A rare dodgy piece of German engineering in this propagator heat mat

Germany has got itself a reputation for top quality engineering, so I was somewhat surprised to come across a pretty poor example of German engineering in terms of the Bio-Green Sahara heating mat. The mat itself is fine, and continues to do sterling service. It is foil with heating wire run through it, the aim is to stick this under seeds being propagated.

It addresses the fundamental problem that the UK is too far north for most of our vegetables, which were used to the more balmy climates of lower latitudes. So the seeds don’t really get the feeling that it is time to grow until too late in the year, when the temperature reaches what they expected in the Spring, but we get in Summer.

The heat mat comes with a thermostat with a remote probe

which DGF reasonably assumed to be connected with a wire. I had noticed that this damn thing was adding a pretty outrageous extra load to our daily power usage – it is a 65W heater, so if it were on continuously, then it would draw the same amount as the fridge, namely 24×65/1000=1.5kWh.

It was time to break this out again this year, and I took a look at it. The probe reminded me of the sort of thing used on a gas valve to stop the main gas valve opening until the pilot light is lit. These are often thermopiles driving solenoids these days but in the past they were a copper tube with a volatile fluid in it which vaporised on heating to increase the pressure. A capillary tube takes this to the gas valve and opens the valve under pressure.

True enough, this appeared to be the case here, and the device was associated with a disturbing smell of chloroform, which is presumably the active ingredient.

Now in a gas cooker you don’t expect to move the sensor, so having a rigid copper capillary tube is okay. But a heating mat that is described by some retailers as

These all new aluminium encapsulated versatile heatmats easily roll up when not in use.

should not be supplied with a device that is designed to be deployed to a fixed installation. Flex that sensor tube too often and the bugger will crack, releasing the chemical into the atmosphere so that the thermostat will never turn off. The manual really ought to tell you that this is extremely delicate and should not be flexed repeatedly.

The next thing that is painfully wrong is that they tell you to whack the sensor into the soil. Stands to reason, right, that’s what you are trying to control? Not so fast – there is a problem in that the delay between the heat getting to the sensor means there is a large overshoot, as the sensor tells the heater “turn it up, turn it up, turn it UP WHOA THERE turn it DOWN you’ve gone far too much turn it DOWN”.

For the mathematically inclined this is a control system and the lag mucks about with the poles on your Bode plot. I think that’s what I recall from uni. As an engineer it was a lot easier, the mantra was always get your sensor right next to the heater. Which is counter-intuitive because you are measuring not at the point of delivery, but it gets the delay down. You will get a static error due to the thermal resistance from the heater to the soil, but that’s better than ending up with large temperature swings. Industrial control systems use proportional control and may add rate-of-change and integrating loops to go for greater accuracy but these are seeds, they just want to feel they’ve been shifted southwards about 20 degrees of latitude.

The instructions should also have included the practical stuff to make an efficient plant mat, as well as how to avoid knackering the device. The heat only needs to go upto the seeds, rather than downwards, so the heat mat should be placed on an insulating substrate, otherwise energy will be used worthlessly in heating the potting bench. Celotex is probably ideal, but I used a couple of sheets of expanded polystyrene foam covered with aluminium foil. You obviously want to consider what happens under fault conditions with the heater on permanently and dimension accordingly 😉 The heat mat then sandwiches the heating cable in two sheets of thick aluminium foil, spreading the heat better.

For those looking to do this on a budget, this can be made using standard heating cable such as used for keeping pipes frost-free, with thick aluminium foil either side. If you are doing that using mains power, you should know the difference between class I and class II insulation and how that pertains to your construction. For UK / Northern Europe you’re looking at about a maximum power input of 150W per square metre, the thermostat will kick that back as required.

The thermostat probe then needs to be placed above the foil, rather than in the soil, and the whole lot covered in a thin layer of builder’s sand, on which the plastic modular trays with the seeds are placed. Since I am using this in a conservatory and don’t want the floor covered in sand I constructed a tray from some plywood and bits of pallets to contain the sand. The disadvantage of using wood from pallets is all the pieces are different widths which makes you look a rotten carpenter if you don’t have access to power tools to trim them to size, or the patience to do it with a jack plane. You can’t argue with the price, however!

tray with heater mat and sand

I was still left with a defective thermostat, so I replaced this sucker with a Dallas DS1820 digital temperature sensor and a 16F628 PIC microcontroller to drive a triac controlling the mains powered heating mat. It ended up looking more like a piece of laboratory equipment than a cuddly Bio-Green growing device, but is a lot more accurate. That system was originally part of a project to propagate sweet potatoes but the development time was a couple of weeks too long so I missed the start time and the tubers rotted 😦 My device had a second sensor and serial output because those sweet potatoes are finicky, this was something that originally grew in Mexico and South America. You are seriously taking the mickey trying to persuade them to think about growing in a chilly British March…

Temperature controller. It doesn't have the friendly curves of the Bio-Green devices so it looks like a piece of lab equipment but it is far more accurate.

For a propagator I don’t need 0.5C accuracy, so if we end up needing more of this sort of thing I may just use an analogue system using thermistors. I also had a Sankey propagator base I used to use for tomatoes, this is thermally balanced and could do with temperature control to save power and get more reliable, it can easily drift up beyond 30°C, which isn’t that great and makes the contents a sod to keep watered.

To save anyone who may come across this having to look the germination temperatures up, here are the values I swiped from a Plant Propagation lecture by the Organic Growers Alliance:

28°C Cucumber

25°C Aubergine, Pepper, Tomato

15°C Celery, Celeriac, Calabrese, Early Cabbbage, Brussels Sprouts

12°C Sweet Corn

10°C All others

All a fair amount of rant from a poor piece of engineering, though it says something for German engineering in general that the odd dodgy one stands out so much. Bio Green do make the electronic version of the device I constructed for about £50.


A New Financial Year looming, plus the Sound of Thunder in the Distance

April 6 is the new financial year in the UK for some curious reason, as it seems the fiscal year ends on the more rational March 31. I’ve maxed my ISA for now, so the change of year means I get to have another bash at building tax-free assets that won’t be counted as income in future. It’s also a chance to have a general reshuffle. Every so often I have to get to lift the drains up and hose out the accumulated fat and grease of the finances to see if it accords with my values and beliefs. That’s not the same as getting the right answer, because my crystal ball is as cloudy as anyone else’s. but at least it will be my own mistakes 😉

I don’t bugger about with formal rebalancing of my ISA, because I’m just not that kind of guy, and also because I am still in full ISA purchase mode what I do this year could shift my asset allocation by about 40%. So I rebalance by going to buy what I don’t already have a lot of. Which probably means mining, pharma, some REITs and some financials, but I have to research this.

What I need is a jolly good stock market crash this year, so I can buy cheaper. There are distant sounds of thunder – some of the eurozone rumblings and of course all that oil war adventure is probably good for some of this. Some part of me suspects that this distant sound of thunder is the beginning of the end, as Peak Oil starts to overcome industrial civilisation as we have currently set it up. Although I wasn’t economically active in 1973 I was sentient, and we’ve been here before, so I may get my jolly good stock market crash this year, possibly on the popular revolution in Saudi Arabia. The challenge, of course, will be whether it (the stock market, rather than Saudi…) gets up off its knees afterwards as it did then. An awful lot of companies’ business cases would look a lot different with oil at $250 a barrel, and not many of them would look better.

I wasn’t used to how National Savings Index linked certificates worked last year. In particular I didn’t realise that these were desert blooms, only available for a short time after the Spring rains. My plan was to buy £500 of these each month to give me a steady index-linked income boost in three year’s time (now two years). That doesn’t fit with the seasonal availability, so I only got £2000 into that before they were summarily canned. Which sort of put the kibosh on that bright idea 😦

However, NS&I may still serve me well. I have an emergency fund of about £7500 in a two year’s back to back Nat West Cash ISA, which, all credit to them,  has actually continued to provide a3%-ish interest rate. Now on reflection, there is a lot to be said for shifting this to NS&I certificates, because you can

  • get the money out at short notice, although at an interest penalty
  • but it’s a little bit of bother, so you have to think about it
  • and thr RPI indexing means an emergency fund of £10k today will be able to fix the same amount of emergency in five years hence
  • oh yes, and did I say it’s tax-free, so what the heck is the point of sterilising some of my ISA allowance looking after cash?

Which beats the cash ISA option, which dies a little bit by about 2% a year. There’s also an opportunity here – I believe I can transfer the Cash ISA into my shares ISA ands still load up with this year’s ISA allowance, ie I could get £17700 into my shares ISA earning an income for me rather than £10200 into it this year. Of course the downside of that is I have to save the £7500 to go into NS&I in the next month, plus save up £10200 over this next year plus increase my pre-tax savings in AVCs to keep that greedy tyke Osborne out of my pay packet.

That’s a very serious big ask and I may not make it, though my outgoings and non-financial investment costs have dropped. But it’s a potential opportunity.

As to the asset allocation, for myISA I have shifted it to this

March 11 ISA asset allocation

which, compared with December has changed to more accurately reflect my views on what an ISA should do for me. Which is buy me an income that isn’t considered an income for tax purposes. I’ve dropped all holdings of precious metals in my ISA because I have come to the conclusion that an ISA is not the place for precious metals. This isn’t because I have decided holding precious metals isn’t for me, I simply need to get my policy on that right, so at the moment I am exposed to currency debasement big time, apart from my non-financial investments.

Overall financial asset allocation

Overall my total share allocation including pension AVCs and stuff outside my ISA is more balanced. The obvious holes as mining stocks, AsiaPac and the US, all of which confuse me.

The US is home to an enterepreneurial bunch of go-getting people who aren’t known for taking no as an answer, and I am sure this will work to their advantage in future. However, they have some deep systemic problems arising from being a reserve currency, which has permitted some extreme excesses which are denied everyone else. I’d prefer not to be caught in the crossfire of unwinding those debts. The US is also hellishly exposed to Peak Oil, in a way which is so much more extreme than anywhere else.I can imagine a Europe without liquid transport fuels. I struggle to imagine a US without gasoline, with perhaps the exception of New York and some of the East Coast. And the low taxation of oil makes the US economy far more sensitive to increasing crude oil costs.

I am sure Americans may be resourceful enough to sort it, but they really do have to get off their butts and engage, simply repeating that “the American Way of Life is Not Negotiable” is not what I would consider a rational response. I am not sure that the military option is such a great answer either. There seems to be some doubt about whether it increased oil production in Iraq  some say yes, but it is not a universally held view. So at the moment I don’t do America, other than as part of my FTSE100 holdings.

Mining, yes, shame that is riding high at the moment 😦 A missed opportunity from last year.

AsiaPac – with the current state of the pound that all looks jolly expensive. I don’t do China, because I don’t understand it, and the demographics suck. I could combine mining with an Aussie tracker ETF, since mining seems to be a lot of what Australia is about.

I am tempted by India, which has strong demographics and a go-getting entrepreneurial class, though some very serious strategic problems. It is hard to gauge performance where the currency has such a shocking inflation rate of around 10%. db-xtrackers do a GPB denominated ETF but this is a synthetic tracker using derivatives and swaps, which introduces a lot of hidden extra counterparty risks.

Fortunately there’s no great hurry, apart from targeting that NS&I investment in April, and I have a war chest saved which can sort that for me, I will hit NS&I up to aim to hold a total RPI-indexed emergency fund of about 10k, so I can think about how to tackle the ISA over time.

March for an Alternative, dream on, guys

So about half a million souls and a small bunch of black bloc anarchist turds rolled up to London last weekend. The half a million I’m all for their right to protest, the anarchists are scum and I wouldn’t be that troubled if a few of them had got brained. Maybe the Daily Mail commenter John Sanderson had a point, we need a remote uninhabited Scottish island to dump these jerks on so they can have anarchy, and fight it out between themselves.

So what about the main event then. The trouble is we seem to have become collectively infantilised, let’s take a look at the nature of the so called Tory cuts. The points the marchers for the alternative are making are three-fold.

  • The spending that is being cut is doing all sorts of good works in the country.
  • Even if we are spending more than we earn, you can’t run a national economy like a household personal finance operation, so you have to spend more than you earn to grow out of a recession.
  • The Tories are rich scum that are unaffected by the cuts so they don’t care.

Individually the first charge is fair enough, a lot of good stuff was done under Labour using borrowed money and it won’t be done any more, from the local libraries that are going to be closed to the music therapy for the disadvantaged. Let’s not deny it, Britain is going to be a harsher, meaner place than it was under Labour, anybody who remembers the 1980s (and to some extent the early 1990s) will know that.

The second point is also good. However, what the proponents of the “alternative” fail to get is that to have the alternative, you must have saved the money in the good times! Labour didn’t – they spent like drunken sailors, so this is just like screwing up your personal finances! So we are SOL on that option, what we have got is about as good as it gets.

The problem is that overspending when times are good makes the retrenchment doubly hard when you try and rein it in. I can see I am not going to be earning as much in future as I do now. Rather than spending all I earn “because I am worth it”, I save most of it towards being able to spend more than I earn in my own personal recession. I can do that because the only votes I have to buy is me.

Unfortunately it’s not so easy for politicians, who want to spend up to the max and more to give people a feel-good factor so they vote for them again. Hello Gordon Brown, here’s looking at you, kid. So unfortunately all the people that benefited from his largesse are not only having to do without it, they may even lose out in the retrenchment to fill in the hole. I, presumably being rich Tory scum in their eyes, didn’t enjoy the largesse. Although I will lose by having to get on my bike to go to the library and will get to feel the general fear and loathing and shabbiness of five years of Tory rule, I haven’t benefited from the largesse in having a nice middle class job created for me as diversity champion, so I will only experience half the pain.

That’s in a similar way to the way I didn’t experience all the foreign holidays and restaurant meals from treating my house as an ATM, which is undoubtedly my loss, but I also don’t get to experience the gut-wrenching sucking feeling of paying all that money back at 14% interest rates (yes, it happened to me in the early 1990s). You pays your money and you takes your choice.

There is an awful lot to be said for having the government as the swing consumer of last resort, but it needs the government to spend less in times of plenty (2000-2007, Gordon Brown, here’s looking at you, kid, once more) so that it can spend more in times of recession. That way construction is funded by house-building and commercial premises in booms, and making bridges and high-speed rail and flyovers in recessions. Unfortunately, that demands the government to spend less than it takes in during booms, and that sort of thing is hard to do when it would make it easy to buy votes, and the sheeple are so infantilised that they scream “but I want it NOW” without trying to work out how to pay for it.

Britain has been living above its means, and living standards are going to have to fall, I estimate by about half. Note that living standards are not the same thing as quality of life, but it takes some doing to make the mental switch so you don’t see everything in terms of money. For instance few people in Britain are too poor to buy food. Many people, however, could spend less on food if they learned how to cook some of it from basic materials rather than using ready meals. We used to do that in the 1970s! As a benefit our food might taste of something other than monosodium glutamate, sugar, salt and artifical flavourings but that’s a rant for another day.


Samantha Cameron at London Fashion week. More attractive than Dave or Gideon, n'est'ce pas, but she'll probably not feel the Tory cuts either 🙂

As to the last point, “The Tories are rich scum that are unaffected by the cuts so they don’t care”, well, you only have to look at Dave and the fragrant Samantha, and Gideon, and it’s hard to come to anything other than the conclusion that it’s a fair cop. They aren’t going to be affected by the cuts.

However, our need at the moment is to extract Britain from the ordure, and that means stopping spending money that we don’t have. The timetable to do that, by the way, for all the bile that has been poured on the Tories, is pretty relaxed. We aim to eliminate the deficit (ie stop spending more than we earn) by 2015.

Now if that were you, going to the CAB for advice and you said you had a massive credit card debt and were spending 10% more than you earned they would probably advise you to nut that 10% overpending now, pronto, without delay, rather than in four years’ time. To those that say you can’t run a country like a household I’d say you may well be right, but there are prerequisites to that. And you guys lost the right to make that claim when your government of the day failed to save the money in the good times, preferring to believe that this was the non-inflationary constant expansion decade, rather than a one-off gift of the encapsulated work of industrious Chinese billions combined with the stored energy of ancient sunlight. That’s all gone, finished, away like summer rain.

So material living standards are going to fall. Perhaps to the 1970s if we’re lucky, perhaps to pre WW1 Britain if we are less lucky, to some other point if we screw up royally.

The problem is that we don’t make what we use, and we don’t make enough of what other people use to allow us to buy what we use. So we’ll have to use less. The upside is that there is absolutely no evidence that rushing around around flushing away our lives on crappy jobs to be able to buy our two weeks in the sun and our iFads is making us any happier, if anything the evidence is to the contrary. So after what will undoubtedly be a grisly time of re-adjustment, we might find that we are happier if we focus less on what is in our lives and more on who is in our life.

This crap is coming our way, for most of us. Hollering “I don’t want CUTS” isn’t going to help – unless you want your children to pay for your jam today. It’s time to rediscover personal responsibility and grow a pair.

Talking of which, another bunch of whingers who screwed up on Saturday are the Oxford Street shops. Apparently the coppers let them down in not telling them there was going to be some bad crap going down and they might want to board up.

Well, colour me naive, but what part of  “there’s a shedload of pissed off people coming to town that are feeling short of money” and “anarchists have been pitching for a fight at the last few London demos” do they not understand? London is the capital city. It attracts tourist money and vast wealth like moths to a flame, just like it attracts the protesting Great Unwashed. If you’re going to flaunt all those glittery baubles in the face of a load of people grizzling about having no money and also dischuffed about your tax evasion, then having your shop trashed once in a blue moon is the price of doing business. Either treat it as such or board up, or relocate to Surrey and accept a vastly lower footfall.

It is the job of society to lock up or otherwise deal with the anarchist violence. But the others causing a peaceful public protest, well, maybe they have a case.

Bad Moon Rising

It does, indeed seem to be a bad moon rising. The real moon was at its closest to us for a while on the 19th, this was taken at 8:15pm lazily from my front door… it is about 50,000 km closer to us and about 30% brighter than it is at its furthest distance. I’m not blaming it, and it was a remarkable sight, but a lot of bad crap has been happening of late, so the old Creedence Clearwater Revival song kind of fits the mood.

There’s obviously the tragedy in Japan, though all the papers seem to focus on the issues at the nuclear plant the plight of the survivors of the tidal wave seems really dire. More recently, we seem to have got ourselves into yet another oil war. I mean, yes, Gaddafi was reputed to have sponsored the IRA in the 1980s and Reagan was right when he named him mad dog but there are enough other mad dogs around the world that we are happy to leave be. Still puzzles me how the army of an small island nation can fight on three fronts at once, but so be it. I hope we won’t still be engaged there this time next year, and definitely hope not this time a decade hence…

Closer to home it’s coming up to the end of the financial year, and that’s when the portcullis is going to come down on a lot of government spending. The Grauniad has been having a bleeding-hearts fest on this, cue the violins in the background, photo of pained looking young mum with a couple of kids who seems to be losing some sort of childcare, though the article failed to tell her story. Then we have the loss of the NI Music Therapy Trust. WTF is music therapy? And why does it need to be fancy instruments, if it’s about the kids ‘expressing themselves’ then can’t we substitute the percussion instruments with dustbin lids and the like? It was good enough for me as a kid, you know, the tin cans or the more advanced version with bottles filled with varying amounts of water. This is one of those things that is undoubtedly nice if you have the spare money, but we don’t now. Let’s face it, kids playing any sort of musical instruments sounds pretty ropey unless you happen to be the doting parents, so this isn’t about sophistication and tone colour, it’s about them having a good time. As the outgoing Labour Liam Byrne said, “I’m afraid to tell you there’s no money left”. But with a bit of enterprise I’m sure we could find something for the kids to play with and make a racket for an awful lot less money, and no expensive musical instruments to break, either!

Then there was the Budget, and unlike it seems everyone else I see this one as a mean and chiseling sort of job. The tax rises are achieved through underhand methods like fiscal drag and rescaling indexation to the duplicitous Consumer Prices Index that excludes housing costs, for the very good reason that we all know Britons don’t like to spend a lot of money on bricks and mortar so there’s no point in including that. Of course Tories can’t be seen to be raising the headline rate of tax, so they grub about and frig with the tax thresholds, so you get to pay more tax anyway.

Well, Georgie babe me old mucker, I’m not paying any of your stinkin’ 40% tax, even if you bring the threshold down to 25k, as I’ve pushed my costs down well below needing that part of my salary, so I’ll be saving that in AVCs so I get to retire earlier or have more when I do retire. There’s no bloody incentive to work for tax at 42%, because I am shorter of time on this earth than I am of money. After I saved my ISA last year I’ve been building up a war chest for this year, as I could see taxes were going to go up this year.

So I could push my salary below my running costs and claw back even more tax from you this year, George. Nasty nickel-and-diming budgets like this one makes it more worth my while to do that, and indeed the increased personal allowance helps a tad. I wasn’t part of creating the credit crunch and I’m not aiming to get soaked for clearing it up, chum. But what I will be having from you, buddy, is some of those nice National Savings certificates that you cancelled last year. About £10k’s worth, actually, because then I can transfer the contents of my Cash ISA into my shares ISA and get my emergency fund inflation-proofed to real inflation, i.e. RPI, and tax-free too. I always thought it’s so rude to tax me for the paltry returns on cash that don’t even match inflation. Tax the amount over RPI, fair enough, but not the return needed to compensate for the Government’s fiscal mismanagement, that’s plain cheeky.

Monevator and his buddies are greedy tykes wanting RPI plus something in my view 😉 Living in these desperate times financially RPI and tax-free is just fine with me. I don’t ask my cash to make money for me, but what I would like it to do is sit there and stay the same value over the years, and at the moment my 3.2% Cash ISA in gently losing the fight year on year. This is my emergency fund, so it doesn’t have to try and get bigger every year, staying the same is quite okay, and RPI matches my experience of inflation in the UK. For me CPI is away with the fairies, because I don’t buy iFads which are getting cheaper, depressing the CPI.

The Creedence Clearwater Revival track I pinched the title from ain’t bad, either, I think it was the first record I ever got to play.

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When Money Dies, a 1975 cautionary tale from the Weimar Republic

Remember the three day week, miners strikes and the glories of fixing British Leyland cars, where every motor was a Friday afternoon job? No, you probably don’t because you weren’t born then 😉 To be honest I was a kid then so I didn’t really understand the horror.

This was after the 1973 oil shock, and there was this thing called inflation stalking through the land. A chap called Adam Fergusson looked back in time, to 1930’s Germany, to garner information about inflation, and this book encapsulated what he found.

Though the stage had been set for the inflation by the conditions set at Versailles, the story has curious resonances with now. In the initial stages, the inflation took the form of a slow-motion economic train wreck, which is similar to now in terms of the middle classes slowly being destroyed by their purchasing power dropping. Some people who either have non-financial capital, particularly businesses connected abroad, do quite well, and foreigners do particularly well as their hard currency is highly sought after.

Now of course the German experience was far worse that anything we have experienced in recent times, and has had a deep effect on the German psyche, with a low tolerance of debt and a low tolerance of Club Med profligacy at the moment. This book is a powerful cautionary tale of what may lie ahead if we don’t get a grip on inflation.

Continue reading “When Money Dies, a 1975 cautionary tale from the Weimar Republic”

frugality – akin to living like a celibate monk in a brothel

Todd at financialmentor.com summarised the challenge of  what you have to do to become financially independent in 10 years. The thrust of his argument is you need to live on a lot less than you earn, and he described how that isn’t so easy

It takes the self-discipline of a celibate monk living in a brothel to survive on 20-30% of what most people earn in our current culture.

It’s why most people fail, with the exception of odd, extremely focused individual like Jacob (ERE) who finds this all a breeze.

I’m with Todd there. I achieve a greater savings rate than 70%, but then I cheat by having a paid-off house and cycling to work a lot of the time, which takes down two big fixed costs for most people.

Not paying a mortgage isn’t hard, what is hard was paying all the instalments and overpayments over the last 20 years to get to that stage. Reducing other costs was hard. It is particularly hard for the first one or two months of going cold turkey on consumerism.

It was difficult because I had to overcome the norms of a lifetime. For most of my working life I was okay with work, and indeed even now what I do is fine and has regular moments of being interesting. It is the management environment that gets me down. So I had got used to spending a little bit less than I earned, so I was both a consumer of boys toys and of fine wines and eating and drinking out.

Losing the gadget addiction was a harsh switch but easier to hold on to, compared with losing the eating and drinking out. In the end I didn’t want to be working longer to sustain that lifestyle of having the toys, once I had come to that conclusion I could execute the decision, job done. I still have the gadgets I bought up to April 2009, there’s no point in flogging stuff like that on Ebay for the time/return point of view and most of them still work, and surprisingly enough I’m happy with their slowly ageing functionality. Stuff, therefore, was not the problem, and indeed sitting on Stuff accumulated over nearly thirty years of working life means Stuff wants have mostly been addressed anyway.

Hardly watching TV and web-surfing with the power of ad-block plus on my side means I am exposed to far fewer ads than most people, and I adopt a30-day embargo to sterilise any residual power of advertising. If I had a desire for some consumer item, stick it on a list and park it. After thirty days if it still seems like a good idea, go for it. 30 days gives enough time to reflect, and eliminates 95% of my purchases – by then I’ve usually found a way round it or it simply didn’t matter that much to me anyway.

It’s where my world intersects with other people that contrasts and difficulty lie. This is where Todd’s comment rings true for me. Before April 2009 I lived in a way that wasn’t particularly different from how my colleagues and friends lived. The biggest obvious difference is probably being child-free, though even that isn’t hugely unusual in the people I know.

Now, there is a big difference. Most of the people I know from work  spend a lot more than I do, and they get nice stuff for it. One guy I know has an audio system that’s worth more than my house. Many have more than one foreign holiday a year; I haven’t used my passport for the last three years.

You have to be more internally referenced than usual to live so differently from the people around you, just like the monk holding to his own values despite the whorehouse around him reflecting contrasting ways of living. ERE observed that early retirement tends to draw personality types INTJ. I would say it is the independence of thought that is the most valuable aspect of that personality type for executing the frugality needed to achieve early retirement, where all around me things urge me to spend! spend! spend!

Trying to spend less means I sometime pass on social opportunities.  So there is a cost to living differently, and I choose to pay that cost in the interest of being able to stop working a lot earlier than most people I know. Compared to the quality of life I lose by not buying Stuff, the quality of life I lose by cost-cutting in experiences and socialising is more of a downside to going for early retirement.

Although I am probably personality type INTJ, I’m not as strongly that way as say Jacob, and by going for early retirement rather than extreme early retirement the frugality challenge isn’t such a big ask. Being older than the typical extreme early retirement planner helps too, as SG observed in this comment.

Half the trouble with extreme early retirement for most people is that the first two decades of your working life contain the biggest costs – getting somewhere to live and buying the stuff to set up a household, and just when you are clear of that, most people then have children. That sets you back again because they costs some extra money but more importantly restrict the household’s capacity to earn money.

If I had time and energy on my side I would go the route of the entrepreneur, I wouldn’t choose saving as a means to financial independence. Although taking a long hard look at spending and cutting waste is worthwhile, at the moment I have reduced spending on things that would enhance my life.

So unlike ERE, and Monevator,  the attractions of the Spending whorehouse are real for me. It is just that the attractions of financial freedom are greater.

Warren Buffet is wrong, there Are limits to Human Ingenuity

It’s not often that I’ll find the brass nuts to call out the Sage of Omaha for talking through his hat, but this is one of them. In the usual fabulous letter to his shareholders including one heartwarming extract from Grandpa Buffett extolling the virtues of old-fashioned thrift. Nothing wrong with any of that. It’s here where I part company with the Sage of Omaha  a little bit:

Money will always flow toward opportunity, and there is an abundance of that in America. Commentators today often talk of “great uncertainty.” But think back, for example, to December 6, 1941, October 18, 1987 and September 10, 2001. No matter how serene today may be, tomorrow is always uncertain.

Don’t let that reality spook you. Throughout my lifetime, politicians and pundits have constantly moaned about terrifying problems facing America. Yet our citizens now live an astonishing six times better than when I was born.

The prophets of doom have overlooked the all-important factor that is certain: Human potential is far from exhausted, and the American system for unleashing that potential – a system that has worked wonders for over two centuries despite frequent interruptions for recessions and even a Civil War – remains alive and effective.

We are not natively smarter than we were when our country was founded nor do we work harder. But look around you and see a world beyond the dreams of any colonial citizen. Now, as in 1776, 1861, 1932 and 1941, America’s best days lie ahead.

The problem with this is that it is entirely ingenuity-centric. Human ingenuity and graft were undoubtedly a lot of why America’s best days lay ahead in 1776, though let’s face it they could hardly have lain behind 😉

And yet for all of the remaining three dates, human ingenuity had its little helpers, the gift of ancient sunlight that gave it a leg-up. For sure, that ingenuity was necessary to make use of it, but it is insufficient on its own to do all of the stuff we take for granted. London lies some four hundred miles from Edinburgh. In 1776 it would have taken the best part of a month to do it using renewable energy (horse power). Now I can decide to leave at noon and be in Edinburgh by sundown. Human ingenuity created the means, but it doesn’t power it.

Warren is right in that America will probably not run out of human ingenuity. But it might run out of resources that human ingenuity needs to deliver its current lifestyle. Whether or not America manages to use its human ingenuity to find a different, perhaps better lifestyle is going to depend on it getting rid of human ingenuity’s evil twin, America’s human sense of entitlement.

Just like Scarlett O’Hara was at her best when she clawed as the soil of Tara and declared that she would make something from nothing, so it seems so often that human ingenuity achieves its best when it does not have the drag of a sense of entitlement pulling people back. Entitlement makes us avoid seeing the world as it is by imposing the world as we”d like it to be onto it.

America’s best days may well be behind it. This won’t be because the wellspring of ingenuity will fail in America. If it happens it will be because Americans’ sense of entitlement to the benefits of cheap energy will blind them to alternative solutions that would need less energy.

Warren may be right in the end and Americans step up to the plate. But for once it won’t be their ingenuity that gets them through. It’ll be ditching their sense of entitlement.

Buffet was talking about Americans, so I’d followed the theme. But it applies to all of us who currently have our lives made easier and more plentiful by cheap oil. We all need to lose the sense of entitlement, and learn to give energy the respect it deserves. Though I can easily bike to work and back, I am not a good enough cyclist to sustain the power to run this laptop computer I am writing this on for the amount of time it took me to write this post. But I have enough ingenuity to imagine an alternative which would be be just as rewarding. Sometimes it is good to drink a few beers with friends and hold forth on a subject. Humans did that well for centuries before the oil age.

Our challenge in the coming decades will not be finding enough ingenuity. It will be getting rid of our sense of entitlement…

Findependence Day, just as Peak Oil’s advance guard comes knocking

Early in my current job, sometime in the early 1990s, there was a all personnel management course mandated called “the Winning Edge”, I think it was from these guys, indeed the geezer in the video looks like the chap who led the course, the intervening 20 years has not been too hard on him.

Now most management courses are utter codswallop.  Of course we could all get more stuff done if we concentrated more/cared more/worked longer/smarter/harder and pretty much every management course I’ve been on has been a variant of one or more of those themes, together with the latest management school fad. You know, the usual suspects, total quality management, anything from Peter Drucker, management by objectives, management by fear(oops, sorry, I meant to say modern performance management), management by incentives, management by walking around. The one course I’ve never seen is the one titled “What’s the difference between Leadership and Management, Why it Matters and How You can Tell One from the Other” but that’s a rant for another day.

This course was subtly different. At the time the Firm was trying to get rid of a whole bunch of people by some pretty awesome financial incentives, particularly for the old fossils that were about as old as I am now 😉 These guys tended to be lifers with some twenty or thirty years at the Firm, and a fairly set view of what they were going to do – ie carry on to 60 and retire. The aim was to jolly them along a bit and get them to take up the financial incentives and reduce the wage bill.

So the Winning Edge was a little different, asking what limiting beliefs people had and what they really want.  I sat in the room of a fine hotel in Aldeburgh, looking dreamily out of the window at the seagulls wheeling about in the late winter sunshine. You know how it is when you ought to be paying attention but you’re thinking of that pretty girl who served you lunch. Fortunately somewhere in the back of your mind there’s a little guy with a tape recorder recording what you should be listening to, and every so often he picks up something odd and knocks on the glass window in your brain between the main thread of consciousness and everything else. He says “Oi, you might want to hear this” , backs the tape up a bit and replays it.

So he does that and my mind wanders back from the girl, and the seagulls, and how it is that there’s so much dust in the air that you can see the sunbeams, and the little guy rolls tape.

And I realise that in the last few seconds that Mr Big Cheese Departmental Manager has been standing up in this Aldeburgh hotel and telling the whole department that what he would really like to have is Financial Independence.

That’s what made me sit up and listen. Here was a bloke in his late forties, on a wedge somewhere north of 35 grand at the time. The Bank of England tells me that is £57,000 in today’s money. I was a lowly pup on less than half that at the time, and I was staggered. How on earth can this guy not feel financially independent when he’s on twice as much money, what the heck is up with that?

I was happy in my job at the time and so I didn’t understand a) what financial independence was and b) why you would want to have it. The difference between debt and deficit was not clear to me.

Fast forward almost a couple of decades to April 2009 and I have the pleasure of hearing a sociopathic manager not give a damn about some traumatic elements that had happened to me in the last year, admittedly outside work, harping on that I was in an area where my skills didn’t fit.

There was a different area at work where there were customers and work for those skills, but due to ‘headcount limitations’ he needed bodies. So he said I had to retrain for some Cisco crap which I could see plain as the light of day was going to be outsourced to India in the next couple of years, and I thought to myself  “I am pig-sick of listening to jumped-up twits like you wittering on about your damned objectives.  I don’t like the cut of your jib, mate, and I can see where this is going. What’s good for you, buddy, ain’t looking so good for me, and it bores me senseless, too.”

I mean, it’s not hard, guys. This is network plumbing. Network configuration is easily remoteable, shifting data from one place to another is what networking equipment does for a living. And there are shedloads of guys in Bangalore that are reasonably bright, reasonably young and are prepared to work for a third of what I am prepared to work for. As a shareholder I happened to know that the Firm had just taken a big stake in an Indian BPO/IT company. So why exactly should I retrain to jump into this bear trap? Obviously I know enough networking to get stuff going as basic professional competence, but memorising tedious Cisco-speak to get a CCIE only to be hoofed in a couple of years (ie now) wasn’t where I saw success lying.

In that interaction I understood what the meaning of financial independence was, and like Proust’s madeleines I recalled Mr Winning Edge and the Big Cheese stating he wanted financial independence. Because I didn’t have financial independence I needed to work to keep a roof over my head. I had to act all nice to Mr Sociopathic Line Manager and smile as he was giving me the BS that this was all good for my career development (ie his objectives), as opposed to what I would do to a double glazing salesman trying to sell me BS – ie tell him to go forth and multiply.

I’ve just been back to Mr Winning Edge’s website and he is still harping on about the same things

  1. Do you feel that events and other people around you control your life?
  2. Do you struggle to find the motivation and passion you think you should have?
  3. Do you find yourself a victim of your own emotional states?
  4. Do you have a clear image of where your life is going and what you want from it?
  5. Do you feel fulfilled in your career and do you feel you are achieving everything you can?

Now a lot of this is in danger of being Calvinist cobblers, inasmuch as the aim of life is to have a good time and have fun, not get trapped in Max Weber’s Iron Cage of work. I was okay with all of those five as the young pup, but as I listened nearly 20 years later to the twerp explaining to me that I had the wrong skills some of those answers didn’t look good, a bit more like

  1. Yes, I have to listen to sociopathic managers like you drivel on trying to maximize your performance at the cost of shafting me
  2. Yes, see 1 above
  3. Perhaps yes, there isn’t so much I would like to see now as your smug face missing a few teeth…
  4. Yup, as far away from here as is practicable.
  5. No, it’s tedious when I am being told to throw away what I know so I can be outsourced. I wasn’t born yesterday, mate.

Not a good situation. At least I’ve managed to get this twerp out of my life, more by luck than judgement. When you have an experience like that, you have two choices. You can either surrender and suck it up, or you can examine what you need to do to kill the beast.

So I rolled up my sleeves, immediately took out a Cash ISA in March 09 for about three and a half grand, and canned all discretionary consumer spending. In April 09 I topped up that cash ISA to seven and a bit grand, and figured after three months of saving I was done with emergency fund requirements, it was time to start buying financial independence. For various reasons the earliest it makes sense for me to draw my pension is 2015, which is also about the latest it makes sense as otherwise the Government will start stealing more and more of it as tax (pensions are taxed as income in the UK). Although I’d had share ISAs before, the traumatic experience led to all that being liquidated, fortunately before the credit crunch, so it was time to start again.

At the same time it was time to stop the Government stealing so much of my income in tax so pumping up my pension AVCs gets rid of my 40% tax liability and then some. All enabled by locking down spending. Freedom from tossers telling you what to do comes at a price. I haven’t had a holiday away since 2008 and started to attack my energy consumption and any other steady costs – that means cold turkey on consumerism, charitable spending, the lot. I have become slightly less hard-line as time went by and reinstated a couple of the latter items after examining my values, but generally the hatches are battened down.

Financial independence is a funny old thing, and it appears to have crept up on me, silently, without giving me a chance to break out the champagne. I use Quicken 98 to manage my finances, and observed recently that if I divide my total cash savings by four I have more than my yearly essential running costs.

My shares ISA don’t help that much, because I can only buy an income of about £500 a year. That’s  assuming a yield of 5% on about £10200 invested a year, and I only have a year and a half because 2009 has half the ISA allocation to cash, and 2011’s year hasn’t started yet.

Now it is a meagre form of financial independence – because I would have to run with everything locked down until 2015. That means living like ERE, which, although I agree with his sentiment

Success is having everything you need and doing everything you want. It is not doing everything you need to have everything you want.

I find it just too spartan for my tastes. I am also older than Jacob and a damn sight less fit, and aware that although I can easily chop firewood now that won’t last 30,40 years into the future. So the financial independence I have now is of a paltry and meagre kind, though I will be significantly better off from 2015. So there are good reasons to carry on working, while accepting I may fall into the one more year before comfort fallacy:

  1. I have at least one possible reasonably expensive project I want to start when retired for which I’d like to save my part of the money ahead
  2. The advance guard of Peak Oil seems to be rapping at the door. An awful lot of things will get a lot dearer, and there will be enormous changes to the economy if indeed it survives intact. My financial investments may be rendered down to toilet paper so relying on those may be unwise until the smoke clears a bit…

The original plan was to win freedom in three years time, so I have a year to go, and some other conditions that make it better in a year and a half (Sept 2012 not April 2012). There is something gratifying in passing this milestone a little bit early, as a result of being able to reduce essential spending by more than I had estimated.

Oh and before anybody tries to bite me for being a lazy b*d and being a load on society, note that anybody with capital of more than £16,000 is automatically debarred from claiming any Government benefits until they reach 66 (currently in my case). In saving and discharging my mortgage I took the decision (knowingly ahead, FWIW) to cut myself off from the support of the government for my income. So I’m not living off your taxes, bud 🙂

Chevreau's Findependence DayAs for the term Findependence, I pinched it from John Chevreau’s Findependence Day. I’ve never read it, but the summary as he was hawking the book inspired me as I made the call whether to suck it up or take the fight to the enemy in 2009. You can read the first chapter here. It’s not that applicable to be as I’d need to lose a few birthdays to start from where his characters start, but I’ve never had some of their problems either 🙂



the Energy Conundrum

Seems appropriate to tackle this one at the moment, when the nut-case Gaddafi appears to be bashing seven bells out of his people, the energy situation could take a turn for the worse.

It’s not so much the uncertainty over the Arab world, which supplies most of the oil used worldwide, though not as much as it used to. It’s the fact that we’ve probably all got to have to start getting used to using a lot less of it. The uncertainty in the Arab world may bring this on sooner, but only by a few years.

The trouble is that we’ve been mining the power of ancient sunlight for many years now, and its let us get ahead of ourselves a bit. It’s also come in a damned convenient form, which with a bit of refinement and chemical wizardry enables us to get a very compact store of energy.

For a lot of energy applications the compact storage doesn’t matter – I’m not so concerned if my electricity comes from great hulking lumps of coal or from tiny amounts of nuclear fuel. But when it comes to fuelling my car, I have got awfully used to being able to load enough fuel good for about 400 miles in about five minutes.

In some ways even if we didn’t mine oil we’d have to invent it – it’s a really convenient store of energy, and indeed you can make oil from wood. So we can cancel all that hoo-hah about peak oil happening in 2009 then, and kick back and enjoy the ride, and another few hundred years of continuous growth?

Not so fast. There probably is a place for synthetic oil even if we don’t get it from the ground, because of a hundred years of experience in handling it in transportation applications. Although in Hollywood movies car crashes result in stupendous fireballs, we have got good enough at designing fuel storage that it doesn’t happen that way so often.

Obviously we may want to use electricity in future, and there is an awful lot ot be said for electrically powered traction in land vehicles – you get to lose the need to gear-shift to match the load to the narrow power band of an internal combustion engine. However, storing electricity is still a right mess, and high energy density batteries tend to use exotic materials, compared to the low-tech of a petrol tank.

People often cite human ingenuity as being ready to solve all our energy problems, so let’s assume we have decent, safe compact energy storage, even when it is no longer economically viable to mine oil to use as an energy source. We might still use it as a feedstock for plastics etc, but say that the cost of oil per unit energy rises above the value of the industrial output it can facilitate.

The trouble with human ingenuity it that it has no answer for the fundamental question

where is the energy going to come from?

and that is a real downer. Ingenuity will never find a solution to the First law of Thermodynamics. The last time humanity lived within the scope of the energy it could sustainably harvest from the sun was about 1900. Okay, so we can probably catch a hell of a lot more than they did then, but as David MacKay analysed in Sustainable Energy Without the Hot Air renewables just ain’t gonna cut it for the UK, leastways not if we want to eat, or pretty much want to see any of this green and pleasant land rather than covering it with solar panels and industrial clobber.

One area we really could get to use some of our much vaunted human ingenuity is to apply ourselves to wasting less energy. That divdes into two areas – cutting down frivolity and improving efficiency. There isn’t any real excuse for air travel city breaks and domestic air conditioning (in the UK) and the sooner that sort of thing is priced out of the reach of the average Brit the better in my view, it’s the market doing the job it’s designed to do, not a revolting attack on the common man as it is sometimes portrayed. You’re entitled to air, not air travel…

According to David MacKay, the average annual energy usage of someone in the UK is 125kWh/d, broken up into 40kWh/d heating, 40kWh/d transport and 18kWh/d electricity consumption, with the rest being lost in transmission. I assume he’s counting the usage by industry, otherwise we are wasteful indeed in the UK – my personal usage is 15/13/2 for comparison.

Apart from air travel,the whole work/commuting/house price mess is susceptible to reductions. At the moment cheap energy/transport is distorting our economy and  living patterns, concentrating them and leading us to commute long distances. In an energy challenged world we just won’t be able to do that, and hopefully the requirement to produce bulk consumables (food, building materials etc) closer to the point of use will spread things out a bit more.

I haven’t really come to a view yet on how an energy challenged world will change the balance between capital and labour. In today’s world, capital has used cheap energy to drive te cost of labour down, but this has been facilitated by better communications. We will probably retain most of the better communications, but we may end up focusing more on the basics and essentials of life.

I also haven’t taken a view on the effect of an energy crunch on human population because I haven’t got any way of getting my head round the data. It will probably range somewhere between the living standards of the 1960s in the West and the sort of thing dieoff.org is all about. It’ll probably be different from life today, and curiously enough I think that some of that difference may not necessarily be a bad thing.