I recently got a comment on the site from a reader asking for a recommendation for an economics textbook to read.
Economics textbooks are Boring but the comment had some background revealing a spark of ambition that intrigued me. So I asked the reader to email me some more details and together we produced a Reader Case Study that neatly illustrates the themes of this blog.
So let’s jump right in!
Before I begin, I want to thank you for giving me the opportunity to be one of your case studies, which I’m sure will help me and others reading immensely.
I was born and raised in a small town in the Welsh Valleys. When I was 13, my parents divorced and I took it hard.
I started skipping school and it affected my relationship with my friends. I became more introverted, wasting away hours on my video games even in summer while other teenagers were out having fun.
I dropped out of school at 15 with no exams, no vision for the future and no goals. I then job-hopped from car valeting, eBay selling, bar serving, gardening, and other frivolity interspersed with dole claiming (ugh). I was socially inept and anxious in public.
This continued until I got my first job that took seriously… part time… at a supermarket… at 24. I shit you not, it was that bad. Since it was one of the biggies in the UK, I thought I’d work hard and try to move up the ranks.
After a few months there, management loved my effort and put me on their junior management training initiative. I waited over 2 years for something to materialise, but the store wasn’t replacing leaving staff and definitely not promoting anyone.
I searched for jobs local to my girlfriend in the Gloucestershire area and found one as part time Night Manager cover at a big hotel chain. A couple of months in, the Night Manager left after 4 years and I was offered his job, which I have now been in for over 18 months.
My girlfriend would like to have a family but I have explained that there is no way I will have children while on such a paltry income (£18k) and I need a decent career first.
I reached 28 this year and my 30s seemed to beckon. This jolted me into what felt like an early mid-life crisis. How could I get to 28 with no money, qualifications or achievements, and to be only a mere Night Duty Manager at a hotel chain? I was interested in IT but didn’t have the confidence for it as a career at the time. I felt trapped and that my situation was my fault.
On top of that, I had worked for 4 years with no money to show for it. I started to cut back when I realised spending all of my money on video games and gadgets wasn’t bringing me pleasure anymore, and the take-aways were hardly making me thinner. So I stopped spending and started cooking more.
When showing my girlfriend the resultant new money I’d saved, she asked me what I was saving for. I didn’t have an answer. One good thing about me is I’ve always intuitively stayed away from debt, but that meant having a mortgage and saving for a down-payment had never crossed my mind either.
I just did not know what to do with saved up money. I hadn’t discovered the idea of early retirement yet! So I caved, built myself a £1,700 gaming PC and weeks later, when the novelty wore off, I felt huge regret. Even worse is the upcoming £2,000 trip to Barbados, booked earlier this year.
Then, 2 months ago, it happened. I discovered the online early retirement movement (MMM, Jlcollinsnh, Monevator and T.E.A.) I’ve since digested every article and now know what I want to do in life. I finally have a long-term goal and sense of purpose.
I started to work through the book recommendations found in these great blogs. I have first read Economics Explained and now I’m reading Smarter Investing by Tim Hale. I plan on reading a lot more while I save for my first (index tracking) equity investment.
I plan on pursuing a switch to IT through acquiring certifications from Microsoft, Cisco, etc. These are more cost-friendly than a degree and just as highly recognisable in the field. I now feel confident I can do it, and trying to achieve financial independence with my current income would be very tough. My present situation:
Annual income: a measly £18k 4 weekly after deductions: £1,200
I live in a 1 bedroom flat with my girlfriend and we split the bills almost evenly. I don’t include my girlfriend’s income because I plan to achieve FI with my own income. (All figures work out 4-weekly)
Rent – £429
Gas & Electricity – £65
Council Tax – £98
Food – £200
Water – £39
Car Tax = £10
Total = £841 /2 = £420.50
My individual costs:
Work fuel – £60 (12 miles each way)
iPhone contract – £35 (This drops to £15 a month next August)
Phone & Internet – £20 (She pays car insurance alone while I pay for this – roughly the same cost)
Cigarettes & Alcohol: £0
Total = £115 Both totals = £535.50
£1,200 – £535.50 = £664.50 every fourth Friday, to save/invest/etc, along with a current stash of £2,200.
It’s going to be tough. Not the frugality, but trying to keep it a secret because of all the myopic lemmings out there who are too transfixed to their current lifestyles to think of scaling it down. I’m sure they’d be happy to inject their negativity into my dream, as they do my lack of spending, (i.e. not throwing my money away).
The frugality I’m actually excited about, along with the extreme challenge of self-studying IT certifications while working full time. One caveat is that the first rung in IT will likely be a tech support role which could potentially lower my earnings (it typically pays £15-£18k). But it’s a chance I’d take as I believe it’s possible I could advance to the average £30k salary.
Congratulations! You have had what I call the lightbulb moment. You have also been able to do what most people can not and that is be honest with yourself and then ask for help and guidance.
You had a shitty start in life but you have 3 HUGE things going for you and they are:
3) Self awareness
Given your ambition, frugality and low net worth, you need to start by getting your income up. Let me say this right at the outset, you can raise your sights and think bigger.
The first thing that captured my attention about your comment / emails was the ambition that shone through. This is great: you have got to want it. You are building from the bottom up and that takes grit and determination. You have not had the pampered middle class start in life but this can be a source of strength for you. You are gonna have to hustle in whatever you do, so a bit of background in ebay selling is no bad thing.
But you still need raise your sights much further. In the IT sector, there are fucking monkeys making way more than double or treble the £30k target you mention. Trust me on this, I used to have to deal with some of them.
The most important thing for you is not investing or frugality, it is maximising income. I love that you have already shown yourself willing to move geographically and to a new career. Given your interest in IT, this is a smart career move. IT employment continues to grow and salaries range from good to excellent.
You should not overlook the opportunities that your current job could offer whilst also looking at a move elsewhere. Is there a graduate / management fast track scheme that you could join? Do not be scared to put your case to someone much further up the chain. CEOs want people like you to emerge and push up the ranks. Why not write to them? It’s the junior / middle managers and HR goons that may act like gatekeepers and try to stop you. They may be obstacles to be overcome or evaded. Be polite but be persistent. Adapt, Improvise, Overcome.
Don’t quit your hotel job until you have used it to find out as much as possible about IT in the hotel business. What systems and what service providers do they use? Could you talk to some of these service providers? Do they enjoy their work? What does their job entail?
Find a community of IT workers you can email / read about / speak with / listen to and see what they recommend. Consider moving closer to an area where many of these people live and work. If you are in Gloucestershire, you could consider moving to the Reading area where much of the UK IT industry is based and where salaries and job opportunities will be greater.
There is no point thinking about a mortgage until you have got your new career started and you know where you want to be geographically.
You are 100% correct to focus on gaining practical IT certifications whilst holding down your day job, rather than a university degree. Wasting 3 years incurring student debt, eating vodka jelly and boasting about how many lectures you have skipped would not be an optimal strategy here.
I see you have a relatively sensible & frugal car (a 50mpg Matiz, shared with your girlfriend). I would also look into replacing (or if necessary supplementing) this with a second-hand scooter. These are cool and fun and incredibly cheap to run.
I love that you bought a bike a few months ago and are riding this around town. I would build this up to cycling to / from work a few days a week – this is a super-efficient way of using your time and resources. Free transport and exercise in one go. You are gonna be busy so don’t spend time trying to exercise for its own sake…work it into your life to help you get shit done.
You originally asked me for suggested economics texts to read. The Escape Artist has a degree in economics and says this: fuck most economic textbooks, they are boring and irrelevant in the real world. If I were you, I’d start by reading the following books:
- The 7 Habits of Highly Effective people
- The Magic of Thinking Big
If you insist on reading stuff about Economics, focus on stuff that is applied to the real world and not boring. You could try The Undercover Economist by Tim Harford or Freakonomics / Think Like a Freak by Dubner and Levitt.
In your emails you mention that you have a difficult time explaining your goal of financial independence to your father and other family. Consider reading Manhood by Steve Biddulph who is good on this relationship stuff.
Do not buy these books new. Get them free from your local library (or second-hand from Amazon if you absolutely must).
You’ve been reading Smarter Investing by Tim Hale. Well that’s a good book on passive investing but you can stop right there. You don’t need to read another word on investing for now.
When you have cash savings in excess of £5k (this will be sooner than you think) then you can start reading more stuff about investing. Until then, it’s an unnecessary distraction. Focus on your new career and reading around that.
For now, get an ISA to ensure your cash savings are tax sheltered and focus on building up your baby stash.
First decide where you want to get to in life and then decide who you are going to go there with. The order is important.
You need to have The Talk with your partner. You have already started this process but have not yet fully reconciled your 2 world views. These things can take time. You are not going to make it without reaching a deeper understanding with your girlfriend. If she understands and respects your FI objectives then everything will become SO much easier in your life. Otherwise, she will not have the understanding of why you are being frugal and she will misinterpret that as being stingy. Most women hate that.
The children thing has the potential to be a big issue. I agree with and admire your stance on not having children until you can really afford them. You have plenty of time but this is a sensitive issue that needs to be treated with care when discussing with your girlfriend.
You mention that most people in your friends and family don’t understand the concept of FI. That’s normal. They are the majority and that is reality. The good news is that you have started to find your tribe.
What….the….FUCK!? Did you book this just to provide comedy material for The Escape Artist??
You are spending 100% of your net worth on a 2 week holiday in Barbados. This is the equivalent of me selling all my investments and using the stash to buy a ticket to go into space along with Bill Gates, Richard Branson and all my other billionaire friends.
I thought all that “Holiday of a Lifetime” nonsense went out in the early 1980s along with The Generation Game, Bullseye* and coal mining. I have done a couple of those long haul beach holidays and, honestly, they are over-rated. If it were me, I’d dig out the terms and conditions of the holiday and insurance and see if I could cancel and get my money back.
The Games Console
The only people that should buy £1,700 video games consoles are rich male models worn out by constant demands for sex from their many attractive girlfriends. Those people may need to buy something that will make them poorer and less attractive to women. For the rest of us, a £1,700 games console is unnecessary. In the same way that leprosy is unnecessary.
You are going to be busy my friend. Cutting out the video games is a perfect place to start freeing up some time and will provide a break with your past.
The beauty of the Holiday and the Games Console is that they perfectly illustrate that we all have quick wins available to us, simply by refraining from shooting ourselves in the foot. Don’t let my ribbing worry you, what’s done is done and you need to move forward.
As you say in your emails, you are unusual amongst the readership of this blog who are mostly high earning professionals. You have no problem with frugality – you have definitely seen the light – and unlike most members of the middle class you are not spending like a drunken sailor on shore leave.
For most readers of this site, the advice is really simple – 1) stop spending like your money is blood haemorrhaging away from a gaping wound and 2) stop getting screwed by wealth managers, financial advisers, active fund managers and other parasites. For most readers of this site, that is enough to reach financial independence within a decade or so.
For you, it is going to be a little more interesting as you are going to need to get the career and income side sorted out first. But the challenge will be life affirming and I’m confident you can do it.
Now that the lightbulb has come on, you can start living in accordance with your values and what is important to you. If you do this, things will carry on getting better and you will notice an acceleration as improvements in one area of your life increase your confidence and spill over into other areas.
Go for it and please let us know how you get on!
The Escape Artist
If you think your situation would make a good Reader Case Study, please email me at email@example.com
*According to Wikipedia, Jim Bowen once described Bullseye as “the second-best darts-based game-show on television”. There are no others.