Part 49

Hello and welcome back to Mortgage Advisor on F.I.R.E.  A short post this week due to my mental health resulting in a bad case of writer’s block.  

Quote of the Week

There is a tendency for people to attribute their own success to their own ability, with their failures attributed to bad luck or circumstance.  However, when assessing the behaviour of others we have a tendency to do the opposite. 

This can be a dangerous cognitive bias when people are in difficult situations. It’s also a common problem with compulsive gamblers as they attribute successful bets to their own judgement but losing bets are put down to bad luck. 

In life it is wise to have plans in place for when things go wrong, because things will go wrong at some point.  This doesn’t make you a negative person. Having plans in place allows you to maintain a positive outlook safe in the knowledge you have a safety net. 

My safety net was my Fuck It Fund. However, with interest rates being so low it did not make sense to keep a lot of liquid cash.  This doesn’t mean I have no safety net though. I have a credit card with a substantial credit limit which currently has over 95% of the credit unused. I also have stocks that can be sold in a dire emergency.  As interest rates increase I will start to allocate resources to my Fuck It Fund, but for now it makes more sense to put as much as I can into stocks to take advantage of pound-cost-averaging. 

Weekly Update

I am still off work. My mental health is not great and I’m trying to go easy on myself. I’m taking daily walks and listening to my audiobooks. Audible is a fantastic service. Although I still enjoy reading, listening to a well-narrated audiobook is a great pleasure.

This week I have had to face facts and admit that I’m not ready to sit my next exam for the financial advisor qualification.  As such, I have postponed the exam indefinitely.  I’m simply not in the right frame of mind.  I normally look forward to writing this blog each week, but in recent weeks I’ve found it more difficult to write and this week has been the worst case of writer’s block I’ve experienced.  

At the start of the week it would have been my Grandad’s 82nd birthday.  He passed away just over two-years ago leaving behind his wife, my Grandma, who he had been married to for decades.  They had an eventful life with my Grandad serving in the Royal Navy.  They spent many years living in Malta when he was serving aboard H.M.S. Surprise.  He was a strong man, and a hard worker.  He supported a large family and after he retired, my grandparents would spend a lot of time back in Malta where they had many happy memories.  He is missed greatly by myself and the rest of the family. 

Health Update

I mentioned a few weeks ago that I’m aiming to get to 100kg by Christmas.  So far I’ve made absolutely no progress towards that goal despite stepping up my exercise.  It all comes down to diet, and unfortunately my diet at the moment is awful.  Some people turn to drink or other recreational drugs when they’re depressed or stressed.  I turn to comfort food, which in a way is just as harmful as some drugs.  If you overeat, you put on weight.  Putting on weight leads to obesity and this can lead to many serious health problems.  I know what I need to do, but I just can’t bring myself to stop snacking in the evening.

Financial Update

Premium Bonds: £20,700 (no change from last update).

Stocks and Shares ISA: £12,399.00 (up £439.54 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,653.00 (up £439.54 from last update).

Credit Card: £535.00 (down £104.06 from last update).

Residential Mortgage: £142,456.43 (down £358.26 from last update). 

Total Debts: £142,991.43 (down £462.32 from last update).

Total Wealth Figure: £77,661.57 (up £901.86 from last update). 

Investment Income in 2020: £161.36 (up £50.00 from last update) (target £2,000).

A good week with my assets increasing in value and my debts decreasing.  I think the stock market gains may be an anomaly, as I expect President Trump’s diagnosis of stupidity Covid may spook the markets.  I might be wrong, but uncertainty seldom leads to long-term gains in the market.  

I also won £50 on my Premium Bonds in October’s draw, which takes my winnings in 2020 to £150 in total.  It’s still a better return than what I would have earned in an instant access savings account considering I started the year with around £8,000 in Premium Bonds.  

Next week I will provide an update on my 2020 reading challenge and take a look back at the books I’ve finished in July, August and September.  

Final Notes

Thank you for reading and I hope you have a great week.  If you enjoy Mortgage Advisor on FIRE, please share the blog on your social media.  If you have any questions, please get in touch on Twitter (@nowwelive01) or Instagram (@david_scothern), or leave a comment on this post.

Part 48

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will talk a little about the Dunning-Kruger effect and how it relates to both the coronavirus pandemic and financial advice.

Quote of the Week

The Dunning-Kruger effect is a cognitive bias in which people overestimate their ability or knowledge.  It explains how believing in your own ability or knowledge is not the same as having ability or knowledge.  We have all encountered people who seem to be overconfident or arrogant about their own ability.  Unfortunately, this can occasionally be dangerous and an example of this would be Donald Trump who continually promotes his own expertise on various subjects despite the evidence showing his complete incompetence.  

One of the negative consequences of the proliferation of knowledge through the internet is that many people believe themselves to be experts after a quick look on Wikipedia.  I’m a fan of Wikipedia; I think it is a fantastic tool that helps provide an overview of any subject I’m unfamiliar with.  It’s a starting point to learning though, and not the end.

The coronavirus has been a hot topic for almost a year now.  I’ve heard opinions on the pandemic from all angles and everyone from taxi drivers to bar staff, from professional athletes to shop assistants seem to think they know the answer, as do I.  The thing is, my opinion is not as valid as those opinions held by the medical experts, and neither are those opinions held by the taxi drivers or athletes.  

We are all entitled to our opinions but that does not mean our opinions are all equally valid, and this is something that a lot of people cannot accept.  We have been conditioned to believe all opinions are equal, and it’s eroding the concept of expert knowledge and respect for authority.  I’m not saying we should all blindly follow the orders of authority figures.  It’s right to question things, but it should always be with the understanding that we don’t know as much as we think we do.

Credit: https://www.dictionary.com/e/pop-culture/dunning-kruger-effect/

Most of the time, the Dunning-Kruger effect is just a harmless cognitive bias but when it comes to things like a global pandemic it can be deadly.  I’m going to use the example of wearing face masks.  The effectiveness of face masks is debatable.  There are many different types of face mask which are effective to varying degrees.  I’ve heard people say things like “why do I need to wear a mask if everyone else is?” or “why do we need to socially distance if masks work?”  These are prime examples of people not understanding the difference between risk elimination and risk management, but they think that they know more than the experts who are recommending these measures.  Dunning-Kruger does not explain all of this resistance to authority.  Some people are just resistant to authority generally and if this overlaps with Dunning-Kruger it can be a perfect storm of ignorance and a misguided belief in one’s own expertise, whilst doing the opposite of what one’s told just because it’s contrary to the advice of the authority.  

Coming back to face masks for a moment.  Face masks are not going to protect people from coronavirus completely.  They offer some protection.  This protection is enhanced if more people wear masks; the more people wearing masks, the greater the protection to society.  If masks are combined with social distancing, the protection is increased further.  The risk is never eliminated completely as that is not possible.  The more barriers you erect, the more protection you have.  It’s that simple.

Weekly Update

I’m still off work as I’m not right mentally yet.  I’m having difficulty sleeping and concentrating.  Just writing this week’s blog is an effort, whereas it is usually something I look forward to.  I have been keeping up with the gym though, and I set myself a goal last week of walking at least 10,000 steps a day.  I managed to do that Sunday through to Saturday but then my knee started aching, so I’m having a break from that for a day or so.  

I have my next exam coming up for my financial advisor qualification but I’ve postponed it as I can’t concentrate on my studies either.  I’ve been spending a lot of my free time listening to audiobooks, playing BlockuDoku on my iPhone or watching Deep Space Nine on Netflix.  I’m not the sort of person that is generally happy to just sit around and do nothing, but I can’t seem to motivate myself to do anything more productive right now.  I think I need to learn to not feel bad about feeling bad.  

Health Update

I’m not managing to lose any weight despite all my exercise but to be fair, my diet is not what it could be.  I need to get a handle on my diet and it’s generally fine through the day.  However, once we get to around 8pm, it’s like I feel the need to snack.  It’s frustrating but I don’t know what the key is.  

As regular readers, and those who know me well, will know, I have had a long history of physical and mental health problems.  In recent years I’ve started to believe that there must be an underlying cause that explains the myriad of health issues I’ve experienced.  I think I may have found that unifying cause but I need to investigate it further and seek medical advice, as there’s nothing worse than self-diagnosing via Doctor Google.  

When I know more, I may talk about it here but I do think that there are limits to how transparent a blog should be.  I’m also conscious that this is a blog primarily looking at finance and investment, and it’s not a health blog.  

Financial Update

Premium Bonds: £20,700 (no change from last update).

Stocks and Shares ISA: £11,959.46 (down £225.74 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,213.46 (down £225.74 from last update).

Credit Card: £639.06 (up £639.06 from last update).

Residential Mortgage: £142,814.69 (no change from last update). 

Total Debts: £143,453.75 (up £639.06 from last update).

Total Wealth Figure: £76,759.71 (down £864.80 from last update). 

Investment Income in 2020: £111.36 (no change from last update) (target £2,000).

A huge drop in my Total Wealth this week which is mostly down to the fact my credit card balance has increased.  There are two factors behind this; first of all I’ve not paid the card off as I just didn’t get around to it.  There is some normal day-to-day spending on there which I normally pay off right away, so that will be corrected for next week.  However, there is a second factor which is that I’ve had to replace my Nespresso machine.  My trusty Nespresso Expert machine has broken down beyond repair and I’ve replaced it with the Atelier machine.  I didn’t plan on replacing the machine just yet, but coffee is one of the few vices I have and the idea of going more than a day or two with coffee filled with me a cold dread.  I love the new machine though.  It looks fantastic and the coffee it makes tastes great.

The stock market continues to plod along.  In the last few months I’ve invested over £2,000 into my ISA but the value of the ISA has actually decreased.  It’s not a major concern right now, as I’m still accumulating units and when the market recovers, my gains will be realised.  I will need the market to recover at some point in the next few years if I’m to stay on track to retire by age 40 though.  

Dunning-Kruger and Money

A few days ago someone mentioned that I would be better off using my savings to pay down my mortgage. This is another example of Dunning-Kruger in action. This person was not in full receipt of all the facts, such as the fact my current mortgage rate is 0.1%. A rate that low is practically unheard of, and so it makes more sense to keep my money invested where I can get a better return. 

There is a lot of uninformed advice out there in the financial world. In this blog, I try to stay clear of giving specific advice and instead aim to educate and give general guidance.  The key point to all this is that no one knows as much as they think they do, myself included. 

I’m hoping that within the next couple of weeks I’ll be able to confirm that our BTL purchase has completed.  Other than that, I’m afraid that’s all I have for now.  

Final Notes

Thank you for reading and I hope you have a great week.  If you enjoy Mortgage Advisor on FIRE, please share the blog on your social media.  If you have any questions, please get in touch on Twitter (@nowwelive01) or Instagram (@david_scothern), or leave a comment on this post.

Part 47

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will be looking at how people are caught out in financial scams, and how global uncertainty ultimately matters little to the FIRE investment strategy.

Quote of the Week

This is quite a bleak quote, but it’s hard to find anything wrong with it.  It can be interpreted in a number of ways, especially around what is meant by beating depression.  People talk about “battling depression” but I don’t think it’s possible to ever really beat depression.  It’s always there, in the background.  The battle against depression is aimed at keeping it at bay for another day.  If you fail to do so, it can result in death.  This is just one interpretation, though.  Another way to interpret the “die trying” part is to think people can beat depression permanently or they can die through unrelated means, such as an accident or old age whilst trying to beat depression.  

I spoke with a friend, who has depression, about this quote and they had a different opinion on it. Rather than focusing on physical death, they suggested that the quote could refer to emotional death; that depression can kill in a number of ways, physically, mentally, emotionally and socially. I think this relates to the difference between living and existing.

Weekly Update

I’m currently off work because of my mental health.  I’m not in a good place at the moment.  I’m alternating between periods of anger, to depression, to anxiety and stress.  I’m having trouble concentrating, and staying asleep.  Although I’ve started on antidepressants again, they’ve not had much chance to take effect.  I’m going to the gym and that is helping a little, but I don’t know what the answer is to my deteriorating mental health.  The start of the year was so positive in many ways.  I had issues with my physical health but it was gradually improving.  Then, I had my trip to India, and then lockdown.  I actually coped well with lockdown until the end of May when it seemed like my mind just imploded.  My mental health did not worsen because of this pandemic, but it hasn’t helped.

I’ve not found counselling helpful.  In fact, I think it’s probably made me feel worse overall.  I had put a lot of my hopes in counselling, but it was just a waste of time.  I mentioned last week that mindfulness and CBT just doesn’t cut it when you are so angry and upset at where you find yourself in life.  I mentioned to my therapist that there are times when I’m consumed by this anger, and her response was that I needed to find a way to “calm down”.  Well, yeah, that’s right.  I do need to find a way to calm down and I thought that’s what the therapist was going to help me with.

Initially I was thinking about finding another counsellor but I don’t know if I have the mental energy or stamina for it.  If I start up with a new therapist I will have to go through all my history again, and that will reopen a lot of old wounds.  I just don’t think I can put myself through all of that again if their suggestion is just going to be mindfulness, CBT and telling me to “calm down”.  

On the subject of mindfulness, I stumbled across a great set of posts on Facebook earlier, which I’ve posted below:

Now, I’m not saying that I’ve been a victim of major trauma like an assault, but I am struggling.  Mindfulness just seems like a strategy aimed at telling people to ignore their trauma.  Maybe it’s useful for helping people deal with minor issues but when you are dealing with people in severe emotional and mental pain it is just not enough.  

On a more positive note, we had a great meal out last Monday.  There is a local bar called Pina which serves the best tacos I’ve had in the UK.  The photos below are of their Al Pastor tacos; pork and pineapple tacos.  They’re amazing.  I barely stop to breathe whilst eating them.  Pina also serve coconut shrimp with a mango and chilli salsa which goes very well with the tacos.

Health Update

I’m still going to the gym and very slowly ramping up the exercise.  I’m itching to lift more, and push myself more, but I have to keep remembering my numerous health problems.  Having had surgery to both shoulders, I have to be so careful with any exercise that puts strain on those joints.  

I’m a few weeks away from moving to split sessions instead of full body sessions.  At the moment, I’m hitting the major muscle groups in the same session, but I’ll eventually move back to a two-day split, and then a three-day split.  On the two-day split I’ll focus on chest, triceps, quads on day-one, and then on day-two back, biceps and hamstrings.  The three-day split will see the leg exercises moved to their own session.  

Financial Update

Premium Bonds: £20,700 (up £150.00 from last update).

Stocks and Shares ISA: £12,185.20 (down £77.59 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,439.20 (up £72.41 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £142,814.69 (no change from last update). 

Total Debts: £142,814.69 (no change from last update).

Total Wealth Figure: £77,624.51 (up £72.41 from last update). 

Investment Income in 2020: £111.36 (no change from last update) (target £2,000).

Not much to say about the finances this week.  The stock market continues to stumble along with not much sign of stability or growth.  All this means is that pound-cost-averaging is working for me.  Every month that passes by with the stock market depressed means that I’m getting more units of stock for my money.  Sooner or later though, it will start to improve.  It always does.  The only question is when.  I’ve posted at length in recent weeks that I can see the situation actually getting worse in early 2021.  The big unknown variable is how long it will take to mass produce a reliable and effective Covid vaccine.  Once this is readily available, we will see the global economy start to improve.  It’s not going to be an overnight improvement though.  Many countries have found themselves in debt due to the huge social welfare schemes implemented, such as the UK furlough scheme.  This money will have to be paid back eventually.  

Investing in Uncertain Times

Investing does not always need a direction or goal.  If you have excess funds, however, it makes sense to get the best return possible.  Some people have said that they don’t know how to invest.  The question of “how” is easy to answer, and it’s never been easier to access different investment products.  The real question shouldn’t be “how” but “why?”

The UK state pension is only designed to provide a basic, subsistence level, safety net for those retiring.  A quick Google search reveals that the average UK retirement income is approximately £15,000 per year, but an amount double to that is needed for a comfortable retirement.  With the fallout from this pandemic impacting us for years to come, one way that the government can save money is to reduce pension entitlement.  This can be done in a number of ways, like increasing the state pension age and not increasing the amount paid in line with inflation.  You can’t rely on the government to look after you in retirement, nor can you rely on a company pension as many of these schemes are in trouble.

My “why” is that I want to retire early.  Some people may want to retire comfortably, but the only way to guarantee either is to take matters into your own hands.  This starts with financial education, and there is a wealth of information available for free online.  There are whole communities on sites like Reddit that discuss how to maximise retirement income.  Some people say that money doesn’t bring happiness.  Maybe they’re right, but what money can do in retirement is allow someone to heat their home and feed themselves good quality food, as opposed to having to choose between food or warmth.  Money in retirement can also allow someone to have a quality entertainment package, as opposed to the basic package.  It can allow a retired person to travel, instead of spending their days at home because all their money went on the basics of survival.  

The welfare state in this country is, in my opinion, going to have to change unless we see a drastic change in culture within our government.  The composition of our population is changing with more people living longer in retirement, which is draining our NHS and increasing the amount of pensions being paid.  As the birth rate is falling in this country, it means there will be fewer people paying the taxes that fund these benefits.  So, something has to give and I believe it will be the benefits paid to the elderly that gives.

In 2016-2017 over £200 billion was spent on benefit payments and over half the figure went to pensioners.  Don’t get me wrong, I’m not saying we should reduce payments to this section of society, but I am predicting that’s what the government will do.  I’m still thirty-odd years away from the current state pension age, and I have time to make my own plans.  However, if I was in my fifties now, with only the state pension as my safety net in retirement I would be very, very worried.  

Fraud

It’s time for a little bit of a rant.  For years now, decades even, we have been told time and time again that if someone calls you saying they are from the bank, and they ask for account details, it’s a scam.  It’s a message that’s been repeated so often that it should be embedded in the public consciousness alongside not taking sweets off a stranger, or believing a single thing a Tory politician says.  Yet, every single week there is a story in the media about someone who fell for a scam and lost their life savings.  

The most recent story I read was about someone who had a call from their bank saying their account had been compromised and they needed details from the customer to move the money from the compromised account to a safe account.  Anyone with mental capacity should be able to spot the logical issues here.  

First of all, a bank would not need information or permission to move customer funds from one account to another.  It’s absurd to think they would spot a compromised account and think “we need the customer’s permission to do something about it.”  It’s just absurd, there is no other word for it.  


The second point is that we all know banks can put a stop on an account.  We’ve probably all experienced at some point a legitimate transaction being stopped because the bank wants to ask us a few questions, like when you try to spend a few thousand pounds on a car or holiday.  

The third point I want to make is actually an example that someone gave in a comments section on the news story I was reading.  This person asked you to imagine you are sitting at home one evening and you get a knock at the door.  You answer the door and the person tells you that there are some suspicious people hanging around your car, and they are trying to break in.  However, if you give this person your car keys they will drive your car to a safe place.  What would you do?

Now, there are some very sophisticated scams out there and unfortunately people will be duped by these.  But often the stories in the media are variations on a person being cold called and asked to give account information so their money can be moved to a safe account.  I just can’t understand how people still fall for this.  The question should always be “why?”  Why would the bank call to get your information if they are telling you your account is at risk?

Never give out account information on a cold call.  Hang up, and call your bank back from a verified phone number you have sourced yourself.

Final Notes

Thank you for reading and I hope you have a great week.  If you enjoy Mortgage Advisor on FIRE, please share the blog on your social media.  If you have any questions, please get in touch on Twitter (@nowwelive01) or Instagram (@david_scothern), or leave a comment on this post.

Part 46

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week is a shorter post owing to the fact it’s my birthday week.  I’ll be discussing my progress at the gym as well as an update on my mental health, and finish with some photos from my birthday meal.

Quote of the Week

I was scrolling through Twitter the other day and I saw this quote posted by Jamie Salsburg, who was in turn quoting Allan Lokos.  It’s a great quote and it struck me like a punch to the gut.  The effect it had on me was like a cross between a blindfold being removed and a penny-drop moment.  Those words contain immense truth and wisdom, but knowing something does not always help with the emotions that come with the thoughts.  In some ways, thinking about something that never happened can be just as painful as remembering something that has happened.  This is where PTSD and obsessive/intrusive thoughts can be debilitating.  You can know that a particular thing happened, but then your mind can take that premise and run with it, creating an entire epic of traumatic thoughts.

Also, a little shout-out to Jamie is needed. For those of you who don’t know, he’s the host of The After Gambling Podcast and it was this podcast more than anything that helped me stop gambling. He’s a great guy and we had a video call a few weeks ago to talk about gambling addiction. For anyone struggling with gambling I would recommend you listen to his podcast and follow him on Twitter; @jamiesalsburg and @aftergambling.

Weekly Update

My mental health is still not great.  In fact, in the last few days I’ve been as low as I can remember being.  I’ve been having therapy, and I’ve had six sessions.  It hasn’t helped.  The act of talking was helpful at first, but that’s all it was.  Talking.  I would feel a little better for a couple of days for having talked about my thoughts and feelings, but the “high” from the therapy was getting shorter each time.  I had my last session on Wednesday and I was just impatient to get it over with.  I was hinting that I needed more practical help, but it was not forthcoming.  We had talked about mindfulness but it just isn’t effective for me.  I have been switching from intense anger to utter despair, and when you are in those extremes mindfulness just doesn’t cut it.  I likened it to trying to quench your thirst with a single drop of water.  It’s only going to make you more angry and more frustrated.  

It was my birthday on Friday (September 11th) and it was maybe the worst birthday I’ve had.  I’ve had worse birthdays objectively; times when I’ve been alone or having arguments.  This birthday sucked because of what’s going on inside my head.  Also, I had to go back on antidepressants.  I stopped taking them years ago and it was self-reinforcing to my self-esteem that I was able to manage my mental health, for the most part, through diet and exercise.  The fact I’ve had to go back on them, and on my birthday, was a massive blow to my self-confidence.  Just as I think I’ve bottomed out, I feel worse.

The thing about depression is it manifests in different ways for different people.  I’m a functioning depressive.  I can do my day-to-day activities, for the most part, to my normal standard.  A lot of the time, though, I’m on autopilot, and I’m simply coasting through life.    

Health Update

My diet is still not great.  I find myself waking up in the middle of the night and eating.  Although I say I wake up, I’m not fully awake.  It’s a little like sleep-walking.  Not sure what the answer is, or why I do it, but from what I’ve read online it can be a symptom of depression.  I asked my therapist about this and she said I should lock my food away, which is not really a realistic option.  Also, if I’m awake enough to have cereal, I’m awake enough to figure out how to open a lock.  The problem is I’m not awake enough to stop myself.  It’s a bit weird.

I’ve gone to the gym several times in the past week and seem to be finding a routine, which is good.  I’m doing full body workouts with much lighter weights than I’m used to.  My plan is to complete these workouts for a few more weeks and then slowly increase the weight lifted and the sets completed.  I’m doing three sets on my chest, back, biceps, triceps, upper legs and lower legs; so eighteen sets in total.  I’ll increase that to four sets and then continue for a few more weeks before splitting the sessions into leg, chest/tricep and back/bicep days.  Then, when I’m back to something approaching reasonable shape, I’ll start working on abs and core muscles.  For now, I don’t want to be that overweight guy doing wrist curls in the corner of the gym.  When you’re overweight, I believe compound exercises are where you get the biggest gains.

Financial Update

Premium Bonds: £20,550 (no change from last update).

Stocks and Shares ISA: £12,262.79 (up £133.23 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,366.79 (up £133.23 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £142,814.69 (no change from last update). 

Total Debts: £142,814.69 (no change from last update).

Total Wealth Figure: £77,552.10 (up £133.23 from last update). 

Investment Income in 2020: £111.36 (no change from last update) (target £2,000).

My ISA value has apparently increased, but when you factor in my monthly investment of £200 you can see it’s actually decreased in value a little.  The stock market does not show any immediate signs of sustained recovery and at the risk of sounding like a broken record, I can see this continuing for some time.  However, as each month passes by I’m increasing the quantity of stock units I own which means when the market does recover I will see more growth.  

9/11

Having your birthday on September 11th is unfortunate, although a friend of mine did point out that if you look hard enough you will find tragedy on any day of the year.  The 9/11 attacks were a turning point in world history though.  It’s one of those events for which there is a definite before and after.  People talk about the post-9/11 world and we sometimes forget how much changed because of 9/11.  My thoughts are with all those affected by the attacks.

My Birthday Meal

Those who know me well, know that I’m a bit of a foodie.  I love fine dining, and so for my birthday, a group of us dined at Rafters and the food was excellent.  Below are a selection of photos from the tasting menu:

Although the food was excellent for the most part, the lamb course was the weakest link.  The sides had an almost spicy flavour that I did not feel complimented the menu as a whole.  The Cornish Plaice was great but the charred leek accompaniment was incredible.  The Isle of Wight Tomatoes with goats cheese, garden herbs and elderflower was a big hit with all four of us.  This is the thing about fine dining; the chefs can take simple ingredients and through careful preparation elevate them into something fantastic.  

The service at the restaurant was a little disappointing.  Most of the staff were great but one waiter, when placing our cutlery on the table, seemed to be passive-aggressive in dropping the cutlery instead of placing it.  It’s difficult to describe but after he finished we were all a bit dumbfounded and wondering if we had done something to offend him.  It was a small issue in the context of the evening though and I would still thoroughly recommend Rafters to anyone looking for fine dining in Sheffield.

Final Notes

Thank you for reading and I hope you have a great week.  If you enjoy Mortgage Advisor on FIRE, please share the blog on your social media.  If you have any questions, please get in touch on Twitter (@nowwelive01) or Instagram (@david_scothern), or leave a comment on this post.

Part 45

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will talk about a small, temporary change to the format of the blog, as well as an update on my mental health before finishing with a look at the potential financial crisis brewing as a result of Covid-19.

Quote of the Week

Like most good quotes, I didn’t go looking for this one.  It just popped up in my day-to-day life.  Although the translation results in slightly broken English, the content of the quote transcends language.  The meaning and the emotion behind those words is powerful.  There aren’t many quotes that make me pause and really think about the words.  

The quote comes from a place of pain, and bitterness.  It’s not like the quotes from Viktor Frankl I posted earlier who managed to find hope even in the most horrific of circumstances.  There is something I like about the words I’ve chosen this week, though.  Although it comes from a place of anger, the message is empowering.  I think it’s an acknowledgment that we shouldn’t feel bad for feeling bad.  Things happen to us that are outside our control, and it’s ok to feel angry and hurt about it.  The key point is to not let that hurt consume you.  So, I think it’s possible to take wisdom from Mr Tawfik’s words and combine them with Dr Frankl’s quotes and find a path forward.  

Weekly Update

Last week I wrote about how I felt I was on an upward swing, but this week has brought me crashing back down.  There is so much going on in my personal life right now, that it’s difficult to bring focus to any one thing.  It’s like I’m fighting fires, but every fire I put out creates two new ones.  I need something to give.  For now, it’s just a case of getting through each day, each hour and each minute as it comes.  Sometimes just getting by is a victory.

I need to look at my therapy as well.  My therapist is a nice woman, and she’s easy to talk to.  I just don’t feel like I’m being challenged by it.  It’s too comfortable, and the buzz, or high, I was getting from each session is getting shorter with each session.  

By the time the next part of this blog is published, I will have turned 37.  In many ways, I feel like a failure.  Objectively, I know I’m not, but I’m just so fucking depressed that it’s hard to feel anything else.  

Depression manifests in different ways, for different people, and that’s something I’m still learning to deal with in my day-to-day life.  I would describe myself as a ‘functioning depressive”.  I can get by with daily life, but it’s like I’m playing a part in a movie.  I’ve had this feeling for a long time, like I’m stuck in a low gear, unable to really let go and show what I’m capable of.  It’s a strange feeling, and I don’t think I’m describing it very well.  The few people I open up to in person are often surprised when I describe my mental health.  I was recently asked to do something for someone, which on the face of it was a great opportunity and this person was trying to do me a favour.  I had to politely decline because the thought of going into a meeting, albeit with many friendly faces, was just not something I could deal with at that point in time.

I think for now, I need to concentrate on the small things and concentrate on getting myself mentally right.  This means going easy on myself, and doing what I enjoy.  Now, I just have to find something I enjoy.

Health Update

I am going to take some time off from posting about my weight because I don’t think it’s helping me.  I’m going through a lot of difficult things in my personal life, and I thought that this exercise would help me.  However, as I’m finding it difficult to maintain a healthy diet, this section is becoming a stick to beat myself with.  So, I will take some time off from posting in detail about my weight.  

Financial Update

Premium Bonds: £20,550 (no change from last update).

Stocks and Shares ISA: £12,129.56 (down £327.36 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,233.56 (down £327.36 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £142,814.69 (down £356.92 from last update). 

Total Debts: £142,814.69 (down £356.92 from last update).

Total Wealth Figure: £77,418.87 (up £29.56 from last update). 

Investment Income in 2020: £111.36 (up £25.00 from last update) (target £2,000).

The hit my ISA has taken was countered by my monthly mortgage payment reducing my outstanding debt.  Although it’s frustrating to see my ISA stuck in the £12,000s, each investment into my ISA is accumulating more units and more stock.  This means when the market does recover, I will see more growth.  I have to keep remembering the principle of pound-cost-averaging.  

The Coming Financial Crisis

In an article published on September 4th in The Guardian, there is a story about high street mortgage lenders Nationwide and HSBC pulling their 90% mortgages for first time buyers.  The article touches on the coming end of the furlough scheme in the UK as a possible trigger for the coming financial crisis.  I think that the end of the furlough scheme in October is going to be a major trigger, but the time of year is also going to play a part.  The furlough scheme will end just as retailers are gearing up for Christmas.  I suspect we will not see a huge wave of job losses in the retail sector in Q4 2020.  Instead, I can actually see more jobs made available which will give the economy a small shot in the arm.  This may give a false sense of security to much of the general public.  

The real issues will start in January and February.  The UK flu season will be in full swing.  People will be facing the financial cost of Christmas and the New Year.  Retailers will start looking at their end-of-year accounts as April 5th approaches.  My prediction is we will see a lot of jobs lost, and a second wave of Covid as people ignore social distancing over Christmas and New Year.  The stress of job losses, and the regret of splurging at Christmas will cause many relationships to hit the rocks.  Credit card bills start landing and suddenly households are faced with a loss of income and debts they are struggling to pay.  Many people who paid over the asking price for properties during the reduction in Stamp Duty will have some harsh truths to face.  It could get very, very messy.

It’s no surprise that we are seeing high loan-to-value deals being pulled by the main lenders.  They will have memories of what happened a decade ago and will not want to be subject to government bailouts again.  Covid has, excuse my language, fucked the economy.  

One possible answer would be to extend the furlough scheme further, to see us through to the start of the 2021 financial year.  If we can keep the economy on life support until the start of spring, when we will hopefully be closer to a vaccine, then we can start to wind it down.  However, the scheme cannot continue indefinitely as all we are doing is creating an economic time bomb that will explode eventually.  The explosion could affect more than just the UK economy.

The US economy accounts for roughly one-quarter of the global economic output, and their budget deficit is eye-watering.  Factor in that China holds over $1 trillion of US Treasury Bonds, and the tense relationship between the two nations, it’s not hard to see how this situation could spiral out of control.  

The global economy is so intertwined that it’s difficult to isolate one major economic power from another, and we must not forget that the UK economy is still one of the largest in the world with London being a major financial centre.  

I sincerely hope I am wrong in my predictions.  There are things that we can all do to help avoid the crisis, and I think being sensible with how much mortgage debt we are considering taking is a major part of that.  Also, I would strongly urge the government to extend the furlough scheme until the end of the financial year in some form.  Tax breaks to companies that keep staff employed could also be a possible solution.  The important thing to remember is that the more people who are working, the more tax revenue is collected. 

The world is in a constant state of flux at the moment, and even short-term planning is difficult.  There are some principles that hold true at any time though; spend less than you earn being the most relevant one right now.  If at all possible do not increase your level of debt.  Try to build up a contingency fund, and bunker down for the next few months.  

Final Notes

Thank you for reading this week, and I hope you have a great week ahead.  If you are following FIRE or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post. 

Part 44

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will be talking a little more about mental health, and dealing with difficult people.  I’ll also touch briefly on asset allocation within my ISA.

Quote of the Week

A quote that feels relevant today (as I write this) having heard the news that actor Chadwick Boseman has passed away at the age of 43.  Although he is not an actor I am hugely acquainted with, as a Marvel fan I loved his portrayal of T’Challa.  He may not have had length of life, but he had depth of life.  His life had meaning and he leaves behind a proud legacy.  My thoughts are with Chadwick’s family and friends.  

In the wider context, I think we can all take wisdom from these words.  We can only do so much to control or affect length of life but the depth of life is within our control.  We can practice mindfulness and stoicism to live in the moment, and to choose our response to what life throws our way.  It’s not an easy path to take in life, but it can bring peace.  

Weekly Update

There are certain things happening in my life at the moment which are causing a lot of stress.  I’m not going to talk in detail about those things, as they concern not only myself but people I care about.  There are a couple of concepts that I want to discuss in general though. 

All behaviour has a cause.  It’s like stimulus and response; you feel hungry and so you eat.  How you eat, and what you eat, can vary greatly.  When you are hungry, it is generally much better to reach for an apple than a tube of pringles.  Just because behaviour can be explained, it does not make that behaviour acceptable.  Someone might be able to point to a specific trigger for their behaviour, but if that behaviour hurts someone else, be it physically or mentally, then the wounded party has no obligation to stick around.  

I’m not saying that past trauma is irrelevant and that people should just get over past experiences.  Bad things happen all the time, unfortunately, and people are being hurt and abused all around the world.  It’s tragic, and unfortunately part of daily life for many.  It’s wrong.  What I’m driving at, is perhaps best explained with a fictional example.  Let’s take Bob and Joan; two completely made up people.  In his past, Bob was emotionally abused by his previous girlfriend.  He was belittled, and mocked for his interests and hobbies.  He was also physically abused, as Joan would smash cups against his head.  Eventually, Bob left Joan and sometime later started a relationship with Susan.  After a while, Susan made a passing comment about Bob’s hobbies which caused him to fly into a rage.  He screamed at Susan and grabbed her by the throat.  

In the above example, we can explain Bob’s behaviour towards Susan through what happened in his previous relationship.  However, just because we can explain it, the behaviour is not acceptable.  What Bob did towards Susan was wrong.  An explanation for behaviour does make it acceptable, and let’s assume that Bob later explained to Susan why he acted that way, she is under no obligation to stick around to experience that behaviour again.  Susan might understand the reason for Bob’s actions.  She might even forgive him in light of the explanation, but she is under no obligation to stick around.  People do not have to spend their lives fixing other people.  They may choose to, and in some cases that is admirable.  In other cases, foolish.  

For those who know me personally, please do not read anything into the example provided other than the general concept.  The content of the example is not a window into my life; it’s just a fictional example to illustrate an idea.

Over the last two-years, but especially the last three or four months, my capacity to cope with other people’s bullshit has reduced to almost zero.  I’m still there for the people I care about, but those on the periphery of my life, I just don’t have time for their drama.  I recently made a joke about the A-Level exam results scandal, that was obviously a joke, but I was then sent an essay by someone on my friends list who took exception to my joke.  I ran the message through google docs and it was 1,755 words long.  I got a couple of sentences into the message and just thought, “I don’t have time for this.”  My comment was obviously a joke, and this person had typed up a rant.  If they had reached out and asked me to explain my comment, I would have stated it was a joke and apologised for any hurt caused.  I’m not a complete asshole.  This person did not do that though; they tried to lecture me about something they did not understand.  I replied, “It was a joke.”  A day later, I received another rant from this person, to which my reply was, “I think you need to grow up and get a grip.”

I blocked that person from my social media accounts. As I said, my capacity to deal with other people’s bullshit is almost zero. Using Bob’s example, I can’t explain the person’s behaviour, but to be honest, in my mind the explanation is irrelevant. A mutual friend reported back to me a conversation with them where this incident cropped up. The mutual friend asked this person if they knew what was going on in my life right now, and the person said they didn’t. Had they known, maybe they would have approached me in a different way, but I doubt it based on the nature and content of their rant. Was my zero tolerance approach to this acceptable? That’s up to each person to decide. I didn’t go off on an abusive tirade against this person, despite my initial reaction being to tell them to “get fucked”. The replies I’ve quoted are my actual replies verbatim. I didn’t actually swear, but I did feel like it. My behaviour may not be acceptable, but it can certainly be explained.

Mental Health

Last week I talked a little about my mental health struggles, and several people reached out to me to check I was ok, and to offer support.  I want to thank each of those people for taking the time to check in and reach out.  It came at the right time and gave me a much needed boost when I really needed it, so thank you. 

I have started keeping a written journal, as in actual writing on paper, which is unusual for me.  I have no idea how I used to write all day in school.  Writing is hard on the hand.  It’s helping though.  I’m also trying to practice mindfulness alongside my stoic philosophy.  The gym is also helping.  Lifting weights is a satisfying way to work the stress out of the body.  

The thing with mental health, is that it’s a lifelong battle.  That’s not something that people want to hear.  People suffering with depression, obsessive or intrusive thoughts, or anxiety, generally want to find a cure.  There is no cure, at least not in my opinion, for these mental health conditions.  There are treatments and ways to manage the symptoms, though.  Ways to dial down the mental noise from these conditions.  Once I realised it was a lifelong battle, it was something of a release.  There is no point stressing about something that can’t be changed.  So, my efforts switch towards tackling this acute phase.  I feel as though I’ve bottomed out and am climbing back out of the dark place I’ve been in for the last few weeks and months.  No doubt, it will not be a straight, upward line as I climb out. There will be setbacks, but I feel as though I’m moving in the right direction.  

Health Update

Current Weight: 114.4kg (down 0.5kg from last update).

Current Body Fat: 39.2% (up 3.1% from last update).

BMI: 34.5 (down 0.2 from last update).

Weekly Goal: lose 0.75kg.

Ultimate Goal: 90kg.

Weekly Steps: 31,614.

A decent week healthwise with some weight loss but a big spike in my body fat percentage.  The problem with measuring these things is that you can get weighed five times in one day and get five different results.  So, it’s important not to get too fixated on an individual data point, but to instead look at the trend.  Last week I talked about setting a target for getting my weight to 100kg by Christmas.  That is still the target.  I’m going to be gradually ramping up my cardio, alongside my weight workouts.

I’ve decided that I will donate £1 for every 0.1kg lost between now and Christmas, to a maximum of £150, to Rain Rescue, an animal charity in my local area. I’ve had a few interactions with them in the past and they are dedicated to the welfare of all animals. If you want more information about Rain Rescue, their website is: http://www.rainrescue.co.uk.

I’m having to be so careful with my weight training due to the shoulder surgeries I have had in the past.  I have this annoying need to push myself as hard as I can in the gym, and this often creates injury problems.  I read somewhere, a long time ago, that when you are lifting weights your muscles strengthen faster than your tendons and bones, which is part of the reason why people suffer joint problems when they push themselves too hard.  The lesson to take from this is slow, steady increases in what you are lifting.  Increase the weight in small amounts every few weeks, or even months.  

Financial Update

Premium Bonds: £20,550 (no change from last update).

Stocks and Shares ISA: £12,456.92 (up £151.34 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,560.92 (up £151.34 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £143,171.61 (no change from last update). 

Total Debts: £143,171.61 (no change from last update).

Total Wealth Figure: £77,389.31 (up £151.34 from last update). 

Investment Income in 2020: £86.36 (no change from last update) (target £2,000).

Another steady week for the finances.  I feel like everything is on hold until the BTL purchase goes through.  We are still making progress on that front, and we might be in a position to take on a second property by the end of 2020/early 2021.  My hope/aim is to try and have three properties by the end of Q2 2021.  Then, pushing into the second half of the year I should be able to take on a fourth property.  It’s all looking very promising at this stage.  The closer we get to this first property, the more impatient I’m getting.  

To help fund these purchases I may have to cash in some of my ISA.  This will be a difficult decision to make, but it will help increase the passive income coming in now which in turn will help me replenish my ISA balance.  There are some stocks in my ISA that I will not be cashing in though, as I believe they have a huge amount of long-term capital growth potential.  

Asset Allocation

I was talking with someone a few days ago who has a similar outlook on investing as myself.  We had a long discussion about asset allocation, and it occurred to me that I’ve not looked at my allocation for some time.  This is what I found:

Most of my UK shares are from one UK-based company, and I think those shares are currently trading way under value. I’ll be holding on to those shares for the long-term, as I can see them quite easily tripling in value as a minimum within the next five-to-ten years. I’m still buying those shares as the current price makes it foolish not to. It’s a risk putting so much emphasis on one stock, but the company is too big to fail (the government would have to bail it out) and the stock can hardly fall lower than its current price. Time will either prove me right or wrong.

Thank you for reading this week, and I hope you have a great week ahead.  If you are following FIRE or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post. 

Part 43

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will talk a little about the stress of taking my recent exam, and then discuss financial hypocrisy.

Quote of the Week

This quote comes from a song by Avi Kaplan called I’ll Get By.  It’s a good song and the lyrics will relate to anyone who has suffered depression.  The words I’ve selected come from the song’s opening lines and anyone who has suffered depression will recognise some truth in them.  The feeling of being weighed down, and sleep being your only reprieve is one I have felt in the past. 

Weekly Update

I passed my exam.  I was so relieved.  Last week I talked about not feeling confident, and I really wasn’t.  I had so much of my self-esteem invested in passing the exam.  I think I would have been in a bad way had I not passed it.  It was like it was the one thing I had the most control over in my life right now, and because passing or failing was in my control, I needed to show I could do it.  When the outcome of the exam flashed up on the screen I was delighted.  That delight turned to frustration quickly though, because in my life things are rarely simple.

The process for taking these exams is that you attend a testing centre and they sit you down at a computer where you complete the exam.  Once you answer all the questions you select the option for “Finish”, at which point you get a pass or fail outcome.  Then, you hit “Submit” and your answers are sent to the awarding body.  A week or so later, you get a full breakdown of your marks.

It all went smoothly for me until I hit the “Submit” button, at which point an error message appeared stating “Server Error”.  Then, my exam disappeared.  I was a little stressed out at this, because it appeared my results were lost and it looked for a time like I might have to resit the exam.  The testing centre staff determined that the PC was not connected to the internet, and that’s why my results had not been sent to the awarding body.  I was now feeling worse than if I’d just failed the exam outright.  After several hours the staff were able to recover my results and confirm I had passed.  I could really have done without that stress though.

I have now started work on the next exam and it looks very straightforward.  The book is much smaller and the exam is only fifty questions instead of a hundred.  I am booked in for September 30th, but I’m confident I can finish studying way before that date is due. 

Mental Health

Regular readers will know about the struggles I’ve had over the last few months.  2020 has been the worst year of my life, and strangely enough it has almost nothing to do with Covid-19.  It has simply sucked on a number of levels and I’ve felt like I’ve been stumbling from one crisis to another with no respite or room to take stock.  It’s felt, at times, like being blasted from one end of the boxing ring to the other with just the ropes and sheer tenacity keeping me standing.  I need a break.  I also need help.

A few weeks ago I started having counselling, and whilst it has helped to talk about things openly and honestly with a counsellor, I don’t feel as though it’s equipping me with the tools needed to manage in the medium and long-term.  I’m struggling to focus, and I think that’s why I’ve found preparing for these exams so difficult.  It’s like having a broken bone and the counselling is pain relief.  It helps for a while, but the bone needs to be set so it can heal.  The pain relief helps with the immediate problem for a short time, but it does not address the underlying issue.  

If anyone has any practical suggestions for dealing with stress, depression or intrusive thoughts, please let me know.  

Health Update

Current Weight: 114.9 (up 0.8kg from last update).

Current Body Fat: 36.1% (down 1.2% from last update).

BMI: 34.7 (up 0.2 from last update).

Weekly Goal: lose 0.75kg.

Ultimate Goal: 90kg.

Weekly Steps: 27,067.

I really don’t know what to say that I’ve not said before.  I need to start making progress here.  I’m angry at myself.  The thing is, as I said before, this has been the worst year of my life with one stressful thing after another coming up, and when I’m stressed, I eat.  It’s a negative cycle which I need to break.  In the past week I have rejoined the gym and started easing myself back into exercise.  It’s my hope that as I exercise, that outlet for my stress will help steer me away from eating because I’m stressed.  

If I’ve done my working out right, there are eighteen weeks until Christmas, give or take a few days.  I want to be down to 100kg by Christmas.  I’m making a commitment now, that if I am down to 100kg by Christmas, I will donate £100 to a charity of my choice.  However, should I not hit my target, I will donate £100 to a charity chosen by my readers.  I’ll talk more about this challenge in the coming weeks, and look at setting up a poll on the blog if that’s possible.

Financial Update

Premium Bonds: £20,550 (up £200.00 from last update).

Stocks and Shares ISA: £12,305.58 (down £159.87 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,409.58 (up £40.13 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £143,171.61 (no change from last update). 

Total Debts: £143,171.61 (no change from last update).

Total Wealth Figure: £77,237.97 (up £40.13 from last update). 

Investment Income in 2020: £86.36 (no change from last update) (target £2,000).

Since Week 32 the value of my ISA has only risen around £500 despite contributions of over £1,000.  The stock market is frustrating me at the moment.  I would like to start seeing some signs of recovery.  It’s not a disaster if I don’t, because pound-cost-averaging means I’m still buying stocks at low prices.  However, my plans are dependent, to a certain extent, on the value of my ISA increasing in the next year or so.  

BTL Update

It would appear that the solicitors have finally updated the details of the purchase with the correct address.  The purchase is proceeding slower than I would like, but we are at the stage where draft contracts have been received and exchange should take place in the near future.  A completion date has been suggested in early October which should see us trying to find a tenant by the end of October once we have completed the works we need doing.  I would have preferred to have completed earlier, but I’m just relieved to almost have this deal over the line.  

When we move on to our second BTL there are a lot of lessons we can take from this process and apply to that next purchase.  The main lesson is to be much more selective in viewing properties.  At first, I was of the mindset of completing as many viewings as possible.  This is just a waste of time for everyone; vendor, agent and myself.  So, being more selective about viewings should make the process a little easier next time.  


Accumulating Wealth and Financial Education


There have been a number of posts on social media recently that have been bitching about major business owners making more money through the pandemic.  These posts are criticising the likes of Jeff Bezos making billions during the crisis.  In my opinion, this type of thinking betrays financial ignorance.  In life, money can be thought of as a game with clearly defined rules.  There are two types of people; those who study the rules of money and those who don’t.  Since I started studying the rules of money, it has become so simple to spot those who haven’t studied them.  If you give someone the choice between understanding the rules, or being given a million pounds, those who don’t understand the rules will opt for the latter option.  The thing is, 60%-70% (depending on who you ask) of those who receive a large windfall without a financial education end up losing it all.  You can always acquire more wealth if you understand the rules of the game.  

How does this relate to the super-rich acquiring more wealth?  Well, the super-rich understand the rules of the game, or employ those who do.  Jeff Bezos is an easy one, but Bill Gates will also do.  According to an article in The Guardian, 90% of UK households use Amazon.  So why is anyone surprised that Jeffe Bezos has an incredible amount of money? 

Our entire culture is based on the laws of supply and demand; we are a capitalist society.  This is what allows us to have the lifestyle we have, with everything from Netflix to social media.  Entrepreneurs spot a gap in the market, and they fill that gap.  The real genius is in creating a need, and then satisfying that need.  Apple is great at this.  They might not have been the first to create a smartphone or tablet, but for many people Apple create the language, create the need and then fill that need.  I think it’s hypocritical to bitch about this online through your iPad.  I think it betrays your own ignorance about how money works.  If you want to use these services, like Amazon, Facebook, Microsoft and so on, you have to pay for them.  That money has to go somewhere.  Make no mistake about it, the desire for wealth is what drives people to create new products and services.  Try going a week without using a smartphone, tablet, PC or laptop.  After that, ask yourself what you would prefer? Access to these services knowing it helped make a handful of people very rich for creating these services, or a return to an earlier time with no internet, social media, accessible computers and streaming services.  

Final Notes

Thank you for reading this week, and I hope you have a great week ahead.  If you are following FIRE or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post. 

Part 42

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week is a soft-reboot of sorts for the blog, as it moves from Now We Live to the new site at davidscothern.com.  I will be looking at the differences between Lean FIRE and Fat Fire, as well as introducing a new section to the blog.

Quote of the Week

As part of the soft-reboot I am introducing a new section where I post a quote I find amusing, motivating or just interesting.  This week, my quote comes from the Stoics and the Spanish-born, Roman-raised Seneca.

I think this quote sums up the Stoic philosophy quite nicely.  Stoicism is built on reason, and not succumbing to emotions, pain or suffering.  It’s about accepting that bad things happen, and that life is often outside our control.  The key is to choose how to respond accordingly.  As such, “it does not matter what you bear, but how you bear it.”

This quote also ties in with a quote I posted a few weeks ago from Viktor Frankl,  “Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

We can’t control everything that happens to us.  Sometimes bad things happen.  Sometimes awful and horrific things happen.  We can’t always control what we have to endure.  All we can control is how we endure, how we respond and how we move on.

Weekly Update

I started the week with a slight hangover following drinks with a friend on Sunday evening.  Then, it was back into the daily grind of work and study.  My exam is on Tuesday and I’m not feeling highly confident.  There are some parts of the unit that I’m comfortable with, but there are a lot of formulas I have to remember for different calculations, such as money-weighted rate of return, time-weighted rate of return, Alpha and Beta values, Sharpe ratios and so on.  I’ve just spent almost an hour trying to calculate an Alpha value, following the instructions in the textbook and I’m coming out with an answer that differs from the answer at the back of the book.  However, the book is riddled with errors so I don’t really know what to believe.  

I’ve been enjoying moving my website from the old site, to the new one at davidscothern.com.  I’m using a new hosting service and it’s much easier to edit and update.  The old provider had an awful interface and I think it’s part of the reason Now We Live failed as a project.  

I had envisaged NWL to be a site that discussed all things art, literature, culture and sport.  For a time, I had a number of contributors but because the interface was so difficult to work with, the contributions stopped coming in and the site started to look tired.  I tried a couple of times to reboot it, but in all honesty for the last couple of years my heart just wasn’t in it.  My focus has been on this blog, but I never felt like NWL was the right home for it.  This blog needs a dedicated home and I’m hopeful that this new site and provider will let it grow further.

I’m thinking that whilst I will stick to the weekly schedule, there may be times I want to post a smaller blog to compliment the main posts.  One thing that frustrated me about NWL, and the host I was using, was the difficulty of posting in the moment.  The mobile app was pretty much unusable but my experience with WordPress so far has been pretty good.  

Health Update

Current Weight: 114.3 (up 0.1kg from last update).

Current Body Fat: 37.3% (up 0.8% from last update).

BMI: 34.5 (no change from last update).

Weekly Goal: lose 0.75kg.

Ultimate Goal: 90kg.

Weekly Steps: 27,067.

A stable week, which has to be a good thing considering everything I have going on at the moment.  Assuming I pass my exam on Tuesday, I will be rejoining the gym across the road which has now reopened following their closure due to Covid-19.  I can’t tell you how much I’m looking forward to doing some proper exercise again.  More than anything else, it helps with my mental health.  It’s impossible to be stressed when you’ve been lifting for an hour.  

I will have to adapt my training though.  The last year or two has been awful from an injury perspective with one joint after another failing me.  I need to take greater care in not pushing myself too far, too quickly.  

Financial Update

Premium Bonds: £20,350 (no change from last update).

Stocks and Shares ISA: £12,465.45 (up £184.89 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,369.45 (up £184.89 from last update).

Credit Card: £0.00 (no change from last update).

Residential Mortgage: £143,171.61 (no change from last update). 

Total Debts: £143,171.61 (down £1,694.90 from last update).

Total Wealth Figure: £77,197.84 (up £184.89 from last update). 

Investment Income in 2020: £86.36 (no change from last update) (target £2,000).

A pretty uneventful week financially.  Some minor gains in my ISA but everything else is just stable.  This is always the case in the week before payday, as my monthly investments are done, and all my bills are paid.  So, until I get paid it’s like I’m coasting.

Post-BTL Uncertainty

I can’t decide how to approach my investments once I have completed my first BTL.  Part of me thinks I should just carry on as I have in the past, with a hybrid approach of investing in stocks, funds, and Premium Bonds which double as my BTL deposit fund.  However, it’s a slow process.  There are certain stocks that I’m convinced will increase in value rapidly once we are past Covid.  However, no-one can predict when we will be past Covid.  Will it be six-months, a year, five years? Who knows.  I’m happy to adopt an aggressive approach to investing, so it would make sense to pile money into stocks and wait for the recovery.  The thing is, I want my return now.  Despite the current downturn, long-term historic data shows that stocks generally outperform cash.  Premium Bonds, not counting the monthly prizes, are basically cash.  There is the small chance of a big win with Premium Bonds, but I keep thinking that if I had £10,000 in Premium Bonds and then the stocks I had my eye on rose back to pre-Covid levels, I could have cashed out for £25,000-£30,000.  

Although stocks do generally outperform cash in the longer term, I think a fair few investors may be liquidating their holdings in cash as the market stagnates and, in all likelihood, suffers more losses in the coming months.  I have quite a pessimistic outlook on the economy over the next few months, which looks something like this:

August to November: Relative stability as the furlough scheme gradually winds down and people return to work.

December: Signs of recovery on the high street as people indulge in comfort spending post-Covid lockdown.  People spend money they don’t have trying to cheer themselves up after an awful 2020.  Retailers retain staff and even hire new staff on seasonal contracts to see them through Christmas and the New Year.

January to February: Retailers begin huge online sales to clear backlogs of stock not bought over Christmas.  As the sales drop off, many retailers begin letting staff go.  

February to March: Unemployment soars as thousands of people are left unemployed as retailers cut job numbers.  Many large businesses are focusing on consolidating stocks into centralised warehouses supplying online sales.  Spending on the high street falls as more people are unemployed.  As we approach the end of the financial year, businesses look for ways to cut costs by closing physical stores and letting even more staff go.

February to April: As post-Christmas credit card bills land, those who have lost jobs and income struggle to keep up with their debts.  More defaults and IVAs are registered.  People struggle to pay their mortgages, and there is a fire sale in the property market.  House prices plummet as properties are snapped up by investors in a wave of wealth consolidation.  

My advice to pretty much everyone this year is to ignore your initial thoughts about a big blowout this Christmas.  Save your cash, and protect your finances against what is coming.

Lean FIRE and Fat FIRE

Within the FIRE movement there are a number of different subtypes.  Two of the common ones are Lean FIRE and Fat FIRE.  

Lean FIRE is when you have enough passive income to meet your basic expenses; the things you need to survive, so things like housing, food and utility bills.  In this situation anything you earn from a job is spending money.  So, you could technically retire in a Lean FIRE state but there is no room for error and nothing to fall back on.

Fat FIRE is where you have enough passive income for a comfortable life with sufficient funds for spending and emergencies.  This is what I’ve been aiming for.  

I’ve been looking again at my Lean and Fat FIRE numbers, in light of what’s been going on in my life over recent months.  My Lean FIRE number is £800 per month, whilst my Fat FIRE number is more like £1,800 per month.  So far, I’ve averaged around £10 per month passive income.  It’s not as bad as it looks though.  Covid has just washed away much of the passive income I would normally expect to have received.  Were it not for Covid, my stocks would have returned around £1,000 this year.  Covid also played a part in delaying my BTL purchase, which would have returned at least £100 per month.  2020 is an anomaly.  I’m hopeful that in 2021 I can achieve a better return than the one I targeted for this year.  Even if it is a better return, in order to achieve Lean FIRE I need to have £9,600 in passive income for the year.  So, still a way to go.  

Final Notes

Thank you for reading this week, and I hope you have a great week ahead.  If you are following FIRE or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post.  

Part 41

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week will see the last post on Now We Live before the site is closed down and the blog moved to a new site; davidscothern.com.

Weekly Update

​This past week has all been about trying to sell our apartment.  We’ve been messed around a little by tradespeople and agents, and it’s been extremely frustrating.  One estate agent told us verbally that they would sell our property for 1% capped at £1,700.  In reality, our property will probably sell for £190,000-£200,000 based on recent sales in our development.  When the contract came through, however, they had increased the fee to 1.5% with no cap.  I queried this and the agent stated they did not remember our discussion.  I have since spoken with two other agents who are offering 1% with no cap.  I’ll probably end up paying slightly more with another agent, but integrity and honesty is everything in business.  If this agent is going to screw with us on the fee, I have no confidence that they will not try and screw us further down the line.  

I don’t have much else to report from this week as I’ve been studying relentlessly for my next exam on 18th August.  Unfortunately, my preparation for this exam has been far from ideal as my personal life continues to present new sources of stress.  Much like with the first exam, I’m just focused on passing it with little thought given to how well I do beyond that.  Under these circumstances, a passing mark is all that matters.

​One thing I have been enjoying recently is eating out and having a cold beer in the sun.  The sunsets in our area have been spectacular lately, and I’ve had some fun putting the photos through various filters, as you can see below:

Health Update

Current Weight: 114.2 (down 0.2kg from last update).

Current Body Fat: 36.5% (up 0.4% from last update).

BMI: 34.5 (no change from last update).

Weekly Goal: lose 0.75kg.

Ultimate Goal: 90kg.

Weekly Steps: 67,456.

I was concerned that I would have gained more weight this week, but fortunately I had a stable week.  It’s just a matter of getting through one day at a time until I can dedicate more mental energy to eating well, and exercising.  I’m itching to get back to the gym but all my time has been focused on selling the apartment and preparing for my exam.  Once I have completed my exam in a couple of weeks, I’m going to sign back up at the gym and start weight training again.  It’s my main source of relaxation and the best method I’ve found to reduce stress, and the last three-months have been the most stressful of my life so far.  Those of you who know me personally will attest to that.

Financial Update

​Premium Bonds: £20,350 (no change from last update).

Stocks and Shares ISA: £12,280.56 (up £672.74 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £220,184.56 (up £672.74 from last update).

Credit Card: £0.00 (down £1,299.01 from last update).

Residential Mortgage: £143,171.61 (down £395.89 from last update). 

Total Debts: £143,171.61 (down £1,694.90 from last update).

Total Wealth Figure: £77,012.95 (up £2,367.64 from last update). 

Investment Income in 2020: £86.36 (no change from last update) (target £2,000).

A great week which saw me finally pay my credit card off.  The funds had been in my bank all along, I just hadn’t got around to making the payment.  Also, my monthly contribution to my ISA boosted the balance alongside some minor increases in stock values.  I’m edging towards the £80,000 mark for my Total Wealth Figure and I’ll probably have a little celebration when I break through that ceiling.  

I was hoping that the second half of 2020 would see some small signs of recovery in the stock market but my suspicion is that the market is going to remain at current levels for a while longer yet, or possibly even drop further.  It’s not a big deal right now, as pound-cost-averaging means I’m getting more bang for my buck, but eventually I will want to cash in some of my holdings to put towards another property.  

Buy to Let Update

I mentioned in my last post that the valuation came back fine with just a couple of minor points.  There will be some repair work needed but we’ve budgeted for that, so it’s not a concern.  We still need to decide on an agent to manage the property for us but this should be resolved in the next few days.  My main frustration at the moment is from the solicitors.  

The firm I’m using was one I was going to use last year when I had a BTL purchase going through.  That deal fell through when the valuation highlighted one problem after another.  My impression of the firm at the time was positive, but in the course of a few emails they’ve managed to damage their image.  First of all, they got the address of the property I’m buying wrong.  Then, they managed to lose the emails I sent with all our ID and proof of address documents attached, which meant I had to send them again.  It’s not a major issue, as it’s not like they lost physical documents.  It is a pain though, and despite me raising the issue several times they haven’t clearly responded to the address issue except to vaguely confirm they’ll deal with it.  The error in the address is that they’ve stated it’s on XYZ Avenue when it’s actually XYZ Road.  However, there is a property at XYZ Avenue as well.  If they end up completing the searches against the wrong property, it’s safe to say I’ll be pissed, as I’ve pointed this out to them four times now.  

I’m going to cut this one short as I’m pushed for time with my studies.  Thank you for reading, and if you’re reading this on Now We Live, please check out davidscothern.com when you get a chance, as it will be the new home of this blog going forward.  

Final Notes

Thank you for reading this week, and I hope you have a great week ahead.  If you are following F.I.R.E. or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post.  

Part 40

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week, a change in direction.

Weekly Update

​Life happens.  All you can do is react most of the time.  The world is complicated, and with billions of people all reacting to their own life, it should be no surprise that life simply happens.  Trying to control it is futile most of the time.  All you can do is react as best you can to what is happening around you.  As Viktor Frankl states:

I was talking to a friend about how events in life shape who we are.  I used an analogy.  Imagine that a painful life event is like a river bursting its banks.  The river floods and the water spreads over the land to damage fields, crops and homes.  The flood waters will recede, and you can take steps to improve the flood defences to make sure that the same flood does not happen again.  However, the buildings are still damaged, and the crops are still ruined.  So, a person can look back at their past at things that have hurt them, and take steps to make sure they are protected against the same hurt in the future, but the damage it has done to their self-esteem, their trust and their happiness also needs to be repaired.  

Part of the reason this post has been delayed is because I’ve been thinking about the direction I want to take the blog in, and in more general terms the direction I want to take Now We Live in.  I started Now We Live in early 2016 when I was at a particularly low point.  The idea was for a general lifestyle site that incorporated travel, literature, art and pop culture.  For a time, I had several contributors but the interface to update the website is not user friendly, and it’s almost impossible to update the site “in the moment”.  Over time, it became increasingly difficult to maintain the site and the contributors lost interest.  As of the time of writing, Now We Live has evolved into Mortgage Advisor on FIRE.  With that evolution, I feel it is time for a change.  As such, this site will be closing and I will be hosting my blog on a different domain; davidscothern.com.  I will update this site for another week or two, but I will be gradually moving all the Mortgage Advisor on FIRE content to the new domain.  

Charity

A few weeks ago I saw a post on Facebook regarding an older man who lives nearby who needs help with his shopping.  He has some health issues and people in the area had been helping out, but now they are back at work or have moved out of the area and so this guy has a gap in his coverage, so to speak.  I volunteered to help out.  

I gave my number to the person who made the post and a few days later, whilst I was actually in the Peak District for a couple of days on holiday, the man called.  I had a nice chat with him and explained I was away but I would be back in a few days.  I did some shopping for him last Friday (31st July) and he seemed like a nice guy.  I sent him a text message that evening and explained I would not be available Monday to Thursday of this week, but I could do another shop on Friday 7th August if needed.  On Monday he called me twice to ask if I was able to do some shopping for him there and then.  I explained I was busy and he seemed upset.  He then called me the next day with the same request, at which point I sent a message referring him to what I had said before.  I don’t think there’s a mental capacity issue here; I think it’s just an assumption that I can drop everything and help out.  I explained that I could do a shop on Friday as planned, but I would need to know by Thursday 6th August.  I have not heard anything, but I’m fully expecting a phone call tomorrow asking me to do a shop there and then.

​I get this guy is struggling, but you know what, so am I, and so are a lot of people.  I want to help but it has to be on my terms.  I am going through a really difficult time in my own life right now.  This may seem really harsh but if I’m going out of my way to help someone, taking an hour and half to walk to the supermarket, then to his house and then back home, it needs to be on my terms.  If he can’t respect personal boundaries then I may have to take the advice I’ve been given by a few people and just block his number.

Health Update

Current Weight: 114.4 (up 1.5kg from last update).

Current Body Fat: 36.1% (down 1.2% from last update).

BMI: 34.5 (up 0.4 from last update).

Weekly Goal: lose 0.75kg.

Ultimate Goal: 90kg.

Weekly Steps: 62,646.

I don’t know what else to say about the health update.  I’m not finding I have the mental resources to dedicate to work, studying for my next exam for my financial advisor qualification, dealing with my personal life and keeping on top of my diet and exercise.  It’s just all too much in one go.  As such, it’s all about damage limitation at this point.

Financial Update

Premium Bonds: £20,350 (no change from last update).

Stocks and Shares ISA: £11,607.82 (down £566.53 from last update).

Fuck It Fund: £0.00 (no change from last update).

Property Value: £187,554 (no change from last update).

Total Assets: £219,511.82 (down £566.53 from last update).

Credit Card: £1,299.01 (up £1,299.01 from last update).

Residential Mortgage: £143,567.50 (up £39.04 from last update). 

Total Debts: £144,866.51 (up £1,338.05 from last update).

Total Wealth Figure: £74,645.31 (down £1,904.58 from last update). 

Investment Income in 2020: £86.36 (no change from last update) (target £2,000).

The stock market took a hammering in the week of this post.  It wasn’t the only thing that took a pasting, as my credit card balance has shot up.  It’s not a cause for concern as I have the funds to pay it off in my bank account.  I just haven’t paid it off yet.  It should look much healthier in time for the next blog post.

Buy to Let Update

The property has been valued and apart from a couple of minor points, the homebuyer report makes good reading.  There are a couple of things we will need to rectify but it’s all well within our budget.  I can’t wait for this deal to be done and for our new tenants to move in.  It will feel like a huge win, and like I’ve finally climbed the first rung of the ladder to FIRE. 

I’ve started thinking a little more about my strategy for saving for the second BTL.  I’m probably going to have to wait a while for the first property to increase enough in value to release funds for a new purchase, so the second BTL will have to come from my own savings.  I have two options:

Option 1 – Premium Bonds

This was my preferred option for saving the first deposit because with interest rates being so low, this method of saving preserved my capital (more or less) and gave me the chance of winning prizes.  Inflation can erode the value of the funds saved, but it’s not a massive problem in the grand scheme of things.  The chance of winning a big prize is appealing and there is zero risk of default from NS&I.  

Option 2 – The Stock Market

Covid has ravaged the stock market and many stocks are trading at, or near to, all time lows.  One of my major stocks is trading at the lowest point since the financial crisis of 2007/2008, but I believe the stock will rebound.  It does not even need to bounce back to pre-Covid levels.  An increase of just 10% would be a huge boost to saving another BTL deposit.  The proposal would be to throw most of my investment budget each month into this stock and hope that over the next few months the share price increases.  If the stock was to return to pre-Covid levels quickly, it could fast-forward my timeline for acquiring a second property by months.  The main risk is that the share price does not increase.  The secondary risk is that the price falls, although that is unlikely in my opinion.  Even if it does fall, the loss is only realised if I sell and there would be nothing to stop me holding on to the stock until it does increase, whenever that might be.  The stock will increase, it’s just a matter of when and by how much.  Normally, I am opposed to speculation in this way but I feel this is a special case just like the period just after the Brexit referendum.  

Until I make a decision, I’ll be carrying on with my normal strategy of investing in both Premium Bonds and the stock market.  Once I have my first BTL completed, I’ll revisit the question.  

Final Notes

Thank you for reading this week, and I hope you have a great week ahead.  If you are following F.I.R.E. or would like to know more about it, please get in touch via Twitter (https://twitter.com/NowWeLive01) or leave a comment on this post.  ​