Karen from Help Me To Save organised the first meet-up of UK personal finance bloggers in Leeds this weekend. I went along and learned a lot about the UK personal finance scene, about blogging, and Leeds and its student population, since it was Freshers week and lots of lovely people were getting thoroughly ratarsed, in a good humoured way 🙂
The decision to go was made a lot easier because Karen awarded me a prize of a free hotel stay in Leeds for being runner-up in the competition with this 5 tips to retire early post. and DW was up for a visit to the Harrogate Turkish Baths so we could both get something out of driving up north.
When you’ve been doing something for a while it is a good idea to take some time to orient yourself, where you’re going, where you have come from and how the landscape has changed. it seemed a good time to take a look at what was happening in the world of UK personal finance blogging.
infer the general from the particular…
I never intended to start a personal finance blog, starting this as a narrative of my journey to early retirement, but personal finance was a means to the end. One of the discoveries was that finance is not enough – it is living intentionally by your own lights and values that matters just as much. So far, this blog is the narrative of my particular path across the minefield. To be more useful I need to distil the principles and techniques that I used, in order to make things more user-friendly. Although you shouldn’t normally infer the general from the particular, I plotted my route from the general principles. Sharing some of those principles might give someone some hope at a low-water mark, that with a lot of effort they could switch and reroute their path. I would be misleading them if I said retiring early is easy.
Early retirement involves different tradeoffs from ERE or regular retirement
Early retirement before you are 40 is all about income diversity, savings from post-tax income as well as ruthlessly controlling living costs. Regular retirement from 65/67 is all about savings from pre-tax income for most people, as well as Government assistance. Early retirement between 50 and 60 is a mix of pre and post-tax savings because of the regulatory issue of not having access to a pension before 55, as well as having longer to live off your savings.
Frugality – Fight the Fire, not the Flames of consumerism
Some topics covered gave me a double-take – ‘bloggers and brands working together’. Uh?. Initially I felt that I don’t fit in there at all, since in my view an awful lot of what is written in personal finance, particularly on the frugality aspect of things, is attacking the flames not the fire. If you are going to put out a fire with a fire extinguisher, you have to aim it at the base of the fire, where the trouble starts. In personal finance, that trouble starts as soon as you pay for anything. If you have ever tried to use an extinguisher under pressure of a real fire, you will know that’s hard to do – the temptation to aim at the flames that are licking up at you is almost irresistible, because dammit, that’s the bit you see and is nearest! So it is with frugality, we aim at the cost, not the cause.
There’s no point is saving 10% at Tesco when you shouldn’t be getting that at Tesco at all [ref]I hold Tesco shares, so please don’t all do this at once ;)[/ref], you should be growing it or getting it from a local store servicing a group of people who still know how to cook from scratch.There’s little point in getting cashback off a new TV when the question you should be asking yourself is do you need that TV new? Do you need it at all, what’s wrong with secondhand? In general, I take the line ‘if in doubt cut it out’
Many personal finance bloggers seem to buy an awful lot more Stuff than I do, so they can recommend places to get it cheaper from personal experience. Something else I realised from the Write on Finance Blog-up was that I am older than most PF bloggers, so this stands to reason. If I look at my spending, it has less Stuff and more experiences, this shift was dramatic from 2009 onwards.
I once read that there is no point in brands chasing people over 40, because they have made most of their decisions on brands and are set in their ways.
- Recall of more ‘creative’ advertising is inversely related to their socio-economic group.
- As people get older they get more cynical and harder to impress – the ability of ads to create a positive reaction declines with age, in particular more ‘creative’ advertising.
source: AQR The 50+ market: bother or wither
When you combine this with someone who has deliberately shifted the focus to trying to make things and experiences rather than buy or hire them in and to focus to nature and reading rather than buying I could see there’s going to be little connection with brands.
However, my thinking was narrow. Two of the brands I did favour, and not just because the sponsored my hotel stay at Leeds[ref]for the record I’ve mentioned them here by choice as a hat tip – in no way was this a condition.[/ref]. Moneysupermarket served me well for single trip travel insurance to Carnac. They recently bought out Martin Lewis’s moneysavingexpert site. Although once again Martin seems to expect us to buy far too much Stuff the forums have been a mine of information. There apparently infographics which would help explain the early retirement issues but I’d damned if I can find them at the moment. Things like that are the devil’s own job to code and test.
ING’s Ezonomics gives a different perspective from both the PF blogosphere and the newspaper financial sites. Plus I learned from Ezonomics’ Ian Bright that while I had to raise about 20% deposit on my first house in 1989, the way I did it would be considered financial fraud in today’s world. I borrowed half the deposit on interest-free balance transfer on an MBNA credit card, apparently this sort of thing is frowned on these days. Everybody got their money back on or ahead of time; I paid that credit card back over the first year, getting the loan interest free, and answered any forms truthfully, they simply didn’t ask about extra credit card debt in those days. This is more a source of off-the-wall bits and pieces and perspective. Part of the problem with trying to get a handle on personal finance is that the whole issue of finance and how the financial system works is in turmoil, because some of the underlying hidden assumptions have failed. Getting a chance to stand back and look at as many possible reasons for this is hard, because of the fog of war.
There seems to be a general sense of too much capital chasing too low-quality investment opportunities. Some of this is because the amount of demand in the economy has dropped, the failure of animal spirits. However, it could be due to peak oil challenging the assumptions of industrial capitalism, in particular its need for growth.
Perhaps lazy politicians buying easy votes with lifestyle giveaways rather than showing voters the fact that their desires outstrip their productive capacity. Maybe plutocrats are co-opting governments and increasingly taking for themselves the spoils of war
I found their article on how to plan for early retirement interesting. I managed a fail on a lot of the topics (1,2,4,6,10) My biggest wins were with 3, 5, 7 and 8. In particular I used windfalls to firstly pay down the mortgage and then pay up my AVC savings, and I didn’t buy too much house. In the years when people thought property only goes up, the mantra was to stretch yourself as much as possible for a bigger house, because it was a leveraged investment bought with other people’s money but the increase accrued to you. I had an experience of negative equity early in my house-owning career, so I only bought as much as I needed. There area lot of parasitic costs in owning a house bigger than you need, and these parasitic costs are likely to rise in future (energy being one of them – heating a big house is alot more expensive). More strategically, you don’t want to stick out too much from the crowd.
Nick Clegg is currently targeting homes of > £ 2 million for his wealth tax but this sort of thing tends to suffer from mission creep. The advantage of living in an average sized semidetached house is that by the time the forthcoming tax comes down to me, there will be an awful lot of other average house owners who will be kicking up a stink.
Adjust your seatbelts, adopt the brace position, ready for a stock-market crash
It’s very unusual that I find myself among the more optimistic of a bunch of people about finance, but the general feeling about the economy seemed to be that it’s doing down, the stock market in particular is overdue for a jolly good crash probably some time in the next four years. Counterintuitively, there’s something exhilarating about that though I don’t subscribe to the expectation. Last year’s summer flash crash did me some good, and it seems ambulance chasing is one of the few ways to improve things. This worked for me in 2009, and again in 2011. Against that, the feeling people seemed to have about the economy were that it was deep-seated and structurally damaged. I share some of that view but seem to come to different conclusions. One of the advantages of having been round the block a few times is that I have seen the sky fall in before. It isn’t always as unsurvivable as it looks.
I am not a Digital Native
The most practically useful part of the session was the litany of tyro errors I perpetrated because I was writing a narrative without looking at the setting. I don’t use social media that much, because heck, I didn’t grow up with it. I only tolerate Facebook despite its inherent evilness because if you don’t use SMS or a smartphone there are some people that only have a common presence there.
I’m not a digital native, far from it. However, other people seem to set store by social media, so facilitating its use seems to help some readers. If it doesn’t, well, it doesn’t cost much real-estate.
Other errors include not having a contact form and indeed no picture and real world name. I like being an ermine, but it’s not actually that hard to identify me. The initial reason for this was that I didn’t want to end up getting dooced over the three-year savings period. All this doesn’t really matter now, and I don’t really think I was hugely controversial. However, I’ve become used to a sinuous body and brilliant white fur…
Hasta La Vista Ad-Sense
I use Google Ad-Sense on a few other websites, and it works well for me there. Particularly for anything technical, it’s useful to readers because it picks up ads where you can buy the spare parts or tools I am talking about.
I personally use Ad-Block-Plus with Firefox. For the simple reason I don’t want to be marketed to, and I want simplicity on my screen. ABP eats adsense as a matter of course, so I never really appreciated that in terms of personal finance it seems to concentrate the evil. Now I personally think if you take out a payday loan you’d pretty much got it coming to you, and while I’m not a dedicated follower of Ayn Rand I do think personal responsibility and agency are important. And it’s inescapable that in on this website Adsense doesn’t square with my values because it concentrates services targeted at losers. I am happy to report that you, dear readers, are clearly not losers because Ad-sense doesn’t make that much on here (presumably it does sometimes throw up useful ads). So hasta la vista Adsense – if it doesn’t square with my values it can go and spin.
Curious that going to a conference which has at its heart a focus on monetizing your blog cause me to de-monetise mine, go figure as our US friends say 😉
Some new reads
I admire Ash’s from Sterling Effort’s chutzpah in packing in his job. I have some 30 years on him. I felt fine about my job for the first 20 years, but I recognised his feelings in me efter 2006. He’s got more energy than I, so I took three eyars about it, but then I don’t have the courage to strike out into the unknown with £50k behind me 😉
Miss Thrifty gave an engaging talk, although I am not sure I am the same wavelength. Fabulous writing style though, she develops the story and narrative well. Guess that shows the value of experience as a press journalist! However, if I ever get to the stage where a 10% voucher on Cath Kidston looks attractive to me I need to step carefully and ask myself what happened to the principle of trying to avoid shops, and indeed favouring secondhand…
Moneysavingprinciple’s ebullient Maria underscored the value of being opinionated. It’s one of the great things about blogging. Being opinionated is frowned at in a work environment – indeed modern management seems to prioritize the pliant at the expense of mavericks. It lends colour to your writing. Her post Money for all seasons picks up on how we just don’t seem to design our financial lives, but firefight the money one season at a time. No wonder we often don’t end up with the results we want, imagine trying to grow crops in such a scattergun way.
Maria voiced a usually unspoken observation that usually dares not say its name. I find myself mainly reading PF blogs written by guys, because it is investment and to some extent ways of making money that draw me. The lady writers tend to have a strong bias towards the frugality axis. Don’t shoot me, I’m just the reporter here 😉 Take look at MoneySaving Challenge’s UK taxonomy where I saw a similar thing.
All in all a thank-you to Karen from helpmetosave for organising it all and I’m chuffed to be introduced to some more great sites. As far as monetisation goes I’ve gone backwards, though the ideas are applicable to other sites I operate. I probably just don’t consume enough Stuff to be able to give personal frugal recommendations, perhaps I have achieved the Zen of frugality without noticing. As Thoreau said
A man is rich in proportion to the number of things he can afford to let alone.