Castlebay Monthly: August 2025

Callum Dunbar
Nov 20
6 min read

Yet another month has passed and with that comes the August Castlebay Monthly. With the Scottish schools going back this week and the English schools counting down the last few weeks before a new term, this time of year hopefully goes ahead with recharged batteries, ready for the last of the summer months before we start to hibernate again.

As a reminder, while the direction of investment markets change on a daily basis, long-term success comes from staying calm in both good times and bad. As we often say at Castlebay, patience and a clear plan will always beat short-term noise.

Enjoy this month's instalment of our newsletter. As always, it is packed with links that you may find interesting. If you would like to add your children, other family members or even friends to this email distribution list, please drop us a line.

The Stock Markets

Thinking Backwards: A Different Way to Plan Your Retirement

Most people plan their retirement by looking forward, trying to envision their perfect future. “What do I want to do? Where do you want to live?” Unfortunately, most people have no idea what they want.

Ask someone to describe their ideal retirement and you'll get vague answers. "Travel more." "Spend time with family." These sound nice, but they're not specific enough for planning.

Here's a different approach that gets you better answers much faster: start with what you don't want. This comes from Charlie Munger, who made "invert, always invert" one of his core principles. Instead of asking "How do I succeed?" consider asking "How do I fail?" and then work to avoid those outcomes.

When you ask, "What would make my retirement miserable?" the answers come quickly. These fears are specific and actionable. Avoiding them brings you remarkably close to the life you want.

The Overlooked Mistakes to Avoid

The financial regrets of retirement get all the attention. Not saving enough, retiring too early, and underestimating costs are common financial pitfalls. Most advisers typically cover these areas well.

We believe four lifestyle mistakes can ruin your retirement, even if your money is sorted.

Missing your active window.

Most people have roughly 15 years of healthy, mobile retirement before things get harder. Yet many waste these precious years because they didn't plan for travel and adventure while they could still enjoy them.

Losing your identity and purpose.

After 40 years of career structure, many retirees feel completely lost. They have money, but it lacks a sense of usefulness or meaning. The days feel empty because work provided more than just income.

Relationship isolation.

Some retirees find themselves living far from adult children and grandchildren, or they've let friendships fade during busy career years. Money can't buy back lost time with people you love.

Neglecting health in your 50s and 60s.

This is when prevention matters most. Poor health choices during these years can significantly reduce the quality of your entire retirement, regardless of how much money you have saved.

All of these issues can be avoided entirely through proper planning.

How to Apply Inversion Thinking to Your Retirement Planning

While most people do post-mortems after something goes wrong, a “pre-mortem” imagines failure before it happens. It's simpler than it sounds.

Begin by imagining you're 80 years old, reflecting on your retirement with profound regret. Ask yourself: “What went wrong?”.

What do you wish you'd done differently? Don't overthink this. Your gut reactions are usually the most telling. Write down everything that comes to mind, no matter how obvious it seems.

Next, get specific. Instead of "I wish I'd travelled more," ask "Where exactly did I want to go, and when was the best time to do it?" Instead of "I should have stayed healthier," ask "What specific health habits would have made the biggest difference?"

Then work backwards to today. For each regret, identify what you need to start doing now to prevent it. If your biggest fear is losing touch with your children, consider where you'll live in retirement. If you're worried about losing your sense of purpose, consider developing interests beyond work.

The goal isn't to solve everything today; it's about gaining clarity on what matters to you, so you can begin incorporating those elements into your plan. This exercise may take 30 minutes, but it can save you decades of regret.

Your Next Step

Most retirement advice focuses on the numbers. How much to save, when to retire, how to invest. These are important, but they're not enough.

The retirement that will bring you fulfilment requires thinking beyond the spreadsheet. It requires imagining not just the money you'll have, but the life you'll live with it.

Inversion thinking gives you a practical way to do this. The pre-mortem exercise we described isn't a one-time activity. Your fears and priorities will change as you get closer to retirement. What feels important at 50 might look different at 60. Regular check-ins help you stay on track.

The financial piece of retirement is well understood. Do the work now to avoid the lifestyle regrets later. If you'd like help applying this thinking to your specific situation, we're always here to guide you through the process.

Life is for Living

While we always encourage smart saving and financial prudence, enjoying the life you're working hard to build is just as important. That means making space for experiences, community and a little fun now and then!

Here’s a roundup of upcoming events that might pique your interest. Treat yourself because balance is key; life is meant to be lived.

Last-minute weekend plans: Edinburgh Fringe Festival, to 25th August

A date for the diary: The Braemar Gathering, 6th September 2025

Something for the adventurous: World Bog Snorkeling Championships, 24th August

Read

The Opportunity Cost of Everything [14 minutes]. The most valuable currency in life isn't money, but the choices you make with your time.

Now You Get It [5 minutes]. What if everything you thought you knew about success and loss was turned upside down by the reality of firsthand experience?

End of Perpetual Motion.pdf by Simon Evan-Cook [5 minutes]. Are we witnessing the demise of the everyone-does-nothing investment model?

Why Struggling Companies Are Loading Up On Bitcoin.pdf [18 minutes] Biotechs, miners and hoteliers are snapping up crypto to boost their share prices but experts warn of a crisis if markets crash

Watch

The Secret to Happiness with Harvard professor Robert Waldinger

We all want to live a happy life but what does research say about how to actually achieve it?

For more than 86 years, researchers at Harvard University have been trying to answer that question. In one of the longest-running and most comprehensive studies of human happiness, Harvard tracked 724 teenagers through every stage of their adult lives since 1938. Some of them are still alive today and the findings are clear: lasting happiness isn’t about wealth or fame, it’s about something much deeper.

Robert Waldinger, a professor and psychiatrist, has directed the study for over 20 years. His TED Talk about it went viral with nearly 50 million views and in 2023, he wrote a book about it, "The Good Life: Lessons from the World's Longest Scientific Study of Happiness".

Simon Sinek asks Robert to share what the study has revealed about happiness over the decades, how its insights have shaped his own life and the one essential ingredient for a joyful, meaningful existence.

The Castlebay Corner

Those of us in the office have been returning from holidays have been welcomed home to another heatwave, which says a lot considering the Castlebay office is based in Glasgow!

Speaking of Castlebay, we’ve had a few members of the office visit the island of Barra over the past month on holiday. The picture Pamela took below shows that it’s not just the tourists who enjoy a visit to the beach!