Liquid Independence

Liquid is the main editor of the Freedom 35 Blog.

May 262016

Windfall from a Bank Error

Engineering student Christine Lee became a millionaire by accident when the Australian bank Westpac accidentally credited her account with an unlimited overdraft. Between 2014 and 2015 she took out AU $4.6 million from this account, and spent most of it on designer handbags and other luxury goods because that’s apparently what young people do these days. ūüôā


Westpac claims it gave¬†Christine the generous overdraft funds 4¬†years ago by mistake. Fraud cops began an investigation into the matter in 2012. But it wasn’t until March this year that an arrest warrant for her was issued. She was¬†then arrested¬†by the Australian federal police earlier this month. The prosecutor said Christine had failed to notify the bank that she was not entitled to the money. Welcome to the real world, Christine. ūüôā If you make a mistake and don’t pay your credit card bill on time, you will be harassed by the bank. But when they make a¬†blunder such as reckless lending it’s still your fault. ūüėõ

However, the magistrate Lisa Stapleton¬†has reportedly agreed with Christine’s defense lawyer that the police would “struggle to prove the spending of the money was illegal.” She points out¬†that Christine “didn’t take it from them. They gave it to her.” I would be inclined to¬†agree with the magistrate.¬†The police is charging Christine¬†with “dishonestly obtaining financial advantage by deception and knowingly dealing with the proceeds of crime.” I don’t know much about Aussie law but this statute is concerning to me.¬†Who exactly would¬†Christine¬†have deceived?¬†Westpac practically gave her the money¬†in the form of a glorified line of credit, lol. And how¬†would it be a crime to¬†buy handbags with overdraft money? Westpac also had 2 years to notice and correct the overdraft error before Christine used it. There are many bank sponsored credit cards that feature no spending¬†limits so it’s not beyond the realm of possibility¬†that a teenager would see an overdraft account¬†and think the bank was just being extra accommodating. Westpac even claims it¬†offers “a range of innovative financial packages to suit your needs.” Maybe some people feel they need a shopping spree. ūüėČ

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May 232016

The Problem with Vertical Structures

I once applied for a job at McDonald’s. But I soon¬†got myself¬†into a pickle when I couldn’t cut the mustard answering some¬†tough interview questions. ūüėܬ† I’ve always admired how quickly fast food workers can be promoted to manager if they work hard enough.¬†When most people think about their careers they imagine themselves moving up the ranks, or climbing the ladder, which are both vertical analogies. In today’s corporate world, the idea of a hierarchy is not only a way to organize a company, but it also dictates how people think about relationships, contribution, accountability, and power.


But in a fast changing economy that requires communication and interdependence across multiple¬†disciplines, locations, and specialties, the top down method of management often isn’t flexible enough to deal with every situation. Instead, a sideways approach that aligns the values of same level workers might provide more value. ūüôā

Let’s pretend there is a boat in a lake. If we want to raise the boat higher, we could¬†try to lift it out of the water. But that would take a lot of energy and sooner or later the boat will¬†drop back to its original level. But if we add water to the lake the boat will eventually rise on its own. This is the essence of the horizontal approach to financial success.

A big impressive job title doesn’t trump a good idea. The best value-creating initiative can come from literally anyone in an organization. In fact, the person who most understands the processes, concerns, and responsibilities of a software engineer isn’t his or her manager. It’s other software engineers. ūüėÄ Real influence doesn’t come from controlling others that report to us. It comes from our ability to add value across the field we’re in.

The horizontal approach has seen success in real life situations. Valve Corporation develops video games such as the Counter-Strike and Portal series. It also operates Steam, a popular digital distribution platform with over 125 million active users.


According to its employee handbook the company has no managers or bosses. The company employs about 300 workers. There are different roles and disciplines within Valve but everyone is treated as equals in terms of their job positions.

Horizontal Approach to Everything

Branching out horizontally to find success can be applied to pretty much anything.

  • One¬†way¬†to become the best¬†point guard on a basketball team is to play other positions. By adding skills horizontally instead of aiming for one specific goal¬†we can develop a better¬†understanding of¬†how the entire game is played.
  • One way to become a good parent and have a healthy relationship with our kids is to be more supportive to our spouse. By helping to lift each other up the family bond will become even stronger.
  • One way to become the best pastry chef is to study¬†a wide variety¬†of other culinary baking skills to gain inspiration and unique ideas.¬†ūüćī
  • When it comes to personal development, meditation and positive thinking is important to create¬†a¬†happier and healthier¬†state of mind. But doing these things alone may not be enough. Instead of focusing 100% on spiritual enlightenment, we could also extend our efforts horizontally to other aspects of our well-being such as¬†eating a cleaner diet or¬†getting more exercise. A healthy body will help to create a more fulfilled¬†mind and spirit. ūüėČ

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May 192016

Triple Digit Returns on Currency Investment

There are lots of ways¬†to make money in the world. It’s up to us investors to find them. ūüėČ A couple of years ago I blogged about my investment in Zimbabwean dollars. I purchased¬†some¬†uncirculated¬†$100 trillion Zimbabwean banknotes¬†on the internet and paid¬†CAD $5¬†for each one. ūüôā


Back then I even made a prediction¬†that these notes would be worth $25 each in 2016. Boy was I wrong, lol. It’s now been about 3 years since I purchased my¬†investment. Here are some recent¬†ones that actually sold on eBay within the last day!


Holy mackerel! ūüėÄ Each of my Zimbabwean banknotes is¬†worth over CAD $60 today. That’s at least¬†1,200% return on investment in just 3 short years. Financial independence – here I come! ūüėÄ If the people who¬†read my previous blog post purchased 15 or 20¬†of these notes, then they could sell their investments today and be thousandaires! ūüôā

Due to runaway hyperinflation what you can buy for a Zimbabwean dollar these days is absolute non-cents. ūüėÜ Around the year 2000 the government enacted a policy to redistribute land and resources. Foreign capital stopped flowing into the country. As a result the Reserve Bank of Zimbabwe printed huge amounts of money to pay for labor and services. The¬†value of the Zimbabwean dollar dropped due to an oversupply of currency and prices began to rise. By 2008 prices of food and other goods were literally doubling every 24 hours! At its highest point the annual inflation rate was 230,000,000%. Savers were wiped out. And businesses didn’t know how much to pay their employees or charge customers because there was no price stability, including for labor. All this turmoil caused the country’s GDP to fall 18% in¬†2008. By 2011, about¬†72% of the country’s population lived below the poverty line.¬†If the¬†first president of Zimbabwe, President Banana, was still alive today, he would probably be very upset by all damage his successors have done to the¬†nation’s economy.¬†(yes, that’s his real name¬†ūüėŹ)

The Zimbabwe currency was abandoned by most people in 2009. Since then the country has¬†stopped printing the currency, and¬†consumers¬†have been using the U.S. dollar and the South African Rand to conduct financial transactions. Last year the government decommissioned the Zimbabwean dollar completely and anyone who still had some could exchange it for¬†American dollars¬†at the official exchange rate set by the government: $1 USD = $35,000,000,000,000,000 ZWD, lol.¬†ūüėĄ

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May 162016

The Enemy of Success is Delusion


Author and public speaker Steve Siebold has helped many people with their careers. His clients include Fortune 500 companies and his books are considered by many to be the gold standard in the field of psychological performance training. One important distinction that Steve notices between the middle class and the wealthy is in how they think.

“The average person believes they are far more competent at what they do for a living than they actually are. Many people believe they are overworked and underpaid, but this is rarely true. In a free market economy we are normally getting paid very close to what we’re worth.” ~Steve

I happen to agree. An employer probably¬†wont pay someone $30/hour if the labor is only worth $20/hour.¬†Workers are¬†replaceable. If a company consistently overpays its employees then it won’t stay in business for very long, assuming all other market conditions being equal. The employee can make the same choice. If a pharmacist¬†is being paid $20/hour but believes he is worth $30/hour then he is free to offer his professional services to another company. Since the labor market is based on supply and demand, it’s important to consider both sides when thinking about compensation.

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May 122016

Bar Stool Economics

Capitalism in¬†the United States¬†is in serious disrepute. The Bush tax cuts have been said to give the top 0.1% of Americans an average of $520,000. That is over 400 times the average tax cut received by¬†middle-class households. Many people are upset at how tax cut policies seem to disproportionately benefit the upper class. If anything, shouldn’t tax breaks help the poorest people? ūüėē Well to understand how the tax system works let’s take a look at bar¬†stool economics.


The origins of this parable have been attributed to Professor T.Davies from the University of South Dakota and R. Kamerschen from the University of Georgia. The following is a modified version of the original.

Suppose 5 friends go out for drinks and the total bill comes to $100. If they paid their bill the same way we pay our taxes, in proportion to income, then it would go something like this:

  • The first 2 men, the poorest, pay nothing.
  • The 3rd man pays $4.
  • The 4th man pays $19.
  • And the 5th man, the richest, pays $77

The 5 men are happy with this payment arrangement so that is what they decided to do. ūüôā Then one day, drinks at the bar were¬†on sale, and the total bill for the 5 gentlemen came to $80. To make it fair the men still wanted to pay their bill the same way taxes are paid. So the bartender reduced each man’s bill by roughly the same amount based on their economic status. The first 2 men were unaffected because they simply continued to drink for free. The remaining 3 patrons split¬†the $20 in savings, and paid the following amounts:

  • The 3rd man paid $2 instead of $4 (50% savings)
  • The 4th man paid $14 instead of $19 (26% savings)
  • And the 5th man paid $64 instead of $77 (17% savings)

Each of the paying 3 men spend less for their drinks than before. And the first 2 men continued to drink for free. But once outside the bar, the men began to compare their savings. “I only got $2 out of the $20 in savings,” complained the 3rd man.¬†“Don’t look at me,” replied the 4th man. He pointed to the 5th man and said, “he received the majority of the $20 savings. The wealthy get all the breaks.”

“Wait a minute,” yelled the first two poorest men who didn’t pay. “We didn’t get any savings at all. *harumph* The system always exploits poor people like us.”

Similar to wine tasting, the discount for the men can be seen as good or bad depending on their mental frame of reference. The first 4 men ganged up on the 5th man and patronized him for being too greedy. Then they¬†went to a¬†Bernie Sanders rally without inviting their rich friend. ūüėõ Feeling betrayed and ostracized the 5th man didn’t show up to the bar the following night. The 4 remaining men decided to drink without him anyway. But when it came time to pay they discovered an unpleasant surprise. They didn’t have enough money between all of them for even half of the bill. ūüôĀ It appears they were in a bill pickle. ūüėÄ

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