Hello and welcome back to Mortgage Advisor on FIRE.
Updates since the last post…
It’s not been a great time, to be honest. I don’t want to dwell on it too much, but I feel it’s necessary to explain why I’ve been absent for a few weeks. I’ve started on a new post each week since the last one, but each time felt like it just wasn’t working. So, please accept my apologies for being absent for so long.
So, what have I been up to during this time? Honestly, not much. I’m not sure where all the time has gone, but there are a few things to discuss…
Millie the Cat
When I was much younger my Mom took in a tiny black kitten, just five weeks old. This little cat was given the name Millie. Her mother had died, I believe, and Millie was the smallest of the litter of kittens left behind. For 22 years Millie was loved and was a source of comfort, friendship, and love in return. Millie went to sleep on October 19th for the final time and crossed Rainbow Bridge.
Regular readers will know that I love cats, and Oana and I have adopted a number of older cats over the years. All cats are amazing, but older cats are often overlooked, despite the fact that they can be the most loving and affectionate companions.
Richard Armitage and Ian Dunt
The past few weeks in Sheffield have seen the annual Off The Shelf festival taking place. This year Oana and I bought tickets for interviews with actor Richard Armitage (Spooks, Robin Hood, The Hobbit), and political journalist and author Ian Dunt.
The Richard Armitage event kicked off the festival and it was a Q&A about his first novel, Geneva. I’ve been a big fan of Armitage’s voice work on different audiobooks, and he’s also starred in the Netflix adaptation of Harlen Coben’s The Stranger. It was a fun event with some questions from the audience, and I was able to sneak in the last question, asking Richard what his favourite book was; The Lion, The Witch, and The Wardrobe.
The Ian Dunt talk was more enjoyable though, as it was a packed audience and there just seemed to be more energy as a result. The interview focused on his latest book, How Westminster Works… And Why It Doesn’t, which I’m halfway through and enjoying. Anyone interested in politics and/or investigative journalism should enjoy it.
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What Am I Doing?
TV: Ragnarok (Netflix); MasterChef (BBC).
Audiobook: Unlawful Killings by Wendy Joseph K.C.
Remember how Game of Thrones was the biggest thing on the planet for a few years, and then everyone just kinda agreed never to talk about it again after the awful final season? Well, a new contender has entered the chat…
Ragnarok is a show set in the fictional Norwegian town of Edda, and tells the story of a young man who discovers he’s the god Thor reborn. It works as a great superhero-style origin story, and the first two seasons are brilliant. Season three was also shaping up to be good, until the final episode. I’ve read comments on Reddit about the finale, and I have to agree that the ending has retroactively made everything that came before worse, just like with Game of Thrones.
There is absolutely no chance that that ending was planned from the start of the show. It was lazy and insulting.
I’ve been smashing through audiobooks over the last few weeks. It’s been helping to take my mind off the mental health stuff I’ve been struggling with. I’ve reformatted the way I have my book lists on this site. Rather than a single page with the lists from each year, I’ve got separate pages for each year now listed as sub-menus. Unlawful Killings is book 92 of 2023.
We’ve also been smashing through Celebrity MasterChef and MasterChef: The Professionals on BBC iPlayer. The seemingly infinite combinations of foods, flavours, and textures people can come up with is insane when you stop to consider what’s out there. Food is, at a basic level, just fuel for our bodies. It can be elevated to an art form in the right hands though.
Financial Update
Total Assets: £518,569.84.
Total Debts: £279,600.57.
Total Wealth: £238,969.27.
Investment Income in 2023: £7,036.24 (target £8,500).
Annual FIRE Update
Week 1 (November 1st 2019)
Assets: £188,119.96
Debts: £134,279.11
Total Wealth: £53,840.85
Week 53 (November 1st 2020)
Assets: £221,230.88
Debts: £142,590.19
Total Wealth: £78,640.69
Week 106 (November 7th 2021)
Assets: £462,259.05
Debts: £260,297.98
Total Wealth: £201,961.07
Week 158 (November 6th 2022)
Assets: £509,769.84
Debts: £285,660.42
Total Wealth: £224,109.42
Week 210 (November 5th 2023)
Assets: £518,569.84
Debts: £279,600.57
Total Wealth: £238,969.27
It’s now been four years since I started this blog and my FIRE journey. The goal was to be able to achieve FIRE in those four years. Although I’ve not hit that goal, I’ve given it a good go and made some solid progress. I’m on track to average approximately £700 per month in passive income for 2023, which is a great foundation to build on over the next few years.
What have I learned from these last four years?
Lesson 1 – Property is hard work.
Lesson 2 – Pensions are vital.
Lesson 3 – A bridging fund is a good idea.
When I started down this road I believed property would be key to early retirement. I still think property has a part to play in my future, but circumstances seem to be conspiring to make it more difficult to make money from property in an ethical way. Making money from property, if you don’t care about ripping people off or being an asshole in general, is easy. I just don’t want to do that. Our aim has always been to provide a quality property at a fair price. In return, the expectation is that the tenant maintains the property to a decent standard and pays the agreed rent. My approach has always been, it’s my house, but it’s their home.
Our first two tenants did not live up to their end of the bargain. The first tenant trashed the property and left most of the ground floor damaged as they ripped out the washing machine and did not turn off the water at the mains. The result was a partially submerged ground floor.
Our second tenant destroyed several of the appliances and caused significant damage to walls, windows, ceilings, and doors. I’m not talking about cosmetic things that could be addressed with a bit of cleaning; I’m talking about things that needed extensive repair. Fortunately, our third tenants seem to be better.
Another lesson learned is that you have to pay closer attention to what is going on in your pension fund. It’s not enough to just let the monthly contributions build up; you should also understand how and where your money is being invested. If you are based in the UK you can also get some cool tax benefits from investing in a SIPP, and many employers offer extra contributions when you invest in their own pension scheme. Anyone serious about FIRE needs to get serious about their pension. The UK State Pension is not enough to retire on.
A major part of my plan was to not eat into the capital, and instead use the income generated by my investments to retire. However, with the way the first four years have gone, it’s just not practical. As such, I’m going to rely partially on a bridging fund; a fund to bridge the gap between when I give up work and when I can start reaping the benefits of my pensions.
The advantage of a bridging fund is that it can speed up the journey in the short term, but the main drawback is you are actually using up the funds which means when it’s gone, it’s gone. When you break down the numbers, it’s clear why it works. If you need £1,000 per month to live off, you need £12k for a year. If you wanted to get that £12k from income on investments, assuming a 4% rate of return you would need an investment pot valued at £300,000. Granted, that pot would return that year-on-year (for the sake of this example, at least), but you still need to accumulate the £300k. With a bridging fund, you just need the £12k in this example.
The way the economy has been over the last year or two has been pushing my target FIRE date further and further back. With the cost of seemingly everything increasing, it’s felt as though FIRE is not actually getting any closer. It’s vital at times like this to stay the course and continue with the process. As long as you follow the process, the result will come eventually. The process doesn’t change; invest as much as possible whilst keeping spending as low as possible.
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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