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Weekend reading: 2020 hindsight

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What caught my eye this week.

I hope you all had a great Christmas and a suitably anti-climactic New Year. But there is something firmly transitional about that strange two weeks, isn’t there?

A friend sent me Private Eye’s video recap of 2019, and it already seems incredibly out-of-date. Jokes about Boris Johnson and Jennifer Arcuri? So last decade.

However a relic of 2019 that I’m not yet completely over yet (bar the ‘B’ word!) is the recent debate I had with the rest of the band about financial independence and early retirement.

Partly that’s because you guys have delivered some excellent follow-up comments to continue the conversation. (Link below!)

But it’s probably also because it’s been a while since I mentally visited some of the wider themes – living for today versus tomorrow, how to best spend 8am to 11pm, and on – and despite my rhetorical posturing for debate purposes, the pushback from The Accumulator gave me plenty to think about.

If you’re still kicking it over, too, then there are two relevant reads in The Guardian this week.

First off, Oliver Burkeman asks whether you’re living too much in the future at the expense of now. He has wider themes than just saving for retirement in mind, but it’s still a relevant read:

The problem with treating every year (or week, or hour) as something you’re supposed to put to use is that you end up living permanently focused on the future.

The more strenuously you try to get something out of life, the more emotionally invested you become in reaching the point at which you’ve succeeded in doing so – which is, necessarily, never now.

One of my arguments was that some FIRE-seekers seem too happy to slog through a bad existence now because they’ve pinned their hopes on a far-flung retired future. There are counterarguments in our debate so I won’t rehash it, but I will flag up this second interesting article on learning to love the job you have now:

There are simple steps we can take to start rebalancing this relationship with our workplace.

Researchers have found that even the most miserable job can be redeemed by taking back a little control.

That word ‘control’ is key. Several people in the comments to our five-part barny said they were all-in on early retirement because they don’t want to be told what to do.

I can fully understand that.

My own solution was long ago to become my own boss, and to work generally out-of-office. As I’ve written before, you don’t have to go nuclear on working for a living.

The one thing we all agreed on is that pursuing the financial independence part of FIRE is almost a no-brainer, whatever your future aspirations. And we plan to chip in over 2020 (and beyond…) with more articles and insights on Monevator as to how to best achieve it.

Happy new decade!

From Monevator

Debating FIRE: The believer vs the sceptic vs the drop-out (Round 1) – Monevator

The struggle for the soul of FIRE (Round 2) – Monevator

The elephant’s revenge (Round 3) – Monevator

Breathing FIRE (Round 4) – Monevator

The final conflagration (Round 5, including poll!) – Monevator

Also check out the excellent comment thread from readers – Monevator


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

Living standards grow at slowest rate since World War 2 [Search result]FT

UK house prices enjoy a December bounce – ThisIsMoney

Click to enlarge

2019 joins JP Morgan’s asset class quilt of annual returns – Nate Geraci via Twitter

Products and services

Will ‘marriage-lite’ civil partnerships for all really protect couples’ cash? – ThisIsMoney

Making a will: 10 things you should know [Search result]FT

HSBC’s £175 bank account switch bribe is back – ThisIsMoney

Ratesetter will pay you £100 [and me a cash bonus] if you invest £1,000 for a year – Ratesetter

Will savings rates continue to fall in 2020? – ThisIsMoney

Homes for renovation projects [Gallery]Guardian

(Anti) forecasting mini-special

The psychology of prediction – Morgan Housel

No asterisks – The Reformed Broker

Will UK house prices rise or fall this year? – BBC

Forecasting follies 2020 – Above the Market

10 things that will happen in the next decade – Klement on Investing

About those Wall Street forecasts – Crossing Wall Street

Comment and opinion

Five lessons from ‘The Witch of Wall Street’ – Morningstar

Return on investment [Spending on experiences]Humble Dollar

Let the roaring 2020s begin – Mr Money Mustache

“I’ve sold my house, and now I’m down over £500,000”FireVLondon

Tourist prices – indeedably

I used to be silly with money, but with Hare Krishna I’ve learned self-control – Guardian

Passive guru Allan Roth gives ESG funds the cold-shoulder… – Allan Roth

…while Robin Powell says that at the least ESG fans should keep costs low – Humble Dollar

Negative interest rates aren’t such a departure, after all – Bloomberg

The death of [US] stock brokerage fees was 50 years in the making – Yahoo Finance

The simple explanation for the under-performance of value investing – Evidence-based Investor

Naughty corner: Active antics

The active future for asset owners – Alliance Bernstein

How tortoises can compete with hares – Morningstar

Five behavioural resolutions for investors in 2020 – Behavioural Investment

Asset classes and their fundamental drivers [Read through for a cool graphic]CFA Institute

Brexit, politics, blah

Dominic Cummings is hiring and I admit it’s one of the most appealing job adverts I’ve ever read – Dominic Cumming’s blog

Kindle book bargains

Economics: The User’s Guide by Ha-Joon Chang – £1.99 on Kindle

The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein – £1.99 on Kindle

The Making of a Manager: What to Do When Everyone Looks to You by Julie Zhuo – £0.99 on Kindle

Off our beat

Coolest things learned in 2019 – Dave Perell

Ten reasons to cheer the progress of the last decade – Reasons to be Cheerful [h/t Abnormal Returns]

Vogue Italia drops photoshoots from January issue in green statement – Guardian

And finally…

“My own experiences in the business world suggest that an ethical approach, far from being a potential barrier to profits, is actually the secret to success.”
– Julian Richer, The Ethical Capitalist

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  1. 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”. []
{ 19 comments… add one }
  • 1 Matthew January 4, 2020, 11:52 am

    Perhaps trump will/could be persuaded to side with greta and encourage ESG and renewables to combat iran’s and russia’s income?

    An increase in oil prices from conflict might help encourage renewables, although there will be burning oil fields

  • 2 Vanguardfan January 4, 2020, 11:54 am

    Not sure whether this should really be on the debate thread, but anyway. One thing I’ve been pondering about ‘FIRE’ is that we don’t spend nearly enough time understanding our emotional responses to our ‘stash’ and our ‘future destination’. I’m with you and Oliver Burkeman in that I don’t believe in waiting to ‘retirement’ to live the best life you can.
    I also think there is a real risk of adaptation to your saving stash, sort of the savers equivalent to the lifestyle creep of spenders. So when you are starting out you think, maybe one year’s expenses will make you feel secure and be ‘enough’ to feel secure. Then you reach for FI and it is 25 times expenses. Then you hit that and somehow, it’s not enough to feel secure. That’s why so many get caught in OMY. I think this underlying fear, seeing money as security and safety, is what drives a lot of natural savers (who are drawn to FIRE). It’s a bit of a hoarding thing, seeing your stash of money going up, and that’s why it’s hard to start spending it. The thing is, the feeling of safety and security is largely illusory. You can never address an emotional need satisfactorily with money.
    I’m not sure I’ve explained this very well, but I think that these emotional relationships with money are not considered often enough. We get caught up in logic and numbers and safe withdrawal rates, and contingencies and what ifs….
    When really we just need to be sensible with money, and spend more time making sure our work allows us to thrive emotionally as well as financially.

  • 3 PC January 4, 2020, 12:11 pm

    Thanks for the FIRE discussion and for repeating the point that it’s important to live in the present. Life is not a dress rehearsal. Putting all your faith and hope on some point in the future is risky and not very healthy.

  • 4 ermine January 4, 2020, 1:04 pm

    Go on. Pitch for the job. It’s time to see if Dom’s commitment to diversity of thinking and out-of-the-box sourcing holds water – does an arch-Remainer get an interview as an insight into the working of t’other side 😉

  • 5 The Investor January 4, 2020, 1:23 pm

    Not sure whether this should really be on the debate thread, but anyway…

    I think ideally FIRE debate follow-ups would go on the other thread, just so it’s all contained for posterity, but obviously I’m to blame if they don’t! 🙂

    Maybe specific Burkeman/job-coping comments on this thread?

  • 6 blake January 4, 2020, 2:18 pm

    As seen on another forum that could be added to Kindle book bargains above is The 2020 Investment Trust handbook for free

  • 7 Simon January 4, 2020, 4:05 pm

    A kindle book bargain, Quit Like A Millionaire at 99p.

  • 8 The Weasel January 4, 2020, 6:07 pm

    So they are hiring experts after all?

  • 9 Neverland January 4, 2020, 7:27 pm

    Dominic Cummings – come on?

    Does no-one remember Keith Joesph, Steve Hilton, Steve Bannon or Nick Timothy.

    That guy will be out of no.10 in a year. One look at this CV will tell you he is continually being sacked.

  • 10 ermine January 4, 2020, 8:42 pm

    > maybe one year’s expenses will make you feel secure and be ‘enough’ to feel secure.

    It’s not enough IMO, if you are depending on risk assets. You need to avoid being a forced seller. One year is not enough, three was what I used. As it was I never needed more than six months, but then I saw no true bear market in the time it covered.

  • 11 Mathmo January 5, 2020, 1:59 am

    TI – Happy New Year and thanks for another year of link thoughts and insights. Weekends are much better for your posts.

    I tend to avoid New Year posts as they do all tend to be either year-in-review navel gazing or outrageous prediction-making for the next year. Being a cardinal decade makes matters ten times worse.

    So here we are sitting at the end of a massive and unusual bull run and we’ve all learnt a lot. About sitting in massive and unusual bull run. Not wishing to be chicken little about the whole thing, but just because the sky hasn’t fallen in, doesn’t mean that we should forget how to worry about it. But that said, I didn’t know about this blog in 2010 (although a thoughtless index investor since 1998), and despite this benign environment, I’ve still managed to make enough mistakes to see my fingers get burnt a few times along the way and have my ego and hubris tested. Thankfully in relatively cheap ways. A lesson taught etc. 2020 is the year that I’m pulling my investing discipline up further and behaving myself even more. Just like 2019.

    Dom’s job post caused a bit of a stir in one of my groups — not least for whether it breaches age discrimination — but more for whether the idea of “binning people quickly” is very modern in terms of management style, and what all those smart inexperienced (apparently) youngsters are going to do there rather than building some great business or one great ego.

  • 12 ZXSpectrum48k January 5, 2020, 5:48 am

    Re: Asset classes and their fundamental drivers. It’s typical of the stuff that my private bank wealth management arm sends me. It confirms why I would never let them touch my portfolio with a 10 foot bargepole. It also confirms why I try not to hire anyone with a CFA.

    Take corp and high yield bonds. According to this they are driven by the fundamentals of growth, inflation and …. err greed. Wtf! How is greed a fundamental driver? If it is why is there no fear? Why are corp bonds and private equity driven by greed but normal equities,
    and property are not? In fundamental terms you buy corp bonds over govt bonds when the spread pickup is larger than the losses due to defaults and non-par recoveries.

    Similarly, he argues hedge funds are not an asset class but a composite of other asset classes. Well, that’s not even often true but we’ll go with it. So surely the fundamental drivers would be a weighted sum of the asset class drivers? Not for this guy. Somehow all the others fundamental drivers magically cancel and the only one left is this “greed” thing. Even aircraft leasing … a clear cut credit product driven by the relationship between loan rates and default rates is somehow mainly driven by “greed”.

    What a pile of nonsense. I do wish these equity centric types would just stick to equities and leave fixed income to those with at least some grasp of the fundamentals of fixed income.

  • 13 JimJim January 5, 2020, 9:16 am

    @ZX… In a similar vein, (regarding advice from interested parties) the piece “The Active Future for Asset Owners” in the naughty corner caught my eye and made me contemplate the make up of my own asset allocation. It would be interesting to get your take on the authors reclassification of income in asset allocation for a future world of projected lower returns. It is very American and the Shiller-PE (CAPE) stuff does not represent our own domestic market but I feel it is worth considering, on the whole I think they made some valid points but as always, predicting the future is a risky business.
    (Delete if naughty corner stuff is off limits)

  • 14 The Borderer January 5, 2020, 9:38 am

    If Dom thinks that recruiting people who are “considering” ‘…machine learning for model-free prediction of spatiotemporally chaotic systems of arbitrarily large spatial extent and attractor dimension…”, then people sleeping on the streets or using foodbanks to feed their families can breathe a huge sigh of relief.

  • 15 The Investor January 5, 2020, 10:15 am


    Take corp and high yield bonds. According to this they are driven by the fundamentals of growth, inflation and …. err greed. Wtf! How is greed a fundamental driver? If it is why is there no fear? Why are corp bonds and private equity driven by greed but normal equities, and property are not?

    Well clearly the graphic is an abstraction/simplification, but I found it quite a novel way of presenting age-old concepts. 🙂

    At least in the case of high-yield, I presume the authors are referencing the opinion/research/view that suggests that on a risk-reward basis there’s no reason to favour high-yield debt over conventional higher-quality fixed income / government securities. So the only reason why investing dollars in aggregate would do so would be ‘greed’ (i.e. yield chasing).

    I don’t think this is in incompatible with the view of a manager with proven alpha saying “I can buy high-yield at this or that point in the cycle” or “the spread on this particular security is excessive” or whatnot, in the same way a (vanishingly rare) proven equity *trader* can ride junky momentum stocks and get out before they crash etc.

    Equities and property as you know have characteristics that drive long-term returns independent (except in hindsight!) of the price you paid for them. (i.e. Economic growth / inflation that can be expected to increase their earnings per share / asset value / dividends over time, by some uncertain amount). I suppose this is where they are drawing the distinction?

    More broadly I agree with you about this private bank stuff. A very high net worth friend of mine occasionally sends me the 15-page quarterly reports prepared by his bank (with his own numbers plugged in etc) and while I don’t think it’s wrong as such (except in that it obfuscates around active/passive etc) it is most impressive for its shininess and appealing graphics!

  • 16 xxd09 January 5, 2020, 12:22 pm

    Re taking control of your job
    I (retd 73 old) notice that there appears to be a slight sea sea change occurring in some of the young professionals I speak to
    Starting to say “No” to their line managers and coming to work at 8.39-9 not 7 and leaving at 5 not 7
    Working back to a lunch interval
    All anecdotal.Seems change coming from the bottom up
    The current crop of managers in place are relics of the good times when “bully” tactics could work ?
    I also notice at the top that headteachers ,judges positions are not being filled
    Not enough money /support for people in these very exposed ,very responsible positions?
    Things happening at the top and bottom of the Civil Service /Councils
    Might be nothing!

  • 17 Gentlemans Family Finances January 5, 2020, 1:08 pm

    Where I work the 4th floor is for staff and all other floors for hourly paid contractors.
    I get in around 6:45 and I am by no means the first or even all that early.
    Staff lights are still off by then – nobody comes in until sensible o’clock.
    That’s the difference between being on an annual salary and hourly rates.
    Also we have much less politics to deal with – just get your job done and time booked.

    School principle job? I wouldn’t want that at any price.

  • 18 Croydon Baby Boomer January 5, 2020, 10:13 pm

    I was interested to read about people not wanting to be told what to do in the FIRE discussion, and it reminded me of my youth in Rugby and Career progression to management.
    In my twenties I decided I needed a degree to progress from my factory technician job to a Manager. Likewise on the Rugby pitch I wanted to play for England. In many ways the the parallels were the same, how to get noticed and how to be good enough to get a result.

    Lets take the easy first part, how to be noticed. Creating a personal brand image is key. I decided to wear a bow tie, not many around for engineers in those days. I was always remembered for the tie but not by name. This came later.

    On the pitch it was about being noticed by my distinctive moustache and hair cut, in those days tattoos for not so common, blond hair and coloured boots were the norm. As a moderately good forward player I was not exceptional or outstanding but I did get noticed, I decided I needed to be where the ball was as this was the focus of attention, not the runner but the giver or receiver to those that could do better than me.

    Whatever you choose to do you will be remembered for the Good and the Bad.

    In management it was the same, the bluffers always got caught out, I became know as Mr ‘Trust me’ as I was trying to move the Company in a direction they had not been before and they did not understand or I could not explain what I was trying to do. So get a sponsor, someone who will share your vision and can help clear out the obstacles in your way. Not every thing you do will be successful but do not give up a war is won by many battles and you can afford to loose one or two along the way.

    Finally remember that the people around you can contribute, they are your greatest asset as few can do it all themselves and alone. Everyone has a utility value and the greatest challenge of a manager is to find out what it is and to match them to a job in which they can excel rather than fire them for a job they cannot do.

    Today I find too many people are all self and do want to spend time finding out how to be happy in what they do. I used to say we are all part of a chain which if one links breaks we all fail. The key is to give to others down the chain and expect them to do likewise, not in return but to make someone else’s life better today.

    FIRE is not an end state but natural consequence of the way you have worked in life which will come sooner or later dependent upon how you have managed expectations and worked with others to achieve the short terms goals down the road.

    Best wishes for a Happy and prosperous New Year to create your own Brand Image.

  • 19 Brod January 12, 2020, 10:01 am

    I think the interesting thing about the Dominic job ad is he’s still caught in the Oxbridge thing.

    I don’t think restricting yourself to “one of the world’s best universities…” is really radical. To get to the best universities you have to pass exams. To pass exams, you have to frame yourself in the current vernacular.

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