↑ Emerging Markets Stock Index Fund is up by $22,568 or +10.4%
↑ Eurozone Stock Index Fund is up by $10,072 or +4.2%
↑ Standard and Poor’s 500 Index Fund is up by $25,257 or +4.6%
↑ Global Small Cap is up by $7,876 or +3.6%
↑ Growth fund is up $7,445 or +6.8%
↑ Additional investment savings $2,500
Total gains: $75,719
Observations:
I have recently started to experiment with AI at work, where I have a commercial license. It is pretty amazing what it can do for financial advice, including the historical prospective. For example, when I tasked it to calculate safe withdrawal in ten years’ time it offered me to consider me long “inflation-stagflation” period in 1970s, low growth periods and, even 1939-1945 (second war period). It ran Monte-Carlo simulation and run survival probability vs withdrawal rate sensitivity.
If one wants to be conservative than the safe withdrawal rate is 2% and allocation moves from 60/40 to 35/30/20/15 (equities/bonds/precious metals/real assets) during withdrawal time. For the run up to withdrawal time advised allocation is 50/20/20/10 (equities/bonds/precious metals/real assets).
WWII-type shock (multi-year recovery), 1970s stagflation (bonds failed as hedge and negative real returns for a decade), Low-growth regime (real returns near zero for extended periods) - these are not theoretical — they happened. Even three percent withdrawal is NOT compatible with 99% survival in real-world conditions. The challenge I am facing now is how to do those withdrawals at low cost and (eventually) during old age. While it is might not accurate but certainly thought provoking.
Personal. I mentioned importance of having continuous cash flow and why having no income really hurts road towards financial independence. I was fortunate enough to find a job after the unfair dismissal. However, it came with a significant pay cut. The high inflation in the recent years also doesn’t help.
For example, one dollar twenty years ago has half of a purchasing power today. This is official inflation; real figures are probably much higher. The inflation also highly dependant on what you consume. For example,
|
Item |
2000 |
2026 |
Inflation |
Annualized |
|
“Oasis ticket” |
£28 |
£350 |
1250% |
10.6% |
|
Premier League ticket |
£22 |
£78 |
355% |
5.2% |
|
Big Mac Meal |
£2.5 |
£8.79 |
352% |
5.2% |
|
10 pints of beer |
£19 |
£62 |
326% |
4.8% |
|
Cinema + popcorn |
£7 |
£22 |
314% |
4.7% |
|
Ibiza flight |
£99 |
£280 |
283% |
4.2% |
|
Average salary |
£18,848 |
£34,000 |
180% |
2.4% |
On average, the salaries have risen by 2.4% but the prices by 5%. The other example is cost of medical insurance – I have option to continue my medical insurance coverage on the same terms as with previous employer. I paid around 10,000 USD in 2013. The same insurance in 2026 costs 40,000 USD a year. This is four-fold increase or 11% a year. I haven’t developed any medical conditions nor used my insurance extensively.
The salary from my new job depends on the point of view: Inflation adjusted, I receive slightly less than in 2010 but 25% more than in 2020. This is positive thinking. I also receive 27% less than in 2014, 19% less than in 2016 and half of what I have received in the last job (all inflation adjusted). This is motivational speaking.
The story is that all my jobs have paid above average. In the previous company I was promoted every 4-5 years and it helped me to keep up with the inflation (as well as taking on assignments in difficult countries).
There has been definitely life style creep over past five years and halving the salary hurts. With the new employer a week before I travelled, they sent me a new contract, stating that for the first five months I will be getting 20% less money. It humbled me further. Now when I am travelling, I am even saving on the food in the evenings – hello instant noodles or nothing at all. Fasting a little bit should help me to lose some weight and get healthier.
On the other hand, becoming mortgage free, having money side for schools and universities enables to focus on financial independence and enjoyment.
Recently flying a long-haul flight (hello economy!), I sat next to cruise ship breakfast serving girl. She works for one of the biggest operators in Caribbean. She has to work 8 months in a row, 12 hours a day with no days off. If she needs a day off, she has to call a” sick” day – she has taken five days in the last 8 months. This job also doesn’t pay a lot of money ~ 2,000 USD a month + tips. A captain on the same ship receives 8 times more, works two months with two months off.
Fun fact: the point of being financially independent is so I don’t have to work with people I don’t like or get along with people I don’t want to.
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