30 Dec 2015, 7:39pm
living intentionally reflections
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  • a look back at 2015 and how does an Ermine return to the middle class?

    It surprised me as a retiree to find a load of bored and squally children and far too many excitable hounds in a nearby rec on Monday, I wondered why at least some of these blighters aren’t back at work. Until UK Bank Holidays set me right, apparently they still had the day off. So it was time to ignore the great outdoors because there were too many people and mutts with cabin fever, and time to look at charts and find out this is the year the old internet died…

    I have passed the point of no return and the soft surrender to gravity has begun

    Decline and fall

    Decline and fall of my networth (excludes housing NW and pension savings)

    The rot is starting to show, bearing in mind I started in the heady days of 2009. I have not had a good 2015 in the markets – the effect of that on my networth is softened massively because there is over half of cash in this, and I have been lucky that inflation has been low in recent years, because only some of this cash is protected by ILSCs. That is because I have been coasting, and slowly my operating cash is dropping.  As a pensioner rather than retiree I will have a more predictable income than when working, although it is still subject to the vagaries of hyperinflation, financial destruction/repression and the usual force majeure of zombie apocalypse. It’s the loss of income from involuntary redundancy that is no longer a hazard for me, rather than there are no hazards.

    The point of no return

    The accumulated capital represented by this chart is not enough for me to live on, that much is clear. Many journeys reach a point of no return – originally an aviation term from where a departing aircraft has burned through too much fuel to return to the starting point. Networth is like fuel, it is a stock, not a flow, and interestingly enough the first metaphorical use of the term was in a novel about someone’s career.

    There is a psychological symbolism in seeing that, a visceral change very much like the change in note that tells the traveller that the final approach has begun. Were this in fact my entire pension savings I don’t know how that would feel. It’s perfectly rational to expect switchbacks in networth on an equity-exposed pension fund, let’s face it, we are well into a long bull run, indeed soon into next tax year we will be into the second longest bull run in history and already pundits are lining up to tell us that it’s all different this time. If that isn’t a sign that there’s a mahoosive bear market limbering up in the wings then I don’t know what is. One of the things I have learned in 1999 is don’t buy in the endgame of bull markets, and I paid handsomely for that tuition. One of the other useful things I learned since is do buy in bear markets, building a HYP, originally to buffer me across this gap and repair my actuarially reduced pension. What I didn’t realise is that you can only really add to a HYP in bear markets. In bull markets like now people simply charge you too much for earnings. The gains from compounding are paltry enough at the long-run 4-5% average of the market. You won’t live long enough to see the wins if you start paying 33 times the future income stream or more.

    The original premise behind the HYP held true

    I have added a column in Excel to identify my original HYP shares and it is still yielding over 4%, the variation in numerical dividend year on year is low. Now some pundits are saying that dividends are on the hit list next year. So maybe this time next year is the time for a wobble in the HYP return.

    I’ve taken a pasting because you have to look in strange places for bearishness these days – I’ve been bazookad in  Brazil, routed in Russia, mashed in mining, obliterated in oil, modestly eviscerated in emerging markets and gently gutted in gold. Indeed the one thing I seem to be learning in 2015 is that I am a really, really, rotten index investor – with a lot of this I accepted  the limits of my knowledge and went for indexing, but an indexing investor is still not passive investor, as Robert Kirby of the Coffee Can Portfolio told us in 1984. I should stick to HYP stockpicking 😉 But hey, that’s the nature of the markets eh, you gotta buy what’s hated, and boy are these sectors really hated at the moment. They were hated early ths year, they’re hated now. they’ll probably still be hated in a year’s time. People will probably have got over it in 5-10 years’ time. They’ll hate something else instead.

    I’m sure there will be some generalised bearishness coming along. Because whatever people say it isn’t all different now. The markets were kind to me when I needed them to be, from when I first started charting a way out of work since 2009, because the steaming bull market acting on my investments stiffened the spine and fought the decline until now, but the decline is there, and it is all down to that Micawber fellow – fundamentally the Ermine lived beyond his means in 2015, and we all know you shouldn’t do that. Of course there is much debate about how long the integration time should be before you decide you are living dangerously. But when the annual lift of an ageing bull run is not enough to end the year better off than at the start then it’s safe to say the red lamp on the dashboard has at least come on.

    I can be chilled about the beginning of the end because although it’s taken me six months to get absolutely nowhere with the enterprise, next tax year I can start the engines of a new income stream – first my DC savings to burn up and cast off before my main DB pension, taken at its normal retirement age in five years time. Neither of these depend on the stock market. Of course at the moment these are latent energy – you never really know that the engine opposing the pull towards the earth will fire up until you hear the whump and feel the fall begin to arrest. The way Hargreaves Lansdown and The Firm are dragging it out doesn’t give me a great feeling this will be an instant start, although I only want it to begin next tax year. Whether they will get their act together in three months is unknown. Certainly the takeaway is if you want to move AVCs to a SIPP, start at least 12 months ahead of when you want it to happen!

    It’s harder to get a multistage journey to becoming a pensioner right, because it would be perfectly possible to run out of money in one part of the journey though overall you’d be good. My exile from the middle class was twice as long as it needed to be because until Osborne introduced a way for me to turn it into a three-stage plan, burning up my DC cash in front of my main pension drawn at NRA, it was a two stage plan, and the first stage would be cresting now. I would have had to switch my ISA into decumulation mode or drawn the pension early, thus losing some of it.

    This dilemma will hold in some form for all early retirees, where early is defined as retiring before the age they can draw pension savings. They will have to balance ISA capital against pension capital. I have been lucky that I did not need to decumulate my ISA – I have never drawn a penny from it.

    But while I know that I have reserves before I have to consider the dreaded Work word again, the feeling in the stomach as I watch the aggregate of working cash plus stock crest and the long slow fall has begun is not easy. I can know a thing but not feel it 😉

    The symbolism of the turning point

    So much written about personal finance is about the how of the finance, but it is also about the why, In this quiet period, I have also had time to think, and perhaps to hark back to the philosophy of M Scott Peck in The Road not Travelled. Although incidental to his main topic, he introduced the concept that living life well inevitably involves coming to terms with loss. We must surrender old forms in order to embrace the opportunities of change. I left the middle class and their consumer ways in 2009 because I had to. It turned out in principle I could earn enough capital to cross the gap from 52 to 55, and as the networth chart shows, this was the case. I had a lot of luck, it sure didn’t look like it was going to pan out that way at the start. Equities looked shot to bits in 2009, and there’s another dog that hasn’t barked yet, which is high levels of inflation. That absence let me stay in so much cash for so long and not be slaughtered. Unlike many, I am happy enough with cash if I find most of it still there when I come back for it. Turning an income on it is a bonus, not an assumed right. I am familiar with the difference between saving and investing, and don’t expect a return on savings. When I have a steady income again, I will run some of that cash down into the ISA.

    I made it to the other side. I can entertain restoring some of  those consumer ways, but just like with TV, the seven lean years showed me a truth I hadn’t known, which is that much of the consumption consumed but delivered no value to me. That sort of consumption needs to remain junked. I saw a lot of new forms of it yesterday – zombies watching tiny screens blinking against the sun trying to stay in another world, while their bored kids and hounds yelled and yapped to try and gain some attention from the virtual world into the real world.

    Another turning point – consumerism doesn’t always mean handing over money. There are new forms of consumption now, it can also mean handing over headspace.

    Consumption is changing as a result of the smartphone – indeed the smartphone itself is in a class of its own as a consumer product, changed every two years as the world changes.

    The smartphone itself is close to a universal product for humanity – the first 1 the tech industry has ever had. 

    the smartphone is the new sun – Benedict Evans

    The battle of advertising is not so much for money as also for attention. I confess that while I had observed the changes I have also been suckered by them too, until I read a couple of seminal pieces. Both are long-form, which is unusual in itself now. They read better in an armchair by the fire on a Kindle using something like Send To Reader (now that the useful part of it is free again 🙂 ) than in glowing letters on a laptop with the screen set the wrong way for reading, or on a sucky smartphone display.

    The first one is 2015 is the year the old internet finally died, which is of course a clickbaity sort of title. I’ve never been good at writing decent headlines – pretty much each and every one of mine on here sucks. 2

    The article has the usual examples, the slightly off-the-wall thesis, but it also has truth and analysis, and it sold the concept to me. It also gelled with a few experiences I’ve had – I have been on the web in various forms since 1994, and webmaster and forum operator of a few online communities. Much of this fell away in the new millennium, initially with the rise of blogging, oddly enough, to which I came late 😉 Todd did me a big favour when he wrote

    The internet has made it clear that the kinds of things that people want to read are sort of an endless collection of what’s cool.

    because I realised what started to really piss me off about Facebook as a reader, to the extent that I don’t use it in any big way now other than to receive messages from a few people who only use that medium. I could live with the cat pictures. I can live with the listicles, because I have finally gotten it through my fat head that is a headlines starts with “The 5,10, 7, however many things you need to know about” then I don’t need to know. Ever. Either my general education is that much better than the sort of people/machines that generate listicles or I am just an arrogant sonofabitch and think this is the case. I have saved a lot of three-minute slices of life that I will never live again by getting that straight.

    Although I’d vented in Facebook becomes Evil, the rant was about the ways it was evil – the symptoms and the cause, but not the mechanism.  Todd’s sentence sums up the fundamental problem. And while it isn’t as bad in me as in many people, the evil lies within, and the search for novelty and distraction rings in resonance to the tinkling siren song from without.

    Todd hat-tipped a deeper article by Hossein Derakhshan, a dude who apparently has done time for what he’s blogged about in an earlier life. One of the things about consumerism is its insidious nature – we don’t often get an opportunity to step outside the stream for a while. As The Atlantic put it

    The Stream represents the triumph of reverse-chronology, where importance—above-the-foldness—is based exclusively on nowness.

    There are great reasons for why The Stream triumphed. In a world of infinite variety, it’s difficult to categorize or even find, especially before a thing has been linked. So time, newness, began to stand in for many other things. And now the Internet’s media landscape is like a never-ending store, where everything is free. No matter how hard you sprint for the horizon, it keeps receding. There is always something more. 

    And you know what? I was shit-for-brains and people had to spell it out for me, because this all happened slowly. Boiling of frogs and all that. The evidence lies all around us in the twisted wreckage of the erstwhile forums and communities that once existed, but are no longer, replaced by Facebook groups and the like of people beating their chests and going Look at Me. No community around a forum that I have been a part of has ever improved by moving to Facebook, because Facebook brings out the narcissist in us all by making all about us. It does so cleverly. After all, you may decide this blog is all about the narcissist in me, let’s face it the first person singular is everywhere, that’s what a blog is, FFS. But if I bore you then you stop reading. I won’t come after you and jam my prognostications in your face in a timeline of “New In –  Read This” In forums and on Usenet you used to be able to killfile/block people whose inanities sucked, and while you’d still see the background radiation of other people’s replies it worked okay. But Facebook is all about you, and each and every you, and it just seems to trash the level of discourse in any topic to become trivia and drivel. Maybe it’s the company I keep 😉 None of my ex-college pals are on Facebook, so the dumb finger of dumbness does sort of point at me. Why do I know so may people who only use Facebook messaging for communication – this is why I still have Facebook, though I use email to receive and send messages.

    I guess if you do time in a Tehran jail you get to step outside the Stream for a while, six years until the bird of luck sat on Derakshan’s shoulder and he was freed. Sparked up his laptop, brave fellow, and started to write, and posted to Facebook, and then went WTF – what is this black hole – because in the six years he had been out of the loop an army of social media companies had zombified the hyperlink – what Derakshan  called the currency of the web.

    But hyperlinks aren’t just the skeleton of the web: They are its eyes, a path to its soul. And a blind webpage, one without hyperlinks, can’t look or gaze at another webpage — and this has serious consequences for the dynamics of power on the web.

    More or less, all theorists have thought of gaze in relation to power, and mostly in a negative sense: the gazer strips the gazed and turns her into a powerless object, devoid of intelligence or agency. But in the world of webpages, gaze functions differently: It is more empowering. […]

    On the other hand, the most powerful web pages are those that have many eyes upon them. Just like celebrities who draw a kind of power from the millions of human eyes gazing at them any given time, web pages can capture and distribute their power through hyperlinks.

    But apps like Instagram are blind — or almost blind. Their gaze goes nowhere except inwards, reluctant to transfer any of their vast powers to others, leading them into quiet deaths. The consequence is that web pages outside social media are dying.

    Now I do appreciate the irony of perhaps being part of the problem, although at least I don’t knowingly force myself into the ticker-tape of the window to your world that is Facebook (or twitter or whatever your virtual poison is). I’m not berating you, anyway. I am berating myself, because 2015 was not just the year the old internet died, but a year where I read too much shit and failed to stop myself. Well, other than stopping Facebook, which was beginning to make me despair of the pedestrian nature of the human condition. We will know when Artificial Intelligence has finally prevailed if Facebook can ever understand the simple instruction

    Don’t ever show me another baby picture. While you’re at it, never show me a picture with a mutt in it. And go easy on the cats, particularly if there’s a caption.

    A half-decent butler could do that without breaking a sweat. WTF is this so hard for computers – after all they can thrash us at chess and people keep telling us how smart they are getting? Until there’s a great big button on Facebook NO MORE BABY PICTURES, GEDDIT! 3 we will know that AI is remains a technology in the still working on it class.

    Now it’s entirely possible that this post is simply the bitter and twisted rantings of a misanthropic git after too much post-Christmas cheer. The world has always had change – in former times agitprop, fanzines and underground knowledge were done by mimeographs and spirit duplicators, then we had economical photocopying, then somebody invented the word processor with the glacial and screaming progress of a dot-matrix printer, then somebody invented the laser printer, and in 1992 Berners Lee came up with a practical implementation of hypertext at the same time as modems got faster than the speed you can read, and we have been through all these changes but the nature of human storytelling hasn’t changed much since prehistory. The problem we are generating, however, is that we used to tell stories to, well, tell a story – the message trumped the medium.

    The medium and the message are becoming one, at the cost of the message

    The noise to signal ratio is rising, and Google is losing the fight. Actually Google may not be losing the fight from their POV but because I block ads I don’t see their success 😉

    The Internet has been awesome for all sorts of engineering. In the early part of my career every lab had to have a massive set of integrated circuit databooks that took up half a bench just so you could get to wire the darn things up the right way and know what they could and could not do. Now you just Google the part number and PDF and you’re all set. I have only ever formally learned two computer languages (both as a postgraduate) – Modula-2 and Pascal. Some I learned from books, but nearly all the internetty ones, Perl, PHP, C, C++, Java, Javascript, Visual Basic, c#, various forms of SQL were learned off the internet through search engines and other people’s websites. Sometimes these were confirmed in formal training afterwards.

    And yet this is now breaking down, because of the dramatic increase in misinformation. I feel this greatest in electronics – not only do patient folks have to try and do the class assignments of half of Asia’s EE students, where the questions are never couched in the form of “how do I go about this”.

    It getting increasingly hard to find authoritative secondary sources on things technical on the net, what with the ranks of eager but uneducated makers 4 I had a board which had a common maker chip, an Arduino chip on it along with a radio modem. I wanted to know an easy way to reset the blighter 5 It took a long time to become reasonably convinced that a safe way to do that is ground reset through a capacitor, and I ran into a wall of misinformation about whether the capacitor was necessary, optional or unnecessary. And that’s because the X Files tagline may well be right. The truth is out there. But the indexing function that lets you find it is beginning to fail, because the essential currency of the hyperlink is being subsumed into the currency of the ever flowing stream. As an example, there are links enough from here to Monevator, because in general he is a reliable source and explains stuff clearly. While he is generous with his links, I would imagine there are fewer the other way, which is entirely correct, because not only is he more reliable, he is more focused and more consistent. In that way Google can know the relative worth. At times I might post three times as many articles as Monevator, and the Stream will push them higher. But the Stream will not be right. Google will be, in general, once they have graded out the lowlife trying to game the system.

    The Stream did not wane.

    I have the advantage of two years of hindsight on The Atlantic, so I know they were wrong when they said.

    Because I think it might be why 2013 is seen as the year the stream started to wane.

    It became a torrential flood, because it matched the limitations of the smartphone web and fed a new wave of consumerism, vapid electronic gizmos like Fitbit that give people the feeling of control as they are tracked. Don’t get me wrong – I am not inherently against this, indeed one of the things I may do with my new found affluence is camp in some of the more attractive parts of the UK and yomp up some of the more modest hills and go track myself and others on the radio because I can and it is a slight challenge.

    But to be tracked everywhere, and heck to be in sold to everywhere? That’s nuts to me, though everyone else seems to think it a great thing. I like the interstitial times, though my perspective is atypical because pretty much all my travelling is elective rather than the commuter grind now.

    Ending a sabbatical from the middle class

    I am glad I came across this concept of the changes in the Internet in the dog days of 2015, where reflection and observation are easy. Yes, as a retiree I am not bound by the daily grind, but pace of the collective consciousness slows for a little while, it is easier to take on new ideas. In the months to come I will have largely solved the problem of personal finance, and my seven-year sabbatical from the middle class will draw to an end. I could, though don’t have to, rejoin the melee. Hopefully wiser, and less exposed to the temptations. But in a much fainter echo of Derakshan’s exile, I am like the Christians of his story.

    Seven years of exile is a long time – a tenth of my lifetime if it is typical, so the unwritten assumptions many people make I will not share because the continuum has been broken. I will also not share many of the values, and in some areas there will be what looks like asceticism, because I have seen that while everybody spends on some things they don’t deliver value for me. I may be in that world I will not be of it. Seven years of living differently changes a fellow. There are some things that people do easily and trivially without thinking that I would find it really hard to do. These range from watching TV to darkening the threshold of a high street chain coffee shop on my own. I made the exception for my mother, but on my own I would struggle to open my wallet at the till. Not because there wouldn’t be enough money in it, but because of the voice in the back of my head hollering “You don’t even like extra milky coffee FFS. Don’t spend money on shit that won’t deliver value for you, even if the sum is trivial”. I struggled to find anything fit to eat in Westfield, Stratford – because it was all overpriced junk, not because I had insufficient cash in my wallet.

    Even in everyday areas I am different, I still wash dirty crockery by hand, for instance, which is considered hair-shirt nowadays. In 2009 most people but not everyone I knew had dishwashers. My ex-second-line manager took a double-take that there were such primitive poverty-stricken heathens among his employees. David Cain from Raptitude who live a mindful and ascetic life considered it a rad experiment. This is a fellow who can live on powdered MREs otherwise known as Soylent, FFS. A young couple we know who go everywhere on push-bikes, don’t possess a car for ethical reasons and even use trains to go places in Britain needed a dishwasher enough to tolerate the plumbing as a major trip-hazard on the way to the bog. I like their style, and they got it secondhand for £25.

    There are many “essential” accoutrements for gracious affluent living that I just don’t have. I may adopt some of them again. I will get my hi-fi power amplifier repaired, because I have missed that, but not enough to rustle up the hundreds of pounds to get the shorted transformer fixed. At least the magic smoke didn’t escape through the speakers. I will experiment with some different ways of travel, though I will probably still eschew flying unless I can use flexibility to fill return legs on private charter. It is low-cost flying, or more the sort of flyers low cost flying attracts that I want to avoid, and while I could afford business class for the amount of flying I would do, it doesn’t get you far enough from some sorts of botheration. I will also investigate if this is a feature of British low-cost airlines and airports – when I used to travel extensively for business I observed the general standard of behaviour in other European airports was much better than in the UK. But air travel was much dearer than then it is now – a shorthaul flight cost about £400 in today’s terms. I would rather pay £400 each way and not have to share with some of the fellow-travellers on airlines now 😉

    I will return to no peer-group, no Joneses to keep up with. Slightly to my shame in my working life I did spend some money on things to keep up appearances where they weren’t things I particularly cared about. I will try to avoid that sort of thing.

    Like Derakshan I also return to a different electronic world. The one I left in 2009 was one which hadn’t been balkanised by platforms – you could reach most people by either phone/text or email. Now some people never do email, just Facebook messaging. Some only use whatsapp. Some are SMS mavens. Some use all sorts. I don’t really know what to do with this sort of patchwork. Perhaps I am being overtaken by change, and will always be a stranger in a strange land from now on.

    Sometimes I think maybe I’m becoming too strict as I age. Maybe this is all a natural evolution of a technology. But I can’t close my eyes to what’s happening: a loss of intellectual power and diversity.

    Derakshan

    We fought so hard to free ourselves from the chains of walled gardens like AOL in the 1990s, then 20 years later we embrace the social media walled garden and surrender the open web.

    Derakshan writes intelligently about the how and why of what is happening from both a technical standpoint and the softer political balance-of-power standpoint. I guess six years bird gives you time to think things through.

    In the past, the web was powerful and serious enough to land me in jail. Today it feels like little more than entertainment. So much that even Iran doesn’t take some – Instagram, for instance – serious enough to block.

    Derakshan

    While he may feel the decline and fall harder – after all it was a big part of his life and the world is full of actors mourning the closing of the final curtain, he has a point – we are drifting towards the bread and circuses end of the spectrum.

    The Stream is a hazard to me, because I don’t understand it, didn’t grow up with it, it is rammed to the gills with advertising payload and manipulative shit to get me to spend money on worthless shit, to create FOMO in me. How do I take on this new world of the Stream? At the moment, having recognised the problem, I am mindful to not take it on at all. It looks one-sided to me – a mechanism to pump more and more incentives to spend on ephemeral consumption, and also to find more and more about how I work. Ad-block plus (and some other plugin) blocks ads on social media – it was a genuine surprise to me when I saw how ad-infested Facebook was. But with apps there is nowhere to hide from ads, though I may be able to block the sources with an access control list on the wifi at home. My motives are increasingly at variance with the values of the Stream.

    I write this blog because I find the discourse with and among commenters interesting and it is good to play with ideas with interesting people. I do have ads, but I would hope you are bright enough to use ad-block plus if you find it bothersome. I don’t get hung up on reach or clicks or whatever – interesting discourse is what I get out of it. I don’t know how people find this – I presume by the old currency of the hyperlink. Hopefully I am of some service to you as readers by occasionally making you think, or laugh, or come across something different. It all sounds so terribly old-fashioned compared to the Stream. I don’t have any social media buttons on here. One of the reasons is because it once got me canned for being a CPU resource hog, but when that was resolved I asked myself what’s the point? I am not a social media maven, I don’t give a toss, and I can afford not to give a toss. If the world gets bored with me then so be it, I will have ceased to add value, time to move on.

    Some things I can do in 2016:

    I can try and live intentionally when it comes to getting and consuming information. I have reached an uneasy truce with facebook (messaging only). I have mastered the termination of the listicle, and I was never that drawn to video or podcasts as information sources because they are linear and the data rate is execrably slow. I want to read and see diagrams to learn how something works, don’t tell me or show me. The world is, however, drifting much more to a video presentation form of that. There is only one thing in the world I have come across that needed video to educate me, and that was the studio over-under method of coiling cables so they don’t end up a tangled mess next time

    Everything else is writing done with the wrong medium IMO 😉

    I need to work the heck out what the Stream is advertising to me and reduce my exposure, because I am pretty damn sure I am not interested. At the moment ad-block plus blocks a lot of this crap, but there is an arms race beginning between the admen and the blocking. At the moment if a site does say we won’t play unless you turn your ad blocker off I simply go “f*ck you” and am off. I’m not playing that game.

    I don’t pay for what I can’t touch.

    I am, of course, part of the trouble. The Internet taught me a simple maxim, which I have applied when it comes to information. Don’t pay for something you can’t touch. I don’t buy ebooks, I don’t buy virtual digital media. When I look at my CDs I see I used to buy a lot of media, particularly books and CDs. I used to buy the paper every so often, I never pay for the electronic version. So while I have bitched at length about how vapid the ephemeral Web is now, I was part of the execution squad, and now I look at the mess and wonder if I really got what I wanted. I got the price down, but I seem to have destroyed the value. At least I can say it wasn’t just me, I wasn’t there most of the time and I certainly wasn’t the only one.

    Maybe I should favour print again – I include Kindle books in that and library ebooks. I read a few books over the last couple of weeks, shite fiction, but at least there was the beginning, the narrative and the end. It’s now much easier to borrow ebooks from the library. Once I have repaired the amplifier, then perhaps I will buy music again – secondhand CDs  are ridiculously cheap nowadays, and I can download a oddball selection of material as mp3s from the library.

    The not paying for what I can’t touch rule saves me from a lot of consumerism. A lot is presented in terms of subscriptions, which I absolutely do not touch at all, with a single exception for the RSPB, so that’s a whole class of consumer fail eliminated. Netflix, Sky TV, Spotify, mobile phone subscriptions, the TV licence.

    So I really don’t know what I will do on returning to the disposable income of the middle class. Perhaps the wilderness changed me, and I can never go back. Maybe that is my message for fellow FI seekers. The road is long, and narrow with a bottomless chasm on either side. Once you have spent time in a place like that, you will never be the same when it meets the wide road of consumerism and dissipation again, because you were forced on your own resources and to ask yourself ‘what do you stand for, where are you going, whom do you serve, who do you trust and what do you want’. The soft blandishments of unthinking consumerism just don’t appeal after you have sought the answer to some of those.

    But enough of that negativity – what will I be prepared to pay for? Well, decent restaurant meals, though not too often due to hedonic adaptation, perhaps better red wine and eternal security from the ravages of homebrew in all its forms. Decent tools, things I can make stuff with. Replacement walking boots. Parts to experiment with. Time in the outdoors in places interesting creatures may occupy. Sojourns at Congham Hall. Slow travel. Maybe bike rides and tea rooms – chain coffee sucks but afternoon tea in a non-chain is okay. I can get my bike in my camper van – I am not as hard as Mr Z’s 200 miles a month 😉

    While some of it is middle class consumerism, I will get better value, because I took that narrow road. I learned that I didn’t miss chain coffee shops, movies, and loads of frippery. That can stay put.

    And above all, I’m not going to move an inch until H&L has sorted their crap out. I want to feel the rumble of that second stage finance booster up and running before I open any of this consumerism out. Because nobody, but nobody, got anywhere good in personal  finance ignoring that Micawber fellow.

    Notes:

    1. Funny, I thought it was fire, but what the hell.
    2. The art of writing a headline is the art of an editor, and because I am not a professional writer inasmuch as while I have earned thousands of pounds writing I have never lived off it exclusively. It’s particularly bad with blogging I have to make the headline first; the post too easily ends up drifting into something different. I did try reading a few articles on how to get better at this, but either I inherently have no talent for it or I just can’t get enough distance from the post in a day or so.
    3. I don’t have anything against babies, I was one myself I hear. But in a true wonder of evolutionary development while they are stupendously fascinating to anybody genetically related to them, they get a bit samey in a Facebook feed after a while particularly if you don’t even know the happy parents. What is said/can be said about a baby is very limited in scope, and the supply of  piss-poor smartphone baby pictures is fecund. Whole Facebook galleries of them, sitting in server farms in the frozen wastes of the North with trucks backing up changing out the RAID hard disks that fail under the load of keeping this ready for when the world runs dangerously low on baby pictures. Thank God we invented digital photography when we did, because we would be living in a world devoid of silver if this nascent demand had been addressed with film. As for bodily functions, the Bard probably took it as far as necessary in All the World’s a Stage with mewling and puking. It gets into TMI after that…
    4. I’m not saying ‘makers’ are dumb – the vast majority of them are sharp enough. The tragedy is that  they are too busy making stuff to write about it, although one who does write cogently and where you can never go wrong with is ladyada
    5. Every microprocessor since Intel’s 4004 in 1971 has a reset pin. Atmel tell you the reset is pin 1 in the ATmega328 datasheet. However, the Arduino has a bootloader so you can program it using itself. Sometimes things like that mean that you could bugger it up royally if you do something funky with the regular reset pin
    23 Dec 2015, 4:52pm
    living intentionally
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  • A midwinter mystery of the missing TV ads

    Midwinter is a good time to have a celebration of the impending rejuvenation of the Oak King at the winter solstice, in particular to have a party, a bonfire and afterwards to head off into town for a few more drinks, ‘cos it starts to get cold when the fire dies down and the sun’s gone down, and fire vodka/krupnik is not enough to fight that.

    our Winter Solstice bonfire

    our Winter Solstice bonfire

    So I get talking to a fellow customer at the bar who was after making small talk, and one of the things about small talk with strangers is that you have to find common experiences, and here I discovered one of the keys to early retirement has to be living differently. When the subject of TV came up I had to say I don’t know anything about that, because I don’t have a TV. Now this was interpreted as I don’t have a TV to avoid paying the TV Licence fee, i.e. that I stream online but in fact in my case I don’t have a TV because I don’t watch TV in any significant way – days and weeks will pass when I don’t watch TV, on the internet or catch-up or whatever.

    And this did not compute, indeed I must have been an odd conversational partner because when that second stalwart topic came up, what did I do the concept of being retired also was atypical, because he felt I looked too young to be out of the rat race. I did pass some time by observing I had worked for The Firm which he guessed right – there is an oddball look to the inmates of the erstwhile research facility in an otherwise normal town. I would hazard a guess he worked for The Firm but the drinks showed up at that stage so it was time to bid him a Merry Christmas and get back to the serious business in hand. I had linked the two however for him – one of the reasons I don’t watch TV is because I don’t want to see advertising. You quite effortlessly buy less consumer shit if you don’t see ads for it. If I want something to do a job  I will go out on Google and search for it, and will find plenty enough sellers and as much information as I could wish for. Until then I don’t give a toss what new stuff is out there for sale. And busting TV out of my life gets rid of a lot of ads. Respect your enemy. It’s why I use ad-blockers too on the web.

    Now I’m not so extreme as to say having no TV is cost-free – there is undoubtedly lots of good stuff on TV, and I don’t get to see that. But on the upside I get a lot of my time back, to think, to make stuff, to read, to kick out the odd post here. I’d say the way to retire early well is to be curious in all things, to make and fix rather than consume, and just generally get headspace. The two worst things about the way work became for me just before the end were the chronic stress and the general busyness it imposed, I was turning into a zombie for the lack of headspace to step back and ask myself where I wanted to go in life. I didn’t have time to watch TV when I was working and I still don’t have time to watch TV, because of the ads and because the good stuff to shite ratio is not good enough for me. Yes, I save £140 a year of the TV licence, but that isn’t a particularly big deal. And of course I don’t get to pay Sky TV £50 every month, which would be a big deal. For sure, there will be all sorts of things I don’t hear about that I might want to buy, but what I don’t know about doesn’t trouble me 😉

    But it’s clearly odd, and atypical enough to confound two common topics of conversation. I don’t mind looking odd, and indeed I think he was still mystified about what looked to him to be people too young to be retired being retired. Which kind of reminds me of the quote that to retire early you have to pass on the blandishments of consumerism and stand out like a celibate monk in a brothel. I was clearly not on the breadline and good for a decent round of drinks, but the jump from not watching TV ads making it easier to avoid spending money on crap just didn’t add up for him.

    But what the hell. I had a good time with my fellow solstice celebrants, and a fellow resident of the town saw a little bit of how to take a road not generally travelled.

     

    22 Dec 2015, 1:52pm
    debt economy personal finance
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  • Now is the winter of our future consumer selves

    The shortest day is one where attention turns to Winter, and the promise of an eventual Spring. I’m going to be contrarian and think about a nascent Winter – for the collective spendthrifts that seems to be the Great British Public, from hero to zero and beyond in six years:

    this ain't gonna end well

    this ain’t gonna end well

    I see the party out and about, particularly at this time of year. So does Barclaycard – apparently the lower oil price has done wonders for the restaurateurs of the country.

    apparently Barclaycard process half of credit card transactions in Britian, which I find hard to believe. Anyway, these are the changes in spending

    apparently Barclaycard process half of credit card transactions in Britian, which I find hard to believe. Anyway, these are the changes in spending

    The good thing is that the predicted rate of change in overspending is slowing. And of course everybody is feeling chipper. Bless their cotton socks, the opposition tried to make political capital out of this without doing what I am doing in this post and hollering out like Scrooge

    Britons – you are overspending way beyond your means. Cancel Christmas and Stop It Now

    After all Cameron got into no end of hot water when he said that a few years ago 😉 Learning from the flack he took, which is basically don’t you dare tell people to spend less, even if it is the very thing they need to do, what this came out like was

    Ms Malhotra added: “Of course families need access to credit and the ability to borrow to invest for the future.

    Families do not invest for the future. They live by YOLO.  Families overspend and firefight the mess as best they can later

    No. I’m sorry, but the general level of financial awareness in Britain is just not that high. Families in general have no understanding of the meaning of the word invest. The principles my parents outlined thirty years ago still hold. Don’t borrow to buy wasting assets. Only borrow if you will save more in total (housing – where you expect a relatively settled lifestyle) or earn more than the total cost (education, in some circumstances which are getting rarer). For all else pay cash, and if you haven’t got it you can’t afford it.

    There are very, very few good reasons to borrow money in Britain. Under some circumstances borrowing money to buy a house is one, although I am not so sure that now is one of those times. I borrowed too much money to buy a house. The damage to my personal finances is still visible after 30 years – the only reason I am in a better financial position than some of my peers is I managed to shut down some of the other ways British households misallocate capital by borrowing it.

    Let me tally a number of ways many families fail to invest –

    • in the immortal words of a good lady friend “they pick up financial commitments like pets and children without thinking through the financial consequences”
    • They borrow for university, an asset that is being rapidly devalued through oversupply and becoming an increasingly unaffordable luxury. Once upon a time (1990s to 2010) you could have made a case for investing in a degree. It’s tough  to make that case now.
    • They borrow to buy wasting assets like cars, for God’s sake. You can get a damned fine used car for £5k and a decent runner for less.
    • They borrow to buy shit they don’t need to impress people they don’t like and keep up with the Joneses
    • They overspend on Christmas because they lack the integrity to tell their children that times are harder now. The road back from that sort of inattention is much longer and harder than recognising straitened circumstances at the time and shutting elective spending down until you know where you are.

    There are other subtler ways that people malinvest, but borrowing to spend on wants rather than needs is never ‘investment’. The shortest day of the year seems a good time to recall that borrowing money is a great way to give your future self a hard time. There are going to be a good many consumers whose forthcoming financial Winter will hold no Spring.

    The problem is that very few people invest. And those people, which probably includes many regular readers, are people who are relatively wealthy compared to most Britons. You don’t usually get wealthy by investing, that is what Work is for if you spend less than you earn, but it is often the way you stay wealthy. There is a massive difference between investing and spending. Opportunities to invest are hard to find and come rarely, and usually involve some sort of uncertainty. Opportunities to spend are commonplace.

    Of course families need access to credit and the ability to borrow to invest for the future

    is a chimera. I’m of the opinion that Britain would be a much happier place if there were far less access to credit for British families – like the credit controls of the 1960s and 1970s. The excess of credit since then seems to have made the banks richer and the people poorer, because they are increasingly forced to overspend on housing precisely because of this credit. It is a classic tragedy of the commons – of course I want to borrow more mortgage to outcompete you. But like an ostensibly neutral country supplying arms to both sides, the banks have no specific loyalty to me, it’s when you can borrow more to fight back that this becomes a gun that fires on both ends – we both pay more for our houses and the banks get to lend more money out. What’s not to like? Well, the opportunity cost of what else we could have done with that money!

    Sooner or later we are going to have to nail this problem. Sometimes you shouldn’t be allowed to do what you want to do, and the litany of commonplace consumer cock-ups with credit is getting longer and longer. It’s no fun any more, and the promise of endless financial winter doesn’t sound so great either. We managed to shut down a lot of Money Shops. We managed to slow the number of Liar Loans on owner occupation. We are taking the battle to the tragedy of the commons otherwise known as BTL. There is hope. Perhaps we need to make it easier to repudiate consumer debt, then banks would be more circumspect about who they lend money to, since the old ways of having credit controls is considered dirigiste and fuddy-duddy in these laissez-faire times. What exactly is so terribly wrong about expecting people to have the money up front for their consumer wants?

    Since you, dear readers, are presumably not among these consumer spendthrifts, a happy Christmas to y’all!

    4 Dec 2015, 8:32pm
    personal finance reflections:
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  • The future of work looks like becoming a relentless rat race

    The Grauniad has some good articles on the future of work out today, and it looks like going to seven degrees of hell unless we can seriously reduce the number of people who want/need work. The latter is quite possible, but it is a social and political problem. I guess I can take some solace from being part of the solution, leaving the workforce eight years early. The issues were foreseen in the depths of the 1930s Depression by John Maynard Keynes with his piece on Economic Possibilities for our Grandchildren. Keynes extrapolated some of the trends from the beginning of the Industrial Revolution to the 1930s, and increasing productivity, and figured we’d all be working less. These trends are being amplified by automation and to a smaller extent globalisation. As one of their commenters observed about automation

    “Automation is fundamentally the substitution of capital for labour. The problem is that the people who already have the capital are the ones who will benefit most, because they’re the ones who will invest in the new automation.”

    That, fundamentally, is why some of you are pitching for FI as soon as you can get there. Because you want to be on the side of Capital…, you want to be on the winning side of the fight 😉

    Let’s take a look at some of the other issues

    Workplace Structures/Delayering

    If we ignore summer jobs as a kitchen porter, an Ermine travelled from Technician -> team technician -> (interruption of MSc) -> design Engineer -> research engineer -> international team leader -> strategic engineering consultant-> then some period of wilderness as coder, pseudo ‘intrapreneur’ 1 then running into the flack and financial crisis that made me want to get out-> engineering consultant on prestige project -> right outta there

    That’s roughly seven layers up the greasy pole, and it got harder as time got by, because of this delayering as well as the natural narrowing of the pyramid. I had to switch across four companies and three cities to get there. The Guardian tells me

    Rather than moving up in one direction, ambitious employees will be able to move sideways, tapping into new networks

    Am I the only cynical bastard who reads this and thinks, well that’s fine and dandy for the company, but WTF is in it for the ambitious employee? Sideways moves come with sideways pay. I heard a load of this bullshit at The Firm in the latter years where they were thinning out the management structure, the aim of one prize prick was only six levels ‘twixt the lowliest employee and the CEO. As a result we had line managers trying to manage over two hundred people at some point. Be that as it may, the ambitious employee does get to broaden their experience, true, and in places like London where you can find enough other places to work this may be showing up as a positive force because you take this and sell it to another firm for the pay rise you didn’t get in the sideways move. Look at the career progression the ONS shows for younger cohorts (I am roughly the middle track)

    career progression is much faster now

    career progression is much faster now

    It seems to indicate career progression is much faster now. So maybe it all works out all right in the end, although it doesn’t really square with Merryn Somerset-Webb’s commentary on the extent of the welfare state or indeed nearly five million households on working tax credits 2. If the ONS chart is really adjusted for inflation as it claims then all I can say is that inflation adjusted real money doesn’t seem to stretch anywhere near as far as it used to 😉 It’s the old saw –  luxuries are much cheaper now while essentials like housing and childcare have gone up like a bastard…

    Intrapreneurship? WTF?

    “Large organisations have a huge challenge in attracting the millennial generation to come and work for them. Those people expect much more entrepreneurial environments – more freedom to operate, less control,” says Philippe De Ridder, co-founder of the Board of Innovation, a consultancy firm

    Philippe, me old mucker, I don’t know what you’re smoking at the Board of Innovation but it must be good and I bet it isn’t legal. Out there in the real world some of those poor bastards from the millennial generation are working on London for bugger all, otherwise known as interning, because presumably these large organisations are struggling to attract talent so they have to pay….boom..tish….nothing? The Guardian offers internships here and some, though not all are even paid these days 😉

    Another piece of the interning pie is this sort of thinking:

    Van der Mersch argues that there are career development opportunities for cloud workers, with many startups using the site as a way of testing out freelancers to see if they’re a good cultural fit before offering them a permanent job – and vice versa.

    There’s already the interesting concept of a permanent job at a startup – over half of startups fail within the first five years making the permanence a moot point. I learned some things with that Web design stuff, in particular that people who want you to work for free will never pay you properly. True character will out…

    Not all of us want to be startup entrepreneurs

    There’s a much larger social perspective here, which is what do most of us want to do with our lives? Do we really want to give so much headspace to working, or do some of us want to  turn up, do a reasonable day’s work and then go home and do something with the rest of our lives, you know, all the way from having children to maybe doing something other than work? How the hell have we come to this ugly pass where earning a living takes up so much nervous energy and angst, in what is a rich First World country? Now some of it is due to globalisation and the fact that two thirds of the world (the Communist countries and what used to be known as the Third World) were largely outside the capitalist system, and now this has changed the water is finding its own level. Living standards in the First World will have to fall until they meet rising living standards elsewhere. That’s not enough, IMO, to explain all of what’s happening to labour. Some of the problem is increased mobility and communications. A hundred years ago if you were the carpenter in your town you didn’t have to be the best for 200 miles around, just the best for 20 miles around and you’d have a lifetime of work. Whereas now if you want to grok code for Google, you’d best be among the upper reaches of the bell curve compared with people in a radius of five thousand miles. There are no middle-level regional search engines.

    The gig economy is all right for some and not for others

    I’m with Lucy Kellaway on this FT article – one of the biggest issues about freelancing is that a lot of it isn’t about the work, it’s about getting the work.

    You are forced to become a one-woman sales team, endlessly having to flog yourself — which means networking and being nice to people you don’t like much. You also have to do all your own tiresome admin and then, when your computer crashes, you have to be your own IT help desk, too.

    FWIW I have some experience of running a separate company, I ran a modestly successful web design operation on the side for a few years. But what I above all else hated about the job was selling and finding new business, and in the end I wound it up when a large customer moved their work in house. Some of us just don’t want this endless fight. Being a startup entrepreneur is a fantastic story and it’s great for some people – but I’d put that number of people at a lot less than half of us.

    For a contrary view on the precariat Money Week tells us that yer average self-employed geezer is on £50k p.a. It’s a classic example of lies, damned lies and statistics, since this assertion comes from Boox who presumably have the same supplier of marching powder as Philippe, since they are making this rosy conclusion on a sample of 1000 of the self-employed and when you ask the ONS then you find that the median income from self-employment has declined to £207 p.w or £10764 p.a. Nice creative use of sample bias, Boox. Presumably the self-employed army of Avon and Betterware and Kleeneze reps who infest my letterbox with their worthless tracts to get enough self-employment income to claim tax credits rather than be mentally tortured for being unemployed under the DWP sanctions system don’t need Boox accounting services 😉 Roll on the universal income if only so that I will be able to find the odd real letter among the blizzard of multilevel marketing material one day.

    This is what many Britons mean by self-employment. You can easily get your 16 hours a week hawking crap like this. £50,000 p.a.? I guess it's possible in theory, unlikely in practice

    Avon catalogue I think. I don’t read dross like this though I could wish people didn’t get uptight if I throw it away. This is what many Britons mean by self-employment. You can easily get your 16 hours a week hawking crap like this. £50,000 p.a? I guess it’s possible in theory, unlikely in practice

    That’s the trouble with working from home opportunities. If you need someone to design the business for you, you’re always going to be on the bottom rung at best. Part of the reason is encapsulated in the Google strapline for that link

    Working from home is a great option if you want to spend more time with your children. 

    Trying to process self-employed statistics is always going to be the devil’s own job because of the wider range of forms of self-employment. Presumably the Government will move an Ermine from the ranks of the economically inactive – a slightly offensive term for a beast with investment income of a significant part of the NMW, to the ranks of the self-employed though I will still be virtually catatonic in terms of hours a week worked. The only information HMRC collect is the total earned in the tax year – it’s irrelevant if I earned that in five minutes of frenzy or 220 days of getting  a pittance for twelve-hour days.

    History is written by the winners

    Part of the trouble is the narrative is being written by the winners in this fight. From Robin Chase, co-founder of Zipcar

    She says: “My father had one job in his lifetime, I will have six jobs in my lifetime, and my children will have six jobs at the same time.” Does she think that is that a positive thing? “Well,” she says, “it seems strange to me that we would always recommend to companies that their revenue streams are diverse, yet for individuals, the smallest and most fragile economic unit, we say: you must only do one thing all your life. What a crazy way to live; 87% of people in full-time employment are not passionate about what they do. When I look at this new way of work, I think of it as opt-in. It gives people economic agency, it puts them in charge. And it gives them flexibility. People love those things.”

    Well, she would say it’s all great – because it’s great for her. There’s something to be said for diversification in income streams, and for those with the temperament, go for it. I can say from personal experience working a job and a bit is a lot harder than working one…

    The narrative sounds great from Robin’s lips. Maybe not so great from the huddled masses working minimum wage jobs on zero hours contracts. Now we should ask ourselves why we encourage many people into higher cost lifestyles such as having more children than can be paid for with the wages their talents can command , and then mentally torture them using the DWP sanctions system when they fail to find the jobs that aren’t there for their abilities/time commitments. The Quiet Man IDS thinks this is a failure of process and 14 day warnings are the answer. There’s something to be said for George Osborne’s more direct approach of limiting benefits to families with up to two children; it may be unpopular but it is at least honestly straight between the eyes and aims to fight the fire before it starts. Either way these are not concerns for the likes of Robin – after all people have agency, they’re in charge and have flexibility, so that’s all right then. Me, I’d want to be on the side of Capital in this fight rather than Labour. The battle between the Irresistible Force and the Immovable Object ain’t gonna be pretty.

    Work is increasingly always-on in a random way

    The 1990s dream of being able to work at home with phones and remote access and what-have you happened – in a big way, from the Blackberry email appliance to the smartphone. But it was a gun that fired on both ends, it seems, because it corrupted the meaning of the working day too. Once again, that’s great for the startup, and the entrepreneur – that technology lets you look a lot bigger than you really are. It also facilitates the zero-hours contract and a pernicious leakage of work into time that once upon a time was clearly off the clock.

    There’s a secondary problem in that a lot of work nowadays is terribly hard to qualify whether it is done well, and many of the political issues that ERE described in his post about careerism start to raise their ugly heads.

    The difficulty of qualifying a job then runs up with bullshit metrics that focus on process rather than intent. This delightful piece of management theory gives us DWP setting targets for the number of the unemployed sanctioned, because presumably some pipsqueak has prior knowledge handed down on tablets of stone that x% of claimants are taking the piss. I’ve no doubt that many well be, but nevertheless the point of the DWP isn’t to turn down the claims of x% of applicants, it is to evaluate the claims and pay up if they meet requirements. If we are spending too much on unemployment benefit than that is the job of Parliament to fix – by paying less, by paying under fewer circumstances or whatever. The setting of job performance targets to process statistics by incompetent gits who don’t understand statistics, the inherent variability on small sample sizes and who are fetishisers of tickboxery is making a lot of jobs needlessly crap with a misery of micromanaged metrics.

    Perhaps what you measure is what you get. More likely, what you measure is all you get. What you don’t (or can’t) measure is lost.

    H Thomas Johnson, Lean Dilemma, 2006

    That’s all very well, but in the case of the DWP as so often the managers set the targets on an internal marker. Even the Harvard Business Review concedes the problem as applied to CEOs

    Human beings adjust behavior based on the metrics they’re held against. Anything you measure will impel a person to optimize his score on that metric. What you measure is what you’ll get. Period.

    We pay the blighters more and get less for it. As the guy said

    if we measure just what’s easy, we’ll maximize just what’s easy.

    The Ermine is introverted, it was already picked up at school that I was not a team player – I never have been, and never want to be. I believe that the finest engineering work is had in a duel with the laws of physics and the constraint of engineering without the incessant background flapping of lips, although like all things balance is needed, I won’t go as far as to say every man is an island. And I was able to work with and lead teams, but it probably is true to say I did my best work alone or with fewer than two other people. Success was identifiable in innovation, in faint signals pulled out of the noise and the success of projects and their teams.

    It’s absolutely at right-angles to the current correct business thinking, which is all about the hive-mind and networking and collaboration – the group is the hero and individual talent and expertise is zero. The hive-mind is normative, it stamps out dissent and difference. Not in the old way of prejudice and stereotyped -isms, but in new ways. As Lucy Kellway observed, this conformity takes new forms – people in the new East London cavernous creative spaces have no space for the ugly. What really worried me, however, was that when she was making a radio programme, even the sound engineers were pretty boys. Engineers aren’t meant to be pretty. When I worked for the BBC, this wasn’t the case, you could immediately tell Production from Studio Engineering in the Television Centre bar – as soon as you got in the door and looked round 😉

    I’m glad to be out of it

    To some extent as you get older you get less adaptable, and while I can use some of these methods I don’t want to live life that way, and I am lucky enough to have the choice. In one of the other good articles on this topic in the Graun Jeremy Rifkin (author of The End Of Work) opines

    A lot of the change, he suggests, has to do with a transformed idea of freedom. When the older generation thinks of freedom it imagines it as autonomy, self-sufficiency, personal choice. “Freedom is exclusivity.” When the younger generation thinks of freedom, he suggests, it is no longer about exclusivity, it is about inclusivity. “For them the more networks they are in, the more social capital they establish, the more free they feel,” he says. “It is about expanding the network. This is the sharing economy.”

    Partly, though, I say, isn’t it also that grim economic necessity has become the mother of all that invention, all those millions of apps? The fact is that in developed countries, that generational gap about ideas of freedom is also a glaring generational inequality in assets and opportunities.

    Rifkin likens the gig economy to the establishment of common land in feudal times. “This sharing economy is reestablishing the commons,” he says, “in a hi-tech landscape. Commons came about when people formed communities by taking the meagre resources they had and sharing then to create more value. The method of regulation of these systems is also comparable,” he suggests. “If people are trusted and vouched for they are accepted as part of the sharing economy group. If they behave badly they are excluded. Your social capital means everything in this new economy.”

    I read that a couple of times, and I still can’t work out whether it is the most arrant load of claptrap or there is a kernel of truth and I’m just on the wrong side of the divide. I recognise some of what he says about the sharing economy. I also recognise squarely that my view of freedom is exclusivity – the freedom to choose what I do with my time, and largely with my resources. I don’t understand the part about networks, but then I am not a cloud person, and I always ask who gains from munging my data ‘for free’. And yet I see the symptoms of this networked utopia at least – in every railway station the soft glow of smartphones reflecting off other people’s eyes. People used to think you were a nutter if you talked to yourself in the street, and I still have the urge to cross the road when I hear someone talking to nobody in particular before realising that they are on the phone yelling out details of their love life or business transactions to all and sundry.

    Perhaps what looks to me like a dreadful, overweening and controlling aspect of work for employees, or a revoltingly competitive bear-pit favouring the loudest wide boys selling their wares on the freelance/entrepreneur side is simply a new generation defining new ways of being human. If it’s the latter, then it should all come out in the wash and good luck to them, I will try and stay on the side of Capital and sit back and enjoy the ride. I do wish that people would seem to be happier with the result, however. It looks like hell on earth to me, but maybe I just don’t understand the digital commons. I confess that one of the first thoughts I had when I read Paul Mason’s stuff about the end of capitalism and the sharing economy was ‘yes, but what will people eat and where will they live’ which a fellow reader took up with greater vim.

    man-with-savingsA lot of the things that are offensive about the way work is going cease to be offensive once you are financially independent. What is going wrong is the power balance between capital and labour. If you don’t need the money then the power balance swings back, you can afford brinkmanship or indeed to walk away. As my favourite 1950s ad says, the financially independent can walk tall, because they can walk away. However, it does take over 10 years of decent and continuous earnings at a pretty high level become financially independent, or several decades of still a decent level for the rest of us. It’s the dirty little secret of the retire early scene – you need to earn well to get to retire early, as well as not screwin up. Most of the narrative out there is about not screwing up, which is necessary, but not sufficient nowadays.

    If you are entrepreneurial you can do that well in the gig economy, because more of the fruits of your labour accrue to you – as the old saw goes you never get rich working for someone else. It is presumably the successes who are skewing those ONS figures up for cohort earnings for those aged 21 in 1995, but at the same time the ONS figures show the reality of self employment is an average wage of less than the National Minimum Wage. If you work in finance or IT you can do it in less time too, indeed you will need to do it, because if you work in an office where fewer than a third of your colleagues have grey streaks in their hair 3 then statistically you want to be FI or have alternative employment planned by the time you are twenty years from State Retirement age.

    Perhaps all the non-entrepreneurs will be kept as pets by the entrepreneur winners, via universal income so they don’t all gang up against them, while the go-getters charge around like flash Harrys with bigger and bigger yachts. Else there could be trouble in Paradise.

    Notes:

    1. thank you, Guardian, for that piece of jargon/insight
    2. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/423621/ChildandWorkingTaxCreditsStatistics-April_2015.pdf
    3. based on a working life from 21 to 67, and assuming their hair goes grey around 50)
     
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