Hello and welcome back to Mortgage Advisor on FIRE.
Weekly Update
Well the World Cup has thrown up a few surprises. England put in a heroic performance against Mexico, and then stumbled over the line against Norway.
It was a bit of a strange atmosphere in our household as Oana and I both love Norway. However, England is my home. I’m glad England progressed, but had Norway won I would not have been devastated.
The match was a frustrating one as it felt England couldn’t get out of their own way. The play was sloppy and it seemed like there were more than a couple of lapses of concentration.
Jude Bellingham is a once in a generation talent though, that much is obvious. He can be a bit of a luxury player at times, but he’s dragged us through that game with some real quality.
Now we face Argentina. I can’t say I know much about this Argentina side, but with players like Kane and Bellingham in our team, we have a chance against anyone. Even Gordon has started to look like a footballer in the last couple of games.
Apart from football, the only other notable events are a few conversations I’ve had with recruiters. I’ve not got any formal offers on the table as I write this, but talks are progressing with a few firms. I’m confident that by the end of the month I’ll have something in place.
“I suffered, so you should too”
As I write this, we’re once again staring down another heatwave. The annual ritual has begun. Weather apps are glowing orange, shops have run out of fans, and social media has descended into its usual civil war.
This time the battleground isn’t politics, football, or whether pineapple belongs on pizza. It’s schools. Should children be sent home because classrooms are roasting?
Now, there’s a perfectly reasonable debate to be had. Parents still have to work. Not every family can suddenly provide childcare at a moment’s notice. Schools provide meals, support and stability for many children. Closing them isn’t a simple decision, and pretending otherwise ignores a lot of real-world complications.
But that’s not the argument that seems to dominate online. Instead, it’s the familiar chorus of:
“Well, I had to sit through hot classrooms in the 1970s/80s/90s, so today’s kids should just get on with it.”
Or…
“It’ll toughen them up.”
Really? Is that genuinely the benchmark we’re aiming for?
Imagine applying that logic everywhere else.
“I survived without seatbelts.”
“I grew up breathing cigarette smoke in restaurants.”
“I never had the internet.”
“I walked five miles uphill both ways.”
Good for you. Genuinely. But why would your response be to wish the same discomfort on someone else?
Surely the entire point of civilisation is that each generation tries to make life a little bit better for the next one.
We don’t refuse pain relief because our grandparents had to grit their teeth through it. We don’t ban central heating because Victorians managed with a fireplace and several jumpers.
Progress is supposed to be… well… progress.
If classrooms are hitting temperatures where children struggle to concentrate, teachers are exhausted, and everyone’s counting down the minutes until home time, then surely it’s reasonable to ask whether the current system is fit for purpose.
Maybe the answer is improved ventilation. Maybe it’s investing in school buildings designed for a warming climate. Maybe it’s changing school hours during extreme weather. Maybe, in exceptional circumstances, it means closing for a day or two.
Or, and stay with me here because this is a radical suggestion; we stop screwing up the only planet we have?
The above points are sensible discussions to have.
“I had it bad, so they should too” isn’t a sensible discussion. It’s cruel, bitter, and full of resentment.
The strange thing is that most of us want our own children to have opportunities we never had. We want them to live longer, healthier lives. We hope they’ll earn more, worry less, and solve problems we couldn’t.
So why, when it comes to something as simple as sitting in a 35°C classroom, do some people suddenly decide that unnecessary suffering has become a treasured national tradition?
Maybe it’s because admitting the next generation deserves better somehow feels like admitting we deserved better too. That’s true, and it’s probably the saddest part of the whole debate.
Autistic Burnout
This week I came across a study looking at autistic burnout, and it struck a chord with me.
One thing that really stood out wasn’t the exhaustion itself, but how people described everyday life becoming harder. Not impossible, just… heavier.
That’s probably the best way I can describe burnout.
Imagine walking into a strong headwind. You can still reach your destination, but every single step requires more effort than it should. You look across and see everyone else walking normally while you’re leaning into the wind wondering why you’re working twice as hard just to cover the same distance.
That’s what burnout has felt like for me.
I could still do my job. I could still hold conversations. I could still solve problems. But every task seemed to demand more mental energy than it used to. Things that would once have taken five minutes suddenly took fifteen. A day that used to leave me pleasantly tired now left me completely drained.
It’s easy for people on the outside to miss this because, from their perspective, you’re still functioning. You’re still turning up to work. You’re still answering emails. You’re still smiling in meetings. Ok, maybe I never smile in meetings, but you get the point.
What they don’t see is that the battery that once comfortably lasted all day is now flashing red before lunchtime.
The danger is that our natural response is to push harder.
If something takes twice the effort, we convince ourselves we simply need to put in twice as much effort. We stay later. We mask harder. We force ourselves through another day, another week, another month.
The problem is that burnout doesn’t work like a fitness programme where pushing through makes you stronger.
It’s more like trying to drive a car after the fuel warning light has been on for the last fifty miles. You might keep moving for a while, but you’re not fixing the problem. You’re just increasing the chances of grinding to a halt somewhere particularly inconvenient.
When you hit burnout, it’s not a lack of motivation. It wasn’t that I’d suddenly become worse at my job. It was that I was using significantly more energy to achieve exactly the same outcome. Sometimes you know you’ve hit the limit but sometimes you don’t.
I think that’s an important distinction, and again brings me back to one of my favourite quotes;
“He hadn’t been aware he’d felt wrong until he suddenly felt right again.”
- James S. A. Corey – The Expanse
When we see someone struggling, our instinct is often to encourage them to try harder. But sometimes trying harder is precisely what got them into burnout in the first place.
Sometimes what people need isn’t more pressure. They just need to have less resistance.
Now, imagine your child, your niece or nephew, your grandchildren, and they are not only having to deal with intense heat in the classroom, but they are also undiagnosed autistics. They are trying hard to fit in by masking, and they’re dealing with this heatwave.
The Million Dollar Question
A story caught my eye this week about a young woman in Canada who won the equivalent of around £1 million on a scratchcard. So far, so standard. What made headlines wasn’t the win itself, but what she chose to do with it.
Instead of taking the million-dollar lump sum, she opted for $1,000 a week for life.
Predictably, the internet immediately split into two camps. One side declared she’d made the worst financial decision since someone looked at a £5 meal deal and thought, “I’ll just get the sandwich.” The other argued she’d guaranteed herself a comfortable income for the rest of her life and would never have to worry about blowing it all.
So, who’s right and who’s wrong?
Well, both.
From a purely mathematical perspective, the lump sum almost certainly wins.
A million pounds invested sensibly in a diversified portfolio has historically produced returns that would comfortably exceed £1,000 a week over the long term. Not only that, but you’d still own the underlying capital. Compound growth is a wonderful thing. It’s basically the financial equivalent of putting Greggs sausage rolls in the oven and somehow ending up with a bakery. Quite why you would want a Greggs sausage roll in the first place is beyond me, but such is life.
The weekly payments, on the other hand, take nearly twenty years just to catch up with the value of the lump sum before you even think about inflation or missed investment returns.
If we’re looking purely at spreadsheets, calculators and historical market returns, it’s not even a close contest.
But here’s where personal finance stops being about maths and starts being about people.
Not everyone who receives a million pounds keeps a million pounds. There are countless examples of lottery winners going bankrupt.
Give ten people a million pounds and you’ll probably get ten completely different outcomes. One invests it. One buys a sensible house. One pays off debts. One decides their cousin’s revolutionary alpaca cryptocurrency startup can’t possibly fail.
Money doesn’t magically make someone good with money. In fact, sudden wealth often magnifies the habits you already have.
If someone knows they’re impulsive, struggles with budgeting or simply doesn’t trust themselves not to make a series of expensive mistakes, then choosing a guaranteed weekly income isn’t necessarily irrational. They’ve effectively put the money behind protective glass where they can’t accidentally spend it on twelve holidays, three Range Rovers and an NFT of an overcooked potato.
It’s a bit like asking whether I’d rather have unlimited biscuits in the cupboard or one biscuit delivered every morning. Logically, I know the cupboard is better value. Realistically, if the cupboard contained unlimited chocolate Hobnobs, I’d be dead by Thursday with crumbs all down my shirt and a look on my face that states “I regret nothing.”
This is why I always say that personal finance is as much about behaviour as it is about numbers.
The mathematically optimal decision isn’t always the best decision for a particular person. The best investment strategy is the one you can actually stick with. The best budget is the one you’ll actually follow. The best savings plan is the one you won’t raid the moment Amazon tells you something is “80% off” despite suspiciously being the same price it was yesterday.
Would I have taken the lump sum?
Absolutely.
But that’s because I know exactly what I’d do with it. I’d invest it, keep living much as I do now, and let compound growth do the heavy lifting. Twenty years from now, Future David would probably send Present David a thank-you card.
The young woman didn’t necessarily make the mathematically correct choice.
But she may well have made the right choice for herself.
And that’s perhaps the most important lesson of all: the best financial decision isn’t always the one that looks smartest on paper. It’s the one that gives you the greatest chance of ending up financially secure in the real world.
What I’m Doing
Listening: The Dead and The Gone by Susan Beth Pfeffer.
Watching: FIFA World Cup.
Reading: Leviathan Wakes (Expanse Book 1) by James S. A. Corey
Financial Update
Assets
Premium Bonds: £250.00.
Stocks and Shares ISA: £147,328.55.
Fuck It Fund: £0.00.
Pensions: £125,734.38.
Residential Property Value: £245,790.00.
Total Assets: £519,102.93.
Debts
Residential Mortgage: £173,633.19.
Total Debts: £173,633.19.
Total Wealth: £345,469.74.
Top Ten Countdown – The Best Financial Advice
10. Know Where Your Money Actually Goes (Part 345)
9. Avoid Lifestyle Inflation (Part 346)
8. Don’t Try to Look Rich (Part 347)
6. Invest Early and Let Time Do the Heavy Lifting (Part 349)
5. Avoid High-Interest Debt
There are two types of compound interest. The kind that quietly helps you build wealth, and the kind that quietly destroys it.
Most of us spend a lot of time talking about the first one. We celebrate investing, pensions, ISAs and long-term returns. But compound interest has a darker side, and if it’s working against you instead of for you, it can become one of the biggest obstacles to financial freedom.
High-interest debt doesn’t just cost you money. It steals your future income.
Every pound you spend paying interest is a pound that can’t be invested, saved, or spent on something that genuinely improves your life. It’s money that has already been earned but is now working for someone else instead of you.
Credit cards are perhaps the best example. Now, before anyone starts sharpening their pitchforks, I want to make something clear. Credit cards are not evil. In fact, I use them regularly.
When used responsibly, they offer consumer protection, rewards, cashback, air miles, and can even help with cash flow. Used correctly, they’re an incredibly useful financial tool.
The problem isn’t the credit card. The problem is carrying a balance.
Once you’re paying 25%, 30%, or even 40% interest on borrowed money, the maths starts working relentlessly against you. You can make the minimum payment every month and feel like you’re making progress, while in reality much of your payment is simply covering the interest that’s being added.
It’s a bit like trying to fill a bath without noticing the plug has fallen out. You’re pouring water in, but it never seems to get any fuller. High-interest debt works in much the same way. You keep making payments, but the debt shrinks frustratingly slowly because so much of your money is disappearing into interest.
This is why I often disagree with advice that tells people they should invest before clearing expensive debt. Let’s say your credit card is charging 30% interest. Paying that debt off is effectively the same as achieving a guaranteed 30% return on your money.
Good luck finding an investment that can reliably match that year after year. It doesn’t exist.
This is one of the rare occasions in personal finance where the correct answer is usually refreshingly straightforward.
If you’re carrying expensive debt, getting rid of it should be one of your highest financial priorities. Notice I keep saying high-interest debt. Not all debt is the same.
A mortgage at a relatively low interest rate that allows you to buy a home is very different from borrowing hundreds of pounds at eye-watering rates to fund everyday spending.
Likewise, a student loan in the UK behaves very differently from a payday loan.
Debt isn’t automatically good or bad. Context matters. What you borrowed it for matters.
The interest rate matters. Your overall financial situation matters.
The mistake many people make is treating all borrowing as though it’s identical. It isn’t.
One thing I’ve noticed over the years is that debt often creates more than just financial pressure. It creates mental pressure. You wake up thinking about it. You hesitate before opening your banking app. Unexpected expenses become stressful because you’re already juggling repayments.
Even if you’re keeping up with everything, the debt sits quietly in the background, demanding a slice of every future payday. There’s a reason people often describe finally paying off expensive debt as feeling like a weight has been lifted.
It genuinely is. It’s not just the money. It’s the freedom.
That’s one of the reasons FIRE appeals to me so much. Financial independence isn’t really about having millions of pounds. It’s about reducing the number of financial obligations that dictate your choices.
Every debt you eliminate is one less claim on your future income. One less bill. One less thing to worry about. One more step towards your money working for you instead of someone else.
If you remember only one thing from this section, let it be this: Compound interest is one of the most powerful forces in finance, and you need to make sure it is working for you instead of against you.
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
You can now find all my social media pages by checking out my Biolink:
bio.link/davidscothern.