He needs a bit of re-educating don't you think? I need to re-introduce him to THE.FuTuRe. He has lots of ideas on how to mess things up, surprise and misdirect this misfit.
THE.FeaR: "He sure can't cross THE.FuTuRe. It is about time THE.CoNTeNDeR realised this and feels THE.FeaR. He needs reminding of what is on the road in front of him. I will rough him up a bit, I like doing that, I am just the man for the job! "
This is the follow up post post to Feeling Fear - Part 1 which covered FeaR's rampage in THE.CoNTeNDeRs past. Now it is is all about THE.CoNTeNDeRS top 3 FEAR's in THE.FuTuRe and what the TRiBe is doing about them on our road to financial independence and hopefully a contented life.
Fear 1 - fear of lack of purpose
What is the point in gaining very early retirement? Just look at Jacob from ERE (Early Retirement Extreme) he went back to work for a challenge, not because he needed the money. Our TRiBE want to be useful to society not just sit in the sun in the French countryside - how sad.
Go Slow
First off sometimes some idleness / a sabbatical / being bored / having time for reflection and to think is a REALLY GOOD THING.We are still de-toxing from the city, its noise, bright lights, pollution and overall speed of everyday life. Time is a great healer and in the last four weeks we needed the time to slow down.
We only used to get 5 weeks holiday a year. Typically this would be split into one two week holiday preferably abroad followed by two one week holidays somewhere in the UK. Our spare five days were taken as odd days off. NONE of these holidays was long enough to completely recuperate / switch off / relax. Is that the point on only allowing five weeks holiday a year?
What really speaks volumes is that in the UK if you are ill whilst on holiday you can actually claim the time back from work. Perhaps it has become so common for people to get ill in the first week off as the body tries to let down the stress defences the government had to do do something about it?
In the CoNTeNDeRs opinion we should all have the ability to have 3 months + off each and every year. Time to reflect, think, re-charge our batteries and de-stress ourselves.
Will this ever be allowed - all that time to actually think deeply about want is going on around us. It is well documented how the mainstream media and education system is dumbing us down. Forbid us free time to think and read as adults in case we don't get with the system right? Would literacy rates jump and the system change because the public at large would demand it?
Fortunately for the TRiBe we have time no what are we going to do with it. Here are some current activities:
- Thinking and reading time is still be very important for us
- This blog and the tools associated with it can be very time consuming and very enjoyable.
- The children are getting lots of attention. We are able to be idle outside walking and playing with them in the garden, fields, hedgerows and local play dates and groups.
- We are making lots of new friends. Such a diverse group all working hard to get ahead in their own little ways. The number of people with practical skills around us has multiplied ten fold. although they have similar problems with making ends meet they seem un-stressed and have time to talk. Going slow.
- We are looking for somewhere to call home. Something ours to do with as we wish. We are finding that the housing market here is expensive as the area is highly desirable due to the local picturesque town and its facilities.
CoNTeNDeR: "What a lack of imagination old bloke! Yes we have skills to be put to use but on other pursuits. Corporate skills are transferable don't you know. Look at this blog would it ever have existed if it it was not for my work?"
So should this FeaR - a lack of purpose put us off? We have been given the gift of time to find our real passion, our contribution to society, we must not waste it. It may take some time to land on our feet but we believe it will happen.
THE.FeaR wins this round with a clip around the ear - what are you doing CoNTeNDeR
FeaR 1 TRiBe 0
Fear 2 - fear of lack of income / high inflation destroying our savings
“The outcome (of all of this) will be more debt, more printed money, and more misery for the masses. Remember that US debt was $10 trillion in 2008 when the crisis began and now it’s $17 trillion. And the Fed’s balance sheet was $900 billion in 2008 -- it’s now at $3.6 trillion....On top of that, personal credit (in the form of) car loans and student loans is growing exponentially. Every year now the US debt is going up by at least $1 trillion. In addition to that the Fed is expanding its balance sheet by another $1 trillion each year. This means that the US government is currently printing $2 trillion per year. " - Egon von Greyerz - KWN Oct 2013
Source: AtomicToasters
Incredible debt numbers are being talked about almost daily. Whether it be company, personal or government the numbers are hard to comprehend as the above graphic tries to portray.What is debt? Just paper promises, electrons on a computer. The problem is that governments and central banks are very good at creating it (currency) and paying for it by typing some numbers into a computer. The result is more inflation in everyday goods. Here is a video on the process from Mike Maloney:
In the past money used to be tied to a hard asset such as a tradeable commodity. What we do know is that paper money has been destroyed several times in the past due to the abuse of the ruling class.
In the current era debt has generally been serviced and living standards have risen but what if THE.FuTuRe is not like THE.PAST what if the can cannot be kicked any further any longer? What may hold its real value in THE.FuTuRe?
Source: dailyreckoning
Fiat paper may be a nice way of conducting transactions but if it looses its perceived value what will be destroyed and what will be left?Is Another Black Swan Ahead - All all of our Eggs in One Basket?
If there is another financial crash (From THE.CoNTeNDeRs standpoint it is only a question of when)
What is going to loose its value?
What is going to be completely worthless?
What will recover?
Jobs - The US federal reserves mandate is to 'create' jobs. We know that jobs will be lost in a recession. Which jobs are the least likely to go in this environment to help pay the bills. Perhaps farmers, doctors, manufacturers of every day goods would be a good starting point.
Unfortunately if QE impact is raising inflation faster than wage increases (shadow stats in the US has inflation calculated with the 90's formula running at 9%!) living standards will continue to fall. That is until workers will rebel demanding higher wages.
Real estate - it is called real for a reason as it will not disappear in smoke if the financial system breaks down.
A few considerations go with this. If income is lost and there is a large mortgage on the property can it be serviced or will the property face foreclosure. If the property is required for income what if the tenants are unable to pay the rent. What is the value of the home plummets and the 'new' rental income would be much much lower?
Pay day loans (THE.CoNTeNDER really despises these boys!) - Delinquencies will be high and returns poor what returns that will be realised will be taking ADVANTAGE of some of the most needy in society hence they suck.
Stock / company investments - Stocks are real businesses. In a tough environment it is all about owning the winners. Same question as ever are which companies are those. THE.CoNTeNDeRs thoughts on this topic are in the post Get Real - Investing in REAL Assets!
Pensions - THE.CoNTeNDeR used to hold government bonds in his pension - diversification and all that. With the onset of QE (fiat money printing) these have been sold and replaces with stocks instead. The UK pound not so long ago (2008) could be exchanged for $2 or a loaf of bread. Now it is around £1.45 for a loaf of bread and around $1.60 to the pound. The pound is not really holding real value. At least the stocks should..... be able to rise prices / profits.....
So where are the winners right? There will always be winners we just need to find them. Can we all be great stock pickers, real estate tycoons or speculators in this market - this is really not feasible. If we were all brilliant investors everything really would be priced to perfection and no 'value' opportunities would exist. As we know us humans are not perfect :)
One probably cannot be a passive investor in THE.FuTuRe as this is likely to be different than the stable past we have enjoyed. A regular check on investments, having stop losses and hedges in place will be important. Being ready to move money between asset classes as well as maintaining some diversification will likely be key. Keeping all ones eggs in one basket or just expecting the tracker fund to just recover could lead to financial ruin.
What are we doing?
- We will keep on reducing our spending.
- by cycling / walking instead of using the car.
- We are looking to own a property with some arable land close to amenities.
- We want to grow some of our own fuel - that is trees to provide wood for burning wood on the land and
- We would like a well to provide the water to growing some of our own food
- Any 'left over' income will re-invested in income producing assets or ways to reduce our day to day living costs such as solar water heating.
- We have moved somewhere where we are not bombarded with advertising and consumerism. There is no shop at every corner or massive billboards. As a result transport and entertainment are limited. We have ditched the TV!
- Investments are monitored. We are looking to manage sell stops on some of the stocks but with the objective of re-purchasing more shares hence more dividends from them at a later date.
Source: SelfManagedFunds
FeaR 2 CoNTeNDeR 0Fear 3 - fear of ill health
We have moved to the countryside for the following reasons:
- Reduction of stress. Lack of advertising and the urge to keep up appearances. Currently no work, no appraisals no bullshit. It also gives our children a chance for a more innocent childhood, where they can invent games and be children and behave like children and not some X-factor pop stars in the making.
- We are eating more locally grown, fresher food, avoiding the junk food that is advertised everywhere you go in the city.
- We are avoiding un-necessary pollutants from excessive traffic fumes, factory emissions, plastics etc.
- We are more physically active – we now have a huge garden that requires a lot of hard work. We have walking and mountain biking paths on our doorstep and a good rugby and tennis club.
THE.CoNTEnDeR is never going to win this one
although he can improve his chances.
FeaR 3 CoNTeNDeR 0
Several groups exist around the world looking for solutions to some of the problems above. Building networks and communities that are resilient. One of the movements CoNTeNDeR has been following is the Transition Town Movement.
The movement is all about building resilient / antifragile communities. Communities that do not have to rely on outside help from government. Communities where people know each other and each others skills. Communities where people enjoy their home made beer and listen to the local band.
Why not check them out:
So FeaR, go stuff yourself!
It is now time for some new tool development. Work is being carried out to simplify and add to the PERL - Plan for Early Retirement and Life Planner. It is being updated toProject ANGELFISH | Financial Independence and Seeking Happiness. The first update is to the library of books. It is being expanded to include a large number of useful books THE.CoNTeNDeR has come across down the years of which some he hope you will find of interest.
Peace, prosperity and happiness
THE.CONTENDER
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