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?

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 212017
 

Another R500 supper at the local Steakhouse is behind us. The ribs were superb but it has to stop for several reasons. Firstly; there is no real value at R500 for only two people. It’s just a waste. Secondly; with no salary or cash coming in the door it makes sense to cut back on spending wherever possible. And cutting back in this area does not really affect quality of life.

I’m not sure the magnitude of what has happened has struck home yet for either of us. For the past 16 years I have had money trickle into my account each and every month without fail. Suddenly, and all because I can no longer take the pressure of being told what to do, all that is about to change. And to be honest, it’s a little unsettling.

The spreadsheet doesn’t lie. There will should be cash to live off for a while and so we’ll not starve in the short term. It’s more the longer term that concerns me. It’s hard not to feel that I’m setting us back in our efforts to live a cushy, comfortable and well-financed life.

It’s strange that feeling, because life in the corprate hell-hole has been exactly that for many years now – Hell! It’s not enough and certainly not for me anymore. This break is needed. Even if I end up taking another job again, I will take some time to sail now. Perhaps it will be good once I have this break behind me? Perhaps I’ll find another path, another way top add value and have the world and the universe provide?

In the back of my mind, always, are my kids. They aren’t really yet in a position to sustain their own lives. Surely my lack of staying power, my quitting will detrimentally affect them? Mmmm!? Perhaps. And perhaps this will add some urgency to their efforts? They are always welcome to live with us, always wanted. But for now the well of cash is about to experience a drought as severe as that of the Western Cape. It’s time to implement Level-5 restrictions.

And implementing level-5 restrictions is not so easy, not when the habits of years are at play. Never really having watched what we spend, now suddenly there is a very real need for it to be foremost in everyone’s minds. Mrs S. is working more than ever and as a result has cash to burn – and she’s burning it on the beach house for sure. Not sure she’s saving enough!? But that’s a discussion for another day since it has the potential to turn frictional.

I don’t exactly know where to from here?

There are currently two properties with the potential for generating income. That’s the most obvious starting point. Neither are ideal but then much of life seldom is perfect. It’s difficult [even for me] to think of all the work Mrs S. has put into both our homes and then think of renting them out. That’s why, finances aside, it better to first try and sell 253 outright. To think of some strangers, trashing our home – it’s a little uncomfortable to say the least. And it’s the same with Woodstone Cottage. Mrs S. has elevated the place out of the dump and made it a home of note. To now think of renting that out is difficult. But perhaps it must be done?

I like living here at 16deV. I don’t think that feeling is misplaced or misguided. All the things I [think I] love doing are here. Ocean Blue, kayaking, beach runs, cycling, mountains, ocean. The list goes on. While none of these things are particularly easy, especially the sailing, they are ultimately very rewarding. I’m not ready to give up on this dream of living here yet. Not until I have given it my very best effort.

So, in that regard the decision to quit, to push the corporate beast, it has been a good one. There can only be one outcome and that is to craft more time, much more time, for living down here. Already, just that decision has opened up an opportunity to cruise the boat a little in late February. I will still negotiate with SE but the outcome will be only one thing – a transition of life to Cape Town. Any ‘deal’ that they might offer is off the table unless they include this vital piece of “Living by the boat”. I don’t think they understand or are willing. I don’t think they will be able to get their heads around that. I also don’t buy into the statement “What you have done is anti-survivalist. Done the wrong way. You should rather have asked first.” That’s utter BS. In my experience, just quietly askling nicely in a beast like SE draws zero response or action. No. Shaking the cage like I have is, ands always has been, the best way.

So the die is cast. Everyone says to me “It will work out!” I want to believe them, desparately. Deep down I think I do believe them. But damn, it would be nice to know for sure.

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…….

Nov 092016
 

My weekend has been filled with reading, research and dreaming….about a South Atlantic circuit.

Leaving early December – Cape Town – Luderitz – Walvis – St Helena. Then on to Fernando de Norha, Recife and south down the Brazilian coast. A summer season in the islands of Bahia de Ilha Grande sounds grand and then further south to the Rio del Plata estuary, either Uruguay or Argentina, to refit the boat in preparation for the return voyage back home passing by Tristan on the way. It’s an ambitious plan, one that can be accomplished in 4-5 months but one that is probably more relaxed and enjoyable being done over 2 seasons at least.

A plan worth working towards!

I can’t help thinking I’m getting a little ahead of myself here though.

Let’s just take this one step at a time. Baby steps. For now, to find the time for a circumnavigation of Robben Island, to hang out on the anchor in House Bay – these will be challenge enough.

Jun 292016
 

There’s a thousand things I want to do ….. http://dtm.inlandsailing.co.za/projects/ and only 24 hours in the day with limited $$.

I am almost a hundred years old; waiting for the end, and thinking about the beginning.
There are things I need to tell you, but would you listen if I told you how quickly time passes?
I know you are unable to imagine this.
Nevertheless, I can tell you that you will awake someday to find that your life has rushed by at a speed at once impossible and cruel. The most intense moments will seem to have occurred only yesterday and nothing will have erased the pain and pleasure, the impossible intensity of love and its dog-leaping happiness, the bleak blackness of passions unrequited, or unexpressed, or unresolved.” ― Meg Rosoff, What I Was
While we are postponing, life speeds by” – Seneca
The balance between sitting in hell every weekday and gently guiding the yacht over a westerly swell……..
The balance between sitting in hell every weekday and feeling the warm winter sun on your face as you sip your morning coffee……
The balance between sitting in hell every weekday and aimlessly wandering in nthe mountain wilderness……
The balance between sitting in hell every weekday and riding your bicycle down a steep gravel mountain pass…….
The balance between sitting in hell every weekday and shaping a living space from scratch…….
All of these things need to be kept “front-of-mind”, indelibly carved into one’s brain lest they are forgotten, neglected, left too late.

For now, priorities. Perhaps one day the van conversion, the wilderness motorcycle touring, the …..

 

Jun 252016
 

With total financial independence (FI) perhaps the end goal, one needs a strategy to keep you focused and sane on the (long) journey to that end result.

Enter the concept of financial flexibility (FF)

You’ll never reach FI unless you constantly improve and grow your FF.

FF means the ability to make choices, to explore options that perhaps pay less but allow more time, that perhaps sacrifice some income but allow relocation closer to the beach and the boat.

Too often in this world life is portrayed as an all-or-nothing race. You’re either FI or not. And if you’re not (and considering how the end goal is so far off and apparently “unachievable”) then you may as well give up and return to the woolly masses. Extreme sports, celebrity, top-ten business, richest man in the world, blah etc blah – we are inundated constantly by stories of the outliers, the extremists, the top performers – with the implied message “nothing else is worthwhile“.

Not true! Life is always more complex and multi-faceted than the media stories portray. It’s important to remember that. Almost everything you read, almost everything “marketed” to you, shows a selective, out-of-context extract of someone’s life. That aspirational solo-trek to the north pole often doesn’t show the rest of life and the resultant sacrifices made to achieve that one event. The martini and the palm fronds with the sailboat at anchor in the background – that is just a very small part of the story.

So ‘Blue now lies impatiently waiting in her slip in the South Atlantic. There’s an immeasurably long road trip that now separates us and a constant mental tweaking of the budget to figure out how often I can afford to fly out to visit and sail. It’s hopefully just a temporary state of affairs, a stepping stone to something else.

I suppose some people do go for the all-or-nothing approach, selling up everything and moving the whole of life in one big bang. I understand that but for us, right now, the time is not right to do that. Perhaps tomorrow, perhaps never? But in the meantime we are constantly chipping away at the huge boulder that is the present, slowly carving out a life we both keenly desire.

While day-sailing in Table Bay once a month may not be the ultimate, final desire, it sure beats not sailing in the ocean at all. Just like FF, it may end up being all that is possible or, just maybe, a state of total FI one day may enable a season or two at anchor in Baia da Ilha Grande?

Apr 152016
 

Adventure bikes. Once again my brain under the misconception that I don’t “adventure” out because I dont have an “adventure” bike in the stable.

The life one observes out there sometimes seems a lot like that, especially true of me sometimes, but it’s totally bogus. The reason we don’t venture out is because it’s a little bit hard, a little bit uncomfortable. Having some cool (read very expensive) new toys may well propagate an ”adventure” or two in the short term, but once the honeymoon period is over all that normally remains is remorse, bills and clutter.

The ZR7 is not ideal. But then I truly believe all bikes are a compromise, a little like sailboats. There is absolutely no reason I couldn’t do the CT run on the Kawa. No reason at all other than I fear the uncomfortable numbness!

This is a recurring thought pattern in my life, this justifying. Fortunately I’m at a stage where I finally realise the folly of this this pattern. It’s not the adventure bike I’m after but rather the adventure itself. And even then, sometimes I fear it’s not even the adventure that I’m after but rather just on escape from this miserably monotonous daily corporate grind.

The plan just can’t happen soon enough at this stage!

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!