Looking Back: Parts 18, 19 & 20

Originally published on 13th March, 2020.

This post covers our trip to India just before the world shut down due to Covid, and I had one of the most difficult times of my life as several other things hit me all at once. It wasn’t a good time, but I feel as though I’ve (mostly) come out of the other side now.

Introduction

It’s been a few weeks since I last updated this blog.  Part 17 was posted on 21/02/2020 and I’m frustrated at the gap between posts.  This week I will explain a little about the reasons for the gap.  I will also look at the impact of the coronavirus on my investment strategy.  First of all, the weekly update.

Weekly Update

I was thinking I should rename this section “Weekly Updates” but I did not want to confuse matters unnecessarily.  In Part 17 I explained that I would be leaving for India, but I did not realise that I had the departure dates mixed up. 

At least I ended up arriving on the right date. I know of other people who arrived at the right airport, at the right time, on the wrong date. I mean, two out of three isn’t bad, as such, but you can’t board a plane that’s not there.

I thought I was flying on Saturday 29/02/2020 but I was flying the day before, and Friday is the normal posting day for this blog.  Part 18, as a result, was lost in the mix.  To be honest, I had a draft of Part 18 ready but it was not my best writing and I think it’s best to just leave it in my saved files.  The plan, as mentioned in a previous post, was to have a guest blogger post an update whilst I was in India but that did not come to pass either.  With a very limited internet connection in India, I was not able to post anything.  So, apologies for the gap between posts.  I have not given up on this blog and am still passionate about the project and the journey to financial independence.

And I’m still here years later, older, wiser, and still as passionate, which is in no small part down to my readers.

India

India was quite disappointing.  In brief, the main issues stemmed from the agents messing us around. We had booked a “luxury” package but it was far from luxury.  Also, we knew this was a trip that involved some travelling between cities but in the eleven days we had in India I calculated that we spent approximately seventy hours on the coach. 

The hotels ranged from adequate to terrible.  In one hotel we had an issue where our room had no hot water and it took over two hours for the hotel to move us to a different room.  This was late at night after a long day in dirty streets.  The hotel’s conduct during this issue was disgraceful.  Another hotel had no power or water from the time we checked in at around 19:00 until almost 22:00.  This meant after a long day on the road we had no toilet facilities, showers or even lighting. 

Another hotel marketed as five-star could not accept card payments, something not disclosed at check-in, which meant that when it came to paying bills, many guests were having heated conversations about paying their expenses.  

The tour guide was also spineless.  There was a group of thirty-six travelers and there was a real division within the group.  One of the travellers insisted on sitting next to the driver in the forward cabin of the coach, and we could see him distract the driver several times.  We narrowly avoided accidents on multiple occasions but the tour guide said he could not do anything about it.  We challenged the other traveler but he refused to change seats. 

I was quite vocal about this issue and another traveller started making comments about me to other members of the group.  I was told about this, and I calmly confronted the woman to ask if she wanted to clear the air.  She became abusive and I told her to mind her own business in future.  She then sent her husband to speak to me, but I made it quite clear to them both that I would not tolerate their nonsense further.  All of this made the trip pretty underwhelming.  

Time has not been kind to my memories of this trip. It was, in large part, awful. We were basically scammed with many of the advertised destinations and activities replaced by others due to, what I’m almost certain, was bribery. It went like this; we were promised a visit to such-and-such temple. Instead, we were driven to some remote place that had people making jewellery or clothing. We were then pressured into buying things we didn’t need.

Initially, I quite liked our tour guide but after just a couple of days, my opinion of him shifted.  Early on in the trip, we were offered an upgraded meal plan that would include dinner at the hotels in addition to breakfast.  This would be at the cost of £10 per person, per night.  We accepted the offer.  Nothing was mentioned in detail about payment, so I assumed that it would just be a card payment to the travel agent or local tour operator.  Now for a little tangent…

The Indian currency is the Rupee.  You cannot buy the Rupee outside of India.  The currency is highly regulated and you are not permitted to transport the currency across India’s borders.  I have cash across three banks, as well as a credit card.  Two of my bank account providers do not charge for using their debit cards abroad or for foreign ATM withdrawals.  However, I had to try many different ATMs to find one that would work.  When they did work, the daily withdrawal limit was 10,000 Rupees, which is roughly £110.  This has to pay for general expenses, lunches and so on.  It does not leave much room to accumulate the cash needed to pay for the meal plan in Rupees. 

It was not just me having an issue with ATMs not working.  On several occasions, there was a queue of people from our group all trying to draw money from Indian ATMs but they would not work for any of us.  I called my banks and they stated they had no record of attempted withdrawals, which meant the issue was probably that the connection timed out between the Indian banks and the UK banks.  The card readers in shops and restaurants were no better.  Our tour guide was well aware of all these problems.  

When we were in Jaipur, one of our last destinations, we were told that we needed to make payment in cash.  We ended up being driven around the city in a Tuk Tuk trying to find an ATM that would work.  We failed.  I explained this to our tour guide; he would either have to find a way to allow a card payment or an online transfer.  After some debate, I was sent a link to make an online payment.  However, the hotel we were at by this point had no wi-fi. 

On the coach the next day, the guide used his phone as a hotspot.  I spent an hour, as we were driving through the Indian countryside trying to make the payment but the signal kept cutting out.  I eventually gave up.  I was only able to make the payment on the last day.  The guide kept pestering me to give him the money.  I ended up asking him if he thought I had some magic power to summon cash out of thin air, and I think he got the message.  

One of the most frustrating things about this trip was just how bad the food was. Oana and I love food and experiencing authentic cuisine from around the world. When I think of Indian food, I think of spices, fragrant mixtures of vegetables, grilled chicken, lamb, and fish. Also, different types and textures of bread, with a sense of warmth and comfort. What we experienced was overcooked bowls of tasteless, mushy, veg. At one of our last hotels, part of a Western chain, they had a chicken burger and fries on the menu. I almost cried with joy.

On the positive side, my girlfriend and I spent time together away from the pressures of day-to-day life.  We made the best of our time together and got to experience another culture and way of life.  We saw the Taj Mahal, several forts, and temples steeped in history.  We also made some great friends in our group including Jane and Melvyn, a retired couple from the Birmingham area.  We met Tess, a lady living not far from us in South Yorkshire.  We also spent time with a lovely Indian family, and our joint dinners at several of the hotels were great fun. 

I also spoke briefly with some other members of the group who seemed like interesting people whom I would like to have known better, but the time pressures of such a trip made it difficult.  I hate being so negative about travelling.  I love travelling, and even when things don’t go to plan, there are normally ways to resolve the situation.  Both my girlfriend and myself agree though, this was our least enjoyable trip in the thirteen years we have been together.  We feel like we need a holiday just to recover from this trip.  

Financial Update

Premium Bonds: £13,725 (no change from last update).

Stocks and Shares ISA: £7,079.55 (down £1,533.87 from last update).

F**k It Fund: £1,614.51 (up £1.40 from last update).

Property Value: £181,626 (no change from last update). 

Total Assets: £204,045.06 (down £1,532.47 from last update)

Credit Card Debt: £1,759.94 (up £1,759.94 from last update).

Loan Debt: £2,936.22 (down £400 from last update). 

Residential Mortgage: £133,673.84 (down £286.73 from last update). 

Total Debts: £138,370.00 (up £1,039.10 from last update). 

Total Wealth Figure: £65,675.06 (down £2,571.57 from last update). 

You will notice two massive changes since the last update.  My credit card balance has increased significantly.  As I’ve stated previously, I normally run my credit card at a zero balance where it is paid off as soon as it is used.  India threw a spanner in the works as we had to spend much more than expected.  Also, with my bank cards not working properly in India I had to rely more on the credit card even though it charged me a fee for non-sterling transactions.  It’s probably going to take a couple of months to reduce that balance back down to zero, but it will get there.  

My ISA has taken a pasting with the stock market slump due to the coronavirus.  I’m not concerned though; it’s an exciting time.  It’s like Black Friday for stocks and there are many, many deals to be had.  For short-term investors, day-traders and speculators, this sort of drop in the stock market is terrifying.  For long-term investors, it’s a great time to start snapping up shares.  The stock market will bounce back; it always does.  

“It’s an exciting time”. Fuck me, that’s not aged well. If only we’d known how bad it would get.

A Soft Reboot

“No plan survives contact with the enemy.” 

~ paraphrased from a quote by Field Marshal Helmuth Karl Bernhard Graf von Moltke.

I’ve spoken before about the need for flexible plans and goals that are process-based rather than outcome-based.  Our trip to India ended up being a bigger speed bump in the road than expected.  Also, the rise of Covid-19 is something that I could not realistically plan for.  I need to reassess my financial priorities and look to streamline as much as possible over the coming months.  I have devised a new plan of action which involves ticking off the financial goals that I’m closest to achieving first, thus freeing up the money that would otherwise be committed to those goals.  

1. Finish saving for my BTL deposit.  The initial goal was to save £14,850 to match my JV partner’s contribution to our first BTL.  I said a while ago that I’d rounded this up to £15,000.  I need to save £1,275 to hit that figure.  I should do this from my next salary credit.  
2. Reduce my credit card to zero.  Once I have my BTL deposit saved I can allocate money that was being saved towards that, towards paying my credit card off.  I should pay more than half the balance off in my April salary, with the remainder cleared in May.  
3. Clear the remaining loan balance.  Initially, I had hoped to have this clear by June, but that’s looking a little less realistic.  Once the credit card is back to zero in May, it will probably take June, July and August to clear the loan.  

Throughout all this, I will also be investing in my stocks and shares ISA.  Depending on dividend income I may be able to hit the targets mentioned above a little earlier, but I’m not counting on that.

Investing in Stocks: Now is the time to buy.

“The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.”

~ Warren Buffett.

Investing can be complicated.  It can involve detailed analysis of economic trends, balance sheets and dozens of other factors.  Sometimes though, it is very simple.  

These mass selloffs which we see in the stock market at times of crisis are a case in point, and amateur investors need a reminder of just what the stock market it.  What I’m about to say, sounds like common sense.  However, the more you let the point sink in, the more relevance you will observe to the market right now.  Here goes;

When you buy stock, someone else is selling.  When you sell stock, someone else is buying.

The stock market is a middleman.  You don’t buy or sell stock to or from the stock market as an institution but rather through the stock market to another individual or business.  When you choose to sell stocks in a panic, someone else is rubbing their hands together as they sense the opportunity for a bargain.  The cynic in me thinks that a lot of the experts you see on the news promoting stock market catastrophe are the ones who will be logging into their trading accounts shortly after to start hoovering up shares that have plummeted in value.  

The stock market isn’t a specific, physical, thing, but rather a name for the whole apparatus. Although there are market makers which keep the exchange liquid, the point stands that when you buy, someone else is selling, and vice versa.

When the stock market falls, it’s a chance to make money.  I did this just after the Brexit Referendum in 2016 and made a tidy profit.  I will probably make some money from this plunge as well.  You make your money in stocks when you buy, not necessarily when you sell, as a long-term investor may not sell.  My strategy is to buy, hold, and take the dividends.  When the stock market falls, I get more for my money; more units of the stock and more dividends further down the line.  

Final Notes

Apologies again for the gap between posting on this blog.  Normal service should now resume.  However, I am making a change to the posting schedule from next week.  Instead of posting on a Friday, I am moving the posting day to Sunday each week.  I have a few things on at the moment with studying for my Financial Advisor qualifications and posting on a Sunday just makes more sense for my circumstances.  Thank you for reading. 

It’s always strange looking back at the world pre-Covid. In my life two demarcation lines are separating what came before from what came after; 9/11 and Covid. It almost feels as though there’s a certain naivety when I look back at my thoughts pre-Covid. It’s going to be interesting going through the next few months of posts to see how my opinions and feelings changed through the pandemic.