The UK Government publishes a lot of Open Source code - nearly everything developed in-house by the state is available under an OSI Approved licence. The UK is generally pretty relaxed about people, companies, and states re-using its code. There's no desire and little capability to monetise what has been developed with public money so it becomes public code.

What about the Open Source that UK Government uses?

The state uses big projects like WordPress, as well as moderately popular NPM packages, and small Python libraries and everything in between. But can it pay the maintainers of that software?

A version of this blog post was originally published on Hackernoon.

Fixing The Plumbing

Open Source is facing a crisis. The code that the world relies on is often developed by underpaid engineers on the brink of burn-out. While I don't think anyone wants Open Source to have a paywall, it seems obvious that large organisation should pay their way and not rely solely on volunteer labour.

Here are some of the problems I faced when trying to get the UK Government to pay for OSS and how you as a maintainer can help make it easier for large organisations to pay you.

Firstly, lots of OSS doesn't have a well defined owner; so who gets the money?

I'm not saying that every little library you create needs to be published by a registered company, nor am I suggesting that you should remove your anonymity. But Governments and other organisations need to know who they are funding and where the money is going. The danger of accidentally funnelling money to a sanctioned state or person is just too big a risk for most organisations.

If you want to receive funding - make it really clear who you are.

What Can You Offer?

Even when there is an owner, there often isn't an easy mechanism for paying people. Donation sites like GitHub Sponsors, Ko-Fi, and Patreon are great for individuals who want to throw a small amount of money to creators but they can be problematic for larger organisations. Many OSS projects get around this by offering support contracts. It makes it much easier for an organisation to justify their spend because they're no longer donating to something which can be obtained for free; they're paying for a service.

This doesn't have to be a contract offering a 24/7 response and guaranteed SLA. It can be as simple as offering best-effort email support.

The important thing is to offer an easy way for a larger organisation to buy your services. Many organisations have corporate credit cards for lower-cost discretionary spending which doesn't require a full business-case. How easily could a manager buy a £500 support contact from your site?

Maintainers don't only have to offer support contracts. Many choose to offer training packages which are a good way to raise money and get more people using your product. Some project maintainers will speak at your conference for a suitable fee.

Again, the aim here is for maintainers to offer a plausible reason for a payment to be made.

Playing Well With Others

Open Source has a brilliant culture of allowing multiple (often anonymous) contributors. That's fine when there's no money involved, but how does a moderately sized project decide who receives what share of the funding? Services like OpenCollective can make it easier to show where the money is going but it is better to discuss in advance with all contributors what they expect as a share.

If people think they're being taken advantage of, or that a project maintainer is unjustly enriching themselves, it can cause arguments. Be very clear to contributors what the funding is for and whether they're entitled to any of it.

Finally, we faced the issue that some OSS projects didn't want to take money from the "big bad state". They were worried that if people saw "Sponsored by the Government" they would assume that there were backdoors for spies, or that the developer might give in to pressure to add unwanted features. This (usually) isn't the case but it is easy to see why having a single large organisation as the main donor could give the impression of impropriety.

The best defence against this is to have lot of paying sponsors! Having the state as one of many partners makes it clear that a project isn't beholden to any one customer.

It isn't impossible to get Governments to spend on Open Source. But state spending is heavily scrutinised and, bluntly, they aren't set up to pay ad hoc amounts to non-suppliers, who aren't charging money. While large projects often have the resources to apply for Government grants and contracts, smaller projects rarely have the time or expertise. It is critical that maintainers remove the barriers which make it too hard for organisations to pay them.

In Summary

• Make it easy for Governments and other large organisations to pay you.
• Be as obvious as possible that you are able to accept payments from them.
• Don't be afraid to put a large price on your talents.
• Offer multiple paid-for options like speaker fees, support, and feature development funding.
• Talk with your contributors to let them know how any funding will be shared.

What if, we said, you could tip a journalist directly on social media? Or reward your favourite creator without leaving the platform? Or just say thanks by buying someone a pint?

Here's a trivial mock-up:

Of course, this hides a ton of complexity. Does it show your local currency symbol? Does the platform take a cut or does it just pass you to the poster's preferred platform? Do users want to be able to tip as well as / instead of reposting and favouriting?

But I think the real problem is the perverse incentives it creates. We already know that relentless A|B testing of monetisation strategies leads to homogeneity and outrage farming. Every YouTuber has the same style of promotional thumbnail. Rage-baiters on Twitter know what drives the algorithm and pump out unending slurry.

Even if we ignore those who want to burn the world, content stealers like @CUTE_PUPP1E5 grab all the content they can and rip-off original creators. At the moment that's merely annoying, but monetisation means a strong incentive to steal content.

When people inevitably get scammed, would that damage the social media platform? Would promoting a payment link lead to liability? Now that money is involved, does that make hacking more attractive?

And yet… Accounts add payment links to their profiles all the time. Lots of accounts regularly ask for donor and sponsors. GitHub sponsors exist and I don't see evidence of people impersonating big projects and snaffling funds.

It is somewhat common for platforms to pay for publishers to be on their site. If you're starting up a new service then you need to give people an incentive to be there. That might be as a payer or receiver.

Personally, I'd love a frictionless way to throw a quid to a helpful blog post, or effortlessly donate to a poster who has made me laugh. Selfishly, I'd like it if people paid me for my Open Source or (micro)blogging.

I don't know whether Mastodon or BlueSky will ever have a payments button - and I have no influence on their decision-making process - but I'd sure like to see them experiement.

You can read more discussion on Mastodon.

Or, feel free to send me a tip!

• Buy me a gift from my Amazon wishlist
• Sponsor me on GitHub
• Send me money via PayPal
• Support me on Ko-Fi
• Become a Patreon
• Join my Open Collective
• Donate using LiberaPay
• Pay with Wise

It is, thankfully, surprisingly cheap! In part, that's because it is a relatively simple tech stack - PHP, MySQL, a couple of API calls to external services. It was designed to be as low cost while also being useful. Here's the breakdown:

Hosting - £171 per year

Our biggest expense but, I think, our most reasonable. Krystal charges around £342 for a 2 year contract. That includes unlimited bandwidth and storage, as well as the domain name. We have nearly 400GB of photos and bot scraping means we can use over 900GB of bandwidth per month - so Krystal give us a rather good deal!

Use this affiliate link and code EDENT to get a small discount.

Stadia Maps - US$20 / month

Geocoding is surprisingly hard to do locally. We need to transform latitude and longitude into addresses, and then back again. Stadia Maps cost about the same as our hosting! What's rather annoying is that we only use about half the API calls in our plan. We need to find a cheaper solution.

Mapping - Free!

When we used Stadia for drawing maps, we regularly ran over our quota. So we switched to OpenFreeMap which produces gorgeous interactive maps.

The service has been rock solid and very responsive to bugs on GitHub.

Logo - US$5

I'm not a good designer, so we bought a logo from The Noun Project and then coloured it in. Bargain for a fiver!

Image CDN - Free!

Although we have unlimited bandwidth with Krystal, we're only located in one region - the UK. WeServ. It's also pointless serving full resolution images to small screens.

So WeServ offers free image resizing and global CDNs. Personally, I'm not a fan of CloudFlare (their CDN partner) so I'm looking to change provider.

OCR - Free!

People don't want to type in the inscription of the photo, so we use Google Cloud Vision.

We send less than 1,000 requests per month - so we're inside their free tier. If we get more popular, that'll get more expensive. But I don't know of a local-first OCR which is as good as Google's. Sadly, Tesseract is rubbish for extracting text from photos.

Authentication - Free!

We don't want to store anyone's passwords. The free tier of Auth0 allows us to do social login for up to 25,000 monthly users. Which is more than enough for us.

Sadly, Auth0 don't support the Fediverse, so I had to build my own "Log-in with Mastodon" service.

As much as we'd like to run social login locally, we simply don't want to be responsible for securing users' details & API keys.

Software - Free!

As per the OpenBenches colophon we use a lot of cool FOSS. Small JS libraries, big PHP frameworks, and everything in between.

Income

Thanks to GitHub Sponsors we make a whopping US$3 per month!

Similarly, our OpenCollective Sponsors brings in about £3 per month.

Merchandising! You can buy OpenBenches branded t-shirts, mugs, and hats. That nets us about £20 per year

Call it roughly £80 income. OK, it is better than nothing - but doesn't even cover a quarter of our costs. Sometimes people give us a higher donation privately, which is also very welcome. These people are listed on our README.

Total

On the assumption that our time is worthless (ha!) and that we only rarely go over our providers' API limits, and we get in some revenue, the cost of running OpenBenches is less than £300 per year.

That's not bad for a fun little hobby. People certainly spend more than that on Funkopops, vaping, and mechanical keyboards!

Nevertheless, I'm always slightly worried that we'll go viral and have an unexpectedly high bill from our API providers.

I would love to be able to hire a proper designer to make the site look a bit nicer. I also want to be able to buy a modern iPhone so that I can test it in the latest Safari.

If you have any suggestions for cutting costs, or non-scummy ways to help us raise funds, please drop a comment below.

A few months ago, my wife and I went on a 30 day Interrail holiday across Europe. 10 countries, over a dozen cities, making over a hundred payments.

I looked in the window of every cafe, restaurant, corner shop, pub, bar, museum, and tourist-trap that we went into. All of them accepted a wide range of credit cards. Some politely informed us that they were either cash-only or no-cash. A few gleefully accepted foreign currencies at ruinous exchange rates.

None advertised accepting crypto.

Due to the language barrier and the risk of looking like a bellend, I didn't actually ask anyone if I could pay with crypto. But every bill we were handed told me which (fiat) currencies I could pay in. The tip-jars let me tap my card or drop my (metal) coins. There were signs warning that I couldn't use American Express.

But, again, no mention of crypto.

I literally only saw one sign that cryptocurrencies existed. Tucked away in Zagreb train station, next to the left-luggage lockers, was this:

I've never used a crypto ATM before. I've no idea if it's safe or whether it'd give me a good deal. I also didn't know whether a guy with a crowbar would follow me out of the station. But, hey, YOLO!

There was no queue of people waiting to use it, so I thought I'd investigate.

Delightfully, it wasn't just Bitcoin that it offered:

Including two subtly different stable coins. Which is nice, I guess.

I clicked through a screen confirming that I wasn't a Politically Exposed Person and got hit by this screen:

I've never had a cash ATM warn me about those kind of scams. Progress!

And yet, after wandering Zagreb for a few days, I didn't find anywhere to spend whatever crypto I could've purchased from there. I went to laundrettes, museums, galleries, bougie little eateries, and had dark kitchen deliveries. None advertised their acceptance of crypto.

Perhaps I'm not cool enough to go to the hip underground club where all the cocktails are only purchasable with an obscure shitcoin. Maybe there's an exclusive casino where all the beautiful people spend their evenings playing baccarat chemin de fer for tokens?

Or perhaps I'm just unobservant.

In the last few years I've wandered through the twisty passages of the Marrakech Medina and pounded the mean streets of Halifax, Nova Scotia. I've drunk in the bars of Kuala Lumpur and slurped food-court noodles in Hong Kong. From Sydney to London, I'm not exaggerating when I say that no one has ever offered to let me settle my bill with a cryptocurrency.

I've paid by mobile, in-app, using loyalty card points, instant bank transfer, and fairground tickets. No crypto.

In London, my home city, there are maybe 50 places which say they accept Bitcoin. London's population is about 10 million. It is one of the most visited cities in the world. There is, effectively, nowhere to buy a coffee using the blockchain.

Perhaps crypto is more like gold? I don't know any shop which would let me pay with an ingot or doubloon. Yet plenty of people have gold as part of their investment portfolio. Although gold is a physically and chemically useful metal whereas the utility of crypto is yet to be demonstrated.

It's the same with shares. I can't go to a pub and buy a round with GME:NYQ. I need to convert it into something more liquid before I can enjoy something more liquid.

So crypto can be an opaque speculative investment. Maybe it is the next tulips, maybe it is the next Ford Model T. But it is obviously so far from infiltrating normal payments that it can be safely ignored.

I've been writing about Bitcoin since 2011. I even studied for the Certified Blockchain Professional qualification and wrote about it for my MSc a couple of years ago.

I'm just so tired of all the unjustified hype. I despair about the amount of energy that's been wasted - both electrical and mental.

It has been seventeen long years since Dr Craig Wright published the Bitcoin paper. How much longer are people going to keep pretending that this is a transformative payment technology ready to be embraced by the masses?

Think I'm wrong. Don't bother arguing in the comments. Instead, you can put your money where your mouth is by sending Bitcoin to me at bc1q60rt4rrnky7syxdw6234zqnmy84ah2gphra5ev 😂

Let's look at this inflammatory headline:

Woman’s 'spree' after $158k banking error, refuses to return pensioner’s life savings

An Auckland beneficiary is under investigation for an alleged “spending spree” after $158,000 was mistakenly transferred to her account.

[…] pensioner lost his life savings due to an account number error.

The account number provided to Westpac had only 15 digits, not the intended 16, so Westpac added a zero to the suffice [sic] as per its usual protocols.

Newstalk ZB

Wow! That seems pretty bad. Obviously the woman who allegedly received the money and then spent it shouldn't have done that. Spending money that doesn't belong to you is a crime in most parts of the world. But let's focus on the real villain here - the evil bank!!

Why did the bank make the decision to add an extra digit to the recipient's account number?

An NZ bank account number looks like BB-bbbb-AAAAAAA-SSS.

The first two digits are the banking institution and the next four are the specific branch. The seven digit account number relates to the specific account. The three digit suffix is for the type of account. For example, your spending account might have suffix 001 and your savings account might have suffix 099.

However, because all suffices have a leading zero, it is often only displayed as two.

So, adding an extra zero to the suffix itself shouldn't have caused a problem. It would have gone to the correct recipient although it might have either gone to the wrong sub-account. Indeed, WestPac's help page on international transfers says "if your account suffix is 12, enter 012". It sounds like the journalist hasn't quite understood where the insertion happened.

It seems likely to me that the victim meant to type 1234567-001 but missed a digit, causing WestPac to shift things to 1235670-01. That's poorly formatted but technically valid.

But, wait! Don't bank account numbers have checksums? Yes! According to NZ's internal revenue, all bank account numbers have a check-digit. However, when checking an account number's validity:

If less than the maximum number of digits is supplied, then values are right justified and the fields padded with zeroes

Bank account number validation

Having played around with the algorithm, the first few digits of the account number aren't included in the checksum validation. For example, the account number 1234567 and 0234567 both pass checksumming. So it is possible that padding the start of the string wouldn't have been picked up.

Whatever the underlying issue, it is distressing to hear of someone losing a significant amount of money.

What could have stopped this?

Humans make mistakes. As an industry, we know this. It's our job to prevent, rectify, and neutralise those mistake. We need systems in place which reduce the likelihood of errors causing catastrophic failures.

Here are some systemic changes which could have prevented this:

1. New Zealand could adopt the IBAN standard for international transfers.
   • They don't seem keen on doing this.
   • It wouldn't prevent mistyping, but a standardised length makes transferring to the wrong account less likely.
2. Confirmation of Payee asks the user to type in the name of the intended recipient. If it doesn't match the bank account, the payment is rejected or cautioned against.
   • NZ is rolling out CoP but it doesn't yet apply to international transfers.
   • Multi-lingual CoP is complex. I don't know if any cross-border payments do this yet.
3. WestPac should have noticed the name discrepancy.
   • This is the argument I have the most sympathy with.
   • Of course, returning the money (especially to a closed account) may be difficult.

Large systems changes are expensive and time consuming.

What else could have been done? Let's go to the final few sentences of the story:

Unfortunately, the incorrect bank account number provided by Che was a valid account number for another customer, Westpac said.

“As soon as Mr Che alerted us to the issue, we traced the payment and froze the remaining funds.”

But Westpac was unable to recover the rest of Che’s money due to the seven-week delay in reporting his error to the banks.

Emphasis added

I'm not trying to victim blame here, but WestPac seem to have done what was asked for them. The sender provided an ambiguous bank account number which was, nevertheless, valid.

The sender didn't raise an issue for seven weeks. Once notified, the bank froze the recipient account and notified the police.

Yes, big evil banks should be less evil. But they're in a tough spot. People want protection, but they resent banks telling them what they can and can't do with their own money. Big systemic change is difficult but it seems crushingly unfair when an innocent party is caught in the middle.

I don't think anyone comes out of this covered in glory. Banks need to invest in technology which keeps their customers safe. Customers need to take some responsibility for checking whether a bank has done the right thing.

The only tips I can give is that you must always copy & paste financial details from a trusted source, rather than manually type them in. Always send a small amount first to check it is received. If you suspect a mistake, contact your bank immediately.

Stay safe out there.

A few months ago, I received a mysterious £25 from National Savings and Investments. A prize from the Premium Bonds! Not enough to make me rich, but enough for a takeaway. Oddly, after checking their app and website, I could find no record of the win. Curious.

A few days later, this letter popped through my door.

My bond was one of a tranche purchased in 2013. I sold it in 2019, yet it won in 2024!

Why was the person ineligible to win? Why had it come through to me?

This is a question lots of people have asked, with general confusion.

A letter to the Guardian in 2011 discusses what happens to a deceased prize-winner's money:

In real life a prize like this would be reallocated to the next eligible bond number.

There's a similar suggestion from an article in This is Money from 2018:

Under scheme rules, bonds can stay in the draw for up to 12 months [after the bond holder dies] and any prize can be claimed by the estate. After this, the bond is no longer eligible to win and prizes should go to the next allocated number.

So, in my case, did someone die before I cashed out in 2019? If so, why was my number chosen and why did it take so long?

I might not get answers to my specific case, but I raised a Freedom of Information request to find out what makes people ineligible, how prizes are reallocated, and how many were paid out in the last year.

This is what I found out.

Reasons why a Bond holder would be ineligible to receive a prize:

As well as death, there are two other reasons why a "winning" bond may not be eligible.

• Account in Excess – where a customer is found to be holding over their maximum Premium Bonds allowance
• Incomplete Sales – where the application is under query at the time of the draw. […] If the sale is cancelled, the investment is returned and the prize is reallocated

That all seems pretty reasonable. But how does an ineligible bond get reallocated?

Details of the reallocation process

They didn't describe the actual technical process in any detail,

[…] on making a prize ineligible, the system will automatically move prize winners up and identify any winners at the top of each prize value boundary that need a supplementary prize payment. For example, if a £1,000 prize was deemed ineligible, the system will move the top £500 prize winner up and note they are due an additional £500 prize. […] This will continue to the first eligible bond out of the draw that missed out on a prize, and they will be moved up to receive a £25 prize payment for that month.

Aha! It is possible that someone higher up the prize ladder was removed and a whole bunch of us took a step up.

I wonder how often this happens?

Last Year

I had hoped for a bit more detail, such as the total number of bonds reallocated, but I'm satisfied enough with this answer:

In the last year, the range of prizes made ineligible was £25 to £50,000. We made one £50,000 prize ineligible and this was due to being notified of the death of one of our customers[…]. In this event the move ups took place as detailed above to a £25,000 winner and then to all prize values below this.

So someone won £25k and then, a few months later, got another £25k! Lucky!

Freedom of Information is brilliant

Huge thanks to What Do They Know for providing such an excellent platform. It really made sending an FoI easy. If I ever win it big on the Premium Bonds, I'll up my donation to them!

Currently, if a customer falls for an Authorised Push Payment (APP) scam, they may be eligible for up to £415,000 back from their bank. The proposal is to limit this to a maximum of £85,000.

What does this mean and is it a bad thing?

APP fraud is when a fraudster convinces you to send them money. This isn't about a bank being tricked, or identity theft, or robbers storming the building. It can be as simple as someone sending you a text saying "You owe HMRC £10,000 - please send it to ...". Or it can be as complex as someone sending you a fake email, supposedly from your solicitor, saying "Our bank details have changed. Please send your mortgage deposit to..." In some cases, it can be scammers building up a fake dating profile, or fake investment account, or similar.

Whatever the reason, you were scammed. You sent money to a scammer. Now you would like it back. Please.

How bad is the situation

The payment systems regulator have very detailed report about the state of APP fraud. It says:

Based on data provided by the 14 largest banking groups […] £341 million was lost to APP scams in 2023

Authorised push payment (APP) scams performance report July 2024

Yikes! That's a lot of money. They estimate 252,626 fraudulent transactions. I don't know if that's 252k victims or total transactions.

How much do people actually lose though?

2% of cases were higher value scams with losses over £10,000. […] Lower value scams involving sums of under £1,000 accounted for over 80% of all APP scam cases sent in 2023.

Here's the data in handy tabular form:

An astonishing 2% of cases make up 52% of losses!

In the consultation briefing they mention that more than 400 cases of APP scams were over the proposed £85k limit, with roughly 18 being over the current £415k limit.

If those 18 were all, say, £500k - that would be about 2.7% of the total value!

If we assume the ones over £85k were worth on average £100k each, the total value of >£85k fraud is worth about £49 million. Approximately 15% of the total amount scammed from people. That's bonkers! 0.2% of fraudulent cases costing 15%.

Would a lower limit make a much of a difference to customers?

For the vast majority of customers, lowering the limit would make no difference.

But take a look at these two statistics:

In 2023, 67% of the money lost to APP scams was reimbursed.

In 2023, 80% of reported APP scam cases were fully or partially reimbursed.

Frustratingly, the data aren't broken down further. While it shows that some banks provide a full refund in over 90% of cases, there's no information on whether those were all low value scams.

It could be argued that having a lower absolute limit, but higher enforcement, would be better for customers in aggregate.

Wouldn't it be better to have a greater number of scam cases refunded - even if it meant some high value scams got nothing? Or to have even more of the total refunded - but have a tiny amount of people lose out?

Hell, you could lower the limit to £10k and easily afford to give 97% of victims a 100% refund.

Would that be worth it? It has a certain utilitarian charm - but perhaps isn't acceptable.

What are the downsides of keeping a higher limit?

There's a comprehensive cost benefit analysis from last year, which contains several comments from banks.

Briefly, there arguments against a higher limit are:

• Only 5% of fraudulent funds are recovered - so there is a huge cost to the banks and their customers.
• Increasing friction might stop some fraud, but would annoy and disrupt customers performing legitimate transfers.
• Banks might be tempted to refuse the custom of vulnerable people.
• There's a "moral hazard" in letting people know they'll always be refunded; they'll take fewer precautions.

Frankly, I find it hard to disagree with those arguments. Compensation is expensive - and that ultimately gets passed on to all customers. It is annoying when I have to jump through hoops to make a normal payment. Here's a story about how a bank refused a legitimate transaction saying they thought it was a scam.

How would you feel if you or your parents were kicked out of your bank because they thought you were likely to fall for (another) scam?

And, I do seriously wonder if people will be more lackadaisical when confronted with scams if they know they'll get refunded.

But there's a major issue left undiscussed. Are banks really to blame here?

Why is this the bank's responsibility?

For some scams, like ID theft, I agree that banks are probably liable. But the "A" in APP stands for "Authorised". You have told the bank you want to do something with your own money. Do they have the right to stop you?

Let's consider purchase fraud.

If you take cash out of an ATM and hand it to some guy who then fails to give you the promised goods, that's not the bank's fault. Right? Why is it different when you send it electronically? The bank shows you a Confirmation of Payee screen to help you make sure you're sending it to the right people. They ask you to confirm that you understand you might not get the money back. They even monitor the amount of complaints about the receiving bank. I'd argue they go beyond their duty to protect their customers.

Of course, it isn't just purchase fraud - although that's the largest by volume - this is how the different scams are categorised, and their values.

Have a read of this account of an investment scam. The bank did everything they could to stop the customer from being scammed. How did the customer react?

[the bank] even questioned whether the money was being invested in cryptocurrency but because [the scammer] had warned this may happen, she lied and said no.

Or read about this romance scam. Was the bank negligent in letting an elderly man send £153,000 to scammers?

The bank blocked a number of transactions, it spoke to [the victim] on the phone to warn him and even called him into a branch to speak to him face-to-face.

Obviously the cases which make the news aren't necessarily representative of the many and varied ways people can get scammed.

Is this a consumer choice problem?

One of the most interesting graphs in the report is this "Percentage of reported APP scams losses refunded by volume". Which bank are you with?

If you're with Monzo and get scammed... you're probably not getting your money back! Nationwide members get excellent customer service.

Perhaps banks should be required to prominently display their scam refund likelihood. Would you switch to a different bank if you knew they were more likely to refund you in the event of a scam?

Final Thoughts

One day, I am going to be successfully scammed. As I get older, I'll get more trusting. Or I'll be distracted. Or I'll be aggressively targetted. Or my email and phone will be hacked.

I want my money to be safe. I want it protected from scammers and - if necessary - from myself.

Fraudsters are terrifyingly good at what they do. They are manipulative, persistent, and organised.

I want my bank to be equally aggressive in chasing down scammers, publishing warnings, and protecting me.

But I genuinely don't know if it is their responsibility to refund me for any mistakes I make up to £415,000.

If you have strong feelings about this, I encourage you to reply to the consultation.

New investors are often told that, when investing for the long term rather than chasing individual stocks, it is better to be invested for the longest possible time rather than trying to do "dollar cost averaging". DCA is the process of spreading out over time the purchasing of your investments. That way, you don't lose it all if the market drops the day after you invest.

Let me explain...

Imagine that it is 1994 and your rich uncle, Scrooge McDuck, has decided to gift you $1,200 per year. How generous!

He has stipulated that you must invest it in the S&P 500 - that's the top 500 companies in the world⁰.

He gives you two choices:

• Put $1,200 in on the 1st of January every year.
• Put $100 in on the 1st of the month every year.

How much money do you make in each scenario?

Get The Data

Kaggle has a download for the historic S&P 500 data. It goes from 1993 to 2024.

The data looks like this:

Experiment 1 - Time In The Market

Here's the algorithm we want to run.

1. Start in 1994
2. Set the investment as 1200
3. Get the Opening price of the first entry of the year
4. Get the Closing price of the last entry of the year
5. Calculate the percentage difference
6. Multiply the investment by the growth / fall
7. Add 1200 to the investment
8. Repeat from (3) for the next year.

Here's the code. I've made some assumptions - for example there are no trading fees, you buy at the opening price, and fractional dollars disappear. I'm aware this doesn't track perfectly but it isn't intended to; this is a rough and ready reckoner.

import numpy as np
import locale

#   Set for American currency
locale.setlocale( locale.LC_ALL, 'en_US.UTF-8' )

#   Location of the data
file_path = 'data.csv'

#   Load CSV into a NumPy array
data = np.genfromtxt(file_path, delimiter=',', names=True, dtype=None, encoding='utf-8')

# Count the number of unique years
unique_years = 0

#   Total investment
total_investment = 0

#   Yearly investment
yearly_cash = 1200

#   Start with an opening of 0
opening = 0

#   Loop through the years
for year in range( 1994, 2024 ):
    #   Add our yearly amount
    total_investment += yearly_cash

    #   Get data for the current year
    data_year = data[data['Year'] == year]

    #   Opening Price
    if ( 0 == opening ) :
        opening = data_year['Open'][0]

    #   Closing Price
    closing = data_year['Close'][-1]

    #   Percentage Change
    change = ( closing - opening) / opening
    movement = "✅ +" if change > 0 else "❌ -"

    #   Calculate change in investment
    total_investment = int( (1 + change) * total_investment )

    #   Print the running total
    print ( f"{movement}{abs(change*100):05.2f}% {year} Total investment is " + locale.currency( total_investment, grouping=True ) )

    #   Set the new opening price
    opening = closing

    #   Increment the number of years seen
    unique_years += 1

print ( f"After {unique_years} years you have invested {locale.currency( yearly_cash * unique_years , grouping=True )}" )
print ( f"Your total amount is {locale.currency( total_investment, grouping=True )}" )

It spits out:

After 30 years you have invested $36,000

Your total amount is $203,445

Experiment 2 - Dollar Cost Averaging

OK! Can we beat that with DCA? In this scenario you take your uncle's money and invest 1/12th of it on the first trading day of every month.

import numpy as np
import locale

#   Set for American currency
locale.setlocale( locale.LC_ALL, 'en_US.UTF-8' )

#   Location of the data
file_path = 'data.csv'

#   Load CSV into a NumPy array
data = np.genfromtxt(file_path, delimiter=',', names=True, dtype=None, encoding='utf-8')

#   Total investment
total_investment = 0

#   Monthly investment
monthly_cash = 100

#   Number of months run
number_of_months = 0

#   Start with an opening of 0
opening = 0

#   Loop through the years
for year in range( 1994, 2024 ):

    #   Get data for the current year
    data_year = data[data['Year'] == year]

    #   There should be 12 months in every year, but let's double check!
    unique_months = np.unique(data_year['Month'])

    #   Loop through the months
    for month in unique_months:
        #   Add our monthly amount
        total_investment += monthly_cash

        # Filter data for the current month
        data_month = data_year[data_year['Month'] == month]

        #   Opening Price
        if ( 0 == opening ) :
            opening = data_month['Open'][0]

        #   Closing Price
        closing = data_month['Close'][-1]

        #   Percentage Change
        change = ( closing - opening) / opening

        movement = "✅ +" if change > 0 else "❌ -"

        #   Calculate change in investment
        total_investment = int( (1 + change) * total_investment )

        #   Print the running monthly total
        print ( f"{movement}{abs(change*100):05.2f}% {year}/{month:02.0f} Total investment is " + locale.currency( total_investment, grouping=True ) )

        #   Set the new opening price
        opening = closing

        #   Increment the number of months
        number_of_months += 1
    #   Yearly total
    #print ( f"{movement}{abs(change*100):05.2f}% {year}/{month:02.0f} Total investment is " + locale.currency( total_investment, grouping=True ) )

print ( f"Your total amount is {locale.currency( total_investment, grouping=True )} after {number_of_months} months" )

The end result?

Your total amount is $193,891 after 360 months

That's $9,554 worse than shoving all the money in on January 1st.

Which... Look, $10k is $10k. I'd rather have it than not. But, in the context of these numbers, it doesn't feel significant. Does it?

Let's Graph It!

Conclusion

Dollar Cost Averaging is fine⁰. Over a long enough time you're probably marginally better off with lump-sum investing. But there's not much in it.

I'm sure you can construct scenarios where DCA is slightly preferential, and not every investment tracks the S&P500, and I'm sure my maths might be a little wonky, and obviously this is not financial advice. But, yeah, DCA if you want to; the difference in this example appears to be minimal.

I have a mixed relationship with the FIRE movement. It basically boils down to "spend less, save more, then you can retire once you've save 25x your annual spend". That's it.

As Michael Taylor writes, some people fetishise the "spend less" part. If you deny yourself all pleasure, he argues, then life isn't worth living. That's probably broadly true.

But he makes a fundamental mistake in his calculations:

Let’s assume that you’re able to invest an extra £10,000 per year by living miserably now in hopes of a brighter future (bear in mind the average full-time salary in the UK is around £35,000 and that’s before tax).

The S&P 500 has historically averaged around 10pc per year, so if we assume a compound annual growth rate of 8pc across 20 years, you’d have £46,609.57.

Yes. £10,000 getting 8%, compounded over 20 years is "only" £46k. Not really enough to retire on. So don't bother saving! Spend! Spend! Spend! Feed the capitalist machine!

But, that's not the assumption being made. Read closer:

you’re able to invest an extra £10,000 per year

You add £10k, get 8%, you now have £10,800. Next year you add another £10k, meaning you get 8% on £20,800. A total of £22,464.

Repeat that for 20 years and what do you end up with?

£540,838.79

Yup! Over half a million quid. That rather changes things, doesn't it? If you started investing at age 30 and stopped at 50, you could retire early and live off the proceeds of £500k until your state pension kicked in¹.

But how much is £10k per year really? It is a lot for most people but can be structured in a more manageable way.

Let's assume you're part of a couple². People who live together spend less on housing, utilities, food, entertainment, etc.

If you're part of a couple, you only need to save £5k per year each. How much is that?

£96 per week. Or £14 per day.

Actually, it is even cheaper than that. If you open up a LISA³, you can deposit a maximum of £4k per year and the Government will give you a £1k bonus.

To invest £4,000 per year, you'd need to save... £11 per day.

I don't want to go all "Millennials just need less Starbucks and avocado toast!" but... yeah. If you're the sort of person who buys a meal-deal for lunch⁴ how much of that can you save per day by making your own sandwiches?

A pint less here, a cheaper bottle of wine there, going to the lower resolution Netflix, all the other boring budgeting tips you've heard of⁵.

£11 per day, each, for 20 years, gets you half a million quid.

That's what the FIRE movement is about. Getting people to realise that a small sacrifice now will pay off in the future.

Michael Taylor's article is correct. You probably shouldn't live on a diet of bread and water, never seeing friends, not going on a spontaneous trip to France; life is for living. Make the most of it!

But, also, life is for living, not working. If you take small actions now, you can free yourself from drudgery later.

I've recently moved down to a 4-day-a-week job. Taking a 20% hit to my salary⁰ felt like a moment of madness. But it was part of a (somewhat) calculated plan.

I've previously mentioned FIRE - Financial Independence Retire Early. It's a culty sort of philosophy which asserts that if you cut your expenditure to the bare minimum and save a chunk of money, you'll be able to retire extremely early.

I'm not quite sure I'm ready to retire to a beans-on-toast lifestyle just yet. But, after reading "Portraits of Childfree Wealth", I was introduced to the idea of FILE. Financial Independence Live Early.

FIRE is a light-switch - you flick it and your status immediately changes from a worker to a retiree. FILE is a dimmer switch - you gradually turn down the intensity of your work to allow you more time to live.

And so, that is what I think I am doing. I need more space to discover what I want to do with my time outside work. And an insight into what I will be like when I have no need for employment.

Of course this is made somewhat easier by being a DINK - Dual Income No Kids. It turns out that the average cost of raising a child to the age of 18 is £200,000. That's a cost my wife and I don't have to account for - which takes us several steps closer to turning that FILE dimmer all the way off.

It's also possible thanks to me reading a truly terrible book called "The 3+1 Plan"¹. Again, it had a simple thesis - if you have 3 rental properties, they will pay for your 1 residential property. Each time we've moved house, we've rented our previous place out. It has more-or-less worked out for us. We try to be conscientious landlords - rent stays stable, maintenance is carried out promptly, pets are welcome - but it isn't a brilliant ethical position to be in.

The final piece of the puzzle is the knowledge that my time on this planet is finite². After reading "Die With Zero", I started to understand that money has utility now. I don't have any kids to leave it to. If there are charities which need funding, better to give them help now. So I might as well spend it while I'm alive.

This all comes down to a single figure. In the FIRE community it is referred to somewhat ominously as... The Number.

Let's say that I am likely to live another 50 years. Let's say that I want to live on an average salary of £33k per year. Let's say that inflation is static³.

The basic calculation is 50 * £33,000 = £1,650,000

If I had a shade over £1.6 million, I could retire today and live on a fairly average salary. On the last day of my life I would have spent my last quid and - one hopes - died with zero.

There are, of course, some problems with that.

The most obvious one is that no one knows exactly when they're going to die. So best to keep a little in the bank in case Centenarianism is thrust upon you.

As one grows older, the costs associated with personal care are likely to rise. There may be fewer all-night partying bills to pay, but that may not offset the cost of a nursing home.

On the positive side of the equation, having over a million quid in the bank and spending it over half a century is likely to attract some fairly hefty compound interest.

On the down side, the value of your portfolio can fall as well as rise.

Sites like https://cfiresim.com/ are good for this. They simulate would have happened to your portfolio if you started retirement every year since 1871.

In this example, it's taking a million dollars, investing it in a fairly balanced portfolio, and spending a $40k per year. You can take a look at that exact example. Across 100 years, 80 simulations were a success - they did not run out of money. But 20 were failures - the portfolio hit zero before death.

There are other methods of forecasting using similar data - here's FireCalc's estimates which reckons about a 75% success rate.

Of course, if it's looking like stocks are crashing, you can tighten your belt or go back to work.

There's also the "Rich, Broke, or Dead" calculator. It has a similar premise - but with the added joy of predicting your death!!!

Property

I never wanted to be a landlord⁴. But the stupid system the English have for buying and selling houses made it a necessity. We needed to move quickly to take new jobs and couldn't be stuck in a chain. So renting out became the easiest thing to do. And, of course, once tenants are in it becomes unethical to sell from under them. So, as and when our tenants give notice, we'll sell the property.

Despite all the hype about the profitability of BTL, our yields have remained under 4%. And house price growth has been about 3%. So, not nothing but hardly a path to infinite profitability.

So what's the plan?

Well, predicting the future is a mug's game. But here's my attempt.

Retire no later than 50. The ideal being around 47. That then gives me about 10 years until I can start drawing my private pensions, and about 20 until the state pension.

This means the next new years will be about reducing work, increasing pleasure, and getting ever closer to The Number.

If you've gone down the FILE / FIRE journey, I'd love to know what you've experienced and whether you have any tips.

It is full of entries like this:

{
    "Account": "My Mastercard",
    "Date": "2020-02-24T00:00:00Z",
    "CurrentDescription": null,
    "OriginalDescription": "SUMUP *Pizza palace, London, W1",
    "Amount": -12.34,
    "L1Tag": "Eating Out",
    "L2Tag": "Pizza",
    "L3Tag": ""
},
{
    "Account": "American Express",
    "Date": "2019-01-11T00:00:00Z",
    "CurrentDescription": null,
    "OriginalDescription": "Work Canteen,Norwich",
    "Amount": -5,
    "L1Tag": "Lunch",
    "L2Tag": "",
    "L3Tag": ""
}

Let's write a quick bit of Python to turn that into CSV. This will turn the above into two separate files.

My Mastercard.csv:

Data,       Description,                       Destination,  Amount
2020-02-24, "SUMUP *Pizza palace, London, W1", Pizza palace, -12.34

And American Express.csv:

Data,       Description,            Destination,  Amount
2019-01-11, "Work Canteen,Norwich", Work Canteen, -5

I didn't make much use of MoneyDashboard's tagging, so I've ignored them. The destination (which is the name of "opposing bank" in Firefly III speak) ignores the payment processor like SUMUP or PAYPAL and anything after the first comma.

It also sorts the CSV into date order. It's not very efficient, but you'll only run it once.

import json
import csv
import os
from datetime import datetime

#   Read the file
json_file = open( "md.json" )
data = json.load( json_file )
transactions = data["Transactions"]

#   Loop through the transactions
for transaction in transactions:
    #   Get the filename
    filename = transaction["Account"]

    #   Format the date
    date = datetime.strptime(transaction["Date"], "%Y-%m-%dT%H:%M:%SZ")
    formatted_date = date.strftime("%Y-%m-%d")

    #   The description
    description = transaction["OriginalDescription"]

    #   The destination is everything after the first " *" (if it exists) and before the first comma
    #   For example: "SUM *Pizza Place, London" becomes "Pizza Place"
    destination = description.split(',')[0]
    if " *" in destination:
        destination = destination.split(" *")[1]

    #   Monetary amount
    amount = transaction["Amount"]

    #   Create the file if it doesn't exist
    if not os.path.exists(f'{filename}.csv'):
        with open(f'{filename}.csv', mode='w', newline='') as file:
            writer = csv.writer(file)
            writer.writerow(["Date", "Description", "Destination", "Amount"])

    #   Read the file and split the header from the existing data
    with open(f'{filename}.csv', mode='r', newline='') as file:
        reader = csv.reader(file)
        existing_data = list(reader)
        header = existing_data[0]
        data_rows = existing_data[1:]

    data_rows.append( [formatted_date, description, destination, amount] )

    #   Sort the data by the first column (string)
    sorted_data = sorted(data_rows, key=lambda x: x[0])

    #   Save the file back again
    with open(f'{filename}.csv', mode='w', newline='') as file:
        writer = csv.writer(file)
        writer.writerows([header] + sorted_data)

Run that against your MoneyDashboard export and you can then import the CSV files into MoneyDashboard, GNUCash, or anything else.

As pointed out by Dave a company called Nordigen was set up to provide a free Open Banking service. It was quickly bought by GoCardless who said:

We believe access to open banking data should be free. We can now offer it at scale to anyone - developers, partners and Fintechs - looking to solve customer problems.

And, I'm delighted to report, it works! As a solo developer you can get access to your own data for free via the GoCardless APIs.

You'll get back a JSON file from each of your banks and credit cards with information like this in it:

{
   "bookingDate": "2023-07-11",
   "bookingDateTime": "2023-07-11T20:52:05Z",
   "transactionAmount": {
       "amount": "-2.35",
       "currency": "GBP"
   },
   "creditorName": "GREGGS PLC",
   "remittanceInformationUnstructured": "Greggs PLC, London se1",
   "merchantCategoryCode": "5812",
   "internalTransactionId": "123456789"
}

For foreign exchange, transactions look like this:

{
   "bookingDate": "2023-10-01",
   "bookingDateTime": "2023-10-01T21:41:40Z",
   "transactionAmount": {
      "amount": "-0.82",
      "currency": "GBP"
    },
    "currencyExchange": {
      "instructedAmount": {
         "amount": "1.00",
         "currency": "USD"
      },
      "sourceCurrency": "USD",
      "exchangeRate": "1.2195",
      "targetCurrency": "GBP"
   },
   "creditorName": "KICKSTARTER.COM",
   "remittanceInformationUnstructured": "Kickstarter.com, Httpswww.kick, 1.0 U.S. DOLLAR USA",
   "merchantCategoryCode": "5815",
   "internalTransactionId": "987654321"
}

Depending on your card and the transaction type, you might also get a few more bits of metadata.

Get started at https://gocardless.com/bank-account-data/. From there, it's a case of following the quickstart guide.

A few niggles

There's a bit of bouncing around. You've got to get an API key, get the institution ID, sign in, get redirected, get an ID from the callback, then get the bank account details. And then you can get the transactions!

Oh, and the access token only lasts a short while, so you'll need to either re-auth or use a refresh token.

Bank authorisation only lasts 90 days, so you'll have to refresh your details every 3 months. That's standard across all opening banking, but a bit of a pain.

GoCardless have pretty comprehensive bank coverage but they are missing a few which you might find useful.

Because there are so many financial institution in there, you might find it difficult to work out which one you need to log in to. For example, if you have a Barclays Credit Card, which of these is the right one for you?

{
    "id": "BARCLAYCARD_COMMERCIAL_BUKBGB22",
    "name": "Barclaycard Commercial Payments",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYCARD_COMMERCIAL_BUKBGB22.png"
  },
  {
    "id": "BARCLAYCARD_BUKBGB22",
    "name": "Barclaycard UK",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYCARD_COMMERCIAL_BUKBGB22.png"
  },
  {
    "id": "BARCLAYS_BUSINESS_BUKBGB22",
    "name": "Barclays Business",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYS_WEALTH_BUKBGB22.png"
  },
  {
    "id": "BARCLAYS_CORPORATE_BUKBGB22",
    "name": "Barclays Corporate",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYS_WEALTH_BUKBGB22.png"
  },
  {
    "id": "BARCLAYS_BUKBGB22",
    "name": "Barclays Personal",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYS_WEALTH_BUKBGB22.png"
  },
  {
    "id": "BARCLAYS_WEALTH_BUKBGB22",
    "name": "Barclays Wealth",
    "bic": "BUKBGB22",
    "transaction_total_days": "730",
    "countries": [
      "GB"
    ],
    "logo": "https://cdn.nordigen.com/ais/BARCLAYS_WEALTH_BUKBGB22.png"
  },

But, overall, it's an excellent service. Now I just need to find / write something to ingest the data and do something with it!

Why is it impossible for me to get programmatic access to my own data?

There are two interlinked reasons which I'd like to discuss.

Background

OpenBanking is a brilliant idea encoded in an excellent standard wrapped in some very complex processes and with some rather unfair limitations.

OpenBanking presents a standardised API to allow read and write access to a financial account. So I could give a smartphone app read-only access to my credit card and let it automatically tell me when I've spent more than £50 on sausage rolls this week. Or I could add all my bank accounts to one service which would let me see my net worth. Or any of a hundred ideas.

I could also connect my accounts in such a way that when Bank Account A drop below £100, an OpenBanking API request is sent to Bank Account B to transfer some money to A.

Nifty!

Access

But here's the first problem. The only way you can get access to a bank's API is if you have a licence. And you only get a licence if you're a financial institution who can prove that they have robust security controls. Which means that individuals have to go through an aggregator. Or, in OpenBanking terms, an "Account Information Service Provider".

Some OpenBanking providers will let individuals play in a "sandbox" to test out the API. There are no real accounts and no real money, it's just a way to test how the API works.

I can see why that makes sense for write access. You don't want a user's unpatched Raspberry Pi suddenly sending all their money to Russia.

And I can see why that makes sense for organisations which deal with data from multiple people. One leak and everyone is exposed.

But I'm not convinced that it makes sense to deny an individual read-only API access to their own account. Sure, I might accidentally leak my own data - but the same risk exists if I download a PDF statement from my bank.

Coverage

The second problem is that not every OpenBanking consumer will talk to every OpenBanking provider.

For example, I have an account with Coventry Building society. They have an OpenBanking API which no one uses! They're not the largest financial institution in the UK, but have a fair few customers. And yet all the OpenBanking apps refuse to work with it.

So even if I did find an aggregator with an API, it may not work with all my financial institutions.

What's next?

As much as I love using someone else's website or app, sometimes there's nothing better than writing something bespoke.

I was using MoneyDashboard as an unofficial API. I gave them read-only access to my accounts and then piggybacked off their API. But that's now closed.

Similarly, I was using Moneyed - which offered a personal OpenBanking API - but that shut down as well.

And now I can't find anything.

If you know of an Account Information Service Provider which provides read-only API access to connected accounts, please let me know!

Most hobby sites and side projects don't cost a lot to run. Lots of services have generous free tiers to (ab)use, and they can pay well in "exposure". But OpenBenches is reaching a tipping point where it is slowly overwhelming us.

We've now got nearly 300GB of photos - which means our storage and bandwidth costs are on the high side. Yes, we could losslessly transcode them all (which takes up compute resources) or store them in Glacier (which involves transit costs) and get a better CDN (as opposed to using free tiers). Similarly, we do a lot of forward and reverse geo-coding, OCR, map drawing, and other little bits and pieces.

Basically, assuming we value our time at zero, OpenBenches costs us about £250 per year.

Now, that's not extravagant, but it's also not nothing. So, how do we make it cost neutral to us?

Having a paywall is the antithesis of open data.

Placing adverts next to memorials and expressions of grief feels grim, so we've decided against advertising.

We don't think that a VC is going to invest a million bucks into this. But, hey, if someone out there wants to make us an offer...

That leaves us with merchandising and sponsorship.

Merch!

We've opened a shop on Spreadshirt.

Spreadshirt is pretty easy to use. Upload a graphic, select your products, launch. Each t-shirt brings us in about £4 after VAT. So far we've sold half a dozen things. Early days, but promising. It's a fairly low effort way to (hopefully) get in a trickle of cash.

Sponsorship

Perhaps you have enough t-shirts from random websites? Wouldn't you prefer a shout out on the website and unending gratitude?

We've set up GitHub sponsors but, infuriatingly, it only accepts donations in USD - which means hefty foreign-exchange fees. Luckily, Open Collective accepts payment in GBP which is a lot easier to manage.

Between the two of them, we've had about £175 so far this year. Again, a promising start.

Other plans

I'm not (para)social enough to do a Patreon. I don't want a job of delivering monthly newsletters, livestreaming my coding, or keeping the hype train running. I don't want 1,000 True Fans. In short, we're not trying to make a profit out of this.

We just want to keep the site running for the foreseeable future and, hopefully, pay a bit forward to the brilliant Open Source projects we're built on.

For now we'll stick with those and see how the year plays out. If you have any clever ideas for how to make the site more self-sustaining, please let us know.

Most modern smartphones are too expensive for people to purchase outright. At the most extreme end, the iPhone 14 Pro Max costs £1,200⁰. So a typical customer elects to pay £50 per month for 24 months.

The customer gets a new phone for a reasonable monthly figure. The phone seller gets a regular monthly payment which helps with their financial forecasting and cashflow.

But the seller has a problem. They have, effectively, loaned over a grand to the customer. And they've secured it against a rapidly depreciating asset which is easily stolen or broken. Most sellers don't offer different loan rates to different people. For a traditional loan, someone with poor credit might pay a higher %age than someone with a better credit rating. But, most sellers just give you a straight approve / deny for their loan¹.

This is where the Collateralised Debt Obligation comes in. You may remember CDOs from the Great Financial Crisis. They're fairly simple to understand. I am a high risk borrower and you are a low risk borrower - mix our loans together and you've got a medium risk debt.

Repeat that over thousands of phone loans. The seller has a pool of mixed risk loans which they can sell in bulk.

Here's a toy example - these figures are plucked out of thin air for illustrative purposes.

• Buy 1,000 phones wholesale for £800 each.
• Loan each customer £1,200 over 24 months to purchase the phone.
• Sell the £1,200,000 debt for £900,000.
• Immediate profit of £100,000.
• Every month, send the £50 from each customer to the group which now owns the debt.
• If fewer than 25% of the customers are bad debtors, the debt-owner still makes a profit.

Of course, it's a lot more complicated than that. And the margins are much slimmer. And there are various insurances, costs of chasing debt, ability to cut off service, etc. But hopefully you get the idea.

What does this mean for you?

If you've got a good credit rating, you're probably better off taking a personal loan to buy the expensive phone you lust over.

If you've got a bad credit rating, you're probably paying a lower rate than you would from a personal loan. But you might be better off saving up or buying a cheaper device.

Will this all come crashing down like the mortgage CDOs of yesteryear? Probably not. Phones are a lot cheaper than houses. For now...

This book is a (slightly shallow) exploration of 26 people on similar journeys. They're all American (or now living in the USA) so it has a slight bias to talking about things like 401(k) and medical bills which are absent in most other parts of the world. The author is a CFP® and, at times, reads a little like an advert for their services. Which is fair enough for a free book.

But it is compelling - if a little repetitive - to read about people going through similar journeys to us. Opting out of the social default can be a little alienating, so it is heartening to hear their struggles and successes. Lots of talk about using spreadsheets to model the future, enjoying the freedom to pick up and leave at a moment's notice, refusing to compromise on their plans.

While I'm a gleeful propagandist for the childfree movement & FIRE in general, it's a little one-sided. There's no one who regrets their choice, so it suffers from survivorship bias. But there are a range of ages, races, and orientations. It's not all straight, white, young couples. Even if you're not American, there's some good advice in there - and some deep questions to ask yourself.

Overall, it's a great book for provoking a discussion with your partner. I'd love to read a follow-up with all the people interviewed in, say, a dozen years.

Fraud victim gets surprise £153,000 refund despite rules BBC News

In the story, the heartless bank refused to refund the fraud victim due to an absurd technicality - the money was sent to a foreign account rather than a UK account. Once again, big business bending the rules in order to protect their profits from a defenceless pensioner. Only after protests did they reimburse him. What a disgrace!

Except, of course, that's not what happened.

Terence Eden is on Mastodon

@edent

I can't remember who told me this, but it is a truism.
Ignore the headline and read the *penultimate* paragraph. That's where the real story is.

---

Let's scoot down the article, past the sensationalism, and see what we find:

It emerged that, in this case, Lloyds had done a really good job of not only spotting the potential fraud but alerting James to it. The bank blocked a number of transactions, it spoke to James on the phone to warn him and even called him into a branch to speak to him face-to-face.

Ah.

The bank kept his money as safe as possible but, ultimately, it was his money. He can choose to do whatever he wants with it. If he'd decided to blow his life savings on fast cars and loose women should he have been stopped?

Ultimately, this man was scammed, and the fault lies with the crooks who swindled him. But, realistically, what more could the bank have done to protect him? I suppose they could have dropped him as a customer. If they'd said he was too risky for them and told him to find a new bank, we'd see headlines of "Fury as cold-hearted bank tells pensioner to piss off".

I'm sure we've all had a friend who has driven themselves into drink, drugs, or gambling. You can intervene. You can counsel them. You can beg, plead, and threaten. But people are entitled to make their own choices in life. And sometimes they make bad choices which end up hurting them.

Perhaps this victim's family should have been more proactive in setting up a Power of Attorney. Perhaps the media consumed by older people should be flooded with scam warnings. Perhaps the victim should have heeded the bank's repeated warnings. Perhaps scammers should reconsider their life choices. Perhaps the bank should have forced him to take his business elsewhere.

Do we want banks to safeguard or money, or to gatekeep it?

This is a sad story with no happy ending and no easy answers.

But it doesn't need to be this way. Exposing users to the immense variability in pricing is probably too dangerous - as seen in Texas recently. Imagine if your electricity provider could say "hey, prices are going to be high tonight. We'll pay you to use less electricity!"

Well, that's what my energy provider are doing! Here's an email I received from them:

Join Octopus and we both get £50!

The UK is experimenting with flexible energy pricing. This is made possible by the large-scale rollout of smart meters. They measure electricity consumption and report it back at up-to half-hourly intervals⁰.

My solar panels already take advantage of this capability. I get paid the half-houly market-price for every kWh of sunshine I export. Octopus publish their price so, in theory, I could tell my battery to store energy at midday when it is cheaper and then sell back to the grid when it is more expensive.

Now, there's just one catch with this offer. The reduction is based on your average usage at that time. If you usually have your electric oven on between 1700-1800 then you'll be able to make some big savings. But if you're already fairly efficient, it is less likely you'll be able to take advantage of this.

The day before the experiment, this was our half-hourly usage:

So, if we were to turn off all our electricity we might be given about £1.95 as a reward. Not nothing, but perhaps not worth sitting in the dark for an hour?

But, in the spirit of experimentation, we tried it! Lights off, TV & games consoles off, chargers unplugged, no cooking or cups of tea. We made our own entertainment¹.

What we earned & what we learned

Using our home monitoring software, here's what happened to our electricity use for that hour:

As you can see, at 1700 we dropped our usage significantly. The hours before and after, we were using about 900Wh. But from 1700-1800 we were down to about 184Wh.

That's about 20% of our usual use for that hour. Our usual cost at that time of day would have been around £0.20 for the hour. Instead, we only used about 4 pence-worth of electricity.

A few days later, we got this message from our electricity provider:

OK! They base the average over the last few weeks, so it isn't surprising that their numbers differ slightly from mine.

So, how much of a reward do they pay us?

I have no idea why they do this in points. Presumably I might be able to exchange the points for a chance to win a prize? Seems silly to me; just use money.

And then, of course, the inevitable "nudge":

I'm not sure how I feel about that sort of nudge. I think we did everything we reasonably could. I'm not a big fan of that sort of competition.

Was it a hardship for us to turn out the lights for an hour? No. But there is a slightly worrying idea that people might feel pressure to turn off vital things like life-saving equipment, freezers, or alarms.

Will people change their behaviour for a couple of quid? That remains to be seen. Should people have to change their behaviour? That's a more complex question. Janet Gunter has a blog post which explores the limitations of this approach.

The idea of a personal carbon footprint has despicable origins - but when scaled up to a population level, it can be a useful way to phrase a problem.

If people merely shift their electricity consumption to an hour before or after the load shedding period, does it have a meaningful impact?

Anyway, I think it is useful to do experiments like this. Perhaps thousands of people will find it useful and it'll scale up to millions of people. Perhaps it won't make a difference at all. But the only way we can find out is by experimenting. And I'm eager to see what happens!

If you're interested in trying this, join Octopus and we both get £50!

How did the rest of you do?

WNJ85

@Will L-J

The figures are in for #OctopusEnergy #SavingSessions and am pretty happy with the outcome considering didn’t go to extremes like some! Popped the #ASHP into ‘Holiday Mode’ for the hour, delayed dinner prep till after 18:00 and didn’t plug the #BEV in to charge straight after getting home as one would normally if needed charge!

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wishy

@Steve Scott

@Edent 48% cut aparrently. Not bad for a test run without changing much

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hd

@Hermit Dave

Took part in 1st #SavingSessions by #NationalGrid & #OctopusEnergy. 83% reduction in electricity usage over an hour compared to average of previous 10 days.

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mttkng

@Matt King 🍔

Got the results of my #OctopusEnergy #savingSessions from earlier this week. I cut down usage in that hour by 89% earning a bonus of £1.43. Apparently I saved 59% more than my neighbours. Useless bunch.

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sfscotland

@S Fraser

@Edent I'd completely forgotten to check until I saw your results. I saved the equivalent of £4.61 with a 91% reduction in use during that hour.

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That got me thinking. Is money the best thing with which to reward people?⁰

There's an interesting (if a little silly) economics paper about why gift giving is inefficient.

The crux of the argument, as I understand it, is that gift-givers rarely know what recipients need or want. So they give gifts which aren't optimal. Your aunt gets you a blue cardigan. But you'd rather have received a yellow t-shirt. Therefore you value the gift at a lower monetary cost than what the giver spent.

If you're happy to ignore all the social niceties around giving and receiving - I'd say it's pretty accurate. Giving the gift of cash prevents newly-weds from being inundated with toasters. A gift registry can solve some of that problem, but inevitably means some gifters end up spending much more or much less than they wanted.

A happy medium is, of course, gift vouchers. As a kid, I lost count of the number of book tokens, record tokens, and cinema coupons I received.

Vouchers have the (dubious) advantage of being unable to be mis-spent. A harried single-parent can't turn a pampering spa-voucher into paying the gas bill, and a student going off to university can't convert book tokens into beer¹.

Back when I was doing developer relations, we were always looking for ways to incentivise people to use our products. They generally fell into a few categories:

• Stickers and other low-value goods.
• Phones and other expensive hardware.
• Credit for our platform.
• Cash prizes.
• Money-can't-buy-experiences.

Would a rational developer go out and buy a 2GB USB stick shaped like our logo? Or a t-shirt with our slogan? No. But they're useful low value items.

Would a rational developer buy the phone we were giving away? If it was a pre-release model, it would have high monetary value and social cachet. But that doesn't pay the bills.

Would a rational developer want £500 worth of credit on our service? Unlikely! It didn't cost us much to give it away, and the developer knew we were trying to hook them into spending more.

Would a rational developer want cash? Yes! Well, unless their accountant found out and told them what the state's tithe was!

And so we come to the most interesting one. Money-can't-buy-experiences. A few years ago I won a hackathon. The prize was A guided walking tour under the Thames Barrier. This was not something anyone could pay to do. Much like a tour of Wonka's chocolate factory, it was a limited offer to see the inner workings of something magnificent.

So, what are the money-can't-buy prizes that an organisation like Google could offer?

An adult-entertainment company I worked with once offered "win a date with one of our models" as a prize. Ignoring the obvious problematic aspects of that, would you like to win a 20 minute "date" with the CEO to pitch your idea?

What is it worth to a young security researcher to win an internship?

Would you place value on sitting in the command-centre when SpaceX launches a rocket?

Do you want an exclusive profile badge / challenge coin / avatar for the service?

Sure, you could get money, but how about a ride in our top-secret prototype?

We have tickets to the sports final that we sponsor - wanna come sit in the corporate box?

Can we name a character after you in our next hit movie?

We'll increase the number of followers you have on our social network.

How about a photo-op with the President / Prime Minister / Chancellor / Pope?

To be clear, I think cash-money is probably still the best. And there are an awful lot of Bug Bounty hunters out there who make a decent living fixing other people's mistakes. And, obviously, money-can't-buy is sometimes just another way of saying "we don't have to spend a lot on this".

But I can't help thinking that big organisations could offer something a lot more valuable - and memorable - than money.

What do you think? What would you like to win?

I'm the sort of person who buys a fancy jar of something delicious - and then I save it for a special occasion. Yet, somehow, those special occasions never seem special enough. And so the jar sits at the back of the cupboard waiting for a train that's never going to come.

How many of you do the same? This book attempts to change that. Why do you spend your time earning and saving money that you're never going to spend? The central thesis of the book is that it is an inefficient use of your limited time on Earth to hoard money. You should spend it on things and experiences which give you pleasure. With the aim that you die with a bank balance of £0.00, but a full-to-bursting memory balance.

The book wants you to spend your time wisely - which means maximising your use of your resources. That means mindfully spending money rather than just going on autopilot through life. I found it surprisingly uplifting and inspiring. What is the point of hoarding wealth? I work in order to have enough money to enjoy myself.

The first thing to say is that is very American - and fully exposes the sheer horror of the American medical "care" system. Some of the examples simply aren't relevant to a UK audience. While care bills may be high in the UK, you're not going to be sent bankrupt by the NHS.

Secondly, this book is explicitly not for everyone. If you are struggling pay-cheque to pay-cheque, there are better books to help you manage your finances. This is aimed squarely at upper-tier earners with low debts and high earning potential.

Which leads on to my final criticism - the author is a little blind to their privilege. They do acknowledge the role luck has played in their charmed life, but don't really address the structural issues that some people may have following its philosophy. Similarly, it is an exercise in survivorship bias. The system works only assuming you have a sufficient buffer against shock. This is addressed belatedly at the end of the book - but it is worth reading with a critical eye.

Much like the book Playing With Fire, this is a pamphlet which has been expanded to novel length. You'll find yourself skipping some of the repetitious bits of it.

At the core, I found very little to disagree with:

• Charity needs your money now - so donate while you're alive rather than leaving a bequest.
• If you're having kids, they can make best use of extra money now - so don't wait until they're old by leaving an inheritance.
• Invest in making fun memories now - so you can enjoy them when you're old and slow.
• You can't take it with you. So spend your money now.

Obviously, you'll need a pension. And emergency savings. And insurance. And you probably don't want to go into unnecessary debt. The book touches on these - but, again, mostly in an American context.

If you're lucky enough to find yourself earning more than you spend - and you find that your life isn't wholly satisfying - then this is a reasonable book to help kick-start you into action.