Realsociology

A hyperreflexive blog focussing on critical sociology, infographics, Buddhism and extreme early retirement

Archive for the 'But what can I do?' Category

Ode to My Chocolate Muffins

Posted by Realsociology on 4th March 2015

 

At the risk of sending my bounce rate stratospheric (and lord knows it’s bad enough already) I just needed to do a post on my recent resounding baking success with my latest batch of dark chocolate muffins. Also it’s nice to have  a break from all things Sociological once in a while.

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Ignore the saw, I was using it for something related, given the interconnectedness of all things, but not immediately related to anything chocolaty or muffiny in the less immediate mundane conceptual world.

I adapted this recipe combining the following ingredients, with approximate costs

  • 200g dark chocolate, melted – .70
  • 75g unsweetened cocoa powder – .80
  • 325g self-raising flour- 0.30
  • 100g light brown soft sugar -0.20
  • 30 grams dark brown sugar – 0.10
  • Two table spoons of honey – 0.15
  • One table spoon marmelade -0.05
  • 365ml milk – 0.15
  • 100ml vegetable oil -0.10
  • 1 tablespoon baking powder – 0.05
  • 2 eggs -0.20
  • 2 teaspoons vanilla extract – 0.20
  • Mixed spice (hideously out of date, but it still seams to be OK) 0.05.

Same procedure as in the link above. Bake for about 25-30 mins.

Total cost comes in at about 0.25 pence per muffin. Not that much cheaper than a box of four from Sainsburys, but significantly superior, and about six times cheaper than what you’d pay in a coffee shop. Not to mention the sheer joy of the process, I love baking (career-baking runs in my family apparently so it must be in the genes), the overwhelming sense of satisfaction, AND I got to regress to childhood and lick not one, but TWO bowls. NB – Note the fact that you don’t need muffin cases, so long as you grease the muffin tins

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The lighting in the picture doesn’t do them justice, but oh man, are they good! Oh simple pleasures. I’m one happy and fatter man after these.

Posted in But what can I do?, My 'life', Recipes of Resistance | No Comments »

On Not watching TV and Meditating Instead (a lifestyle experiment)

Posted by Realsociology on 17th February 2015

 

The Dalai Lama of Tibet practices meditation four hours a day, the same length of time the average American spends watching TV. Now it’s obvious I’m not the Dalai Lama, and I’m reasonably certain I’m not his reincarnation born 40 odd years too early either, but like the DL I have recently tried to cut down my TV use and meditate more instead, although it’s taken me some time to commit to it properly.

Halfway through Le Tour 2014 I unplugged my TV and put it in the office, promising myself I would break my habits of watching TV over dinner and indulging in the occasional bout of idle channel hopping, but I pretty quickly just got into the routine of watching whatever on iPlayer or 4OD on the iPad or laptop.

On Sunday 4th January, however, I finally committed to watching no TV for a week, and I’m still abstaining. With the two exceptions of watching the final four minutes of The Dead Poet’s Society (don’t ask) and about eight minutes of a classic episode of ‘Why Don’t You’ on YouTube (again, don’t ask!) I have managed to be TV free at home ever since.

At the same time I also started to severely restrict the use of anything involving a screen. This means spending as little time in front of them as possible, and limiting the number of screens and ‘windows’ I expose myself to in any one period. Ideally, I try and limit myself to reading one book/ website at a time and writing into one Open Office Document at a time (like this!), rather than flitting backwards and forwards between multiple sources.

Also on the 4th January, I made a commitment to the following ‘evening disciplines’ –

  1. Leave work promptly – 16.45 at the very latest (I start at 7.45).
  2. Run or do circuits most days after work. (Although in fairness I did this anyway)
  3. Spend about half an hour tidying and cleaning every evening except Friday and Sunday (I even have a roster for certain rooms on certain days.
  4. Meditate for 40 minutes immediately following tidying.
  5. Do ‘soft meditation’ for 40 minutes before going to bed at 21.30 at the latest.
  6. Do a minimum of 4*40 meditation sessions on Saturdays and Sundays.*

This typically leaves me with 30 mins to an hour to do something else in the evenings, with plenty more time at the weekends.

After just two weeks, and they weren’t the easiest of weeks at work either, I’ve noticed the following benefits of not watching TV and meditating instead.

  1. I’m sleeping much more soundly. I’ve never actually had (ever!) a problem sleeping, but this last week my sleep has been even more sound. Sound is a good word to describe it actually, as would be ‘denser’, ‘heavier’, more intense, more complete, oh hang on, maybe ‘deeper’ is the word I’m looking for.
  2. My outlook on life has slowed down – I feel more centred, more stable, calmer, more in-control.
  3. Interestingly, although I only have a scant hour to cram in some ‘me-time’ I’d say I’ve been more productive in those hours than compared to double the amount of time without the meditation (I can see why the corporate world is into this mindfulness stuff, just don’t mention Right Livelihood!).
  4. On those few occasions I have gone online, I find myself more irritated by the whole experience – I am much more aware of and intolerant of the sheer amount of advertising, the explicit purpose of which is to distract me from what it is I am actually doing.

To conclude…

Technically speaking this isn’t a very good experiment because I’ve changed three variables at once (The amount of TV/ Internet Use and meditation) BUT in practical terms given that the former two are the antithesis of the later, I don’t think the benefits would have accrued as much if I hadn’t replaced the former two with the later: meditation (and mindfulness) require a calm mind, TV and the internet encourage a hyperactive mind. It may well be that had I maintained my habitual usage of TV and just increased my meditation hours (in which case I’d have to sleep less, so that wouldn’t work experimentally either), the effect of meditation would merely be to calm down the increased hyperactivity in my mind caused by media-indulgence. So it’s naff as an experiment, but it works!

In short, try it, stop watching TV etc. and start meditating instead.

*This may sound like a lot of hours – If you’re new to meditating, this much may be too much so you might need to spend a few years building up to it. I’ve been meditating for 20 years on and off, more seriously for about eight years after I spent a year taking formal Zen classes (after which I realised I didn’t need the formality), and I’m fairly sure that two-three hours a day is as much as is useful to me at the moment (by useful I mean conducive to promoting mindfulness in daily life). If you’re new to meditation, less may be more. Also, go to classes if you’re new to it!

 

Posted in Alternatives, Buddhism, But what can I do?, My 'life', Things I like | No Comments »

Careers Advice for Teenagers Part One – Why You Can Never Do Enough to Make Yourself Employable

Posted by Realsociology on 17th January 2015

 

So you’re 17 going on 18 and it seems like the end of A levels are ages away, but for some reason your damn tutors keep haranguing you about about preparing for your future career NOW. When it comes to career readiness, there is no such thing as enough, even if you are going to university and possibly putting off the final choice of your ‘career pathway’ for another three or four years, there are still things you can be doing NOW to make you more employable in the future.

You know the sort of thing…

First of all there’s the ‘online careers survey’ which asks you to tick a load of boxes about whether you’re a ‘team player’ or like to ‘work independently’, on the basis of which you’re given a whole load of possible career options, most of which probably won’t sound that exciting. (Admitedly I think these surveys may lack some validity, as my ideal-career doesn’t seem to match any combination of answers I’ve tried: ‘lounging around in bed ’til about 10.00 and then strolling into to town for a Cappuccino every day’ never seems to come up as a viable option).

Once you’ve chosen a career, it’s quite likely that you’ll have to do some sort of work experience in that general area, not only to prove that you’ve got a basic level of competency, but also to provide some evidence of committment to this career-path. Alternatively, you might be lucky enough to have a part-time job in area you want to go into. I say lucky, but either option sounds pretty grim to me – the former will probably involve giving up some of that holiday time to work for nothing, which is a bit of a rub, while the later probably involves doing enough hours a week while at college to make balancing paid-work, college-work, family and social commitments something of a challenge.

Incidentally, if you’re putting this phase off by going to university, you may not escape it, given that we live in the age of the unpaid-internship, especially if you want to get into any of the higher-end professions such as journalism.

(What’s also interesting here is that it’s up to you to prove commitment to a career-path before you set out on it, while your employer, in this age of flexibilised labour, is unlikely to offer you the same.)

Thirdly, and finally for now,  you need to build a C.V. – Assuming you’ve got a decent set of qualifications and some work experience, and know your name and address, the first half a page is easy enough, but then things can get difficult because filling in the rest of it requires you to have engaged in quite a few ‘C.V. Able activities. And if all you’ve done these past few years outside of school and college is flit between Youtube, twitter and whatsapp, then you’d better get of your ass and go and join a gymnastics club, take up horse riding, volunteer with your local church, and apply for and WIN young apprentice, even though you’re probably too old for that already.

Indeed, when it comes to work readiness, there is never such a thing as enough. This is because we live in an economically insecure world, and the cause of this insecurity is that global capital is freer  today than ever to move around the globe to seek short-term profit and then uproot at a moments notice to seek greater profits elsewhere. As it stands there are no global institutions capable of controlling global capital (the Nation State is declining in power) and so this global economic context of ‘Flexibilised Capitalism’ is likely to remain.

What this means is that it isn’t just NOW that you can never do enough to get ready for your that future career (which you may not even be certain about yet), but that in the future you will constantly have to update yourself to keep pace with an ever-changing labour market. Below are a few of the key reasons why you have to spend so much time an effort making yourself employable, and why you will need to continue to do so in the future…

Firstly –  ‘Technological Dislocation’ could be set to reduce the number of jobs available in the future. A recent post from The Economist summarises the situation thus….

‘Technological dislocation may create great problems for moderately skilled workers in the coming decades… innovation has speeded up a lot in the past few years and will continue at this pace, for three reasons: the exponential growth in computing power; the progressive digitisation of things that people work with, from maps to legal texts to spreadsheets; and the opportunities for innovators to combine an ever-growing stock of things, ideas and processes into ever more new products and services. Between them, these trends might continue to “hollow out” labour markets as more and more jobs requiring medium levels of skill are automated away.”

This is the first reason you have to increase your effort to be employable now and in the future – because not only are their fewer jobs and thus more competition, it is impossible to tell what jobs are going to disappear and what new opportunities may arise (which will require retraining) because of technological change.

Secondly,  it is cheaper for employers to pay a smaller amount of employees for long hours (50-60 hours a week say) rather than to duplicate the costs of such things as training, holiday pay and pensions contributions by employing a larger workforce part-time.

This means you may well end up in a nice job that you want, but with no choice but to work hours that prevent you from having anything like a social life, let alone a family.

Thirdly, Capital today is more free-floating than ever, in other words it is free to leave this country at a moment’s (or no) notice if it can find labour cheaper somewhere else. This has already happened in the low-skilled manufacturing sector, but it could just as easily happen with higher skilled, techno and creative jobs, especially when much work today can be done in a virtual environment and the costs to Capital of uprooting and relocating are no where near as expensive when it doesn’t have to rebuild expensive ‘heavy’ factories.  The chances are, if you end up being employed by a global company (or contracting yourself out to one) your job is likely to be increasingly insecure as the years ‘progress’ – given that you are competing with millions of other employees who are just as well qualified as you from lower-income countries.

Thus, in the future, be ready for periods of unemployment as your employer moves to countries with a cheaper source of labour leaving you to seek new employment (which is likely to get harder the older you get).

Fourthly, the primary source of profit for the Capitalist Class is to encourage consumers to consume more and more products and services at an ever faster rate – thus there is pressure for technologies, software, fashions etc. become obsolete at an ever faster rate, to have an ever shorter shelf-life – thus you are unlikely to be able to rest on your laurels – The software skills you learn in university may be obsolete when you start work, and that idea that made your company a fortune today will be superceded by someone else’s idea tomorrow, leaving you in the position to have to constantly update your knowledge and generate new ideas.

Yes, all in all, sorry to say it, but I’m glad I’m not 17, even though I had hair then. And I’m also glad I’ll be retired fairly soon, spending my days drinking my real ales, smoking ma cigars and, if they still exist, leisurely leafing through some ole school broadsheets.

Don’t like the sound of your flexibilised, insecure future – then what to do???

The mainstream starting-point strategy suggests that you should position yourself into the core of highly educated, highly skilled knowledge workers. This is the best way of guaranteeing yourself a high income and relatively secure employment (and if not secure at least well-paid enough to be able to endure short periods of unemployment between contracts).

The problem with this strategy is that it is only the extreme minority of people in the UK are going to be able to get skilled up to this level – What proportion of the population? 5%, maybe 10%? Certainly no more. And even for this top 5-10%, in a globalising ‘converging world’ where more and more people are educated up to degree level (especially in Asia) there is simply going to be more competition for these types of job, so the only way for this proportion is down.

By all means, try and land one of these jobs, but in the meantime, because you’ve got more chance of not getting a decent job than you have of getting one, you should also consider how you can minimise your exposure to the labour market and can minimise your dependence on money, because you may not end up having a choice in the matter.

Forthcoming Post – A few alternatives to working in an insecure job for the next 50 years.

Posted in Alternatives, But what can I do?, Capitalism, Changing Britain, Postmodernism, Retirement - Early, Work | No Comments »

My Early Semi-Retirement Strategy

Posted by Realsociology on 22nd November 2014

Unlike many other ERE (early retirement extreme) blogs I’ve included some fairly specific details about my income below. Having read quite a few of these blogs it really isn’t helpful that most of them don’t talk about their incomes because this makes it very difficult to assess how likely it would be for someone else to pursue a similar financial plan. I’ve decided to include my own actual income in order to make it very clear that my early retirement strategy excludes at least the bottom 80% of income earners. So in short, unless you’re a high income earner in the UK already, or are on the path to becoming one, there is no point you reading this! This is what all ERE blogs should say, but don’t.

My grand plan pads out into three stages – 40-48/ 48-60/ 60+. The boundaries are flexible. NB I only stumbled upon and committed to the idea of early-retirement when I was 41 this August  2014 (so slightly oddly I’ve backdated this plan!)

Phase One – Age 40-48 years – Full time work, voluntary poverty, paying down the mortgage and saving

This phase consists of six goals…..

  1. Reducing my expenditure to a minimum and living a voluntary-poverty lifestyle. My current outgoings are around £930/ month, which might sound high by ERE standards, but a painful £160 of this is ‘service charge’ which I intend to ditch in the medium term, and so my actual long term outgoings are really just £770/ month.
  2. Paying off the damn mortgage over a 15 year term, at the rate of +£1000 a month. I intend to downsize and buy a property outright in a cheaper part of the country after 8 years.
  3. Saving a minimum of a further £450 a month. Combined with the £20K I already have saved this should give me around £80K at a 4% growth rate over 8 years.
  4. Continue paying into my current Teacher Pension Scheme (TPS). I’ve done the maths and it simply isn’t worth stopping paying into it. This should yield about £11K/ year (post-60) after another 8 years of payments.
  5. Generating second income streams. I’ve set myself the goal of earning about an extra £20K over the next 5 years. This would enable me to quit the rat-race even earlier and some of these streams might also give me some income from age 48 onwards.
  6. Developing ‘resilience skills’ – I got the phrase from Fisker, and I like it! Resilience skills to my mind include constructive skills, cheap hobbies and meditation, the kind of things that are free, and hence work with a frugal retirement plan.

Phase Two – Age 48-60 – Semi-Retirement  –  Hobo-capitalism and working part time.

By the time I’m 48 I should have £130K (2014 figures) equity in my current property and £80K in savings, which will give me £210K in capital. At this stage, I will either simply pay off my existing mortgage or buy a much cheaper property and invest the rest, and use these investments to bring in a base-income while I travel around the world for 12 years. I will need to do a mixture of paid and voluntary work during this phase of my life to support myself, but not very much given that a £210K pot would yield £8K/ year income at a 4% return.

Alternatively I might decide not to go travelling, in which case having the mortgage paid off would mean I could afford to work part-time or intermittently for the rest of my working life based in the UK. I might also just decide to skip to phase three below.

Phase Three – Age 60+ – Full retirement

Barring further layers of neoliberal shaft, my teacher’s pension should kick in at 60, which should be worth about £11K a year, which, with no mortgage costs, will be sufficient for me to live off comfortably. Something else I intend to do at this stage of my life (although I may do this a lot sooner) is to use a portion of my capital to buy some land and establish an edible-forest, with which I will merge to become ‘man of the forest’, or something along those lines.

A few facts about this thing I call myself

I can only start my early retirement drive from where I found myself when l became obsessed with the goal of early-retirement (I think it’s fair to call it an obsession!). TBH I find myself in a pretty favourable position, in a stable job I can probably stomach for several more years, earning more than 85% of the population.

I earn a gross salary of about £44K a year and I’m one year in to paying off a £146K mortgage at 3.1% interest. Previous to buying my current flat (mere non-inheretee high-income earners simply can’t afford houses where I live) outright in 2013 I’d already saved £40K towards it, and the flat’s actually now ‘worth’ about £200K. I work in education which means I’m likely to be able to draw on a  Teacher’s Pension  from the age of 60. At time of writing, after 13 years of paying into it, this is already worth about £6.5k a year (plus a lump sum of £19K) and on my frugal budget this is approximately two thirds of my desired retirement income. To put some of these figures in monthly terms, I take home £2500 after tax and pensions contributions (the later being about £400/ month).

I’m well aware that an early retirement extreme person would look at these statistics and think a five year early retirement strategy would be a doddle, but my own plan is to do it in eight, so what’s below is very much an early retirement light strategy, a luxurious early retirement vision by extreme standards, but still frugal by normal standards.

Below is more detail about how my plan pads out… I think it’s pretty bullet-proof.

Age 40-48 years – Full time work, voluntary poverty, paying down the mortgage and saving

Goal One – Frugality budgeting

Frugality budgeting means committing yourself to voluntary poverty. To my mind this means not only reducing expenditure on ‘necessities’ such as housing, food, transport and utilities to a minimum, it also means a rejection of the consumerist mode of existence. If this is taken to extremes, it is possible to live without money, but my own attempts fall far short of this – I’ve so far only managed to cut down on the take-out Cappuccinos and beers rather than giving them up altogether.

Below is a summary of my own monthly expenditure, based on a take-home monthly income of around £2450. All figures are approximate. NB I’ve since had a small gross pay-cut since I worked out these figures in August 2014 and as a result I now take home £2500 (that’s not a typo, that’s the effect of the wierd and not so wonderful TPS scaled contributions).

My savings to expenditure ratio

According to the early retirement movement, you should aim to save and invest somewhere between 60-80% of your income, which I’m well short of. Taking into account my Pension contribution, I am only at a 30% savings rate. However, because I see my property as a form of future-capital I am going to claim an overall savings rate of 67%. Of course it will be slightly less than this once you factor in the average £3K/ year I pay on interest on the mortgage which cannot be regarded as savings, which would bring my investment rate down to the low 60s in terms of percentage.

Some in the ERE movement may not accept my inclusion of my mortgage repayments to boost my savings rate to 60% – Fair enough, I may in fact be in denial of the insult that is the mortgage and just be trying to warp these repayments into something they are not. In this case, call my effective savings rate 30%, it’s still a lot better than the average, and the important thing is that I am effectively living off 33% of my current income, and the figures all add up to an extremely early semi-retirement after eight years. It’s worth stating at this point that high property prices and being lumbered with a mortgage will prevent most people in the UK rom achieving full early-retirement US style. I think the best we can achieve here in the UK is early semi-retirement like I’m aiming for…. The section below will give you an idea of something of the scale of the mortgage-burden. There are plenty of people worse off than me!

Goal Two – Paying off the mortgage as quickly as possible is essential

Unlike in the US, here in the UK property is the factor that makes Extreme Early Retirement (in five years) simply impossible for all but the very highest income earners (top 5%?). Even if you’re well into the second-decile of income earners like I am, repaying a mortgage on even a small property is probably going to take you 10 years if you want to stash savings away on top of mortgage repayments. (NB I am assuming here that someone hasn’t benefitted financially from a dead-relative at some point in their 20s and is largely self-financing their property. It also goes without saying that owning is the only ERE option in the UK, renting works out at least twice as expensive over a lifetime).

When I bought my current property in January 2014 I took on a mortgage of approximately £146 000 on a 15 year term. At 3.1% interest I will pay back about £183 000, which means the total cost of financing the mortgage is £37 000, or about £3,000 a year (very roughly). If I were to pay this back over the normal 25 year term I would pay back a total of £211 000, or an additional £55 000 over the amount borrowed.

As well as illustrating the extreme cost of a mortgage, even at a relatively low interest rate, this also illustrates the extreme savings (£18K) to be made by paying off the mortgage 10 years earlier than normal.

As stated above, I do actually intend to pay off the mortgage in eight years rather than 15, but I’m investing money elsewhere to facilitate this, to be utilised when I downsize in the future.

I’ve got to be honest, as it stands, the £3000/ year in interest and £1700/ year in service charges I pay above pay HURTS. Over a ten year period, it would cost me £47 000 just for the privilege of living in and eventually owning a two bedroom flat, above the actual market value of the flat.

Unfortunately, looked at in the long term, unless you want to put up with some pretty severe privations, there is no realistic alternative option other than putting up with being shafted to the tune of £5K/ year, mainly because the only other option (if you rule of living with your parents or squatting) is renting, which just means a further layer of shaft (paying of someone else’s mortgage). NB I refer to this as shaft because the only reason I am paying this £47K is because people in a position of greater power (i.e having greater control over the money supply) relative to me have set up a system which makes it impossible for me to live to the standards reasonably required to hold down a demanding full-time job without paying them money for which they effectively do nothing.

Goal Three – Saving….

In addition to paying off the mortgage I’m putting an additional £450/ month away into investment funds and savings accounts, in the hope that these accumulate at a faster rate than the 3.1% interest I pay on the mortgage, a kind of partial endowment-gamble if you like.

In most early retirement models, getting a decent rate of return on investment is crucial, however, my savings are relatively short term, and my income in full and semi-retirement will simply come from part-time occasional work, rent, and a decent pension, so this type of thing is mostly irrelevant for me. If are interested in longer term investments then you should check out Jacob Lund Fisker’s E-R-E blog where you will find links to financial planning for early retirement. Getting this right can make a massive difference to how early you can retire and your income in retirement, so you might want to learn about this. Personally, I’m happy to leave this dark-art to others.

Goal Four - Building second income streams.

There are huge advantages to doing this – I could retire even earlier, I could supplement my income while travelling, and a second income would give me more security. The second batch of ideas below are potential career changers too, and I do quite like the idea of diversifying jobs sometime before I fully retire! NB – My thinking here is ‘realist’ and very much within the ‘salary-man’ mind set. I’ve seen a few ERE blogs which talk about more creative ideas for earning passive income on the side through such things as monestising blogs and social media channels, but I’ve seen much more ‘wishful thinking’ about such schemes than actual evidence that such passive-income earning schemes are likely to bring in that much money. TBH I think such schemes are more hassle than they’re worth, and probably only worth a few hundre quid a month unless you approach them like a full-time job for several months or so to kick-start them, thus not really for me.

Ideas which overlap with my present full-time job:

The ideas below are all linked into my present job. Together, they could return a few thousand pounds extra a year.

  1. Write Sociological articles – I have had a few things published already, although the only source I know is through the Sociology Review.
  2. Write and sell A level Sociology Resources, mainly focusing on revision material.
  3. Develop an online Sociology course… which could get me into offering online tuition at some point in the future, maybe through the Open University.
  4. Develop ‘how to teach A level Sociology Resources’ – which could lead into earning money through training Sociology teachers.
  5. Sell My Soul Once More – Through Examining.

Other ideas for generating income – Career changers:

At present I have no in-depth plans for generating income out of any of these ideas, these are really just my interests that could be converted into income streams. All of which are feasible to set up with relatively minimal outlay, although number two might involve illegally using the allotment to generate an income.

  1. Make infographics – This is my preferred, long-term career change idea – although there is a mountain to climb in terms of skills development.
  2. Set up a business based around Permaculture design and an ‘edible perennial plant nursery’. There seems to be a growing demand for this sort of thing.
  3. Do a fitness instructor course and focus on developing classes for the over 50s market. Presently I’m in no way qualified to do this, but I’ve always thought Nordic Walking is totally cool, and something I’d quite like to get into in later life. Even if there’s no money in it for me, it’d be another practically free hobby – basically walking with poles.

Obviously the list above is highly specific to my own circumstances, and strategies for generating a second income will vary widely.

Goal Five – Developing Renaissance Skills

As I see it, this consists of two things – firstly and most importantly developing meditation and mindfulness skills, and secondly developing those practical and social skills I’ll need to build my own personal ecotopia.

Developing meditation and mindfulness skills

This part of my early retirement strategy is very much inspired by Buddhism and TBH this aspect of my early retirement vision should come first. In essence what this means is putting meditation and mindfulness at the heart of daily life, which is best accomplished through very simple living. This facilitates early-retirement because, again simply, all of these activities involve minimum cost.

My own list of simple living tasks with the times I could spend on them each day if it were not for work are as follows, which is pretty much what I do most weekends and every day during holidays. This kind of lifestyle is what I intend to be doing when I retire, my early-retirement planning is really just to give me the property-security to allow the following to happen on a daily basis –

  • Meditate in the morning and evening and periodically throughout the day (120 mins)
  • Do ‘chores’ (mainly cleaning) mindfully and swiftly (60 mins)
  • Workout every day – for me swimming/ running/ cycling, possibly just walking by the time I’m 60 (120 mins)
  • Read about and offer critical commentary on a range of sociological issues (several hours)
  • Maintaining an allotment/ edible-forest (also several hours)
  • Soft meditation (flow type activities) – Yoga and contact juggling (90 mins)
  • Read about Buddhism (30 mins)
  • Repeat daily until enlightened

In my general life-philosophy, you don’t really need much to be happy – In fact I’m a big believer in the fact that meaningful happiness is something that is non contingent – you should be able to be happy just sitting there, breathing. If you can’t sit quietly alone, you clearly can’t stand yourself and that’s something that needs to be sorted out urgently. It is unfortunate that the norm in Britain seems to be one of constant distraction away from facing up to the ultimate intangibility of self through the work-hard, consume-hard cycle. Unfortunately for many who fall into this trap, retirement is likely to be experienced with an accompanying sense of dread, because deep down one knows that there is going to be a lot more ‘empty time’ in retirement. If you’ve already come to terms with this by the time of retirement, however, it will be much less of a concern, and you would have saved yourself tens of thousands of pounds too!

Looked at in a simpler way – the advantage of putting meditation and mindfulness practices at the heart of things is that it costs practically nothing and the basis of your life is nearly free (as is your mind, incidentally), and consuming things is just something you do occasionally, rather than the norm of unfreedom through overconsumption.

Developing money saving skills

While my own early-retirement vision is very much focused around maximising income-generation, there is also an important role for saving money by developing new skills. To this end, I am currently learning to grow my own food, build and repair bicycles, build cheap computers, and I will at some point move on to household DIY and construction and possibly even motor-mechanics if van-dwelling ends up looking like being a major part of my future. All of these will become much more important in my later years, and will be crucial to living frugally, but I haven’t dealt with them here because I simply don’t need to think about these things just now.

The 48-60 plan!

The mortgage should be paid in full by the time I’m 48,and my basic plan at this stage is to quit full-time work, rent out my flat and use the £8K I get from this as a ‘base-income’ to allow me to travel/ work abroad for 12 years, until I’m 60 and the teacher’s pension kicks in, at which point I intend to sell my flat and build ecotopia. Yes, sad to say but the only option I’ve got of retiring early is to shaft somebody else, just like I’ve been shafted for the last couple of decades where rent is concerned.

I may as well mention here that I have explored the option of buying land and living in an eco-shack now, but the depressing truth is that this isn’t feasible in the UK if you have a full-time job – basically because doing so means you essentially have to take up all out war with the planning system, which is time-consuming.

Building Ecotopia would be much more feasible abroad, but this would mean very limited opportunities for income generation. I’m sure it would be possible to do this now, if you’re creative, and prepared to take on risk, hassle and extreme-frugality, but as I’ve said before, given the fact that I quite like my job and my life and, I’m in no rush to get to this stage, and every year I hold off makes it more likely that the eco-shack future will be a pleasure rather than a miserable disaster.

The Transition from work to Nomad

The amount of money I’ll need to transition is mainly dependent on whether I want to van or cycle/ walk around the world – The former is about twice as costly as the later.  Assuming I’m prepared to go on foot I figure I’ll need something like the following –

  • £2000 to sort the flat out for rental – mainly replacing carpets/ bathroom and disposal of stuff.
  • £3000 in the bank as an initial fund/emergency fund/ return fund.
  • £1000 on traveling stuff, including tech.

If I wanted to go via bike, I’d need to add about another £1000, and if by van another £5000. So depending on my preferred mode of transport, I’ll need from between £6 and £11k to move on!   A further related advantage to my nomad Plan is that it will force me to get rid of much of the material crap I really don’t need and reduce my possessions down to the bare-minimum.

Rough plans for travelling

As I see it I’ve got another eight years to figure out what I want to do, so these are just rough ideas. If future projections work out, I’ll have about £8K/ year (or £650/month, or £20/ day) to do the following – not necessarily in the order below.

  • Cycle around the world. – Do some nice wilderness- trail walks in various places.
  • Live in Dharamsala for a while and just be.
  • Do voluntary work to learn the skills I’ll need to build my own eco-shack.
  • Find a location for ecotopia.

Needless to say spending will be a little tight, and when I’m not volunteering and exchanging my labour for room and board, most of my evenings will be spent camped at roadsides or on people’s couches. Having said this, it is possible to stay in a cheap hotel in many parts of the world for less than than the amount of money I’ll have coming in, so at times this phase of my life might mean holidaying in the classic sense of the word, and possibly for a greater period of time than most worker-consumers would typically ‘enjoy’ in their lifetimes.

It may be that I have to stop off and do paid work every now and then. I simply don’t envision this being a problem for a qualified teacher (especially as I’ve got a TEFL qualification). All of the above sounds like huge amounts of hard work, but also a lot of fun, and I really don’t understand why anyone whose already mortgage free with their kids at university (which amounts to hundreds of thousands of people in their 50s in the UK) doesn’t just quit work and do something similar, rather than continuing to work for the majority of the year and then paying through their teeth for holidays while leaving their houses empty. I guess people just lack imagination.

The 60+ Plan

TBH This post is already over-long – So I’ll just re-emphises that when I turn 60, I’ll buy some land, plant a few hundred ebible trees and shrubs and quinoa, don some lemmy style cut-offs and graze, bare chested in summer, for the next 25 years or so until this thing I call myself dies. I’ll also meditate a a lot, keep up to date with Sociology and comment via my blog, and take the odd trip into town slices of cake and a few beers. Sorted!

Related Posts

My Book – Early Retirement Strategies for the Average Income Earner

A summary of Early Retirement Extreme by Jacob Lund Fisker

 

Posted in But what can I do? | 1 Comment »

Five ways to spend less than £263K on housing over the next 32 years

Posted by Realsociology on 1st October 2014

The average twenty something in the UK will spend £263K on housing over the next 32 years of their life, and many will spend considerably more.

What I find deeply offensive about this astronomical figure is the simple fact that the house below cost £3K and took only 10 days to build.

ST_roundhouse_1307_2982916b

 

Given this, I think normal housing strategies are in need of serious reconsideration.

The Housing Norm in the UK (which is just NUTS!)

According to this is money, a typical first-time buyer who buys a £151,000 home with a £121,000 repayment mortgage over 25 years will pay back £191,600,  calculated at 4% interest. This works out at £638 a month or £7664 a year, which is equivalent to 9 years worth of earnings on the median-salary. Of these repayments, interest accounts for £191, 600 – £121, 000 = £70, 000.

Previous to buying their first property,  A recent report by Santander found that the average person spends 7.4 years renting paying an average monthly rent of £474, totalling £42, 000,

Combined with the £191.6k loan repayment and the £30K assumed deposit in the scenario above this gives a total 32 year average spend on basic housing costs of £263 600. Obviously, if you are twenty-something, you have the choice to follow a similar path-to-property ownership and just settle for paying out an overall average of £600/ month for 32 years.

Obviously you have the choice to follow a similar path-to-property ownership and just settle for paying out an overall average of £600/ month for 32 years. Or, like me, you might think this is totally nuts and consider doing all, or any of the following in order to reduce this figure…

  1. Live with your parents for the rest of your life
  2. Squat someone else’s second (or third/ fourth/ fifth etc….) property
  3. Live in a van
  4. Buy some land and live on it without planning permission
  5. Set up a low impact eco-village

This post is really just an overview of some of these alternatives, to demonstrate that they are viable, even if challenging….

One –  Live with your parents – until they die.

According to the Office for National Statistics, A total of 3.3 million 20- to 34-year-olds lived with their parents in 2013, the highest number since it started keeping records in 1996.

While the prospect of a 34 year old still living with their parents may sound sad, it is good for your finances. Taking the average rent of £5688/ year, if someone were to live with their parents from the age of 20-34, they could potentially save £80 000, and that’s before accumulations on savings are factored in, and for the ultimate savings on housing costs, you could just live with your parents until they die, which is what 42% of current renters are waiting for in order to be able to get their foot on that first rung of the property ladder.

Two – Squat

Squatting means to unlawfully occupy an uninhabited building or settle on a piece of land.

Until recently squatting in England and Wales was generally a civil matter, not a criminal matter, However, in 2012  Squatting was technically criminalised by the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012, section 144 of the LASPO made it a criminal offence to trespass in residential properties with the intention of living there.

However, a few test cases have revealed that if the police find you squatting a building, charge you with squatting and you plead not-guilty, it is actually nearly impossible for the prosecuters to prove that you were actually living in the building permanently.  Also, the law does not cover non-residential properties.

There are a few things you need to get right in order squat a property for any length of time –The squatter’s advisory service recommend the following –

  • You need to make sure you do not commit criminal damage to get into the property, and repair any such damage that someone else has done immediately after you take up occupation.
  • Always make sure somone is in the property, because if the property is vacant you can be evicted.
  • You should contact the utilities providors asap to prove that you intend to pay.
  • When the police turn up, do not give them entry, talk to them through the door, and finally research who the owner is so you know who you are up against when you go to court, and don’t expect them to be too happy about it the fact that you’re squatting their property.

It’s difficult to say exactly how many people squat in the UK exactly given that squatters don’t generally want to draw attention to themselves, but there are some high profile, political examples –  One of the most interesting being Grow Heathrow which was established in an abandoned market garden site in Sipson, one of the villages due to be completely tarmaced to make way for a third runway at Heathrow. Over the past four years the site has played host to a wide range of political gatherings for groups such as: UK Uncut, Climate Camp, Reclaim the Fields, and The Transition Network, so you would need a certain amount of subcultural capital to fit in to this network, but if you can embed yourself comfortably into that sort of thing, then the payback is free accomodation, and probably food too.

Also of interest is this site – Made Possible by Squatting which is an exhibition from  September 2013 documenting stories of how squatting has benefitted the lives of individuals and communities in London- against the backdrop of the government’s attempts to criminalise squatting.

Three – Live in a Van

Admitedly this doesn’t seem to be a very popular option here in the UK, so firstly to America for some inspiration….  To Simplify is a blog by someone called Glen, whose been living a mobile life for over 5 years in a heavily converted 1988 Volkswagen Vanagon, which he describes as the closest thing to a home he’s ever owned. The blog simply documents Glen’s life on the open road, and he also details his total van conversion, from totally gutting the original van and then installing a whole range of new features – not least of all the engine and a solar electricity system. I particularly like this picture in which Glen’s parked up with other, more typical American mobile home dwellers – it sort of sums up his philosophy.

van 1

Bringing it back across the Atlantic, El Pocito is a nice little blog which, among many other things of an alternative nature, outlines the experience of two art teachers, originally from the UK who spent 9 years travelling through Spain and Portugal in their converted van. The site offers some excellent advice on the realities of van-living on the continent.

Campervan Life is a web site devoted to providing advice on buying, converting and living in a camper van, set up by a guy called Darren who bought a cheap Mercedes Sprinter (£1000 in 2006), learnt how to convert it on-the-job with no prior experience or any significant background in DIY and then travelled around Europe in it for 9 months. He lists the ‘van-travel’ related costs of his trip at under £3K, and although he doesn’t appear to include costs of the conversion can’t imagine it would have cost more than £1000, which means that in total Darren had almost a year of comfortable living and travel for under £5K, which is cheaper than the average rent in the UK.

While there are no doubt hundreds of people who live in vans long-term in the UK, but hardly any of them document their experience, hardly surprising given the degree of prejudice against ‘travellers’. The only example I could find was of a guy (who, incidentally has a job!) who’s put a few videos up on youtube outlining aspects of his life in a converted ambulance. In this clip he’s talking about his ‘split charge relay’ while smoking a king size roll up (contents undisclosed)

Incidentally, living in a van may sound like it’s an extreme strategy for saving money, and possibly only for hippies, and you’d be forgiven for making this mistake given that one of the first search returns for ‘living in a van uk’ takes you to a forum called ‘UK HIPPY’, but there are even members of the relatively conservative caravan club who have lived in their caravans long-term, combining this with either owning a small no-frills apartment, or house-sitting.

Four – Buy some land and just build without planning permission

In eco-circles, the best known example of someone who has actually done this is Tony Wrench and his partner, who built their own low-impact roundhouse for about £3K in 10 days (picture above). Actually, this may be the only example of a couple who have managed to do this and get away with gaining retrospective planning permission, others, such as the couple who built the beautiful hobbit-house below don’t seem to have been so lucky.

Shortly to be torn down because local planners judged it to be 'out of touch with the countryside'

Shortly to be torn down because local planners judged it to be ‘out of touch with the countryside’

 

For this reason, although this particular strategy is the one I intend to adopt at some point in the future, you might be better off going for option five…..

Five  Set up a low-impact community

There aren’t very many low impact communities in the UK, this is a very emergent phenomeonon, but one example of a group who have managed to get temporary planning for their dwellings is Tinker’s Bubble, a community of 11 adults and 2 children based in Somerset who live on 28 acres of land in self-built houses, grow most of their own food and are fossil-fuel free. I don’t have too many about the economics of the place, but the dwellings most of them live in seem to be of Tony Wrench’s low impact design and the weekly contribution for food is only £20, so compared to the average mortgage-monkey, this represents a significant saving.

One of the most inspiring recent examples is that of Llammas. Based in Pembrokeshire, on about 75 acres of land, this is one of the few fully legitimate (in planning terms) eco-projects in the U.K. It combines the traditional smallholding model with the latest innovations in environmental design, green technology and permaculture. The ecovillage was granted planning permission in 2009 by the Welsh Government and is currently part-way through the construction phase. The dwellings being built here are more robust than those in Tinker’s Bubble, and thus more expensive, but over the course of a lifetime these individuals will save themselves well over a £100K per person compared to the average, and have a significantly higher quality of life into the bargain.

In conclusion

Although all of the above involve more hassle than the standard massive-mortgage route to home ownership, personally I think a little discomfort and risk is worth it given the injustice involved with said mortgage route – via which you pay tens of thousands of pounds to people who simply haven’t done anything to earn it.

 

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Stop buying crap you don’t need now and retire 4 years earlier!

Posted by Realsociology on 24th September 2014

In this post I continue my statistical critique of the ordinary life of the everyday worker-consumer. This is done through comparing a hypothetical 35 year old who earns the median salary and has average expenditure to a hypothetical construction I call the frugal-consumer who spends as little as possible without completely cutting themselves off from society. The expenditure levels of the former effectively tie them into working for a further 33 years until the current projected standard retirement age of 67-8, while the later, assuming they maintain their frugal levels of consumption, will be able to retire when they are 52-3, or 14 years earlier, or in half as much time as the average-consumer on the average wage.

Here I consider spending on Consumer Frivolities (see previous posts for other categories of expenditure).

The average-consumer spends £216.71 a month on what I call consumer frivolities, which includes unnecessary expenditure on restaurants and hotels (£73.15), furniture and furnishings (£51.48), ‘miscellaneous goods’ (£69.33), which in the ONS family spending survey mainly consists of beauty products and jewellery, and finally recreation and culture (£111.06), which for most people means the cost of purchasing audio-visual equipment and subscriptions to various services, and also includes the cost of entrance to things such as cinemas, concerts and festivals.

Over the course of one year this amounts to £3,933 and maintaining this for another 33 years will cost £129, 798,  which represents 6.0 years working earning the median salary.

So what does the average person get for this £129, 798, or 6 years of toil? Most people would say it’s hard to generalise, because the consumer gets what ever they want for the money they’ve got, assuming the market can provide it. Some people will choose a house full of antiques, others a house full of gadgets, and stilll others closets full of clothes and  boxes full of jewellery. Increasingly likely, though is that money will be spent not on stuff, but on experiences, such as playing the dating game, or weekends away and longer holidays, supplemented by such products as fake tan and sun cream to prevent an actual sun tan.

To many people, such consumerist experiences are the very purpose of life: the products we buy define us, mark us out, and the events we purchase play a crucial part in our weekly, monthly and yearly life-course – they are things we look forward to, and back on, the events which help to maintain and define our relationships with our friends and family and give us something to talk about at work, other than work.

I’ve managed to resist the urge to be utterly cynical about the role which consumption plays in most people’s lives, because just recently I’ve come to perceive most ordinary consumption as tragic, and in this context cynicism seems innapropriate. Those people  who define themselves through their stuff become tied to it (and possibly require a bigger house in which to stuff their stuff), and for those who define themselves through their experiences, it seems to me that the way in which many people consume such events involves them not really being present because they’re too concerned with acting for the sake of sharing the experience via social media, and for me if you’re not actually present, then you’re not really even alive.

Ultimately such unnecessary consumption costs the average-consumer on the median salary 6 years of their working life. In contrast to this the frugal-consumer rejects the trivial, shallow and short-lived fake-joys of consumerism and instead engages in meaningful, productive and either free or very cheap activities when not working.

The frugal-consumer is not, however, an anti-consumer, and maintains an expenditure level on ‘consumer frivoloties’ which allow them to avoid being completely cut off from ordinary society. This is mainly because I could not, hand on heart, say that I am ever likely to cut out consuming frivoloties all together myself, cut down radically yes, cutting out altogether, highly unlikely.

The frugal-consumer spends just £60 a month on such frivolities, allowing for £20 a month on restaurants and hotels (so basically no hotel stays and one trip to a restaurant a month), £20 a month on furniture and furnishings, given that this category includes spending on basic household items such as hoovers, a further £20 for ‘miscellaneous goods’ because everyone needs a little something extra, and a whopping £30 a month for recreation and culture. This amounts to an annual expenditure of £1080 a year, a total of £35 640 over 33 years, representing a saving of £94 158 or 4.33 working years of working at the median salary compared to the average-consumer.

NB If this looks unrealistic, or even unbearable, something like the bottom fifth of the U.K.  in terms of income live such a life out of necessity rather than as part of an early-retirement strategy, so it is possible.

References

http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.htmlhttp://www.ons.gov.uk/ons/dcp171776_335332.pdf

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On the Social Ideology Ideology of the Motorcar (UK version, 2014)

Posted by Realsociology on 20th September 2014

One unexpected finding from my statistical analysis of average consumption patterns (E R E for infographsBLOGv3) is that an irrational addiction to the motorcar is the single most significant  factor which locks the individual into having to work until they are 68. Giving up the car and moving to within cycling (preferably walking) distance of work and most other places you want to go is the single most significant thing you can do to save money and make early retirement possible.

The average-consumer’s crazy car habit.

According to the National Travel Survey 2012, the average distance travelled per person  in 2012 was 6,691 miles, with 78% of these miles being travelled by car, which means roughly 5000 of these miles were travelled by car. If we assume that someone makes an economically rational choice and purchases a relatively cheap car, then using the AA’s Motoring Costs Survey 2014, the overall average standing costs of the cheapest category of car (up to £13K in this survey) stood at £1913, with a running cost per mile of £18.56. If we factor all of this together, the average cost of running a cheapish, and thus probably small car in 2014 was £2841. (See endnotes 13-14)

This works out at £277.77 a month or £3333.20 a year, which rounds up to a staggering £110 000 over 33 years, equivalent to 5.2 years worth of earnings on the median salary.

worst-ever-jams3-01122012-jpg_130019
I was first alerted to the incredible economic inefficiency of the motor car by Andre Gorz’s excellent 1973 essay ‘The Social Ideology of the Motorcar’. Following Ivan Illich, Gorz made the point that the average American spent four hours a day devoted to their car, either sitting in it (moving or not-moving), or working to pay for the various services associated with driving. He calculated that if you added up all of these hours and divide by the average distance travelled by car, the average American travelled at an average speed of 3.5 miles an hour, or the same as walking pace, but thousands of dollars worse off and probably a lot more stressed as a result.

In Britain today, the statistics aren’t quite as bad as this. If we take the approximate average distance travelled of 5000 miles a year, and divide by the average speed of 24.6 mph, this makes a total of 203. 25 hours spent driving. If we then add to this the 212 hours it would take you to pay for one year’s worth of motoring costs, the total amount of hours we get is 415.25, which when divided by 5000 miles gives us an average speed of 12 mph.

Given that this is comparable with the speed of a bicycle, and that I am being quite generous in my calculations (the bigger your car, which won’t go any faster in all that traffic, the more local your journeys, the more of them are in peak hours, and the lower your wage, then the more time inefficient the car becomes), all in all I’d say the car is, for your typical person, a total waste of money and of 5.2 years of a precious human life.

References

The National Travel Survey

AA’s car costs

http://www.bikereader.com/contributors/misc/gorz.html

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310251/congestion-local-a-stats-release-mar-14.pdf

http://www.thebikestation.org.uk/storage/BS_Travel_Cost_Comparison_2011.pdf

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Your mortgage or your life?

Posted by Realsociology on 13th September 2014

Following on from my realisation that the average income earner could retire at 52, I’ve started to analyse the relative importance of various categories of expenditure in preventing early retirement. Here, I look at housing.

Given that housing represents the single largest life time expenditure item for most people in the U.K., getting your housing strategy correct is vitally important for early retirement. As far as I’m concerned, it is simply irrational to rent in the long term, so, if you can afford it, buying really is the only option. However, the average-consumer goes about this in the wrong way – i.e. by spreading their mortgage repayments over a relatively long, 25 year term and dragging the mortgage out even longer because of trading up to a larger property.

According to this is money, a typical first-time buyer who buys a £151,000 home with a £121,000 repayment mortgage over 25 years will pay back £212, 000, calculated at 5% interest. In my calculations I’ve been a little more optimistic, to reflect some of the better interest rates out there at the moment, and assumed an average life-time interest rate of 4%, so borrowing the same amount  (£121 000) at 4% over 25 years means paying back a total of £191,600, at £638 a month or £7664 a year, which is equivalent to 9 years worth of earnings on the median-salary. Of these repayments, interest accounts for £191, 600 – £121, 000 = £70, 000, which in itself is equivalent to almost 3 years of work earning the median salary. (See endnotes 8-12)

In my frugal-consumer model (Spread sheet ) the same figure is paid back over 11 years, which means paying back a total of £149, 764, at £1135 a month or £13, 620 a year,  equivalent to 7 years worth of earnings on the median salary. Compared to the average individual, the frugal-consumer saves themselves over £40, 000 or the equivalent of nearly 2 years worth of work earning the median salary.

The above scenario is actually extremely generous in its comparison – In the sense that while my 11 year pay-back model is, I think, reasonably achievable for the average income earner, my ‘average’ consumer model is in fact not realistic – If a couple chooses to ‘trade up’ to a house then their costs of housing almost double.

The Average house price is currently £264K – And if we apply the same payback-ratios as above, then a  4% mortgage over 25 years gives a total payback amount of £385K (5% gives  £424K).

(NB – Many people will pay back more than this – 30 years is rapidly becoming the norm for mortgage repayment periods – In 2012, the number of mortgages with more than 30 years on the term had risen to 27.8%, up from less than 3% ten years earlier, and the longer the mortgage term, the greater the interest!

So let’s just pause…. assuming that you stay in a one or two bed flat for the rest of your life and stick to the standard mortgage term, then that will cost you £250K over the course of your lifetime, but if you want a family-home, you are looking at something in the region of £400K. Looked at in starker terms, if we take the median salary, these figures represent approximately 12 and 20 years of work respectively. If you compare the later of these to my frugal-consumer model, you lose 9 additional years working to pay for property.

To make an even starker comparison, there are several people in the UK who have built their own houses for 10 times less than these figures both in terms of money and time, it becomes clear that most of the above years are basically years spent making someone else rich – A combination of the land owner, property developer, previous owner and/ or mortgage-lender – And I think anyone who is either considering getting on the property ladder or who is currently on it needs to urgently consider some of the available, cheaper, alternatives to housing.

Or look at it this way – If you walked in to work tomorrow and your boss offered you a year, or two, or ten off on full pay, that’d be pretty nice, wouldn’t it? Or if you won £100K on the lottery, that’d be at least Facebookable. These are the types of figures radical housing alternatives can save you…..And these are the figures you throw away by being a mortgage slave.

NB – The point of this post isn’t necessarily to criticise the injustice of a system based on debt, the aim is simply to raise awareness of the extreme savings that can be made in terms of your money and your life if you just pay that damn mortgage down as quickly as possible.

References

http://www.thisismoney.co.uk/money/mortgageshome/article-1633400/Mortgage-calculator-Compare-true-cost-rates-fees.html

Related Posts

1. How the Average Income Earner could retire at 52

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The freedoms of living without money

Posted by Realsociology on 6th September 2014

I think learning to live with less money is a crucial life-skill that pertains to greater freedom, but here are two examples of people who have managed to live without money altogether…

Based in the UK and author of the Moneyless Manifesto, Mark Boyle gave up money for more than 2 years in November 2008. Having studied economics for six years he found himself looking around for a ‘big cause’ to devote his life to, he concluded that the one thing that disconnects us from nature more than anything else is money. Boyle points out that while we tend to associate money with independence, in fact it just makes us dependent on people far away from us, and less likely to look to our local communities for our sustenance. It is also money that is the root disconnect which facilitates the type of global production processes which are associated with social and ecological injustice. In the video below he makes the point that he couldn’t really proselytize about such things unless he actually lived them, and hence the moneyless experiment was born.

He originally set out to do this for one year, but after that year started to question how he could return to a money based economy, so he carried on.

A second example from the US is Daniel Suelo who occasionally updates the Moneyless World Blog has been money free since the year 2000 – Seriously, the video below is one of the most inspiring things I’ve ever watched. He says that he’d thought about going money free ever since he was a child, when he used to question why his Christian household didn’t really keep to the ideals of Jesus. He then went on the study other religions and realised that what they had in common was that they all stressed the importance of living a ‘giving’ life based on compassion, rather than one in which you do something now for future gain, which is precisely the typical lifestyle associated with our money-based economy. There’s also a major ecological thread running through his philosophy – he lives a ‘natural life’ rather than an ‘accounted’ life, and if you want an interesting perspective on death, this video is a must watch. (Also, I may have this completely wrong, but Suelo is what I imagine the Zen Masters of the Tang to have been like.)

The man who quit money from Sacred Resonance on Vimeo.

 

The difference between the two is that Suelo seems to be living without money for spiritual reasons, part of which involves living spontaneously, and connecting with nature, and although networked and now joined by similar people, he seems to be more of a lone agent amidst other lone agents, whereas for Boyle his experiment is much more political, and he’s well-embedded in the Transition Movement and is currently involved in in establishing Streetbank, a nation wide money-free skills and stuff sharing site. Mark Boyle’s book also has some interesting criticisms of the money economy, whereas Suelo seems much more content just living a money free life, relatively disconnected, stating that the problems with the money-economy are so obvious they don’t really need to be criticised.

Such radical lifestyles serve as a reminder of not only how central money is to our present social system, but just how colonised the average mind is by the very idea of money.

 You might like to ask yourself the following questions

  1. What do you need money for?

  2. Do the benefits of consuming the things you purchase actually outweigh the cost (working) of getting that money?

  3. Could you get the things you want by other means other than money?

  4. Could you let go of the the desire for the things you want and live with much less money, or without money altogether?

  5. Why is it that I struggle so much giving up take-out Cappuccinos?

OK, so the last one’s personal….! 

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How the median income earner could retire at 52

Posted by Realsociology on 3rd September 2014

Over the summer I worked out that a 35 year old earning the median salary could potentially retire at 52, if they just stop buying crap they don’t need now. In contrast, the expenditure levels of the average worker-consumer effectively tie them into working until the current standard retirement age of 68.

This post is simultaneously a critique of the ordinary worker-consumer and of the Extreme-Early-Retirement model, which I don’t think can be applied in its fullest sense to an average person in the U.K. (Although if someone wants to modify my stats using different investment models to see if the retirement date could be brought forward, I’d be interested!).

In this blog post I compare two hypothetical 35 year old individuals (4) who both earn the median UK salary. One individual has average consumption and expenditure while the other has in mind the goal of retiring as early as possible and so is much more frugal, without completely having cut themselves off from society.

As testimony to my lack of Open Office Calculator and Inkscape skills, this is represented below:

Ret Info

To make reading this more meaningful, you should refer to this spread sheet throughout – Comparing 33 years of expenditure

For the sake of making an easy comparison, I’ve used expenditure figures based on one person living alone for the remainder of their life, and imagined that they have just bought their first property at the age of 35. The reason for selecting a 35 year old is because this is the age by which most people are settled into a stable career, and this is also the age by which most people are at least starting to think about retirement, if not yet looking forward to it in the near future. It also happens to be the age at which today’s typical graduate student can reasonably have expected to have paid off their student debts and have some kind of savings towards their first property. Although the figures in each expenditure category will vary considerably depending on variables such as age, or household make up, the levels of expenditure are generally not going to be that far away from how the majority of people spend their money for much of their lives, and thus most people should at least recognise something of their own and their friends’ expenditure habits in these figures.

However, to satisfy those who just can’t get over the problems of using averages when variables which will differ widely, I’ve included a link (4) to the spread sheet where I’ve done my calculations so you can add in your own expenditure and income levels in order to personalise these calculations for yourself, or you can even modify at a deeper level to add in things such as inflationary effects, investment returns and changes in circumstance over time.

The purpose of this exercise is to put in the starkest terms possible how many years and months (expressed in decimal terms) of one average human life one individual would have to spend working to buy certain things for the remainder of one’s normal working adult human life. In those stark terms – The expenditure levels of the average-consumer effectively lock them into working until the current standard retirement age of 67-8, while the frugal-consumer, assuming they maintain their frugal levels of consumption, will be able to retire when they are 51, or 14 years earlier, or in half as much time as the average consumer on the average wage.

 

Executive summary – A comparison of the 33 expenditure patterns of an average-consumer compared to a hypothetical frugal-consumer.

As far as I see it, there are three main factors which work together to keep the average 35 year old worker-consumer locked into the need to work for 33 years until they are 67-8. In terms of overall expenditure, the single most significant item is the 25 year mortgage with massive interest payments (costs 9 years). However, this lock in occurs primarily because the high cost of car ownership (costs 5 years), and what I can only characterise as fragmented expenditure on a range of unnecessary consumer frivolities (costs 4 years), which together means that a person earning the average median salary has no choice other than to drag the mortgage out over a 25 year period, and accept the attendant massive interest costs.

In contrast, what I call the frugal-consumer chooses to get rid of the car and buys a bike (saving 4 years), radically reduces consumption of frivolities (saving 2.3 years), and in addition makes some relatively marginal savings on necessities (saving 1.5 years) such as food and utilities. Taken together, these changes in lifestyle allow for an 11 year mortgage repayment term and much lower interest payments as a result (saving 2 years). All of this, factored with the lower cost of living, mean that this individual could potentially accrue enough savings over 16 to years to pay for 33 years worth of frugal consumption, allowing for an early retirement age of 52.

In future blog posts, I’ll compare expenditures across four categories – housing, transport (focusing on the car), consumer frivolities and things which may be reasonably regarded as necessities.

If you can’t wait, you can always buy my book and help me retire a few minutes earlier…..

 

Boring but important – A few (selected) notes on data sources and expenditure categories and statistics

Categories of Expenditure In my analysis below I have four main expenditure categories, mainly drawn from The Office for National Statistics’ Family Expenditure Survey (5) -Mortgage repayments -Transport costs -Necessities – food, utilities, council tax, clothes, pensions contribution, communication, maintenance of dwelling, health -Consumer frivolities – recreation and culture, restaurants and hotels, ‘miscellaneous’, household goods and services, alcohol and tobacco and education.

To get my figures for individual expenditure based on one individual living along I’ve mainly used the data from the ONS’ family spending survey and divided by the average household size (2.4 people) where it makes sense to do this (dividing makes sense for clothes, but not for council tax). Because the figures are mostly weekly, I’ve multiplied by 52 to get the annual figures and then 33 to get the 33 year overall expenditure to the normal retirement age. I’ve calculated how many years working it would take the average consumer to pay for one category of expenditure earning the median net salary by  dividing the total cost of 33 years worth of expenditure by this figure (£21, 240). Where housing costs are concerned, I’ve used the figures for the cost of repaying the average mortgage which is £121 000 according to this is money (6).  Here, for the average-consumer repayment is over a 25 year term, while for the frugal-consumer, the repayment period is over an 11 year term.

Median Income

According to the UK Annual Survey of hours and earnings (7) median, full-time gross weekly earnings stands at £517.00 per week, which amounts to (*52) a median gross annual salary of £26884, which equates to a take home annual salary of £21, 240, or a monthly salary of £1770 after income tax and national insurance are taken out (£408/ week for those who like to work in weeks).

Potential problems with my modelling

Firstly, I don’t take into account inflation, I’ve just worked out everything at today’s prices, and neither do I take into account any returns you might make investing rather than paying down the mortgage, which is the main early-retirement strategy in my scenario. However, these two things being equal in both my average and frugal-consumer examples, you are still a lot better of spending as little as possible on anything other than the mortgage or savings. Another potential limitation of the model is that it is mainly based on someone having a stable job, and being single, although it is possible to ‘stick to the programme’ while moving around jobs and holding down a relationship, maybe even kids, just a lot more difficult.

 

References

(4)See the spread sheet above

(5)Office for National Statistics – Family Spending 2013 http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.html

(6)http://www.thisismoney.co.uk/money/mortgageshome/article-2553023/Two-thirds-time-buyers-turn-Bank-Mum-Dad-deposit-help.html

(7)ONS – Annual Survey of Hours and Earnings 2013 – http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/2013-provisional-results/stb-ashe-statistical-bulletin-2013.html

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