The Voluntary Life

This episode is an interview with Joel Bowman, the managing editor of The Daily Reckoning e-newsletter email and former managing editor of the Rude Awakening. After completing his degree in media communications and journalism in his home country of Australia, Joel moved to Baltimore to join the Agora Financial team. His keen interest in travel and macroeconomics first took him to New York where he regularly reported from Wall Street, and he now writes from and lives all over the world. Joel currently lives in Buenos Aires. In the interview he gives his perspective on life as an expat in the city and provides an overview of what has been happening to the economy in Argentina recently. Apologies for the technical problems with the recording: the audio cuts out very briefly intermittently throughout the interview, but it is still possible to understand the interview.

This episode covers a lot of questions I faced getting started in investing as a private investor and my own experience in tackling these questions: Why invest (i.e. why not just leave your money in a bank)? Who is going to manage your investments, an external manager or yourself? Are you going to be an active investor (e.g. analysing individual securities for value and trading more often) or a passive investor (e.g. using index funds and trading less often)? Which asset classes are you going to invest in (e.g. stocks, bonds, precious metals, cash)? How will you allocate and balance assets in your portfolio? Which individual securities are you going to select within each asset class (e.g if you decide to buy bonds, which individual bonds will you choose)? When should you start investing, within the context of your overall personal financial planning? When should you buy or sell individual assets? Will you try to time the market or will you automatically rebalance a portfolio based on an asset allocation strategy? Where should you invest? Should you have geographic diversification and if so, what kind? You can also get more information about the concept of the permanent portfolio discussed in this episode in Harry Browne's book "Fail-Safe Investing" and in many of the previous Voluntary Life podcast episodes on investing. As always regarding investment, do your own research. I am not an advisor and this isn't advice of any kind, it's just my own opinions based on my experience.

This episode is about saving money and it's relationship with freedom. Many people are trapped in a "wage slavery" lifestyle, living from month to month. Although their income rises during their career, their expenses scale correspondingly (or even lead ahead, creating debt). There are two approaches to developing the savings that allow get you out of this trap: One route is to increase earnings without increasing expenses, creating savings. The difficulty with this approach is that the higher the income, the bigger the tendency or temptation to spend more on a more comfortable lifestyle. The other approach is to decrease expenses without decreasing earnings, by focussing on minimising living expenses as much as possible. The challenge with this approach is to do so without losing income (for example, moving to a low cost location might not make it possible to keep a well paid job). Jake talks about his experience focussing on the first approach and discusses some of the benefits in terms of freedom that saving provides: Developing an emergency fund of approximately 3 months expenses reduces a huge amount of stress associated with living month to month and enables you to cope with unexpected expenses or irregular cashflow. Developing savings to cover 1 year of expenses opens up a huge degree of freedom, for example to start your own business, to leave a job if you don't like it or even to change your life in other ways such as by emigrating to another country. This podcast and blog summary contains only personal opinions, it does not constitute financial advice and I am not a financial advisor.

This episode is about the freedom that comes from getting out of debt. We live in a time when being in debt is the norm in our society. The basis of the debt culture lies in government policies (such as inflating the money supply and artificially lowering interest rates) that actively incentivise individuals to get into debt. These government policies filter through into opportunities for debt everywhere that are encouraged by mainstream culture. For example: student loans for college, credit for consumer goods,  the mainstream ideal of home ownership and the mortgage debt that goes with it. Debt becomes a way of life for most people, which can lead to rationalising it and being over-optimistic about it's impact. Ultimately debt always reduces your financial freedom. It is always restricting the freedom of action of  your future self. Jake talks about his experience of being in debt and getting out of debt. The podcast goes on to focus on the benefits of being debt free: The main benefit is in increasing your freedom of action when you are out of debt When debt is cleared it removes a constant source of worry Deciding on how to use your money can be a pleasure again and an aspect of freedom Removing debt is an aspect of self-care: it is financial self-care This podcast and blog summary contains only my personal opinions, it does not constitute financial advice and I am not a financial advisor.

This episode is a about the significant milestones along the way towards achieving financial freedom. In my opinion, reaching each of these milestones brings you closer to being financially free and it is useful to take a step back and consider what the steps along the way of your journey will be. Some milestones to consider are suggested: Financial independence or "paying your own way", whereby you are sustaining yourself from your job or work income on a month to month basis. You are not living off parents, not living from significant subsidies from your family, not accumulating student debt and not accumulating credit card debt. It's important to note role how going to college significantly delays reaching this milestone and how many people do not achieve this milestone until they are in their 30s or later. Achieving positive net worth, whereby your assets are greater than your liabilities. This is often what people mean when they talk about "getting out of debt" (although that is not exactly the same). It is important to be aware that consumer credit and mortgate debt can significantly hinder or delay you reaching this goal. Making your first investment, for example by purchasing an income producing asset like shares or bonds.  The key distinction is that this is not just money you haven't used yet which you are putting aside until  you spend it, it is money you do not intend to ever spend. You are putting this money to work for you creating income. Although a lot of people consider purchasing a house with a mortgage as their first big investment, a property for your own use is really a consumption item. Net worth surpasses annual expenses- in other words, your savings (assets) could keep you going for 1 year if you needed to. This means you have a significant safety buffer, but if you did have to use your savings it would mean that you consume your capital and you would be back to square 1. Annual passive investment income becomes larger than your annual expenses: this is real financial freedom, as  you can now live off your passive income. For this to be sustainable it needs to take into account the effect of inflation, taxes etc. However, once you can sustainably live from your passive income, you are financially free. This podcast and blog summary contains only my personal opinions, it does not constitute financial advice and I am not a financial advisor.

This episode is about the entrepreneurial mindset. What kind of thinking do you need to be an entrepreneur? More importantly, how will doing entrepreneurship change the way that you think? Jake talks about some key aspects of the entrepreneurial mentality including: cultivating optimism and perseverance using the trial and error method acceptance of failure and the possibility of failure a deep rooted focus on sales a results-oriented outlook thrift and developing a reluctance to spend time or money without demonstrated good value being market oriented and having a tendency to look for voluntary solutions in all of life

This episode is about the issue of shared ownership in business. It covers key questions that anyone considering going into business with others will face, including: Should you go into business with others or be a sole owner-entrepreneur? If you do go into business with others, how will you split ownership? How will you ensure that the owners are all incentivised to add value to the business? In other words, how will you avoid the free-rider problem? How are you going to make decisions together efficiently and avoid deadlock? What will you do if the owners no longer want to work together, or one of them wants out? Jake provides his own experience in facing these questions and summarises some of the options available to consider. It's up to you to decide what the best choices are for your own business. This podcast will help you make these decisions.

This episode is an interview with Craig Rowland, who is the co-author of a new book called The Permanent Portfolio: Harry Browne's Long-Term Investment Strategy. In the episode we discuss the Permanent Portfolio strategy and many of the insights from Craig's new book. We talk about the way in which the Permanent Portfolio approach differs from other investment strategies including: The choice of being an independent investor as opposed to entrusting your money to someone else Achieving diversification in investing, as opposed to the Warren Buffet quote of "putting all your eggs in one basket and watching the basket very closely". Using an asset allocation strategy based on identifying how assets react to each of the possible economic conditions, as opposed to asset allocation based on correlation studies. The problems with trying to time the market in investing The benefits of a passive investing approach that rebalances according to a strategy of maintaining diversification. We also talk about some particular practical issues relating to the portfolio including Creating your own portfolio versus using the Permanent Portfolio fund (and differences in the fund's approach to the classic PP strategy) The growth of passive indexing strategies in stocks and how this aspect of the Permanent Portfolio approach is now more mainstream Craig's thoughts on how best to own gold bullion and the tradeoff between convenience and safety. How the permanent portfolio can help independent investors in the current context of artificially low interest rates and Quantitative Easing. You can also get more information about the concept of the permanent portfolio in Harry Browne's book "Fail-Safe Investing" and in many of the previous Voluntary Life podcast episodes on investing. Neither Craig nor Jake are financial advisors or dealers of any kind and this podcast only expresses our opinions.

This episode discusses ways in which you can overcome the limitations of the country in which you happen to have been born and, as much as possible, live with the whole of planet earth as your homeland. The topics covered include: Travelling and seeing the world, to help you make conscious choices about where you want to spend your life Taking the opportunity to live abroad for extended periods of time so that you can experience life in different parts of the world Learning another language and giving yourself different tools to think with Internationalising some of your assets, as geo-political diversification in case of catastrophic events such as a war. If you have the opportunity, taking advantage of the chance to obtain dual nationality to further extend your flexibility in terms of where you can work or live. 

This episode is about the most advanced democracy on earth. It is about the most effective system we have for letting everyone have their say, working together to change society in a non-violent way.... Oh and it's probably not what you think. Show Notes: Ludwig Von Mises' "The Anti-capitalistic Mentality" Churchill's quote on democracy Karl Popper's views on democracy can be found in The Open Society and Its Enemies