Hello and welcome back to Mortgage Advisor on FIRE. This week, thoughts on interest rates on savings, some potentially exciting news about superconductors, and all the usual financial updates.
Weekly Update
I’ve been feeling a little better in myself this week. That’s not to say I’ve felt good, but less rubbish. I’m generally on a slow upward curve, I think, at least with my mental health. I’m also continuing to lose weight which is a positive. What is really frustrating is the constant aches and pains in my joints. It’s fairly common in autistic people that they have joint problems. I don’t know why this is the case; I just know that it’s very common.
At the moment I’m struggling with my elbows, and my right knee. My physio suspects that my elbow is linked to gout, because I have had gout attacks in the past. I don’t think this is likely for my elbows as I can point to a specific incident that triggered this pain. Last summer we had our apartment refurbished. As part of that I put together more furniture than I care to remember. I was also weight lifting during this time. At one point I was doing some bicep curls and I just felt the strain in my elbows. So, I think it’s more a case of tennis elbow (seemingly a catch-all term for any strain to the elbow joint) and less a case of gout.
One news story that captured my attention this week was the announcement that a research team has claimed to have cracked ambient temperature and ambient pressure superconductors, by mixing several elements and heating them to a high temperature until they formed a solid material. They claim this material works as a superconductor at room temperature under normal atmospheric pressure. This claim has been met with widespread scepticism, but if (and it’s a huge if) they have discovered a way to easily produce superconductors that work under these conditions then it’s a huge step forward. It would arguably be one of the biggest, and most important, scientific breakthroughs in human history.
Why are superconductors so important?
Superconductors allow an electric current to exist indefinitely as nothing is lost due to resistance. These materials would revolutionise everything from the electric grid, to quantum computers, to maglev trains, to fusion power. In itself, a superconductor might not seem that exciting but the doors it could open would change society forever. It would be as huge a technological leap as inventing the wheel, or achieving powered flight. For me, the most important use of superconductors would be in helping to regulate and control fusion reactions. I’m not going to argue the point, as more knowledgeable people than me have argued the point better than I can, but without huge advances in nuclear energy our civilisation is doomed. Climate change is real and we’re not doing enough to tackle it. Fusion power would change everything, but we can’t currently maintain fusion reactions long enough to produce meaningful energy. Once we refine the technology, fusion power stations would produce much more energy than our current, fission based, nuclear power stations. To explain just how powerful fusion can be, I’ll let the following quote from the International Atomic Energy Agency do the talking;
“Fusion could generate four times more energy per kilogram of fuel than fission (used in nuclear power plants) and nearly four million times more energy than burning oil or coal.”
Four million times more energy than burning oil or coal. Using energy-saving lightbulbs is great, but I doubt they’re four million times more efficient than old-school lightbulbs. Electric cars are great, but there’s no point using them if you’re just going to charge it up from energy generated by burning fossil fuels. Renewables are great, but they’re not the complete answer. Whichever way you look at this, it all leads back to nuclear power, and if we want nuclear power to be as efficient as possible we need to crack fusion power, and to crack fusion power we need superconductors. This is why I find this story so exciting.
Chadwick Boseman
I was chatting with a friend this week about a recent episode of the Choose FI podcast, which had an interview with a property developer based in Clemson, South Carolina. I mentioned that I took part in a school exchange program with a high school in Anderson, South Carolina, and during my time there we visited Clemson. This led me to look up the school I exchanged with, T. L. Hanna High School on Wikipedia. As I read the page, I noticed the notable alumni section;
So… yeah… he might have graduated a couple of years before I was there, but I can technically (and I admit I’m clutching at straws here) claim I went to the same school as Chadwick Boseman.
In all seriousness, it’s tragic what happened to him. By all accounts, he was a great guy, and a very talented actor. I just thought this was a cool little nugget of information.
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2023 Goals
Click here to see my 2023 progress (opens a new tab).
What Am I Doing?
TV: The Queen’s Gambit (Netflix).
Audiobook: The God Delusion by Richard Dawkins.
We enjoyed The 7 Lives of Lea, which I mentioned we were watching last week. We’ve since started The Queen’s Gambit, which is something I’ve wanted to watch for a while but only just got around to it. We are five episodes in and it’s great. It’s made me want to play chess again, even though I’m an average player at best.
I’m almost done with The God Delusion, and once I am done with it I think I’m going to tackle Easy Money by Ben McKenzie; the actor who has starred as Jim Gordon in Gotham, amongst other films and shows. This book came to my attention via a recent news story which called back to December 2022 when he testified before the US Senate Banking Committee regarding cryptocurrency. As someone who enjoyed Gotham, I’m interested to hear his thoughts on crypto, which is something I think is complete bullshit.
Financial Update
Assets
Premium Bonds: £10,300.00 (no change).
Stocks and Shares ISA: £60,207.56 (-£224.06).
Fuck It Fund: £5,575.08 (+£21.59).
Pensions: £61,473.70 (+£315.38).
Residential Property Value: £229,653.00 (no change).
BTL Property Value: £148,195.00 (no change).
Total Assets: £515,404.34 (+£112.91).
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: £233,649.82 (+£112.91).
Investment Income in 2023: £4,777.21 (target £8,500).
I spent some time this week playing with a spreadsheet idea. I wanted to build something that would let me calculate how much money I’d need to bridge the gap between a potential FIRE date, and the point at which I could draw on my private pensions. I wanted something that would automatically tweak different values according to changes I made in other values. For example, if I changed my target FIRE date, or my estimated cost of living, I wanted the other fields such as “required monthly saving”, “months until FIRE” etc to update automatically.
It was a fairly successful exercise and has helped crystallise some of my thoughts and feelings. It’s definitely looking like FIRE will need to wait another few years, as the cost of living has eaten into how much I can invest. Also, interest rates increasing have made BTL investing a non-starter for the time being. Although I’m not too bad with spreadsheets, I couldn’t face factoring in inflation and investment returns. If anyone knows of a decent calculator that will factor these in, which is designed to calculate this bridge, please let me know. Some calculators I’ve looked at are way too detailed for what I need, and I’m not willing to register for anything to simply use a calculator.
One question I was asked this week was, “how far behind the leading savings account interest rates do you have to fall before you’d consider moving your money?” This question goes to the heart of many FIRE debates, in terms of whether absolute returns are everything, or whether there are things you can’t put a value on. For me, there’s no simple, universally correct answer to that question. I’ve experienced enough awful service from banks to make brand loyalty extremely important. I’ve had my current account with my bank (one of the newer banks) for a few years and they are absolutely fantastic. I’ve had to register one formal complaint in that time, and it was resolved quickly. Compared to my previous bank provider it’s like night and day. I seemingly couldn’t complete one simple transaction with my old bank without something going wrong. As a result, I get nervous dealing with new financial institutions, and I just want to take a moment to highlight Barclays as being the absolute worst bank I’ve dealt with. My complaint with them is with the Financial Ombudsman, and I hope they get nailed to the wall, but I digress.
When it comes to interest or rates of return on investments, the percentage isn’t everything. I’d rather have a slightly lower rate, but be with a bank I have faith in, which has an app/interface that doesn’t look like it was created by the lowest bidder. The amount of money invested also plays a part. Take my Fuck It Fund as an example. I have roughly £5,500 saved in an instant access account, giving me a rate of 3.64%. This will earn me around £220pa. If I had a rate of 4.14%, it would earn me an additional £27pa. For all the hassle and uncertainty it’s just not worth it. I trust the bank I’m with, and I like their service and interface. An interest rate 0.5% higher is just not worth it. If I was talking about £20k in savings, then I might need to think about it more seriously.
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:
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