7 Jul 2015, 7:06pm
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  • How do you recognise product quality online?

    Buy cheap, buy twice – I keep on doing this to myself, and really need to learn :) The trouble is that it’s hard to avoid – modern consumerism deliberately tries to strip out any markers of quality, leaving us chasing cheap, as Ellen Ruppel Shell highlighted a while ago.

    Three years ago I bought some RGB light strings from a fine Chinese emporium on ebay, which I used for parties outside. When new if I connected power to all RGB strands it would all light up white, but six lots of unrolling and restowing and it’s done for. Whereas the equally Chinese white LED tape I bought five years ago is still going strong. This stuff is made out of three LEDs at a time – the workmanship was so shoddy that half the sections had gone – I bought two 5m lengths and both have become faulty with ratty connections and missing segments.

    should really all be a nice even white colour

    should really all be a nice even white colour

    Perhaps using it outside was bad – although we think of dew as a morning phenomenon, in fact dew descends soon after the sun goes down, particularly in the summer. This surprised me when I observed it, but it is a consequence of the dew point, which falls with temperature. Derigging the equipment at summer parties after 1 a.m. the gear is often damp. Maybe this got into the supposedly waterproof tape and corroded the connections, though it was sold as waterproof :)

    Buy cheap, buy twice – it’s an online thing

    Ebay is a marvellous cornucopia of components and bits and pieces – whenever you want some part it’s always cheapest from there. Recently on a design I was making I wanted some TL494 power control ICs – I can pay 50p for these from CPC in 10-up prices or I can pay 13p a throw if I buy 10 from China on ebay for £1.29 – delivery free 1. If I rock up to Mr Texas Instruments and say I want to buy 1000 they will a) laugh me out the door – 500k is probably the minimum order, and b) cite me a budgetary unit price of 21US cents, probably F.O.B. Texas Instruments.

    A pukka Texas TL494, from when they used to make them in the low-cost manufacturing place du jour before the fall of the Berlin Wall and Tianamen Aquare

    A pukka Texas TL494, made by Texas in 1988 from when Portugal was the low-cost manufacturing place du jour before the fall of the Berlin Wall.

    Whereas the spotty youth in Shenzhen could manage to slightly beat the manufacturer’s price and stick ’em in a Jiffy bag to send over here. The canny buyer will, of course, ask himself some serious questions about the provenance of these parts, let’s just say that the Texas Instruments stamp on the cheaper parts may be a little bit fuzzy and this is probably not an ISO9001 traceable supply chain. You pays your money and you takes your choice.

    Shenzhen electronics store

    Shenzhen electronics store

    The way most sellers of onesy-twosy Ebay goods work from China is you put your order in, and over in China an enterprising young fellow will go down to one of the fabled electronics shops of Shenzen and buy the part and stick it in the post to you. Looks like it pays to be a local here to avoid getting ripped off, but ’twas ever thus. At Huaqiangbei you can nip up to the next floor and check out Women’s World or Carnival Clothing City if you are, ahem, “bargain hunters and brand name copy lovers“. Which explains why so many Chinese ebay sellers of electronics parts are equally at home selling me some LED strips 2 or a girl’s dress. This puzzled the inquisitive Ermine snout, and now I know why.

    Price is not a clear signal of quality in many markets, and it’s hard to gauge quality online

    Once upon a time people used to go into a store to buy things, and when you handle the goods the experienced buyer can often gauge quality – by the weight, the smooth running of moving parts, the quality of workmanship. We’ve lost many of these quality cues when we buy online, leaving us with the basest metric of all, price. Although price can be correlated with quality it doesn’t depend on it – marketing is a lot more sophisticated now, indeed websites can show different prices to different consumers for the same thing, depending on their history. One of the main advantages we got with the Internet is that it allows us to compare by price, so that’s what we do, driving everything down to the lowest common denominator.. Which is great with many things – but it drives us right down to the bottom end for a lot of products. Which is not always where we want to be.

    I don’t know where to go to buy a better RGB LED strip. I could go to these guys, and pay £8 a go. But let’s face it, they probably get their strips from China and mark ’em up – the product image looks exactly the same as my faulty item. For all I know there is one massive company in China turning these out. What I will probably end up doing is getting big 3W LEDs and screwing them to a aluminium rail – at least if I get failures it will be my own rotten workmanship and I will be able to fix it 3.

    In the grand scheme of things this isn’t a big deal, but the quality conundrum is observable in many things now – if you want something a little better than the bottom end quality you have no way of finding a reliable supplier even if you are prepared to pay more money. I can pay more, for sure, but as UTMT said, price is what you pay and value is what you get.

    more »

    Notes:

    1. the price matters here because someone is thinking of using this in a product; for a single unit 37p is neither here nor there.
    2. For the record I didn’t buy the defective LED strips from this seller
    3. I can’t use the obvious route of commercial lighting kit as that’s all 240VAC and I want to run 12V
    27 Jun 2015, 10:46am
    living intentionally personal finance
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  • Don’t be in thrall to Total Return

    Poor old Greybeard over at Monevator has stuck his head above the parapet again saying he will use actively managed investment trusts to smooth his retirement income and make it easier to manage. Meanwhile Insourcelife has paid down his mortgage in his late 30s, some ten years earlier in his life cycle than I paid down mine in my late forties. 1. Paying off a mortgage early is an opportunity costThe Accumulator sensibly decided to invest instead. Here are two people giving up some Total Return, OMG, that’s nuts!!!

    The world of personal finance seems to be moving towards an intellectual materialist rationalism that favours Total Return over all else 2. Now if you are a 20-something with 35 plus years before you can get a hold of your pension savings then yes, I agree TR is what it’s all about in those pension savings taken in isolation. If you are a retiree who wants to featherbed your adult children because you think the robots are coming to take way their middle class jobs then TR is important too, because although you can’t take it with you they will and a little bit of you will live on, enabling you to do the whole terror management theory thing of living beyond death. Beats having your head frozen, I guess.

    The trouble is that life is a balance, and often maximising one aspect above all else has undesirable consequences. Money is crystallised power, a claim upon future work. You can prioritise one aspect of it like total return, but then you will have to deal with being exposed to massive volatility. It’s easy to sit back at 30 and say I’m cool with that but you need to have gone through a couple of stock market crashes to know if you are cool with that really. Maximising TR means you should run towards that sort of fire :)

    The Ermine is not a Total-Return maximising rationalist

    I have done some dumb things in personal finance. I retired 8 years early – the gross money I would have earned in the remaining eight years probably roughly equals my total networth 3. Oh no – hundreds of thousands of pounds kissed goodbye to-  how crazy is that? Well, I don’t know – the world of work was driving me round the bend with it’s stupid metrics and micromanagement – I am ERE craftsman, not gamesman. The view is a hell of a lot better, too:

    giving up a six-figure sum to see this

    giving up a six-figure sum to see this

    or this

    or this

    instead of this

    instead of this – hell yeah.

    I paid my mortgage off early – even at the time I knew this was a teeny bit irrational, and took a whole year with it dropped down to to about £1000 4 mulling over whether I should pay it off. Then I did, and although every so often I observe that I take an income suckout between leaving work and getting hold of my pension savings, faced with the same I’d do it again, because at that time I wanted peace of mind that if I got iced from work I could lock down and make it through.

    There’s a time to maximise your total return, and that’s probably when you’re young, because you aren’t usually putting much in. But as you go through life, beware of black-and-white thinking. Sometimes you have to consider throwing some red meat to The System and giving up some total return, particularly after you have retired, because it is about the ride, not just the money. Otherwise we are in the danger of becoming that “man who knows the price of everything and the value of nothing” Oscar Wilde warned of in Lady Windermere’s Fan.

    I’ve given up a very decent six-figure sum, pasting my potential Total Return by about 50 to 25%. I  did it because it is more important to live to see another few decades with health intact, and sometimes you have to take chances in life. It is nearly three years since I left work, and would I do it again if I had my time over? Hell yeah – because the aim of the game is to maximise Total Life Experience, not total return. It’s a balance thing, not a single variable.

    For sure, I’m poorer for it in money, but I am richer for it in Life. Money is not the only thing you can run out of…

    The Escape Artist put it this way

    Why behave as if this one life we get is just a dress rehearsal?  If you are one of those people and you carry on working in your all consuming City or Corporate job, then you are wasting your life.

    If maximising total return is stressing you out in retirement as you see your capital eroded which is reminding you of the Grim Reaper’s call then give up some total return. Use investment trusts, have a plan to annuitise at some stage/stages, give up the fight slowly for an easier ride.

     

    Notes:

    1. Insourcelife is American so paying off a mortgage may be an easier ask as houses are less expensive relative to wages I believe, certainly from looking at US real estate windows on a business trip in 2007 where I could have easily bought a house cash, but impressively Insourcelife has done this with children which probably more than offsets the difference!
    2. I’m projecting some of my own prejudice here, but passive investing is still a belief system IMO. Any belief system has axioms, and I am uncomfortable with some of them, in particular the ‘valuations don’t matter’ one. My perspective is different, however – I don’t have 30 years of investing without extracting returns ahead of me like a young Boglehead starting out would have
    3. the opportunity cost is in fact a fair bit lower, I was a HR taxpayer and couldn’t have extracted anywhere near the gross amount because of limitations on pension contributions introduced since I retired.
    4. it was a flexible mortgage so I could have ramped it back up at will up to the original repayment track
    4 May 2015, 3:50pm
    living intentionally personal finance:
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  • The ethical investment conundrum

    As an example of living the FI principle, every so often people ask me “what is this investing thing you speak of – isn’t it all just a grand casino”. And I point ’em right over to that Monevator fellow who has done most of the hard work, specifically to the passive investing section. Although for a few pints I will talk the specifics of their situations I try and emphasise it’s all ideas and DYOR and all that – everybody is different ,in philosophy, temperament, risk tolerance and lifestyle. However, there are some things people often miss – a few people at The Firm were pointed at investigating AVCs and some others to consider a SIPP. Pointing people at passive investing is pretty much like buying IBM was in the old days – nobody gets fired for it, though it’s curiously passionless at times.

    And then every so often somebody comes along and throws you a curve-ball – in this case it is Mrs Ermine, who is looking at pension investing, and to date the general answer has been something like Vanguard Lifestrategy 100 – do so for 20 years and you’d expect to get about the amount you put in monthly back. This is because of the 5% SWR limit and ignoring compounding, as a rule of thumb it’ll do. This is part of her pension savings, Mrs Ermine is far more entrepreneurial that I am so some of the assumptions one makes for wage slaves don’t really apply.

    Unlike myself, Mrs Ermine thinks about the wider issues and comes to the conclusion that she wants to invest ethically. This is totally outside my ken. First thoughts are that it obviously reduces the action space somewhat and therefore will intuitively underperform. It also immediately debars you from index funds; you’re becoming an active investor if you decide that fossil fuels are a no-go area, f’rinstance, along with the whole Guardian thing. I know some other PF bloggers have given this some thought – Keeper of the Cauldron on fossil fuels and on wider ethical considerations here. The search for ethical solutions seems to take Cerridwen into racy territory – Abundance crowdfunding strikes me as having a risk profile way ahead of publicly quoted equities and terribly difficult for members of the public to qualify the risk balances.

    A last look at our unscarred friendly skies before flight resume

    A last look at our unscarred friendly skies in April 2010 before flight resume

    Now I have to admit that the cynical me doesn’t see a world of people deciding to leave fossil fuels in the ground unless something cheaper and hopefully less polluting comes along. I only have to see the 4x4s on the school run, listen to the increasing racket of jets in the sky and look at the concomitant scarring of our evenings with vapour trails and how quickly no third Heathrow runway at the start of the Coalition became a firm proposal for one to think that this is the wrong side of the bet, and that’s without the increasing power drain of IT since you’ll only prise smartphones from the cold, dead hands of the addicted consumers. I’d be surprised if this happens in my lifetime, and to be honest, if it does, I think all our investments are going to be written off in such a zero-growth or negative growth world. Capitalism needs growth like a vampire needs fresh virgin blood. It’s perfectly possible to postulate successful zero or low-growth economies, and indeed we seem to be going ex-growth as it is, but they don’t look like industrial consumerism, and they don’t have endless smartphones, city breaks and foreign holidays in them for most people.

    But this isn’t my fight. To invest ethically you have to decide either what is ethical, or conversely what isn’t. At the moment Mrs Ermine is in the latter camp – fossil fuels and industrial agriculture are what she wishes to avoid. It’s probably not exhaustive – indeed one of the issues of ethical anything is that it’s fundamentally difficult to be a blameless consumer if you chase anything to its logical conclusion. One should probably add CAFOs to the list, so Smithfield Foods probably fall into the beyond the pale category as well.

    An Ethical Investor is an Active Investor?

    To my eyes the two go together, although I’d like to hear different. By definition you’re selecting a subset of the investable universe. Now one option would be to be a stock picker, but that’s probably not how Mrs Ermine wants to spend her time, so it’s probably along the lines of this list of ethical funds. Now I don’t do funds unless they’re index funds and the history of non-index funds isn’t illustrious. I observe that Vanguard do offer a couple of socially responsible index screened funds in this list but again, what does that mean? Are there options for ethical investment trusts?

    The investment return is low enough as it is – that 4-5% real return hasn’t got much fat in it. To combine active investment and artificially reducing the investment universe seems to be a tough headwind to fly into. Even in the ITs – take Impax Environmental f’rinstance – over the last 5 years the improvement in NAV seems to have been buried in the -12% discount to NAV.

    The whole thing does my head in and I have no idea where one would start. The Ermine, with the libertarian social bias is not going to be an expert in this sort of thing but hopefully some readers have given this some thought. Am I missing any rich seams of knowledge or obvious goto places for ethical investment at low cost?

    28 Apr 2015, 2:03pm
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  • Caledonian Contemplations and an encounter with the Weasel of the Trees

    An Ermine has been touring Scotland for the last couple of weeks, seeking out wild places and fellow mustelids. It’s been a time of reflection and inqusitiveness – up in the wilds of the north it has been good to get away from the virtual and into the real. I did have a computer to transfer pictures and sounds but connectivity was ratty and very low speed – even the weather forecast was iffy at times. But I got to stay by the side of lovely lakes and see hawks circling over mountainsides.

    Loch Garten, Abernethy forest

    Loch Garten, Abernethy forest

    It surprised me how remote some parts of Scotland still are – I had somehow expected the tentacles of the mobile phone networks and suchlike to have penetrated far more than they did. Because of its open spaces Scotland shares an enlightened approach to wild camping with places like Scandinavia. Most of the interesting places and creatures are in the remoter unenclosed regions, though I am a slack bastard and use a camper van. Campsites often don’t work for me, because they cost more than I typically use in fuel in a day, they cluster around ‘attractions’ and they also often discourage movement between 7pm and 7am – some of the best light and interesting sounds are to be heard in that period.

    Shin falls

    Shin falls

     

    There seems to be an election going on and everyone is talking tactical details and nobody is talking strategy…

    It’s odd hearing the odd snippets after the weather forecast on the radio – with time to reflect it seems increasingly bizarre. The airwaves are full of micromanagement and pork-barrel politics. A lot of energy is being wasted on the micro and not enough focused on the macro. So here’s some of the big picture things an Ermine would like to see getting attention. Most of them seem to theme around a rapid loss of diversity in may ways of organising human affairs:

    Improved communications and lower cost of transportation is decreasing homogeneity and leading to concentrations of people and job opportunities. It’s not what we expected to happen – the idea of the freelancer able to access the world from a laptop in one of those wild places (or even a market town in the north of the country) was part of the early promise. Didn’t work out that way, so we have London with shitloads of jobs and sky-high prices of housing and other cost of living bits, and a lot of the rest of the country bombed out. Is this a problem, and if so is there anything that can be done to alleviate the human suffering?

    Along with the geographic inhomogeneity the improved communications are creating winner-takes-all effects in big parts of life. Internet services – for many people Facebook/twitter ≡ the Internet, and we are losing diversity in many network services not through standardisation but through de-facto sole suppliers and network effects.

    The distribution of money/resources is also becoming more unequal – capital is winning the fight against labour, a little because of globalisation but more largely automation seems to be developing apace. There’s nothing wrong with humans doing less work – it’s a trend that has been going on since the Industrial Revolution. But if fewer and fewer people are getting to keep the spoils of war then it seems a tough deal – what makes them so special apart from being in the right place at the right time.

    Why do we have this Calvinist fetishisation of work as being noble? It’s being used to spoil a lot of little people’s days, because They Must Work It is Good For Their Soul. I can see the problems of money for nothing, but benefit scroungers pale into insignificance compared to welfare for well-funded lobby groups. That seems to be an odd perversion of free market principles in industries like farming and banking. George Monbiot took the battle to the enemy in terms of farming subsidies of £3bn p.a.

    Why do we permit lobbyists at all? Why do we not debar any minister in an department connected with an industry from working in or having worked in that industry for two years either side of their term of office. I get the argument that it’s good to have domain knowledge, but I am reminded of Adam Smith’s observation

    People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices…. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.

    Never mind the assemblies, let’s keep these dudes out of assembling within the flippin’ government where they get to make the rules to featherbed their conspiracies… Caroline Spelman, she of ex GM lobbyists Cormack Spelman and associates was Environment Minister for a couple of years, obviously there was no conflict of interests.

    The game of tag ‘twixt Greeks and Germans is still going on

    I guess if you’ve been doing something for two years now then why change a winning formula, strange how little seems to have changed over a few weeks, still the same people calling each other names. Oh well. Despite this

    the markets are in serious nose-bleed territory

    UTMT observed this a while back and it’s still going on – indeed having come back I need to get in and sell my CGT limit of The Firm. But what to buy in it’s place. In general WTF is going on, everybody seems to be having a touch of the vapours, even the Russkies aren’t as much down shit street as they used to be. This ain’t real, guys. Has that ugly sucker Putin stopped being nasty to people? Surely not – the twisted wreckage of his psyche would take more than the collected shrinks of New York and California to iron out into something approaching normally convoluted grey matter. This really can’t carry on like this.

    Of legacy, and an odd glimpse of the bizarre inequity of children inheriting wealth…

     

    Loch an Eilein with its castle

    Loch an Eilein with its castle

    Forty years ago I came here as a teenager and took a similar picture of this lovely lake with its enigmatic island topped by a castle, though the teenage Ermine took that picture in the light of the noonday sun because that’s when we were there. It’s in the relict part of the ancient Caledonian forest, and part of the Rothiemurchus Estate. It so happens that the current head honcho, Johnnie Grant, happens to be a decent sort of egg, but I kinda took a double-take with this part of the guidemap.

    Shouldn't that be owned by us for generations, paid for my you?

    Shouldn’t that be owned for generations, paid for by you?

    There’s a teeny bit of sense of entitlement here, Johnnie. Now Britain does have an extensive history of aristocratic ownership of land, and indeed the aristocracy did do a lot to advance knowledge, particularly from the Enlightenment onwards. Charles Darwin was an aristocrat – like an Ermine after 30 years of work, Darwin could afford to pursue his own interests, but he didn’t need the 30 years of work. The British aristocracy were the main body of people who had the time to pursue non-pecuniary interests in those times.

    The conjunction of a lot of this with Britain holding a large empire did throw up some valuable additions to the body of knowledge – the Victorian expeditions around the Empire bringing back specimens are one of the reasons the Natural History Museum is one of the key plant archives of the world and there is such a vibrant gardening and plant-breeding tradition in the UK. Britain also has more veteran trees than typical for this part of Europe, partly because of that tradition. Just as well all this plant collecting came back to an established and fairly robust natural environment and not too many of the alien species caused trouble here, eh 😉 We could have done without Japanese knotweed and grey squirrels, but it didn’t turn out too terribly.

     

    the enigmatci catle on the lake

    the enigmatic castle on the lake

    However, in a different universe, Johnnie could be a hedonistic twat keen on yachts and fine living, in which case the stewardship of the estate could be a very different matter. One of the things that an Ermine occasionally gives thought to is that perhaps I may not run down all my capital – it depends on the kindness with which Fate graces the older Ermine, and to that effect I reflect on where I would want to aim the residue of my estate. One of the things that did concern me in some of the obvious diretcions is that I am not sure that having large tracts of Britain in the hands to the likes of the RSPB and the National Trust would necessarily be kind to future generations of Britons. These would not be my children because I am child-free but despite a common stereotype I do have compassion for the future population of this country, and concentration of ownership is one thing that seems universally bad in human affairs. Until I read Johnnie Grant’s little missive – which brought home to me that I’ve grown up in a Britain where huge parts of the land have been in the ownership of individual families for years – and to be honest I’d rather than conservation charities in charge of these now, because any one of Johnnie’s three kids could be a spendthrift wastrel. There is a lot wrong with charities – in particular how much of the money seems to walk out of the door in executive ‘cos we’re worth it‘ salaries, but there’s even more wrong with ancestral wealth.

    Even Johnnie agreed, when he sold a lot of forest to the Forestry Commission, although that’s not exactly a safe home either. Not only did that incompetent nincompoop Caroline Spelman try and flog this off to the highest bidder until it was halted by the outrage of half a million of the UK’s good men and true.

    a forestry comission landscape

    a forestry commission landscape

    As well as being sell-offable by newbies the Forestry Commission also gives us harsh and blasted moonscapes like this, with their homogeneous monocultures suitable for 25-year clear-felling, compared with the antiquity of some of that ancient Caledonian forest

    Abernethy forest

    Abernethy forest

    So all in all I feel better about the RSPB owning big chunks of the land than the laird. Mind you, the long arm of the aristocracy did make sure that embedded into the Constitution of the RSPB was the following, hamstringing the nascent society from taking a general view of the welfare of birds:

    The Society shall take no part in the question of the killing of game birds and legitimate sport of that character except when such practices have an impact on the Objects.

    Obviously game birds aren’t birds, ‘cos the toffs wanted to carry on blowing the suckers out of the sky when this was enacted in 1957 1. It was okay for the little ladies to set things up to prevent egrets being killed for their white feathers used in the millinery trade, when when it comes to the man’s business of massively breeding game birds and getting your serfs to beat the suckers in the air and shoot one of the many young birds driven into the sky to show what a hard man you are and how skilled a shot you are by aiming somewhere into the air then that’s a different matter and Must Not Be Touched. Thus the RSPB is officially neutral on shooting game birds.

    The aristocracy did historically do some good stuff, but they did also have it in them to treat people like shit. They came to the conclusion it was cheaper to raise sheep in the Highlands. There was one small problem – there were too many people on the land to make this work. One Sheep farmer, Patrick Sellar, delivered himself thusly

    “Lord and Lady Stafford were pleased humanely to order the new arrangement of this country. That the interior should be possessed by Cheviot shepherds, and the people brought down to the coast and placed in lots of less than three acres, sufficient for the maintenance of an industrious family, pinched enough to cause them to turn their attention to the fishing.

    A most benevolent action, to put these barbarous Highlanders into a position where they could better associate together, apply themselves to industry, educate their children, and advance in civilisation.”

    He hard a charming habit of roasting people alive in their houses if they wouldn’t move first. Which is why you see so many abandoned cottages in Sutherland. The time of ancestral wealth and using agricultural land a a store of dynastic capital  is for the chop in the modern world IMO. Indeed, the whole inheritance thang and the way people get het up about it is bizarre. For starters, if you truly love your children and have raised them right then you can give your entire estate to them free of tax – just do it while you are alive and survive seven years – stand by your principles. If you don’t trust the blighters not to turn you out of your ancestral pile when you go ga-ga then a) you should have dragged them up properly and b) why should future generations of Britons be subject the the boot of these ne’er-do-wells just because they were related to you. If you can’t trust them with power why should the rest of us have to deal with them empowered by capital they didn’t earn?

    The current threshold of IHT is also unreasonably and recent-historically high. The aristocracy held a stranglehold on land capital until the wars, when the reforming governments saw that the little people who had been slaughtered in their millions for King and Country did deserve a little bit more of this green and pleasant land than they used to have – for instance the plot of land their small hovels stood on. It still took time – in 1969 my parents bought a house in London. A house, mind you, a suburban semi, not a caravan on wheels, but they didn’t get to buy the land it stood on (freehold possession, in modern parlance). They had to buy it leasehold, because if there’s one thing that old money doesn’t do – it doesn’t sell off the capital, and so many of the houses built in the post war era were sold on long leases of 99 years. Ten years later they took up the opportunity to buy the freehold for about 5k in today’s money, presumably the estate that wanted to hold onto the land was skint due to paying IHT. Inheritance tax was an equitable way of breaking up these historical accumulations of wealth – in the end we all inherit the earth from previous generations and yield it to future ones. Of course what you accumulate through a working life should be inalienably yours 2, but if you believe that you have a problem with Taxes after you’ve succumbed to Death then you’ve not used your time on earth well to familiarise yourself with its ways… The dead really do pay no taxes. It’s your grasping children who will pay the taxes. Since it’s a windfall for them anyway, easy come easy go…

    If you own your house freehold you have IHT to thank for it prising the land rights out of the cold dead hands of the aristocracy gifted it by William the Conqueror 3. What goes around comes around  – what makes your progeny so damned entitled to free money so they can stamp all over their peer group who aren’t so fortunately endowed? If you want to give them your money, show ’em the love – do it when you’re alive and trust to the upstanding personal character you have instilled in them to look after you. You should at least share some of the risk with the rest of us if you want to disadvantage others and featherbed the fruit of your loins beyond the grave.

     An encounter with the Weasel of the Trees and other mustelids

    Not only did I see a fine male Stoat crossing the road on my travels, but thanks to Johnnie Grant’s tree-hugging tendencies I got to say hello to the Tree-Weasel of old – the noble pine marten, once persecuted by gamekeepers (a lot to answer for, these grouse estates!). I can’t claim talented fieldcraft and stalking skills here, I took the easy way out and paid Speyside Wildlife £25 to sit in their pine marten lodge and look for one taking the peanuts laid out for them

    Pine Marten

    Pine Marten

    The trouble with mammals is that many of them are nocturnal, and they have way better senses that we do. I could actually still see in colour to take this picture because they have low floodlighting. It was a tough picture, throwing everything I had – f5.6, ISO 1600 this was still a 1 sec exposure, which is why the picture is so bad. The marten could probably still see the hairs in her fur clearly. So you need edge to see nocturnal mammals, £25 in this case. With badgers thrown in too.

    1504_badge_IMG_3061_lznThe pine marten has an interesting  service to offer us, too. They have a penchant for eating squirrels, but in a curious twist of fate they are a friend of the smaller red squirrel. Pine martens chase squirrels into the trees and follow them along the branches, but the red squirrel can go further out on the branches that can support its lighter weight but not that of the marten. Not so the grey squirrel. As Monbiot describes, once the Irish stopped killing pine martens, the martens have been driving grey squirrels out of the west of Ireland – and now they have hemmed them in east of the Shannon river, and presumably as the martens build their ranks they will eventually drive the greys into the Irish Sea.

    The eternal sunshine of the spotless mind of Owen Paterson

    Owen Paterson, a Tory gent with a penchant for the politics of Enoch Powell, believes shooting greys will be effective. Even allowing for the fact that Owen seems to be a bit on the dim side with an antipathy for science unless it suits his ends (Climate change bad, well, simply non-existent in that spotless mind, culling and shooting good even if it doesn’t work and blame the bloody badgers for moving the goalposts) he’s clearly not been familiarised with r/K selection.

    1504_badger_owenYou have a decent chance of killing off a species that reproduces slowly but occupies its ecological niche at carrying capacity by culling. Pine martens, humans, African big game, yup, you could clear an area of these species that way. Grey squirrels breed twice a year so fall into a r-selection pattern- you need to carpet-bomb the place and then secure the perimeter to be sure of killing off enough of them that they don’t simply renew their ranks. Or set the pine martens on them 😉 The difference between the pine martens and the shooters is that the pine martens keep on coming, whereas the shooting stops when the Government sponsorship runs out, whereupon the skwerls repopulate the joint. Quickly – and you’re back to square one.

    Paterson is a odd fellow, aristocrat by marriage, a chap who when faced with the right answer to something and the wrong answer to it, unflinchingly chooses the wrong answer particularly if it benefits his rich countryside buddies.  For example, this Soviet-style special interest pleading:

    Andrew George (St Ives) (LD): It is, of course, right that public money should be spent on public goods. At a time of severe austerity, what public good is there in spending hundreds of thousands of pounds—indeed, £1 million cheques—on large landowners who do not need the money?

    Mr Paterson: I thank my hon. Friend for that question. The fact is that we are going from 7 billion to 9 billion people. There has been complacency in this country over recent years, because there was unlimited, safe and easily accessible food to be bought abroad. We want to make sure that we have an extremely efficient, high-tech agricultural sector producing food. I take food security extremely seriously and welcome large, efficient farmers.

    Dear Owen, you are so full of shit. Food security may be an issue one day, but the security bit comes to play when the global system is stressed, and in that case we want a resilient and lower-tech system that isn’t all interlinked with just-in-time connections. High-tech food production has massive sprawling inter-country supply chains as evidenced in the horse for beef scandal.

    Alternatively, if we want cheap food then here’s a radical idea. You know that thing called the free market? Howsabout it – get your damned Government pork out of our food system, stop picking bloody winners  like your aristocratic buddies in their huge estates leased out to contract farmers to whom you piss in huge amounts of the proletariat’s VAT taxpayer money as subsides. While proles claiming benefits are of course labelled lowlife scum, the rich storing their ancestral wealth while sucking loudly at the Government teat of ag subsidies is noble policy and an essential bulwark against Britain being starved out of the future, because of course the history of central planning in food production has such an illustrious history, eh?

    Let’s take a look and what this highly complex subsidised high-tech system has brought us in recent years. There’s the whole GM thing which seems to be forced upon us despite European customers being rich enough to say we don’t like the idea of that – a free market without Monsanto and Syngenta etc pulling the strings  would give us the choice in the same way as if you want something without nuts or organic you can go get that, clearly labelled.

    We have horse in our beef, we are all becoming fat bastards and now the WHO tells us that the magic Roundup which is what this whole GM stuff is designed to promote isn’t good for us either. Maybe the place for Government in this area is regulation and monitoring (like when it sez beef it is beef) rather than spraying taxpayer’s cash around to rich people and their buddies to maximise profits, minimise resilience and charge every UK household about £250 p.a. to keep them in the style they’re accustomed to.

    If GM really is more profitable without subsidy, then drop the objections to labelling the stuff as such, FFS, and let the market decide. In the battle between cheap and good, the evidence is overwhelmingly that the punters will go for the cheap.

     

    Notes:

    1. I have never, ever, seen grouse on sale to eat, which would at least be less wasteful of life. I don’t even know if you can eat grouse. The market value of pheasant is low, basically because too much is shot as sport for the demand as food, so a lot of this is wantonly buried
    2. subject to the usual rules of the land and taxation
    3. history buffs will gripe over running roughshod over the details
    12 Mar 2015, 3:03pm
    living intentionally:
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  • Congratulations to Patrick Pichette of Google, 52 (ret)

    The CFO of Google has achieved something that few high earners seem to do. In amongst all the Sturm und Drang of earning shitloads of money as CFO of Google, he heard the faintest sounds of the distant drum at 52, having climbed Kili. In itself that’s not particularly remarkable. What was remarkable, however, is that he took action. He switched the engine into neutral, and planned his glide path out.

    say cheese, guys

    say cheese, guys

    Now the cynical Ermine observes a massive helping of cheese in this pic. Hopefully that photo is a mock-up – it would really, really piss me off to pay all that money and go to all that trouble to find such a ghastly contraption bringing unauthentic consumerism with a Capital C to a natural place. Las Vegas is fine where it is 😉 But if it’s really there, well, it takes all sorts, eh.

    Be that as it may, and even if it’s a publicity stunt to promote the ailing Google Plus system, he’s outlined the fundamental problem. You’ve only got so much time in your life, and it’s running out 24 hours every day.

    His valedictory post has all the usual things the rich retiree wants to do – travel the world, blah blah blah blah. It’s great- each to their own. It reminds me of the things I thought I would do lots of once I had control of my own money and time. And indeed I may still do. All these things are projected outwards, but retiring well is also an inner journey. I am reminded of the words of the Swiss psychologist Carl Jung

    It seems to me that the basic facts of the psyche undergo a very marked alteration in the course of life, so much so that we could almost speak of a psychology of life’s morning and a psychology of its afternoon. As a rule, the life of a young person is characterized by  a general expansion and a striving towards concrete ends; and his neurosis seems mainly to rest on his hesitation or shrinking back from this necessity. But the life of an older person is characterized by a contraction of forces, by the affirmation of what has been achieved, and by the curtailment of further growth. His neurosis comes mainly from his clinging to a youthful attitude which is now out of season….

    Carl Jung, 1929 CW 16, para 75

    Translated into our times, in youth the ego is expands in strength and influence. Although the West has few rites of passage, the ego follows a well-signposted path, projecting and gradually gaining force and influence – job, career, relationships/marriage/kids. All this is promoted and is in the symbols all around us.

    We don’t have many symbols for success after the turning point – look at the ads around you, they are to hang on to youth, to beauty, most commercial symbols of ageing are negative. The ads assume we want to look like we are between 25 and 29.

    I lived some of Carl Jung’s neuroses in my 20s  – the young Ermine lived in a rented room in London, putting salt around the room to keep out the black slugs. I was in a decent job, 25, but I couldn’t buy a house and seemed stuck in all aspects of life other than work. I did finally sort my shit out and make changes. It wasn’t just me – the mid twenties seemed a really tough time for several of my peers too. Maybe it’s a London thing, or Imperial graduates. Maybe it’s birds of a feather sample bias. I have experienced worse lows in life since, but none as protracted. Bollocks to all the ads, I never, ever, want to be mentally again in the place I was in my mid to late 20s. For all the lows and the fortunately modest losses I have so far had since, the highs deepen and colour in with experience. That runs against the narrative of the Western Myth, and it is important to be prepared to surrender some of what was valuable in youth in order to deepen and grow. So far I have found Carl Jung’s map to be more true that that held up to me by the consumer society around me.

    I did not dodge the midlife crisis 1 – arguably the forces that pinged me out of The Firm were stronger because my inner values began to diverge more an more from the values of my younger life. In particular I found it harder and harder to suck it up to The Man’s stupid metrics and bullshit ways – little empires of small desperate people doing what their immediate higher-ups said despite it being often wrong (in engineering terms) or simply against common-sense, nature and experience. The misery of mendacious measurement and metrics enforcing mediocrity and digital Taylorism continues unabated, but at least it isn’t my problem any more. There are some who simply carried on turning the handle, and good luck to ’em. I wanted to determine how I spend my days. And while I probably have the edge on Patrick on some of the inner changes, he has lived more intentionally, choosing to throw the switches of his life in a controlled manner, unlike my uncontrolled derailment from the Work strand of life. So hat tip to Patrick – a great exposition in how to retire well.

    But a word in your shell-like Patrick, from someone else who retired at 52. Remember the question posited by Erich Fromm in To Have or To Be. What you do may matter less than what you become. Much heartache and angst waits for those who listen to the messages from their inner world with the coarse equipment that listened well to the messages from the outer world. We don’t help ourselves with that second half of life by trying to hold on to outdated forms. I liked this article on the adventure inward  – this passage speaks to me

    In youth the ego is expanding in strength and influence. Typically, it follows the well-posted paths of society, perhaps gathering accolades along the way. But at midlife the ego is challenged to become a servant of the larger personality and soul. This is why men often encounter a feminine guide–and women, a masculine guide–in their dreams towards midlife. These figures are manifestations, or symbols, of the soul 2. They invite and would guide us to an understanding of our deeper nature and a more personal spirituality. Thus, we could say that in youth the ego is educated mostly by family and society, at midlife and beyond, by the soul.

    One of the characteristics of the last two and a bit years is that I see that I made far too many simplifications in my model of the world and how it worked, they had served me okay in work and career. But they blinded me to faint signals from within, and also faint signals from the future too. I come to know much more how much I don’t know, and learning from others becomes easier to do but more daunting as I see the further mountains to climb in the search for wisdom.

    To take one example – writing this blog has helped me, both in the obvious way that articulating something makes it clearer and throws light on inconsistencies, but also I have learned from many of readers in the comments – sometimes I have been plain wrong, but all too often there are nuances I may have missed, things I’ve been unaware of and it is always good to refine my mental models closer to the territory.

    In this time I have perhaps focused on the inner journey. Maybe the time will come that I balance this outwards, though I’ll probably pass on Kilimanjaro, a quick google search still gives me the feeling of pumped up consumerism

    If you’ve ever wanted to do something truly amazing, something that’s as far removed from a lazy beach holiday as possible, then Mount Kilimanjaro is calling you! Join the great explorers and mountaineers in scaling Africa’s highest peak, hiking through lush rainforests, alpine deserts and glaciers that have been there forever. With our Kilimanjaro treks, you can take on a challenge and do something awesome in Africa.

    STA travel

    It seems a fave for mid-life crises – a fifty-something I know did it to make himself feel better after a divorce. Good luck to y’all, whatever floats your boat.

    For some reason I’ve focused on the inner journey in the first couple of years, but life has an ebb and flow. Maybe the time for travel and looking outwards is soon to come, to integrate some of the changed perspectives, to play across the strands of life. Patrick’s message is cheering, because it runs against the Calvinist Work is Good for you meme. Work is a means to an end, but it’s also good to know what enough looks like – when to consider a switch from having more to being more. Happy retirement!

    Notes:

    1. I don’t really understand Jung’s chronology he termed the years from c. age 56 to c. 83 the “afternoon of life,” using the analogy of the passage of the sun through the sky from morning to night. This kind of sits ill with the typical allotment of three-score years and ten.
    2. The translation of soul from German into English is hard. It has religious connotations in English which I don’t believe are in the German original
    27 Jan 2015, 5:34pm
    living intentionally personal finance:
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  • George Osborne may help me to live intentionally and spend more

    By his pension changes, that is. Sadly the exact mechanics wont be of much use to young’uns but for for some modestly old gits (45 plus) who have accrued a defined-benefit (DB) pension where you can buy  additional voluntary contributions (AVCs). Since there are a number of readers who work(ed) for The Firm that employed me for many years I’m throwing it out there.

    The philosophy of how difficult it is to qualify living off savings may be of more general interest. It’s heavy on pensions, which seem to be the Cinderella of the PF world, because most PF bloggers are younger than me and Monevator’s Greybeard seems to be off on a cruise. However, hopefully you’ll all get old enough to be interested in pensions one day, and if you can learn from my mortgage screw-up then so be it 😉

    Some pension and early retirement orientation

    One of the big challenges facing early retirees is how to fund the pre 55 early part of their early retirement. The part before 55 has to be something other than pensions because you can’t get hold of pensions before getting to 55. The goto place for this is ISA income and cash savings, though not paying your mortgage off early is a great way to have more cash savings in the pre-55 period, because you can use the pension commencement lump sum to save to pay off your mortgage from pre-tax income.

    don't automatically pay off your mortgage early if you are retiring before 55

    don’t automatically pay off your mortgage early if you are retiring before 55

    I didn’t get the mortgage wheeze right. In threading your way through the myriad paths to early retirement you are always going to get something or other wrong, that was my big mistake. I don’t have housing costs other than council tax and the 1% or so house purchase price depreciation fund, but having the borrowed capital to run down now would be useful. I could then use my AVC fund to pay off the mortgage tax-free at 60. Pretty much any time I go anywhere near anything to do with housing I screw it up royally. Why break the habit, eh?

    Because I drove my spending down to be able to quit early I have been able to string out my savings for twice the amount of time I anticipated. But it’s probably fair to say I haven’t lived large like like mistersquirrel and theFIREstarter 😉 I don’t have any complaints – freedom from The Man and being able to pursue my own interests is more than adequate compensation. For much of the first couple of years it was a process of recovery from the experience – and it’s respite that matters, not consumer goods and services. But I am also mindful that time is also ticking away, so if I could smooth my income I could do more in the near future rather than back-loading it. I’ve noticed the birds are starting to sing and maybe they call to me, get out there, travel more.

    I have no income – one of the primary navigational aids of personal finance spins and knows no North

    Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness.

    Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

    Wilkins Micawber

    I never understood how to manage finances without having a number I could allocate on the Annual Income side. Without a figure for income, I could never qualify the Micawber question. It has made me fearful and over-conservative in spending. This has worked out okay for me till now – it is how I got to this point and having the choice to take Osborne up on his alternative offer of getting my AVC out tax-free but earlier. If I had favoured spending I would have drawn my pension short by now.

    or, as da yoof sez, YOLO

    or, as da yoof sez, YOLO

    Some readers will wonder WTF? The income computation is easy. Take current age of Ermine, subtract from 60 which is how long it needs to last till a good alternative, then divide total amount of cash savings by years and you have the income level. Maybe knock off about a year’s savings to cover emergencies then run the calculation.

    Not so fast. If you have no income, you will find it the devil’s own job to borrow money which is a perfectly reasonable way of leveraging your emergency fund. A year’s worth of low-ish running costs as  savings is not enough to hedge some kinds of risks. Lucy Mangan charges us that If you don’t understand how people fall into poverty, you’re probably a sociopath  – probably correctly. I didn’t want that to happen to me, so I have used a much smaller percentage of my non-pension cash savings than that cash÷(60+1-current age) calculation would give. At least half of them are with those NS&I people so they aren’t being killed by inflation, unlike my cash ISA and cash balances. I really, really hate cash as an asset class, and never expect a return on it. At least inflation is surprisingly low given all the QE money that has been  pumped out – it seems to have gone in inflating the stock market and the housing market.

    The logical thing to to with a cash ISA these days is to switch the damn thing into S&S ISA but I can’t bring myself to do that, because of the fears of some of Lucy Mangan’s demons catching up with me, or needing to pay for an operation 1, or something like that. And as a result, the fearful me jams my spending. I err in the opposite way to mistersquirrel and theFIREstarter but error it still is.

    TEA calls this out well in The Pyramid and the Oxygen Mask – to wit

    If you are one of those people and you carry on working in your all consuming City or Corporate job, then you are wasting your life.

    This is more frequent than you might think. The most common motivation for this behaviour is fear  – fear of change, (irrational) fear of poverty, fear of loss of status, fear of their spouse’s reaction etc.  Its not enough just to make a life-changing amount of money, you still have to change your life.  Don’t just load the gun, pull the trigger.

    Apply own mask first…
    We owe it to ourselves and our families and friends to start by getting our own shit together.  Think about the airline safety briefing : always apply your own oxygen mask before helping others.  This initially sounds a bit counter-intuitive and even selfish to some people. 

    I have overcome most of that. I changed my life, and I qualified what Enough looked like to me. But I am still on his Level 2.

    These people understand the power of money and have mastered some of their emotional weaknesses re money. Paradoxically, they are seeking to get to a point (see level 1 below) where they think much less about money.

    I am not sure I can do that until Mr Micawber’s compass begins to respond and the questing needle shows which way is North. After a certain level personal finance is much more about the personal than it is about the finance. My fears of Lucy Mangan’s demons are part of the emotional weaknesses re money. Possibly I have some of the elements of her sociopath. I just didn’t want to depend on other people’s grace for dealing with the demons and so I spent less so I could buy my way out of certain kinds of misfortune. But I take TEA’s point. This is a question of balance and I haven’t got that right. A clawed hand remains frozen on the controls set to dead slow because the broken compass shows no signal I feel I can trust. There is still work to do on that intentional living thing.

    It has been five, getting on for six years since that fateful day in February 2009 when a jumped up punk of a manager squeezed an Ermine, intimated TINA and I realised I was all out of options and didn’t want to kiss The Man’s ass, and I locked down spending and took a three-year holiday from the middle class in the name of Freedom. I would do the same again. I have become even more ornery, awkward and unemployable since then. Work is not the point of Life 2. This much I know.

    I would soon have access to a DC pension

    Now if I had a DC pension I would soon be able to draw it. As a brutal simplification that everyone should qualify for their own circumstances, it makes sense to draw a DC pension as soon as possible, all other things being equal. By drawing it early, you stretch out the time over which the money is extracted, and you get a personal allowance for each of the years over which you take it. If you don’t need all the money that year , reinvest it in an ISA in the same sort of thing the pension was invested, and you shift the pension capital from being taxable to being sheltered from tax. If you still have more than 15k left over each year I suggest you need to spend more, unless you are looking to mollycoddle your kids in which case leave it in the pension since they can inherit that at their marginal tax rate it seems. The converse is that if you are so bloody stupid as to take your DC pension out in one lump then you deserve to pay a shitload of tax because such arrant stupidity should be taxed out of existence.

    But I don’t have a DC pension. So I can’t do that. Don’t get me wrong – I am deeply grateful that I started work at a time when there was a better balance between labour and capital and The Firm actually wanted people to work for them so they offered good benefits, the original DB pension being one of them. However, a DB pension is less flexible than a DC about the retirement date – draw it earlier than normal retirement age (60 in my case) and it is reduced by roughly 5% per year drawn short. If you are in decent health you really don’t want to do that. The actuarial reductions usually favour those who follow the norm rather than the early retirees. In itself that’s not a big deal, because I saved a quarter of my DB pension capital 3 in AVCs.

    the original plan – invest the 25% tax-free PCLS in the market in a couple of years time

    The original plan was to run off the SIPP I took out earlier this year when Osborne changed things, after another two years worth of contributions which I can get in by May 2015 (this year and next tax year), and then to draw my main pension a bit early and eat the actuarial reduction. I would then get the AVC tax free, which I would then shovel into ISAs over a few years, getting more ISA income to top up the actuarially reduced pension.

    Note the correct way to have done this job would have been to keep my mortgage at the level of the PCLS and live off the money I paid my mortgage off with until at 60 I take the PCLS tax-free and pay off the mortgage. The general cocked up the tactics there, even before the battle plan made contact with the enemy.

    the new plan – invest the AVC in deferring my main pension

    It appears I can shift the AVC into a SIPP without taking the main pension, as it is considered a DC independent saving. All of a sudden I lose the whole point of the AVC, which is to get 25% of my DB pension capital free of tax. I now only get 25% of 25% or a sixteenth of the capital tax free. However, I have discharged my mortgage and don’t have a particular need for a shedload of cash, other than as investment capital to make up for the actuarial reduction.

    From some time after this April, I can draw down the SIPP tax-free, as long as I stay below the income tax threshold. There is also some hazard of work income over the coming years 4. Indeed, it seems I can contribute to a SIPP up to £10k p.a. while drawing from it, so I can lose any earned income into the SIPP, which is a good way of spreading out earnings to minimise tax – I don’t aim to give up much time to the filthy W word, so 10k will probably do :)

    Each year I live off the AVC fuelled SIPP and the dividend income of my ISA, my deferred DB pension increases by roughly 5%. Effectively I get a return on my AVC funds in terms of that permanently increased DB pension, and at current stock market valuations that looks a higher return and lower risk than I could win from adding to my ISA. Of course that is a return on capital, the return of capital is consumed as income. Normally if you want a return on capital you need to retain the capital and not spend it, this is one of the few exceptions 5. When I get to 60 I will probably stop drawing down the divi from my ISA unless I think of something to spend it on. Running down the AVC + ISA income is roughly equal to the value of the DB pension at NRA, so I smooth my income. I will get two smaller bump-ups, one at 60 when the ISA dividend income becomes superfluous to requirements, and one in the distant time at 67 when and if I get the State pension.

    I get the same general effect as if I hadn’t made a cod’s of the mortgage/PCLS thing, subject to the limitation of being limited to the tax threshold + the income from my ISA each year. I’m easy with that, big spenders may not be.

    An annual income, and an answer to the Micawber question

    Obviously there’s the benefit of getting this AVC cash into use rather than depreciating for another six years. More importantly, however, I get an income for the first time in about three years. So I could return to that middle-class sort of spending if I wanted to. They say that it takes a month to break a habit, so six years should be plenty. I can’t unsee the wanton waste I discovered in some of the empty dreams of the middle class cubicle slave I was. I am no longer a cubicle slave, but some of the dreams still seem empty. I found freedom in the open spaces, in the sound of birdsong, in places like this

    1501_wolves_P1000135rather than places like this

    Westfield, London

    Westfield, London

    I am in no hurry to spend more, but I do need to release the dead hand of the fearful non-spender who felt adrift in a pathless land without the compass of Wilkins Micawber to guide the way. Unusually among consumers, possibly I am consuming at too low a rate. I can easily live well on the personal allowance plus £5000 tax-free from my ISA, maybe I will have to consult with good people like mistersquirrel and theFIREstarter as to how to inflate my outgoings on fine living. On the other hand I don’t have to spend all of it every year. My ISA will thank me for continued reinvestment. I now have a high-water-mark for annual spending, which I can exchange for the dead-hand’s ‘as little as possible’. The tide is a long, long, way out.

    the tide is out there somewhere

    the Wash – the tide is out there somewhere

    There’s no rush – one of the arts of pension planning seems to be keep as many options open, and then opportunistically close them off at the eleventh hour in whatever way is most advantageous at the time.

    Ed Miliband could destroy this plan

    …in May. In which case it’s back to plan A. There’s nothing I can do about that, it’s the usual mantra – coffee for the things I can do something about, red wine for what I can’t change. It’s the problem with pension savings all round – government meddling can screw up the best laid plans. In fairness to governments, it is only government meddling that has made this alternative a possibility. It wasn’t a possibility when I left work in 2012.

    of market crashes, and excitement, and foolishness

    All this will take a few years, should there be a market crash I can rethink, draw my DB pension a little earlier, eat some actuarial reduction and seize the opportunity to invest the SIPP. Assuming, that is, I have the cojones to do that – such a market crash could be the trumpet at dawn of the great unwinding. Or maybe I lack the taste for the ride. Finding myself unable to to determine a reasonable spending rate without having an annual income shows that perhaps I am not the Wolf of Wall Street. I should heed the words of Warren Buffett…

    To make the money they didn’t have and they didn’t need, they risked what they did have and did need–that’s foolish, that’s just plain foolish.

    …and at most half-split this if the denouement comes this year. At the moment an increase in DB pension looks lower risk than the known risk of the market 6. It’s taken me a long time to realise that I had this opportunity, because my original plan was built when Osborne’s changes hadn’t happened. However, the job of any chief executive is to adapt to changing circumstances

    no plan survives contact with the enemy

    von Moltke

    Pension planning is a bastard for complexity and counterintuitive wrinkles and changing rules. I’m generally of Monevator’s opinion when it comes to financial advisers, but I wonder if pension planning might not be an exception. Certainly for those working at The Firm, take up the offer of the Wealth at Work seminars, since you don’t pay for the advice and they have knowledge of your specific environment. Just don’t hire W@W to run your investment portfolio, which is what they’d like you to do afterwards 😉

    My pension will eventually be a combination of the DB pension with about 2/3 of the target time accrued, and my ISA to make up the difference, tax-free. But as an early retiree I could have 30 years ahead – possibly more. It would be unwise to ignore the tail risks that affect both types of pension, though differently. The world will change over that sort of timescale. Just to remind ourselves of the scale of those sorts of changes, we were listening to this on the radio 30 years ago

    Only one guy in Britain had a mobile phone, though the first had been demonstrated in 1973 in the US. Those 1970s analogue devices were not cellular like TACS was, so the number of channels was very low and prices were astronomical.

    Motorola's Martin Cooper, April 1973

    Motorola’s Martin Cooper, handset first used in April 1973

    Nobody much had the Internet. I was using a VAX with green-screen text terminal and 9600 baud serial connectors to do circuit simulation. 30 years is one hell of a long time for things to change. It’s plenty of time for tail risks to show up. But it’s also plenty of time for nimbler, younger minds to invent good stuff that people want to pay for. Assuming, of course, that the work of humans is not done here – in which case the spoils will accrue to patrimonial capital as Piketty told us it would.

    Notes:

    1. the NHS does fine with big stuff and with chronic stuff, but elective quality of life interventions it does poorly now the Tories have been at it.
    2. with the obvious rider ‘for me’. If Work is the point of Life for you then knock yourself out
    3. computed by taking the gross paid at NRA and multiplying by 20
    4. there is some research work I want to do. In the end even an ermine can’t outrun the W word forever…
    5. it isn’t a true exception, it is the interaction with life-expectancy figures that gives an appearance of a return on capital.
    6. I am casually interchanging risk and volatility of the short-term price levels which I really shouldn’t do
    9 Dec 2014, 12:59pm
    economy living intentionally
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  • The case for a Universal Income

    Those clever fellows at Oxford University have identified a problem with social mobility – it’s increasingly downwards. I have to run with the Guardian’s description of this because it looks like the paper is published by Wiley and is therefore going to be £££££ to get.

    The Grauniad will bring to the party their own biases, and yet their summary of the problem seems pretty clear and gels well with Humans Need Not Apply  – a storm of globalisation, automation and the shift of power from labour to capital is stripping out premium jobs – to wit

    The UK’s boom in managerial and professional level public services and industrial jobs during the 1950s, 1960s and 1970s saw an increase in the proportion of children born into professional and managerial families. The decline in these jobs meant that the number of individuals at risk of downward mobility were higher.

    Goldthorpe added: “Politicians are saying that a new generation of young people don’t have the same opportunities for social advancement as their parents, and these results seem to bear that out. The trend shows that, while social mobility has not stalled, more mobility is going in a downward direction than in the past.

    “ The emerging situation is one for which there is little historical precedent and that carries potentially far-reaching political and wider social implications.”

    I’m not totally sure there’s no historical precedent – the story of humanity is not a monotonic increase in wealth from generation to generation, but it is a problem. The issues boil down to that Britain’s GDP is being produced with fewer people. In itself that shouldn’t be a surprise – after all if you look at how many people it took to make anything a generation ago it’s obvious that you need far fewer people to make it now. There was a programme called The Secret Life of the National Grid that showed how the old CEGB used to erect pylons – basically about a hundred men and a lot of rope! According to the ONS, the real value of Britain’s manufacturing output is much higher now than in what we think of its heyday. When I entered the workforce over a quarter of the UK workforce was involved in making stuff, whereas now we make more stuff, but with  fewer than 1 in 10 of us compared to more than 1 in four. As the ONS succinctly says

    productivity in the manufacturing industry has risen by around 2.8% a year since 1948, compared with 1.5% in the service industry. While only 8% of UK jobs are now in manufacturing, compared with 25% in 1978, today’s workers are significantly better skilled and more experienced.

    We booted those humans out, and manufacturing does this quicker than services. Now whenever you say this might not be an unalloyed good loads of people come down on you like a ton of bricks and holler Lump Of Labour Fallacy until you can’t hear anything any more. The Economist gives a good summary too. The LoLF is predicated on the assumption that it is always possible to improve things for people in the world by putting more people to work, so Schumpeterian creative destruction is all to the good, as it can reallocate capital and work to where it can do most good.

    This assumes people are always as flexible as they were in their 20s. So they had better not get old, have children or otherwise tie themselves down to any one place or way of doing things. If you want to see the counterfactual, take a drive to some of the Welsh valleys – the Ermine started work and got to retire all in the space of time since these areas were nuked by Mrs T in the early 1980s and they still haven’t recovered by the looks of it.

    The other trouble is the modern economy produces great jobs and crap jobs, with nothing in between. And it’s producing fewer and fewer great jobs, though these seem to be higher and higher paid. At the moment we fight that – but the battle is being lost. At the moment we tell people work is the way out of poverty, which is bullshit.Let’s have a bit of fun with Google, shall we, on the theme of work is the way out of poverty. Let’s start with the dude who ought to know

    Bloomin' eck, I thought we've already done Halloween. Oh, wait. That was the other guy...

    Bloomin’ eck, I thought we’ve already done Halloween. Oh, wait. That was the other guy

    Iain Duncan Smith: ‘My mission is to lift people out of poverty and I will not give up’ there’s a hint of the Terminator in there, Iain. Always pays to investigate whether the thing you’re trying to do can actually be done, if only to find out which impediments to take on first…

    Sweatshops: A Way out of Poverty – Ludwig von Mises institute. Loosely paraphrased to  ‘get ’em by the balls and their hearts and minds will follow’ 1

    For millions of people, work is no longer a way out of poverty – Archbishop of York/George Osborne

    Seven ways UK wages have changed over the past four decades – the proletariat has been losing this fight for the last 20 years

    Is Social Mobility Really Going into Reverse – only if you think about the money, according to the Telegraph

    We now have to subsidise crap jobs with tax credits for people to survive on them. I don’t think work is the way out of poverty unless you are unusually skilled. It’s time to strike a new bargain with the 1%. Along the general lines of

    Dear 1% – Britain provides opportunities for you to sell us stuff, move money around in complex ways and get rich on that, and hell, invest in London property. We the people of Britain are easy with that. In return, we require that you give us something in return, and that is a tax on economic activity in terms of corporation tax, CGT and income tax. And we also require that you obey the law of the land as far a polluting the environment etc. Let’s cut a deal. Make as much money as you want, within the rules. If you don’t like that, piss off to Monaco or wherever.

    The standard riposte to that is the wealth creators and owners of capital will up sticks and take their toys with them. Atlas Shrugged by Ayn Rand is the long-form version of that. In balance  there should also be a call to the rest of the 99%, along the general lines of a fantastic rant I overheard from someone describing why the 99% were moaning about the cost of living so much

    People go through life picking up unnecessary accessories like dogs and children without thinking how much it all costs. No wonder they get themselves into trouble.

    It’s hard to argue with her observation, and this is from one of the 99% 😉 Mr Squirrel takes a slightly softer line.

    It appears that that august organ, the OECD takes issue with the claim that all the wealth creators will cram into Monaco or a seastead with their capital leaving the remaining starving hordes to eat each other. Unlike  Wiley who act as Gollum to knowledge the OECD publishes their stuff – short form here and full monty to be had from here. It’s worth a read – basically in contrast to Ayn Rand they take the view that we are our brother’s keeper in terms of the maximum aggregate human societal benefits:

    The most direct policy tool to reduce inequality is redistribution through taxes and benefits. The analysis shows that redistribution per se does not lower economic growth. Of course, this does not mean that all redistribution measures are equally good for growth. Redistribution policies that are poorly targeted and do not focus on the most effective tools can lead to a waste of resources and generate inefficiencies.

    Now before we all become communists it is possible for this to be true and yet nevertheless some people’s end of the boat may end up going down, even if most of the boat and inhabitants rise. Somewhere the John Galt in me does and did object for paying for other people’s lifestyle choices, for most of my working life I was paying towards my colleagues’ child benefit, though I am very happy that this has been stopped now. They are/were rich enough to pay for their own choices in life 😉

    The OECD’s stats are also backward-looking, over a period where the assumption that it is always possible to improve things by putting more people to work probably held. I have a lot of time for the thinking that we are in the middle of a third industrial revolution, and I will probably not live to see the full effects of this one. It takes far longer than a human lifetime for the rubble to stop bouncing in an industrial revolution, and the transformational effect of the improvement in communications, data handling and processing on economic activity is probably not complete. Unlike Roger Bootle, however, I wouldn’t necessarily bet on human ingenuity this time.

    We have a lot more humans to draw on, and capital can be more picky about which humans it uses. When I graduated, I was bright enough to be able to work in research and development. The twenty-something me was 2 nowhere near bright enough to work for Google. So we could have a lot more economic activity and vast increases in GDP with fewer humans aided by machine ingenuity, but the spoils of war would increasingly accrete to those that own the means of production, otherwise known as Capital.

    As a result the idea that we can improve economic efficiency by educating people better is not a given for the future in my view. It may be a good thing for their quality of life – after all having reached the end of my working life the economic value of my education is now entirely spent. There is still some intangible value in terms of being able to read, write and have a basic grasp of how things work, infer conclusions from experimental data and have a cultural reference to the world around me – the value of education is not purely as a way to amplify earning power. It’s possible that the OECD’s narrative is accurate for the past – the historical economy had the capacity to employ more human capital and ran below full bore because it was starved of skills and boots on the ground. The global economy has got access to a hell of a lot more people now than it did when I started work, and this seems to be at the same time as it needs fewer people per unit economic activity as a result of the various issues in Humans Need Not Apply.

    Which then brings us to the point of what the hell is the economy for? Is it to make as much stuff as possible and get as many people to buy this as possible, even if they can’t add enough economic value to pay for their consumption? Is it to maximise the sum total of human experience? These are political issues, but we don’t really seem to be tackling those issues as to what all this economic activity means and whether it is serving us well, we just know that we want ‘growth’ because it sprinkles some fairy-dust and seems to have made people feel better over time. Charging around telling people work is the way out of poverty seems to be pissing more and more people off, because it’s just not true. Eighty years after Keynes observed

    The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn’t deliver the goods. In short we dislike it, and we are beginning to despise it. But when we wonder what to put in its place, we are extremely perplexed.

    he could still make the same observation.

    The Citizen’s Wage/ Universal Income – an alternative to the Occupy movement

    The Occupy movement is one response to the rise of the 1%, which is basically to try and tear them down. But it isn’t the only one. There’s another one. Let the 1% (and the 20% below) earn shedloads of money. After all, take a look at the Grauniad’s excellent analysis from Mona Chalabi  – people paying higher-rate tax and above make most of the running in tax revenue – about 2/3 of the tax take comes from them.

    Then set a flat rate of tax, at 40%. Abolish the personal allowance. But give everybody a universal income of about the National Minimum wage once they reach 18.  At the old higher rate tax threshold of ~ £40k you will have paid 32% of £30k which is about £10k in tax leaving you with £30k, under the new regime I guess you’re paying £24k in tax leaving you with £16k to which is added £13k resulting in ~ £30k in total

    Abolish all special interest pleading – nearly all of the Welfare state goes away, we presume that the NMW is enough to basically live on, be you pensioner or 19 year-old. No special case for having children – a couple on the NMW is a little under the average household income. Now, without the requirement to work, you can enjoy your children, see them grow up, walk them to school. You can now live anywhere in Britain we don’t all need to pack ourselves into the SE because that’s where all the jobs are – maybe even repopulate the North of the country – fabulous countryside.

    If you don’t have kids, well, you have a bit more money then, follow your interests. Have a better house or car, or go on holiday more. If you want more than the NMW, then by all means, if you are talented enough, go get a job. Your universal income won’t be taken away or taxed, but everything you earn would be taxed.

    The uber rich will now have to pay decently for their shit to be cleared, their houses to be cleaned and for fire service in London. But they can afford it, so the wages of shit-shovelling service industries will go up to whatever is needed that people will sell their time to do that sort of thing electively. But both parties will have a choice, and it’s up to the market to set the right price.

    This isn’t a fully formed idea – there’s no doubt endless problem with it. For starters until globalisation makes everybody in the world equally well off and we have ended war, entitlement needs to managed. Britain allocates citizenship/residency largely by jus soli as far as I can see, and some steps will need to be taken such as requiring you to be born in Britain by people here legally to get the entitlement. Before I get charged with being a card-carrying nut-job – immigration is no problem but the parents will have to be here legally and presumably work of be of independent means. And it seems fair enough that if you aren’t entitled to the citizen’s wage you at least get a personal allowance re your earnings of the same amount :) The devil would be greatly in the details.

    The problem we have at the moment is that we seem to be trying to micromanage our way out of macro sociological changes. The disenfranchising of a large part of the human population of a First World country isn’t necessarily a problem if it is caused by improvements in productivity caused by technology 3, but the way we allocate resources is going to drift out of track with the assumptions that underlie our societies.

    With the industrial revolution we managed to dramatically reduce our use for human physical labour, but increased our capacity to use intellectual human labour. With the Information and computing revolution we are reducing our need for intellectual human labour, because we can solve many of these problems using IT (and outsource a lot that doesn’t). It’s not absolutely clear to me where we are going to put these now idle hands to work, though I don’t have the Protestant Work Ethic that always assumes the Devil is going to be the employer of last resort. There are many things that would be nice that more human effort could do, but in general we don’t seem to be prepared to pay hard cash for them.

    That which we can’t do automatically demands much more cognitively of the humans 4, and it is beyond what many can do, we are way beyond the central bump in The Bell Curve and out there in the tail. I’m not really sure I’m bright enough to get ahead in this economy if I were starting now, the leading edge is way out there. We aren’t doing less, but the fruits of the productivity enhancements are accruing to people with capital and to people with power. CEOs and the 1% are skimming off a fair amount of the capital, but it is interesting that they have streaked ahead particularly through the use of equity allocations as well as higher pay.

     

    Notes:

    1. Charles Colson, possibly
    2. I am making the slightly ageist common assumption that this fades with time – accumulated experience has much less value now in technical fields than it did when I started work
    3. if the improvements are caused by globalisation then it is a problem, because living standards must fall to equalisation otherwise there will be balance of payments problems with the countries doing the work
    4. Not all future work is cognitive. There will still be work for some other types of skills – being a footballer, or a Kardashian doesn’t require smarts, and artistic creativity requires a different type of smarts
    28 Nov 2014, 12:53pm
    living intentionally
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  • Today is the official spendy frenzy of Black Friday and it’s time to

    … ask yourself some searching questions in the vein of Oscar Wilde discoursing about the cynic

    A man who knows the price of everything and the value of nothing.

    because apparently you must go out and bag yourself a bargain this weekend. So what are these bargains they tell me of, then? I may as well start with what I know :)

    Bargains I tell ya

    Bargains I tell ya

    So what do we have here? Top left, a shaver, which apparently was ‘worth’ £300 and is now half that. Now the Mail is not targeted at Russian oligarchs, or the sort of bullshit you get in the seat-back in business class, or even the Torygraph’s look-but-don’t-touch Luxury section. So it wouldn’t be unreasonable to imagine the typical Daily Mail Reader on the median UK wage, apparently £517 per week last year. From all the wittering about stagnating wages, automation and damned furreners I don’t imagine it’s gone up that much in the last year. These are apparently gross earnings, so a quick spin on ListenToTaxman tells me

    Listen to Taxman gives it you straight

    Listen to Taxman gives it you straight

    that this fellow gets a gnat’s over £400 per week. So let’s say he runs a 40 hour week then he’s earning £10 per hour. Sadly his commute costs him more time and to add insult to injury the train companies seem to take a dim view of not paying. The FIrestarter did the maths, I’ll assume my punter eats a 25% hit rather than TFS’s 1/3 hit. So our Daily Mail Reader needs to spend an hour working/going to work for every £7.50 he earns.

    Righty-ho, so he wants a shaver, call it £150. That’s 20 hours of not seeing his wife and kids… The Ermine is clearly behind the times, I didn’t realise you can spend that much on a shaver. So be it. We have the Nespresso Lattissima coffee machine, yours for £125, that’s 15 hours at work. I’ve already had the rant about how a Nespresso anything is a way to electively pay more for a restricted range of coffee, and produce more needless waste compared to the gonzo filter cone. But here you have to add the extra time to decoke this darned thing, because the combination of milk and heat is a cleaning nightmare, so you have to factor in the extra cost of the cleaning help. Or be prepared to take half an hour over an espresso, half of which is to clean out the milk section. The advantage Starbucks has is they amortize the cleaning over lots of coffee drinkers, whereas drinking 50 cups of espresso a day is going some at home.

    So let’s move on to the pretty lady then. mail6Somebody really ought to tell her that winter’s coming, but what the hell. The trusty Ermine calculator tells me that is about 634 of your Great British Pounds for four items of clothing, so she’ll be working a month and a half 1a shade over two weeks  to pay for that little lot.

    Black Friday is For Fripperies, not Fundamentals

    Not so fast –  the time calculation gets worse. All these good people have to live somewhere and presumably eat something, so we really ought to run these calculations using disposable income. The Money Advice Service tells us that the average monthly disposable income is £224 2. Mind you, these are the same fellows who tell us that  it’s news to 1 in 100 of our fellow countrymen that you are supposed to pay a loan back, so maybe they fish in murky pools for their punters.

    All of a sudden our shaver purchaser is looking at working for three weeks to get his whiskers trimmed, and our summery lady is looking at the wrong side of three months to buy that outfit.

    Personally I’m on the other side of Oscar’s cynic.  There are a lot of very clever people out there. They go to work every day to make you screw up your finances by buying shit you don’t need. And Q4 of every year they go into overdrive.

    ‘just think of your children – buy these loom band kits’

    Reminds me of Charlotte Metcalf buying Silly Bandz for Christmas because she couldn’t bear to tell her daughter that she didn’t have any money left. WTF is it with selling overpriced rubber bands to children?

    Where’s Tyler Durden when you need him, eh?

    God damn it, an entire generation pumping gas, waiting tables – slaves with white collars. Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.

    Happy Black Friday, all, and Cyber Monday, two inventions designed to put the consumers of the UK further away from financial independence. We can’t have the people giving The Man the middle finger, eh, so run along and form an orderly queue to buy shit you don’t need. No fighting on the shop floor, okay?

    Notes:

    1. Clive is absolutely right, it’s not as bad as that
    2. lies, damned lies and statistics, eh, note the shocking sleight of hand switching from median to average. When it comes to income, it seems the stinking rich lift the average with respect to the median so that £224 is probably an overestimate
    5 Nov 2014, 12:08pm
    living intentionally
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    15 comments

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  • Work is but a stage of Life

    A human life has seasons – it is written in the cycle of life, we aren’t Immortals, dying through accident alone. The gateways between these seasons was often marked by rites of passage in earlier generations, but the modern First World has few rites of passage.

    But life is still a journey. You can close your eyes and pretend it isn’t, but like all parody the Trainspotting song gets its edge because it does contain a kernel of truth. Many of our life choices are taken on autopilot. Some of this lack of deliberation is necessary – there simply are some important stages that the newborn has to master in the difficult progress from mewling and puking infant to the arbitrary stage of 18 we call adult. There is a dynamic tension in all of us that balances preserving the comfortable status quo against the effort necessary to challenge old forms, to break free of constraints, challenge habits and develop as human beings.

    Consumerism can help you with all of these bar one

    Consumerism can help you with all of these bar one

    Consumerism doesn’t do meaning well, and if you look at Maslow’s Hierarchy of needs, the one at the very top, self-actualisation, is the one element that you can’t buy or outsource, by definition. Consumerism becomes increasingly ersatz the higher up the pyramid you go, but it doesn’t run out of road until the apex.

    Sorry, Paris, but Daddy's billions still ain't gonna buy you to the top of that pyramid. Some jobs you have to do yourself. Time is on you side, so you can get away with 'Dress cute' for now...

    Sorry, Paris, but Daddy’s billions still ain’t gonna buy you to the top of that pyramid. Some jobs you have to do yourself. Time is on you side, so you can get away with ‘Dress cute‘ for now…

    In this journey through the stages of life, often you cannot progress until you surrender old forms. Thus it is that the parents of a newborn must surrender some of the hedonism of the DINKY lifestyle. Many years later tears well up in the mother’s eyes as she waves her son goodbye as he steps into the world to become his own man. It is a transition for him, but also for her too, we have no shared Western narrative for maiden/mother/crone 1 or the masculine equivalent boy/man/sage or wizard 2.

    Consumerism doesn’t favour introspection and a search of meaning, and it actively discourages personal growth, because it always needs you to look outwards for satisfaction of your wants. There’s nothing to sell, otherwise :) MMM summed this up well as the Poisonous Pitfall of Piss-Poor Lifestyle Planning. Look at how much is sold to young and middle aged men to encourage the puer aeternus who “covets independence and freedom, chafes at boundaries and limits, and tends to find any restriction intolerable”.

    look - no other cars get in your way if you are in one of these

    look – no other cars get in your way if you are in one of these

    Indeed, an awful lot of ultra-luxury seems to be marketed towards these ideals of independence and freedom as expressed in Stuff. The irony doesn’t escape me that some of the aims of Financial Independence are seeking to live life without boundaries and limits, finding restrictions (on one’s time) intolerable 😉

    In many of the myths of Europe, there is the story of the hero starting his journey as a young man, going out in the world to earn his fortune. Precisely how we have turned this, in an age of relative richness, into working for The Man until you drop is a puzzle. Some of this is because  because of the endless aspiration to Stuff and Experiences. Some of it is because we have engineered certain kinds of inequality into our economy such that an increasing number of people will never have the opportunity to decide what Enough looks like because their lifetime earnings won’t be enough to compete with the credit-inflated value of some necessities.

    And so I offer to the FI community that making your fortune is good, as a first step, but the hero of our myths of old does not simply make his fortune and then sit on it, or play cards into his dotage, In the modern world work is often the way to making your fortune, but once you have this, then its work is done. To progress the  traveller on the journey of life must release old forms. For most people working for The Man, their legacy as a human being will not be their work 3. People who retire often believe they will be sorely missed but most organisations self-heal rapidly.

    Thoroughly unprepared we take the step into the afternoon of life; worse still we take this step with the false presupposition that our truths and ideals will serve us as hitherto. But we cannot live the afternoon of life according to the programme of life’s morning; for what was great in the morning will be little at evening, and what in the morning was true will at evening be a lie.

    Carl Jung, Modern Man in Search of a Soul

    As the slave grows accustomed to his chains, so it seems the wheel grows accustomed to the shape of the rail for thirty of forty years, perhaps even fifty if we count the guided track of the education system in childhood. For long a path is trodden, but as Jung indicated, it slowly begins to lose validity.

    The Queen's Tower at Imperial College

    The Queen’s Tower at Imperial College

    The seeker of financial independence speeds up the process. Recently I passed through Imperial College where I did my first degree in Physics many years ago. The alumnus office provided me and Mrs Ermine with a fine cup of coffee gratis and a place to rest a little. It’s  strange to think that when I last passed this way here I had maximum human capital and zero financial capital. Over the ensuing thirty years I exchanged that human capital for financial capital – in the words of our fairy tales, I made my fortune.

    Now the value of my human capital is zero – nobody is going to pay me more or less because I have a Physics degree. It has become worthless, but it has done its job. Surrender and redemption are part of the cycle of life. Work is now an old form for me. In many of the earlier posts on here I ascribe leaving work early to the world of work changing. It did, but now I also see that I changed – things and ways of doing things that used to be acceptable to me became less acceptable. I resisted the change, because I had a conventional viewpoint that I would make this change at 60 (which was the normal retirement age for The Firm). Resisting change in personal development always causes pain, but here I took the pain up front. Exchanging my human capital for financial capital doesn’t trouble me, I don’t hanker after the ‘meaning’ of work. It was a phase of life, it is done, and I’m with Carl Jung there. I want to deepen, to develop, to understand more. I will probably affect other people, and share some of the journey. It’s more open-ended than the world of work, and that is a good thing.

    If they are successful, and if they know how to know that they are successful, every striver for financial independence must one day ask themselves

    What do you want now?

    If the answer is ‘more of the same’ then you may have to tarry awhile at this waystation of Life. Retiring is a change, and to do it well you must change. The change is hard, because you have followed the track of ‘work’ and the meaning and setting that gave you. Change comes easier to the young – your change into work was easier than perhaps your change out of it. Little wonder, then, that so often the new retiree seeks to replicate the comforting rituals of work.

    I see it a lot, and it puzzles me. Mistersquirrel calls some of it out with

    Have viable alternative pursuits. One of the side-effects of working in a regular job is that there isn’t actually much time left over to do things.

    Now self-development is a strange thing – everybody comes to it by the shortest distance they can manage, even if that path is messy and indirect. Many get stuck somewhere, because the process of knowing who you are, what you stand for and what you value is not easy. M Scott Peck said

    The truth is that our finest moments are most likely to occur when we are feeling deeply uncomfortable, unhappy, or unfulfilled. For it is only in such moments, propelled by our discomfort, that we are likely to step out of our ruts and start searching for different ways or truer answers.

    Work is a stage of life for some people. Retiring is a challenge, and I would estimate that of the people I’ve observed 4 more than half get stuck because they cannot surrender the work-self that they built up over decades. They still value themselves by what they did. Even the Ermine retains Chartered Engineer status at a modest cost, because I haven’t yet come to the conclusion that I will never do engineering professionally 5 again.

    Only once you surrender the old truths and ideals can you further the process of individuation and enter the next phase of life as Carl Jung intimated. People’s paths are many, and there is no one True Way, but I choose to go forwards, to surrender the old to gain new insights in the game of Life.

     

    Notes:

    1. Crone is terribly perjorative in a youth-obsessed world, I mean it in the way referred to in Wikipedia as  “a Croning is a ritual rite of passage era of wisdom, freedom, and personal power”
    2. I’m sad to observe that fewer of my gender seem to pass into the wizard stage, though it is hardly as if the mythic landscape of Western culture lacks the Gandalf/Luke Skywalker role model, and RPGs seem full of it. We aren’t getting lost because we’re in a pathless land
    3. If you’re a Nobel prizewinner or otherwise advance human knowledge or art in your work, maybe. Tim Berners-Lee was working for the Man, part of his legacy is you can read this
    4. most of these are from my parents generation, being an early retiree myself, I don’t have much data from my own peer group
    5. I use professionally in the sense of ‘for money’ as opposed to looking for a job in it, which I view as extremely unlikely
    7 Oct 2014, 8:48pm
    living intentionally Suffolk:
    by

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  • the season of mellow fruitfulness is on us

    Nutscape

    and it’s time to look at the non-financial investments. In this case, indeed, the non-financial investments of the local Squire, the Fonnereaus. Not only did they build this gaff

    Christchurch Mansion

    Christchurch Mansion

    but they planted some chestnut trees, and the chestnut harvest is awesome this Autumn. The recent winds have brought down a fine crop, and it’s before the weekend when World + Dog will have got to these. The trick is to win your chestnut harvest from the spiky hulls

    Herein dwells a fine nut

    Herein dwells a fine nut

    Sweet chestnut

    Sweet chestnut

    with the minimum of cursing.

    a fine  nut harvest

    a fine nut harvest

    and win a fine harvest of fresh, sweet chestnut from veterans like this tree

    one of the chestnut trees

    one of the chestnut trees

     

    Now there may be some of you reading this that think to yourselves

    goddamnit I earn £200,000 p.a which boils down to £125 an hour and I can get loose chestnuts from Tesco delivered to me for £7/kg so all round so WTF? Why would I be pissing about scavenging nuts in the park

    And I would respect your opinions. But I would venture you’re missing out of some little piece of being human as you sit behind your  screens oblivious to the passage of the seasons. Being a flâneur is one of the good things about owning my own time and if I want to go pick nuts then I damn well can 😉 It’s the sheer optionality of it that adds to the sweetness. As summed up delightfully by The Escape Artist – the Ermine tips his hat and welcomes yet another soul across the event horizon of FI.

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