I want to learn to spend a little more, with grace, with gratitude and with a new map

Everyone is on the New Year’s resolutions track, and most PF folk want to save more. I am going to take a different line this year, because I am in a new territory. That needs a new map. It’s been a long time coming, over six months between when I started the process of transferring my DC savings to Hargreaves Lansdown and actually seeing the numbers tick up. It has happened now.

That'll be a nice Lamborghini, and to hell with the money

That’ll be a nice Lamborghini, and to hell with the money. Secondhand, in my case, as I am using five years worth of pension, not a lifetime’s worth.

So the long period of coasting between my last pay packet in June 2012 and the first appearance of a regular income in the new tax year worked. I will enter the new tax year with some working cash to spare, and all the earnings from this year to toss into the SIPP on March 31. It has been a very different perspective, living on the fossil wealth of my erstwhile career to living on an income. That period felt like a limbo – yes I had retired but there were hazards that meant I might have had to work. Now it is very likely that I will never work again, at any rate at the level of most of my working life. Sticklers for accuracy will, of course point out that a pension is also fossil wealth, but living with it expressed as an income is different to living off saved capital. The amount in the SIPP is such that I could rush out and purchase a Lamborghini – I’m quite taken by this red one  – I am not rich enough to buy the quarter-million jobs but I am good to follow through on Steve Webb’s recommendations for the lower end of the secondhand market.

Passing through the turning point is difficult – there is a big  difference between living off capital and using income

I was always a salaryman, not an entrepreneur, and so as I left the workforce and the income tap turned off, I lost my main financial navigational instrument, the first law of Wilkins Micawber – spend less than you earn. This has guided me across thirty years of working life, but once the annual income falls to zero, this waypointer spins in a pathless land and knows no North. And at the same time the source of accumulation ceased. That I was able to still accumulate is tribute to an ageing bull run that seems to have finally reached senescence. I am not complaining, as someone who now has too much asset allocation to cash 😉 I am disappointed in RBS’s definition of cataclysmic year. WTF is the use of a fall of 20%? 50% is what I want :) OTOH this fellow has he S&P at 800, 1200 will do me.

For three years the answer on how much can I spend always came back ‘as little as possible’. I struggled initially because I couldn’t serve two masters, and eventually accepted the slow fall in working capital.

Decline and fall

The turning point

Some of that struggle was simply not acknowledging that I had passed the accumulation phase, had reached the apogee of my earning power and accumulated wealth. It felt wrong because for thirty years previously it would have been wrong. The switch to living off capital may be doubly hard for people in the PF community who have focused on accumulation for many years. I am lucky and perhaps privileged – my main pension is expressed in terms of income not capital and I am burning up a Lamborghini’s worth of DC savings ahead of it to avoid the penalty of drawing it early.

Everybody else’s New Year’s resolutions are how to save more or earn more. Mine are about learning to spend more 😉

Over at Quietly Saving Weenie is sensibly looking to push her savings rate up. FFB40 has set himself a plethora of goals broadly aiming to earn 100k this year and presumably save a fair chunk of it. ERG is doing forex trading and matched betting.

I now have the answer to Micawber. For the next five years I can spend up to £14k a year and not fall behind 1, which roughly matches Mr Z’s Goldilocks spender‘s disposable income. If I drew an income from the ISA I could push that to 18k. That’s the equivalent to earning 20k gross p.a. which is apparently the white collar minimum in London according to FvL. God knows how people do it – I left London 28 years ago earning more than that in real terms because I was pissed off with being skint all the time and living in shared accommodation. I must have been a terrible spendthrift, because nothing indicates to me that London living has got cheaper in real terms over those three decades. But I obeyed Micawber’s rule, so while none of it stuck to the sides I was debt-free.

I have not been spending anything like 18k p.a. across the last few years. I don’t aim to take it with me into a next life, so I need to become a curious combination of Mr Zombie’s Jones’ and frugalistas. I need to keep his chart on the level, not go for the networth increase and accumulation that has been the watchword until now, otherwise I will be rich in the graveyard but poor in life. That is a big change in perspective.

We went to Orford to celebrate the milestone where Mrs Ermine bought me lunch at the Pump St Bakery  and I finally managed to crack open the wallet and blow £20 on some fine products from Pinney’s smokehouse, after observing this fine piece of cold war brutalism across the river in the January breeze.

Orfordness radio station, erstwhile site of the failed Cobra Mist Cold War over the horizon radar

Orfordness radio station, mothballed in 2012, erstwhile site of the failed Cobra Mist Cold War over the horizon radar.

The village seemed totally quiet, I guess this second weekend of the new year isn’t a time most people are on the razz. Unlike Steve Webb’s exhortation, I’m not going to go mad, but it is a significant change to my situation. I need to reflect upon the upside of spending, without being suckered into the stupid consumerism that promises but doesn’t deliver. I spent so much effort over the years to shoot needless spending, and I find I don’t know what to do here.

Then last night we went out to the Fox at Newbourne to celebrate some more, and in returning we passed the Firm and I recalled the first time I had come there twenty-seven years ago, also in the night, and it felt as if the circle had turned now fully, when I change from being a retiree to being a pensioner 😉 The pub has positive memories from the Firm – many project topping out celebrations as well as a fair few summer lunchtimes dreaming up project ideas or setting the world to rights in the distant early years before the dotcom bust. It was a different world of work then, much more creative and less micromanaged routine paint by numbers…

I froze all my SIPP savings in cash as of March 2012 because I believed I was leaving then and would have needed to liquidate that AVC fund as a pension commencement lump sum. It happened to be a local high for  the FTSE100 around the 5900 mark. I occasionally cursed myself in the intervening period for not leaving it invested, but I lived by the old rule of thumb – don’t have capital you expect to call on in less than five years in the markets. If the period is longer it’s worth taking the volatility of the markets because inflation will also be eating at the value. And as it turned out the FTSE100 is within spitting distance of March 2012. Had I kept it in the 50:50 FTSE/global fund I would be notably better off now. But what the hell. At the moment the stock market can’t hurt 2 my SIPP or main pension, and I’m okay with giving up the upside. I will take market risk all in the ISA and soem unwrapped equity holdings.

I am now an oddity in the PF universe

because I have crossed to the other side of the accumulation/decumulation divide. Most writers are in the accumulation phase. Indeed the only other exception I can think in the PF blogs I read is Jim. As such my aims and risk profile have changed in a big way. There are many standard FI/RE things on my old map that I will not need to do –

no need for pension saving (beyond the £3600 to get £720 p.a free money for a few years). Having earnings has buggered this tax opportunity up somewhat anyway.

While on zero income I carried an emergency fund of several tens of thousands in cash across the three years, because I needed to be my own lender of last resort in an emergency. Nobody lends money to someone without an income 3, but I have an income now. I was lucky – no emergency happened. Some of this erstwhile cash reserve needs to get invested and start working for me now that I have an income and could borrow against the future income stream again, in the same rationale as Jacob ERE. Of course I will still need an emergency fund of sorts, but much less. I will retain my NS&I ILSCs and shift the rest into a new S&S ISA. I don’t need the three-years expenses cash buffer to smooth investment income, because I won’t be living off investment income.

I am nominally working in this tax year, it will be my 35th and final year of National Insurance to pay. I will electively pay that NI, to become fully paid up.  I asked for a State Pension forecast which is about £7100 p.a. It’s not quite clear to me where I got this good fortune, as I have been contracted out for 20 years, and the last time I asked for a statement in 2009 the amount was £5700 p.a. I am not sure I can rely on the existence of a State pension – it’s still another 12 years before I’d get it which is 12 years for some government to decide to means test it. If I were to get that then I personally would have an income of the typical UK household. That is more than enough for me.

I have an ISA originally designed to compensate for the actuarial reduction to my pension from drawing it early, which is no longer required because I won’t draw early. A source of tax-free income is always nice, and I will continue to build this up, though the market crash will no doubt make this smaller in the near future. In the long run (10 to 20 years) it will compensate for the erosion of my pension relative to workers due to earnings inflation outstripping RPI, and gives me some buffer against modest strings of bad times. If peak oil happens, zombie apocalypse or other shocks to the system I am still stuffed of course. Otherwise I am like this Telegraph pensioner, I will never be rich, but I will never be poor. Thirty years is a long time – for perspective thirty years ago I was still working in London… Things will change.

That ISA may begin to compound. I am not a great believer in compound interest in helping you get to financial independence. But once you reach FI, and in particular if you don’t need the income from a lump of capital, it starts to snowball. In its short life of about six years of contributions and no withdrawals, the accumulated dividend income has put in about a year’s worth of ISA allowance into the pot on top of my contributions, which is being reinvested. The ISA needs splitting and part transferring to other platforms, because it is now way over the FSCS guarantee 4.

I don’t really know where I’m going with the ISA because the original aims has been overtaken by events and Osborne’s changes. But I will have a lot of cash looking for a home from that large emergency fund and the PCLS, and Fortune seems to be smiling on me by beating up the stock market for me in advance for 2016. I bought a lot of gold ETFs in stages in 2015 to try and get more defensive in the face of a frothy market, and up to RIT’s 5% asset allocation. This is the first and only of my 2015 purchases to turn a profit now. The less said about HRUB, oil, mining and emerging markets the better for now, though I confess to a temptation to double down on some of those. Every dog has its day 😉 OTOH if the market continues to take even more stick then that is a time to build the HYP too – you can’t build a HYP cheaply  in the heady heft of a bull market.

What can go wrong

There is always lots that can go wrong. Let’s face it, in the 1960s of my early life we had Kennedy and Khrushchev glowering across the Cuban Missile crisis and B52 bombers on 24/7 watch over the North Pole with nuclear bombs. Somehow, despite frequent accidents we survived. The 1970s had the oil crises and the Winter of Discontent as the unions manipulated the government like puppets on a string, and 26% annual inflation in 1979. The 1980s had two harsh recessions, a lot more Cold War sabre rattling, Thatcher’s goons in running battles with Arthur Scargill’s goons. The 1990s had the implosion of Russia and all the hazards that entailed, the slaughtering of UK housing as a can’t fail asset class and the Asian financial crisis which was the birth pangs of capitalism trying to adapt to a tripling of the world workforce as the Iron Curtain and other barriers to trade began to fall. The 2000s had the dotcom bust and some of that increasing world workforce weakening the power of labour versus capital in the West; we are still trying to work out where all the rubble is ongoing to fall. The 2010s seem to be about more geopolitical risk, and ugly confluence of mediaeval religious tenets with 21st century technology, along with a lot of chickens freed by the neocons coming home to roost. On the subject of religion, in one generation the West lost all the moral and intellectual principles that were lauded by Niall Ferguson for making it such an effective economic machine with its shared values from the Enlightenment – we are all consumers now. Those shared values had their problems too – they ossified the class system and justified a lot of actions we would now disapprove of, but they were a common myth of perhaps a different nature from our current one of continuous growth. We seem to be still working on a replacement story for how/why to be better at being human, which is probably not purely a materialistic enterprise. That’s a drag given our economic creed knows the price of everything and the value of nothing.

So far we have survived. There will be change across the next thirty years, some of it welcome, some of it unwelcome. I think I have made a reasonable fist of hedging what I can. I do not have enough to hedge wars of all against all, zombie apocalypse or even the sort of aggravation Moneyweek has been trying to scare its readers shitless about to sell more magazines.

There are far too many people in the world for us all to live the American Dream of the 1950s never mind like the Wolf of Wall Street, although I hazard that we could all live like kings of old materially.  But I have come to see the wisdom of accepting the uncertainty without dwelling on it – coffee for the things I can do something about, red wine for those that I can’t change. The bearish argument always sounds smarter. But as a way of living life to the full it sucks – it raises your blood pressure and makes you miserable. So I am going to park that. Yes, I may one day regret not having a bug out bag and guns and ammo. But hopefully I will also have missed living ten or twenty years thinking about the bug out bag and the ammo. Humans need to be careful gazing long into the abyss, because else the bastard will blink and look back into you.

What I know will go wrong

There are some things we do know. Brexit or not will scare the horses, and it’s an intricate mess from which it’s hard to see which way is up. Taxes will rise, because they have to, we’ve lived beyond our means for a long time and are still at it. For all the bellyaching income taxes are in fact at low levels in living history, which is part of the problem. The young Ermine at the start of his career paid a much bigger proportion of his pay in tax and national insurance 5 than the old Ermine in the last three years of his career. The solution to paying high taxes is be no tall poppy – live a reasonably economical life, because then you have the push-back of lots of people on your side. If you are going to live more than  a third up Fire V London’s scale you are going to pay a shitload of tax until you get into the upper reaches (whereupon you will pay clever people to avoid tax for you in creative and highly inventive ways). Likewise if you want to live in London and decide your children are special flowers who need private education, then this decision creates a fierce money burning furnace that you need to continually feed. You will find it difficult to minimise taxation and need to focus on increasing income to feed the fire. You takes your lifestyle choices and you pays your money.

There may, however, be trouble in raising taxation. I can imagine the integration of NI and income tax, which would hit me with a tax hike on pension income. Reducing tax exemptions are another way. Pundits are screaming blue murder about tax relief above the basic rate on pension contributions. In the UK 15% of people pay over half the income tax take. Monevator is talking about going Galt with dark mutterings about  “supporting other people’s lifestyle choices, rather than the essentials of State and a worthwhile safety net”. This was a large part of my hitting pension savings hard too.

On the other hand I find it hard to view people spending less time at the office as a bad thing. They really should spend more time with their children and see them grow up – my working class parents saw more of me growing up in the employment environment of 40 years ago than typical middle class parents both working to pay for their consumption do now. The latter of course have far more and better Stuff and numerous fast and furious fancy foreign holidays, but time isn’t a renewable resource. The days are long but the years are short. If the robots really are going to come for our jobs then more free time is an upside, not something going wrong 😉 The trouble is a lot of people won’t have that choice, the power structure is such that extra productivity will likely increase the return on capital rather than increasing overall human happiness. The solutions Asimov’s Solarians took to arranging their society so the humans had a high standard of living in a work-free world always cause palpitations in right-thinking people, so I don’t know how that will pan out.

ambitions in things other than finance too

There seems to be a big thing about goals and metrics in the PF community. Personally I think goals and metrics suck the joy out of life and work, so I don’t do that. But a total amorphous mess isn’t effective either, so I have some ambitions. January is a terrible time of year to try and start anything – we really should be starting our year somewhere between February and May so you get a bit of a leg-up in cheer and hope from Nature. Although if we are all going to sit behind screens in a virtual world like those Solarians perhaps that will become irrelevant in the years to come. We will become Spacers all watched over by machines of loving grace with “All other contact accomplished by sophisticated telepresence viewing systems”  – with the smartphone as the fore-runner of the technology.

So rather than goals I am going to go for ambitions, and I will change my mind frequently and give some of them up ere the month is out in the time-honoured tradition :)

No thanks. Unlike the rest of the country, I am lighter and richer in January ;)

No thanks. Unlike the rest of the country, I am lighter and richer in January 2016  than in December 2015 ;)

I don’t need tosh like this – the joy of owning my own time is that life is more chilled, and as a result I eat better and less. It also helps that a lot of what I eat comes from the ground, not from the industrial food system, for that I have Mrs Ermine and the Oak Tree farm to thank.

Chris with the squash harvest. There are no Clubcard points on this lot...

Chris with the squash harvest. There are no Clubcard points on this lot…

Unlike it appears the rest of the UK, I managed to lose weight in December, and have been for some time since retiring. It is within the realms of possibility that I may one day see the same weight as when I was 21, before I draw my main pension. This is an aspect of health that I persistently and continuously screwed up while working – retire and I discover the forces of natural equilibrium slowly shift to the right target. I have still never seen the inside of a stinky gym and I’m not going to. But I have the time to walk and bike to places within the town, I don’t usually drive unless I am going to leave the city limits or shift heavy stuff. It should be noted that average people like me 6 are way, way too lazy to lose weight through exercise. You can’t outrun a bad diet.

I want to do some hillwalking, to see prehistoric stones, to travel more slowly, to cycle in interesting places 7 in the UK.

Living frugally simplifies some decisions. I want to still live well and intentionally even if this simplification is lifted.

I’m not drinking homebrew again.

I want to learn morse code.

One thing I want to do in 2016 is to bust some of the media junk out of my life and to read less crap. Before the millennium people wrote books because they had a story to tell, and publishers were valuable gatekeepers because they had to take a financial risk to publish. Increasingly it seems people write ebooks because it’s seen as a way of making money, rather than telling a story, they trade websites because they want to buy the clicks and SEO without adding value. Movie companies trot out sequels and prequels because they’re safe. All in all the media and information space is trending towards arbitrage and extractive rentierism, and the quality of material online and the signal to noise ratio of search results is falling. I spent perhaps too much of the last three years, looking at the world through screens. It was cheap and I learned a lot, but I noticed an increase in clickbait and content farming and a material decline in quality.

I want to originate, and to co-operate with creative people. I want to tell stories because I think they are worth telling, and to create and shape things because I think they are interesting. And I am privileged enough to be rich enough that I don’t need to try and make a buck, I want to pursue the intellectual freedom to craft and leave my work to speak for itself.

man-with-savingsI want to leave the world of grubbing for money behind, it is coarsening a lot of discourse as it becomes always-on. In the gig economy work spreads like velveeta into all waking hours. I occasionally talk to people and see the hungriness in their eyes as they are trying to compute whether I am a networking opportunity. I can save them the trouble. I am an introvert, a retiree and of independent means. My networking value to the gig economy is bugger all, I’m not swimming in the same ocean.

I will engage if something interests me, but people find it hard to understand that it is difficult to incentivize an Ermine with money, despite it being the universal currency of making people do what you want. There are surprisingly few people of independent means in the modern world, despite that fact that Britain is a far richer country than we used to be. The ever-hungry money furnace of consumerism is making most of us poorer faster than human ingenuity and the accumulated capital and knowledge of generations is making us richer.

I want to preserve the sweetness of this freedom from the rat race, expressed well in this 1960s ad. For thirty years I was motivated by earning more, before I was challenged by events to ask myself why. The learning and the wisdom gained in the crucible was hard won, to change the ‘just because it’s what everybody else does’ to ‘I need enough, and enough more than enough to match my risk perception and view of the world, and then stop and get off this hamster wheel’. Work is overrated – even a frugal Ermine could live like a king of old.

On the flipside, I don’t do some of the things retirees do to fill their days. I don’t volunteer, because if you want a commitment from me you have to pay, to express some appreciation for the commitment. Otherwise you may get assistance from me, but on my own terms and with no strings. That’s just me, it’s not a criticism of other people living by different values.

I can pursue some interests I mothballed because they were expensive, travel, birdwatching, recording and photography 8. I may buy the oscilloscope I considered a while ago.  In general it’s yes to experiences and tools and to things I use to make and do things with other people, no to the beach and no to ‘this XYZ (mobile phone, gizmo, whatever) will transform your life’ – it never does.

I want focus. I want to do one thing at a time and pursue flow. I want to listen to music again as I did years ago – in the dark and on my hifi once it’s been repaired. I want to get off the modern trend towards doing three-and-a-half things badly rather than one thing well at any given time. I have trialled some of this with books – when I read books I read exclusively. And if the book bores me enough that I feel I want to do something else then after about five minutes I stop reading and decide this is not for me. I don’t listen to music or audiobooks when I am on my bike. I listen to the birds and try and be aware of the traffic around me, not immerse myself in a e-bubble. Consumerism being what it is, it is trying to turn this into the modern self-help religion of mindfulness. Two generations ago, parents and schoolteachers knew all about mindfulness with the two simple words – “pay attention” :)

I want to keep regular use of smartphones out of my life. They have their uses, but they should not become a vade mecum, despite everybody else feeling that way. If Steve Hilton can run a tech startup without a phone a retired Ermine can resist becoming a gormless zombie illuminated by the blue glow of the latest iPhandroid whatever. It is very very hard to originate anything on a smartphone, but it is a fabulous tool for passive consumption and tethering to the Hive Mind. If I want to take pictures I’ll use a camera. If I am recording I will use an audio recorder. I don’t want to tote a device that does sixty-seven things all at half cock. Jennifer Lawrence was absolutely right. You can’t live your whole life behind your phone, bro

That’ll do for ambitions for now. Across the lean years I learned how to bridge the gap with not enough, and now I want to learn to live well with enough, and live intentionally, and with grace and kindness. I am a different me from the mindless consumer, and I will handle the change slowly and carefully, because the world has become even more talented at invoking mindless consumerism, and presumably some of my inherent flaws are still latent. The challenge now is to spend wisely under my control, rather than being constrained by resources.

So yes, I want to spend more this year than last. But I want to claim the gift of the seven lean years, and spend it to enhance the quality of my life and that of those I care about, rather than to fill my house with consumer trash and my time with empty manufactured experiences. And I’d like to learn to do it with gratitude. Because for all the challenges and the doomsday razamatazz on the news, I live in a special time and place, where humanity has solved a lot of tough problems and it’s working on more. I want to tip my hat to the giants on whose shoulders we all stand, and not waste that gift in the time I have left.

Notes:

  1. this is conveniently and by design roughly the maximum rate I can draw keeping below the tax threshold, plus 25% from the PCLS
  2. obviously an unending economic crash would take me out like everyone else
  3. this is not strictly true, there are all sorts of bottom-feeding lowlife scum that lend money to people who don’t have incomes. I’m just not prepared to swim in that foetid pool
  4. note this is £50,000 on S&S ISAs not the higher £75,000 level for cash deposits. This is protection against your platform going bust, not against you making bad investment decisions
  5. the single person’s personal allowance was appallingly low in 1982, less than a quarter of a modest pay level, then tax on the rest at 30% plus NI at 9% means the youthful Ermine paying 39% was closer to a modern HRT taxpayer at 42% marginal than a BRT taxpayer at  32%, and paid that high tax on much more of his modest salary than the old Ermine, although that was distorted by pension contributions of the latter
  6. I deeply detest all sports and have done ever since school, and yet it is quite remarkable that a sport-loathing Ermine is in fact a lot less inactive than much of the adult population of the UK. Just nowhere near active enough to shift the needle on the dial regarding weight
  7. taking the bike most of the way there in my camper van ;)
  8. I actually turned a profit on the latter two over the last three years. But I was using fossil wealth in terms of gear bought while working, and was limited in opportunity by limitations in finance

a look back at 2015 and how does an Ermine return to the middle class?

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

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

Decline and fall

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

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

The point of no return

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

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

The original premise behind the HYP held true

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

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

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

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

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

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

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

The symbolism of the turning point

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

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

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

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

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

the smartphone is the new sun – Benedict Evans

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Stream did not wane.

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

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

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

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

Ending a sabbatical from the middle class

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

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

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

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

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

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

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

Derakshan

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

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

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

Derakshan

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

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

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

Some things I can do in 2016:

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

Everything else is writing done with the wrong medium IMO 😉

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

I don’t pay for what I can’t touch.

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

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

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

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

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

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

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

Notes:

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

The future of work looks like becoming a relentless rat race

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

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

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

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

Workplace Structures/Delayering

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

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

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

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

career progression is much faster now

career progression is much faster now

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

Intrapreneurship? WTF?

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

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

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

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

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

Not all of us want to be startup entrepreneurs

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

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

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

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

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

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

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

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

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

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

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

History is written by the winners

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

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

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

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

Work is increasingly always-on in a random way

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

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

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

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

H Thomas Johnson, Lean Dilemma, 2006

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

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

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

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

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

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

I’m glad to be out of it

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

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

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

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

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

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

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

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

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

Notes:

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

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.

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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 😉

Notes:

  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?

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.

Disclaimer

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)

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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 »

Notes:

  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.

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…

1505_this-too-shall-pass-bracelet

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.

Notes:

  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.

Notes:

  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 :)

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

1408_moon_a_IMG_1410

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…

Notes:

  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

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

 

 

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