Part 81

Hello and welcome back to Mortgage Advisor on FIRE. This week is a bit different as I didn’t have a subject in mind when I sat down to write.  All I had was my Quote of the Week.  So, what follows is me just writing…

Quote of the Week

So many people do not understand money, whether that’s debt or investments.  This lack of understanding leads to so many poor financial decisions.  If you don’t understand an investment, you are just gambling.  It’s that simple.

If you are considering an investment, you should think about whether you could explain the investment in basic language to someone with no financial education.  If you can explain it accurately, then great.  If you struggle to explain the investment, then you should really think carefully about proceeding and look to educate yourself.

The most common misunderstanding I see from people, when it comes to investing, relates to the stock market.  Many people see the stock market as risky and just a form of gambling.  The reality is, with a bit of education, it’s actually a very safe investment.  Since I opened my ISA in the 2018/2019 tax year, I have invested a total of £18,400.  My current ISA balance is £22,667.27.  This doesn’t take into account the money I have also withdrawn or the income I’ve received from dividends.

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My ISA performance is extremely positive despite Covid-19 which wiped out my expected dividend income last year.  Since opening the ISA, I’ve received £48.48 income.  To put that into context, by the end of the month I’m expecting a dividend payment of approximately £250.  I would have received a similar amount last year from this stock had the pandemic not struck.  The big win is that I’ve withdrawn almost £3,000 from my ISA.  When you add that withdrawal to the current balance of my account, you can see that my ISA is up by roughly £7,000 on the amount I’ve actually invested.  That’s not a bad return.  

None of my actions have been mystical or speculative, but rather they have been based on a hell of a lot of research and education.  Had I invested my money in a savings account, there is no way I would have returned even a tenth of what I have through the ISA.  

This week’s quote can also apply to mental health.  I’ve been struggling in the past few weeks and I’ve had to increase my dosage of sertraline.  I’ve gone from 100mg a day to 200mg.  I’ve also been prescribed sleeping tablets, but they don’t seem to be doing much.  Can I explain why I’m struggling with my mental health? To a degree but I don’t fully understand it because I can’t explain it myself.  There are some things in my life causing stress that are temporary.  There are other things that are more permanent, and I just have to find a way of living with it.

I was asked recently if the pandemic had affected my mental health.  It’s a tricky one, and there’s not a simple answer.  The only way I can think to explain it is in terms of direct and indirect impacts on me because of the pandemic.  The direct impacts have been that I now work from home and that I’ve not been able to exercise at the gym.  Working from home is a bonus.  I was able to spend much more time with my buddy Sweep, who I miss every day now that he’s passed.  I will treasure those months I got to spend with him.  The gym being closed has stopped me from being able to exercise, and weight training has proven to be the most effective way of keeping my demons at bay.  The social aspect of the pandemic, in terms of cafes, bars and restaurants being closed, hasn’t really bothered me too much.  I’m not a drinker and I loathe nights out in loud bars and clubs.  The indirect impact on me has been more severe with people I care about struggling in various ways. 

Two things that I have been craving recently are a restful sleep, and silence.  I can’t remember the last time I slept through the night and woke up refreshed.  It was in another life I suspect.  I’m finding it harder and harder to get going in the morning, sometimes spending an hour or two just staring at the clock, then scrolling through my feeds, before looking back at the clock and thinking, “I should really get up.”  

Silence is something I’ve not experienced in years due to my tinnitus.  It’s not so severe that it bothers me all the time, as I’m able to zone out from the constant tone in my head.  Sometimes though, I would just love to sit in silence.  

Another part of my health that is frustrating is the amount of drugs I have to take on a daily basis. I’m taking 21 different tablets each day on prescription, not including the paracetamol or tramadol I’ve been taking for the various aches and pains I experience.  

Exoticca

Since last week’s blog I have shamed Exoticca on social media and the result is that the refund has been paid.  Their service has been unbelievably bad and I can’t understand how it’s taken over 420 days to issue the refund.  It’s just insane.  I don’t like to see people lose their jobs, but I would be amazed if this company survives the next year or two.  I have a voucher for £150 off a holiday with them, due to issues with my trip to India with them last year.  I’ll never use it, because to use it I would have to give them more money.

2021 Goals – to be achieved by 31/12/2021

1 – Reduce weight to 92.8kg.  (Current weight 120.5kg).

2 – Finish 104 new books. (Current total: 37).

3 – Complete RO3 for my DipFA. (In progress).

4 – Complete RO4 for my DipFA.  (Not started).

5 – Complete RO5 for my DipFA.  (Not started).

6 – Complete RO6 for my DipFA.  (Not started).

My weight loss has completely stagnated but that is not surprising considering my mental health.  I’ve only completed one new book this week which is a surprise, but I’m nearly finished with two others so I would expect to have completed forty books by next week’s post.

Financial Update

Assets

Premium Bonds: £1,000.00 (no change from last update).

Stocks and Shares ISA: £22,667.27 (up £710.66 from last update).

Fuck It Fund: £648.71 (up £16.40 from last update).

Crypto: £661.99 (down £88.63 from last update).

Pensions: £44,475.19 (down £1,245.83 from last update).

Residential Property Value: £199,355.00 (no change from last update).

Buy-to-Let Property Value: £128,644.00 (no change from last update).

Total Assets: £397,452.16 (down £607.40 from last update).

Debts

Credit Card: £808.45 (up £63.29 from last update).

Residential Mortgage: £139,949.54 (no change from last update). 

Buy-to-Let Mortgage: £93,121.57 (no change from last update). 

Total Debts: £233,879.56 (up £63.29 from last update).

Total Wealth: £163,572.60 (down £670.69 from last update). 

Investment Income in 2021: £476.35 (target £5,000).

A strange set of numbers this week with my ISA increasing in value but my pensions losing value.  My crypto balance has proven to be quite volatile with the value rising and falling drastically on a daily basis.  My credit card debt continues to increase as I help subsidise our joint living costs.  However, my girlfriend just finished her first week in a new job and will be able to start contributing to the household finances again.  The next few months, as we move into quarter three of the year, should see a surge in my investments as I allocate more of my monthly income to my FIRE journey.  

Smart Meters

I recently switched my electricity provider from E.On, a company rivalling Exoticca for gross incompetence, to Octopus.  The service from my new provider has been excellent and because I used a friend’s referral code we both received a £50 account credit.  (Note: let me know if you want to use my referral code and we can both enjoy a further £50 account credit).  As part of the switch, Octopus arranged for a smart meter to be installed.  I was anxious about this because E.On had tried, and failed, to install a smart meter on three separate occasions.  It was done with no problem whatsoever through Octopus.  

So, why am I talking about smart meters? It’s simple; by analysing the data on our electric use through the smart meter we have reduced our electric costs drastically.  This chart shows how our usage changed after installing the smart meter. 

A combination of a slightly better tariff and more considered use of electricity has reduced our bill from £140pcm to £80pcm (Octopus thinks it should be £75pcm based on our reduced usage but I’ve rounded it up to build a little account credit for the winter).  Switching provider has saved £720p/a and provided us with a £50 account credit.  If you are thinking of switching your electricity provider, please consider Octopus and ask me for the referral code. 

Please show your support

I spend several hours each week writing this blog and make it freely available to all readers.  I do not hide my content behind a paywall.  However, maintaining a website incurs costs.  If you can afford a small donation, it would be gratefully accepted.  Click on the Buy Me A Coffee image to be taken to my supporter page.  You can either make a one off donation, or sign up to a monthly subscription.  If you can’t make a donation, please share my blog on your social media.

My Instagram is @david_scothern and my Twitter is @advisoronfire. You can also email me at mortgageadvisoronfire@gmail.com.

You can still see Sweep’s Instagram @sweep_the_kelham_island_cat.  

Finally, have a look at Darren Scothern’s fantastic blog at darrenscothern.com.