Photos of the Week: Life in 1950s Seoul

Sometimes looking at a photo or artwork or listening to music, you can simply appreciate and grasp snippets of pure joy. Perhaps that’s what they call self-actualization. Best things in life are sometimes the simple things and you don’t need financial independence to start enjoying it.

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Photos taken by Han Young-soo of life in Seoul in the 1950s after the war.

‘The war had taken away many things,’ Youngsoo wrote. ‘Not only had it mercilessly trampled down on our beloved families and neighbours, but also their happiness, hope, and furthermore humanity itself. As if that wasn’t enough, by the end it had utterly destroyed everything on the face of the earth leaving behind ruins, despair, famine and sorrow’

Wars are indeed bad. I never been through one and I count myself extremely fortunate. Hope it stays that way.

Check out his other photos here.

Current exhibition at International Centre of Photography in Jersey City, New York till June 2017.

-FIREplanter

How to Be Your Own Independent Financial Advisor

–The Series of Questions you have to ask yourself to assess your own financial health and plan for your financial goals!!–

I frequently trawl through the excellent forum over at MSE to read through other people’s experience and circumstances and questions that they face on a daily basis. Very often, various questions of the nature ‘What should I do with my money’ will come up which I feel that everyone who has a reasonable income will ask at some point or another…

Where to invest £500 per month

Savings for rainy day / retirement / happiness

Where To Save £30k

Here is how I might approach this question..

  1. What are your life goals?
    • Habit 2# of the 7 Habits by Stephen Covey: Begin with the end in mind. To be effective with your money, you need to know what you want to achieve in life. Is it to retire at 65/60/55? Do you want to live in a bungalow/terrence/mansion? Do you want to drive a ferrari/BMW or a nifty Fiesta? How many kids are you going to have, how many holidays are you going to have in a year etc… You get the picture.
    • You need to have a vision of what is going to happen in your future to know how to effectively manage your money and not put your money in inapproprate risky investments that might not provide a reliable return.
    • A different version to this question is ‘What do you need in your life to make yourself happy?‘ because the only logical pursuit in life is happiness.
  2. What is your cashflow like on a monthly basis/yearly basis?
    • Monthly Earnings (Income) vs Expenses (Outgoings)
    • There are various ways to monitor this; ie. budgeting, spreadsheets, tracking all spending on one card
    • I do this very simplistically by tracking my monthly ‘Cash Worth‘ and tracking on Net increase/decrease of Cash Worth on a monthly basis. I can also figure out my savings rate from this.
  3. How much in an ‘Emergency’ Cash fund do you have?
    • The Emergency cash fund should be vital to everyone’s financial planning. The general rule is to have 6 months – 1 years of expenses in cash, preferably in highly accessible top interest paying savings/current accounts.
    • This cash buffer will allow you some leeway to take some more significant risks in investing and more importantly provide some mental relief that if things in life go south for you (eg losing your job, getting ill/accidents), there is some form of temporary self-insurance that buy you time to sort things out.
    • Imagine the alternative of not having a emergency fund and you get redundant. Most people will get into credit card debts/loans to pay for rent, utility bills and Debts are costly to maintain. Or if you don’t have access to those facilities, the cold flat or cold streets might just be your new reality.
  4. How much risk are you willing to take in investing?
    • Now how long is a piece of string? My own take on this is you wouldn’t know the answer to this question until you have taken on the risk yourself and learn the experience of holding a risky investment before learning about your own risk-tolerance. This is where the experience of an Independent Financial Adviser might come in useful or some input from an experienced investor.
    • Firstly, read and educate yourself about the various asset classes and their risk profiles and what role they play in various market cycles and various portfolio setups.
    • Start investing by regular drip feeding into a tax-advantaged account and choosing diversified passive funds or globally diversified multi-asset funds. You learn more about your attitudes to investing as you go along and you can make more informed choices later on when you have some experience. Life is a process.
    • Read this investing ultimate collection by Jacob from Poweroverlife for an introduction to investing.
  5. What are the Tax-advantaged accounts available to you?
    • If you pay 20% tax,
      • Every £100 you make, the Big G takes £20 OR
      • For every 5 day working week, you are working your ass off for the Big G 1 day per week, ie You are working for someone else.
    • If you pay 40% tax,
      • Every £100 you make, the Big G takes £40 OR
      • For every 5 day working week, you are working your ass off for the Big G 2 days per week
    • As noted above, what are you waiting for??? Start using all legally available tax shelters!
    • Have you subscribed to the yearly ISA limits for Stocks & Shares? (Cash ISAs are not too worthwhile at present of writing this article)
    • If you are going to be a first time buyer in the future, have you signed up for the Help to Buy ISA or plan for the new Lifetime ISA come april?
    • Are you paying into a pension scheme? What are the rules of the pension scheme? What benefits do you get from the scheme?
    • If you are in other countries, learn what are your local legislation, laws regarding this. I believe US has IRA, Roth IRAs, 401Ks etc. Basically educate yourself of how the system you are in works.
  6. Mortgages, Loans, Credit Cards, Mobile/Broadband contracts, etc

Okay this is an endless questionaire that most questions you probably would not have the answer to immediately. That is fine. But we need to start asking ourselves the hard questions to make ourselves being accountable to our future. Only then can we focus on the 20% of important decisions that will result in 80% of the results according to Pareto’s principle.

I have never met with a IFA, but I believe the above is what a good IFA should do for a client. In reality, I doubt that’s what will happen. I think IFAs still have a role to play especially to work round a increasing complicated system of financial/tax/pensions bureaucracy and also gearing your investments appropriately  to your goals and risk tolerance. How does your IFA help you in your personal finance and what other tough questions you had to ask yourself in your personal finance journey??

Start asking the tough questions and start learning about yourself as you try to answer them. Baby steps.

Good Luck!

-Fireplanter