Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss the different paths to funding retirement. Also, the arrest warrant for Putin, and a busy end to the week.
Weekly Update
An item of news that came up late in the week was the arrest warrant issued for Vladimir Putin, or as some people pronounce his name, Pew-Pew-Pewtin (you also need to do the finger guns whilst doing this). Although this is welcome news, it probably will not achieve anything in the short-term. It does, however, keep the pressure on Russia as they become even more isolated in global politics. It’s looking increasingly likely that this war will only end when Pew-Pew is removed from office. That day can’t come soon enough.
I was also surprised to see that Gary Lineker will be returning to Match of the Day. I fully expected the BBC to double down and for this to drag on, but in this case I was wrong. What will be interesting to see is whether Lineker continues to be a vocal critic of Darth Sunak and Darth Braverman.
We’ve had a busy end to the week as we saw Dara O Briain on Thursday, and then attended a classical music concert on Friday. Dara O Briain was great, and we laughed long and hard. It wasn’t quite as good as the last time we saw him but it was still a really good show. The concert on Friday saw two pieces performed; Beethoven, L.: Cello Sonata Op.5 No.1, and Beethoven, L.: Cello Sonata Op.5 No.2. We enjoyed the performance but the venue was not the most comfortable.
On Saturday evening we went to the theatre to see The Good Person of Szechwan. I knew nothing about it beforehand and both Oana and I absolutely loved it. It was utterly batshit crazy but made some powerful points about capitalism, gender inequality, the nature of good, evil, and altruism. It’s up there as one of the best pieces of theatre we’ve seen.
Customer Service
Yes, it’s that time again…
I sometimes wonder if I’m being too demanding with customer service, and this is what leads to so many bad experiences, but I don’t think this is the case.
Wayfair and DHL
A couple of weeks ago we ordered my Dad a new rug for his new apartment. It was due to be delivered on March 9th. This didn’t happen, but it wasn’t a big deal. DHL then emailed to state it would be delivered on March 10th. This didn’t happen. Again, not a massive deal. On March 13th it was again due to be delivered. It didn’t happen. Then, the tracking information updated to show it was due to be delivered on March 10th. For those keeping track, this would have involved time travel. I then contacted DHL but got nowhere. I then contacted Wayfair and explained I wanted to cancel the order, as it was now the 14th and we were all going to be working and unable to accept the delivery. Wayfair explained they could only cancel the order once we’ve received it.
I can understand deliveries being delayed, and if we’d been kept in the loop it wouldn’t have been an issue. However, we’d purposefully waited in for the delivery on the 9th, 10th, 13th, and 14th of March by this point. Our post room has items stolen from it, and if DHL simply left the parcel it was likely we’d never see it. This is why we’d arranged delivery when we did. All Wayfair kept saying was they could only cancel when we received the order, ignoring the fact that we would not be able to receive the order.
I explained our concerns and was assured that DHL would a) ring our buzzer, b) would not leave the parcel with a neighbour or in the post room, and c) would keep us fully informed and attempt to redeliver another day if we were not in.
Now for what actually happened.
DHL dropped the parcel in our postroom without ringing our apartment. They claim I signed for the parcel. I didn’t. Fortunately, it wasn’t stolen but it’s still extremely frustrating that our instructions were not followed. If the parcel had been stolen, we’d still be dealing with this now. We received no real apology from either company.
On the face of it, this is a fairly minor issue; an item was delivered late. It’s the lack of effective, clear communication from both companies that is annoying. It’s the fact that for days no one could say where the item was, or why it hadn’t been delivered. It’s the fact that only after shaming both companies on social media that the issue was resolved.
Bupa
I’ve used Bupa for private health insurance for years and they’ve mostly been great, but this week saw me encounter so much unnecessary bureaucracy that it left a bitter taste. Last year, after the refurb of our apartment that saw me singlehandedly assemble all our new furniture (I had some help with the bed though) I developed tennis elbow. My GP said it was tennis elbow and referred me to the practice physio, who agreed it was tennis elbow. So, I rested the elbow as much as possible. Fast forward to the last few weeks and both elbows are now causing me discomfort. So, I had a phone call with Bupa’s physio service. They agreed it was tennis elbow and referred me to see a physio in person. He also stated it was tennis elbow and recommended I have shockwave therapy. He also suggested I call Bupa back to inform them about this treatment as it often needs to be authorised differently.
I called Bupa and explained the situation. They asked if I had been given a diagnosis. I replied, “the physio says it’s probably tennis elbow.” Because I used the term “probably”, I opened up a massive can of worms. Bupa stated that as there was not a definite diagnosis they might not be able to authorise the treatment. The conversation went like this:
Me: I’ve been told that diagnosing tennis elbow is mostly a process of elimination, so how certain do you need the diagnosis to be?
Bupa: It would have to be a scan.
Me: but a scan can only be requested by a consultant under the policy, no?
Bupa: that’s correct.
Me: So, you want to pay £250 for an appointment with a consultant, then hundreds, maybe thousands, for a scan and all the associated costs for the hospital and radiographer, and then another couple of hundred pounds for the follow-up, just for the consultant to say, “it’s probably tennis elbow”?
Bupa: erm… yes.
Me: Ok, so let’s backtrack a little. I’ve seen my own GP, two physios in person, and spoken with your own physio team on the phone, and everyone agrees it’s tennis elbow, but to authorise a slightly more expensive treatment, you need someone else to say it?
The conversation continued for some time, and in the end, I gave up, called back, and got the treatment authorised.
Virgin Money
A few weeks back I mentioned I had a complaint with Virgin Money about a credit card. Well, they’ve contacted me to explain some of the background about how the issue occurred and to offer me some compensation. Whether this results in a change to how they offer their credit card, I don’t know. However, the compensation was a pleasant surprise.
It really does seem that whenever you deal with a business now, you are just bracing yourself for something going wrong. It’s not that I’m doing anything unusual. Take Wayfair and DHL; it was a simple online order. How can it go wrong when DHL pick up the item from point A, and deliver to point B? It’s not like I’m asking a pizza restaurant to make me a curry; delivering items is what DHL do. It’s literally their only job.
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2023 Goals
Click here to see my 2023 progress (opens a new tab).
What Am I Doing?
TV: The Boys (Amazon), Picard (Amazon).
Audiobook: The Millionaire Next Door by Thomas Stanley and William Danko.
I’m halfway through season one of The Boys and it’s good fun for the most part. A couple of characters who are supposed to be annoying are, but not in the way intended. It’s more like I find the performer annoying and want them to go away. There are a few people that do this for me no matter who they play. The first one to come to mind is Tom Yates from House of Cards. Each time he appeared on screen, I checked out. The actor had a small part in The Crown, and yes, it was the same effect. For Oana it’s Juliet from Lost, who also plays Anna in The Expanse. I just asked Oana for more examples, and she said she had hundreds, so stay tuned for a possible bonus post in the week.
Financial Update
Assets
Premium Bonds: £38,000.00 (no change).
Stocks and Shares ISA: £63,514.85 (-£3,508.56).
Fuck It Fund: £100.00 (no change).
Pensions: £55,826.30 (-£3,180.28).
Residential Property Value: £228,006.00 (no change).
BTL Property Value: £147,133.00 (no change).
Total Assets: £532,580.15 (-£6,688.84).
Debts
Credit Card: £0.00 (no change).
Loans: £9,700.00 (no change).
Residential Mortgage: £178,674.86 (no change).
BTL Mortgage: £105,001.75 (no change).
Total Debts: £293,376.61 (no change).
Total Wealth: £239,203.54 (-£6,688.84).
Investment Income in 2023: £458.81 (target £8,500).
I came across a formula in The Millionaire Next Door to suggest what your net worth should be. The formula is (Age x household income) / 10. For me the resulting figure is £253,500. I’m a little off that figure but at least I’m in the general area. It’s important to remember when faced with formulas or statements like this, that it’s just an opinion.
Our BTL has been listed for rent again. We’ve already got a full list of viewings booked in for this coming week, so I’m hopeful it will be tenanted by the end of the month.
I’m thinking of opening a new stocks and shares ISA in the new financial year. My current provider is good, but the fees are starting to bite. I’ve checked out Vanguard and they have much lower fees. The only downside is that you can only get Vanguard funds when your ISA is with Vanguard. With my current ISA provider, I am invested in other stocks and funds that I don’t want to give up. As a result, I’m thinking I’ll keep my current ISA open and let it continue to generate income, whilst investing purely in the new ISA with Vanguard.
Replacing Income
I was asked recently what my goals are in terms of replacing my income. The short version involves three stages of income replacement;
- Covering my basic needs from investment income.
- Replicating my current standard of living from investment income.
- Improving my standard of living from investment income.
However, the long version is, well, longer.
Most FIRE devotees follow a similar path; invest in Vanguard global funds and let the gains compound, before cashing in units in their funds to pay for retirement. It’s a safe, well-trodden path. But what if we did something different?
My plan involves buying assets that generate income and using that income to buy more assets that generate income, and so on, and so on. The downside to this approach is that you can end up leveraged because the best asset to generate income is property. The upside to this approach is that you can leave a sizable estate behind when you pass. I don’t plan on having kids, but I want to leave the world a better place than it was when I arrived. Assuming my loved ones are already gone, I’ll be leaving my estate to charity; animal charities and something to help children from poor backgrounds complete higher education. If I was to take the standard approach to FIRE, then my estate would be greatly diminished after decades of drawing on the capital. I know that safe withdrawal rates are supposed to be, well, safe, but it just doesn’t feel right for me.
There are several stages to my plan. The first stage involves replacing my income until I can draw upon my pension. Assuming I don’t invest anything further to my pension, and I let it grow until I’m 60, using a conservative rate, it would still result in a decent annuity equal to roughly a third of my current salary. If I tweak that projection to include contributions at my current level, then the annuity I could purchase would replace my current salary.
It’s important to note that these projections don’t account for inflation, and there is any number of things that could change between now and then. However, like with many things in life if you follow a logical, structured process then the results take care of themselves.
It’s my hope this year will result in me earning £8,500 in investment income. I think I’ll probably fall slightly short but still increase on last year, which is the main thing. If I follow the process of buying assets that generate an income, and use the income to buy more assets, then the results will come; it’s just a matter of time.
Disclaimer
The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, nor should they be considered advice.
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Argh! and argh again!
Don’t health insurance companies act upon the basis of probabilities?
And they would have a decision tree about tennis elbow and more overuse injuries.
Hope you do leave the world a better place [both when you’re alive and when you die].
Like an X-ray or an MRI?
[or a CAT scan?]
All three would have their consequences and costs.
***
I’ve been a Brecht fan for about 25 years now – and have read the play – The Good Woman of Szechuan.
Seems like GOOD PERSON was a good production and you and O enjoyed it.
The play was amazing. I deliberately did no research before hand as I wanted to be surprised, and I’m so happy I didn’t know what to expect. It was fantastic.
As a fellow tennis elbow sufferer, I hope you get some respite and help. For mine, I received a few free physio sessions on the NHS, which didn’t really help but the stretching plan they gave me did, although I think the main thing which helped me was stopping playing badminton altogether. My tennis elbow still flares up occasionally (from weight training) and I just move onto different exercises and do the stretching thing again to keep it under control.
The Boys is one of my favourite TV shows, unapologetically dark, violent yet humorous.
Thank you 🙂 we’re nearly done with season two of The Boys. It’s one of the most brutal and hilarious things I’ve seen. I love it.