At the time of writing, I’ve not long returned from an impromptu sailing holiday in Greece. Bizarrely, I learned as much about financial independence and business on the trip as I did about sailing. I thought I’d share some of the key points with you for your own financial independence campaign.
Regular readers will remember…
I wrote a post about 13 ideas for investing in yourself in 2022, and no.5 was learning to sail a boat.
One of the things in that post mentioned that I’d been invited to help crew someone else’s boat. Well, Lady SierraWhiskyMike and I took up that invitation, and we’re glad we did!
One of the cheapest holidays we’ve ever had
So we spent about £570 flying to Greece with Easyjet, then lived off £500 that I’d loaded onto my Crypto.com debit card.
This last bit was simply to avoid paying a fee to pay with card. One of the perks of the version I have is that you can spend in foreign currency without incurring a card fee, which is normally something you get with credit cards. There’s also the benefit that if anyone swipes your card details, it’s capped at whatever is loaded onto the debit card.
The main cost of any holiday is accommodation, but we were lucky enough to have accommodation on the boat thanks to our hosts and captains for the week.
Anyway, it was super cheap, we got a cracking suntan, and the Ionian Sea was beautiful. It’s a shame I didn’t take pictures really, but it’s hard to sail and hold up a camera. Oh well, you’ll have to imagine the azure waters and tame sea creatures.
Which makes the Return On Investment (ROI) on this holiday exceptional.
Our hosts were both financially independent
The sailing was awesome, but the biggest benefit was actually sharing ideas over a drink at the end of a day’s sailing with two people who had achieved their financial independence.
Admittedly, one of our hosts was well into normal retirement age. However, what was interesting is that they’d both been financially independent years before, and there were some striking similarities in the way they had gone about it.
Which is why I thought it might interest readers of this blog!
Reinforcing The Millionaire Next Door
Both D and T (our kind hosts – we love you guys!) had inadvertently followed The Millionaire Next Door trend of creating their own income. I wrote a review of The Millionaire Next Door if you’re interested in learning more of its secrets.
D had started a radio control business
OK, radio control is less of a big thing now. Back in the 1970-1990 though, it was cutting edge exciting technology.
D had been an electrical engineer by trade. He decided to set up his own firm to specialise in radio control, which I believe built on his hobby of radio controlled vehicles. However, the business worked on industrial uses of the technology, where the money was.
He started the business with a loan from his uncle. That certainly helped in the early days, but interestingly D agreed to pay him back at 10% APR and give him a cut of the equity on exit. To give you some perspective, that’s a lot worse than commercially available terms on a business loan, so it’s not as if the family investment was the decisive factor.
D did however admit that it was the fact that it was his uncle’s money that made him determined to make the business succeed. Maybe there’s something in that.
Anyway, having kept him living well for a long time, the business was then sold for significant capital sums. Good on you, D.
T also turned what she knew into a business
T’s first husband hadn’t been keen on letting her have a career (gender equality has come a looong way) so T had tried all sorts of side hustles during the day. These were effectively training for later.
Fast forward a few years and ditch a husband, and she was working in hospitality. Not a famously lucrative field. However, she stuck at it, and went into management.
Having met D and lived on their first boat for a bit, T (with D’s help) effectively set up a farmstead with a Bed and Breakfast/ hotel-style offering, which T ran. Using her knowledge from hospitality and her hustle from her early life, this became a profitable business.
How this ties in to The Millionaire Next Door
One of – if not the – key findings of Stanley and Danko was that most millionaires they interviewed made their own money from business. Better yet, a lot of them went into blue-collar or perceived low status businesses.
While I can’t say that radio control is a blue-collar industry (I actually don’t know about that), you can see how T’s career in hospitality was then leveraged to set up the farmstead and accommodation business.
Attitudes to investments
Both D and T are all over investing, but not in the way you’d expect.
T favours real estate
In her eyes, you can always make money from it. You can rent it, build on it, or leverage the land to set up a business. When I queried her about it, her favourite “rent” from real estate is Air B’n’B, which she sees as a golden opportunity for a lot of people.
This might have something to do with her background in hospitality; whereas you or I might see intermittent rental yield as a risk compared to getting a buy-to-let tenant in, T is much more comfortable with getting short-term guests into rooms.
Being Australian, T couldn’t believe the house prices in rural Wales, which she believes are a screaming opportunity. We had a collective giggle over her terrible pronunciation of Betws-y-Coed and a few bottles of cheap rosé.
I had asked T about the stock market before. She doesn’t trust the market at all. While she didn’t go as far as saying that the stock market is a Ponzi scheme, she hinted something close.
D tasks this out to a professional
While D is completely on board with investing and was keen to encourage us to continue, I was surprised to learn that he had an investment advisor back in Australia to manage such things for him.
This must have cost him a bit in fees, certainly compared to an index fund, but that didn’t seem to concern him. With his business being his main asset, he was happy for someone else to take the stress of managing his investments so that he could generate the capital. Any inefficiencies from advisor fees would be completely negated by the amount of value his time could add to the business.
It’s a strategy that paid off. D is a millionaire a few times over. I didn’t pry into how many times that was, but we weren’t on a cheap boat and the pair were looking at the golden visa programmes in the EU.
These aren’t my strategies, and they’re not typical for FI Campaigners, but it’s good to consider
The thing that ties these two investment approaches together is control.
“But wait!” I hear you cry. “D doesn’t control his investments!”
Well, you’re right, on the face of it. However, he was able to influence the growth of his business, which was his main investment asset. It’s only now – when he has enough capital that the performance of his other investments isn’t critical to his financial independence – that he doesn’t control his income.
This has given me food for thought. Index funds, individual shares, cryptoassets – these aren’t things that I have much control over. Sure, I use my crypto for DeFi, but there’s a limited amount of influence there. At some point I should start looking at creating my own assets.
This lesson also supports my experiences from my placement in Private Wealth – which you can read about if you like.
Frugality
I wrote a post before I went on holiday about how being frugal shouldn’t make you unhappy. Interestingly, D and T are both incredibly frugal when it comes to things that they don’t value.
D had no hesitation in depositing EUR 300,000 into a Greek bank account to gain residency, but D and T don’t make the most of the Greek restaurants. Instead, they prefer to eat on the boat and buy their beer (or, better, their EUR 3.50 locally brewed rosé) in the shops.
T is also a master at making food last. Having worked in hospitality for so long, she was used to meal planning and reusing the same food for multiple meals and snacks. Which is just as well, as there’s limited food storage on a boat!
However, despite the money saving, they weren’t tight when it came to hosting. D and T freely shared – and sometimes pressured us into accepting – what food and drink they had on board.
I can say that while they are certainly frugal, they aren’t frugal to the point of making themselves unhappy.
What I can’t be sure about – but I suspect is true all the same – is that this frugal mindset was a significant factor in them gaining their financial independence.
Neither D nor T had any interest in working for other people again
The biggest criticism levelled at financial independence campaigners is the idea that people suddenly stop when they’re not working anymore.
D would entirely disagree. He explicitly told me: “Working sucks.” You don’t say that a few years into financial independence if you’re bored.
(Actually, D said it with more swearing, but you get the idea.)
T loved the homestead/ accommodation business, but both D and T pointed out that it had become a lot of work – which is why they’d moved back onto a boat.
Even so, D explained that he would like to take on other – personal – projects. T was also clearly on the lookout for other investments (watch out, Betws-y-Coed!).
Things to take away
- Greece is beautiful, and you should check out the Ionian Sea some time.
- There are alternative investment strategies to the classic “index funds and grind” idea you read in other blogs.
- Leveraging what you know and turning it into a business you control is a highly effective moneymaking strategy.
- Frugality is still being practiced by self-made millionaires.
- Your life doesn’t end when you achieve financial independence: you just choose what you do next.
