Life before Death

In some respects I find blogging is a pressure valve. It allows me to be serious, rationale, manic, controversial; whatever I want, whenever I want. To that extent it does not really matter whether anybody reads the post.

Somebody wrote yesterday on another’s G+ post: ageing sucks. I could not have put it better myself. I worry about the process and all that goes with it. I am without doubt one of the world’s great worriers. I am the man, who will worry if he does not have something to worry about. As my former boss repeatedly said, I am the Risk Director and I’m paid to worry. The Grand Canyon sized difference is that I am not paid to worry. I do it because I have turned into my father. There can be no other explanation.

Much attention was garnered recently about Josh Brown’s article: How much time do you have? The thrust of it is that we all waste too much time worrying about what might happen and we forget to live. I felt an odd twinge of self-flagellation when I read it. Now Josh writes in an investment context but his message was that worrying about financial health is probably not the best use of our time. It is easy to argue that this is relevant as an idea only if you have money to worry about. Perhaps. However the great and the good of the financial and political world have decided in recent years that savers should be thrown to the dogs. Take risk or earn nothing. Quantitative Easing. Zero interest rate policies. ZIRP – sounds like a kitchen cleaning fluid. Flat yield curves. Let us suppose in a moment of madness you chose to lend money to Uncle Sam. He offers you an IOU repayable on a fixed maturity date that was originally 30 years from issue – the aptly named Long Bond. You will receive a gross yield of 3.63% at the time of writing. Why gross? Because it is not inflation protected. Only up for 10 years? Just over 2.5%. And if you only trust him for 2 years, he’ll offer you a yield of just 30 basis points. You could get 3.7% for 10-year money if you wanted to lend to that awfully nice Kevin Rudd and his chums in Australia. But if you do not have Aussie dollars to start with you may end up with less than you started. Exchange risk, don’t you know? So whilst I agree with the general message in Josh’s article it won’t stop me worrying about how I am going to pay the bills in 20 years time. If I am spared….. And that of course is his point. I may well not be.

The best piece of investing advice I read recently said my best course of action was to “do nothing”. Hmmm. That may be difficult for an inveterate worrier. It reminds me of the cover of The Hitchhiker’s Guide to the Galaxy, which supposedly had the words “Don’t Panic” emblazoned across it in large, friendly letters. I am not sure how letters can be friendly but the thought is certainly reassuring for a short while.

One of the classic traps is to be asset rich, cash poor. In other words, you have things but whether you can turn them into cash at a fair value when you need to is another matter. Part of the cacophony going on in my head is what sounds like 76 trombones all blasting out the word “simplification”. The sliders go in and out and the tone may vary but the message remains the same. I have too much stuff. I had a vaguely sensible discussion with Mrs. Ha the other day about how to dispose of my books after I have returned to ashes and dust. Now if I simplify I would resolve this problem by offloading the bulk of them now. But I can’t bring myself to do so. Many are collectable, first editions or obscure reference texts and I don’t want to part with them. We rent an air-conditioned godown area for well over US$2,000 per annum. In it we keep all our belongings that one day might come in useful and for which one day we may have space and use. But not today. Since we filled it I have never set foot in the place. We are now in year four. Do the maths. At the start of the year we agreed we would simply get rid of everything. But we haven’t. If we outlive the dog, which I sincerely hope we do, we expect that our next move will be to downsize. How on earth am I going to do that? I can’t even empty a small warehouse storage area. Does Josh have an answer to that? Should I agree to be sectioned for a month so the men in white coats have time to do all this for me and I can’t intervene?

I come next to the question of inheritance. I was fortunate. There was little to inherit. Problem solved. I am faced with the question of deciding how much to target leaving for the girls and how much to blow on Mrs. Ha and myself, whilst we await the call. This loops neatly back to the zero interest rate policy. If we could earn a decent interest rate on our capital we could live off that and the accumulated capital could remain untouched. We are not asking much. Five percent would do us fine. I would not have to think about selling properties in the future. We would have a comfortable lifestyle – not lavish but comfortable – and the future would be bright, even if it is likely to be communist red, not orange. This is complicated immensely by not knowing when the call will come – do read Josh Brown’s article. If the world reaches a state where it is no longer able to support a population that gorges itself on natural resources then the same politicians, who currently offer us high risk or no reward, may solve the problem for us. As kids we played a version of cricket called “six and out”. You could bat for as long as you like but if you lofted one over the boundary without the ball bouncing then your innings was up or indeed out. Perhaps the politicians will offer future generations sixty and out. We of course as existing taxpayers would be grandfathered and exempt.

The baby boomers are now spending their boom time loot and their sons and daughters may end up like me, with an inheritance that barely troubled the scorer. I encouraged my parents to spend the lot right up to the bitter end but they weren’t very good at spending. It went against their nature. I worked out a rather damning statistic recently. When I retired, I was earning 2.5x in a month what my father earned in a year when he finished working. I have already had as much retirement as he had before the call came. That was of course the primary driver for finishing early.

The conundrums remain. Worry or don’t worry. Spend or save. I suspect I shall have some sleepless nights mulling those over. I think the best approach may be to reread The Hitchhikers Guide to the Galaxy. And then empty the godown.



16 thoughts on “Life before Death

  1. The trouble is when someone dies the other person feels guilty for throwing away things that meant so much to the person so they keep them and end up with a whole pile of stuff they don’t want until eventually it passes to someone who doesn’t remember the person.
    There’s great advantage to having nothing (or next to nothing) in the world. ‘Freedom’s just another word for nothing left to lose’ and all that.

    • I have a load of stuff that belonged to my parents – can’t bear to part with it but has no intrinsic value at all. Furniture, knick kacks, books……. the most important things are the photos. It will have to go one day….. just not quite yet.

  2. I had a friend who always lived out of a suitcase. He would buy books, read them and just leave them behind. He traveled light and never had a need for any possessions. We are not as possession free but do keep to a minimum. Our electricity bill is a bout a quarter of what most couples pay according to the graphs on the bill, yet we don’t sit in a dark room or read by the light of a radio. We do have a TV, a fridge and vacuum cleaner
    I was lucky to have met my partner, born and educated in Finland. Finnish design, architecture including all arts and lifestyle is sparse and uncluttered. The essence of their culture is keeping things to the essentials which is really all that one needs. We have thrived on this for many decades. Changing from a very large farm-house to a smallish townhouse wasn’t easy but we just gave away many items to Vinnies, the Salvos etc.
    Our income is a modest pension with income from savings earning franked dividends from Telstra and banks. Most of my worries, and I do suffer from ‘worry’ are probably gene related and as Andrew pointed out very succinctly, I am my father’s son.

    • Gerard, I had a colleague who claimed only ever to live out of 3 suitcases. Wherever the firm sent him all he took was 3 suitcases. He was well into his 50s and we thought this was amazing. I finally discovered he had a house back in Britain and periodically shipped loads of things back there. Nonetheless he was moving internationally just with the 3 cases each time. We are going to spend 3 days in Helsinki in October so if you have any recommendations as to what we should see……. We found FinnAir do very cheap flights to London but you have a stopover in Helsinki. So we decided we would stay 3 days before we head on to my aunt’s 80th birthday. My first trip home since 2004 other than business trips!

      • Go and see Finnish architecture, especially that by Alvar Aalto. Look at modern urban design suburb in Helsinki or relax at a concert of Sibelius music. October is a somewhat somber time but you will love Finland. I did, and often dream of returning to a hut with H. on a frozen lake with a sauna and wood stove.

  3. Years ago, we had a house fire which destroyed 60% of our possessions. Amongst the charred remains where bits and pieces that my mother had left me and things that I had collected over the years. I wiped away my tears and thanked my lucky stars that none of us perished in the fire. 20 years later I had to flee from a violent and unhappy marriage. Unfortunately, all my worldly goods and my children’s books and toys where stored at his house in France. As I couldn’t afford to get them back to England, I had to leave them there. These days I have not a penny to my name bar my small capital share in our house and my possessions are few. A couple of boxes of books, 2 chairs, a small kitchen table, some pots and pans, my laptop, camera and my paints and easel. Having to let go of things that we are sentimentally attached to is hard but ultimately it is quite liberating. House moving is a piece of cake 😀

    Soon we will have no salary coming in and we are going to have to live by our wits until new jobs come up. Weirdly I’m not frightened nor scared. I’ve been in this situation before and I know that somehow we will manage and scrape by. It’s all about attitude. Austerity is very on trend you know!

    Don’t worry, go and empty the Godown, give the books to your daughters and, what you will have saved on rent, go and spend on Mrs Ha and yourself. I have a feeling that you will be just fine 😉

    • Just think of yourself as one of the nouveau pauvre, Lottie. You should fit in well in Spain. I can’t imagine what it must be like to lose so much of your past, either through fire or divorce. I have a few things from my parents that just sit in drawers but I can’t part with them – my mother’s watch, some simple jewellery I bought her for her 70th birthday, letters from them both, even my father’s articles of apprenticeship from the 1930s. They have all survived and followed me around the world. When I moved back to HK again in 2004 after a short spell in London I sent 187 packing cases. And sadly I think there would be rather more now. Scary.

  4. Funnily enough, Gerd and I are in the same process. I try to convince him to retire earlier than mid 2015 and to spend the money while we are still healthy and up-and-running 😉 At least, we don’t have to worry about inheritance – we are both the last of our families…

  5. Lookin In
    Did you ever stop to notice,
    it’s when you feel a little low,
    that the entire spinning universe
    descends to say hello
    with heavy-handed cheerfulness
    and a calculated smile and says,
    “Carry me awhile.”
    but you don’t have to carry
    much of anything at all.
    The biggest thoughts of bigger things
    are really pretty small.
    the major thoughts that occupy the minor state of mind
    are what we leave behind.
    Just a minor thought that we can leave behind.

    Don’t worry ’bout the future, you can’t afford the price.
    There’s madness to the method when you pay the piper twice.
    Once when you start to worry,
    once again when you begin to take the future on the chin.
    I know that you think worry is your ever-faithful friend,
    cuz nothin’ that you worry over ever happens in the end.
    And there might be somethin’ to it,
    but it sure gets in the way of fun today.
    What you say we try and have some fun today.

    It takes a sense of balance on this tiny little ball,
    with a tiny mind still big enough to think about it all,
    to realize the size of things is just a state of mind,
    and you can change your mind.
    There’s a riddle in the middle of that universal spin,
    but we’re out here on the edges where it gets a little thin.
    So just for once permit yourself a carefree little grin
    from the outside lookin’ in.
    Cuz we’re out here on the outside lookin’ in.
    And it’s better on the outside lookin’ in.

    Or if you prefer it live:

    Signed, your pal,
    Alfred E. Gingold 🙂

    • I love this Steve – the idea of paying the piper twice. I guess I should listen to Eric Idle more – Always look on the bright side of life……. Thanks.

  6. Thought provoking post, Andrew. You are not alone. MOt people worry about money whether they have plenty or are living hand to mouth as my mother used to say about folks living in poverty.

    They say that we become our parents and I have been my mother for most of my life. I worry when I am not worried thinking that something is terribly amiss and I had better find out what it is that I have missed to worry about.

    If money is not earning interest as it should then logically does one become more frugal to compensate? I have had to compensate in many ways. I drive less. Don’t go on trips. Eat simple fresh food. I don’t eat out. I wear clothes from thrift stores (shoes are new) and I seldom buy books. AC is run around 75 F. No television. I dry my laundry on a line outdoors. My computer I was able to get up and runnng again for less than a hundred.(I sent the new one back to HP) I would love more than anything to get a better zoom lens for my camera…. And the list goes on. The rescue animals in my care- priceless. I feel they are a worthy cause.

    Money as they say, doesn’t buy happiness but how can one be happy when scrimping? Actually it can be done. I am proof of that. Now, I just have to worry about still having enough money to live as a miser. 🙂

  7. Quantitative easing—oh how loathsome that euphemism is!—is a high tax on people like me who have dutifully saved and have to depend on our savings in the decades immediately ahead. The continued profligate printing of dollars causes my dearly earned dollars to be worth less and less.

  8. My name us Rod and I am a worrier.
    Your article struck a couple of notes for me. I too turned into my Dad who was the worlds biggest worrier (till now).
    The second is, I am preaching this morning Brahe Gospel reading starts with Jesus saying to his followers ” Don’t worry little flock…”

    It’s been good advice for a couple of thousand years, but so hard to go.

    Put an appointment in your calendar ” clean out storage area”. Should be a good start anyway.

    Anyone need some good theology books…

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