Time for the annual campaign review! What worked, what didn’t, and – like a Disney film – what life lessons we learned along the way.
Like last year, I’m breaking this down into the three campaign areas:
- Investing in myself,
- Spending intentionally, and
- Investing my money.
1. Investing in myself
Loads of cool stuff happened to me this year.
I qualified as a lawyer
My career transition is now complete and – importantly – my take-home pay has doubled.
Technically, I began this change way back in 2015 when I started an Open University law degree. It’s still pretty cool, and it massively accelerates my financial independence campaign, so I’m going to count it.
Law is less well-paid than finance. Just about. However, it’s fairly recession resistant, so it’s fairly predictable that – unless I commit fraud or whatever = I can find some kind of legal work indefinitely.
I’m an offshore corporate lawyer, so while there are market trends, we can subtly change our target market during recessions to do insolvency work.
Nice!
I learned to swim (again)
Now that I live on a Channel Island, I’m basically surrounded by water. Water and water sports are almost unavoidable here if you want to meet people.
So I took a six-week remedial front crawl course for adults.
For a modest £85, I’ve gained the superhuman regular human ability to swim over 1,000m front crawl in a single go. I’m pretty pumped about it, because in October I started losing power at 100m. That’s a huge improvement!
I’m now a member of the swimming pool, which is just up the hill behind my workplace. I try to go swimming in my lunchtimes, at least twice a week. My lats are looking great!
At £250 for the entire year, it’s cheaper than any gym membership around here.
I completed an introductory archery course
Hawkeye?! He’s more like Chickeneye when I’m around!
Let me dream, dammit.
Anyway: I completed a six-week novice archery course with the local club. I’m starting to make some friends there, and shooting longbow was awesome, so I think I’ll continue that in 2023.
It’s good to have hobbies and it’s great to meet people.
Archery isn’t too expensive, but there’s a big capital cost early on:
- I spent around £45 for the beginner course using all the club kit, which is reasonable.
- Annual fees are then around £120.
- A bow and the other kit is about £300-400 for an initial set-up.
In theory, an initial set-up should last several years, but if you’re a kit fiend in other stuff then there’s a risk of turning it into a pricey experience.
What I like about archery is that focusing on the target and your form is almost meditative. There’s a physical aspect, but it’s not the biggest burden at my level. The focus is on building a consistent, repeatable movement. Almost zen.
I tried out compound bows, recurve bows and traditional longbow shooting during the course. Longbow is a really satisfying thing to shoot… but this isn’t relevant for financial independence.
Hobbies are an expense but it’s cheaper to meet people by doing hobbies than by relying on meeting people in the pub, so I’m quite happy to invest in them.
Reading list
In 2022, I mostly read fiction or political books. I haven’t reviewed many on the Financial Independence Campaign this year, but I enjoyed testing some new ideas and losing myself in a few stories.
Most inspiring read of 2022
The book that changed my perspective the most this year was Doing Good Better by William MacAskill. This isn’t a financial independence book. It’s about giving money to charity. No, instead of saving money, it inspired me to commit £50 a month to climate change charity Cool Earth.
The argument goes that if you earn something like US$30,000 (I forget the amount, but it’s a less than the UK median wage) you’re in the top 1% of earners worldwide. If you could then donate a couple of percent of your take-home pay, the loss would probably be insignificant to you, but there is the potential that if this is spent in the right way you could have a disproportionately huge impact on the world.
A regular pattern of one or two percent of your pay will come to hundreds of pounds per year, which is more than a successful charity fundraise, but a lot less effort on your part. It makes sense that you’re going to be more effective at raising money for charity by simply maximising your earnings and committing a small amount to charity each month than you are by trying to do a deliberate fundraising event.
MacAskill then goes on to suggest that we should scrutinise how effective a charity is at using our money in the same way we would a business: does it do what it says? Do its projects have an impact? Is investing in this charity better than investing in another charity to achieve the same goals?
Here’s an affiliate link to the book on Amazon. It’s an intriguing read, and now I donate more to climate change with less burden to myself than I would have done with some sponsored events. I figure that £50 a month will barely slow down my financial independence campaign, but that money will make a huge difference to the charity.
Other notable reads from 2022
Lifecycle Investing by Barnes and Nalebuff – which I reviewed!
Quit Like a Millionaire by Chen and Leung – also reviewed!
Building a Second Brain by Forte – see this affiliate link on Amazon. Following this, I signed up to (and use!) Evernote, which is great for home stuff and planning things but is also awesome for building up a searchable knowledge bank at work. In law, that’s incredibly useful, and might suit other knowledge workers.
Atomic Habits by Clear – see this affiliate link on Amazon. Loose premise is that small and consistent beats big, dramatic single-shot interventions over pretty much anything. The book goes into the details of why this works, but ultimately if you follow the “pay yourself first” approach and simply automate your investments, you’re probably doing this already.
Die With Zero by Perkins – see this affiliate link on Amazon. I didn’t enjoy this book, it could have been a blog post. The general premise is: “chin off everyone else, by the time your kids gain an inheritance they’re already set up for life. Invest a bit less, retire earlier, aim to die at the same time as your money runs out instead of having a perpetual safe withdrawal rate.”
I completely failed a free diving course!
Lady SierraWhiskyMike and I did a free diving course in Newquay that will rank alongside the Most Stupid IdeasTM we’ve had.
That’s not a registered trademark, I’m being flippant. If you want to register it, go crazy.
We knew we were in the wrong place when:
- On arrival, we were told: “if you have hay fever, you’re basically never going to be a free diver”. That’s me gone. It turns out *any* congestion in your sinuses messes you up after a few metres depth, due to the water pressure. If I’d known it I wouldn’t have booked a course, dude!
- “We needed you to read and remember the contents of that 70-page PDF we sent you for the day one written test”. Glad I flicked through it on the night before… I didn’t remember any of that by the time we got to the practical session.
- First getting into kit (there was quite a lot of kit…): “these wetsuits are specialised. To protect them we need to lube up. We’re using cow obstetrics fluid, basically what baby cows are birthed in, with this fence sprayer. Make sure to really get it around the inside of the suit before you put it on”. It felt and – I can unfortunately confirm – tasted as grim as it sounds.
What actually is freediving?
Freediving require you to float on the water meditating for a bit, then take in as much air as possible and swim vertically downward near a safety line. Your body feeds off the dissolved oxygen already in your bloodstream, and you use the air to stop your lungs from collapsing. You then fight with your ears to equalise pressure, your diaphragm and breathing reflex to stop you inhaling water, and the cold of deep-ish water to go to a depth and slowly swim back up to the surface again.
So, not what you expected?
There was nothing to see after the first metre down, and it was a thrashing.
I managed to swim horizontally for 40m in the end, but I only got to 10m depth before my ears finally gave in. I needed to reach a depth of 12m and complete a 12m-deep rescue to pass the course.
I’m still glad we gave the course a go, but it’s not for me. Now every sailing YouTuber I see talking about how they go freediving when they anchor up is basically telling me they’ve experienced the taste of cow lube.
I became a competent crew!
Completing the RYA Competent Crew course was awesome. I made some friends, learned that I really like sailing, and was lucky enough to be offered a few days in the Ionian to help crew a friend’s 49ft sailing boat.
This is also the first step towards the boat plan, so it was very important to get under my belt.
2. Spending intentionally
I wrote about lifestyle creep recently. I reckon there’s a balance to be had between enjoying spending a bit more, deliberately, and spending a bit more because of absent-minded lifestyle creep.
Overall, I’ve not been too bad. The cost of my food and clothing has increased, but so has the quality of both, and I’m in a workplace where casual clothing that I could wear to the pub could also be worn in the office at a pinch (or on Friday, where anything goes).
I’m probably going to continue archery, which will add to spending, and I’m committing to further swimming lessons since I get such a benefit out of them, but those are intentional. I’m happy to spend on those things.
Socialising has cost us a lot more than it did in England. If we weren’t living with my mother-in-law, we probably wouldn’t go out quite so much. On the other hand, our rent is temporarily cheap as we are lodging in a single room. I guess our costs will probably equalise when we move into our own place.
On that note – We may have bought a house…
Rhis hasn’t completed yet – but we have made an offer and had it accept on a little terraced house.
It’s… small. There are two bedrooms, but good luck getting anything more than a double bed and a wardrobe in each. However, the downstairs is open-plan and the finish quality is pretty good, so it should more than suit our needs.
We’re going to have a mortgage of around £300k after putting down over 30% in deposit. With interest rates of over 4.5%, it’s not an ideal time to be taking on debt, but it’s really good for a Channel Islands property. You’d be amazed and horrified at the amount of debt the banks were willing to lend us.
Debt slavery for life? No?
Despite the big-looking numbers, things scale here. I reckon this would have been a £250k place in our last city, but I wouldn’t have been paid there what I am here. It’s strange to think of £1,500 a month as being “affordable”, but here we are.
We deliberately kept our eyes in the cheaper, smaller properties so that when we leave on the boat plan we will own enough equity in it to rent it out. This means that we could try the boat plan out and still have some way of returning if it doesn’t work out for us.
Pending the survey, and anything the bank says, pretty good news.
3. Investing my money
I’m doing pretty well on the amounts invested
I’ve saved around £6k into the Wealthify robo-investor and after the weak market performance I’ve got around £7k in Trading212. Not bad for liquid equities!
My workplace and private pensions are still on a little under £20k. I started these three years ago when I left the public sector, so I’m quite pleased with my contributions.
Finally, we squirreled away a decent cash pot to bulk up the emergency fund now that we’re in a high cost-of-living area. That’s important to us, it’s nice to know that you can always grab something in an emergency.
I added to the gold stack
I added more to the physical gold this year. It’s still tiny as a percentage of my assets, but I like having something tangible thrown in to the pot.
Gold is kind of odd as an asset. It’s like the ghost of money, but when times really do get tight it magically gets revived in international payments where paper currencies aren’t trusted. In some countries, it’s the only retail investment acceptable other than real estate.
I like having it, despite the storage costs. It’s reassuring to have something tangible that isn’t reliant on electronic records of ownership. I’d own more real estate for this reason, but I’m just not that flush with cash and tying up what I have into more real estate other than my house is a big commitment.
Wait, didn’t you buy crypto? How’s that going?
As I said at the start of the year and again this summer, I put a fair amount of money into various crypto projects.
It paid off, but I really had to keep on top of the situation as things evolved and the various scandals appeared.
For example: I had planned to use centralised finance providers like Celsius and Nexo, but when the Terra Luna thing started to wobble I withdrew from all of these positions – about a week before the various collapses and insolvency cases.
I don’t regret taking those risks so early on in my financial independence campaign. It was a small amount of risk in the bigger scheme. I could’ve lost that money and been at worst disappointed. However, while I do believe in the potential of decentralised digital finance, the number of projects that I am willing to invest in has become significantly smaller.
It also paid to rebalance out of crypto in general when the gains became too unbelievable. I still hold a fair amount of Bitcoin, Tezos and Cosmos tokens, but I’d withdrawn the money I had initially invested.
Our home was the best-performing asset of 2022
We sold our home for quite a bit of profit this year. This is powering our new house purchase.
The profit came from buying a neglected HMO and converting it into a reasonably good family home. That’s the value-add; that’s why we made such a gain. We would have still made some profit, but without completing the work it wouldn’t have been nearly as much.
I think the lesson here is that the biggest gains come from things that you actually add value to directly. Passive income and capital gains definitely exist, but creating something or performing a value-add service make the biggest strides forward.
Which makes sense, I guess.
I don’t really know how I’m going to apply this lesson, but I’m convinced that this is the lesson – it’s not just “real estate makes money”.
Final thoughts
A lot happened to me in 2022, and I reckon a lot more will happen in 2023.
I’m now going to take the lessons and reflections from this end-of-year review and draw up the campaign plan for 2023. Onwards!
