Part 232: The link between the Fermi Paradox and Compound Interest

Hello and welcome back to Mortgage Advisor on FIRE.  This week I discuss the link between compound interest and the Fermi Paradox.  Also, some updates on our BTL, and our neighbourhood cats.

Quote of the Week

This question, or something like it, was asked by physicist Enrico Fermi in 1950 whilst discussing the possibility of intelligent alien life with his colleagues.  The universe is huge, I’m sure you don’t need to be told that, but on a smaller scale so is our galaxy.  It’s almost beyond comprehension how vast the cosmos is.  

The view held by many is that the universe is so large, that it’s a statistical improbability that there is no intelligent alien life out there.  I think we have to be careful citing statistics in this argument because we only have a single data point; Earth.  So far we’ve not discovered life anywhere else; intelligent or otherwise.

The Milky Way galaxy is roughly 100,000 lightyears across and contains hundreds of billions of stars.  Within just 50 light-years of Earth, there are approximately 1,800 stars spread amongst a lower number of star systems; binary systems are quite common.  We have been pumping out radio and other types of signals of our presence such as pollutants in our atmosphere that would be visible to observers within such a distance.

We can deduce the atmospheric composition of far-off exoplanets, so it’s not much of a stretch to assume that alien civilisations could do the same.  Certain gases are mostly produced artificially, and if there’s a concentration of them in the atmosphere you can be fairly confident that something is producing it.  I’m thinking of methane and dimethyl sulfide specifically.  

When methane is produced it is not stable enough to survive for long periods.  In our atmosphere, it reacts with ozone to produce water and carbon dioxide.  If there is a constant source of methane, then it does point to the possibility of life.  

The Fermi Paradox

The Fermi Paradox is the conflict between the idea that life must be abundant with such a vast number of stars out there, and the fact we’ve seemingly not had any contact with it or discovered any conclusive proof of its existence.  

I’m not so convinced that this is a paradox though.  The vastness of space can support the argument for there being life out there, but it can also explain why we haven’t discovered it yet.  It takes light years to reach our nearest neighbouring systems, and as far as we understand physics, travelling faster than light just isn’t realistic.  Even sending radio or laser signals to other star systems depends on the signal being strong enough and not suffering divergence over long distances.  Interstellar communication, even at light speed, would be a massive undertaking and assumes both parties would be communicating in the same way, at the same time.  

I’m not going Full Nerd on this because it could take up several hundred thousand words and I still would only have scratched the surface.  However, one of the main reasons I’m doubtful that there’s been an advanced alien race in our galaxy can be linked back to finance and investing.

What am I thinking of?

If you said von Neumann probes you would be correct.  A von Neumann probe is a type of self-replicating spaceship that is designed to explore space and harvest materials to build more of itself.  Then, the ones that have been built proceed to build more, and the process continues.  It’s essentially compound interest.  It would not take too long, in the context of the age of the universe, for a species to start a project like this and then see that project expand so that the probes have visited every corner of the galaxy.  Assuming the probes travel at 10% of C then the probes could cover the whole galaxy in a few million years.

Compound Interest

It’s just not realistic for most people to achieve FI without taking advantage of compound interest.  You need your money to make more money, which in turn makes more money.  Your wealth replicates like the way von Neumann probes self-replicate.  You need your money to be working for you every hour of the day, every day of the year.  Unless you are earning an absolute fortune or come into a huge sum of cash, this is the only way to FI.

Weekly Update

Our week started on a bit of a downer.  We had four viewings booked for our BTL, but two of them cancelled and the other two just didn’t show up.  It’s not a great way to start the week.  We need to get the property sold and I’m not sure why four separate groups or individuals would book an appointment to view somewhere, and then either cancel or not turn up.  One or two would be understandable, but all four not taking place seems strange.

I’ve decided I need to cut down on my caffeine consumption.  I read one of those lists, on Bored Panda I think, where people talk about the best little changes they’ve made in their life.  One person commented that when they cut down on caffeine, their anxiety massively reduced.  It makes some degree of sense with caffeine being a stimulant.  I’m not sure I could ever totally give up caffeine, so I’m going to try and go from four cups a day to three, with the third one being decaf.

Oana has had a few more interviews for jobs and has a good feeling about a couple of them.  Hopefully, something will come along soon.  I don’t think either of us expected the search for a new job to take this long, but it is what it is.  I’m convinced there’s an element of racism involved, whether it’s conscious or not.  

John Lewis

We had our third, and hopefully final, visit from John Lewis last weekend.  This was to correct the wiring they’d failed to install correctly the previous two times.  I sent a fairly detailed email to John Lewis about it, and their reply essentially ignored all the points we made and stated that they needed to come out a third time to make sure it was all correct.

If there’s one thing that is guaranteed to tip me over the edge it’s when I explain an issue to someone, covering all the relevant points, and they take some time to think about before coming back with a response that is just repeating the same information.  It went something like this;

My Email to John Lewis (abridged)

We ordered an oven with installation.  Your guys did not install it correctly and you called me to explain you needed to come out again.  Following that second visit, you called me again and explained that the repair work had caused another issue that you needed to sort out.  During each visit, the engineers were polite, but not very clean.  For example, we gave them a blanket to use as they needed the rest the oven on something that wouldn’t damage our flooring.  Following this they put the blanket back on our clean sofa.  Also, I’m autistic and hate having strangers in my personal space.  

JL’s Reply (abridged)

Our records show that it was necessary to come out two further times following the initial installation, and this was because our quality assurance team highlighted errors with the work that had been completed.

That was it.  Their response to the complaint was just to slightly reword things and tell me the information I already knew, and they should know I already knew because I told them that same information.

John Lewis also failed to acknowledge many of the other points we raised and it just seemed like a “we don’t give a shit” response.  All in all, a hugely frustrating experience.  To have three separate appointments to install an oven is crazy, and we’re now left wondering if the installation is even safe and/or correct now.

Looking Back

In case you missed it, I posted another instalment of the Looking Back series earlier in the week.  I discussed budgeting and the concept of Paying Yourself First.  

Kelham Island Cats

I’ve often mentioned our cats in this blog and I thought it was only fair to share the love for the cats in our neighbourhood.  Oana and I know many of the local cats, and we always stop to say hello when we meet them as we walk to the shops or are just having some fresh air.  These cats are all pretty friendly, and we’ve met most of their owners.  Here are some pics:

Felix lives around the corner from us and is a big cat.  He’s friendly and comes to say hello when we see him out and about.

These two cats are small and live together a few doors down from Felix.  We only found out their names on Saturday.  They’re very friendly and come over for head scratches.  They can sometimes be found playing with Felix.

We’ve not seen this cat outside, but the house it lives in has full-length windows and a cat tree up against the window.  This cat will often be on the tree either sleeping, cleaning, or just generally watching the world go by.

This little fella is a cat I’ve seen for a few months now.  When I would walk past it would come bounding over and want attention. We have named the cat Squirrel because, well, why not? Anyway, Squirrel always comes running to us when we are nearby and always gets scratches and plenty of compliments.  We don’t know much about Squirrel except for which house they live in.  I think this kitty is very young still, but seems happy enough.  It always brightens our day when we see this sweet young cat.

What am I doing?

TV: MasterChef (BBC).

Audiobook: For We Are Many – Bobiverse Book 2 by Dennis E. Taylor.

MasterChef has started up again, so now we can start judging people’s cooking whilst sitting at home eating pasta.  The early rounds are always funny with some real disasters in the kitchen.  Other than watching this on BBC, I’m not watching anything regularly.  I’m more focused on writing and listening to audiobooks and podcasts.  I’ve also been watching a lot of YouTube, specifically the channels The Infographics Show, Cool Worlds, Ownage Pranks, and then various sci-fi-related videos.  

I’m also enjoying my new book series which is a sci-fi story involving self-replicating spaceships all controlled by multiple versions of the same person, Bob.  I’m almost at the end of the second book and it’s proving to be a refreshing and entertaining story.  I think there are four books in the series and I’m looking forward to seeing where it goes.

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Financial Update

Assets

Premium Bonds: £13,225.00. 

Stocks and Shares ISA: £65,157.63. 

Fuck It Fund: £6,076.10.

Pensions: £76,810.77. 

Residential Property Value: £228,116.00. 

BTL Property Value: £147,203.00.

Total Assets: £536,588.50.

Debts

Debts

Residential Mortgage: £172,638.93. 

BTL Mortgage: £104,885.22.

Total Debts: £277,524.15. 

Total Wealth: £259,064.35.

Investment Income in 2023: £1,192.76 (target £10,000).

The numbers are looking good with gains across the board.  It’s a shame that mortgage rates have gone up as we’re not making a lot of progress in reducing the debt.  I had a little extra income at the start of the month with interest from bank accounts.  

ISAs

There’s been some more talk about capping ISAs in the news this week.  The thought is that ISAs are removing a lot of funds from the tax system, and as such the government is losing a lot of tax revenue.  I don’t buy this as an argument.  I think the real fear from the Tory government is that more young people want to use ISAs to try and escape the rat race.  

Almost everyone chasing FI is using an ISA as a major part of the plan.  In 2021/22 it’s estimated that approximately £34B was invested into ISAs in the UK, whilst the annual budget for the UK was somewhere north of £1T.  We’re talking about a tiny fraction of the UK GDP as well, which was over £2T.  If ISAs were scrapped, or capped, it’s not going to raise huge sums of money when placed in the context of the budget and GDP figures.  Also, one has to consider the impact of many people not having ISAs to fall back on in the future, and these people will have to draw upon state benefits.  To me, the argument that scrapping ISAs would generate more cash for the country just seems wrong, and a cover for the real reason which is to try and stop social mobility.  

If you ever wonder why something is being done, ask the question “Who will benefit financially?” and the pieces normally fit together pretty quickly after that.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, nor should they be considered advice.

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