Once a prison island . . .

The First Fleet Ships (Convicts) | Discovery of Australia | Seacraft Gallery

Convicts sent to Australia from England and Ireland were sentenced to either seven years of hard labour, fourteen years or life. None were allowed to return home. That was the punishment: to live out their lives on the opposite side of the world, far from civilization.

Those who escaped mostly assimilated into Aboriginal tribes beyond the frontier of settlement. Finding a berth for the perilous, eight-month return journey was almost impossible.

In one of history’s customary ironies, some convicts found life in the antipodal hellscape agreeable enough to send for their families, a policy encouraged due to the severe sex imbalance. Colonial women frequently suffered problems during labour because they were small from growing up in poverty while their unborn babies grew large from their mother’s new, protein-rich diet.

They were still poor but land was plentiful and mutton was cheap.

Few of the big, colonial-born subjects of the Empire returned to their ancestral homelands. They were allowed to but the tyranny of distance meant that few could even consider such a journey.

In later years, many Europeans would emigrate as free settlers in hope of a better life. Like the convicts, their farewells were mostly final as few saw their relatives in the old country again.

In 2021, we see a rebirth of this strange phenomenon of prison-island-as-haven.

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Friday Finance: the trouble with REITs


This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual for Building Liberating Wealth on a Low to Medium Income.


There is a way to invest only a small portion of your capital in property instead of buying a whole house.  This is through a fund that pools investor money and uses it to invest in many properties.  Such a fund is usually called a real estate investment trust (REIT, pronounced ‘reet’).  Through this vehicle, you can put exactly as much or as little of your wealth into property as you want, with plenty left over for investing in shares and bonds in order to better diversify your holdings. 

In addition, these REITs can invest in a variety of types of properties, i.e. mortgages, commercial office space, or retail, and they can invest across many locations, thus significantly reducing the risk should any one investment go bad.  For some investors, this can be a good way of getting into property without having all the hassle of owning an actual house.

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Friday Finance: should you buy an investment property?


This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual for Building Liberating Wealth on a Low to Medium Income.

An Investment Property

You might want to buy a property in order to charge others rent to live there rather than live in it yourself.  In addition to the rent, which will perhaps increase over time, you’ll hopefully profit from capital gain when you eventually sell the property for a higher price.  This is called an investment property.

In many countries it offers generous tax concessions.  However, you should not be buying an investment property just for the tax advantage – it must be a sound asset to begin with.

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Beware of these two finance gurus


Jessica Irvine is a Senior Economics Writer at the Sydney Morning Herald, one of Australia’s premier legacy media outlets. She’s kind of a big deal.

I’ve been following her with bemusement for a while, mostly because of her far-fetched stances on some issues. For example, she’s one of those jaded feminists who proclaim true equality will be reached when child-care is provided free by taxpayers (men) so that strong, independent single mothers like her don’t need to depend on any particular man.

Her reasoning powers are also on display in this TV appearance where she claims that a federal minister accused of rape (via a letter from a dead woman, not a police complaint) should not be given a ‘platform’ (press conference) to defend himself. On the grounds that the accuser can no longer speak for herself. Jessica’s not saying he’s guilty of course, just that men in parliament need to be ‘held to a higher standard’ and that ‘the Prime Minister should take a stronger stance’ (sack him without evidence).

Yikes, I only just found that one when searching for her qualifications. This was going to be a gentle piece but now the gloves are off. After all, such a prominent person with a national platform should be held to a higher standard.

Back to finance. Some time ago, Jessica gregariously wrote posts listing her exact superannuation savings, the cost of her house, and hinted at what deposit she’d put down and how’d she’d managed the financing – a bit of help from Australia’s most trusted institution, the Bank of Mum and Dad. No shame there. The median house price in Sydney and Melbourne is around $1M so purchasing a home is an intergeneration project.

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Friday Finance: do you need to buy a house?


This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual for Building Liberating Wealth on a Low to Medium Income.

Growth Assets 2: Real Estate

Executive summary:

Jargon: The terms ‘real estate’ and ‘property’ can include houses, apartments, office space, retail space, or even farmland.

Risk: Like shares, it is possible for the value of real estate to fall as well as rise.  More about this below.

Return: If you go online you can enjoy reading never-ending arguments about which is the better growth investment in the long term, shares or real estate.  These threads usually end in vicious personal insults and accusations that the other contributor is merely a shill for the rival investment vehicle, and an idiot.  I’ll not get into it. 

Let’s leave it at this: over a long investing horizon, returns on real estate in general are comparable to those of the stock market, i.e. pretty high.  That’s what makes it a growth asset.

The details:

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Death rates

Some time ago I tried looking up total death rates for different countries to get a mathematical view of Covid’s impact. Curiously, one of the countries that compiles and releases its data first is Sweden.

What I found was so interesting that this post will only consider Covid in passing as it investigates broader trends.

Have a look:

You can see the Covid bump in 2020, likely to be repeated in 2021, but there are many other interesting things going on in this graph.

First, there’s a very obvious downward trend over the decades. You can see how improved nutrition, medicine etc. over the last century led to dramatically lower death rates, especially among infants.

There’s also a bulge over the 1980s. This is no doubt due to the age structure of society at that time as the graph shows crude death rates that are not adjusted for the age of the population.

Do you see those really big spikes? That’s what major pandemics look like. No doubt you can spot the Spanish Flu of a century ago.

Notice how early years have much more irregular death rates due to pandemics (mostly), harsh winters, crop failures and other perils of the pre-modern period. Compare to how death rates smooth over the twentieth century along with economic and technological development.

Most people understand that death rates have gradually declined since the Olden Days but it’s surprising to see that mortality has continued to drop even in the twenty-first century. In Sweden’s case, this decline is such that the Covid blip pushed 2020’s mortality rate up to what would have been normal a decade ago and still well below the average of two decades ago.

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Friday Finance: are you a sophisticated investor?


This is an extract from The Poor Man’s Guide to Financial Freedom: A Realistic, 10-Step Manual for Building Liberating Wealth on a Low to Medium Income.

What is a sophisticated investor?

Some investments are recommended for, or restricted to, ‘sophisticated investors’, also called ‘accredited investors’.  This is because the investment requires a high level of capital or expertise to manage properly.  Such products are sometimes called ‘wholesale’, rather than ‘retail’, which means that they are mostly marketed to institutions rather than to individuals and often the minimum investment amount is half a million dollars or more. 

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