Introduction
Hello and welcome back to Mortgage Advisor on F.I.R.E. I hope you are all having a great time over the Christmas period.
I’m shaking things up a little off the back of reader feedback. For the past few weeks I have followed the same format with sections in order; Weekly Update, Financial Update and then my financial subject of the week followed by Final Notes and a preview of the following week. I am keeping those sections, but I will now introduce my posts with a section called Introduction. I trust I do not need to explain what purpose this section will serve.
This week I will talk a little about my Christmas experience and then have a look at my finances for the week. The financial subject of the week will be a look back over some of the worst financial mistakes I’ve made. This will be difficult for me as it will perhaps be the most I’ve opened about some subjects to the general public.
Weekly Update
Christmas this year has been a little underwhelming. I’m not generally a “Christmas person” anyway, but this year has been disappointing even by my own low expectations. The highlights have been spending time with my parents. I saw both my Mom and Dad on Christmas Eve, then had Christmas Day lunch with my Mom and it was the first time since I was a child that I’ve spend Christmas Day with just my Mom. I then saw my Dad on Boxing Day in what has become a little ritual of going for brunch to exchange presents. The company of my family (I class my girlfriend as family) is always the highlight of my Christmas. The second highlight is food. I love food but this year, the food has been a disaster.
On Christmas Day we booked Miller and Carter, as we did last year. It cost £75 per person, which is about the going rate for a full menu including starter, main, dessert and coffee. The food started out ok and just got worse. I had a fillet steak which I ordered medium. I will happily eat steak rare and one of my favourite dishes is steak tartare so I’m not squeamish about raw meat but on Christmas Day morning I was not in a good way. Without going into too much detail, I felt rubbish and had spent an hour in the bathroom before getting ready to go for lunch. The joys of IBS…
I did not feel like having blood on my plate after already seeing blood that morning (I know, gross). So, I ordered my steak medium. I class medium as charred on the outside with pink being the main colour through the middle of the cut. The middle of the steak should have felt some heat from the kitchen, but it should still have colour. There should not be a cube of raw beef that makes up the middle half of the meat. I was not feeling great at all and no staff came to check how our food was. I love a good steak; it’s one of my favourite meals and there are a few restaurants where I’ve had fantastic steaks. In Syracuse, New York, the waiter insisted I cut into the middle of the steak to check it was cooked to my liking when the meal was served. I experienced this on a cruise earlier this year, and in a fantastic steak restaurant in Valletta called Sciacca Grill. For a steak restaurant to not cook your steak anything like how it was ordered is as bad as it gets. The sides to my meal were also tired. The onion loaf looked, and tasted, like scraps from the chippy and the fries were cold and stale. A very disappointing experience. When our plates were cleared, I mentioned to the waitress how poor my food had been and the chunk of raw beef on my plate confirmed my experience. I left with an apology and a voucher for £26.50 – the price of a fillet steak.
Boxing Day was also a bit of a disaster in terms of food. We went to a place called Graze Inn, which we have done the last two years. It’s not the best food but it’s generally ok. The location is the main reason for choosing there as it’s midway between my apartment and my Dad’s house without needing to navigate the city centre. The restaurant has changed since my last visit on Boxing Day 2018, and not for the better. The restaurant is much smaller now and all the tables are close to the bar where the sound of the coffee machine drowns out all conversations. The brunch menu has a dozen or so options with bacon and sausage, a few sweet options and then a vegan option and then a halloumi sandwich. Nothing was grabbing me, so I went for the halloumi sandwich. I left most of it as it was a soggy, tasteless mush. Out of the seven people in our group most of us were disappointed.
All in all, a poor food experience over Christmas.
Financial Update
Premium Bonds: £9,900 (no change from last week).
Stocks and Shares ISA: £7,521.26 (up £112.55 from last week).
Credit Card Debt: nil (down £196.90 from last week).
Loan Debt: £3,800.49 (down £30.77 from last week).
F**k It Fund: £1,075.85 (no change from last week).
Total Wealth Figure: £191,998.11 (total assets including residence valued at £173,501 by my lender) minus £138,397.92 (total debt including residential mortgage) equals £53,600.19 (up £340.22 from last week).
Not a bad week overall. The ISA has increased in value once again following the election a couple of weeks ago. It’s a nice feeling having the credit card back down to zero and I’ll feel even better when I eventually get the loan paid down. That might have to wait a bit longer though as there are things in our apartment that need addressing.
Moving into 2020 it’s just a matter of waiting for funds to come together that will allow me and my JV partner to start searching for properties. We will probably start looking mid-March. It’s expected that we will have our deposit ready by May 1st, but we want to have a property or two in mind at the point we have the cash ready.
Financial Mistakes and Regrets
University
If I knew at age 18 what I know now, I would probably be a millionaire. I would have snapped property up whilst it was cheap, and I would have invested in stocks as soon as I was able. There is little point dwelling on this, as I’m not able to go back in time. My hope is that my experiences will help other people avoid some of the mistakes I made from turning 18 until I started educating myself about money.
I went to University of Leicester in 2003 because everyone else I knew was going to university. I did little to no research and ended up unhappy. I dropped out early in the second year. I was not mentally ready for university at that time. In school and sixth form I had been reasonably popular with a large group of friends, but something changed as sixth form ended. At the time I could not explain it, but I now know it was depression. I was depressed for a long time. I only snapped out of it when I took a job with Norwich Union (now AVIVA). I have a lot of good memories from my time there and I started to come out of my shell again. I made some friends and felt better about myself, and I made the decision to “finish what I started” and go back to university. I did much more research and went to UCLan to study Sport Psychology. For the most part, I had a great time. I met my girlfriend there and missed out on a First in my degree by a narrow margin. I did, however, achieve a First in my dissertation which is my proudest academic achievement. I wrote a report on home advantage and stadium design in English professional football. I had a great tutor who I am still in contact with a decade later. Overall, my time at UCLan was a successful time. Financially though, it was a disaster.
My two stints at university as an undergraduate student have left me with almost £30,000 of student loan debt. Every month I pay £100 back from my salary. I don’t include this loan in my commitments because the payments are taken at source and I’ve mentally compartmentalised that debt. The biggest frustration is that I’m now working with people who never went to university and did not get a degree, yet we are on the same money doing the same job. In net terms, they are £100 per month better off than me. If I had that £100 each month, I would be further along the line to financial independence. Rationally, I know that life doesn’t work that way. I had to have all my life experiences to get to where I am now. But still, university remains my biggest financial regret, not only due to my undergraduate experiences but more my post-graduate experiences.
I have had many bad experiences of trying to complete a master’s degree. I signed up with the Open University, but it quickly became clear that the tutors did not care. When I tried to contact one tutor, they told me that their OU work was not their priority. The following year I was accepted on to a course with another university, but as the course date drew closer, I did not hear anything. I kept contacting them asking for enrolment details and was repeatedly fobbed off. The day before the course start date they informed me they had messed up my enrolment and would not guarantee a place as the course was now full.
The year after that another university mis-sold a course to my girlfriend and me as an Occupational Psychology course, when it was in fact a business course. I then started a masters with the University of Leicester but had problems with some of the tutors who unfairly marked some of my work. I will not get into the details as it’s not that interesting, but I had definitive proof my work had been marked incorrectly. They refused to engage with me regarding the mark, stating that I was not allowed to “question their academic integrity” or words to that effect. I was then mistakenly CCd into an email chain where the staff were bad mouthing me. I quickly exited the course. At this point I was quite bitter but was still determined to get my masters because it felt like unfinished business. I started another MSc with University of Derby but after just a few weeks I ran out of enthusiasm for formal study. I was also not the same person who left UCLan on an academic high. I was older, and in worse physical and mental health. All in, I estimate that my unsuccessful attempts to study for a master’s degree cost me £10,000 on top of what I owe in student loans.
The problem with universities is that they are incentivised to get as many bums in seats as possible and they are not answerable to anyone. If you have an experience like I did at University of Leicester, as a student you are powerless. The cost of education is absurd as well. Tuition fees can now run into the tens of thousands when you then get ten hours of contact with lecturers each week, if you’re lucky. There is also an issue with how university is positioned in our society. Back in the day, you went to university if you were intelligent and wanted to specialise in a specific field. Now, young adults go to university “for the experience” which is a euphemism for drink, drugs and sex. Does one really have to sign up to thousands of pounds of debt for that “experience”?
My advice to any young adult thinking of university is don’t do it. Take some time, a year or two as a minimum. Experience the world of work. Do some reading around different subjects that interest you and then if you decide you want to specialise as a lawyer, doctor, architect or engineer, go and do it. If you want to go to university to get drunk and get laid, it’s not worth getting into that much debt for.
Gambling
I used to gamble on football. A lot. It all started when I was studying at UCLan, and like a lot of compulsive gamblers, it started small and with a win. I won my first football bet and was hooked from that point on. I gambled on and off for over a decade and had some good wins in that time, but the gambling was consuming time, mental energy and more money than I realised.
The human brain and memory cannot be trusted. It’s like the quote from Emo Philips; “I used to think that the brain was the most wonderful organ in my body. Then I realised who was telling me this.”
I’m not going to lecture people about gambling as it’s not the point of this blog. I am going to share my experiences though. Gambling over the internet and in-play gambling, can so easily spiral out of control. The money does not seem as real, and it’s harder to keep track of your spending in this way. I would never walk into a betting shop and hand over hundreds of pounds in a few hours on in-play bets, but I have done that over the internet many times. There is a wealth of research in psychology that shows addicts get their “hit” of feel good chemicals before engaging in the addictive act. Gamblers get their “hit” when they place a bet, and not just when they win. Drug addicts get their initial “hit” when they see their drug, not just when they use it. I know a lot of people who gamble, some of whom have confided in me regarding their inability to control their gambling. I know a few other people who I suspect are addicted but are either in denial or scared to face their addiction. You’ll never know if you’ll become an addict or not. I heard somewhere that total abstinence is easier than half measures. So, a while ago I gave up all gambling. I don’t even take part in raffles because it must be total abstinence. If you allow yourself to take part in a raffle, then what about some informal football bets between friends? Then it becomes easier to progress to a few pounds on an accumulator and from there it spirals out of control.
A few months ago, I spent a few hours going through my historic bank statements to see how much I had spent on gambling. I had a rough idea in my head, and I wanted to see how accurate my estimate was. It was not even close. £5 here and £10 there soon adds up. The second biggest mistake I ever made was placing that first bet.
Gambling is too lightly regulated and too easy to access. You can open an account and gamble thousands of pounds in minutes. It’s scary how easy it is. If you’re tempted to gamble, don’t. If you are just testing the water, stop. It’s just not worth it. If people could make money consistently through gambling, the bookies would have closed long ago.
Gambling addition is a serious issue. Research has shown that gambling addiction results in more suicide attempts than any other addiction. Not only is gambling a financial mistake, it’s a path to mental health problems and possible suicide. It’s just not worth it. The only way to gamble responsibly is to not gamble.
Final Notes
The next part of this blog will be the first entry of 2020. I will be starting the Investment Income Tracker and, as per an earlier part of this blog, I will track how much income my investments and assets generate throughout the year. The aim is for my investments to produce enough income so that I no longer must work. My aim for 2020 is to receive £2,000 in investment income.
Thank you for reading. This post has been a little bit of a departure from the norm, but if you have any questions about this post please get in touch. Now We Live is on Twitter, Facebook and Instagram so feel free to contact me using any of those channels. If you are concerned about your gambling, please contact a support group such as Gamblers Anonymous.
Mortgage Advisor on FIRE. 