Hello and welcome back to Mortgage Advisor on F.I.R.E. This week, a change in direction.
Life happens. All you can do is react most of the time. The world is complicated, and with billions of people all reacting to their own life, it should be no surprise that life simply happens. Trying to control it is futile most of the time. All you can do is react as best you can to what is happening around you. As Viktor Frankl states:
I was talking to a friend about how events in life shape who we are. I used an analogy. Imagine that a painful life event is like a river bursting its banks. The river floods and the water spreads over the land to damage fields, crops and homes. The flood waters will recede, and you can take steps to improve the flood defences to make sure that the same flood does not happen again. However, the buildings are still damaged, and the crops are still ruined. So, a person can look back at their past at things that have hurt them, and take steps to make sure they are protected against the same hurt in the future, but the damage it has done to their self-esteem, their trust and their happiness also needs to be repaired.
Part of the reason this post has been delayed is because I’ve been thinking about the direction I want to take the blog in, and in more general terms the direction I want to take Now We Live in. I started Now We Live in early 2016 when I was at a particularly low point. The idea was for a general lifestyle site that incorporated travel, literature, art and pop culture. For a time, I had several contributors but the interface to update the website is not user friendly, and it’s almost impossible to update the site “in the moment”. Over time, it became increasingly difficult to maintain the site and the contributors lost interest. As of the time of writing, Now We Live has evolved into Mortgage Advisor on FIRE. With that evolution, I feel it is time for a change. As such, this site will be closing and I will be hosting my blog on a different domain; davidscothern.com. I will update this site for another week or two, but I will be gradually moving all the Mortgage Advisor on FIRE content to the new domain.
A few weeks ago I saw a post on Facebook regarding an older man who lives nearby who needs help with his shopping. He has some health issues and people in the area had been helping out, but now they are back at work or have moved out of the area and so this guy has a gap in his coverage, so to speak. I volunteered to help out.
I gave my number to the person who made the post and a few days later, whilst I was actually in the Peak District for a couple of days on holiday, the man called. I had a nice chat with him and explained I was away but I would be back in a few days. I did some shopping for him last Friday (31st July) and he seemed like a nice guy. I sent him a text message that evening and explained I would not be available Monday to Thursday of this week, but I could do another shop on Friday 7th August if needed. On Monday he called me twice to ask if I was able to do some shopping for him there and then. I explained I was busy and he seemed upset. He then called me the next day with the same request, at which point I sent a message referring him to what I had said before. I don’t think there’s a mental capacity issue here; I think it’s just an assumption that I can drop everything and help out. I explained that I could do a shop on Friday as planned, but I would need to know by Thursday 6th August. I have not heard anything, but I’m fully expecting a phone call tomorrow asking me to do a shop there and then.
I get this guy is struggling, but you know what, so am I, and so are a lot of people. I want to help but it has to be on my terms. I am going through a really difficult time in my own life right now. This may seem really harsh but if I’m going out of my way to help someone, taking an hour and half to walk to the supermarket, then to his house and then back home, it needs to be on my terms. If he can’t respect personal boundaries then I may have to take the advice I’ve been given by a few people and just block his number.
Current Weight: 114.4 (up 1.5kg from last update).
Current Body Fat: 36.1% (down 1.2% from last update).
BMI: 34.5 (up 0.4 from last update).
Weekly Goal: lose 0.75kg.
Ultimate Goal: 90kg.
Weekly Steps: 62,646.
I don’t know what else to say about the health update. I’m not finding I have the mental resources to dedicate to work, studying for my next exam for my financial advisor qualification, dealing with my personal life and keeping on top of my diet and exercise. It’s just all too much in one go. As such, it’s all about damage limitation at this point.
Premium Bonds: £20,350 (no change from last update).
Stocks and Shares ISA: £11,607.82 (down £566.53 from last update).
Fuck It Fund: £0.00 (no change from last update).
Property Value: £187,554 (no change from last update).
Total Assets: £219,511.82 (down £566.53 from last update).
Credit Card: £1,299.01 (up £1,299.01 from last update).
Residential Mortgage: £143,567.50 (up £39.04 from last update).
Total Debts: £144,866.51 (up £1,338.05 from last update).
Total Wealth Figure: £74,645.31 (down £1,904.58 from last update).
Investment Income in 2020: £86.36 (no change from last update) (target £2,000).
The stock market took a hammering in the week of this post. It wasn’t the only thing that took a pasting, as my credit card balance has shot up. It’s not a cause for concern as I have the funds to pay it off in my bank account. I just haven’t paid it off yet. It should look much healthier in time for the next blog post.
Buy to Let Update
The property has been valued and apart from a couple of minor points, the homebuyer report makes good reading. There are a couple of things we will need to rectify but it’s all well within our budget. I can’t wait for this deal to be done and for our new tenants to move in. It will feel like a huge win, and like I’ve finally climbed the first rung of the ladder to FIRE.
I’ve started thinking a little more about my strategy for saving for the second BTL. I’m probably going to have to wait a while for the first property to increase enough in value to release funds for a new purchase, so the second BTL will have to come from my own savings. I have two options:
Option 1 – Premium Bonds
This was my preferred option for saving the first deposit because with interest rates being so low, this method of saving preserved my capital (more or less) and gave me the chance of winning prizes. Inflation can erode the value of the funds saved, but it’s not a massive problem in the grand scheme of things. The chance of winning a big prize is appealing and there is zero risk of default from NS&I.
Option 2 – The Stock Market
Covid has ravaged the stock market and many stocks are trading at, or near to, all time lows. One of my major stocks is trading at the lowest point since the financial crisis of 2007/2008, but I believe the stock will rebound. It does not even need to bounce back to pre-Covid levels. An increase of just 10% would be a huge boost to saving another BTL deposit. The proposal would be to throw most of my investment budget each month into this stock and hope that over the next few months the share price increases. If the stock was to return to pre-Covid levels quickly, it could fast-forward my timeline for acquiring a second property by months. The main risk is that the share price does not increase. The secondary risk is that the price falls, although that is unlikely in my opinion. Even if it does fall, the loss is only realised if I sell and there would be nothing to stop me holding on to the stock until it does increase, whenever that might be. The stock will increase, it’s just a matter of when and by how much. Normally, I am opposed to speculation in this way but I feel this is a special case just like the period just after the Brexit referendum.
Until I make a decision, I’ll be carrying on with my normal strategy of investing in both Premium Bonds and the stock market. Once I have my first BTL completed, I’ll revisit the question.
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.