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Part 261: Are you not entertained?

Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss the upcoming Labour budget, and take a look at why I won’t get bored when I FIRE. Also, it turns out I look Danish to some…

Weekly Update

I look Danish. I’ll take that. Let me explain…

Earlier this week I accompanied Oana when she had her head and face scanned by a tech company. They were offering £50 for volunteers to be scanned with their likeness potentially being used in video games, adverts, and in facial reconstruction software for medical and legal applications. It’s interesting stuff.

When we arrived, Oana was taken to a make-up chair and I sat on one of the sofas. The people were asking Oana where she was from because of her name and accent. No one guessed correctly but we have a new one to add to the list; Finnish (which reminds me of the Antti Niemi call which I will come back to).

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I then asked where they think I’m from (Sheffield, UK). The woman I was sitting with looked at me thoughtfully.

Her: Well… I’m thinking Scandinavia. You’ve got this whole Viking thing going on.

Me: Hmmm… that’s interesting.

Her: Danish?

Me: Danish? Yeah, I’ll take that.

Her: Where are you from?

Me: Sheffield.

According to the people there, I have an accent that sounds like a mix of Scandinavian and Mancunian. A few years ago I did one of those 23&Me tests and much of my genetic background comes from Norway.

As of now, I’m formalising my change of name to David Finehair.

Antti Niemi

This one is too good to ignore. For those who don’t know, Niemi was a goalkeeper from Finland who spent much of his career in the UK, with a decent spell in Scotland. Someone once called TalkSport to lament the fact that Niemi had not been selected for the Scottish national side. The call went something like this:

Caller: Why doesn’t he look at Niemi?

Host: He’s Finnish.

Caller: He’s not finished he’s 28.

Host: No, he’s Finnish. He’s from Finland.

Caller: What do you mean?

Now, we’re going down the rabbit hole because it’s possible the caller was one of those people who buy into the conspiracy theory that Finland does not exist. Yes, there’s a conspiracy theory out there which argues the country of Finland is not real. I’m convinced most people arguing this are doing it for a laugh, and to be fair some of the posts about it can be pretty funny.

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So, in summary, Oana is not from Finland because it doesn’t exist, and Antti Niemi is finished. Thank you for attending my TED Talk, and I will not be taking any questions.

Botanical Gardens and other walks…

We’ve been for quite a few walks this week and it’s our favourite time of year for looking at trees. The colours in Autumn are amazing, with all sorts of gold, copper, and shades of red. We saw many squirrels and got some great photos:

Won’t you get bored?

I was chatting with a friend this week about FIRE, and one of the points we discussed was the common questions asked when you tell someone about your FI plans. The most common question is typically, “Won’t you get bored?”

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So, when faced with someone who is planning to retire from work years, maybe decades earlier than normal, rather than asking how they are doing it, the burning question is whether that person will be bored.

I think that people ask this because they’ve been conditioned from a young age to anchor their life around school, and then work. It’s what most people consider normal; you go to school, and then you find work for 35-40 hours each week.

Getting out of the traditional mindset and into a FI mindset is hard work, and can be mentally and emotionally uncomfortable for some. It can challenge your beliefs and what values you were raised with. Most people learn about money from their parents, and if those parents were the sort who thought money was a dirty subject, then you were probably not going to learn much useful information.

Life is short and the world is vast, and here follows a list of reasons I would not get bored once FIREd.

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Things to do…

1. Travel the world: I would have so much time to explore new countries, cultures, and cuisines, seeing places I’ve always wanted to see.

2. Building my Blog: I would have much more time to work on this blog, with more regular posting.

3. Learning New Skills: From cooking to photography, from DIY to coding.

4. Volunteering: Helping out with causes I believe in.

5. Writing a Book: I’ve got several folders full of ideas for books, but I’ve never had the mental energy to commit to them whilst working.

6. Investing and Financial Projects: Learn more about investing and possibly start some new FI-related projects.

7. Reconnecting with Nature: Hiking, biking, camping, or even wildlife photography.

8. Spending Time with Loved Ones: Unhurried time with friends and loved ones, where new memories can be created.

9. Starting a Passion Project: Building or designing something from scratch, whether it’s art or something practical.

10. Becoming a Mentor: Using my experience and knowledge to help mentor people starting on their FI journey.

11. Health and Fitness: Starting an exercise regime that works at my own pace, rather than scrambling to find time around work.

12. Learning a New Language: Being able to dedicate more time and mental energy to learning a new language.

13: Entertainment: There’s an almost endless supply of books, films, shows, plays, games, and other hobbies to explore.

14: The Internet: An archive of the history of human civilisation. A quick Google search suggests it would take almost 25 million years to browse the whole internet, not accounting for the rate at which new information is added.

This is just a quick list I’ve popped together off the top of my head. Becoming FI doesn’t mean that you can never work again, either. It just means that money is no longer the main factor in choosing how, where, or when to work.

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Diabetes UK Step Challenge

A massive thank you to those who have donated, and a reminder that I’m still accepting donations until the end of October. If you’d like to donate, you can do so here.

Letters to Oana

Part 2 of the series Letters to Oana is now live.

Looking Back

Part 16 of the Looking Back series is also live.

What I’m Doing

Listening: Good Boys 2: Unleashed by Jeremy Robinson (audible).

Watching: Looking for something – any suggestions?

The second book in the Good Boys series has been released, and Saturday afternoon saw an email drop in my inbox announcing the release of the next book in the Stone Man series by Luke Smithard. I’m going to go back and relisten to the previous books in the series first and I can’t wait.

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Below is the Audible summary of the book and I highly recommend the series for fans of sci-fi and horror. I’ve had a few interactions with the author and he seems a decent guy. Also, some of the series takes place in Sheffield which is a bonus.

Polenta

Do you know what polenta is? Have you at least heard of it? I’ve been craving an orange polenta cake (yes, I know it’s very specific) and so we’ve been trying to track down polenta in the supermarket.

Our local Tesco does not stock it, nor had three separate members of staff even heard of it. We also asked in Marks and Spencer with the same result, and finally, Waitrose where it took a few attempts to find someone who had heard of polenta. We thought we had found some in a little corner shop but their polenta was massively out of date.

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I didn’t think polenta was that unusual, but it would seem I was mistaken. The long and short of it is I no longer crave that cake, so we have a big bag of polenta spare. We’ve decided to use it to make Mamaliga, a traditional Romanian dish.

Reddit Post

Reddit is my preferred social media app for scrolling and judging, and one of the subreddits I enjoy reading is r/hypotheticalsituation. I’ve had a thought rattling around my brain for a while and I eventually got around to posting it.

There were some great suggestions, including some I’d not thought of. One person said they’d consult experts in the sciences to see what questions would be best. Another person said they’d ask how to increase their lifespan by 20%.

So, would you ask anything?

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £92,369.14.

Fuck It Fund: £1,230.27.

Pensions: £86,423.37.

Residential Property Value: £237,447.00.

Total Assets: £432,569.78.

Debts

Residential Mortgage: £185,383.74.

Total Debts: £185,383.74.

Total Wealth: £247,186.04.

Some of my investments took a massive hit late in the week, with my ISA dropping almost £3k. It’s just part of the normal fluctuations of any stock market investment, but it’s impossible to not feel something when there’s a sudden drop.

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It’s going to be interesting to see what the next two weeks bring as we have the Labour budget and the US Presidential Election.

The Budget

I don’t remember being as nervous about an upcoming budget as I am now because it seems almost anything is on the table. I don’t see Labour messing around with income tax or national insurance, but other than that it could be brutal for investors and savers.

ISAs

There are a few ways we, FI followers, could be hit. The first one that springs to mind is changing the nature of ISAs. We have a generous allowance of £20,000p/a we can invest in a stocks and shares ISA, with no cap on the overall value of the account. Income within an ISA is free of tax, as are profits from the sale of units. It’s a fantastic tool for building wealth, but it does remove a lot of potential money from the tax system.

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I would not be too upset if the £20,000 annual allowance was reduced, even if it was halved. However, a lifetime cap on an ISA balance would be a gut punch if it wasn’t something high like £2M. Any limit would have to be low enough to make a difference, so a high limit is probably less likely. There have been some calls for ISAs to have a lifetime limit of £100,000, and should this happen I, and many others, will be pissed.

Unintended Consequences

People tend to work out how to hit a target or restriction with the least amount of effort or stress. Should ISAs be targetted in this way I think it will have unintended consequences.

The thing is, people don’t want to part with their money. Those with six-figure ISAs will find other ways to protect their cash and it could even involve cashing in their ISAs to buy other asset classes or to pay off their mortgage. When these people are older, they will no longer have the same financial buffer to fall back on which may increase dependency on the welfare state. It would just be kicking the can down the road.

In short, I wouldn’t be opposed to reducing the annual investment allowance but I would be massively opposed to any sort of cap on lifetime balances unless it was such a high limit as to be pointless.

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Dividends

We only have a small dividend allowance as it stands, so removing it entirely would not feel like much of a loss. If the government leaves ISAs alone I wouldn’t lose any sleep over the dividend allowance being scrapped entirely. I would question how much money this would raise for the treasury though.

Capital Gains Tax

This is one that I’m fully expecting to change in a couple of ways. First, I think the allowance will be cut or removed altogether. Second, I think the rate of tax charged for CGT will be reviewed.

The smart way to handle this would be to charge a modest amount for gains up to £3,000 each year (£3k being the current allowance). The modest amount could be as low as 5%, with the CGT charge increasing in line with income tax bandings. The thing about CGT is that if you set it too high, people will just stop selling and incurring chargeable gains. It needs to be high enough to make a difference but low enough to not put people off.

In 2022/23 approximately £14.4B was raised through CGT with less than 400,000 people paying this tax. The Office for Budget Responsibility is predicting that CGT will raise just over £15B in the current financial year. With a financial “black hole” of £22B reported, CGT is not the answer in isolation.

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Pensions

It’s looking likely that there will be some impact on tax relief for pension contributions and on the level of national insurance paid by employers. Under current rules, employers pay NI on wages except for that paid into a pension. If this was changed so that employers paid NI on all wages, even those invested into a pension, it is thought it could raise billions for the treasury. Once more we have to think about the unintended consequences further down the line.

Many employees pay extra into their pensions to fund retirement with the bonus of reducing their tax and NI. Rightly or not, some people will look at a change such as this and think it’s not worth paying as much into their pension. This could lead to increased dependency on the welfare state years later.

Another potential change to pensions could relate to the tax relief given on contributions, but that’s a subject that I’m not going to tackle here as it would require much more time, brainpower, and caffeine.

ISA v Mortgage

With all these possible changes to taxes and allowances, I started looking at my ISA and mortgage in comparison. One, somewhat jokey, suggestion from a friend was to simply cash in the ISA and use it to pay down the mortgage. Then, some time later take out a further advance to replenish my savings.

Although the situation is more complex because of early repayment charges and limits on how much can be invested into an ISA, it got me wondering about the point at which my ISA would be double my mortgage balance. The idea would be to pay off the mortgage but still have a decent chunk of savings.

The Calculations…

I ran a few projections based on different rates of growth, savings, and payments off the mortgage debt.

As things stand I pay approximately £330 off my mortgage debt each month. Due to daily interest, the amount of interest charged in monetary terms will drop over time. However, for the sake of simplicity, I assumed it would remain the same.

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If I pay £330 off my mortgage debt each month, and invest £200 in my ISA each month, with annual growth of 6%, it would not be until July 2031 that my ISA balance would exceed my mortgage balance. I’m not talking about it being double my mortgage, but rather just exceeding it.

If I tweak the scenario so I’m paying £400pm off the mortgage, and investing £250pm with 6% annual growth, then my ISA would be £50,000 higher than my mortgage by August 2033.

I completed a final calculation assuming that my ISA balance was £20k higher now (to account for maxing out the allowance in April’25), with the mortgage coming down by £450pm and the investments still increasing by £200pm and 6% growth…..

August 2035 is when my ISA would be double my mortgage debt. There’s no specific reason I’m looking at double as a target, and it is entirely arbitrary. It would be nice to be mortgage free that soon though.

That’s all for this week. Thanks for reading, and I hope you have a great week ahead.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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.

Part 260: Too Big to Fail?

Hello and welcome back to Mortgage Advisor on FIRE. This week I offer some thoughts on why the stock market can’t fail, and take a look back at the growth in my ISA since it was opened.

Weekly Update

I’m still in that mindset of waiting for the year to end. I’m finishing up my time in my job, and waiting to see what the next chapter brings. I’ve started looking for other jobs because of Oana’s work situation. The plan had been to take a few months off but if neither of us is earning, even a basic standard of living will eat into our savings quickly.

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Turning Down an Opportunity

I had a good chat with the director of an independent brokerage about joining their company. The guy was open about the pros and cons of being self-employed, and although there’s potential to earn a lot of money, it’s important to pay due respect to the word potential. To be successful in this industry as a self-employed mortgage advisor you have to be switched on all the time. You have to be able to network, and just the thought of networking fills me with anxiety. After thinking it through and talking with some people who have tried going self-employed as a mortgage advisor, I decided against it.

Off The Shelf

Earlier in the week we attended a talk as part of the annual Off The Shelf festival. This one was by author Adam Sharp and concerned his latest book The Wheel is Spinning. The talk was advertised as a collection of amusing phrases from different languages. The tagline of the book from Amazon is;

The Wheel is Spinning but the Hamster is Dead: A Journey Around the World in Idioms, Proverbs and General Nonsense.

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The whole evening was a bit, well, underwhelming. It started with the sound system being handled in such a way as to create an ear-piercing shriek that was painful, followed by the same song being played on a loop for fifteen minutes whilst the venue filled. The event was supposed to start at 19:00 but was a little late getting going. The person introducing Adam Sharp read their intro from a sheet of paper as if they’d only just been handed it as they walked on stage. It was a few minutes after seven when the talk began.

I was expecting some examples of amusing language from around the world with some insight, analysis, and so on. It was just the author reading out numbered lists of sayings from around the world. There was a ten-minute break, and the talk finished at 19:56; I checked the time thinking, “Wow, this went quickly”.

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It’s the first time I’ve attended one of these events and thought, “That would have been better as an email.”

The only positives from the evening were picking up some amusing phrases, such as “If the duck can’t swim it’s not the water that’s stupid.”

Off The Shelf: Part Two

Normally the talks from Off The Shelf are really good. We’ve been to many over the years and this was the most disappointing one by a long stretch.

On Saturday evening we went to another Off The Shelf event which was much better. It was called Collision: Stories from the Science of CERN. Steven Moffat (of Doctor Who and Sherlock fame) was there, as was a scientist from CERN, and the event was hosted by Spencer Kelly, who has hosted the BBC show Click for many years. It was an interesting event but did not go into as much detail about the science as I would have liked. It was mostly to promote the book which the event was named after. We bought the book and got it signed by Steven Moffat who contributed a story to the collection. I’m glad we went even if was a bit lacking in depth.

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As we were waiting to get the book signed, one of the scientists was hovering around so I asked if they were free to answer a question. Their response was a little rude, as they seemed very dismissive and didn’t really listen or look at me. Someone else stepped in and answered my question but it was all very awkward. I wasn’t the only person who asked a question so I’m not sure what the issue was.

Diabetes UK Step Challenge

A massive thank you to those who have donated, and a reminder that I’m still accepting donations until the end of October. If you’d like to donate, you can do so here.

Letters to Oana

Part 2 of the series Letters to Oana is now live.

Looking Back NEW POST

Part 16 of the Looking Back series is also live.

What I’m Doing

Listening: The Power of Geography by Tim Marshall (audible).

Watching: Nightmares and Daydreams (Netflix).

I enjoyed Tim Marshall’s previous book Prisoners of Geography but this latest one just didn’t do it for me. There were some interesting bits to it, but I don’t think I was in the right headspace for this type of book. I’ll probably give it another go at some point. He has a good writing style and seems to know his stuff.

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I watched the first episode of Nightmares and Daydreams, an Indonesian show, but I just couldn’t get on with it. From what I can tell it’s an anthology show with loosely connected stories but it was too out there for me. I won’t spoil it for anyone thinking of watching it, but it was just too wacky for my taste.

Website Stuff

It’s getting to that time of year when I need to pay to renew my domain and plan with my site host. I will probably never make money from this blog but I would like to reduce what it costs me to run. There are a couple of ways you can help and it will not cost you anything.

Sharing

If you share my blog posts on your social media you are helping me get more traffic. The more traffic I get, the more ads the site serves, and the more ads served the more revenue I get. It’s a few seconds of your time, but it will make a big difference for me.

Interactions

Liking and commenting on posts will help boost the site and attract more traffic.

You can sign up to receive emails when I publish a new post.

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Donations

This is the one that involves paying something. I’ll never put the site behind a paywall. However, should you wish to donate to the running costs of the site it would be greatly appreciated. You can do this via the form below. You can select one of the suggested amounts or choose your own.

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £95,301.22.

Fuck It Fund: £1,230.27.

Pensions: £87,251.91.

Residential Property Value: £237,447.00.

Total Assets: £436,330.40.

Debts

Residential Mortgage: £185,383.74.

Total Debts: £185,383.74.

Total Wealth: £250,946.66.

In typical fashion, I was chatting with a good friend of mine about our investments and we got to talking about how much growth our ISAs have achieved. The stock market has had a fire lit under it of late and is surging up. A few years back I looked at how much I’d made from my ISA, but that was some time ago. So, I revisited the figures and I was pleasantly surprised. Now, I should point out that the calculation is not 100% precise because it does not account for fees charged, but as they are a drop in the ocean it’s not something I’m too concerned about.

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The numbers are as follows:

Total amount paid into my ISA: £98,300.

Total amount withdrawn from my ISA: £28,169.62

Current ISA value: £95,301.22

Growth: £25,170.84

That is incredible growth since I opened the ISA in 2018.

One of the great things about discussing FI with other people is you pick up all sorts of hacks for saving money. So, what I learned this week was that if a hotel offers you a price whereby you can cancel the reservation for a full refund, keep an eye on the price for the room and if it drops, cancel and rebook. Modern problems require modern solutions and all that.

Stock Market Fears

The most common response I get from those sceptical about investing in the stock market is rooted in fear. People are afraid of losing their money in a big market crash. The thing is, I don’t think the market will fail permanently. Let me explain why…

In today’s globalised economy, the stock market is a foundation upon which governments, corporations, and individuals all build their wealth. If you trace any investment back, you find yourself looking at the stock market. It’s not just about rich investors; public pensions, insurance funds, and 401(k)s (in the US) are all deeply tied to stock market performance. With so many stakeholders relying on it, there are strong incentives from all sides to prevent a total collapse. It’s a game which no one wants to see end.

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When markets show signs of significant downturns, governments often step in like a parent calling time on their kids playing before someone gets hurt (think of the 2008 financial crisis or the COVID-19 pandemic).

The Central Banks and the Speed of Information

Central banks like the Federal Reserve or the European Central Bank have tools designed specifically to prevent market catastrophes, like controlling interest rates. The extent to which these measures work is up for debate, but these efforts show that no one wants the market to fail.

Unlike previous times when information and transactions were delayed, today’s real-time data and communication help prevent market freefall. Institutional investors, hedge funds, and retail traders alike have access to technology and information with minimal delay that allows them to respond swiftly to issues or problems.

Markets now have circuit breakers in place that act as a safety net, and if the market moves too far, too quickly, the game is paused to give people a chance to reflect before things get too crazy.

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Who Benefits?

The global economy is a closed system and if the market was to crash irreparably it’s difficult to see who would benefit. I’m not talking about a dip or even something like the crisis in 2008. In those situations, the people with money to invest will often benefit because they can snap up shares at a cheaper price. This in turn leads to increased wealth when the market recovers. If the market were to fail completely though, the game would end and no one would benefit. As such, it is in everyone’s interest to keep the game going, even if they need to bend the rules from time to time to do so.

That’s all for this week, so thank you for reading and I hope you have a great week ahead.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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.

Looking Back: Part 16

Originally published February 14th, 2020.

Hello and welcome back to Mortgage Advisor on FIRE. This week I will be discussing deal packaging and direct to vendor marketing. First, however, I will have a look at the past week.

Weekly Update

The next few paragraphs are a bit depressing. I was not in a good way, and I think there was a lot of stuff bubbling under the surface that I was only subconsciously aware of. Our senses pick up on a lot of cues that do not always reach the conscious part of our brain, but I firmly believe that these things are processed and analysed in the background. This, coupled with poor physical health, creates a situaton where you feel like you’re being attacked from all sides.

I think I’m getting better physically. I can walk more freely around my flat with pain that is manageable. I still need crutches when I’m out and about, as much for security as anything. I can take a few steps but then my feet and ankles start to hurt, and the crutches help take some of the burden. The only issue with the crutches is that they are causing discomfort in both of my shoulders, which have both been surgically repaired in the past.

Mentally, I am not in a good way. It is difficult in the week when your friends, family and partner are all at work. It would not be so bad if I could leave the house and grab a coffee in a café with a book. I’m comfortable doing that; it’s something I enjoy, just sitting in a crowd in my own company and a good book. This injury/injuries has taken that away from me. Without sounding too melancholy, I’m feeling lonelier than at any other point in my life.

I’ve had a better day today (Thursday, as I write this). I met up with a friend for brunch and we had a good catch-up. It was so nice to have a conversation that did not revolve around my health. However, there have been some updates about my health since my last post. I saw a Rheumatologist who was very friendly and thorough in his consultation.

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He completed a full examination of my joints, spine, breathing and blood pressure (120/80: much lower than it was a couple of years ago when it was around 197/130). We also spent a long time going through my extensive medical history, to which the consultant commented “you have the medical history of a man in his 60s, not his 30s.” It felt good for a medical professional to look at my entire medical history and agree that something does not add up. I choked up a little going through my history over the last decade or so as it’s not been a pleasant experience.

I remember this guy. He was thorough and made me feel heard. Too many medical professionals seem to view you as a set of symptoms rather than a person.

I will be seeing the consultant again in just under two weeks to discuss the results of the blood tests he ordered. I’m in the unusual situation of hoping there is something wrong; something that can tie together all, or most, of my medical history. I want to be able to point at something and know that it has been responsible for the numerous injuries and health scares I’ve endured. I want something that I can fight, and to know that in time my situation will improve. I stated before that for many years now, my physical health has been in decline. I’m not sure that mentally I could cope with much more pain or the mental and emotional isolation that comes with physical ill-health.

I know I have people that love me and care about me, and it helps to an extent. I’m sure that anyone who has experienced chronic physical pain will agree that a support network helps, but only to a certain extent. Eventually, something must give. I need to get right physically. I know what I need to get right mentally; I need social interaction. I need physical exercise. I need mental stimulation. To get right mentally, I need to get right physically. It’s a relationship between the two. This blog is providing some mental stimulation, and I look forward to addressing it each week.

I can’t believe this blog has been running for almost five years (as I write this on 17/10/24).

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Financial Update

Premium Bonds: £13,000 (no change from last week).

Stocks and Shares ISA: £8,608.17 (up £373.84 from last week).

F**k It Fund: £1,513.11 (no change from last week).

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

Total Assets: £204,747.28

Credit Card Debt: £0.00 (down £47.06 from last week).

Loan Debt: £3,370.33 (no change from last week).

Mortgage Debt: £133,960.57 (no change from last week).

Total Debt: £137,330.90

Total Wealth Figure**: £67,416.38 (up £420.90 from last week).

Investment Income in 2020: £0.00 (Target £2,000)

*valued at £181,626 according to lender’s index.

**total assets minus total debt

I always get a buzz out of seeing how far my figures have grown..

My ISA has increased in value due to my monthly investment being applied and a general increase in the market. I’m in the final week before payday so the next instalment of the blog should see and increase again to the Premium Bonds and F**k It Fund.

Financial News

Since I started this blog, I’ve been making a bit of an effort to network with other property investors. I’ve made a couple of contacts but my mental state, general social anxiety, and introvert nature, mean that I’m hardly likely to be the life and soul of any party in the near future. For me, networking is about sharing ideas and best practices and seeing if there is a way to build common ground, and possibly an ongoing professional relationship. It can’t be rushed. It’s organic and will evolve in unexpected ways.

Funnily enough, as I’m reviewing this post I had a conversation with a friend earlier today about networking. The thought of having to network fills me with a cold dread, because, as an autistic person, I just can’t get to grips with the utter pointlessness of small talk. So much useless information. So much irrelevant social ritual. No thank you.

Some people view networking as an opportunity to sell, and I find that extremely off-putting. I’ve had several deal packagers contact me via social media and manipulate an introduction into the hard sell in less than a dozen messages. It goes something like this:

DP: Hi there, I see you are investing in property in Sheffield.

Me: Hi, yes, I am, or at least hoping to.

DP: What are you doing in property?

Me: Looking for my first BTL. What about you?

DP: I find properties for other investors and I’m using the cash raised to buy my own BTLs. What type of property are you looking at?

Me: Cool. Houses mostly, 2-3 bed.

DP: What is your budget?

Me: Around £100,000.

DP: I’ll let you know what I find.

Me: Er…

I’ve had several of these exchanges in the last few weeks and it frustrates me on several levels. The first thing is that what I thought was a chance to network, has turned very quickly into a sales pitch. I can use Rightmove myself. I can crunch numbers myself. I don’t have an issue with anyone approaching me with a sales pitch so long as they do it in the right way. Tell me it’s a sales pitch for a start, and at least then I can tell you that you’re barking up the wrong tree.

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I’m not sure how I feel about deal packaging. It just seems like an unnecessary link in the chain. I get that there are people who are cash-rich and time-poor. I don’t think there are enough of these people to sustain a deal packaging industry, especially now that it seems so many wannabe investors are jumping on the No Money Down bandwagon.

What is deal packaging?

Short answer: it’s bullshit.

It is where someone finds a property for an investor and then sells them the information. The deal packager may also agree a purchase price, and research the likely cost of bringing the property up to spec. They would then be paid either a flat fee or a percentage of the purchase.

It’s an industry that I can see having a limited shelf life. After all, it does not take long to set up alerts on the various property search engines. I don’t think we are too far away from having more complex algorithms for computers where software can search for property that meets your requirements and then fire off an email to the relevant agent according to a set template.

It’s not that much of a stretch to see a time when a cash-rich-time-poor individual pays an IT expert to set this software up, whilst at the same time setting up similar emails that go to tradespeople and builders to get quotes on necessary work.

I predict that in less than five years, Deal Packaging will be old news.

Direct to Vendor Marketing

The next time I receive a direct to vendor offer, I’m going to waste as much of their time as possible. It’s such a murky area of investing.

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For the most part, I’m firmly opposed to Direct to Vendor Marketing (D2VM). It’s a fancy term to describe the act of mailing whole streets or communities with letters that state you are a Property Investor or Property Solutions Expert and that you are looking to buy properties for cash, quickly. It is often done in conjunction with deal packaging. I’m concerned about the morals of the industry. It’s very easy to see how vulnerable people can be ripped off. Let’s use an example:

Bob Smith (a fictional man) living on 123 Fake Street has been left in a dilemma. He bought a house for £100,000 in his sole name for him and his partner to live in. Shortly after moving in, his partner left him. Bob Smith then had a bout of ill health and lost his job. He is now struggling to afford his mortgage. As someone who is not financially savvy, and has no one to turn to, he wonders what to do.

One day a letter comes through the door saying that a Property Solutions Expert wants to buy properties for cash, quickly, in the area. Bob calls the number on the letter and is asked a few questions like “how much do you owe on your mortgage?”

During the conversation, Bob tells the person on the phone he owes the bank £79,000 and is behind with his payments. The bank is sending letters out threatening to repossess the house. After a long conversation on the phone, Bob feels like he has someone on his side willing to help. The next day some guy comes around to talk to Bob. This “Expert” has read several books and attended a Property Investing course but has never owned a BTL and has no formal financial qualifications. This “Expert” tells Bob that he can have a deal done and dusted for the property in weeks, but as it will be done so quickly the purchase price will be no more than £80,000.

Bob is worried about the low price as he only bought the house a year ago for £100,000. The “Expert” reminds Bob that £80,000 will pay his mortgage off and get the lender off his back. After some cajoling, Bob agrees to the deal.

Is this making you uncomfortable yet?

Anyone who has worked in mortgages for any length of time will be screaming at their screen telling Bob not to go with this deal. Lenders do not like to repossess properties. It takes a lot of time and effort to do this, as well as a lot of money. It must go through legal channels and it rarely happens. Missing payments is a bad thing, but lenders will work with customers to move through financial difficulty so long as the customer is open and communicative. Not many people realise this, and Bob Smith is the very definition of a vulnerable person.

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The “Expert” thinks they are solving Bob’s problem, but where will Bob live when he sells the property at a £20,000 loss?

In this scenario, the investor who buys the property will either sell it immediately at something close to the actual value or will rent it out and then a few months later pull the equity out.

I see these D2VM letters and leaflets often. I’ve received several myself, and I know many people who have also received them. Apart from increasing awareness, I’m not sure what the answer is to stop vulnerable people from being ripped off. I accept that there will be many deal packagers and D2VMs who want to do the right thing, but I fear there is an increasing number of people who have drunk the kool-aid and are convinced there is plenty of money to be made by finding below-market-value properties, agreeing on a deal and then selling those leads to investors. My concern is for the vendor; the person selling the property on the cheap and who may not have been given the best advice.

I wrote a few weeks ago about the industry surrounding Property Investing Courses and how it needs to be regulated. I think the answer to deal packaging and D2VM is that it should be regulated, and those practising should be certified, and each deal should be logged with an independent body and checked to make sure no one has been ripped off.

Reading through all this just makes me angry all over again about deal packaging and D2VM. It just feels wrong. Please, if you find youself struggling with a mortgage seek independent advice before agreeing to any unsolicited deal.

Final Notes

Thanks again for reading Mortgage Advisor on FIRE. There will be two more instalments before I have a break for India. I’m looking into the possibility of having a guest blogger to post in my absence and I will update regarding this in the next week or two.

If you have enjoyed this article, or others in the past, please share the article on social media. Thank you in advance.

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Part 259: Jobs, Food, Rockets, and Lego

Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss looking for a new job, and compare the cost of Gousto and shopping from the supermarket. Also, a nerdy bit on rockets and technology.

Weekly Update

It’s one of those times in life when everything just seems to be on hold. It’s the final stretch of the calendar year, and the cold weather is starting to take hold. Our apartment can get very cold. Last winter it got to the point where we could see our breath indoors. We made sure Poppy was nice and toasty, but we tried to hold off on using the heating (we’re all electric here) as much as possible due to the high cost. We layered up and there was something fun about the whole experience. This year we will not be quite so militant.

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The final bits of admin relating to the BTL sale seem to be complete now. We’ve settled all our bills, fees, and taxes, and closed our joint account down. The last remnants of the ~~Old Republic~~ BTL experiment have been swept away.

There is one thing that has changed this week, with Oana leaving her job. I fully support her decision even though it means I might have to pick up some work in the new year. When you are in a long-term relationship, goals, priorities, and stress are all shared. I don’t understand when couples have no understanding of their partner’s finances, and by extension, their joint finances.

I’ve not had to look for a job for almost fourteen years, so this is all a bit foreign to me. I’ve been tinkering with my CV and casting the net out there, and as expected I’ve been approached by several scammers. One consequence of this is that I’ve got to start being a bit more sensible when I answer the phone to unknown callers because it might be a legitimate recruiter. If it’s clear they’re not legit, then I still have my fun.

“No hablo Ingles!”

A few days ago I had another one of those calls where they’re asking about the car accident I had…

Scammer: Am I speaking with David Scothern?

Me: huh?

Scammer: I’m calling about the car accident you had.

Me: I don’t speak English.

Scammer: You don’t speak English?

Me: Did I stutter?

Scammer: …

Me: …

Scammer: What language do you speak?

Me: No hablo Ingles

*call ends*

On Thursday I went to a viewing with my Dad for a place he was thinking of buying. Yet again, it was an example of the listing having almost no relationship with the reality of the property. I get that agents want to make a property look good, but all this does is annoy people when they get their hopes up and turn up at a place that is, to be blunt, a shit hole.

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Some people want a project to get stuck into, and other people want a place that’s pretty much ready to move into. If listings were honest, it seems logical to assume that you might get fewer people viewing but at least they’ll know what to expect.

I also had my follow-up dentist appointment, and it’s always uncomfortable because I struggle to breathe through my nose. So when I’ve got multiple fingers, tools, liquid, and whatnot all in my mouth I pretty much have to hold my breath. I also got to enjoy a few hours of the left side of my face being numb, which is not a pleasant experience.

Food

Friday evening was good fun as we had some friends over for dinner. Our guests were Romanian and I was in charge of the food. I made a soup which went down a treat. I’ve been asked for the recipe by one of our guests, so I figured I’d pop it in here as well, which you will find below. Our guests brought a few dishes including an amazing homemade apple cake. Apple desserts are some of our favourites, and Oana and I smashed through it.

It’s a spicy, garlic, chicken, and spelt soup, served with garlic and parsley oil. It’s inspired by a Gousto recipe with a few added ingredients and tweaks to the process.

Ingredients (for four people)

Chicken breast (x 4)

Spelt (250g)

Baby potatoes (750g)

Brown onions (2 medium)

Carrots 500g(ish)

Green Pepper (1 medium)

Garlic (lots)

Red chilli x 1 (adjust to taste)

Spinach (200g)

Fresh parsley

Knorr chicken stock pots (x 2)

Soy sauce

Dried bay leaf

Ciabatta or baguette

Olive oil

Salt

Pepper

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Cooking

You’ll need a big pan/pot to accommodate all the ingredients and a good amount of liquid; approx 2 litres. Or, you can split it amongst smaller pans. Also, preheat oven to 200c.

Chopping

Onion finely diced
Carrot diced
Garlic
Green Pepper
Parsley
Chilli
Potato into bite-size pieces

Heat some oil in your pan(s) and add the onion, carrot, and some salt. Cook over medium heat for five minutes.

Add the garlic and green pepper. Cook for another five minutes.

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Boil two litres of water and add to the pan(s). Then, add the stock pots and the fresh chilli, with a splash of soy sauce. Stir through. Then, add the potato and some fresh parsley and stir again.

Cover the pan leaving a small gap. Let the soup gently boil/simmer. Stir occasionally. Cook for 30 minutes. Depending on how much liquid you like in the soup you may need to add water throughout the cooking time.

Garlic and Parsley Oil

This is a Gousto recipe which elevates an excellent soup into something akin to a spiritual experience.

In a small bowl mix some olive oil, chopped fresh parsley, and chopped garlic. Set aside until ready to serve.

Bread

Slice the bread into approx 1cm thick slices. Put them on a baking tray and drizzle with olive oil. These will need approx 6-8 minutes of cooking.

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Chicken

Place the chicken breasts into an oven dish. Season with salt, pepper, and olive oil, and mix around making sure the chicken is seasoned on all sides.

Cook for approx 15 minutes, and then remove from the oven.

Butterfly the chicken to see how it is cooking i.e. no uncooked sections. Once the chicken is opened up, season the inside as you see fit with salt, pepper and olive oil. Cook for a couple of minutes more.

Remove the chicken from the oven and use two forks to pull the chicken apart. Once the chicken has been shredded in this way, add to the pot of soup.

Once the soup is cooked, with the spelt and vegetables having the right amount of bite, you can add the spinach and cook for another minute or two. The spinach will wilt almost instantly.

Serve the soup with a few spoons of garlic and parsley oil on top, with a couple of slices of the toasted bread.

I’ve mentioned in recent weeks that I’ve enjoyed the coffee at 84 John Street, and although I wasn’t able to make it there this week for another coffee, I did discover another new(ish) place in the city centre that made me an excellent drink; 2323 Coffee. It was pretty quiet when I popped in but they had a decent-looking selection of cakes and pastries, and the coffee I had was great. The milk had been prepared with care, and it wasn’t overheated. The coffee was mild, with a slight cereal taste. I enjoyed it and would definitely go back, and maybe sit down and have a bit of cake too.

Zoomies

If you’ve ever had a cat, you should be familiar with zoomies. It’s when a cat suddenly decides to sprint like crazy, with little regard for crashing into things. It’s funny and utterly adorable. Zoomies can be triggered by a variety of things and one of the common causes is when they’ve just pooped. Why am I talking about this, you may be wondering…

At least several times a day I have random thoughts pop into my head that just make me laugh, and one of those was how life would be if people got zoomies after going to the bathroom. The flush goes, and you suddenly have the urge to smash the door down as you come sprinting out of the bathroom with a crazed look in your eyes. It would be amazing. Strange, but amazing.

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Diabetes UK Step Challenge

A massive thank you to those of you who have donated, and a reminder that I’m still accepting donations until the end of October. If you’d like to donate, you can do so here.

Universal Limit for Technological Development

I recently read an article that suggested an explanation for the Fermi Paradox, which argues there may be a Universal Limit for Technological Development (ULTD). The idea is that technology becomes increasingly advanced, and reaches a point where it’s impossible to advance it any further. There are two primary reasons for this; firstly, because of the cognitive processing limits of the beings creating that tech, and secondly, because of the resources necessary to perform the experiments needed to advance our understanding of the principles underpinning such tech, like vast particle accelerators in space, or huge solar farms orbiting the sun.

I think there are some interesting points made here, but I don’t think it’s the right answer to the Fermi Paradox in isolation. I think there’s more going on here, and I think much of it has to do with our environment.

Let’s talk about food for a moment and regional variations in diet. We don’t have to go that far back in time to get to a point where people ate what they could grow in their immediate environment, and what was in season. It’s a fairly new feature of society that we can get almost any ingredient at any time. It was in my lifetime that Boris Yeltsin visited a typical American supermarket and had his whole worldview shattered by how this average store had such an abundance of food available.

How does this relate to the Fermi Paradox and ULTD?

Ok, let’s talk about space exploration and The Tyranny of the Rocket Equation.

If you want to launch a satellite into orbit you need to achieve a specific escape velocity, which in turn depends on what type of orbit you want i.e. circular, stationary, etc. If you want to leave Earth behind and travel within the solar system you need to achieve a higher speed, sometimes called the second cosmic velocity (approx 11.2km/s). The third cosmic velocity, that is needed to escape the solar system, is even higher (and also depends on your distance from the sun) at approx 42km/s from Earth’s orbit.

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Anthropic Principle

Our solar system seems perfectly suited for us and is often an argument put forward for a creator, but this ignores the anthropic principle i.e. we could only make this observation because we are here, and we are only here because the environment allows it. If our system was just slightly different, or if Earth was slightly more massive, then it would be impossible for us to escape our planet’s gravity using chemical rockets. I’m not saying it would be difficult; I’m saying it would be physically impossible.

Remember the Tyranny of the Rocket Equation? This refers to the calculation completed to determine how a rocket will work in terms of weight, fuel, thrust, and so on. Basically, you need more fuel for more thrust, but the more fuel you have, the heavier you are, and the heavier you are, the more fuel you need. It’s a cycle, and if we were living on a world with just a fraction more gravitational pull, we would be stuck on the surface and not be able to escape using chemical rockets.

Much like how we would eat what was locally available, technological progress follows paths that are open to us through circumstance. If you live on a small island chain made up of flat, sandy land, you’re unlikely to develop extensive mining knowledge instead of fishing, for example.

Gravity…

If we imagine a planet in another solar system that has 1.6g, for example, and no natural satellites, it’s easy to understand why that planet’s inhabitants may not turn their attention to space travel. Escaping the gravitational pull of the planet would be impossible without using something like nuclear pulse propulsion. Not being able to put satellites in orbit would impact everything from weather forecasting to GPS networks. Without a moon, there would be no stepping stone to the rest of space either.

So how does this relate to ULTD?

Although this hypothetical civilisation may not develop space tech as we understand it, it may advance down a different path. Perhaps they develop fusion, or tech that allows them to explore oceans under greater pressure. Maybe they develop advanced nanotech or genetic modification.

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So, whilst I believe there are limits to what technology can be developed, referring to it as universal limits our imagination, and may result in us giving up too easily.

Can lessons from this be applied to FI?

I’m glad you asked. Yes, they can.

In some ways, the rocket equation and the impact of gravity are similar to working out what you need to achieve for financial independence. The FIRE formula is so simple that I think it makes people doubt its validity.

25 x desired annual spending/cost of living.

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That’s the number you need to hit in your investment pot for a retirement that will, in roughly 95% of scenarios, work.

The biggest issue here, in my experience, is that people rarely know what they actually spend. If your spending is more, you need more invested, but as a higher spender, you have less to invest from your salary each month than, well, if you spent less. So it becomes a balancing act between how quickly you want to retire and what standard of living you want now and in the future.

Letters to Oana & Looking Back

It’s been a while since I’ve had the chance to update these two projects but stay tuned for updates soon.

What I’m Doing

Listening: Death’s End by Cixin Liu (audible).

Watching: nothing at the moment…

I’m almost done with the third book in the Remembrance of Earth’s Past trilogy (what some people refer to as the Three-Body Problem series). It’s my third time going through the audiobooks and I’ve enjoyed them just as much as the first two times.

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My favourite book is the second one; The Dark Forest, and I can’t wait to see what Tencent and Netflix do with their respective adaptations for television. The second book has a couple of events that are just mindblowing and I really hope they do them justice.

In a few days, the second book in the Good Boys series by Jeremy Robinson will be released. I’ll be downloading that as soon as I can.

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £92,865.67.

Fuck It Fund: £2,230.27.

Pensions: £86,293.43.

Residential Property Value: £237,447.00.

Total Assets: £433,936.37.

Debts

Residential Mortgage: £185,383.74.

Total Debts: £185,383.74.

Total Wealth: £248,552.63.

The only noteworthy change is that the valuation held by our mortgage lender for our property has been updated. I don’t think the valuation is entirely accurate based on how properties are selling in this area, and I think it’s a little on the high side. That being said, it’s how I’ve always recorded the value in this blog so I’m going to stick with it. Ultimately, the valuation is irrelevant unless we decide to sell.

My total non-property investment value is almost at £200k, which is a huge milestone to hit.

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Lego and Gousto

In the last couple of weeks, I’ve had separate conversations that did not seem to be linked, but the more I’ve thought about it the more connections I’ve drawn. I’m thinking about Lego, the building block toy, and Gousto, a food delivery service providing ingredients and recipes.

Both companies provide a similar service in that they sell components alongside the instructions to turn those separate components into a whole object. For Lego, this is supplying pieces of plastic that are combined to form a replica of something, be it the Titanic or a ship from Star Wars.

It’s not just the raw materials…

When I was a kid, it seemed that Lego was an accessible toy that was not overly expensive but it seems as though it’s become a luxury item in recent years. I’ve often wondered what the markup is on each set because the cost of producing each piece of plastic must be very low. However, when you buy a set from Lego you are not just purchasing the materials, you are also paying for the intellectual property in the form of the design. You are paying for the time and effort that went into designing the set, and the instructions, and if it’s a licensed set from Marvel, DC, Fortnite etc, then you are probably paying for that as well.

For Gousto it’s a similar concept. The raw ingredients are almost certainly going to be cheaper if you source them yourself, but you are not paying just for the items of food. You are paying for the time and effort that went into making the recipe, and for the recipe card which you can then use again. In respect of the food, because it is all portioned out you are paying for that service as well. For example, you might not use rice wine regularly and buying a bottle may cost a few pounds. The recipe may only call for a splash of this ingredient, and buying a whole bottle could be wasteful. As Gousto provide the ingredients already measured out, you are not experiencing that wastage.

The Comparison

So, what I’m going to do is a bit of in-the-moment research. I’m going to pick five recipes from Gousto and then work out the cost of buying those ingredients from Tesco (it’s our closest supermarket). To make life simpler, I’m going to try and use recipes that use mostly the same ingredients as it will make buying in bulk easier. I’ll then compare this to the standard cost of a five-meal box for two people. My prediction is that buying the food will be cheaper, but there are intangible factors you can’t put a price on such as being given a tried and tested recipe and having the food delivered to your door.

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A typical Gousto box for two people, with five meals, comes in at roughly £50 including delivery. There are some factors which will cause the price to fluctuate, like selecting premium recipes. £50 is a decent benchmark to use though.

Typical Gousto Box

I’m going to use the following five recipes, which I’ve tried to group as they use similar ingredients:

Garlic mushroom and sage gnocchi
All in one chicken breast and gnocchi cacio e pepe
Mushroom pasta bake with cheesy truffle breadcrumbs
Brazilian-style black beans with zesty lime chicken
Warming chicken bhuna with rice and naan

Total Ingredients needed (not including seasoning, herbs, spices), with prices, assuming bought from Tesco are below. Note, that some of the amounts of specific to the recipes and can’t always be purchased exactly in those amounts. I’ve tried to align as closely as possible…

Shopping List

Gnocchi 700g x 2 (£3.70)

Chestnut mushrooms 330g (£2.20)

Cheddar cheese 120g (£2.50)

Pine kernels 30g (£1.90)

Roasted garlic paste 15g (£1)

Chicken breast 750g (£6.25)

Tomato x 2 (£1)

Soft cheese 100g (£2)

Grated Italian hard cheese 30g (£1)

Chicken stock x 3 (£2)

Pasta 200g (75p)

Flat white mushrooms 150g (£1.25)

Panko breadcrumbs 30g (£1)

Garlic (£1)

Black beans 390g (49p)

Rice 260g (50p)

Lime (24p)

Brown onion x 2 (£1)

Chipotle paste (£1.80)

Red chilli (70p)

Spring onion (65p)

Cherry tomatoes (£1)

Garlic naan x 2 (£1.85)

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In total, I make that £35.78, but it doesn’t include all the things you have to buy periodically for your cupboard, like salt, pepper, dried herbs, oils, vinegars, and so on. I’m surprised that the difference in cost is not bigger, and it makes me wonder what sort of markup the supermarkets are placing on certain items, and just what sort of deal Gousto get from their suppliers. I think Gousto probably make a decent saving on their vegetables by sourcing ones that are rejected by supermarkets, and I have to say that the quality of some of the fresh veg we get from them is poor.

The quality of the veg is one of the major reasons why we’ve just binned off our subscription from next week. The recipes are generally great, and how the various dried ingredients are organised is helpful. It’s just that at least half the time we have to replace some of the veg with stuff we got from the shop.

I think these services are a very good idea, but more care needs to be taken when it comes to quality control.

Competition

No one guessed correctly from last week, and I’m not going to give the answer as I may return to it in future. If you think you know the answer, please leave a comment.

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Here is a reminder…

Below is an image made up of two pictures; one from Four Lions and one from Game of Thrones. There is a link between the two and it’s quite obscure, but the first person to correctly guess in the comments will receive a little gift from me (if they’re comfortable telling me their address, that is).

That’s all for this week. Thank you for reading. If you enjoyed this post, or have any questions or feedback, please leave a comment below.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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:

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Biolink

You can now find all my social media pages by checking out my Biolink:

bio.link/davidscothern.

Part 258: Hitting a million steps…

Hello and welcome back to Mortgage Advisor on FIRE. This week I look back on a successful end to my walking challenge for Diabetes UK. Also, the fallout from selling my BTL, and other random musings.

Weekly Update

This week saw me finish up my walking challenge to raise money for Diabetes UK. It was a three-month effort to hit one million steps, and on the last day, I hit the goal. Although it became a bit of a chore towards the end I’m glad I took part, and that I succeeded. The window for accepting donations is still open, so if you’d like to contribute you can do so here.

I’m thinking about incorporating a new step challenge into my daily life. I’ve felt better with all the walking, and it’s helped with my weight loss. I’m not going to do anything too extreme, and I think that a target of 100,000 steps each week is doable. My week would start on a Saturday and end the following Friday, as that’s the day I normally collate all the data for the blog that week.

Cost of Dental Care

I had a small win on the Premium Bonds and my dentist quickly took that cash. Private dental care is so expensive. I had a check-up and some x-rays, and I’m having a filling repaired next week, and it’s £310. It’s crazy.

Dental care is really important and yet it’s treated almost like a luxury. Poor dental hygiene can lead to all sorts of health problems down the road and it just feels wrong that quality care and treatment is not accessible to many people.

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Funding healthcare in the UK is an emotive subject, with the NHS being both a source of pride and frustration. Pride, because free healthcare at the point of use is a great benefit for society. Frustration, because the service is badly managed by the government and is creaking under the weight of high demand. I would gladly pay a little more in tax to help improve the NHS, but the real question is how much extra is needed if you want to bring dental care into the fold.

In 2022 just over £3B was spent on dental services in the UK. Assuming that the figure has increased to, let’s say £4B, then how much extra tax would need to be paid by the average taxpayer?

Some rough calculations suggest an extra £10 per month for the average taxpayer. This is based on there being approximately 37.5 million taxpayers in the UK. Now, if this tax burden was spread out in line with the income tax bandings we have, then the lower earners would pay less and the higher earners would pay more. It doesn’t seem like that much of an increase to grant free dental care to all who need it.

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Annoying Phrases

ATM machine. PIN number. Seeing as though ATM stands for automated teller machine, calling it an ATM machine is just bizarre. It’s the same principle for PIN number; personal identification number number. Yeah, that just rolls off the tongue.

Anyway, there’s the guy who was recently fired for his browsing history. In an interview with the venerable publication, Ladbible, he said;

“The consequence of me doing this is that I’ve had to do a complete 360 turn in terms of my own career and I’m now doing something that I never in a million years thought I’d be doing.”

Ah, yes, the 360-degree turn that ends with you facing **checks notes** the same fucking direction as before.

His browsing history included searches like “Simon Cowell botched botox” and “Does Turkey teeth hurt”.

I don’t think I need to say anything else about this one.

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Customer Service

It’s been a little while since I vented my frustration at poor customer service. Oana and I had a few items to return to retailers this week. Our printer is out of ink, so we couldn’t print anything. Normally, we go to the library to print as it’s only a few pence per sheet. However, the library printer is out of order.

We asked the retailers if there was another option and they all stated the Post Office could print them for us. No mention was made of any cost for this. When we asked at the Post Office they confirmed they could print them off for us. Again, no mention was made of any charge for this service. Once the labels were printed and attached to the boxes, we were then told there was a charge for this.

How the Post Office had replied to us made it seem like they were just doing us a favour by printing these labels. I said after that if they’d told us there was a charge, we wouldn’t have bothered, and that it was pretty poor to not inform us of the charge before completing the printing. It was £1 per label; not a huge amount in the grand scheme of things, but the library charges 20p per sheet, and a new ink cartridge would bring the cost per sheet down much further.

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When I made these points to the owner of the PO, he just shrugged his shoulders and smirked.

Not just any bank, this is M&S Bank…

On the same day, I had another frustrating interaction with M&S Bank. I opened a credit card with them a few months ago but hardly used it because the app is awful, and the website doesn’t accept my login information. So, I tried closing it down through live chat but they told me I had to complete a form, which didn’t work. I was told I could complete a form via the desktop site, but I couldn’t log in even after resetting my info. The only option left to me was to call them.

So many companies have the same two bullshit messages on their phone system; first, they’re experiencing a higher volume of calls than normal. Second, it will be quicker and easier to deal with my query online.

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So, if you’re always experiencing a higher volume of calls than normal, then you don’t understand what your actual normal rate of calls is. It’s 2024; no one wants to have to deal with someone over the phone anymore. If someone is calling a business, it generally is because they’ve not been able to sort their issue out online and calling is their last resort.

Can’t do anything until you complain…

The call went pretty much as expected. Ten minutes on hold listening to those messages on repeat. The agent answered, listened to my query, and then ignored all that I’d said and told me I could deal with this online. I again explained why I couldn’t. He again ignored me and said he couldn’t close the card over the phone. I asked to register a complaint. I’m put on hold for another five minutes before the agent comes back and says he can close the card after all.

Incredibly, someone at that level of the organisation was able to effect a major policy and process change in just a few minutes. Absolutely incredible. No sarcasm whatsoever.

Good service is the exception, not the rule…

I seriously despair at dealing with most businesses now because I just expect to be given crap service. However, we did have a positive experience the other night. We called a restaurant we’ve not tried before to ask a question about the menu. We’ve booked for our anniversary and wanted to check a couple of details. There was no answer.

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A few minutes later the restaurant called back explaining they’d just missed our call, and asked how they could help. We asked our questions and got a simple answer back clarifying what we wanted to know. It was a simple interaction, but the fact they called back was a definite positive. Most businesses would just ignore the missed call and assume that the person would try again.

More Walking

On Saturday Oana and I went for another long walk. We returned to 84 John St. for a coffee and the guy who served us last time remembered us and asked how I’d got on the previous week with my walking challenge. We had a bit more of a chat and I left with another great coffee. If this place was more local to me, it would be dangerous as I’d be there three times a day for a coffee.

We walked up to Meersbrook Park which offers some fantastic views of the city. We also stumbled across some more filming locations for the film Four Lions, which is one of our favourite things to watch at Christmas bizarrely. After walking through the park we set off towards Heeley City Farm and had a little look around, before setting back off in the direction of home.

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In total, we completed a further 20,000 or so steps on this walk. It’s been great for our mental and physical health being out and about in the fresh air, and we are keen to continue this trend.

Peddler Market

At the start of each month, there’s an event in our area called Peddler Market, where there’s street food, live music, a bar, and some arts and crafts stalls. This weekend was the tenth anniversary of PM starting. Oana and I debated whether to go and the conversation went a little like this:

Me: What we thinking about Peddler?

Oana: Not sure, what do you think?

Me: Let me check who will be there.

Oana: Kebab Cartel?

Me: Yup, they’ll be there.

Both: We’re going!

We arrived at the warehouse and ignored everything as we closed in on Kebab Cartel like a laser-missile. We ordered an Escobar each and it was amazing. Their food is normally great, but this was just beautiful. After we ate we had a little chat with one of the guys from KC and he was really happy that we enjoyed their food. If you ever see them at an event, definitely give them a try.

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After the main, we shared a cookie from Depot Bakery and it was also incredible. It was a sticky toffee and date cookie and it’s one of the best we’ve had. All in all, a very good and enjoyable Saturday.

Health

I’ve lost more weight and I’m now down to 115.3kg. The walking is helping, as is controlling my blood sugar and keeping up with a better diet. According to my scales, which have all sorts of fancy measurements included, I have the body of a 44-year-old. So that’s something new I’ve learned.

Letters to Oana

Part 2 of the series Letters to Oana is now live.

Looking Back

Part 15 of the Looking Back series is also live.

What I’m Doing

Listening: The Dark Forest by Cixin Liu (audible).

Watching: nothing at the moment…

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £92,481.09.

Fuck It Fund: £1,796.80.

Pensions: £86,166.38.

Residential Property Value: £234,044.00.

Total Assets: £429,588.27.

Debts

Residential Mortgage: £185,383.74.

Total Debts: £185,383.74.

Total Wealth: £244,204.53.

I had my pension statement through this week and the projection is that it should be worth almost £600k by the time I hit the declared retirement age of 69. Although this looks great on paper it’s important to remember the assumptions built into that projection; that I’ll continue working there and continue paying into the pension at the same level. My pension has increased by almost £2k since last week which is amazing growth in just a week, but it could be a blip due to general market volatility.

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More BTL Frustration

Although it’s been over a month since the BTL sold I’m still having to deal with the various utility companies and council tax. On the day the sale was completed, I contacted the gas, electric, and water companies, and then the council tax people to let them know the property had sold. The water was dealt with efficiently. The others were not. It turns out my email to the council tax office was ignored (their words, not mine). It has since been sorted but it shouldn’t take multiple emails, calls, and personal visits to their office.

The one that has really pissed me off is EDF. Someone at their end has made a mistake and changed their records to show that we were responsible for the utilities for periods we were not, like when the property was tenanted and someone else was paying the bill. Rather than them correcting their own error they wanted me to send in evidence to show it was let out on dates going back a couple of years. On Saturday, whilst I was on my walk with Oana, we received an email from EDF stating the electricity account was £700 in debit from the last two years; a time when the property had two different sets of tenants who were paying their electricity bills on their own accounts.

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All this means yet more work to correct errors on behalf of huge businesses that are set up to be sort of right, some of the time. It’s this sort of bullshit that adds to the argument that BTL just isn’t worth the hassle.

Final Notes

Before I finish up this post I have two quick bits to update on. First, the finished Lego Titanic model that I had for my birthday.

It was such a fun, satisfying build and is one of my favourite ever sets.

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The second is a little competition. Below is an image made up of two pictures; one from Four Lions and one from Game of Thrones. There is a link between the two and it’s quite obscure, but the first person to correctly guess in the comments will receive a little gift from me (if they’re comfortable telling me their address, that is).

That’s all for this week. Thanks for reading.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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.

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Part 257: Patience and Inaction

Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss patience and inaction in the context of investing. Also, a busy week of walking.

Weekly Update

Last Sunday, Oana and I walked along the canal and river to Meadowhall. In terms of the weather, it was a bit rubbish, but the walk itself was great. We saw lots of wildlife along the river, including different types of ducks such as Mallards and Gooseanders. We also saw Cormorants, different types of Geese, Herons, a Kingfisher, and much more. For a moment we also thought we saw an Owl, but it turns out it was just a statue. Fortunately, no one saw Oana trying to attract its attention. Anyone claiming I also tried to get its attention is lying.

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Once we got to Meadowhall we walked over to Tinsley to start the walk back along a different route. We made it about two-thirds of the way before exhaustion, and the fact we were absolutely soaked from the rain, got the better of us. An Uber was requested and we got home, cleaned up, and made some food.

Walking and Cooking

We’ve been enjoying our regular walks, and we’ve also enjoyed making new food via our Gousto subscription. I made an incredible mushroom risotto. I added a few bits and changed a couple of the processes, but I think it would have been nice regardless. The recipe called for two types of mushroom; chestnut and flat, but I added some shitake to the mix. Also, once the mushrooms had released all their liquid, rather than draining and discarding it, I used it as part of the stock for when I added the rice. There were a couple of other tweaks made to the amounts and timings in the recipe, but when we ate it we were blown away. It was lovely.

Much of the week has been spent either walking or working on my Lego Titanic model. I’ve also been contacted by numerous recruiters asking if I want to discuss new jobs. I generally don’t, but one opportunity sounded positive so I scheduled a call which then never happened. There are a fair few bullshitters out there.

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Scammers

On the subject of which, I experienced a pretty poor attempt at scamming earlier in the week. I’m looking to sell a couple of things on Facebook Marketplace; nothing too exciting, just some exercise equipment. Someone contacted me and was keen to buy. I thought their use of language was a bit weird, but figured they were just a bit out there. I normally prefer to receive payment by bank transfer, but this person started going on about having a business bank account and needing my email address to generate an invoice. This is all bullshit, and if you are asked to provide this in future just ignore the request and block/report the other person.

How to protect yourself

I believe that the idea is they send you an official-looking invoice/statement showing that payment has been made (it hasn’t) and then they will ask to collect the item soon after. So, you end up without an item and without payment. Another strand to this is that the payment confirmation they email maybe for too much money, at which point they will ask you to refund the difference. However, as no money has been sent to you, you are just sending the scammer money.

Whilst I’m on the subject of scams, if you get a call from an unknown number and they ask a question that would normally result in you answering “yes”, please try to train yourself not to do so. Some places will try to record your voice as a way of getting access to other accounts. I suspect the risk is minimal, but minimal is not the same as no risk.

An example of what I mean…

Scammer: Is that David Scothern?

Me: who is calling?

Rather than…

Scammer: Is that David Scothern?

Me: yes.

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The important thing to remember is that when anyone contacts you out of the blue, whether it’s a phone call, knocking at your door, or approaching you on the street, they are not trying to do you a favour; they are trying to get something from you. It might not always be immediately clear what they’re trying to get, but you can bet they’re after something.

Pizza

Towards the end of the week, I went out for some food with Oana and a few of her colleagues. They’re a nice bunch of people but I was quite focused on my pizza because, well, it’s pizza. On Saturday Oana and I went on a big walk around the city. We set off in the direction of Norfolk Park and tried to get as high as possible, geographically speaking, not on drugs.

We don’t deserve animals

Along the way, we saw an older woman with crutches/walking sticks very slowly walking up the hill in the park. She had two small dogs with her, and neither of them was on a lead. These dogs were so sweet, staying with the woman and matching her pace. One of the dogs approached us and sniffed us a little; I think he was making sure we were not a threat. It was so sweet and heartwarming seeing these dogs being so protective and attentive. We asked the woman if she was ok and if she needed help, but she said she was fine. We don’t deserve animals; they’re too good for us sometimes.

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Later in the walk, we saw a cat, which we stopped to talk to. This cat was incredibly sweet and had a lot they wanted to get off their chest. We stopped for ten or fifteen minutes and this cat was talking to us, rubbing up against us, and generally being a sweet little thing. It wasn’t a stray and was living in the home at the entrance to the park, but it definitely wanted to be our friend.

Coffee

We debated whether to go to a different park, or whether to head towards a food hall we wanted to check out. In the end, we decided on the latter. We stopped at a coffee place, 84 John Street, and had a nice chat with the guy making my latte. He seemed like a nice, genuine, kind of guy and I liked that he took real care and attention to the process of making my drink.

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A common mistake places make when heating milk is that they simply overheat it. Also, the depth at which the steam nozzle is placed in the milk can impact the texture. For a latte, you want the milk to be silky smooth and not too foamy. This latte was bang on. I’ll definitely return for a coffee at some point, but it’s not anywhere close to my usual haunts.

Health

My weight continues to drop, and I’m getting more people asking if I’m losing weight. There’s not a simple magic bullet I can point to and this weight loss is down to a combination of things; more physical activity, eating better, and coming off antidepressants.

Poppy

It was Poppy’s 15th birthday this week and we spoiled her with some shredded chicken. She loved it. Pops is now the cat we’ve had the longest, and she’s still loving, affectionate, and completely crazy. We love her so much.

Diabetes UK Step Challenge

From July 1st until September 30th Diabetes UK is running a step challenge to raise money for their cause. There are three step targets to choose from; 500k, 1m, or 1.7m. I had originally gone for the 1.7m steps, but it’s become clear I’ve bitten off more than I can chew. I’m now aiming for the 1m target.

If you’d like to follow my progress or make a donation, it can be done here.

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Letters to Oana

Part 2 of the series Letters to Oana is now live.

Looking Back

Part 15 of the Looking Back series is also live.

What I’m Doing

Listening: The Three-Body Problem by Cixin Liu (audible).

Watching: nothing at the moment…

Yes, I’ve started on The Three-Body Problem series of books again. Don’t judge me – they’re awesome.

Website Stuff

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £92,927.90.

Fuck It Fund: £1,716.35.

Pensions: £84,390.08.

Residential Property Value: £234,044.00.

Total Assets: £428,178.33.

Debts

Residential Mortgage: £185,693.35.

Total Debts: £185,693.35.

Total Wealth: £242,484.98.

We’re almost in the final third of the year and I’m happy with how my finances are shaping up. Now the BTL is off the books, I’ve got a more accurate idea of what my situation looks like. I’m delighted at the growth in my ISA and pension funds, and my hope that they’d hit £80k by the end of 2024 has been achieved early. I’m not going to get my hopes too high, but I’d love for them to both finish the year above £90k.

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I’m not expecting too much to change in the remaining weeks of 2024. My Fuck It Fund and Premium Bonds will likely change in December as I reallocate funds, but it will then be a waiting game until the new financial year starts in April.

Doing nothing is still a choice…

Many people, in my experience at least, adopt a head-in-the-sand approach to money. It’s seen as too complicated and too big to worry about, and so people just ignore it. The thing is, it’s not the sort of thing that goes away if you ignore it. Our world is built on money, and the more secure your financial position is, the easier life becomes. If you choose to not address financial concerns head-on, it’s still a choice; doing nothing is still a choice. In this respect, doing nothing is very much a bad thing.

Doing nothing is not always a negative though. There are situations where doing nothing is the best course of action. For me, one example is when I’ve put money into my ISA. Once I’ve invested the money, it makes sense for me to leave the money where it is so it can grow over time. Doing nothing, for me, is the best thing.

When it comes to investing, there’s often a strong urge to act, whether it’s buying, selling, or reshuffling your portfolio. We’re constantly bombarded with information about market fluctuations, economic shifts, and opportunities that seem too good to miss. What is often overlooked, however, is that doing nothing can be one of the most powerful actions you can take. Inaction is still a choice, and sometimes, it’s the best one you can make.

Market Volatility

Markets go through cycles of ups and downs, and reacting to every minor fluctuation can be detrimental. Successful investors often emphasise the importance of patience and letting time work in your favour.

One of the key principles of long-term investing is the power of compounding, where your returns generate their own returns over time. By resisting the urge to tinker with your investments constantly, you allow compounding to do its work.

Markets are volatile. It’s common to see dips or spikes in stock prices. However reacting to these short-term changes, especially out of fear or greed, can lead to costly mistakes. By doing nothing during market volatility, you give yourself the chance to weather the storm, which often leads to better outcomes than trying to time the market.

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Investing is not about instant gratification. Many investment strategies take years, if not decades, to fully realise their potential. By choosing to do nothing, you allow your strategy the time it needs to succeed.

Doing nothing is not the same as ignoring risks though. There are times when action is required, such as rebalancing after a significant market shift or responding to a fundamental change in circumstances. However, the key distinction is that inaction should be a deliberate decision, not an unconscious drift. If your financial goals haven’t changed, doing nothing can be the most effective move.

When our financial goals are often set over periods of years, or decades, it can feel as though not much is changing day-to-day, but this is where patience is so important.

That’s all for this week. Thanks for reading, and I hope you have a great week ahead.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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.

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Here’s a recent story on BBC News about the bells…

Part 256: Ring Out Your Bells

Hello and welcome back to Mortgage Advisor on FIRE. This week I go into more detail about the impact of time on compound growth. Also, another eventful week…

Weekly Update

This week has gone by in a blur. I don’t quite know where the time has gone, and it brings me back to something I’ve thought a lot about. Some people claim they would get bored without a job, and I don’t get it. You can do so much to occupy your time, such as reading, spending time with friends or family, getting out into nature, or just going down some deep, nerdy, rabbit holes. Bring on FI, I say.

I’ve got another week of leave and then I’m back at work for a few more weeks before wrapping up in early December. Then Oana and I are heading to London to see Kygo again.

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As I’m approaching the end of my Diabetes UK step challenge I’ve been doing a lot of walking to try and get over the 1,000,000 step target. I should hit the goal but I have to complete around 18,000 steps daily.

The Green City

Oana and I have started having late afternoon and evening walks around the area, and it never ceases to amaze me how much greenery there is in, and around the city centre. On Sunday we stuck to the Kelham Island area and met many of the neighbourhood cats, which obviously took up a lot of time as we stopped to talk to them.

On Monday afternoon, after Oana finished work, she went for a bike ride and I took a walk up to Weston Park. My walk served a couple of purposes; I wanted to get some steps in and see the park, with its squirrels, ducks, geese, and other wildlife. Also, there was a Too Good To Go offer at Starbucks for their pastries. For £3.50 I picked up two almond croissants and two pain au chocolat. There’s some great stuff on TGTG but I’d gone a while without using it, forgetting all about it, until a friend mentioned it in passing.

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Pizza

The middle of the week was mostly taken up with walks and a couple of meals out. We ended up, almost by accident, having dinner at Pizza Express on two consecutive nights. We are now having a break from pizza for a day or two.

One of the walks we completed was up from Kelham Island, our neighbourhood, to Norfolk Park. We had a walk around up there and stopped by the monument. We then thought we would walk over to another park in the area. This is where things got strange.

Mandela Effect or Rubbish Memory?

We both distinctly remember an entrance to this park at the same location. When we arrived there, there was no sign that there was ever a park there. It was like a glitch in the Matrix, or perhaps an example of the Mandela effect. We walked around a little trying to work out if we were misremembering but gave up after a while. This seemed like as good a reason as any to have a meal out, and this accounted for one of the pizza nights.

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In addition to the walks around the various parks, we’ve also been trying to gain access to some of the taller buildings in the city so we can see it from above. We have had some modest success with this, with buildings that are publicly accessible. However, some of the taller buildings require a pass to access.

Sheffield is undergoing a massive regeneration, and it’s almost completely changed from the city we returned to in 2010. It’s mostly for the better but there are still those who complain about every single thing that’s changed. These people are the ones who look back through rose-tinted glasses to the 70s, 80s, and 90s when the city was often packed with buses and cars belching out fumes, with pavements packed with people shoulder to shoulder. I fail to see what was good about that.

Now, we have a city with little traffic in the city centre, with wide open spaces for people to walk and chill. We also have cafes and restaurants everywhere. It’s a much better city, and I can’t understand the arguments against this.

The Bells

In the city centre we have a couple of Cathedrals; the Church of England’s Cathedral and the Roman Catholic Cathedral, called St Marie’s. Oana arranged for us to have a private tour of the bell tower at St Marie’s and it was cool and interesting. We were met by Bob and Maggie who are part of the team responsible for the bells. Now, I’d never realised just how complex the ringing of church bells is. I’d assumed there were a couple of bells that were mechanically rung to preset tunes. I was wrong.

St Marie’s has eight bronze bells of different sizes and weights. Each bell is individually rung by a bell ringer, and the bells can be rung in different sequences and combinations. In total, there are over 40,000 possible combinations, and to play each in turn would take 22 hours and 30 minutes.

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Up, up, up, up the stairs we go…

We were led up a narrow spiral stone staircase to the midlevel where the bells are rung from. We were advised to avoid the ropes as the bells were currently in the “up” position. Another point I was not aware of is how the bells can be stored up or down, i.e. upside down or in a normal upright position.

Bob then talked us through the history of the bells and how they are played, with a demonstration on the ropes. We were then invited to climb more stairs, which then led to a series of wooden ladders. We climbed up to the wooden ledge with just one more ladder ahead of us, but the dust and cramped space made it difficult to progress. My elbow is still causing problems and I didn’t want to worsen the injury, but it was fascinating getting up close to all this history.

Oana and I are in no way religious but the history is something we care deeply about. This is one of those things that we would all be diminished by if the knowledge was lost. Bob and Maggie, and their colleagues, deserve a lot of respect and gratitude for the work they put in. We did not have to pay for this tour, and they did it out of their own free time. We left a donation to the bell fund and thanked them. It was a fascinating experience.

Food

If you want to sign up for Gousto, which we’ve been using, please use my link and you’ll receive a discount.

One thing I’ve come to realise is that when a recipe calls for garlic, it’s bullshitting you about how much to use. I’ve since coined the Garlic Rule; when a recipe states how much garlic to use, simply convert cloves to bulbs and you’ll have a more accurate, and tastier, plate of food.

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Health

I’ve been monitoring my blood sugar more closely in the last couple of months and it’s coincided with some decent weight loss. I’ve dropped almost 10kg since my peak weight earlier in the year. This is due to a combination of more physical activity with my step challenge but also being more mindful about what I’m eating. I think the Gousto boxes have helped with this, as they control portion size. Also, tracking my blood sugar and avoiding eating when the levels are too high is having an impact.

Diabetes UK Step Challenge

If you’d like to follow my progress or make a donation, it can be done here.

Letters to Oana

Part 2 of the series Letters to Oana is now live.

Looking Back

Part 15 of the Looking Back series is also live.

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What I’m Doing

Listening: Good Boys: The Lost Tribe by Jeremy Robinson.

Watching: Dumb Money (Prime).

Dumb Money is based on true events, specifically the Gamestop saga from a couple of years ago. You may remember it vaguely, where a bunch of people got together via Reddit to pump the Gamestop stock. This was in response to several large hedge funds shorting the stock, which means they are betting that the stock will crash. Instead, the price of the stock surged and this cost the hedge funds an eyewatering amount of money.

As entertaining as the movie was, and as funny as the real life events were, it’s important to remember that this was essentially a gamble and was based on the Greater Fool Theory. There are people who made lots of money out of the Gamestop short squeeze, but it all depended on those people selling their stock at massively inflated prices to people who didn’t want to miss out and, I should note I’m speculating here, probably didn’t understand what they were doing. This is the GFT; you are relying on someone more foolish to pay more for the investment than you did.

Another lesson from all this is how values can mean little until you cash out. If you’ve invested in a global fund which is made up of hundreds of stocks, you can be more confident of the value of the units. However, with all your money on one stock you can never be sure what is going on in the background that can pull the rug from under you and cause the stock to crash. There’s the possibility that the stock will explode and increase in value many times over, but again it’s only real if someone else will pay that price for it.

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Morality?

There’s also a question of morality. If you buy a stock that has typically been trading at 10p, and there’s a campaign to pump the stock and it rises to £100, and you then cash in, you are selling those units to someone. It may be a market maker acting as a middleman, but there will be someone buying those shares at the other side. When the stock drops back to 10p a share, someone is caught with their pants down. The only way to not be complicit in this is to not play that game. Yes, sticking it to Wall Street is funny, and there’s truth that “a fool and his money are easily parted” but I just don’t feel comfortable being the one taking that money.

Good Boys: The Lost Tribe

It can’t be a secret to regular readers that I’m a big fan of author Jeremy Robinson. His latest book was absolute insanity and I loved every minute of it.

The premise is that dogs are descended from aliens. Yes, dogs are alien space dogs. The ones on Earth are descendants of a stranded group tens of thousands of years ago. Now, in the present day, a group of space dogs come looking for this mythical lost tribe.

There’s a cast of different dogs, an ex-Army Ranger, a stoner, and a good boy Golden Retriever called Grover that round out the cast. It was hilarious and action-packed, just like his usual stuff.

My new favourite bromance is Chirk, a small yapping member of the doggo special forces, and Sean, a stoner who just rolls with the idea of walking, talking, space dogs.

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Financial Update

Assets

Premium Bonds: £15,100.00.

Stocks and Shares ISA: £92,339.26.

Fuck It Fund: £1,716.35.

Pensions: £83,428.64.

Residential Property Value: £234,044.00.

Total Assets: £426,628.25.

Debts

Residential Mortgage: £185,693.35.

Total Debts: £185,693.35.

Total Wealth: £240,934.90.

I’m almost done moving money around in the wake of selling our BTL. With limits on how much can be transferred between accounts it’s taken a little time to get all the funds where I want them. My ISA is maxed out until the new financial year, so the only changes to that balance will be from market movements and the reinvesting of income received. Which brings me to a topic I covered slightly last week, and that was expanded upon in the comments by one of my regular readers, MaximTsigalko.

Nothing Fucks You Harder Than Time…

Forgive the colourful language but I love this quote. It’s from Ser Davos, a character in Game of Thrones. It can be interpreted in several ways, and one way to look at the quote is as an explanation of just how powerful time is compared to other factors.

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Imagine you have a large rock and you have thousands of litres of water positioned above it. You release the water and it crashes down on the rock, but after the water has dried, the rock will look the same. Now, imagine the same rock being subjected to a constant, smaller, drip-drip of water. Over time, maybe thousands of years, the rock will wear away. This is how time can boost your investments.

Let’s look at some examples to better explain this idea…

Mr is 40 years old and invests £200 each month. For the sake of simplicity we’ll assume this is in a fund that grows 6% a year, ignoring fees, inflation, etc as these will be assumed the same in all examples.

After 25 years, the numbers are as follows;

Total amount invested £60,000
Value of investment pot at end of investment period £138,598
Interest earned £78,598

Compare the above to Mrs who invests £100 each month for 50 years…

Total amount invested £60,000
Value of investment pot at end of investment period £378,719
Interest earned £318,719

There really is no substitute for time in the market. Even if you are only in a position to invest small amounts in the beginning, those amounts can be the building blocks, or foundations, of your financial future.

As the saying goes, the best time to plant a tree was twenty years ago, and the next best time is today.

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Lego Titanic

I’ll wrap up this week’s post with an update on my Lego Titanic. I’ve started building it and it’s great fun so far. Here are some pictures of my progress.

I hope you have a great week ahead and remember to please leave a comment, and to like, share, and subscribe.

DISCLAIMER

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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:

https://step.diabetes.org.uk/fundraising/david4047

Biolink

You can now find all my social media pages by checking out my Biolink:

bio.link/davidscothern.

Part 255: Birthday Week

Hello and welcome back to Mortgage Advisor on FIRE. This week I discuss house buying, time in the market, and look back on a great birthday week.

Weekly Update

It’s been a busy week as I’ve celebrated my birthday, and I’ve had a great time I’m pleased to report.

On Monday Oana and I went for a walk along the canal from Kelham Island to Rotherham. We stopped for photos and lunch along the way, and it took roughly three hours for us to complete the walk. It was so nice and peaceful, and we were able to see lots of ducks, swans, herons, and cormorants. We also saw the new sculpture that’s been showcased in the local, and national news.

People are strange in both good and bad ways, and one of the good examples comes from when you are out for a walk. You can walk down the street and pass someone without acknowledging each other. However, those same two people passing each other in the countryside or along a river or canal, and suddenly it’s all “hello” and “good morning”. It just goes to show how easily people will group themselves based on the most vague situations; we are both walking along the same river, for example.

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Birthday Brunch

We went for brunch on Wednesday morning with my Mom and her husband. The food was amazing; I had salt beef brisket with hollandaise. Oana had Turkish eggs. We ate at Tamper in the city centre. It’s a Kiwi-inspired restaurant although I’m not sure what the Kiwi influence is. Ignoring that for a moment, the food is consistently great and it’s not surprising that you generally have to book in advance.

In the evening we popped down to my Dad’s place and ordered some food in. It was nice chilling out with good food and company.

It was a more low-key birthday than last year, but that’s what I wanted.

Time for gifts…

But what about my birthday gifts? A few people chipped in to help buy me the Lego Titanic, which is amazing, but the service from Lego was poor. The order was placed on Friday 6th September in the afternoon. On the Lego website, it states that if you order before 14:30 you will receive it the next day in Metropolitan locations if you pay £18 for Express Delivery. As someone living in a city centre apartment, you would think that qualifies.

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I knew I’d missed the 14:30 deadline on Friday but logically you would think that it would meet the deadline for Monday, meaning the order would be here Tuesday. You would be wrong. I spoke with Lego on Monday as the order was not yet showing as dispatched and they explained that the Express Delivery timescales only apply from the point the order is handed to DPD.

I was not given any explanation for the next day promise from the Lego website, but I was advised I would get a refund on the delivery fee.

On Tuesday I had to contact Lego again because the courier, DHL and not DPD as I was told, had contacted me to let me know the item would probably be delivered Wednesday the 11th (my birthday), but it might be later in the week. At this point, we are in the delivery window expected from the standard, free, delivery option.

Making the situation worse…

Lego advised that because the order was placed just before the weekend, it would cause delays. I still don’t understand this explanation. I told them I was not impressed and that the delivery would be an issue because I live in an apartment with no secure postroom. Also, items are frequently stolen from the postroom. So if DHL turns up and leaves the box, the likelihood is it will be gone by the time I get home.

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If I had a delivery window, I’d be able to wait for it as I normally do with DPD or Yodel. All I had here was an aim to deliver on Wednesday, but it might be later. If I wasn’t in when DHL arrived and they decided to take it to a collection point instead, I’d have a hard time getting the box home as it’s massive. This is a model costing £589.

Calling bullshit

I explained all this, and why I’d paid for express delivery, and how I wasn’t happy potentially having to cancel plans to wait in on my birthday for a package that might not arrive. Lego said it wasn’t their fault and it was down to their courier. I called bullshit on this; if they can’t exert control over their courier, perhaps they should use a different one. Eventually, I was offered a £20 gift card as an apology. I accepted.

As of Friday, I’d not received the £18 refund of the delivery fee that I was promised on Monday. It turns out they cancelled the refund when they offered the gift card. I was not impressed. After more back and forth I was given the refund and the gift card. It really shouldn’t be this difficult to deal with a retailer. I’d not asked for anything unusual and had simply gone with what I was offered and promised. It’s the first time Lego has let me down this badly though.

Fortunate timing…

I didn’t wait in on Wednesday as I had plans for my birthday. Also, for some reason, DHL doesn’t provide live updates. DPD and Yodel show you where in the queue you are and where the driver is up to, i.e. you are stop 50 and the driver is on 23 of 200. As we were walking through our courtyard I saw the driver ringing our apartment with a massive box at his side. Good timing in the end.

This set is going to be amazing. It’s over 9,000 pieces, whereas the next biggest set I have is Rivendell with just over 6,000 pieces. Getting lost in a huge Lego set while listening to an audiobook or podcast is so relaxing, and it’s no secret that many autistic people feel the same way.

As the week drew to a close I accompanied my Dad on a viewing for a property he is interested in buying. It was a group viewing with a young woman also taking a look at the apartment. The viewing was completed by the agent and the owner had gone out.

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It’s a nice apartment and I spent a bit of time looking at the person’s bookshelf and was amazed how many of the same books we had. I could probably have an interesting chat with them, so I was sorry they weren’t home. They also had a cat, but despite me wandering around going “pspspsps” I couldn’t find them.

My Dad likes the place and has put an offer in, which has been verbally accepted. Property transactions are never simple though, and I don’t think he’ll feel like he can celebrate until contracts are exchanged.

Things to consider when buying a property…

The viewing I attended, and some of the questions I heard the young woman asking the agent, got me thinking about things people should consider when buying a property. We don’t learn this stuff as a matter of course in school, so you’re relying on those you spend the most time with to give you information and advice.

The Agent

There are some great estate agents out there, apparently. The main thing to remember when looking to buy a property is that the agent does not have your best interests at heart. They work for the person selling the property, and generally will only get paid when it sells. They don’t have any obligation to you other than abiding by the law and basic professional guidelines. The long and short of it is they are trying to sell you something. Always remember this and take the information given with a pinch of salt. The phrase, “trust, but verify” springs to mind.

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Exit Strategy

If you are buying a property for cash, i.e. no mortgage, you might be tempted to ignore mortgages entirely. This would be a mistake.

There are many reasons why a property might not be suitable security for a mortgage, such as the proximity of things like takeaways, garages, or other non-residential buildings. The property might be in a flood-risk area, or it might be in a building that has safety concerns. If you are a cash buyer there might not be anyone to point these things out to you, especially if you go for a very basic survey or simply don’t instruct one. What you need to think about is your exit strategy.

Unless you are buying your forever home, you will need to either sell or let your property out when you move. When selling, you need to consider the pool of buyers. If you are only wanting to deal with cash buyers, your list of potential buyers will shrink quickly. If you have a property that lenders are not willing to lend against, then you might find yourself stuck with that property.

It’s for this reason that it might still be worth getting a small mortgage when buying a property because you will have something of a safety net provided by the lender, and you can always pay the mortgage off if you have the funds. Granted, you will pay more interest and possibly some fees for arranging the mortgage, but it is something worth considering.

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Remember, lenders want to make money and if they refuse to lend against a property there will generally be a good reason.

Present and future needs, and the local area…

It’s vital to consider not only your present needs but also what your future needs may look like. Every time you move home you will incur costs and experience a great deal of stress. Where possible, it’s advisable to minimise the number of times you move home. It’s a bit like when you were a kid and your parents would buy you clothes to grow into.

Another factor to consider is how the local area is changing. Where I live, our apartment block was one of the first to go up. Since then the number of apartments and homes within a few hundred meters has more than tripled I would guess. There have been at least half a dozen new apartment blocks built, as well as a number of new eco-friendly homes.

This surge in population has impacted on the availability of parking spaces and increased the need for other public services. Although our area is considered one of the best in the UK (and according to a recent-ish article one of the best in the world) if the population keeps growing it will probably reach a tipping point.

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Who is buying?

One of the biggest mistakes many first-time buyers make is buying a property with someone they’ve never lived with before. There is a huge difference between living with someone, and just sleeping at each other’s place most nights. If you are just sleeping at each other’s, you always have the option to go home but if you are living together, you see each other at your worst. If you are thinking of buying somewhere together, please try living with each other first in a rented place. You may save each other a lot of time, money, energy, and stress.

A friend of mine is going through an awful situation at the moment because he made this mistake. When he was much younger he bought somewhere with his girlfriend. They split up and she continued living in the house. It was agreed he would not pay anything to the mortgage, and she continued living there for years, having other relationships and raising her children there. At some point, she stopped paying the mortgage and this impacted my friend’s credit rating. Also, she put him back on the council tax at the property without him knowing and then stopped paying that. Fast forward a few years and he’s now being chased by debt collectors trying to get their money for the council. The property was repossessed by the bank, and that is another mark against his name.

Seriously, before you sign the biggest financial commitment of your life, please make sure you have done a trial run of living together first.

Amazing Meal

On Saturday we went for a meal at Grappa in Sheffield, and it was fantastic. I had a trio of bruschetta for a starter, and then lamb meatballs in a tomato sauce with pappardelle. It was one of the nicest pastas I’ve had in the UK. For dessert Oana and I shared tiramisu and it was lovely. Oana and I have had lunch here before, but this was the first time we’ve had a proper dinner. We’ll be going back.

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There was one funny incident where Oana and my Mom had both ordered the same starter; mushrooms in a gorgonzola sauce served with toasted bread. They served it on a flat wooden board. A cheese sauce on a board. Yes, as the waitress brought the food over the sauce was dripping off the board across the floor. I think they’ll be switching to plates for that meal from now on.

Gousto

On the subject of food, we are still enjoying our Gousto boxes. The range of recipes is great and the food is mega tasty. If you want to sign up please use my link below and you’ll receive a discount.

Gousto Referral Link

I’ve learned a few things from these recipes as well, such as the massive difference using stock can make to almost any recipe. Also, using soy sauce instead of salt in many non-Asian recipes can work wonders. Something else I’ve learned is that a small amount of marmite in a tomato-based pasta sauce adds a nice depth of flavour.

Diabetes UK Step Challenge

I’m making great progress towards the 1,000,000 step target, and I’ve now completed over 600,000 steps.

You can follow my progress and donate here.

Letters to Oana

If you missed it, Part 2 of the series Letters to Oana is now live.

Looking Back

Part 15 of the Looking Back series is also live.

What I’m Doing

Listening: Not Till We Are Lost (Bobiverse Book 5) by Dennis E. Taylor.

Watching: The Perfect Couple (Netflix).

I frickin love the Bobiverse series. It’s a sci-fi series about a guy who dies and is brought back as an AI, which is then uploaded into a Von Neumann probe. It’s batshit crazy and I love it. There’s some interesting science but it’s not a science lecture; it’s entertaining and thought-provoking.

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Oana and I watched The Perfect Couple of Netflix and it was bad. There are levels of bad when it comes to TV. There’s bad, so bad it’s good, so bad it’s insulting, and so bad they have a choreographed dance number as the intro involving all the cast even though it makes no sense. The only good thing about the show was Liev Schreiber who seemed to be having a great time.

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Financial Update

Assets

Premium Bonds: £14,050.00.

Stocks and Shares ISA: £91,925.53.

Fuck It Fund: £4,016.35.

Pensions: £82,534.00.

Residential Property Value: £234,044.00.

Total Assets: £426,569.88.

Debts

Debts

Residential Mortgage: £185,693.35.

Total Debts: £185,693.35.

Total Wealth: £240,876.53.

I have now maxed out my ISA for this financial year, and I’ve hit the goals I had for my ISA and pension this calendar year. I wanted to get to £80k in both by the end of 2024 and I’ve smashed it well ahead of time.

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The priority now is saving money to use to fund my upcoming mini-retirement. It’s unlikely that I’ll max out my ISA in the 25/26 financial year but if I can get to £100k in my ISA by the start of the new financial year I’ll be delighted with that progress. Typical rates of growth on £100k should see it double every decade without another penny being invested.

In reality it will take a little longer for my ISA balance to double in that way, as I’ll be using some of the income from the ISA to live off instead of being reinvested. I would hope to be earning money again this time next year and so I can speed up the accumulation of my investment pot.

There’s no substitute for time in the market…

I’ve often said that if I knew at 18 years old what I know now, I’d be a millionaire several times over by now. Time in the market is everything.

If an 18 year old was to invest £100pm for twenty years, with typical growth they would have a little over £52,000. If they waited until they were 28 years old and then invested £200pm for ten years, they would only have around £34,500. It’s the same amount of money invested in each scenario; £24,000, but in the former scenario the interest has more time to work its magic.

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Starting early, even if it’s just small amounts, can make an incredible difference over the course of a working life.

That’s all for this week. Thanks for reading and I hope you have a great week ahead.

Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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.

Make a one-time donation

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If you’d like to follow my progress or make a donation, it can be done here.

Part 254: Taxes, Squirrels, and Lost in Space

Hello and welcome back to Mortgage Advisor on FIRE. This week I have a huge announcement regarding my BTL. Also, a cool end to the week, and thoughts on arguing with people. Finally, an update on the stranded astronauts, and how I would rebuild the tax system.

Weekly Update

A short working week as I only had to do Monday and Friday. I’m now off work until October and have just a few more weeks until I leave the business entirely. It’s a strange, almost bittersweet, feeling because this job has been a third of my life. I’ve met some great people, some of whom have become good friends outside of work. I’ve also learned a lot about money, banking, mortgages, and how to navigate the workplace as a neurodivergent person.

The biggest stress of the week has been trying to get the BTL sale over the line. At the start of the week, it seemed as though the deal was off. We were getting ready to relist the house for sale. On Tuesday afternoon the antics of the other side’s solicitors were becoming ridiculous and we set a deadline; exchange by midday on Wednesday or the deal is off.

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The issue was that they kept changing their story and were telling the agent, our solicitor, and the buyer, all different things. At one point we were led to believe that the buyers did not have the required funds.

On Wednesday morning I had a call from the agent and my solicitor explaining that some progress was being made, and so I put the deadline back to 13:00 on Wednesday. I met my Dad, who owned the other half of the BTL, for lunch and the 13:00 deadline came and went.

Going silent…

We decided to go radio silent for a few days but a couple of hours later I received a call from the agent who levelled with me about the issues they’d been having dealing with the buyer’s solicitors. They explained that the exchange of contracts could take place the following morning. The biggest delay was because the other solicitors were refusing to give their bank details to the buyers for them to transfer their deposit.

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I’m not sure what they were hoping to gain from all these delays but the agent gave me their opinion on it; the solicitors were simply too busy and were unable to cope with the workload. On Thursday afternoon we exchanged contracts which sealed the deal. The following day the sale was completed and we received our funds.

Art in the Garden

Saturday was a really fun day. Oana and I went to Art in the Garden at the Botanical Gardens in Sheffield. It’s an open-air art festival with some food and drink stalls. It wasn’t as busy as last year which was probably due to it being a bit foggy and rainy. We had a great time though, especially with the squirrels in the park. They are friendly and not at all timid. They come right up to you for food. One squirrel decided to climb up my leg and body before chilling on my shoulder:

On the way down, rather than going down my body, it went via my uncovered arm and scratched me in a few places. As it drew blood I didn’t know if I needed a tetanus shot or something, so on the way back we stopped at a walk-in clinic. They said I was fine as I’d had a shot in 2022 which I had no memory of. I checked back through my photos and found one from the same date where I’d cut open my head on a rusted metal sign. Quite how I forgot about that I don’t know.

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We walked back through another park and sneaked into a university building we’d wanted to explore for a while. It was an open day so I suppose sneaking isn’t the right word. It’s the Diamond Building which has won a few awards for its design. I didn’t like it at first, but over time the building has grown on me.

Lunch

We then stopped for a late lunch at a new(ish) Italian place where we shared a few dishes including some Italian sausage with crispy bacon bits, some bruschettas with olive tapenade, and some with goat’s cheese and caramelised red onion. We also had some garlic bread because I can’t pass up garlic bread when offered.

Arguing for the sake of it…

Much like some geese wake up and choose violence, some people wake up and choose to argue. We’ve all encountered people who just want to argue for no obvious reason. You can spot these people by picking apart their argument, and when you do you find nothing but stupidity.

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I’m not talking about people with a legitimate gripe or concern. I’m talking about those people who view interactions with other people as a contest; something to be won or lost, rather than an opportunity to share information, knowledge, and experience, or as a joint effort to arrive at the truth.

Recently I was the target of someone who just wanted to argue. Apparently, I present “an aura of expertise” and give “bad advise” [sic]. This was in relation to the 4% rule.

I was asked, on a forum I post on, what amount of investments was needed to retire. I gave a very brief answer along the lines of “your annual cost of living (X) multiplied by 25”. This accounts for those wanting to live on £12k p/a or £120k p/a because X is unique to you. My FI figure and your FI figure will be different.

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For and against…

There are all sorts of arguments for and against 4%. Some advocate for a more aggressive withdrawal rate whilst others are more conservative, preferring 2%-3%. One major variable is how long you are drawing on your ISA for, and how long you will be drawing on your pension for. You need the right balance between the two based on your age and circumstances.

According to my detractor, the 4% rule is bullshit because the chances are most people will have money left when they die. Forget the fact that people might want to leave an inheritance to their loved ones, or perhaps leave money to charitable causes. I’m “just a bloke on the internet with a dream” according to some other bloke on the internet.

The great thing about FI is that there are endless ways to approach it, and it’s unique to each person. I steer away from giving advice as much as possible and I always encourage people to do their own research. If you invest in something you don’t understand you are gambling, and will likely lose money. It’s absolutely vital that you understand what you are doing, and if you don’t like the approach I take then, as Fleetwood Mac said, “go your own way”.

Boeing

I don’t think I’ll ever feel comfortable flying on a Boeing aircraft again because, well, just look at their track record for the last few years. Another area in which they are not covering themselves in glory is space transport. Back in June, the Boeing Starliner Capsule underwent its first crewed test flight.

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This mission was to last eight days and was to transport two NASA astronauts to the ISS; Barry Wilmore and Sunita Williams. As the capsule docked with the ISS, faults with the craft’s thrusters were detected. After weeks of testing and investigating it was determined to be too dangerous to bring the two astronauts back via the Starliner. So, the 8-day mission became a 94-day mission before the Boeing capsule was returned to Earth remotely.

What about Barry and Sunita?

You may be wondering what happened to the two astronauts. Well, they will be brought back to Earth in a future mission scheduled for February 2025. Being in space would be awesome for a while, but the ISS isn’t that big and there are drawbacks to being in space such as muscle and bone wastage. I hope the two crew are in good spirits and are able to safely return.

Space exploration is fascinating and unless you’ve studied it you probably don’t realise how difficult it is. The ISS is located in low Earth orbit (LEO), which means it orbits approximately 400km above the surface. In contrast to this, GPS satellites orbit approximately 20,000km above the Earth, with satellites in geostationary orbit being over 35,000km distant. Space is big. The ISS is so close to Earth that it still experiences atmospheric drag and has to fire its thrusters on a schedule to maintain orbit. I’d still love to go to space and hope I see a day when it’s accessible to the masses, or at least those called David.

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Coming back to my original point, though, I would not travel with Boeing if they paid me.

What’s in a name?

Something a few people have asked about is whether I plan to change the name of the blog, as I’m leaving my position as a mortgage advisor. Should I change the name?

The blog name, Mortgage Advisor on FIRE, is almost a brand name now rather than a description. My concern is that changing the name could confuse things. I’ve thought about maybe tweaking the logo slightly so that it shows as The (Former) Mortgage Advisor on FIRE, or something similar. Let me know what you think in the comments and/or the poll below.

Gousto

We received our first Gousto box last week and we’ve enjoyed every recipe we’ve tried. It’s all well packaged and the instructions are easy to follow. It’s something I’d recommend if you want to try some new meals. If you use my referral link below we will both get a discount for it.

Gousto referral link

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Diabetes UK Step Challenge

I’m making great progress towards the 1,000,000 step target, and I’ve now completed over 600,000 steps.

Letters to Oana

If you missed it, Part 2 of the series Letters to Oana is now live.

Looking Back

Part 15 of the Looking Back series is also live.

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What I’m Doing

Listening: The Dark Side of the Mind by Kerry Daynes

Watching: Celebrity MasterChef.

Financial Update

Assets

Premium Bonds: £14,050.00.

Stocks and Shares ISA: £87,413.87.

Fuck It Fund: £7,211.35.

Pensions: £82,379.98.

Residential Property Value: £234,044.00.

Total Assets: £425,099.20.

Debts

Residential Mortgage: £185,693.35.

Total Debts: £185,693.35.

Total Wealth: £239,405.85.

A week of massive change. The BTL figures have dropped off both the asset and debt side of the balance sheet, and because I included the full value of the equity but only received my half once it sold, it’s reduced my total wealth figure. This is just down to the way I calculated things. If anything I’m in a better position now because that equity has been released allowing me to invest elsewhere. The property had been empty for months and was like a millstone around our neck.

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I’ll be maxing out my ISA in the coming days, and I’ve had to space out the process of moving money around because of the daily limits on transfers and card payments. It should be a strong end to the year, and then I’ll be living off my investments and investment income until I find another job in late 2025.

CGT

I was pleasantly surprised by how easy it was to pay my Capital Gains Tax for selling the BTL. The online form was simple and quick to complete, which was helped by the fact I kept detailed records of all the costs associated with the purchase and sale of the property.

I don’t have an issue with the concept of taxes, but we don’t make the system easy to understand. We have all sorts of different allowances, like a dividend allowance, trading allowance, and CGT allowance, and then we have different tax brackets which impact the amount of income tax you pay, whilst also determining which rate of tax you pay for things like CGT. Is this complexity a feature or a bug?

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It feels as though there must be a simpler way of structuring tax, and what follows is my idea for a new tax system. This is based on absolutely no research and may result in economic ruin. I will not be taking questions.

Personal Allowance

I would increase the personal allowance for income tax so that it matches up with the amount someone would earn in a full-time job on minimum wage. Basically, if you earn the minimum wage you don’t pay income tax.

Income Tax: What’s Included and Bandings

I would bring all dividend income (outside an ISA or pension) in line with standard income. This would mean the self-employed, or those earning dividends through stock ownership would pay tax at the same rate as PAYE income.

Earnings greater than the personal allowance, but under £100,000 p/a would be taxed at 25%.

Then, earnings at £100,001 or over would be taxed at 35%.

Finally, earnings over £1,000,000 would be taxed at 40%.

National Insurance

I’d scrap the current system and introduce one class of NI contribution which would be a standard amount across the board. This would be 10% of earnings above the personal allowance.

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Capital Gains Tax

Nothing is paid on your main residence. Also, nothing is payable on shares sold outside an ISA or pension. Second homes and other assets would be charged at the same rate as income tax, as part of the income tax regime. This would mean your CGT allowance is part of your personal allowance for income. If you have a personal allowance of £25k and you earn £20k, you have £5k that can be used for CGT.

Inheritance Tax

I don’t have a problem with the current rules on IHT. Fewer than 1 in 10 estates are subject to any IHT as things stand. Although I can see where people are coming from when they say we shouldn’t tax death, IHT is designed to limit, to some degree, the hoarding of generational wealth. There are enough provisions in place to make IHT not that much of a burden for most people.

As I said, this isn’t a serious plan but I think the system does need an overhaul. There are so many things about the tax system that confuse people. It’s still fairly common for people to think that going into a higher tax bracket means you’ll earn less than in a lower tax band. We really need to teach this stuff in school.

That’s all for this week. Thank you for reading, and I hope you have a great week ahead.

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Disclaimer

The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, 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:

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