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Simple choice: Adapt or die

It is often said that I lack subtlety and tact. I accept that. I’ve never been entirely sure whether this observation was intended as a compliment, criticism, or simple statement of fact.

Outside of boardroom presentations, I have seldom had to suppress the urge to punch people in the face quite so often as a recent visit to the town where I grew up.

The “good life

This is a government town, where everyone makes a living out of the making, influencing or executing of governmental policy… or providing supporting services to those who do.

Disposable incomes are well above average.

The residents are generally well educated.

Career progression to middle management levels is based on time served as much as ability.

Much of the population live in reasonably large single occupancy housing and drive around in reasonably new cars.

Life is generally affluent and comfortable, with keeping up with the Joneses a favourite past time.

I spent much of a week catching up with old friends. It was great to hear about their victories, their future plans, and their complaints that the sporting teams of my youth still lose more games than they win (some things don’t change!).

Everyone is afraid

There was a recurring theme that I hadn’t observed on previous visits: fear.

Fear of the future. How will their state pensions and healthcare be funded? How will their private pensions be watered down or taxed to make up the shortfall?

Fear of automation. Robots and artificial intelligence are apparently going to take away all the jobs.

Fear of immigration. “Foreigners” willing to work for less money, driving down living standards.

Fear of outsourcing and offshoring. “Big business” was delivering lower quality (at lower cost) commodity services using resources who are willing to work longer hours for less money without the security blanket of permanent jobs, benefits, or pensions.

Generally just fear of the unknown.

Adapt or die

I was sympathetic to a point, I struggle with change as much as the next guy.

However change is one of the few certainties in life. You either evolve and survive, or you perish. My (mostly) successful old friends appeared to have been brainwashed by all the talkback radio shock jocks and fear-mongering politicians, forgetting this most fundamental law of nature: adapt or die!

Evolution or extinction

Evolution or extinction. Image credit: Bright Bricks

As is my wont I attempted to “trust, but verify” what I was told.

Had I lucked into a safe stable profession early on, and obliviously coasted my way through all this apparent uncertainty that was plaguing my friends? Or had I, consciously or otherwise, tap danced and evolved my way through an ever-changing professional landscape?

Change is hard

I briefly replayed a few of the roles I performed early in my varied working life.

Paper route

Lugging around vast bags full of newspapers and junk mail earned me the princely sum of $3.24 a week and Popeye-like forearms.

The change: websites, targetted internet advertising, and spam emails have largely rendered this profession structurally redundant.

Milk run

Jumping on and off the back of a moving truck while carrying 12 glass bottles of milk was certainly exciting, but not a job anyone survived with knees and ankles intact for long.

The change: internet grocery deliveries by major supermarket chains have eliminated the profession.

Skilled lab technician

My career backup plan was over less than 10 years after it began.

The change: digital cameras killed off the local one-hour photo development industry. Smartphones killed off digital cameras.

Barman

An ancient that has continued largely unchanged since time began.

The change: health-conscious teetotal millennials, combined with big screen televisions and internet beer deliveries to the homes of their parents, is slowly but surely killing off the traditional pub. That said there will always be people who enjoy getting drunk, so there will always be work for this who want it.

Accountant

A varied profession of many facets, many of which were neither client facing nor requiring imagination.

The change: practitioners of any profession that can be reduced to a script or repeatable set of decision statements are doomed. Software, automation and offshoring has greatly reduced (but not eliminated) the demand for number crunchers and Excel jockeys. There are always jobs for the “what do you want the answer to be?” style Management Accountants however!

Software developer

The profession overall thrives, though the commodity nature of the work combined with the rapid pace of innovation has always required re-skilling every 2-3 years to remain relevant and employable.

The change: everybody rents or buys rather than develops bespoke software these days. Today project delivery risk is regularly shifted onto large consultancies, who employ vast armies of offshore resources to turn handles, simultaneously overcharging and underwhelming the client for solutions that seldom solve their problem. If you are a code monkey without any customer-facing elements to your role, and live in a high cost of living locale, then I wish you the very best of luck… you are going to need it.

I could go on, but by this point I had satisfied myself that there had been plenty of change.

Evolution or extinction

Yet here is the thing. Has anyone observed a vast spike in homelessness caused by all the paper boys, milkmen, and photo lab workers becoming structurally redundant? Me either. Most of them adapted and evolved, moving on to other professions that demanded willing and able workers.

Complaining that my decades-old visual basic programming skills or photo development knowledge are no longer relevant or in demand would be ridiculous.

Demanding that “they” (the government, society, whomever) should do something to resist or prevent change, protecting my antiquated skills and abilities to ensure I can continue to earn a decent living is nonsensical.

Yet that was the line of reasoning being advanced by many of my old friends, fanned by the media and politicians. There were seemingly endless calls to:

  • protect farmers and dying country towns
  • restore dying industries like car manufacturing or steel production.
  • insisting that teaching or nursing roles are filled by local citizens, rather than visa holding “foreigners” who are willing to take up these important demanding, yet low paid, roles.

The list goes on.

Conclusion

Workers must invest in themselves to ensure they maintain marketable skills relevant to their chosen living locations. Dinosaurs and Dodos became extinct for a reason. Workers who fail to maintain their relevance should suffer the same fate.

It is a simple choice: Adapt or die.

Next Steps

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Financial Planning - When self-interest and bad advice collide

Several years ago I toyed with the idea of turning my interest in financial planning into a career as a financial planner.

There were two main drivers behind my interest in financial planning.

Firstly I wanted to peek behind the curtain, learn what it is the professionals are taught.

  • What do they know?
  • Does it actually work?
  • And if so, where are all the rich financial planners? If they practised what they preached, and it worked, then there should be thousands of them!

Secondly I observed folks all around me who earned plenty money, yet never seemed to have enough. Invariably this was because of their own poor choices, made out of a variable combination of apathy, greed, ignorance, and stupidity.

Book learning for fun and profit

I spent a couple of years completing the formal training required, receiving a shiny Graduate Diploma in Financial Planning and Investment for my trouble.

By the end of my studies I had learned that the financial planning industry had no secret sauce for financial success. Most planners are comfortable, but few are more financially secure or successful than the average white collar professional.

When the time came to change career directions and make the leap into the world of financial planning, I blinked.

I couldn’t reconcile the fundamental conflict of interest that existed.

Misaligned commercial interests

The basics of successful personal finance are both simple and well documented. Earn more, spend less, invest the difference in low-cost diversified investments, and then leave them alone. Rinse and repeat, until the magic of compounding makes you wealthy.

Earn more, spend less, invest the difference in low-cost diversified investments, and then leave them alone. Rinse and repeat, until the magic of compounding makes you wealthy.

The problem with that approach is that a financial planner can’t make a decent living from it.   

The path to financial success for a planner is paved with activity and commissionable churn… and/or fees, lots and lots of fees.

  • Trading commissions.
  • Trailing commissions.
  • Platform fees.
  • Product placement fees.
  • Account keeping fees.
  • Administration fees.
  • Referral fees to other financial services professions who are actually qualified to provide more fee-based accounting, insurance, legal, mortgage, tax and wealth management advice.

You get the idea.

This creates an inherent conflict: what is good for the advisor is unlikely to produce an optimal outcome for the customer.

Fees... lots and lots of fees.

Fees… lots and lots of fees.

I made my peace with my decision, applied the relevant lessons learned to my own financial planning approach, and moved on.

Price gouging pensioners for a living

Recently while helping my father put his affairs in order I had cause to validate my decision.

I was stunned to discover the total fees and commissions he had been charged over the preceding year exceeded the median annual household disposable income!

the total fees and commissions he had been charged over the preceding year exceeded the median annual household disposable income!

Digging into the figures further, there was no single item that was outrageous. Instead on top of the eye-watering platform and account keeping fees, every one of the (many) planner initiated buy, sell or rebalance activities on the account came with a hefty fee attached.

I challenged my father on the vast size of the fees. He protested that his fees were lower than those being paid by his peers. Over the next few days I met several of his friends, and was alarmed to discover my father was correct.

These old guys happily competed amongst one another to see who could get the best deal, but all of them had blindly accepted the premise that high fees were the cost of doing business.

When self-interest and bad advice collide

Another thing that alarmed me was the prevalence of “vertical integration” within the financial planning firms. Client funds were directed towards investment vehicles owned and operated by the financial planning firms, rather than lower cost options like Vanguard or Fidelity.

Instead of listed low cost index trackers, these pensioners were being talked into investing material portions of their wealth into exotic unlisted funds that operated in asset classes such as wind farms, film financing, or directly held international residential real estate.

Financial Planners love pensions

The other gripe I had about financial planners was their fondness for pensions.

I can see the allure, it is an easy sell.

Tax-deferred.

The lure of “free money” in the form of employer matches for pension contribution.

However the thing that financial planners love most about pensions are the age restrictions! These make it difficult, expensive, or impossible (depending on the rules applicable in your locale) to access for years… or decades depending on how old the customer is.

This creates a dangerous “out of sight, out of mind” mentality for many customers, making them less inclined to challenge the cancerous high management and transactions fees that are eroding their nest eggs.

Pensions are optional

My own view on pensions is likely to be a tad controversial.

As a child, I rejected the notion that everyone had to work until they dropped, or were too old to enjoy many of the fun things in life.

As an adult, I worked to replace my earned income with a collection of diversified passive income streams.

Once those passive income streams reliably exceeded my living costs I was financially free to control how I chose to invest my time.

You may have noticed pensions do not feature prominently in my simple financial plan.

I wanted to get off the hamster wheel at an age much younger than the typical pensioner. Having a material portion of my assets locked away inside age restricted pension wrappers wasn’t going to help me achieve that goal.

Here is the thing. If you have done it right, the perpetually sustainable passive income generating machine you assembled to reliably support you prior to reaching pension ages will continue to reliably do so after pension age.

This being the case, having ready access to deploy my funds advantageously becomes very important.

Pension wrappers offer a promise of tax deferment… which may (or may not) be honoured at the whim of future governments. However this promise often comes at the price of restrictions about which asset classes pension funds can be invested in, and whether those assets can be geared or borrowed against, and so on. Again these restrictions vary greatly by locality, so do your own homework.

Conclusion

Good financial planning advice is worth listening to, but only when the commercial interests of the planner and client are aligned.

As always: “trust, but verify“.

Critically assess and validate whether the advice you receive is going to help you achieve your goals, at a reasonable price. This is particularly true for folks interested in retiring earlier than the traditional retirement age, as this will take them off the standard financial planning script and require a different set of approaches.

Pensions are a useful financial planning tool with many desirable features. However they are not the only tool, nor are they always the right tool for the job.

Next Steps

  • Are the fees and commissions you are being charged fair and reasonable?
  • If not, do something about it!
  • If you liked this post then please share it with your friends.
Disclaimer: I may receive a (very) small commission from any purchase you make via links on this website.
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Hard Won Property Investment Lessons

A useful list of hard won property investment lessons, learned the hard way during my own adventures in the world of property investing.

Learn from other people’s mistakes!

  • Investments should enhance your financial comfort level, not pick your pocket.
  • Capital gains may make you wealthy, but cash flow will pay for your groceries.
  • An investment property is a stand-alone business, manage it accordingly.
  • Property provides the imaginative investor the opportunity to create value. Shares can’t do that.

Analysis

  • A property is only worth what someone is willing to pay for it. No amount of wishful thinking will change that.
  • Analyse all properties as if they were potential investments. Yesterday’s “dream house” will seldom comfortably transform into tomorrow’s cash flow positive investment property. Life happens, as many “accidental landlords” will attest, so be prepared!
  • Property is one of the few asset classes where it is possible to add value. For example extending, subdividing, redeveloping, zoning, planning permission, etc.
  • Low cost is not the same as cheap.
  • Property transaction costs are huge: stamp duty on the way in and capital gains tax on the way out. Be sure of your numbers before committing to a purchase.
  • Luxury facilities such as lifts, porters, swimming pools and gyms are features that your tenants get to enjoy, but very expensive for the investor to maintain.
  • Don’t let your own personal tastes influence your property selection. Successful property investment is all about the numbers. You don’t have to live there!
  • Things change over time, so remain focussed and pay attention. Interest rate movements or local employment prospect changes may significantly alter the investment prospects of an existing investment property.

Financing

  • A good mortgage broker will more than pay for themselves.
  • In the hands of a responsible investor flexible financing options such as lines of credit, offset accounts, and redraw facilities are incredibly useful tools.
  • Refinancing is generally preferable to selling, play the long game to achieve capital gains.
  • The average interest rates over the last 100 years is 5.45%. Since records began 324 years ago the average is 4.71%. Plan accordingly.
324+ Years of United Kingdom Interest Rates

324+ Years of United Kingdom Interest Rates

Legals

  • Organised, proactive, reliable and timely conveyancing solicitors are creatures of myth and legend.
  • Short duration leasehold property titles are a form of serfdom. Long duration leaseholds aren’t much better.

Location

  • Location, location, location” is a cliché for a reason. Buy in the best location you can afford.
  • A crap property in a great location will generally appreciate in value faster than a great property in a crap location.
  • No matter how beautiful a property, a crap location is still a crap location.
  • Beware of properties in a one employer location. It sucks big time if the employer downsizes or departs.

Property Management

  • Property maintenance costs are inevitable. The maintenance cost profile of a standalone dwelling is erratic, while the service charge of a well run building evenly spreads out those maintenance costs over time.
  • Beware investing in a complex comprised of mostly owner occupiers. They may want landscaped gardens and gold plated vanity signs for the development, but those things cost money without adding value to your investment.
  • Managing a property costs time and money. Always factor management costs in your analysis, even if you plan on self-managing initially. Not doing this is just lying to yourself, as it places no premium on your time.

Not factoring property management cost into your analysis is lying to yourself

Stress

  • In general the property market provides a smoother ride than the stock market, but stocks don’t have toilets that need unblocking in the middle of the night.
  • If you enjoy a simple life or have a low stress tolerance, consider a REIT instead of owning directly.

Tenants

  • As a landlord, tenants are your customers. Treat them accordingly.
  • Tenants won’t look after your property the way you would. Stuff will get broken, damaged or stolen. Get over it.
  • Christmas and the start of the school summer holidays are the worst times of year to be seeking a new tenant.

Taxes

  • Tax minimisation is a terrible investment driver.
  • The government can and will change the rules. Ensure each property makes sense as a business proposition in its own right. Before tax.

“The government can and will change the rules.”

Wisdom

  • If commentators, experts and gurus really knew what they were doing, wouldn’t they be out there actually doing it instead of trying to sell you their “expertise

Next Steps

  • The Property Hub and Bigger Pockets provide fantastic free resources to educate property investors. Just be a bit wary of some of the advice in the forums, always “trust, but verify“.
  • If you liked this post then please share it with your friends.
Disclaimer: I may receive a (very) small commission from any purchase you make via links on this website.
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Property Investing

There is a seemingly endless stream of articles wailing about how difficulties facing 20 somethings. How could anyone afford to buy a property or start property investing?

The same stories were being written 20 years ago. Mortgage payments as a proportion of income had increased by nearly 30% over the the preceding 3 years. The horror! How could anyone afford to buy a property?

And 20 years before that. Interest rates were in the mid teens. How could anyone afford to buy a property?

In fact I’m certain that, at the time, it has never felt easy.

There is an Chinese proverb that says:

The best time to plant a tree was 20 years ago. The second best time is now.”

The same is true of investing.

Living location is a lifestyle choice

Where you choose to live is a lifestyle decision, determined what you like and enjoy.

It could be a house in the suburbs, a flat in the city centre, a canal boat, a caravan near the beach, etc.

Whether you choose to buy or rent where you live is an investment decision. Run the numbers to determine the optimal outcome for your personal circumstance.

These are two vastly different decisions, and should not be confused or conflated.

An investment property does not need to be in the same city or country that you choose to live in.

Property as an asset class

As an asset class property investing has a lot going for it.

Direct property owners have the ability to create value as a result of their own actions. Examples including extending, subdividing, redeveloping, zoning changes, planning approvals, and so on. That is something that is not possible with stock market investments or REITs.

Generally (but not always!) property tends to be less volatile than shares, moving at a slower pace.

This makes it possible to secure a medium to long term mortgage over a property, and unlike margin lending against shares there are no margin calls to worry about before the loan becomes due.

Property investing

Never forget that property should be evaluated as an investment. You don’t have to live there!

This is liberating. It doesn’t matter if you personally like the colour scheme, layout, or location providing there is a reliable supply of tenants who will.

The purchasing decision should be driven by the numbers.

You don’t have to afford to live there

You can probably purchase a better located investment property, that will be paid for by tenants, than you could ever hope to fund were you to occupy it yourself.

Providing you get your numbers right, a good investment property will be self funding.

You will need to be able to cover holding costs during void periods between tenancies. That is not the same thing as having to pay every mortgage payment over a 25 year mortgage yourself, unless something goes horribly wrong!

You must also cover maintenance costs whenever these occur. Your numbers should factor in a reasonable level of maintenance. It may not be possible to know ahead of time precisely what will go wrong, but it is a certainty that at frequent though random times things will need fixing or replacing.

The power of leverage

As the owner of a property you get to enjoy any capital gains that may result from rising property prices.

To illustrate consider the table below highlighting four different funding models for the same property.

Power of leverage

Power of leverage

The judicious use of leverage can significantly increase your return on investment.

Note the negative impact the  servicing of that leverage has on cash flow.

Higher borrowing levels reduce the investor’s safety margin.

Interest rate rises or falling market rents will really ruin the day of a highly leveraged owner.

If you have analysed thoroughly then you should be able to obtain a self-funding, positive cash flow generating investment property.

If you have researched well then over time that property’s value should grow, increasing your equity.

In time it should become possible to extract some of that accumulated equity, while ensuring the property remains self-funding.

Use that extracted equity as the deposit for your next self funding investment.

And repeat.

Passive income pays for financial freedom

Over time your passive income steams should increase and your wealth will compound.

Once your portfolio contains sufficient accumulated equity, consolidate. Sell off some investments to clear the debts over the remainder of your portfolio.

If things have gone well you will have achieved the same goal those folks with 25 year owner occupier mortgages strove for. You should have a sufficiently sized portfolio that you could own outright one (or more) properties should you choose to. The big difference is you will have been living where you choose, rather than where you could afford to buy,

With a bit of luck the passive income generated by your portfolio will cover your own living costs, buying you financial freedom. If you are really luck you lived in a locale where the mortgage interest was tax deductible!

Next Steps

  • Evaluate whether renting or buying in your own locale makes more financial sense.
  • Consider property investing as a means of generating wealth.
  • If you liked this post then please share it with your friends.
Disclaimer: I may receive a (very) small commission from any purchase you make via links on this website.
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From struggletown to sorted

One of the great things about being a parent is we each get to fuck up our children in our own unique special ways.

Some years ago my son was approaching the age that children start school. Like most parents, I wanted him to enjoy all those opportunities and privileges that were not present during my own childhood.

I enrolled him in a fancy private school. For the most part his classmates were the children of C-level executives, bankers and hedge fund managers living large on the generous ex-pat packages that used to be on offer pre-Brexit. At various times they also included a Thai prince, the son of a Saudi billionaire, and one of David Beckham’s kids.

The plan had been that while my son received a good education, he would also establish a network of well placed supportive contacts. In the future they could provide introductions, grease wheels, and open doors to opportunities that would otherwise be inaccessible. The “old school tie” network.

The old school tie

As a migrant, I did not enjoy access to such a network. If I wanted a door opened I had to kick it in!

As a migrant, I did not enjoy access to such a network. If I wanted a door opened I had to kick it in!

Over the years I have vicariously observed how beneficial these ready made networks can be: employment offers; favourable zoning or planning decisions; parliamentary preselections; knowing the price required to win a competitive tender; having (well deserved) regulatory fines and punishments watered down to mere warnings and slaps on the wrist, and so on.

I don’t believe that business should be conducted this way. That said, I am pragmatic enough to understand this is how the real world works. A disheartening number of university places, graduate jobs, and lucrative non-executive directorships get awarded on the basis of knowing the right people.

Starting in struggletown

My own upbringing was somewhat modest. I attended the local state school, where breaking into cars and selling drugs were considered extracurricular vocational courses. The principal strongly believed all children should have the opportunity to receive an education, and put this philosophy into action by taking in all the troubled kids who had been expelled or unwanted elsewhere.

That certainly made for a cosmopolitan student body and provided a very hands-on school of life education.

My school had a well deserved reputation for breaking teachers, teenage pregnancies, and drug overdoses. However that true believer mentally also attracted a few incredibly driven educators who regularly worked minor miracles in order to provide a decent education to those kids who were willing to learn.

Where and how we grow up has a huge influence on the lens through which we view the world. It hones our worldview and provides us with a baseline for what we perceive to be “normal”.

Vocational training

Vocational training. Image credit: Mother – Brick of Galom. Dealer – Brickforces. Seductive Girl – IoaIoana.

Maintaining perspective leads to success

Yet here is the thing. After winning the ovarian lottery, the single biggest contributing factor to my modest financial success has been preserving my struggletown perspective of what is “normal”.

As a 19-year-old, I embarked on a solo backpacking adventure around Europe. When you maintain a struggletown perspective of “normal” backpacking is easy. Your worldly possessions are limited to what you can comfortably carry, and constrained by what you can afford to lose in a youth hostel.

I had a fantastic time on the road. The re-entry challenges I face settling back into “real” life upon my return were brutal!

Unfortunately once you have the travel bug in your system it is there for good. The only successful “cure” that I’ve found is the prospect of travelling with young children!

Celebrating the small wins…

My first professional job after university started to pay me some real money. Not a lot, but significantly more than I had been making doing a paper route, working in a shop, and behind a bar.   

The student lifestyle certainly has a used by date. A diet of beer and peanut butter sandwiches catches up with a person once they sit in a cubicle for a living.

It felt great to finally have more money than I needed. Bollocks to “normal”, I had escaped struggletown!

For a while I lived large: going to concerts, live sporting events, and weekends away; eating (and drinking) out with my friends every night!

Life was good.

Living Large

Living Large. Image credit: Madonna & Lemmy – MountainOfAwesome. Beckham – Brickforces. Drunk – Phantuz.

… until lifestyle inflation punched me in the face

Predictably a day or two after each payday I was broke again.

I learned the hard way that if you let them, lifestyle costs will easily expand to consume all available income. Just as with travel, the lifestyle genie is difficult to put back in the bottle once released.

Adjusting my baseline of “normal” to sit just above what I calculated to be “enough” solved the problem. I no longer lived like I was still a resident of struggletown, but I adopted a measured approach to enjoying life to ensure I didn’t continue to burn through my whole pay packet.

The remainder of my income I divided between funding my travelling adventures and (often unsuccessful) investments.

This approach worked remarkably well, and I greatly benefited from consistently applying it.

From struggletown to sorted

Over the years that baseline has required revisiting in response to major life events.

Co-habitating, migrating, marriage, and kid(s) all resulted in material changes to both how much was “enough” and where my “normal” baseline was defined.

Maintaining a healthy perspective of “normal” throughout was a major contributing factor to my becoming financially free.

Keeping up with the Joneses

Sending my son to this fancy school ran contrary to the approach that had worked so well for me. I had hoped that being surrounded by children from successful high achieving families would show him what was possible, and broaden his horizons.

Without a doubt, my son had the “poorest” father in his class. The school fees were eye-watering!

My son seemed relatively content at the school initially. Young kids are refreshingly blind to skin colour, religion, and socioeconomic status.

Unfortunately they grow out of that.

Over time he started grumbling occasionally that we didn’t have as many nice things as his friends.

He became embarrassed we took the bus to school, insisting we hopped off a couple of stops early so that nobody would see. His classmates were dropped off at the door in Mercedes and Porsches.

Parental embarrassment

Embarrassed that we took the bus to school, we hopped off a couple of stops early so that nobody would see.

How the other half live

It wasn’t until I took him to a classmate’s birthday party that I realised I had made a huge mistake in sending him to the school.

The birthday boy’s mother spent the equivalent of half a year’s average UK salary on catering and entertainment for the party. Instead of doing the traditional kids party “dump and run”, parents stayed to enjoy the amazing wine list and delicious canapés prepared by a nearby Michelin star restaurant.

An elder sibling of one of the kids complained that her father was such a bastard because he wouldn’t lend her the private jet to “summer in Como” with her school friends.

A group of fathers huddled together comparing bonuses. They earnestly debated the relative merits of upgrading their vacation homes in Barbados versus buying a new Bugatti Veyron.

The baseline for what was “normal” at this party was so different from my own as to be unrecognisable!

Just as mine baseline had been a generation earlier, my son’s perspective of what was “normal” was being framed by his peers and experiences in and around school.

Unfortunately he wasn’t learning that it was possible to be successful, earn millions, and do great things. Instead he was learning about all about the politics of greed and posturing, that appearance was more important than substance, and that money really can buy you into or out of just about anything without there being any need to work for it.

To say those were jarringly inconsistent with what he observed at home would be an understatement.

Huge mistake

In his eyes his parents were embarrassing

In his eyes his parents were embarrassingly poor, living in a small flat some distance from school in a less desirable part of town. We didn’t spend our summers in the Hamptons or winters skiing at Zermatt. We didn’t even own a car!

Fuck the Joneses!

I realised that exposing him to this grandiose perspective of “normal”, I had sabotaged his worldview.

Could he be content spending a weekend in a caravan on an Essex beach when his friends were all flying off to Marbella or St Tropez in Daddy’s jet?

Would he be happy paying for his own used Volkswagen Golf student car, when his peers received brand new BMW convertibles  for their birthday?

There were several reasons why I pulled my son out of the private school, sending him instead to an outstanding state school. Ensuring that he developed a grounded baseline of “normal” was a major one.

It took several months for his attitudes to begin to change. Initially he looked down on his new classmates, many of whom lived in council estates. After a while he came to realise they were just people, some of them nice, some of them not.

Without a doubt, my son has the “richest” father in his class. The school fees are free!

Conclusion

The education quality received at the state school exceeded that of the private school.

The state school teachers work with kids from very diverse backgrounds and very limited resources. To succeed the teachers must adjust their methods to what works for each child. At the private school if a child was struggling then the parents needed to hire a tutor to provide additional help.

My son has been fortunate to have been taught by some of the same driven style of miracle workers that I once benefited from.

After roughly a year at the state school he thanked me for pulling him out of his private school. He said he felt happier and less pressured. Best of all, he was grateful for the nice things he had that he recognised his friends did not.

That is a promising beginning for where he will define his own baseline for “normal”.

Next Steps

  • Evaluate your own baseline for what is “normal“. Is that helping or hindering you achieve your goals?
  • If you liked this post then please share it with your friends.
Disclaimer: I may receive a (very) small commission from any purchase you make via links on this website.
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