Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss gambling addiction, Tory sleaze and then take a detailed look at the numbers for my BTL and how property values will impact my plans.
Quote of the Week
As I write this I have gone 702 days without gambling. Since I first gambled online in 2008, this is the longest I have gone. I previously went over 500 days before relapsing, but I am feeling different about it now. Whereas in the past I had the urge even when trying to stop, I no longer have the urge. I know that I have to be vigilant against returning to my addiction, as any recovering addict will know you are never truly cured. With an addiction, it’s about winning the daily battle to not engage in the behaviour.
Although gambling addiction is starting to get more mainstream attention, I still feel as though it’s an issue that is being treated as an afterthought. Gambling addiction is serious though, and has the highest rate of suicide attempts when compared to other behavioural addictions. It is a lonely addiction and one that is too easy to hide in an age of smartphones and betting apps.
I have found great support amongst the community of recovering gamblers on Twitter, and I think this support has helped push me forward and find my recovery a little easier to manage. However, it seems that every day there is another story of a recovering addict being brought before the courts for crimes related to their addiction. Whilst addiction is not an excuse to avoid punishment, I feel that there needs to be more focus on prevention and recovery. Simply locking gambling addicts up who have stolen to fund their habit achieves very little.
I’m not going to lie, although I don’t have the urge to gamble, from time to time I do miss the rush that comes with a winning bet. Then I remind myself that there is no such thing as a winning bet; just a temporary blip where the bookies give you some money back just so you can bet with it again. This is why there are so many betting companies out there; it’s a very profitable business, and it’s also one of the most morally bankrupt.
I’ve spoken before about how gambling will never go away. In one form or another, people have gambled for thousands of years. It’s behaviour that seems embedded in our very DNA. If we can’t ban it completely, all we can do is regulate it effectively. It is far too easy to open accounts and start spending vast sums of money. The industry does little to verify the origin of funds. I’ve heard stories of people opening accounts in other people’s names to get access to free bets and promotions. This sort of behaviour from betting companies needs to stop. Obtaining a betting account should be difficult enough to filter out problem gamblers, but not so difficult that it drives gambling underground. If you are struggling with gambling and need support, there are plenty of resources available online. If you want to talk to me about it, drop me a private message on Twitter @advisoronfire or email me email@example.com
I’m not a trained therapist, but I know what it’s like to have a gambling addiction. One resource that I found incredibly helpful was the After Gambling podcast run by former addict Jamie Salsburg. The podcast itself was just the crutch I needed in the early days of my recovery. More than anything else, that podcast helped me. I’m forever grateful to Jamie for putting the episodes out there, and for his support via Twitter, and through a Zoom call a few months ago. He’s a great guy and I’d recommend following him on Twitter if you want to see great content about gambling addiction.
I started the week with some blood tests, from which my arm is still bruised. I’m having a few little flare ups in my physical health that I need to get checked out. I have an appointment next week with a consultant and I’m expecting to have more tests in the coming weeks. It’s frustrating but with the amount of health problems I’ve had, it’s not unexpected.
At the start of the year I posted a little about an artist, Laura Slade, who paints animal portraits. I commissioned one of our old cat, Sweep, for my girlfriend for her birthday. This week I received a little surprise as my girlfriend had commissioned a painting of a kingfisher for me. Laura’s work is fantastic and her customer service is friendly and responsive. I would definitely recommend her services if you want to remember a pet. You can find her on Instagram or Facebook.
At what point will people turn against this shitshow of a government? In a development that surprised absolutely no one, it turns out that Matt Hancock is a bit of an asshole.
The thing is, until we have an effective opposition to this Tory government we will just continue to shuffle the same corrupt people from one post to another. When the guy at the top has a history like Boris Johnson’s, how can he have any sort of moral authority over those working under him?
So, now he’s resigned and although I would have liked him to have been dragged over hot coals for his part in the (lack of) response to Covid, it’s typical that he leaves his post due to sleaze rather than obvious incompetence.
Bob is settling in properly now and his health issues when he first moved in with us seem to have settled down. He is still a real scaredy cat but he’s also affectionate in his own way. He’s not a lap cat like Sweep was, but each morning at around 6 or 7am he will climb up on the bed and get under the covers between us.
Yesterday I spent a good thirty minutes playing with him. I was on the bed with a ribbon and Bob was on the floor. I would wave the ribbon over him and then pull it back, and Bob would jump up and try to catch it. I don’t know who was having the most fun, but we both seemed to enjoy it.
2021 Goals – to be achieved by 31/12/2021
1 – Reduce weight to 92.8kg. (Current weight 123.2kg).
2 – Finish 104 new books. (Current total: 53).
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 have no idea when I’m going to start losing weight. It’s just so difficult at the moment between work, and then just doing the day to day things. Life is exhausting right now. I used to be, until fairly recently, one of those people who could function with just a few hours sleep. I would go to bed after midnight and be up at seven with no problems. Now, I’m generally ready for bed around nine in the evening. I just don’t sleep well though. I’m waking up several times throughout the night. It’s pretty frustrating.
My 2021 reading challenge is progressing nicely though. I have just finished two brilliant books; The First Fifteen Lives of Harry August by Claire North, and Project Hail Mary by Andy Weir. The former was the physical book and the latter was the audiobook. The fact that Project Hail Mary was an audiobook enhanced the experience. There are aspects to the story which were definitely improved by the addition of limited sound effects. The title description on Audible explains that Andy Weir supervised several minor changes to the physical book for the audio conversion and it definitely worked. If you want to read Project Hail Mary and enjoy audiobooks, I would recommend the audio over the physical book.
Premium Bonds: £17,225.00 (up £725.00 from last update).
Stocks and Shares ISA: £27,865.07 (up £480.89 from last update).
Fuck It Fund: £500.00 (no change from last update).
Crypto: £405.79 (down £68.18 from last update).
Pensions: £47,121.92 (up £185.75 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: £421,116.78 (up £1,323.46 from last update).
Credit Card: £392.73 (up £232.34 from last update).
Residential Mortgage: £159,392.09 (no change from last update).
Buy-to-Let Mortgage: £93,103.52 (no change from last update).
Total Debts: £252,888.34 (up £232.34 from last update).
Total Wealth: £168,228.44 (up £1,091.12 from last update).
Investment Income in 2021: £1,267.77 (target £5,000).
My credit card has increased again but this is simply down to my own laziness and the fact it’s on 0% interest for purchases. The card has taken some hammer with Bob’s vet visits and the fact we have to buy him special food which is quite expensive. Then, as my girlfriend and I are smashing through books, it’s easy to see how it can quickly increase. It’s not a problem though as we have the funds to clear the balance. It’s just not a priority at the moment.
As many regular readers will know, the agent managing our BTL has not covered itself in glory. It is one of the worst companies I have dealt with. A few months back they asked for some money for some repair work. They held onto the money for a while and are now sending it back. No one seems to know if/when any of the work was completed. At this stage, I no longer care and I’ll just be happy when the money drops in next week.
BTL – Future Strategy
The property market is just insane at the moment. Everything I see at the moment, through friends and family who are selling their property, to what I see in the various groups I’m a member of, the market is in danger of overheating. Timing the market is generally a bad idea, as there are too many factors at play. However, at certain times it can be prudent to bide your time. For now, I’ve decided to take a little pause and just observe what happens through Q3 as the Stamp Duty Land Tax holiday comes to an end.
I started thinking the other day about the cost of our BTL. I don’t mean the purchase price, but the full cost of everything related to buying the property and putting it into a rentable condition. The numbers break down as follows:
Deposit, Legal Fees and Taxes: £35,697.70
Repair Work: £5,296.56
Our strategy is based on the idea that we recycle our money in each deal. The gold standard is to recycle 100% of your money, but this can be difficult to achieve quickly. Over time, as the property increases in value we will be able to draw money down.
I’ve had a look at the value of UK property over the last ten years and it’s interesting looking at the overall trend. Since 2010, the average UK property has increased in value by approximately 3.35% year on year. Obviously, it’s not a smooth annual increase with some years seeing much higher increases and some even seeing decreases. In general, over the last ten years property owners have done well with an overall increase of almost 40% during that time. Assuming that trend continues, we can expect our BTL to be worth approximately £180,000 by 2030. If we can still take the mortgage up to 75% loan-to-value, we would be able to pull all of our money out of the property by that point.
The above calculation is based on the last ten years, but there is no reason to focus on a ten year period. In the middle of the last decade, we saw prices increase by over 7% for two consecutive years. If that happened over the next two years, we would be able to release almost half our funds that were used in the first BTL purchase.
With the market going crazy right now there is every possibility that the value may increase faster. Although that would help me release money more quickly, it means that the properties I would then be looking at would also be more expensive. It’s a difficult one to judge the right time to release equity and the right time to take the bull by the horns and invest in another property.
I think for now my plan to take a slight pause is the right thing to do. I can continue to accumulate money to invest in Premium Bonds and into my ISA. Once I hit £20,000 in Premium Bonds I will shift my focus to my ISA to try and increase the dividends I receive from the various funds I invest in. It’s looking as though I will struggle to hit the £5,000 investment income target for the year, but that’s ok. I’m still moving in the right direction and that’s all that matters.
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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.