Jan 312018
 

A few things leapt out at me during a recent interaction:

  • Our business is very dependant on our client’s shut-downs. We typically install and commission during the March-April Easter break and over the December Christmas/New Year period. Oh, and we often do smaller jobs on weekend shutdowns.
  • This company is really good. It’s pensionable age is 65. The previous company I worked for was 60. It gives me a whole further 5 years to save for retirement.

There were many other things said, many other topics discussed and explored, but ultimately these two statements are indicative, I think, of the environment.

The people, I’m sure are personable and friendly, most likely a good team to work with if…. If you buy into their world view, which appears to be – You work your career, full-on, nothing else but work. Then you retire at some arbitrary age in the future and you then live and enjoy life.

It’s always dangerous to jump to conclusions, to make judgements based on a short two-hour meeting with someone, but in many situations it’s all we have and decisions need to be taken based on those short interactions.

What struck me again is the overriding inability of most corporate sheep to even consider that something else is possible. After all, what on earth is normal about accepting that the company takes preference over all your limited weekends and public holidays?

I really don’t think I could go back into this type of environment, irrespective of whatever the offer might be. I know, I just know, I’ll be miserable there. The initial contact was certainly no time to interrogate their attitudes to unpaid leave, flexible working hours, remote-work but I have seen enough of the culture in that one brief meeting to understand that it’s not something they have up until now considered let alone would embrace and allow.

So I pretty much know all of this, even before I went in for the chat. So why do I do this to myself? Why even waste the time?

Well, partly because much of this could actually still be only in my head and I may well be wrong. It’s always good to have a particular stance clearly and directly articulated by the other party rather than assuming what it might be.

The other, less desireable aspect, is that the money [or lack thereof] really does have a serious hold on me. It’s been extremely hard considering a future with no income and there really is this inner concern that I will not be able to replace a standard job/salary by my own efforts. Again, perhaps all in my head and not a current valid concern until I’ve tried and tried again. Unless I’ve tried and repeated failure has proven this point, perhaps I’m imagining things that may not be?

None of this makes it any easier. None of this allows me to easily just say no to one of the very few opportunities that have popped across my path.

Mmm! Living in my head. Not perhaps the best thing to do all the time. Perhaps it’s best if I give the independant, self-earning path a full go before I take the coward’s way out and run back to the coporate?

Jan 012018
 

Depending on the flock you listen to, breaking free from the corporate cubicle to self employment and entrepreneurship is the only viable path to wealth and contentment.

Speaking with those that have done it solicits the common response “It’s hard work but I should have done it years ago. Don’t be afraid. Just do it. you wont be sorry”.

So I’m thinking – I have always been “self employed”. No, not by the Woolly Masses definition, but certainly by my own. Up until 2017.12.31 it has just happened to be “self-employed” within a corporate framework. I have had bosses and customers, just like a consultant or one-man business. Everyone answers to someone whether a boss, a customer, a shareholder. No one escapes that, not if you want people to pay you.

That said, it’s still a major shift in direction that this beautiful first morning of 2018 has brought. From today, I really am “self employed” by everyone’s definition of the word.

Let the Funemployment begin!

Nov 302017
 

Life becomes interesting when theory turns to practice!

It’s one thing to have an FU-Fund, hidden away in a financial institution somewhere, purely represented as numbers on a spreadsheet. It’s quite another to actually be deep into the process of cashing it in, preparing for a period of unemployment sabbatical from January 2018.

I’m doing the calculations over and over and over, cutting back all unnecessary spend, looking into capital gains tax implications, trying to make the best decisions to ensure that the bucket of cash stretches as far as possible without sacrificing any too much quality of life. It’s too late now, the deed is done….

People ask of me “Was this planned?”

Yes and No!

I’ve known for a long time this day was coming but never knew exactly when. To be honest I was only expecting it in 6 years time, at age 55. Also, the plan, if one can so grandly call it that, was always more to gather enough in order to be able to quit permanently.

But, as an old salt knows, plans should always be drawn with a stick in the sand since the tides of life have a habit of washing them away at times.

And so it has come to pass that events at The Office have become too much for me to stomach. “I quit!” is now a reality.

The FU-Fund consists of 2 portions. The first, held in unit trusts and shares, will fund phase-1; 8 to 10 months of living. If, in that time I still haven’t found another suitable and sufficient source of income, then phase-2 will be funded by the corporate pension fund (which will be transferred to a preservation fund on resignation). There’s about another 2 years of living there. If I cannot come up with some income in that timeframe then I’m going to call myself pretty useless!

The problems are few but potentially critical:

  • The FU-Fund is also the emergency fund. And we all know that life has this nasty habit of throwing “emergencies” your way, especially when they’re not needed.
  • In order to stretch the money, all savings and investments are put on hold. This obviously impacts the final FIRE date and needs be addressed asap. It also means that the FI stash is now on its own. No added monthly boosters. Only compound interest.
  • Cashing out the corporate pension should be a last resort. We need this growing towards the final FIRE date. But, there is uncertainty about whether it will be needed or not and that’s why it’s going into a preservation fund. It maintains the benefits there but allows a single transaction to cash out before 55. Just in case!
  • I’m 49, pale and male – living in South Africa. Enough said! This is most likely the end of normal, corporate career – forever.

Not all of these are negative factors. The last is probably the incentive I need to be autonomous, to create and run my own little lifestyle business?

So, while I still have one foot in the door, hoping for some kind of “offer” to keep me working here, deep down I know it’s not worth it. The stress and misery of this particular corporate is killing me. It would be a huge mistake to stay. I need to search for new opportuniies closer to the boat.

And so, for better or worse, the plan has being put into action, not in exactly the same way as envisaged but close enough. Now it’s time to ensure that my free time is not wasted.

Nov 192017
 

What does the future hold?

In many ways, the general trajectory of possible outcomes is known. For example, if you don’t add some kind of value in exchange for cash, chances are good you’ll end up living under a bridge. Or, if you commit a crime, chances are you’ll end up serving time. But, those kind of generalised cause-and-effect scenarios don’t really appease the inate “need” for certainty, the need to know how tomorrow will be.

It’s utter folly of course, on several fronts. If tomorrow were known life would certainly be dull.

I happened upon an svDelos video the other night. They were interviewing the crew of svSaltBreaker (in Cape Town nonetheless). Another boatload of people, taking a chance at living a good life (or so it would seem). It is of course important to always remember, the internet is very, very good at painting a picture-perfect life and very, very bad at showing actual real life. That said, there are definitely people out there living their dreams and who have an appetite for uncertainty that extends far beyond mine.

I perhaps need to exercise that muscle a little. Not just in single huge events like quitting a 30 year career but in everyday life as well.

Oct 222017
 

Markus awakes yet again to the cold sweat of fear.

He finds himself in a long, dark corridor, right at the very end. No matter which way he looks, he can perceive but two options.

Former colleagues, knives out and heads like snakes, block the return to a bright and cheery cubicle hell. Worse still, some advance with malicious intent.

At the dead end, a vast and intimidating fire escape door emblazoned with the words “Exit Only. No Return!”

Unable (or perhaps unwilling) to fight his way back to the light, Markus rests one trembling hand on the door release, sensing full well the turbulent vortex beyond, waiting to suck him out. Its a drastic move he now contemplates, with no turning back once it’s done.

The unknown looms fearfully on the other side. A drop to a grimy sidewalk eleven stories down? A sailboat voyage to tropical paradise? Or something unknown in between?

Uncertain and afraid, Markus pulls the covers up and returns to restless sleep, hoping with all his being the situation might resolve itself, but knowing full well that only he can change things by opening that damn door…….

Sep 022017
 

Currently, the rage is “speculative investment” [i.e. gambling] in bitcoins. Mining them, buying/selling them. The “price” has been extremely volatile. In the last year or so it has risen ~800%, once again still compared to the USD.

Had you only got in at the right time…..! And now the mad stampede of the woolly masses gains momentum.

The value of bitcoin? Perhaps as a replacement to cold hard cash or Kruger Rands in the bilge as we sail south? The fundamental problem remains however. You can mine them [getting harder and harder to do], you can hide them [only if you don’t use them]. But, in the current world, there is still an interface in and out into the financial currencies we all need to buy food, fuel, fund daily life. And it’s this interface that governments will watch and tax. And watch very closely they will. And ultimately, even inside the Bitcoin system, your bitcoins and you transactions are, ultimately with a little computing effort it seems, traceable back to you.

The fact that the Bitcoin system takes away central financial control from the ruling elite is a very, very appealing lure to any with even a hint of anarchistic or libetarian thought. But then again, will it really? How likely is it that those with vast financial resources, those that rule the world, have not seen this and are also employing armies of vastly intelligent programmers to further their own agendas?

And then there’s also way, way too much emphasis placed on how transactions are “totally secure” because of the distributed Blockchain. There’s the argument that they are like gold, limited and finite and not inflationary like dollars that can be printed at will. Really? If they are divisable into smaller and smaller units, at will and ad-infinitum? I call BS on that.

Someone, somewhere, is waiting in the shadows, ready to turn on some code and transfer some wealth. You wait and see.

===================================================>

….here’s an interesting extract from an article from Startupboy.com…..

Silicon Valley knows a platform when it sees it, and is aflame with Bitcoin. Teams of brilliant young programmers, entranced by the opportunity, are working on Exchanges (Payward, Buttercoin, Vaurum), Futures Markets (ICBIT), Hardware Wallets (BitCoinCard, Trezor, etc), Payment Processors (bitpay.com), Banks, Escrow companies, Vaults, Mobile Wallets, Remittance Networks (bitinstant.com), Local Trading networks (localbitcoins.com), and more.

Looming over them is how governments view Bitcoin and the entrenched financial powers it threatens. The last few decades have seen a move towards a cashless society, where every transaction is tracked, reported, and controlled. Bitcoin takes powers from the central actors and returns it to merchants and consumers, savers and borrowers. Bitcoin brings back some pseudonymity in the transactions, and can be irrevocably traded like cash. And finally, it points a way towards a single currency – it is a bug, not a feature, that we have multiple global currencies with exchangers and transaction fees in between.

Governments have been cracking down on the bitcoin exchanges, making it harder to obtain and slowing its development. Strict and expensive Money Transmitter regulations, designed to slow terrorist and child porn financing, threaten the next great technological revolution – never mind that terrorists can use cash just fine, the means of terror are cheap, and that they account for an infinitesimal fraction of global commerce. Regulators in the US and UK would be wise to proceed with a light touch, lest they push the development of Bitcoin and its entrepreneurs to places like Canada, Finland, and the Sino-sphere.

The United States has benefited enormously from being home to the majority of global companies driving the Internet revolution. The country that is the home to the Internet of Money could one day end up as the guardian of the new Reserve Currency and the Global Money Supply.

Jan 012017
 

Those who know me will vouch, I’m not a New Year’s Resolution kind of guy. There’s no difference between the 31st and the 1st in my book, no reason not to make decisions and take action when you think of them no matter the time of year.

That said, time off life and work that is typical this time of the year does lend itself to more contemplation and introspection ……

2016 has been a watershed year for for myself and my sailing. This was the year I finally bit the bullet and moved Ocean Blue down to the coast. A very good year in that regard. Somewhat less good because I’m still stuck up here in Jo’burg slaving away to pay the bills.

I’ve spent a fair amount of time reflecting on when and how to move the rest of life down to the beach to join the boat. As with all things in life, it’s rarely simple, rarely just as easy as saying “Sell up everything and go”. Well at least for me it’s not that easy even though I know it’s possible and been done a thousand times by a thousand sailors.

Several more years of ‘varsity commitments remain. Those are best dealt with while the corporate salary trickles in.

Sandy, although she’s slowly getting into the Table Bay sailing, is not of the same “sell up all to sail” school. She likes her house by the beach and if she had to choose it would be that rather than the boat. To be honest, I’m not sure I’d like to only have the boat. The land base by the beach also appeals to me. (Shhhhhh! Don’t tell anyone)

Lastly, South African legislation imposes prohibitive penalties on early withdrawals of retirement funds and annuities before the age of 55. That means that whatever I decide to do I need to make the greatest effort to keep up the payments for at least the next 7 years. Whether I stick it out at the Jo’burg job, find another in Cape Town or find a way to make sipping martinis from the hammock pay, either way I need to generate enough cashflow each month to keep the investments going. Anything else just doesn’t make financial sense.

People looking in on the dream from afar may well believe it’s not happening. It might appear that it’s stalled and we’ll never get it right. But that’s not true. Yes it’s slow. Much slower than I would ideally like. But it’s happening. Most definitely.

The most very hard and difficult thing though is I miss the boat and I miss sailing her. Living an hour away when she was on the Vaal is nothing compared to the gulf of time and space that now separates us. No longer can I just pop in for the weekend to check the lines, see if the bilges are dry. No longer an easy weekend escape from the rat race and a leisurely overnight anchorage in Bunny Brook to take the edge off a hard week in the office.

Don’t get me wrong. I’m not complaining. But I’d be lying if I said that the current transition is easy.

I harbour ambitions to cruise the West Coast, see St Helena, perhaps cruise Ilha Grande and further south. To do this, there are a thousand-and-one things to do on board. Repairs, improvements, upgrades. With me in Jo’burg and ‘Blue in Cape Town, that preparation phase is very, very difficult. Almost impossible.

And that’s the thing I’m finding most difficult. This period between moving the boat and moving myself. It wasn’t easy in 2016 and it wont be easy in 2017.

As usual, life is all about finding balance and so, if ever there was a resolution made, it’s to try and keep the dream moving forward while keeping the stash growing and future finances healthy. The moral of the story though is “Don’t bury your dreams.” Find a way to make them happen. After all, what will you achieve if you spend all your living days working, saving, hoping one day to find the time to live and youtr time runs out? Many people gamble that way and for some it works out. For many others the gamble fails due to accident, ill health or other circumstances.

Tomorrow may never come. Build your dream today. Take action and make it happen no matter how slowly.

Happy New Year to you all and may 2017 be good to you and your dreams!

Feb 222016
 

The risk of swimming with dolphins……….drowning, being swept out to sea, shark attack.

So don’t do it dude. Stay on the couch in your little padded cell and live out your years.

Us, we did the swim, survived the sharks (yes they were there) and look back with fondness on a once-in-a-lifetime moment !

Feb 152016
 

I’ve been sucked down an endless rabbit hole of analysis, speculation and opinion on the current state of China, it’s society, it’s government, its environmental destruction and, most of all, it’s declining economy and the associated impact on the rest of us.

While no two analysts agree in full it’s clear there is a large and looming correction both currently on the go and likely to extend well toward the end of the present decade. With the world economies so tightly coupled even we here on the southern tip of the Dark Continent will not escape the escalation of the current trauma. Ours is a mining-based economy and when China sneezes we live with the cold.

Besides the slump in resource prices and lower volumes, we are also having to contend with an absolutely diabolical exchange rate, the worst drought in living memory and government corruption and ineptitude which is off the charts.

No matter what anyone says it’s going to be a tough 4-6 years ahead. Food prices are already noticeably higher (despite the drop in the diesel price), sub-standard municipal services continue to cost more and wage increases are likely to fall far below inflation as they have since 2007/2008.

The worst possible thing for the man in the street right now is to be in over his head in debt and have his only source of income, his job, at risk. And in the South Africa of 2016, if that’s the case and on top of that he happens to be white, then heaven help him over the next few years.

On the personal front one often asks the question “How is it possible to cut back further monthly spend?” After all, I need the car (with the resulting payment) so I can’t possibly cut back further (one of several examples….car, house, yacht, two homes etc).

The real problem is not whether it’s possible to scale back further. The real problem is that it’s not yet a real and tangible emergency.

There is still this thought that “I’ll lose too much by selling now. Its not too bad yet, lets try and maintain the current lifestyle. Better to carry on while I still have the income and while the doom, whatever the real probability, is still somewhere off in the future”.

Now I’m totally not qualified to judge and make decisions for Joe-Average. All I know is, if I didn’t personally have a plan and 4-6 months F-you money in a fund, I’d be very very nervous right now.

Should I by some strange chance be asked what to do, I’d respond; “If you cannot survive being kicked to the curb right now (something i believe is a very real and present danger) then you probably need to go into survival mode and jettison your anchors and reduce your upside-down debt situation as much and as fast as possible, no matter what!” And that’s a difficult ask of anyone so I fear many will suffer the consequences of a lifetime of spending to the limit without too much thought for the future.

Us personally, I think we will survive. We may wish to extract some cash because the F-You fund is currently in a unit trust and taking a beating. But for sure, now is probably not the best time to be buying that Ferrari on terms (or perhaps borrowing to move a yacht to the coast or going further into debt to fund children’s educations) ?

There is undoubtedly doom ahead in the gloom. Just how much remains to be seen!

Feb 032016
 

Our Glencairn rental property is, because of it’s location, size and value, targeted at a certain demographic (by default I guess); typically that of the single mother or lower middle-class income earner. As a result, over the two-and-a-bit years we’ve owned and let the house, we’ve seen many cases of people living pay-check-to-pay-check, unable to pay the rent as soon as their employers make a late payment or they loose their jobs.

Not nice. Not for them and not for us as landlords!

These cases often have me pondering our own situation, our liquidity and our own ability to survive a job loss or a temporary loss of salary. (The issue that clouds my thinking sometimes is the bond debt.)

So, we’re not in the same situation by any means but if we were to max out the bond (I. E. Take the full R1.6M allowed) Then we would have zero means of getting ready cash in an emergency. All our reserves are tied up in assets and investments that, while they can be sold or borrowed against should the need arise, would all take a while to liquidate and would all most certainly take a knock in value with a depressed market and economy. That is, I believe, my greatest concern with the way we are funding UCT this year – we’re greatly diminishing that “buffer”.

A worst case scenario for us in the present moment would be a retrenchment; with UCT fees to pay and no desire to find another corporate Plato’s Cave. Such an event would have us scrambling to see which options suited. There would be three avenues of investigation:

1. Could we sell 253 for a decent price (akaR2.5M)?

*  This would kill the debt and leave us with R1M to R1.5M which would buy a little time but would quickly run out at current burn rates.

2. Could we rent out 253 while living in the cottage?

* The cottage isn’t yet habitable; we need some spend here still but we could live and build while income comes in from the main house.
* The hope is that this option would bring in R20k pm between 253 and 16deV (but it comes with risk and headaches as we’ve seen this month in Glencairn )

3. We could cash in unit trusts (R177k) and SESA shares (R35k?)

* Not ideal right now since the market is in something of a free fall (OM UTs lost about R10k in value already)
* The plus here is these are quick and easy to cash and could buy us time.

So these are our only real options (there may be others but right now I can’t think of any). Damelin is paid for all of 2016. UCT is paid up until mid-year, so as of Feb we’d have 4 to 5 months to make a plan or go back to work. If it did happen we would immediately need to rachet down our current burn ( eg putting Frank on notice, cutting travel costs, really shopping carefully, selling the cars, changing the medical aid options, etc. There’s not much space to cut but there are definitely possibilities). As an ultra extreme measure we could pause the PPS RA’S again but that would be last resort.

Bottom line is there is no way we can carry on at our current burn rate. We would have to make some hard decisions if we wished to do that – either more corporate slavery (if indeed that is even possible in sunny SA at present) or lifestyle killers (bye bye Glencairn).

It wouldn’t be pleasant but we could survive it…..I think (at least way better than our tenants).

We’re not quite comfortable with the stash but at least there is a workable plan. Need to keep the expenses low as possible and keep building the stash and the rental options.

We have no choice because I have this gut feel that the scenarios discussed above are way closer than we may like to think!

Do we give it all up for this life? I think so!

Do we give it all up for this life? I think so!