Hello and welcome back to Mortgage Advisor on F.I.R.E. This week I will be looking at how people are caught out in financial scams, and how global uncertainty ultimately matters little to the FIRE investment strategy.
Quote of the Week
This is quite a bleak quote, but it’s hard to find anything wrong with it. It can be interpreted in a number of ways, especially around what is meant by beating depression. People talk about “battling depression” but I don’t think it’s possible to ever really beat depression. It’s always there, in the background. The battle against depression is aimed at keeping it at bay for another day. If you fail to do so, it can result in death. This is just one interpretation, though. Another way to interpret the “die trying” part is to think people can beat depression permanently or they can die through unrelated means, such as an accident or old age whilst trying to beat depression.
I spoke with a friend, who has depression, about this quote and they had a different opinion on it. Rather than focusing on physical death, they suggested that the quote could refer to emotional death; that depression can kill in a number of ways, physically, mentally, emotionally and socially. I think this relates to the difference between living and existing.
I’m currently off work because of my mental health. I’m not in a good place at the moment. I’m alternating between periods of anger, to depression, to anxiety and stress. I’m having trouble concentrating, and staying asleep. Although I’ve started on antidepressants again, they’ve not had much chance to take effect. I’m going to the gym and that is helping a little, but I don’t know what the answer is to my deteriorating mental health. The start of the year was so positive in many ways. I had issues with my physical health but it was gradually improving. Then, I had my trip to India, and then lockdown. I actually coped well with lockdown until the end of May when it seemed like my mind just imploded. My mental health did not worsen because of this pandemic, but it hasn’t helped.
I’ve not found counselling helpful. In fact, I think it’s probably made me feel worse overall. I had put a lot of my hopes in counselling, but it was just a waste of time. I mentioned last week that mindfulness and CBT just doesn’t cut it when you are so angry and upset at where you find yourself in life. I mentioned to my therapist that there are times when I’m consumed by this anger, and her response was that I needed to find a way to “calm down”. Well, yeah, that’s right. I do need to find a way to calm down and I thought that’s what the therapist was going to help me with.
Initially I was thinking about finding another counsellor but I don’t know if I have the mental energy or stamina for it. If I start up with a new therapist I will have to go through all my history again, and that will reopen a lot of old wounds. I just don’t think I can put myself through all of that again if their suggestion is just going to be mindfulness, CBT and telling me to “calm down”.
On the subject of mindfulness, I stumbled across a great set of posts on Facebook earlier, which I’ve posted below:
Now, I’m not saying that I’ve been a victim of major trauma like an assault, but I am struggling. Mindfulness just seems like a strategy aimed at telling people to ignore their trauma. Maybe it’s useful for helping people deal with minor issues but when you are dealing with people in severe emotional and mental pain it is just not enough.
On a more positive note, we had a great meal out last Monday. There is a local bar called Pina which serves the best tacos I’ve had in the UK. The photos below are of their Al Pastor tacos; pork and pineapple tacos. They’re amazing. I barely stop to breathe whilst eating them. Pina also serve coconut shrimp with a mango and chilli salsa which goes very well with the tacos.
I’m still going to the gym and very slowly ramping up the exercise. I’m itching to lift more, and push myself more, but I have to keep remembering my numerous health problems. Having had surgery to both shoulders, I have to be so careful with any exercise that puts strain on those joints.
I’m a few weeks away from moving to split sessions instead of full body sessions. At the moment, I’m hitting the major muscle groups in the same session, but I’ll eventually move back to a two-day split, and then a three-day split. On the two-day split I’ll focus on chest, triceps, quads on day-one, and then on day-two back, biceps and hamstrings. The three-day split will see the leg exercises moved to their own session.
Premium Bonds: £20,700 (up £150.00 from last update).
Stocks and Shares ISA: £12,185.20 (down £77.59 from last update).
Fuck It Fund: £0.00 (no change from last update).
Property Value: £187,554 (no change from last update).
Total Assets: £220,439.20 (up £72.41 from last update).
Credit Card: £0.00 (no change from last update).
Residential Mortgage: £142,814.69 (no change from last update).
Total Debts: £142,814.69 (no change from last update).
Total Wealth Figure: £77,624.51 (up £72.41 from last update).
Investment Income in 2020: £111.36 (no change from last update) (target £2,000).
Not much to say about the finances this week. The stock market continues to stumble along with not much sign of stability or growth. All this means is that pound-cost-averaging is working for me. Every month that passes by with the stock market depressed means that I’m getting more units of stock for my money. Sooner or later though, it will start to improve. It always does. The only question is when. I’ve posted at length in recent weeks that I can see the situation actually getting worse in early 2021. The big unknown variable is how long it will take to mass produce a reliable and effective Covid vaccine. Once this is readily available, we will see the global economy start to improve. It’s not going to be an overnight improvement though. Many countries have found themselves in debt due to the huge social welfare schemes implemented, such as the UK furlough scheme. This money will have to be paid back eventually.
Investing in Uncertain Times
Investing does not always need a direction or goal. If you have excess funds, however, it makes sense to get the best return possible. Some people have said that they don’t know how to invest. The question of “how” is easy to answer, and it’s never been easier to access different investment products. The real question shouldn’t be “how” but “why?”
The UK state pension is only designed to provide a basic, subsistence level, safety net for those retiring. A quick Google search reveals that the average UK retirement income is approximately £15,000 per year, but an amount double to that is needed for a comfortable retirement. With the fallout from this pandemic impacting us for years to come, one way that the government can save money is to reduce pension entitlement. This can be done in a number of ways, like increasing the state pension age and not increasing the amount paid in line with inflation. You can’t rely on the government to look after you in retirement, nor can you rely on a company pension as many of these schemes are in trouble.
My “why” is that I want to retire early. Some people may want to retire comfortably, but the only way to guarantee either is to take matters into your own hands. This starts with financial education, and there is a wealth of information available for free online. There are whole communities on sites like Reddit that discuss how to maximise retirement income. Some people say that money doesn’t bring happiness. Maybe they’re right, but what money can do in retirement is allow someone to heat their home and feed themselves good quality food, as opposed to having to choose between food or warmth. Money in retirement can also allow someone to have a quality entertainment package, as opposed to the basic package. It can allow a retired person to travel, instead of spending their days at home because all their money went on the basics of survival.
The welfare state in this country is, in my opinion, going to have to change unless we see a drastic change in culture within our government. The composition of our population is changing with more people living longer in retirement, which is draining our NHS and increasing the amount of pensions being paid. As the birth rate is falling in this country, it means there will be fewer people paying the taxes that fund these benefits. So, something has to give and I believe it will be the benefits paid to the elderly that gives.
In 2016-2017 over £200 billion was spent on benefit payments and over half the figure went to pensioners. Don’t get me wrong, I’m not saying we should reduce payments to this section of society, but I am predicting that’s what the government will do. I’m still thirty-odd years away from the current state pension age, and I have time to make my own plans. However, if I was in my fifties now, with only the state pension as my safety net in retirement I would be very, very worried.
It’s time for a little bit of a rant. For years now, decades even, we have been told time and time again that if someone calls you saying they are from the bank, and they ask for account details, it’s a scam. It’s a message that’s been repeated so often that it should be embedded in the public consciousness alongside not taking sweets off a stranger, or believing a single thing a Tory politician says. Yet, every single week there is a story in the media about someone who fell for a scam and lost their life savings.
The most recent story I read was about someone who had a call from their bank saying their account had been compromised and they needed details from the customer to move the money from the compromised account to a safe account. Anyone with mental capacity should be able to spot the logical issues here.
First of all, a bank would not need information or permission to move customer funds from one account to another. It’s absurd to think they would spot a compromised account and think “we need the customer’s permission to do something about it.” It’s just absurd, there is no other word for it.
The second point is that we all know banks can put a stop on an account. We’ve probably all experienced at some point a legitimate transaction being stopped because the bank wants to ask us a few questions, like when you try to spend a few thousand pounds on a car or holiday.
The third point I want to make is actually an example that someone gave in a comments section on the news story I was reading. This person asked you to imagine you are sitting at home one evening and you get a knock at the door. You answer the door and the person tells you that there are some suspicious people hanging around your car, and they are trying to break in. However, if you give this person your car keys they will drive your car to a safe place. What would you do?
Now, there are some very sophisticated scams out there and unfortunately people will be duped by these. But often the stories in the media are variations on a person being cold called and asked to give account information so their money can be moved to a safe account. I just can’t understand how people still fall for this. The question should always be “why?” Why would the bank call to get your information if they are telling you your account is at risk?
Never give out account information on a cold call. Hang up, and call your bank back from a verified phone number you have sourced yourself.
Thank you for reading and I hope you have a great week. If you enjoy Mortgage Advisor on FIRE, please share the blog on your social media. If you have any questions, please get in touch on Twitter (@nowwelive01) or Instagram (@david_scothern), or leave a comment on this post.