Month: June 2014

Different path

Years ago, more than a decade, I was given some advice by a manager of mine. He advised me to read a particular investment book. He told me with a wistful smile that he wish he’d read it at my age. For all my failings of youth one thing I did well was to gleefully, if not discriminately, learn from the experience of others. I wouldn’t listen to any old fool, but I would listen to someone if I got the sense they were on point about a particular subject.

Now this manager I didn’t particularly respect. In fact, I didn’t respect him at all. I saw him as a figure of fun. That doesn’t mean I didn’t like him, I just didn’t see anything in him to admire. He was a great example of a kind of person I have encountered in life who I like to call ‘commentators’. All words and little delivery. These people are very adept at talking impressively and with grand language, but when you listen to what they are saying, it’s always something we all already know. They describe what has happened, or what is happening, in a very impressive tongue.

‘I think we are finding that if we draw out on our primary data sets we learn that the net percentage of our value streams come from those sectors which are characterised by medium positioned, high volume subscription driven businesses’.

That sounds amazing until you realise all it really means is ‘Most of our clients last year were tech companies’. everyone in the company knew this. No one said it because it didn’t really need to be said. But wait a moment … this guy has ‘drawn down a data set…’

Accountants and people in finance talk like this all the time. They use an impressive turn of phrase to dress up the most simple of statements and it fools everyone into thinking they are geniuses. Indeed they are, it’s an impressive skill and certainly a mark of intelligence.

I remember in 2002 (I know the year exactly because it was during a time I set up a tech start up in Colorado) a friend told me the following, in plain English.

‘Internet speeds are going to get faster, cheaper and more readily available, as they do, internet providers are going to be looking for services to value bundle. The result will be that websites will be able to do things like playing movies. You won’t have a physical video shop anymore, you’ll have a company that hosts movies on a server, you’ll probably sign up through your ISP. Most services will be held on a server rather than on your hard drive and the desktop PC will probably make way for the mobile phone or something similar’.

Now THAT was what I consider smart. I’ll never forget that. That’s a guy who really know what he’s talking about. I’ve paraphrased him, but he saw a lot of what was coming a long time before others could even conceive it. He saw Netflix, the demise of Blockbuster video, cloud computing, mobile phones and tablets, all ten years before it happened.

Going back to this manager of mine, I liked him, but I could see he was just another in a long line of corporate bullshitters. He gave me solid advice on one particular point though. I read his book and it profoundly changed the direction of my life.

a)      I learned how to successfully invest – and I learned and started EARLY. This improved the potential I had to accommodate my future. I could do less than most other people and still get a lot more.

b)      I learned with ease what I had previously presumed was as skill that required a super hard degree and/or a lifetime of experience. Within 6 months I was getting 15% returns. I started to think ‘If something as seemingly baffling as investment is so simple, what else is seemingly baffling, but actually simple’.

I decided to track the fellow down and thank him. So I hit Linked In. I found him, added him and I wait for his response. If he responds I shall ask how he is doing and just thank him for the good guidance he gave me in the past.

While on Linked In, I tracked through my contacts list to see who I had, a trip down memory lane.

I noticed a lot of my old friends had really moved on in life. Some are now wealthy, company owners; some are departmental Directors at big name companies. No longer the fresh faced 20 something crowd we once were, we’re now the late 30s guys who will very soon be middle aged.

It made me check myself for a moment. Have I done as well as I could have done? Why didn’t I follow the same path? Have I made a wrong turn?

Well the answer is, I don’t really know. I have carved out a lifestyle of incredible freedom. I avoided marriage, I avoided children and I avoided a mortgage. I can throw my things into a bag and leave at any time I like. I have little obligation to anyone. I have carved out a career which pays me as much as possible for doing as little as possible while giving me months of downtime between contracts so I can travel and pursue other interests.

Don’t get me wrong, I would not swap my position for a fancy title and authority for a second, but I am willing to hear the other side of the story. I always feared that devoting yourself, 9-5, 5 days a week, year in year out to the rat race was a trap and I consciously resisted it. All that hard work for all the best years of one’s life is for what in return? Well that depends on the person, what he does with his money etc. Everyone’s situation is different, but I wanted easy cash and freedom.

Since I am back in London and currently in contract for at least the next 3 months (when I will probably take in a two month tour of Europe), I may make this my little side investigation. To track down some old friends and find out how they feel on the other side of the pasture.

Lonely Old Men

Some background:

An interesting aspect of my profession is that I spend time in new locations. I get to live in a variety of cities such as Manchester, Edinburgh and Glasgow for extended periods of time, three to six months usually. I get to live as a local, eat as a local, read local news and make local friends. My new location is not so new to me, London, but the area of London is very new. I am located in Ilford.

So my first task is to get a place to live. I tend to book a hotel for two weeks, make that my crash landing, make sure I can get to work without any issues and focus on the job. I get to know the local area and look for my first flat. Nothing too impressive, just somewhere I can spend time and work out how long I might be engaged in my current project, do I need to get my own long term place or will I be moving on again soon.

So it came to be that this weekend I spent my time flat hunting. I was looking for basic accommodation, something that would do for a month maybe, but not be as much as a hotel.

I messaged one lady on AirBnB. She agreed to cut me a deal and wanted to meet me. So she invited me out in Stratford with two of her male friends. It was clearly a ‘safe meet’ for her to decide if I was safe to live in her house. No problem with that. We all went for dinner and watched a jazz band.

Her friends were interesting. One of them in particular, a 60 year old man who is in my exact line of work, just 20 years senior, was noteworthy. He contracts just like me, he travels the world just like me, he dresses well, eats well, reads well. I felt like I was seeing the possibility of my future and it didn’t look bad at all. In fact, it looked damned good. Money, sunshine, happiness and being my own boss. He was young of spirit, free and single. Never married, no children, no divorce payments or maintenance payments. He did not look 60 at all, though I am not surprised seeing as he was rich, happy and lived in Italy 6 months a year. I’d have guessed 50. I don’t know if he has female company, I presume so. There are not many men in his age bracket as fit, healthy and impressive. I’d expect he finds it easy to attract women in his age bracket. He may just feel he is a bit old for all that and take his pleasures in wine and song these days.

I’ve heard people warn that men may be ‘left on the shelf’ if they don’t marry soon, that they’ll end up ‘old and lonely’. I’ve got to thinking, as we get older, surely the ratio of women to men steadily increases in favour of the single man. Female company only gets easier to find as we age.

I discovered something else interesting at first hand while flat hunting this weekend and it goes thus:

At the lower end of the rental spectrum, basic but clean and secure, rooms in my area of London seem to go for £120 a week. The lady I am living with is a lawyer with a city law firm. She naturally lives in a nice house. She rents at that rate. As I say, it’s a nice house. Some of the other places I looked at however were appallingly bad. I mean, truly appalling. Five people crammed into tiny rooms in a very small apartment in a tower block sharing one bathroom, surrounded by people in a similar situation. These apartment blocks are dirty, litter strewn and plagued with anti social tomfoolery. One man was beating the water out of a dirty rug over the balcony, oblivious of the water flying onto the people below.

So how did I end up looking at such bad places? Well the answer is, they were advertised at the same rate. I just assumed all offerings at the same rate would be of a similar standard.

But no. To live in such a terrible place was exactly the same price as it was in the nice places. Why would someone pay £120 a week to live in hell when they could just pay £120 a week to live in a beautiful house? Well I asked and here’s what I found out.

1)      Some rooms are actually worth £120 a week. The landlords want clean, reliable people who tidy up after themselves.  They don’t take people who have the Government pay their rent, it’s a lot of hassle dealing with the Government.

2)      If the Government pays your rent, you can go to landlords who cater for that. These places are smaller and dirtier but they are willing to take DSS cases because they actually cater specifically to them. They welcome them with open arms.

3)      These places just aren’t worth £120 a week. Nowhere near that. But since the tenants aren’t paying for it, they don’t care what the cost is. So the landlords charge twice as much as the place is worth. That’s why they cater to the DSS – so they can get more than they would on the market. The DSS tenants don’t care, they just get free rent. The landlords get well above market rate for poor properties.

So if you have a slum you want to rent, you can make more money if you rent it to people on benefits. That’s what people told me this weekend. The landlords, the tenants. They may be wrong.