Hello and welcome back to Mortgage Advisor on FIRE. It has been two years since I started this blog. This week I look at time as a resource, and how retirement is defined by how much money you have. Also, a look at where my readers come from, and which posts have been read the most. The financial update reports a huge increase in my wealth this week, thanks to an unexpected gift. This week’s blog finishes with a discussion over what to do with my residential mortgage in light of rumours of a base rate increase. First, the Quote of the Week:
Quote of the Week
Time is the most precious resource we have. It is the one resource we can’t make more of. Once it is spent, it’s gone. This is part of the reason why I hate waiting for people who are late. Things crop up and it can be no fault of your own for being late, but if it’s just because of poor timekeeping, then you are showing the ultimate disrespect for the other person. You are saying that their most valuable resource is not worth as much as yours.
A huge part of why I am working relentlessly towards FIRE is because I only have a finite amount of time. Every second I’m working for someone else is a second I can’t use to enjoy life. I’m exchanging my time for money, so that I can ultimately exchange my money for time.
I read somewhere recently that retirement is not a function of age, but rather a function of money. Once you hit a savings or investment goal, you can then retire. For some people that target amount could be a simple total value, say £1,000,000. For others, like myself, it’s more about the income received. Ultimately, I want to have a net passive income of at least £1,500 per month. Once I hit this, I’ll feel safe taking early retirement.
The relationship between time and money is something that, in my experience, not a lot of people think about in detail. When people talk about how money is “the source of all evil” or think about the accumulation of wealth being a dirty subject, it shows a fundamental misunderstanding about what money is. Money isn’t the objective. Money is simply a tool to create time and freedom. Far from being a dragon sitting on a mountain of gold, having wealth provides the time and freedom to live your life instead of spending most of your waking hours working.
I’ve had a busy week between work and attending different medical appointments. I’ve had some blood tests carried out to try and find out what’s happening with this infection I’ve been fighting for the past few weeks. Also, I’ve had more physio on my ankle. The pain I’m getting in my ankle is really starting to annoy me. I’ve been dealing with ankle issues on and off since 2019. I just want to be able to walk without pain.
Except for work and different medical appointments, there is not much to report from the past week. There has been a lot of second-hand stress I’ve been feeling as those close to me have been going through their own trials and tribulations. It seems as though they are moving past those issues now, and I’m hoping we all have a clear run until the end of the year.
A Brief Interlude
I’ll never hide this blog behind a paywall, but it does cost money to run the site. I spend a minimum of six hours each week writing the blog, and maintaining the other parts of davidscothern.com. It is a labour of love. However, many of you have asked how you can show your appreciation. I set up a Buy Me A Coffee page but the main feedback was that you couldn’t pay by card. Well, now you can! My page now supports card payments and Apple Pay. So, if you want to show your support and appreciation for the content I create, please buy me a coffee. It really does mean a lot.
I’ve started paying more attention to where my readers come from and what posts get the most views. It’s been fascinating looking through the data. Unsurprisingly most of the people reading this blog come from the UK. However, following that there are some interesting findings. In order of where most of my readers come from, the top ten are:
- United Kingdom
- United States
- South Africa
So, who are you? How did you find my blog? What are your FIRE goals, hopes, and dreams? I’d love it if you get in touch either through my social media or email. I’ve already met some cool people through this blog and would love to meet more. So, please reach out if you have questions or just want to have a chat.
Most Popular Posts
I figured there is always going to be a bias towards older posts as they have more time to accumulate views, but again looking at my most popular posts has proven interesting. In order, here are the ten most popular posts on my blog from the past year:
- Sheffield Wednesday Football Club
- Part 2
- Part 100
- Part 101
- Part 99
- Part 103
- Part 76
- Part 78
- Who, What, When, Why?
- Part 75
The Sheffield Wednesday post was written back in June this year. I’m active on a Wednesday message board and I shared the post there, so it’s probably not a great shock for it to be my most popular post. I think there are more people interested in football than FIRE.
As for the other posts, I’m not sure what has made them so popular. I’ve recently discovered that my blog is listed on several indices of recommended FIRE blogs around the world. It’s probably the case that those lists are directing more traffic towards my site, in addition to (what I hope is) word of mouth spreading my blog. The real key to a blog becoming successful is social media shares. This is the hardest thing to achieve; getting people to share and promote your blog. If you are reading this and enjoy my writing, please do consider sharing each post.
2021 Goals – to be achieved by 31/12/2021
1 – Reduce weight to 92.8kg. (Current weight 121.7kg).
2 – Finish 104 new books. (Current total: 100).
Monthly Goals – October
1 – Reach 100 completed books.
2 – 200,000 steps in October.
3 – Reduce weight to 117kg.
I think it’s safe to say that my weight loss and walking goals are not going to happen. The weight loss just isn’t happening at all. In terms of the number of steps completed in October, I’m on 135,322 steps so far. Unless I walk 65,000 steps today I will miss that goal.
In more positive news I have now completed my 100th book of 2021. I should easily hit my 2021 goal of 104 new books.
Monthly Goals – November
1 – Complete my annual book challenge.
2. Reduce weight to 118kg.
Premium Bonds: £15,000.00 (up £8,000.00 from last update).
Stocks and Shares ISA: £44,270.41 (up £1,045.07 from last update).
Fuck It Fund: £1,625.00 (up £125.00 from last update).
Crypto: £877.37 (up £10.59 from last update).
Pensions: £50,795.76 (up £960.73 from last update).
Residential Property Value: £210,058.00 (no change from last update).
Buy-to-Let Property Value: £135,550.00 (no change from last update).
Total Assets: £458,176.54 (up £10,141.39 from last update).
Credit Card: £1,295.77 (up £246.91 from last update).
Residential Mortgage: £157,555.15 (no change from last update).
Buy-to-Let Mortgage: £93,019.03 (no change from last update).
Total Debts: £251,869.95 (up £246.91 from last update).
Total Wealth: £206,306.59 (up £9,894.48 from last update).
Investment Income in 2021: £3,415.65 (target £5,000).
A very good week, as I’m sure you will agree. This was boosted by an unexpected £8,000 gift which I deposited straight into my Premium Bonds. Also, the stock market has moved in a favourable direction for me. I’m quite exposed to UK banking and it seems like the recent talk about the Bank of England base rate rising has nudged the stocks in the right direction for me.
My credit card continues to increase, but this is not a surprise. As my girlfriend is just getting into her new job and we have things we are working on in our apartment I knew this balance would take a short-term hit. It will be reduced to zero before too long though.
Two Years On
I first got the idea for this blog whilst on a cruise around the Norwegian fjords in 2019. I was listening to, and reading, some financial books and thinking about my future. I remember looking out to sea and thinking there has to be more to life than working 9-5 and having brief moments here and there to enjoy life. The recent realisation that I’m autistic has also factored into my thought process and adds extra motivation to my desire to achieve financial freedom.
The progress made in two years is incredible. When I started this project, my total wealth (assets minus debts) was £53,840.85. It’s now a little over £200,000. It’s so frustrating that I did not start this earlier. Had I adopted a more structured approach to my finances earlier, I would be in a much better position now. It’s dangerous going down that road though, because you can just keep asking, “but what if?” and this leads to madness.
Although my total wealth is looking very positive, I am disappointed not to have more BTLs by now. Much of this was outside my control with Covid impacting the housing market, and also impacting on the amount of income I was expecting through dividends.
As I’m now at the halfway point of my project, I need to make sure that I use these next two years wisely. I don’t want to have to keep working after 31/12/2023. It’s all going to be about acquiring more BTLs going forward. We have started the search for the second property, and hope to complete a deal before the end of the financial year. Then, from April 2022 to December 2022 we need to complete at least one more deal, but ideally two more. Once we have 3-4 BTLs behind us, things will start to snowball as the rental income can be reinvested back into the pot for the next property. Compounding gains are awesome.
My Residential Mortgage
I’ve been faced with a difficult decision over the last few days. My mortgage is currently on a Bank of England base rate tracker, which has been fantastic for the past few years. However, with all the talk of rates going up I have been debating whether to switch to a new fixed rate. My tracker is incredibly low and it’s pretty much guaranteed I’ll never get a rate like it again. On the other hand, the fixed-rate I’m eligible for is only 0.71% above the tracker I’m on. This would mean an increase of approximately £30 per month but it fixes the payment for two years; in other words until the end of my FIRE journey.
I decided to have a chat with a mortgage advisor and see what the numbers look like if we take the fixed-rate and borrow an extra £10,000. Our mortgage payment at the moment is roughly £500. We could take the extra £10,000, secure a new fixed-rate, and take ten years off the mortgage and the payment would be £700. I think that’s a great deal all around. I’m not usually a fan of paying off cheap debt, as the money can be used elsewhere. However, with rates looking likely to rise, paying the debt down faster means rate changes have a lesser impact as the debt will be lower when the deal ends. It also means we will have more equity when we come to sell, or remortgage to a BTL, when we are ready to move.
The increase in payments is going to have a negligible impact on our finances now that my girlfriend has a new job. Based on some rough and ready number crunching we should be in a position to invest around £2,000 between us each month. When people ask why we don’t have kids, or a car, I just point out this fact.
What do you think is going to happen with interest rates moving forward? Have you made any changes to your mortgage in light of recent speculation?
As always, thank you for reading. Please reach out with any questions or if you just want to chat about FIRE.
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Finally, have a look at Darren Scothern’s fantastic blog at darrenscothern.com.