What caught my eye this week.
There’s a big article to be written about the FIRE movement (though I still don’t like the name [1]) and what it can and can’t deliver for its growing band of adherents.
With ever more aiming to ride the wave to the island of early retirement (or maybe getting washed up on that shore by fate) it’s not surprising to me to find the sea catching quite a few by the heels and dragging them back out again.
It turns out the promised land isn’t exactly what they expected – or else they discover they’re not quite who they thought they were.
For now though I just want to highlight a thought-provoking article in The Atlantic [2] this week that’s more than tangentially relevant.
In Your professional decline is coming (much) sooner than you think, the author warns high-flyers in the prime of their life that the decline and even demise of their careers is almost inevitable. Biology will catch you, even if you escape the siren call of the personal finance bloggers!
So do not ask for whom the bell tolls:
According to research by Dean Keith Simonton, a professor emeritus of psychology at UC Davis and one of the world’s leading experts on the trajectories of creative careers, success and productivity increase for the first 20 years after the inception of a career, on average.
So if you start a career in earnest at 30, expect to do your best work around 50 and go into decline soon after that.
The whole piece is well worth a read. But isn’t it interesting that the frustration identified by some of those desperate to retire early might not be all to do with work itself – and more to do with their waning place in it?
Is early retirement seen through this lens a precocious mid-life crisis? Instead of splurging to buy a sports car, you squirrel away the money to do so if you wanted to.
Don’t get me wrong! I continue to think financial independence is a great goal for nearly everyone – and retiring early worth a try if you’re keen. It took me a mid-career sabbatical / snoozefest to realize I’d probably always want to do some paid work for as long as I could.
Maybe you’ll have to retire early to discover similar. Hopefully no harm done – it’s a joy to be financially free even in an office of wage slaves, though I’d keep it under your hat and be careful not to betray yourself in the Secret Santa.
At the same time, you might consider that you and the harried 50-something man without a plan from accounts that you just bought a pair of vintage Bart Simpson socks for might have more in common than you think…
The same question: “What next?”
From Monevator
Visualizing investors’ emotions – Monevator [3]
From the archive-ator: Gold as an asset class – Monevator [4]
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!1 [5]
Fund managers most bearish since the financial crisis – CityWire [6] and The Fat Pitch [7]
Facebook has incubated a new cryptocurrency called Libra – Libra [8] and Simple Living in Somerset [9]
Honesty is majority policy in lost wallet experiment – Guardian [10]
Pension transfer advice substandard, warns regulator [Search result] – FT [11]
Demented billion dollar row erupts after a UBS economist makes a quirky quip about pigs – Business Insider [12]
Young adults have less to spend on non-essentials, study finds – Guardian [13]
Draghi sends bond yields negative all over Europe – Axios [14]
[15]
Remember when the Conservative party was conservative? – YouGov via Twitter [16]
Products and services
Vanguard cuts fees on its UK active fund range on hitting three-year track record – Portfolio Adviser [17]
Natwest becomes first big bank to let customers open account with a selfie – Guardian [18]
How to turn your Lifetime ISA cash into a deposit for a first home – ThisIsMoney [19]
Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter [20]
Neil Woodford should find alternative ways to return capital to clients – Hargreaves Lansdown [21]
Morningstar finds its [own…] fund ratings do add value – Morningstar [22]
For hedge funds to survive, they best have at least $250m in assets says Goldman Sachs – Bloomberg [23]
‘Amazon’s Choice’ does not necessarily mean a product is any good. [It’s a robo-verdict] – Buzzfeed [24]
Glass houses for sale [Gallery] – Guardian [25]
Comment and opinion
Maths versus emotion – Humble Dollar [26]
Academics find a simple five fund passive portfolio beats active funds 90% of the time, with lower volatility2 [27] – Institutional Investor [28]
Taylor Swift has an economics lesson for you – Bloomberg [29]
Playing with FIRE – Simple Living in Somerset [30]
Early retirement can be a killer, so start your planning now – USA Today [31]
What role do bonds play in a portfolio? – Morningstar [32]
What Mrs YFG wishes she’d known about work half a decade ago – Young FI Guy [33]
What was the greatest asset bubble of all time? – Of Dollars and Data [34]
The risk of being unemployable after retiring early is overblown – Financial Samurai [35]
Why do we need inflation? – A Wealth of Common Sense [36]
Diverse life experiences make for better financial advisors – Abnormal Returns [37]
Your financial mid-life MOT: is it time for a tune-up? [Search result] – FT [38]
Investing is risky. Press your luck – Bone Fide Wealth [39]
For stock pickers: Moat erosion starts behind the castle walls – Ensemble Investing [40]
Berkshire Hathaway Annual Shareholder meetings since 1994 [Podcasts] – via Overcast [41] [h/t Zude PR [42]]
Brexit
Mark Carney: 150,000 firms are not ready for no-deal Brexit – BBC [43]
How Oxford University shaped Brexit – and Britain’s next prime minister [Search result] – FT [44]
Kindle book bargains
The Millionaire Next Door by Thomas J. Stanley – £0.99 on Kindle [45]
How to Make a Living with your Writing by Joanna Penn – £0.99 on Kindle [46]
The 80/20 Principle: The Secret of Achieving More with Less by Richard Koch – £0.99 on Kindle [47]
Bean Counters: The triumph of the accountants and how they broke capitalism by Richard Brooks – £2.59 on Kindle [48]
Off our beat
Puppy dog eyes evolved so dogs could communicate with humans – National Geographic [49]
Clean energy overtaking fossil fuels in Europe – BBC [50]
What really happened to Malaysia’s missing airplane – The Atlantic [51]
Marriage of ultimate doom – Indeedably [52]
Alexa, I’m having a heart attack – Bloomberg [53]
And finally…
“The fact that a thesis is flawed does not mean that we should not invest in it as long as other people believe in it and there is a large group of people left to be convinced. The point was made by John Maynard Keynes when he compared the stock market to a beauty contest where the winner is not the most beautiful contestant but the one whom the greatest number of people consider beautiful.”
– George Soros, The Alchemy of Finance [54]
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- 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”. [↩ [60]]
- To be fair, it seems they compared a five-fund ETF portfolio to a single mutual fund, which isn’t really apples to apples. If they’d batched multiple active funds together I think the return results would be at least as compelling, but the volatility of a multi-fund active portfolio would probably be lower, too. [↩ [61]]