Author Topic: greetings from the UK  (Read 2717 times)

isleofthorns

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greetings from the UK
« on: September 30, 2013, 04:16:56 PM »
Thought I'd drop a quick line to say hello from the UK.

Having read through many of your posts, and the blogging of MMM, I can't help but recognise a few underlying themes of mustacharianism in my own past.

I would say that I am FI. Obviously, peoples differing definitions of FI will vary considerably; in my case, my current lifestyle and overheads have never been higher, but I am fortunate that my job is not very time-consuming, and allows me a great deal of daily freedom whilst providing a very decent income.

To get myself in this position I have certainly employed some mustacharian-tactics.

I started my business in 2001 with the proceeds of my savings from the sale of my house. I rented cheaply and cut my lifestyle fairly dramatically. As a trading company, I relied on saving profits to build the trading pot. This meant that my drawings from the company were kept to a minimum for many years, whilst slowing building a stronger trading position. In most years my drawings were kept at no more than 20% of profits. In recent years this has increased to about 40% due to increased family and education costs.

My main reason to continue working is my contention that we are in (and likely to continue to be in) an era of high inflation. I see the purpose of work and continued saving as little more than inflation-protection.

I can only think that it's a brave person (or braver than I) who retires in their thirties of early forties on the basis of a 4% drawdown...



daverobev

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Re: greetings from the UK
« Reply #1 on: September 30, 2013, 04:50:06 PM »
Hey, ex-pat here.

Curious as to why you are terribly afraid of inflation when there are good hedges - real return bonds - aren't there national savings bonds that match CPI or whatever it is? - Ah, here http://www.nsandi.com/savings-index-linked-savings-certificates - none at the moment...

Don't get me wrong.. if you're caught out it can be bad - but if you're smart and aware and, most importantly, diversified..? Few sovereigns tucked under the bed for doomsday, some gilts, some stocks, an investment property..

Trading sounds interesting - what do you trade?

isleofthorns

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Re: greetings from the UK
« Reply #2 on: September 30, 2013, 05:16:12 PM »
Hi
Thanks for the reply.
I think if a truly suitable hedge existed, I'd be interested. Cpi isn't the best indicator for real-world inflation. For example, my year-on-year electricity costs have risen nearly 30% (not welcome when I've just invested in an electric car!).
Precious metals are also an obvious choice, and useful in conservation, but ultimately I prefer more practical assets - land, property and general means of production.

I trade pharmaceuticals. Not the most exciting of industries, but medicines are one of the more recession-proof activities and are in themselves fairly good against inflation.

daverobev

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Re: greetings from the UK
« Reply #3 on: September 30, 2013, 05:24:50 PM »
Ok - why not get some solar panels then, if you face the right way? Coming to an Ikea near you soon, apparently!

And/or buy electricity suppliers.

And/or rental property - with a long, fixed rate low interest mortgage (shame you can't do what the Americans can with the 30 year fix... well, I guess you can, my friend had a fixed-for-the-life-of-the-mortgage mortgage.. about 2 or 3% higher than a 3 year one I guess).

People need somewhere to live, food to eat, etc. Buy stocks of the companies that provide that, or provide it yourself, and you'll be ok - IMHO.

I'm.. kinda retired, ish, early thirties. On the basis of a rental property, and not too much else. I'm sure it'll work out!

 

Wow, a phone plan for fifteen bucks!