Solved problem

Once upon a time, I started a blog.

A hobby. Creative outlet. Escape from the everyday.

My writing focussed on personal finance, because personal finance was what I was focussing on.

Hard-won experience increased my wisdom and reduced my certainty. Two sides of the same coin. I have learned that there is a great deal I don’t understand. Have control over. Exert influence upon. But there is also little point worrying about this fact. Worry won’t change the outcome in the slightest!

Instead, I have learned acceptance. Patience. Surrender.

Not outright capitulation. Learning to swim across the tide, rather than against it.

More effective.

Less exhausting.

Experience provided the confidence to try the new. Wealth granted the ability to survive the failures.

Daring to imagine. Reflect. Refine. Revisit.

Hope the for best. Prepare for the worst. Learn, regardless of the outcome.

Five years on, my focus has shifted. Finance may well be personal, but it is also a solved problem.

I have thought about this a lot. Hundreds of stories. Hundreds of thousands of words.

Here is what I believe to be true. Today. At the time of writing. The answers may differ tomorrow.

Beliefs, not laws or rules. Those terms imply certainty, which I have come to recognise as hubris.

Beliefs lightly held, not dogma. Subject to change, I keep an open mind. Always learning.

Beliefs that form principles. Principles to guide decision-making. Helping to find least wrong answers.

It’s not what you earn, but what you keep. Live within your means. Align expectations to income.

The happiest people I know are broke. Surprising, but true. Surviving on social security. Living in council housing.

The secret of their happiness appears to be maintaining low expectations.

Their tribe are as poor as themselves. Family. Friends. Neighbours. Narrow horizons. Blinkered world views.

The Joneses they run with set the bar low. The poverty cycle ensures it remains difficult to clear.

Often having kids too young. Having too many kids. Broken relationships. Living hand to mouth.

Yet despite having modest means, the happy ones lead rich full lives. Living. Laughing. Loving. Their lifestyle choices may not be for me, but I respect their ability to make it work for them. Money certainly makes things easier, but it doesn’t guarantee the outcome. Far from it. Finding happiness is a choice.

By contrast, the most miserable people I know are all comfortably well off.

By any objective measure, they have “enough”. Yet they forever yearn for more.

Measuring themselves not against their peers, but against fantasy lives projected on social media.

Always falling short.

Endlessly found wanting.

First class felt like winning at life, until it got trumped by a private jet.

Six-figure salaries don’t go far when the salary earner occupies a gilded cage.

Half, or more, is likely consumed by tax. Vanishing before hitting the taxpayer’s bank account.

Car payments. Mortgage payments. Nursery fees. Private school fees. Each claims a hefty slice.

Remunerate the service providers. Cleaner. Dog walker. Nanny. Personal trainer. Therapist.

All those people we outsource our obligations to. Buying back time with money.

Sensible, if that time is used for rewarding pursuits.

Less sensible when that time is reinvested in working. To earn more money. To buy more time. The hustle trap. Not living life, but using work as an excuse to hide the absence of a rich fulfilling life.

A home we don’t want to go home to. Epic commutes. Frequent business travel. Lifestyle choices all.

Perhaps a family we choose to avoid rather than embrace. Too busy earning to be experiencing.

Probably not the narrative the noble worker would tell. But ask their loved ones. Deeds, not words!

After the bills, there is unlikely to be much left to pay for projecting that social media perfect lifestyle.

Cue the tiny violins, life is tough in the fast lane! Yet for reasons I struggle to understand, this life of quiet desperation is the one many adopt as their chosen lifestyle. A prison of their own making.

That “what you keep” equation offers several levers that are within our control.

Earn. Earn more. Maximise the marketable value of your time.

Money provides options.

Money creates the illusion of control.

Money buys time. Except not really. Time allocation is a prioritisation decision, not a monetary one.

Spend. Spend less than you earn, but spend.

Spend consciously.

Spend what it costs to be comfortable.

Spend on things that make you happy or provide contentment. Recognise that both feelings are fleeting, not permanent states of being. Anyone telling you otherwise is selling you something.

Don’t become an addict, endlessly chasing the next hit like a caffeine fiend or a heroin addict.

Self-sacrifice and denial are not the way. They do explain why frugalistas and budgeteers are a miserable breed. Forgetting that money is an enabler, not the goal.

Invest. Invest the difference between earnings and spending.

Invest often.

Invest wisely.

Invest in productive assets, including yourself.

Invest in enough professional advice to make you competent. But not so much it makes you a sucker.

Understand that financial advisors of all stripes earn their living from activity. What is good for you is not the same as what is good for them. For best results, align their financial interests with yours.

Avoid excessive fees.

Avoid commissions.

Avoid activity and churn. Both manage wealth out of your pocket and into the pockets of others.

Then wait. Wait patiently. Play the long game.

Ego is an investor’s greatest enemy. Boredom comes a close second. Recognise your weaknesses.

Accept that activity is not the same as effectiveness.

Comprehend that markets are comprised of a vast number of players who are just as fallible and uninformed as you. The only players who truly know what will happen next are those large enough to move markets and generate their own demand. They are playing a different game, a rigged game, which makes money not from investments but from the behaviours of investors just like you.

The only true alpha is inside knowledge. If you haven’t got that, any outperformance is down to luck.

Prediction is guessing. Your guess is as good as mine, and worth just as little.

Probability is our way of attempting to apply science to chance.

Risk management accepts uncertainty. It can’t guarantee a win, but may reduce the chance of a loss.

Doing the thinking. Imagining. Running the numbers. Wargaming scenarios.

In the absence of certainty, being prepared is the next best thing.

Investments compound while you wake. Compound while you work. Compound while you sleep.

A water wheel powered by money. Turning ever faster. Generating wealth. Funding lifestyle.

It is this one characteristic that distinguishes investments from assets.

If your investments don’t do this, then they aren’t investments. It really is that simple.

That is a lens that should be applied more broadly than financial investments.

The most important investments we will ever make are in our choices of education, profession, spouse, and social circle.

Should any of those areas fail to deliver a positive return on investment, or fail to add value to our life, then we should cut our losses and reinvest our energies elsewhere.

Holding onto losing investments is faulty mental accounting, driven by pride and ego.

The fear of realising a loss. Acknowledging that things didn’t work out as planned. That we got it wrong, for any number of reasons. Recognising that a paper setback has real world impact.

I have applied that lens to some aspects of my own life recently. Evaluating the return on investment from my scarce time and limited attention.

One area that was found wanting was Sovereign Quest, a personal finance aggregator I established a few years ago. The idea was to help people such as myself, with an interest in personal finance, to easily discover relevant content created by amateur bloggers, podcasters, and vloggers.

It has been an fascinating journey, observing as the personal finance creator community has evolved.

Technology has played a part, changing the methods and mediums the audience use when seeking out and consuming content.

Financial circumstance has also contributed. Over the life of Sovereign Quest we’ve seen crypto bubbles and busts. Pandemic economic shocks. Populist politicians committing economic vandalism. The return of inflation. The end of borrowings being as good as free.

Today, I no longer feel SovereignQuest successfully achieves its original goal.

The platforms and mediums used by creators have moved on from the traditional world of long form blogs and newsletters. Short form video clips and instagram posts now meet the demands of a new generation of audience. In the past 12 months only a small handful of new blogs or podcasts were added to the Soveriegn Quest creator directory.

Meanwhile, many of the creators who provided the content shared via Sovereign Quest have gone dark. Interest lost as audience numbers dwindled. Personal Finance content creation has ever been a high churn game, few creators last more than six months. With so few new voices joining the existing community, and so many choosing to cease creating, the feeds are now dominated by those few hardy souls who continue.

Traffic volumes have been telling. The average daily volume of new posts or episodes shared via the SovereignQuest feeds is almost 90% lower than it was three years ago. Back then, Sovereign Quest was visited by thousands, sometimes tens of thousands of visitors each day. Today that number has fallen to less than 200 daily visitors on average.

Curating SovereignQuest has been a rewarding activity for much of that time, providing new insights or ideas, or challenging existing premises. While I don’t pretend to know everything, my personal interests are no longer aligned to those publishing content aimed at those near the beginning of their personal finance journey.

As my interests have evolved, so too should my time allocation priorities. Therefore, SovereignQuest will go dark when its hosting contract expires.

I would like to thank all those who contributed to the SovereignQuest community, creating, consuming, or sharing the content produced by a generation of generous personal finance voices over the last few years.

This post summarises the key lessons that I’ve learned from you all. Hopefully it may help stimulate the thinking or challenge the beliefs of those who may read it.

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