How I Found Freedom in an Unfree World – Book Review

I picked up a copy of How I Found Freedom in an Unfree World based on J.D. Roth’s recommendation on the MadFientist Podcast.

This book was originally written in the 70s by Harry Browne, and is described as “A Handbook for Personal Liberty”.

I have always considered myself to be something of a libertarian as far as my political leanings go (although I have never been active or particularly interested in politics). So I probably did not find the book as radical as the average person off the street might, but still, Harry presents a fairly radical approach to living life.

His book is organized into 3 major parts, the first being a series of chapters on various “traps” that people fall into including the morality traps, government trap, group trap, etc. Then he goes on to explain how you can be free from various problems in your life (including the government, marital problems, business problems, family problems, etc). Finally, Harry discusses living your new life by your own code, and how you can free yourself.

Like most things in life, different people will take different things away from the book, but I think there is a little something for everyone. Harry’s views on government, peer groups, religion, the projection of other people’s morals on you, etc are certainly viewpoints and lessons that people could stand to hear, especially if you are at all interested in the pursuit of financial dependence, lifestyle design, etc.

What I really took away from the book is the concept that “the world owes you nothing” and the idea that it is OK to be selfish. I already knew that the world owes me nothing (although it’s a great lesson and reminder), but I found Harry’s approach to selfishness to be intriguing.

For most people, selfish might as well be a 4 letter word. In the book, Harry presents unselfishness as a zero sum game and makes the position that the world gains nothing from everyone being unselfish, and that there is a net reduction in happiness if everyone were to behave unselfishly. He states that one of the great traps is to guilted in to do things, under the auspices of being “unselfish”. Whether that is a family even you would rather not go to, or saying “yes” to that extra assignment you don’t want. Most people preach that to be selfish is bad, and it’s important to be unselfish.

I haven’t full resolved an opinion on this matter, as I don’t necessarily like the image of being a “selfish” person in my own mind, but I can see and appreciate that to truly achieve freedom you need to march by the beat of your own drum, and learn to say “no” quite a bit. I have learned the power of saying no in my business (although that is a skill I have yet to master). I thought that Derek Sivers has an interesting idea with his “Hell Yeah! or no.” approach.

Some of Mr. Browne’s thoughts on relationships, and business partnerships were interesting. I would agree with him on his desire to reduce payment on taxes. Part of the book feels like it should be a companion book to The Anarchist Cookbook. The parts on honesty, and how real freedom is being comfortable with yourself and

Mr. Browne goes in to a number of different traps (and how to get out of them) in detail. I read this book on my Kindle, and found that I would have likely benefited from a hard copy, as at times it felt like the book read almost like a textbook.

How I Found Freedom in an Unfree World will not solve all of your problems, but it may force you to examine your life critically and at least consider the possibility that much of the stress and discomfort in the life of a modern American is by choice, and that it is possible to become “free” if you allow yourself to walk away from the many “traps” in life.

While I did not walk away loving the book, I found it useful and provocative. Worth reading if you are interested in financial independence or living a freer more satisfying life.

Wet Shaving for Fun and Profit

If you are a guy who is still stuck in the corporate world like me, then you probably need to shave. And if you shave regularly with cartridge razors, then you are probably somewhat dissatisfied with the process.

I never enjoyed shaving with cartridge razors. First of all, they were always damn expensive. I have seen them anywhere from $3-5 a cartridge for the Gillette Mach 3 razors (basically, the standard of the industry). Highway robbery really. And more importantly, they never worked that well. I have sensitive skin and am prone to razor bumps. I never liked shaving with cartridge razors. Even the fancy $3-5 ones.

In short, shaving sucked and was expensive. That’s probably why I never shaved in school and just used clippers a few times a week.

I had heard of using an “old school” safety razor before, but never gave it serious consideration until my father introduced me to them a couple years ago. He had been bitten by the safety razor bug and had amassed a small army of razors, brushes, soaps and different blades. I think he gave me a starter set for Christmas one year. This is sometimes referred to as “wet shaving”.

wet-shaving-01

After using a safety razor for a couple years I can “safely” say that this is far superior to shaving with a cartridge razor. But I didn’t start this blog to write about grooming. There is a personal finance lesson in here. Once you get over the initial start up costs of shaving with a safety razor (which can be minimal if you shop smart), it is much cheaper to shave with a safety razor than with disposable cartridge razors. So this is also a great frugal hack for guys that want to upgrade their shave while keeping dollar bills in their wallet.

And the odd thing is that it is not only cheaper, but you get a far superior shave. My problems with razor bumps have largely disappeared. Shaving is still a chore for me, but it’s less of a chore with the safety razor. In some cases I’d even call wet shaving mildly therapeutic (some people really enjoy it).

Wet shaving may be one of the best frugal grooming hacks for guys, right up there with cutting your own hair. The goal of this article is to give you a quick primer on the subject so you can stop throwing money away with expensive multi-bladed cartridge razors.

The Gear

So you need a few items to get up and running with wet shaving. You can probably get everything you need for under $50 if you buy your safety razor on ebay or at a garage sale. If you were to buy all of this stuff brand new I think you are looking at $100-150 – so there is an upfront cost. But once you have your razor, brush, mug, and stand, expect to pay about $30 a year for consumables (blades, soap, and after shave).

Compare that with what you are currently paying for consumables and my guess is this setup will make financial sense for most people. Plus, the shave is going to be a lot better than with disposable cartridge razors.

The Razor

There are a ton of safety razors out there. Companies still manufacture them, and they have been in production for decades. This is where the “collector” aspect of this activity can emerge, and if you aren’t careful you can quickly amass dozens of safety razors.

Thankfully, that never appealed to me.

There are 2 major kinds of safety razors; adjustable and non-adjustable. I was initially given a Merkur Model 178 non-adjustable razor. This is about as simple as it gets. I actually did not care for this razor all that much and eventually obtained a vintage Gilette “Big Boy” adjustable razor. I liked the adjustable, found that I was able to adjust the razor to obtain a superior shave.

safety-razors

If you want to go adjustable, but not the vintage route, then consider something like the Merkur “Futur”. It’s an adjustable model.

Let me close this section out by saying that this is a rabbit hole if you are into collecting things. There are so many different brands and models of razors, and the vintage element of them means there are far more models than I can possibly discuss in a single article. There are entire websites and forums dedicated to safety razors.

The Blade

The blades that go into safety razors are somewhat similar to the kinds of blades you find at the hardware store. They are wafer thin double edged stainless steel blades, sold in packs of 5 that can be bought in boxes of 100.

Much like the razors themselves, each blade is different, shaves a little different, and offers the end user an endless variety of options.

Personally, I like Astra Blades. My dad gave me half a dozen different blades to try, and I found Astra suited my purposes the best. Astra blades shave nicely, and you can buy 100 for $10. That’s 10 cents a blade. I typically use one blade a week (5 shaves), so $10 worth of blades is good for approximately 2 years of shaving. You can quickly see how economical it can be to shave with a safety razor.

razor-blades

At any rate, if Astra blades aren’t your thing, experiment with a few others (often you can buy sampler packs on e-bay and Amazon and try out a dozen different types of blades), and then you are all set.

In addition to the Astra Blades I also like Gillette Blue blades and Pohl Silvers. They seem somewhat similar to the Astras, but I still prefer the Astra blades for some reason.

The Brush

Real wet shavers don’t use shave gels or shave foams in a can. Instead, they use traditional shave soaps, and they apply them with a shave brush.

Much like razors and blades, there are a ton of different shave brushes out there. There are 3 major types: badger hair brushes, boar bristle brushes, and synthetic brushes.

badger-brush

I started out with a cheaper boar brush (the Semogue 830 – which can be had for around $20), but upgraded to a Semogue badger brush once I realized that I liked wet shaving. Brushes can range anywhere from $10 to $100+. I believe my brush was around $50.

The Soap

Like I said, to get the full experience you will want to pick up some shave soap to use with your brush and shave mug. This soap is a lot better than the foams and gels you buy in a can at the grocery store.

Again, you can really go down the rabbit hole with this stuff and buy all manner of fancy boutique soaps.

shaving-soap

Personally, I like C.O. Bigelow shave cream made by Proraso. I use about a dime worth of the stuff for each shave, and a $10 tube is good for a years worth of shaves. This was after trying out a couple different soaps.

Aftershave

This step is completely optional, but I really like Osage Rub as an after shave. Osage is alcohol based, and experts will tell you to not use an alcohol based after shave as it dries out your skin. For this reason, many shaving gurus recommend shave balms (like the Nivea balm shown in the picture). I never liked Nivea shave balm – go figure. I say do whatever works best for you.

after-shave-stuff

Certainly, after shave isn’t a requirement, and I know many people prefer shave balm instead (notably, Nivea shave balm comes highly recommended by folks in the know – I never cared for the stuff).

Stands, Mugs, etc.

You will also need to acquire a shaving mug / bowl, and a stand for your brush and razor. These are items you can find inexpensively online or at a garage sale or flea market.

I believe I have the Omega 226 brush and stand and I use a mug very similar to this one by Edwin Jagger.

That’s basically it. I use an old toothbrush and some dishsoap to clean my razor, brush and mug after each use. I also use a rubber stopper for my sink, and a little isopropyl alcohol to further disinfect my razor after use.

You may also want to pick up a Styptic pencil or an alum block for the occasional nick.

Technique

Entire websites are dedicated to shaving tutorials, so I won’t pretend to offer a comprehensive guide here. Plus, I consider myself an amateur. I get the job done, but there are people who take this a lot more seriously then me. I’ll briefly describe how I shave for posterity.

Prep

I like to soak my razor, and brush in hot water for several minutes before starting. I fill my shave mug with hot water and stick the brush in there, and leave the razor at the bottom of the sink in hot water.

Ideally, I do this while I take a hot shower. This prepares your face for shaving, and softens up the brush. At a minimum I left the brush soak in hot water for a minute or two.

Lather

After my brush has soaked I go ahead and dump out the water in my mug and knock some of the excess moisture off my brush. I then squeeze a small (maybe a dime size) dollop of shave soap into my mug, and work it around in circular motions with my shave brush to build up a lather. If the cream is too thin I might add a little more. If it’s too thick and won’t build a lather then I add a couple drops of water. I work the soap for 30 seconds to a minute until I have built up a nice lather.

Shave

After building up the lather I apply it to my face with the brush. I spend a couple seconds to work it in. I then grab my trusty razor and do a light initial pass over my face. I follow the grain of my beard and wash off the razor every stroke or 2 (the bottom of my sink is filled with an inch or 2 of hot water so I just dip the razor in the water). The goal with the initial pass isn’t “beard removal”, but “beard reduction”. You aren’t going for a finished product with one pass.

After the initial pass I apply more shave cream and go over my face again. You can work the razor perpendicular to the grain on this pass, or against the grain. I usually don’t bother with that and go with the grain to minimize irritation. I pay special attention to areas that need it (my neck line, underneath my ear, etc) on this pass.

Usually, 2 passes is enough for me to get a presentable shave. Some people like to do 3 passes. I say, do whatever works for you. In shave circles the goal is a “baby bottom smooth” shave. I don’t particularly care if my face is baby bottom smooth. I just want to get to the office and not have people look at me as if I were a hobo. I find 2 passes actually gives me a real nice shave.

Again, I am not going to pretend to be an authority on wet shaving technique, but I will say that it is real important not to put any pressure on your face with a safety razor. Unlike cartridge razors, you don’t need to apply pressure to shave with a safety razor. Go slow and experiment with an easy surface like your cheek first. If you can’t get a perfect shave at first with a safety razor, then finish up with your cartridge razor and watch some YouTube videos on the subject. It took me a couple weeks to get the hang of it, and I did better with an adjustable razor.

Post-Shave

After you are done shaving the first thing I like to do is take a wash cloth, wet it with warm water, and wipe off any excess shave cream. If I missed a spot then now would be the time to take care of that.

Once I’m satisfied with the shave and have washed off my face, I switch to cold water and wash my face with cold water. This closes up the pores.

I then liberally apply Osage Rub to my face. You can use any after shave or post-shave balm that you would like.

If you nicked yourself (which should be super rare once you get your technique down), then consider using an alum block or styptic pencil to help close up the nick.

Final Thoughts

If you have to shave, I think wet shaving is the way to go. It may seem somewhat complicated and time consuming at first, but after you get the technique down it goes really fast (5 minutes?). It’s well worth the time and effort for me.

And I think that safety razor shaving is a great example of how newer isn’t always better. Just because the TeeVee tells you that more blades are better, doesn’t make it true. These old school razors are cheaper and more effective than cartridge razors.

More Reading

Again, I’m not an expert. I’m a regular guy who found safety razor shaving and realized it was less expensive and better than using cartridge razors. Here are some additional resources if you want to explore the subject further:

Badger and Blade – This is the most popular shave forum on the web. They have a buy/sale/trade section which I have told can be quite addictive.
Sharpologist – This is Mantic59’s blog. He is known for being one of the first to create shaving “How To” videos on YouTube.

Books as Mentors

I am not sure where I first heard of the concept of using books as mentors. It may have been Ryan Holiday. At any rate, who explained how before he attracted a true mentor he used books as mentors. That could almost be akin to being raised by wild wolves. I’ll say that in my professional career (as a civil trial lawyer), my real life mentor has taught me much more than any books I have read on that subject.

But still, books definitely have their place. They can be a great reference and a wealth of perspective. I have benefited greatly from reading books in my life. I think reading tons of fiction was one of the few things I did as a kid to help distinguish myself from my peers. I try to always be reading something and one of my 2016 goals was to read 2 books a month in 2016.

And in many ways I have chosen books as mentors, and over the past few years have really fallen in love with reading biographies. Mostly biographies of successful business people, although a few random bios have snuck into my queue.

What I would like for this post to be is a list of some of my favorite biographies to date. To be updated and annotated as I come across new biographies I enjoy. How does this play into financial independence? I think reading biographies of wildly successful people will inform my financial future. If I can take away one piece from each book, and use that to form a habit, or have that be the basis of an idea that I can apply to myself or my business, then the money will slowly follow.

Ok, on with the list.

Titan – John D. Rockefeller – Ryan Holiday is a huge fan of this book, and after reading it I can see why. This is an epic biography of a titan of capitalism. Like many highly successful people, Rockefeller was a crazy man. His focus and zeal for business and improvement are paramount. His results are spectacular. Highly recommended.

The Power Broker – Robert Moses – I had never been particularly interested in New York City. Which is odd, as I was born in New York (but quickly moved to the South). This book changed that, and is a fascinating account of a man who literally shaped NYC. I am somewhat embarrassed to say I have not visited New York City yet, but after reading this book (and watching countless Casey Neistat vlogs), it’s only a matter of time.

The Snowball – Warren Buffett – I greatly enjoyed this book. Buffett is idolized among investors, and for good reason. To read about his rise (and peculiarities) fascinated me to no end. A must read for anyone interested in business and investing.

Steve Jobs – Walter Isaacson’s portrayal of Steve Jobs was another biography that I couldn’t put down. Steve Jobs is another crazy business person. Driven beyond measure he built two companies and amassed a fortune many times over. But despite all his success I don’t know how many people could honestly say they would want to be like Steve Jobs after reading the book. The man had problems (don’t we all).

Elon Musk – This was an epic story. In the age of Silicon Valley entrepreneurs who build businesses that don’t see to “do” much of anything (Uber, AirBnB, Twitter, etc), here is a man who tackled electric cars, space travel, and solar energy. These are tangible, capital intensive, heavily regulated industries. All I can say is that Elon Musk has far bigger balls than I, has sought to solve some of the world’s biggest problems, and it was a true treat to read this account of his rise.

Jeff Bezos – Ok, I realize this list is fairly tech heavy, but I am a big Amazon fan, and I was just as big of a fan of this unauthorized biography of Jeff Bezos. Another oddly twisted man, who used his psychosis to build the biggest e-commerce company of all time. But what I found interesting about this book, is all the other businesses under the Amazon umbrella, and the stories from the retail trenches, outlining the tactics that played out as Jeff sought to disrupt major players in book selling, music, and steak knives.

Andrew Carnegie – Another industrialist. I found Andrew’s biography interesting because of how hands off he was with his business. Yet he managed to amass a staggering fortune. This book was a little slower at times, as much was dedicated to things besides the rise of his business (as he didn’t appear to spend a whole lot of time on his businesses once he got them going, and brought in capable partners to manage them for him). But this book definitely had it’s moments and I am glad I finished it.

How I Lost My Virginity – Richard Branson – being a Yank, I had heard of Richard Branson, but didn’t really know much about the man or his businesses. I knew he had an airline, a record company, an island in Virgin Islands, and that was about it. This was an autobiography, and is written in the same cheeky and irreverent style that I suspect Richard is known for. He is a charming and charismatic man, and I enjoyed reading about his beginnings (running a barely profitable magazine, of all things). The end of the book was a little flat for me, with much time spent on his charitable work in Africa, and talk of working with various political leaders and celebrities. But the meat of the book was great, and this was a fun read.

That’s all for now. I have read more business biographies, but these are the ones that are top of mind at the moment. Let me know if you have any recommendations for more in the comments section.

My Lending Club Experiment Fail

Lending Club is a much talked about investment strategy in the personal finance blogosphere. Perhaps because it has a robust affiliate marketing program behind it. That seems to rule much in the world of professional blogs (if it doesn’t make dollars, then it doesn’t make sense). At any rate, you have a number of folks singing the praises of Peer To Peer (P2P) lending, with LendingClub being P2P’s lending chosen son.

And the value proposition is exciting; at least on paper, if you read the highlights. Here is a chance for the little guy to be a bank, and loan people money at credit card interest rates $20 at a time, diversified over a pool of borrowers. It’s supposed to throw off lots of cash and offers the prospect of double digit interest rates, without the volatility of stocks. Sounds fantastic.

Like many who read the articles, I too decided to give P2P lending a whirl. At the time (late 2014) the stock market seemed to be climbing higher and higher, and the thought of investing in something like treasury bonds didn’t excite me. I wanted to cordon off a small piece of my portfolio and have it be a skunkworks of sorts – invested in things like individual stocks, precious metals, and consumer debt. The rest of my money is invested in diversified low cost index funds with Vanguard, so this is experimental stuff.

After reading MMM’s very cavalier approach on investing in P2P lending (just crank the automated investing dial over to the highest risk / highest reward section and damn the torpedoes) I decided I would follow a similar approach. I figure what the hell, I’m not going to loan my money to random people for some average return. I want an awesome return.

Unfortunately, LC didn’t have this same high risk / high return setting that MMM apparently had at the time, so I spent a few hours researching Lending Club strategies and landed on a strategy (which was tested on Nickle SteamRoller, a P2P lending analytics site) that purported to yield results in excess of 20%. This strategy involved only investing in the riskiest classes of notes with some filter that theoretically sifted out the best smelling turds in the toilet.

What could possibly go wrong?

I started with $2,500, the minimum required to qualify for LC’s automated investing program. Unlike some people, I had zero desire to hand pick loans. I also decided to automatically add $25 a week to my account. I am pretty sure I threw some more money in there (another $500 here or there over the first 6 months or so). Currently my portfolio is valued at just over $5,000.

And originally I seemed to be starting out that the 20%+ return advertised. It was pretty sweet. It actually stayed in the high teens for several months (6 months? I don’t really remember), but it slowly started to decline.

Initially I was cool with it. After all, 20% returns are pretty crazy. It was unlikely that the portfolio would keep that momentum forever. I’d be fine if it generated a return in the high teens.

But every time I logged in to Lending Club, the returns would slowly decline. I figured if it was still yielding 12% or whatever then that’s fantastic. Double digit returns of any kind would be welcome at my house.

Then it dipped below 10%. I reviewed the statements, and saw that each month my earnings were slowly going down. Then in January 2016, my losses from delinquent loans exceeded the interest I received. Here is a spreadsheet of my results in all their gory detail:

Statement DateAcct TotalInterestLossesTotal Earnings
11/30/2014
2517.7818.09018.09
12/31/2014

2551.7934.58034.58
1/31/2015
2638.6337.46037.46
2/28/2015
2678.0840.11040.11
3/31/2015
3325.9148.68048.68
4/30/2015
3480.6255.64055.64
5/31/2015
3734.1154.41054.41
6/30/2015
3921.4463.52063.52
7/31/2015
4090.5569.3624.0545.31
8/31/2015
4451.3161.91061.91
9/30/2015
4593.8667.223.4743.73
10/31/2015
4770.8476.9223.4553.47
11/30/2015
4923.4173.823.3350.47
12/31/2015
5067.2186.4543.2843.17
1/31/2016
5175.0277.9394.26-16.33
2/29/2016
5,213.84
78.25
137.19
-58.94
03/31/20165,366.1995.0246.6448.42

Ouch. A pretty swift kick in the nuts here, although I suppose I shouldn’t be too surprised. I was chasing unusually high returns, so to see it come crashing down on my head was always a possibility.

At that point I decided to adjust my automated portfolio settings, and shifted to a less aggressive strategy. It’s too early to tell if this will turn my Lending Club ship around, or if my portfolio is destined to be an “outlier” in the Lending Club promotional material.

Lending-Club-Returns-for-Diversified-Accounts-by-Portfolio-Age

Looking Forward

So keep an eye on this post, as I will update it periodically and will continue to invest. Needless to say, I’ll be interested to see if I can right this Lending Club disaster train, or whether my portfolio will continue to go off the tracks. At this point, it is what it is. I can’t sell these notes like I can sell a stock, and don’t feel like trying to sell off these defaulting loans one dog at a time on the LC marketplace.

Instead, I’m going to ride it out and let this post serve as an example for people interested in Lending Club. I’m not here to say that Lending Club is a bad investment. Plenty of people have demonstrated that LC has the ability to generate stable returns (at least, over the past few years while we have been on a bull market).

I think it has the potential to be a decent investment and it’s a cool idea, but if you aren’t careful it’s possible to lose money on these loans. So it will be real interesting to see what happens if the economy shifts further south. After all, these are unsecured personal loans. There are no hard assets to back these up. People take out Lending Club loans to do things like refinance credit cards, pay off medical debt, etc. There is no real estate mortgaged or collateral pledged.

With that said, I hope Lending Club is suing some of the people who default on these things. I know regular credit card companies are quite litigious, and I have seen plenty of folks sued by big banks over defaulted credit cards. On average they probably collect 30 cents on the dollar, but it’s something.

But it begs the question, does Lending Club really care if people default on these loans or not? I suppose at some point they would care, if the level of charge offs got so high that it significantly effected the average rate of return. As it stands, I have no idea. Lending Club claims to sell charged off loans to third parties who try to collect on those loans. These parties usually take these on a contingency, so they get a good portion of any recovery. Then whatever is left trickles back to the issuer of the note (theoretically). Lending Club admits in their own FAQ that “recoveries on previously charged off loans are infrequent.”

Now I am not writing all of this because I am mad at Lending Club. I’m not, and at this point I don’t regret the decision to invest (and again, I purposely picked a risky strategy), but since there seems to be an overwhelming amount of positive press on investing with Lending Club, I’d like to play the role of devils advocate here.

So the way I see it there are 3 major problems with investing with Lending Club:

  1. These are unsecured loans, meaning there is no collateral to recover in a default;
  2. There is little liquidity with this investment; and
  3. These don’t necessarily, run inversely with the stock market, and I am guessing a major downturn with the S&P will also hurt your LC portfolio.

All of this equates to a pretty risky investment in my book.

But still, Lending Club may have its place in a portfolio. The jury is still out for me.

Some Final Thoughts

It was important to me to write this article, even though it’s somewhat embarrassing to talk about. Like most people, I have an ego, and the thought of admitting to the internet that my investment went sideways was not my first instinct. I’d much rather write about how this investment yielded double digit returns, and that I’m an investment rockstar.

But I want this blog (which is really a glorified diary at this point) to be real. I want it to reflect the highs and lows of my businesses, and my investments. I want to celebrate the victories but also identify the losses. I don’t want it to be some candy coated crap. The reality is most of what I have done in business is swimming upstream and I have been shaped by my mistakes. I like to think I have learned from them. A whole lot of learning has gone on in my short existence.

Hopefully someone will learn from this experience, and maybe one day it will spark a discussion.