Part 230

Hello and welcome back to Mortgage Advisor on FIRE.  This week I discuss student loans, and a frustrating story from Reddit.  Also, another milestone passed in my abstinence from gambling.  

Weekly Update 

This week saw me pass 1,700 days since I last gambled, which was a nice boost.  The time when I was gambling was a dark one, and I feel better for having stopped.  The gambling industry is evil, and I don’t use that word lightly.  The practices of these companies and how they get their hooks into vulnerable people are just abhorrent.  The more I’ve read about what goes on behind the scenes, the more angry I get.  If you are struggling with this addiction, please reach out.  I’ve said it before but it needs repeating; a large part of what helped me stop gambling was the After Gambling Podcast by Jamie Salsburg in the US.  

I saw an interesting post on Reddit this week where someone shared a story from another subreddit.  The OP had stated that he and his wife had been aiming for FIRE by the age of 45, and had both stated they were paying into pensions and investments.  Anyway, it turns out that she had lied about all the investing.  She put in for divorce and got a huge chunk of the OP’s assets.  This guy had a pension fund of approximately £750,000, with emphasis on the word “had”.

What Lesson Have We Learned?

Well, apart from the fact that I don’t agree with marriage or the idea that the government gets to decide how a relationship ends, I think it’s important for there to be a healthy amount of transparency in the finances of any stable couple.  I’m not saying there needs to be total transparency, or that one partner needs to be able to exercise control over both of their finances.  But transparency, honesty, and trust are vital.  When you are in a relationship with someone you make yourself vulnerable, and you put trust in the other person not to abuse that vulnerability.  Whether we like it or not, money is a massive part of life, and we need to trust our partners with it to be able to have a happy life.  

Assuming that the facts of the story are true, as we only heard his side, then this just feels wrong.  The one bit of comfort that the guy can take from this is that he’s responsible with money and she is not, and for him, this will simply be a setback.  Someone who is utterly clueless with money will do the same thing they always do; spend it on crap.

Student Loans

On the subject of spending money on crap, I was thinking about my days at university, and trying to work out if it was worth the financial cost.  There was a story in the news this week about student loan debt in the UK.  According to the Student Loans Company, the average student in England will have loan debts of £44,940 when graduating.  That student, assuming they find a job earning £40,000, will pay £95pm towards their student loan whilst the interest will be approx £290pm (based on the current rate for a Plan 2 loan at 7.7%).  

In the above example, our student will not be making any inroads into the debt itself.  For the sake of simplicity let’s assume they work in the same job for thirty years, with no change to pay, inflation, and interest rates.  Thirty years of paying £95pm comes to £34,200.  After thirty years the Plan 2 loans are written off, and you can see that the vast majority of loans are not repaid in full.  Rather than being a loan, for most graduates, it’s a tax.  

I’ve looked through my loan documents and worked out that I have borrowed £29,072.  I’ve paid back approximately £17,500.  I still owe £23,034.34.  Until Liz Truss and Kwasi Kwarteng were allowed to govern without supervision, I was making decent progress in reducing the balance.  Since interest rates have increased, I’m now paying a small amount off the balance each month, but not enough to realistically clear it by retirement.  So it is, for all intents and purposes, a tax.

The whole university system in this country is bullshit.  It’s a simple transfer of wealth.  Young adults, basically children, are expected to make a huge financial decision which will impact the rest of their lives.  The universities can now charge more or less what they want, and the kids are told to not worry because their student loans will cover it.  It’s all just bullshit and a way to generate income for the universities and other people in positions of power.  

If I could go back and do it again, I wouldn’t bother.  The expense isn’t worth it.  Unless you are going to study something like medicine, law, sciences, or courses that have a direct route into a career or things of that nature, the expense just isn’t worth it.  Too many kids go to university because it’s expected, and end up being financially crippled by a debt they’ll never pay off.  For the majority of students, it becomes a lifelong tax.

Site Update

A few people have asked recently about sections of my blog I’ve not included for a while, such as the Quote of the Week, and This Week’s Tory Incompetence.  If either of these are popular enough, I may bring them back.  So please let me know below if you want to bring either of them back to future parts of the blog.

What Am I Doing?

TV: Three-Body Problem (Netflix).

Audiobook: We are Legion (We are Bob) by Dennis E. Taylor.

The Three-Body Problem series of books is one of my all-time favourites.  The more accurate name for the series is Remembrance of Earth’s Past, but everyone seems to call it Three-Body, and that’s what I’ll do.  Last year I watched the Chinese adaptation, which I thought was generally excellent.  It was 30+ hour-long episodes, but I would say only a handful of episodes in the middle were filler.  

Netflix have now released their adaptation helmed by Benioff and Weiss who ruined adapted Game of Thrones for TV.  For the first season, Netflix has produced eight episodes.  We are three episodes in and my feelings on it are mixed.

A large part of the appeal of the series, for me at least, comes from the fact it’s rooted in Chinese culture.  The Netflix version has been reimagined and seems to mostly be taking place in and around London.  Except for a couple of characters, the ones here are new creations.  The central character of book one seems to have been switched from male to female and then split into at least two different characters.  It’s all a bit rushed, but then again I’ve read the books a few times and watched a pretty faithful adaptation from China.  I’m curious what people think who are watching this new series having not seen or read anything else about it.  

Financial Update

Assets

Premium Bonds: £13,225.00. 

Stocks and Shares ISA: £64,422.77. 

Fuck It Fund: £6,048.51.

Pensions: £75,813.74. 

Residential Property Value: £228,116.00. 

BTL Property Value: £147,203.00.

Total Assets: £534,829.02.

Debts

Residential Mortgage: £172,897.27. 

BTL Mortgage: £104,891.96.

Total Debts: £277,789.23. 

Total Wealth: £257,039.79.

Investment Income in 2023: £1,163.39 (target £10,000).

Another crazy week of gains in the stock market.  I had a goal of wanting to get my ISA and pensions to £80,000 each by the end of the year.  It looks like the pension could do that before the halfway point in the year.  My ISA is going to take a little bit more investment I think, but the next two months will see two sizable dividend payments which should add a further £2,000 or so.  

BTL Update

Still no significant update.  It’s pretty frustrating.  Each month that passes by the property is costing us at least £400 in mortgage and council tax payments.  Even if we get an acceptable offer this coming week, it will likely take a couple of months to go through.  I was saying to my Dad earlier that if we don’t get an offer in the next month or so, we could end up having this property until the end of the year.  

We are going to wait a little longer before making any decisions about how to proceed.  The choices are clear as I see it;

1. Continue listing the property for sale.
2. Change the agent and try remarketing the property.
3. Rent it out again.
4. Try selling at auction.
5. Offer the property on a rent-to-buy basis, where it is initially let to a tenant on the understanding they can buy the property with a discount further down the line.

I’m not too keen on the more complex options and would rather just sell the property and be done with it.

That’s all for this week, so thank you again for reading.  I hope you have a great week ahead.  Don’t forget to like, comment, share, and subscribe.  Also, if you’re feeling generous you can make a payment towards the running costs of this site using the payment form below.