The Voluntary Life

Mike talks about how he saved his way to financial freedom, without a college degree or a high-powered job. He shares his thoughts on how to be conscious about your relationship with money and explains some of the methods for saving your way to wealth that work for him. As always, do your own research- we're not financial advisors and this is just our opinions.

Podcast Episode

Some thoughts on what it is that frightens people about the free market, based on my own experience. The fear of the market is often expressed in very abstract arguments about whether free markets would really work (if we had them) and what their relationship is to poverty etc. However, at an individual level, I believe people fear markets because of how vulnerable you can feel when taking part in voluntary exchange:

• Trade on the free market involves selling to others. This opens you up to the potential for rejection and failure, which can be scary.
• The division of labour involves choosing to specialise in some skill or area of work that might one day become obsolete, which can feel vulnerable. It also involves taking responsibility for specific outcomes- the buck stops with you- which challenges any defences against the fear of responsibility.
• Respect for private property rights involves looking after your stuff and respecting other people's stuff. This opens you up to the potential for feelings of humiliation if you don't understand how or why others have made a success of selling when you have not yet been able to.

It's understandable to fear the free market. It can be scary to launch yourself into entrepreneurship, as well as being wonderful. However, some people project their personal fears of the market into abstract theories: they blame the market itself for the world's ills. That approach will prevent you from overcoming your fears and limit your potential.

This episode is an interview with Edwin, an expat entrepreneur in Chile. Edwin talks about his experience on an entrepreneurship visa in Chile and shares his thoughts about the pros and cons of Chile as a place to live and to create a startup in. He discusses other things to consider regarding coming to Chile as an entrepreneur, including his views on the Start-up Chile grant, some comparisons of cost of living and considerations on quality of life in Chile as an expat. You can contact Edwin at [email protected].

An interview with Eduardo Marty, who founded Junior Achievement in Argentina and in many other Latin American countries. Junior Achievement is a charity that teaches entrepreneurship to children and young adults. Eduardo has also held academic posts as professor at the University Francisco Marroquín, Guatemala, and the University of Buenos Aires. He is one of the few academics who is truly passionate about the need for young people to learn the practical skills of entrepreneurship. As he says in the interview; "the problem with intellectuals is that they are always running out of money". In this entertaining interview, he discusses his experiences and his adventures in a life dedicated to helping kids realise their entrepreneurial potential, including a narrow escape from being imprisoned in Cuba when he tried to establish Junior Achievement there.

This episode is about gaining freedom from intellectual heroes. I share some thoughts about how to extract the best ideas from thinkers that you admire, without relying on someone else to think for you. I talk about some ways I have found for gaining intellectual independence, including:

• Taking apart the "package deal" of a set of new ideas to use the ones that work and discard the ones that don't.
• Learning to trust your own judgement: if an idea doesn't make sense to you, it's probably because the idea is incoherent.
• Starting from the assumption that "everything is a remix", even if an idea appears to be very original or is presented as very new.

Ultimately, intellectual independence is about giving up the emotional search for leaders. It is a part of growing up and being an adult to stop looking for intellectual heroes and to treat every thinker as someone who puts their pants on one leg at a time, just like you and me. A really important aspect of intellectual freedom is to give up deference to our heroes- to take what we can from their ideas and own those ideas for ourselves, so that we truly think for ourselves. That's what free people do: they think for themselves.

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.