There have been several articles about the
collapse of Lehmans in September 2008 and over the past few days I have been
casting my mind back to the very different life I was leading a decade ago.
Back then I was living and working as member of a
community partnership based on the edge of Dartmoor in Devon. We owned a large
12 bed manor house set in its own extensive grounds - 18 acres of pasture and
woodland overlooking the surrounding villages. It felt like I was living the
dream life, far from the madding crowd.
Work involved hosting groups of between 10 and 20
people who would stay for a long weekend or possibly a week. The courses were
mainly centred around personal development and relaxation - so, things like tai
chi, yoga, meditation, massage etc.
All of my partners had various responsibilities -
ground maintenance, cooking, bookings co-ordinator, plumbing and general house
maintenance etc. My main responsibilities were as accounts manager...what's not
to like about counting money! In addition to this we would all muck in when needed,
especially at busy times when there was a same day change over between one
group finishing and another arriving.
The business turnover was quite healthy, I think
we were getting toward £300,000 per year but of course this was not all profit
and there were all the expenses of servicing the groups and what was left over
was divided 10 ways..and then there was tax and insurance...and no company
pension scheme...but we enjoyed 'free' food, and use of the indoor swimming
pool and sauna when the groups had left.
When the larger groups were in residence, it could
be very busy starting with breakfasts at 7am and usually finishing after the
evening meal, maybe 8pm. There was plenty of time for relaxation however -
walks on the wide expanse of Dartmoor, usually a trek up to Pew Tor and back,
or along the banks of the nearby river Tavy. I enjoy tennis and spent quite a
bit of time on the courts. Then there was just taking time out in the grounds
which included a large Victorian walled garden, a wildflower meadow, orchard
and lots of places to curl up for the afternoon with a good book.
I had been doing this for the previous 6 years
since giving up on financial services for a large insurer based in the North
West...far too stressful!
Over a period of time however personality tensions
inevitably grew, it became more difficult trying to work with 10 partners who
all had differing opinions on how the business should be run as well as
tensions arising from some people doing more of the work than others, feelings
of insecurity and all the usual personal politics and game playing and even
infidelities...idyllic surroundings provide no escape!
I think by the end of 2007 it was becoming clear these tensions
were not going to get resolved and in the end we decided to wind things down
and sell the property. This was completed by mid 2008 when we all departed with
our share of the proceeds to go our separate ways.
Post Devon
I had grown very attached to the good life and
made a few close friendships and joined the local choir. I stayed on for a few
months to give myself some time to think about my next move. My roots are
however up North and in early 2009 it was time to return. As it turned out,
fortuitous as the grandchildren came along shortly afterwards and I am lucky now to
be a mile down the road rather than 300!
I had also made a decision to not seek alternative
employment and it was therefore in June 2008 that I 'retired'. Whilst the money
would not stretch far in Devon, I had sufficient for a house up North and
although I could never get by on cash savings due to the dire interest rates, I
could get along fine with income from my investments and SIPP which was duly
converted to drawdown.
The markets hit a low in Feb 2009 and some of
those most affected were financials. Whilst interest rates were falling
quickly, it was possible to acquire building society PIBS and bank preference
shares with an annual yield of 10%. I loaded up my portfolio with a good spread of income-generating securities... PIBS from the
Coventry, Nationwide and Skipton as well as some Lloyds Bank prefs. I also
picked up a few investment trusts such as Edinburgh, City of London and Murray
Income as well as some higher yielding shares such as Shell Oil, BHP Billiton,
Scottish & Southern all of which helped to generate the income I needed on
a regular basis.
So, an interesting and colourful chapter in my
life. If I had my time over, would I repeat the experience? Yes, I'd like to
think so.
What were you doing a decade back? Feel free to
share some memories in the comments below.
Thanks for your personal account of this period. I think anyone living through it ill have life lessons, just like living through 1929.
ReplyDeletePersonally I was 37 and in private law practice in London and saw a crash in my business and earnings. But I had paid off all debts three years earlier: with the house paid for, I was a castle impregnable to whatever the world could throw at me.
Interesting times.
Thanks Chris. You did very well to have paid off your mortgage and be debt free at the ripe old age of 34...as you say, you were pretty much bullet-proof.
DeleteThanks for sharing, diy - interesting to read what other people were doing when all things financial were going pear-shaped!
ReplyDeleteMe, I wasn't in a great place back then. The financial crisis had hit the company I worked for hard, over 100 people were made redundant and my job was at risk though was ultimately saved. I hadn't yet paid off all my credit card debt at that point (that wouldn't happen for another year) so they were very worrying times for me and I was feeling very vulnerable. Job prospects looked slim in other financial companies, morale was at an all time low. We were all just grateful that we had jobs.
So, I have yet to experience a big market correction as an investor but feel that I should be able to weather the storm as I'm more financially secure this time round!
Thanks weenie. I can imagine it would have been stressful with all your credit card debt and the real threat of redundancy...ironic that the actual redundancy came some years later when the economy was in much better shape!
DeleteYou have certainly made good progress with your finances in the past decade and on the way towards FI.
I hope the next downturn is not as bad as 2008/09. We may not know when the bears will appear but, as you say, we should be prepared to weather the storm and I am sure there will be a few bargains on offer.