Andy Haldane, Bank of England chief economist at the time, said that the economy was like a coiled spring, ready to leap into action after the Covid crisis. He’s now off to head up the RSA after 32 years.
An Ermine is left scratching his head and wondering what the backstory is here. Did Haldane always have a hankering for the arts, and his mastery of the metaphor made him wonder if the grey garb of the professional economist was beginning to chafe? Did he pitch for a promotion and get blanked? There’s also the admiration for a fellow up to working for more than three decades, clearly the FI/RE mantra speaks less to him that say one of the mustelid species, or Monevator’s TA.
When they reopen, pubs and restaurants could see a boom because of the Joni Mitchell effect: you don’t know what you’ve got till it’s gone.
It’s a fair cop, guv. Kicked off early last week with a full English Breakfast at one place which was mighty fine, and we repeated the exercise today, apparently they are overbooked for Sunday lunch so we needed to clear off by 11:20, which was fine, it doesn’t take an hour to eat breakfast! They’ve had to ring round to drum up staff, with the added incentive of free drinks at the end of the shift. However, it helps that the weather is reminiscent of that in lockdown 1 last year, a light breeze and sunshine. Their problem is that it’s all up to the vagaries of the weather – people aren’t going to want to sit outside in the rain, more typical of April weather in the UK.
A couple of days after the first breakfast we sought out lobster on the beach, now that it’s open season on them.
We were out of luck, perhaps the cafe doesn’t want to carry the capital risk to having too much of a wasting asset. I can see their point, so we slummed it with fish and chips instead.
However, we did see evidence of lobster being eaten by one of the other patrons. After such hedonism a wander up to the top of the hill and look out over the surprisingly blue sea. It is still a surprise to me. I am used to the coastline of East Anglia bordering on the North Sea, where the sea is shallow and easily churned up so it always looks like dirty dishwater.
In some parts of the Dorset coast it’s clear enough you can see your feet in the water, though I leave that sort of thing to Mrs Ermine. I’d always thought blue seas are a Mediterranean sort of thing.
Eating out is a slightly odd experience. Many people find it difficult being around others now, I am not sure I noticed a change. Perhaps I never melded with the mosh-pit in the first place. However, here’s a sound I haven’t heard for an awful long time, humanity in its garrulous exuberance.
As I was waiting for the bill I was trying to work out exactly what it was that disturbed me about the King Charles spaniel at another table. Obviously that a dog was in an eatery, but after a while I sussed it. This craven mutt had no lower canines. Not a gap where the original ones had been, just no pointy eyeteeth in the lower jaw, all incisors. No damn self-respect.
The markets are not the economy
Despite the Joni Mitchell effect, the coiled spring may not have much substance behind it in the medium term. Unless you’re in your twenties you shouldn’t really eat something and chips more than once a week, so you’re not going to eat a year’s worth of missed meals out in three months. As that Investor’s Chronicle article observed, much is in suspended animation at the moment, and jobs will be lost as the rubble hits the ground. On the flipside, capitalism turned out a lot more resilient in the face of the challenge than we expected this time last year. As evidenced in the markets. After settling down the frenzy of the first part of last year, I’ve been buying FTSE250 since mid last year, because sometimes you have to stake a claim on what you don’t believe in.
That has done well, but I suspect that some of the hurt is being felt more in the unlisted small firms, the tiddlers. Oddly enough I was looking out for this on the drive down to the south coast, and I didn’t really see much that was shuttered, more was shouting that it was open than usual1. Most of the pubs looked okay, it’s not like the drive through Dorset was like driving through the Welsh valleys, where the mark of Thatcher still blights the land three generations on. The worst part was coming back through Yeovil, but that’s a town that always looks like hope came to die. Enough boarded up shops, but I couldn’t remember if these were places that had been boarded up two years ago. Yeovil is that sort of place…
It’s hard to see where the markets are now. However, after the last post where the sentiment seemed to be that I am not representing the bond value of my DB pension adequately using the HMRC scale factor of ~20, perhaps I am overly defensive at the mo. It did lead me to ask the question of whether I really should hold getting on for twice my erstwhile salary as cash. I am not at the widows and orphans end of the risk profile scale. This mustelid fears inflation. It doesn’t have to be in equities, but it shouldn’t be so much in cash…
Hard to know what to use this year’s ISA allowance for, though. Perhaps a little more gold, and then there’s the Lars doctrine, nobody ever got fired for buying VWRL. Indeed, Lars’ latest has an indirect bollocking for those in cash because they fear the stock markets
If you feel the minimal-risk asset’s interest rate does not give you enough return in your simple two-product portfolio – and you’re willing to take more risk – I’d say maybe take that risk in the equity markets. At least that keeps things simple.
The non-equity part of the portfolio is bonds, which in my case is the DB pension. If I am undervaluing the bond component by using the HMRC multiplier of 20, then perhaps I can shift some into equities. Shame they are up in the sky… I missed this point about the State Pension shifting the needle on the dial in the more bonds department.
Since it appears that Vanguard’s ISA is a flexible ISA, I can ground my Charles Stanley and move it to Vanguard. What I will do is first open Vanguard with this year’s ISA allowance, and buy VWRL or the fund equivalent on the same day as selling out the similar fund in Charles Stanley. Which will reduce market risk. I haven’t yet worked out if Vanguard’s ISA will only hold Vanguard’s products. I normally transfer ISAs in specie which gets round that problem.
Perhaps the markets are expecting a massive post-pandemic boom. Personally I wouldn’t be surprised to see another lockdown as Autumn turns to Winter – yes vaccination is giving us breathing space, but the enemy is adapting too. Maybe capitalism has the resilience to adapt and profit from the new normal, though it seems to be doing so by throwing an increasing part of the workforce under the bus. That tends to have undesirable side-effects. There are cheerleaders for the concept of the Roaring Twenties, let’s hope that Kondratieff was wrong, because that didn’t end well on the last turn of the arc 100 years ago. Now is the winter of the fifth Kondratieff wave, let us hope that winter holds a spring…
There’s sample bias here, since if you’re the Abbotsbury Swannery you have 20 billboards advertising for the masses to bring their ickle children for a perfect family day out, whereas if your eatery is closed you can get away with a single ‘closed’ sign on the door. However, I was looking out for the latter ↩
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Mrs Ermine and I recently celebrated a year of lockdown with a bottle of wine. A strange year, but there’s something to celebrate, which is that we are still here. I will drink to that.
This is one that a lot of the the rich world got wrong, ballsed up in spades, with the UK in the top ten with a death rate of 1 in 530. There aren’t any really big-picture commonalities that can be drawn, though the intelligencer’s high-level takeaway isn’t bad. We have become soft in the West from having it easy for a long time, so we didn’t really believe shit was happening to us. That’s bad when you are up against an exponential.
We have continued to just think that something bad isn’t happening to us, and that there’s an out somewhere — that, of course we’re going to solve this next month. It’s always been one month away. And as long as the solution is always one month away, the urgency isn’t there. And I do believe that this is a symptom of a bunch of nations and societies that really haven’t had to deal with adversity on our shores in a really long time. We are uncomfortable with making the hard decisions that have to be made.
Europe including the UK, the US, and for some reason South America made a pig’s ear of responding to Covid. You have to scroll down a long way down to South Africa to get out of Europe and America on the JHU table ranked in deaths/100k.
Yes, we have a route out in the vaccination programme, a win for science. It’s also a win for the one thing that Boris’s crew did get right – dropping a lot of money, and in not trusting Trump/Merck in the Oxford vaccine production.
Anyway, we are still here, and we cleaned most of the green slime off the camper van in the hope of being able to use it sometime next month. Even if only to go and eat lobster – except that it seems to be closed season so we will have to make do with fish and chips by the beach.
The NT opened only a third of the car park, so while we got there early the car park was already rammed. I asked them if they were going to open the other two, but apparently not. Helpfully they said it would be open for Easter, it was to do with the grass being ready. I had assumed they were doing it to limit numbers on the beach. Anyway, this is the south coast. There are beaches enough, indeed the next one westwards had a council car park where you could park all day for £2 as opposed to £6 for a day. The view was still superb, the fish and chips tasted better after so long and people were spread out.
Stock market gives Covid the middle finger
The Ermine sticks a snout at my ISAs, and it appeared they have still been creeping up. Didn’t really look like what I expected this time last year. It is now much more defensively biased and there is a fair amount of gold, on which I have taken a soaking in £ values. But the other stuff seems to have outstripped the loss of lustre. The change in the gold price leans away from the obvious possibility that our great British Pounds have become rather less Great, they are relatively spiffing of late. Maybe World + Dog thinks Brexit is the greatest thing to happen since sliced bread? Or they think Covid is on the run? Goldwyn had it to a T Nobody knows anything. I don’t think it’ll be over by Christmas, but I’m a nobody…
I can’t say that’s what I expected, but given I have a rammed Premium Bonds allocation and NS&I ILSCs and next year’s ISA contribution in cash I have far too much GBP exposure, so being wrong in that way is not a hardship. I’d rather be wrong than poor. I still worry what is coming our way though, and with the markets up in the sky what the hell do you buy to diversify that? Gold is one place. There have been other oddities. What’s up with BlackRock world mining? Have we all decided to start digging shit up from the ground then?
I am getting older, and perhaps not allowing for that.
I recently had to do one of those finametrica attitude to risk things, as a CYA exercise I guess. Less extreme results this time than last time. Perhaps that is as things should be, after all, a tenth of my three-score years and ten has rolled by since the original result. The ISA is now much higher than it was, buoyed by a rising stock market and swelled by the transfer of my old AVC/SIPP during my lean years of earning very little. To a first approximation I have achieved my financial goals, and I am reminded of Warren Buffett’s observation of the likely lads of Long Term Capital Management. “Too much cock, boys”
to make money they didn’t have and didn’t need, they risked what they did have and did need. That is foolish. That is just plain foolish. It doesn’t make any difference what your IQ is. If you risk something that is important to you for something that is unimportant to you it just does not make any sense.
My job as a wealth manager is to help clients hold on to their wealth and to preserve and grow it to keep pace with inflation. My number one priority is to ensure that money is there to meet their goals, when they are ready to spend it.
I don’t need to hit it out of the park. Just as well at current valuations, eh? Perhaps I have more in common with Warren’s last outing. He sounded pretty much out of ideas. I am not the desperate Ermine of 2009, needing to chart a route out of work as soon as possible. I need to look closer at preservation, and that is a different mindset.
Preservation is about asset class diversification. You give up return for security
The trouble with FI/RE is your younger self sets a course at the start of the journey. You have time on your side to ride the markets, and you need win, because over a working life you’d rather the mythical magic of compound interest double your savings in real terms over 40 years, and it builds a certain mindset. If you happened to be a feckless Ermine who started all this stuff far too late in life then you need a lot more punch, and the win that feckless blighter had was starting in the hole of the GFC, which coincidentally was also what made my job a bit shit hence the breakout requirement.
Trouble is, your younger self sets the direction, and what was right in the morning in the afternoon becomes a lie, not just in the psychological sense. I was playing that hungry younger self, this time last year, looking for opportunities in the noise and hum. I took them, more actively than most, and shorting the market in March/April to boot, and I have been fortunate, the numbers are decently bigger now than the end of December 2019. Obviously I am chuffed that it worked, but there’s a bigger Warren Buffett-style question I should be asking myself
“Self, what are you doing on the bleeding edge of the coalface shorting, when you are grizzled of fur? OK, so you have win, but you have to ask yourself whether you should have been on the playing field at all?”
Let’s hear it again from The Belle Curve. Now obviously I don’t employ a wealth management firm, so I am not sure I classify as being able to stay rich, I have never worked in finance or the upper echelons of IT, but I am reasonably well off, and I am with Joseph Heller. But Blair has some words of wisdom. She doesn’t help people climb the mountain. What she does is help them stay near the peak, and that appears to be a very different ballgame.
Few things compare to the high of making millions off a concentrated bet; whether that bet is on a single stock, building a business, or working for a successful start-up. I imagine the brain responds to this high in the same way it does to addiction. The temptation to chase the next high is all-encompassing. I talk to investors all the time who can’t stop chasing that high.
Hmm. Am I that guy? I recall reading TA’s Do Not Sell post into the teeth of the March selloff last year and thinking to myself “F*ck that for a game of tin soldiers, there’s win to be had”. Not only did I sell a load of crap, I shorted some of it, along with some of what I retained which was taking on water. Sure, I made errors along the way, like selling BRWM, only to rebuy it, fortunately still bent somewhat out of shape. But in the round it paid off handsomely, as I cleared a couple of numerical thresholds which are more a product of having ten fingers than actual significance, but nevertheless good for the fur.
I have now well over twice as much in my ISA as the capital assets I left work with1. Inflation makes that less riveting than it sounds, but it’s still worth having. I saved a capital amount starting three years before I stopped working that is over half the capital amount backing 23 years of DB pension savings. You aren’t meant so save for retirement that way, but all’s well that ends well etc. However, it’s got to stay well, and here perhaps I have something to learn.
I have to look in the mirror and wonder if this grizzled mustelid is doing the walk of shame as far as Warren’s LTCM comment. I didn’t need that boost last year. Maybe I should have listened to TA, much as it went against the grain. Self, be like Joe Heller, not the hedge fund manager in Kurt Vonnegut’s poem. I’d imagine by now it’s worked well enough for TA, if you did nothing than you are probably better off than before Covid in a balanced equity portfolio. Update: TA is 20% up on the deal. Chapeau that man. I am up a fair bit more, but I sweated buckets for it and in retrospect took a shitload of risk for it. Shorting anything always comes with a ‘here be dragons’ warning. TA just wiped his brow, went away with all this noise and hum and sat on his backside watching Netflix.
Sadly I know some ex colleagues who are well pissed off with the markets, I put my foot in it with one of them because I figured pretty much everyone with market exposure has come out well of the last year. Not necessarily. If you did something in the crossfire, it depends what, and how long you took to get back on the horse after you fell off if that happened.
I was balls-deep in equities before March last year. Some of that is because I have a DB pension, which is a very bond-like asset, and it is enough that if I scale the annual income by 16 to roughly get the capital value behind it, I will never tip the balance to the classic 60/40% equity:bond ratio because I didn’t save up enough in my working life.
However, if it leads to intemperate behaviour, then maybe I need less of that. I now have a large slug of gold, and because the shorting happened outside the ISA I have a fair amount of cash. I have as much premium bonds as I can have, still the old NS&I ILSCs and some random savings accounts earning sod all.
Much of that is because I took some money off the table selling rubbish and moved it into gold, and my cash was lifted by short-selling some of the ISA which indirectly moves money out of the ISA. Since then the markets have lifted the ISA in the same way as for TA , turning it into a sort of double win. TA will probably leave me in the dust over the Roaring Twenties with buy and hold. The Big One is gonna come, and TA is a young fellow, he can probably ride the suckout and hold on for the uplift. Me, not so much. Roaring Twenties be damned, as the Germans say
Gott läßt sich keinen Baum in den Himmel wachsen
the Lord sees to it that the trees do not grow into the sky.
I am closer to the Permanent Portfolio than I was before last year. All in all it was interesting reading the purity of purpose in my seven-year younger self – investing is all about return, about getting ahead. It was then, for me.
I could be more aggressive with the security of the DB pension floor to my income, but I am still a relatively young retiree and the value in my ISA holdings is in defending me against longer term hazards like inflation, so I should perhaps be more respectful of its value to me, and take less risk. It’s instructive to look back nearly 10 years at my younger self when I wrote about the PP last
Back then, I was in the final straight to retire. Fixed interest is the rescaled annual amount of my DB pension at 60 after tax (because I don’t giveashit about what I don’t see, it isn’t useful value to me). It was over half my networth. It has more or less stayed the same in real terms, but I have forced that beggar back to 30% of my asset allocation. Which is OK for a deadbeat who is considered ‘economically inactive’ by Her Majesty’s government. Yes I have earned lousy amounts here and there, but never amounting to more than 10% of my erstwhile salary, and most years less. The magenta part of the Pac-Man swelled, not only to match the cyan pie, but also to fund my life over nine years, spaff more on a house and fund the other 33% in gold and cash. At current valuations, it’s not inconceivable that it falls to half, but the problem is in calling when 😉
It is easier to derisk after having taken a win from one last Covid crash hurrah than if it had all gone titsup. While I am less exposed to the markets now, all that cash exposes me to inflation and currency risk. An obvious move would be to take half of it and buy gold over a period. I would still have less than Harry in cash and gold, but the balance would be better. Harry Browne was a 1970s USA guy. I am also not in the USA, and 50 years have rolled by. The West is not cock of the rock and insulated from China and Russia, it was still in the ascendant in his time (the UK was further along the Imperial downslide than the US is now).
There’s some hazard in having gold as the only non-fiat currency store of value – surely there are others, but I can’t think of any that I trust. I did give a short consideration to Monevator’s ‘should you own bitcoin in your portfolio‘ and thought – intellectually the answer is probably yes, but bollocks to all that. I should probably own a BTL or two but, well, bollocks to all that as well. I’d rather do bitcoin than go there.
the Vanguard Borg
I should take a leaf from AlCam’s book and switch out of Charles Stanley to Vanguard’s ISA for my standby ISA account. I shouldn’t increase iWeb any more – they are attractive because there are zero fees if you don’t hold OEICs and you don’t trade, which suits my general activity pattern well. CS charges 0.35% as a platform fee, which begins to irk me as the account increases in size. Vanguard charges 0.15%. There’s nothing racy in there. I hold a L&G world exUK fund in there and a L&G FTSE250 ex ITs fund. I favoured L&G over Vanguard to diversify away from Vanguard – I have a lot of VWRL and had way too much VUKE. I can accept the risk of Vanguard going titsup now because the great lump of VUKE is gone. Vanguard offer a serviceable replacement for the L&G Dev World exUK fund and a FTSE250 fund albeit without the ex-investment trusts tilt.
Main and standby is good enough ISA protection for me. Finimus has the go-to post on why you can’t rely on platforms client-money segregation rules. In engineering having 1+1 redundancy is usually the main win. You can do more to spread the risk, but complexity gets out of hand and you end up with a maintenance liability.
Your broker going down is a tail risk, very unlikely but the results could be devastating. From a gut feel Vanguard going down is less likely to me than CS going down. I will make sure in future that I don’t buy more Vanguard ETFs in iWeb, though I won’t liquidate VWRL. I am sure somebody else does an ETF like VWRL, though the substitute is not obvious on Monevator’s list. I don’t want a fund because iWeb charge platform fees on funds. Scratch that – having just checked to see if I can substantiate this, which was true when I opened my account, I can’t back it up from iWeb’s charges list. In which case the obvious course of action in iWeb is to go buy Ishares HSBC FTSE All-World Index C GB00BMJJJF91 and be done with it. Vanguard slightly frightens me – so many people believe in it and it is huge. The win for a bad actor taking it down is enormous.
Vanguard are a better and cheaper bet that Charles Stanley, with similar advantages of the flexible ISA offering and regular investing. So rather than putting cash into CS next month, I will open with Vanguard. I can defray part of the market risk by selling the L&G funds in CS and buying the equivalent ETFs in Vanguard on the same day. There’s a lot more than one year’s ISA contribution in CS but at least that takes out some of the risk. I can then do an ISA cash transfer at my leisure.
Covid makes spending and working very different
It’s reduced my spending overall. There was a flurry of spending at the beginning, to hedge some of the worst eventualities which didn’t come to pass. They also hedge Brexit to some extent, which is very clearly making the price of some things rise – oddly electronic gizmos from Amazon seem to have risen, and food is rising. We bought a lot of wine, but still have most of it in stock 😉 But overall outgoings are very clearly down.
Monevator has occasionally given me stick about a rabidly anti-work stance, basically the whole point of getting to FI was to get the monkey of The Man off my goddamned back. Work is overvalued in our society. It’s way overrated as a source of meaning in life, to be honest if you’re going to look for meaning from a belief in God or a meaning in work, I’d take the former any day. At least it gives you hope in adversity2. Whereas a belief in the meaning of the grind of the 9 to 5 is empty IMO – a form of terror management theory writ large. Even a Grand Fromage is typically forgotten about two weeks after they take the nameplate off the door.
The Protestant Work Ethic is a mashup of meaning and money. Niall Ferguson made a cogent case that it was what until recently made the West cock of the rock economically3. Not absolutely sure how you make sense of the more recent decline and the rise of the East, I am a little bit more with Oswald Spengler there, that there is a cyclical nature to empires. Let’s hope it’s not Jared Diamond and catabolic collapse eh? The problems Obama called out eight years ago don’t seem to have got any better. MAGA doesn’t seem to have improved the State of the Union that much.
We once had a positive view of a world with less work
I feel sure that with a little more experience we shall use the new-found bounty of nature quite differently from the way in which the rich use it today, and will map out for ourselves a plan of life quite otherwise than theirs. For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich today, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter-to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!
The old boy did well in the what will happen. Compared to the 1930s his narrative of economic and material plenty has largely come true. But he achieved an epic fail in the why of work. It’s hard to know where we lost the plot, but if the peak human breeding age is about 30-35, then there’s no escaping that fact that those grandchildren have definitely come of age and entered the workforce, and they stick their head up above the parapet and go WTF? Where are my fifteen hour weeks, then?
One can argue that for a narrow section of the workforce, that has arrived, paradoxically amplified by the coronavirus pandemic. There be many workers who change the state of information. They don’t turn metal on a lathe or unload ships or build stuff. If what you do falls into that category, then working from home wins. I would say that if you’re doing that for an employer and you find it successful, then watch your back. If you can do it at home, then it’s susceptible to geographic arbitrage, and it can probably be done in a country with a much cheaper cost of living, to your detriment. Be careful what you wish for, and all that. I expect to see a big hollowing out of lower-end white collar jobs in the years to come. Pandemics accelerate change, because they squeeze the focus onto the essential to the detriment of the cosmetic. We didn’t hear so much about the Kardashians last year 😉 McKinsey say this is also acting on businesses, again amplifying the difference between the best and the rest.
Keynes was right about work in one way IMO
I gave thirty years and arguably the best years of my life to the god of Work. Unlike many others, I didn’t have a great attachment to it.
I never had a problem with keeping myself occupied since giving it up, but one thing I have missed in the pandemic is creative activity with others. I would do this in the area associated with recreation before, but in one of the clubs we decided to cease operations until a secure way of meeting is possible and it’s not, at the moment.
I am an introvert, I see in others quite serious distress at relative isolation, because the community of people I know are generally fortunate enough to be able to work remotely. Which may have its ups, but it seems to also have its downs. True home/remote workers probably compensated for the remoteness in the leisure or other non-work areas of life, like I did, though as a retiree you have more time to do that.
I recently physically built an instance of the design I made to qualify it worked, with somebody else. Physically assembling it was basically technician work for both of us, but there was an element of the case for working with your hands in it. We didn’t even really have the right tools4, so needed to improvise with a bench vice and a bunch of cardboard boxes, but there was something satisfying in assembling this component, making the connectors, and sparking it up and having all components report back as present and correct. I had been spending too much time in the virtual world spinning the parts on a screen to make them fit and optimise things at home, and it was good to do something real with real stuff and real people for a change. It was a good win for half a day.
There’s probably more of this work than I want to spend time on it, so I needed to think and prioritise, chase the higher value-add. Keynes was right. One day a week to one and a half is about right – although the pattern is different. Some of this work is CAD, and I am on the maker side of the maker/manager divide.5 It doesn’t fall neatly into days, or even half days, Sometimes I have to have at it, then take a walk. Strange things happen in the downtime, and things which were intractable before become obvious after.
You’d get sacked in a heartbeat doing that in a company. Where the hell is that Ermine? What do we pay him for if he’s not there? However, as a maker, the productivity of the time in such an unscheduled way goes way up.
On the other hand, working one day a week doesn’t earn enough to build a life – I’d be in the precariat renting a single room if I had 30 years of that behind me. I can do that now because I don’t need the money, other than to feel valued and to buy commitment 6. I can work Keynes’ pattern, but in an economy designed for a 24/7 requirement. Because: FI. There’s no other way for most people.
I am also doing a recreational creative project with somebody else. This is an entirely virtual operation. It was a chance to get my head round how to use Git, bitbucket and Cloudcannon to redevelop a website while making the technology usable to somebody who has had no background in software engineering. There will never be a revenue stream from this, but it is developing something bouncing ideas off other people, and that is something valuable, even to somebody identified as a lone wolf on leaving primary school. I am introvert, but not an island.
I am also privileged I can avail myself of these incidental upsides precisely because I don’t need to make them pay my costs of living. In What’s Wrong with the Way we Work. the New Yorker indicates that the cult of finding meaning at work started in the 1970s
“management must develop a better understanding of the more elusive, less tangible factors that add up to ‘job satisfaction.’ ”
Hmm, respect, enough pay to live well on, and not too much time lost to it seems a good place to start, eh? How did we let twats like Steve Jobs tell us rubbish like this
You’re not going to believe Usain Bolt telling you it’s easy to win the 100m Olympics, so why believe the DWYL-LWYD lie from Steve Jobs? No doubt it worked for him, but you shouldn’t infer the general from the particular. Not without at least some statistical analysis.
Work can offer you some of that peripheral claptrap, but only after it gets to pay your rent and put food on your and your family’s plate. The trends weren’t heading in the right direction before the pandemic, never mind after it.
Keynes was cheerful sort. Current visionaries, not so much.
Work is the fundamental problem. We have designed systems where you need to work to satisfy Maslow’s hierarchy of needs
In theory we have a welfare state that addresses the bottom of the pyramid, but you have to ask yourself why if you go around the streets of London or Oxford or many other towns and cites you see people who have clearly fallen between the cracks. There’s no law saying this has to be so – Asimov’s Solarians and Keynes’s grandchildren were imagined in worlds where you didn’t have to work to meet these bottom needs. But it was why the twenty-something Ermine signed up for working five days a week – to be able to get out from under my parents’ roof and get food on my plate. I could have occupied myself better elsewhere, there’s plenty enough to interest a curious mustelid. However, not being able to make the rent concentrates the mind.
Steve Jobs was telling us all to get into the green and blue bits up top, all the other stuff will take care of itself.But he had the self-same blind spot that many people who don’t have to fuss with the lower parts of the pyramid have. He spent his time up in the world of ideas, and that’s where a lot of the successful folk in our economy end up. The people who have the money are focused on the top end, and just like Al Capone, if you want some, then go where the money is. Hence all the poncey services to help the ultra-rich feel great about themselves, with their yachts and stuff. But that goes a long way down the line. Why is Facebook minting it? Ask yourself – does any human being really need Facebook’s services, in the way you need water, or shelter? I don’t use Facebook in any big way, indeed I don’t use social media in a big way – it was fun to learn about but after a while I came to the conclusion life was better without that stuff 😉
I’ve survived so far, in a way that I wouldn’t without water, or trying to use a cardboard box as shelter rather than a house. Facebook addresses the upper two tiers of the pyramid. Go where the money is. If you want to make money, compete at the top, and if your business has the capacity and smarts, then you see this as being all there is. That fellow made a cogent case for it, though he lost the plot at the end
Consumers in the Purpose Economy have too many options in every marketplace and want you to give them a reason to buy your product. Simply, they want you to help them find meaning in their lives. We are entering a world where meaning is the most valuable currency. What a time to be alive.
Same category error as Steve Jobs, mate. Meaning isn’t the most valuable currency for everyone. If you see people sleeping in boxes and cars, they couldn’t giveashit about meaning, because they’re down at the red end of Maslow’s pyramid.
I used to fulminate at the radio in the 1970s that that sonoabitch Arthur Scargill was governing the country, with his damn flying pickets stopping other people working and turning my lights off. Which he did, and I am still of the opinion that that sort of thing needed to be crushed. I have absolutely no problem with people withdrawing their labour, but getting in the face of other people working in industries that used the product (power generation) and threatening them with GBH to stop working isn’t good. Nor is dropping concrete blocks on taxi drivers when you’re trying to reduce strikebreaking. And yes, for the record, the violence wasn’t only on the miners’ side, though it did seem like they had the lion’s share.
All these white collar folks go tsk tsk, work is the route out of poverty, education, training, yada, yada. Really? You and I with our soft uncallused hand can say it’s easy, but it isn’t, and the rising water’s coming for us now anyway. There’s an argument my job went bad because of globalisation, though a humdinger of a financial crash didn’t help any. What do the good folk at Bloomberg have to say?
The unskilled worker is the next pandemic.
Let me just step back. First of all, I think that it’s pretty clear if you have high degrees of unemployment, there are basic economic impacts that are not good for the nation. It puts an incredible strain on the economy. It usually only gets addressed through higher taxes on a smaller and smaller tax base. It increases the gaps between the haves and have-nots, which historically has caused more social unrest if it goes on for a period of time. We saw high levels of unemployment like in the Depression create hopelessness and despair in individuals, in families, and their communities.
I think [unemployment] happens as quickly as automation displaces people from work without concurrently retraining them and retooling them for other types of work.
Ah, that old error again. concurrently retraining them and retooling them for other types of work. That’s OK if the other work is at a similar level and hopefully needs at least some of the same skills. I’m sure there are some ex-miners that went into high finance, but if you drive through the Welsh valleys 35 years after Thatcher won that fight and Scargill lost, there are still pockets where regeneration didn’t happen. Hope went to die and got buried.
When I was a child playing on the bombsites and slum clearances where they eventually built Goldsmith’s College halls of residence I had to watch out, there were builders all over the place who would give kids hell. 40 years on and at the end of my working life and the canteen at the Athlete’s village of 3000 flats of the London Olympics only needed a maximum capacity of 200 for a much larger build. The market for unskilled7 work has been falling for decades.
Less risk. More spending
is what I want to do with my post-covid world, if and when I get there. I can’t really do much about the more spending at the moment, but I can change the risk. Changing a mindset isn’t easy, however, but if and when the next crash comes along, I need to think to self
Real estate is actually my favorite asset class to build wealth because it is easy to understand, is tangible, provides utility, and has a solid income stream.
and an Ermine thinks to himself WTAF? Property was the greatest source of hurt in my entire personal finance life, and it grabbed me by the nuts at an early age and wouldn’t bloody well let go until 20 years later. I’d rather gnaw a leg off than rely on that. I don’t consider property as an asset at all. When we moved down here we went for a detached house, because I don’t want to hear the neighbours’ grandchildren squealing or Coronation Street on t’telly as they get mutton jeff. Mrs Ermine wanted more garden. I want to hear my own stuff, and if Mrs Ermine is away, then I want to play music at 1am without feeling bad about its impact on other people’s beauty sleep. So I spent more, but I considered the extra as frivolous lifestyle inflation, not an investment in property.
Whereas everybody else leans in, rubs their hands together and thinks ‘money tree’ when they spend money on bricks and mortar.
But I should also listen to the whispers in the wind. I have heard a few times now from people of a certain age that they got slaughtered in the stock market last year and are very pissed off. The advantage the younger Ermine had against being hammered by property was youth, in particular the ability to keep working. These greybeards don’t have that advantage.
There’s a lesson in here. Safety first for a grizzled pelage, though where you get safety in the current financial arena frothed up by money created out of nothing is a difficult question. It is why I have shifted it in the direction of gold, and RICA, RCP and VWRL, and I may sell out of some of the individual shares from the old HYP. It looks more like a greybeard’s asset allocation – and indeed the eponymous writer on Monevator took a lot of shit from young pups who said “investment trusts – pah – just buy a single world tracker and be done with it”.
They don’t know his hopes and fears, which is right, you shouldn’t put an old head on young shoulders. Conversely, you should take the young head off the old shoulders when you are grizzled of fur the return of capital matters more than the return on capital. Most people end up dialling down risk when the markets are in a hole and they have just lost their shirts. Spinning the dial towards risk-off when the markets are up in the sky is not a terrible time to do it…unless you need the return, of course.
TA will probably lean back in his chair bingewatching Netflix and double his money in the next year as the coiled spring doctrine of the UK economy does its stuff. I probably won’t be swinging for that ball, other than what’s already in equities. That’s OK. I don’t need it.
Now if Monevator posts another dark transmission like this one, from deep in the trenches of The Big One, then I don’t know. An old sailor still hears the call of the sea. Perhaps I should dabble in my residual SIPP with a few grand, after all, there are big wins to be had in the teeth of a storm, and it’s ringfenced from my main investments.
there’s a school of thought that accumulated assets from Imperial plundering may also have had something to do with being king of the castle, though our Niall would probably say the the PWE made all this imperialism a lot more effective and directed. ↩
fitting 250 screws by hand without a power screwdriver or even a Yankee screwdriver, or even damn it – a ratchet one gets old very quickly… ↩
Succinctly summarised by Monevator as “including, I say again, the feeling that getting some cash for doing something generates in a capitalist society, like it or not.” I may have outrun the getting meaning from work in a spiritual sense side of things, but the fellow has some point. I am just not going to work minimum wage, because I am a peacock like that. I pitched for a pay rise, not because I need the money or can spend it, but to feel valued enough to put in the time. How absolutely barking mad is that? Walt Whitman again. ↩
By no means all building work is unskilled, but particularly historically, a lot of it was more brawn than brains. I didn’t see any hod carriers on the Olympics site, but it seems the job still exists. They were the guys my primary school self had to watch for, because they were often up on the scaffolding with the time to look for miscreants on the way back. ↩
In the midst of winter, I found there was, within me, an invincible summer.
Albert Camus, Return to Tipasa
Ah, so much to celebrate, the joy of victory over the EUSSR, we’ve already had the Godwinian cheering in the Express about the clusterf*ck that the EU have made of their vaccine procurement compared to Blighty. They seem positively delusional falling back on the idea we are risk mavens. This is a revolver with 100 chambers and a bullet up against everyone’s heads. You can take a lot of risk if you are up against that. I would say hats off to the UK response in one area, vaccination seems to be a stand-out on the success side.
But seriously, fellow-citizens, WW2 is 90 years ago, and if we are still looking at our place in the world through that prism then perhaps we should ask ourselves why we haven’t done much of note since then? Dean Acheson observed there was a problem in 1962. Still, we are busy looking to give away a bit of that hard-won sovereignty in joining the Asia-Pacific CPTPP. Eh what?
It is just as well that we have sorted our shit out with the vaccine procurement. Because we have made such a hellacious mess of just about everything else to do with coronavirus that vaccination is our only hope. Unlike NZ’s 25 deaths to Covid, or Japan’s 5000 on a population twice our size, getting on for 100,000 people down is well up in the pack, but not in a good way. I’ve still never heard a good explanation for how the world-beating track and trace system, staffed by expensive mates of Boris and the finest management consultants £12bn can buy, hasn’t been disbanded and the £12bn given to councils. Or a conclave of mustelids for all the good it’s done. I know wingnuts don’t really like local government, but they couldn’t do a worse job that dear Dido. Take a look at her CV, and its clear track record of understanding healthcare, or even just, like, success in anything. I know scum floats to the top, but normally all it does is make things unsightly, rather than contributing to a higher death rate through culpable incompetence.
Despite all that, I would say round one to perfidious Albion. When Michael Gove starts looking like the adult in the room, you know you’re on the wrong track. Well done the EU. Just for the record, two massive EU cock-ups don’t make the massive perma-cock-up of Brexit a terrifically good idea IMO, but that train has left the station.
Fans of Sweden’s outstanding success in saying boo to the Covid19 goose and aficionados of the Great Barrington Declaration, I am going to shoot any comment promoting that sort of claptrap. Why is this? I know someone in London. The tests failed to qualify her as Covid, but the symptoms meant her doctors conclude it is. Not so long ago, if you were that ill, you would be in a hospital, but London seems to no longer have capacity, they have virtual wards, where doctors check up on you by phone. Well, except on Sundays. So the nutjobs that post pictures of empty hospital corridors to social media and CRGs and Desmond Swayzes of this world, piss off. This shit is real and it does happen. Those corridors are empty for the same reason as the Nightingale hospitals are empty – because we don’t have enough boots on the ground to staff them, so you focus your scarce resources on what you can do. And is seems London is on a sticky wicket in terms of capacity. It’s got lots of hospital buildings, but buildings alone doesn’t do much.
Still, things can only get better. Damn, that was the other lot. And twenty years ago.
Ah Covid and Brexit, the Bash Street Kids – super skill, Maximum chaos! The Ermine has been investing a little into the FTSE250 from about halfway through last year. On the grounds that people have hated the UK ever since 2016, and the sector’s taken a lot of punishment. On the principle that history doesn’t repeat itself but it rhymes, perhaps there will be a roaring Twenties. No, I can’t believe it either, but sometimes you have to invest in what you don’t believe in. I have got out of the FTSE100, because I now use VWRL for a general index, and the pandemic highlighted that the FTSE is quite sectorally concentrated1, and with some clapped out companies too. I also still have most of my original high yield portfolio. Ah, yield, that was soooo last decade, dahlink. So if I want more big fish, VWRL will do, because that’s what market cap weighting does for you.
Whereas everybody knows that the UK midcaps has been hammered by Brexit, will be hammered by Brexit, and if it isn’t hammered by Brexit it’ll be hammered by Covid. What’s not to like – well pretty much everything. Apart from the price…
It seems to have been on a roll showing a decent 10% lift since I started last year, in the Charles Stanley account where I use the L&G FTSE250 ex investment trusts fund. I figure I have enough investment trusts .
If you compare the FTSE250 ex IT with the same inc IT you see a possible case made for the virtues of active management 😉
but there’s not much in it over the period I have invested. And I am going into this chasing a particularly troubled sector with poor prospects, though I’m glad I bought a most before that mad lift at the end of last year. Are these the Lamontian green shoots of recovery?
Where was the last time I heard that? Way back in 1991, when I was freezing in the first house I daftly bought, and I had been paying 15% mortgage interest. You gotta watch those buggers, you need deep pockets to take cheer at the green shoots stage. Still, there’s lots of money flying around to make it happen. Bozza told the Torygraph that the £350m p.w. promise on his bus was a dreadful underestimate
So let’s be seeing some of that then, Vote Leave. It’s delivery time and the Kingdom is in its hour of need. Remainers have been purged, pissed upon from a great height and ground into dust. The Govester was even able to be magnanimous in victory over the EU NI Border cock-up. And their vaccine cock-up.
I can see jingoism is going to be the main dish of the day for the next decade if not my lifetime. The time will no doubt come when the boot is on the other foot, and we didn’t get a month out of the gate before the UK-EU relationship turned fractious. Since Brexit fans are on a roll at the moment how’s about delivering some of that £350m a week into getting a working track and trace system? You’ve spaffed £12bn on getting Dido Harding and Deloitte to balls it up royally, so sack the lot of them and start again with a clean slate and £50m a day. Let’s be seeing some action, then, boys, and P.D.Q. It’s time to make good on the promise of those sunlit uplands. Let’s see the plucky li’l FTSE250 pull ahead of the behemoths in VWRL 😉
Even more bizarrely, the sectoral concentration seems to go in waves. It was all banks in 2009, it’s all oil and mining ↩
Sovereignty, such a many-splendoured thing. The right to do what you bloody well like regardless of Johnny Foreigner. Taken all the way you get to Juche in North Korea, but it is what a small margin of our fellow Brits wanted in that Brexit vote.
Its core idea is that North Korea Britain is a country that must remain separate and distinct from the world, dependent solely on its own strength and the guidance of a near-godlike leader.
The opportunity to make our own laws, and to eat our own fish, even if in fact we don’t really like most of it so we flog it to people who do. I am old enough to know what Britain was like before we kowtowed to the EUSSR, back in ’73. As a child there was a fix1 for fish we didn’t like, we called it Rock Eel/Salmon in fish and chip shops, and it’s what poor people had. Used to be catfish back in the day, nowadays it’s random shark, even stuff on the IUCD red list of endangered species, because, well, capitalism is rapacious like that. Expect rock eel to come back to a chip shop near you, along with warm beer and the sound of willow on a balmy summer’s day. Oh, that’s the wet dreams of the aristocracy who funded Brexit. More from them later on.
The initial juche Brexit ideal of “self-reliance” centred on three elements: ideological autonomy, economic self-sufficiency, and military independence.
There always was a fractious relationship ‘twixt les rosbifs and the French back in the day, and it’s returning to form. Agence France Presse have syndicated that les rosbifs can keep their damn ros bif out of the EU, indeed they can keep their biohazard sarnies in Blighty. I don’t find that such a terrible thing, it’s how things used to be2.
It’s not unheard of – you need to eat your ham sandwiches and indeed anything organically live before you touch down in JFK3 coming from Blighty, because else it’ll cost you no end of hurt. The French need the rosbifs’ money to make the otherwise twisted wasteland of some of their northern districts work, but they also need something to push back against. As do we.
Every time one of these FIRE-ees announces their return to work, I think of another soldier falling to cannon-fire amid the thinning ranks of a Napoleonic line.
I am one of the old guard, I have passed the FI/RE event horizon, and it seems the chimera of reappearance from RE of some folk caused a disturbance in the Force. It’s time to start rolling the cannons to the front line and fight for the noble cause. For the record:
I am not working a few hours a week because:
FI/RE didn’t work out and I am skint
The step-changes at the end, while clear, aren’t important, they are one-off windfalls. You really shouldn’t charge around shorting stocks in a pandemic, Do Not Sell but if you are going to sell, double down and short. Still, if Monevator can ‘fess up to a bit of non-passive jiggery-pokery, well, so can I. The first lift in 2019 is not investing win, it was a dialled down PCLS and not all of the lift in 2020 was shorting – a lot was simply the market roaring back. We should also remember that this is denominated in Great British Pounds, and Brexit has made them more British and less Great. You need more of ’em to represent a given value. But what is clear, in a more understated way, is the trend of decline has been arrested and reversed, since mid-2019.
of valuations and safe withdrawal rates
When I left work I did not have enough ISA+SIPP capital to match the safe withdrawal rate. That was okay strategically because I had a DB pension to come later/ From 2012 to 2014 the market crawling from the wreckage of the GFC beat out what was a too high spending rate, but the fall showed up in 2014, as the irresistible force of spending overwhelmed the immovable object of ROI. I had to fall back, fall back, fall back and hope the engines restart in the low-water mark by the time I started to draw the pension.
It’s not supposed to, and perhaps it doesn’t if you accrue over many market cycles. I didn’t. Imagine the trajectory of 2015-2018 imposed upon the start. You’re never allowed to say that valuation matters to the passivista crew, but I would say that trajectory shows just that. I started out at low valuations into the GFC. I was able to make a SWR of 5% work – that’s what people said was OK back in the day. Don’t even think about that now. 3% is probably racy on current valuations. Continue reading “early retirement isn’t boring. Brexit and Covid are”
I could talk abut Trump in a grump, but World + Dog is at it, so I’ll do some retiree navel-gazing instead. Yes, I’m relieved to be shot of the narcissistic psychopath in the short term, but still fearful of the poison he gave licence to. A lot of people thought he was so good at his job that they wanted more of it, the pushback was a blue ripple, not a wave. There’s a message in that signal that bodes ill for 2024 IMO, so I’ll celebrate a reprieve, but not trumpet a resolution for now.
So I will talk about life beyond the 9-5. And how Covid helps clarify some things and mess up others.
living well in covid confusion
Well, obvs #1, try not to get it. Many people’s lives make that difficult, but for a retiree it isn’t that tough.It’s the whole K shaped recovery thing – there are many people who are really suffering. And others who are doing OK, I am fortunate enough to be in the latter camp.
Covid has buggered up recreational ideas, which is a pisser because it’s the first year for a long time when I have an answer to the question how much can I spend – pretty much all of my pension. Before it was always ‘as little as possible’ to try and bridge the gap between leaving work and getting the pension. We were toying with going to Paris in March, glad we didn’t book that. In general, I book nothing. If an opportunity presents itself, I will pay over the odds to do it. That’s not what the economy needs, but sod it. Book nothing…
I still remember the tale of one fellow at work who had been on holiday with his family to Morocco or something like that when the volcanic ash cloud from Iceland grounded flights ten years ago. He was spitting bricks because if cost him over five grand and an extra week to get ’em all back overland, plus extra accommodation costs.
It’s not that I can’t afford that. But it’s not what I want to spend my money on. And from enough experiences of having gutrot or the flu in hotels when I was travelling for business I don’t want to fall ill in foreign parts. So I haven’t been abroad this year, and that’s OK. And that was just flu and gutrot. I really don’t want to fall potentially life-threateningly ill in foreign parts, even if the revolver has 99 empty chambers…
So the answer to living well is different these days. It also makes for a wider reflection because of the narrower experience.
As it turns out, because Covid stopped many other things I’d like to have done I have started working, at a relatively low level. I am doing some engineering/CAD work for a small firm. I don’t need the money, but I am solving problems, it is mostly in a computer, and I learned some new stuff. Crazy old world, eh. In the absence of Covid, I am still of the opinion that if the best thing you can think of to do with your time is working then perhaps you lack hinterland, but on the other hand these are unusual times and one should deploy resources where best they can fit. This works for me. I am, of course, sore because I pay 20% tax on the entirety of my work income because my pension already takes me over the personal allowance. First world problems, eh?
Now Monevator bangs the drum endlessly that you should never give up working, because otherwise your brain rots and drips out of your nostrils. I haven’t gone over to his way of thinking at all.
I understand – The Man sucks – but it’s not a good reason to quit working. Especially if you’re impoverishing yourself for the rest of your life to do so.
Reversing this, the money I do earn isn’t enriching my life either. It’s the absence of other options due to all the other shit that’s going down this year that makes that attractive. I can never earn enough to appease these fears. This is because they are recordings of ancient stories playing out- hearing my German great grandmother relate losing her life savings. Twice. If I went back to work for The Firm I couldn’t earn enough to forestall that sort of incoming grief. We’re talking Peter Thiel prince of darkness sums to be able to buy the NZ island retreat. Even assuming that I could do that, there’s one small problem. I would have to become an evil shithead like Peter Thiel1, and I don’t have the talent, and I’m not sure I have that level of Ayn Randian sociopathy in me. I am an introvert, and while the introvert stereotype is the shy, dangerous loner with a gun I am not a sociopath.
The other points Monevator raises about working at home sort of hold. I am a right pain in the arse for people to get hold of, because I am not in one place at one time, and I don’t have a mobile phone implanted. If I am in the lab I can’t use Zoom because the computer there isn’t hard enough to run Zoom, and anyway you don’t want to be interrupted if you are developing some circuit and it’s being ratty. If I am out on the Somerset levels for a walk you can’t get hold of me because: no mobile phone. OTOH I am reasonably responsive by email. I’m not being deliberately obstructive, but I seem to have skills and originality valuable enough for people working full-time to be prepared to put up with my working pattern. And if I say I will do something I will do it, or flag up showstoppers. And I am flexible, and capable of lateral thinking. Because I am very part-time, I can reflect on things and seek solutions which full-timers are too run-ragged to wrangle. So it is a win-win in the face of Covid limitations. Covid also made me think about other things in life, in the way an increased presence of death does 😉
Q what is creativity?
A the relationship between a human being and the mysteries of inspiration
Elizabeth Gilbert, Big Magic
early passive income successes
The Ermine is biased towards the sciences, by inclination, by education, by career. Oddly enough, early in my post-work ‘career’, it was in the arts that I made money, at that stage my investments didn’t return enough to help much.The shock of an instant-off to what had been a decent salary was massive – all of a sudden I had decent savings, some tax-embargoed. And hardly any income, but I did have some. I didn’t recognized it as ‘passive income’ because it didn’t fit any of the classic personal finance models of the time. The FI/RE community is not biased to the arts 😉
I earned money through writing2, I earned money through stock photography, and I earned money through field recordings, more particularly sound effects (SFX).
How come, after all it’s not something I have shown previous form? Because my exit from the workplace was a rout, not a controlled descent, it shattered my view of the worth of my primary skills, which are along the thinking/academic3 axis. People under pressure tend towards binary thinking, and for me it was working full-time on a decent screw at The Firm, or it was working minimum wage at Tesco, I could not see any shades of grey. The loss of this primary function4 made way for the inferior function of feeling, which as a very broad approximation mediates the arts among many other things.
I did not leave work with enough5 to bridge the eight-year gap, so the fearful early me searched for solace in the chimera of passive income. Oddly enough, the arts have some semblance of passive income because of the way intellectual property is viewed in Western culture. It’s a hard row to hoe for many reasons, and I am still not quite sure how I got away with it. But I did, because I was given grace in those first years of leaving work, until the stock market crawling from the wreckage of the GFC could take over. It was the stock market that did all the heavy lifting, but it took about five years for the ISA income to cross the totemic point of being more than JSA. That was a concern in 2010, where I hadn’t made it, though I was still working. I cleared the more income than JSA bar in 2015, three years after leaving work
Back in the day, passive income used to be a big thing in the FI/RE world, presumably until people realised that passive income meant an awful lot of work up front, and if it was mediated by platforms, your passive income had a half-life of about three years before the platform went titsup or got taken over. The grand-daddy of passive income is a stock market portfolio of ~25 times your desired annual income, but that’s a really big ask, so in the FI/RE world we hung our hats on other so-called passive income streams that were easier to achieve. The classic passive income streams of yesteryear were:
Buy To Let (leveraged on a mortgage). How the hell people didn’t class wrangling with tenants and fixing houses as work beats me, but anyway. If I had a penny for all the people who said property is my pension, you can’t go wrong with bricks and mortar, I would be rich as Croesus by now. As someone who had battle-tested how to go wrong with bricks and mortar early in my career I couldn’t see the attraction. BTL was finally pasted by the demise of the tax breaks that privileged BTL slumlords over people who wanted to borrow money to buy a house to… boom-tish… actually live in it. There’s nothing wrong with BTL if you are rich enough to buy the house outright, it is BTLers fighting real people wanting to buy their first houses in the mortgage market with the unfair advantage of not having to pay tax on the interest that was wrong. The problem here was regulatory hazard
Matched Betting. Also looked like work to me, the upside was you could do it at home. The down side was you felt a little bit bad about fishing in this pool of sewage, and the risk of screwing up was high for people without OCD. You’re basically arbing one big number against another one cancelling it out. It’s picking pennies up in front of a steamroller, I’m just not a careful enough worker for that to be safe in my hands. Other people make it work. It’s extractive, but you can’t feel too bad extracting money out of bookies, or rather their punters by proxy. regulatory hazard is a problem here too, because betting really shouldn’t be allowed on that scale, and historically in the UK it wasn’t. To that should be added technological hazard, because I assume bookies are paying bright minds in AI to run matched bettors out of town by spotting them and shutting them down.
Spam Kindle ebook writing. As a Kindle customer I reserve a particular place in hell for the people who churned out tripe which made it harder to find books worth reading on Amazon. Presumably Amazon jumped to this too, because it’s not a problem any more. Trying to charge people real money for pay by numbers tripe is cheeky, particularly when you try and masquerade as a useful source of information, padding out an index of attractive chapter-heads up until the end of the free preview and it’s followed by padding. Looks like the clockwork stopped on one major protagonist, who also charged people to learn from him how to…get rich writing crap Kindle books. Let’s hope he got financially free by his target age. technological hazard writ large. Betting that you are smarter than Amazon is a fool’s game…
All of these were extractive to some extent, good while it lasts. BTL lasted until there were enough people taking the shaft from buy to letters that even the Tories saw that tax-favouring people front-running first-time buyers was evil and not a long-term vote winner as the shaftees started to outnumber the shafters. MB is an arms race between the matched bettors and the bookies trying to shake them off their backs, one that so far the matched bettors seem not to have lost yet. The rubbish Kindle books presumably collapsed when Amazon got AI onto their platform because they don’t want too many customers getting pissed off with their purchases on Kindle. That’s the trouble with a lot of “passive” income – when the mother lode runs out your passive income dries up. There is no safe withdrawal rate from that sort of income, because it’s living on borrowed time.
Compared to the extractive nature of those sorts of things, royalty income for minor creative works is relatively benign. It’s always puzzled me that passive income tends to mean skimming in the FI/RE world. I guess we have a bias towards the sciences and tech so it’s not the obvious route.
There is an argument that writing for a content mill fell into the parasitic category, and sure enough, I got my comeuppance about four years later when the business model went titsup when Google cut the operation off at the knees. Nevertheless, making a few grand out of the operation was more than I got out of matched betting, and a lot less like hard work, and I felt less filthy afterwards. I had no money capital value at risk, either, although of course my time on this earth is one stock of capital that was consumed a bit.
For photography and audio I used iStockphoto, which got subsumed into Getty images. I wasn’t really a strong enough photographer to do well at stock, certainly not enough to make a living. I’m not sure anybody makes a living at microstock, because the business model is a little bit evil, it borders on the vanity publishing of the photography world. But it paid for the hobby, when you are newly out of a regular paycheque is no bad thing to sweat existing assets. I had spent too much of camera gear while working because I was a geek, and it was actually getting the kit out into the field and using it that made the difference in getting better pictures. A better camera means you can make pictures under more varied conditions, but most of the effort and money should be invested in getting the damn thing in front of interesting stuff. Again, like the writing, I did learn something from producing for a market rather than as a pure hobbyist.
I was a competent field recordist, albeit very much on the technical side. My revenue followed Zipf’s Law, however – one recording made the lion’s share of my revenue. I never really understood enough about how people used these short clips to be able to target subjects better. And my edge was probably that I had decent gear and knew how to use it. Some subjects simply can’t be done with a handheld recorder and a cheap and noisy microphone. That recording was technically quite difficult to make, and although the talent was common, it was difficult to manage,
Anyway, Getty music has got out of the SFX biz, so my ten year run is at an end. But since there is a global pandemic on, and the SFX field recordist has a dislike for the presence of other humans6 with their wittering, noise and clobber, I wondered if this is perhaps an opportunity to try and learn something and develop the inferior function. I am also mindful of a commenter from a while back observing that scientists and engineers do their greatest work in the first half of life, but artists can improve through their lifetime. I am not in the first half of life…
the arts is a foreign country, they do things differently there
Nearly all sound recording is pressed into the service of music or film. Even there it’s shockingly tough to make money in it. It’s slightly easier to make money in these fields as an engineer/tech/operator than as an artist. The starving artist in a garret is a cliche because it’s common. The world is awash with starry-eyed young folk who call themselves film-makers, though they sometimes have limited control of both their story and their tech. But it lets them express their dear little selves. Art delivers part of its pay packet in terms of meaning and expression, but the trouble is a lot of art has meaning only for the artist originating it. Which is why it isn’t always terribly good at paying the rent. This comes as an unwelcome surprise to legions of meeja studies graduates, because while there are examples of where art pays the rent, only good or great art resonates with enough other people that they sponsor it. Many are called, but few are chosen. Right up top in prospects.ac.uk
The creative industries are competitive, so use the skills gained from your media studies degree along with personal determination to succeed
Ermine Translation of ‘personal determination’: If you are rich enough to consider your degree part of the entertainment budget, and Mom and Pops are rich enough that you can spend two or three years working for free (called interning) in London, one of the dearest cities in the world to live, then knock yourself out. Everybody else, save yourself fifty grand and a shedload of heartache.
Elizabeth Gilbert would not approve of my cynical curmudgeonliness. She had a whole page on trying to shut down such naysayers. But she would say that, it’s not like she is a resting actress down to her last ten bob, eh? Maybe it’s different in America. But it’s a recognised problem over here. They are also rampant lefties but I guess you knew that already. It tends to go along with being skint 😉
Some of these young media studies pups also need to pay attention in lectures, or mebbe even show up. If you are interviewing someone and your mic is on the camera then either your microphone is in the wrong place or your camera is.
The Ermine has a thread of philistinism running though his lopsided one out of Two Cultures bias. For example, when I was working as a studio engineer in BBC TV’s White City complex, the Television Centre bar was a watering hole common to the engineers and the arty sorts. Every so often I would hear someone waxing lyrical about theatre and how absolutely fantastic it was, while bemoaning that the pay was absolutely crap, that this was for people doing this occasionally in London’s West End, not some provincial repertory. They’d do some TV to pay the bills while ‘resting’ 😉
I have great admiration for my younger self’s restraint in not asking the obvious question after eight pints of whatever, broadly along the lines ‘if it’s so fantastic then why are people not prepared to pay a living rate for it then?’ I’ve been to the theatre on about three occasions spaced out by a decade. Every time I did it I came away with the feeling ‘why do people do this, now that we have invented movies to make sets look less kludgey and scene-changes work right?’
Up and down the country, there are am-dram societies putting no end of work and time into staging plays. I can only presume that the experience is rewarding to them. There’s nothing wrong in hobby acting, but it doesn’t pay the bills. You wouldn’t expect to make a return on fishing, or model railway building either. Theatre is one of those artistic endeavours that seems terrifically rewarding to do. To consume, not so much. There are 4500 cinema screens in the UK, and about a quarter that many theatres. QED.
One of the things that has always done my head in about the arts is its relation to pay. If you engineer/design a product or service, in general if it sells then it does something for the user. If it doesn’t sell, it’s considered a failure. For a good artist, it seems that it first has to do something for the artist – express something within themselves, the search to be witnessed is secondary to communicating something. If it doesn’t then it will probably end up pablum. I saw this in my content mill days – occasionally I would write something to meet some minimum delivery requirement. It was always crap, and monetized poorly. So you can have a successful piece of art that just lets the artist express themselves, even if nobody is prepared to pay for it. That is not necessarily a failure, indeed some art is only considered great posthumously.
Mrs Ermine improved my art appreciation no end when she shared the concept that you shouldn’t look at art purely along the lines of ‘do I like it’ but more along the lines of ‘what does this tell me?’ – if you think it sucks but you look at the world a slightly different way mediated by that, then perhaps it has done its job.
I still struggle with that – suffice to say that I don’t think I am ever going to go to the theatre again in my life 😉 But it has helped me open up to some material where I would have just passed it by.
As a sound recordist, I favoured accuracy 7, but people often use field recordings as part of telling a story. Either in film, or increasingly in video games. I have never played modern video games – I used to play the odd shoot ’em up on an old Atari 800 in the 1980s but I don’t do that now. Not because I think games are terrible, but I am not young, so I do not have the loads and loads of time people tend to put into that. I’m not sure that video games are necessarily an art-form, but on the other hand perhaps they are very much so – a different form of story-telling.
Something else about the arts is that there is a lot of baggage – you need to know the vernacular of that genre to be able to appreciate the content. I don’t have the right sort of education or background for that sort of thing. I pass CP Snow’s test of having read some Shakespeare, but I have read only 13 out of Penguin’s 100 must-read classic books, for example. Slightly more worryingly, I have given up on quite a few, literary talent is thin in this mustelid.
Google can tell me how to make something. It can’t teach me the language of the arts
Up until now, I have taken the line that if I want to learn something new, spending time with Google and armed with an inquisitive mind is pretty much all a fellow needs. So far that has served me well. It worked well in my last few years at work, it solved many problems at the farm, I have stayed generally with the twists and turns of Web design. It’s a shame that so much instruction has gone towards YouTube these days, I hate learning anything that way, I far prefer to read about the principles. Science and technology is easy with Google. For example if you want to know how quaternions help you rotate stuff in 3D and avoid gimbal lock, Google is your friend. One of the few examples where YouTube works rather better than text 😉
Most days I have learned something new and one of the good things about being a mustelid of leisure is that it doesn’t have to be useful or directed.
Conversely, I am terrible with MOOCs. I just don’t stay the course. I hate the pacing, often glacially slow to start with, the faux-interaction with others. It is possible that I am culturally unattuned to modern teaching. It is over 30 years since I last darkened the halls of a university, and over 40 years since I matriculated at what was then called Imperial College of Science and Technology. To me MOOC pacing stinks, and I am used to yearly exams, not itty-bitty coursework. I did okay on a MOOC learning how to use R, but the government futurelearn digital skills course on how to use social media for business bored me shitless in about a week, so I quit. And the pacing sucked. It is possible that my problem was I didn’t have anything to sell and wasn’t that interested in social media, but hey, I am not a statistician, or writing 3D software so I will never use quaternions for anything. I retained interest long enough to at least feel good that I understood it while they were talking.
However, Google failed me in teaching myself to read anything academically written about the arts. Sure, the words pass my eyes, and each one I can understand or look up each and every one of them. But I read such papers like a nervous rat in a maze, skipping ahead, searching back, trying to distil understanding from an alien world. For instance, I found Michael Gallagher’s publications less impenetrable than many, but Listening Geographies is still tough sledding for me.
I did learn something from it though – as I walk through the Somerset Levels I become more aware of the interrelationship between places and the sounds. Enough to investigate when I heard the sound of water running where I was not used to it, and then to investigate how the Somerset Drainage Boards try and keep this water in the right place.
With the help of some fine Dutch engineering from HC Waterbeheersing by the looks of it. So I could temporarily shift my consciousness to a artistic sensibility, though I didn’t really understand what the heck he was on about. I’ve walked past that thing many times without observing it or asking myself how the heck does that happen that the water isn’t up to our knees on a regular basis.
Now realistically my professional sound recording career has gone with the closure of gettymusic. Most sound designers now either shoot their own SFX or they use libraries, it appears bought from individual recordists than from aggregators.
This surprises me. After all, if I am some young sound designer working in post up against a deadline I would have thought I want one large library, but clearly the economics of the business didn’t work at scale. Or it’s just too hard to locate the sort of sound I want in a large collection – searching for a particular type of sound clip is notoriously difficult, there is no competent audio search engine.
I don’t want all that overhead of selling the brand of me, I liked the faceless anonymity of Getty. So what I really ought to do is to return to being a sound hunter8, and carry on as a hobbyist. Most of what I record is humdrum, it is evocative for me only. Some of it is more widely evocative – on 11-11 it seems apposite to hear the sound of a Spitfire flying over England’s green and pleasant land
It is ML407, the Grace Spitfire, noodling over the Suffolk countryside. Apparently you can get 425 mph out of these things, which is most of the way towards the speend of your Easyjet flight to Ibiza. It’s quite remarkable something which is towed by a spinning bit of wood. Kind of heartwarming that replacements are made in Germany these days, although concerning for the state of British manufacturing 😉
keeping the learning curve vertical for the hell of it
But that way lies stasis. I want to learn something new. Goldsmith’s College does a 10 week course in an Introduction to Field Recording. Now I know most of the early part, and from my previous rant about MOOCs, I’d be in trouble, though I have much to learn from week 1 and 2 which are the arty meaning sort of thing. Week 3 and 4 will be a dead loss for me. The practicals are lost with online, but the last four weeks are what I want to learn, because I always stopped before the composition stage.
So the question I have to ask myself is do I want to spaff £300 on what is basically a MOOC, in a field where I have spent several decades showing no aptitude for? Playing on the weakest string, the inferior function
Also it’s on Zoom, FFS. I will look different from all the other students. They will be bright-eyed and bushy-tailed, dreaming of great things as a sound designer in the already oversubscribed media industry. There will be all these bright young things, and a cynical grizzled mustelid with streaks of grey hair. Look at the pictures on the ASD website. Nobody over 40 😉 Looks like I need to watch it with that attitude to theatre, too!
educating ermine – the business case doesn’t stack up
In my work using the primary function of thinking, an inquisitive mind and the trusty sword of Google and the most mind-bendingly aggressive ad-blocking and cookie-destroying plugins serve me well. Strictly speaking the sort of engineering I am doing now isn’t something I’ve ever done before but I have been able to learn how to use the tools and I am adding value and solving problems.
In the inferior function this is not enough. I cannot compose discrete sound element parts into a whole, and I am unable to derive how to do that from YT videos. It is, of course, possible I have no talent. That would be the obvious conclusion for ‘why have I never gone further in several decades’. I am very unlikely to recover the £300.
So I’d have to file it under entertainment budget. And I have spent many years being cynical about the value of paid-for university education, along the general lines of that Monevator fellow.
But the Ermine snout is curious. One of Carl Jung’s ideas was that the process of individuation was the gradual integration of the opposites. Perhaps the inferior function that was written off early on wants to go to university. I am not short of £300, so perhaps the primary function’s cynicism about the value of an arts college experience is irrelevant. I don’t need to make a career out of it. I am not 19 and starry-eyed, thinking I will be the next [insert name of current celebrity here]. The business case doesn’t stack up at all.
Maybe the signal I am hearing is of that unvoiced part, saying
“I was there when all seemed lost. I held the flame that gave irrational hope among the wreckage when you left work, a trickle of passive income that slowly grew. I forestalled the total surrender, I am the strand of the wire that did not fail under the load, because I was not the part of you that established your career.
And now, because symbolically my apparent value has come to an end as these earnings cease, because you know the price of everything and the value of nothing, I ask for a channel that the river can still run towards the sea. I have been despised and never regarded, but I am part of the whole, and I share the inquisitive nature of the primary function, but in a different realm.
And over the eight years my earnings worked quietly and steadily. They never amounted to much in any given year, but when you compute the total they are about half of your last year’s working salary. I want recognition, so for a moment, still the cynicism you share with Monevator.”
Anyway, it wasn’t a less time-consuming arts degree, let alone something deeply spurious like a photography course or a diploma in fashion
“You are cynical because you repudiate the life not lived. I am always the shaded pole, but I have carried the torch across the darkness before, when the primary function failed. At school in the Lower Fourth (key stage 3 Year 8 in modern parlance) when you fell to rank 31=31 in the class in many academic subjects you came first in art9, much to Dad’s annoyance, because the shaded pole became unshaded when the primary function went. You had cleared the de facto 11+ entry exam, but it untempered the mainspring. I took the lead in that troubled year, before the fire returned for your O levels.”
“You have seen many people become ossified as they refuse to change across the first and second part of life. I am the skull in the picture because no traveller on the path of life reaches the other side intact if they have thrown something of themselves overboard in haste to gain speed.”
Perhaps I should find the £300. Not because it will restart my moribund sound recordist’s earnings. Not because I will make a £300 back with what I may learn. The shaded pole paid its dues – all the gear is bought and paid for many times over, but like the primary function the shaded pole wants to learn, and perhaps it needs to learn that in the normal way that my primary function despises. Still grates to pay for arts education, though, because I have long held the view that artistic talent is innate, if it’s there it will out.
Thunder on the horizon
It has been a strange year, one of greater hazard, one of more general angst among many people, and an awful lot of real distress and tragedy. I have had good fortune that I am less exposed than many. I rolled back the stone that jammed work, but perhaps in doing that I destabilised something. Perhaps the unvoiced inferior function feels the echo of what happened in the GFC, and demands to play its part for the sake of balance. Maybe it senses the distant sound of thunder on the horizon.
I opened Iweb for the first time after the election, and thought holy shit, something has screwed up. The excitement isn’t particularly in VWRL, though that is doing well enough, it is in the investment trusts, where someone seems to have stuck a rocket up their backsides. I don’t really understand why there is this skew, but then perhaps at the moment nobody knows anything.
The one thing I do know is that markets are either too high or the value of money is dropping like a stone. This really isn’t right. I am uneasy about both things that seem to be driving the euphoria. The Covid vaccine is good news, but even if it sorts the problem 100% much lies broken and ravaged. The answer to why are the markets higher in Q4 2020 after a year of value destruction than they were in Q4 2019 isn’t that everything is tickety-boo and going swimmingly after a great and productive year.
Many things are deeply borked, and solutions are being sought along some strange axes. For instance the Tory Northern Research Group is banging the drum for
building up a research capacity, and looking at how the north can be turned into a ‘globally exporting superpower to drive Britain’s economy forward after Brexit’.
which sounds great, but I would say a universal basic income is probably a better way to improve the lot Up North, because after 10 years since the financial crash the idea that work is the way out of poverty should be classed as religion, not evidence-based policy. The modern world needs smarts that are above the level of most of us, and the bar is rising. I am not smart enough to work for Google in research, though I was smart enough in the past to work in industrial research. The difference isn’t that I have become shit for brains, the difference is that globalisation means the competition is a lot harder. This is not necessarily a bad thing, but the assumptions we made when the economy could find productive work for most of us need to be re-evaluated.
As for t’other reason to celebrate, there is this issue
Let’s hope it’s a matter of “I’ll be back”, rather than “I’m still here, whatcha gonna do about it?”
See also Thiel’s fellow sociopathic PayPal alumnus Elon Musk. ‘Evil is strong in these padawan, it is’ ↩
somewhat to my shame for a content mill, but it was a decent run while it lasted. I still can’t write a decent headline to save my life, but I did learn something from some basic targeted discipline. And I did try to add value. Was it art? Probably not, but if Dickens got paid by the word and is considered art, I’ll have a bit of that. I did reclaim some of these articles then the site went titsup, and one of them is still the goto article on why one type of sound tech sounds shit if you plug it into your mic input. ↩
academic as the sort of thing you get a leg-up at university, not academic as in being a professor ↩
Primary function in Carl Jung’s terminology is the most differentiated, in me it is thinking and analytical, which is fitting for someone who worked as an engineer. The corresponding inferior function is feeling, which I would say mediates artistic sensibility and expressivity. I have used Jung’s terms here because I find his model useful. Any capability that lies unused has hazard in it, it can easily become destructive. Part of the aim of individuation is as you go through like is to integrate the various aspects of the Self. ↩
Enough being defined as as enough cash to clear the gap at a minimal rate of spending. Something will Turn Up, Mr Micawber. It did, but there was more luck in it that was initially apparent ↩
Oddly enough some of the field recordings I am most pleased with as derivé feature humans, but you can’t use them for stock audio/SFX because you need model releases and all sorts of argy-bargy. So as a professional field recordist I don’t like humans. As a sound hunter, they’re fair game ↩
to my simplistic mustelid mind accuracy is does this darn thing sound like it did IRL. I have read a lot of academic critique that challenges this, saying by choosing your moment or letting the helicopters fly by before pressing record you are distorting reality in a different way, and separating sound from the environment does violence to the notion of accuracy in a different way. I couldn’t work out whether these guys were really onto a truth I could only see dimly or if they were simply overpaid trustafarians, since everybody in this biz seems to be sponsored by some arts organisation. At least they made me think I guess, which is part of the job description of the arts. ↩
in the Karin Bijsterveld sense of the term rather than the early years spelling program. It’s surprising that post-war manufacturers expected people to create using their tape recorders, rather than tape their records which is what happened. The irresistible attraction of the lowest common denominator is strong in tech users still now. I recall the tail end of this from my schooldays, and it influenced radio programming, much more so in mainland Europe than the UK, though Radio Ballads like Song of a Road by the BBC about the construction of the London-Yorkshire motorway (now knows as the M1) show the slow pacing and unusual production of mixing with tape and the discrete production in those days. We are much more used to layered production now, and this is something I never learned. ↩
And first in physics. Which puzzled the teachers, crap at most subjects apart from opposing the ends of the spectrum, If you are going to have a teenage crisis, the L4th is a good year to go off the rails – enough to establish some competence in the third form so they don’t kick you out, and getting it out of the way before you start the first set of formal exams (O levels at that time) ↩
We have long argued that the country needs to live with this virus. […]
The alternative is to protect the vulnerable while letting normal life continue for most people. Older people who do not wish to be locked away can make their own choices knowing the risks.
Don’t sweat it, guys, it’s what’s going to happen anyway. After Cominic Dummings’ little escapade because he is such a sociopathic Billy No Mates he couldn’t find anyone to do his childcare in London, you can’t tell any bugger what to do. We’ll be battle testing herd immunity by default. We got there in the end, 40 years after I played this track at university.
Weed out the weaklings…
And WTF is it with all the over-acting emphasis Bozza? Don’t they have decent drama school and elocution in Eton? Less of the lunging into the damn camera, and perhaps engage brain before opening trap? Nah, it’ll never catch on, and anyway, we’ve had enough of experts. Funny how Boz is so uniquely unsuited to wrangling something with the potential to kill people. I’m not convinced that it’s the end of the beginning yet. Boz really did need to pay attention at drama school. This, dear boy, is how you deliver that sort of news:
Socrates called out the problem of the unwilling leader being better qualified than those who really, really want the job, though he didn’t crack the implementation problem. Bozza is proof positive, he’s a good-time guy who wanted to get Brexit done, not fight bugs. Be careful what you wish for…
Capitalism gears up to ream the poor at Christmas
Anyway, it was clearly bollocks that it’ll be over by Christmas. What’s more, capitalism red in tooth and claw is tooling up to ream the poor, and the recently unemployed anyone else.
The Bank of England fondly believed that shitting on savers would give borrowers a break.While they did shit on savers they gifted ‘investors1‘ a doozy, which is how after a near death experience in Spring your equity portfolio is worth more, though about 10% of the UK economy has been burned.
Dunno what the heck they are smoking in Threadneedle Street, but it is strong. For starters lending money to people who have just lost their jobs is a risky biz in the first place, it’s about return of capital as well as the return on capital. Personally I’d also charge people more around Christmas anyway, because parents who are unable to tell their kids that Christmas is cancelled this year are unlikely to have the fortitude to do what it takes to pay this borrowing back under adverse conditions. Ten years ago in the midst of the GFC I suggested Charlotte tell her precious ankle-biter that Christmas is off, and the problem remains the same. Different perps, different kids, but Christmas is an elective spend, and it’s likely to be a tough time this year. Elect not to spend, rent and power before pressies. Tragically, there will be many who won’t have the option of either. If you have no assets, there is an argument to hit the old CC hard and fast, knowing you will never pay it off, but the IVA/bankruptcy option does rob you of some options in future. Given this hit is hopefully a one-off, then it’s a hard call. Going IVA/bankrupt may make it harder to rent a place or get some jobs…
Maybe we should have a guest appearance from Shona Sibary, she of the too many kids and the unawareness2 that you’re actually supposed to pay off a mortgage, plus if you use a string of fixes to borrow more than you can afford you make yourself a hostage to fortune in market crashes.
Lenders gonna lend, and you have to make money. They’re more Chuck Colson than FDR on this,
“If you’ve got them by the balls, their hearts and minds will follow”.
If the Bank of England was really that troubled about hard-working families getting a dreary Christmas then they could always lob money out of helicopters themselves, rather than getting credit card companies to do the dirty work for them. I guess Rishi might disapprove, but hey, whatever works, my friend.
As living proof of this incipient reaming of the newly unemployed, I received the following mealy-mouthed missive from a bank:
We want to help you manage your borrowing and ensure your overdraft limit is right for you. As you haven’t used your overdraft for a while, we’re planning to reduce this from £3,150 to £1,300 on 27 November 2020. Your new overdraft limit is still above the most you have used on your account in the last six months.
Well, thanks a bunch. I’ll have you know that I haven’t used my overdraft for the last fricking ten years, I can’t remember ever using it and it will have been cock-up anyway. However, you cynical punks are clearly expecting me to lose my job by Christmas and don’t want to be left holding the baby, eh? Well, you can f*ck right off and stick your overdraft where the sun don’t shine, busters.
Help me manage my borrowing? WTAF?
We’re in the chest-beating and mutual hollering abuse stage on Brexit
It was always going to get to this. Personally I’m of the view that too many Tories want a no-deal Brexit and there’s another four years to spin it as all t’other side’s fault. But perhaps all the chest-beating is just a phase we are going to have to go through.
In this crossfire, the Ermine needs to work out to preserve capital across the Brexit interregnum. I grouped together the bits from shorting earlier this year, reserves and I have enough for next year’s ISA before becoming a net decumulator.
I have ‘invested3‘ in SGLP, I will tolerate some cash in NS&I ILSCs, and some more in premium bonds. Now that does expose me a bit to Government cash grabs in the troubled fiscal future, as well as the lessening of the greatness of British Pounds to buy stuff, but the combined amount is less than the FSCS limit. Not that that pertains to NS&I anyway. I need to work out what I am going to hold the value of next year’s ISA contribution in. Gold via SGLP is one option, but I start getting seriously exposed to the gold price.
There’s still time before Brexit once October is gone, with it’s nasty tendency to downside violence in the markets, and perhaps if we know whether Trump will finish the job of Making America Great Again. Although my shares ISA is rammed, I could start to deploy the next year’s allowance into a trading account, and then bed and ISA the shares into the ISA after March. I am unlikely to be hammered for capital gains on £20k worth of say VWRL, although I suppose it depends on how well Bojo and his mates respond to the FXmarket singing ‘how low can you go’ about the GBP in the background.
There aren’t any good options here. Just less bad ones…
That’s you and me trying to make sense of what will hold value into the storm. assuming you have capital. God knows, but I suspect valuations are not representative of value. This too will pass. That’s better for you if you have 30 years of investment horizon rather than two, but hey ho, I have had a good run since the GFC. If I buy VWRL, I am not under the impression I an ‘investing’ in productive assets at good value these days. More I am disinvesting in great British pounds. It’s a race to the bottom. ↩
Thus quoth ZXSpectrum48k, over on Monevator. From a fellow who does this as a day job, looking at the legions of wannabe escapees from the office
Socrates was the counterfactual, though he defined the Dunning-Kruger problem in his first sentence.
for he knows nothing, and thinks that he knows. I neither know nor think that I know
Or Plato talking about Socrates. whatever, there still be truth in it
It is part of the way of the world – the young fellow must be ignorant to his faults to make his way in the world and try and put his ding in the universe. ZX was also talking of the younger ermine, and probably even of me now, after all, how would I know 😉
In it, TA postulates saving ten years worth of cash, to bridge your spending over 10 years between retiring early (the RE part of FIRE), and reaching 57, the earliest point the Agglomerator, hero of his journey, gets to access their tax-privileged pension savings (SIPP). I confess I haven’t studied his derivation of that requirement, but I was only a little bit older than his putative future Millennial when I packed in work, I was very early fifties whereas Agglomerator wants to clear the workforce at 46.
Let’s just zoom out a little and put that into perspective, the Agglomerator enters the workforce at 21 on leaving university, and clears it at 46, so he works for 25 years. In that 25 years, somehow he saves 10 years of spending as cash and about twice that much in tax-privileged accounts to see him out. That looks like a massive ask to me, saving effectively 30 years of essential spend1 along with buying a house outright and establishing himself.
Today’s FIRE community is very different from that 10 years ago
For a start, fat FIRE is a much bigger thing than it was in the past. When I started it was about frugality first
there are only 5/13 left standing (I haven’t counted those that haven’t been updated for over a year). It shows how different the world is now that it was just over ten years ago when I started down the FI/RE track. It was about saving and frugality.
Why was this – it was just after the GFC, people didn’t really believe the stock market would come good. Apart from Monevator, who sounded the clarion call into the low-water mark – git your ass into this market- NOW. However, valuations were such that you could get a decent return on shovelling money into that market. Although you were never going to retire early making minimum wage, you didn’t need the fancy City finance pay packet.
Today’s FIRE community is much, much richer than that of ten years ago. Some of that reflects these high valuations – if you want to accumulate enough to retire early now it’s a much tougher job. A safe withdrawal rate of 5% was conceivable in 2009, it’s much lower now, simply because valuations are higher. You need to be working in finance to get enough. There’s much more emphasis on fat FIRE now – starting off with a lot more, and spending at much higher levels. The frugalistas have been run out of town.
If you’re starting out, that’s not so bad, I have the suspicion that valuations will become more reasonable2 in the not too distant future, you need to keep buying into it. You have three decades.
But if you need to make it all happen in five years starting yesterday, then it’s going to be tough sledding. And I would imagine that a lot of getting-on-for-fifty-somethings are going to find themselves heading towards early retirement this year and next.
Talking of padawan, bless my younger self’s cotton socks, I thought I would have edge in sectors. Then I chased the HYP, is some ways because after a GFC yield was easy to find. Dunning and Kruger would be proud of me. I did do well. But not for the reasons I believed. I have no particular edge is stockpicking. But I was next to an open goal. Truth be told it didn’t really matter what you bought at that time. Valuations were in the dumps. My big win was to buy anything. I would probably have done better buying VWRL, except it didn’t exist in 2009 and before the RDR there were all sorts of dodgy practices to do with funds and backhanders. I was weak on the US market, which has been on a tear for most of that time. But I bought in at a low, and while I would have been better off buying a broad index, getting the timing right trumped sector allocation.
It’s not what I bought, it was when I bought – at low valuations. The rest of the journey was slowly coming to the conclusion that I am still a padawan, though not hopelessly so. I did OK, such that now, marked to market at high valuations (now) I have more capital than market to market at low valuations (the GFC) despite living off investment return over the last 8 years.
TA’s article says I was nuts. I agree, if I were starting now being balls-deep in equities other than three years’ essential spend would be crazy. It was less nuts starting from low valuations, because it is the truth that passivistas never allow to be heard – valuation matters, and the other name for that is market timing 😉 . But Dunning-Kruger probably would have the last laugh, because if TA went back in time to the younger Ermine and said ‘my crystal ball tells me you have to have enough cash to carry you for the next 8 years, what do you know that I don’t?‘ I am not sure that the younger ermine would have puffed up his furry chest and say ‘traveller from the future, valuations are historically low now, so the risk is much lower than it will be in your time.‘ TA wasn’t there, though Monevator said pretty much that at the time in his if not now, when?
A tale of desperation against logic
We are all, of course, the hero of our own narrative. Using the flight analogy from a few weeks ago, I ready myself for the eight lean years in a flimsy craft, refuelling and seeing fire streaking across the runway behind. I am faced with the choice of wealth or health, and choose health. TA would not have cleared me for take-off, I did not have eight years cash saved, I did not have enough to bridge the gap. But enough to be prepared to take the chance. Against the backdrop of the GFC, the increasing value of the shareholdings stiffened the spine enough that I felt I could make it, though I did have to experience the lean years, particularly at the beginning. But in the years after the GFC, many people were skint. The ask is much, much higher now.
Look at the sedate trajectory On the one hand they’re expecting to write lots of letters to the Chancellor on how they cocked up bringing inflation down to 2%, indeed this will be a regular event for the rest of my lifetime. The Bank of England has a lot of finance bods much smarter than me, and I am sure that they will say well, hey, this is what is implied by the yield curves, it’s not our opinion. Sort of like a variant on guns don’t kill people, people do. Nothing to do with us, guv, it’s wot the market numbers say.
All over the decadent demise of the Western world there is this refusal to take responsibility for the consequences of our actions in favour of magical thinking. I’m all for magical thinking, but in that case let’s have some magic back, eh, rather than pretending we’re all materialist rationalists. Smells and bells, please. At least some of the ride will be more fun. Meanwhile
it looks not so different from the B of E’s prognostications, if we stick to the last 40 years. We have to go back nearly 30 years to the last time it was over 5%. Case proven, m’lud. Along with history, inflation has ended. Obviously you need some inflation, else capital will sit back on its lardy butt rather than get out into the world making good stuff happen in theory, but we’re sorted as far as inflation taking off. Hmm. In other news
We seem to be suffering a general competence deficit
We seem to be suffering a major competence deficit these days. In the battle between ability and craftiness, everyone seems to be losing their grip. The malefic Dominic Cummings seems to losing his mojo – starry-eyed for Big Data, his feet of clay show when it comes to hiring people to do anything with it. Obviously you ask your mates first, because, well, corrupt bastards are like that. He’s of the view that leadership in politics requires a science degree, but his own ancient and modern history degree from Oxford clearly failed him in his/our hour of need. He’s unable to find competence in handling data.
If the answer to your data processing job is Excel, the question is wrong
Back in the day, the Ermine was chatting to the guy at the next desk, who was tasked with keeping records of set-top boxes. Now I had an electronics, not software background, but he was planning on keeping this in Microsoft Excel. “Your problem there,” opined the Ermine, “is that you can’t do ‘owt with the data. What you need is a database”. This guy was going to try and search for repeating faults and that sort of jazz. Now you can do that is Excel, but it’s a bit like Samuel Johnson’s quip about a dog waking on its hind legs, it’s not so much that it’s done well, it is that it’s possible at all. It grinds to ever slower after about a thousand records – I discovered this the hard way when running the records of a club that had about 1500 members at its high water point. I switched to Access3 after about 500 members.
The trouble is everybody can understand Excel, whereas getting your data into a database is a different level of abstraction. Even in DOS days, dBaseIV had the edge on Lotus 123, though wrangling the forms to make it work was a nightmare.
Excel just isn’t designed to handle huge amounts of data – wrong tool, wrong job. This fellow might have had a hundred thousand set-top box ids, and Excel was only good for 65535 rows back then. You don’t use Excel for massive lots of data. I’d get off that wagon at more than 5000 data points, so you don’t use Excel for tracking your set-top boxes. Or your coronavirus victims…
Now in fairness to our Dom, he’s busy getting his mates to do his data munging, falling for the old saw of anonymised data. The trouble with AI and Big Data in particular is that the aim is to de-anonymise everything. AI looks intelligent because it cross-correlates everything, at scale. The public data Dom’s giving his buddies may well be anonymised on its own, but when combined with other data the keys to the kingdom often show up.
Now is the winter of our discontent[…]
I am determined to prove a villain
And hate the idle pleasures of these days.
Plots have I laid, inductions dangerous,
By drunken prophecies, libels and dreams,
This lot seem to have skipped a few lines of Richard III, and gone straight on to the doing evil. The thing that’s saving the rest of us is the competence deficit – in driving out Brexit non-believers, they seem to also have driven out anybody who can spot a bad idea miles away. Or indeed anybody who’s got a clue. Funny old thing, that… Correlation is not causation, eh, Dom?
Brexit zealotry doesn’t seem to correlate with competence
Perhaps driving out those who had a clue was the point – disaster capitalism unfolding before our eyes. Never let a good crisis go to waste and all that. Perhaps it has to be the way- you need moronic slavishness to the Brexit Ideal to Get Brexit Done, and perhaps afterwards we can engage people who understand the art of compromise. A little bit of that on t’other side wouldn’t go amiss, either, but we have to stick with what we can change…
I’m sure we will trade with other people after Brexit. But let’s get some people who can talk in a civilised manner to others, eh, rather than yelling we have the sovereign right to do exactly as we damn well please, and thanks for all the fish. That’s an awful long way towards the Juche doctrine of North Korea, and I suggest Brits are a little bit too soft and used to their creature comforts to want to pay that sort of price for absolute sovereignty, regardless of what Jacob Rees-Mogg and his disaster capitalism compadres in the European Research Group have to say about vassal states.
I am old enough to just remember 1973. Britain was a lot more self-sufficient in many things then, like food and cars for instance, than it is now. We weren’t that good at a lot of this, which was roughly why we signed up to the Common Market as it was then – we were the sick man of Europe, economically speaking. However, the issues raised by James Goldsmith of the Referendum Party weren’t ever addressed with Maastricht. Brexit will definitely fix those. A little bit like burning the house down fixes bad wallpaper, but some non-ERG eyes can probably make Brexit work right after a few years. Britain’s economy did sort of work before 1973, and hopefully we have all learned something in the intervening 47 years. Just for God’s sake keep the British Eton-educated whazzocks away from leadership of our companies, particularly any that make cars, it took foreign management to make Britain’s car factories make cars that were worth buying…
work is not the route out of poverty for the ability-challenged or those with more children than skill
I confess I will struggle to drum up sympathy for the Red Wall if they find they are vassals to British plutocrats rather than EU technocrats. True, they weren’t to know of the coronavirus pandemic, but the deep compassion for those who fall on hard times of the crew that they voted in to Get Brexit Done has been hidden in plain sight for a very long time.
I still remember the relatively benign version of that looking for my first job nearly 40 years ago, it scared the hell enough out of me to never take any time between jobs until I packed work in for the last time. The experience of being unemployed in Britain doesn’t seem to have improved between Margaret Thatcher and the punitive and nasty Universal Credit.
Personalised, like the red dot from a rifle. The personal adviser will be targeted to make your life miserable. If you want to cop a feel of the quality of the personalised advice, knock yourself out on the gov.uk careers advice beta to gauge the accuracy.In the case of the Ermine, that’ll be
Because there is a fundamental truth here. Britain is a rich, First World country. That means the cost of living is higher here than in many other places.
Sadly, Brits are not, on average, cleverer than other people. We’re average. Quelle surprise, eh? As a result, the sort of jobs available in the UK that pay enough to live on need to demand a higher level of skill than the global average, and the bar is increasing all the time4. Because: globalisation. If you thought Brexit is going to fix globalisation, then you should have been more careful about the people you gave the keys to.
Elementary logic shows that the result of increasing skill requirements is that fewer and fewer people will be able to earn enough for the average cost of living. Some of them won’t be bright enough. Some of them will have had children too early in life, or split up with the other party involved. That means you won’t have enough time to get a full-time job. As a society while we mouth platitudes about wanting to make up the difference, by our actions we clearly don’t care that much to be prepared to carry your choices for years and years.
We have hidden this in the past by increasing the number of shit jobs in the economy, things that should have been done by machine or not done at all, and priced these at minimum wage. It is one of the reasons why productivity has gone down the toilet in the UK since the credit crunch. For contrast, I started work when this was about 55 on that scale, and left when it was about 95. Britain got better off while I was at work – not due to me I hasten to add. You need an increase in productivity to address poverty. There has to be more shit to go around per head for the country as a whole to get better off – it is a necessary but not sufficient condition.
There’s only so far this can go. Another way we are hiding this is to create a punitive DWP system for the un(der)employed called Universal Credit, employ young graduates who can read and write to be mean to people who perhaps have literacy issues or generally can’t stand filling in forms. We incentivise the graduates to disenfrachise as many of their ‘clients’ as possible so that they keep their sort-of middle-class jobs, while making it all look like the clients’ fault that they don’t have the natural ability to get/hold a job that pays enough to live on.
Let’s not even start on what we do to the physically and mentally ill, eh? We just don’t care. Oh and then we wring our hands about the amount of homelessness.
Now I’m not saying I am clever enough to know the solution to this problem, but I have learned over several decades is that whistling a tune and repeating inappropriate platitudes like ‘work is the route out of poverty’ isn’t the way to fix the problem. It would be more honest simply to tell some of the people with insufficient skills or chaotic lifestyle choices that there is nothing we are prepared to do for you. Work is not the route out of poverty, for the simple reason that the cost of living is too high in Britain to keep a roof over your head on anything less than the full-time minimum wage, and there are too many people in the UK who don’t have enough aptitude to add enough value to something to even justify the minimum wage.
Some people are seriously short of basic life skills, like recognising food 😉
Ceci n’est pas food
Microsoft offered me this picture of a field of Halloween pumpkins in some American field. It’s a little bit weird, a tad Magritte, IMO. How do I know it’s American – there are no trees, hedgerows, we don’t have one-armed pylons unless there’s a really good reason and we don’t run our railway tracks with no guarding, and I don’t think I’ve seen boxcars like that.
However, it’s in keeping – Halloween never used to be a retail-fest or even A Big Thing until about 30 years ago, and it’s been pushed like hell, imported from Over There. It’s still rather disturbing that a significant proportion of British parents were presumably raised by wolves themselves in being unaware that you can eat what’s inside pumpkins5. Although I had no idea how they grew, I was aware of this by the time I left home, though it wasn’t particularly useful information as Halloween wasn’t a big thing, and I am child-free anyway 😉
However, I am with hubbub – eat your damn pumpkins FFS 😉 Tossing 90% of the pumpkins we grow is just plain rude. Mrs Ermine grows these smaller ones which look the part but taste better. We don’t need to carve them, but with cucurbits size does not correlate with flavour IMO.
It’s not so much that the big supermarket ones will taste horrible, the main failure mode is to taste of nothing much at all. Think marrows as opposed to courgettes. Having said that, if it tastes bitter, then toss it out. Pretty much a rule of everything to do with eating really, but according the the RHS bitter squash can give you bellyache if it doesn’t breed true. So don’t seed save curcubits unless you know what you are doing.
Last year I was in Morrissons and they actually labelled their Halloween pumpkins as ‘not for human consumption’, which makes me wonder what the hell they spray the buggers with. And quite frankly, parents, maybe you want to ask yourselves, if you buy this sort of contaminated shit for your kids, then what sort of world you are encouraging capitalism to build for them?
I know, he doesn’t keep it all in cash and gets some return on his money. But the maths works out at enough for 30 years essential spend, even if it isn’t deployed in that way. ↩
Valuations becoming more reasonable is otherwise known as a bear market ↩
Before all the DBAs take the piss, Microsoft Access was the right solution for a club database, easy enough to a tyro to make it work. If it didn’t, the result was going to be embarrassment rather than death. I’m not saying PHE should have used Access ;) ↩
I took my O levels in the mid 1970s. The typical class sizes of my grammar school was 31, but after the O levels class sizes were about half, because half the kids had gone into the world of work. They were fixing cars, helping in businesses, all without A levels or a degree. I saw far more people as a child building the Goldsmith’s College halls of residence than I saw on the entire Olympic Athlete’s Village building site in 2012. You wouldn’t need to be able to read and write as a hod carrier in the 1970s, I saw nobody carrying bricks onto the scaffolding up a ladder in 2012, there were mechanacal aids t do that. ↩
While I despise Halloween for being a jumped up capitalist consumerism-fest, rather than an honourable celebration of the turning of the seasons/harvest festival/thinning of the veil, the truth is that parents who eat their pumpkins with their kids and then carve jack o’lanterns out of them use more of the fruit than I do. Upcycling writ large and they should be applauded! ↩
It is August, California has recorded the hottest temperature on Earth at the aptly-named Furnace Creek. I just can’t imagine 54 degrees. I went there in 1993, and overheated my rental Grand Am in the 1500 meter lift up from Zabriskie Point through Daylight Pass, with the heater flat out and all the windows open. In July…
Nevertheless, in Blighty there is the hint of Autumn in the air in the changes of the natural world. Birdsong has changed from the frenzy of the breeding season, perhaps most clearly and commonly with the Robin, which sings a song that sounds in a minor key to me, which we associate with mournfulness, though of course this is pure anthropomorphising. The retired Ermine is more physically active than the working Ermine. Earlier this year in lockdown there was an edict from the government that you were permitted to spend an hour walking. I stayed with some of this, while I don’t do it every day I cover about three miles. Walking is good for reflection and rumination – in the heat of summer I started earlier, and there is some reward to doing it before wrangling anything that needs an Internet connection to happen.
I get to know the small area better, and living in a small town it is easier to get out into the countryside by shanks’ pony. The transition between town and country is sharp, I cross the liminal space in about fifty yards. Earlier in the year I got to know the territory of some of the blackbirds and robins by their individual song. Now these ranges are more fluid, and I hear the lovely sound of flocks of goldfinches who have swelled their ranks in the breeding season, feasting on the seed-heads. Although the swifts have gone some time ago, the swallows are still swooping over the fields with their chattering sound.
Swallows chattering hawking insects over the fields as I come to the main road
The bold song of the chaffinch has been replaced with the double finch-finch sound of their alert call, and the lovely arrow-like white tail feathers flicker in the morning light as they make their swooping flight away from the paths into the trees. I have seen herons courting and the odd egret drifting lazily on the summer breeze.
I have learned that the sound of the wind in the oak is not the same as the wind in the ash or the willow. In some ways it is reminiscent of the almost animistic approach of my primary-school self, where I knew a very small area intimately. I cover more ground, and there is far more natural variation in the natural world of the Levels than there was in the urban landscape of New Cross. When I checked the size of my childhood world on Google Maps the size of my patch was amazingly small. Continue reading “winter is coming”
Funny old game, really. One of the really big issues in the UK causing much bellyaching is the recently imposed quarantine requirements for returning from Spain, along with the usual gormless whinging about will I get paid. Err – no. Like when volcanic ash stopped flights a while back, you don’t get paid for the extra time you took to get back home, nor the extra hotel and transport bills. Unless you had decent travel insurance, and even then it was the insurer’s job, not your employer’s.
Earth to Great British Public – your holiday is not a human right. There’s no fairness fairy. There’s a global pandemic on. If you decide to take the risk of going for your two weeks in the sun, you also get to suck up the added risk of getting stuck out there and the concomitant costs (if they lockdown) and/or the risk of ending up with a domestic holiday bolted on (if we quaratine your destination).
Your right to two weeks in the sun doesn’t trump the public health. In the same way as we have other limitations on yer yuman rights to do what the bloody hell you like and have others eat the consequences. You can’t drive your Maserati at 100mph down an urban street, though I’m sure as hell it’d be great fun.
The Ermine is not overflowing with the milk of human kindness on the subject, because it is pretty obvious to anybody with a brain cell rattling about in their cranium that unexpected delays are a much higher risk this year. Earlier we have had the evidence of a country-wide shutdown and serious impairment to international travel, enough to clear our skies of contrails and shut down the endless rumble of jet noise so you get to hear the birdsong better.
It’s clear that humanity hasn’t really got ahead of coronavirus and hasn’t really solved the issue of the highly communicable nature of the disease plus its long incubation period making the whole thing really tough to manage from a public health standpoint.
So you’re taking several elevated risks on going on a cheap flight to somewhere sunny. I don’t know if you can insure against the potential loss of earnings, though to be honest why not self-insure? Save two weeks of earnings before you go on holiday, then if they do quarantine your destination you get a couple extra weeks to catch up with some DIY on unpaid leave.
If they don’t, well, stick the money towards next year’s holiday and celebrate your good fortune. Not only were you able to afford a holiday, but you saved the money, and if you think your employer should have paid for the risk then you actually still have a job, which is a stroke of great luck compared to an awful lot of Britons come August; one in ten will lose their job by the end of the year. Faced with this level of hazard, ending up with the loss of two weeks earnings pales into insignificance – if you would find that devastating then you can’t afford to go on holiday even if you currently do have a job. You’re not meant to say it, but if I were an employer struggling to keep afloat then if somebody had the brass neck to ask me to fund the tail risks of their ten days in the sun then they will go higher up in the queue when push comes to shove.
A holiday is for your benefit and enjoyment. Why the hell should your employer pay you if you aren’t back at work as originally planned. particularly as business conditions are tough this year?
Damn well prepare for foreseeable risks yourself, insure against them yourself, or just don’t take the risk in the first place. What the heck is so hard about that?
Back home, staycations seems to be making us into chavs all round
Last month I took a gander at this standing stone in Oxfordshire, and I was surprised at the amount of trash in laybys. Since there’s a theme of whining whingeing here, I will join in; this seems to be a wider problem that we’ve all become a lot more slobtastic.
The Ermine has a campervan, but I can honestly say that I am not the problem these guys are talking about. I have never shat in the great British outdoors in my entire life. I don’t dump camping gear in the outdoors, for two reasons – one is I don’t buy rubbish in the first place, and try and service it properly. But if it does break up, then I throw it away in … a bin? One of the great things about the supermarket plastic bag was you could use it to collect your sundry trash if rough camping and then ditch it in a litter bin. These days you have to buy a roll of swing bin liners, but I haven’t got through my first roll yet. Don’t be a slob. Fair enough, I don’t do tent camping and don’t hike to campsites so maybe this is easier for me, but what the hell is up with us now?