Welcome to another supplement and nearly 7 months through the year – summer always goes so quickly! A week where we whittled down to two candidates for the next Prime Minister of the UK, and “enjoyed” record-breaking temperatures which caused significant damage to our infrastructure and housing which is not set up to cope with 40 degree heat, alongside loss of life. I tend to fall on the laissez-faire side of most debates – let them do as they please, within the rule of law anyway – but this week I could sympathise with the Government and public bodies who tend to issue these edicts in times like this. Most readers, if not all, will struggle to understand exactly why people need to be told how to be sensible in extremely hot weather – but, it seems, many don’t. I think one thing that surprised us all was that the good old English country garden compost heap could be a serious danger in such temperatures – so we learned a lesson there.
Inadvertently, I missed all the action, having taken a short break with family in order to recharge the batteries and enjoy some quality time in the post (or, perhaps, nearly-post) pandemic world. Prices have indeed rocketed, so our longer break was switched for a shorter one, and an inferior hotel – first world problems indeed. Why? Because mindset is absolutely key at times like this. There needs to be scarcity, even if you have a relative abundance of resources. The whole of economics is effectively the study of situations where resources are scarce – so, it is a case of practising what one preaches, in my view.
It was also a shorter flight than usual, so the upheaval involved with the there-and-back was much more manageable. We were also very lucky, not to get delayed at all – plenty of evidence of delays in other flights at the airport, we just fluked it – just as is the case in life in general, good or bad fortune plays a massive part. I always liked the phrase “the harder I work, the luckier I get” – because, like so many others I am sure, I consider myself to be a hard worker – but there was something about it that always bothered me. I think, having studied probability and variance for many years, and applying that to sports arbitrage, casino gambling and other forms of betting (what a hobby, eh?) – that I am more comfortable with the phrase (that doesn’t exactly roll off the tongue): “If I can avoid bad luck, then the harder I work, the luckier I seem to get”. I will avoid the potential segue into Bayes’ Theorem and conditional probability there, for any keen mathematicians/statisticians reading this.
A few observations first, that I think are worth sharing. Prices are up massively, but not everywhere, and not on everything. We had not booked very far in advance at all – I wanted to see just how the overall difficulty with lack of staff, pilots, baggage handlers etc. developed – and flights were still at a reasonable price, if you can navigate the budget airlines pricing system effectively (as usual, there is a tax implied in there – a tax on those who don’t have the knowledge, or the courage, to make sensible decisions). Our hotel offered a very reasonably priced upgrade when we arrived, far cheaper than if we had booked the same package online. That made me wish, of course, that we’d gone for the very cheapest package in the first place rather than a middling one (but that’s just the way my mind works – an opportunity lost).
Car hire has become the preserve of the wealthy, with prices still more than double what they were pre-pandemic – and taxis are hard to come by. This cannot be a surprise – as taxi services were scantly looked after (and in the gig economy world, this is likely to be permanent) – they had to seek other employment and have not necessarily returned. There was still plenty of capacity at hotels around and about however, as you can quite visibly see passenger numbers at reduced levels – and this no doubt means opportunity for last minute bookings, reductions, sites like priceline (worth a look if you’ve not heard of it).
The whole “system” has changed. That’s part of the shock. If you aren’t prepared – if you don’t adapt quickly – if you don’t like change – again, you will be taxed in the bluntest way. Many are making up for lost time in an environment where it seems they can almost charge the customer whatever they want, and the customer will pay it – with their savings from the past couple of years. This is, of course, a completely unsustainable situation but is one of the things doing its best to paper over the cracks of the overall issues that seem so obviously leading to a recession, on a macro level, to the likes of myself.
What’s even better about a break, though, is the chance to switch off. Mobile-phone free time, focus on things that are fun today, and were likely fun 50 years ago too. Children seemingly unaffected by the past couple of years of (in turn) stress, worry, panic, underprovision, fear and control – it is often said that they are very resilient, and that seems to be the case. The minority wearing masks, the majority not – but without the edge of one or the other being angry about the choice that another person is making, which is refreshing.
This gives some short-term rental opportunities to the space between the ears, and from a very light browsing of social media, I noticed a bit of a trend of reflection and wistfulness from 3 or 4 people. Post-covid does seem a sensible time to take some stock. Many are expecting this inflationary situation to cause further problems – and/or are not resting easy with the Russia/Ukraine conflict still raging. For my money, the closer we get to October, the more perilous things become on that front, as the “heating season” begins in Europe.
Once relaxed (I get far better at this as I get older – I’m not sure if I am putting extra effort into relaxing, which would seem to defeat the point – or just worrying less as I carry on), which took a couple of days, I too had the opportunity to think about many of the choices I have made, and continue to make, and why I spend my time doing what I do. A few mini-conclusions and citations will follow from my reflections.
- More doesn’t make you happier. I always remember the US survey of happiness topping out at $75,000 per annum – and the CEO who took a massive pay cut in order to pay everyone that as a minimum at his company. The more detailed conclusions here are that emotional well-being tops out at a lower level – life satisfaction takes a bit more, but then can also drop after a certain level. If you’ve interacted with people similar to those that I have, then you will know the “rich miserable person” who is a control freak, or thinks everyone is out to get him, and genuinely does not seem anywhere near as happy as he should do to a dispassionate observer. The real conclusion – the pursuit of money in itself will never make you happy, because the only thing you will find out when you have that difficult conversation with yourself is that there really is nothing there at the end of that rainbow.
- Life is short, and also long. In the most perverse way, if you spend your time doing what you enjoy all the time, then it seems to go so very quickly indeed! Or, what was great fun as a hobby isn’t fun anymore if it becomes work. People often opine that footballers or other elite athletes are so lucky, but when you look at the sacrifice that they go through on many levels, the pressure. The average US Olympian lives for 5 years longer than their general population counterparts – so it does pay itself back if you are fortunate enough to have the genetic ability, plus the mindset, to make it work – but never-ending hedonism isn’t the path to a long, or a happy, life. If there’s no challenge – however small – in a day, then it is very hard to feel satisfied at the end of it.
- One year doesn’t mean a lot, but 5 and 10 years can mean great leaps and bounds. This is worth bearing in mind when reflecting on what you’ve managed to achieve over the past 12 months. Who says 12 months anyway? An arbitrary period. By shortening that time you pander to the get-rich-quick mentality. By extending it, and by understanding the miracle of compound interest, you can get yourself into the right zone. Have targets? Absolutely. Expect everything to happen within a few months? That only guarantees disappointment.
- Have a business, not a well-paid self-employed position. It is a classic cliche but if you can’t take a week, or a month, or a quarter off, then you don’t have a business yet. Work towards having a business, if you don’t already.
- Hard work alone isn’t enough. You have to work smart, but also inside and outside of “work”. You can waste so much time and effort on fools’ errands, keeping others happy; or you can achieve so much in the world of work or business but have an entirely dysfunctional personal life – or vice versa. This is one time when aiming for the middle of the top may well be far smarter than aiming for the top, regardless of the cost or toll it takes on you.
- 97% of people are good people. Sure, there are different customs, cultures, differences between men and women; there are selfish people, there are greedy people, etc. – but the vast vast majority are well-intentioned. When you forget that, the world can close in on you very quickly. Just because you are paranoid, doesn’t mean they aren’t out to get you…….
- Or is a word best avoided. Consider and. There are far, far fewer binary choices than you really think there are. Most truth lies somewhere between two extremes. There will not be one explanation for your success, or lack of it – or your net worth, or lack of it. Understanding tradeoffs without shutting off sources of income, knowledge, support, friendship or many other phenomena is absolutely key. How do I do this? Start with positivity in your inflection.
- Investment is a philosophy and a lifestyle choice. It isn’t for everyone and it takes long-term discipline. You don’t take a week off, a month off, a year off – you are always an investor, as long as you choose to be. You need to empower yourself with knowledge, put good people around you, understand that if you don’t consume then you save – and if you do consume then you don’t save – and be comfortable in both of those positions and be able to flick between the two, almost effortlessly. To wheel out one more cliche……you don’t want to be the richest person in the graveyard.
I could go on, and on, and on – but the outcomes of my musings, as I continue on my own path looking to improve my knowledge, my lifestyle and my “little bubble” of a world around me, I hope are useful and provide something different for this week. If not – well, just keep calm and buy property…….