Part 194

Hello and welcome back to Mortgage Advisor on FIRE.  This week I talk about mortgage rates.  Also, and a bit of a content warning/trigger warning is probably needed here…

CONTENT WARNING – MENTAL HEALTH, DEPRESSION, HAVING CHILDREN

…I talk about mental health, mental illness, and my thoughts on having children/creating life.  I know a lot of people who read this blog have either had kids or are trying to have kids.  None of what I say is a personal attack or judgement on what anyone else chooses to do.  It’s my thoughts on my blog.  I hope you’re not offended, but I felt like I needed to get some of these things off my chest.  

Weekly Update

I’m sure many people working in the mortgage industry braced themselves for the Martin Lewis show this week, where he discussed rising interest rates and their impact on mortgages.  I feared the worst, but the show wasn’t too bad.  That’s not to say it was great either, but it could have been much worse.

My main issue with shows like this is that, typically, they try to reduce mortgage advice down to just a few golden rules.  There aren’t many, if any, rules in mortgage advice that apply to all customers, in all circumstances.  Everyone is unique, their circumstances are unique, and mortgage advice can’t just be reduced to a few soundbytes.  Basically, if you are worried about your mortgage, speak to your lender or a qualified, reputable, mortgage professional.  

One fact that has been reported by multiple news sites is that mortgage payments are set to increase by £500 for one million households.  The thing is, it’s not going to do much, if anything, to actually combat inflation.  Let’s break it down a little…

There are millions of people in the UK living in poverty according to reports from Parliament, Child Poverty Action Group, and Statista.com, among others.  The point is that many people are already at breaking point and have no more cloth left to cut.  Raising interest rates, that increases either their own mortgage (or their rent by way of increased costs on their landlord’s BTL mortgage) is just kicking them whilst they’re already down.  

Further to this, even if inflation reduces it doesn’t mean things get cheaper.  I was part of a conversation recently when someone actually argued that inflation slowing meant things became cheaper.  It made my eye twitch and my blood pressure spike trying to keep my mouth shut because there are some arguments that, even when you win you actually still lose.  But back to my original point, inflation has already done the damage and everything is seemingly more expensive.  Even if inflation comes down to the target of 2% it just means that things are still getting more expensive, but at a slower pace.  One more time for those at the back; inflation slowing or reducing does not mean things get cheaper.  For things to become cheaper we need deflation, not a reduced rate of inflation.

Another reason why interest rate increases are not going to have the desired impact on inflation is that the rate increase are only going to impact those people who have mortgages on variable or tracker rates, or whose rates are coming to an end soon; basically, it will only impact that small proportion of mortgages that are currently exposed to rate changes.  

Inflation will inevitably come down in time and when it does, those who embarked on this campaign of increased interest rates will pat themselves on the back for a job well done, even though doing nothing may have resulted in the same outcome for less pain.  We’ll never know what the impact of doing nothing would have had because we had no control group.  So, people will just assume that doing “A” leads to “B” when in fact that may have happened anyway without intervention.  

Mental Health

I’ve not been in a good way this last week.  My levels of anxiety and stress have been building up slowly, but steadily.  I had a particularly bad night where I felt like I was in a constant state of fight-or-flight; a heightened state of anxiety and stress that lasted for hours.  It was not nice.

I suspect that I’m finally feeling the impact of reducing my dose of Mirtazapine.  I had a call from the mental health team from my private medical insurance, and the specialist referred me for a series of sessions with a clinical psychologist.  I’ll see how it goes but I’ve never found this type of therapy useful.  

Life is generally shit.  I know I’m in a glass-half-full kinda place at the moment, but when you stop and look at the world around us, it’s just, well, shit.  The world is on fire, both literally and figuratively.

We have war, famine, inequality, religious persecution, and what feels like complete apathy from the ruling parties when it comes to tackling the climate.  There are parts of the world that will soon become uninhabitable for much of the year due to the temperature.  Things are not okay.

In addition to all this, we are conditioned by society to work for five days a week, eight or nine hours a day.  There’s no reason why, for many jobs, we have to work this long.  If we all just agreed that four days a week, for six hours a day, was the new normal, then the sky wouldn’t fall in.  The world wouldn’t suddenly end.  It would just be better for everyone, not to mention less commuting to and from work, and less energy used up by workplaces, but the issue is no one wants to take that first step.

I can get into some deep philosophical funks at times, and one thing I’ve been thinking about recently is the idea of consent, in particular, whether anyone can consent to be born.  If no one can consent to be born, then what right does anyone have to create a life that will inevitably suffer?  A counterargument would be whether a non-existent life, a potential life if you will, has rights at all.  Does the right to consent only come with life?  It’s a minefield and I don’t think there’s a simple answer.  However, if we take the view that it’s only ethical to create life if that life consents to its own creation (a paradoxical situation as life has to already exist to be able to consent) then the end result is that there would be no procreation, and as such no life in the universe, if all beings acted in that ethical way.  This then leads to another question; does the universe exist if there is no life to observe or experience it?   

My own view on this has changed over time.  I’m now of the mindset that I can’t create a life that will inevitably suffer.  If the world was a better place, then it might be different, but this is the only world we have at the moment.  Mental illness has a strong genetic component as well, and I just couldn’t bear to create a life that would experience some of the lows that I experience.  Even if I was to create life, that life will die, and so in creating life, I’ve condemned that life to death and all the existential anxiety that comes with facing your own mortality.  

How To Support Mortgage Advisor on FIRE 

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Thanks, as always, for your interest and support.

2023 Goals

Click here to see my 2023 progress (opens a new tab).

What Am I Doing?

TV: not watching anything at the moment.

Audiobook: Atomic Accidents by James Mahaffey.

Financial Update

Assets

Premium Bonds: £10,250.00 (no change). 

Stocks and Shares ISA: £58,505.46 (+£1,431.25). 

Fuck It Fund: £5,203.49 (+£536.58).

Pensions: £59,907.21 (+£201.51). 

Residential Property Value: £229,653.00 (no change). 

BTL Property Value: £148,195.00 (no change).

Total Assets: £511,714.16 (+£2,169.34).

Debts

Credit Card: £0.00 (no change).

Loans: £0.00 (no change).

Residential Mortgage: £176,781.05 (no change). 

BTL Mortgage: £104,973.47 (no change).

Total Debts: £281,754.52 (no change). 

Total Wealth: £229,959.64 (+£2,169.34).

Investment Income in 2023: £4,592.83 (target £8,500).

This month’s rental income dropped in this week, taking me ever closer to 2022’s income total of £5,685.20.  My rough and ready projections are suggesting I’ll beat 2022’s figure by the end of September this year, which leaves October onward as pure progress from the previous year.

It does feel like progress is slowing all the time though.  The economy is a dumpster fire and everything is becoming more expensive.  When the value of investments are relatively static it can be disheartening as you watch your money being poured in and hardly moving the needle, so to speak.  In times like these, it’s important to keep an eye on the number of units you own because although the overall value might not move much if you are acquiring more units, you are still making progress.  

I’m liking my new(ish) savings account that I keep my Fuck It Fund in.  You can see your interest accumulating in real-time and with a decent rate of interest, and instant access, it feels like a great balance of features.  

That’s all for this week.  Thank you for reading and I hope you have a great week ahead.

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.

If you want personalised financial advice, seek an appropriate professional.  If you are in financial difficulty, seek advice via the resources below:

StepChange

MoneyHelper

Biolink and other links

You can now find all my social media pages by checking out my Biolink:

bio.link/davidscothern.

Also, check out Darren Scothern’s blog which talks about autism, being autistic, and general mental health:

www.darrenscothern.com

If you want to show your support for my FIRE blog, please Buy Me A Coffee at the link below: 

https://www.buymeacoffee.com/davidscothern