Mrs Ermine makes a rare appearance here on Simple Living in Somerset as her normally smooth white fur was ruffled by news of national salad shortages.
The Ermine Household is far from self-sufficient, unlike back in the day when this blog was Simple Living in Suffolk and I ran The Oak Tree Low Carbon Farm. Despite this, old habits die hard and we have a large vegetable garden and I forage for wild greens on a regular basis.
So these days supermarket visits are a regular event, and wandering round Tescos last week this caught my eye.
An old friend lives in an area of Spain which is well known for horticulture, including for export to the UK, so I checked in with him. Our man in Murcia reported that there are no shortages there. Of course, they may ensure local supply by slowing exports, but it did make me wonder whether the difficulties of exporting into the UK these days might not be a factor? On the BBC Radio 4 News yesterday evening it was all put down to weather conditions, but this morning’s Guardian asked the same question, “Some suppliers said potential bureaucratic hurdles meant the UK was not the first choice for hard-pressed European producers, although others said leaving the EU was not a factor in the current supply issues.”
Regardless of all that, IMHO we’re putting ourselves in a very vulnerable situation (as a nation) by being so very reliant on imports of fruit and veg which are totally out of season here, and on increasingly expensive heated domestic greenhouse production. I honestly don’t know what the policy answer to all this is. If I was the one making the decisions I’d make it a priority to have a long chat with Professor Tim Lang https://foodresearch.org.uk/publications/horticulture-in-the-uk/ before doing anything.
On a household level growing your own veg is time consuming, many people don’t have access to a garden big enough to make a difference, and it may simply not appeal… if any of these apply to you then please feel free to disregard this post and wait for the next instalment here from Mr Ermine (though he adds a post script below).
But I wonder whether some FIRE folk might not be interested to learn how Ermine Towers is weathering the current salad shortage storm, which Radio 4 reports may continue for some weeks? Over the years I’ve found a decent veg garden to be great way to guarantee a supply of really good quality, utterly fresh seasonal veg, as well as saving thousands of pounds – I once read an estimate that a well-managed allotment garden could save a few thousand a year. My allotment certainly helped me to keep my costs down early on in my career in engineering, before I ran the farm, and my times outdoors helped keep me more or less sane through it.
Right now we eat a mix of bought and home grown veg, and salads are a regular feature on the Ermine Towers menu, so the shortages simply don’t affect us at all. I wouldn’t dream of buying fresh tomatoes in February as we eat more or less seasonally, and I focus on crops we both like that require the least work for maximum yield. My ten years as a market gardener (once I’d escaped working for the man) gave me the opportunity to hone this to a fine art.
Now, in late February, I’m harvesting the last of the winter leeks along with cut-and-come-again cabbage (variety Wintergreen- I sow them in late August, overwinter them in pots outside, then plant them out around now, they last over 12 months and I will still be harvesting the ones sown in 2021 for a few more weeks, harvesting the flower shoots like sprouting broccoli before clearing the bed). A more recent addition is perennial Kale, my variety is Taunton Deane, so far it is very promising and productive. Perennial leeks are to be this year’s experiment. My sprouting broccoli isn’t doing terribly well this year after the very cold winter, there are always winners and losers every year.
Right now our salads are a mix of:
Home cooked lentils. I like the British grown green ones from Hodmedod’s – and just to prove I’m not getting a kickback, you’ll need to Google them 😉 I did meet the people who set it up ages ago and they were really inspiring, and it has been incredibly successful since then. Good for them.
A mix of seeds, again from Hodmedod’s.
One vegetable (ed: carrots) I buy organic as I am suspicious of any chemical that can bump off carrot fly. I can’t be bothered to grow them here, not least as we have clay soil which doesn’t suit them. I use a vegetable peeler to make strips of them, it is prettier.
Chopped red onion. Again, bought – they are cheap and colourful.
Home produced lacto fermented veg, currently a mix of last year’s home grown green tomatoes that weren’t going to ripen, last year’s surplus French and runner beans, and sauerkraut made from shop bought red and white cabbage. There is a lot of song and dance about how complicated it is to make home fermented veg – it isn’t. It is cheap and easy, I wouldn’t bother otherwise. It is also incredibly good for you. I store it in sealed jars in big plastic storage boxes buried in the garden to keep them cool.
Mixed home grown, and foraged, salad leaves. The ones from the garden right now include claytonia and red veined sorrel from the greenhouse, broad bean leaves, dandelions, & cleavers: the mix varies through the year. I find most shop bought salad leaves insipid and stale – I’m convinced that home grown and foraged greens contain considerably more nutrients than most shop bought salads.
Our salads are cheap, good for us, and Mr Ermine, while not a huge fan of salad, admits they do “taste of something” unlike those in (most) restaurants.
It does take effort to do all this, a few hours a week, but I enjoy it for the most part and regard it as a way to improve our health and quality of life without spending a fortune. Audiobooks transform the experience, when I first started gardening I used a Sony Walkman (remember those?!) to play books from the library. If you’re interested in these gardening ideas, please do bear in mind that the UK climate is quite specific and odd: our growing season is short and the light levels are quite low despite fairly mild temperatures thanks to the Gulf Stream. So what works here in the South West of England may not work elsewhere, even in the North of the UK… but it is all about experimentation and asking local gardeners what does work, then taking what they say with a pinch of salt, everyone has a strong opinion when it comes to gardening, and there is rarely a consensus. A bit like the situation surrounding Brexit, but that is another story.
Welcome to the Brexit, sir
We were indulging in some decadence on the south coast today, fish and chips with a glass of rose and a view over the English Channel.
Which meant I missed DPD’s attempt to deliver a secondhand camera lens. DPD only attempt one delivery, then deliver it three miles up the road, to a Sainsburys concession outlet. I wanted to get to play with the new toy. And take the chance to substantiate this scurrilous rumour that Blighty is running low on toms and veg.
Seems a fair cop. There’s a Lidl nearby, so it’s time to load up on beer, and have a reccy on the presence of green things
On the upside, they had beer.
As the friendly Dutchman said, welcome to the Brexit, sir. A smaller market will experience more variability in supply. It’s not impossible to imagine better solutions within Brexit, but it takes strategic thinking and money, which seem in short supply with the crew that Got Brexit Done. I’m not even of the view it will take Jake’s 50 years. What is does need, is grit, determination and some attention to detail. Let’s take a look back in time.
As a child in London over fifty years ago, I recall there being some market gardens in the city1, as well as around it. There were many more allotments then, and even in the working-class area of London, New Cross where I grew up, many houses had respectable gardens. My Dad used to grow onions in the garden, I’m sure he grew other things as well but it’s a long time ago. These terraced houses had alternating apple and pear trees, on the assumption neighbours would swap. We had an apple tree.
Observant fellows will note that was before Britain joined the Common Market in 1972, we should note that times were very different. Once a week ISTR I would go along with my mother dragging a shopping trolley the two miles to Lewisham , and she would buy veg at the market stalls that used to line Lewisham High Street. Google tells me there is again a Lewisham open market there. We did not have a car 2, although we would walk there sometimes we would get the No 21 bus back to New Cross if we had bought something like spuds. It took some doing to heft a loaded shopping trolley up onto the open platform of a routemaster double-decker, I think you could stow it in a cubbyhole under the stairs, next to the platform.
Much of this fruit and veg, though not things like oranges and bananas, was grown in Kent though some was grown in the city. People didn’t buy veg from supermarkets then, they were much smaller than now and a much smaller range, mainly focusing of dry goods and non-fresh stuff. Few people had freezers then – our fridge had one star, where at best you could keep ice-cream where the ice cube tray went, and even then it would start to lose the fight after a few hours.
We can’t replicate that world. Housing is very different. Jobs are very different. Families are very different. But we could probably find a better way to grow our food, and perhaps not be such punks as to demand strawberries and tomatoes in February. Working a little bit more with the grain of the seasons might reduce those energy bills farmers are grousing about. But until we apply ourselves to making a better fist of this we will have empty shelves more often.
The vast majority of veg was grown outside of London, and interchanged in the early hours of the morning at Covent Garden market. Kent used to be the Garden of England due to its proximity to the Great Wen and its southerly location with a warmer climate ↩
Although some readers may jump to the conclusion we were living under the railway arches poor not having a car, it wasn’t that unusual in the 1960s – it took until the 1970s for half of British households to own a car ↩
One of the likely issues we will have later this year due to coronavirus is a shortage of fresh produce. This is absolutely not the same as OMG WE ARE ALL GOING TO STARVE! For starters, a fair proportion of the population doesn’t eat fresh produce at all. In general, young males living in cities don’t, and the very existence of my older self is living proof that it doesn’t kill you. Indeed, the very existence of urban food deserts shows that you can live perfectly OK without fresh produce, though perhaps you shouldn’t do it for more than 10 years once you have reached 30, for your general health. so once again, I am saying things may not taste as good as normal by the Autumn. We are not going to starve by Autumn. There are just some lines you won’t find in the produce aisle that you usually do.
We should tip our hats to the fact that society has managed to keep the wheels running despite the lockdown in terms of the essentials. The Chinese managed it, the Italians have managed it, we are managing it, I hear you can even buy bogroll again 😉 This is not an existential challenge. But we are going to face shortages of fresh produce in the Autumn, and we import a lot from Spain, which is not having a great time of things. The price is likely to go up and the quality will be down.
But you can do something about it, particularly as you may have more time on your hands. Now (in the UK) is a good time to start. Last month would have been better, but you start where you find yourself.
Now I am the first to admit that this isn’t really my area of expertise. I am writing it because I am closer to an ordinary punter, but I have observed Mrs Ermine, for whom this has been a passion from childhood.
Hit the tasty and the exotic first, particularly if you don’t have a garden
We will be fine on staples I should imagine. There will be shortages of some basics, because we import more than half our food, and we featherbed our aristocracy to ruin our soil1 or play silly buggers on our hills. Tim Lang summarises the issues of how we got here, a combination of our early industrialisation and imperial past, we grow about half our food.
but if you turn some of those issues on their head, we will probably be OK, because we can probably pay more on the global market than poorer people. T’ain’t pretty, but it’s the way of the world. But you can fight back and make Autumn taste a little bit better, if that matters to you. If it doesn’t, then I am sure Nando’s and your local kebab shop can keep the show on the road. About a quarter of London’s food by value is eaten outside the home- there have been reports written before the current crisis promoting the kitchenless city. NYC has already got there in part2.
Probably the easiest win for the space-challenged are herbs – a little goes a long way, they are usually cut and come again, they don’t need huge amounts of water, you can use a window box. But they do generally want sun. They make things taste a lot better, and fresh always beats dried. You can grow these from seed, but for a window box get ’em from a supermarket, given garden centres aren’t open. Compost is a problem, some supermarkets carry it. It’s not essential, my younger self never realised you were meant to use compost. I used earth from the garden. Sure, things work better if you have compost, but use what you have to hand. The young Ermine was perhaps unwittingly channelling Masanobu Fukuoka’s natural way of farming ahead of time. There’s too much dogma in gardening. The will to life of most things is strong. If you want to optimise yields and germination rates, sure you have to work harder. But seed is cheap, in most cases JFDI and see what happens.
If you have a small space, then eschew staples. There’s no point in trying to grow a field of wheat in your back garden. Similarly a bag of Maris Piper or King Edward spuds is cheap. Don’t bother. If you are going to grow potatoes, grow fancy ones with a distinctive taste – something like Pink Firs. You can also grow potatoes in compost in containers on a patio.
Look at what’s expensive, and favour that. Favour the vertical over the low and spreading. We3 favour tomatoes, peppers, cucumbers, though we also do beans and lettuce. Grow from seed, it’s cheap and lets you succession sow so you don’t end up with more than you can use at any one time
The fog is getting some stick for the inconvenience, but as I wandered in the Suffolk countryside it struck me that it created a really fantastic quality to the late afternoon light. It made everything look really luminous and dreamy. Britain really is a beautiful place at times.
and so will you, unless you’re reading this on your smartphone while sleeping rough… I’m currently reading Ian Morris’ Why The West Rules for now and it struck me that in terms of lifestyle we live the life of former royalty. Take Queen Victoria, which whom Morris opens his book – despite being the richest person in the country at the height of Empire, she couldn’t do many of the things I can. There’s a chair in the drive with which I could be off and at the Scottish border by midnight, there are machines to do the washing for me and I can see and talk to anywhere in the world for a modest cost. Unlike even thirty years ago when I was at university, the accumulated knowledge of the world is largely at my fingertips – right here in the garden, I don’t even have to get up.
I live better than Queen Victoria, sitting in the garden out in the summer heat with a glass of iced coffee watching the birds sunning themselves near the bird-bath. I can get anywhere quicker than she could, indeed I am less than twenty-four hours away from any of the pink bits on the maps on her walls. I have libraries immeasurably richer than hers, and the state of medicine and health in Britain is much better too.
And sometimes it’s good to lift my eyes from what’s wrong about the world and tip a hat to what’s damn well right with it.
It’s soon coming up to two years since I checked out of the rat race, a good time to take stock and look at what I’ve learned. This is particularly long. I did think about breaking it over several posts, but what the hell, it is a long story. I’ve collected a few pointers to some things I’ve heard people being interested in over the years as a table of contents
First off, I am not using any of my retirement savings – my pension remains deferred along with my linked AVC savings.What I am using now to live off is saved cash, though I also have income from ISA savings but these are reinvested. If I were to draw it now, my pension is notably above my annual running costs.
Three things contributed to this –
getting the mortgage monkey off my back
Paying off my mortgage eliminated much of the static drain of housing from my finances.It was a long job paying down the debt over twenty years. It’s not always a wise thing to do for an early retiree – anybody who is retiring before they can access their pension savings may want to consider keeping their mortgage and saving into pension savings with the aim of paying off their mortgage with the pension commencement lump sum. I didn’t do that because I was reactive and fearful. It’s a mistake that’s fail-safe – I live off less at the moment but will have more later on. It so happens that I was able to save the maximum worth saving into my pension savings and pay down the mortgage, after which I tossed what would have gone into the mortgage into ISA savings because I also saved money by
shooting the consumerism monkey
Breaking the cycle of mindless consumerism has helped me no end. Initially I did it because I was desperate to win freedom from The Man and needed to save every pound I could. I’m not going to bullshit, the first six months are hard. I never borrowed to buy consumer crap, but I wasn’t above buying Stuff because I thought it would make me happy. Only after about a year did I come to the awful realisation that
Stuff very rarely makes me happy
Now the validity of this varies across one’s life-cycle. When starting out, and you have very little, of course Stuff makes you happy, from you first iPad/kettle/car/bed/chair whatever. It’s later on, particularly in the upgrade cycle where the wheels come off the whole spending money on Stuff thing. People started to realise this, so there are some classes of Stuff that are deliberately engineered to become worthless or hard to use over time – the way Apple manages IOS to depreciate their historic gear is a classic example. Other examples are cloud services. I am using a 10-year old copy of Quicken because it does what I want it to – the rental versions introduced after 2004 have become worthless in the meantime.
I say very rarely because some Stuff does make me happy. The key to achieving a decent balance with consumerism is to know why you are buying something, and to evaluate its likely impact on your life without the spurious trappings of advertising. One of the simple rules to help with that is to wait 7 days before buying it – the initial sugar rush of ‘this will change my life’ decays over a couple of days, leaving me with a clearer head.
Mr Money Mustache has an entertaining read on this topic, titled recovering from the Pack Rat years. I came to a very similar conclusion to him independently – all the way down to no longer having a broadcast-TV capable viewing system. The only area I disagree is that I have no smartphone, because a smartphone is an absolutely shit digital camera and equally crap audio recorder1, and it seems I am more demanding of these functions than usual. However, all my camera and recording gear was bought before 2007 – I am still the limitation there. In the event that my skills and creativity become honed to get better results out of better gear and I can turn that into profit I will consider it.
savouring the moment
It took a long time to realise this, and it wasn’t the result of any conscious decision. Perhaps it’s the result of having more time – when I was working I was always chasing after being somewhere else, in space or in time. I don’t know why, maybe it’s the ‘anywhere but here’ of a drone, I spent too much life energy wanting what I didn’t have rather than wanting what I did have. I need time to appreciate what I do have, and maybe it was time I didn’t have before I retired.
There’s a corollary to this, which is
become an opportunist as a retiree. It’s cheaper, and more fun
Many of the costs associated with life are to do with controlling your world. As a wage-slave you must control your world to fit in with the strictures of your job. You have to make sure you are somewhere for specific times. Even if you are a freelancer you have to work a certain amount of the time unless you are financially independent. You have to arrange a lot of things to be just so, you have to take your holidays within so many days, often people have to match their availability with the requirements of other people’s jobs and childcare etc.
All of this takes optionality out of your life so you need to control your non-work life to fit in, and control costs money. If you have to be at work you have to pay someone to look after your children in the day. You have to pay commuting costs. And so on.
It takes a long time to realise that there are other ways of living, that are far less structured if you let go of the inner control freak that had to fit in with work. Roll with opportunities.
A lot of early retirement is about reducing living costs
As we go through the many decades of a working life, we tend to see some lifestyle creep. We are social animals, we spend money on things that other people do because no man is an island, entire of itself. Others may spend money on things that really matter to them, and often we end up apeing these or hankering after stuff because, well, if it’s valued by others it must be good.
In the first couple of decades of working this social pressure is stronger – as time goes by there are more differences in the way people live their lives and this pressure is less. In my twenties most of my peers lived similar lives, often flatsharing or in digs. As time went on they paired up, then many had kids. The differences in living styles diverged more, and these divergences add up, reducing the social pressure. I should add that being childfree means I don’t know about child-related social pressure, though I suspect this is high. The way people work themselves up about schools indicates this child-related peer pressure is of a quite stupendous nature!
The key to early retirement is to look at how you are living and to ask yourself how much of this spending matters to me or people dear to me, how much does it enhance my quality of life? Then stick with that, and start to eliminate the rest, and simplify things. Complexity begets cost and dependencies. And take a wider systems approach to your living – how far you are living from work, how big a house you have.
For instance I took the shaft from housing early on, so I am in a lower grade of housing than most of my ex-colleagues. There is an indirect upside to that – my house is smaller than theirs, easier to heat, less to decorate and furnish, and less council tax to pay. Year on year on year, and that adds up over time. Some of this shows in the result – I discharged my mortgage in 20 years despite buying at a stupid time, taking a hit on a relationship breakup and buying with an endowment. My ex-colleagues often still had big mortgages on their big houses as they entered their 50s. Obviously I don’t get to spread myself out over such a wide area. Unlike them, housing is not the largest capital ‘asset’ I have.
A lot of consumer complexity I seem to have avoided by a combination of luck and the fact there were fewer temptations in my formative years. ERE has a nice wiki article on this for people who want to design their lifestyle by intent rather than by happenstance. Like starting to save for retirement, ideally you try and design your life consciously by the end of your twenties, because a lot of big lifestyle costs start to get baked in to your life after that.
You can reduce living costs further by ignoring differences that don’t really matter to you. MMM has a great rant on Cure Yourself of Tiny details Exaggeration Syndrome which saves me the bother of explaining that. It often staggers me, when talking to people who in theory would like to retire early how much they cling to things like being able to run new cars every three years and regular high-cost things like the fast and furious skiing holidays of the cubicle slave. As for golf – it seems designed to be the nemesis of economy, with high course fees, club fees and equipment costs plus the depredations of the 19th hole.
Now if they have sat back and asked themselves does this really matter to them and the answer is yes, then of course that’s intentional living and to be saluted. But often if you scratch a little harder it is because they fear the loss of status. The obvious question is who are they living for, because the Joneses don’t really give a shit. But to ask it would be unkind – people can only shift their world-view at a certain speed, and it’s always better if that shift comes from within.
Retirement is a different phase of life. Making it like work without the work is not the only choice you can make.
Retirement is a different phase of life. The tradeoffs are dramatically different. If you want your retired life to look exactly like your working life but without the work, then fine, you gotta do what you gotta do, generally working to 65. You will be able to broadly maintain the same spending, provided you have paid down your house. But you owe it to yourself to at least challenge the assumption and examine alternatives. Many people at The Firm have this pathology – they’ve been there so long they struggle to imagine anything other than the same life they have, but without the work. Some indeed fear that subtracting work will subtract meaning from their lives. These types of people should never stop work – because Nature abhors a vacuum. It goes along with the general thread that flexibility and openness to new ways of doing things is important to retiring early successfully.
Not having a regular income is scary
Two years ago I went from being a wage-slave with a steady income to being some odd combination of drawdown retiree and investor, I’m not even an honest pensioner because I’m not drawing a pension. I am doing what any early (pre-55) retiree has to do for some of the time. It’s impossible to overstate how different that feels to having a regular income. People who have been self-employed or otherwise handle a variable income will find that transition easier, but I find it scary.
The problem is that the job of squaring the financial circle is easy to define to a wage-slave. Keep at it, don’t do anything to lose your job without lining up another, and don’t spend more than you earn, with some notable exceptions (housing and education). Summed up pithily by the distillation of my parents’ wisdom
Don’t spend more than you earn, son
The definition is easy, though the implementation isn’t. What you earn in a year is a number, written on your P60, and what you spend is a number too, in my case available from Quicken. Take one from the other, and Wilkins Micawber is your man
So the Ermine checks in his computer, phone and staff card and all of a sudden the inflow stops. Now I got a year’s salary as redundancy, so the intuitive answer to ‘how long to go before I have to draw my pension’ is one year, but all of a sudden everything gets more complex.
For starters I had to toss a significant part of the redundancy into my pension AVCs to avoid paying tax on it. I also want to fill an ISA’s worth every year, so doing that for a couple of years means all of a sudden I am left with less than the minimum full-time wage for a couple of years. And at the moment I don’t use any of the income on my savings; the reason for that is that at the moment I cannot turn a useful return on cash savings so it makes sense to run my cash reserves down and reinvest the dividends from the ISA.
Many aspects of finances are easier for a wage slave, with their steady flow of income. For instance I have to hold much higher cash reserves against the unexpected – fortunately this is held with NS&I so at least it doesn’t particularly depreciate over time. If you have a regular income you don’t need to do that, so simply need enough slack in the system to be able to cut back if something untoward happens like the roof leaking. You simply cut down your partying until you’ve paid the unexpected bills down. I have to hold the cash to address these hits up front.
But the hardest part of having no annual income is that it’s hard to qualify what a sustainable annual spend would be. If you ask Wilkins Micawber he’ll shoot back
expenditure > income, result misery, wrong way, do not enter, turn back now, don’t go there bud
I don’t have any of my retirement capital available to me, as I am deferring my pension to raise its annual value once paid. So my AVC savings are also quarantined by that. In one limiting case I am okay now – if I drew my pension now my spending is lower than the net amount, and that also excludes any value from my AVCs or existing share portfolio. The job of bridging this gap has also been made harder by some of the opportunities that the Chancellor has made – the greater flexibility of taking a DC pension pretty much mandates saving about a personal allowance-worth of DC pension because HMRC toss a fifth of it in the pot and the new increased ISA allowance needs filling up.
Fortunately I have a shedload of The Firm’s shares purchased under Sharesave and Share Incentive Programme, all unwrapped. These can get sold over time and the proceeds bulk up the ISA. Once I get hold of the pension the I will have the AVC funds to shove into ISA savings over a few years. In the long run my ISA savings will be about half the capital value behind my pension which is RPI linked to a point. The ISAs job is to fight inflation in the medium to long term.
what it feels like to live off ‘drawdown’
So I’m easy with the long term strategy. But obviously, I am running down the cash at the moment. And that’s not a good feeling. I fought against the depreciation of my net worth intially after I retired, before coming to the conclusion that wasn’t possible. At the moment it turns out that it was possible – this is a zero based networth chart, excluding the value of my house and any pension associated savings.
It looks okay, but I’d also have to deflate this by inflation, two years of inflation roughly knocks 10% off the real value. I don’t have an excel version of this so I used the shear function in Photoshop to drop the right hand side by about 10%2
What is, however, happening is that the balance is shifting from cash to equities, which looks in Quicken like a madcap 20-something’s asset allocation. Although the equity allocation is getting on for three-quarters equities, this also explains the strange image of networth increasing while drawing down some of the capital. I need to remember the good men in white coats (hat tip to Monevator) who rock up just in the nick of time with their ‘this too will pass’ ring and remind me that this is illusory.
Observe the increase, and increasing volatility with time. That, my friend, is what the stock market does to you. In exchange for a little bit of real return, it gives you a hellaciously rough ride with a massive noise signal to bamboozle any attempt at rational thought. Remember there isn’t any income in here3, there is some spending, and the equity ratio is increasing. And stock markets have been on a tear for the last few years, only last year people were asking ‘I don’t know what the ‘king hell we’re doing up here mate‘. Twice…
Three-quarters of my current asset allocation is in equities, and in a bad year, equities can fall by 50%. In a different world it could look like this
This sort of roller-coaster ride is what awaits anyone with a DC pension who does not annuitise any part of their capital on retirement or shift to some safer asset class. In particular, the good people who the Pensions Minister exhorted to enter drawdown rather than go buy a Lamborghini are going to be facing this. Yes, they don’t end up getting a fixed crap income of 5% of their capital, non RPI linked. But they have to accept that bronco ride. And every time an IFA asks Joe Public about his risk profile the answer comes back that he hates risk. I am in the stratospheric nutcase end of the risk tolerance (because my risk tolerance is balanced by the bond-like nature of a final salary pension)
And I don’t like it. Am I drawing down at a sustainable rate? The 4% SWR is an article of faith, and that faith is easy to come by at the moment, as the good doc said. It was probably harder to find in 2009. If it mattered greatly, I’d have to ‘fess up that I have no idea to that sustainable question. However, since I have a pension that is greater than my rate of spend waiting, plus an AVC fund that is in cash and larger than my ISA I will probably get away with it.
The takeaway is that living off a large equity based capital allocation feels like a very rough ride indeed, and let’s face it, I’ve only have the upside of that ride. For someone who has drawn a steady salary for 30 years, that is not a peaceful feeling. I have other options, and perhaps I am more fearful than others, but it would totally creep me out to rely on that4. I don’t know what the answer to that is, but I am happy to say I don’t need to find out, because I will get some of that steady income back.
I am probably underspending
It’s not a common observation in the PF universe, but I am probably running below my financial capacity. I had expected to reach the zero cash line between a year and a year and a half out (that would have been end of 2013), and to be drawing my pension already or imminently. I am six months into extra time. The reason for the underspending is because I extrapolated from spending at work, and it was also cluttered a little bit by spending on establishing a business.
Now if you’re going to err in retirement, err on the underspending side. However, da yoof is not totally wrong with YOLO and at some stage I need to review this. Even after two years, I am still in the recovery phase from a pretty rough experience of the last couple of years of work. So this spending pattern fits my needs at the moment.
The extra win a 40% tax payer gets from pension saving is counterintuitively high, compared with the BRT win.
We all know the pack drill. When you save £100, you put it somewhere and you can’t spend that £100. Easy – that’s pretty much how your ISA works, and almost all non-pension saving. The deal with pensions and taxation is different – you save some amount x and you don’t earn £100 net. The net effect is the same – you have £100 a month less to spend on beer/chocolate/paying off your mortgage.
It’s very counterintuitive, but forego £100 of net income and you get to save £166 in a pension. That’s because the £100 has been taxed at 40%, ie your net £100 is 60% of the gross amount, so the taxman gives you back 40/60 ie 2/3 of the amount you have foregone. Everybody thinks oh it’s only 40%, but in truth of the amount you can forego it is 66% – for every £100 net you don’t earn, you save £166 in your pension, a 66% bump up compared to if you earn it and bung it in an ISA.
Compare that with the basic rate taxpayer – they forego £100 and it’s made up to £125. Okay, it’s still a 25% boost but it’s nowhere near the boost the HR taxpayer gets. It was a little bit better at The Firm because they used salary sacrifice, so the BRT payer gets 32% (20% tax and 12% NI) so for every £100 he doesn’t earn he gets £47 added, which is nearly twice as much.
I hit this hard, and I started investing in a Global:FTSE100 50:50 fund from March 2009 on, so I got a 20% uplift in my AVCs from the stock market and the depreciation of the pound. But even so, I look back at my AVC savings and wonder how the bloody hell did I manage to save a year and a half gross salary in pension AVCs in three years. And fill my ISA each year and save a third of a year’s gross from net savings into NS&I ILSCs. I still don’t really understand it, but that tax relief did a lot of the heavy lifting, and the stock market played its part too, in that lift from March 2009.
This is why old gits at the end of their working lives can karate-chop the much vaunted magic of compound interest and bust its ass. They’re more likely to be higher rate taxpayers, they have more chance of having paid down their mortgage and they are a hell of a lot closer to getting the win so they are much more motivated because of the effect of hyperbolic discounting – loads of wedge in five years is a damn sight more interesting than loads of wedge in four decades. I saved a quarter of the total value of my work pension in the last three years, which is roughly an eighth of my time there.
I retired early because I was stressed and became increasingly out of sync with the way work was being run. I am still recovering from that. It is only recently that I can reliably hear what is good in music, and there’s still a while to go before I will have recovered this to what I once had. In a myriad of small ways I am still reminded that I pushed my luck flying into the storm for three years, and indeed to carry on after I had been off sick. To a large extent the emotional centre shut down, and what was left was fearful; I retained most analytical capacity. Emotion gets a lot of flack in the PF world, and people draft long lists of ways it leads us astray. And yet it relates us to others of our kind, it gives us the hope to carry on against adversity.
Emotion is the chief source of all becoming-conscious. There can be no transforming of darkness into light and of apathy into movement without emotion.
Carl Jung Psychological Aspects of the Mother Archetype (1938)
The old boy had a point, try living with that function shattered – you attempt to strike lights and they sputter and flare out, never overcoming the steely greyness of undifferentiated days. The analytical capacity did refine my investing behaviour and this was easier with a spanner jammed into the works of some of the biases. But it’s no fun, because I would see how to do things but not why. Motivating yourself when you know how but not why is sheer effort of will, not inspiration.
On an anecdotal note, I vastly prefer less stress to the low level stress that is present in most modern life. The stress I feel now is the “original” stress of a boat about to crash. Not the continuous stress of not being able to meet deadline after deadline.
Because the world of work changed slowly, I did not realise the low-level stress increasing at work with the gamification of the workplace. That sort of continuous stress is bad because the response of increased heart rate and adrenaline has nowhere to go, it doesn’t help. Whereas when some stupid twat got pissed up at lunchtime last year and came round a corner fishtailing on my side of the road then yes, that is stressful when you see a dark Jag incoming at 12 o’clock. But it did some good, because it did the time-dilation thing and I was able to see what was happening, brake and pull way into the side, turning a head-on crash into a glancing blow. That is one of the correct uses of stress, because it did some good in improving clarity of thought and reactions for a short while where it matters.
ERE is much younger and fitter than I am, so if he noticed that it took a while to adapt then it isn’t surprising that the results of the work stress is still washing out of my system. I crossed the finish line exhausted and no reserve capacity. I didn’t expect to be still recovering two years on and to still have significantly impaired capabilities but it is better to roll with it than fight it. It’s also a warning call for all those ‘one more year to comfort‘ merchants. You will almost always be financially better off working for another year. But you may be running out of other resources that occasionally matter more. And everybody is running out of time, 24 hours in every day.
The two years since retiring has given me some space to see where the working world and I drifted apart. The obvious reason is a combination of the 2008/9 financial crisis and changes in the way The Firm was being run. The obvious reason is not always the whole reason.
I’ve avoided the vexatious issue of making money myself, largely because I don’t want to enter the world of wage-slavery and I have no desire to fill in an income tax return for lousy itty-bitty amounts. However I haven’t avoided directed action of the sort that sometimes goes under the title of work, I’ve taken these to add value to other people’s projects. And I look at them, and I realise that there was one big thing that I missed where I was diverging from the world of work at The Firm.
I am a generalist, and worse than that the sort that Firestarter identifies as both Renaissance Man and dilettante 🙂 This runs terribly against the way work is going, which is specialising, knowing more and more about less and less. This applies particularly to IT, which was the way The Firm was going.
As they drove their way down the value chain they became much more prescriptive in structures and methodology. As a research facility it was a very wide-ranging operation for much of my career but as this was moved to become an outsourcing jobbing shop it narrowed. Specialisation is an aspect of the IT contract world too, it would be unfair to blame The Firm purely for this. For illustration, as a generalist since retiring I have programmed in assembler, JAL, Python, Perl, PHP, C and VB. I code in whatever suits the application and the platform. Raspberry Pi? That’ll be Python then. Arduino – C, Pic microcontrollers? MPASM or JAL. The Firm was trying to make everybody code in Java, and only Java. I am dilettante in seven languages and not master of one 😉 In my last project for the London 2012 project I also didn’t focus in IT – CATV was from legacy electronics and system design. Indeed, at work the one thing I didn’t do much of was Java, that policy was instigated just before I got onto the 2012 Olympics project…
When I retired I had thought that if I were to sell time or skills for money it would be in the field of engineering. But it isn’t likely, because I am running against the tide with that generalisation.
After leaving work I built wooden shelters and fixed tractors, I’ve designed an irrigation system (the design part is being able to operate through winter, it’s not just going down to B&Q and buying up a load of hozelock connectors). I’ve produced and edited video. I have electronics design facilities, but this is at a fairly modest level. I have produced some IoT environmental sensors and the like. But only as part of a system design to do something else. This may point the way in future – don’t do stuff, do capabilities and services. I’m not going to be hidebound about it – a lot of the problem with Stuff is regulation; small fry can get away with a lot and if you get bigger you can afford the overhead. No small business became a big one by following all the rules…
Where I’ve actually made money, is photography and sound recording. I’ve managed to work a little bit harder than my ISA, though these guys will pay me in dollars so I have to wait until the exchange rate is better. Unfortunately this is impaired because the stress nearly wiped out any creativity I had.
But without this playing with fantasy no creative work has ever yet come to birth (Carl Jung, the psychology of individuation)
I actually see some of the recovery in the improved popularity and profitability of the photos I take…
The fact that I can tell the agency to pay me when I’m good and ready means I am safe from the Internet Retirement Police – I haven’t done that for the money and it forms no part of my financial planning. But even as a cold-turkey retiree I haven’t totally avoided the four-letter w word. But I didn’t seek it out, indeed the problem I have with work is the whole bad power play of it. Perhaps I will have to reconsider this and view that I have achieved manumission through financial independence as opposed to retiring. It’s not really catchy though, is it?
The thing that runs through these things is that there isn’t any single thread running through them, and if there is something running through them then it was only incidentally engineering, indeed much of it wasn’t even left-brain stuff.
I am probably unemployable now because of this hopeless sprawling generalisation, it’s just not what the modern workplace wants. The reason for this is the concentration of power to capital and the improved communications. Companies can concentrate the work to hyper-specialists, the distribute the results to the proletariat virtually cost-free. Look at the setup at Google. These will eventually become brains in a jar with multiple redundant high capacity optical fibre data connections. You ain’t seen nothin’ yet with Google Glass. Google employees can’t cook for themselves or do their own washing, which is why Mama Google sees to it to fix their household requirements. Free food, free laundry, free haircuts. free cars. If you want to see where white collar work is going, look at the leading edge – it’ll be most places in 10-20 years. Hyper specialisation has a dark side. I am nowhere near bright enough to work for Google. Nor are many of my fellow Britons. Specialisation is where it’s at, but it will need fewer and fewer people and require more and more of those it does need.
Generalists work well in a small scale – there are often opportunities to use knowledge across unrelated fields in small-company operations. They are more flexible, there isn’t a structure of existing practice to adapt, and they can get away with short-term fixes for temporary requirements as long as they trust their generalists of they have seen enough track record. But I have no desire to work full-time as a general fixer. The 21st century technical workplace is no place for a generalist Ermine, because of this culture shift towards specialisation and narrow but deep skillsets. But then that’s the whole point of becoming financially independent. I don’t have to give a damn.
The distinction between work and not work is peculiar to the financially dependent
because you’re financially dependent (usually on a job). So you have to do what The Man tells you, and that division is clear-cut and non-negotiable. Contractors and the self-employed soften this distinction a bit. It seems to easily end up with work taking over their life, however, because work is still not elective, it is when they work that is more elective than someone working for The Man. Not that they work.
Philip Greenspun posted an interesting article on early retirement way back in 2006. I used to read his site as photo.net just before the the turn of the Millennium, the empty dreams of a cubicle slave dreaming of making shitloads of money on the stock market from the dotcom boom and then making pin money shooting picture and travelling, those heady days when Momentum was King. And that’s when I really enjoyed work. Anyway, I came across his article, and the comments as he was seeking feedback on the article. Although I’m normally of the opinion comparisons are vexatious, part of the insight from the article does come from the differences and the similarities between two different journeys.
I’m nowhere near as rich as Greenspun and I earned less. There’s at least one order of magnitude in it, probably two, possibly more. This is not something that particularly bothers me, I don’t have the desire for flying. However, I can see it gives you more options in the US, where distances are much greater and people disperse over a wider area; Greenspuns college pals are more important to him (Even for couples/people with kids they get a little more important to people after most have gone through the baby/children tunnel of 30s to early 50s)
He is/was single and is about 10 years younger than me. He had to take special measures to address the social life issues that I just don’t have – he’s clearly given it some thought and does it well. He’s more outgoing that I am. In particular his angle on that being single has a very strong effect on where you choose to retire to have a decent chance of stimulating human interaction is quite an eye-opener. I didn’t appreciate there was this difference, but what he says makes sense. A single early retiree (~40) probably does need more money than someone who has a partner. However, since the single fellow probably doesn’t have kids he probably does have more money, so there’s some auto-compensation.
How much work does the average college student get done? Almost none. Yet the same person, injected into a corporate bureaucracy, becomes a reasonably effective worker. Why? Most people have terrible time management skills. This limitation is of no consequence in public school. The school tells you where to sit and what to do and when, at least for six hours per day. This limitation is of no consequence at most jobs. The employer tells the workers where to sit and what to do and when, at least for eight hours per day.
If you’re retired, however, nobody tells you how to organize your life. If you have goals that you’d like to accomplish and your time management skills are poor, you might end up disappointed in yourself.
Now an ermine isn’t an enormous fan of the self-help industry, though I’m happy to accept it helps a lot of people and occasionally indulge. There’s a very heavy thread of self-discipline and virtual Calvinism in the personal-finance world, but it is nothing to the apotheosis achieved by some of the American writers – Steve Pavlina is over 1000 times more effective than I could ever be, and it’s not like I disagree with the efficacy of what he says. But to me seems me as a joyless way of living – life needs dynamic contrast and empty spaces for reflection and understanding. I didn’t stop work to reproduce the problem again in a different place. Each to their own.
However, Greenspun has a point. I found it helpful to take the time out in the morning to centre and actually write down what I wanted to achieve that day. The idea is roughly pinched from a book The Artist’s Way at Work, which I bought way back as a cubicle slave looking for a way out. It didn’t work for me, I produced trash because I was trying to make money which shuts down the playful creative side. Presumably people who work in the creative arts don’t have this problem, or the fact they start off with a damn sight more talent makes up for it. It was in the box of to get rid of books until I read How to get Unstuck, and figured I should reread it from a point other than desperation.
That rough orientation is generally enough for me. though I have used the basic tools of project management for longer projects, such as the open source Gantt Project, and of course Excel has its place in the finance area. It’s not mandatory to leave all the useful tools untouched when you stop work.
Work, cold turkey, rentierism, aristocracy and the Ermine
I went cold turkey, or so I thought, because the word work became associated with a traumatic experience. This made the transition easier. And unwittingly, I overlooked some of the positive aspects of making stuff happen in the world for pecuniary reward, because it was associated with having to suck up to stupid crap. The two aren’t inherently linked, provided you don’t need the money. The money has some value – it is an estimation and recognition of exchanged worth.
And I’m left with a load of inconsistencies and conflicting attitudes because I have simply buried this subject and left it, so it is still linked with outdated psychological forms. To live intentionally I need to dig this out, untangle the knots and live my values.
The trouble is I have spent 30 years being motivated to work for money because Bad Shit would happen if I didn’t. That’s a terrible way to motivate anybody – it’s the Bad Shit that puts the slave into cubicle slave5
for a man is rich in proportion to the number of things which he can afford to let alone
Thoreau, Walden, delivering a message for the 1% that they will not hear
And now, curiously, I have the edge on a significant part of the 1% – who all earn far more than I did. But they spend more, whereas I am within spitting distance of becoming a rentier. Much of the secret, as Thoreau observed above, is to reduce spending. If that works for you, of course!
So the whole reason I worked for money has gone. The empty space still speaks – I cannot relate to some of the ways the retired ‘work’. I don’t volunteer. I don’t understand it, and at some level I find the concept demeaning, of working for nothing . Maybe I am just a bad person, maybe I will chill on that in time, though I doubt it. There’s still the echo of work being a four-letter word, and ending up in a situation where other people tell me what to do still reminds me of that fateful February day in 2009 in a one to one where I realised that the Ermine was out of luck, out of time and out of options but needed to suck it up for long enough to buy freedom. I have added value to other people’s projects without being paid, because of this
Still, it’s hard to suddenly turn off an educated brain.
What I really want to avoid is an ongoing commitment. It’s far more satisfying to start in the morning, get some tools together and wrangle something into a more useful form and then get out.
That favours Stuff and kind of runs counter to the Don’t. Do. Stuff argument, but most of the objections are lifted when other people have the problem of buying the Stuff and storing it, and all I have to do is show up sometime and turn it into a working system.
So there are loads of inconsistencies and conundrums in my approach to work. None of them are urgent, though resolving and drawing the sting from the psychological hangups is probably worth the investment of time. I want to live intentionally, and not shadowboxing the psychic wreckage of past injuries is part of that goal.
Grow – or begin to die within
You have more opportunity for self-development and individuation when you own your time, but you have to engage and work at it. Many people really hate that – they feel they are adults and have it all sorted, that was the whole point of the first 20 or 30 years of their life. Individuation involves being more reflective, writing about what you feel or even things like the Artist’s way journaling. There’s often not enough time to fit that sort of thing into a busy working life, so it easily gets put on hold. It takes time to unstick that.
Your vision will become clear only when you look into your heart … Who looks outside, dreams. Who looks inside, awakens.
I’d really like to say I had done well there, but progress is slower than I had expected. I have started, and of course the process of individuation does not have an explicit end target. Journey, not a destination etc. There’s no point in wasting too much time trying to describe this because it’s very different for different people. Just remember that
the day you stop growing is the day you start to die.
William S Burroughs, Junky
Observation shows that one of the big ways people go wrong when they retire is they stop growing, because most of their challenge was at work. Too much TV and too little curiosity kills the cat…
Luck plays a big part in the story
More than I had realised, and while it’s easy to point at the things that went wrong far more went right. I had rotten luck in two big areas at the beginning and at the end of my career – I bought a house at a terrible time, and I lost the last eight years of earnings by retiring early. I’ve had good luck in other areas – joining a final salary pension and getting nearly 24 years out of the design 30 in it is a large stroke of luck as is never losing a job since getting my first one6. And if I was going to bail out 8 years early, then being a higher-rate taxpayer and recognising the open goal of the stock market next to me and taking the opportunity was another piece of luck – if I started now my ISA and my AVC savings would both be a lot lower after five years, assuming we aren’t about to enter the mother of all bull markets 😉
The tl;dr version
Looking back after two years I have spent about half of what I expected, and largely got away with retiring early. I am still not drawing on my retirement savings. I have a decent measure of what running costs are in retirement, I am probably underspending and have space to adjust upwards. Cutting costs helps greatly – it helped me save more when working and reduces the drawdown when retired.
I have learned that being a generalist is also very bad for the way work is going, particularly in big firms. And the recovery from getting knocked out of the workplace by stress has progressed but by no means finished – even after two years.
Retiring early is good -I can allow the generalised interests that were becoming toxic in the workplace free rein, and they help me live cheaper than would otherwise be the case because of the various reasons skecthed out by ERE
Flexibility and openness to new ways of doing things seems key to retiring early successfully.
a smartphone has no optical zoom, and is preset for a good first-person shot of a human-sized object about 2-5m away. Which is what most people want and makes great Facebook posts. Audio recording seems to be stuck in mono and doesn’t take external microphones. Again, great for facebook video. To make a smartphone into a good camera or audio recorder, you end up with a great big smartphone which is stupid as a smartphone ↩
which is obviously a linear interpolation of an exponential function, but it’s okay with such a short period and relatively modest inflation. ↩
]this isn’t strictly true, as the HYP ISA pays a shade under 5% dividend and there is some unknown amount of capital appreciation too. But I don’t spend this ↩
This is a peculiarity of the short timescale of my DC savings of less than a business cycle. If my savings were the result of a typical DC pension this concern would be softened because I would have entered the market over many decades, the 4-5% SWR would have greater validity because I would have a better idea of what the true value of my savings really was after saving across many business cycles ↩
I use the Americanism cubicle slave because it is common shorthand in the personal finance world. However, the enslavement is just as much for anyone who has to sell their time or skills for money to keep Bad Shit from happening in their life – whether they’re a office worker, a CEO, a coal miner or a Big Issue seller. ↩
there is a year’s hole when I took time out to do an MSc but I was sharp and did that in an economic boom so it was easy to get a job afterwards ↩
Three years ago, almost to the dot, I wrote a post called Post Retirement Needs & Wants are Hard to Envision in Debt Slavery I’ve come across this again a few times since then, and it seems that though I found it hard, it was a damn sight easier for me than many people. So I thought I’d revisit the theme, with about a years worth of hindsight.
Most people, particularly those who have been working for a while and got set into a certain lifestyle spending, lose the ability to think outside the box. yeah, I know it’s a terrible piece of management-speak that I heard all too often at work, but it seems uniquely apposite here. I can’t believe the number of times I’ve heard variations on the theme.
how on earth do you have a life on that little?
A lot of successful people seem to gain their sense of self-worth from the number on their P60 corresponding to their salary, and there’s a knock-on effect that means their sense of self-worth ends up connecting to their spending. They feel that life isn’t being lived to the full if they aren’t spending a similar amount in retirement as they were spending at work.
Now there’s nothing fundamentally wrong in identifying yourself with your spending, provided you can afford it, and most of these successful people can afford it. Many people become successful precisely because they identify themselves with their salary, I know I switched jobs a few times early on because I thought I was worth more than what I was getting, and stopped when I figured I had reached Enough. Identifying yourself with your spending, however, has a cost. It makes retirement in general, and early retirement in particular, scary.
That’s because you lose a bit of your sense of self-worth if you retire, since in most cases the maths dictate your retirement income is lower than working income[ref]a typical expected retirement is about as long as your working life, so unless you are saving nearly half your pretax salary you will retire on less than your working pay. Compound interest isn’t enough to do most of the heavy lifting here[/ref]. Early retirement in particular, is all about reducing your spending. It isn’t about earning more, because earning more is generally associated with lifestyle inflation, if only to compensate for the extra stress that usually goes with it. If you get your self worth from some of your spending, then reducing that is going to make you feel like shit and generally give you the willies. There are three things you can do about this
Accept this is the way you are, these are the values you choose to live by, enjoy the spending and retire later!
Examine your priorities, and ask yourself if your spending is really that important to you or if working is costing you more in loss of quality of life than the increased spending is improving your quality of life.
Refuse to look at the situation and conclude that people who reduce their spending are living a miserable life of slumdogs
1 amd 2 are both valid and reasonable courses of action. While 3 may make you feel better, if you haven’t asked yourself the question and honestly considered the alternatives, well, you haven’t really got your head out of that box, have you? It’s not like you are committing yourself to course 1 or 2, but at least if you go for 1 then you know that you are living your values, that there are other options but on balance you know you prefer to work longer and spend more.
One of the problems is the classic one associated with all change. It is easy to see what you will lose with a change, but not so easy to see, and impossible to live, what you will gain with the change. The vast majority of the benefits of retiring I found were not to do with money. They were to do with the extra time I have, the vastly increased sense of self-determination, and the elimination of stupid rules and hoops to jump through.
Many people think they will dive into a frenzy of DIY which will save them a load of money, and good for them. I did repair a tractor starter motor and a few things. But I can’t be arsed with many DIY tasks – I still have a flat roof fund against the time when that will need redoing, I paid a chimney sweep rather than do this myself though it’s perfectly in my capability, and I still haven’t really convinced myself I want to paint the house. All of these are still choices and the balance may change in time. There are some things I will do if it’s too hard to find competent workmen or the labour cost would make it prohibitive but I haven’t run into too many of those yet.
My spending dropped because far too much of it was compensating for the stress and ennui of not being a free-range human being. And here’s a secret I can share with you – all the money in the world can’t compensate you for the deep loss of personal freedom that working for a living imposes upon you. Each one of us has 24 hours allocated to us every day, and about 8 of those we have to sleep. Of the remaining 16 half of them are sold to work. It’s a necessary evil, but over the course of three decades it is easy to end up with the words of Tyler Durden being all too true
Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need.
Now there’s no getting away from the fact that the transition from working to retired is a change, and a challenge to boot.
It made me nervous. More so in my case than most, I should imagine, I went from having a decent income to sweet FA, because I am not drawing my pension. Why not? Because I saved a shedload of money as cash, I had a year’s worth of salary under the tax-free threshold as cash and even after filling up 2012’s ISA I still had a load of cash left over.
And you can’t turn a profit on cash these days. So the best I could do with this cash is to live off it and defer my pension. Because the trustees in charge of my pension expect me to die 20 years after I turn 60, each year I defer my pension it gets bigger by 5%, though since I am running into tax that actually only increases by 4%. It would be mad to take that income now because where the hell else am I going to turn a 4% in real terms return on investment on cash after tax? What am I going to do with it, there’s no point in drawing it and saving it, or even investing it, because I am not such a smart investor that I can say I have a good chance of doing better than 4% real.
However, I have the ghost of Micawber on my shoulder, yelling out
You are spending more than you earn Wrong Way, Stop, TURN BACK NOW
He’s right in a narrow way and wrong in a big picture way. At the point of transition this gave me grief, I had just come out of three years of saving to get out, and wasn’t in the greatest place mentally. I tried to maintain my net worth, becoming virtually catatonic for a short while after leaving. No, that isn’t living life to the full, but the time was productively used, it’s called convalescence, and that sort of thing takes just as much time as it’s gonna take 😉 Life is a dynamic balance – as so well summarised in Ecclesiastes on “a time for all things”
However, looking back I went on holiday three times in the last year. So why is it that I needed less money after retiring? Was it as simple as Jacob ERE highlighted in his direct way – that for most people, the idea of living life to the full consists of
In general, if you ask the average consumer what enjoying life is all about, it distills to the following trifecta: buying tickets, going to restaurants, and shopping.
That’s it. Those three things are all there is to enjoying life. The uninformed opinion is that if you don’t have these these three things in your life, your life sucks. I know, because that’s what I used to think. And it’s also what consumers keep bringing up
Why is this so? Jacob linked to this post on Raptitude which makes an attempt to nail down why, where the author looked at what changed when he went back to work
We buy stuff to cheer ourselves up, to keep up with the Joneses, to fulfill our childhood vision of what our adulthood would be like, to broadcast our status to the world, and for a lot of other psychological reasons that have very little to do with how useful the product really is. How much stuff is in your basement or garage that you haven’t used in the past year?
The ultimate tool for corporations to sustain a culture of this sort is to develop the 40-hour workweek as the normal lifestyle. Under these working conditions people have to build a life in the evenings and on weekends. This arrangement makes us naturally more inclined to spend heavily on entertainment and conveniences because our free time is so scarce.
I’ve only been back at work for a few days, but already I’m noticing that the more wholesome activities are quickly dropping out of my life: walking, exercising, reading, meditating, and extra writing.
The one conspicuous similarity between these activities is that they cost little or no money, but they take time.
Suddenly I have a lot more money and a lot less time
I failed dismally to call this out in my post on post-retirement needs and wants, because I wrote it while still at work. I missed Raptitudes’ insight because I hadn’t lived it, but now I have lived it he’s spot on. He goes on to say
Can you imagine what would happen if all of America stopped buying so much unnecessary fluff that doesn’t add a lot of lasting value to our lives?
The economy would collapse and never recover.
All of America’s well-publicized problems, including obesity, depression, pollution and corruption are what it costs to create and sustain a trillion-dollar economy. For the economy to be “healthy”, America has to remain unhealthy. Healthy, happy people don’t feel like they need much they don’t already have, and that means they don’t buy a lot of junk, don’t need to be entertained as much, and they don’t end up watching a lot of commercials.
I recommend his post to those who say that reducing spending means not living life to the full. To wit –
Big companies didn’t make their millions by earnestly promoting the virtues of their products, they made it by creating a culture of hundreds of millions of people that buy way more than they need and try to chase away dissatisfaction with money.
Now if that’s really what you want to do with your three-score-years-and-ten then have at it, but do take the time out to ask yourself whether that really is what living life to the full means to you 😉
Me, I’m going to post this and then wander out in the neighbourhood and look at the bees skimming the clover and the flowers growing and the birds singing. It’s part of my investment in health insurance after MMM punched me in the face with his 23 1/2 hours article.
That’s why I need less money than I anticipated. It’s that I have more time. And no, it’s not as simplistic as time=money so I can do for myself what I’d pay others to do. That sounds smart but it’s bollocks. More time has an existential value in and of itself. It enables me to live better, so I don’t have to chase away dissatisfaction with money.
Something I’ve discovered is that many people who have been working for some time find it hard to imagine what life is without work, and occasionally fear the void. I’m not talking about someone who has found their vocation and genuinely enjoyed most of it. I observe that most often in the self-employed at the entrepreneurial end of things, be that in DW at The Oak Tree Farm, or the driven creative entrepreneur, or hell, even Diamond Geezer Bob ex of Barclays ;). That’s fine – but some of the rest of us wage slaves occasionally look at our lives, look at the bits that aren’t work (weekends, vacations) and subtract work to think ‘is that all there is’? with a little shiver down the spine at an imagine life of long weekends and extended vacations. For some, it seems to lack meaning and purpose.
It isn’t how it will be, but it’s an understandable mistake. When you have retired, life is not like one long weekend, or even a long vacation. Yes, the weekends are less different to the working week, obviously, but therein lies the clue. For people working 5 days a week, the two-day weekend is a brief respite, a chance to recharge the batteries, to take a break. You don’t need to do that when you have control of your own time, so your weekends are different! it still staggers me how I became almost zombified as energy drained, whole swathes of weeks merged into grey blocks of time compared to the kaleidoscope of variety. Don’t get me wrong, there was much more busyness then, but the ancient Greeks identified the problem with their concepts of Kairos and Chronos. You must live time, not just watch the hands sweep over the face of the clock. That means paying attention and doing things with respect.
Retirees still have to take some regard of the weekends, of course, because meeting up with others who are working is usually easier. Just as steam gives way to sail you need to respect other people’s time pressures. Nevertheless, life retired isn’t one long weekend, because there’s no need to decompress from the stress of work or to pack all the stuff into the two days that you couldn’t do in the other five days. It’s hard to say exactly how that is different, but it is – it is much more relaxed and more fun. Your weekends are no longer the bassline to the strident demands of work, they are part of a greater harmony.
It’s not one long vacation, either. Unless you’re very rich 😉 Even if you are, ask yourself whether an endless vacation isn’t perhaps the grown-up version of the kid who only wants to eat ice cream all the time. A life well lived has dynamic contrast, moving between different poles. A lot of your vacations while working are expensive because you are packing in a lot of stuff to make it as different from work as you can. You are usually time-constrained, too. I can’t really put this much better than GOP from this comment:
One change since I retired relates to travel. I used to go on far-flung holidays ranging from Bolivia to Bhutan which I thoroughly enjoyed but which also satisfied a need to get as far away from work as possible in every sense. Since retiring, although I can still afford to do it and my partner would be happy to let me, the need has somehow gone and I’m content with more local travel which, preferably, does not involve flying.
Now I am somewhat constrained at the moment in that I have no income, so I’m not going to spend large amounts on travel right now, but that won’t last forever. I still feel similarly to GOP – I travelled reasonably well with work when I was a single man and had a penchant for trying to take longer but travelling overland. Most of the time I love my fellow humans but that doesn’t extend to seeing them milling around in airports, or pretty much anywhere where a whole load of people have to line up all in one place. MMM may have put his finger on the problem with a Peak life is lived Off-Peak.
One of the key Principles of Mustachianism is that any and all lineups, queues, and other sardine-like collections of humans must be viewed with the squinty eyes of skepticism. Because if so many people simultaneously decide to do something that they are forced to stand or drive in a queue to do it, there’s a good chance it is something that is not worth doing.
He’s got a point. Don’t travel at the same times as the rest of humanity if you can. Sometimes that means don’t travel at all 😉 Often it’s as simple as travelling midweek, sometimes it means travelling at night. Similarly if you have to queue to buy something, it’s probably a carefully orchestrated shortage (think anything made by Apple, Christmas toys where the supply, marketing and demand are carefully managed to engineer a shortage and pester power that keeps sales up well after Christmas).
Your life will change post-retirement. When you’re working more than half your time is owned by someone else, and in a hard twist that means you often have to pay other people to do things for you because you don’t have the time, be that Starbucks to get you coffee, some deli in London because you didn’t make sandwiches or calling in a plumber because you don’t have the time to fix the problem yourself or understand and learn what needs doing.
The other thing, for which I have to thank GOP for introducing me to, is Herbert Marcuse, and his critique of capitalism, which is even more true now than when he wrote it :
“The people recognize themselves in their commodities; they find their soul in their automobile, hi-fi set, split-level home, kitchen equipment,” meaning that under capitalism (in consumer society) humans become extensions of the commodities that they buy, thus making commodities extensions of people’s minds and bodies.
You are not what you buy or use. Your soul is to be found in the space between your ears, in the web of life with other sentient beings, in your love of life, and of others. It has no barcode; there is none other like it. Never lose sight of that in the mesmerising maelstrom of marketing messages. Thoreau had some point when he said
“A man is rich in proportion to the number of things which he can afford to let alone.”
In general, if you ask the average consumer what enjoying life is all about, it distills to the following trifecta: buying tickets, going to restaurants, and shopping.
That’s it. Those three things are all there is to enjoying life. The uninformed opinion is that if you don’t have these these three things in your life, your life sucks. I know, because that’s what I used to think. And it’s also what consumers keep bringing up.
Gulp. The Ermine has been known to darken the door of a restaurant occasionally 😉
It is a little over three years since I started this blog. The first real transmission was this one. It’s hard to picture your life retired when working – I found even the financial issues hard to envisage and they are among the more tractable and quantifiable changes. Nobody bangs the drum for things after the change – because nobody has the experience of being retired before they are retired 😉 Looking at that post, it was quite prescient. Illich had a point when he said choose a life of action. I spend more on tools and things to investigate stuff and make things happen. I don’t spend money on DVDs and video games. I’m fiddling about with finding out how to post a graph of the temperature of some chickens, and a polytunnel on Cosm. Because it’s a challenge. The secret to retirement is to be curious. Become like a child, always ask the question why.
I took a rotten shot of some flowers I passed because I’ve seen them before, and I figure it’s time I knew enough about my world to know what they are called. It’s one of the things that the gift of time gives you – you don’t have to live life on autopilot any more. Take joy in the quotidian as well as the unusual. I hear the song of the blackbirds slowly becoming more accomplished as time goes on. I learned about how to use json for data interchange.
It was easier for me to not fear the void, because my work experience had deteriorated, and I was seriously stressed, not by what I was doing but by the stupidity of the system. In life you should generally try to run towards the light rather than away from the darkness. But sometimes it simplifies things. For someone who doesn’t have serious issues at work, there is much to be said for taking some time. I can’t recommend highly enough scaling down your expenditure to match what you expect to retire on, and do that for a year at least. The decision to retire, and if so to retire early, is one that is important, though not urgent. You have to make time to consider it. I was seriously motivated to retire early, but it still took me three years to get to the right point for me. The delay wasn’t for the want of trying to convince myself I could do it earlier. And you have to be prepared to take some leap of faith, because you have no clear idea of what it will be like. Sometimes in life it is good enough to do the best you can with what you have to hand 😉
It won’t be an endless weekend, or even an extra long vacation. Like sculpting anything, crafting a good life free of ‘work’ is a matter of having a general idea in your mind’s eye, and then taking the first steps. It won’t turn out exactly like the mental picture, and that’s fine. It won’t solve all your problems either, because remember that every place you go, still yourself you see in the mirror, and it is still your shadow that the lamp throws on the wall. Issues that lie within will retire with you. You may have more time to ruminate on how to work on them, but you won’t leave them behind as you hand in your mobile phone, computer and access card. Possibly for the first time you will be in charge of most of your time. Carpe diem – and may it serve you well.
I spent a lot of time thinking about the money aspects of retirement. I overshot somewhat – I don’t spend now as much as I’d get if I drew my pension early right now. Getting the money straight is a prerequisite, and I would urge anybody thinking of retiring early to inform themselves about the financial aspects of retirement as much as they could. But money isn’t the whole story.
Finance is necessary to crafting a decent retirement. But it isn’t sufficient. Your setting is just as important – who you will spend your time with, where you are, who is in your life, what your connections with the wider community is. Early retirees have some extra challenges in this area (most of their current social circle will probably be still at work) but they have other advantages unique to them too. They are younger, and probably more adaptable too. In the end I only retired eight years early, so I am not that unusual, compared to, say, Retirement Investing Today or Mr Money Mustache. There is a big difference in retiring in your early forties compared to early fifties. While the principles are the same – basically spend less than you earn, the scale is very different.
This morning I heard a welcome noise, a fine trilling in the air. It can mean only one thing, Scandinavian invaders on the loose. Stand by your ornamental garden berries!
These guys had come all the way from Scandinavia over here, in search of berries. And they parked themselves on a telephone pole at the end of my road. so I could go get a camera for a second look at these handsome creatures with their jaunty crests. They aren’t particularly shy, and tend to group in garrulous flocks, trilling away to each other.
They post some of the ranks on the telephone pole as lookout, busily digesting the spoils of war.
Sitting around also helps them digest 🙂
It’s kinda rude to ignore something as lovely as these guys, and what’s nice about them is they are drawn to urban areas, because fo the ornamental berry crop. They aren’t particularly shy and have a penchant for supermarket car parks which have a lot of that as low ground cover. first time I’ve had them in my road!
It’s about living well. Welcome to a guest post from Mrs Ermine on some of the finer aspects of living well
How, you may ask, does the Ermine household keep itself in high style on a modest budget? Mr and Mrs Ermine like to eat well, but don’t like to fill the coffers of large food corporations. Fortunately good food and industrial food are two very different things.
So while Mr Ermine prepares his next post on financial wizardry, or perhaps another of this rants about the state of modern Britain, why not come and join me in the Ermine Towers kitchen on my new blog Simple Eating in Suffolk? The kettle is on (with just the right amount of water, of course) and right now there is something with a distinctly South Indian theme being prepared… a fine dish which Mr Ermine enjoys, and which costs just a few pence.
The Elder tree is often to be found growing right next to the house or an outbuilding, making a right nuisance of itself. They get there because birds love the berries, and then the bird sits on the top of a wall or the gutter and shits out the seeds, and voila, new elder tree you get to spend ages trying to hack down, only for a bazillion shoots to spring up. Apparently a clean cut encourages shoots,so if you do want to take one down then hacking away at the stump with an axe to open up loads of cuts is recommended. Elder is no use for firewood, indeed, presumably this line from the Wiccan Rede is there to prevent people making a right prat of themselves trying to use it to light a bonfire
“Elder be ye Lady’s tree, burn it not or cursed ye’ll be”
You have to have seen someone try it to know how little success is to be had 😉
In our long ancient hedgerows we’ve got lots of Elder trees and they aren’t doing anybody any harm. Indeed Elder has its uses, and one of them is making the most fearfully strong and sweet elderflower wine. You can also make elderberry wine but that needs to get aged for over a year. Since we want something for the Harvest party in the Autumn, we’ll go for the elder flowers.
Unlike the berries, the elder flowers have a short season. It’s best to harvest on a dry sunny day, but the best we can do is a wet Jubilee Bank Holiday weekend – another week and the elder flowers will have started to go over.
The flowers come in umbels, which the decadent Germans have been known to deep-fry in a sweet batter. However, we prefer the alcoholic form, so we harvested a load of the flowers, which you have to avoid crushing which releases the fragrance.
Prefer the fresh flowers rather than the older ones that are excessively open for a better flavour – that’s the trouble with these, the short ripe season means you get only a couple of weekends to hit the trees at their best.
The season is sensitive to the microclimate, in more sheltered areas the flowers were just buds
What makes this job easier on a sunny day is that you can take a sniff of the flowers, you want ones that smell good as there seems to be some genetic variation. even with a few hundred yards of hedgerow we don’t have so many to choose from, but we had decent results last year so we used trees from these areas again.
You need a pint of flowers per gallon. The next bit I’ve simply lifted from one of Mrs Ermine’s articles as I don’t understand all the technical stuff 😉
How to Make Elderflower Wine
1 gallon of boiling water
1 packet wine yeast
3 lbs white sugar
A small cup of very strong black tea
Juice of two lemons or 1 teaspoon citric acid
1 teaspoon yeast nutrient
1 pint of Elder flowers cut from their stems and gently pressed down
Two one gallon demijohns
A large unchipped enamel container or stoneware crock.
Clean cloth for covering this container
Airlock and bung to fit demijohn
2 meter length of clear food grade plastic tubing
Sodium Metabisulphite or Camden tablets for sterilising equipment
Large plastic spoon
Home brew thermometer
Extra boiling water for rinsing off sterilising solution
Clean and sterilise the enamel pot or the crock, the thermometer and the spoon. Rinse off the sterilising solution with boiling water.
Add all the ingredients except the yeast, yeast nutrient and two of the three pounds of sugar to the crock or enamel container and pour on the boiling water and stir well. Insert the thermometer, cover, and leave to cool.
When lukewarm add the yeast and yeast nutrient, and stir in with the spoon (which must again be sterilised).
Remove the thermometer, cover with the clean cloth to keep flies out, and leave to ferment in a warm place for three days.
After these three days, sterilise one demijohn, the airlock and bung, the sieve and funnel, and rinse all this equipment with boiling water.
Pour the remaining two pounds of sugar into the demijohn using the funnel and then strain the fermented flower mix into the demijohn, over the sugar. Fill so that the wine is around and inch (2.5 cm) below the fitted bung. Fit the bung and airlock (which should contain a little sterilising solution to prevent contamination by flies) and leave to ferment in a warm place for a couple of months.
After these two months, sterilise the second demijohn and the plastic tubing, and rinse with boiling water. Remove the airlock and bung, and carefully siphon the wine off the yeast sediment into the fresh demijohn. If necessary make up the volume with a very little boiling water. After sterilising and rinsing the bung with boiling water, and refreshing the sterilising fluid in the airlock, refit the bung and airlock on the new demijohn.
Leave to ferment until the airlock no longer bubbles, meaning that fermentation is complete. Your wine is ready to drink, or you may prefer to let it mature a little longer by siphoning into sterilised wine bottles
How much sugar goes into that again?
One of the thing that struck me was the off-the scale amount of sugar that goes into it. Alcohol has a bad rap for all sorts of things, and not being part of a calorie controlled diet is probably one of the lesser of the charges, but you can see why it has a lot of calories because that is a lot of sugar. On the other hand elderflower wine is quite strong and 5 gallons is a fearsome amount that goes a long way. It took a lot of assembled party-goers two parties to get through the lot last year.
I took a look at the sugar label, and it looks like you could chug down half a bag of sugar and still remain within the nominal adult calorie allocation. It’s quite awesome that the small box above has enough power to run an adult human for a fortnight.
Elderflower wine has a very sweet taste with a hefty kick and seems to be targeted to the female palate in particular 😉 It seems to come out about the same strength as port subjectively, but apparently wine yeasts top out at 17%-ish as opposed to 20% for port.
I can take it or leave it but it does make parties more fun, and it’s nice to have the Harvest party with some of the produce from the field.