Early Retirement Extreme – A Motivational Visualisation (?)

One consequence of striving for early retirement is that you end up having no-life, so I’ve developed the visualisation below to provide some motivation.

Extreme Early Retirement

It shows how long my current total savings would last assuming monthly outgoings of £700/ month (the minimum/ base mount I’ll need to live off once the mortgage is paid off).

The end date is set at July 2033 when I turn 60 and my teacher’s pension kicks in which, with lump sum factored in, is already set to provide me with more than £700/ month from that point forwards.

The start date is pretty arbitrary – I just backdated it to to this July because that’s my most recent birthday. No reason why I couldn’t start this at some point in the future, but you never know, I may find a duffel bag of £50s tomorrow and be able to retire at 44, there’s always hope. (And there in’s the curse of my life – hope).

Personally I like the Viz – it shows me clearly that each £700 I save (which is what I can tuck away each month at a push) brings my retirement date forward by a month. (OK perhaps if I’d started it at 2022 or something around there it would be a tad more motivational?!?)

In summary, here’s a few financial facts which have emerged out of this exercise, based on calculations specific to my own individual circumstances!

  1. £700 saved = retirement date brought forwards by one month

  2. £24 saved = retirement date brought forwards by one day

  3. £1 saved (actually every so slightly less!) = retirement date brought forward by one hour.

Alternatively, you could express this in terms of how many hours and days each good or service costs you in terms of retirement-days lost. E.G…

1 large Cappuccino from Costa (cost £2.65) pushes one’s retirement back by 2 ½ hours.

1 pint and a bag of crisps in the pub (approx cost £5) pushes one’s retirement back by 5 hours.

1 Domino’s Pizza (£10 if on special) pushes retirement back by 1 day.

Another way of seeing this is to look at the time spent engaging in the ‘consumption moment’ in terms of a ‘time trade-off’ – Given that each of these activities takes me about 30 minutes then….

Enjoying a Cappuccino for 30 minutes pleasure extends my working life by 2 ½ hours, or 5 times the amount of time it takes me to delicately sup the Cappuccino.

Enjoying a pint and bag of crisps extends my working life by 5 hours, or ten times the amount of time it takes me drink the pint and scoff the crisps.

Enjoying a Domino’s for 30 minutes extends my working life by 10 hours, or 20 times the amount of time it would take me to eat the Pizza.

NB – Don’t forget that all of the above is based on my personal statistics entirely – and I’m not saying that it would take me 20 hours of work to earn enough to buy a Domino’s, of course it wouldn’t. What I mean is that, based on my needing £700/ month to retire, which works out at £24 a day, then £10 costs me half a day. If I forewent the Domino’s and saved the cash, I could retire half a day earlier (assuming I don’t eat Domino’s again, that’s not in the financial model).

Closing thoughts

Of course, with luck, my savings will accumulate at a faster rate – and so every now and again I’ll be able to notch another month forwards. Also, I could of course assume that once I retire with a lump sum of, say £60K, that I can expect some more money back from that in returns too. In short, this is a very conservative way of estimating my early retirement date.

I wish I had the technical expertise to do a live infographic of what’s above, rather than relying on a static version in word.

Executive Summary

No more Domino’s!

If you like this sort of thing, then why not buy my book:

Early Retirement Strategies for the Average Income Earner, or A Critique of Curiously Ordinary Life of the Everyday Worker-Consumer

Available on iTunes, Kobo, and Barnes and Noble – Only £0.63 ($0.99)

Retirement Cover5

Also available on Amazon, but for $3.10 because I’d get a much lower cut if I charged less!

How Corporate Charitable Foundations Influence Economic Policy in Developing Countries

What’s below is again summarised from Arundhati Roy’s ‘Capitalism: A Ghost Story’ (2014). It could be used in the Global Development topics on ‘Organisations in Development’ or ‘the role of Private Aid in Development’

A flow chart of what’s below would run something like this…

TNCs (pump their profits into their) – Charitable Foundations (who established) – The Council of Foreign Relations (which influences) – The World Bank (which sets the economic policies of) – Developing Countries

Basically Roy argues that in the early 20th century, three of the largest corporations in the world (one of which was Ford) set up Philanthropic (charitable) organisations – In the middle of the 20th century, after World War Two, these organisations were key to establishing the Council of Foreign Relations, the World Bank, the United Nations and the CIA. Essentially, Roy is arguing that US Corporations run the biggest international organisations in the world, which in turn coerce Developing countries into doing what these Corporations want.

The enthralling history of ‘philanthropic foundations’ began in the United States in the early 20th century. Among the the first was the Rockefeller Foundation, endowed in 1914 by J.D Rockefeller, founder of Standard Oil Company.

Rockefeller was America’s first billionaire and the world’s richest man. He believed his money was given to him by God. Among the institutions financed with Rockefeller’s money are the United Nations, the CIA, and the Council on Foreign Relations.

Philanthropic Foundations are non tax-paying legal entities with massive resources with an almost unlimited brief. They are wholly unaccountable, wholly non transparent, and are basically about translating economic power into social, political and cultural capital.

They emerged in the 1920s because it was then that US Capitalism began to look outward for raw materials and overseas markets. Foundations began to formulate the idea of global corporate governance. In 1924 the Carnegie and Rockefeller Foundations formed the Council on Foreign Relations (the CFR), also funded by the Ford Foundation as well. By 1947 the CIA was working closely with the CFR and over the years the CFR’s membership has included 22 secretaries of state, and all eleven of the World Bank’s presidents have been members of the the CFR. The CFR also contributed a grant of £8.5 million to pay for the land in New York on which the United Nations building now stands.

Given that the World Bank has more or less directed the economic policies of the Third World, coercing them to open up their markets in return for loans and aid, and given that the World Bank is steered by the Council of Foreign Relations, which in turn is steered by Transnational Corporations, it seems to follow that it’s TNCs which really have really determined the foreign policies of third world countries over the past few decades.

By the 1950s the Rockefeller and Ford Foundations were funding international educational institutions began to work as quasi-extensions of the US government, which was at the time toppling democratically elected governments in Latin America, Iran and Indonesia.

The Ford Foundation established a US style economics course in Indonesia at the Indonesian University. Elite Indonesian students, trained in counterinsurgency by US army officers, played a crucial part in the 1965 CIA backed coup in Indonesia which bought General Suharto to power. He repaid his mentors by slaughtering hundreds of thousands of communist rebels.

Twenty years later, young Chilean students who came to be known as the Chicago Boys were taken to the US to be trained in neoliberal economics by Milton Friedman and the University of Chicago (endowed by J.D Rockefeller), in preparation for the 1973 CIA backed coup that killed Salvador Allende and brought General Pinochet and a reign of death squads, disappearances and terror that lasted for seventeen years. Allende’s crime was being a democratically elected socialist and nationalising Chile’s mines.

Like all good Imperialists, the Philanthropoids set themselves the task of creating and training an international cadre that believed that Capitalism and by extension the hegemony of the United States was in their own interests.

Corporate foundations also provide scholarships at universities for courses in development studies – and many of these are for people from the middle classes in the developing world – these are the future finance ministers, corporate lawyers and bankers of the developing world. Of course the courses funded are the ones which sing the virtues of neoliberal economic policy, rather than the ones which are critical of neoliberalism.

According to Roy, not only do Philanthropic Foundations control the agendas of International Economic Organisations, governments and education systems, they also control the media and social movements which emerge to protest neoliberal policies – she gives a few examples of how, but probably the best piece of supporting evidence for this point of view is that we don’t question the role of philanthropic foundations in society. When Corporate funded philanthropic foundations first appeared in the United States, there were debates about their accountability, and people suggested that if they had so much money they should maybe raise the wages of their workers instead, nowadays we just don’t question them.

In summary, Roy argues that Philanthropic Foundations are simply a way of using a minuscule percentage of profits to run the world.

A Question to Consider….

The largest philanthropic foundation on earth today is the Bill and Melinda Gates Foundation. Roy points out that it’s odd that Bill Gates*, who admittedly knows a thing or two about computers, is now designing education, health, and agriculture policies, not just for US governments but for governments all over the world.

The question that Roy makes us ask is this – Is Bill Gates really trying to help people through his organisation, or is the Bill and Melinda Gates Foundation really a just a way for Gates to translate his economic capital into global political power, and to make sure that government policies the world over benefit Microsoft?

*Or to refer to him by his full name – ‘The Man Child Bill Gates’.

Jeffry Sachs – The Case for International Development Aid

This is a brief summary of the case Jeffry Sachs made for International Development Aid in his 2005 book ‘The End of Poverty’. Taken mainly from chapters 12-16

(1) Why is Aid needed?

Sachs argues that injections of aid are needed to break the poverty trap –because there is no where else money is going to come from when there is insufficient income to tax or save.

Sachs uses a description of a visit to Sauri village in Western Kenya to describe the poverty trap – the villagers face a range of poverty related problems including poor food yields due to lack of fertilisers and nitrogen-fixing trees, the fallout from diseases such as AIDS and malaria and the fact that children cannot concentrate in school because of malnutrition. All energies and money are basically spent on combating disease and staying alive.

As a result of the poverty trap the village faces under investment in the following five areas

  1. Agriculture
  2. Health
  3. Education
  4. Power, transport and communications infrastructure
  5. Sanitation and water.

 

Aid needs to be spent boosting whichever of these areas are undeveloped (and all of them, all at once, if necessary) because a weakness in one can mean money is wasted on another (it’s pointless spending billions on education if disease means kids can’t concentrate in school, or lack of roads means they can’t get to school.). This should be based on what Sachs calls a ‘clinical diagnoses‘ of a countries requirements.

(2) How much aid is needed?

There’s a number of ways of looking at this>

$70 per person per year for at least 5 years would being sufficient to provide suitable investment in these five areas for the poorest regions on earth (basically the bottom billion who are stuck in the poverty trap). After an initial 5 year period, Sachs believes that this figure should reduce considerably and that 10 years should be sufficient for a country to be self-sustaining financially.

Looked at globally The World Bank estimates that meeting basic needs costs $1.08 per person per day – 1.1 billion people lived below this with an average income of 77 cents. Making up the short fall would mean $124bn/ year, or 0.7% of rich world GNP.

(3) Arguements for providing International Development Aid

Firstly, using aid to eradicate poverty will make the world a more secure place

The US spends 30 times as much on its military as it does on aid (for the UK it’s about 8 times as much, 2002 figures), but spending money on military solutions is not going to make an insecure world more secure.

A CIA task force examined 113 cases of state failure between 1957 and 1994 and found that three explanatory variables are the most common:

  1. High infant mortality rates (which indicate low levels of material well-being)
  2. Openeness of the economy – the more open, the less stable
  3. Democracy – the more democratic, the more stable.

Sachs rounds off by listing 25 countries which America has intervened in following State Failure since 1962. His point is that state failure typically leads to US intervention, which is more costly than the price of providing aid which would prevent such interventions.

Secondly, Official Development Aid  is crucial to provide health, education and infrastructure, and because it makes up a significant part of the total income of many countries.

Thirdly,The  public will support a massive increase in aid if there’s leadership on the issue – nearly 90% of the US public support food aid (it depends how you frame the question). Also, broad support was garnered for The Marshall Plan, The Jubilee Drop the Debt Campaign and The Emergency AIDS campaign.

Fourthly – There is evidence that Aid can work:

Besides the usual green revolution and eradication of smallpox examples Sachs also cites…

  • The Global Alliance for Vaccines and Immunisation
  • The Campaign against Malaria
  • The Eradication of Polio
  • The spread of family planning
  • Export Processing Zones in East Asia
  • The Mobile Phone Revolution in Bangladesh

Five – the West can easily afford it 

Sachs points out that the richest 400 individuals incomes stand at just under $70 billion dollars, and the first two years of the Iraq War, which was an unexpected cost, was $60 bn a year, so basically yes. He also recommends a 10% additional tax on the richest for the purposes of development.

(4) Sach’s view of why Aid Doesn’t Always Work – Poor Countries Aren’t Getting Enough Aid! (**This can be used to criticise Dambisa Moyo”s views on aid. )

Poor countries are receiving no where need enough aid to make a difference to development – To demonstrate this he uses the West African Water initiative as an example – Worth $4.4 million over 3 years, but this only worked out at less than a penny per person per year, no where near enough to make a difference.

He also cites the case of Ethiopia – in 2003 it would have needed approx $70 billion to kick start development – half for health and most of the rest split between food productivity and infrastructure. It was then receiving $14 per head per year which was well short of the money needed. At the time the IMF acknowledged in private that this was not sufficient but in public made no mention of this.

Another way of outlining how limited current ODA is lies in the following:

in 2002 of $76 billion total assistance….only $12 billion amounted to what might be called development support to the poorest countries (most of the rest was emergency aid, with $6 billion being debt relief and $16 billion going to middle income countries.

As a result of this countries often don’t get anywhere near what they need – Sachs cites Ghana as an example – it requested $8 billion over 5 years in 2002 and got $2 billion. His point is that $2 billion is no where near enough to kick-start development.

(5)) Myths about why aid doesn’t work (**these could be used to criticise Dambisa Moyo)

He actually lists 10, but I’ve only included the first three!

Myth One – Giving aid is ‘money down the drain’

It is common to hear Americans bemoaning the fact that there is nothing to show for the amount of aid given to Africa. This is, however, unsurprising. The total amount of aid per Africa works out at $30 per head, but of this $5 goes to consultants, $4 was for food aid, $4 went to servicing debts and $5 for debt relief, leaving $12 per African.

Of the $3 of US aid to Africa, approximately 6 cents makes it on the ground African projects.

Myth Two – Aid programmes would fail in Africa because of backward cultural norms

Sachs points out that he frequently encounters prejudiced views based on African stereotypes even among those in senior positions in the aid industry – Such as the idea that Africans don’t understand western concepts of time. He dispels this by simply drawing on his own experiences telling him different things.

Myth 3 – Aid won’t work because of corruption

Nearly all low income level countries have poor levels of governance. However, corruption is not a reason to not invest in a country because the causal relationship runs in the direction of wealth reduces corruption. This is because when incomes increase people have more of an interest in keeping governments in check and there is more money to invest in good governance through better communication systems and a more educated civil service for example.

Looking at cross national comparisons reveals two things – Firstly that African countries governance levels are similar to similarly poor countries. That is to say that governance is not especially poor in Africa, and secondly there must be something else going which results in poverty other than poor governance – there are still some very poor countries in Africa with good governance yet high poverty, he cites Ghana as one such example.

Statistical indicators reveal that African countries grew at 3% percentage points slower than countries with similar levels of governance and income between 1980 and 2000. The reason for their low growth is geography and poorly developed infrastructure.

(6) A more ambitious approach to Development Aid

Ultimately Sachs believes we should be spending more on aid rather than less!

Sachs outlines ‘a needs assessment approach’ to development which basically involves identifying a package of basic needs, figuring out the investments required,, figuring out what poor countries can pay and then working out the finance gap which is what rich countries should meet. The list of basic needs includes such things as:

  • Primary education for all children, including teacher pupil ratios
  • universal access to antimalarial bednets
  • I kilometre of paved road per person
  • nutrition programmes for all vulnerable populations
  • access to modern cooking fuels
  • Access to clean water and sanitation.

To establish these poor countries would need $110 per person per year for 10 years (calculated by the UN for five countries – Bangladesh, Ghana, Cambodia, Tanzania and Uganda.

Of this Sachs believes that households and poor country governments could pay $10 and $35 dollars respectively meaning that $65 per person per year is the finance gap

Who should pay? Basically it breaks down like this…

USA – 50%
Japan – 20%
UK, Germany, France, Italy – 20%.

Related Posts (contains criticisms at the end )

Summary of chapters 1-4 of Sach’s End of Poverty

Does Aid Work? The Aid Audit

Does Aid Work? The Aid Audit:

Below is a summary of this World Service Podcast from 2015

Intro

‘Fifteen years ago, German journalist, Ulli Schauen helped compile a book of the top 500 global aid programmes… they ranged from schools for Maasai nomads to support for organic farming to training for volunteer sexual health workers.

The question is did they succeed or fail? Ulli travels to Kenya to see how the projects in that country fared. Ulli sets out to find if Aid really does make a difference.’

(These projects were all related to the original Millennium Development Goals and the folllow ups are here – one author’s blog – The Aid Audit: Development Projects Revisited After Fifteen Years

International Aid money has helped all of the projects below….

Kenya
Kenya

Project One – OSIGILI

in 1995 the Laikipiak Maasai formed an organization called OSILIGI (which means ‘Hope’.)

In one of the first projects OSILIGI organized reading and writing courses geared to the nomadic life. In April, August and December, when the nomadic herdsmen are settled, a teacher comes to the village. During these weeks children have concentrated lessons. This made-to-measure education is considerably cheaper than state elementary school. In 4 years, OSILIGI has reached 380 children with this programme, mainly from poor families.

Eco-Tourism - Marginalising the Maasai?
Eco-Tourism – Marginalising the Maasai?

However, the broader issue OSILIGI campaigns for is to establish land rights – to pasture and watering holes, and here they appear to have lost. The Maasai still have no formal rights and their land, and thus way of life, is under threat from agribusinesses and eco-tourism and in the programme we discover that the Maasai live amongst miles and miles of fences – which fence off private farms – one farm being as large as the island of Malta, which houses shipped-in Rhinos for eco-tourism, but this leaves little room for the Maasai.

Osigili seems now to be focussing on the education aspect, but the land rights issue has been taken up by another organisation – IMPACT. It is possible that more progress will be made in this area in the future.

Project Two – A Voucher System for Health Care

In the far West of Kenya the German Government Trained volunteer health advisers – 20 000 community health workers for 10 years. Unfortunately this terminated in 2006 and so no evaluation or final report can be found, the argument here, however, is that a lasting legacy

The German government now funds a voucher programme for the poor where they can use vouchers to receive free or subsidised contraception, maternal health services and HIV treatment.

Through the voucher programme local (privately run) hospitals receive $50 for maternal treatments and $12 for AIDs screenings (from the German Aid fund, they don’t get state funding) – 3/4s of the money goes on medicine and food, but the rest is available to allow for hospital expansion.

To give an example of how it works – one woman is interviewed who is HIV positive, and giving birth in the hospital meant that the infection was not passed on to her two children.

Despite the above, Kenya still failed to reach two of its MDGs -reducing infant mortality and improving maternal health.

But German Government trying to influence Kenyan health policy into the bargain. Germans wand to promote health insurance, Americans want to promote other issues – donors don’t co-ordinate their programmes.

Project Three – The Matinyani Business Cooperative

mat

This is a cooperative of 4000 women, who initially set up a library, primary school and a health centre. They also established a range of small businesses devoted to weaving, water, candlemaking, bakery.

However, all of this stopped working years ago… 75% of the initial money went into other people’s pockets – so they couldn’t pay workers or for materials to keep the projects going.

However, what these women learnt in the early days of this project allowed them to establish their own businesses, many of which are today successful and export to other countries.

Project Four – Environmental Protection on Lake Victoria

darwins-nightmare1

Lake Victoria is heavily overfished and polluted.

This projects aims were to build water treatment plants and limiting the spread of the water hyacinth. There are laws in place about catch size (enforced by the mesh size of nets). However, it seems that everyone is happy about breaking the law and the aid-funded environmental organisation doesn’t seem to be enforcing the rules.

The World Bank Project labelled this one as unsatisfactory.

Project Five – A Foot Pump for Water

An Australian company called Kick Start (originally known as Aprotec ) which focussed on developing just one product – a small, foot operated water pump, claims to have lifted almost one million people out of poverty. Aid has been essential in this. The CEO says that it is not profitable to develop such products for people – it’s high risk, low return, and high cost – so it’s a market failure – thus subsidies in the form of International Aid, with this money going mainly into Research and Development and marketing (radio ads).

The pumps themselves are sold for $130 – and they have sold 250 000, which means about 900 000 will have been lifted out of poverty. We visit a tree nursery to see how this works – where an employee is using the foot pump (like a step machine) to pump water to water the young trees – this has allowed the company to grow a lot more trees and it is now much bigger than it used to be.

Question – Has development aid worked in the above five cases?

The programme finishes off by noting that we see all of the classic problems associated with Aid in the above examples, but it is the positive impacts which stick in his mind, especially the fact that when official projects collapse, the people who have gained skills carry on campaigning in different ways.

Find Out More…. There are another two episodes in the series if you wish to listen further!

How to End Poverty in 15 Years

I’ve moved this post to my other site – revisesociology.com – which is more dedicated to A level Sociology material. This blog remains more eclectic.

Additional…

In the Infographic below (nowhere near as impressive as Hans’) I’ve selected four African countries, and there’s a clear historical link between child mortality coming down first and then the economy growing (since 1960).

Interestingly, Malawi have recently got their child mortality rate down to 10%, but they are waiting for economic growth.

 

The Gender Pay Gap – A Brief Analysis

This chart shows what most of us would regard as a generally positive trend – the decline in the gender pay gap – which is down to 9% for full-time workers, and even lower for part-time workers.

Gender Pay Gap 1 2014

However, there’s a lot more going on than this….

For starters, there is considerable variation by age – with women in their 20s and 30s actually earning more than men in the same age categories, with  a significant pay gap then emerging between older workers.

Gender Pay Gap by Age

The ONS notes that the gender pay gap between workers 40+ is probably down to women taking time off to become primary child carers, which to my mind is pretty bleak – Given the ‘negative’ gender pay gap between younger workers, this suggests women are getting into jobs which will give them the same (or better) wages than men (reflecting their higher educational achievement) but that this is then abruptly reversed when childcare responsibilities fall on the mother rather than the father.

It also seems that women in higher paid jobs lose out more compared to men in lower paid jobs – with the gender pay gap for the highest 10% of earners being near 20%, while it’s nearer 5% for the lowest 10% of earners (so rich women are less equal to rich men than poor women are to poor men, at least if we look purely at income). Of course this will also reflects the gendered age differences in the chart above.

Employment - gender pay gap

However to complicate matters there’s not a straightforward correlation between occupational class and the gender pay gap – it’s actually the traditionally masculine jobs which have the highest gender pay gap, not the highest income ‘professional and managerial’ jobs.

 gender pay gap occupation

There’s various explanations for this larger gender pay gap in traditionally male occupations – It could simply be the later entry of women into such occupations compared to women going into the professions – thus there are fewer older women than older men, so women on average earn less compared to men because older workers earn more than younger. An alternative explanation would be that women who go into these professions are less likely to return them after taking time out to raise children, in which case the question of whether this lack of return is due to gender-barriers, or genuine free-choice would arise. Of course, it’s probably a mixture of all three of these reasons.

Finally, it might be worth exploring what’s going in in Northern Ireland that’s led to such a significant reduction in the gender pay gap….. Whether this is down to social policy or just societal changes I don’t know, drop me a line if you do!

Employment - gender pay gap 1997 to 2014

 

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

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