What caught my eye this week.
The idea of trading money for time underpins early retirement, although it’s not often put that way.
We can debate safe withdrawal rates [1], passive portfolios [2], and whether investment trusts have a role to play in creating a retirement income [3].
But the day you leave work and never intend to go back – however you got to that point – there’s no argument. You’re by definition turning down the chance to make more money.
You are swapping money for time.
There are excellent reasons [4] to quit work ASAP. Nobody lolling on their death bed ever wished they’d spent a few more years at the office and all that.
Personally, I see downsides, too, especially to very early retirement. As a result I expect to keep doing some work indefinitely.
But you don’t have to go totally cold turkey to swap money for time.
More flexible working [5] – especially from home – can kill your commute and give you the freedom to work around you, instead of an employer. Or you can try to work fewer hours at a conventional job.
Either way the pay-off is a double whammy, because they don’t tax free time [6].
In contrast early retirement back loads all the extra time into one initially distant but eventually never-ending block. It’s a slog to get there, but in theory a coast thereafter.
For some, it’s nirvana. For others it can lead to boredom, ill-health, social isolation, and a life more ordinary if it cuts down your options.
For the latter reasons, for me financial freedom is the better part [7] of FIRE.1 [8] But wherever your own heart takes you, think about the value of time.
As Harvard Business School professor and happiness researcher Ashley Whillans noted this month [9]:
Over and over, I find that prioritizing time over money increases happiness.
Despite this, most people continue striving to make more money.
For example, in one survey, only 48% of respondents reported that they would rather have more time than more money.
Even the majority of people who were most pressed for time – parents with full-time jobs and young children at home – shared this preference for money over time. […]
Research shows that once people make more than enough to meet their basic needs, additional money does not reliably promote greater happiness.
Yet over and over, our choices do not reflect this reality.
True, plenty of people strive to survive. Work isn’t optional for them.
But many regular Monevator readers do have choices – or at least they can create them.
Not everything that’s valuable shows up in a net worth [10] spreadsheet. Far from it [11]!
Time to choose.
From Monevator
Apple Card, fintech, and the future of good money habits – Monevator [12]
From the archive-ator: The Devil’s Financial Dictionary: An ABC for passive investors – Monevator [13]
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!2 [14]
First house price fall in England since 2012 – BBC [15]
Investors face ‘unacceptable’ delays to switch platforms [Search result] – FT [16]
UK households spend above their income for longest period since 1980s – Guardian [17]
Why investors are worried about the yield curve [Search result] – FT [18]
Mobile eWallet usage surging around the world – ThisIsMoney [19]
[20]Households’ stark net borrowing position has been partly financed by non-secured loans – ONS [21]
Products and services
Five ‘favourite’ cash ISA options – ThisIsMoney [22]
Ways to own gold: Raising the bar into a safe haven [Search result] – FT [23]
Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter [24]
One in 14 used cars for sale have had their mileage tampered with – ThisIsMoney [25]
Moneyfarm offering up to £600 cashback if you open its ‘Brexit ISA’ with £20,000 – ThisIsMoney [26]
Investing platform Willis Owen retrospectively identifies top performing funds [I’d also point out active investing is a zero-sum game [27], so you can also safely ignore the comments about when active funds do better than passives et cetera] – ThisIsMoney [28]
Comment and opinion
When everything declines at once – Morningstar [29]
The myth of average returns – The Evidence-based Investor [30]
Nothing is safe – Of Dollars and Data [31]
You probably don’t want another ‘generational buying opportunity’ – Bona Fide Wealth [32]
Better than golf – Humble Dollar [33]
Pension Calculator: How much money do you need to retire? – The Humble Penny [34]
Never confuse luck with smart investing – Bloomberg [35]
Different kinds of information – Morgan Housel [36]
Will Nutmeg’s crowdfunding plans cut the mustard? [Search result] – FT [37]
Five years into the slog and not bored yet – Quietly Saving [38]
Pensions, doctors, and the NHS crisis caused by the tapered annual allowance – Young FI Guy [39]
The 4% rule is dead? No it’s not! – MoneyMaven [40]
How to increase the odds of owning the few stocks that drive returns [PDF] – Vanguard [41]
What went wrong at Interserve? – UK Value Investor [42]
Five personalities who can boost the value of your professional network – Financial Samurai [43]
Brexit
MPs reject all possible Brexit solutions. What now? [Excellent videos] – TLDR [44]
The obscene moral spectacle of Theresa May’s resignation – Politics.co.uk [45]
Brexit: What the fuck is going on? [Video, week old but still relevant] – YouTube [46]
The humbling of Britain – The New Statesman [47]
Game of Thrones, hamsters, and other things that didn’t last as long as Brexit – BBC [48]
When even the BBC turns to swearing [Video] – YouTube [49]
[50]
Theresa May and Jeremy Corbyn have never been less appealing – YouGov via Twitter [51]
Kindle book bargains
How Women Rise: Break the 12 Habits Holding You Back by Sally Helgesen – £0.99 on Kindle [52]
The Talent Code: Greatness isn’t Born. It’s Grown by Daniel Coyle – £0.99 on Kindle [53]
The Complete Guide to Property Investment by Rob Dix – £0.99 on Kindle [54]
Winners and How They Succeed by Alistair Campbell – £1.99 on Kindle [55]
Off our beat
Man stole $122m from Facebook and Google by sending them random bills – Boing Boing [56]
How Moneyball [57] ruined baseball – MarketWatch [58]
Life After Facebook: The second act of billionaire co-founder Eduardo Saverin – Forbes [59]
How to share a bed and be happy – Guardian [60]
And finally…
“The two greatest enemies of the equity fund investor are expenses and emotions.”
– John C. Bogle, The Little Book of Common Sense Investing [61]
Like these links? Subscribe [62] to get them every Friday!
- Financial Independence Retire Early. [↩ [67]]
- Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”. [↩ [68]]