2 Nov 2015, 1:20pm
reflections simple living Suffolk


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  • the afternoon fog makes everything look luminous and lovely

    The fog is getting some stick for the inconvenience, but as I wandered in the Suffolk countryside it struck me that it created a really fantastic quality to the late afternoon light. It made everything look really luminous and dreamy. Britain really is a beautiful place at times.




    11 Sep 2015, 5:44pm
    living intentionally reflections


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  • turning work into performance art by gamesmen

    The world of work changed tremendously over the three decades I spent in it. Much of that change has arisen as a result of the tremendous improvement in communications since I entered the workforce in 1982 1. Communications in 1982 were the telephone and the letter, computers were rare and accessed by expensive text terminals on RS232 serial lines and didn’t feature highly in the early days. Companies were much more hierarchical and experience was more valuable – equipment, technologies and staff didn’t change as  often as they do now.

    Over at Retirement Investing Today RIT has a fascinating post Will I want seclusion in FIRE – he is much more analytical than I am and identified trends which, looking back seem obvious but I sure as hell missed them 😉 Part of the thesis is that RIT self-identified as an extravert but he wonders if this was an adaptation to the performance art known as work.

    The Swiss psychologist Carl Jung gave us the concept of extraversion and introversion, although they are commonly understood to mean something a bit different from his description. The general summary is

    Extraversion tends to be manifested in outgoing, talkative, energetic behaviour, whereas introversion is manifested in more reserved and solitary behaviour.

    RIT’s post set me thinking, it’s not surprising that the vastly improved range and nature of communications today will play well to extraversion, and it is my experience of the changes in the workplace. Early on I decided I wanted to work in research and design, and within the first few years of working had got myself into this field- something where the intellectual challenge is interesting and also areas of work that don’t greatly feature the endless flapping of lips that makes up a lot of human activity. Although humans are top predators which normally tend to be loners in the rest of the animal kingdom, we are social animals. But some of us are more social than others; I only just about get the point of Facebook and I am still trying to work out exactly what is the point of Twitter 😉

    FI/RE tends to favour introversion

    ERE Jacob called out that the group of people chasing early retirement tended to include more introverts than the general population. It’s not that surprising when you think about what you have to do differently to achieve FI early – you have to opt out of some of the shared experience of modern consumer life. For example I don’t have a television any more, not because I can’t afford it, but I don’t want to give headspace to ads and I don’t want to live other people’s dreams. It’s not cost-free – there is a hell of a lot of good stuff on TV. I aggressively block as much online advertising as I can – some popular websites just don’t work on my system, and when I see the web on other people’s computers I am flabbergasted at the amount of ads and moving crap there is everywhere.

    Although I’d agree with ERE that the balance of FIers is shifted along the spectrum to introversion it is a trend not a requirement – after all Huw over at FFBF is enthusiastically organising meet-ups which get a good attendance so there are a decent number of the PF community who are towards the more extraverted end of the spectrum. I probably lie a long way to the introverted side, I have tried but I can’t really see what the point of a PF meet up is – which is not a criticism of the concept at all, it’s just something I can’t get my head around.

    The workplace increasingly favours extraversion

    In my thirty years at the workplace, I saw them knock down the walls of the roughly ten-person offices that were common at the BBC Designs and the early days at The Firm, first into sort of cubicles and then into the instrument of productivity destruction that is the open-plan office. The talented engineers of the early days were often very seriously weird human beings, some were almost totally unable to read human emotion and could piss others off deeply without realising it or meaning to. People could get away with being such oddballs if their work was great 2 , indeed I would say that probably most of the major advances in human knowledge have been made by people who had something wrong with them.

    The rest of us are just a little bit too average to push the envelope that much. Some of these oddballs and misfit  guys (they were mainly guys, engineering is just like that 3) were strange, some of them just plain stank because their minds were focused on thinking rather than the issues of being a large animal rather than a brain on a stick. But when they got in their stride they would be talking about stuff that left me searching for the overdrive setting on my brain, regardless of the amazing hum in the office…

    In those distant days although there were annual appraisements a lot of this was around what had happened in the last year. The designs and research were often easier to ascribe to one individual, and I was okay with that. I was happy to be judged by the results of my work – did this work well and was it reasonably in budget? I led an international team of guys doing some research on optical transmission, but communications were still largely done by fax and the phone, although there were primitive forms of email using UUCP and some DEC Vax technology. But the world of work started to change with the advent of the Web.

    Many of the extremes were eliminated – there was much less individual eccentricity and excellence in the world of work I left that when I started. Some of that is good – some of those early workplaces carried deadweight. I applied to the University of Southampton do to a MSc in electronics in the mid Eighties after observing some 50-year olds in Studio Engineering at the BBC who were on the same 2N5P entry grade as me. If you always follow the path of least resistance, you tend to roll downhill. I was prepared to make the climb for a better view.

    and so the cycle will turn again, and start anew

    a fast follower

    My experience was influenced by these external changes, but also that I was slowly creeping up the greasy pole and also that The Firm had shifted its emphasis away, and one Big Cheese openly admitted, from becoming a ‘first mover’ to becoming a ‘fast follower’. Apparently in MBA circles there is a sound intellectual basis for this policy, which is kind of depressing in a general way. Eventually the wellspring of human progress will dry up as we all try and follow each other

    Astute fast-followers recognize that part of Customer Discovery is learning from the first-mover by looking at the arrows in their backs. Then avoiding them. 

    The changes in the world of HR seemed to be that it was all about performance management, writing lies and bullshit into dire computer systems, impose forced distributions that implicitly set everybody against each other  – if I avoid helping you then you can become meat for the mincer rather than me, despite all the platitudes about teamwork. Performance management favours those who shout loudest and big themselves up the most – the clue is in the word performance, which has a double meaning in English for a good reason. It’s about the singer, not the song.

    RIT has the edge on me – he was able to observe, and adapt, he will retire earlier in his life than me. And good luck to him – to be honest his daily experience of work sounds like a hell of a lot rougher than my three years of running out in lockdown mode – I didn’t spend much on useless consumer shit, didn’t eat out and didn’t go on holiday but it wasn’t that tough! Unlike RIT  I was unable to play against type and eventually I came to the logical conclusion that I am better off out of there. Though I was tickled by some of the comments

    I certainly don’t enjoy spending time with wider family and friends who continue to consume like the best of them.  Their talk of how much their house has gone up in value or what new car they are going to buy now just bores me.

    It’s called getting older 😉 Although it’s not for everybody, I find Carl Jung’s work a decent map for the territory of my life-cycle

    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, ¶75

    and observation shows that a trend towards reflection and understanding is associated with ageing well 4– arguably a shift from extraversion which is needed to be successful in the first half of life to introversion and deepening in the second half.

    Countering that I became less introverted after retiring, because I own my own time and take things on my terms or walk away. The performance managed workplace made me mistrustful of other people because you don’t have to be stupendously clever to see the logical conclusion of a forced distribution – your end of the boat goes up at other people’s expense, and vice versa.

    Some people learn to live in the matrix quickly. They are always seen as stars, but they have no real results to prove it.

    I took a hit in a non-work area of life and interpreted the bad quarterly performance review after that as the starting gun to get out three years later. As it happened The Firm needed a legacy skill I had for the London 2012 Olympics and invested a little in trying to patch it up, but once the mainspring is broken the clock can never be rewound. I did that work because I needed the money to thread my way out of there, and it was satisfying in its way, but I struggled.

    Modern performance management f*cks people up, particularly introverts.

    I was particularly maladapted to it because I didn’t grow up with the problem, for most of my career performance management was about results, not narrative. I believe that there is a lot of fluff and peacockery now that just wasn’t possible in workplaces before, facilitated by easier and cheaper communications, from the cc CYA emails to the endless telephone conferences to try and work out what you are going to start to all do, it just grows, along with the empty metrics and targets collated because it can be done 5. ERE again identified the problem – the workplace is becoming a game, with rules and levels – it rewards those who learn to play the game, the gamesmen, whereas I am more to the craftsman end of ERE’s taxonomy.

    ERG may not like the stupid dance, but he probably grew up with it. Performance management is the #1 reason I retired early, I never, ever, wanted to have that feeling again. I was okay with what I was doing, but the writing was clearly on the wall – the workplace was becoming increasingly hostile to introverts. It is apparently possible to change this orientation, and if not then some people can fake it. But you get more cantankerous as the years roll by – WTF should I change myself to dance to this rotten tune when I can leave the stage altogether and navigate by the light of my own lamps? I’ve only got another three or four decades max, I have enough money to have a good time and indeed re-enter the middle class and inflate my lifestyle should I want to do that once I have access to my pension savings.

    There’s a very good argument to be made that you should do this thinking about what you want to spend your time on earth doing at a much earlier stage, and it’s good to see such a lot of people in the PF community are indeed doing just that in their 30s and 40s. Life is short, use it well 😉


    1. of course as an engineer much change in what I did adapted to changes in technology
    2. this is still present in some tech extremes –  like the way Google employees can’t cook for themselves or do their own washing, which is why Mama Google sees to it to fix their household requirements. Free food, free laundry, free haircuts. free car…
    3. when the IET which is the UK electrical and electronics engineering trade body has to establish a more female-friendly alter ego as the Women’s Engineering Society with nary a link to the IET then it shows that there’s trouble in Paradise – along with the carping about the status of engineers in the UK the lack of women is something that occupied the Letters page of the IEE when I joined in 1982 and still exercises them as much 30 years later
    4. Jung himself did pretty well – anybody whose last words are “Let’s have a really good wine tonight.” is someone who knows how to cash in their chips in style
    5. there’s nothing fundamentally wrong with metrics, but as Stephen Covey says, begin with the end in mind. Why are you collecting these metrics, and are you measuring it because it’s easy to measure or because it’s worth measuring?
    23 Aug 2015, 1:41pm
    personal finance reflections


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  • Valuation matters – the dirty counterfactual to steady index investing.

    I’m going to stick my neck out against a common shibboleth here. Compared to many UK FI pursuing people the Ermine has only a short accumulative investing life; this is because I am FI, I haven’t done a stroke of work for more than three years. Because I am earning zilch I still have a very large cash holding of several times my erstwhile gross salary. Some of this was won hard by working for The Firm, but a decent part of it was won hard by investing in 2009 and to a lesser extent in 2011, with a generous risk-free punt assisted in taking up The Firm’s kind offer of Sharesave in 2009 with both hands, yes, please, lots, and a little bit of help from ESIP. In retrospect I could have played the latter far better, but the stupid mind-games played by The Firm hammered my perspective somewhat, and I focused on pension and ISA savings.

    Once I get a steady pension income I can invest a large chunk of this. However, I have a shorter investment perspective and can’t take 30 or 40 years to do it because a) I’m likely to be dead by the end of the term and b) the ravages of inflation will destroy roughly half the value every ten years at the long-run UK inflation rates. In comparison, a worker starting out now will steadily earn the money they will invest in the market.


    Most of you have 30,40 years of working and investing life ahead of you. Bear that difference in mind, and remember that this is my opinion. The history of the world is littered with people honestly believing things that are totally wrong. This article is worth exactly what you paid me for it. Remember you are not me. The UK PF/FI-RE blogosphere has changed greatly in the last few years for the better with younger writers looking to escape the rat race extremely early. Most of you are young and in the prime of your working life. You are not me, a grizzled veteran with a dwindling stock of financial ammunition but a decent sized accumulated bunker where I will make my stand. Etc.

    This also assumes you are looking at making money through stock market investment. By far and away the best way to make money through your own efforts is to add value through starting a business, which gives returns greatly above the return on a diversified portfolio of stocks, which are basically a secondary market for businesses other people started and sold to us all. The trouble is that the odds against success are absolutely terrible and the lifestyle isn’t that great in the early years either. Which is why most of us are (dis)contented wage slaves working for The Man. Working out whether to pay your suppliers or your fellow humans working for you when the kitty is nearly empty is a peculiar type of stress that employees just never get to experience.

    Enough of this disclaimer shit, I’ve done my duty. You have been warned that this may be a total load of arrant bollocks, like anything else on here :)

    Slow and steady investing in low cost assets is the received wisdom

    Received wisdom is that to build capital in the stock market as a wage slave, save a steady amount every month come rain or shine. Do this in a widely diversified low-cost index fund for decades and you’ll be sorted. Minimise platform fees and fund fees and take advantage of tax privileged accounts where possible. Here is a decent instruction manual and here is someone living the dream.

    Let’s first take a butcher’s hook at why this works for most people. Basically if you work for 20 or thirty years, then look at the FTSE100 (in practice you’d go for a wider index)


    note Owl’s comment that the scale should be log Google will fix this for you if you go settings vertical scale log and if you click on the image to go there I have set that to log

    your job is now to find any start period where you are worse off at the end of 20 years that you were at the start bearing in mind that this chart doesn’t show the effect of dividend income so you need to tilt it up by about 3.5% p.a. which is the long-term average yield of the FTSE100.

    But it gets better – since you are buying whatever you can get for regular lumps of cash, you buy more in bear markets, Google dollar/pound cost averaging to see how it works. Your accumulated capital is roughly doubled over a normal 40-year working life because you reinvest earnings. Although I am eternally cynical about the magic of compound interest, a doubling is worth having – it is more valuable if your earning power peaks early, which seems to be one aspect of the modern career arc compared to mine. You can simulate your odds on firecalc. I’m not going to spend any more time on talking about how great slow and steady investing is because this is about the counterfactual, for people who don’t have decades of investing ahead of them. Loads and loads of other people are going to give you that spiel, and if you have 20 to 30 years of accumulation then knock yourself out and JFDI. It’s lowish risk, as long as you anticipate there still being a global financial system in 30-50 years time. If you don’t then you have much bigger problems on your hands that fretting about early retirement, and you are misallocating intellectual and nervous capital by reading further. The fundamental win of slow and steady investing was identified many years ago by Jesse Livermore the Boy Plunger

    And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight!

    That’s not to say the Livermore was a Boglehead, far from it 1 , but he was a shrewd operator. In general, the market goes up over the long term. Put the time in the market, and you get more of the up.

    Valuation matters more for people with shorter time scales

    One fellow raised this a few years ago and got continuously slaughtered for it by the cognoscenti to the extent he shows serious signs of becoming paranoid (Rob, don’t even bother commenting should you come across this tiny backwater – I thank you for your ideas which I came across in 2008 but I won’t tolerate conspiracy theories because life is too short). GIYF for readers interested in the story, the keywords passion saving will take you most of the way there. Nevertheless, if you don’t have thirty years then you should at least look at the Shiller CAPE and ask yourself if this carries no meaning at all to inform your investment decisions – Jarrod Wilcox’s overview is a good summary.

    Long story short, run towards fire. Buy when valuations are low. There is a corollary that you should sell when they are high, which I don’t use, because I have come to the conclusion that I am not a good caller of the time to sell. As a result I buy and hold 2, I just don’t sell. But I do modulate when I buy, and for the last couple of years when valuations have been high I have not committed new money into the market, I have focused on discharging capital gains tax liabilities 3 by selling unwrapped holdings within the CGT limit and either buying the same or diversifying into my ISA. Yes, I’m buying overvalued stocks, but on the flipside I am selling overvalued stocks so it’s a wash from the high-level view.

    I can’t afford long term drip feeding, because it ain’t going to help me fast enough. I don’t have a huge talent for spotting the up and coming. But valuation has served me well three times now, and hopefully will serve me well again if the sound of distant thunder turns out to be an incoming storm.

    more »


    1. Livermore was an extremely active investor, and not only that, one who favoured shorting stocks. Because stock markets creep up over the long term, you are fighting a headwind as a shorter. Livermore scored by shorting through the Great Depression :)
    2. This philosophy inherently limits me to HYP style dividend paying shares and income versions of funds/ETFs
    3. you can discharge more CGT in bear markets because your unwrapped holdings are worth less. But that would come at the cost of shovelling new money into a bear market, so it’s better to defuse CGT more slowly in bull markets.
    15 May 2015, 11:32am
    personal finance reflections


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  • of savings rates, metrics and goals

    Over the last couple of years the UK personal finance blogosphere has expanded massively – it is a great thing to see many more people taking their financial future into their own hands, and asking themselves what they want out of the whole work-eat-play-sleep tradeoff offered in a post industrial consumer society. One of the great things is that there is more awareness of these options – and that there are choices to be made, at least for some of us.

    Most PF bloggers seem to be in the accumulation stage, although there are a few who have passed across the event horizon to the other side like me – The Escape Artist for one, and I greatly enjoyed Living A FI’s post on crossing the Great Divide. My summary of the changes looking back on work to non-work is here. I feel different to most writers, not only because I am looking back from the other side, but also because I lack much of the laser-like analytical focus. It’s been just over five years since I started. I have changed, the world has changed, perhaps my work is done here.

    Of measurement, and metrics, and goals

    Many of us are quite analytical employing metrics and goals, tracking progress against these goals reviewing them and keeping score. In particular the notion of the savings ratio clearly works for most people. I’m a lazy barsteward and don’t do any of that. I had no idea what my savings ratio was – all I knew is it wanted to be as high as possible to shore up the defences against an earlier exit from The Firm than I had planned. I guess I took RIT’s £0 target and considered anything else a fail.

    Metrics never worked for me steer savings. For starters the whole goals and metrics things was one of the things that really pissed me off towards the end of my working life, I have no desire to gamify my life, and I lose the big picture easily if I focus on the details. I have never forward budgeted like you are supposed to – I have always tried to satisfy the Micawber rule by looking in the rear-view mirror and the shape of the road behind me in what I have spent, and adjusting the direction to keep the line on the right side of the Micawber threshold.

    The one exception is I track investment dividend income and capgain, benchmarking total return against VGLS100 and the FTAS, unitising every year. I probably need to rethink the benchmark as I am diversifying geographically. Maybe benchmark the HYP against VGLS100 and FTAS and the overall portfolio against some sort of passive world index fund.

    It’s difficult to work back and see what it had been when I was working – it was probably in the order of 80% for the three years as I ran out. This was easier for me than most because as I had discharged my mortgage. In theory saving has now switched into reverse – I don’t have use of pension savings yet and I don’t use the proceeds from my ISA. And yet one thing puzzles me – I look at how dramatic the contributions of Saving Hard make to RIT’s networth and wonder what is different. It might be as simple as I am ten years older and therefore the stock of accumulated resources was higher than the flow of savings, but on the other hand I didn’t have huge savings when I started in 2009 because I had favoured paying down debt in the form of the mortgage. I don’t count the value of my house in my networth because its value is more income-like in the rent I don’t pay. Shona Sibary is the cautionary tale of considering home equity as networth and spending increases in it. If you want to make money from residential property do it on other people’s homes, as a BTL landlord. I don’t do BTL and I don’t eat the seedcorn, so res property doesn’t show on my networth chart.

    I only have investment gain at the moment to carry things forward until first my SIPP gives me an income that I run down over five years and then my main pension comes in, paid at the normal NRA of 60 for The Firm for the vast majority of my time there.

    Ermine networth

    changes Ermine free cash and investments networth – ignoring house equity and any pension savings

    The stock market has been on a tear pretty much from when I left work, I have been lucky with that. This would have been tough had things gone the other way – as I crawled from the crash-landing of my career it would have been difficult to look at a gradual networth decline and not extrapolate that to a feeling of general wipeout and fail 2.0. Personal Finance is as much about the personal as it is about finance. The numbers circumscribe what is possible, but what matters is how you feel about the numbers and where they are going. That’s not always acknowledged – this is symbolic, it is part of the myth 1 of one’s lifestream.

    Not everything that counts can be counted, and not everything that can be counted counts.

    Albert Einstein William Bruce Cameron

    About half of these assets are in cash – I would have reached the other side (getting to 55 to use pension income) before the cash ran out even if the market had wiped out. But it’s as much about how it feels as about how it is. I fought against the fears of a fall in networth as I retired, but in the end Lady Luck smiled upon me – governments pumped stupid amounts of money into inflating asset classes, the oil price fell holding the inflation that would normally create at bay for a few years. I was fortunate enough to have invested in the right things, though over the last few years you just had to show up in the market and be reasonably spread out across sectors. Of course I would like to say that I was a stupendously brilliant investor. But that would be bullshit. So thank you, madcap governments who pumped up asset prices with fistfuls of funny money – I feel better set to face the coming crash than I did in 2012 because I will soon have pension income and once again an answer to that Micawber fellow…


    Some of the government activity that made things look better in the markets may turn out bad in the end – perhaps as the decades roll by the centre cannot hold and it will all fall apart in a doom and death spiral. But so far, despite endless prognostications that the world was going to end including some of my own it hasn’t. Maybe it will end with a series of whimpers rather than a bang – after all the middle class is slowly being destroyed in the West and the whole experience of work is getting increasingly insecure, ugly and marginal for many 2, although a small number are making hay. Indeed, apparently by taking my engineering skills out of the workforce, I am a hazard to the economy and destroying Britain’s productivity. 3 To which I can only say f**k that – if you want humans to work longer then stop being stupid with metrics – as Liz Ryan summarised

    To hire talented people and hobble them with bureaucracy is the height of stupidity and poor management to boot.

    In the long run this too shall pass, indeed. More and more jobs are being controlled, measured and rammed into a rigid structure. I rose four levels up the greasy pole at The Firm – when I started as a young pup I could authorise £500 spend before needing authorisation from the next level up, when I left as a greybeard I had to get authorisation from two levels up get a train ticket to London. The only correct response of humans to that sort of ossification of processes and systems is to get the hell out, and let the devil take the national productivity :) Work is supposed to sustain your life, not replace it.

    I am an outlier – much less analytical, and I don’t subscribe to some common PF shibboleths

    Maybe because I never worked in a management consultancy, I’m weak on the whole PDCA thing here. Philosophically I just don’t have the faith in in it when it is applied to complex and interactive systems, because it is hard to separate the variables properly, and also you are typically an observer rather than an active experimenter (unless you’re the Fed). As for the check part, the problem here is the dreadful uncertainty of some key variables – obsessing about the exact value of a variable with an inherently massive uncertainty leads to short-termism and massive over- and under- compensations. Lord Kelvin is all very well in his place but mistaking precision for accuracy can turn meagre knowledge into precisely incorrect beliefs.

    I’m with Mr Fox here rather than the prickly one – read widely and cover much ground, and read lots of stuff I don’t believe in (the efficient market hypothesis) as well as echo chambers of my own predilections and prejudices. I should know why I disagree with something, what the counterarguments are and I should have the humility to accept that I may be currently believing something that’s wrong simply because sometimes I know jack shit and sometimes see things wrong. I try to  at least do common memes the honour of trying to understand their premises. Nevertheless, I’m big picture fellow rather than streetfighting the details. I leave it to others to determine the details worth fighting – lower fees, yes, all the way, but I still can’t get excited about trying to win a return on cash.

    There are a number of common tenets in the PF community – passive investing, an ultimate ~4% SWR, the efficient market and some of the consequences of that hypothesis, that I don’t find common ground with. So be it, I have no desire to push what may simply be my ignorance onto others. So far I have survived six years of investing reasonably well. That’s still not a huge track record and it doesn’t span multiple market cycles. The job I had to do was much simpler and lower risk that for many – I wanted to top up my works pension to compensate for the missing eight years of working, which is easier than establishing a complete retirement fund for 30-40 years of working. I have largely done that now – the HYP pays enough dividends now to make up the shortfall, and being tax-free as ISA savings the target was 20% lower. I will half split future funds, half to build the HYP and half to built a more globally diversified index ETF section of the portfolio to insure against something currently unknown about the HYP philosophy going bad in the decades to come.

    The trouble with networth is while financial stock and flow are related, they aren’t locked together, and the variation is called volatility, and afflicts the stock value – the income flow is much less volatile. It was with great difficulty that I finally broke out of the instinctive association of volatility with risk. At some point, to become a successful investor, you have to do the Dr Strangelove thing with volatility 4 and learn to love it. It gives you your opportunities as well as your challenges.

    How I Learned to Stop Worrying and Love volatility

    How I Learned to Stop Worrying and Love Volatility

    Although volatility is sometimes associated with risk, it doesn’t stand proxy for it. For someone with a high proportion of capital in equities the volatility makes the savings rate/rundown rate unknowable over short time-scales of less than about five years, particularly if they are adding to their equity holdings.  I exchange some of my cash savings for equities rate limited by the annual ISA allowance. It is possible to derive some statistical estimates for the income from equities – after all the 4 or 5% SWR principle is derived from a Monte Carlo analysis of historical (US) data. However, the history of statistical analysis on equities is littered with some extremely big fails.

    There’s an implication that I have a positive savings rate at the moment despite having no income, because the networth is still rising, though the value is volatile. It’s a bizarre carry-on that investment capital can increase at a faster rate than I spend it, I guess this was the thesis of Piketty’s Capital in the 21st Century, and of course there should always be the memento mori that the stock market has been going absolutely bananas for three years and really cannot go on like that. It’s not like the world has suddenly become free of financial hazard. Presumably it would also be possible for a working saver towards FI to have a negative savings rate even if he were saving as much as he could, in the event that his investment capital were high enough for a stock market crash to diminish his networth faster than he is saving.

    This seems to be a problem with some of the common PF metrics – they start to fail you and become noisy and erratic as you approach the destination, because of the uncertainty of the value of equities. The rising uncertainty of the value can be seen as the increasing erratic trace of my networth as time goes by. This is characteristic of any equity based DC pension savings – and mine are buffered by about half the holding in cash.

    There will be two more jumps in the networth when my DC pension savings appear in the total – one when I get to 55 and the other when I get to 60. After that the fossil savings from my working life will be mined out, other than my pension after 60 which is deferred pay, a flow not a stock. The implication of that networth chart is that once I get these extra funds/income I will be underspending. That’s what happens when you shoot the demon of consumerism. There are many people who fixate on replicating their income when they were working, and want to be able to buy a new car every three years etc because that’s what a prosperous middle class lifestyle looks like, and good luck to them. My income will be less than when I was working, though it is possible that my disposable income will be a little bit more. The working me put a lot of money into the mortgage, and a lot into spending on rubbish, and the focus needed to get out in three years still serves me. The lesson stuck – consumerism involves a lot of spending that doesn’t necessarily lead to enhanced quality of life. One of the metrics the consumer sucker uses is comparing their Stuff and lifestyle with other peoples Stuff and lifestyles, rather than their own requirements. Busting out the TV and other instruments of consumer mind control like Facebook and social media in general help shift the balance closer to following my own needs and wants rather than those of the admen.


    1. myth as in psychological legend, not the alternative usage myth as in fictitious
    2. Lousy and Lovely Jobs: the Rising Polarization of Work in Britain, Maarten Goos, Centre for Economic Performance, LSE
    3. there seems to be much head-scratching as to why Britain’s productivity is falling, and early retirement isn’t fingered by Peston, for example, who seems to point to governments spiking the guns fired by Schumpeterian creative destruction
    4. hopefully without the drastic ending!

    Financial Independence is about more than money

    In Blighty there’s a raging debate about the subject of independence going on – Scottish independence that is. I’m not going to add to the verbiage about Scottish independence because this is a matter for the Scottish people themselves on Thursday, but I am struck by the paucity of the thinking of the No/Better together campaign.

    Independence is about self-determination, not about money. When I chose to shoot for financial independence, the reason for doing it wasn’t financial. In purely financial terms it was a disaster – dropping my income to a prospected 20% of the high-water mark 1

    The No campaign seems to have taken Bill Clinton’s adage that it’s the economy, stupid to the extreme, and focus on the alleged economic Götterdämmerung that will come to pass as a result of independence. Now there are inconsistencies in Salmond’s campaign 2 exactly what the point of independence is if Scotland continues to use the pound and retain the queen as a figurehead is hard for me to understand, but the No campaign seems to have missed the point entirely.

    It’s about more than money. It’s about time, and about self-determination

    Independence is about freedom of action and of self-determination. I was prepared to eat a 80% fall in income to win my freedom – to choose how I use my days. We often get too hung up on the how of financial independence because it is a big, challenging ask. Don’t get me wrong – if you want to get there, you need to understand the how, and some of the UK bloggers are doing a great job in doing what ERE did for the US scene with his book. Mistersquirrel has written an excellent condensed summary of how to achieve financial independence with his ebook, Monevator will set you right on the hows and whys of investing.

    The reason financial independence(FI) is a hard sell is because of the No campaign thinking – the focus is all on what you can’t do.The focus is clear and sharp, because money is measurable. The hours and years of your life aren’t so quantifiable, because unlike the Cyclops you don’t have a clear measure of the end-date. But as Gretchen Rubin highlighted 3, the days are long but the years are short.

    The Escape Artist does a good job of summarising the issues

    The flipside of this is that once you have met your reasonable financial needs, you owe it to yourself and to others to raise your sights and stop just focussing on money. In my time in the City, I used to meet plenty of people that (I’m guessing) had a net worth of £2m+, who were good at their jobs but would have been happier being a writer, tree surgeon or a school teacher. 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.

    Now I didn’t work in his field, my networth is far less than £2m+, but I do have other advantages – not living in London, being a bit older for instance. So relatively I am in a similar position. And I didn’t get that wasting your life bit  – I assumed I’d carry on working to 60 (the normal retirement age at The Firm) because  er, well somewhere along the way between starting my first job and getting to my late 40s the clutch must have slipped in the why am I doing all this department. Now to be honest my job wasn’t all consuming for a long time and gave some intellectual challenge, it served me well up until the early 2000s, But then it started to go wrong, and demand too much for too little, in particular micromanagement and Digital Taylorism started to creep in and the erstwhile research facility was driven down the value chain into a jobbing shop.

    And although it took me far too long to jump to it, in the end I came to the conclusion I didn’t want to live like this, and I wanted out. That is the time when the how of financial independence matters, and I took the resources available to me and focused them with extreme prejudice on getting out. The Escape Artist was exactly right

    […and you carry on working…, 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.

    It’s easy to get lost in the money side and paralysed by fear. It’s where the No campaign is going wrong, IMO. Independence is about more than money. Yes, having enough money is necessary, but sufficient. There are cultural differences in Scotland that have not been answered, and there is more of a feeling for the collective good. Because I personally am somewhere to the right of the Scots 4 I think they will be sorely disappointed in the promises of milk and honey offered by Salmond, but I have enough faith in their savvy that they probably suspect this too. The nation of Scotland has achieved far too much for far too long to be made up of people universally daft enough to believe him.

    It’s a perfectly reasonable call to accept some degree of economic poverty for greater freedom of action. In the big picture, it isn’t all the economy, stupid. Money is crystallised power, it is a claim on future human work or resources that displace the same. It is an enabling component of a life well lived, in the same way as your car needs four wheels to run, three won’t do. But five, six or three hundred aren’t needed. When success starts to look to you like a yacht then it may be worth asking yourself if you haven’t strayed onto the motorway to consumerism hell. In general, if success starts to look to you like Things and Wants then you may want to consider that Maslow’s hierarchy of needs has at its pinnacle

    “morality, creativity, spontaneity, problem-solving, lack of prejudice, acceptance of facts”

    Not so much Stuff in there, eh? I don’t know about morality and lack of prejudice, but I would go along with that getting better at being myself, expressing myself, and individuation are the primary wins of early retirement, and the main enabler is that I own my own time. It really doesn’t matter how rich your are or how many of your yachts are in the harbour if you are still owned by The Man and have to be somewhere and do something for a lot of your day to keep things that way. Obviously if you are truly of independent means then more is better, but there is a long sliding scale between the amount of your life that you give to The Man and the amount of wealth that you accumulate.

    I am poorer, but I have far more self-determination than when I was working

    Let me take an example. The Ermine household was out in Wales this last week – Mrs Ermine was attending a community-supported agriculture shindig, and I went along for the ride to go look at things like this

    prehistoric site in Wales

    easy to get to prehistoric site in Wales

    as well as searching for less easy to find sites, going round in circles because Cadw are poor at signage and rights of way are also poorly maintained in Wales I am a  crap hiker because I only do it to get to interesting stuff, rather than the the whole personal challenge/because it’s there thing. Cadw are erratic at signage and I did find one place where some toe-rag had extended his front lawn over the erstwhile footpath and removed all signage to the stone stile, but it’s still no excuse for wandering aimlessly on a rocky outcrop, and I could learn to get that right, and have learned that blaming others for stuff I could fix isn’t a way to long-term success. I am a unreconstructed map and handheld GPS 5 when it comes to hiking, but it struck me that what I want is a GPS that shows a moving OS map. It’s been a long time coming because of the technical challenges and ridiculous Gollum-esque licensing restrictions of the Ordnance Survey, but I can go out and buy such a thing now.

    Oy vey – £350. Now when I was working I would have dropped the £350 on this just like that. Because this was going to change my life and make it easier to find things in the open.

    Err, no. For starters, all but five weeks of my time was sold to The Man, and much interesting stuff like this is left lying around in places far away from people. It takes time and effort to get to. I now take some time in places, to look and to listen, be it some urban nexus or a prehistoric site or something else.

    A colleague at work did me a great favour in highlighting the contradictions and lack of intentional living of those expensive, fast and furious holidays while working. It was when he told me that his wife got on the internet as soon as they came back from their summer holiday to book the next year’s one. And I thought to myself  “I do not want to live in the future like that, flushing away 50 weeks of my time like that for two weeks of respite”

    I stopped going on holidays then, for three years, so that I could maximise my savings rate. Yes, I was living in the future for those three years. But my future is now. And I have far more freedom of action. If I wanted to I could spend more time looking at prehistoric stones, indeed I considered a period as a peripatetic photographer. You can never travel with anybody else if you want to make money take decent pictures outdoors, because you need to be out at the times of day when most people are eating or sleeping because the light is better then, rather than the harsh light of the middle of the day. It’s just too antisocial. I can consider that – because I own my own time, so it wouldn’t be robbed from our collective couple of weeks of freedom. Three or four weeks a year just wouldn’t cut it. But then I wouldn’t want to try and be creative or make the money because The Man would be paying to own the remaining time, and time away from The Man is more about recovery than about creativity, spontaneity, problem-solving 6.

    Consumerism attacks you at the third and fourth levels particularly

    In particular the need for respect… It’s all the buy this to make yourself look better, set you above the Jones, etc. The Joneses don’t give a shit about what you have, they are bothered about what they don’t have. They don’t respect the people that have what they don’t, indeed they hardly think about the people, it’s the stuff – it is the feeling of the missing eyes from their own peacock tail that exercises them. I know because I’ve been there – consumerism gets you to project part of your self image on stuff and lifestyles – can you even remember much about the beautiful people who were the clothes-horses for the lifestyle in the ads?

    If you want out of this rat race then refuse to run with rats. Focus on what you think about your stuff, not what other people do. If your stuff displeases you, then change it. If it serves you okay but isn’t the latest smartphone/gizmo/whatever then so what?

    Another thing that helps you with consumerism is that when you own your own time you can work out what you want of your stuff and how to use it right. F’rinstance, I discovered  that I could use the existing iPod I have with a CoPilot bluetooth GPS I got from ebay ages ago for a project, and then make it work with Viewranger which can download individual tiles of OS maps for a price. Smartphone aficionados will of course say they can do all this but one thing the last week did teach me is that mobile data coverage is non-existent in the parts of the UK where interesting stuff is often to be found – I had thought it would be a useful fallback data network for researching but it’s useless – run and gun WiFi is far more reliable because at least you know where to find it  at centre of habitation. With a bit of experimentation I can find out if a GPS showing OS maps is useful to me for about £20 using gear I already have. If it is I may consider the Garmin product – but I will do so knowing what questions to ask and how I use this in the field, rather than having to sport the £350 up-front just to find out if it works for me and take the risk of there being some subtle gotcha or yet another gadget that promises much but fails to deliver on the essentials – let’s hear it for the smart watch with less than 24 hours of battery life and which doesn’t tell the time at a glance as a case in point of getting the 20% gimmickry right and losing the 80% essentials.

    The Scottish referendum highlights that it isn’t all about the money, and it’s the same with financial independence.

    To paraphrase Bill Clinton, It’s the freedom, stupid. Financial independence isn’t a notch on the bedpost, it has no meaning in and of itself. Even in the midst of trying to find a way out, I understood this, because I was driven by wanting options, to win a way out from having other people be able to tell me what to do with my time. It’s important to first answer the question why, before addressing the how.

    Savings. Yes, there’s a lot to be said for them. Most people save in order to buy something. That’s good, particularly is the alternative is to use credit. Though the most common reason for saving, it isn’t the only one.

    I save to buy power and freedom – the freedom to walk tall […] – modern ads for savings accounts emphasise saving up for something like a house, or the advantageous interest rate. I have never seen a modern ad advocating saving to buy yourself independence of thought and action. Wage slavery is too ingrained in our culture, and we have surrendered to Illich’s modernized poverty.

    What’s your reason for wanting to be financially independent? After all, many, many people in Britain live happy and fulfilling lives enjoying the fruits of consumerism and living paycheque to paycheque, and good for them. I have no quarrel either with the YOLO set who ram themselves up the eyeballs in debt, as long as they don’t then turn round and demand I pay to bail them out without getting a slice of the YOLO fun 😉 There are choices to be made in life, in general you can do anything you want 7 if you want it hard enough, but not everything you want.

    So it is for Scotland on Thursday. It is freedom to live in the way they want, albeit in probably straitened circumstances 8. It’s not about the money. It’s about freedom and self-determination. These are things that it’s sometime worth making sacrifices for.


    1. There are many, many distorting factors that make this a lowball estimate and it being less of a hit than the headline fall, but 80% was the drop I was prepared to eat
    2. Alex Salmond worked as an economist in MAFF in the late 1970s – I presume he is fully aware of the consequences of being in a currency area with a bunch of guys who are carrying on in a way so opposed to the way your area wants to live that you want to get shot of them, but if he has forgotten that, the Euro area is a good object lesson in why you don’t want to be the 60lb gorilla next to the 600lb one in a currency union
    3. warning – extremely cheesy child-centric crap, but says a truth all the same. You may or may not need a sick bucket and/or end up in hyperglycaemia shock due to the saccharine schmaltziness
    4. more from the point of view that “if you aren’t a socialist when you are young you have no heart and if you are when you are older you have no head” rather than a deep Ayn-Randian philosophy or being a dedicated follower of Hayek’s Austrian school
    5. with a mechanical compass to back it up, but I don’t normally use this
    6. Not everyone working for The Man needs the recovery time – I know a few people who choose to work some jobs that pay modestly but aren’t particularly consuming precisely to have a better lifestyle. They do enjoy their time off much better, and it’s a perfectly reasonable alternative the the financial independence/retire early approach, albeit with the inherent risks of depending on the availability of that type of job, which seems to be falling over time, or at least paying less well
    7. bearing in mind you are in a rich first-world economy, assuming you are of above average aptitude in something that can enhance the lives of your fellow men and that you are capable of understanding that your actions have consequences
    8. I don’t believe the milk and honey promises, though I don’t believe the hell on earth the No campaign are selling. And I find it more admirable when someone chooses freedom over the chimera of economic comfort through slavery anyway, it’s what this blog is about :)
    11 Aug 2014, 2:52pm
    reflections Suffolk:


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  • Supermoon reflections

    It’s not often that someone goes and moves a celestial body closer to us so we can see it clearer. The Grauniad has a far better series of supermoon pictures along with why it’s a supermoon, ‘cos decent photography is about the context and telling a story.

    However, although the tail of storm Bertha had been giving the region some stick it all cleared for the moon. I don’t know how your astronomer types get to see anything through a telescope, because when I stuck my birdwatching telescope at it it was far too bright to see much. However, it was easy to take a photo 1and I was surprised to see all the gnarly bits on the bottom. Taken a hell of a hammering, that has


    And I’d never noticed that in many decades of looking up at the moon. Obviously if you want a decent picture of the Moon you head over to NASA, cos they have better gear, my photo shows I’m not totally over the chimping of a tourist with their crappy smartphone photo – but hell, it’s my picture, I pressed the button. Kudos to NASA for a superior take, nevertheless :)

    NASA have better gear and get to spin it round a bit

    NASA have better gear and get to spin it round a bit

    While over at NASA I took a gander at their Apollo mission pages, I have fond memories of watching the July 1969 landing at school (we didn’t have a TV at home) at about lunchtime – they had dragged the great big set into the assembly hall. Either it’s me or we just don’t have big stuff like that with the widespread buzz of some Really Interesting Stuff Going Down now. Then I looked at the timeline, and thought of Jacob ERE

    How far are we?
    That depends on your perspective. If you take the view from 400000km, humans are no longer going to the moon and have not been doing so for 40 years. From an energy perspective, the available energy/capita ratio peaked 30 years ago. Real wages have been declining for a good 30 years as well (a connection?)

    and of course Tim Morgan on the same string in a different key. Basically the 1973 oil crisis pole-axed the world I’d read about in far too much crappy science-fiction where everything was going to get better and more exciting because people were going to boldly go into an ever-expanding space exploration.

    Carter and his solar panels

    Carter and his solar panels

    Then the price of oil went up, Jimmy Carter stuck solar panels on the roof of the White House, told people to ease off the gas 2 and the American people went bugger this for a game of tin soldiers. They considered that defeatist cheese-eating surrender-monkey cobblers and elected a B movie actor who told a much more cheerful story, which sort of stuck for the next 30 years, but I notice that humanity is still too skint to go to the moon. We last put boots on the ground in December 1972.

    Strange to think back at those fast and furious years of innovation and exciting stuff in my primary school years. It’s not like we haven’t made things a lot better and progress has arrested – if things had stayed like 1972 most of Britain wouldn’t have central heating, never mind a notable section being able to live like kings. Somewhere, however, I wonder whether that last footprint in 1972 wasn’t the day some of the vision died in the West, the first time we came up against insurmountable limits to growth… You can coast a long way from the peak with the engines out, and as ERE said, it took many years for Rome to fall. Maybe we are partying in the endgame…


    1. There was a surprisinglylarge amount of  light – ISO200, f/8, 1/250s
    2. the story of what happened to those panels is interesting, you can read it courtesy of the Scientific American
    18 Jul 2014, 3:38pm
    reflections simple living


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  • Today I shall live like a king

    and so will you, unless you’re reading this on your smartphone while sleeping rough… I’m currently reading Ian Morris’ Why The West Rules for now and it struck me that in terms of lifestyle we live the life of former royalty. Take Queen Victoria, which whom Morris opens his book – despite being the richest person in the country at the height of Empire, she couldn’t do many of the things I can. There’s a chair in the drive with which I could be off and at the Scottish border by midnight, there are machines to do the washing for me and I can see and talk to anywhere in the world for a modest cost. Unlike even thirty years ago when I was at university, the accumulated knowledge of the world is largely at my fingertips – right here in the garden, I don’t even have to get up.

    So despite the Joseph Rowntree Foundation telling me that I am an impoverished Ermine unable to take part in society

    Straight between the eyes, no? You do not have enough to live on

    Straight between the eyes, no? You do not have enough to live on

    I live better than Queen Victoria, sitting in the garden out in the summer heat with a glass of iced coffee watching the birds sunning themselves near the bird-bath. I can get anywhere quicker than she could, indeed I am less than twenty-four hours away from any of the pink bits on the maps on her walls. I have libraries immeasurably richer than hers, and the state of medicine and health in Britain is much better too.

    And sometimes it’s good to lift my eyes from what’s wrong about the world and tip a hat to what’s damn well right with it.


    Drinking iced coffee on a day that's too hot to do anything else with isn't all bad, JRF - I think Queen Vic would approve

    Drinking iced coffee on a day that’s too hot to do anything else with isn’t all bad, JRF – I think Queen Vic would approve



    the misery of metrics and measurements destroying job satisfaction

    Yesterday I chose to get wet in Ipswich town centre to demonstrate about Mr Gove.  Okay, that’s bull, but I was roadie for the day as I ran the PA 1 for the NUT strike demo about pay and conditions, and Mr Gove.

    The NUT rally. can't work out why this iPod photo is such bad quality; is it me or do mobiles always take crap pictures?

    The NUT rally. Can’t work out why this iPod photo is such bad quality; is it me or do mobiles always take crap pictures?

    I’m not a teacher and don’t have kids so he isn’t specifically my problem. However, some of the themes sounded familiar. In particular the rise of collecting ‘data’ for performance measurement systems and the trends of micromanaging the shit out of white-collar jobs was exactly the sort of thing that pissed me off about work. I wrote about digital Taylorism in 2010, and the NUT’s Jon Parker indicates the issues that sound similar – listen to the crowd response to ‘data’ being collected pointlessly 2

    Ipswich NUT John Parker on data and metrics (MP3 1min)

    There’s a case to be made that The Firm was trying to squeeze their old gits out of the place, which is why they employed pointless pricks to produce software systems to piss people off. This doesn’t seem to apply to teaching, however, where it seems the working environment is such that 2 out of 5 teachers quit within the first five years, there’s presumably no imperative to thin the ranks at a time when Britain is experiencing a baby boom and somebody presumably has to teach them.

    Now some of the changes to the workplace are the result of secular trends like globalisation and technology, which at least does somebody some good even if the end of the boat Western workers are in is sinking. But the stupid pursuit of pointless performance metrics making jobs a misery seems to be 100% own goal. Not only do we have to employ useless patsies  to collect the pointless performance data to piss people off, but the measurers are usually paid more than the people who do the work being measured, because of the Peter Principle.

    That’s the trouble with the homogenized management theories that come out of MBAs. Theories and fads go through companies like a dose of salts. and because we have people benchmarking along the lines of bollocks like ‘business best practice’ they all follow the same bullshit until the next fad comes along that is going to be the Holy Grail and sort out the crap that the last fad made. Let’s have a sample of bullshit MBA fads from my working life.

    • Empowering employees
    • TQM (total quality management)
    • winning edge – mindset management
    • investing in people
    • managing my performance
    • shareholder value (that’s 1 year share price hiking so the CEO can Maximise his Apparent Performance by buying today at tomorrow’s cost)
    • Agile development (in a big firm?)
    • six-sigma
    • just-in-time
    • business process re-engineering
    • mission statement
    • outsourcing
    • Putting Customers First
    • core competency

    All of these can work well some of the time in specific instances. None of them work when applied across the board like velveeta. One of the worst things they must teach people on MBA courses is that there is a silver bullet. You see these wet-behind-the-ears young pups promoted into a situation beyond their competence as they wax lyrical about the next best thing that’s going to transform everything and have to keep a level gaze… Because you know that it’s never different this time, and it wasn’t different the last ten times either. One size does not fit all. And these berks have insufficient experience of the real world to have had that belief in the silver bullet beaten out of them in the school of Real Life™. Reorganisations are political, they are the new Top Banana and Chief New Broom acting like a tomcat 3, spraying his mark on the organisation. They are not functional.

    The teachers are just taking the same hit from performance management theory which is a Current Big Thing – tell people how shit they are doing, preferably every quarter, because you can manage expectations about pay that way. That’s obviously the way to motivate people to do better. That toe-rag Tom Peters has a hell of a lot to answer for. You get what you measure. Right. You can measure a pint of beer easily enough. How do you measure a teacher? A CEO? An income tax inspector? Ah, teachers, that’ll be exam results then? What about if they have to teach a whole bunch of stupid kids then, or the kids of parents that don’t really give a shit and probably shouldn’t have been encouraged by Tony Blair to have ’em in the first place? Ah, let’s measure how clever they are when they enter school. Right, so how do you measure how clever they are? Is cleverness the only dimension of success – maybe a reduction in sociopathic behaviour and not kicking the shit out of the municipal bus shelter is a good outcome too? How do you measure the civic street furniture not trashed by the little tyke because he’s inspired to do something else? Measurement always has a problem with the counterfactual and the road not travelled. And so on. I’m with Lord Kelvin when it comes to measuring things that have a numeric answer that matches with the aspect of reality you’re trying to get, but when it comes to people the belief that Tom Peters prosyletised that ‘measurement works’ seems to be responsible for a lot of hurt in the workplace, and some not  particularly great outcomes. If you link people’s pay to metrics you get those metrics, but you don’t usually get great performance 4.

    However, thankfully this is no longer my problem :)


    1. Our farm isn’t on the electricity network but every so often we want to all get together and have a party so I have a music system of a couple of hundred watts  run off a 12V leisure battery. Using this saves having to wheedle a mains power feed from some local business or run a genny in a public place with all the safety issues.
    2. the dreadful distortion is because the recorder was overloaded, the Ermine delivered a better quality PA service to the crowd
    3. I have some trouble picturing Michael Gove as a tomcat, he’s a bit on a weedy side for a big old ginger tom
    4. for example, CEO pay since the 1990s, NHS waiting lists and beds, Enron, the Global Financial Crisis, the list goes on
    6 Mar 2014, 4:31pm
    reflections Suffolk:


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  • Capitalism, crowdfunding and gadgetry

    Capitalism brings up thoughts of great big phallic buildings, a concrete forest of tall buildings thrusting towards the light to eclipse the others in a Darwinean struggle for urban domination. Loads of folks in sharp suits talking important stuff into mobile phones.

    God v Mammon contest - Mammon has the edge when it comes to size...

    God v Mammon contest – Mammon has the edge when it comes to size…

    That gherkin in particular dominates the skyline, it’s not just the sheer size of it, but the symbolism is all Wolf of Wall Street

    more tall buildings

    more tall buildings in the Wolf of Wall St

    A couple of finance guys from the Square Mile party.

    Couple of guys from a Square Mile press release

    Couple of guys from a Square Mile press release

    Seems to be a lot of guys, FinanceRomance sheds a bit of light on some of the issues. Maybe all this testosterone is why the buildings have a certain profile 😉

    still there, rising...

    still there, rising…

    And that’s all good. Finance is something that Britain happens to be good at 1, or perhaps I should say the future city-state of London is good at. Must unearth my birth certificate and apply for dual nationality when it secedes, and hope citizenship is jus soli. We’re good at it, and we have scale, but let’s face it, share-owning capitalism isn’t that widespread in Britain, because, er, you need capital to make it work for you. And you still need to be a pretty big fish to list on the LSE.

    Gonzo capitalism – no tall buildings and yachts needed

    However, there seems to be a curious form of capitalism rising, called crowdfunding. I’d already come across this phenomenon in the electronics small biz area. Getting a small run of electronic items made is dear, because you have fixed non-recoverable engineering costs for making masks for the printed circuit boards and assembly. These are sunk costs before you even start the project, they aren’t dependent on how many items you make. I’d used radio modules from Ciseco and they used kickstarter for one of their projects.

    Crowdfunding gets a bunch of ordinary people together to put up some of the money in small bite-sized chunks. It’s gonzo capitalism – or alternatively capitalism going back to its roots. The Stock Exchange originally started a few hundred years ago with a bunch of people coming together to share risk-funding of projects that were too big for any one individual to take on. I like the story that they got ejected from the original place for being too rowdy – looks like the high jinks that seem to go with the territory nowadays started a long time ago!

    Crowdfunding the Calf at Foot Dairy’s move

    The Ermine came across this again because I got to dig out my old MiniDV video camera a couple of days ago. This is seriously ancient, steam-driven technology from about ten years ago, and it was pressed into service to shoot a crowdfunding video for the Calf at Foot dairy, which has been given short notice to quit the place they’ve been for the last year and a half.

    It’s been an awfully long time since I worked at the BBC and saw how people pulled a programme together, and I was an engineer, not a creative sort. It’s no easy task to try and tell a story using video – you’re always fighting the tendency to run too much material and overrun. Plus the Ermine no longer has a working TV in the house, and much has changed in the 10 years since I last worked with video – HD has arrived, and computers and progressive scan seem to have muddied the waters. Culturally, it appears that attention spans are much shorter. Obviously what I needed was new video camera, but what the hell, I will see if I can tell the story with the junk that I had.

    Because in the end the story is one bunch of humans relating a tale to another bunch. The technology is part of it, and it would be a lot better with a HD camera. But there are some universals to video – hold the camera steady,  preferably with a tripod, don’t hosepipe , do not zoom on-screen. The elements of story-telling haven’t changed much from the original three act drama told around prehistoric campfires.

    A lot of the challenge here wasn’t technical. I grew up in a city, FFS. I am really, really scared of cows, indeed any animal bigger than myself. And cows are HUGE…

    Cows. They're big. And they're scary - could just crush you by sitting on you

    Cows. They’re big. And they’re coming to  get me!

    Crowdfunding seems to take two forms. The sort that the Calf at Foot use, and the sort used by Ciseco to get enough interest to do a prototype run is in fact fundraising to do a specific job or project. It’s the kind of co-operation that previous generations used for a barn-raising – everyone chips in a little to help get something to happen. In some ways it’s closer to a retail bond, but with the coupon paid in kind. These are relatively easy to qualify and secure against the natural fears of fraud because of the transparency. With Ciseco, if they achieved their target, you get a circuit board or kit, if not you get your money back. With Fiona’s dairy move, you get to see that the cows are up near Lowestoft rather than out near Hollesley – in this case it’s a straightforward support of the specific project, rather than a purchase as such.

    However, there is an equity form of crowdfunding that is in its infancy, that is closer to shares. There are strict conditions around both forms, but particularly the equity variant. After all, what do you get as an equity shareholder? You get a share in the company, and sometimes a share in the earnings of the company. Many of the equity crowdfunding projects are hard to measure value, and they are startups, so they are unable to produce money that the shareholders can take out of the company as income, just as in general you don’t go to the AIM looking for dividend stocks. Of course, this applies to stocks and shares too, but it’s particularly hard to qualify risk and do all the due diligence associated with qualifying counterparty risk. After all, over half of startups fail within the first three years. The FCA seems to require investors declare they don’t have more than 10% of their free capital 2 in equity crowdfunding.

    Nevertheless, it is heartening to see that there are attempts being made to democratise capitalism, that it isn’t all about massive buildings, that people are looking for ways to increase access to small scale funding. It’s to the stock and bond markets like Zopa is to the banking and savings market. And it’s where some of these large institutions had their roots. After all, building societies got their name because in more cash-straitened times, people banded together to raise the capital to build houses. The crowdfunding website Abundance Generation draws out this parallel in their blog. One of the things the original building societies got wrong is the concept of one member one vote (OMOV), which gave rise to carpetbaggers taking out a lot of accounts with the minimum amount of £1 or so. They then used their OMOV votes to force a demutualisation and get a hold of the fossil wealth accumulated by the building society. The moral of the story is allocate voting rights by invested capital, but the problems weren’t obvious in the 1700s. I don’t know how equity crowdfunding works, but if you see OMOV as an investor avoid. Or open lots of accounts funded with the minimum amount for lots of voting rights 😉 OMOV is one of the problems with consensus decision making. It hamstrings it – in the end people who put more in should have more say, to build an effective system. Dunno where this goes with democracy, perhaps we have to live with the Churchillian democracy is the worst form of government except all those other forms that have been tried from time to time.

    One of the pluses of being in charge of my own time – I can say Hell Yeah if I want to

    I don’t know if this is the way of the future, or it is an evolutionary dead-end of the tree of capitalism. But it was an interesting diversion. And it’s one of the things that is a joy of being retired. It didn’t cost me anything apart from a couple of late nights to start with nothing and end up with something that might help someone take their cows to pastures new. An Ermine is capricious. If something tickles my fancy, I’ll have a go. If it doesn’t, I’ll pass. I enjoyed the challenge of trying to make a coherent story out of this. Of course the result could have been better if it were made by some indy video house somewhere. It would be better if I used a modern video camera, it would be better if I’d had more time and less coffee. But it’s probably good enough, and I learned about crowdfunding, something I had no idea about. I don’t personally have any application for it, but I have to say, looking at the projects on crowdfunder and kickstarter, that there are a lot of small enterprises that are in the extreme bootstrapping phase.

    Although I worked for a year in a 10-man SME firm at the start of my working life I didn’t realise it was so hard out there for entrepreneurs. I also ran a multimedia firm on the side for a few years, but that was purely selling the products of mind – I took on commissions but didn’t have the cashflow issues that are associated with doing real stuff, where you have to buy the supplies and services  to make the product. I have a renewed admiration for the grit of Britain’s SMEs!

    It isn’t all about your camera

    Oh yes, and one in the eye for consumerism. A lot of consumer goods like cameras and the like are sold with the promise that this gizmo, feature or gimcrack will make you creative. And I’m sort of susceptible to some of the siren song. But I don’t need the latest, I probably do want to upgrade to HD if I do more video, but ebay will probably be my friend – you can get now for about £150 what you’d have to pay £500 before. But what I do need is the ability to set the exposure to manual. And a camcorder sound is junk – I shoot separate sound with an audio recorder and separate furry microphone and resynchronise in post, so all I need of the camera is some sound to sync to. Eliminating any quality cares there saves me a load of cash.

    I did experiment with an iPod, my stills cam and with the last gadget I bought before I went into save for retirement mode, a Flip cam. All of those are great for shooting first-person simple stuff, and facebook here’s my mates mucking about in a bar, but they just don’t let you shift perspective. All of them can give a better rendition in that first-person up to 10 yards away scenarios that my 10-year old camcorder – two of them can even do HD. But I realised why they make me angry when trying to do anything else – the auto gain kills anything in the shadows and the lack of zoom is a massive handicap. A truly talented artist would probably be able to work within those limitations, but it would take them time. I ain’t got that sort of talent. But I’m not so gormless that I need face-tracking.

    So I learned something and had some fun. I saw a new form of capitalism in the making. And the cows didn’t crush me!


    1. yes, we did have a major snafu a few years back, but it seems we sort of survived that, and animal spirits seem to be back
    2. free capital excludes property and pensions. I am pleased to see that the FCA has adopted the Ermine’s policy – your house is not part of your financial capital assets. It’s official, and you read it here first :)
    6 Feb 2014, 5:01pm
    living intentionally reflections


  • December 2015
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  • how much work can you withstand?

    I’ve already had the rant about how The Man is gamifying the office and turning it all into a Kafka-esque numbers game. But you can eventually buy your way out of The Man’s filthy paws.

    However, it appears that The Man is not the only bad guy in getting the balance between Work and Life right. The enemy is embedded within us, according to this NYT article on mindless accumulation. (hat tip to Monevator)

    “[earning more than you can use]It’s a waste of effort,” he added, “But once people are in action, they can’t stop.” […] Dr. Hsee said strongly suggested that both groups were driven by the same thing: not by how much they need, but by how much work they could withstand.

    I’d have berated the good prof in an earlier life, goddamn it, I need to work to earn all the money to…

    buy things I don’t need with money I don’t have to impress people I don’t like?

    Damn. I was that guy, and heck, I didn’t even have the need/want for the yachts of the Wolf of Wall Street 1

    Till one day, in Tesco as the picture in front of my eyes shimmered and dissolved into a jumble of meaningless lines as for a second the thin line that keeps the delicate fire of reason alight failed. Slowly I gathered my wits and drove back. Really slowly. And then asked myself WTF just happened – and the short form of the answer was basically ‘wrong way, do not enter, turn back now‘. I was lucky, some colleagues discovered they had taken more than they could withstand when they wake up in hospital from a stroke or heart attack. I had to form an exit plan. I was happy as an engineer and with what I was doing, but the micromanagement, targets and bullshit I grew to really hate.

    The prof is right. I haven’t earned any notable amount of money for over a year and a a half. And yet I could still go into any Ipswich car dealership and buy a car, new, with cash 2. Because of the paradox he hinted at – I needed the extra cash when I was working to compensate me for the bad experience and the way it stopped me following my own interests, hopes and dreams. Now I can do that, I don’t need the cash – I’m already six months into extra time from when I thought I would run short.

    Nobody will listen to the good prof though. Michael Norton put his finger on the problem at the end of the article.

    Still, he said, choosing happiness or leisure over earning is challenging, in part because accumulation of money — or candy — is easier to measure than, say, happiness. “You can count Hershey’s Kisses,” Dr. Norton said. Being an involved parent or partner is not so quantifiable. “Most of the things that truly make us happy in life are harder to count,” he said.

    Well that’s a bastard then. We are losing our complex values to the simplicity of one-dimensional numbers. We are becoming number-savvy and value-blind.

    I walked away from working before the strokes and heart attacks. But I haven’t recovered all intellectual facility. I still occasionally look at things and feel shit-for-brains as I think to myself when faced with a task that once I would have been able to do this easily. I find concentration and focus hard to hold for more than a few hours, though it is slowly getting better – but the recovery time is measured in months and years, not days and weeks. It isn’t all bad- I find it easier to see the big picture and not dive down ratholes of detail. It’s one of the things that helps with not spending badly – I don’t mind spending more for something that I use every day. Or means something to me, but a lot of advertising and a lot of overspending is because the customer doesn’t stand back, ask themselves whether they need this class of thing or service in their life, and if so, do they really need the best or will cheap do. Often the best and dearest is the cheapest – if you use it often, this is the Vimes Boots theory why the poor pay more for many things.

    Vimes Boots happens in other areas too – Adnams had an offer on beer, it wasn’t a huge saving, but since everybody seemed to be both skint and on the Carol Vorderman misery diet 3 and beer keeps, I’ll save the tenner. We buy coffee from Garraways in London by mail order as beans and grind these, rather than getting itty-bitty bags from Tesco. I take higher insurance excesses to keep premiums down.

    So back to The Man – now that’s a problem you can do something about. But the enemy within, who blinds us so our values compass spins and knows no north as we focus on the countable at the expense of the valuable, against this there is little defence. You find out how much work you can withstand by discovering how you can’t withstand and easing off from there. If you’re lucky…

    Compared to the enemy without, the enemy within is a trickster. Reining that one in comes down the the old Gnostic maxim, ‘Know thyself’. Getting to do that usually takes two qualities that are in very short supply in the modern world – reflective introspection and time.

    Know Thyself in Greek in a stained glass window

    ‘Know Thyself’ in Greek in a stained glass window




    1. What’s up with this yachts thing on Wall Street – and where are the customers’ yachts anyway
    2. we don’t have any Lamborghini or Ferrari dealerships in Ipswich, it’s not that kind of place
    3. Why the hell do people do stupid things like that – you’reb etter off drinking 10% less all year than nothing for a month and then going on a bender in February, which seems to be the way people deal with the end of the 28-day detox, from observation
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