How to Prepare for Upcoming Stagflation

Recently markets have been shook by rising interest rates in the US. Interest rates around the world are somewhat correlated because of globalization. Australian banks often borrow from overseas (even from the US), so if interest rates rise overseas, this affects the cost that Australian banks pay to borrow money. The ASX200 chart below shows the correction in recent weeks.

the beginning of an xjo crash september 2018
Source: Bloomberg

How may the stock market crash?

Even though it is not wise to try to predict markets, my hunch is that a very large correction is near, but it may be delayed until around 2020. During the 2009 GFC, the threat was deflation i.e. prices going down, which means prices of e.g. property and shares went down as well. The solution to this was unprecedented money printing around the world. The printed money was used to purchase government bonds (in the US) or even stocks or ETFs directly (in Japan). When there is deflation, money printing is an easy fix because money printing puts more money into the economy, generating inflation, which cancels out deflation.

However, this time the fear is that when the market crashes, it is not a deflationary crash. Rather, we have a downturn while there is inflation at the same time. Why would there be inflation at the same time as a downturn? For example, take the US-China trade war. If US companies and consumers cannot import cheap goods from overseas, consumers and US businesses face higher costs. Higher costs cut into margins, which reduce profits, which reduce stock prices. If the trade wars heat up, US equities should decline futher as inflation increases. Usually when there is inflation, the central bank can combat inflation by raising interest rates. However, US businesses are already highly indebted. If the US central bank (the Federal Reserve) increases interest rates to combat inflation, businesses face higher interest expenses, which cuts into their profit margins and reduces stock price.

This dilemma that the Fed faces, in my opinion, will present a problem in the future and may usher in a 1970s-style stagflationary recession.

What can be done to protect against a downturn?

In a previous post, I spoke about the importance of the “age in bonds” rule. The “age in bonds” rule is just a guide. It doesn’t literally mean you must hold your age in bonds (e.g. if you are 30 then you hold 30% bonds).  “Age in bonds” is a rule of thumb. The complication comes from the fact that some bonds are risky (e.g. emerging market bonds, corporate bonds, etc) whereas some shares are arguably safe (e.g. utilities, gold mining stocks, etc). The basic principle behind “age in bonds” is to reduce risk or volatility in your portfolio as you are nearing retirement so that you are not exposed to e.g. a 50% decline in your wealth just before you retire.

“My personal, non-retirement accounts are about 80 percent bonds and 20 percent stocks, reflecting my old rule of thumb that your bond allocation should roughly equal your age. It’s spread across different bond funds, like the Vanguard Intermediate-Term Tax-Exempt (VWITX). I’m a pretty conservative guy.”

~Jack Bogle, Vanguard Group Founder

Given that I live off dividends, consider myself somewhat semi-retired, and don’t really have a fixed retirement date, I feel it is wise for me to reduce risk in my portfolio much moreso than the average person. For the average person in their 20s or 30s, they may feel that they don’t need to worry about a huge market correction because they can simply make up for the lost wealth by working longer. However, I don’t like the idea of being forced to work when I don’t need to.

Furthermore, even though many people feel as if they can withstand a huge market crash, if a 70% decline eventually does occurs and the reality hits that they have lost hundreds of thousands of dollars without any guarantee that the market will recover in the long run (remember that in the recovery may be many decades away and may be in the next century), I feel that many people would succumb to panic.

Which ETFs perform best in a bear market?

During the recent market correction, I was observing the reaction of different ETFs. What I found interesting is that MNRS, a gold mining ETF, shot up as the XJO went down. See the Bloomberg chart below, which shows MNRS (in yellow) shooting up as the XJO (in black) heads down.

xjo MNRS HBRD QAU and BOND during september 2018 correction
Source: Bloomberg

The large increase in gold mining stocks contrasts with the price of gold, which is represented above by the QAU ETF (in red), which holds physical gold. This makes sense since holding pure gold only provides you with access to gold whereas gold miners usually hold debt, which means they are leveraged to gold. The blue and aqua above show hybrid and bond ETFs, which both remain very stable.

Looking at the last six months, we can see how these ETFs perform not only during a bear market but also during a bull market. We can see that as the XJO goes up, the gold mining ETF and physical gold ETFs go down, which is not ideal. The bond and hybrid ETFs are stable as expected.

Gold miners and bonds vs stocks
Source: Bloomberg

What does this tell us? If you were shaken up by the recent market correction and feel that more risk is coming, a quick way to reduce risk in your portfolio is to buy physical gold and gold mining ETFs. This can be ideal if you don’t want sell shares and trigger capital gains tax. Gold miners are also legitimate companies in their own right. However, the problem with physical gold is that it pays zero passive income, and gold miners historically pay little in dividends. In contrast, the government bond ETF (BOND) pays about 2% in yield whereas the bank hybrid ETF (HBRD) pays about 3% to 4% in monthly distributions, so if you feel you have far too much risk in your portfolio, you can correct it fast by buying gold, but once you have derisked your portfolio sufficiently but still want to tread cautiously, you can take advantage of passive income with bond and hybrids, as well as some high dividend ETFs as well (e.g. IHD, VHY, EINC, etc).

The Simplicity of Living off Dividends

Some people have made comments that many of my posts on this blog are not finance related, so I will make an effort to post more about ETFs and other financial topics in the future. Perhaps the reason why there are few finance topics on this blog is because living off dividends is such a simple technique that I rarely think too much about finance. The whole point of making money is so you do not need to think about money. You do not need to stress about making ends meet when you have few obligations and multiple streams of dividends flowing into your bank account.

Budgeting, tracking net worth, trading, and rebalancing are not worth it

While most people maintain spreadsheets to track expenses and net worth, living off dividends only requires you to invest all your work salary and spend your dividends. If you end up spending more than dividend income, simply “borrow from yourself” by maintaining a few thousand dollars in cash in a separate savings account that you borrow from but pay back with dividend income. Either use a spreadsheet to keep track of how much you own to yourself or ensure that this savings account has a fixed amount e.g. you have $2000 in it, run out of dividends to spend, so you “borrow” $500 to have a balance of $1500 and then when your next dividend payment comes in, put $500 into this savings account to top it back up to $2000.

I don’t recommend tracking your expenses or tracking your net worth because it is time consuming and because the information you get out of it is not valuable. If you track expenses, you can see where all your spending goes, but what matters is not what you spend your money on but how much you spend. If you spend such that your expenses are equal to dividend income, this ensures you don’t spend too much, and one of the benefits of living off dividends is that dividends increase over time as you invest more and as companies become more profitable, so there is a gradual increase in standard of living, which I think helps overcome the feeling of deprivation many feel when they are frugal. If you only spend e.g. $10,000 per year for the rest of your life, you are stuck on that level and do not feel as if you are growing or making progress, but if you live off dividends and your dividends grow, you feel a sense of personal growth. As for tracking net worth, when you diversify across multiple areas (e.g. retirement accounts, managed funds, ETFs, cryptocurrency, etc) then it becomes a huge burden to log in to each of these accounts to check the balance. What matters to financial independence is not net worth per se but passive income. You live off passive income, not net worth, and if you live off passive income then you’ll be able to assess automatically whether you have enough based on whether you are satisfied or not with your standard of living.

Because living off dividends is simple, there are only two things you need to consider: how to spend your dividends and what to invest your work salary in. Most people have no issue with figuring out how to spend their money (e.g. holidays, books, smartphones, and coffee). What to invest in is more complicated, and generally I recommend buying broad and diversified ETFs with a slightly heavier allocation towards high dividend paying ETFs (or LICs). However, more important than what you invest in, in my opinion, is the “buy and hold” mentality. You should buy with the intention of holding these investments for a long time, if not forever. I also do not bother with rebalancing. For example, in recent years the Australian stock market has underperformed whereas foreign stocks (particularly US stocks) have done very well. There are those who rebalance by selling off US stocks to buy Australia stocks to maintain a certain amount to certain countries. This is far more effort than necessary, adds administrative burden by triggering capital gains tax, and does not add much value because if you feel you have too little Australian stock, rather than sell US stock, you can simply buy more Australian stocks. For example, in recent years, as US equities has gone up, I have purchased more high-dividend paying Australian stocks and ETFs e.g. CBA and IHD.

Age in VDCO

For most people who ask, I recommend Vanguard’s diversified ETFs. You cannot beat the simplicity of these ETFs. Whatever your age is, hold that amount in VDCO and the rest you hold in VDHG. For example, if you’re 30 then hold 30% VDCO and 70% VDHG. These Vanguard diversified ETFs diversify across just about all asset classes (e.g. Australian shares, international shares, emerging markets, small caps, property, bonds, etc) so you don’t need to worry about mixing and matching. The reason why you hold your age in VDCO is to broadly follow the “age in bonds” rule, which is insurance against retiring just after a huge market crash. There are many people who are anti-bond and claim that they are a drag on performance, that stocks always go up on the long run, etc, but this is not true. In fact, this is dangerous advice. There is no guarantee that stocks go up in the long run as the value of stocks merely represent company profits and there is no guarantee that company profits will go up in the long run. Even if stocks do go up in the long run, there are huge market crash (e.g. 50% decline) that emerge, not just normal business cycles but debt supercycles that can take centuries to materialize. You do not want to be in the position of being in 100% equities and then losing 50% just before you retire as this can really set you back and impact on the quality of your retirement. Broadly following “age in bonds” (government bonds, specifically) is insurance against such a scenario. In fact, of all the rules of personal finance, “age in bonds” is, in my opinion, the most important. You can pretty much invest in any exotic high-risk asset class (e.g. emerging markets, tech stocks, robotics ETFs, cryptocurrency, etc) but if you own your age in government bonds, you are safe.

When markets go up, it is very easy to rationalize why defensive asset classes are poor quality. It is when markets go up that people easily covert to the cult of equity, but when there is a market crash or when there is a prolonged economic depression that lasts many decades or centures, many will understand and appreciate the wisdom of “age in bonds.” The reality is that when markets are booming, it’s easy to convince yourself why 100% equities or high leverage is a good idea, and the opposite is true when there is a market crash. It goes back to Warren Buffet’s quote about being fearful when others are greedy but also thinking about Ray Dalio’s idea that you must stress test your ideas because you are never be too sure in yourself  because it is easy to be moved by your emotions as well as other psychological biases.

 

 

Using Netflix for Ad-Free Background Music for Study or Work

I pay $14 per month to subscribe to Netflix, which is somewhat hypocritical as I generally try to avoid any ongoing recurring expenses because I feel that you are less likely to put scrutiny on your expenses when it is ongoing and recurring. If something is on autopilot, it is human nature to forget it. This is why “paying yourself first” and automating investing is a powerful tool. For example, if $1000 is deducted from your pay automatically and invested, you will save without effort. However, this principle works in the opposite direction, that is, if you automated your spending, you are more likely to spend more than you would otherwise.

Even though I apply this principle to e.g. phone plans (preferring instead to buy phones outright and use prepaid arrangements) I have made the exception with Netflix. There are many movies and series on Netflix that I enjoy, and if you stay home and watch Netflix, I rationalize that I am not going out and wasting money, and so Netflix is financially prudent.

Of course, you can watch videos for free e.g. YouTube, but over time I have noticed that free products have a downside in that even though you are not paying for the product, you are paying via watching advertising, and because advertising produces little revenue, the creators of free content don’t have an incentive to produce good art, and so much of the free content on the internet is simply people using it as an outlet to unload negative emotions (read the comments of most YouTube videos and you’ll understand) and being exposed to this negativity cannot be good for it. It makes sense to spend a little bit of money to shield yourself from the depravity of humanity.

Over time I have found that there are is such a variety of content on Netflix. I usually dedicate Friday or Saturday nights for Netflix, and during these times I’d watch something serious such as Ozark or Black Mirror. However, when I am eating dinner, I prefer to watch something that is not so heavy, that doesn’t require much concentration. There are many trashy docuseries that provide this e.g. Drug Lords or even Magic for Humans. However, often when I am browsing the internet, working at home, or even writing this right now, I want to listen to background music. The problem with using e.g. YouTube or Spotify is that these have ads, and having ads annoy you while you’re trying to relax is infuriating. This is why I have, of time, found various videos on Netflix that provide ad-free background music. Not only do these videos pay nice music but they also tend to have very beautiful visuals as well.

Note that many of these videos play not only music but e.g. the Slow TV videos may play long videos of train rides or firewood cutting. There are also many videos above that depict a fireplace in case you want to turn your television into a virtual fireplace without any of the mess and smoke.

Please also note that the list above applies to the Australian Netflix, and Netflix lists in other countries may vary.

What if I wanted to play specific music e.g. ambient music?

Even though I love to use Netflix as background music, there are some genres of music that I like e.g. dark ambient music and new age ambient music. These are not accessible via Netflix but they are available all over YouTube. In fact, just about all music is available on YouTube. The problem with YouTube, of course, is the advertising. However, there is an easy way to bypass this, which is to use Listen on Repeat.

Listen on Repeat allows you to set up playlists and fill them with your favourite YouTube music. Even though there is no audio advertising, there are many banner ads on the site, which clutters the sight greatly and slows it down, but at least it doesn’t ruin your music while you’re listening to it.

What if you are at work?

If I am at work and want to listen to music using my earphones, I prefer not to use Netflix, YouTube or Listen on Repeat because these sites are data intensive. Because these sites play not just music but also visuals, a considerable amount of data is used, and using a considerable amount of data at work for music may not be wise.

Thankfully there exists Public Domain Radio, which plays free public domain classical and jazz music. Because this music is old and in the public domain, there is no need to pay anyone royalties. Everything is ad-free and the site is very clean and minimalist. Beacuse it only play audio, there is little data used.

Photo by freestocks.org on Unsplash

 

Top 10 ASX ETFs or LICs

See below a chart providing a ranking of the best income-producing ETFs or LICs on the ASX. The chart below updates in real time and estimates future income returns (including franking credits) based on historic returns. Past performance does not guarantee future performance. The chart below is not exhaustive and does not include all ETFs and LICs.

Buy a House vs Invest in ETFs

This is a common dilemma. You are saying up money and want to know if it is better to buy a house and live in it or invest in ETFs and rent (also known as rentvesting).  Personally I would invest in ETFs. The reason why is because the key difference between the two options is you pay far higher taxes when you buy a house.

For example, if you buy a house then you’re need to pay stamp duty. On a $1 million house that is roughly $57k in stamp duty, which will reduce your net worth. Assuming you save up a $200k deposit, then right after you buy your house your net worth will be $143k whereas if you simply keep your money in ETFs you’d still be at 200k.

However, an argument can be made that if you buy a house, because you have borrowed money to buy $1m worth of asset then you have leveraged exposure, which moves you up the risk-reward curve (also known as the efficient frontier). If you save $200k and invest it in ETFs, if there is a 10% increase, you have made $20k. However, if you have purchased a $1m house and it goes up 10% then you have made $200k. However, what is misleading about this comparison is that it compares apples with oranges, that is, it is comparing leveraged real estate vs unleveraged ETFs. To compare apples with apples, you need to compare leveraged real estate vs leveraged ETFs. Leverage does not increase returns without any consequences. Leverage increases risk, which may result in higher returns.

You can move up the risk-reward curve with ETFs simply by reallocating a portion of your ETFs into internally leveraged ETFs e.g. GEAR or GGUS. Another option is to invest in higher risk niche ETFs (e.g. ROBO or TECH) to move up the risk-reward curve. The benefit of buying higher risk ETFs is that there are no mandatory monthly mortgage payments or, if you take out a margin loan, margin calls. The effect of leverage is handled by the fund itself and there is no obligation for you to pay anything.

Gearing into equities is expensive before tax but cheap after tax

Another way to move up the risk-reward curve is to take out a margin loan and buy ETFs with it. The downside to taking out a margin loan is higher interest rate compared to home loans. According to Canstar, the cheapest margin loan rate is 5.20% from Westpac whereas the cheapest home loan it is 3.49% from Reduce Home Loans. However, if you buy a home to live in, the mortgage debt is not tax deductible, but the margin loan debt is tax deductible, i.e. you can negatively gear into ETFs by taking out a margin loan, which effectively lowers your interest rate by your margin tax rate. Assuming you earn between $87k and $180k and face a 37% margin tax rate then rather than pay 5.20% interest rate you are effectively paying 3.27% which is in fact lower than the home loan. If you have chosen to leverage using internally geared ETFs, because the fund manager has high bargaining power, he or she is able to get low interest rates anyway. According to the GEAR and GGUS brochure from Betashares, “the fund uses its capacity as a wholesale investor to borrow at significantly lower interest rates than those available directly to individual investors.”

Another advantage of investing shares or ETFs is that Australian shares often pay dividends with attached franking credits (e.g FDIV pays 100% franked dividends), which lowers you tax burden even further.

Capital gains tax has little impact

Even though living in a home does not make you eligible for negative gearing, you are eligible for capital gains tax exemption. However, capital gains tax is easy to avoid if you buy a hold shares or ETFs. Because capital gains tax is triggered with you sell and because capital gains tax is charged at your marginal tax rate, simply buy and hold and wait until you are retired. When you are retired, you will earn no salary, so your income will drop and your salary will likely face lower income tax, perhaps even being within the tax free threshold. You then sell off shares or ETFs bit by bit when you’re retired, ensuring that you pay little or no CGT.

Low rental yields vs high dividend yields

Now that we have established that ETFs have lower borrwing costs than real estate due to the impact of negative gearing, stamp duty avoidance, and franking credits, a huge argument for investing in ETFs rather than real estate is the huge difference between rental yields and dividend yields. As of right now, a three-bedroom unit in Brunswick East costs $1.3m and has rental yield of 1.42% i.e. around $18.5k in rent per year. However, as of right now, Commonwealth Bank shares are paying gross dividend yield of 8.6%. This means that if you have $1.3m, then rather than buying the Brunswick East unit and living in it, you can simply take out a margin loan, invest $1.3m all in CBA, and then receive $110k in dividend income per year. After income tax and franking credits, this will be around $90k. After paying rent of $18.5k you have roughly $70k per year extra simply by using ETFs.

Not only do you get $70k per year extra thanks to the extreme spread between rental and dividend yields, but the benefits for ETFs are magnified even further because of lower post-tax borrowing costs.

Using one Brunswick East unit vs one high dividend paying stock (CBA) is an extreme example. Not all stocks are the same and not all residential real estate is the same. However, the general trend is indeed that rental yields in Australia are low and dividend yields on Australian stock are high. If you bring up a list of all properties on the BrickX fractional property platform and sort by rental yield, the highest yield property, a one-bedroom unit in Enmore NSW only delivers a rental yield of 2.76% with the average rental yield about 1.5%. However, a broad ASX200 ETF such as STW provides gross dividend yield of 5%.

 

 

 

“Act as if You will be Fired Tomorrow” – the Impact of Capitalism on Family, Career, Society, and Trust

In the last few months I have been really busy. A lot of my work is mainly stakeholder management and project management. It can be very stressful but at the same time it can be rewarding because you produce something very tangible at the end.

The routine of work sometimes depresses me because it feels meaningless. The financial year is over, so I will need to prepare my tax return soon. This has its upsides because I get to see how much passive income I have received. Last year I made about A$20k in passive income, which works out to around A$1666 per month (US$1200 per month). (According to most digital nomads, passive income of US$1000 per month is enough to retire in Chiang Mai.) However, I don’t feel that US$1k per month is enough. Now that I have reached this milestone, I feel more secure in my job because, if I were fired the next day, I could simply fly to Chiang Mai and retire. Approximately two years into my job, there was a large restructure of the organisation. I saw colleagues being fired and legally abused. This experience taught me at an early age that the job you have (even a government job) is precarious and not secure. It was devastating seeing colleagues with family responsibilities and large mortgages being fired. In my opinion, this experience, coupled with witnessing the divorce of my parents, have shaped me greatly. These were hard moments but I got through these moments stronger, and thankfully none of these incidents affected me. They affected others, but because I witnessed these incidents, I was able to learn from them. The key lesson is the importance of acting as if you will be fired the next day. Whenever I walk into the office, I act as if I will be fired. I do not take my job for granted. I structure my life as if I will be fired and live accordingly. If I am not fired and make money, that’s a bonus. 

Marriage and career are similar in that, if you don’t handle them correctly, you will be in a position of dependency. My mother is a traditional woman. She cooked and cleaned and tended to the household. She was loyal. However, my father cheated on her. Many people ask me what I think about the incident and what I will do, almost expecting me to disown or become angry at my father. But I was too numb to really do anything. When I really think about, even though my father cheated with another woman, I begin to realise that my mother shares some blame because she made herself dependent on my father. She thought she was doing the right thing. Traditionalism seems like a good idea. Most people, when they are unsure of what to do, do what has always been done, which is the allure of conservatism. It provides an easy default answer. The problem is that what has been done in the past does not always work, especially when the world today is very different to the world centuries ago. Today we live in a highly capitalist individualistic society. As Margeret Thatcher said, “There is no such thing as society: there are individual men and women, and there are families.”

quote-there-is-no-such-thing-as-society-there-are-individual-men-and-women-and-there-are-families-margaret-thatcher-29-25-01

However, Ms Thatcher was wrong. The quote should be: “There is no such thing as society or family: there are individual men and women.” Society is just an aggregation of individuals, and so is a family. A family is simply a mini-society. Thatcher was a political conservative and as such felt compelled to accept capitalist ideology without understanding that capitalism and traditional family values are incompatible. Under a capitalist system, it is each man for himself, and family is an expense and liability. This explains why, as countries become more and more economically developed, family structure changes from extended family to nuclear family and now the nuclear family is breaking up into pure individualism. Under pure communism, the community, country, or people is the family. The nation is the family. However, as market capitalism is introduced, this family breaks down gradually. The next phase of capitalism will be technocapitalism, which will make the world far more individualistic. Whenever I see families, the children are on their smartphones, disengaged. In fact, often the parents are on their smartphones as well. Everyone has separate lives. Everyone is an individual, and this individualism is enhanced by technology.

So while family was important in the past, those days are over, and we must adapt to the changing times. The same applies to career. In the past, it was normal to have a job for life, but such an idea goes against free market capitalism because businesses should have the freedom to hire talent that benefits them, and so under pure capitalism you should only be hired insofar as you are profitable and if you grow older and your productivity deteriorates, the ideology of capitalism would state that you should be fired unless your experience and wisdom compensates sufficiently. More rights for businesses to fire workers as well as more private sector and contestability principles being applied to government jobs has made jobs more precarious over time. The idea of an employer being almost like a family is starting to diminish under the weight of individualism.

As such, the best approach is not to be suckered by the delusion of the sacredness of collectivist fantasies such as family, nation, or organisation. You are just an individual. You are expendable. You may be divorced, fired, or betrayed at any moment. You must expect that and you must prepare for it.

The solution is as follows:

  1. live a minimalist lifestyle in opposition to consumerism
  2. minimise all obligations, not just financial obligation (e.g. debt) but also non-financial obligation (e.g. social norms, obligations to family and friends, etc)
  3. diversify your investment portfolio
  4. live off passive income.

Ultimately, it comes down to trust or lack of trust in others. These recommendations address the risk of trusting in others. If you live a minimalist lifestyle, your distrust is in business whom you believe will try to profit off your impulsive desires. If you minimise debt, you do not trust that your the source of income to pay the debt will continue forever. If you keep people at arms distance, you do so because because you recognise that anyone can betray you at any moment for their personal gain. You diversify your investments because you cannot trust any one investment to perform well. You live off passive income because you cannot trust your job to provide for you, and you cannot trust your body to always be young and agile enough to provide value to an employer.

In an individualistic world, the only person you can trust is yourself, so you structure your life so that you never need to trust anyone.

Benevolent Sexism

In my free time, I often read old blog posts to remind myself how much I hated my job in the past, but things have changed now. When you endure the pain of work, often things change. Workers around you change. People move on. Suddenly I am surrounded by better workers and suddenly I enjoy my job. However, just as things can change for the better at work so too things can change for the worse, which is why I live off dividends and minimise obligations. I live as if employment termination is imminent.

Something I have noticed is that there are many powerful women in my organisation and that the line between me and the man in charge of the organisation is mostly filled with women. I may have had an issue with this earlier, but I’ve had a change of heart, and I don’t mind women occupying positions of power in society. I find I don’t mind treating women better than men. I open doors for them and even walk with them through dark alleys to protect them. I wouldn’t call myself a feminist because feminism implies equality. I now believe in benevolent sexism. Of course, when I behave like this around women, I’ve had men tell me that women won’t love me because I am nice to them. These men are typically married and feel as if they can teach me a thing or two because I am single and therefore must be desperate to do whatever I can to attract women. Their great value-add is that women do not love nice guys. They tell me this as if it were such a huge revelation, a secret that only the smartest men know. According to these people, I need to display more dominance if I want to be loved. I need to rough women up and put them in their place. They are begging to be dominated by powerful men. To be honest, it is annoying when people impart this advice on me because clearly they look down upon me as if I am inferior, and the solution to my problem, according to them, is to spend more time trying to conform or do whatever is necessary to impress others. What ever happened to just being yourself?

Nevertheless, I do want a girlfriend. However, I am content being single, and I am prepared to be single forever. I suppose I am selfish because I do want a girlfriend but I don’t want the commitment. I don’t want the obligation. I believe in antiobligationism, i.e. do whatever you can to minimise obligation whether it is financial obligation (e.g. debt), legal obligation (e.g. marriage), or social obligation (e.g. customs, norms, or tradition). The minimisation of obligation and control over the “direction of flow of obligation” is central to freedom and autonomy (see The End of Slavery: Why I Live Off Dividends).

When I had a girlfriend in the past, I complained about how expensive it was to take her out all the time, but it’s been a long time I’ve been single and I find I am losing passion in my life. I don’t look at travel or going out as something enjoyable anymore. If there is no one to go out with or travel with, I feel I am wasting my time. I am saving a lot of money, but now that I have more passive income and therefore more money budgeted for spending, there is little I can do other than make the routine of work more comfortable or luxurious.

I notice that many people at work go to incredible lengths to save money. During lunch they bring their disgusting smelly food to work, and they wash their plates after they’re done eating. They drink instant coffee at work. They wear old clothes. They do whatever it takes at work to slave away and save money, but then outside of work these people splash out and go on consumerist binges. They have multiple children, they go on lavish vacations, and they send their children to private schools. This is the work-life balance that people talk about. People work to live, but work is not living. Work is something to be endured, something to slave away at so that you can live your real life, which is outside work, mostly on the weekends.

However, I don’t have a typical life: I don’t have children, I don’t have a family (or at least, I have a dysfunctional family), I don’t have a partner, and I have few obligations. My spare time mostly consists of work or passive electronic entertainment (Netflix, YouTube, Kindle, etc). When I am not working, I barely spend anything. Netflix is only $14 per month, YouTube is free, and Kindle books cost maybe $15 and I spend many months finishing a whole book. Because I don’t have a “life,” then work is life, and life is work. If I don’t spend money at work, there is a risk I will never spend any money ever, so I allow myself, while I am at work, to indulge in a coffee at a proper cafe, or I eat out at a restaurant during lunch. I like to get out of the office, breath in the fresh air, chat to the barista, and indulge in that warm $5 coffee.

To be honest, I would love to be a “normal” guy i.e. I would love to have a girlfriend so I could have someone to travel with, and I do value female intimacy, but at the same time I am skeptical of marriage and I never want children, so if I do have a girlfriend she needs to have similar values. But I just can’t find such a girl and there is no way I can meet such a girl. I cannot use Tinder because I don’t want people to see me on Tinder. I used Tinder before and found out that there were rumours around the office that I was using it, so I completely shut down the account and vowed never to use it again. My friends and family have tried to arrange relationships for me, but these relationships failed. Finding female intimacy at work is very dangerous, so I am extremely cautious. There is no way I am going to a bar or a nightclub. I do not like these places. Therefore, there is nowhere I can go and nothing I can do. It is as if modern society has conspired to make it impossible to find love. I just need to find happiness in being single.