Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss the recent update to the house price index. Also, thoughts on the war between Ukraine and Russia. Also, the usual financial updates and some pictures of how our apartment is coming along.
Quote of the Week
“Everything illegal must be destroyed, everything stolen must be returned to Ukraine, everything occupied by Russia must be expelled.”
~ Ukrainian Presidential Advisor, Mykhailo Podolyak.
Following the illegal annexation of Crimea by Russia in 2014, a bridge was built linking Russia and the occupied territory. That bridge has been destroyed in what many believe to be an operation by Ukrainian partisans or special forces. Whatever the cause, this is a huge blow to Russia’s ability to resupply forces in the south. The lack of Russian effectiveness in this conflict has surprised some, but many commentators with knowledge of Russia’s military have stated, for some time, that the Russians have poor logistics. War isn’t just about who has the most soldiers or the best weapons. It often comes down to logistics; who can move the most stuff from point A to point B. There’s no point having troops advancing as part of an invasion if you can’t supply them with ammunition, food, medicine, armour, and so on.
Russia has lost a huge amount of material in this invasion of Ukraine, as well as a lot of high ranking officers. In an army of conscripts this is especially damaging. One element to this, that hasn’t been as widely publicised as I expected, is due to the US supplying Ukraine with sixteen HIMAR systems (basically a mobile rocket launching system on a flatbed truck, but you know, much cooler). These missile platforms are highly mobile and can launch a variety of different warheads. Ukraine is using them to devastating effect and has reportedly destroyed over 400 targets with them so far. In the coming months the US is going to supply Ukraine with more of these HIMAR systems, and with Russia seemingly incapable of defending against them, I suspect Ukraine will use these weapons to expel Russia from their land.
When it comes down to it, in conventional war, the side that can build the most stuff, transport the most stuff, and supply its troops most effectively, is the side that wins. With the majority of the developed world supporting Ukraine, and with Russia hammered with sanctions, I see a few possible outcomes for this conflict and none of them end well for Russia.
Scenario One: Russia is expelled from Ukraine and is forced into a negotiated peace. Russia’s economy will be in ruins and it will take years, if not decades, for them to replace the people and equipment in their military. With Russian access to advanced microchips extremely limited, they will find it difficult to build the missiles, tanks, drones, and other aircraft a 21st century military would expect.
Scenario Two: Russia deploys tactical nuclear weapons inside Ukraine. Should this happen, the gloves of the western world would come off, but this doesn’t mean a nuclear response from the US or NATO automatically. I believe that if Russia deployed nuclear weapons inside Ukraine, Putin would quickly be removed from power by elements inside Russia. The Generals inside the Russian military must know that any use of nuclear weapons is suicidal for Russia. To stop the full might of NATO airpower turning Russian cities into rubble, Russia would need to remove Putin, withdraw from Ukraine, and agree to demilitarisation.
Scenario Three: Russia refuses to back down in Ukraine and is forced into a lengthy conflict over the disputed regions along the border. Russian losses mount forcing them to deploy conscripts of ever lesser quality (in terms of training and morale) with older equipment. Ukraine’s military becomes fully trained in the use of advanced NATO and US weapons systems (this training is ongoing right now). The war ends when Putin dies.
Would you believe me if I said I’d had yet more poor customer service? As part of the improvements to our apartment, I ordered a new espresso machine from Nespresso. I’ve had four machines prior to this one; one which worked fine until I gave it up (the first machine I had from them), two machines which developed faults within weeks of being bought, and finally one which was faulty out of the box. I figured that I couldn’t be so unlucky as to have another machine with a fault. I was wrong. The new machine seemingly had two faults; it would not heat up to the required temperature, and water would not flow through the machine. I spent half an hour on the phone with technical support. The call ended when they said there wasn’t more they could do and that I should try working through more troubleshooting. If that failed I should return the item via the retailer I bought it from. So, I’ve sent it back for a refund. I wasn’t even angry; I think I knew on a subconscious level it would be faulty. Five machines; four of which wouldn’t work. That’s some piss-poor workmanship.
Something weird has happened in the last couple of weeks. My go-to trainers when I head out have started giving me blisters on both feet in the exact same place. These are not new trainers, and I’ve worn them without a problem for a while. Just seems bizarre that they’ve suddenly started giving me blisters. I’ve tried adjusting the laces, using an insert, and a couple of other things without any improvement. I’m utterly confused by this, and if anyone has any theories about what the cause is, I’d love to know.
Following my frustrating medical call that I mentioned a week or so ago, I had a follow-up conversation with my GP. It was decided to increase the dosage on my mirtazapine from 15mg to 30mg. I took the first, higher, amount on Friday evening. Saturday morning I woke up feeling like I’d got a huge hangover. It wasn’t a headache, but I felt like a zombie. I could barely walk in a straight line. I decided to go out for a walk, and a coffee, to try and clear the cobwebs but it wasn’t until lunch time that I started to come around. I was like this when I first started taking this medication, but after a few weeks, I adjusted to it.
Our apartment is really starting to come together. My girlfriend, Oana, has done an amazing job organising things, and I love how the living room looks now:
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2022 Goals – to be achieved by 31/12/2022
1 – Reduce weight to 90kg. (Current weight 124.3kg).
2 – Complete 10 “classic” books (4/10)
- Crime and Punishment by Fyodor Dostoevsky (1866)
- Moby-Dick by Herman Melville (1851)
- Dracula by Bram Stoker (1897) ✅
- Catch-22 by Joseph Heller (1961)
- The Iliad by Homer (8th century BC) ✅
- The Count of Monte Cristo by Alexandre Dumas (1844) ✅
- War and Peace by Leo Tolstoy (1867)
- A Tale of Two Cities by Charles Dickens (1859)
- Les Miserables by Victor Hugo (1862)
- Don Quixote by Miguel de Cervantes (1605) ✅
3 – Read 10 authors I’ve not read before (21/10)
- John Birmingham ✅
- Nicole Perlroth ✅
- Sabine Durrant ✅
- Luke Smitherd ✅
- Max Skittle ✅
- Harlan Coben ✅
- Jo Spain ✅
- Kate Elizabeth Russell ✅
- Kiersten White ✅
- Rob Hart ✅
- Edward Aubry ✅
- Marina J. Lostetter ✅
- S. J. Morden ✅
- C. J. Tudor ✅
- Greer Hendricks ✅
- Clare Mackintosh ✅
- Stephen Baxter ✅
- Pete Wharmby ✅
- Devon Price ✅
- Nick Jones ✅
- Nathan Hystad ✅
What Am I Doing?
What I’m reading: The Good Samaritan by John Marrs.
What I’m listening to: Lost Time by Nathan Hystad.
What I’m watching: MCU in timeline order.
The Good Samaritan is messed up. It’s told from the point of view of two characters. The first you are introduced to is Laura who works on a charity phone line for people who are depressed. She picks callers who meet a certain type, and then slowly encourages them to take their own life. It’s a page-turner and I’ll have it finished in the next day or two.
I was enjoying the time travel series by Nick Jones, but the fourth book in the series is not released until October 11th. In the meantime I’ve been listening to The Bridge Sequence by Nathan Hystad. Lost Time is the second book in the series. It’s nice, easy listening but I doubt I’ll remember it in detail in a few months. The story centres on an archeologist who is trying to find out what happened to his dad, also an archeologist, who went missing. Objects have been detected at the edge of the solar system heading for Earth, and there’s a shadowy group of “believers” who are preparing to receive their alien masters. It’s entertaining, but is trope-heavy.
Premium Bonds: £9,700.00 (no change).
Stocks and Shares ISA: £59,937.00 (+£1,157.05).
Fuck It Fund: £1,050.00 (no change).
Pensions: £53,095.54 (-£239.08).
Residential Property Value: £233,989.00 (+£4,830.00).
Buy-to-Let Property Value: £150,993.00 (+£3,117.00).
Total Assets: £508,764.54 (+£8,864.97).
Credit Card: £0.00 (no change).
Residential Mortgage: £180,898.62 (-£822.89).
Buy-to-Let Mortgage: £105,279.23 (-£22.23).
Total Debts: £286,177.85 (-£845.12).
Total Wealth: £222,586.69 (+£9,710.09)
Investment Income in 2022: £4,305.87 (target £6,000).
The quarterly house price index update took place and saw both my properties increase in value. I wouldn’t be surprised if this is the last increase for a while, as I’m expecting something of a reset to the housing market with the current rate situation. I don’t think we will see a complete crash, but I’m now thinking there will be a period of instability whilst the ripples of this Tory government’s latest fuck up spread through the economy.
I’d talked with my investment partner about additional borrowing on our BTL, but we’ve decided against it. Whilst the value of the BTL may drop in the coming months, making extra borrowing more difficult, we feel this is outweighed by the level of rates right now. If we completed £10k of additional borrowing (the lowest amount possible) we’d be looking at an interest rate of almost 6%. Roughly speaking, £50pcm on interest only to secure £10k of capital is not worth it. So, it’s looking like we will not release funds from the initial BTL for some time, but that’s ok. Each month that passes sees our BTL balance reduce slightly, and it’s been demonstrated time and time again that in the long-term property values increase.
Just out of curiosity, have your plans to buy/sell a property changed because of what’s happening in the world? I’d be interested to hear your thoughts on the matter.
For now, we are still thinking that adding to our BTL portfolio would be a mistake. We’ll see how the market responds throughout the rest of 2022 and into 2023. In the meantime, I might be putting some money towards a place for my Dad to buy outright. For those who don’t read his blog, first of all you should. But yeah, he’s talked about how frustrating it’s been looking for a place to buy since he sold his previous property. With the mortgage market as it is, and with us both having spare cash, it makes sense to put it to use. The idea would be that when rates stabilise we could release funds by securing a mortgage against the property in the future and use those funds to buy further BTLs. We’ll see how it develops.
That’s all for this week. Thanks for reading.
The views and opinions in this blog are my own, and do no represent the views or opinions of my employer, nor should they be considered advice.
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