CHISWICK, WEST LONDON – Greetings from my childhood home in England…
This week, we are exploring London as tourists. We’re taking advantage of the fact that there are very few international tourists here because of COVID-19 restrictions… but as the British government lifts those limits, London will be bustling again. And we prefer to learn about and explore places when there aren’t huge crowds.
Today, we’re visiting Hampton Court Palace, where Henry VIII lived.
In today’s mailbag, we talk about how we educate our kids… what it means to have true happiness… U.K. citizenship… and how we live the lifestyle we do, as a nomadic family.
So let’s jump in…
Reader question: Bravo for your homeschooling and the rich experiences you have afforded your children. A number of famous people have been homeschooled, including Alexander Graham Bell, Thomas Edison, and Franklin D. Roosevelt. Question: Do you give your children formal tests, especially on travel experiences?
We test the kids, but not in the same way they test children in schools. For example, after we’ve been to a museum, we might make the kids write a short essay on what they learned. Or draw a picture of something we saw. Or we might have a discussion about something we experienced.
We make them do similar tests on the work they do online. After they’ve watched a video on a famous historical figure, we might make them write an essay or give a presentation.
We don’t use any type of standardized testing, though. One day, we might though, just because we’re curious how they’d fare…
Reader comment: I think you have found true happiness. To love and be loved…
My grandma always asked, “How’s the enemy?” Initially, I was confused… She explained the enemy was time. She realized she had to leave before dark, which made her time with me and my brothers extremely valuable. I believe this is what you realize!
I’m not an eloquent writer; I wish I was able to explain how your writing feeds the soul… It’s the people that make your life special and health is true wealth – you can’t buy true love or health!
So enjoy your time with the ones you love – give your kids and wife watches, and explain time is your most priceless gift. Tell them to enjoy every second, minute, and hour of their lives! Thank you for your beautiful shares!
I love the story of your grandmother. She nailed in one line what I’ve spent two years trying to explain! The enemy is time. Enjoy your time with the ones you love before it gets dark. Great words.
Reader comment: You explained what happens when you die but not how you have the money to live and travel now. The life insurance policies pay when you die. What do you do for current spending money?
Maybe I missed it, but where is the money coming from? Are life insurance dividends so high that you can withdraw the excess? I am puzzled. Keep writing, as we love reading your adventures.
Thanks for your question. I receive a salary for writing these Postcards… but I don’t count on this salary continuing. I get no income from life insurance dividends. They pay for the annual premiums and if there’s any left over, they buy more life insurance.
My core plan is to live off our savings, which we’ve invested in gold, silver, and steel (cheap shipping stocks). I hope it grows and pays some dividends, but if not, we’ll just slowly draw down the principle until there isn’t any left.
I call this “burning the furniture” or “eating the seedcorn.” I’m not worried about ending up with nothing, because when I die, my wife and children will get an inheritance, thanks to my life insurance policies.
Reader question: Are you so certain that you can “sell up and move next year”? Are you so certain that London property values will maintain, or increase?
The opposite is true. I expect London property prices to crash at any moment and I’m terrified of how much the decision to stay in London is going to cost us financially.
In other words, I feel like we’re picking up pennies in front of a steamroller by staying. I’m just hoping they remain elevated for another few years and we can get out in time before the crash! (Full disclosure: I’ve been expecting London property to top out in price for years, and they haven’t. Maybe they’ll keep rising?)
Reader question: One thing not clear to readers in your case is if you have a stable, continuous income…
I receive an income for writing these Postcards, but I do not consider it stable or continuous. In fact, I expect to get fired by my publisher every day. I’m a very insecure writer.
Reader question: You were born there and have U.K. citizenship. But what about Kate and the children? Will you get residency (marriage/dependents) or do “border runs” every 180 days? Take care!
I have U.K. citizenship, but because I was not born in the U.K., my children do not automatically qualify for U.K. citizenship. So we’re going to have to apply for something called a “spousal visa” for Kate and the kids.
We’ll be able to apply for residency after we’ve lived here for two years. And then, after that, citizenship if we want it. Until I get around to doing the paperwork, we’ll have to do border runs.
Reader question: I would question the means with which you want to purchase by borrowing from your life insurance policy. If it’s your money, yet you’ll have to pay it back with interest, more than likely, make sure you check the rates first!
The interest rate to borrow using our life insurance policies as collateral is around 3%.
Reader question: You say your investments are in gold, silver, and steel. When it comes to steel, I know you are referring to the shipping industry, but what about the steel industry itself? How would that compare? Thank you for all that you are and do!
My strategy, in one sentence, is to keep our money “under the mattress,” in hard currency, so it keeps up with inflation and maintains its purchasing power. But we don’t take any risk of losing it.
Of course, this means gold and a little silver. But it can also mean certain securities that have the same qualities as gold and silver. In other words, they’re safe, scarce, and hedge against inflation. I love shipping stocks, especially last year.
Because the stocks were so cheap, we were able to buy productive hard assets (tanker ships) at discounts to net asset value (NAV) that were so large, I knew we couldn’t lose money. (As a refresh, in simple terms, net asset value means the investment’s assets minus its liabilities.)
But I’m not married to ships. Productive, hard assets could be anything… pipelines, toll roads, factories, real estate, ports, refineries, oil wells, restaurants, etc.
The key is, they need to be trading at big discounts to NAV for me to consider them hard currency investments. I’d consider buying the stock of steel manufacturers, too, if they were trading at a discount to NAV in the stock market…
Reader comment: I agree with your macroeconomic view regarding gold and stocks. I would just caution that the currently empowered elites will fight the consequences you predict to the death. It will happen as you say, but it will be a “battle royal,” with lots of unintended consequences.
Totally agree. Things get really interesting when the bond market revolts against the Federal Reserve’s money-printing or against the level of consumer price inflation (CPI) or both. The Fed will be faced with the choice of either blowing up the dollar (and the bond market) or blowing up the economy.
Reader question: I thought your reasons for not wanting your children to take part in a formal educational system were insightful and valid. However, I think the piece of paper associated with a degree can function as a sort of club membership in society. In particular, I’ve gotten jobs that I’ve liked based (partly) on the degrees that I have, and having that cushion to fall back on can be helpful. What’s your take on that aspect of the issue?
True, but I’ve read that university degrees aren’t worth as much as they used to be, as there’s been an inflation in the number of university graduates in the marketplace. Also, it seems that the internet allows new ways for employers to evaluate candidates and so they don’t need to rely on qualifications so heavily anymore.
Reader comment: There is no way the stock market can be this high when the economy is such a mess and debt is spiraling. It is not held up by strings. It is the result of a surge of massive optimism.
Market prices are a measure of social mood, and that has been on boom, but is now rolling over the top… and a very serious crash is looming. When markets crash, house prices follow every time.
Social mood is about to make a drastic reversal. If you really want to know more, get a copy of Conquer The Crash by Robert Prechter, of Elliott Wave International (available on Amazon U.K.). It is quite brilliant in its analysis, and should prove a massive help.
I’ve read Conquer the Crash by Robert Prechter several times. It’s one of my favorite books.
And that’s all the time we have for today! Thank you for continuing to write in and share your thoughts with us. We read every message you send in.
Please keep your comments and questions coming to [email protected], and I’ll do my best to answer them in a future Friday mailbag edition.
– Tom Dyson