Kvin

Five years is a curious interval.

Too long to be considered short term. No longer an experiment. Indulgence. Romanticised hope.

Longer than early childhood. That period between birth and starting school.

Longer than most university educations, outside of the United States at least.

If an investment of time, effort, or emotion had merit it would have started to pay off by then.

A business worth owning would have secured a customer base and be generating cash flow.

A relationship worth continuing would have settled into a comfortable familiarity. The rewards derived outweighing the costs.

A career worth persisting would have enjoyed advancement and pay rises, for those who sought them.

In all cases, if it hasn’t happened after five years, some honest introspection is called for: is it ever likely to happen?

Five years is too short to be considered long term.

Not long enough for the compounding benefits of time to really start paying off.

Compounding education into earnings.

Compounding experience into wisdom.

Compounding productive assets into wealth.

Compounding intellectual property into perpetual cash flow streams.

Not long enough to distinguish good fortune from good judgement. A feat only possible in hindsight.

Old clichés are clichéd for a reason. Encapsulating the wisdom of crowds. Right enough, often enough, to be fallibly accepted: a rising tide floats all boats, while a receding tide will leave skinny dippers exposed. Both are true, yet only those riding their luck will endure sunburn in unexpected places.

This month marks five years of { in·deed·a·bly }. A personal indulgence, where I did the thinking and told stories about the everyday. Written by me, for me. Shared as an afterthought with the world, who for the most part wisely chose to ignore it! Viewed by a handful of generous souls, some of whom returned to accompany me part of the way along my journey.

These five years have been a learning experience. Although that should be true of all five year intervals. If they are not, we are doing something wrong. Stagnation, not growth. No risk, no reward.

Five years ago, I thought I wanted Financial Independence, and led a semi-FI kind of life. The goal drove my thinking. Underpinned my planning. Directed my prioritisation decisions.

Financial Independence not in the headline grabbing “world’s youngest retiree” influencer sense.

I had no agenda to monetise. No brand to build. No ideology to sell. My audience was not my product.

Plus, I was no longer objectively “young”. A short-sighted marketing strategy if ever there was one, due to its fleeting and finite nature!

Nor did I subscribe to the hustle porn induced game of chicken between attaining arbitrary magic numbers and enjoying life. A false dichotomy, while longevity remains an unsolvable variable.

No, my individual flavour of Financial Independence was one of balance.

Minimising how much of my time I needed to sell, by maximising the marketable value of that time.

Accumulating income producing assets to purchase control of my time investment decisions. Each cash flow stream received bought back hours I had previously needed to sell.

Recognising that not all time is equal. That most important things in life occur only once.

Prime parenting years coincide with prime earning years. All too soon, those hero-worshipping toddlers become moody independent teenagers, before leaving the nest entirely. Leading independent lives. Making independent decisions. Hopefully remaining our friends as adults.

I could have devoted myself to playing the breadwinner. Salary collecting through endless cycles of workplace theatre and corporate politics. Days consumed by low value tasks as an interchangeable cog in the corporate machine. Prostituting myself to meet my lifestyle costs and support my family. Possibly money rich. Certainly time-poor. Definitely missing out on a lot of the good stuff that matters.

Alternatively, I could have invested that same time vicariously experiencing the joy and wonder of childhood. Watching as my kids develop. Learn. Mature into the adults they will one day become.

The challenge with the Stay-At-Home-Parent model is it requires funding.

Having already made bank in the days before parenthood.

Alternatively, being financially dependent upon others. Benefits-FI. Spouse-FI. Inheritance-FI. None of which are financially independent at all. Anyone claiming otherwise is trying to sell you something.

However, I couldn’t do both. Opportunity cost. There is no cakeism magical thinking in the real world.

Instead, I had chosen a third path. Attempting a combination of the two.

Remote working over commuting and presenteeism.

Prioritising flexibility over advancement and earnings.

Entrepreneurship over employment, enriching myself rather than enriching others.

Allocating passive income streams to cover lifestyle costs. Funding enjoyable long summer days and school holiday adventures.

Making up the financial shortfall by working full time throughout the cold wet winter months while the kids were at school. Joining the rest of the adult population as they ride the endless stimulant rollercoaster. Caffeine in the mornings. Sugar in the afternoons. Alcohol in the evenings. Weekend to recover. Holidays to recharge. Rinse and repeat until we burn out, retire, or die.

On the face of it, I led a charmed life. A glorious existence. To a large degree it was, while it lasted.

When viewed with the clarity of hindsight, it proved a successful lifestyle design experiment. An answer, rather than the answer. Solving a timebound prioritisation question while my children first needed and later desired the attention, companionship, and interaction of an accessible parent.

Five years ago, I penned a bucket list of sorts. A living testament to my publicly professed desires.

Sporadically, I have gone back and checked off those few items completed, or crossed out a greater number of things that had once been attained, but were no longer true.

Over the entire five years, I don’t recall adding any new goals. To the list, or otherwise.

Reading back through that bucket list today, more items are complete than outstanding. To be honest, I wouldn’t be greatly troubled should all those uncompleted items remain so. The life expectancy tables guesstimate I’m a bit over half way through life’s journey, plus or minus the influence of luck and genetics. My bucket list suggests I have already accomplished almost all I had set out to achieve.

Which makes the list superfluous, as many such lists are. Less statement of intent, more signalling. Perhaps I lack the imagination to replace old goals with new ones. Or perhaps five years ago I was yet to earn the self-confidence needed to admit to a lack of ambition. Quite possibly both.

Five years ago, I wrote a 250 word autobiography, stream of consciousness style. This is harder than it sounds, I challenge the reader to try it for themselves. This too remains unchanged, nothing of sufficient note or novelty has occurred during the subsequent interval to displace the incumbents. I am now older. Possibly wiser. Certainly greyer. But the summary then and now are the same.

So what then does the next five years hold in store? For { in·deed·a·bly }? For me?

My writing has evolved over the life of this blog.

Early on there were lots of numbers posts. Seeking enlightenment in economic statistics and solace in spreadsheets. Over time, I learned that life and money are games played in the head, not a spreadsheet. Questions of psychology, not finance. At that point I stopped publishing my financial charts, as they were a distraction that did not answer the exam question.

No amount of numeric precision can help find happiness, contentment, or meaning. Which are exactly the things those seeking financial independence really desire. Beginning with control of their time.

It also partly explains why all but the most marketing driven FIRE movement voices fade away as they approach their self-selected finishing line. Their race run and story told.

The realisation dawns that they have merely reached the end of the beginning. Base camp. Before the real adventure commences. Recognising the challenges ahead cannot be met or measured with monthly progress reports and Monte Carlo simulations, nor from a fervent desire to be anywhere but “here”. Saving their way to happiness will prove to be as impossible as saving their way to riches was.

More recently, my writing has evolved to examine a search for meaning, a luxury few not yet financially independent can afford to indulge. I’ve also begun thinking about life after children, an evolution in self-identity likely to be as dislocating and impactful as redundancy or retirement.

Along the way, I have discovered some faulty mental accounting in my planning and approach.

Implicit assumptions, some of which were foundational, that had been baked into my plans.

The examples are many and varied, representing changes in the way I think about things.

Part learning.

Part course correction.

Part acceptance that there are many things I can neither change nor control.

My long-term planning had been based upon living in one of the most expensive countries in the world. Compounded by residing in one of the most expensive cities. Further compounded by choosing one of the most expensive neighbourhoods. Faulty thinking all.

Choosing a living location based upon proximity to opportunity and high paying white-collar jobs may have once made sense when I migrated many years ago.

Today, not so much.

My career has topped out,

I’m walking the tightrope between being at or beyond my level of competence.

This country of opportunity has been in a state of managed decline since at least the Global Financial Crisis, probably earlier. More recently, remote working has hastened the global race to the bottom for white collar wages. Residing in a high cost of living locale is no longer a necessity. It will soon be a handicap.

Indeed, when viewed in aggregate, my choice of living location no longer withstands scrutiny.

Now more habit than conscious choice. Not the choice I would make today.

I still wish to see my children complete their childhoods and educations with all that London has to offer. However, I believe their best opportunities for future employment and enrichment will be found abroad.

Another faulty assumption had been one of marriage, and the notion of happily ever after. Marriage has an asymmetric risk profile. Get it right and the upside can be immense. Get it wrong, and the toll can be, in the eloquent words of a wise friend: “apocalyptic”.

Those are things I got wrong. There are others, where externalities dictated a change in approach.

Buy-to-let land lording had long been a license to print money.

Use other people’s money to acquire well-located properties that should experience outsized capital appreciation. Create value via extension, re-zoning, subdivision, or title consolidation. Then revalue, refinance, release equity and go again. All while providing a safe warm home for tenants to reside in.

There was no desire to pay down loans on investment properties, that would happen upon disposal. Providing the rental income sustainably covered the holding costs, property investment was a case of set and forget.

But the world has moved on.

Interest rates have risen at a rate exceeding any increases the rental market will absorb.

Meanwhile, the ever-shifting balance between landlord and tenant is currently tilted away from the investment owners.

Both things are cyclical.

Other changes are structural.

In some markets I invest in, rent rises are now capped at CPI, irrespective of how the local market may have changed in terms of gentrification, fashion, or access to infrastructure.

In others, legal changes mean it now takes longer and costs more to recover properties from recalcitrant tenants.

In yet others, the introduction of retrospective minimum environmental or energy efficiency standards has incurred significant maintenance costs and negated investment returns. Properties cannot be tenanted nor leases renewed until those standards are met.

My age now plays an increasing role.

Loans are relatively easy to obtain for a landlord aged in their twenties or thirties. By their mid-40s however, the lender starts to tick the “it’s complicated” box on their application forms and ask inconvenient questions about retirement plans and how the debts will be repaid.

As a result, the duration of loans offered reduces. Which increases borrowing costs.

In high-value low-margin markets, the numbers soon fail to add up.

Of course the alternative is to shift target markets. Focus on higher-margin, lower-value properties. The McDonald’s end of the spectrum, rather than the Mercedes dealership. The same landlording hassles, but at much lower buy-in price. Potentially increasing the number of doors owned, providing some semblance of diversification via safety in numbers.

This can be dubious mental accounting however, akin to the stock market investor who foregoes tech stocks in favour of dividend aristocrats. In both cases, the investor is trading growth for yield.

Forgetting that it is capital growth that creates real wealth.

There are many things I have changed my thinking on over the last five years. However, this rambling post already contains a lot of words, but little substance and less definitive answers.

While it remains fun, I will continue to write stories here. The inspiration to do so strikes less often, and the words flow less fluently, than they once did. A product of mindset and competing priorities. The unfulfilling full-time job and the complicated home life that make it necessary. Both cruel creativity.

For those still accompanying me on the journey, I thank you for your attention. You are fewer in number this year, but just as appreciated. SovereignQuest audience statistics suggest that changing fashions and content consumption patterns may explain some of that. Today there are far fewer creators publishing long form writing, competing for far fewer eyeballs who still wish to consume it.

Happy fifth birthday to { in·deed·a·bly }.

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