Looking Back: Part 14

Originally published January 30th, 2020.

Introduction

Hello and welcome back to Mortgage Advisor on FIRE.  This week I will be looking at Fear Setting and how this can complement Goal Setting, as well as discussing my ongoing health problems. 

Weekly Update

In the latter part of 2019, I was undergoing physio for Achilles tendonitis in my left leg.  On the instruction of my physiotherapist, I was completing some basic stretches and the result was a series of fractures through my right foot. 

After several scans and appointments with a surgeon, it was discovered that some of the bones in my right foot had not separated as they should have when I was born.  So, as the foot was under pressure, stress fractures occurred.  This knocked me sideways and it was the worst pain I’ve ever experienced.  I even lost consciousness and collapsed in A&E whilst waiting to be seen. 

This was not fun. I can’t emphasise just how bad the pain was.

​After a few weeks of rest, my foot recovered, but throughout this, my left Achilles was still causing pain and discomfort.  A few days ago, for lack of a better way of putting it, my Achilles “went”.  I can barely put weight on my leg and am using crutches to hobble around my apartment.  I’m also back on tramadol as it’s the only pain relief that makes a difference. 

All this means that I’m off work again, which sucks.  I just need a break, not literally speaking.  Since 2018 it has been one health problem after another.  In addition to seeing a surgeon about my Achilles, I’m being referred to my cardiologist due to losing consciousness again.

Financial Update

Premium Bonds: £12,450 (no change from last week).

Stocks and Shares ISA: £8,219.00 (down £32.23 from last week).

F**k It Fund: £1,511.85 (no change from last week).

Property Value*: £173,501 (no change from last week).

Total Assets: £195,681.85 (down £32.23 from last week).

Credit Card Debt: nil (no change from last week).

Loan Debt: £3,370.33 (down £200 from last week).

Mortgage Debt: £134,279.11 (no change from last week).

Total Debt: £137,649.44 (down £200 from last week).

Total Wealth Figure**: £58,032.41 (up £167.77 from last week).

Investment Income in 2020: £0.00 (no change from last week) (Target £2,000)

*Valued at £173,501 according to the lender’s index.

**Total assets minus total debt

It has been one of those weeks where I haven’t moved any money into investments, but I have been able to make an extra payment towards my loan.  As such, my total wealth figure has increased despite my total assets decreasing slightly in value. 

Fear Setting

I wanted to take some time to discuss a concept I first discovered a few years ago called Fear Setting. Almost everyone must be familiar with goal setting in general, even if they do not know about things like SMART (specific, measurable, achievable, realistic and timely) goals. 

Goal setting relates to what you want to happen or what you want to achieve.  The idea is that setting a goal helps solidify the behaviour change needed to achieve the goal.  There is some debate in the field of psychology as to whether goal setting is effective.  I also have some doubts over the effectiveness of setting ends as a goal, rather than a process. 

For example, you could set a goal that you want to lose 50kg in a year.  This would be an “end” goal because you are aiming for a specific result.  You could instead set a goal that you will eat five fruit and veg portions each day and limit yourself to one bar of chocolate a day.  This is more of a behavioural goal, with the idea being that if you stick to the behaviour, the “end” will come as a result of the behaviour. 

In recent years I have adopted a hybrid approach to goal setting, where I am trying to focus more on the process than the result.  This has led to my investment behaviour becoming almost automatic.  Fear Setting is something that lit a fire under me, and I believe it has much more motivational potential than simple goal setting alone.  I think that Fear Setting is a great way to kick start a new set of behaviours and that process-goal setting is an excellent way to maintain those behaviours.

What is Fear Setting?

I first came across Fear Setting when I watched a TED talk by Timothy Ferris.  The video goes into a lot of detail but there was one specific part which resonated with me, and it’s something which encapsulates the entire point of Fear Setting.  I’m talking about the cost of inaction. 

Since I’ve become aware of this, I become increasingly frustrated when I see inaction, well, in action. My brain is wired in a fairly logical way. If something is going wrong, I tend to jump directly into problem-solving mode. When I see other people confronted with a difficult choice or situation, and they choose to do nothing because they think that will make the problem go away it is almost physically painful.

Inaction is a choice. Imagine you are in a car on a train crossing. Your car has broken down and you see a train fast approaching. The choices are to try and get the car moving, or escape the vehicle. Doing nothing is also a choice, but not one that will yield a good result. Some things in life happen whether we take control or not. The obvious one is ageing. We all age.

Another example of this is someone who always wanted to study a specific subject but feels put off now because they will be fifty years old when they graduate. The thing is, whether they study or not they will still be fifty at the same point in the future. The inexorable march of time can’t be stopped.

When you set a goal, you must take some action to achieve that goal.  Granted, you could have an abstinence goal which requires you to refrain from a behaviour, but I would suggest exercising willpower and restraint is a form of action, rather than inaction.  Fear Setting asks you to consider the cost of inaction; the impact on your future if you change nothing. 

I know a lot of people who are unhappy with their lot in life.  The frustrating thing is that when I ask what they are doing to change or improve their situation, I am answered with a shrug.  There is a quote that is often credited to Albert Einstein but there is some debate over the accuracy of that credit, but the quote is still powerful: “insanity is doing the same thing over and over and expecting a different result.”

If there is something you are unhappy about in your life, ask yourself where you will be in six months, three years or five years if you carry on as you are.  Does the answer please you, or upset you?

Fear Setting and FI

My journey to FI. was prompted in large part by the answers I had to the Fear Setting questions.  Life is too short and unique for regrets.  I do not believe in any sort of afterlife.  I believe this is it.  We are born, and then we simply keep ourselves busy until we die.  Spending your adult life doing things you don’t like is tragic.  I’m not saying that everyone can be a winner, a millionaire, or happy for the rest of their lives.  What I am saying is that the only things you can control are your thoughts, feelings and (to some extent) your actions.  Small changes now can have a big impact on later outcomes. 

​I feel that I wasted a large part of my life so far.  I look back at my 19th to 23rd years and get so frustrated at wasting that time, but I had to go through that difficult time to get to where I am now.  There are a lot of positives to my life.  I am financially comfortable.  I have great parents.  I have a girlfriend whom I love very much.  I have a cat who, in the year I’ve had him, has brought so much joy and fun to my life.  I have a few friends whom I respect and value greatly.  Despite all this, I feel unfulfilled. 

Motivation for Change

For almost my entire adult life I have felt stuck in second gear, like I have more to offer but no outlet for it.  As we live in a capitalist society, money is the key to survival.  I need money because money is what buys my freedom to choose, and with my freedom to choose comes my ability to sink or swim on my terms.  When I asked myself where I would be in six months, a year, or even ten years down the line if I didn’t change anything, the answer was terrifying.  I don’t want to be that person who is just killing time until death.  

Financial Education

I’ve said many times that there is not enough financial education in the UK.  In school, children will learn about many interesting things of which only a small fraction will have real-world relevance.  I’m not one of those people who will say we shouldn’t teach photosynthesis, Shakespeare or the water cycle because hardly anyone will use it when they are older. 

As much as I believe we need to do more for children concerning financial education, I don’t think it should be at the expense of any one subject in school. Although having money is generally seen as a positive thing, learning about money is often seen as dry or dull to study. There needs to be a change in attitude or else the next generation, and the one after, will just keep repeating the same mistakes.

Rather than just lecturing children there needs to be a more collaborative approach. If children are told to do something by teachers, most of the time they’ll want to do something different. It’s a fine line between teaching kids to be money obsessed and teaching them to wield money as a useful tool to a good life.

Final Notes

Thank you for reading again this week.  Fingers crossed that no major typos or leaps in logic were present, considering I’m high as a kite on pain medication as I type this.