Hello and welcome back to Mortgage Advisor on FIRE. This week I revisit the issues surrounding the collapse of betting site Football Index. I also discuss a strange experience I had with my own memory. First, the Quote of the Week:
Quote of the Week
I’m part of a network of property investors on Facebook and although the group does have the occasional bit of useful information, I find that a lot of the time it’s taken up by boast-posts and cringe inducing pitches. So, in a move that will surprise absolutely no one, I decided to have some fun and go on the wind up.
Many of the posts take the form of a scripted sales pitch aiming to find investors or mine other members of the network for information, rather than the poster going out and doing the research themselves. My eyes roll so hard I give myself a headache reading some of these posts.
Anyway, here is my attempt at one of these posts. So far, it has received a positive reaction and it would appear I’m not alone in finding these types of posts annoying.
I don’t have a problem with people promoting themselves. I just want to see interesting, or quirky posts and not the same format every single day.
In Part 76 of this blog, I talked at length about the failure of Football Index. I’m not going to go over it again in much detail, but the issues surrounding the collapse of the betting firm are still rumbling on. Many people have lost money, with some of the amounts running into the tens of thousands.
A major part of why I write this blog is to help increase financial literacy, even if it’s just in my own small way. There is just not enough financial education out there. I have some sympathy for many who lost out to FI because they would have looked at it only superficially and thought their money was relatively safe because gambling companies normally keep their customers’ money separate.
It’s easy for me to sit here and say, “you should have known better”, but you don’t know what you don’t know. If no one sits you down and explains financial risk, then you will not know any better. There were some people who realised that FI was gambling, but under that definition the funds held on account for the customers should have been held separately to the funds of the business. This is, I’m fairly certain, a legal requirement for operators in the UK.
I think that one issue at play here is that many people built up huge portfolios and thought the money was safe. In truth, it was easy to build a portfolio on FI, and the fact that it was so easy is part of what rang alarm bells when I dabbled in it. There are lots of threads on Twitter where people are saying they had worked hard to build up their investment and they feel that their efforts have been undone. This is going to be a very painful, very expensive lesson in finance for these people who thought their money was completely secure. For those who treated this as a bet and understood the typical risks of a bet, they have still been treated unfairly. You don’t expect the bookmaker to change the terms of the bet after it’s been placed.
The take home message from this is that you always need to ask, “where is the money?”. With any investment you need to have an understanding of what your money is getting, where your money is stored and what protection your money has. If you can’t answer these questions, then you are just gambling and when you gamble the house will always win in the end.
As I stated earlier, I dabbled in FI for a few months a while back but I was clear from the start that it was not an investment. It was gambling and, when I was still gambling, I didn’t find it all that interesting. With a standard bet, you know what you are getting and you know where the money is coming from; if you win it’s typically paid from other gamblers’ losses. With FI I could not work out where the money was coming from. It seemed unsustainable and so I took my money out. I was fortunate enough to make a profit on my brief relationship with FI but I suspect I am in the minority. This story is going to rumble on for a while.
To be clear, I’m not victim blaming here. Whether FI acted legally or not, there is a strong argument that they did not act ethically.
There’s only one thing to talk about this week and that’s England’s win over Denmark and the upcoming final against Italy. It’s been a long time since we could be proud of our national side, and I’ve been critical of Southgate in the past. The facts are that he’s taken us to a World Cup Semi-Final and a EURO Final. That’s more than anyone else has done with England in over twenty years. There are players in the current squad who were not born when we lost to Germany in 1996.
It’s the same story with my sleep, in which I’m not sleeping well at all. Last night I woke up every few 20-30 minutes, until I just thought I may as well wake up. I made some toast and a mug of coffee, and got comfortable on the sofa with my headphones in to listen to an audiobook. I then proceeded to spill half the coffee over me.
If anyone has any suggestions for getting a better night’s sleep I would welcome them.
This little man continues to settle in and work his way into our hearts. He’s so sweet in his own way; not as a lap cat like Sweep was, but in a more playful way. He’s still struggling with his insides though and he’s been getting bored on the same food every day, which we were told to feed him for a few weeks to try and settle his stomach. A couple of days ago he refused to eat it, and so we tried a couple of other foods. He smashed through the new food but he felt the effects after.
Next week he will be going to the vet for some surgery to remove his teeth. He has a long standing issue with his gums and the vet has stated that they need to come out. He will still have his murder mitts to show us who is boss even if he no longer has his deadly fangs.
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: 57).
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 finished a book this week; 2034: The Future Laid Bare, and it was hilarious for all the wrong reasons. It had all the hallmarks of a self-published work, not that there’s anything wrong with that. There are some quality books out there that have been self-published that have had a lot of care and effort put into formatting and presentation. This is not one of those books. The formatting is just a mess. Sentences abruptly stop halfway across the page before being started on a new line. The paragraphing is awful as well, with the perspective of the writing shifting from one character to another without warning. It’s quite jarring.
The thing is, the story is actually pretty good. It just needs rewriting. The first third or so of the book is the prologue, which is a timeline of the backstory before the main story. I love alternate history and there are some great forums out there with detailed scenarios put forward. This book did not have the quality of some of those scenarios I’ve read online, but it was interesting nonetheless. It’s just bizarre for a prologue to go on for so long that you could argue the main story is actually an epilogue.
Premium Bonds: £17,500.00 (up £200.00 from last update).
Stocks and Shares ISA: £27,608.56 (down £103.00 from last update).
Fuck It Fund: £525.00 (up £25.00 from last update).
Crypto: £438.72 (up £22.08 from last update).
Pensions: £47,862.74 (up £94.84 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: £421,934.02 (up £238.92 from last update).
Credit Card: £733.98 (up £168.11 from last update).
Residential Mortgage: £158,925.57 (no change from last update).
Buy-to-Let Mortgage: £93,079.52 (no change from last update).
Total Debts: £252,739.07 (up £168.11 from last update).
Total Wealth: £169,194.95 (up £70.81 from last update).
Investment Income in 2021: £1,387.77 (target £5,000).
Another steady week but I would love to see a consistent surge in the stock market for a few weeks so I can cash in some of my stocks to put towards a new BTL. Much of my ISA is made up of one stock and once that stock hits 60p per share, I’ll have to think long and hard about selling my holding. I would like to wait for the price to go higher, but I’m getting impatient to acquire more property.
Once I get this next week out of the way, I should be able to start bringing down my credit card balance. The trips to the vet have seen the card take some hammer, but it’s worth it if it means Bob feels better.
The week ahead should also see an update to the valuations of my two properties. I’m hoping for an increase in my BTL’s value which will enable us to draw some funds back out of the property. This could help bring forward the purchase of a second rental property.
I have a pretty good memory and can remember account numbers and passwords for many different sites and profiles. When we worked in the office, I could go from my desk to the other side of the building to talk about an account, and rather than writing the account information down I just remembered it. Last week something happened which threw me a little, and it’s happened only once before to me a few years ago. I completely forgot an account number I’ve been using for years. This number is one that I use on a frequent basis, at least weekly, and have done for years. I went to the website to enter my details and I completely forgot. I could not remember any part of the number at all.
A few years ago I went to an ATM and inserted my card, but the only problem was I could not remember my PIN despite it being the same one I had used for years. No matter what I tried, I could not remember it. In both instances, I had to reset the information and start again.
My understanding of memory is that there are neural pathways inside the brain and the more something is rehearsed, the more that pathway is strengthened which aides in future recall. Memory is not perfect though, and if we are recalling an event each subsequent recall distorts the accuracy of that memory until it eventually becomes total fiction. The type of forgetting I am referring to with my account information is not like that though. This type of forgetting is like a switch has been flipped; one moment you know the information and the next you don’t.
I reached out to a psychology lecturer who was my dissertation tutor. We’ve stayed in touch since I graduated in 2010 and he shared an article from The Guardian where Charlie Brooker experienced the same phenomenon. It’s bizarre. If you have experienced this, I’d love to read about it in the comments, and if anyone knows of research in the area I would be very interested in reading it.
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Finally, have a look at Darren Scothern’s fantastic blog at darrenscothern.com.