FISH | Financial Independence Seeking Happiness

Retirement Mis-direction and Tips

Contender 0 Critical Thinking, downshifting, Early Retirement, Happiness, Saving, spending 09:50

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<tr><td style="text-align: center;"><a href="http://1.bp.blogspot.com/-u9RhoSecuiQ/VWM2bRkl-YI/AAAAAAAADe8/80ZGci9KPB4/s1600/Dont%2Bdo%2Bit.JPG" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img alt="Mis - direction" border="0" src="http://1.bp.blogspot.com/-u9RhoSecuiQ/VWM2bRkl-YI/AAAAAAAADe8/80ZGci9KPB4/s1600/Dont%2Bdo%2Bit.JPG" title="Financial Independence" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Warning Advert!</td></tr>
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<ul>
</ul>
Our TRiBe still read the mainstream press (although the quality of the articles has been reduced in size and quality down the years). One <a href="http://www.bbc.co.uk/news/magazine-32974131" target="_blank">BBC article</a> that caught our attention was about a young couple desperate to spend quality time with their kids. They did this by selling their (mortgaged) house, quitting (great word quitter - very negative right?) full time teaching jobs and took off in a caravan for a year. They called their adventure the GO > DO LIFE. 
 
It was nice to read about people trying something different - seeking the good life for them and their kids. It was a reflection that the time spent as a young family is fleeting and easily lost to other commitments. Unfortunately for the family involved it was only a year, no income just spending - no sustainability, longevity or way out. 
 
I believe the article glamorises a one year rebellion (perhaps portraying it as a mini mid life crisis). Unfortunately the article was a missed opportunity. It was short with little advice on ways to take time out from from the coal face. There was NOTHING on how to REALLY getting out of the system for a sustained period of time. 
 
The family in question would have to go back to the grind and slowly re-build all of the capital they have spent. Additionally due to continuously raising house prices they would incur more mortgage debt to get back on the holy money cow that is the UK housing ladder. 
 
I felt the <a href="http://www.bbc.co.uk/news/magazine-32974131" target="_blank">article</a> was almost offering a subliminal message "don't do it".  Look they have no job, and living off the proceeds of the sale of their house. This has prompted today's post: 
<ul>
<li>Mis-direction: 8 Retirement nonsensical generalisations we are fed by the mainstream media</li>
<li>Practical Tips</li>
<ul>
<li>Fighting back: Re-learning rhetoric - asking why </li>
</ul>
<ul>
<li>Planning for Freedom: Basic steps to plan for financial independence \ retirement</li>
</ul>
</ul>

<blockquote class="tr_bq">
<div class="MsoNormal">
When you're young, your whole life is about the pursuit of
fun. Then, you grow up and learn to be cautious. You look before you leap and
sometimes you don't leap at all because there's not always someone there to
catch you. And in life, there's no safety net. When did it stop being fun and
start being scary? - Carrie Bradshaw</div>
</blockquote>
<h2>
Selling the wrong life</h2>
We are bombarded with media that says consumerism is good. Admittedly materialism \ consumerism brings some happiness and comfort up to to a certain point. It gives us some short term joy, excitement, at at a cost to you and a gain for someone else. 
 
Media, big business and government all have an interest in consumption and you are their target. 
 
Powerful tools are available to groups interested in your money. 
 
Governments can engage in negative interest rates manipulating house prices higher, change taxation "rules". 
 
Companies use TV, film, magazines, bill boards and Internet pages to sell you a dream. 
 
We are poorly equipped to ignore all of their messages. It is so easy to spend money. 
 
They know we do not have to over spend. We have all we really need to be happy (especially in the West) at low, low prices. Instead of benefiting from increased incomes we chase house prices higher and gizmo's to fill the time we have fee from the treadmill to pay for the house. 
 
The strange thing about it all is that alot of the workforce are there to to encourage over consumption, waste and debt slavery actually being part of the problem. Doh! 
<h2>
</h2>
<h2>
</h2>
We are constantly fed titbit's of information and propagation aimed at our natural instincts to "hoard" and "protect us from danger": 
<ol>
<li>Retirement is for old people - how old and who decides?</li>
<li>You need loads of money saved ($1 Million +) to replace your current and future spending - How do they know this there are too many considerations such as personal living costs and return on investments \ business. This needs to be worked out by each family unit.</li>
<li>You will lack meaning once you have retired - Where is their imagination? Besides they are still working so how could they know? </li>
<li>Retirement too young is dangerous - your money will run out - did they forget to say you only live once so if you don't try you will never know?</li>
<li>You must have a successful career to have achieved in life - First what is the definition of achievement? Achievement is what you want it to be not what someone tells you it is......</li>
<li>Work provides a good role model for your children  - I presume they mean a 9-5 job, get with the system. This way the kids see you work and spend all your disposable income. Meanwhile they (the kids) will be well looked after like you have been in expensive childcare. A picture of normality and something to aspire to! Why would you wish that on your kids - the elite certainly don't. </li>
<li>Early retirement means that you are molly coddling your children and they will turn into loafers - In our experience this is a load of rubbish. We have time to engage in real useful activities such as splitting wood, cleaning the car, painting a picture, making a model and playing chess. We help them with homework and take them to interesting places (we have just been down a cave). We have time to give them a real world education away from the system, idiot box, wired living.</li>
<li>Every day is a Saturday - hence there is no Weekend - that is really a choice and a perception isn't it? Self discipline doesn't stop when you finish work. Get up and do your thing in the week as 'normal' and kick back at weekends.</li>
</ol>
see articles such as: 
<a href="http://www.canadianliving.com/life/money/5_reasons_not_to_retire.php" target="_blank">5 Reasons not to Retire</a> 
<a href="http://www.dailyfinance.com/2014/03/14/5compelling-reasons-never-retire/" target="_blank">5 Compelling Reasons Not to Retire</a> 
<a href="http://www.latimes.com/business/hiltzik/la-fi-mh-the-death-of-the-millionaire-next-door-dream-20150310-column.html#page=2" target="_blank">The Death of the Millionaire Next Door </a> 
<h2>
Practical tip: Always ask why</h2>
Why do children always ask why but us adults have seemed to have forgotten this basic natural skill? Here is a process (widely used in business) to help clarify thoughts and actions: 
 
Take the big vague concern and break it down in to smaller concerns 
Ask why is it a concern several times until you understand the 
What is the cause of the concern 
How can you react to the concern 
<div style="text-align: left;">
<h3>
E.g. - What if I lose my job I will not be able to save enough to retire</h3>
</div>
3 concerns - lose job / not be able to save / want to retire 
 
- lose job 
- why would I lose my job? 
        - Company fails 
        - No longer have relevant skills 
        - outsourced 
        - illness 
- Take each one again and how would you react? 
        - Failing company - stop procrastinating and hoping for redundancy and move company now. 
        - Make sure you change roles on a regular basis in work 
        - Outsourcing risk do you need to retrain \ change roles 
        - illness - are you really looking after yourself 
<h2>
Practical Tip: Planning for financial independence \ retirement</h2>
Here are some steps to help to work out financial independence: 
<ol>
<li>Consider all of the large costs you will make in your life and your expected income and its growth year on year. Take the number and multiply them all by 20% (random I know but you have to consider most of the expenses will be made in THE.FuTuRe and will be more expensive than now due to inflation)</li>
<li>Find out benefits that are available to you (tax free savings, employer pension contributions) </li>
<li>Work out how much you want to save into a pension 
such as 401K(US)\SIPP(UK) (taxed at a later date) or pay into a tax free
 wrapper such as a IRA(US)\ISA(UK) (taxed at source). This will dramatically impact the date at which you can take early retirement. For
 instance NOT contributing to a pension will result in a much earlier 
retirement (pensions cannot be taken to a set age such as 55) as you 
will be able to invest and grow a passive income stream quickly. Investing
 in a pension will provide a future safety buffer that you cannot 
access. Should early retirement go wrong you will have this net in the 
future and be able to go back to work until it is available. here are a few consideration:</li>
<ol>
<li>Save a pension.
 If your employer offers matching contributions it will probably be 
wise to start a pension as soon as possible to the maximum matching 
amount. This IS part of your salary! It IS OPTIMAL to take it!!!!! Do 
not overlook this money dropped at your feet otherwise the only person 
laughing is the company and its shareholders. Others considerations are what if you cannot access it until later? What if the rules are changed e.g. the ability for a tax free lump sum on retirement or you have to invest in a government decreed way etc?</li>
<li>No pension.
 If you do not get any benefits from a pension perhaps you are better 
off NOT having a pension. By this I mean pay the TAX now and invest in tax exempt savings plans or other investments that provide an INCOME. </li>
</ol>
<li>Build a rough financial time line (<a href="http://getintheringwithme.blogspot.com/p/muff-tools-and-check-lists.html" target="_blank">try this tool and keep it up to date!</a>) - this really is key. If you cannot project your finances into THE.FuTuRe you are just guessing and will be flying by the seat of your pants - often with bad repercussions, not only for the pants.</li>
<li>Build a budget tracking tool (capture all or expenses - have a look (monthly?) and criticise your spending - did you really need it, did it really make your life better?</li>
<li>Learn to invest (diversify - such as the permanent portfolio, property, commodities) and build a passive income</li>
<li>Re-visit you assumptions and financial plans (time line) on an annual basis</li>
</ol>
<div style="text-align: center;">
THE.FuTuRe "I'm gonna get ya! Retire you? You have no idea what is a commin your way so why waste your time chasing financial independence for the odd year or two. I will change the rules, wipe out your savings - you will be stuffed. Wake up and smell the Thyme and Rosemary MR.CoNTeNDeR" </div>
<div style="text-align: center;">
<blockquote class="tr_bq">
THE.PeSSiMiST: "But..But... But  are you mad? Who in their right mind retires? Way too dangerous. You will be lifeless, a cast out, dead by 50, oh the horreur! I've must (been told) to work until I'm 70 otherwise I will not have achieved in life. My oh my besides they know much more than me I can't be that stupid and retire early"</blockquote>
</div>
<div style="text-align: center;">
</div>
Peace, prosperity and as always happiness, 
 
CoNTeNDeR 
 
Welcome New Readers! Please take a look around.<a href="http://getintheringwithme.blogspot.com/p/about-me.html" target="_blank">Click here</a> to find out more about THE.TriBe and the blog is or perhaps browse the <a href="http://getintheringwithme.blogspot.com/p/all-posts-get-in-ring.html" target="_blank">all posts list</a>, Please feel free to play with the <a href="http://getintheringwithme.blogspot.com/p/muff-tools-and-check-lists.html" target="_blank">planning tools and checklists</a>. If you liked this post can you please spare a few seconds to share it?

Retirement Mis-direction and Tips

Warning Advert! Our TRiBe still read the mainstream press (although the quality of the articles has been reduced in size and quality d...

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>
</tbody></table>
 
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 
<ul></ul>
<div style="text-align: center;">
<div style="text-align: left;">
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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<a href="http://2.bp.blogspot.com/-tL8VG8izI4E/VQ54JDlsQeI/AAAAAAAADd8/O9BfdyUK8vE/s1600/SpendSave.JPG" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" height="245" src="http://2.bp.blogspot.com/-tL8VG8izI4E/VQ54JDlsQeI/AAAAAAAADd8/O9BfdyUK8vE/s1600/SpendSave.JPG" width="400" /></a></div>
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<div style="text-align: left;">
*Income increases at 3% per year (25K starting point)</div>
<div style="text-align: left;">
*Inflation increases at 4% per year</div>
<div style="text-align: left;">
*Investments return on average 7% per year </div>
<div style="text-align: left;">
*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>
<div style="text-align: left;">
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>
<div style="text-align: left;">
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>
<div style="text-align: left;">
</div>
<div style="text-align: left;">
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>
<div style="text-align: center;">
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>
<div style="text-align: center;">
 </div>
<div style="text-align: center;">
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. 
 
<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="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>
</tbody></table>
<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 
 
Welcome New Readers! Please take a look around.<a href="http://getintheringwithme.blogspot.com/p/about-me.html" target="_blank">Click here</a> to find out more about THE.TriBe and the blog is or perhaps browse the <a href="http://getintheringwithme.blogspot.com/p/all-posts-get-in-ring.html" target="_blank">all posts list</a>, Please feel free to play with the <a href="http://getintheringwithme.blogspot.com/p/muff-tools-and-check-lists.html" target="_blank">planning tools and checklists</a>. If you liked this post can you please spare a few seconds to share it?

Spendaholics

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

Spendthrift Or Save Bore

Contender 2 Budget, Dividends, frugality, Habits, Happiness 20:47

Spendthrift Or Save Bore

Corfe Castle - A bad investment? Bad advice on Spending, Saving and Investing I have been reading a few posts recently going along the...

2014 Financial Independence Progress

Contender 0 downshifting, financial independence, Freedom, Happiness 17:08

<a href="http://3.bp.blogspot.com/-zPAN_dE-K44/URd0cVFyD6I/AAAAAAAACcE/quj2ZUwE_9o/s1600/AngelfishGlovesOff.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="180" src="http://3.bp.blogspot.com/-zPAN_dE-K44/URd0cVFyD6I/AAAAAAAACcE/quj2ZUwE_9o/s1600/AngelfishGlovesOff.jpg" width="200" /></a>Welcome to 2015 and a new year of FI (Financial Independence) and SH (Seeking Happiness) opportunities! 
 
Before ploughing ahead (literally for us) on some new articles for the year I thought a personal re-cap of the mistakes and learnings (in dark green) our tribe encountered on our FISH journey in 2014 is in order. 
 
Happy New Year! 
 
 
 
<h2 style="text-align: center;">
2014 a year of change and constant learning</h2>
We spent the majority of 2014 in our new country, France. Here are some of the main activities about FISH from last year: 
<ul>
<li>Activity 1: We have spent a lot of time recharging the batteries and de-toxing (mainly mentally - the wine is great here as well!) from work stress (no more long hours, difficult people, lots of travel, changing work, the "grid" performance scorecard and its intensification - all horrible and why in the h*** do we do it to ourselves - pointless management manipulative exploitation) from our long term corporate jobs.</li>
<ul>
<li>Learning: A dramatic change to our work / life balance is a challenge. Work provides challenges, deadlines and meaning (e.g. I am an engineer and this is what I do each day). A dramatic reduction in work and routine naturally leaves a void - a good void that needs to be filled - what should you fill it with?</li>
</ul>
<li>Activity 2: We have explored and enjoyed our local area and made lots of new friends (the Gascon accent is quite a challenge, food, weather and landscape a joy). The kids love their new school (anyone seen the French movie The Chorus?) - unfortunately for me their French is now better than mine so I have to be careful what they say behind my back!</li>
<ul>
<li>Learning: Moving to a new area is fun if it is approached in the right frame of mind and for the right reason. Moving for more money or a dream can have a detrimental impact on happiness if it is not thought out thoroughly.</li>
</ul>
<li>Activity 3: We have found a run down property that we have bought to renovate and call home mortgage free (it may be falling down in places but it is ours and we don't have to give money to someone else - YEH).</li>
<ul>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: right; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://3.bp.blogspot.com/-SR1eVr5oGU0/VLKkMzJOqEI/AAAAAAAADcY/aFf-ivVLUt8/s1600/P1040815.JPG" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="320" src="http://3.bp.blogspot.com/-SR1eVr5oGU0/VLKkMzJOqEI/AAAAAAAADcY/aFf-ivVLUt8/s1600/P1040815.JPG" width="240" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Mrs Renovator</td></tr>
</tbody></table>
<li>Learning:  Paying someone else to do the work is VERY expensive. You are in effect paying double taxes (the taxes to earn the money in the first place followed by the taxes on labour for the renovation work). Do what you can yourself and learn something along the way. For example we now know how to cut holes in walls (accidentally as well), tile floors, make a concrete floor, insulate rooms, cut down trees and make firewood, repair windows, fix a roof and create a new ceiling out of floor boards,... to name a few.</li>
</ul>
<li>Activity 4: We are running over our monthly budget (still renting) and need to keep our expectations in check for the house renovation costs.</li>
<ul>
<li>Learning: Make sure you know what the end goal is. Overspending and finding out you do not have enough free cash to move in = a trip to the bank and debt. </li>
</ul>
<li>Activity: We have changed our residency tax status (confusing to say the least)</li>
<ul>
<li>Learning:  Get it right or get in trouble. Shop around for the best FX companies to convert money at the best rate. Minimise tax liabilities where possible when making large changes in capital allocation (e.g. capital gains taxes).</li>
</ul>
</ul>
<h3 style="text-align: center;">
FI(sh) - Financial Independence in 2014 </h3>
<h3>
<a href="http://1.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDg/cqhiNCjLCVI/s1600/InvestmentChoice.png" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="216" src="http://1.bp.blogspot.com/-bG9sVWwZteo/UpsEz-bQlNI/AAAAAAAADDg/cqhiNCjLCVI/s1600/InvestmentChoice.png" width="320" /></a>What happened?</h3>
Our finances have been a bit all over the place (for once) due to the purchase of the house. 
 
During 2014 we had the oil collapse shock, gold going nowhere and general stock indexes up. This is how the 3 tiered portfolio we run fared: 
 
1. HYP - High yield portfolio (Dividend value growth stocks) and Commercial Property Investments - objective to pay our monthly bills 
 
  - down in value due to the oil price drop 
  - dividends overall have dropped but still have special dividends propping up the income for now. 
 
2. GROW - Growth asset portfolio (low to no dividends) - objective to provide a hedge and capital gains. This is the speculation portfolio and also contains our pensions 
  - All SOLD to buy the house except the pensions which gained 7%....All those gold mining shares sold before the recent gains DOH! 
 
3. PROTECT - Cash, Cash Equivalents and Physical Assets - objective to have liquid funds when we need them -  Cash has been used to buy and renovate the house.....bought in Euros which is a currency dropping like a stone and an area looking down at a deflationary gun barrel - what will European QE accomplish? Another DOH! 
 
SUMMARY: a slight loss on the year from a GBP perspective... or should I consider it a gain in barrels of oil or USD? What should wealth be considered in? At the moment it is the ability for us to pay the bills and what percentage we can save. 
 
From an original 40,30,30 split of the portfolios (all assets \ net worth) above this has changed to: 
 
HYP dropping to 27% 
GROW dropping 22% 
PROTECT increasing to 50% (Mainly assets (house and stuff to fill it) and some cash) 
 
We feel comfortable with the current mix due to the addition of the house. Our next step is to gradually change the allocation to something closer to 40,30,40 to increase income \ cashflow. 
<ul></ul>
<h3>
What did we learn?</h3>
<h4>
Currency, diversification and strategy learning</h4>
<ul>
</ul>
<ul>
<a href="http://1.bp.blogspot.com/-c_ihto23ui8/UYNizFSopgI/AAAAAAAADNI/mfdwWuUIfpw/s1600/Cash.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" height="210" src="http://1.bp.blogspot.com/-c_ihto23ui8/UYNizFSopgI/AAAAAAAADNI/mfdwWuUIfpw/s1600/Cash.jpg" width="320" /></a>
<li>Positives</li>

<ul>

<li>Finding the FX service <a href="https://transferwise.com/" target="_blank">Transferwise</a> to move our money from GBP to EUR. The peer to peer money conversion service created by the guys who invented Skype (another favourite of ours) is transparent and have very very low fees.</li>


<li>Highly diversified pension funds continue to perform strongly  </li>
</ul>
<li>Lost Opportunities</li>

<ul>

<li>HYP portfolio's capital value has dropped - primarily driven by the performance of commodity stocks. Does diversification win each time - should the HYP NOT BE individual dividend value growth stocks but an income fund instead?</li>


<li>Renting can be expensive but can be a good investment by giving you a serious amount of time to find the right property at the right price.</li>


<li>Capital loss sales (Ouch!) to buy the house (growth funds and utility stocks) - When is there ever a right time to sell? - ALL our investments would have benefited from a trailing stop loss to lock in gains / minimise losses. </li>

</ul>
</ul>
<h4>
Risk and asset allocation learning</h4>
<ul>
<li>We now own a<strike>wreck</strike> property mortgage free - a core pillar stone of freedom and financial independence. This has significantly de-risked our portfolio - replacing PAPER investements with a physical ASSET. It is an asset that is a LIABILITY as it costs to live in it however it replaces our need to RENT. Is this going to be a good investment? Well that depends on the rennovation costs \ problems we encounter! For starters the pipes were frozen and cracked (as was the boiler), woodworm infected timber has had to be removed and replaced, a main wall partially re-built to stop it taking a barn down, numerous timbers and walls eaten by vermin, toxic roofing. It <strike>should</strike> will yield some benefits:</li>
<ul>
<li>You are not beholden to interest rates and currency fluctuations.  </li>


<li>You can make your house cheap to run </li>
<ul>
<li>Invest in lots of insulation</li>
<li>A solar hot water solution</li>
<li>Cheap heating solution. (we have installed a wood gassification boiler system with a large buffer tank - very efficient and we can cut our own wood)</li>
<li>Use a well if you have one (we are setting up an irrigation system for the vegetables from our well)</li>
</ul>


<li>Plant a forest garden (We have our own fruit trees and plenty of land to grow some of our own food) This increases your resilience from the system and you can reduce your food bill.</li>
</ul>
<li>We have diversified \ de-risked our asset mix (the majority of which was in stocks and cash) through the purchase of the property.</li>
<ul>
<li>Diversification is very important - at the same time making sure the diversification a) provides an income OR b) reduces your spending is highly desirable.</li>
<ul>
<li>A speculative bet on a stock, industry, new business is a huge risk to your earned cash. As they say ONLY speculate on what you are willing to loose. </li>
<li>In our experience ideally become financially independent first then speculate with spare cash. We would have saved a lot of precious time following this approach - reduced research and reduced losses.</li>
<li>If you have to speculate keep it to a very small percentage of your total pot (say %5) - If you win take some off the winnings off the table periodically e.g. re-balance at least once a year0 </li>
</ul>
</ul>
<li>We now live in an area where there are less temptations to spend money (and we avoid advertising and mainstream media).</li>
<ul>
<li>No shop windows on every corner (we still have too many gadgets 4, laptops (2 very old and need to go to re-cycling, 4 mobile phones (2, pay as you go and one a contract 2 euros a month with FREE MOBILE. We do accumulate phones.... a kindle for cheaper \ free books - still no TV, Blue Ray player, Projector, etc.)</li>


<li>No keeping up with the Joneses such as flash cars.... but we have 2 of them! We have bought a second hand 1.5 Diesel Eco2 Clio that sips fuel compared to my old car which now serves as a backup and spends most of its time in the garage)</li>


<li>Slow Internet connection (horror - it takes ages to rent a movie - we do rent quite a few) </li>
</ul>
<li>We are conscientious of our health (Temptations are a problem with the great wine, French bread, pastries and cakes) and are taking steps to improve it to avoid future medical costs. </li>
<ul>
<li>Being responsible for some land and house means you have to be more active. It is just a question of how active you want to be (such as choosing a manual lawnmower instead of a sit on.)</li>


<li>Access to fresh locally grown food</li>


<li>Living in an un-polluted area</li>


<li>Sunny :)</li>
</ul>
</ul>
<h3 style="text-align: center;">
(fi)SH - Seeking Happiness - Looking for more Tranquillity</h3>
<a href="http://4.bp.blogspot.com/-qcYjFGDaKgU/UqxZMZxKz9I/AAAAAAAADEw/KPcaPHxLsOQ/s1600/P1030554.JPG" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="320" src="http://4.bp.blogspot.com/-qcYjFGDaKgU/UqxZMZxKz9I/AAAAAAAADEw/KPcaPHxLsOQ/s1600/P1030554.JPG" width="240" /></a>It has been said that seeking happiness actually makes you un-happy in doing so. I can understand this point of view. If you cant be happy with what you have now how will you ever find happiness? It can imply that you constantly have something un-happy in your life - glass half full instead of reflecting on how good you actually have it. 
 
We enjoyed the city life in London, we always had distractions and entertainment and were surrounded by people, noise and lights. It was not a very tranquil place which we believe we have found here. 
 
At night we can see a carpet of stars with the only noise being your own breathing and the chirping crickets. 
 
Our other main love is the space, open the doors and you are in the countryside. Our kids (and ourselves) are not forced into a small living space and can run wild and safe outside for the majority of the year. We now have little to no concerns about the danger of cars, people and pollution. 
 
Here are a few learning's \ things the TRiBe need to continue doing ;) 
<ul>
<li>Appreciate what you have it can always be worse</li>
<li>Likewise do not dwell on what you don't have</li>
<li>Give yourself the gift of time, peace and quiet</li>
<li>Get outdoors - nature is a great healer</li>
<li>Ask - is it really necessary to get angry?</li>
<li>Move on - THE.PaST has happened enjoy today!</li>
</ul>
 
Peace, prosperity and happiness 
 
CoNTeNDeR 
 
Welcome New Readers! Please take a look around.<a href="http://getintheringwithme.blogspot.com/p/about-me.html" target="_blank">Click here</a> to find out more about THE.TriBe and the blog is or perhaps browse the <a href="http://getintheringwithme.blogspot.com/p/all-posts-get-in-ring.html" target="_blank">all posts list</a>, Please feel free to play with the <a href="http://getintheringwithme.blogspot.com/p/muff-tools-and-check-lists.html" target="_blank">planning tools and checklists</a>. If you liked this post can you please spare a few seconds to share it?

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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

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2014 Financial Independence Progress

Living in France, Are you Mad?

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