FISH | Financial Independence Seeking Happiness: Saving

Spendaholics

Contender 0 Early Retirement, financial independence, frugality, Habits, Saving, spending 17:03

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<tr><td class="tr-caption" style="text-align: center;">A good investment?</td></tr>
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The Tribe is currently going through a period of EXTREME spending. 
 
First up this post is not about idiotic hedonistic spending. We have not been to Bali (ever), we do not have silly fuel guzling, flash cars, we do what we can ourselves and do not rely on expensive services. It is about: 
<ul>
<li>What have we spent money on</li>
<li>A case study on good spending</li>
<li>Have a play with the free FISH timeline planner </li>
</ul>
<h2>
 
 THE.FuTuRe: "I did not think they would last long in financial independence - the spending bug has finally got them"</h2>
Let's have a look at what we have spent (invested) money on and why we consider it useful in the pursuit of FISH. 
<ol>
<li>We have installed a really cool eco heating system for new house: </li>
<ol>
<li>25kw wood gassification boiler with a 1000 litre water buffer tank</li>
<li>300 litre solar water tank with heat exchange between the two tanks - new unpressurised design.</li>
<li>3 chimneys </li>
<li>two 4kW wood  burning stoves</li>
<li>So much insulation we do not know what to do with it all other than double it up</li>
<li>Very low running cost  - minimal electricity (pumps and controllers), Purchase of wood (currently free as we are using the wood we have available around the house (~15 dead trees).</li>

<ol>

<li>Electricity - break even</li>


<li>Wood cost of £500 per year </li>

</ol>
</ol>
<li> Grow some of our own food and medicine</li>
<ol>
<li> Tools and machines: vegetation mulcher (to fertilise and protect the fruit trees), chain saw and safety equipment (we have lots of 
dead trees), axes, shovels, well pump (this will halve our water bill as we can water the garden and vegetable patch with free water)</li>
<li>Aim is to grow
 our own Fruit and Vegetables in the Summer \ Autumn. Initial aim is to 
save 30% of our grocery shop for 6 months of the year (we currently 
spend £321 on food and consumables per month so saving 30%*321*6 = ~£580
 per year</li>
<li>Have free wood for several years </li>
<li>Free water for the garden</li>
</ol>
<li> Our second hand 1.5 Diesel Renault Clio consumes HALF of the fuel of my 1.6l petrol WV GOLF</li>
<ol>
<li>Re-negotiated the insurance and BOTH cares are less than our payments on ONE CAR in the UK</li>
<li>No yearly road tax in France (was £180 in the UK)</li>
<li>Bi Annual Car Check (Control Technique) in France versus Yearly in the UK </li>
<li>Saving 180(tax), 50(insurance) £700(Fuel), MOT £30  =£960 - Car Cost £5800 time to payback = 5800/960 = ~ 6 years</li>
</ol>
</ol>
 
<ol>
<ol></ol>
</ol>
Estimated total reduction in living costs per year £580 (food),  £240 (water), £700 (Heating), £960 (Car Costs) = £2,480 savings per year 
<blockquote class="tr_bq">
THE.FuTuRE - "What a waste of time CoNTeNDeR all that work - why bother. New technologies are making everything CHEAPER - keep with the system." 
CoNTeNDeR - "It's an investment - the value of your investments may fall, blah blah blah. At least it is in my control not yours!"</blockquote>
<h3>
How much would we need to earn each year to pay for the savings?</h3>
Consider this £2,480 having to be earned after tax. Tax at the lower rate of 20% and Social charges at 8%, you would need to earn £3,174 
 
Assuming a 5% return on investment you would need £3,174/.05 = ~ £63,500 working for you that needs to provide a return that increases at least in line with inflation. 
<h3>
How much have spent / invested to get the savings?</h3>
Compare that to the investments we made above to reach the same amount of "return", Car £5,800, Heating £19,000, Gardening Equipment £1,500, Insulation and shutters, £7,000 = £33,300 & we get some completely inflation proof protection with regards solar hot water, home grown food, well water and wood. 
<h2>
Does it make sense to spend savings in this way?</h2>
<ul>
<li>£63,000 need to be invested to pay for living costs of £2,480 (£3,174 before tax)</li>
<li>£33,300 need to be spent to reduce living costs by £2,480 </li>
</ul>
It
 seems that this is a wise "investment" to spend the money to reduce our living costs. We will have less capital invested but can save more per month. Will compound interest work for or against us? 
 
Consider the following case: if you had 100,000 in savings, your earned income is 25,000 per year (post tax) and you are saving 30% of your income (living costs = 25,000 - 30% = 17,500) 
 
Case 1 - You don't spend the money 
 
100,000 invested returns 5,000 per year at 5% 
You can save 30% of a salary of 25,000 = 7,500 per year 
Living cost 17,500 per year 
 
<a href="https://www.blogger.com/blogger.g?blogID=5841097566669291663" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"></a>TOTAL SAVINGS = 12,500 per year   STARTING CAPITAL = 100,000 
 
Case 2 - You spend the money 
 
100,000 - 33,300 = 66,700 invested returns 3,335 per year at 5% 
You can save 30% of a salary of 25,000 = 7,500 + the savings of 2,480 = 9,980 per year 
Living cost 17,500 - 2,480 (reduction due to savings) = 15,020 per year 
 
<a href="https://www.blogger.com/blogger.g?blogID=5841097566669291663" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a>TOTAL SAVING =  13,315 per year    STARTING CAPITAL 66,700 
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In this case (*see parameters) this is what your investment capital may look like in 25 years time. It takes around 19  years for the "purchases" to reach the same capital balance if you just carried on saving </div>
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*Income increases at 3% per year (25K starting point)</div>
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*Inflation increases at 4% per year</div>
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*Investments return on average 7% per year </div>
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*Living costs start at 17.5K (15K reduced living cost)</div>
<blockquote class="tr_bq">
<div style="text-align: left;">
THE.FuTuRe: "19 years! to catch up and that is assuming just 7% return on invetment - aren't you just betting on your Eco system which will probably be obsolete before long! - Burn the hydrocarbons baby and smell the smoke of progress you tree hugging chimp."</div>
<div style="text-align: left;">
CoNTeNDeR - "Sure I should be one of the sheeple, go with the flow, listen to the mainstream media, <strike>indoctorate</strike> educate the kids to be good consumers, build reliance instead of resillience, be part of the team instead of an odball fanatic hiding in a eco hideout scared to go out"</div>
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MR.REaLiST - "Sounds good to me CoNTeNDeR plan ahead a bit, why sit still and wait.</div>
<div style="text-align: left;">
MR.PeSSiMiST - "What are you doing - ruining the lives of your kids - molly coddling them from the real world. </div>
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MR.OPTiMiST - "Everything is awesome, chill, relax and have some fun man, thinking is so outdated. Everthing is Now Now Now and to your doorstep if you like!"  </div>
</blockquote>
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What can we learn from this case study?</div>
<ol style="text-align: left;">
<li>Spending is bad for very early financial independence (especially unproductive spending)</li>
<li>A large starting point (inheritance) makes a massive difference</li>
<li>Productive spending will pay off in the LONG term - if you need to move the investment in the house may be "lost"</li>
</ol>
</div>
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You need to SAVE and BUILD capital to benefit from the power of COMPOUND INTEREST instead of SPENDING to reduce your costs for very early retirement.</div>
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 </div>
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You should look at ways to reduce costs through lifestyle choices. For example, choosing not to buy something or some service and live in a cheaper place. </div>
 
<h2>
Why did the TRiBe do it then?</h2>
Like any decision there are unique reasons and circumstances behind any decision. Arbitruary if you forego all spending it (saving and no spending) can have different outcomes. Some can be negative such as not moving (costs) for a higher paying job, failing to look after your health. 
 
In the Tribe's case the bucks have really been invested for the long term in our new life. This investment reduces our dependence on VARIBLE or DECLINING CASH FLOW, to some degree PROTECTS CAPITAL and increases our resilience \ self sustainability: 
<ol>
<li>We get to live in a mortgage-freehouse</li>
<li>The house had no heating and minimal insulation so we chose an energy efficient solution. </li>
<li>My old car had already done 150,000 miles - a new car was needed for reliability and backup. </li>
<li>We have a degree of self sufficiency (land, water and fruit trees)</li>
<li>Our net worth is not as exposed to market crashes as we now have a wider asset allocation.</li>
</ol>
<h2>
Why this case doesn't make sense for Financial Independence Seeking</h2>
<ol>
<li>House prices are at historical highs versus earnings. </li>
<li>Renting can often be cheaper than buying and paying for a mortgage </li>
<li>Buying a property generally means SPENDING your investment pot to INVEST in lower living costs - Think this through carefully.</li>
<li>Owing a house can reduce your flexibility to move for a better job.</li>
<li>A house is a liability. You have maintenance costs and property taxes. </li>
<li>A larger capital investment pot can compound very fast in a bull market providing more capital to re-deploy in housing etc later. </li>
<li>Cheaper heating systems (inital installation costs) are available. Personal choices such as live in only a couple of heated rooms in the winter (which is fairly short in the SW of France) would only require one 12kW stove.</li>
<li>Live close to your work to avoid the car costs</li>
</ol>
Why not have a play with the free financial projection spreadsheet on this site? Play with the numbers for your personal situation and dream of your future. 
 
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<tr><td style="text-align: center;"><a href="https://sites.google.com/site/lifeplanltd/home/TimeLine_Financial.xls?attredirects=0&d=1" style="margin-left: auto; margin-right: auto;" target="_blank"><img alt="Click to load excel file" border="0" height="307" src="http://2.bp.blogspot.com/-qHTJ4bB92B0/UuPg-X20IYI/AAAAAAAADGs/rtq-uZza1UM/s1600/25yrFI.JPG" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;"><a href="https://sites.google.com/site/lifeplanltd/home/TimeLine_Financial.xls?attredirects=0&d=1" target="_blank">Financial Timeline Planner (click to download excel file)</a></td></tr>
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<div style="text-align: left;">
<blockquote class="tr_bq">
Perhaps if we all conserve resources better we would actually have more as a society. We would leave more for the future and instead of just burning fuel (also known as money) the savings can be used to build a better world to live in.   
 
THE.FuTuRe - "Wake up you muppet - that is NOT how we have been told the world works, don't think just do it"  
THE.CoNTeNDeR - "We will just do it... our way"</blockquote>
</div>
 
Peace, prosperity and happiness 
 
CoNTeNDeR 
 
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Spendaholics

A good investment? The Tribe is currently going through a period of EXTREME spending . First up this post is not about idiotic hedon...

Messed Up, Clued Up, Wised Up

Contender 2 Critical Thinking, downshifting, Early Retirement, financial freedom, financial independence, Planning, Risk, Saving 19:46

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As human beings we start off in life learning from our parents who generally protect us from the real world. We make mistakes, do and say things we shouldn't. All part of being a kid and the learning process. Later in life we act and talk bravado, drink and party too much, fun, fun, fun continuing the learning process. Eventually adolescence leaves us behind, the real world of work and personal responsibility beckons but we are still a long way from being wise. 
 
To be financially independent is to learn to be wise with our investments. We need to manage and adapt them to deal with the opportunities and uncertainties that we will be presented with in the 40+ years of living financially independent.  
 
Specifically this post considers how we gain wisdom to overcome some of the challenges to our financial independence and what we could do about them. 
<h2>
Confidence (A.K.A THE.PaST)</h2>
<blockquote class="tr_bq">
Confidence is generally described as a state of being certain 
either that a hypothesis or prediction is correct or that a chosen 
course of action is the best or most effective.???</blockquote>
Before looking at some options for financial resilience, let's consider some of the major changes to our lives and what we can learn from them. 
<h2>

Past Precedents</h2>
In the recent past mankind has overcome numerous challenges. The green revolution has fed the masses and enabled us to hugely increase the world population. Nuclear power came along at the right time to reduce our consumption of oil, coal and gas which in turn have been tapped with space age technology. 
 
Companies have thrived, profits have flowed. Based on our past it is fair to believe that things will continue as they always have  the status quo and invest accordingly based on long term trends. There are numerous investment approaches to manage investments in several of the websites linked from the front page of this site. 
 
Investment opinions and approaches are just opinions albeit backed up with historical precedents. Should one run one's life and investments based on the opinions and ideas of others? Perhaps they should be used as a way to build wisdom, take responsibility for ones decisions, think outside the box and get rich instead of market average?   
<h2>
Arrogance (A.K.A THE.PReSeNT)</h2>
<blockquote class="tr_bq">
The act or habit of <a href="http://en.wiktionary.org/wiki/arrogate" title="arrogate">arrogating</a>, or making undue claims in an <a href="http://en.wiktionary.org/wiki/overbearing" title="overbearing">overbearing</a>
 manner; that species of pride which consists in exorbitant claims of 
rank, dignity, estimation, or power, or which exalts the worth or 
importance of the person to an undue degree; proud contempt of others; 
lordliness; haughtiness; self-assumption; presumption.</blockquote>
<h2>
Seeking Wisdom from the Past </h2>
Wisdom takes time. For me THE.CoNTeNDeR the light bulb dimmer was adjusted up a little around the age of 36. I write my opinions here on this blog - are they wise, perhaps they are wiser for me but how would you know when you have wisdom or enlightenment? 
 
As you grow older you tend to be more reflective instead of impulsive, learn to understand and accept risks, take responsibility for your actions, developed a greater depth of knowledge and skills, learnt how to keep your hand on the pulse and filter out the chaff from the important. 
<blockquote class="tr_bq">
"Bloggers write s**** with exclamation marks and bad punctuation with no concrete evidence" - quoted in the film Contagion</blockquote>
Is it wisdom when you have learnt how to be objective, understand different points of view, listen to others and then critically analyse the information and make your decisions? 
 
Is giving no advice and just asking probing questions good advice? Is listening and asking relevant questions the right way to be happy with your family friends and colleagues?  Do what you believe is right. Don't take anyone else's advice for granted or blame someone for taking it. At the end of the day you are the person ultimately taking the action of your own free will. 
 
Listen, think, ignore and do what is right for you. 
<h2>
</h2>
<h2>
Delusion (A.K.A THE.FuTuRe)</h2>
<blockquote class="tr_bq">
A delusion is a <a href="http://en.wikipedia.org/wiki/Belief" title="Belief">belief</a> held with strong conviction despite superior evidence to the contrary. As a pathology, it is distinct from a belief based on false or incomplete information, <a href="http://en.wikipedia.org/wiki/Confabulation" title="Confabulation">confabulation</a>, <a href="http://en.wikipedia.org/wiki/Dogma" title="Dogma">dogma</a>, <a href="http://en.wikipedia.org/wiki/Illusion" title="Illusion">illusion</a>, or other effects of <a href="http://en.wikipedia.org/wiki/Perception" title="Perception">perception</a>. </blockquote>
<h2>
Present & Future Opportunities?</h2>
I thought it is worthwhile to consider a few things going on in the world today that definitely raise a few questions on the viability of financial independence. 
<ol>
<li>Cyprus Precedent - Your money in a bank is not actually yours - you lend it to them and it is a liability for them. What stops a bank haircut across the board?</li>
<li>Negative interest rates! Yes you pay the bank to look after your money which it may use in risky lending practises to make more money or the bank safe?</li>
<li>Money flows into stocks and especially dividend stocks. These "investment" actually become risky in a high inflation environment under performing in real terms as margins are eroded.</li>
<li>Real estate prices rise as money finds a home - over inflating the price of a home. Worse still people buying a home with a mortgage have to take on more debt. Debt = time and lots of debt = debt slavery. If the property bubble bursts the debt remains and due to the inherent leverage in the system the buyer can be left with huge losses.</li>
<li>Increase in the money supply / inflation increases living costs. Just divide 72 by the inflation rate to get the time for prices to double. e.g. a 4% rate 72/4 = 18 years!</li>
<li>Resource depletion - why are we digging up huge swathes of Canada, fracking US plains and drilling miles under the sea? At the same time US gasoline usage has cratered by 60%+ and oil is hovering around $100</li>
<li>Central bank / government intervention and herd mentality - financial markets are just as emotionally driven as they are fundamentally valued. Central banks can completely change the rules of the game. Governments can force changes on the populous.</li>
<li>Black swan events - what about the nuclear fusion problem being solved in the next 5 years and "free" energy being available for everyone? </li>
</ol>
Joining some of the dots together above highlight that time could be a changing.What about the FI enthusiast what does this mean to the 4% withdrawal guideline? Like everything in life it is a rule of thumb, guideline based on historical norms (how long has it been normal?) 
 
Guidelines are there to be broken, re-defined just as the current rules of the game in finance are being changed favouring different people and entities. 
 
Who knows? Perhaps the 4% rule becomes the 6% rule as we may be ushering in a new prosperity. Instead of saving 25 times your outgoing you only need to save 20 times instead? What if you invest in the right sectors? 
<h2>

Opportunistic Investments?</h2>
<ul>
<li>Oil is depleting - invest in oil companies with long life reserves and buy a small car?</li>
<li>Food costs more - grow your own?</li>
<li>Electricity is going up - get some solar panels, wind turbine our water wheel?</li>
<li>Cash savings are loosing their value. Learn about fiat money and why we are told inflation is good and deflation is bad (to whom?) - invest your spare cash (always keep a cash buffer for opportunities and emergencies)  in perhaps productive farmland or forestry, perhaps a depleting resources such as platinum, copper or silver or rarity in artwork, first edition books, stamps?</li>
<li>Have your own business so you can set the right prices for your needs. </li>
<li>Have a strategy, a backup strategy and and backup backup strategy. What if rental yields drop - should you exit?, Stock markets soar - should you sell some and buy rental properties? What happens if the misses is pregnant with triplets or you receive an inheritance windfall?</li>
<li>What are the growing businesses of the world? What are the trends where are the opportunities? Perhaps take time twice a year to read up on the future. Trend forecast sites can be a good source of information, consider any of the new websites, buzz gadgets that are the new big thing. What are the key resources needed to provide our 21st lifestyle? (e.g. rare earths, silver, semi conductors, solar panels, new drugs etc.)</li>
<li>You are getting older - look after yourself as health costs are rising - avoid processed foods high in sugars and fat, eat fresh local produce, clean your teeth properly, look at alternative medicines and preventative treatments.  </li>
</ul>
<h2>
Wisdom (A.K.A .....Dalai Lama, Thomas Jefferson, Socrates.....)</h2>
<blockquote class="tr_bq">
Wisdom is the ability to think and act using <a href="http://en.wikipedia.org/wiki/Knowledge" title="Knowledge">knowledge</a>, <a href="http://en.wikipedia.org/wiki/Experience" title="Experience">experience</a>, <a href="http://en.wikipedia.org/wiki/Understanding" title="Understanding">understanding</a>, <a href="http://en.wikipedia.org/wiki/Common_sense" title="Common sense">common sense</a>, and <a href="http://en.wikipedia.org/wiki/Insight" title="Insight">insight</a>.</blockquote>
<h2>
Muses on attaining wisdom</h2>
<ul>
<li>Listen more than talking</li>
<li>Read, observe, analyse, criticise, and form your own opinions </li>
<li>Be idle and have idle thoughts</li>
<li>Ask questions with no right or wrong answers - What is the meaning of life?</li>
<li>Have friends that like a good debate</li>
<li>Don't jump to conclusions, listen, ask and understand the other persons point of view</li>
<li>Wait - there is no real rush - take your time when making decisions and weigh up all options </li>
<li>Open your mind - everything is interesting, there is no right or wrong just choices with different outcomes. What are the outcomes you want?</li>
<li>Have a go at anything and everything </li>
</ul>
Why do we want to be at peace, prosperous and happy? ... 
 
CoNTeNDeR

Messed Up, Clued Up, Wised Up

As human beings we start off in life learning from our parents who generally protect us from the real world. We make mistakes, do and say ...

Defensive Investing

Contender 0 Critical Thinking, Dividends, downshifting, financial independence, frugality, Planning, Saving 17:41

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In this post I am going to talk about  investment timing decisions in particular: 
 
1. A new financial independence striver   
2. Someone who has already amassed significant investments   
3. Changes to the TRiBeS investment approach   
4. The latest DVGI (Dividend Value Growth Investments) screener results for the UK and US (at the end of the post) 
  
<ul>
<li>No one can accurately predict THE.FuTuRe</li>
<li>Human beings are emotional and sometimes delusional</li>
<li>Timing is important </li>
</ul>
So what is the link between these statements and financial independence planning? Well over the past five years the stock market has done very well. At the same time THE.PaST tells us it corrects around every 5 - 8 years. Does it continue to rise over the next few years or do we get a correction. There are numerous opinions out there on the web. 
 
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<tr><td style="text-align: center;"><a href="http://dshort.com/inflation/inflation-recessions-sp500.gif" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="290" src="http://dshort.com/inflation/inflation-recessions-sp500.gif" width="400"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">source: dshort.com</td></tr>
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But this time is different right? There is no need to be cautios as the Fed has our backs covered. So go ahead and go all in now. 
 
Hold on a second....If you are starting to invest in the stock market at this juncture is this wise? 
 
If you are fully invested and enjoyed the good run should you be cautious and check out some of your chips? 
 
Or are you confident of further gains and are adding to your positions? 
 
Here is a quote from a seasoned trader Dan Norcini on holding onto a loosing position which I think is pertinent if you flip it on its head and consider it from a winning position as well: 
<blockquote class="tr_bq">
"They may pride themselves and 
encourage their followers to, "Stay the course". That is great if you 
are a sailor on the ocean and are being buffeted by some high waves and 
gusty winds but at some point the winds and the waves will force even 
the most stalwart of mariners to take a detour out of their way if they 
wish to avoid getting slammed into the rocks or going down. It is called
 "prudence". 
    
 Those who "stay the course" and keep
 pushing ahead out of sheer stubbornness often pay the price with their 
lives. Same goes for trading or investing - at some point one has to 
"take a detour" to skirt the danger so as to arrive safely at the final 
destination. 
    
 Spitting into the eye of a hurricane
 just gets your face wet and does nothing to force the hurricane to 
change directions. It is going to go wherever the hell it wants to go 
and it could care less what you want. This is how markets are - they go 
where they want, when they want. If you are smart, you learn to either 
go with them or get out of the way" 
 
<a href="http://traderdannorcini.blogspot.fr/2014/05/euro-weakness-remains.html" target="_blank">Trader Dan Norcini</a></blockquote>
 
Time to sell growth and cyclical stocks? 
 
Are we now in a position with the markets we we could be lured into the trap outlined by Dan above. Could the market change direction and we hold on for dear life waiting for the tide to change. 
 
I have first hand experience of working on a cyclical business - semi conductors. A new super chip would be designed the factories built then the chip sold for the next few years until the next super chip is designed and the whole cycle starts again. The business knew this happened therefore it set itself up for, and planned ahead, for these cycles. It did this through sub contracting, temporary contracts and stock management. 
 
Coming back to point can we manage our investments in this manner or are we doomed to failure? Are we doomed to re-produce past mistakes such as the Tech Bubble. 
 
Growth stocks have been back in vogue and are trading at very high price to earnings ratios. Well known names such as Facebook, Amazon, Twitter have soared based on future growth and revenue expectations / forecast. Are they really going to deliver unlike the companies in the last Tech bubble? Should we downsize our investments now? 
 
Lets consider some different circumstances:

Defensive Investing

Everyone needs a system to select shares In this post I am going to talk about investment timing decisions in particular: 1. A new...

The Optimist, Realist and Pessimist

Contender 0 #financialindependence, Critical Thinking, financial independence, Happiness, Risk, Saving 22:10

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Once upon a time there was an OPTiMiST he went about his day with a smile on his face and the wind in his back. He was off to see his friend the PeSSiMiST.  
 
Mr PeSSiMiST was having his usual grumble about his day and life in general, why doesn't anything work and I am stuck with this life? Just listen to the news a meteor is going to hit the earth any time now Doomed, Doomed I say! 
 
Naturally Mr OPTiMiST shrugged his shoulders (whatever next he thought) - and moved onto his joke of the day to cheer up the poor old chap unfortunately to no avail. 
 
Then along came Mr ReaLiST he was going about his business, walking past the local lottery machine shaking his head on his way to deposit some savings at the bank...Hi guys see you in the pub after work for a beer. 
 
Who are We? 
 
We can all probably place ourselves in each of these classifications depending on our circumstances and mood. 
 
Perhaps whole countries could be generalized in one of the classifications - in the UK we always complain about the weather and always look at the other side of the coin. Not everything is rosy but it ain't bad. So we are probably more of a plan for tomorrow realist bunch.... Whenever I have worked in America I consider them as optimistic go-getters, very driven and optimistic about almost everything. These are generalisations for sure and completely off the mark depending on your point of view. 
 
Exploiting the moment 
 
These traits can be the financial independence worst adversary or even weakness. The world is setup to prey on these traits so that you squander your money. 
 
The optimistic young adult starting out in the real world looking for an identity is quickly lured into the world of Sex. You must buy this brand of clothes, listen to this music drive that car. While you are at it buy this perfume / deodorant it is all you need to have scantly clad members of the opposite sex running after you. Feeling more optimistic about your chances? 
 
On the flip side we have the DOOMERS! BEWARE THE DOOMERS! The end of the world is neigh, load up on food, guns and ammo - you can't eat it but you can use it and trade it. A trade in death - nice..... Hunker down, save cash under their pillow don't speculate don't get rich. 
 
What about those weird realists - stuck in the middle - middle class? A nerd - you must have this games console, this most awesome powerful PC. A striver - buy these books to make you rich attend this course and buy these stocks. Save for your pension work hard until you retire at 70. Spend the rest and get the biggest mortgage possible. Bahh Humbug! 
 
Now after recognising some of the weakness and what does the #financialindependence #downshifter do?

The Optimist, Realist and Pessimist

Once upon a time there was an OPTiMiST he went about his day with a smile on his face and the wind in his back. He was off to see his fri...

Financial Independence Options

Contender 1 Budget, downshifting, Early Retirement, Finance, financial freedom, financial independence, frugality, Planning, Saving 18:30

<a href="http://4.bp.blogspot.com/-BG85piBTkus/UuU-niALSnI/AAAAAAAADHY/88GfwH9Hgn0/s1600/TeddyFamily.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="283" src="http://4.bp.blogspot.com/-BG85piBTkus/UuU-niALSnI/AAAAAAAADHY/88GfwH9Hgn0/s1600/TeddyFamily.jpg" width="320"></a>Mr Teddy Bear: "Time to review our family finances and consider where are we going. Let's get the facts and run the cold hard numbers." 
 
Mummy Bear: "Oh daddy bear you are so cuddly when you talk tough" 
 
Baby Bear: "I want a games station, mobile computer, princess bike and trust fund...Now!" 
 
 
 
 This post is about a few hypothetical scenarios entered into the NEWLY UPDATED financial time line planner. 
 
The financial time line planner has received a little bit of tender and loving care in the last week. The following has been changed / added: 
<ul>
<li>Mortgage calculations</li>
<li>Debt repayments</li>
<li>Improved graphics</li>
<li>Financial scenarios</li>
</ul>
Here we are going to look at three different type of people and see how the timeline works for them: 
<ol>
<li>A fun loving/carpe diem 25-year old on a professional career who loves #selfies</li>
<li>A 35-year old looking to #downshift as fast a possible</li>
<li>A clued up 25-year old who is going for #ExtremeEarlyRetirement</li>
</ol>
Party on! CEO, Playboy, Sports car, Mansion, Hawaii 
 
Our
first example is the one THE.CoNTeNDeR started out in life believing would make him happy...
 This was soon dashed by the property boom in the UK effectively resigning him to having to rent for teh rest of his life. This caused a huge
 shift in THE.CoNTeNDeR's financial mindset. 
 
So here is a representation of an ambitious 
life and fun loving 25 year old looking to climb the corporate ladder. He is going to enjoy the high life and 
all the consumer goods on offer. The result shows 
the need for an ever increasing income to pay for the increasingly high 
life living costs. Although cash flow rich and materially wealthy on the outside he needs to keep the hamster wheel turning to avoid a nasty shock. 
 
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="http://2.bp.blogspot.com/-74UIXtw9txg/UuPiBkUZPtI/AAAAAAAADG4/U19n5TSyFBs/s1600/25yrPartyOn.JPG" style="margin-left: auto; margin-right: auto;"><img border="0" height="195" src="http://2.bp.blogspot.com/-74UIXtw9txg/UuPiBkUZPtI/AAAAAAAADG4/U19n5TSyFBs/s1600/25yrPartyOn.JPG" width="400"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">CLICK ON PICTURE !</td></tr>
</tbody></table>

Financial Independence Options

Mr Teddy Bear : "Time to review our family finances and consider where are we going. Let's get the facts and run the cold hard num...

The Ride of a Lifetime

Contender 0 Black Swan, Critical Thinking, Dividends, Gold, Inflation, Oil, Saving 18:10

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<tr><td class="tr-caption" style="text-align: center;">Our Fire - A warm fuzzy feeling what about 2013?</td></tr>
</tbody></table>
*CHUMP - Fool, loser, muppet, victim of THE.FuTuRe, loner, weirdo, odd, strange, picked on. 
 
*WINNER - Happy, healthy and challenged. 
 
THE.FuTuRe: "Hey CoNTeNDeR you CHUMP, Did 2013 work out as you planned it? Of course it did not. Why did you even try? You know I have lots of unpredictable surprises for you so don't try to hide. Come out of the woodwork and GetInTheRingWithMe!" 
 
CoNTeNDeR: "You fight dirty! Sure I am up for it just like every year. Our TRiBe has a plan for you.... we know you will mess some of it up just look at some of last years silliness. Some people WON" 
 
Everyone has his/her own agenda. The rich want to stay rich, the poor want to get ahead, the politicians want to stay in power, the greens want to save the planet.... Every butterfly flap of a wing could cause a hurricane. 
 
There is no knowing what THE.FuTuRe holds, let alone the complexities of an individual in a specific place at a specific time - ain't it great! 
 
Rich and lose it all, poor and win the lottery, a survivalist without a match, a capitalist going long in a bear market, the gift of a new borne child. 
 
Today a brief look at 2013 which will have a follow up post on what, if anything, THE.TRiBe has learnt from it. 
 
Unique, unfathomable, awesome 2013 
 
Well, what a year 2013 was, just like THE.PaST. Unpredictable. Perhaps more unpredictable than ever. 
 
Great gains in US stocks with modest gains in the UK and Europe. Why amazing well company earnings are not exactly up 28% like the stock market. I wish I could have a business that gains 28% a year. 
 
Energy did ok - if you were invested in the US shale oil boom. As for how long the drilling of vast acres of the US will yield results is another question? Be pessimistic for 2020 or oil forever see <a href="http://srsroccoreport.com/" target="_blank">SRSrocco.com</a> for some analysis. 
 
Defensive stocks in the UK were on a blinder at the start of the year and lost out to risk on stocks later. Twitter, Facebook, Bitcoin get on the free money gravy train of the cyber economy. dot.com boom and prosperity is coming back. 
 
In the mean time we thought staying at home on the computer was a safe place to be. Yet this year we are told we are being watched and they have software to turn on your web camera to see what you are up to. Orwellian indeed.

The Ride of a Lifetime

Our Fire - A warm fuzzy feeling what about 2013? *CHUMP - Fool, loser, muppet, victim of THE.FuTuRe, loner, weirdo, odd, strange, picked...

Maintaining Wealth II - We are all Investors Now

Contender 0 Black Swan, Critical Thinking, Dividends, Finance, Financial Armageddon, Gold, Inflation, Investing, Saving 16:03

<a href="http://3.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDc/swNrFYBwmhY/s1600/InvestmentChoice.png" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="216" src="http://3.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDc/swNrFYBwmhY/s320/InvestmentChoice.png" width="320"></a> 
TiMe: "Dring, Dring, TiMe to wake up sheeple" 
 
THE.FuTuRE: "Shussssh! They are sleep walking towards a cliff. We are providing wonderful <strike>distractions</strike> entertainment for them. Just look at all of their happy faces. Everything is great. There is no need to think just enjoy! Until I am ready to claim my pound of flesh MurrrGH HA HA HA" 
 
CoNTeNDeR: "Oi you evil B****** we the people will not stand for your bull****. We are waking up in our droves, turning off the entertainment and thinking about what you are up to. Financial freedom from your tyranny.  We are  lemmings no more and are turning away from the cliff - watch out below FuTuRE" 
 
In <a href="http://getintheringwithme.blogspot.com/2013/12/maintaining-wealth-i-bitcoins-and-real.html" target="_blank">Part 1</a> of this post we had a look at Paper Money, E-currency, Commodities, Real Estate and bonds. Today we are looking at Stocks, Land and investing in oneself as additional wealth preservation options worth considering. 
 
Stocks - Growing Profits? 
 
What
 value can you give to a company, let alone picking the winners in the 
stock market? This issue has flummoxed investors for years. 
 
Owning
 part of a company gives you an interest in that company's profits. 
Provided the profits keep rolling in due to a competitive advantage, the
 company should have some longevity. 
 
Perhaps looking 
for companies that have a distinct brand, product or advantage such as 
extremely difficult barrier to entry are the place to be. Those 
companies will grow in value along with their sales and / or return some
 of that profit back to shareholders through buybacks or dividends. 
 
Companies generate wealth - can you pick the right ones? THE.ConTeNDeR is trying see the <a href="http://getintheringwithme.blogspot.fr/2013/11/screener-for-value-and-dividend-stocks.html">Screener for Value and Dividend Stocks Here</a> 
 
For a seasoned professionals take on stocks for the long term, check out some articles by <a href="http://www.investmentu.com/2013/October/a-near-perfect-portfolio.html" target="_blank">Alex green from InvestmentU</a> and I am a fan of his book <a href="http://www.amazon.co.uk/gp/product/0470598204/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0470598204&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">The Secret of Shelter Island: Money and What Matters</a> 
Warren Buffet even has a <a href="http://www.ivillage.com/warren-buffett-teaches-money-lessons-kids-cartoon/6-a-533797" target="_blank">cartoon series for kids on investing</a>. 
 
Tribe's opinion - Stocks allow the building of a diversified set of businesses. If stocks were not available it would probably be difficult to invest in diverse ideas such as graphene, new drugs and technology companies such as Google. Core holding. 
 
Arable Land 
 
An interesting investment class in THE.CoNTeNDeR's
 opinion. Precious renewable resources can be harvested from arable land
 year after year making it a very profitable investment class.  
 
Invest
 in woodland and you get free winter fuel and can sell the excess. 
Farmland can be planted for delicious fresh vegetables to be sold down 
the market. 
 
THE.ConTeNDeR likes the idea of some
 arable land next to his house. From a purely financial independence 
perspective 'free' heating, vegetables and eggs would reduce our living 
costs substantially. 
 
The <a href="http://www.transitionnetwork.org/" target="_blank">Transition network</a>
 are keen on this concept to help preserve the planet and combat 
resource depletion. They do a good bit on supporting communities as 
well. 
 
Tribe's opinion - We really think owing a bit of land even if it is used by someone else is a good idea and something we are looking at for THE.FuTuRe

Maintaining Wealth II - We are all Investors Now

TiMe : "Dring, Dring, TiMe to wake up sheeple" THE.FuTuRE : "Shussssh! They are sleep walking towards a cliff. We are pro...

Maintaining Wealth I - Bitcoins and Real Estate

Contender 2 Black Swan, Critical Thinking, Dividends, Finance, Financial Armageddon, Gold, Inflation, Investing, Saving 20:18

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<a href="http://3.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDc/swNrFYBwmhY/s1600/InvestmentChoice.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="216" src="http://3.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDc/swNrFYBwmhY/s320/InvestmentChoice.png" width="320"></a></div>
THE.FuTuRE: "Contender you wuss, what is all this talk about income, growth and protection investments. I will take it all from you eventually. I have time on my side" 
 
TiMe: "Tick Tock, Tick Tock" 
 
CoNTeNDeR: "Precisely FuTuRe I have no idea what you are really up to. Heck I had a guess at the outlook for the year and how did that come out.....so I need a bit of diversification because of all of your conniving, plotting and outright corruption!" 
 
We are living in very interesting times especially with regards building and maintaining wealth. 
 
In this post we cover the TRiBe's options for investments in currency, commodities real estate and bonds with examples and opinions on some of the pro's and con's? 
<blockquote class="tr_bq">
 "You have much more opportunity 
to earn money than you do to 'not spend' money, and yet most people spend hours 
upon hours clipping coupons and perusing daily deal sites instead of 
brainstorming how to earn more money and solve 
people's problems." - Susan Fujii</blockquote>
In the second post we will be looking at other investment classes such as stocks and yourself followed by the TRiBe is current thinking. 
 
Paper Money Supply - Blind Faith? 
 
Since 1970 when Nixon took the world off the gold standard there has been no anchor to excessive money / currency creation. Governments have control over the supply of their currencies and they can determine the ultimate value of the currency in circulation depending on the amount in circulation. 
 
Previously if people wanted to save their labour and future buying power through the means of a currency, they could chose a checking account. It earned interest that was enough to offset any excessive increase in the currency supply. This is certainly not the case at the moment, interest rates are artificially low and people are being 'guided' to riskier investments for a return. 
 
One may ask but why is the currency supply increasing above the increase in productive capacity of the economy. Unfortunately this is easy to attribute to governments' fiscal irresponsibility. Excessive overspending is used to buy votes from the electorate. 
 
Alternatively if a country has strong institutions, low spending and fiscal responsibility - holding that countries currency is less of a concern. 
 
Fiat Money is covered by <a href="http://www.amazon.co.uk/gp/product/B005GSYZRA/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=B005GSYZRA&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">Currency Wars: The Making of the Next Global Crisis</a> by James Rickards, and <a href="http://www.amazon.co.uk/gp/product/0718192141/ref=as_li_qf_sp_asin_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0718192141&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">Paper Promises: Money, Debt and the New World Order</a> by Phillip Coggan. There is also a good video to watch by Warren Buffet highlights how <a href="http://www.youtube.com/watch?v=5DvuyvuHmJI" target="_blank">countries get into trouble in the first place</a>. 
 
See the video series <a href="http://www.youtube.com/watch?v=DyV0OfU3-FU" target="_blank">Hidden Secrets of Money</a> by Mike Maloney 
 
Tribes opinion - it is so easy to transact in paper money and in the governments interest to keep them in place we will always keep some in our portfolio. 
 
Electronic Currencies - How Many? 
 
We now have alternative currencies such as Bitcoin and Litecoin hitting the news wires for their massive gain in relative value to reference currencies such as the US dollar. 
 
Firstly there are many people in favour to the inbuilt scarcity of the digital coins. Secondly they are not issued by any government and they are scattered globally that make them uniquely difficult to manipulate. 
 
One thing that is a red flag to THE.ConTENdER is what stops an unlimited amount of new versions of electronic currencies being created? 
 
Will the herd just jump from e-currency to e-currency chasing gains - see a list of them <a href="http://en.wikipedia.org/wiki/List_of_cryptocurrencies" target="_blank">here (10 listed)</a>? THE.CoNTeNDeR thinks this is highly likely until the number of e-currency options goes to infinity or faith in them is destroyed. Their value will go the same way as fiat currencies trending towards their intrinsic production value of close to zero. 
 
What may save them is if the herd all commit to ONE e-currency. 
 
One thing preventing this e-currency utopia is ... human nature. We are opportunistic and after an easy meal / fast buck. Our prehistoric past moulded us that way. When we were being chased by sabre toothed tigers whilst eeking out an existence coming across a free lunch in the form of a dead Mammoth. 
 
Will everyone commit to one e-currency? I would like to think it could happen but who can tame  human nature. Will we have to live in a dystopian future where we all take the happy pill to keep us controlled? 
 
Zero hedge recently <a href="http://www.zerohedge.com/news/2013-11-27/presenting-bitkillers-these-are-richest-holders-bitcoin" target="_blank">reported that 100 people hold 20% </a>of the bitcoin currency - a new type of Ponzi scheme in the making? Create a new e-currency holding a large percentage of the issue then cash in and move on as the perceived value burns. Who is left holding the proverbial handbag - the new entrants - good luck or what a good SUCKER!- THE.FuTuRe would be impressed! 
 
See this <a href="http://www.youtube.com/watch?v=T_hBhymFfm8" target="_blank">utube documentary on bitcoin</a> 
 
Tribes opinion - Speculative and almost impossible to value - mine some coins by all means* but only purchase if you have some spare gambling money :) 
 
* THE.CoNTeNDeR has had a go at mining. The setup is a pain, it is geeky, based on lots of technical know how. To mine alot of coins and to really exceed requires specialise mining rigs - a currency for the people - you must be joking! 
 
Next up commodities

Maintaining Wealth I - Bitcoins and Real Estate

THE.FuTuRE : "Contender you wuss, what is all this talk about income, growth and protection investments. I will take it all from you ...

Financial Independence and Happiness Books

Contender Black Swan, book, downshifting, Early Retirement, Education, Finance, financial independence, Freedom, Investing, Planning, Saving 13:01

SPEND.IT.NOW: "You say Read Read Read - I haven't got time to read! TLTM (too long too much?). I've been fed snippets all my life. The news in 10 minutes is all you need don't you know? That's what I want concise, short, to the point, none of this 300 page novel stuff. Crikey, even your blog posts are too long CoNTeNDeR. I've gotta do other stuff you know.  
 
<a href="http://4.bp.blogspot.com/-t8Jvc_oIscg/UpJAPlru4gI/AAAAAAAADC8/WHpH97fVVxk/s1600/Books.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="235" src="http://4.bp.blogspot.com/-t8Jvc_oIscg/UpJAPlru4gI/AAAAAAAADC8/WHpH97fVVxk/s400/Books.jpg" width="400"></a>Short is all I want! Let's start by sorting this blog out. 
 
Change it to "SMBH" Save Money, Be Happy" -  that's it nice, simple and quick to read! Genius!  
 
Delete everything on the blog and replace the front page with "SMBH". Job done. You will thank me CoNTeNDer you can pack up the website as you have done your bit and have all that spare time to fill with fun" 
 
CoNTeNDeR: "SMBH to you too!" 
 
Books are great, something to get lost in for a few hours, something to debate, something new to learn. A lot of what is discussed on this site has its starting point in a book or article. This post is all about the books we have relied upon for our financial independence and downshifting planning. 
 
Reading, Why Bother? 
 
Books, Books, and More Books, so many to read and so long. When will one ever the the time to read them all? 
<div style="text-align: center;">
<a href="http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate" target="_blank"> </a></div>
Aren't a lot of books just fiction such as graphic crime stories and romantic slush. Yes they may be great to retreat into a fantasy world unfortunately they will not help with gaining financial independence (although they may help on the happiness side). 
 
What we are really looking for are reference and how to books and essays. 
 
It is all too easy to say "Come on, I had my share of serious books at university" unfortunately the books in university were generally just on topic. Too specific and not everyday real world challenges. 
 
For example <a href="http://www.amazon.co.uk/gp/product/0141038225/ref=as_li_tf_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0141038225&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">Antifragile</a> and <a href="http://www.amazon.co.uk/gp/product/0141034599/ref=as_li_tf_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=0141034599&linkCode=as2&tag=thecontfinain-21" id="static_txt_preview" target="_blank">The Black Swan: The Impact of the Highly Improbable</a> by Nassim Taleb are the opposite of  "Don't worry about challenges, society will look after you, go to the pub, watch a movie or go to the shops instead. It is more fun". Taleb highlights how fragile some of our support systems actually are how unforeseen events will always exist and what we as individuals can do about it. 
 
<div style="text-align: center;">
<a href="http://upload.wikimedia.org/wikipedia/commons/thumb/3/39/WorldMapLiteracy2011.png/400px-WorldMapLiteracy2011.png" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="185" src="http://upload.wikimedia.org/wikipedia/commons/thumb/3/39/WorldMapLiteracy2011.png/400px-WorldMapLiteracy2011.png" width="400"></a></div>
<div style="text-align: center;">
 <a href="http://en.wikipedia.org/wiki/List_of_countries_by_literacy_rate" target="_blank">List of countries by literacy rate source: Wikipedia</a></div>

Financial Independence and Happiness Books

SPEND.IT.NOW: "You say Read Read Read - I haven't got time to read! TLTM (too long too much?). I've been fed snippets all my li...

Infographic | Achieve Very Early Financial Independence - Part I

Contender 0 Budget, Education, Finance, financial independence, Infographic, Investing, Planning, Saving 09:50

Infographic | Achieve Very Early Financial Independence - Part I

Achieve Very Early Financial Independence - Part I | Create infographics <<< Click here for a spreadsheet planning tool th...

30 Rules of Very Early Retirement

Contender 3 #financialindependence, Early Retirement, financial freedom, financial independence, Rules, Saving 07:07

<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-y2REvB58QQc/UJ5bJCu_KdI/AAAAAAAACEs/mAzuSPdZ7Dc/s1600/Rulers.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img alt="Rulers" border="0" height="195" src="http://3.bp.blogspot.com/-y2REvB58QQc/UJ5bJCu_KdI/AAAAAAAACEs/mAzuSPdZ7Dc/s200/Rulers.jpg" title="Lots of Rules" width="200"></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Lots of Rules</td></tr>
</tbody></table>
Today THE.CoNTeNDeR and trainer SORT.YOUR.LIFE.OUT have a look at all of the rules of the Very Early Retirement Fight. Can they be mastered as THE.FuTuRe is waiting in the wings ready to mess up THE.CoNTeNDeRS plans! 
 
Our tribe has been on the quest for Very #EarlyRetirement / #FinancialIndependence over the last few years. Along the way we have subconsciously created some rules for ourselves which have been put to paper below: 
 
 
 
<ol>
<li>Set out with the end in mind - very early retirement (financial freedom) in school! - a good job that pays well - yes it is nice to think about being a wealthy pop star but what percentage of the population are that famous? By all means have it as a hobby and perhaps you will excel in it if it is your passion. Consider a growing industry that you have a real passion for to enter for a career. It will be the best to negotiate higher wages. Computers were the pace to be in the 1980's - 2000 perhaps bio technology, graphine or renewable technology are the upcoming areas now.  </li>
<li>Get stuck in at a young age - It is better to screw up at a very early age and learn the lessons early instead of later in life when it can cost money and time.  <iframe allowfullscreen="allowfullscreen" frameborder="0" height="266" mozallowfullscreen="mozallowfullscreen" src="https://www.youtube.com/embed/l1YmS_VDvMY?feature=player_embedded" webkitallowfullscreen="webkitallowfullscreen" width="320"></iframe>  </li>
<li>Wait and research before you buy. NEVER buy on impulse. Are you buying an asset (e.g. property, shares, woodland, precious metals) that will provide an on going passive income or a consumable? Is the consumable necessary (e.g. food) or a want (e.g. electronic device)?  </li></ol>

30 Rules of Very Early Retirement

Lots of Rules Today THE.CoNTeNDeR and trainer SORT.YOUR.LIFE.OUT have a look at all of the rules of the Very Early Retirement Fight. ...

Early Retirement, Lean and Maslow what do they have in common?

Contender 1 Early Retirement, Education, Ethical, Freedom, frugality, Happiness, health, Investing, Life, Planning, Saving, Toolkit 09:27

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Hello Fight Fans, welcome to Fight Night on channel CONTENDER! Let's get ready to RUMBLE! Introducing in the red corner weighing in at 13st 2lb THE.CONTENDER! In the blue corner weighing in an impressive 16st 9lb is THE FUTURE.  
Tonight's fight is over 12 rounds. The prize is for the UFF (Undisputed Freedom Fight) Belt  
 
THE.CONTENDER has been training for the future for some time. Since he was born actually; just like everyone else. THE.CONTENDERhas been fighting to achieve his goals and desires; funnily enough just like everyone else. THE.CONTENDERhas searched for the key to making them happen; just like everyone else, where is it damn it! 
 
So this post is about THE.CONTENDER's personal thoughts on what this key could look like. In particular could it unlock the secret to an effective Early Retirement and Life Planning approach? THE.CONTENDER's approach is based on three key parts: 1) Maslow's hierarchy of needs, 2) a concept called LEAN and 3) Monthly Planning process. This is what it looks like in THE.CONTENDER's world: 
 
<a href="http://1.bp.blogspot.com/-6QEj-mPPFjc/UGyWvS4_T9I/AAAAAAAAB2k/akM4hlRgZFE/s1600/Maslow.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img alt="" border="0" height="240" src="http://1.bp.blogspot.com/-6QEj-mPPFjc/UGyWvS4_T9I/AAAAAAAAB2k/akM4hlRgZFE/s320/Maslow.jpg" title="Maslow's Pyramid of Needs" width="320"></a>1) MASLOW 
 
Maslow placed the most important aspects of life at the bottom of a PYRAMID. Water, food and shelter at the bottom as they are essential through to self-actualization at the top. 
 
 
 
 
 
 
 
 
<a href="http://2.bp.blogspot.com/--jJqJ6b2XN4/UGyW8K4qa_I/AAAAAAAAB2s/Ul_nhiiRV1g/s1600/Lean+House.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"></a>2) LEAN 
 
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THE.CONTENDERwould like to introduce Tachi Ohno of Toyota. He is considered the father of  <a href="http://en.wikipedia.org/wiki/Lean_manufacturing" target="_blank">LEAN</a> in the manufacturing world. LEAN is all about removing waste (Japanese for waste is "muda") and making the products as close to the point of  delivery as possible (JIT - just in time). 
 
What is interesting is that LEAN principles have been simply represented as a house. You need strong foundations, build the walls and top off with the roof while regular maintenance will keep it in tip top condition. 
 
3) PLANNING (Making it Happen): 
 
Project management has lots of models and different approaches depending on what the project is. It can can be very complex such as building a skyscraper or simple in the case of planning a journey to the Zoo. 
 
Over complication and missing steps, have put THE.CONTENDERin hot water in the past. THE.CONTENDERhad to learn how to mange projects and people effectively to make sure he could not see the wood from the trees.  
 
THE.CONTENDEReventually learnt that planning really is a simple process wits for key repeating steps PLAN - DO - CHECK - ACT. When carrying out these steps a list of checks and skills must be used. Below is a list of the key aspects of planning, leading and execution that THE.CONTENDERhas been rigorously trained on. In THE.CONTENDER's opinion consider all of them, in a robust review process, and you won't go too far wrong: 
<ul>
<li>What is your VISION - what do you want- your end goal - Early Retirement and Happiness?</li>
<li>Do you have a PLAN to get there - this can be on the back of a biz card or a spreadsheet? </li>
<li>Are you keeping everything SIMPLE?</li>
<li>Be prepared to ADAPT your plan and goals, make sure you have regular checks </li>
<li>Do you have the right ATTITUDE - are you really committed to being frugal for early retirement?</li>
<li>Do you see the PROBLEM clearly? is it that you have to pay your debts first or get a new job close to home?</li>
<li>Have you DISCUSSED this with your close family / friends and do you have everyone on board?</li>
<li>Who is in CONTROL - tracking progress and spotting deviations, obstacles and opportunities and getting back on track if you fall behind.</li>
<li>ASSERTIVENESS - get on with it, have a go, back up your convictions</li>
<li>INVOLVE everyone in the decision making progress - THE.CONTENDER and his tribe are moving to France, the reason is that the living standard is higher, decent warm weather and it has good schools for the kids; so THE.CONTENDER turned to the grandparents: "what do you think?"</li>
</ul>
So what if we try combining the life (Maslow) with the continuous Improvement and removal of waste of Lean (Tachi Ohno), with the principles of planning and financial freedom? Here is THE.CONTENDER's interpretation, please read on ;)

Early Retirement, Lean and Maslow what do they have in common?

PERL Hello Fight Fans, welcome to Fight Night on channel CONTENDER! Let's get ready to RUMBLE! Introducing in the red corner weig...

Daddy Contender a Financial Frugality Case Study of Bringing Up Baby - Round 6 1m10s

Contender 1 Early Retirement, Finance, frugality, Life, Saving 22:26

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THE.CONTENDER recently quit his job to be a proud stay-at-home father. This post is about the benefits of having dad at home, the financial adjustments we had to make in particular how we reduced our spending by £269 per month with a surprising end result! </div>
 
Quitting work to look after the kids full time was quite a big step into the unknown for THE.CONTENDER . Work had dominated his life for the last 13 years. When the news leaked out that THE.CONTENDER was taking the new paternity leave for 6 months after Mrs C went back to work full time, it raised quite a few eyebrows, especially when THE.CONTENDER then quit his job at the end of his leave. Why was a top talent employee who works hard and has invested a significant amount of time in the company giving it all up? 
 
Here THE.CONTENDER wants to share the reasoning (financial and family), the benefits - CGBB (Contender Great Big Benefits) and detailed analysis of the change to our finances (including our significant cost saving exercise). 
 
The Reasoning 
 
As the grandparents live in different countries the childcare is up to us. Options we considered after child number two arrived were: 
<ol>
<li>One of us had to stop working - would this be detrimental to that persons career - was it really important to us? The kids would benefit greatly from parental care. </li>
<li>THE.CONTENDER gets a better job so his salary pays for the kids to go to nursery or nanny (current salary would NOT cover the child care costs (detailed analysis is in the second part of this post). The increase pay would probably mean increased work and travel - a worse situation for the family.</li>
<li>We both go part time and take turns - this would have reduced our ability to save for financial freedom and hence delayed our move to the French countryside. Positives are that the children benefit from both parents being part of the upbringing and we would probably be less stressed for example we would not have to worry about the rush hour commute home each night to pick them up. Would we get paid less but still work more than the allotted part time hours - probably.</li>
<li>We both stay in our current jobs and get a full time nanny / childminder or creche for five days - this would have reduced our saving rate as we would be subsidising THE.CONTENDER 's salary to the tune of around £500. Kids are brought up by someone else. THE.CONTENDER would have that cherished career though......</li>
</ol>
We chose option 1 - THE.CONTENDER quit - but why? Let's look at the family happiness and our perceived financial pain in more detail. 
 
The Benefits - CTH (Contender Tribe Happiness...in October) 
 
One parent at home has significant benefits in our opinion: 
<ul>
<li>The children have their fun loving daddy to look after them - no changes of child carer etc just consistency. </li>
<li>As parents we have peace of mind no rushing home from work to pick the kids up. No problems of juggling work when they are ill. </li>
<li><a href="http://edis.ifas.ufl.edu/he137" target="_blank">Click here for a list of benefits in having an actively involved father in the children's upbringing</a> </li>
<li>THE.CONTENDER not spending (and risking) his life on the motorway going to work - avoiding work stress, tiredness and the always on call culture.</li>
<li>THE.CONTENDER has time to write this blog - cowabunga :) </li>
<li>THE.CONTENDER 's wife likes her work as it is constructive to society and is well paid (more than THE.CONTENDER ). As THE.CONTENDER wasn't enjoying himself at work, so it was obvious THE.CONTENDER should stay at home! </li>
<li>Our eldest child started nursery school which is mornings only - how do you juggle that with jobs and a one year old - lots do and hats off to them!</li>
<li>Seeing the girls grow up is PRICELESS.</li>
<li>THE.CONTENDER has time to invest wisely..... </li>
<li><a href="http://www.dadcando.com/" target="_blank">THE.CONTENDER learns new skills and has to step up to the plate quickly!</a></li>
<li>THE.CONTENDER was up for the challenge </li>
</ul>
<blockquote class="tr_bq">
Nothing I've ever done has given me more joys and rewards than being a father to my children. -  Bill Cosby 
 </blockquote>
Please read on to find a detailed investigation into our financial considerations and impacts and how we reduced our spending by £269 per month. This leads to an interesting overall result.

Daddy Contender a Financial Frugality Case Study of Bringing Up Baby - Round 6 1m10s

THE.CONTENDER recently quit his job to be a proud stay-at-home father. This post is about the benefits of having dad at home, the financi...

Investment Challenges

Contender 0 Dividends, DRIP, Ethical, Inflation, Risk, Saving 15:02

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<h2>
One Black Eye Too Many?</h2>
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Today I would like to discuss some CIT (Contender Investment Themes) and challenges faced today. Investing at the time of writing is a mine field. We are in one of the most volatile financial periods in recent years. An economic crisis is ongoing in the western world while concerns about sustainable growth in emerging markets are frequent in the financial press. 
 
<h3>
Managing Inflation</h3>
 
Inflation is most often described as prices are going up because materials and labor etc are getting more expensive.... Really as I see it this is a fallacy - money is actually loosing its purchasing power as there is more of it. 
 
Like everything in life we have supply and demand balances. The more abundant something is the less it is worth to the consumer. The same is true of the current version of "money" we have in the world. We are creating vast amounts of money - mainly electronically. The more there is, the value of each unit decreases over time. In the UK I have seen the cost of a loaf of bread increase by 2.5 times over 20 years but if anything we have more global grain supply now. 
 
Inflation is a real concern in the MIT list. It affects our investment choices, pension allocation and impacts our ability to build and protect our savings. Inflation is like a stealth tax - legal theft. 
 
It is of utmost importance to plan for a significant rate of inflation and make sure you have assets that compensate for any increase in prices \ decrease in the value of the fiat currency in the future. Examples of investments that could grow at the same rate if not faster than inflation: 
 
1. Companies with strong brands, advanced distribution and manufacturing networks \ economies of scale can raise prices in line or above inflation (such as consumer goods companies) 
2. Energy and raw material producers 
3. Stable currencies and precious metals (scarcity value) 
4. Agriculture (we are not creating any more land on the planet) 
 
A note on CASH and GOVERNMENT BONDS. Cash and bonds are deemed safe investments. Bonds will pay some interest and you can buy inflation protected products. In MIT I consider these investments \ savings as dry powder for opportunities when there is "blood on the canvass": 
<blockquote class="tr_bq">
"I am not so much concerned with the return on capital as I am with the return of capital." - Will Rodgers </blockquote>
<h3>
 </h3>

Investment Challenges

One Black Eye Too Many? Today I would like to discuss some CIT ( C ontender I nvestment T hemes) and challenges faced today. Invest...

10 Rules of Extreme Saving

Contender 0 Finance, financial independence, Freedom, Investing, Rules, Saving 14:23

Is a 50% saving rate really possible?</h2>
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Living in a high tax and benefit system such as the UK saving 50% of your pay seems extreme. I recently had a conversation on this point with a colleague - he could not believe how we as a family of 4 could still manage to save a 50% of our take home pay. He sat there playing with a very expensive mobile phone. He was working out how to use the latest app to track how much faster he was on his top of the range carbon fiber bike. 
 
As you can already gather THE.CONTENDER was trying to refrain himself for not stating the obvious. One of the most difficult topics I have encountered in professional social and family life is how to approach difficult subjects and significant change: 
<blockquote class="tr_bq">
So and so is really good I could never be as good as..., that is not possible....., my circumstances are special...it is OK for you but it would never work for me..... </blockquote>
So the problem is not the subject per say - surely everyone would like to be financially free. It is the person's initial mindset and perception of sacrifice that goes with it. Where has that perception come from in the first place and is it misplaced? So how do you get your point across \ engage them or should you try and discuss further, at the expense of coming across as pushy.....****!!! 
<h3>

Buy now and retire at 70 or save a lot and be financially free after 10 years? </h3>
So if you need to save 50% or more of your salary to be financially free quickly what is the "sacrifice". Expensive, fun (tropical holidays \ designer suits) are delayed. In budgeting and saving (investing) diligently you will build the capital to be financially free for you to pursue your dreams in a surprising time frame. Could this be true? 
 
<blockquote class="tr_bq">
"Don't forget  you could be knocked down by a bus tomorrow. So don't be silly LIVE FOR TODAY! consume, enjoy your shiny gadgets - forget about financial freedom that is only for the wealthy you are a worker bee in the middle class. If you are a good little worker and make it to 70 you can retire on us" - Anon </blockquote>
 
Advertising, peer pressure, fear and not being part of the crowd are very powerful influences on everyone in society. How is the financial independence blogosphere really going to get its point across? Are people going to give their precious time between distractions like films and the challenges of our hectic daily life to understand the benefits of saving like mad? 
 
My concern is the powerful media message to buy, buy, buy is backed by the best advertising talent and research money. It tells us how to spend our money and is very persuasive to boot. We are exposed to advertising from a very early age when we have very few defenses. Society has been educated to listen and be a good consumer of needs that are actually wants. A lack of inquisitiveness has been instilled in young minds. Subordination to hierarchy is "normal" in the western education system. Young people are at its mercy and do not have the mature skills to critically challenge the status quo.

10 Rules of Extreme Saving

Is a 50% saving rate really possible? Living in a high tax and benefit system such as the UK saving 50% of your pay seems extreme. I...

Financial Independence in 7 Years!

Contender 2 Finance, Freedom, Saving, Toolkit 08:17

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What an idea we had in 2005: could our little tribe be financially free in 7 years! Feelings of crazyness, being excited yet a sense of daunt and dizzyness all at the same time. 
 
As I update this in early 2014 we consider ourselves financially free. All those emotions followed us along the way on what has been a very bumpy rollercoster.   
 
Here is the story of how our little tribe ended up financially independent 7 years after the inital thoughts about or finances and what really made us happy.  
 
Finding Our Feet 
 
Financial independence was never spoke of in our families our our up bringing. Both my wife and I had different but comfortable up bringing. 
 
Me, my sister and mum getting on as a single parent family in the SE England Sussex countryside. We lived in a little cottage in an idyllic village surrounded by field where we ran free, collected tadpoles and rolled in the mud. We moved closer to family in a South Wales mining village surrounded by hard working families. Great times and fond memories. Money was tight but we did not want for anything. 
 
I excelled through education culminating in an engineering degree from a prestigious red brick university. Fun times were had, reckless spending and childish, stupid and regrettable pranks. Did I actually learn anything? I certainly did not have a clear direction to my life, no mentor to knock some sense into me. I was just making it up as I went along. 
 
My first "proper" job was a sea of figures, terms and diagrams. People dressed in suits jockeying for the top jobs. Still no direction. What is this career thing all about? Why does that manger make things so difficult for our department and what is the point of a deadline? 
 
Time for a change of company. A bigger beast altogether. Even more dog eat dog, downsizing the workforce, appraisals and feedback. B- my son - must do better. It was all so serious and deadlines had to be met.  
 
These early experiences shaped me. The desire to run in the wilds. Knowing that I should respect  money and save for retirement. I had to get organised, grow up and be more responsible, tame the silliness but keep some of the fun. 
 
<div style="text-align: center;">
Our Financial independence Story</div>
  
Our Environment Shaped our thoughts 
 
Our local environments have always shaped our thoughts and ideas. Fortunately we have lived in the countryside, villages, towns and mega cities. We have worked in numerous countries and cultures and visited ancient ruins and tropical beaches. 
 
At the time In 2005 my then to be wife and I moved in together in the most expensive city in the world London. 
 
We had bright lights, amazing attractions, comfortable houses and plenty of entertainment. Not forgetting the UK's status as a major transport hub for all those exciting getaways. What a great place to live right? 
 
Especially when you have money. I had just paid off my student and car loans $30K. I was finally looking at a positive balance sheet for the first time in 10 years. Our living costs were reduced as we shared the bills. We had money to spend! 
 
<iframe allowfullscreen="allowfullscreen" frameborder="0" height="266" mozallowfullscreen="mozallowfullscreen" src="https://www.youtube.com/embed/iMUiwTubYu0?feature=player_embedded" webkitallowfullscreen="webkitallowfullscreen" width="320"></iframe>We were renting a modest one bedroom apartment in a Victorian house. It had a huge garden with a beautiful blossoming cherry tree. It was located in an affluent area with great restaurant's, pubs and shops. 
 
Each weekend we would go out to try different cuisines. Visit sparking, thumping night clubs. Entertain our selves at the cinemas and have friends around for meals and drinks before hitting the tiles once more. 
 
Frequently we would take cheap city breaks around Europe. Lots of income was spent and little was saved. 
 
Thankfully we lived within our means and avoided all forms of debt. Our spending was controlled through a joint bank account and a budget. 
 
Changing Direction 
 
My wife and I sat down one cold dark February night in 2005 to consider our future. Sure we were having a great time but something was missing. We talked about family, where we wanted to live what type of life we wanted, family, kids and seeking some tranquillity in our lives. 
 
We had both heard about downshifting. Perhaps we could work less and live more simply 
but we needed to get rich first! Let's invest. 
 
We had no property to speak of so did not consider real estate investing. We had good jobs so did not see the need to setup our own business so for us the most natural place to start was the great casino of the stock market. 
 
Unfortunately
 no one tells you how to invest. We subscribed to a few stock picking 
news letters and rolled the dice. The result was not pretty. Too much, 
too soon and on too few. 
 
More Money than Sense 
 
Bonus Time more money to invest and spend! We wanted to buy a house - house prices always go up right and we were missing out. Well that would have to wait as London housing was so expensive. Back to the stock market. 
 
In London we were surrounded by stories of the ridiculous bonus culture of the city with everyone getting filthy rich. Warren Buffets latest stock winner. Google shares shooting to the moon. This  encouraged us to plough everything we had saved and we were earning back into shares.  
 
TFD Tribe Financial Disasters ensued. Penny shares promising the moon going to zero, the latest and greatest mutual fund idea languishing in the gutter. What was I doing wrong? 
 
Fortunately Mrs C on the other hand had taken advice from a financial adviser and her savings were growing steadily. 
 
The route to riches was through 10 bagger shares though. Instant riches. Bring it on. One was bound to hit the jackpot soon.....learn from my mistakes the next pick will be a winner. Oops!! 
 
Hindsight 
 
In hindsight I was lured by the financial press (magazines, newsletters and the mainstream financial media). It was a hard learned lesson. Luckily it was out of the way early in my saving and investment career :o) I stated to save more carefully from then on. Here is the TFD list of losses :o( 
<ol>
<a href="http://getintheringwithme.blogspot.co.uk/p/muff-tools-and-check-lists.html" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;" target="_blank"></a>
<li>The penny stock miners - total loss in the region of £5,000</li>
<li>The New Technology Energy Stock £4,000</li>
<li>Buying Europe just as Europe goes down the pan £3,000</li>
<li>A consumer goods technology stock - wiped out £500</li>
<li>Green energy bio fuel stock - worth 1/100th of the purchase price another £500</li>
</ol>
Stock picking for 10 bagger gains gave way to mutual funds and large cap stocks who paid dividends..... 
 
These
 dividends grew and grew. Slowly our modest passive income goals looked 
feasible, but how much did we need and what were we going to do with it? 
 
In the Meantime - We must get on the property ladder quick! 
 
We had amassed enough money for a deposit on a home by 2007. A home is a much better investment right? 
 
We looked around and were perplexed by extremely high prices. Property was in a huge boom in London. We were looking at huge mortgages on what would have been a shoebox apartment. 
 
This did not make sense to us as we could rent a much larger property (a house with a garden) at less than the interest payments on a mortgage. Additionally we did not have to spend money on decorating or repair costs, building insurance or expensive conversions let alone porter and leisure fees. 
 
Renting it was, even though there was peer pressure to buy. 
 
Please read on for the financial crisis and light on the other side

Financial Independence in 7 Years!

What an idea we had in 2005: could our little tribe be financially free in 7 years! Feelings of crazyness, being excited yet a sense...

Free Tools

Contender 0 Education, Finance, Investing, Planning, Saving, Toolkit 12:46

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Free Toolkit Manifesto - Provide simple, accessible, customizable planning tools</h2>
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Free CPT's (<a href="http://getintheringwithme.blogspot.co.uk/p/muff-tools-and-check-lists.html" target="_blank">Contender Planning Tools</a>) that cover radical solutions to life's challenges are a key part of this blog. A blog post will accompany each tool and a how to use guide. Is this a new concept - definitely not. My objective may be different though : "Provide, free, clear simple, very user friendly planning tools with the specific goal of the Pursuit of Happiness". I know this is a very ambitious, difficult, complex if not impossible task but I sincerely hope it will be a fun collaborative effort and interesting to see where it ends up. </div>
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All the great things are simple, and many can be expressed in a single word: freedom, justice, honor, duty, mercy, hope.
 
Winston Churchill
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Qualified???? - CLSAD (Contender Life Skills and Disasters) 
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How have I learnt how to plan \ create ad-hock tools? 12 years work in process design has laid a solid foundation. I have found that business tools are readily transferable into social life. The challenge is to simplify and adapt their purpose. 
 
I have read a huge number of business books gone on numerous training courses. A vast amount of information and too much to remember and apply. I applied, succeeded and messed up in places but then adapted and ultimately worked hard to get results in work. The same is true in my personal life and a <a href="http://getintheringwithme.blogspot.co.uk/2012/07/round-5-15-secs-muff-family-financial.html" target="_blank">later post</a> covers some of the bad decisions the Tribe have learnt from. 
 
Does this qualify me to have a go at a bunch of tools for life? Definitely not but someones got to do it. I am willing to have a go, try them out in real life situations to find out 
 
Tool Contents - CBBT (Contender Big Bag of Tricks)  
 
CBBT includes planning, strategy building, risk planning, tracking, calculations, graphs and diagrams. They cover the key points from the start of the planning process to the final long term goal (it is almost always a good idea to state your long term goal and work backwards). 
 
I have found that having a plan that you can update easily with checks \ action lists is extremely important. This makes sure you do not miss the obvious and you stay on track. A plan helps you to be realistic with yourself. A regularly reviewed plan gives you a sense of control and comfort that you are going in the right direction. If you are off track you can adapt and not panic onto bad decisions. </div>
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Free Tools

Free Toolkit Manifesto - Provide simple, accessible, customizable planning tools Free CPT 's ( C ontender P lanning T ools )...

Welcome to FISH !
You have come here looking for answers. How to get out of debt? How to save and invest? How to retire early and how you want to live in retirement.

Well this is the right place for you as out tribe has been through all of these steps. We no longer work for a corporate employer and have saved enough to retire early. How we did this is shared here on this site for you.

Our little tribe found out these secrets to financial independence in our late 20’s. Since then we have taken early retirement, in our late 30's, in just 7 years. We now live in the South West of France with our two young children.

Along the way I decided to share everything I learnt. My articles and tips on aggressive saving and compound investing are there to help you meet your financial goals fast. I discuss ways to help you decide what you want by building a life plan. This helps to work out how to get where you want to be whilst avoiding the pitfalls along the way.

My expertise was built up working in blue chip corporate jobs, extensive reading and putting it into practice. I have condensed this knowledge into simple strategies to help you meet your goals and not those of the bank or the place you work.

There are free planning tools on this site that help you make a life plan. A plan for your future. The tools calculate how to reach your financial goals in a timeline that suits you. The tools help set out your life goals, make them happen and how to exceed them.

There are tips on how to simplifying your life to remove day to day headaches. These include ways to pay off debt fast buy eliminating wasteful spending habits. How to reduce your monthly bills through choices that actually improve your health and wellbeing. Identifying things you don’t need that sap your time and wallet.

There are little sustainability projects to reduce your dependence on shops and utilities whilst saving money to spend on things you want.

All of these little steps will show you how save 50%+ of your salary so you can meet your goal whatever it is. This huge saving rate can be compounded for very early retirement. I am sure you will find something here for you.

Darren Lee (A.K.A the Contender as in my blog)

FISH | Financial Independence Seeking Happiness