)
    6. King, C.M. 1989. The natural history of weasels and stoats. Christopher Helm, London, U.K.   And the personal knowledge of a gamekeeper
    7. S/He seems to have given up now, I haven’t got a picture for the last week now
    8. because Springerlink want to charge you shitloads of money to read academic journals – I’d rather not know it exists, rather than knowing I could buy it for $100, not because the papers are garbage

    “I didn’t anticipate a second childhood with the benefits of adulthood, but I sure as hell am not going to pass up the opportunity to repossess some of the wonder at the workings of the world.”

    Yup, this is what I anticipate my retirement to be like. Final countdown has commenced, but it’s still a couple years away.

    On meetings, I find the worst form is where the manager gathers everyone around to get the individual status. Crikey! You’re holding the entire team hostage while information transfer is happening between only two people!

    The other problem with meetings is how poorly people listen and comprehend. Fer crying out loud, don’t hold the rest of the team hostage while everything gets explained for your benefit a second time (or a third time because you want to argue with the boss)!

    > Final countdown has commenced, but it’s still a couple years away.

    Sounds good! That you can see the light at the end of the tunnel i mean, rather than that it’s further away than tomorrow…

    That jamming of the flow is what hacked me off about SCRUM meetings too. Years ago I was workpackage leader for an international project which had about 10 people. It seemed the obvious thing to do to spilt the group into the guys who had actual functional interfaces and only collate the results and present at a roundup meeting at the end.

    I fear I was part of the problem with the listening and comprehend at times daydreaming! I believe smartphones have made this problem worse but it’s not my problem any more ;)

    “Trends in the world of work are running away from me, promoting an extroverted ideal”

    As a software engineer who has worked in both Agile and Waterfall environments I would probably favour scrum over other team formats. But as a strong introvert I find it exhausting. Endless rounds of meetings, pairing and huddles. Always being ready to give instant reasoning when your approach is questioned, often in front of other team members, in the name collaboration.

    Ultimately promotion and higher pay goes to those who stand out in this environment. Which probably means I’ll have to work longer and earn less than I would like before reaching the dream of financial independence.

    On a positive note though, my experience has been that good tech skills do eventually shine through the noise.

    This is my first time posting, but I wanted to say how much I enjoy your blog.

    And this: “I didn’t anticipate a second childhood with the benefits of adulthood, but I sure as hell am not going to pass up the opportunity to repossess some of the wonder at the workings of the world.” resonated with me as well. I feel a bit like this this summer, and that’s just because I’ve finished grad school (while working full-time), so it feels like a long holiday so far. I am luxuriating in the amount of free time I have…I felt like my fun self had died, but it is coming back! I was worried it was gone for good. I can only imagine that this is a faint echo of what retirement will feel like. Thanks for the great posts!

    Your Springerlink comment made me laugh out loud. I am an NHS librarian so have the joy of dealing with publishers and their insane ideas of costs all the time. “ah yes – we can happily milk the cash cow of libraries cos they don’t have a choice”
    They are all as bad as each other.
    I think (hope) that they are currently having a shock as libraries can no longer afford it. Certainly I have been making the decision to not renew at ridiculous prices for a few years – £96 per issue plus another £100 per month for e-access – sorry – no longer going to happen.
    It doesn’t seem to occur to them that they would sell more articles at a reasonable £20 each rather than £60 each – only pharm companies can afford that and even they are cutting back.
    Even more annoying is when public money has paid for the research but the publisher is getting free gravy out of it.
    As you can tell, this pushes all my buttons :(

    When I used to work at the agency, I dubbed our weekly meetings ‘Monday morning arguments’ which is all they ever were. I finally stopped going to them. They persisted in having them for a while without me, but eventually the rest stopped having them too.

    Why stop the entire agency to update each individual? Who needs to take an hour or two out of the week when you should be doing and producing something? Meetings were invented by idiots who don’t actually do anything. See any Dilbert cartoon for a decent analysis of the usefulness of meetings:

    http://dilbert.com/strips/comic/2010-12-22/

    @Chalkie – I’m glad that in the end better tech skills do shine through. My first love engineering wise was electronics engineering, but I switched to software as The Firm moved out of hardware. I’ve probably not got that deep skillset that true software engineers have, I was already halfway up the greasy pole by the time of the change ;) I could pick up languages and methodology okay, but the concept of pair programming still gives me the creeps! I was glad to be able to switch back to RF system design and CATV at the end, the Ermine is at his best when one of a kind.

    @Sara – that’s barmy wherep ublic money hasp aid for the research – once again our American friends seem to have cracked this in where government money has paid for the research I understand the results can’t be copyrighted!

    @Dave – I used the below the radar technique where I could too. That got harder to do with things like LiveMeeting where they could tally who was on – and one particular tosspot of a line manager did! Man am I glad to be out of that sort of micromanagement!

    […] independence feels… It’s the low level of needless consumer spending that I found didn’t give me lasting value, and this is particularly injurious to financial independence because it’s unthinking and it […]

    […] other half of the retire early fight is reducing the crappy middle-class and work-related spending that doesn’t enhance your quality of life – note that you do increase some areas of […]

    […] big picture and not dive down ratholes of detail. It’s one of the things that helps with not spending badly – I don’t mind spending more for something that I use every day. Or means something to […]

     

    Leave a Reply

    Your email address will not be published. Required fields are marked *

    You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>