Hello and welcome back to Mortgage Advisor on F.I.R.E. This week I will be sharing some thoughts on how society may adapt to a post-covid world, and how this could inform my investment strategy.
Weekly Update
Although my last blog post was not written to attract attention, I was heartened by how many people got in touch privately to check I was ok. I’m still feeling angry and stressed, but I’m dealing with it better than I was. I’ve gone a few nights without sleeping tablets which has been a relief. I’m not working at the moment as I should have been in Romania. I decided to keep the holiday from work booked as I felt I needed some time out. I’ve spent much of the last few days finishing The Glass Hotel by Emily St John Mandel. Some of you may recognise the name from a previous blog post where I talked about her earlier book, Station Eleven. Both books by the author have smashed their way into my top-ten books of all time list. It’s difficult to assign these works to a specific genre. All I can say is that there are few books that have been so vivid, deep and atmospheric.
The BTL search continues without success. I’m becoming increasingly frustrated with estate agents for a number of reasons. The first frustration is that I get the sense they sometimes don’t want to sell a property. The amount of agents that only conduct viewings in office hours is absurd. Many people who are wanting to view a property will be employed in some form, and finding time between office hours to view a property is difficult. If I had a property for sale, and it had been on the market for a year and the agent was just shrugging their shoulders when people ask for viewings after 5pm or at the weekend, I would be furious.
Another source of frustration is when the agents market the property in such a way that it is unrecognisable when viewing. The property I visited today looked nothing like the pictures in the listing. The advert stated that “some cosmetic refurbishment” is needed. This property needed; several internal doors replacing, complete redecoration, all carpets ripping out, walls plastering and possible total floor replacement in the bathroom. This is not “cosmetic”. The property was not habitable. The vendor was a nice guy, but he’s going to struggle to sell that property in the current condition and climate. The thing is, I’m not opposed to a property that needs major work, under normal circumstances, if the price is right. We are not in normal circumstances though. If I was to buy this property, it could take months to complete the work and in that time I would be responsible for the mortgage, council tax, utilities and making sure the property was secure.
I’ve had a chat with my investment partner and we’ve agreed that we are going to change approach and start looking at higher value properties, which will have a better chance of being let immediately. I don’t know what agents hope to achieve by deceiving potential buyers. If I see an advert for a property that looks to be in a good state of repair, and it’s actually a dump, it’s going to piss me off. If the advert was honest, it will attract the right type of buyer; i.e. one that wants a refurb project. It’s like seeing an advert for a two-year old car, but when you turn up to look at it, the car is ten-years old, rusting and missing a wheel.
Health Update
Current Weight: 113.7kg (down 0.6kg from last update).
Current Body Fat: 39.9% (up 0.6% from last update).
BMI: 34.3 (down 0.2 from last update).
Weekly Goal: lose 0.75kg.
Ultimate Goal: 90kg.
Weekly Steps: 48,763.
Another positive week of weight loss, but my body fat is not really moving much. I need to make sure I’m losing body fat and not muscle, as muscle mass helps burn calories, where fat is just dead weight. I need to keep my protein levels up, but it’s difficult now I’m not having any protein supplements and keeping a mostly vegetarian diet so as not to increase my uric acid levels.
Financial Update
Premium Bonds: £16,500 (no change from last update).
Stocks and Shares ISA: £11,669.25 (down £194.77 from last update).
Fuck It Fund: £1,754.94 (no change from last update).
Property Value: £185,248 (no change from last update).
Total Assets: £215,172.19 (down £194.77 from last update).
Residential Mortgage: £143,886.47 (no change from last update).
Total Debts: £143,886.47 (no change from last update).
Total Wealth Figure: £71,285.72 (down £194.77 from last update).
Investment Income in 2020: £56.44 (no change from last update) (target £2,000).
The stock market has taken a hammering in the last day or two. I’ve lost almost £1,000 in value since Wednesday, as I’d just invested over £500 in to my ISA earlier in the week. It looks bad on paper, but it’s nothing to worry about. I’ve been saying for weeks that the market will dip several more times before the end of the year. 2020 is about buying stock whilst it’s cheap, and what I buy now could become vital to my retirement plans in the future. Every unit of stock I am acquiring will most likely be worth a lot more as the next few years pass by. At the risk of repeating what I’ve been saying for weeks, now is the perfect time to buy stocks (assuming you have done your research and are not getting into debt to invest). As I said before, you shop more when there are sales and offers on. Well, this is a massive sale with plenty of offers.
Post-Covid
It’s going to be a different world once covid-19 is under control. There are some aspects of “normal life” that I’m not sure will ever return to “normal”. One of the first things that comes to mind are gyms, especially the bigger 24/7 gyms. The gym I used to go to was a 24/7 gym and there were times when it was very crowded with multiple people waiting to get on each piece of equipment. That sort of environment will not be safe going forward. I can see gyms setting limits on the number of people allowed in at any time, which will inevitably lead to people cancelling memberships. Perhaps a system where people need to book a slot to attend a gym would be a way forward, but any system to manage attendance at a gym will result in a loss of revenue for the gyms.
Another type of business that may struggle is cinema. I’m not suggesting that cinema will be a thing of the past, but the days of huge screens packed with hundreds of people could be over. The obvious way to mitigate the spread of a virus in the cinema would be to make masks mandatory. I don’t have much faith this would work, as people can’t be trusted to keep their phones turned off despite warning after warning. Also, cinemas make a lot of money from food and drink, and wearing a mask will make it difficult to consume snacks and beverages.
International travel is going to take a long time to recover but people will still want holidays. The domestic travel sector could see a major increase in revenue in the next few months. People will want to travel to the coast, or countryside, and holiday lets, cafes and spas could very well see a surge in demand.
FIRE = Nihilism
I read an interesting discussion on Reddit where someone had expressed concern that FIRE equates to nihilism. Their argument was that by pursuing FIRE, they are seeking to exit the game of life and spend their time outside the system, and that without a job they will have no purpose. I get the argument, but I disagree. FIRE does not mean that you will never work again. It means that you have the ability to be selective about the work that matters to you. In some ways, it’s the opposite of nihilism; you think life is so important that you want to escape unfulfilling work so you can fully embrace your calling.
Final Notes
Thank you for reading this week, and I hope you have a great week ahead. If you are following F.I.R.E. or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post.
Mortgage Advisor on FIRE. 