The End of Slavery – Why I Live Off Dividends

One of the reasons why I don’t like being around people most of the time is because they tend to say things that trigger me. Maybe I am too sensitive. Most of the time people just say whatever is on their mind, and they quick jump from one superficial idea to another. Most of the time human interaction is just an attempt to say something for the sake of saying something, so perhaps I take things too seriously.

I live with my mother, and a few days ago, someone at work commented that I should not live with my mother because she will become a burden on me as she grows older. The reason why this comment triggered me is because there are many assumptions made, and it simply isn’t true. I didn’t get much of a chance to explain myself before the topic of conversation moved on, but days after this colleague made this trivial comment, I am still thinking about it, and my colleague may have forgotten all about it.

If I moved out from my mother’s house, she could still be a burden on me because technology connects us all, so even if I lived far away from my mother, she can still call or message me if she wants something from me.

However, suppose my mother and I lived in different cities. It would be more difficult for me to get to her, so she won’t be as much of a burden on me. Regardless, currently I don’t consider myself to be too close to my mother even though I live with her. I work quite often, and she also works as well, so we often do not see each other. My mother and father divorced a few years ago, so my mother learned from experience how important it is to be independent and to never trust or be dependent on anyone. Even on weekends I may be out somewhere, and she would be as well, so we rarely see each other. The only time we regularly see each other is at night when I get home from work and she cooks me dinner, and this is a tradition that seems to just happen all the time. She has always cooked dinner for me, and I never objected to it, so it keeps happening. In fact, my mother cooked dinner from my whole family, but over time everyone moved out. After the divorce, my father moved out, then my brothers moved out, and now she only cooks for me.

Even though my mother is in the habit of cooking dinner for me, this doesn’t happen all the time. For example, last night I had dinner with a colleague at work, so I came back at around nine at night, had a shower, and went to bed. This tradition of my mother cooking dinner for me seems to be the only habit that keeps us together. My grandmother on my father’s side used to wake up early and cook breakfast for me. I didn’t like it because there were days when I wanted to go to work earlier, so I just wanted to make my own breakfast or skip breakfast and just drink coffee, but my grandmother wanted to make breakfast for me. After the divorce that ripped through the family, my grandmother left the house to live with my father, and now I rarely see her. Most relationships are based on dependence and habit. When you are a child and you’re dependent on your parents, you are forced to interact with them, and they become familiar to you, so you bond to them. The same applies with work. You provide skills to your employers, and employers give you a salary, so you are mutually dependent, and over time there are colleagues at work you see all the time, and familiarity breeds trust and bonding. But as people become more independent, that dependency goes away, and as a result, bonds break.

Going back to the topic of my mother and her habit of cooking dinner for me, there are many in my family who jokingly talk about how I need my mother to cook for me (or I need a woman to cook for me), but I think many people say this because many people are traditional, and they believe in the traditional family. They want to believe that the woman’s role is to cook. This includes many traditional women. However, in my opinion, modern technology has made cooking irrelevant. You can easily eat out at restaurants, but even if you consider that to be expensive, it is not difficult to cook simple meals for yourself using e.g. a blender or microwave. For example, it is not hard to microwave or boil beans or to throw fruits and greens into a blender. To clean up, there is the dishwasher. There are many traditionalists out there (mostly women, based on my observation) who want to go back to the days of old when they stayed at home and engaged in low-skilled cooking and cleaning duties, and I think the allure of this is that woman don’t need to go out into the workplace to make money, and this is what drives anti-feminism among women. These women are simply selfish. I would consider myself to be a feminist man, and I encourage all women to get out into the world, work, invest, and become financially independent. They should resist the temptation to glamorize slavery.

My mother does not always cook dinner for me. There are times when I eat out, e.g. when I had a girlfriend a few years ago I spent a lot of time having dinner with her. If I wanted a cheap dinner, rather than eating out, I can bring meal replacement powders (e.g. Aussielent, Soylent, Huel, or Joylent) to work, and after work I can simply mix the powder with water and drink it as dinner. For added nutrition, I can come home and prepare a green smoothie using the blender. Because these foods are simple to make, I am not dependent on my mother for anything.

In the future, I intend to rent a one-bedroom apartment in or near the city because I am quite tired of commuting to and from work. I love to just be able to walk to work. Once I grow my dividends, my dividend income should cover the cost of renting an apartment in the city. As my dividends grow even more, I may be able to work part-time and use the spare time to work in a coworking space doing projects that I enjoy. With the proliferation of cryptocurrencies and blockchain technology, I suspect that a lot of business in the future will be done online and on the blockchain. It is a new frontier. Basically my plan is to transition gradually from living in the suburbs with my mother to living in the city and being self-reliant. I will also transition away from the traditional 9 to 5 job into more flexible work that gives me more control over what I do and with whom I work, and all this will be funded by dividend income. I recently performed a quick back-of-the-envelope calculation and found that I am investing about $70,000 per year, which is a lot. A considerable amount of this (about one-third of it) is going into my superannuation fund, which means I will not have access to it until I am very old) but about two-thirds of it is going into dividend-paying stocks or ETFs, so I expect my dividend income to gradually increase, which will improve my standard of living. I want to use my dividends to fund a more autonomous life with more freedom. I want to be free from my family and from my employer.

I expect freedom to come gradually. Most people have a date when they simply retire. There is a clear date, a line in time when they are no longer slaves but are free. I will have no such date. I believe that slavery is a continuum. On one end you have total freedom, i.e. no debt, good health, and living off enormous amounts of passive income. Then on the other end you have total slavery, e.g. shackled and in prison. Then there are degrees of slavery, and most people have quite a considerable degree of slavery imposed on them by their jobs, their family, their children, their mortgage and car loans, etc. For me, there is no retirement, just a gradual move from slavery to freedom.

As my dividend income increases, I will eat out more for dinner (or drink Aussielent) rather than go home and get my mother to cook. As my dividend income grows even more, I will sleep at home less. Rather than commute back home, I may hire places to sleep at night using Airbnb or I will rent apartments in the city for longer periods of time. The same applies for work. My intention is to reduce my hours so that I work part-time, or I may be more flexible, e.g. I may work at coworking spaces or at cafes. I may even ask my manager if I can work at overseas coworking spaces. This is good for me because I get away from the office, but it is also good for my employer because my desk is not being used, so there are cost savings. If technology is good enough, working remoting should not make me any less productive. This will be my main digital nomad plan, which is to do what I currently do at work but to gradually do it remotely as my dividend income and skills increase. As dividend income and skills increase, I have more bargaining power, and technology will improve over time, which should make remote work be easier. There is also a broader push by feminists for more flexible working arrangement because women want to spend more time looking after their family, so this could possibly benefit me.

Basically with higher dividends, I have more power so that I can shape my life the way I want my life to be. This has been the intention since the beginning. Living off dividends is my guiding philosophy in life because it gives me the freedom and power to do what I want. The basic idea is that you increase dividend income so that you get paid without needing to work, and at the same time you reduce all obligations, e.g. debt, marriage, and children. You minimize responsibility, obligation, and duty. By not putting any future obligation on yourself, you are free to do what you want. You are free to experiment with what makes you happy, and dividend income will allow you to experiment.

At the end of the day, my belief is that freedom depends on the direction of flow of obligation. When you hold stocks, ETFs, government bonds, etc, then there is an obligation for others to pay you money. There is a legal obligation for companies to pay you dividends. There is a legal obligation for the government to pay you interest because you are a bondholder. The flow of obligation is from others towards you. However, if you have debt, then the flow of obligation is reversed. For example, if you have credit card debt or a mortgage, you owe money to the bank. If you have obligations to family, friends, spouse, or children, that also imposes either a legal or social obligation from you to others.

The flow of obligation from you to others makes you a slave. The flow of obligation from others to you makes others your slave and increases your freedom. Freedom or autonomy is dependent on the flow of obligation. Manage the flow of obligation and you manage your freedom, and freedom is happiness.

Advice to Millennials: Don’t Buy a House

Where I live in Australia, most people are obsessive about property investment. There is an assumption that you must buy a house otherwise you will fail financially. As a millennial who doesn’t own a home, people always ask me when I will plan to buy a house or whether I have made any progress in saving up for a deposit on a house. People are either pressuring me to buy a house or to get married.

My response is that I will never ever buy a house. There is simply no need to buy a house when there are investments available that are far better. For example, BetaShares (a brilliant organization, in my opinion) has recently issued the BetaShares Global Banks ETF. This ETF tracks an index that invests in big multinational too-big-to-fail banks. The top 10 holdings are disclosed on the BetaShares website and is reproduced below:

top 10 holdings of BNKS as at 29 July 2016

Investing money in large too-big-to-fail banks, in my opinion, is a wise strategy. For years now, Australians have only had access to Australian banks on the ASX via ETFs such as QFN and MVB. Banks are an excellent investment because typically they pay very high dividends.

The more dividend income you have, the more freedom you have in your life. Dividend income is true passive income because you don’t have to do anything to earn it. Even if you own property and rent it out, you must still find tenants, fix broken showers, and unless you own the property outright you have to slave away at work in order to meet monthly mortgage repayments. Then you pay outrageous taxes such as stamp duty, and every year you must pay bills and council rates, as well as land tax. If you own the BetaShares global bank ETF, you pay virtually nothing other than a minuscule 0.47% management fee. You can literally sit back, relax, do nothing, and watch the dividends enter your bank account.

When you own property, you typically need to borrow money from a bank. If you’re borrowing money from a bank, you’re not generating dividends. Rather, you’re paying for someone else’s dividend income. If you borrow money from a bank, you make the bank rich, which effectively means you’re making bank shareholders rich.

What happens if there is a GFC 2 and bank shares collapse?

This is a fair argument. One could make a strong argument that the financial system is more precarious now than ever. However, even if we are nearing a massive recession (which I suspect we are), I don’t think that is a reason to not invest in bank stocks (or stocks in general) because we don’t know when the bubble will pop, and bubbles can perpetuate for decades or centuries.

When I see a bubble forming, I rush in to buy, adding fuel to the fire. That is not irrational.

~George Soros

Furthermore, if you own a property and the global economy collapses, how will owning a house help you? Property prices can go down just like stock prices can go down.

One of the benefits of owning bank stocks is that, even if these banks fail, many of them are too big to fail. They are so integrated into the economy that in the event of an economic crisis they can hold society as hostage and demand ransom (or bailout money) from the government. The government will typically give money to these banks, either from existing funds or from simply by printing new money to hand to the banks. Once banks receive bailout money, they can use it to repair their balance sheet, and stock prices should go back up again.

Below is a passage from the Financial Systems Inquiry report in Australia:

Global history records governments of all political persuasions using taxpayer funds to support distressed institutions. As undesirable as it may be to put taxpayer funds at risk to support financial institutions, in the midst of a crisis it is often the fastest and most certain option to stabilise the system and avoid widespread economic damage.

Investors can rationally surmise that the government is likely to rescue systemically important institutions if no other options exist, as their collapse would cause the most damage to the financial system and broader economy. This leads to a belief that some institutions are too-big-to-fail — that they receive an implicit government guarantee.

http://fsi.gov.au/publications/interim-report/05-stability/too-big-to-fail/

In a world characterized by wage slavery, big banks are basically the apparatuses of wage slavery. Whips and chains have been replaced with mortgages and credit cards, and banks are the institutions responsible for distributing these instruments of oppression to the masses in order to enslave them.

If the big banks are in trouble, the entire system of wage slavery is under threat, and for this reason I don’t think the government will allow the banks to collapse. They might make one bank fail just to make an example of them (e.g. Bear Stearns) but if you buy a broad-based index fund, you’ll be investing in the entire banking sector, so it’s not a problem.

How can you live without a house?

Of course you need to live somewhere. Shelter is a necessity. However, shelter is not expensive. I currently live with my parents and pay some of their bills. Other people can easily lower costs by sharing a house with others. They can rent (or even buy) a place and then rent out spare rooms. I recommend buying or renting a place far away from the city in order to get the cheapest price or rent possible and then simply use public transport to travel into the city if you need to work.

Living with others can be problematic because it can be difficult to get along with other people, but there are easy ways to fix this problem. Try to find people who are kind and who will not cause drama. Also try not to interact with people you live with too much. Personally I am always out of the house, either at work or at the local library. If I am at home I usually stay in my room. I have food cooked for me, but even if there is no food, I have a large supply of Australian Soylent (Aussielent Body) that I can drink should I need to eat. This ensures I never have to bother with cooking or cleaning, and arguments over who should clean the dishes are common when people share accommodation.

Personally, with food technology so advanced nowadays, cooking and cleaning are quaint, archaic and useless activities that must be eliminated from your life. People are always trying to tempt me into a life of slavery by telling me that I must get married because I need a woman to cook for me, but Soylent has now made the housewife’s cooking skills completely redundant.

Conclusion

You don’t have to buy a house. Live with your parents or find good housemates, and then keep interactions with them minimal to prevent drama.

Drug dealers have a saying: “Don’t get high off your own supply.” In other words, drugs dealers make money off their customers’ drug addiction, but if a drug dealer were to consume his own product, it will be to his detriment because the strength of his business depends on the weakness of his customers. The same applies to banking. Everyone in society is addicted to debt. The “drug dealers” who supply this debt to the masses are banks, and anyone smart enough can become a drug dealer by buying bank stocks or bank ETFs, but as a drug dealer you should not “get high off your own supply,” that is, you should be very cautious about going into debt.

The goal of my life is to produce passive income mainly from dividends. This ensures I can obtain income without working, which gives me freedom. I am not dependent on anyone. Even though I live with my mother, I rarely speak to her as I’m out of the house all the time, and even if she wants me out of the house, I can easily rent a small one-bedroom apartment paid for with dividend income. Most people move out of their parents’ home, buy a house, and drown in mortgage debt, which makes them slaves to their managers. Because I live off dividends, I am not dependent on my work. I don’t need a job. If I get fired or even if I dislike my work, I can simply find a different job that I enjoy or I may even fly off to Chiang Mai where US$1000 per month ensures you live like a king, and in Chiang Mai I can spend all my time in coworking spaces where I can work on whatever I want that I am passionate about regardless of whether it makes money or not since I don’t need income to live since I live off dividends. None of this would be possible if I had a massive mortgage over my head that forced me every month to pay a large chunk of my income to the bank so that other people can collect their dividend payments. I’d rather be on the receiving end of a dividend payment.

Typically when someone has a large mortgage over their head, they have more than a mortgage. A house has associated costs such as electricity and gas bills as well as taxes, and people who are desperate to buy a house in order to keep up with the Joneses are usually trying to show off in other ways as well, so they will likely have expensive furniture, massive kitchens, refrigerators, huge couches, and expensive TVs. People always put me down for being a minimalist. Some do it with more subtlety than others, but people always try to put me down for not owning a house or having expensive furniture or having a trophy wife or multiple children in elite private schools. I am usually very honest nowadays. I tell them I am trying to have more freedom in my life so I can do what I want, and I tell them I am trying to build up dividend income. This usually comes as a complete surprise to most people because most people have been conditioned by society to buy things and to go into debt. All the money they earn is eaten up either by debt or by lifestyle expenses whereas all the salary income I earn is invested. My savings rate is 100 percent, and I subsist off dividends of approx $30k per year. I do not live a hand-to-mouth existence. I am not fed with money obtained from my own labor. I am fed with money obtained by other people’s labor. My hands don’t feed me. Other people’s hands feed me.

Living off dividends and escaping slavery is not about showing off, in my opinion. I have no need to show off to people because I am quite detached from people. As such, other people’s opinions don’t matter because I am not close to them. Most people must care about what others think because they’re forced to be around them due to circumstances, and if they’re stuck with these people, they need to get along with them, which means these other people must have a good opinion of you.

But I don’t need to be around anyone. I am not dependent on anyone for anything. I am completely independent. I am not afraid of bullies. Bullies can bully me, but because I live off dividends, I can use dividend income to block them from my life. I don’t need to suck up to anyone because, unlike salary income, dividend income doesn’t impose upon you an obligation to keep someone happy. I am no one’s slave.

But from my position of freedom, I am a witness to all the manipulation, deceit, propaganda, slavery, and oppression in this world, and I personally cannot be willfully ignorant of it. I cannot close my eyes and pretend that atrocity does not exist in this world.

Doing something about it is the difference I can make. I can spread the word and help vulnerable beings escape from oppression. That is my purpose in life: to be free myself and to help others be free as well.

Can we change the world? No, but hell, we can all try.

~Rupert Murdoch

There is nothing in life more important than freedom. Even if you don’t want freedom, being free will give you the freedom to not be free. Better to be free and have the choice of being a slave or not rather than be a slave and have no freedom to be free.