A side effect of investing a growing share of my disposable income in pursuit of the dream of financial independence is that I’ve come to rely ever more on a good holiday to refresh the soul.

My response to austerity, no pay rises, the threat of unemployment, and galloping inflation of the past few years has been to save harder. I want to build my financial fortress as soon as I can.

I’ve never been a believer in all pain for some far-off gain, though, and that’s where holidays come in.

Holidays enable us to keep the wheels on our frugal wagon. The memories of getaways past and thoughts of escapes to come keep Mrs Accumulator and I going strong in the here and now.

But holidays and a frugal lifestyle can be dangerous bedfellows. Holidays are an escape – a few days of fantasy that break with the routine. Holidays are also a major expense, especially as I’m not about to prescribe living under a tarpaulin in the local woods, catching rabbits to eat for breakfast.

What living frugally is about is devising strategies that enable you to extract maximum satisfaction and value from expenditure, rather than mindlessly blowing a wad on pretty pictures out of a brochure, just because simply everybody is riding giant tortoises in the Galapagos this year.

I’ve therefore devoted a considerable amount of energy to devising a strategy that enables us to have more positive getaway experiences for less money.

Happy holidays

Some time ago, I heard a piece on the radio about research into the selectivity of memory.

It’s well known that human beings create positive or negative memories by screening out contradictory aspects of past experiences. But what are the key drivers of this process?

The conclusion was that two factors were liable to create more positive memories:

1. Change – a break from the everyday routine.

2. A happy ending – even a bad experience may be remembered more positively if it ended relatively well.

I decided to try and apply these findings to our holidays to increase their value to our lives. To see if there was a way we could get more holiday for less money, just by playing with our minds.

Creating more breaks in our routine obviously means going away more often. With no more money in the pot, that means more frequent, shorter holidays instead of one or two annual blowouts.

Instead of going away somewhere for a week, we now go away for three days (two nights) and do it twice as often.

A shorter break and the obvious bear trap of doubling your travel expenses has a number of implications that feed into the second component of our more positive holiday experience: making sure it ends well.

Happy endings

A good ending means not spending the last day of the holiday being endlessly shunted around airports, enduring delays, frustration, and the stress of not being somewhere at the right time with the right piece of paper just so you can join the next queue.

A good ending means being in control of your own schedule, so if you’re a little late along the way, it’s no drama.

It means keeping travel times relatively short, cheap and ideally part of the adventure (simultaneously dealing with the expense of going away more often).

Let’s face it, I’m talking about a staycation. A good ending is far more likely if you holiday in the UK.

Packing everything into the car for a staycation carries with it nourishing notions of the spirit of independence. “I’m master of my own destiny, I can drive to our destination in my own sweet time, and there’s no worry about passports, baggage allowances, missed flights or security checks”.

Then there’s the freedom of the road (peak hours and bank holidays excepted), which enables you to plan or meander as you see fit. You can even work in a pleasant stop-off on the way home, to break up the journey and increase the chances your memory banks will register a happy ending to the tale.

Most Accumulator holidays now take place within two to four hours drive of our home. We pick a point on the compass and find somewhere along that bearing that we’ve never been.

Staycations are a revelation:

• You discover much you never knew about your own country.

• You find new places where you might want to live one day.

• You stop writing off dear old Blighty as a miserable toilet in the typical British style.

Another way of ensuring a holiday ends well is to not make it the actual end of the holiday. The advantage of the three-day getaway model is that, during a week’s leave, you can time it so you’re back home for the weekend.

No more getting home in the wee hours of the last day, thinking “Oh my God, I’m back at work tomorrow.”

Instead, you’re back with days to spare, with time to sort out any overhanging chores, and time to buffer the shock of your return to everyday life. In the years ahead, you’ll forget the weekend and be left with the pink-hued memories of the time away.

Happy staycation

Obviously this strategy doesn’t work if your holiday absolutely has to involve baking yourself at 40ºC next to a pool, hand washing a Thai baby elephant, or mixing it with the playboys in Monte Carlo.

Chances are though, if that’s the kind of holiday you need, you’re doing it more for the bragging rights back at work.

Try the staycation alternative. Try something less ambitious and less costly but more frequent and full of soul food.

And with Brexit turning the pound into the new peso – making spending overseas around 10% more expensive at a stroke – there’s rarely been a better time to do your bit in Britain.

Take it steady,

The Accumulator

Good reads from around the Web.

The speedy installation of Theresa May into 10 Downing Street and the self-assurance she displayed in reshaping the Cabinet to fit her agenda made the past week was a good one for Great Britain PLC.

Obviously, we almost certainly still face years of heightened uncertainty as a result of Brexit.

But in avoiding an extra two months of front-loaded angst while the world and its money wonders who is even in charge is akin to avoiding initial fees on an investment fund. We’ve dodged even more pain for absolutely no gain.

That it’s May in charge – and not a cabal of unknowns – dampens some of the tail risks, too. Theresa May has her pros and cons, but she’s probably not going to drive us into a cliff out of ideology or inexperience.

Of course, as the The Economist points out, getting a cabinet in place and the optics sorted is only one step on our journey to Brexit:

“These things matter, of course.

But they melt into insignificance compared with the geological scale of the mountain the country must now climb.

In its continent, Britain must now rewrite its relationship with its largest trading partners, extricate itself from four decades of treaties, laws and conventions and negotiate painful trade offs.

Farther afield, it must reconfigure its role in the world and its relations with other countries.

This is not some hermit state, but one of the most globalised and internationally interdependent economies on the planet.

It rises and falls on its relations with the outside.”

I suspect it will be many months – if not years – before we’re even sure what kind of mountain we’re climbing.

Hammond time

Before then, Phillip Hammond, the new Chancellor, might have rocked a few of our apple carts

If May and Hammond are to be taken at their word, this new incarnation of the Tory government has different ideas about the UK economy – certainly post-Brexit – and perhaps, under Hammond, about our personal finances, too.

Wisely in light of how the Brexit vote broke down, May says she wants to govern for everyone. But it’s impossible to please everyone at the best of times, and these are not such halcyon days.

The commitment to an austerity timetable has gone at a stroke. That can only mean higher borrowing. Fine while gilt yields are low – but will they stay low, given the additional borrowing, likely higher inflation, and our huge current account deficit?

Interesting times.

Meanwhile, will Hammond do anything different on the personal finance front as part of this new purportedly inclusive agenda?

If George Osborne had kept the job, I would have expected him to swiftly cut corporation tax and possibly do something radical like suspend capital gains tax and stamp duty in an attempt to encourage investment. It’s not inconceivable he would have abandoned the goal of balancing the books by 2020, too, but I suspect any dividend he gained would have probably gone on cutting income taxes, in an attempt to cheer our animal spirits and keep the country spending.

This kind of Osborne-style agenda sounds far better for the wealthy than the poor though, which seems incompatible with May and Hammond’s stated goals.

Hammond told BBC Breakfast: “It’s not about making the fantastically rich richer”. He went on to pledge rising prosperity for “ordinary people”.

What might that amount to?

I can’t see him ramping up spending on benefits in a significant way. We already have a minimum wage. And he literally can’t afford to be too generous to the masses – there’s masses of them, and the country is still in debt.

Perhaps infrastructural investment biased to the regions is logical choice, but it’ll take years to get going and make a difference.

No, I find myself speculating that in any abandoning the effort to balance the books in favour of trying to rebalance inequality – even a bit – there’s going to have to be a carrot and stick approach to make it politically palatable.

That suggests halting spending cuts, higher taxes on the wealthy, no changes to the likes of capital gains tax or stamp duty, and perhaps an accelerated end to higher-rate tax relief on pensions.

It seems unlikely that they’ll jack up the highest rate of income tax again – perhaps to 50% – when they’re trying to prevent an exodus of City workers, but who knows? (Answers on a postcard in the comments below!)

Back on the front

Finally, to those who – when not swearing – have told me in the past three weeks to “can it”, “shut up”, “stop Remoaning”, or “go back to writing about passive investing or I’m going to stop reading” I say: Do what you like.

Really. Not to be antagonistic, but that’s certainly what I will keep on doing.

I haven’t run this website for eight years to let unhappy strangers start dictating what I write about.

Especially when a sizeable proportion (though definitely not all) of the complainers are of the Barry Blimp sort.

Life is to short to cater to these people – unless you’re one of them yourself.

For example, one of the Blimps’ traits is they can’t seem to handle nuance or uncertainty. They are convinced they are right, but if they are proved wrong then they blame unforeseeable factors for derailing their vision or calculations. (I’ve mentioned before that many seem to have an engineering background – in my experience one of the reliably worst flavours of private active investor. Perhaps there’s a connection, to do with left brains or similar.)

Now, judging by their annoyance at my Brexit posts, I suspect some of them will accuse me of just the same steadfast intransigence.

“Wait and see, you’ll be embarrassed in 10 years when Brexit is proved a huge success!” more than one has said.

But really I won’t be – I’ll be surprised, but not astonished – because I’ve repeatedly talked about uncertainties and probabilities.

In every post I’ve written about Brexit, I’ve allowed that there may be a net positive outcome from the vote to Leave. I don’t think it’s likely, but it’s a possibility.

If you don’t think in those terms – as their blind certainty suggests many don’t – then perhaps you can’t read it in others.

Alternatively, uncertainty for some seems to mean: “Hey, it’s happened, get over it. Come back in five years when there’s certainty”.

In other words, they believe it’s at best futile and at worst confrontational to think about a range of possibilities, especially one where most of your range sits on the wrong side of their own axis of rightness.

Deliberately not speculating about the future like this is a fine approach to bring to your passive investing strategy.

But it’s a terrible way to invest actively (which is what I do for my sins) and to a lesser extent it can be bad for your personal finances.

And it’s a futile way to critique a blogger who is trying to wrap his (inadequate) head around the potential consequences of a nation-shaking event. You might not want to do it but I do, and I am not going to replace my methods with blind faith in people whose reasoning I doubt.

I see a range of possibilities, and as I said at the start, the odds will keep changing.

This was a good week. Theresa May in, Andrea Leadsom not, and a version of Brexit which essentially amounts to “burn the ships” has become much less likely.

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Good reads from around the Web.

Take the stereotype of a Leave voter at face value, and they’ve already struck a blow against the wealthy and pretentious urban South.

According to an article in The Telegraph, the price of coffee is rising due to the declining pound.

Stephen Hurst, founder of Mercanta, a speciality coffee importer based in Kingston upon Thames, estimates a rise of 60-70p on a kilo of beans, taking the price to around £4.95.

Richard Champion, deputy chief investment officer at Canaccord Genuity Wealth Management, said: “We don’t expect sterling to recover anytime in the near future so we’d expect this to wash through into higher prices.

“It’s another clear example of what we’re going to see happening in the coming months as higher import costs filter through.”

Ye, the infamous latte factor is about to become that little bit more taxing.

Oh I know, there’s now a Starbucks in Hartlepool. I appreciate, too, that maybe you voted Leave even though you live in a nice house in the Home Counties.

I wrote about some such voters, remember.

Indeed back in the earliest Days After Brexit Day, there were a lot of clashes here and elsewhere due to Leave voters feeling misunderstood.

So while I think generalizations can be helpful when studying broad trends such as how a country voted, it’s true they can be superficial and perhaps misleading.

Getting personal

To that end, there’s a developing view that aside from ethnicity (the elephant in the room, maybe) a big predictor of how somebody chose to vote is how socially conservative they are.

According to a London School of Economics blog:

Britain’s choice to vote Leave, we are told, is a protest by those left behind by modernisation and globalisation. London versus the regions, poor versus rich.

Nothing could be further from the truth.

Brexit voters, like Trump supporters, are motivated by identity, not economics. Age, education, national identity and ethnicity are more important than income or occupation.

But to get to the nub of the Leave-Remain divide, we need to go even deeper, to the level of attitudes and personality.

These personality factors include attitudes to immigration and – most strikingly – whether a particular voter thinks we should bring back the death penalty.

• In polling before the referendum, 71% of those who said they were in favour of bringing back the death penalty said they would vote to leave the EU.

• This falls to 20 percent among those most opposed to capital punishment.

Now, you might argue we’ve just swapped one stereotype for another here. It certainly won’t tell you every nuance behind a Leave vote – or necessarily describe YOU.

Some 29% of people who want to string ’em up would prefer to remain part of the EU, remember. And 20% of Remainers quite fancy a hanging.

Yet as we struggle to reconcile a new relationship with Europe in the light of this vote, it’s going to be vital to tease out the real motivations behind the decision to Leave.

No side is going to get everything it wants from any negotiation. We’ll need to get the best political and economic bangs for our buck from the compromises.

Identifying this conservative Leave instinct – which I tactfully personified as 50-something Barry Blimp in my piece, and which the LSE researchers more kindly refer to as the ‘Settler’ personality type – could be valuable.

It may also point to why the debate has been so ill-tempered, especially as the researcher adds:

By contrast, people oriented toward success and display (‘Prospectors’), or who prioritise expressive individualism and cultural equality (‘Pioneers’) voted Remain.

If pitting these kinds of people against death penalty supporting Leavers doesn’t sound like the classic ingredients of a family punch up, then you clearly haven’t been to my house at Christmas.

Incidentally, don’t get caught up on “success” there, Barry. We know you did very well for yourself in your career and you have a big house to prove it.

The question is how to reconcile Barry’s stance – maybe your stance – with the more disenfranchised and widespread Leave contingent, given the economic interests seem so very different.

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