One year out of the Camp

orbitIt’s now been just over a year since I left my job.

In life, one year may not be long enough to judge success or failure. As Terry Smith reminds us, a year is the time it takes the earth to revolve around the Sun and not necessarily the right period over which to judge investment performance or anything else.

But the Internet must be fed and I feel I should write something about how my first year out of the Prison Camp has been.

So let’s summarise a few things that I’ve learned in my financial independence experiment. You may think some of these points are obvious. Others you may find hard to believe.

But that’s kind of the point of this article. Some of these points were hard for me to believe before I escaped. Actually, some are still hard for me to believe now.

1.My spending fell

A lot of spending is work-related or can be reduced with time.

For example, as an office worker, I was a bit like a juvenile delinquent going to Court. I used to feel obliged to wear a suit to impress people judging me. Not now.

Here are some of my expenses that have disappeared from my life since I quit: suits, office lunches, cigarettes, season tickets, work shirts, newspapers. These are expensive and none of them are good for you. A railcard to London from my town is £4,580…that’s over £8,600 per year of pre-tax income a higher rate taxpayer will need to make to cover the cost.

I used to believe a lot of things that weren’t true. One of these was that it would be expensive to retire. After all, what would I do with all that time? Surely, I’d need to be entertained? Servants would need to be paid to bring food to me. All those cruises, golf bats, flights, restaurant bills and tickets to Dismaland Florida would surely cost a fortune?

This is based on a misconception that entertainment is something you must pay for. Sure, it can be that way if you choose. But you can choose to do things that are free (see 2. below) or that make you money (see 6. below).

2.The best things in life are free

Uh-oh…cliche alert!

But it’s true. For me, there is nothing more rewarding than cooking for my children (although they would disagree). How about waking up without an alarm clock? Or achieving goals you have wanted to achieve for many years?

How about an infinite supply of music?

Or sex? Enough said.

3. Everything is a learnable skill

I used to think that some people were just naturals and that many things could not be taught.

But whether its learning how to get rich, cooking, origami, poker, martial arts, languages, attraction, fridge management or charm…these are all learnable skills.

For example, people look at George Clooney and think how annoyingly jammy he is.  Now a role model for late-developing middle aged men everywhere, Clooney had been a struggling actor for the 16 years between his 1978 TV debut and getting his break on the show E.R.  Yes, Clooney was undoubtedly lucky in the genetic lottery. But he persisted and built on his looks with a load of self-improvement work. There are plenty of people in the world who are better looking than Clooney but aren’t making $20m per film. It’s not just me.

Achieving mastery of one skill is like a gateway to being able to achieve mastery of any skill. Not because it’s easy. But because mastery is a skill itself. So if you can figure out how to beat the system ethically and get to financial independence, you will be able to figure all sorts of other stuff out.

4. I am still saving

Let’s be honest, when I quit I didn’t know how things were going to play out. Back then I hoped that a 4% withdrawal rate would be safe….but you can never know 100% in advance.

I had enough self-awareness to realise that I would naturally err on the side of caution. And I knew that you can be too careful. So I pulled the trigger.

I was ready for the prospect of selling some units / shares to fund living expenses. But it hasn’t turned out like that. My spending has fallen. My investment income has increased. I made some changes to my portfolio, selling all my gold and replacing it with high quality dividend paying shares and gilts.

And with me being able to do the school run, cook and generally contribute a little more around the house, my wife has earned more from her super-flexible part time job.

So it turns out that I am still saving…in “retirement”. Go figure.

5. Ignore the news, everything is fucking marvellous

Objectively speaking, me quitting my job has not been a big change for the universe.  Global capitalism seems to have coped with losing me from the workforce surprisingly well.  Its almost as if I wasn’t indispensable.

Technology continues to progress: a mixture of pointless consumer shit plus stuff that may change the world for the better. Things like access to family planning in the Third World, desalination plants, desert irrigation, solar energy and food techologies like aquaponics that might stop the human race from destroying nature.

The world is what you think it is. That’s because we create our own experience of reality through our beliefs, expectations, attitudes, fears and desires.

The news media is always there ready to beam fear into your living room 24-7. But I have turned it all off. When you live without stress, you realise that (almost) everything is fucking marvellous.

If the Zombie Apocalypse kicks off, please can someone email me to let me know? Thanks ever so much.

6. Start your side hustle early

The last year has also showed me that’s its possible to start a side hustle.

In my case, writing my investment newsletter and doing financial coaching have been very rewarding. Just not financially. Although they don’t make me much money, I love doing it and its valuable to clients. I only wish I’d started earlier.

I wouldn’t recommend anyone quit a solid job to start their own business from nothing without having first built a decent stash. Even if you have the best product or service in the world, it takes time for word to spread. Overnight success is rare: the Facebooks and Twitters of the world are the exception. And even Mark Zuckerberg probably felt at times like it was a long, hard slog.

So the better thing to do in most cases is start small and start early. If you can start your side-hustle when you are still working, so much the better.

7. It’s possible to beat the market

OK, I know that most of you Vanguard fans and passive investing purists won’t believe this, but it is possible to beat the equity market. Not every year. And not with every share. But over time and on a portfolio basis, I’m confident this is possible. Just not for most people.

A year ago I wrote a post How they did it: 12% a year. A year later, the annualised rate of return on my direct equity portfolio is still ~12%. But now that’s over 19 years not 18.

In practice, this growth comes with volatility so it feels anything but smooth to live through. But if you can live with the volatility, 12% annual growth in your portfolio is something beautiful to behold:

I have 19 years of data on my stockpicking performance. But even if I had 50+ years of beating the market, that still wouldn’t prove 100% that it was skill not luck. But each additional year that passes makes me more sure that I’m doing the right things.

8. You can be too careful

I just wrote about this here.  I’ve since done my first training run for a marathon.

9. The first million is the hardest

When I started this blog in 2014, the viewer stats page reminded me a bit of a scene from a Western movie starring Clint Eastwood.   Tumbleweed would blow and you could hear the wind on the high plains but there were no people to be seen anywhere.

I remember the early days when 10 page views was a good day and 100 page views in a day was an interesting theoretical possibility.

I’m now coming up to half a million page views since I started the blog.  Yes, I know that’s still tiny in Internetland. And no doubt some of those people have stumbled across this site by accident and been disappointed by the lack of porn.

My goal is a million page views. In my blog traffic stats, I can see the classic J curve that comes with compound growth. Anything that grows exponentially (like money) obeys the same laws. So the first million is always the hardest.

TEA blog stats

I’d like to say thank you to Rockstar Finance and Monevator who have both sent a lot of traffic my way. Both are providing a great service to the world. I think the Universe will find a way to reward them.

10. Don’t believe me, experiment!

Some of the so-called “softer” stuff that I’ve learned over the past year about psychology and motivation has blown my mind. Not all of it relates directly to personal finance, so I don’t cover it in depth here. But it turns out that lots of things that I previously thought were impossible are possible.

I don’t ask you to believe what I write on this blog without checking it for yourself. A certain amount of scepticism is necessary in life.

You shouldn’t take my word for anything. But you owe it to yourself to try this stuff to see if it works in your life. According to the Huna philosophy, effectiveness is the measure of truth. In other words, go with what works.

So if you read something that looks interesting where the potential upside is great and the costs of experimenting are small, then what are you waiting for?

You can follow The Escape Artist on Twitter here

33 comments

  1. rugbytrader · · Reply

    if you want to further up your page views then don’t put the whole article in the email!!!
    also, does your counter include when your articles are viewed through an RSS aggregator?

  2. Congrats on your first year of freedom!

    It’s fantastic news that your spending is lower than expected and that you’re still saving. If that doesn’t reassure you that you made the right choice then surely nothing will.

  3. BeatTheSystem · · Reply

    Congratulations, you have definitely made a very welcome contribution to this community of people aspiring to be where you are now. I am still in the camp but plans are drawn and the guards are getting suspicious.

  4. Congrats on a well spent 12 months TEA. November for me will be 5 years in my downshift… like you Mrs LCIL & I are saving more now in both £ & % terms than we were before we adjusted our lifestyle.

    By working 3/5 of a week you’d perhaps think i could tell you I’m now saving 40% on my work clothes, but I’ve managed my entire career without needing to don a suit, which has been just lovely, so no savings there… just the travel card by cycling all year round 😉

  5. Thanks for another great piece and congrats on celebrating your one year out. On news media, I totally agree. I have never been a news junkie but recently i switched it all off (TV, newspapers and online) and it has been great.

  6. I like the world where Mr Z is creeping about with a similar level of charisma to Mr Clooney.

    I’m sure you will clatter through 1 million page views, your writing deserves it.

  7. BillyBow · · Reply

    Congrats on passing the year one milestone and many thanks for blogging about your journey.

  8. OgreNoseGrid · · Reply

    Thanks Escape Artist man, I draw some strength from your words.

  9. Nice post, much of it ringing true for me. Spending less, watching less of the news, learning new stuff, free sex all the time, yes, early retirement has a lot going for it! I still like to read Opinion columns in the media and I read a lot more blogs but totally agree with you that the endless, relentless global search for misery by the mainstream news is a disgrace. I wonder if being in the fortunate position of having the time to appreciate what you have got makes you notice how much the news colludes in the “Isn’t it awful” game. No, it isn’t awful, not even close.

  10. Survivor · · Reply

    Another good post. Don’t underplay the milestone buddy, escaping takes incredible courage, the work hamsterwheel puts you into a trance so heavy it’s hard to leave that race that goes nowhere.

    Everything in the article resonated totally for me – I’m on my 4th year as a free human being [ a critically endangered species, est. ~1% of the population 🙂 ] & it’s just awesome now, but in the beginning it felt like I shat myself most of the time, I couldn’t fully enjoy it. Even though nothing was actually going wrong at the time, a lifetime of conditioning was giving me feelings of foreboding – ”This has to be too good to be true”. The 9-5 herd conditioning is just so strong, you feel like the guy in films sitting on a bench at the railway station with nowhere to go & a whole day stretching ahead of him because he hasn’t told his wife yet that he’s been canned from the firm.

    So your site here is important to inform people that it is possible to be free & not incredibly hard at that, they just have to at least make a start by questioning everything the establishment propagates. Also, if you write on a deep-thinking topic, you will not have mass readership, but so what, isn’t quality so much better? There’s a reason all-you-can-eat buffets are financially viable, it’s because as Ratner would have [ before though, presumably not now ] said:- ”It’s crap”

  11. […] brain to any of the mainstream media, is that you begin to believe the hype (and the misery, as The Escape Artist points out this week in his blog). When it comes to business, the message is that you too could […]

  12. fibrarian · · Reply

    It’s reassuring to see a real world example showing that the world doesn’t come crashing down around you when you finally pull the trigger and retire. Like jiggling the metaphorical carrot in front of the yoke you’ve just me all the more determined to get there as fast as I can!

    Congratulations on making the site such a success in such a short time, it’s certainly been a huge inspiration to me.

    1. Thank you Fibrarian, Survivor, Jim, ONG, BillyBow, Mr Z, Aminaado, LCIL, BeattheSystem, UTMT and RugbyTrader…I appreciate all the kind words

  13. well done on the portfolio performance. 12% a year over 19 years is exceptionally good. a quick scrape of the web suggests neil woodford has achieved 9.6% over 16 years. So you’ve outperformed the UKs star fund manager by some margin. £1 should have turned into just shy of £10 over that time period, so an overall return approaching 1000%. I think you’re financial side-hustle may follow similar growth to your site hits if word gets out about your track-record?

    1. Ben – thanks for the comment.

      My experience has been that few people I meet in everyday life have any interest in shares. Of those that do, most either 1) don’t believe my track record could be that good or 2) can’t be bothered with individual shares(!). But if you are interested, please email me and I’ll give you a free look at my portfolio website so you can see for yourself.

  14. I did clock that achievement too but didn’t want to write in on too many points & hog the page in my post. But since it came up in another thread now, I’d like to add a little – I worship at the altar of Terry Smith at Fundsmith for my longer-term investments because of the relative volatility of shares & have been rewarded handsomely since he started his own Warren Buffet-style, UK-equivalent fund. But, I think that excellent run is over generally for shares in general, (at least at that level of performance) seeing as they were riding the QE wave & were aided by a lack of decent returns on the other investment options.

    I survive short to medium term mainly off a spread of P2P investments & was really pleased to have managed to claw my way up to ~ 12% on average currently, but that’s on a 3 year record only in comparison to your impressive effort.

    As to your answer to Ben on turning pro yourself in regards to your investing, I hear you, I showed my portfolio only to my closest friends & relatives because they are my world, but even then, having proved with evidence, only my most immediate family would trust it. It gets a lot better with them now obviously when their savings are compounding in front of their eyes, but I’m sure they only initially did it for me, not because they trusted the ‘science’ as such.

    It never fails to amaze me that most people would sooner trust a financial advisor [so basically a stranger that they have to understand at some level is incentivised to make money off you even if indirectly] than someone they know has their best interests at heart as well as the proof they know what they’re doing at this stage of the fight.

    It’s up there with believing adverts, when you know that the people on screen are paid to read a script whatever they really think, or catching yourself listening to words coming out of a politician.

    1. Yep…don’t get me started on this subject, Survivor! I’ve met plenty of people where I explained how they could save a million pounds over their lifetime by not paying the fees of active funds / financial advisers / wealth managers etc….then they just go back to work and carry on paying the proceeds to the financial services industry….sigh!

  15. Congrats TEA. I’m almost reaching a full year without work, 4 ish years after reaching FI. Kind of wish I’d just yanked the plug 3 years ago, but I am the conservative one.
    While I enjoy all the UK ER blogs, I’ve a soft spot for your witterings just because FIRE is way different when you try to factor younger children into the whole thing. However like you we’re still accumulating, largely due to Mrs Nathan choosing to get stuck back into her job. I suspect that she thinks that this 3 or 4 % business is just smart arsery on my part.
    I’m almost embarrassed to admit the level of satisfaction I’ve had from looking after my children. Even outside of school holidays, just being able to see them off in the mornings, be there when they get back and all sit down for a (expertly cooked) dinner at 6pm. Simple pleasures.
    However I’d be telling porkies if I said that I didn’t miss some aspects of work – largely all the clever interesting people. I am also kind of operating without a long term plan for the first time in my life.
    I’ve really enjoyed your writing over the last year, (even the guru crap 🙂 ) and hope you continue to enjoy feeding the beast for a while yet. Thanks.

    1. Ha-ha…thanks….I think!?

      What next to feed the beast?…perhaps a Guru interview with David Icke?…just for you Nathan 😉

      1. Oops, didn’t intend any ambiguity, I’ve really enjoyed your writing. Looking forward to the Icke interview, although with your past industry associations I’d decline any invitations to see his vivarium 🙂

  16. Congratulations TEA!

    It is interesting to see how your first year has gone. Reading your posts has been enlightening and made me consider the jump, I am not sure I am completely FIRE (that conservative/ too careful vibe at work – its an earworm that is hard to silence ) but the job was so sh*t I had to pull the plug before I ended up in a straight jacket. Here are a few comments on your points based on my current 5 month stage:

    Point 1 – I can agree with, I didn’t realise how much of my ‘drawings’ went on work related stuff. That and the reduction in my travel costs has been a great indicator that FIRE is possible.
    Point 4 – I am still saving, any of that spare cash that was in the ‘drawings’ pot is being saved and I am rebalancing my portfolio to increase my income.
    Point 5 – My sister said this to me some time ago. I shouldn’t watch the news as it is all doom and gloom. You are spot on with this one. Watching and reading more informative, ‘educational’ articles gives more pleasure! A mindfulness course has really helped me too.
    Point 6 – I am considering a side hustle of occasional work, on my terms if it is possible to find anything 🙂 the occasional prison visit to top-up the funds is my option at the moment, unless I have a light bulb moment. I think it also has something to do with Nathan’s comment on missing some aspects of work – the interesting people!
    Point 7 – Good going on the portfolio. I calculate my returns as 8% at the moment now that I am in freedom mode. It may not be your stellar 12% but I’m happy its enough.

    Keep posting! 2 years will fly by before you know it.

    1. Great to hear that the blog helped you with “The Jump”…as I always say, pay it forward!

  17. Congrats on your first year of retirement, you’ve been doing great. I just crossed my 3-year early retirement anniversary a few months ago, I wrote about that here:

    https://webetripping.wordpress.com/2015/07/15/after-3-years-of-early-retirement-5-things-ive-learned/

    All the best!

  18. Thanks for the overview.
    Half a million views in a year is not to be sniffed at, no where near that after 2 years for me!
    You’ll be at the first million in no time.

    Cheers and well done on all fronts 🙂

    1. Thanks TFS

      ps I liked your article on solar energy…good work!

  19. Agree with TFS, it sounds like you chalked up your first 500k pretty rapidly.

    Are you sure your counting machine is not on the blink?

    Just kidding! Your site has oozed quality and care, and you’ve had different and new voice from day one. That’s why people will keep coming back I reckon.

    Thanks very much for the namecheck and link; it’s my pleasure to send people your way. 🙂

    1. Thank you…the link was the least I could do

  20. jkim5825 · · Reply

    Thank you for this post. In our household we have been talking–constantly!–about when we should make the jump. Right now, we are probably close to FI, but we are not sure whether we are prepared yet for RE, and to walk away from the prospect of saving more money for a secure retirement. (Yes, I read your post about being too careful. Thanks for that too!)

    Question related to your point #6 (Side hustle): While we planned to do some type of work (like consulting, etc.) we have not really considered the side hustle as a prerequisite to pulling the plug. We thought we would take the time ONCE we retired–since there is not much time while we are working–to research the side hustle.

    So, other than making sure that we are financially set, is it important to make sure that we have already started some other activity/work to keep us busy and engaged? We ask because we do wonder whether we’d feel too aimless the first couple of years without a clearer plan ahead in terms of “work” of some kind. Thanks!

    1. To answer your question, I don’t think having a side hustle is a prerequisite to pulling the trigger….I didn’t have anything lined up before I quit. I agree you can research it afterwards…you’ll have plenty of time!

      My comments about starting early were more specific to my own position…with 20:20 hindsight I could have cut my expenses earlier, started this blog earlier and got my investing newsletter up and running earlier….but hey, that’s life and perfection is usually not required.

      I think its healthy to take some time out first and get your thoughts together before deciding what sort of work you want to do in future. You’ll be fine…I wish you all the best.

  21. Forgot to identify ourselves for this last comment. (Sorry!) We are Will and Julie, and we have really enjoyed discovering your blog through Monevator. Thanks!

  22. moneycounselor · · Reply

    Inspiring to read about your discoveries during your first post-escape year. Congrats!

  23. TheLuckyOne · · Reply

    Congrats on one year out of the camp. Whilst everyone is different, there does seem to be a common thread of “nice” people that chuck their two pennies worth of comments on to your great site. As the old cliche says ” Its nice to be important…. but more important to be nice!”
    For me the site has been/still is fantastic as you are 10 months ahead of my escape curve. So I can look and listen then measure what I do knowing that its not rocket surgery and someone else has lived through it and survived. Carry on old chap!

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