Heightened Risk

I suspect that the next three to five years will bring a greater geopolitical and economic risk than many anticipate.

The election of a US President prone to making rash decisions and one who is not afraid to take on large debt and file for bankruptcy in business combined with a more assertive China both internally and with its neighbours makes for a precarious dynamic. In addition, the ongoing conflict in the Arab states, involving ancillary support from the major military powers is spreading into the developed world and has the potential to ignite into something more potent.

It is concerning how complacent the world is in light of these events. Optimism across the major economies is high. Share prices are hitting new peaks and asset prices are largely overvalued relative to earnings. Global debt is high and is likely to increase further in the US and China.

While acknowledging these risks, there remains potential for asset prices to continue to ride higher spurred on by momentum and improved economic growth.

However, it only takes a sidestep by a major superpower or a black swan event to bring things back to reality. The risk of a major downside event such as a conflict and/or a recession is significantly increased.

Decision

At age 29 I had two paths.

One path was to crack the BRW Young Rich List and become one of the 200 richest Australians aged 40 or under. All I needed was a net worth of 20m by age 40. It looked likely that I would achieve this.

The other path was to retire with the aim of living life to the fullest. This is what I chose.

We are always faced with tough choices in life and there are no easy answers.

When I was reading the recently released 2016 Young Rich List, I calculated that I am still well on the trajectory to joining the list if I maintain my net worth growth rates over the past ten plus years. At the same time, I know how pointless the race for never ending wealth is. Yet, I still feel a sense of melancholy as I ponder over my decision to retire and live.

To retire is not the easiest choice. I am giving up enormous wealth. I have to put in effort every single day to be happy and make my life the best it can be. I know how easy it is to slip into mundane activities and routines that don't make me happy. I still have goals I want to achieve and I know in my heart that they will take hard work. Great achievement rarely comes without effort.

Despite no longer working, I still have the option to build more wealth and create more businesses if I choose to do so. While I sometimes flirt with this idea, I know that living a happy life and exploring the world are higher priorities for me.

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On a related note, I sometimes wonder whether I could have retired earlier. Under the most optimistic scenario, I would have retired at 27 and then taking 0.8 years to invest the proceeds of say a 10m sale with 30% ownership (around 2 years earlier than when I did retire) as I would have only started to look for jobs at 24, then work 1 year in banking and then 2 years in a startup and its sale finalisation. However, I retired at 29 and took 0.8 years to invest the proceeds.

As I retired 2 years later than my most optimistic scenario, I need to make the most of the time I have now. I generally wasn't happy during my last 2 years at work, but I cannot dwell on that any more as now is the only time I have. On the plus side, I learnt that there is no such thing as a dream job and I don't envy anyone's job (particularly so after having tried a few different jobs post retirement in technology and other sectors). 

Sectarian Movements

Throughout history there have been movements formed that push an agenda. Sometimes these movements become the dominant localised way of thought and action.

Although society is conforming to similar ideologies due to increasing global interconnectedness, there exists latent possibility to build disciples for a cause. Movements can spring up anywhere, although it is more difficult to form movements counter to existing values in developed countries where there is a strong rule of law.

A strong leadership or group philosophy is generally required to form a movement. It is much more powerful to have a sizable dedicated following than for an individual to go it alone, case in point being WikiLeaks. In the case where there is a leader, there are some traits which can be advantageous. A firm leader with clear cut viewpoints and strong beliefs will likely bring more followers as such a leader generates polarising opinion where some people will love them and others hate them. A leader is best suited to use emotion to convince people and persuade them of their message. Almost all behaviour and action can be normalised and almost all humans can be convinced to do something against their wishes.

Popularising a movement or ideology requires some form of devotion. Usually this starts with a small group of followers and then grows to become an army of people who are willing to live for a higher cause and willing to sacrifice their lives. Sometimes movements perpetuate an us versus them mentality. Movements are difficult to scale to a stage where they have significant impact, for example Anonymous, Sea Shepherd, Falun Gong, WikiLeaks are all of insufficient size to make an impact.

There are a myriad types of movements, with varying degrees of difficulty to form:

• Countries with its own laws, although a country is geography limiting
• Remote tribes with their own versions of status, autonomy or government, bodies based on limited interaction with modern life
• Societies and organisations with a common interest free from constraint, in some cases underground (Somali pirates, mafia, armies)
• Movements based around a religion or a cult, where there may be no definable region (Islamic state) 
• Movements based around a media following with strong support from the media (Nazis)
• Activist collective interest groups
• Companies and not for profits can also initiate or be part of a movement

Unintended Consideration

I had planned to work in the UK and then retire and travel the world one year ago.

I got sidetracked with the ensnaring motive to increase my net worth. Now that I have purged my desires to keep increasing net worth, I am going to the UK again, in part due to necessity to finalise my construction and refinancing projects.

While my original intention was to have already begun my travelling adventures, working in the UK is not as bad as I had supposited. In fact, it may turn out to be a blessing in disguise. I have the opportunity to attend to unfinished business, in the name of winning a football championship, which I see as my highest priority, and also to position myself and learn from great minds in the technology sector where I do see myself having involvement with in the future.

I was dreading the prospect of returning to work. While there is no job that I look forward to doing any longer, technology is better out of the lot and can still get me excited. The thought of returning to finance and running spreadsheets is demoralising.

I have to know my objective for working in the UK. I want to work for 6 months or so and then travel. I don't need to work to sustain my lifestyle as I have income from my investments, although I will still need to find a job to finance my projects. I believe I have a contribution to make and I have previous founding experience. I am interested about recruitment startups and I enjoy keeping active in retirement. However, at the same time, I know how time intensive startups are so I am not interested on taking a founding role, and would rather provide guidance.

Coupled with the fact that I will outsource parts of my relationship life, have a group of friends already living in the UK, and work towards my goal of championship glory, it is looking brighter than the bleak predicament that I had envisaged.

I guess how you view your exact same situation can make profound difference to your perception and interpretation of reality.

After living in the UK for a few months, I realise that it is not for me. I still intend to get this one project out of the way and leave it at that, but it's proving much tougher than I thought. This project is taking time. At the same time, I am only getting older. There is no turning back time. I am not getting the girls I am after. I cannot keep chasing the money.

The Rise and Rise of Cities

Cities today are capturing an increasing share of the world's activity.

Big name 'tier 1' cities are continuing to diverge from smaller cities. Population growth, both from interstate and overseas migration are increasingly attracted to tier 1 cities. Immigration, which once accounted for a small fraction of a country's population, is set to become a global tidal wave unleashed by lower barriers to migrate and availability of information.

Today over 50% of the world's population lives in urbanised areas, a trend which shows no signs of abating. However, whereas in the past people moved from regional locations to cities, the future will see greater movement from smaller cities to larger cities that have greater name recognition and growth prospects. This is being played out globally from the United States to China.

Success begets success. Employment growth and investment opportunities are growing in tier 1 cities at the expense of their regional counterparts. Tier 1 cities benefit from their global recognition and attract talented individuals worldwide lured by high paying knowledge jobs and a cosmopolitan lifestyle. Tourism and education is increasingly focused on tier 1 cities. Entertainment and dining options are also more available and accessible.

It is no wonder property price growth in tier 1 cities is outstripping the rest, particularly in suburbs located close to hubs and activity centres. Within cities themselves, there are large scale differences too. We are witnessing a rise in neighbourhoods within cities, where different suburbs have their own distinctive flavour.

On the whole, country statistics are becoming obsolete. Metrics to measure the wellbeing of a country are no longer applicable as there is significant divergence between cities and even within cities.

The movement towards cities is in turn leading to the demise of country towns. This is particularly evident in the low to middle class living in the the city fringes and rural areas. These people are getting by on a low salary and seeing their blue collar jobs disappear due to technological disruption. Concurrently, males in these regions feel as if their influence in society is being diminished with the uprising of females and minorities, an increasingly difficult dating market, and eroding of social prejudices.

However, the continued growth of cities is by no means certain. Government intervention such as through protectionism and tightening of immigration, security issues and war, technological advancements such as through telecommuting, and the spread of disease amongst other things could restrict or even reverse the growth of cities.