Some people on the internet say that The Escape Artist is running out of fresh material.
If I was running out of fresh material, then how could I be coming up with original gems such as Now That’s What I Call Financial Independence! 19??
Answer me that.
Yes, The Escape Artist is back to review more classic songs about financial independence in the guise of a music critic from the NME…armed with increasingly tenuous metaphors, earnest prose and psycho-babble.
Got Your Money (Ol’ Dirty Bastard)
They say that possession is 9/10 of the law. Well…it certainly seems like the business model of most wealth managers is based on inertia. They got your money.
Customers of wealth management firms are often paying 2.0% – 2.5% per year. The problem is that fees are deducted silently, invisibly and stealthily. This will cost you hundreds of thousands of pounds over your lifetime. Maybe millions. Don’t believe me? Check the maths and calculate your own investing costs.
How many clients know how much they are paying in total (including adviser fees, fund management fees and trading commissions)? People are being fleeced while they bury their heads in the sand. Its part-tragedy, part-farce.
Yes, I understand that many people want help. I’m all for financial planners helping people to save and invest. But there is a good reason why I charge clear, fixed fees for my financial coaching. People work best together when their interests are aligned.
If you don’t know upfront how much financial advice is costing you, then you’re probably being screwed.
If I could turn back time (Cher)
Do you remember the story of Kate who becomes a millionaire by getting a job aged 18, saving £167 per month for a total of £15,000 AND THEN SAVING NOTHING AFTER THE AGE OF 25. Compound interest is a beautiful thing.
Sadly though, many people procrastinate and miss out. If I had £10 for every time someone had told me that they wished they could go back and tell their 18 or 21 year old self to start saving…well, I’d be a wealthy man.
But you can’t turn back time. And sadly, Cher did not start saving when she was 18. As a result, Cher is so poor these days that she can’t afford clothes, having to make-do with with a Borat-style mankini she got from a jumble sale. Never one to seek attention, I can only imagine Cher would have been *mortified* at being half-naked on a ship full of male sailors.
The best time to plant a tree was 30 years ago. The second best time is now.
Ice Ice Baby (Vanilla Ice)
Why didn’t Cher invest in the stockmarket when she was younger?
One reason is that sensible savers are often terrified of the ups and downs of the stockmarket so they get stuck in cash. But here’s the problem. Your cash is like an ice sculpture at a party. You can’t see it melting away…but it is. Inflation guarantees that your cash will lose its real value over the long term.
Let’s Get It Started (Black Eye Peas)
It would be wonderful if everyone reading this could learn from Cher’s mistake, take action and get their compounding machine working.
But sadly, people continue to procrastinate and invent
excuses rationalisations why now may not be the right time (Brexit, Trump, trade wars etc etc) to start investing. If you are dithering about which Vanguard fund is best, or whether perhaps it might be better if you did this, that, or the other, you are losing the initiative. Meanwhile the enemy (debt, lifestyle creep, conformity etc) is creeping up on you as you lie dozing in The Duvet of Complacency.
When investing, there will never be a situation in which the geopolitical outlook is clear and you have all the facts to feel comfortable with your decision. Guess what…you still have to get started.
Don’t Stop Til You Get Enough (Michael Jackson)
Do you have to wait until you get to 25x your spending before quitting a job you don’t like? I say no…but some people are
scared reluctant to quit until they’re SURE they have enough. This even has a name: One More Year Syndrome.
When it comes to debating the Safe Withdrawal Rate, Michael is a STICKLER. He’s annoyed that The Trinity Study only considered 30 year retirement periods. He writes lengthy blogposts on sequence of returns risk. Not for Michael the breezy assurances that you can trust the 4% rule of thumb and everything will probably be fine. Michael advises a 2.75% withdrawal rate (note the 2 decimal places) and, whatever you say, he can be more
But, for my money, Micheal seems a little dogmatic and prone to binary thinking. The Safe Withdrawal Rate is a concept not a number. The idea that you reach financial independence retire in your 30s/40s/50s and never earn another penny nor get any state pension strikes me as
I Won’t Let The Sun Go Down On Me (Nik Kershaw)
One of the sneaky tricks of The Prison Camp is to encourage you to let yourself go (both physically and mentally) as you get older. As we discussed in Get Rich Without Mobility Scooters, many people seem to give up physically at about age 30 and just accept that its a long slow inevitable decline from there.
The Escape Artist says: fuck that. Much of what we think is ageing is just the result of the awful modern Western diet (processed carbs) and sedentary lifestyles. I can bench press more now than I could in my yoof. I’m not competing with anyone else but I am competing with myself.
Sure, I know where this is headed and soon we will all be dead but I’ll be staying as strong as I can for as long as I can.
When The Going Gets Tough (Billy Ocean)
Yes, I know this song is cheesier than a bag of Wotsits that’s several years past its sell-by date. But I love the cameo appearances in the video from Danny De Vito, Kathleen Turner and Michael Douglas.
It would be lovely if everyone could get to financial independence without any effort, any resistance and any sacrifice. Sadly the universe just doesn’t work that way. Life isn’t fair.
No one said it was gonna be easy. On your Path towards financial freedom, it will often feel like 2 steps forward, one step back. But the journey will improve you. As well as wealthier, you will end up happier, more resourceful and definitely not a complainypants.
A Little Party Never Killed Nobody (Fergie)
So yes, there will be times when it feels tough…but pursuing financial independence does not have to be all sacrifice, deprivation and extreme frugality (whatever the media say).
I suggest you enjoy the ride and party along the way. Its easy to
get drunk socialise and party for next to nothing. The trick is to recapture that vibe you had at college or the Friends vibe in your 20s. Adulting doesn’t have to be expensive (or boring). Who needs fancy dinner parties or restaurants? Some cheap booze from the supermarket, some friends and some banging tunez (free) are all you need for a party.
As I may have mentioned before, you should enjoy the journey not just the destination.
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