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.

Betashares Active Australian Hybrids Fund (ASX: HBRD)

I have always been interested in the latest ETFs in Australia. Most people are collectors e.g. they collect stamps, coins, antiques, wine, or wristwatches. I personally like to collect investments. As such I has bought and continue to hold countless investments across many different asset classes. The problem with a passion in e.g. wine or wristwatches is that it may not be profitable (unless the wine or watch is so rare it goes up in value) but an obsession or passion in investments is one you can indulge in without any guilt.

The latest ETF I have researched and purchased is the Betashares Active Australian Hybrids Fund (HBRD). The reason why I have purchased HBRD is because I feel at this stage I have an overweight exposure to stocks, so I want to reduce the risk of my portfolio. However, reducing risk usually involves investing in cash, bonds, or gold. However, these asset classes (with the exception of corporate bonds) pay low passive income thanks to the current low interest rate environment. Investing in HBRD allows me to reduce risk while at the same time getting about 4% or 5% passive income paid monthly.

For a few years now I have been worried about the valuations of stocks and property, but I have been surprised that these assets continue to go up, so the derisking of my portfolio over the last few years has certainly cost me money as I have missed out on large price appreciation. (I also missed out on the cryptocurrency boom as well.) Nevertheless, I have little regrets because I believe in diversification i.e. spreading money across everything. My plan is to gain freedom by slowly building passive income through steady and consistent investment fueled by a minimalist lifestyle. I also believe it is better to be safe than sorry. I’d rather walk steadily towards my goal rather than run there in order to save some time and potentially slip and fall. As they say, everything looks good in hindsight.

What is a hybrid?

All investments have a risk-reward trade-off. The more risk you take, the more potential reward you have. For example, cash or government bonds are safe investments. Government bonds are guaranteed by government. In Australia, cash deposits are mostly government guaranteed as well. However, if you invest in government bonds or cash, you will earn little interest, perhaps 1% or 2% if you’re lucky. Bonds are merely IOUs. If you buy a bond, you are effectively lending money and in return you receive regular interest payments (called a coupon) as well as your money back after a certain period.

In contrast to bonds, stocks are risky investments. Buying stocks allows the stockholder to vote (e.g. for who becomes a director) and allows the stockholder to earn dividends, which are simply payments made by the company to stockholders from profits. Stocks are risker than bonds because bondholders are paid before stockholders. If there is profit made by the company, bondholders are paid first and remaining profit is paid to stockholders. This also applies in the event of bankruptcy. Because stocks are riskier, companies need to pay higher dividends in order to compensate investors for taking on more risk. Dividends from Australian bank stocks such as CBA pay dividends of about 8% currently, but stock prices are volitile and can fluctuate wildly. Although bank stocks pay higher passive income, you are risking capital loss and dividend cuts should the banks become unprofitable.

Hybrids are assets that are a hybrid of bonds and stocks. When you buy a hybrid, you receive regular income as you would a bond. However, under certain circumstances within the hybrid contract, the asset may be converted into equity. All hybrids are different, so it is difficult to generalise. Some hybrids have characteristics that make them more like bonds whereas others have characteristics that make them more like stocks. Regardless, hybrids sit between bonds and stocks on the risk-reward continuum and so can be expected to be less risky than stocks while still paying reasonably high income.

Why buy a hybrid ETF

As explained earlier, every hybrid is different. In order to understand whether a particular hybrid is more bond-like or stock-like, a careful study of the terms and conditions is required. Hybrids are complex investments and as such is suited to active management and oversight by experts, which is what HBRD provides.

Conclusion

Although a good case can be made for active management in hybrids, active management has its issues. You are putting your trust in people, which is generally not a good idea. Nevertheless, I do not intend to put everything into HBRD but will instead spread money across lower risk investments with high passive income. There are another ETF also issued by Betashares that invests in corporate bonds (ASX: CRED). Corporate bonds are higher risk than government bonds thereby allowing higher yields. CRED also pays monthly income, which is very attractive for people who live off passive income (such as myself).

One of the frustrations with hybrids is that there is very little information about it. For example, if you research cryptocurrencies such as bitcoin on the internet, you will find a neverending flood of information, YouTube videos, etc. Bitcoin is a global investment that everyone can access. Hybrids, on the other hand, have few exchanges and are mostly purchased by institutional investors off exchanges. There is little information on the internet about hybrids.

Another consideration is that HBRD purchases hybrids from Australian banks, which are heavily exposed to the Australian housing market. There are currently fears of a slowdown in the property market. Nevertheless, Australian banks do not hold the property itself but rather the mortgages used to buy the property. So long as borrowers keep making their interest payments and paying their fees, revenue should be unharmed. Hybrids are issued all around the world, so the returns on hybrids should correlate with global interest rates. In the recent rising interest rate environment, this should mean higher returns from hybrids but more interest cost for Australian banks as wholesale credit becomes more expensive. Nevertheless, Australian banks do have considerable market power allowing them to respond to rising cost of global wholesale credit by raising interest rates or fees.

 

How Much Passive Income Do You Need?

Most people I speak to, when they want to measure someone’s wealth, measure wealth by referring to how many houses they have. For example, “John owns 14 houses. He is rich.” However, someone may own 14 houses, but each house may only be worth $200k, which gives total assets of $2.8 million. However, what if he also had $2.7 million worth of debt? His net worth would be $100k whereas someone who owns one house worth $1 million that is fully paid off would be 10 times wealthier even though he owns 14 times fewer houses. This example clearly demonstrates how misleading a count of houses is. A more sensible approach is to calculate net worth.

However, net worth can be misleading as well. For example, suppose you inherited a house from your parents that was worth $500k and you live in this house. Suppose suddenly this house went up in value to $1 million. Are you better off? Your net worth has increased by $500k, but because the extra wealth is within the house, you cannot unlock it unless you sell the house. If you sell the house, you’d still need a place to live, so you’d buy another place. The problem is that if you buy another place, that home will have risen in value as well, so the net effect is that you have paid taxes, real estate agent fees, conveyancing fees, etc but there is no difference in your living standards. You are worse off. If you downsize and buy a cheaper place, you’d be able to unlock your extra wealth, but then your living standards drop (e.g. extra commute time).

This point highlights that net worth, although better than a count of houses, has its flaws. An alternative metric, in my opinion, is passive income. Passive income (e.g. from dividend income but also from rent, interest, etc) is income you receive by not working. Passive income should subtract any debt as debt is negative passive income. Debt is the opposite of passive income because you must work to pay off debt. This applies if you hold debt as a liability. If you hold debt as an asset (e.g. you own bonds) then this is passive income. The bonds generate interest for you that you can live off without any work.

Passive income is more useful because it directly measures your standard of living. If your net worth goes up by $500k, that may have zero impact on your standard of living. However, if your passive income goes up by e.g. $1000 per month, that is actual cash in your hands. It directly impacts how much you spend and directly impacts your standard of living.

So how much passive income is enough? It all depends on the person. Everyone is different. It also depends on the city you live in. Some cities are expensive while others are cheap.

However, using Melbourne, Australia for this example, in my opinion, to cover the basic necessities of life, passive income of about A$2000 per month (US$1500 per month) at a minimum is needed, in my opinion.

Currently I work, and I do like my job at the moment, but loving my job is a recent experience. For a long time I have hated my job mainly because I have had bad managers. Something I have learned is that things change all the time at work, so you need to have an exit plan at all times. Too many people get a job, expect they will always love the job and always make good money, so they go into debt to get a mortage, have children, inflate their lifestyle, etc and then suddenly they find they hate their job, but by then they are trapped. I made this realization early on in my career because, when I started working, I went through a restructure in the organisation. I learned quickly how risky it was to have debt and obligations, and I realised the value of structuring your life so that you have the ability to walk away from anything, not just your job but from any person or any organisation. There is great power in being able to disappear at the drop of a hat, and this is achieved with passive income coupled with minimum or no obligation (including financial obligation i.e. debt).

Don’t let yourself get attached to anything you are not willing to walk out on in 30 seconds flat if you feel the heat around the corner.

~ Neil McCauley

Even if there were a restructure at work or a tyrannical manager took over and started legally abusing staff, with passive income of $2000 per month, it is easy to stop work and live an urban hermit lifestyle e.g. renting a one-bedroom unit on the outskirts of the city (e.g. this place in Frankston), living off Aussielent, and surfing the internet all day. The only costs are rent ($1000 per month), Aussielent ($320 per month), wifi ($50 per month), electricity ($100 per month), and water ($100 per month), which comes to a total of $1570 per month. I round that up to $2k per month just to give a little buffer. Nevertheless, this is quite a spartan minimalist lifestyle. Doubling it makes $4k per month passive income, which I feel is enough to really enjoy a comfortable and luxurious lifestyle e.g. travelling, living in the city, eating out, etc. Nevertheless, $2000 to $4000 per month in passive income is a good range to aim for.