Hello and welcome back to Mortgage Advisor on FIRE. This week I briefly discuss the concepts of truth, risk and expertise. I also look at my FIRE number and explain why my Facebook account was recently restricted. First, the Quote of the Week:
Quote of the Week
Another week down and, after over a year dealing with Covid, the stupidity still runs strong in some people. Yes, the UK government has been grossly incompetent in handling the pandemic. Yes, the lockdown sucks and I would much rather have the freedoms I enjoyed prior to the pandemic. The thing is, the truth of the matter cares little for what you, or I, want. The truth is we are in a pandemic and there is a long way to go. This isn’t like a game of football in the park where we get to decide when to stop playing; we do the right things and we beat the pandemic – it’s that simple.
The amount of people out there that believe the lockdown is a form of social control is pretty scary. These conspiracy theorists are great at imagining all sorts of secret plots to control us all, but they are poor at explaining why.
One common argument I have seen from people who are refusing the vaccine, is that they want to know what they are putting in their body. I take from this, that they want to understand the science behind the vaccine because simply knowing the ingredients does not tell you much. So, if you agree that it’s a reasonable leap to go from, “I want to know what I’m putting in my body” to, “I want to understand how it works”, then that philosophy can be applied to almost all aspects of daily life. For example, how many drivers understand the science behind how their car works? How many tourists understand how their plane works? How many people understand how the different ingredients in their takeaway burger work to extend the lifespan of their food? If you were to only use or consume that which you fully understand, you would have a very difficult and very short life.
Related to this is the concept of expertise. I don’t need to know how a plane works because I trust the engineers and pilots to do their job. I don’t need to know how a car works because I trust the people who designed it. I don’t trust fast food, so I’ll not go there. The point is that as part of a society we have to trust the people around us to do their jobs. When you drill deeper, you can apply this to all sorts of aspects of daily life, such as trusting drivers to stop at a red light or trusting your pharmacist to give you the right medication.
It’s never possible to eliminate risk entirely, and the best you can hope for is risk management. This is something I’ve talked about before, but it’s worth revisiting again. Many anti-vaxxers scoff at the fact that the vaccines don’t offer total protection. Seatbelts don’t offer total protection from car crashes. Shin Pads don’t offer total protection from crunching tackles on the football field. Hell, armour and a shield didn’t offer total protection on medieval battlefields but even the spearmen of the time understood that some protection is better than none.
We are all frustrated and stressed at another year passing by in lockdown. It sucks. I want a holiday. I want to go to restaurants and bars. I also understand that it’s not just about me. The chances of me dying of this virus are remote. That doesn’t stop me from being a carrier and passing the virus down the chain at which point someone will almost certainly die.
I’ve been on leave from work this week and despite having grand plans to exercise or study, my time has been eaten up by other things. I’ve spent some time out in the sun, which has been nice. I’ve caught up with a few people, in a socially distant manner, and I’ve also just allowed myself time to relax.
Bob has been to the vet for the first time since we adopted him and although he was quite vocal, he was well behaved and brave. He is still coming out of his shell and learning that this is a safe, loving home for him. As a result, we are starting to see more of his personality. There are still some health concerns we have and I’m not completely convinced we were made aware of all his medical history, but it’s not important now we have him. He has so much fur though, and when we brush him it just keeps coming off. We have to make an effort to brush him because, like most cats, he grooms a lot and this leads to him throwing up furballs.
My Sheffield Wednesday related post generated a lot of traffic this week, and if you missed it you can view it here. The state of the club is just embarrassing but unfortunately I can’t see much changing in the short term except for the club, you know, ceasing to exist.
Although I’ve been on holiday from work, I have still had to spend more time than I’d like on the phone dealing with financial matters. I’ve spent several hours dealing with my own residential mortgage, but I’ve also been dealing with a complaint with my old bank account provider that was first logged in February this year.
For those of you unfamiliar with the rules around complaints in the banking sector, you have to give your bank up to eight weeks to investigate and attempt to resolve your complaint. If they fail to offer an acceptable resolution in those eight weeks, you can take your complaint to the Financial Ombudsman either when their rejected resolution is offered or at the end of the eight week period.
The bank provider made one mistake after another. The complaint has been repeatedly closed and reopened despite me contacting them numerous times to explain I’m not happy with the offered resolution. The bank has not contacted me once regarding the complaint. So, in May I referred the complaint to the Ombudsman. Since then, the Ombudsman have contacted me stating I have to give the bank eight weeks to resolve the complaint, which was confusing because you can only refer to the Ombudsman after eight weeks. After several calls it was determined that the Ombudsman had just sent out poorly worded emails to me.
I received a notification from Facebook stating that my account had been restricted for 30 days. I am unable to “go live” or “advertise” on the platform during this time. My offence was posting a meme over a year ago. The offending meme is below:
I posted this meme back in the days of Trump when the US was, well, to put it bluntly, going batshit crazy in their (lack of) response to Covid. I don’t get why it took so long for Facebook to censor this and I suspect it’s probably an automated process using image recognition software.
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: 48).
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).
I’ve finished a few books this week, including some fantastic sci-fi stories by Mary Robinette Kowal which make up The Lady Astronaut series. The first book, The Calculating Stars is a prequel to a short story written a few years ago. Following this, The Fated Sky was released which follows (more or less) directly on from The Calculating Stars. Book three in the series is The Relentless Moon which is a sort of sidequel to The Fated Sky.
What I love about this series is the setting of the 1950s and 60s. It’s a refreshing look at science fiction, looking back at the early days of the space race and asking, “what if?”. In this case, the question is “what if a meteorite devastated the United States in the 1950s?” It is this event that kick starts the series. I would highly recommend this series of books to anyone interested in science fiction. Links to the Amazon listings for these books are in the images below. If you purchase the books using these links, you will help support this site at no extra cost to you.
Premium Bonds: £1,500.00 (no change from last update).
Stocks and Shares ISA: £23,109.76 (down £238.19 from last update).
Fuck It Fund: £301.70 (up £1.70 from last update).
Crypto: £488.16 (up £12.40 from last update).
Pensions: £46,771.72 (up £403.72 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: £400,170.34 (up £179.63 from last update).
Credit Card: £170.46 (up £81.46 from last update).
Residential Mortgage: £139,592.09 (no change from last update).
Buy-to-Let Mortgage: £93,103.52 (no change from last update).
Total Debts: £232,866.07 (up £81.46 from last update).
Total Wealth: £167,304.27 (up £98.17 from last update).
Investment Income in 2021: £1,005.97 (target £5,000).
A fairly steady week overall with some dips in my ISA being offset by gains in my pensions. My credit card bill increased slightly but this is just down to not paying it in time to meet this week’s update. Next week’s update should see some significant changes to my financial position but I’ll save that surprise until then.
I was talking with a friend the other day and that conversation has been simmering away at the back of my mind. I was explaining to her that when my plans for FIRE come up in conversation, most people seem to react badly. The thing is, I’m not doing anything illegal or unusual. I’m approaching my finances in a structured and organised way. I’m prioritising some things, like investing, over other things, like having a car. There are some people out there that love to work and to keep busy. I, on the other hand, can’t wait until I can quit my job and do my own thing. Then again, I’m not a social person and I’m quite happy in my own company.
I think that part of the reason so many people are taken aback by my plans is that talking about money is still seen as being unclean or uncivilised in some way. It’s something I don’t understand, but many people are uncomfortable talking about money. I suspect that this is down to the fact that money management is not taught in schools. There is little, if any, education about interest, investing, settling a bank account, paying taxes or paying bills. A cynical person might think this was deliberate to try and keep the rich and poor in their respective places.
I’ve seen a few posts recently where people talk about their FIRE number, which is the amount of money, or the value of their investments, they need to hit to achieve FIRE. My number has always been based around a net income figure of approximately £1,500pcm (£18,000p/a). This would allow me to maintain a standard of living I would be very happy with. Assuming a 5% return rate, I need my total wealth figure to be somewhere in the region of £360,000. If we assume a 6% rate of return, I would need a wealth figure of approximately £300,000. I’m just over a year and a half into this project, and my net wealth is just over £167,000. It would seem that I’m on the right track. I’ve just had a look at what return we are getting on our first BTL and it’s 6.5%. This is all looking quite positive.
The important thing to remember is that these calculations are quite abstract. Some of my investments do not generate income, but instead accumulate value. Some of my total wealth is also tied up in pensions. Looking purely at the income in 2021 so far, when my June rent is received, I will have averaged approximately £200pcm of investment income. There is still some distance to go, but this will snowball as I accumulate more property and as the market recovers post-Covid.
Before I wrap this week’s post up, I just wanted to remind you that you can sign up for email updates. Near the bottom of the page there should be a button saying “follow”. If you click that link and follow the instructions you can choose to follow the blog and receive email notifications when I publish a new post.
Edit: As I’m writing this the football match between Denmark and Finland has just resumed. My thoughts are with the Danish players and staff, and all Christian Erikson’s friends and family.
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Finally, have a look at Darren Scothern’s fantastic blog at darrenscothern.com.