How to achieve financial independence

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Dear Investor Challenge

I love my job, it’s easily the best thing since the slow motion running scenes on Baywatch. I love the oPamela Anderson Runningffice politics and the free food I get during the endless hours of meetings discussing nothing in particular, and the hours spent behind my desk trying to find the balance between actual productivity and complete boredom.

I’m just scared that eventually I’ll have too much money and won’t need to go in to work every day. Once my wife sees that, she’ll definitely want me to retire, and that will mean I’ll go from being the big man at the office, to replacing her handbag yorkie taking instructions, all day long.

My days will then be spent getting dragged around Mr Price Home trying to decide which of the two identical shades of blue towels would best match our guest bathroom, and cleaning my perfectly disorganised garage so that it has space for the treadmill my wife has recently developed an allergy to.

All this while being called Schmoopie is already too much, but it will also almost certainly mean I won’t be able to get drunk at the annual Christmas party, and flirt with my inappropriately young secretary.

Is there any way I can avoid this disastrous chain of events from becoming a reality?


I’m so glad you wrote in Schmoopie, because I planned on doing an April fools post this month, but we were all pranked a day early by the biggest fool south of the Limpopo. Well played no. 1, well played… And why the hell do people call you number no. 1 when you remind us so much of a steaming pile of no. 2?

But anyway, at least now I can talk about something else. I’m not a fan of the name Schmoopie either. How about a change. Can I call you Bob?

You’ve done the right thing by asking for help Bob. Most people would simply stroll their way to excess wealth and end up in the nightmare situation called FIRE (Financially Independent, Retired Early) where they had all the time in the world at their disposal.

So without wasting any more electrons, here’s how you can avoid the pitfalls of prosperity.

1) Get a big expensive 4×4
Tell your wife it’s for her safety, your annual trip to the game reserve with it’s mildly bumpy roads, and necessary for her to do the shopping, even though it’s only 2km away and her teacup yorkie fits into the basket on her bicycle perfectly.

It’ll have to be new of course so it can depreciate relentlessly. Something that burns tanker loads of fuel every time you turn the key is what you’re after. Also make sure it has big expensive tyres, and if at all possible, breaks down regularly so you can give more money to the dealerships and parts stores.

If you’re not sure which is the most ridiculous car to buy, try taking a look at the choices made by South Africa’s most efficient spenders, the government ministers. Here’s an article on what they’ve bought for both their Pretoria and Cape Town palaces.

Audi’s Q7 seems to be the top of the pile, and having some Audi experience I can vouch for the fact that they’re outrageously good at ensuring you never become financially independent. Also big on that list is the BMW X5’s and 6’s, and the Mercedes M class. All three meet the criteria above perfectly.

Now I know you might find it hard to be as wasteful as the ministers, but keep in mind, they’re spending other peoples money, something much easier than you and I need to do.

2) Pay extremely close attention to your investments
Stop scratching your head, this is a great way to ensure you never reach FIRE. Keep working on your investments. Find the best unit trust out over the last year and put all your money into it, then change next year to the new king of the pile. Ignore the outrageously high total expense ratios. Surely the more expensive the Unit Trust, the better the people are at looking after your wealth.

You can also take the time to learn technical analysis and begin trading. Draw a few red and green lines on a chart, and then use those to decide what and when to buy. It must be working, I keep seeing a number of courses offered online in spite of the fact that all the billionaires I’ve ever heard of want them banned. Remember, the course instructors are doing all this for you. They’re already rich from all their trading, and now they just want to share those secrets with you out of the goodness of their hearts.

3) Learn about compound interest
It’s really an amazing concept. Even a small amounts of money invested will end up huge given enough time to grow. Yes I know that’s not what you’re trying to do here, but fortunately the opposite is also true. Any money owed can also grow huge given time, and unlike earning interest, there isn’t really any upper limit on how much interest you can pay. The 11% on your homeloan is pocket change. Aim for the 18% car loans, 24% credit and store card charges and the 1000% micro loans. It’s so easy even complete idiots manage to do it every single day. Jump on this band wagon and you’ll soon be tied to your job until the day you die!

4) Lend money to family and friends
I know, they’ve promised they’ll pay you back. They’ve just been through a rough patch, but now they’re starting a new job and can guarantee that you’ll get your money every month starting next Tuesday, or maybe the one after that…

Or give the money to your friend. He’s smart and very hardworking and now has this fantastic new business idea for a restaurant/app/perpetual motion device. He seems so enthusiastic too, you have to get in on this. When else will you get a chance to be part of the next Elon Musk in the making?

Yes Bob, fortunately we both know you’ll never see the money again if you do this.

5) Buy a big house
Yes renting is for suckers who like to invest all the money they save on maintenance, transfer duties, sales commissions, maintenance, rates and taxes, levies and more maintenance. Yes that is three maintenances. Yes maintenances isn’t even a real world, but what is real is the money leaving your pocket, all the time. I’m guessing you put in that pool for your annual swim.

I once complained to my friend about how I once over-tightened my bath tap and it broke off in my hand. That meant I had no water for a day until I managed to make a few phone calls and take time off work to meet the plumber who charged me the same repair rates a brain surgeon would for reattaching my spine. My friend said that was nothing, she once had a blocked shower drain so bad they had to dig up the entire base of the shower, then it had to have new pipes laid, and have the shower re-tiled. And then the tiler broke the shower door so that had to get replaced too. “That must have royally sucked” I said to her. “Nah it wasn’t too bad. I called my landlord and he arranged everything, and paid for the plumber, tiler and shower door while I sat on the couch in the TV room playing Candy Crush”.

Then she said it wasn’t even the worst thing to happen to her house. Apparently living close to the airport during the past freakishly heavy rainy season meant her house was under a foot of water. The landlord said he’s never seen flooding that bad in the area ever in his lifetime. She shrugged. He then started arranging to have the wooden floors ripped up, mold treatment done, carpets and floors replaced, new doors fitted and had the pool drained cleaned and refilled. This time she had to play Candy Crush upstairs.

Aside from those nightmares, there’s the lack of flexibility. When the neighbourhood goes downhill you’ll lose money while not being able to move away. Plus the fact that you have a few hundred thousand in deposits tied up earning you no interest, and over a million in debt costing you interest. Of course you can justify it all to your wife by saying it’s not an expense, your house is an asset so it’s just increasing the value. That’s kind of true, it does increase in value, by around 0.1% over inflation on average for the last 100 or so years. Your house being an asset is definitely true, it’s an asset on the banks books. They’ll phone you when you’re a few days late for paying them. Then they’ll sue you a few weeks after that. I don’t know about you, but I generally don’t get sued for owning assets. I think I’ll just stick to ETFs.

6) Don’t keep track of your expenses
Who needs a budget? A Starbucks a day makes you far more pleasant to be around. And those Krispy Kremes are like little hoops of happiness. Don’t you know people look down on you for not having the latest iPhone, and that even if you can’t taste the difference between Johnny Walker Blue and Black, your kidneys definitely can.

The best way to do this is to always keep loads of cash in your wallet, that way there will be no record of where the money goes. Be like Mike… Tyson!

7) Get expensive toys
What do you call a giant hole in the ocean you pour money into? A boat. It also stands for Break Out Another Thousand. I plan on living on a boat one day, so surely I should buy one now and learn to sail it? But actually what I really want now is a DJI Mavic Pro drone. It’s a drone that folds up to the size of a water bottle. And it can fly 5km away for 27 minutes, I must have it! I’ll never get bored of it, not like my three friends who haven’t taken theirs our of the box since the first month. And I’m an aspiring travel blogger, how on earth can I travel blog without a drone?

Why don’t you find a nice expensive hobby Bob. How about a motorbike? No not a small economical run around, that might actually end up saving you money. Buy a cruiser that’s far too awkward to ride to work, and even if you did it costs more to run than your car. Or a superbike that comes with expensive medical bills?

Always wanted to fly? A small plane could remove R1500 an hour from your abused wallet? Not good enough? Switch to helicopters. An entry level two seater would open the taps and drain R3500 an hour. You’d struggle to burn cash that fast on a bonfire!

Do you have any tips for our poor wealthy friend Bob? I’d love to hear them in the comments section below.

How many of the above are you guilty of?

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