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Is it time to ditch index-linked bond funds? [Members]

Index-linked bond funds were meant to protect us from surging inflation, yet they failed their first serious test. Since CPI took off at the tail end of 2021, these products have been a bitter disappointment – like waterproof trousers that leak or wasp repellent that attracts the blighters like it’s made of sex pheromones.

We’ve previously explained exactly why index-linked bond funds didn’t work during the car crash markets of 2022.

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Weekend reading: the happiness smirk

Our Weekend Reading logo

What caught my eye this week.

How do you feel today? Happy? Sad? Despairing? Joyous?

Can’t believe there’s still a week to go until Euro 2024 kicks off to relieve the tedium of the same old, same old, soggy British spring?

Or dreading football on the telly 24/7?

Hmm… can I ask how old you are?

Age-appropriate emotions

For as long as I can remember, posts about the happiness ‘smile curve’ have been a staple of personal finance blogs.

Perhaps it was because so many bloggers were in or approaching middle-age.

The smile curve theory, you see, came from research showing a person’s lifetime happiness followed a U-shaped curve.

You were happier when you were young and carefree. And you were happier again when you were old and grateful and didn’t give so many tosses anymore.

But in the middle? Loaded down by mortgage repayments, ungrateful children, and job stress?

Not so much.

No doubt the theory resonated in FIRE circles because it gave an extra reason for – and impetus to exit – the heads-down push through the suck to achieve financial freedom.

But – alas – it seems the smile curve has turned lop-sided.

Like this video about unhappiness

In The Global Loss of the U-Shaped Curve of Happiness, David Blanchflower and Alex Bryson tell us new research has…

…shown something astonishing and of global importance: the general contour of happiness across the age-span has changed around the world.

Young adults are now the least happy people, and this broad multinational change began sometime in the mid-2010s, right as Gen Z was entering this age-group.

I’ve linked to other takes on this trend before. It does seem to be well-established.

Of course this being 2024, every faction has a different theory as to why young people (especially young women) are so much more despairing:

  • Progressives blame structural inequalities and a greater awareness of dangerous prejudices such as racism and misogyny.
  • Traditionalists see an erosion of family values that’s left young people adrift with nothing to aim for but satisfying their own hedonistic ends.
  • Environmentalists point out the climate – and our future – is going to hell in a hand basket. Despair is rational.
  • Techno-sceptics warn that smartphones daily pipe a globe’s worth of desire and misery into eyeballs only meant for the surrounding 5km of savannah.
  • Older people think identity politics has given everyone a grudge.
  • Financially-minded Monevator readers might blame sky-high house prices and rents, or how taxes scythe away young people’s incomes even as more bungs go to pensioners.

There is something in all of it. But I do think smartphones should take most of the blame for the specific curve shift.

Some version of everything else was going on well before 2017, after all.

Thanks to smartphones and social media though, young people do appear to be much more aware of both the wider cruelties and injustices in the world, and also the roadblocks standing in their own way.

But of course they learn about most of it through polarised social media and 30-second videos. There’s little room for nuance.

To generalise: I’d say they’re more aware, but less informed.

Student grant philosophising

When I was in my early 20s, talking to the average person at a party about the sort of issues that everyone now has a gripe about usually earned you funny looks.

I know this because I read very widely for a science student – everything from business profiles to Marx to AdBusters magazine – and I actually was talking to people about the troubles of the world at parties.

And it usually went down about as well as you’d expect.

Obviously I like to think I was bit more intellectually sophisticated than the average 90’s kid pining for The Beach without wondering what it meant for the locals or the ecology.

But I suppose you could just see a posturing Rick from the Young Ones.

The point is though, it took some research to even know about much of the stuff in my all-faction complaint list above. You didn’t get a five-second hit when sitting on the loo.

Most people spent little time thinking about any of it, unless they happened to catch a late night documentary on the BBC.

Whereas today reminders are omnipresent.

And at the clear risk of sounding like a curmudgeonly old man, while I’m heartened young people now appreciate the world is a pretty screwed-up place, I wish they’d try harder to understand why.

Regular debates I’m having with a younger friend about the horror show in the Middle East come to mind. But it’s true of many things.

Younger people genuinely do seem to care more than most of my generation did at that age. And they at least say more of the right things about the world beyond their own desires.

But ask them what should be done about any of the issues and there’s often little substance there.

Walking back to happiness

At least 30 years ago the typical person was unhypocritical in not giving two hoots about, say, the plight of indigenous peoples in the Amazon basin.

There was a pure-hearted obliviousness to it.

Whereas now people see a TikTok video, they’re angry, but they seem to not explore what’s even feasible as a remedy – beyond waving their hands at capitalism, men, or wokery, depending on how they roll.

I suspect this blend of being constantly provoked but at the same time feeling it’s well beyond anyone’s control is even worse than when I was young and engaged myself.

And that this is what has pulled down the lefthand of the smile curve.

At least I got happier with time. I guess they will too. Perhaps you get immune to gloom? Or maybe you just get complacent.

Then again maybe it really is all because young people can’t see how they’ll ever afford a house – and yet they can’t follow the old escape route into sex, drugs, and rock-and-roll either because online dating is awful, they know the drugs don’t work, and today’s music is written by robots.

Gosh I feel old. But at least I’m happier than I was!

Apologies to anyone reading who is under-30. Despite my gripes above, you’re actually my second-favourite generation. (After my own Gen X, of course. Slackers forever.)

Please share your perspective below on the fashion for youthful angst. That way we can all learn together.

Have a great weekend!

[continue reading…]


Buying the Great British boot sale [Members]

Moguls membership logo

Last month we looked at how UK shares were cheap, unloved, and overdue some mean reversion.

I also promised to follow-up with a way to play the hated small-to-mid cap space.

This article can be read by selected Monevator members. Please see our membership plans and consider joining! Already a member? Sign in here.

FIRE update: third year anniversary

FIRE update: third year anniversary post image

I have a confession to make. I’ve unFIRE’d myself. For the last six months, I’ve taken on so many paid projects I’m effectively working full-time.

I’ve always done some work since declaring FIRE. Including Monevator, those side projects have kept me slaving over a hot laptop for two or three days a week.

I enjoyed a balance that:

  • Anchored my week
  • Made the freedom of my other days taste like ice-cream
  • Provided a trickle of pocket-money to blow guilt-free

But this is different. I returned to work because I needed the money. And this extra work is squeezing out time I’d prefer to spend on other things.

What happened? Did I miss my old 5.30am starts, back-to-back meetings, and ridiculous targets plucked out of the P&L owner’s backside?


Renovating the house happened. Doing up our money pit turned into a black hole of unforeseen expenses. A swirling vortex sucking in everything with a pound sign on it:

  • The war chest I’d initially set aside for the fix-uppery
  • All our extra pocket money
  • Then, finally, the bridging cash that was tiding me over until I could raid my SIPP

Cash and burn

I don’t want to make it sound like I was an innocent victim in all of this.

Sorting the house could have been done more cheaply. Shortcuts could have been taken. We could have papered over many of the cracks and crossed our fingers. The final result could have been less ‘nice’.

Mrs Accumulator, for one, did not want me to burn the bridging cash.

But I argued for a different perspective:

This is our forever home.

We spend a lot of time in it.

We love it.

Our property is very old. It has a lot of problems we can resolve here and now (probably).

The interior is just dying for want of TLC.

So let’s just fix everything we can in a one-er. Let’s make it look the way we’d talked about on so many walks, late evenings, and envious Internet browses.

Let’s feel really good about living here for the rest of our lives.

And if we have to compromise anything, then let’s not compromise the house. Let’s compromise my FIRE status for a time. FIRE will keep. I can come back to it.

Mrs TA was not won over, but she reluctantly agreed. And she does love the final result. As do I.

So I think it was worth it. Even though I’m still feeling the heat of the backlash.

FIRE alarm

Part of the heat came from The Investor. He gave me a proper grilling about my U-turn.

“Is FIRE not all it’s cracked up to be, then?”

“Are you secretly missing work?”

“Has inflation made a mockery of your numbers?”

Here’s how I feel about it:

Unretirement shouldn’t take more than a year of my life, if I’ve done my sums right. (That’s a sizeable ‘if’.)

Also, I’ve got something I really wanted out of it. A home I’m very happy with, and that I’m loving living in every day.

The work itself is fine. It’s not like my old job. No 5.30am starts, back-to-back meetings, or ridiculous targets. And I’m working for some very nice people. It’s been fun to meet them all. I enjoy working with them.

I choose my hours, I’m given all the autonomy I could ask for, and there’s no commute.

For all those reasons, this doesn’t feel like the grind I previously escaped from.

The problem with my old gig was that it took everything I had and I only felt like I lived in the holidays.

The current arrangement still means I can goof off whenever I like, as long as I get the job done.

Burning my bridges

I’m not pretending this is FIRE. It’s not. There’s only seven days in a week and I’ve lost the balance that FIRE gave me. But I should have recharged the savings account after 12 months, and I’ll be able to rebalance my life again.

For what it’s worth and to address TI’s main point, I’m not worried about inflation now that it’s subsiding. Our underlying portfolio can still support the income Mrs TA and I need.

The only hitch is it’s all locked up in SIPPs and I can’t personally touch mine for [*checks watch*] two years, a few months, some days, and 43 seconds.

Keep the faith

So there you go. That’s what happened.

I’d like to add that – when I was working towards FIRE – I got very disappointed whenever someone in the community went back to work. I suppose it made me worry that FIRE was a mirage.

I don’t think FIRE is a mirage. If you’re on the FIRE path then I say – loudly – “stick with it!”

I’ve gone off-piste for personal reasons related to my values and circumstances. I’d rather not have to, but I’ve temporarily sacrificed FIRE to achieve a goal that I hope will make me happy for decades to come. I think that’s a fair swap.

Take it steady,

The Accumulator

P.S. Our FIRE budget for 2023-24 was £27,600 for two. Actual spend minus one-off renovation costs: £26,200.