Introduction

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

Weekly Update

I was thinking I should rename this section “Weekly Updates” but I did not want to confuse matters unnecessarily.  In Part 17 I explained that I would be leaving for India, but what I did not realise was that I had the departure dates mixed up.  I thought I was flying on Saturday 29/02/2020 but I was flying the day before, and Friday is the normal posting day for this blog.  Part 18, as a result, was lost in the mix.  To be honest, I had a draft of Part 18 ready but it was not my best writing and I think it’s best to just leave it in my saved files.  The plan, as mentioned in a previous post, was to have a guest blogger post an update whilst I was in India but that did not come to pass either.  With a very limited internet connection in India I was not able to post anything.  So, apologies for the gap between posts.  I have not given up on this blog and am still passionate about the project and the journey to financial independence.

India  

India was quite the disappointment.  I am going to write a separate blog detailing the trip for another part of this site, and so will not go into too much detail here.  In brief, the main issues stemmed from the agents messing us around.  We had booked a “luxury” package but it was far from luxury.  Also, we knew this was a trip that involved some travelling between cities but in the eleven days we had in India I calculated that we spent approximately seventy hours on the coach.  The hotels ranged from adequate to terrible.  In one hotel we had an issue where our room had no hot water and it took over two hours for the hotel to move us to a different room.  This was late at night after a long day in dirty streets.  The hotel’s conduct during this issue was disgraceful.  Another hotel had no power or water from the time we checked in at around 19:00 until almost 22:00.  This meant after a long day on the road we had no toilet facilities, showers or even lighting.  Another hotel marketed as five-star could not accept card payments, something not disclosed at check-in, which meant that when it came to pay bills, many guests were having heated conversations about paying their expenses.  

The Tour Guide was spineless as well.  There was a group of thirty-six travelers and there was a real division within the group.  One of the travelers insisted on sitting next to the driver in the forward cabin of the coach, and we could see him distract the driver several times.  We narrowly avoided accidents on multiple occasions but the Tour Guide said he could not do anything about it.  We challenged the other traveler but he refused to change seats.  I was quite vocal about this issue and another traveler started making comments about me to other members of the group.  I was told about this, and I calmly confronted the woman to ask if she wanted to clear the air.  She became abusive and I told her to mind her own business in future.  She then sent her husband to speak to me, but I made it quite clear to them both I would not tolerate their nonsense further.  All of this made the trip pretty underwhelming.  

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

The Indian currency is the Rupee.  You cannot buy the Rupee outside of India.  The currency is highly regulated and you are not permitted to transport the currency across India’s borders.  I have cash across three banks, as well as a credit card.  Two of my bank account providers do not charge for using their debit cards abroad or for foreign ATM withdrawals.  However, I had to try many different ATMs to find one that would work.  When they did work, the daily withdrawal limit was 10,000 Rupees, which is roughly £110.  This has to pay for general expenses, lunches and so on.  It does not leave much room to accumulate the cash needed to pay for the meal plan in Rupees.  Also, it was not just me having an issue with ATMs not working.  On several occasions there was a queue of people from our group all trying to draw money from Indian ATMs but they would not work for any of us.  I called my banks and they stated they had no record of attempted withdrawals, which meant the issue was probably that the connection timed out between the Indian banks and the UK banks.  The card readers in shops and restaurants were no better.  Our Tour Guide was well aware of all these problems.  

When we were in Jaipur, one of our last destinations, we were told that we needed to make payment in cash.  We ended up being driven round the city in a Tuk Tuk trying to find an ATM that would work.  We did not succeed.  I explained this to our Tour Guide; he would either have to find a way to allow a card payment or online transfer.  After some debate, I was sent a link to make an online payment.  However, the hotel we were at by this point had no wi-fi.  On the coach the next day, the Guide used his phone as a hotspot.  I spent an hour, as we were driving through the Indian countryside trying to make the payment but the signal kept cutting out.  I eventually gave up.  I was only able to make the payment on the last day.  The Guide kept pestering me to give him the money.  I ended up asking him if he thought I have some magic power to summon cash out of thin air, and I think he got the message.  

On the positive side, my girlfriend and I spent time together away from the pressures of day-to-day life.  We made the best of our time together and got to experience another culture and way of life.  We saw the Taj Mahal, and several forts and temples steeped in history.  We also made some great friends in our group including Jane and Melvyn, a retired couple from the Birmingham area.  We met Tess, a lady living not far from us in South Yorkshire.  We also spent time with a lovely Indian family, and our joint dinners at several of the hotels were great fun.  I also spoke briefly with some other members of the group who seemed like interesting people whom I would like to have known better, but the time pressures of such a trip made it difficult.  I hate being so negative about travelling.  I love travelling, and even when things don’t go to plan, there are normally ways to rescue the situation.  Both my girlfriend and myself agree though, this was our least enjoyable trip in the thirteen years we have been together.  We feel like we need a holiday just to recover from this trip.  

Financial Update

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

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

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

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

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

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

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

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

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

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

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

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

A Soft Reboot

“No plan survives contact with the enemy.” 

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

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

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

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

Investing in Stocks: Now is the time to buy.

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

~ Warren Buffett.

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

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

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

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

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

Final Notes

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

Introduction

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will be looking at my investment plans once I have finished saving for my first BTL deposit.  I will also revisit the differences between process goals and outcome goals. 

Weekly Update

I’m feeling better this week.  I’m not all singing, all dancing, but I’m better than I have been both mentally and physically.  There is still a way to go, but I’m feeling more positive now that I seem to have bottomed out and am starting to climb out of the funk I’ve been in.

​In the last few days I have been able to leave home without crutches.  I struggle to walk or stay on my feet for too long and take frequent breaks, but it is such a good feeling to have some degree of independence back.  I have just finished wearing a 24-hour heart rate monitor, and it is a relief to have it disconnected.  Whilst not as distracting as a 24-hour blood pressure monitor which inflates on your arm every thirty-minutes, the stickers and wires over my chest were annoying.  I have an ultrasound on my heart tomorrow (Friday 21st) and then a follow up with my rheumatologist next week.  I’m hoping to have some more concrete news about my health then. 

I don’t have much else to update you on this week.  It’s been a mostly uneventful week.  

Financial Update

Premium Bonds: £13,725 (up £725 from last week).

Stocks and Shares ISA: £8,613.42 (up £5.25 from last week).

F**k It Fund: £1,613.11 (up £100 from last week).

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

Total Assets: £205,577.53 (up £830.25 from last week).

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

Total Wealth Figure**: £68,246.63 (up £830.25 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

Another positive week with my assets increasing.  By next week’s instalment I should have made another overpayment off my loan which might just bring it under the £3,000 mark.  As the payments take a day or two to clear, it might not show up on the balance in time for 28/02 though.

Since I started this blog sixteen weeks ago, I’ve seen my Total Wealth Figure increase from £49,903 to £68,246; an increase of 36%.  I’ve graphed out that growth rate until the end of my project and, assuming the same rate of growth, it should see me with a Total Wealth Figure of approximately £1,800,000. 

The thing is, I don’t think that figure is realistic.  36% growth is insane.  Have you spotted the problem with my calculation?  I’ll explain with a basic example.

Let’s say that you start with £0 invested.  In the first month you invest £500.  The second month you invest a further £500.  You have doubled your savings.  If you add a further £500, you don’t double your investment again, you increase it by 50%.  If you add another £500 to take your total from £1,500 to £2,000, you have increased your savings by 33%.  The next £500 invested increases your savings total by 25%, and so on.  If you only look at a small window and then project outward it will magnify the misunderstood growth rate.  Another example will illustrate the point more clearly.  The increase from £49,903 to £68,246 is 36%, but in cash terms it is £18,523.  The difference between £249,903 and £268,246 is also £18,523, but it’s only around 7.3%.  Percentages do not always tell the full story.

​It’s an interesting exercise and should serve as a note of caution when looking at limited data and then scaling the data up or projecting it into the future.  The moral of the story is that if the return seems too good to be true, it’s probably too good to be true.  Always crunch the numbers until they make sense. 

Financial News

I’m so close to having my BTL deposit (£14,850 in Premium Bonds) that I can taste it.  Once I get to that point, I have a decision to make about how to structure my investments going forward.  My original plan was to just continue saving, but I’m thinking of taking a different approach.  My residence is increasing in value and rather than saving for my second BTL deposit each month, I think I will let my equity in my residence increase and then use that as the deposit for my second BTL.  Assuming we don’t have a property crash, I should have enough equity to raise that deposit in the latter part of 2020 or the early part of 2021. 
Assuming I take this approach, this will free up at least £500 each month.  So how do I allocate that money?

Process Goals and Objective Goals

​I was asked this week about my approach to goal setting, and I discussed this in a recent instalment of this blog.  I’m of the view that process goals lead to better outcomes that objective goals.  For example, rather than saying “I want £10,000 saved in a year”, you can set the goal of saving or investing each month.  By aiming to complete the process, the objective takes care of itself.  Also, by focusing on the process you are less inclined to give up if something happens that makes achieving the objective unlikely by the deadline. 

Despite all that, objective goals are still important.  They provide the direction and focus for your process goals.  It’s fine to say you are going to save each month, but unless there is an overall strategy you might not get the best returns on your investment.  My end goal is financial independence.  My process is saving and investing regularly.  My strategy is made up of several things: maximise investment returns, minimise fees, avoid unsecured debt, and leverage as much as possible without too much exposure.  

How does this relate to my extra £500 per month?  There are two smaller financial factors that I want to draw a line under as soon as possible.  I want to clear the decks, so to speak.  As soon as is possible I want to clear my loan and increase my F**k It Fund to £4,500. 

Between the outstanding amount on my loan (£3,370) and the amount needed to increase my F**k It Fund to £4,500 I need to save approx. £6,000.  I’m already clearing £30 per month off the loan through the regular payments and saving £100 towards the F**k It Fund.  My budget allows for overpayments to the loan of £300 per month on top of the £500 I could free up from the Premium Bonds contributions.  In total, I have £930 that is being put towards the F**k It Fund and to pay off my loan.  It’s not beyond the realms of possibility that I could achieve these two smaller goals within the next six months when I factor in dividend income that will be received throughout the year. 

Allocating my money in this way means that I will not be increasing my Stocks and Shares ISA as quickly as I could or increasing my deposit fund for future BTLs as quickly as I could.  However, it does mean that I will be trimming the fat.  I will be paying off a smaller commitment that will then free up even more money to direct to other things.  Also, by getting my F**k It Fund up to £4,500 I will no longer have to contribute to that monthly.  I will be free to allocate the entirety of my monthly income to my ISA and to my deposit fund, rather than spreading my money across the F**k It Fund and loan payments as well. 

The plan, as it stands, assumes that I continue in my current role with my current salary.  However, there is a possibility that I could be in for a new job.  My employer is paying for me to study to become a Financial Advisor, and I’m not sure if I would rename the blog as the thought has only just occurred to me as I type this.  Taking up this new role would mean more money and would mean I would relocate from Sheffield to Manchester.  I would then rent my apartment out (it would achieve £950-£1,000 per month in rent, against a mortgage of approx. £450), and initially rent in Manchester whilst I look for somewhere to buy.  This would mean I would have my soon-to-be-purchased BTL, and my current residence both providing me with rental income. 

2020 is going to be defining year in my plan to become financially independent by the age of 40, but it’s all looking positive. 

Final Notes

​Thank you again for reading this blog.  Next week I will be discussing values and principles and how they are the foundation of my investing strategy, and I will be looking ahead to my two-week trip to India.  If you have enjoyed reading this blog, please share it on social media.

Introduction

Hello and welcome back to Mortgage Advisor on F.I.R.E.  This week I will be looking at Fear Setting and how this can complement or even supersede Goal Setting, as well as discussing my ongoing health problems. 

Weekly Update

In the latter part of 2019 I was undergoing physio for Achilles tendonitis in my left leg.  On the instruction of my physiotherapist I was completing some basic stretches and the result was a series of fractures through my right foot.  After several scans and appointments with a surgeon, it was discovered that some of the bones in my right foot had not separated as they should have done when I was born.  So, as the foot was under pressure, stress fractures occurred.  This knocked me sideways and it was the worst pain I’ve ever experienced.  I even lost consciousness and collapsed in A&E whilst waiting to be seen. 

​A few weeks of rest and my foot recovered, but throughout this my left Achilles was still causing pain and discomfort.  A few days ago, for lack of a better way of putting it, my Achilles “went”.  I can barely put weight on the leg and am using crutches to hobble around my apartment.  I’m also back on tramadol as it’s the only pain relief that makes a difference.  All this means that I’m off work again, which sucks.  I just need a break, not literally speaking.  Since 2018 it has been one health problem after another.  In addition to seeing a surgeon about my Achilles, I’m being referred to my cardiologist due to losing consciousness again.

Financial Update

Premium Bonds: £12,450 (no change from last week).

Stocks and Shares ISA: £8,219.00 (down £32.23 from last week).

F**k It Fund: £1,511.85 (no change from last week).

Property Value*: £173,501 (no change from last week).

Total Assets: £195,681.85 (down £32.23 from last week).

Credit Card Debt: nil (no change from last week).

Loan Debt: £3,370.33 (down £200 from last week).

Mortgage Debt: £134,279.11 (no change from last week).

Total Debt: £137,649.44 (down £200 from last week).

Total Wealth Figure**: £58,032.41 (up £167.77 from last week).

Investment Income in 2020: £0.00 (no change from last week) (Target £2,000)

*valued at £173,501 according to lender’s index.

**total assets minus total debt

It has been one of those weeks where I haven’t moved any money into investments, but I have been able to make an extra payment towards my loan.  As such, my total wealth figure has increased despite my total assets decreasing slightly in value. 

Fear Setting

I wanted to take some time to discuss a concept I first discovered a few years ago called Fear Setting.  I believe almost everyone must be familiar with goal setting in general, even if they do not know about things like SMART (specific, measurable, achievable, realistic and timely) goals.  Goal setting relates to what you want to happen or what you want to achieve.  The idea is that setting a goal helps solidify the change in behaviour needed to achieve the goal.  There is some debate in the field of psychology as to whether goal setting is effective.  I also have some doubts over the effectiveness of setting ends as a goal, rather than a process.  For example, you could set a goal that you want to lose 50kg in a year.  This would be an “ends” goal, because you are aiming for a specific end goal.  You could instead set a goal that you will eat you five fruit and veg portions each day and limit yourself to one bar of chocolate a day.  This is more of a behavioural goal, with the idea being that if you stick to the behaviour, the “end” will come as a result of the behaviour. 

In recent years I have adopted a hybrid approach to goal setting, where I am trying to focus more on the process than the result.  This has led to my investment behaviour becoming almost automatic.  Fear Setting is something that really lit a fire under me, and I believe it has much more motivational potential than simple goal setting alone.  I think that Fear Setting is a great way to kick start a new set of behaviours and that process-goal setting is an excellent way to maintain those behaviours.

What is Fear Setting?

I first came across Fear Setting when I watched a TED talk by Timothy Ferris.  The video goes into a lot of detail but there was one specific part which resonated with me, and it’s something which encapsulates the entire point of Fear Setting.  I’m talking about the cost of inaction. 

When you set a goal, you must take some action to achieve that goal.  Granted, you could have an abstinence goal which requires you to refrain from a behaviour, but I would suggest exercising will power and restraint is a form of action, rather than inaction.  Fear Setting asks you to consider the cost of inaction; the impact on your future if you change nothing. 

I know a lot of people who are unhappy with their lot in life.  The frustrating thing is that when I ask what they are doing to change or improve their situation, I am answered with a shrug.  There is a quote that is often credited to Albert Einstein but there is some debate over the accuracy of that credit, but the quote is still powerful: “insanity is doing the same thing over and over and expecting a different result.”

If there is something you are unhappy about in your life, ask yourself where you will be in six months, three years or five years if you carry on as you are.  Does the answer please you, or upset you?

My journey to F.I.R.E. was prompted in large part by the answers I had to the Fear Setting questions.  Life is too short and unique for regrets.  I do not believe in any sort of afterlife.  I believe this is it.  We are born, and then we simply keep ourselves busy until we die.  Spending your adult life doing things you don’t like is tragic.  I’m not saying that everyone can be a winner, or a millionaire, or happy for the rest of their lives.  What I am saying is that the only things you can control are your thoughts, feelings and (to some extent) your actions.  Small changes now can have a big impact on later outcomes. 

​I feel that I wasted a large part of my life so far.  I look back at my 19th to 23rd years and get so frustrated at wasting that time, but I had to go through that difficult time to get to where I am now.  There are a lot of positives to my life.  I am financially comfortable.  I have great parents.  I have a girlfriend whom I love very much.  I have a cat who, in the year I’ve had him, has brought so much joy and fun to my life.  I have a few friends whom I respect and value greatly.  Despite all this, I feel unfulfilled.  For almost my entire adult life I have felt stuck in second gear, like I have more to offer but no outlet for it.  As we live in a capitalist society, money is the key to survival.  I need money because money is what buys my freedom to choose, and with my freedom to choose comes my ability to really sink or swim on my own terms.  When I asked myself where I would be in six months, a year, or even ten years down the line if I didn’t change anything, the answer was terrifying.  I don’t want to be that person who is just killing time until death.  

Financial Education

I’ve said many times that there is not enough financial education in the UK.  In school, children will learn about many interesting things of which only a small fraction will have real world relevance.  I’m not one of those people that will say we shouldn’t teach photosynthesis, Shakespeare or about the water cycle because hardly anyone will use it when they are older.  As much as I believe we need to do more for children with respect to financial education, I don’t think it should be at the expense of any one subject in school. Although having money is generally seen as a positive thing, learning about money is often seen as dry or dull to study. There needs to be a change in attitude or else the next generation, and the one after, will just keep repeating the same mistakes.

Final Notes

Thank you for reading again this week.  Fingers crossed that no major typos or leaps in logic were present, considering I’m high as a kite on pain medication as I type this. 
If you would like to follow Now We Live on social media, you can check out our Facebook, Twitter and Instagram.  As always, if you have any feedback or questions, please leave a comment.  

Introduction

Hello and welcome back to Mortgage Advisor on F.I.R.E.  We are now in the first full week of 2020 and it is still so bizarre to think we are in 2020.  In some ways it feels as though not much has changed in the world since 2000, which as a child I always thought was so futuristic, but we now have extremely powerful computers that fit inside our pocket with access to the history and entirety of human knowledge.  We have wearable tech such as watches and VR headsets.  Yet, despite decades of awareness we are still destroying our planet.  The fires in Australia are heart breaking and although the situation is more complex than Climate Change = fires, the fires are a stark reminder of how fragile our planet is.  For all the despair, I have some hope that technology will be our saviour.  Turning most road vehicles to electric with an increase in nuclear and green energy is the way forward.  It’s going to be a generational project and a race against time to see if the technology can integrate itself before we reach a critical tipping point in the planet’s ability to heal itself.

​This week I will be discussing another story I read in The Guardian about how to manage debt in the new year.  I will also discuss a concern regarding my upcoming purchase of BTL property with my business partner.  First, however, I will update you on my week and look at a significant improvement in my finances from last week. 

Weekly Update

I did something this week which some readers may see as controversial.  I placed a bet, but it’s not like any bet I’ve placed before.  It’s a bet on myself.  There is a company out there called Healthy Wage which allows you to bet on your own ability to lose weight.  You must have your weight verified through a video recording process and then you choose how much you want to lose and over what period, and Healthy Wage offer you odds.  I thought about whether this was something I was comfortable with, as someone who has had issues with gambling in the past, but as I thought through it, I realised that this type of wager has a fundamental difference to betting on football.  With a bet on the football, I have no control over the outcome.  It is a gamble in the truest sense of the word.  With this bet on my weight loss, I am totally responsible for the outcome.  It is completely on me.  There is no luck involved, just determination and effort.  I need to lose weight as the last couple of years have hit me hard.  In 2017 I completed a stationary bike ride for charity and by the end of that challenge I weighed in just under 95kg.  When I placed my bet with Healthy Wage, I was 119kg.  My aim is to lose 30kg in seven months; roughly a kilo a week.  If I succeed, I more than double my money.

To help me lose weight I am trying intermittent fasting and time restricted eating.  With intermittent fasting there will be days where I drastically reduce my calorie consumption and, on all days, I will adhere to time restricted eating.  With TRE you limit calorie consumption to a set window of time each day.  You can choose to do 12/12 where you eat within a twelve-hour window and fast for twelve hours, or 8/16 where you eat within an eight-hour window and fast for sixteen hours.  I am employing a 10/14 split.  I eat within a ten-hour window and fast for fourteen hours.  My fourteen hours start with my last snack of the day at approximately 10pm and ends at 12pm the following day.  When fasting you can drink as much water, or black tea/coffee as you want.  I’m finding it easy so far and, in a week, have dropped 3kg.  From what I’ve read this is quite normal for the first week or so.

Financial Update

Premium Bonds: £11,500 (up £1,575 from last week).

Stocks and Shares ISA: £7,745.46 (up £292.86 from last week).

Credit Card Debt: £1.10 (up £1.10 from last week).

Loan Debt: £3,800.49 (no change from last week).

F**k It Fund: £1,161.85 (up £10 from last week).

​Total Wealth Figure: £193,908.31 (total assets including residence valued at £173,501 by my lender) minus £138,080.70 (total debt including residential mortgage) equals £55,827.61 (up £2,297.68 from last week).

I received £1,800 that I was owed this week which allowed me to significantly increase my deposit fund held in my Premium Bonds.  The rest of the £1,800 helped to cover a couple of expenses that cropped up, but I’m in a good position to hit the amount needed to complete the purchase of our first BTL. 

Financial News

​Another story in The Guardian caught my eye this week.  The story is titled: New year money: how to regain control of your cash.

This story is another example of banal reporting when it comes to money.  I could have predicted the content with a high degree of accuracy before reading it. There is the initial set of statistics reporting how many people are in debt following reckless Christmas spending, a link to debt charities followed by advice about how to get out of debt. 

The article has four pieces of advice:

1. Cut your credit card costs
2. Get a better overdraft deal
3. Consider consolidating your debts
4. Think about switching to a better current account

There are some obvious issues here.  There are two types of people that get into debt.  The first type of person is one that literally does not have enough money to cover their basic living expenses.  Each month, their debt increases until something gives.  This article does nothing to help them. 

The second type of person is bad at managing their money and often spends excessively using all their money and then some, which results in them getting in debt.  There may be the liberal use of the phrase “it’s only money” to support their spending habits.  This article does nothing to help them. 

This type of article is like having an article about how to lock your stable door after the horse has left.  If you are in debt, it is because you have spent more than you earn.  I’m not making a value judgement here; my definition is just a statement of fact.  Rather than telling people how to manage their debt, we need to be telling people how to avoid debt. 

In this country people do not generally like to talk about money.  It is seen as impolite to ask how much someone earns or whether they are in debt.  If we really want to tackle the debt crisis, then we need to talk about money more openly.  We also need to stop telling people how to rearrange the deck chairs on the Titanic, and teach them how to make ships that don’t sink in the first place. 

The problem with telling people how to spend money is that much of the advice is boring.  Read any article about financial planning and budgeting and you can guarantee that the article will contain one of the two following tips: ditch your morning Starbucks and/or take your own lunch to work.  For many people, having a lunch they buy at work may be the only time they get to have their food made for them.  For many people, their morning Starbucks is the only thing that keeps them going at work.  For many people who are struggling financially, these little treats are the highlight of their day. 

Tackling the debt crisis is going to take a lot of time, and it maybe a generational project, but we cannot rely on government to tackle this issue.  After all, the major banks make their money from interest charged on debt.  There are things that the average person can do to reduce their outgoings though.  Before I offer some suggestions, I must stress that I realise everyone’s circumstances are unique and I am not qualified to offer financial advice.  The following is for information only and does not constitute advice on my part.  If you are struggling with debt, then please contact StepChange or another debt charity.

The Car

Cars are expensive to buy or lease, but the cost of running a car can be just as expensive.  According to an article in The Express, the average monthly cost of a car lease agreement was £253 (February 2018).  Some additional google-fu suggests the average cost of running a car come in at £150-£200 per month.  Then, you have potential costs of parking your car at work if you don’t have a secured space.  It’s not unreasonable to suggest that the average person could easily spend £400 per month on car related expenses.  If you were to invest £400 into a stocks and shares ISA each month and achieve growth in keeping with historic trends, after 25 years your ISA would be worth £535,000.  In my city, Sheffield, a monthly bus pass costs around £60.

Even if you budget for the occasional Uber, not owning a car looks very attractive.  When people ask me why I don’t drive, I think about these figures but hold off on trying to explain as when I have in the past, the person I am talking to mentally switches off.  People don’t like to talk about money, and people think the figures sound too good to be true. 

For some people, owning a car is essential.  However, there are many such as me for whom a car would be an unnecessary burden but there seems to be a societal expectation that you should learn to drive and have a car. 

Review Your Spending

Sometimes the act of reviewing a behaviour with no judgement can prompt change.  This can happen when you record your eating habits and it can work with money.  Set aside an hour or two and go through your last three months bank statements and credit card statements and review what you are spending and where.  You could group spending into different groups such as household expenses, food shopping, eating/drinking out and so on.  Compare your expenses to your outgoings and see where you stand. 

If you want to be financially secure, you need to be spending less than you are earning.  It mind sound like simple advice but I have met many people in the course of my personal and professional life who have thought themselves secure because they are saving each month whilst refusing to acknowledge they were getting further into debt each month by subsidising their spending on credit cards. 

The Richest Man in Babylon by George S. Clason gives some very simple advice.  Clason suggests that you try to bring your spending to 70% or less than what you earn.  Of the remaining 30%, 20% should be used to repay debts.  The last 10% should be invested.  Once you pay off your debts, the 20% allocated to that could be invested as well.  This is good, simple advice. 

There will be some people who physically do not have enough money to cover their expenses.  Should you find yourself in this position I would strongly encourage you to speak with Stepchange who can offer more tailored budgeting advice.  

Planning for Death

As I have stated in previous posts my plan is to purchase properties with a business partner.  We know each other well and share the same ambitions and plans for the property and so, I am not concerned about disagreements with how we will manage the properties.  However, I have been thinking about what happens if one of us was to die before we had completed our exit strategy.

In the UK, when you buy a residential property, it will normally be owned as either Joint Tenants or Tenants in Common.  My understanding is that under Joint Tenants each owner owns 100% of the property, so that if one of the owners dies the property becomes the sole property of the surviving owner.  With Tenants in Common, each owner has a defined share of the property, typically an equal share each although it does not have to be.

Another complication is how mortgage lenders will allow a mortgage account to be administered if the property was purchased as Tenants in Common and one owner dies.  It can cause a lot of delays, stress and confusion.  The deceased will require an up to date will and it will take a long time to process the change of ownership.  Another concern with Tenants in Common, is that whilst I and my business partner are happy to do business with each other we do not necessarily want to do business with each other’s next of kin.   Also, it is not fair to expect our respective next of kin to share the same passion, drive and interest in managing property.  It would seem, therefore, that Joint Tenants would be the way forward.  The complication here is that we both want to provide for our next of kin, and although we trust each other, it is never advisable to take people at their word where potentially hundreds of thousands of pounds are at stake.  With Joint Tenants, if one of us dies, the survivor gets the property and according to what I’ve read, not even a will can overrule a Joint Tenants agreement.

I have been thinking about this issue for a while, and I think I have hit upon a solution.  I have proposed the solution to my business partner and, so long as we can get the agreement drawn up by solicitor in a legally binding way, we will proceed with this solution.
What I propose is that we purchase the properties as Joint Tenants but draw up a separate agreement that states in the event of one of our deaths, the surviving partner has X number of years to pay equity to the deceased’s next of kin.  This would be calculated as 50% of the equity at time of death, based on average market value.  For example, if we own two properties each valued at £100,000 with £50,000 debt on each, the total equity is £100,000.  The next of kin would then be entitled to £50,000.  By giving the surviving partner full control and ownership of the properties, it allows them to manage the properties without undue interference.  In addition to this, there would be a second condition that requires the surviving partner to pay the next of kin 25% of the net rent until the equity is paid back.  The other 25% would be kept by the surviving partner as a “management fee” for dealing with the properties on their own and to cover costs such as maintenance.  If the equity was not paid back within the agreed time, then interest would start being paid in addition to the 25% rent.

I am not sure that this type of agreement would be legally binding, and we will consult a solicitor first.  Assuming it can be done, it will probably cost some money to draw up the agreement, but it would be a sound investment to secure our respective financial futures. 

Final Notes

​Once again, thank you for reading.  If you have any feedback, good or bad, please leave a comment.  Also, if you spot any funny financial stories or poor financial journalism, please point it out in the comments section.  

Introduction

Hello and welcome back to Mortgage Advisor on F.I.R.E.  We are now up to the tenth part in this blog, which is a satisfying milestone to pass.  Over the next few weeks I will be introducing a few new sections to the blog.  In addition to the usual weekly and financial updates, and the subject of the week, I will talk a little about finance related news.  Another section that I thought would be interesting is the word of the week, where I will pick a finance related word and attempt to define it.  They say that the best way to learn is to teach, so I hope to pick up some knowledge through this exercise.  The word of the week will start from next week, but I will be discussing a poor piece of financial journalism I saw in The Guardian today.

Weekly Update

The week between Christmas and New Year is a strange time.  I was away from work until the 30th and then had to catch up with a lot of emails and briefs as I had been away from the office since 12th December.  I’ve been finding work difficult as I have missed a lot of time in the last six months due to ill health and holidays.  Hopefully as we move into 2020, I will achieve some consistency.  As I write this on the evening of January 2nd my girlfriend is on her way back from Romania where she has been staying with her family for the past few weeks.  It has been a bit dull having Christmas and New Year away from her, but I’m happy that she has been able to spend this time with her family.  It’s the first time in over a decade she has been home for the holidays. 

New Years Eve was a bit underwhelming, even by my own low expectations.  The highlight came at 19:25 when I finished my 104th book of 2019 and hit my target of completing two books every week over the year.  I have blogged about this reading challenge here. 

It just seems that NYE is just an excuse to get drunk.  I’m not a big drinker; I have an alcoholic drink once every few weeks.  I’m not anti-drinking, but alcohol tends to exacerbate some of my health issues.  Also, over the last few years I have become increasingly bored by “nights out”.  I would much prefer sitting with a group of interesting people, over a nice meal.

​I’ve not enjoyed the holiday period this year.  I would go as far as saying it’s been one of the worst holiday periods I can remember.  It’s been nice spending time with family, but I’ve not felt more alone than I have in a long time.  I have always enjoyed my own company, but for spells of a few hours at a time.  I don’t think I cope well spending extended periods of time on my own.  The fact that I’ve felt quite ill for much of the time over Christmas has not helped, nor has the fact my sleep has been disturbed almost every night. 

Financial Update

Premium Bonds: £9,925 (up £25 from last week).

Stocks and Shares ISA: £7,452.60 (down £68.66 from last week).

Credit Card Debt: nil (no change from last week).

Loan Debt: £3,800.49 (no change from last week).

F**k It Fund: £1,151.85 (up £76 from last week).

Total Wealth Figure: £192,030.45 (total assets including residence valued at £173,501 by my lender) minus £138,500.52 (total debt including residential mortgage) equals £53,529.93 (down £70.26 from last week).

I believe this is a first; my Total Wealth Figure has decreased from one week to the next.  There is a simple reason for this, though, so I’m not too concerned.  December’s interest has been added to my mortgage balance, but because of how the publishing schedule for this blog has fallen, my mortgage payment was made today but has not updated on the balance on my statement.  Next week, the mortgage debt will drop by several hundred pounds. 

​Investment Income Received in 2020: £0. (Target: £2,000 by end of 2020).

Financial News

This story caught my eye on The Guardian website today, although it was published on 29/12/19.  These types of stories are a guilty pleasure/frustration for me as they often have me shaking my head and swearing at the computer screen.  The advice given is often unrealistic or completely banal.  This article managed to hit the full house of being unrealistic, banal, irrelevant to most people with a side order of offensiveness. 

Tip #1 – Don’t miss the tax deadline

You would think that the first tip would be something that applies to most people, but The Guardian takes the approach that something that applies to roughly one-in-nine adults is the most pressing issue on the agenda.  There is also the fact that if you need to submit a tax return, and you don’t do it, you are breaking the law.  Stating this as a financial resolution is just stupid.

Tip #2 – Watch out for currency shifts

One could forgive the first tip as being a little ill-judged, but this tip is practically offensive to many people.  The fact is that for 99% of the UK population, currency shifts are as low down the list of concerns as things like alien invasion or a zombie apocalypse.  With hundreds of thousands of people in the UK in food poverty, and food banks being used in record numbers, telling people to watch out for currency shifts is just offensive.  For many people that are going on holiday, tiny changes in currency conversation rates hardly matter.  By all means, shop around for a good rate of conversion but if your second biggest financial concern of the year is worrying about conversion rates then you don’t really have much to worry about.

Tip #3 – Shop around for savings deals

Once more, this suggestion from The Guardian is detached from the reality for most people.  The average UK household has around £2,500 of credit card debt.  General figures for the average amount of savings are more complex, but if you spend just ten minutes googling the situation you will see that for many people savings are a luxury. 

Tip #4 – Take stock to avoid debt & Tip #5 Make your mobile work for you

In Tip #4 the author explains that you should avoid credit card debt, and if you have credit card debt you should pay more than the minimum amount.  In Tip #5 the author suggests using a credit card to purchase your next mobile phone outright as opposed to taking it on a contract.  I think I have already mentioned that the article is detached from reality, but this is just absent all logic. 

Tip #6 – Fingers crossed for the budget

Are you f*****g me?  The Guardian has published an article regarding financial tips and one of those tips basically boils down to “hope for a lottery win”. 

Tip #7 – Look for energy bill deals

This is advice that has been doing the rounds for years now, and whilst there are some savings to be made it is hardly going to make the difference between poverty and comfort for many people who are struggling. 

The article from The Guardian was disappointing and made me angry.  Next week I will look at some more sensible suggestions that might be a bit more relevant for most people. 

Ground Rules Revisited

In Part 4 of this blog I set out a series of Ground Rules to help focus my investment efforts.  I now find myself having to revisit some of those rules as life has a habit of getting in the way.  Some of my targets were a little ambitious and with the expense of Christmas, my trip to Romania and an upcoming two-week trip to India, I need more free cash.  Also, we have had a few things go wrong in our apartment and need to free up money to deal with some repairs. 

A quick recap of the rules now follows:

Rule 1: Save a minimum of £400 each month in Premium Bonds.

Rule 2a: Invest a minimum of £250 each month into my Stocks and Shares ISA.

Rule 2b: Reinvest all dividend income from the ISA.

Rule 2c: Absolutely no withdrawals allowed from the ISA.

Rule 3: Save a minimum of £100 each month in my F**k It Fund.

Rule 4: Save a minimum of £30 each month in my Tech Fund.

Rule 5: If I use my credit card, pay it off immediately.

As you may remember I removed the Tech Fund from consideration in this blog, as I realised it would not be an ongoing investment and eventually the funds would be used to replace my phone and/or laptop when they eventually stop working. 

I am going to tweak the amounts in Rule 1 and 2a.

Rule 1 (updated): Save a minimum of £300 each month in Premium Bonds

Rule 2a (updated): Invest a minimum of £200 each month into my Stocks and Shares ISA.

All the other rules apply as normal. 

There will probably be many months when I invest more than the minimum, but I’ve realised that in life you must be flexible when things come up.  If you are rigid, you are brittle, and things that are brittle tend to break. 

Final Notes

A bit of a shorter post this week as I’ve been a bit busy.  Next week should be more in-depth as I look at some of my suggested financial resolutions.  I will also look at how realistic my £2,000 target for investment income in 2020 is.

Thank you for reading and I hope you have a great weekend.

Link to The Guardian story discussed in this blog: https://www.theguardian.com/money/2019/dec/29/top-financial-resolutions-for-2020

Introduction

Hello and welcome back to Mortgage Advisor on F.I.R.E.  I hope you are all having a great time over the Christmas period.

I’m shaking things up a little off the back of reader feedback.  For the past few weeks I have followed the same format with sections in order; Weekly Update, Financial Update and then my financial subject of the week followed by Final Notes and a preview of the following week.  I am keeping those sections, but I will now introduce my posts with a section called Introduction.  I trust I do not need to explain what purpose this section will serve.

​This week I will talk a little about my Christmas experience and then have a look at my finances for the week.  The financial subject of the week will be a look back over some of the worst financial mistakes I’ve made.  This will be difficult for me as it will perhaps be the most I’ve opened about some subjects to the general public. 

Weekly Update

Christmas this year has been a little underwhelming.  I’m not generally a “Christmas person” anyway, but this year has been disappointing even by my own low expectations.  The highlights have been spending time with my parents.  I saw both my Mom and Dad on Christmas Eve, then had Christmas Day lunch with my Mom and it was the first time since I was a child that I’ve spend Christmas Day with just my Mom.  I then saw my Dad on Boxing Day in what has become a little ritual of going for brunch to exchange presents.  The company of my family (I class my girlfriend as family) is always the highlight of my Christmas.  The second highlight is food.  I love food but this year, the food has been a disaster. 

On Christmas Day we booked Miller and Carter, as we did last year.  It cost £75 per person, which is about the going rate for a full menu including starter, main, dessert and coffee.  The food started out ok and just got worse.  I had a fillet steak which I ordered medium.  I will happily eat steak rare and one of my favourite dishes is steak tartare so I’m not squeamish about raw meat but on Christmas Day morning I was not in a good way.  Without going into too much detail, I felt rubbish and had spent an hour in the bathroom before getting ready to go for lunch.  The joys of IBS…

​I did not feel like having blood on my plate after already seeing blood that morning (I know, gross).  So, I ordered my steak medium.  I class medium as charred on the outside with pink being the main colour through the middle of the cut.  The middle of the steak should have felt some heat from the kitchen, but it should still have colour.  There should not be a cube of raw beef that makes up the middle half of the meat.  I was not feeling great at all and no staff came to check how our food was.  I love a good steak; it’s one of my favourite meals and there are a few restaurants where I’ve had fantastic steaks.  In Syracuse, New York, the waiter insisted I cut into the middle of the steak to check it was cooked to my liking when the meal was served.  I experienced this on a cruise earlier this year, and in a fantastic steak restaurant in Valletta called Sciacca Grill.  For a steak restaurant to not cook your steak anything like how it was ordered is as bad as it gets.  The sides to my meal were also tired.  The onion loaf looked, and tasted, like scraps from the chippy and the fries were cold and stale.  A very disappointing experience.  When our plates were cleared, I mentioned to the waitress how poor my food had been and the chunk of raw beef on my plate confirmed my experience.  I left with an apology and a voucher for £26.50 – the price of a fillet steak.

Boxing Day was also a bit of a disaster in terms of food.  We went to a place called Graze Inn, which we have done the last two years.  It’s not the best food but it’s generally ok.  The location is the main reason for choosing there as it’s midway between my apartment and my Dad’s house without needing to navigate the city centre.  The restaurant has changed since my last visit on Boxing Day 2018, and not for the better.  The restaurant is much smaller now and all the tables are close to the bar where the sound of the coffee machine drowns out all conversations.  The brunch menu has a dozen or so options with bacon and sausage, a few sweet options and then a vegan option and then a halloumi sandwich.  Nothing was grabbing me, so I went for the halloumi sandwich.  I left most of it as it was a soggy, tasteless mush.  Out of the seven people in our group most of us were disappointed.

All in all, a poor food experience over Christmas.

Financial Update

Premium Bonds: £9,900 (no change from last week).

Stocks and Shares ISA: £7,521.26 (up £112.55 from last week).

Credit Card Debt: nil (down £196.90 from last week).

Loan Debt: £3,800.49 (down £30.77 from last week).

F**k It Fund: £1,075.85 (no change from last week).

Total Wealth Figure: £191,998.11 (total assets including residence valued at £173,501 by my lender) minus £138,397.92 (total debt including residential mortgage) equals £53,600.19 (up £340.22 from last week).

Not a bad week overall.  The ISA has increased in value once again following the election a couple of weeks ago.  It’s a nice feeling having the credit card back down to zero and I’ll feel even better when I eventually get the loan paid down.  That might have to wait a bit longer though as there are things in our apartment that need addressing. 

​Moving into 2020 it’s just a matter of waiting for funds to come together that will allow me and my JV partner to start searching for properties.  We will probably start looking mid-March.  It’s expected that we will have our deposit ready by May 1st, but we want to have a property or two in mind at the point we have the cash ready.

Financial Mistakes and Regrets

University

If I knew at age 18 what I know now, I would probably be a millionaire.  I would have snapped property up whilst it was cheap, and I would have invested in stocks as soon as I was able.  There is little point dwelling on this, as I’m not able to go back in time.  My hope is that my experiences will help other people avoid some of the mistakes I made from turning 18 until I started educating myself about money.

I went to University of Leicester in 2003 because everyone else I knew was going to university.  I did little to no research and ended up unhappy.  I dropped out early in the second year.  I was not mentally ready for university at that time.  In school and sixth form I had been reasonably popular with a large group of friends, but something changed as sixth form ended.  At the time I could not explain it, but I now know it was depression.  I was depressed for a long time.  I only snapped out of it when I took a job with Norwich Union (now AVIVA).  I have a lot of good memories from my time there and I started to come out of my shell again.  I made some friends and felt better about myself, and I made the decision to “finish what I started” and go back to university.  I did much more research and went to UCLan to study Sport Psychology.  For the most part, I had a great time.  I met my girlfriend there and missed out on a First in my degree by a narrow margin.  I did, however, achieve a First in my dissertation which is my proudest academic achievement.  I wrote a report on home advantage and stadium design in English professional football.  I had a great tutor who I am still in contact with a decade later.  Overall, my time at UCLan was a successful time.  Financially though, it was a disaster.

​My two stints at university as an undergraduate student have left me with almost £30,000 of student loan debt.  Every month I pay £100 back from my salary.  I don’t include this loan in my commitments because the payments are taken at source and I’ve mentally compartmentalised that debt.  The biggest frustration is that I’m now working with people who never went to university and did not get a degree, yet we are on the same money doing the same job.  In net terms, they are £100 per month better off than me.  If I had that £100 each month, I would be further along the line to financial independence.  Rationally, I know that life doesn’t work that way.  I had to have all my life experiences to get to where I am now.  But still, university remains my biggest financial regret, not only due to my undergraduate experiences but more my post-graduate experiences.

I have had many bad experiences of trying to complete a master’s degree.  I signed up with the Open University, but it quickly became clear that the tutors did not care.  When I tried to contact one tutor, they told me that their OU work was not their priority.  The following year I was accepted on to a course with another university, but as the course date drew closer, I did not hear anything.  I kept contacting them asking for enrolment details and was repeatedly fobbed off.  The day before the course start date they informed me they had messed up my enrolment and would not guarantee a place as the course was now full. 

​The year after that another university mis-sold a course to my girlfriend and me as an Occupational Psychology course, when it was in fact a business course.  I then started a masters with the University of Leicester but had problems with some of the tutors who unfairly marked some of my work.  I will not get into the details as it’s not that interesting, but I had definitive proof my work had been marked incorrectly.  They refused to engage with me regarding the mark, stating that I was not allowed to “question their academic integrity” or words to that effect.  I was then mistakenly CCd into an email chain where the staff were bad mouthing me.  I quickly exited the course.  At this point I was quite bitter but was still determined to get my masters because it felt like unfinished business.  I started another MSc with University of Derby but after just a few weeks I ran out of enthusiasm for formal study.  I was also not the same person who left UCLan on an academic high.  I was older, and in worse physical and mental health.  All in, I estimate that my unsuccessful attempts to study for a master’s degree cost me £10,000 on top of what I owe in student loans. 

The problem with universities is that they are incentivised to get as many bums in seats as possible and they are not answerable to anyone.  If you have an experience like I did at University of Leicester, as a student you are powerless.  The cost of education is absurd as well.  Tuition fees can now run into the tens of thousands when you then get ten hours of contact with lecturers each week, if you’re lucky.  There is also an issue with how university is positioned in our society.  Back in the day, you went to university if you were intelligent and wanted to specialise in a specific field.  Now, young adults go to university “for the experience” which is a euphemism for drink, drugs and sex.  Does one really have to sign up to thousands of pounds of debt for that “experience”? 

​My advice to any young adult thinking of university is don’t do it.  Take some time, a year or two as a minimum.  Experience the world of work.  Do some reading around different subjects that interest you and then if you decide you want to specialise as a lawyer, doctor, architect or engineer, go and do it.  If you want to go to university to get drunk and get laid, it’s not worth getting into that much debt for.

Gambling

I used to gamble on football.  A lot.  It all started when I was studying at UCLan, and like a lot of compulsive gamblers, it started small and with a win.  I won my first football bet and was hooked from that point on.  I gambled on and off for over a decade and had some good wins in that time, but the gambling was consuming time, mental energy and more money than I realised. 

The human brain and memory cannot be trusted.  It’s like the quote from Emo Philips; “I used to think that the brain was the most wonderful organ in my body.  Then I realised who was telling me this.”

I’m not going to lecture people about gambling as it’s not the point of this blog.  I am going to share my experiences though.  Gambling over the internet and in-play gambling, can so easily spiral out of control.  The money does not seem as real, and it’s harder to keep track of your spending in this way.  I would never walk into a betting shop and hand over hundreds of pounds in a few hours on in-play bets, but I have done that over the internet many times.  There is a wealth of research in psychology that shows addicts get their “hit” of feel good chemicals before engaging in the addictive act.  Gamblers get their “hit” when they place a bet, and not just when they win.  Drug addicts get their initial “hit” when they see their drug, not just when they use it.  I know a lot of people who gamble, some of whom have confided in me regarding their inability to control their gambling.  I know a few other people who I suspect are addicted but are either in denial or scared to face their addiction.  You’ll never know if you’ll become an addict or not.  I heard somewhere that total abstinence is easier than half measures.  So, a while ago I gave up all gambling.  I don’t even take part in raffles because it must be total abstinence.  If you allow yourself to take part in a raffle, then what about some informal football bets between friends?  Then it becomes easier to progress to a few pounds on an accumulator and from there it spirals out of control.

A few months ago, I spent a few hours going through my historic bank statements to see how much I had spent on gambling.  I had a rough idea in my head, and I wanted to see how accurate my estimate was.  It was not even close.  £5 here and £10 there soon adds up.  The second biggest mistake I ever made was placing that first bet.

Gambling is too lightly regulated and too easy to access.  You can open an account and gamble thousands of pounds in minutes.  It’s scary how easy it is.  If you’re tempted to gamble, don’t.  If you are just testing the water, stop.  It’s just not worth it.  If people could make money consistently through gambling, the bookies would have closed long ago. 

​Gambling addition is a serious issue.  Research has shown that gambling addiction results in more suicide attempts than any other addiction.  Not only is gambling a financial mistake, it’s a path to mental health problems and possible suicide.  It’s just not worth it.  The only way to gamble responsibly is to not gamble. 

Final Notes

The next part of this blog will be the first entry of 2020.  I will be starting the Investment Income Tracker and, as per an earlier part of this blog, I will track how much income my investments and assets generate throughout the year.  The aim is for my investments to produce enough income so that I no longer must work.  My aim for 2020 is to receive £2,000 in investment income. 

​Thank you for reading.  This post has been a little bit of a departure from the norm, but if you have any questions about this post please get in touch.  Now We Live is on Twitter, Facebook and Instagram so feel free to contact me using any of those channels.  If you are concerned about your gambling, please contact a support group such as Gamblers Anonymous.