Hello and welcome back to Mortgage Advisor on FIRE. This week, I look at the true costs of owning a car and of raising a child. Also, thoughts on the newest financial clusterfuck at Sheffield Wednesday, and lazy writing in science fiction.
Weekly Update
I’m now firmly in a routine for work, and despite the long hours, I’m hanging in there. In so many ways, this job is better than Lloyds, with much more freedom to manage my own time and vastly more freedom when it comes to actually giving mortgage and protection advice. I actually feel like an advisor rather than someone working with a flowchart. The things I miss from Lloyds are the people. Some of the people. Ok, a few people.
In all seriousness, I did work with some great colleagues, some of whom are still in my life several months on from leaving the business. I miss some of those interactions and having random calls through the day where we’d just shoot the shit. Many of those relationships came about through working together in person, but following Covid, I’ve worked almost entirely from home. I wonder how new work friendships develop in a completely remote working world.
The horrors persist, but so do I…
I ended the week with an appointment with a consultant about my elbow, and the outcome is that they don’t know what’s causing the pain. I’m now giving up trying to get to the bottom of it. I’ve seen several surgeons, consultants, and physios, and no one can work it out. The pain is real, and I guess I’ll just have to live with it.
The problem started in the summer of 2022 when we refurbed our apartment. Over a few weeks, we had all our flooring taken up and replaced and with just two exceptions, a bookcase and our TV unit, we replaced every other piece of furniture. It was hard work, and on top of that, I was lifting weights. I felt something in my arm go, for lack of a better term for it. Since then, it’s just never felt quite right.
Sheffield Wednesday
The main thing I’ve been tracking this week is the chaos at Sheffield Wednesday football club. Wages have not been paid in full again. The non-playing staff are having to make do with a small amount of money being paid, with the rest possibly arriving at some point. How did it come to this?
When we were first bought by Chansiri, it all seemed pretty positive. We had a group of respected advisors to help on footballing matters: Glenn Roeder, Paul Senior and Adam Pearson. Within a few months, they had all left. This, perhaps, should have been the first red flag.
In the first couple of seasons under Chansiri’s ownership, the club did great, finishing 6th and then 4th in the Championship and qualifying for the play-offs. There were those of us who started having doubts about where all this was going, though.
There is a major difference between building a club and throwing money at players. When you build a club, you instil a philosophy from top to bottom. You recruit players in a strategic way to improve your squad. It takes a detailed, analytical approach. We did the opposite.
In the second season under Chansiri, we had some great attacking talent, with Fletcher, Hooper, Forestieri, and Atdhe Nuhiu. We signed Sam Winnall, in what seemed a shrewd bit of business. Then we did something bizarre; we spent a reported £8M-£10M on Jordan Rhodes, even though we were crying out for players in other parts of the squad.
Well, well, well… If it isn’t the consequences of our actions…
It did not turn out well as the club lurched from crisis to crisis, and it was clear the funds were drying up. We’ve since gone through managers and coaches at a scary rate before ending up with a talented young manager in Danny Röhl. Now, we appear to have fucked that up as he’s seemingly desperate to leave for a club that’s not a complete basketcase. If you were at a club with multiple instances of wages not being paid, you’d probably be looking to jump ship as well.
The amount of money that has been wasted since Chansiri took over is frankly embarrassing. According to Transfermarkt.co.uk, we have spent approximately 50 million Euros on transfer fees. On top of that are vast amounts of wages for players who contributed little or nothing.
I’ve only covered a fraction of what has gone on at Hillsborough since 2015, but there’s an excellent timeline available here.
I’m all for banter in football, but when working-class people who are probably on minimum wage are not being paid, I think rivalry should be pushed to one side. As someone said recently, I forget who, if you want a rivalry, you have to have rivals. People deserve to be paid the agreed wage for doing their job. That’s just the absolute fucking minimum expected, and if/when Chansiri does make up the difference he shouldn’t be congratulated for it.
Poppy
I just wanted to take a minute to show you all how amazing Poppy is. For a senior lady of 15 years, you would not expect her to be as playful as she is. One thing her years have given her is crazy skills to manipulate us to do her bidding.
What Poppy has trained us to do;
Breakfast; 1st, 2nd, and 3rd
Poppy eats like her life depends on ingesting the food in front of her as fast as possible. She will not slow down. She is relentless. When finished, she will then wander off and regurgitate the food. The only solution is to feed her the food in smaller portions. As such, her breakfast is served over three courses.
Placing her food in the precise spot for maximum comfort
If you place the food down a millimetre too far or too close to her, you have failed. If you place the food down too quickly, you are being hostile. If you place the food down too slowly, you are being an asshole. No, you have to place the food down in the precise spot with just the right amount of deference.
It’s also important to realise when Madame wants to dine in the lounge and when she wants to dine in her room. We are expected to know this with no signs to guide us.
Hallway Time
Around the same time every evening, we are beckoned to our front door, where Pops waits for us to open up to the hallway outside our apartment. However, the door is too heavy for us mere humans, and so she uses her front paws to pull the door open herself. She will then patrol the corridors before plonking herself down and cleaning her belly. Occasionally, she will sniff at other doors. Once she has finished, she will guide us back home. Once we have put our shoes away, she will often decide to go out again.
Shoulder Time
The most important time of the day. When Pops feels like she needs to rest on you, she will let you know. The other day, I was working and she leapt onto my desk and headbutted my mouse out of my hand before climbing up on me and resting on my shoulder. To be honest, it’s my favourite part of the day. She will lie down on my chest with her head on my shoulder and purr away until the purring turns to gentle snores. There are few feelings better than when an animal decides that you are the safest place to sleep, assuming that the animal is not a bear high on cocaine.
Protecting us when we are most vulnerable
It’s not all take with Poppy as she will rush to our aid when needed. Not like Gondor when the Westfold fell, Poppy is there in our hour of need. Whenever we are in the bathroom, she will stand guard outside and from time to time, we will see a paw reach under the door, accompanied by a yowl to ward off evil spirits.
What I’m Doing
Listening: You Are Not So Smart by David McRaney.
Watching: The Eternaut (Netflix).
Alien invasion stories can be intense, interesting, and good fun. They can also be lazy.
**SPOILERS**
The laziest thing in alien invasion stories is when the aliens are actually humans, or are represented by humans under their control. I facepalmed at the 2019 version of War of the Worlds for this very reason. I’m convinced the reason many shows revert to this is because of budget; they don’t have the money to realise convincing aliens on the small screen. It can be done, though, and you just have to look at all the sci-fi shows that have graced television in recent decades: Star Trek, Star Wars, Babylon 5, Space: Above and Beyond. All these have interesting and well-designed alien species. Any story that says it’s an alien invasion but it’s just other people can get in the bin.
Anyway, The Eternaut is ok.
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Financial Update
Assets
Premium Bonds: £19,000.00.
Stocks and Shares ISA: £112,583.16.
Fuck It Fund: £100.02.
Pensions: £94,716.86.
Residential Property Value: £239,368.00.
Total Assets: £465,768.04.
Debts
Residential Mortgage: £178,228.08.
Total Debts: £178,228.08.
Total Wealth: £287,539.96.
Mortgage Daily Interest
The other day, when I was bored, I decided to have a look at how much the daily interest is on our mortgage. On the Halifax app, I could go back a year, and I looked at the interest charged each month and then divided it by the number of days in that month. It told me this:
June’24: £20.43
July’24: £20.39
August’24: £22.73
September’24: £22.00
October’24: £21.96
November’24: £21.93
December’24: £21.89
January’25: £21.86
February’25: £21.89
March’25: £21.94
April’25: £21.91
May’25: £21.52
When you frame it as a daily cost, it seems crazy that this is how much interest is being charged. There’s not really much to be done other than switching to a lower deal if possible, or overpaying to bring the debt down. Sadly, neither is a possibility at the moment. Rates aren’t significantly lower than what we already have, and we don’t have the spare cash to make meaningful overpayments. Any overpayment is a bonus in the long term, but I’m thinking more about short-term benefits.
EWS1 Worries…
I did consider remortgaging, but there’s the whole EWS1 issue hanging over our heads. Our previous safety certificate has been ripped up because of the signature forging scandal that broke last year. I dread to think what work may be needed. Our complex doesn’t have cladding, but there are wooden parts here and there. The assumption amongst some other residents is that there will be work needed, it’s just no one knows how much it will cost.
Our apartment is located in an amazing part of the UK, but the actual construction of the building leaves much to be desired. The placement of heaters is awkward, as is the fact that it doesn’t ventilate properly from the bathrooms or kitchen. Then, there are the windows that open at strange angles, and the whole issue when we had to have our whole balcony door and window unit ripped out and replaced.
I really hope we aren’t hit with a massive bill for repairs.
The Cost of Recurring Expenses
A few weeks ago, a friend and I went to an event hosted by the Donegans, a married couple who have embraced FI and now teach the basics to other people. We didn’t expect to learn much because FI is, in reality, very simple. We thought we might be able to meet like-minded people, but not so much. Anyway, my friend sent me a link to something from the Donegan website where they explain two rules: the rule of 840 and the rule of 194. These rules are meant to show the impact of recurring expenses. If you have a weekly expense, the idea is to multiply the cost by 840, and the result is what you could have in ten years if you redirected that amount to a low-cost global index fund. The rule of 194 is the same, but with monthly expenses.
Some “rules” in finance are great, like the rule of 72; if you want to know how long it will take your money to double, divide 72 by the rate of growth, and that’s how many years it will take. For example, a 6% growth rate will double your money in 12 years. It’s not an exact rule; it’s more of a quick reference guide. It’s good because it’s simple. I don’t think the 840 and 194 rules are quite there.
They just seem a little clunky. The idea is good and it’s something more people should be mindful of, in that impulsive spending has an opportunity cost in that you lose the potential growth over time. When you order in instead of cooking, that extra £30, as a one-off, could grow to £100 after 20 years. In isolation, it’s not a big deal, but when it becomes a regular occurrence, i.e. £30 twice a week for several years, it starts to add up to much higher amounts lost in future. £60 per week over 20 years growing at 6% will end up at over £110,000.
Children and Cars
The two big, easily avoidable factors, that generally cripple people financially. Before I go any further, I just want to make it clear that I’m not judging everyone who has a car or who has children. The people I am judging are those who do these things without adequately considering the long-term impact., and who then bitch about the fact they have no money and are always tired. Children are a massive responsibility and not something that will repair a relationship. Children are beings in their own right, and not an accessory. I thought I’d be a parent at some point, but over time, I have come to realise that my line will end with me (sounds cooler than saying I don’t want kids).
Anyway, back to my original point. According to Google, the average monthly cost of raising a child in the UK is anything from £900-£1,000. That is insane. If you put £900pm into a low-cost global index fund, through an investment ISA, at 6% growth over 18 years, you could end up with over £330,000. I’m not saying “don’t have children.” I’m saying it should be a considered decision, and not just something you do because it’s expected of you. The planet is overpopulated as it is.
Car finance is something that gets me angry and frustrated in equal measure. I understand that, for some people, cars are a necessity. There are way too many people for whom they’re a luxury disguised as a necessity.
An expensive luxury
The typical car in the UK will spend 95% of the time parked up doing nothing. Despite this, it’s often the third biggest expense after mortgage or rent, and then children. According to some Google-fu, we’re looking at around £320pm to run and pay for a car. £320 every month for something that spends 95% of the time doing nothing except depreciating.
Cars are tools, but to some people, they seem to be an extension of their personality. I just don’t understand it. Putting to one side things like safety, size, and range, cars are designed to get you from one place to the next in relative comfort. You can choose to spend tens or even hundreds of thousands, or you can go for something that’s basic. You’re still driving the same roads. You’re still limited to maximum safe speeds. If you choose an expensive BMW over a Dacia, for example, a large part of it is that you want to be seen driving a BMW.
If you want to pay thousands more just to be seen by strangers for an hour or so a day driving a BMW, it is your choice. If you bitch to me about not having money though, there’s a good chance I will physically shake you and yell “What did you expect!”
Extra points if you bought the Chelsea Tractor because you need to drive your kids to school and back.
That’s all for this week. Next week’s post will be a little bit different, but I’ll let you find out why next Sunday. Have a great week, and please remember to like, comment, and share this post on your social media of choice.
DISCLAIMER
The views and opinions in this blog are my own and do not represent the views or opinions of my former, current, or future employers, 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:
Biolink
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bio.link/davidscothern.