The Fire Blog Cemetery (August 2021 Edition)

Here lies a list of blogs now deceased, moved on to fairer lands…

On life support (>6 months since last post)

  • Big Blue Money – Formerly Big Blue Money, now renamed to Coffee Money, posting intermittently.
  • Rockstar Finance – Was back under new management, but with a very barren site. Doesn’t seem to have added any posts for some time.
  • Left FI – Blogged from May to August 2019, with a bit of a hiatus before a further flurry back in May 2020, then another in February 2021.
  • 3652 Days – Fairly infrequently updated, but going since December 2015, so often dips into the three-six month warning zone. Last post Feb 2nd 2021.
  • Cashflow Cop – A fairly big name, who started blogging on the 5th of April 2019. Last post Feb 20th 2021. I’m aware they’re still around the FIRE bloggosphere.
  • FatFire – First post was on the 17th of December 2020, with the last 27th Jan 2021, so about six weeks total.
  • Money for the Modern Girl – First post in last was on the 22nd of February 2018, pretty active up until the 18th January 2021.
  • Middle Class Hustlers – Holy smokes! Blogged for about a month in 2018/9, then back with three posts in two days in January 2021.
  • My Money Tree – Only a few posts here, between December 2020 and the 1st of February 2021.
  • The FI Fox – A regular contributor from around the time I started (August 30th 2018), their last blog was January 30th 2021.
  • Zero To Freedom – Georgi started on the 13th of Jan 2019, last post 6th September 2020.

On the slab (dormant for >1 year)

  • Finance Your Fire – Marc participated in lots of the FIRE blogging scenes Thought Experiments etc, but last posted in August 2019.
  • Fire in London – First post in Nov 2016, last in December 2018.
  • Sex Health Money Death – Jim first posted in August 2015, and the last post was August 2018. At that point he was close to retiring, so he may well have blogged his last.
  • Under The Money Tree – One of the original few, now dormant since December 2017
  • UK Girl on Fire – First post April 14th 2019, last on July 31st 2019. A fair amount of indeedably inspired work on their site.
  • The Finance Zombie – Last post in February 2019, infrequent prior but had been going since the 25th of September 2014.
  • Bangkok 2 Blighty – Another big name, they started posting in April 2018, last post in October 2019.
  • Your Freedom Pot – Started blogging in Feb 2018, with monthly updates to July 2018, then nada.
  • Girl vs Money – Another short blog, with a few personal finance posts from July to September 2018.
  • Fire Fans – Posted seven times, five in Dec 2019, one in Jan 2020, and a final one in Feb 2020.
  • Financial Anvil – Also started in Dec 2019, lasted one month longer, March 2020.
  • Money By Choice – First post on 17th of April 2020, with last post 10th July 2020, a four month survival.
  • The English Investor – Last post in July 2020 titled “The English Investor is back”.
  • Psyfitec – A potential competitor, blogging on psychology and finance. They started in Feb 2009, and have had a few short hiatuses along the way, so I suspect their March 2020 post won’t be the last.
  • The Saving Journey – Starting in October 2017, with frequent monthly updates, their blogging peters out up to May 2020.
  • Want Less – Started blogging way back in June 2015, but blogging has slowed in the last two years, with the last post in July 2020.
  • The Canny Contractor – Started posting about their dividend growth portfolio in Q3 2016, with their most recent post in April 2020 covering Q4 2019. Now shoes security warnings.
  • Baldrick’s Early Retirement UK – First post 5th March 2020, last post 23rd April 2020.
  • Frugal Student – Posting from August 2016 to March 2020, mainly about investing.
  • Prudent Programmer – Pages comes up with safety warnings, but is accessible. First post September 2019, last post August 2020.

Dead and buried

  • Mr Squirrel – Another titan, sorely missed
  • The Fire Engine – About a month of posting
  • Some Things Don’t Change – Been gone some time sadly
  • Financially Free by 40 – the latest addition, Huw’s last post was in mid-2018. The domain is now up for grabs.
  • Grizgal on Fire – Last posted on the 8th of October 2019, their website is now dead.
  • Liberate Life – Last posted on 11th September 2019, before deleting their website
  • Chuffed 2 bits – Last posted in November 2019, the disappeared from this plane of existence. Now redirects to a completely unassociated blog.
  • Next Chapter FI – My records show they last posted on the 2nd of January 2020, before puffing into void.
  • MsZiYou – Feminist FIRE fan, who at one point was podcasting as well as blogging. Close to FIRE and changes in life circumstances led her to close her blog.
  • Mess and Marigolds – Last posted on October the 15th 2019, their blog (mainly about cleaning with a bit of saving) started in September 2016. Domain now dead.
  • Ready Steady Retire – Posted for about two months, from November 7th 2019 to December 21st 2019. Another dead domain.
  • FIDdom – Bec started posting way back in November 2017, with her last post on the 17th of November 2019. 18 months to two years seems to be about average for survival time.
  • Fretful Finance – Blogged from December 2nd 2018, with the most recent update on January 25th 2020. Also now deceased.
  • Formerly Skint – Weekly money diaries started in January 2018 and dried up in January 2019. Now ‘parked’.
  • Make Save Invest Money – Leon was posting from December 2017 to January 2019, and then appears to run out of steam. Now another dead link.
  • Money Doesn’t Talk – Wasn’t blogging long, from 7th November 2019 to 13th November 2019.
  • Liberate Life – Blogging for about a year, now dropped off my radar and with a dead site. Last post September 2019
  • Adotium – First posted on October 19th 2019, now showing as a dead domain. The waybackmachine reckons they were posting until the 30th December 2020.
  • Finumus – A great blog which began in December 2019. As of April 2021 the author now writes for Monevator.
  • Plan on Fire – Started posting 15th June 2020, last post 28th July 2020. Domain now dead.
  • Financing Freedom – First post 4th April 2020, last post 25th July 2020. Site now comes up for sale from Go Daddy.
  • The All Round Investor – Ran from May 2020 to September 2020. Now barren.

Crossed the finishing line:

These bloggers finished their FIRE journey or completed goals, and signed off with distinction:

  • Young FI Guy – One of my favourites, a titan, gone but not forgotten
  • Fire the 9 to 5 – A fairly big poster, first post February 28th 2018. They had retired early, and posted a sign off blog entry in November 2020. Hope they’re enjoying their time.
  • Pursue Fire – Dan started in July 2018, last post in January 2020 winding up the blog.

The Lazarus circuit

These are bloggers who have returned from the edge, touched the void, etc:

  • Sparklebee – After a six month hiatus returned to posting with the news they quit their job and were truly on countdown to FIRE!
  • Early Retirement Guy – Now redirects to MatchedBettingGuy, where he continues to blog.
  • Little Miss Fire – LMF changed sites in 2019 and blogging was patchy after the swap. First post sometime in 2018 I think. As of October to December 2020 is back posting regularly.
  • Deliberate Living UK – First post 2017, then a big hiatus between 2019 and the end of February this year.

If you can think of any more please leave a comment below, and I’ll periodically return to update.

I am indebted to /u/reckless-saving over on /r/FIREUK, along with friend of the site Indeedably via the magnificent Sovereign Quest, who make this post so much easier by curating blog posts.

July 2021 – Property Planning

We recently signed up to a new five year fixed mortgage. Five years seemed a good time to fix at 1.65% for, with the spectre of inflation lurking (and potential associated interest rate rises). We’ve spent quite a bit (~£20k) on renovating our current house over the past two years, getting it to how we want it. Over that time local house prices have continued to rise. Wales appears to be bucking the trend, as house prices continue to rise here whilst falling or flatlining elsewhere in the UK (1, 2). Zoopla seems to estimate that our house is worth 10-15% more than we paid for it three years ago. The Rightmove estimates have asking prices for our area rising by 15% in one year (1). This seems an overestimate, and more about ambitious sellers. Either way, we would hope to achieve a 10% increase, and the useful leverage of a mortgage makes the equity my most significant asset.

Received wisdom (or what estate agents tell you) is to buy at the absolute upper limit of what you can afford. Borrow to the hilt, as that outsized leverage will boost your equity return.

When we purchased our current property it was following two previous purchases where we were gazumped/ outbid. For one, a property round the corner from our current home, it went to sealed bids and we narrowly lost. I found out later (through discovery of a mutual friend of the owners) that the ‘winner’ could not meet their bid, pulled out, the sale fell through and the owners remain in the property. The other potential purchase was in a different suburb, 15% more expensive than our current home was priced, and was a proper fixer-upper. We were gazumped by an offer 10% over our asking price bid prior to contract exchange. I am still sore about that.

We set a firm limit on our budget when we were buying this house. The mortgage had to serviceable by a single one of our salaries, just in case. Staring down the barrel of statutory maternity pay I am glad of this self-imposed limit. Estate agents and banks offered us 150% of what we spent, on favourable terms. We looked at some much larger houses in the countryside at the time. Houses that are now worth 20% more thanks to the pandemic rural shift. Will all those people who have moved be happy once they realise the internet doesn’t get better than 10Mbps, no takeaway delivers, and they need to do a 15 minute drive for a pint of milk on a Saturday morning.

Both MrsShrink and I were raised in the countryside (a market town and a hamlet respectively). With the new generation here we will return to our roots at some point. We hope that we haven’t missed the boat on rural house prices; I suspect we haven’t and a rejuvenation of city centres with bars, independent stores and activities will once again lure people back.

A shopping list is already being put together for that eventual purchase. Like Simon Lambert of the This Is Money podcast, stamp duty dissuades us from too many further purchases (3). Without stamp duty we would be tempted towards another five year property step up the ladder. As it is we will probably look for another fixer-upper as a forever home. A lifetime timescale means planning for 20 years in the future, and there the recent IPCC report on climate change has me concerned (4). Everything in the report frankly scares me witless, and I have to hope for the inventiveness, altruism and resourcefulness of the human race, even if others don’t (5, 6). Things like using flooded coal mines to heat homes through geothermal waters (7).

The specific bits of the IPCC report that’s got me thinking refers to sea-level rise and water cycles. Large parts of the UK are only a couple of meters above sea level, and the IPCC report suggests a rise of 0.28-0.55m by 2100 on the minimum best-case climate change projection, 0.63-1.02m in the most likely scenario, and up to 5m in the worst case estimates (Box TS4, Technical Summary)(4). It’s difficult to picture this, and the conventional flood risk calculators from the government (England, Wales, etc) used on building surveys and by insurers don’t seem to take it into account (8, 9). Helpfully Climate Central provide two different models, a coastal screening map and the more complex Surging Seas map which includes multiple models and the latest research based on Antarctic melting (10, 11).

Our future home will need to be >20m above sea level and away from active flood zones. How many of those taking ownership of a new build property as a forever home could anticipate annual flooding in the 2030s due to more extreme weather and sea level rise. We’re also aiming to be as off-grid as possible, for resilience and environmental purposes. Solar PV, ground source heat pumps, micro-hydro, and Tesla Powerwalls are all future dreams. Is this overly extreme? A bit prepper? Would welcome thoughts in the comments.

July’s Finances

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. I saved around 33% (28% not including pension) of my salary, which will probably be the last of the big savings months as MrsShrink is moving to statutory maternity pay. This months S&S ISA money again went into Vanguard’s ex-UK Dev World Acc Fund. There’s been a bit of churn in my Freetrade account, moving out of meme stocks into more long term holdings – mostly selling the last of my GME/ PLTR. If you fancy a free share, sign up to Freetrade with this link (I also get one).

Budgets:

  • Groceries – Budget £200, spent £396.02, last month £281.22 – This is hugely over. MrsShrink and I sat down and noticed we had been spending at least £150/week in supermarkets, plus smaller shops. We’re not sure what this is on, which is a worry, so it’s going to be rice and beans for a month to see.
  • Entertainment – Budget £100, spent £133.45, last month £219.15 – We’ve been hosting a bit this month, which explains this cost
  • Transport – Budget £250, spent £384.92, last month £445.35 – More car parts. Thanks to my Starling pots and budgeting I’ve still got a little set aside for this
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £78.71/ £236.81
  • Loans/ Credit – £50/ £960/ £340 – The main focus this month
  • Misc – £50/ £145.83/ £535.24 – A baby is an expensive investment
  • Fees – £300 /£421.85/ £630.26 – My indemnity fees have increased, so I’ll need to revisit this

In the garden:

Full on harvesting now, with lots of green beans, courgettes, cucumbers and squashes. First tomatoes should be this month, and the potatoes are hardening off in the ground ahead of being lifted. The heatwave caused a lot of my lettuce to bolt, so I’ll need to sow some more. I’ve also got some curiosities (luffa, salad burnet, land cress) going in the greenhouse.

Happy August everyone!

The Shrink

References:

  1. https://www.bbc.co.uk/news/uk-wales-58203740
  2. https://www.thisismoney.co.uk/money/mortgageshome/article-9893165/House-prices-UK-Asking-prices-fall-time-year-says-Rightmove.html
  3. https://www.thisismoney.co.uk/money/podcast/index.html
  4. https://www.ipcc.ch/report/ar6/wg1/#TS
  5. https://www.forbes.com/sites/jamesconca/2021/08/16/latest-ipcc-report-predicts-disasteryet-again-but-not-much-will-happenyet-again/
  6. https://www.theguardian.com/commentisfree/2021/aug/13/ipcc-latest-climate-report-hope
  7. https://www.bbc.com/future/article/20210706-how-flooded-coal-mines-could-heat-homes
  8. https://flood-warning-.service.gov.uk/informationlong-term-flood-risk/postcode
  9. https://naturalresources.wales/flooding/check-your-flood-risk-by-postcode/?lang=en
  10. https://coastal.climatecentral.org/map/11/-0.1212/51.4848/?theme=sea_level_rise&map_type=year&basemap=roadmap&contiguous=true&elevation_model=best_available&forecast_year=2050&pathway=rcp45&percentile=p50&return_level=return_level_1&slr_model=kopp_2014
  11. https://ss2.climatecentral.org/#9/51.5074/-0.1278?show=satellite&projections=0-K14_RCP85-SLR&level=5&unit=feet&pois=hide

Quarterly Returns – Q2 2021

Quarterly return posts supplement my monthly Financial Dashboard, covering investments in detail and looking at my yearly targets. Here I track purchases and sales, document progress against my (in progress) investment strategy, and discuss re-balancing and changes over time.

A bit late with this update, as during the past quarter we’ve had a new arrival in the FireShrink household and we’re pretty tight for time these days. I write this while the rest of the household nap, sterilisers and washing machines whirr, and test match special plays softly in the background. We had cash-flowed the possible expenses over the next year and we’ve received a huge number of kind gifts from friends and family, but nothing had quite prepared us for events of the last couple of months. Exciting times that mean investment plans may get put on hold, and plans changed.

Q2 Returns:

  • Cash Accounts £13,860 (+£1,760)
  • Investments £11,600 (+£1,950)
  • Property £52,100 (+£3,100)
  • Cars £2000 (no changes)

Continued steady growth, well on track for my 2021 targets with an average 40% savings rate. I’ve been really targeting reducing my credit card debt amongst the routine investment, paying off between £200-500/month, with a plan to clear it in the next few months – I have a few invoices for locum work which will cover this. I’ve continued to put away £250 in cash/month, building the emergency fund further in the Principality Thank You Saver, which is a 1.4% regular saving offering for NHS workers in South Wales (1).

Investments:

Deployed cash ratio in investment accounts
Active/ Passive investment split

Core/ Satellite Passive/ Active Split

I’m not paying in to Freetrade for this years ISA, so all activity in that account has been churn on the active side (fancy a free share? Sign up to Freetrade using this link, and we both get one). I sold out of GME with a return on investment of ~160%. Those funds went through a succession of memes stocks (I was browsing WSB a lot at the time), with a slight loss on NEE (-6.5%) and gain on INO (+38%). It’s now in Coinbase (COIN), bought at £164/share (currently +14%), and UWMC, bought at £6.87/share (currently -20%). My lessons from this quarter are in the madness and profit of crowds, and that I really do not have any particular skill in the markets.

For the 2021 ISA I have returned to Vanguard, adding £400/month to my old friends their Dev World ex-UK and Emerging Markets accumulation funds. I need to look further at how I’m calculating my global allocation split, as I think my current system is over-weighting me to emerging markets even with my aggressive tilt. I’ve also been persuaded by Monevator’s recent series on emerging market bonds (2), however the most recent article points out now might not be the best time to open that investment avenue (3).

While I’m continuing to invest and act passively I feel generally concerned about the state of the market. US and UK housing markets seem peaky, with marked rises in house prices in the UK which don’t seem entirely sustainable. I expect them to flatline rather than fall, which isn’t really an issue for me. Equities markets also seem frothy – those all time high P/E ratios haven’t gone away. The NASDAQ and S&P500 have been on an absolute tear since the lows of March 2020. How long can this remain? If/when we see a fall, I am concerned about what ammo central banks and governments have in their locker, given they’re yet to unwind 2020s financial stimulus. Bonds remain at all time lows, with crappy returns. What are long term options?

A gamble play is crypto, so I have bought some Ethereum. My logic is that gold and silver are long-term stores of value, but have been on bull runs for years as bearish investors load up. I am not convinced that gold or silver would negatively correlate in the face of a sustained combined equity/bond recession, and I wonder if crypto might. I don’t think cryptocurrencies are going away. I’ve been following Bitcoin since 2010, but never had deployable cash or a use case for it. Ethereum seems to be a much more functional coin, and I feel we have crossed the threshold where it is only likely to get more widely used. It’s therefore partly a 20-year play on growth, and partly a hedge against a BIG crash. It’s beer money, and will test the correlation theory in event of future recessions.

Happy summer everyone,

The Shrink

References:

  1. https://www.principality.co.uk/savings-accounts/everyday-savings-accounts/thank-you-online-saver
  2. https://monevator.com/emerging-market-bonds/
  3. https://monevator.com/bond-credit-risk-valuation-rule-of-thumb/

June 2021 – FIRE as an expression of self-actualisation

One of the reasons I started blogging about my road to financial independence was to address and discuss the mental health and psychology aspects of the process. What motivates people to seek financial independence? Lots of the personal finance community are interested in their own motivations, and in attempting to understand them and motivate others on a long and often dull investment road they turn to Maslow’s hierarchy of needs. It’s pretty basic; a broad explanation of the intrinsic motivations of people. Why we do what we do, and an approach to build on through life. Like all popularly assimilated psychological frameworks it’s over-simplistic – life just isn’t that easy, but it helps people to think about themselves, so we’ll roll with it. A LOT of FIRE bloggers have takes on Maslow’s product, most of them making various versions to try to frame an FI approach or timescale (1, 2, 3, 4, 5):

There are all useful graphical representations of the route to FI. The steps up the pyramid to the pinnacle that we hope to achieve. But I think they’re all taking a distorted field of vision. They’re conflating motivation with a path. People get into investing and FI for lots of different reasons, to look at why I want to go back to the source material:

Maslow's Hierarchy of Needs | Simply Psychology
Maslow’s Hierarchy of Needs. Source: https://www.simplypsychology.org/maslow.html (6)

The classic pyramid argues that your motivations are governed by completion of the lower steps. You need to have food, shelter, water, safety and security before you can think about settling down for an intimate relationship. You can’t fulfill your life dream potential without a home to come sleep in etc (note – can you see where some issues lie here?). Where does your motivation for financial independence, FIRE or whatever form of personal finance interest you have come from?

My reading of the personal finance community is that there is a wide variety of intrinsic reasons, but a lot of people fall into two camps. Those who are seeking FIRE in response to their basic needs (the bottom two rungs of Maslow), and those seeking the pinnacle of self-actualization. The former camp seem to be people who seek FIRE to ensure they never have to worry about their safety, security, bills, food or housing again. FIRE is the ultimate safety net, that means a perceived failure – poverty, unemployment or homelessness, can never occur. I think this is often learned from debt, or fear of debt. Debt is terrible for your mental health – ergo no debt ever means perfect mental health? As MedFI lays out, FIRE is no mental health panacea (7). If you are aiming for FIRE in the hope of not being anxious about debt, then you may well end up being anxious about something else when you get to be debt-free. Being anxious you’re not saving enough? Being anxious that even though you’ve saved to live without work, have you saved enough and will it last?

Then there are those seeking self-actualization. The pinnacle of this period ties in nicely to FIRE rhetoric, creating an environment where you are free to seek any pursuits which might help you achieve your full potential and receive feelings of accomplishment. I’ve spoken about the concept of using FIRE as a target when running from work, but what are you running to? Work often forms a core part of a person’s identity, and much as we don’t like the idea of being a ‘wage-slave’, your role can be part of that definition. Maybe following the financial independence community is a part of that identity, but it isn’t an end in itself. There are recurring themes in the personal finance media around this; people who have achieved financial independence and then think ‘…now what?’

For those seeking financial independence to get out of a crappy job and into a fulfilling early retirement, that future needs a plan too. You will need an identity, an idea of the person you want to be, else you will end up bored and suffering (8, 9). You have to have a purpose, and this can take A LOT of thought… the Mad Fientist wrote a long post about his process, and so did MMM (4). For some, like Young FI Guy, it might mean returning to work on your terms as part of your identity. It might mean spending more time travelling like M&S at Fire and Wide, with friends, family and all the things that matter to you (10).

Where is your fulfillment? You may be at the top of the financial pile, but you’re still not at the top of Maslow’s pyramid, and you might have just taken a knock back because you’re not receiving the FIRE-target feelings of accomplishment. There needs to be a final step.

So to be a typical shrink, I ask you, why are you doing this?

June’s Finances

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. I saved around 46% (42% not including pension) of my salary, continuing last months good run. New invested money has gone into my old friend Vanguard’s ex-UK dev world fund. This can’t and won’t continue.

If you fancy a free share, sign up to Freetrade with this link (I also get one).

Budgets:

  • Groceries – Budget £200, spent £281.22, last month £200.77 – Back to spending too much, must rein this in
  • Entertainment – Budget £100, spent £219.15, last month £99.95 – Going out to eat too much again
  • Transport – Budget £250, spent £445.35, last month £177.91 – Car parts, insurance, serious mileage this month
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £236.81/ £143.68
  • Loans/ Credit – £50/ £340/ £60
  • Misc – £50/ £535.24/ £52.50 – Furniture and birthday gifts
  • Fees – £300 /£630.26/ £33.27 – Amazon, GMC and various others taking their pound of flesh

In the garden:

It’s all gone bonkers with this humidity and warmth. Harvesting plenty of peas, lettuces, radishes, rocket, sweet peas and various other bits. Planted out tomatoes and beans. Generally looking lush.

Happy July everyone!

The Shrink

References:

  1. https://www.moneyforthemoderngirl.org/the-financial-independence-hierarchy-of-needs/
  2. https://maplemoney.com/your-financial-hierarchy-of-needs/
  3. https://squirrelers.com/2734/
  4. https://www.madfientist.com/hierarchy-of-financial-needs/
  5. https://semiretireplan.com/financial-independence-hierarchy-pyramid/
  6. https://www.simplypsychology.org/maslow.html
  7. https://medfiblog.wordpress.com/2021/06/21/why-fire-is-no-mental-health-panacea/
  8. https://www.yourmoneyblueprint.co.nz/blog-1/2021/5/2/early-retirement-needs-you-to-have-an-identity
  9. https://www.reddit.com/r/FIREUK/comments/o3bnyj/fired_a_couple_of_years_ago_now_im_totally_bored/
  10. https://fireandwide.com/

May 2021 – r/wallstreetbets, Gamestop and millennial investors

I am feeling very torn of late. MrsShrink calls me an eternal optimist, and worries I get ripped off by hustlers looking for their next mark. I must admit I am hopeful about life (and finances), but that hope hides a deep-seated cynical miserable bastard. Said miserable bastard is stirring, moved by the sight of the markets and inflation. But let’s start at the beginning.

GME

I started following r/wallstreetbets in 2019, mostly for the memes if we’re honest. There has always been some decent analysis (DD in the parlance) on there, although since the GME prompted flood of interest in January it’s mostly drown out by noise. I’ve never really invested based on r/WSB info, though I have read along with interest. This applied to when /u/DeepFuckingValue posted some analysis in mid-2020 about the long term view on GameStop (GME).

A lot of the media take on the subsequent GME squeeze in January and March has been of a collection of millennial neckbeards sitting in darkened basements “sticking it to the man” and organising themselves into groups to game the market. Troll armies swarming the walls of Minas Walls Street.

Have you tried to organise people online? It makes herding cats look easy.

GME took off because enough people read the analyses on r/WSB relating to institutionally oversold short float to be able to put pressure on the price. There might be a lot of apes on r/WSB, but there’s also enough smart private investors with decent portfolio weight to lend power to this. This lead to ‘gamma squeeze’ and further price movement. Forbes actually did a great analysis of this (1, 2). As the price began to move it added to the narrative of the little guy making the institutions pay, leading to narratives like this (3). It’s worth a read for the emotive angle. The actual owners attempting a restructuring of GME towards a new sustainable business aren’t about to knock it (4). As a generation millennials spent formative years around the time of the 2008 financial crisis, and to many, the institutional banks just carried right on with no repercussions. This was not helped by institutional weight and alleged attempts at market manipulation (e.g. pressure on Robinhood to stop retail purchases of GME) which ultimately led to that weird congress hearing.

WSB nonsense (5)

Millennial Investors

The footsoldiers in the media-spun frontline of this war are my generation, millennials, investing via the free-to-use apps like Freetrade (plug below), Robinhood, Trading212 etc. This appears to have garnered disdain from some corners, the suggestion that investing is something better done late in life with the addition of wisdom and grey hair, or a string of letters after your name. My grey hair argues otherwise. Previous generations could get a simple savings account that offered >3% annually if they wanted to save for a big purchase and beat inflation. Those products no longer exists, so thousands of young people saving up for their first home are looking for places to put their money. When NS&I, the last bastion of savings rates >1%/inflation, pulled the plug last year savers removed billions (6). Where do you think that money went?

The removal of friction and democratization of stocks and shares opened the floodgates (7, 8). We’re all on board with equities beating inflation in the long run averages (9). Passive trackers make it easy. If you want to dabble in the casino based on your hopes for growth, companies you love might make you millions (10, 11). Where does accurate price discovery sit in this?

The roaring twenties

The COVID-19 related recession/correction in the stock market of Feb/March last year taught us a few things. The market fell by a eye-watering sum, but had reverted back to it’s previous level in <6 months. Turns out borrowing and injecting funds at infinite limits into the market will do this sort of thing. The Spanish Flu epidemic of 1919 knocked back stock markets briefly, before they surged upwards into the roaring twenties (12, 13). So maybe we’re seeing the same, a fall, an adjustment to new normal, and the acceleration of changes that were likely to happen anyway but have now been precipitated by force; home-working, online project management, a reduction in the high-street mainstream business economy and move to online sales, a reduction in commuting and the move of wealth from London to the provinces.

We also learnt that bonds aren’t a great hedge for stocks anymore. We’ve seen bond returns go negative, and central rates hover above the 0% mark. This has mapped to nice cheap mortgages, but bugger all return on savings or bonds. As people fled the market in Feb-March 2020 it put more pressure on returns. Many FIRE followers work on the 4% rule; long run averages suggest withdrawing 4% from your portfolio annually will allow growth and prevent depletion. Safe options for the 4% return become more challenging in a 0.5% bond environment, meaning you push to stocks and shares (14). Increased risk. At the same time stocks and bonds are becoming positively correlated; when stocks fall bonds fall, when stocks rise bonds rise (15). Timing the market and pre-empting a crash, then watching your bond holdings rise in value no longer works. When the market goes down, everything goes down. This is probably ok, it just makes your asset allocation decisions harder (16).

Play the game

So let’s play this thought experiment out. Passive tracker options have grown in popularity, and cheap frictionless methods to buy them have proliferated. Passive tracker growth means more big funds buying the same stuff with no thought to price discovery (Michael Bury’s new bubble prediction (17)), and while active funds are cutting prices many are also buying similar portfolios to the trackers in an effort to be the least worst. Meanwhile ‘meme stonks’ and general growth focus has pushed PE ratios to silly levels, and weird investment vehicles like SPACs have emerged (7, 18). See the image of the S&P 500 P/E ratio from the fantastic Banker on FIRE (18).

S&P 500 PE Ratio
S&P Historical P/E Ratio, shamelessly stolen from bankeronfire.com (18)

So is the efficient market still efficient? Assuming it somehow is, we’re still all trying to beat inflation, but as Banker on FIRE points out, there’s a lot of reasons why the outlook of a 10% annualised market return for the future isn’t rosy (18). But what other option do you have? Bonds, with yields at 1% and correlated to the market anyway. Property and BTL seems to be one option, but the market there looks frothy. REITs, when the high street is shut and companies are moving to slash overheads by a working-from-home and hotdesk hybrid?

There’s inflationary pressures too. The US continues to pump money and there appear to be blips. In China there’s the combo of a rampant sub-prime lending shadow lurking, and pressure on the increasingly weather and middle-class populace to knuckle down and shut up, else you end up like Jack Ma (19). I think the UK is particularly poorly positioned for future inflation. Anyone watching the housing market in the UK can voice for a spike in prices. There are also issues with import/ export costs due to (pick one) Brexit, COVID, Suez, and actually finding workers since we cut off the cheap European labour supply. But as Monevator says, someone is always crying “inflation, inflation” (9).

How do you plan for the uncertainty? You could do an ermine, VWRL and bags of gold (20). Or what the mega-rich are doing; buy shitloads of farmland (21, 22, 23). Personally, I’m going to keep doing what I’ve been doing, buy passive ex-UK equities. And maybe dabble in a bit of GME and BTC on the side. Because as Keynes said “the market can remain irrational longer than you can remain solvent”.

May’s Finances

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. I saved around 49% (42% not including pension) of my salary, a return to form. New invested money has gone into a new cryptocurrency holding.

If you fancy a free share, sign up to Freetrade with this link (I also get one).

Budgets:

  • Groceries – Budget £200, spent £200.77, last month £243.91 – Better
  • Entertainment – Budget £100, spent £99.95, last month £100
  • Transport – Budget £250, spent £177.91, last month £233.97
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £143.68/ £246.48
  • Loans/ Credit – £50/ £60/ £250
  • Misc – £50/ £52.50/ £191.14
  • Fees – £300 /£33.27/ £476.77

In the garden:

I have to agree with Monty Don off Gardener’s World, our garden is about two weeks behind last year. Having said that, potatoes are well up and early peas are cropping. Getting huge amounts of salad in the form of various lettuce leaves, sorrel, radishes, spring onions and the tail end of land cress. Courgettes, squashes and pumpkins are almost ready to plant out, tomatoes are getting bigger and the french beans have started climbing their poles. Grass hasn’t quite recovered from last years building work, so will need some more re-sowing and watering.

Happy June everyone!

The Shrink

N.B. After all that doom and gloom, here’s a list of a load of ways in which we’re making the world a better place (24).

References:

  1. https://www.forbes.com/sites/georgecalhoun/2021/03/05/gamestopgamestonk-has-nothing-to-do-with-the-madness-of-crowds/?sh=4e05e55b25d0
  2. https://www.forbes.com/sites/georgecalhoun/2021/03/10/gamestop-the-second-surgeanatomy-of-a-gamma-swarm/?sh=30472fd64225
  3. https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_open_letter_to_melvin_capital_cnbc_boomers_and/
  4. https://www.theguardian.com/business/2021/jan/27/gamestop-three-largest-shareholders-earn-over-2bn-amid-stock-surge
  5. https://www.reddit.com/r/wallstreetbets/comments/l8rf4k/times_square_right_now/
  6. https://www.thisismoney.co.uk/money/saving/article-9111337/Savers-withdrew-staggering-6-2bn-NS-accounts-November.html
  7. https://monevator.com/the-sci-fi-stock-market/
  8. https://fortune.com/2021/06/02/changing-stock-market-meme-stocks-day-trading-reddit-crypto-investing-robinhood-btc-tsla-gme-eth-amc-nfts/
  9. https://monevator.com/beating-inflation/
  10. https://www.bbc.co.uk/news/business-55391571
  11. https://www.theguardian.com/business/nils-pratley-on-finance/2021/jan/19/dr-martens-flotation-may-create-around-50-instant-multi-millionaires
  12. https://www.wsj.com/articles/the-stock-market-barely-faltered-in-the-1918-20-pandemic-is-history-repeating-itself-11599480001
  13. https://www.tandfonline.com/doi/full/10.1080/13504851.2020.1828802
  14. https://www.forbes.com/sites/stevevernon/2020/05/20/withdrawing-from-retirement-savings-is-four-percent-a-safe-rate/?sh=691e62411ab7
  15. https://www.bloomberg.com/opinion/articles/2021-06-01/stock-bond-yield-correlation-suggests-inflation-is-a-real-concern
  16. https://www.institutionalinvestor.com/article/b1rpyq8lgqdll2/Stocks-and-Bonds-Have-Moved-in-Opposite-Directions-for-Decades-Here-s-What-Could-Change-That
  17. https://www.bloomberg.com/news/articles/2019-09-04/michael-burry-explains-why-index-funds-are-like-subprime-cdos
  18. https://bankeronfire.com/future-stock-market-returns
  19. https://www.theguardian.com/business/2020/dec/28/china-orders-alibaba-founder-jack-ma-break-up-fintech-ant
  20. https://simplelivingsomerset.wordpress.com/2021/06/08/the-coming-gilded-age-and-vanguards-mustelid-indigestion/
  21. https://www.theguardian.com/news/2018/feb/15/why-silicon-valley-billionaires-are-prepping-for-the-apocalypse-in-new-zealand
  22. https://thehustle.co/09162019-land-billionaires/
  23. https://farmfolio.net/articles/why-bill-and-the-mega-rich-are-buying-farmland/
  24. https://www.reddit.com/r/AskReddit/comments/m8o6iq/what_makes_you_hopeful_that_we_can_reach_net_zero/grjhsxt/

April 2021 – Political Realignment and Class

A very late Financial Dashboard this month, and a bit of a crossover post. For the last couple of years I’ve used the Financial Dashboard posts to track my budget, bills and set myself goals. I feel I’m fairly well into my financial planning now, and as such posting and sharing my goals each month doesn’t make particularly interesting reading. I’ve not had time to write the Full English posts since the start of COVID, and it’s unlikely to make a return any time soon. To an extent it’s also been superseded, by Indeedably’s fabulous Sovereign Quest featuring automated daily/weekly curation (1), and Dr Fire’s Wednesday Reads (2) (as well as Monevator of course). Instead for the future the musings which used to occupy the Full English will sometimes appear here.

Some time ago Indeedably suggested I read Slate Star Codex, now Astral Codex Ten, a US-based blog about… well… most things (3). SSC/ACT has had a huge impact on my thinking (mostly for codifying some underlying cognitive trends), and I truly appreciate the recommendation. Before going any further, I would recommend reading the Book Review: Fussell on Class, and their post A Modest Proposal For Republicans: Use The Word “Class” (4, 5). In it Scott Alexander suggests the US Republican party should start using the word “class”. Here in the UK we’re already obsessed with class, so that’s less of an issue, but do the old class boundaries still apply?

The upper class is still (probably) distinct, though oil oligarchs, millionaire footballers and bitcoin influencers are blurring the view from below. For an interesting take on this, read this Reddit post (6). The middle class has allegedly been hollowed out, but I feel the old definitions of white-collar, moderately wealthy, moderately educated middle class has expanded. University educations are widespread, home ownership has been driven to the core of our political ideologies, and most people expect a few holidays a year, a modern car, and all the accoutrements of modern living. Where are the working class? With the disappearance of the industrial manufacturing sector from the UK’s landscape, the loss of DB pensions and general move away from the honourable lifetime spent working at the same company, cared for and honest, the old-working class definition no longer seems to apply. Plenty of builders, plumbers, electricians earn more than the average HR manager. Skilled manufacturing operators also earn more than the office temp.

Assuming that the old definition of the working class is kaput set me wondering how you could now classify groups, with an eye on the political spectrum. Historically the upper classes voted Tory, the working classes voted Labour. The Tories supported the upper class economic moat, whilst Labour were the voices of unions and the working class. Labour still markets itself as the voice of the working man, yet culture has moved as evidenced by the loss of the ‘red wall’ and traditionally safe Labour seats. How do we now divide up the voting public? The Republicans, and more specifically Trump through populism, has appealed to and cemented a base in the working class in America. This may be a harbinger of a political realignment – the theory that sharp changes in party ideology, power base, demographic base etc result in shifts in establish political parties on a roughly generational basis leading to entirely new power structures (7). Other authors have suggested populism, Brexit and Trump are symptoms of this event (8). The last major realignment we experienced here in the UK was in the 1970s, with Thatcher and the interventions industry and home ownership that have ultimately resulted in neoliberalism.

Working with a realignment hypothesis, I set to trying to identify for my own purposes where the new divides fell. The US working class isn’t so clear in the UK, so who are the populists appealing to? Farage and Boris Johnson are opportunistic (I won’t call them smart) enough to hitch themselves to a bandwagon towards a specific voter. That voter is typically older, less well-educated, and less-liberal. They were less likely to be working. They were more likely to either own their own home, or be in council or housing association rental (9). Odd dichotomy that.

Brexit vote by demographic, from lordashcroftpolls.com (9)

Leave voters were also more likely to perceive external and internal threats to their quality of life and standard of living. They were more likely to think life would be worse in the future, and better in the past.

Social attitudes of Brexit voters, again from lordashcroftpolls.com (9)

My conclusion was that the new system of class is based not on qualification or income, but on quality of life and financial security. The upper class remain the upper class, generationally wealthy and able to cross borders and financial rules without issue; they are the financially invulnerable. The old middle class are now the financially secure with minimal risk to their future quality of life and lifestyle; liberal, well educated or trained, in secure employment fields where they are able to look beyond their current situation to the experiences of others and wider society. The new financially insecure class are the populist target. Underemployed or not working altogether, in temporary or insecure work, looking to try and build security in their employment, home and personal environment. Boris Johnson appeals to this insecure class, offering rhetoric of job, border and house security. He’s been quick to drag the Tories to a new working-class heartland. This new financial security class system is actually by-product of neoliberalism; right-to-buy, defined contribution pensions and raids on existing pension schemes, creeping privatisation, and changes to the broader societal contract. The ‘what does society do for me’ mentality.

That working class heartland, now hollowed out into an insecure class, has shifted from Labour to the Tories. How do Labour adapt? They continue to sell themselves as the party of a working class that no longer exists, even as they split apart as the old unions collide with the socialist-leaning environmentally conscious members in their midst. Can they shift to be a party of the middle, financially secure class? It will mean shedding their old image and tag-lines, and maybe too many of the old guard remain. Certainly I have family members who self-define as working-class Labour-supporting people, and aren’t too sure about being defined as a liberal intelligentsia.

And finally, does this make FIRE a class-rebellion? The ultimate social-climb scene? Forget the ambassador’s parties young fellows, get thee to the FI Chautauqua.

We live, as always, in interesting times.

Goals

The goals for April were:

  • Simplify and improve flexibility of online investment tracker
  • 16/8 fasting
  • Set up new ISA
  • Final repainting and touches to downstairs rooms

Checking the assets and liabilities:

Assets and Liabilities for April 2021

These are taken, as always, from my Beast Budget spreadsheet. I saved around 30% of my salary, which isn’t bad considering it was a surprisingly expensive month. My net worth took a 4.5% jump as we had our property revalued for a new mortgage. New invested money went into a Vanguard account, and where it has gone into my old favourite, the FTSE Developed World ex-UK Acc Fund.

If you fancy a free share, sign up to Freetrade with this link (I also get one).

Goals:

Goal failed: Simplify and improve flexibility of online investment tracker 

Just didn’t get the time to do this, and am unlikely to in the short term.

Goal passed: 16/8 fasting

I did this for about a week, and it worked fairly well but was a struggle around some of my work/ life commitments. Planning to use it flexibly for the future, aiming to not eat between 8pm and the following midday.

Goal passed: Set up new ISA

Cheated a bit by going back to Vanguard, but it’s nice and easy to just add into a new ISA there. Easy to visualise, track and minimal faff.

Goal passed: Finish repainting and touches to downstairs rooms

As part of a big reshuffle ahead of an impending arrival, the downstairs rooms of our house have been touched up, and my office is in the process of moving downstairs. Said impending arrival also incurring some expenses with new furniture.

Budgets:

  • Groceries – Budget £200, spent £243.91, last month £274.70 – Same rules apply as last month, too much excitement in the middle of Lidl
  • Entertainment – Budget £100, spent £100, last month £127.98
  • Transport – Budget £250, spent £233.97, last month £294.80
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £246.48/ £54.62
  • Loans/ Credit – £50/ £250/ £200
  • Misc – £50/ £191.14/ £325.34
  • Fees – £300 /£476.77/ £103.62 – GMC/ RCPsych, various others

In the garden:

Everything has been bloody slow with the cold, and I’m very glad for our greenhouse. Various cucumber/ squashes seeds have been sown under cover. Companion plants, beans and next round of leafy veg coming along nicely. Potatoes sown. Everything else just ticking over, but we avoided any frosts, so no death.

Happy May everyone!

The Shrink

References:

  1. https://sovereignquest.com/#curation
  2. https://drfire.co.uk/
  3. https://astralcodexten.substack.com/
  4. https://astralcodexten.substack.com/p/book-review-fussell-on-class
  5. https://astralcodexten.substack.com/p/a-modest-proposal-for-republicans
  6. https://www.reddit.com/r/AskReddit/comments/2s9u0s/what_do_insanely_wealthy_people_buy_that_ordinary/cnnmca8/
  7. https://en.wikipedia.org/wiki/Political_realignment
  8. https://www.cato-unbound.org/2018/12/10/stephen-davies/great-realignment-understanding-politics-today
  9. https://lordashcroftpolls.com/2019/03/a-reminder-of-how-britain-voted-in-the-eu-referendum-and-why/

Quarterly Returns – Q1 2021

Quarterly return posts supplement my monthly Financial Dashboard, covering investments in detail and looking at my yearly targets. Here I track purchases and sales, document progress against my (in progress) investment strategy, and discuss re-balancing and changes over time.

Time seems to be passing so quickly at the moment. I’m sure COVID and restrictions have removed our mental ability to signpost time with activities and events. Through this blur we’re into Q2 of 2021, which means a bit of a financial update…

2021 Net Worth

Q1 Returns:

  • Cash Accounts £12,100 (+£100)
  • Investments £9,650 (+£1,700)
  • Property £49,000 (-£700)
  • Cars £2000 (no changes)

This quarter has mainly been steady-as-she-goes from a financial point of view. I reduced the property valuation for our home to something more conservative, which has resulted in a nominal paper loss. We’re actually up in equity, and moving to a new 5-year fixed rate at 1.69%. Slow and steady has seen my net worth rise by about £3k so far this year, a few percent. Not sure if I’ll match last years 20% rise maintaining this rate.

Investments:

I’m not going to review my goals each quarter this year other than to say I have somehow managed a mean 41.5% savings rate so far (target 35%), I’ve knocked £1.1k off my credit card (£3k to go), and I’m enjoying spending more time pottering with hobbies. Instead the Quarterly Returns will focus more on what I’m doing with investments. I’ve continued to put away £250 in cash/month, building the emergency fund further in the Principality Thank You Saver, which is a 1.4% regular saving offering for NHS workers in South Wales (1).

Rough Global Asset Allocation
Cash-Equity Split in Portfolio
Passive Core vs Active Satellite Ratio

Core/ Satellite Passive/ Active Split

Been busy in my Freetrade account this quarter (fancy a free share? Sign up to Freetrade using this link, and we both get one). January just saw further purchases into iShares MSCI EM and Vanguard FTSE All World. February was much more active. I added to previous holdings of Unilever, whom I am mainly buying as a solid, dividend paying consumer staple. I do not see Unilever going anywhere any time soon (see Warren Buffet school of thought – buying something you can forget about for 10 years and expect to still exist), and they have a very strong corporate sustainability goals which I approve of. I also bought a small amount of IQE, a South Wales computer chip firm. Their share price is volatile (++) and I’m currently down about 15% on the beer money that went in there. This was a bit of a home market bias purchase, but also a potential future growth buy as they’re in the 5G game and chip manufacturers are currently struggling to keep up with demand. There’s also massive investment into S Wales computer chip foundries by Welsh Gov, so thought I’d get some skin in.

Towards the end of Feb I sold out of DS Smith (held for about a year) at a 45% profit. That money got put back into further Vanguard FTSE All World. Around this time I was nosing around r/wallstreetbets, and jumped on the AMC/GME bandwagon, riding these meme stocks up for a 65% return. I bought a small amount of Palantir, another meme stock, again beer money. This one is at a fairly daft PE ratio, but as I dabble more in big data through work I can see the difference this will make to retail/ government/ industry in the future, and this small holding is a gamble towards that. I sold out of GME at the end of March, buying further Vanguard FTSE All World with the stake and profit. GME continues to be a casino, waiting for that lift off to the moon that may never come.

The final note is to say that this portfolio calculation does not include my CrowdCube gambles/investments. I recently had an email to say that Freetrade are offering a share sale opportunity as an institutional investor buys in. The share valuation from that sale puts my holding up about 80%. I’ll continue to hold that to see where it goes.

Happy spring everyone,

The Shrink

References:

  1. https://www.principality.co.uk/savings-accounts/everyday-savings-accounts/thank-you-online-saver

The Financial Dashboard – March 2021

The goals for March were:

  • Update online investment tracker and calculate rebalancing required
  • Make a few hours each week to enjoy hobbies without pressure
  • ?Modified paleo

Checking the assets and liabilities:

March Assets and Liabilities

These are taken, as always, from my Beast Budget spreadsheet. March has been a long and busy month, days getting longer and lighter. Lots of DIY in the house and gardening, sowing the seeds for the summer. Looking forward to things opening up, going to the gym, getting in the pub with friends. I saved just under 25% of my salary, a slightly disappointing result, however my net worth continued it’s 2.5%/month climb. New investment money went into my Freetrade account, and where it has gone in a mixture of active positions which I’ll cover in my quarterly investment update.

If you fancy a free share, sign up to Freetrade with this link (I also get one).

Goals:

Goal passed: Update online investment tracker and calculate rebalancing required

I’m terrible at keeping my tracker up to date (now done), and I really need to get into the habit of updating it when I do my budget spreadsheet. Recently I’ve been selling some positions, and it’s shown that my current tracker is not built to handle such active antics. Probably a goal for next month.

Goal passed: Make a few hours each week to enjoy hobbies without pressure

This was a really simple and nice thing to do for myself. I’ve got a lot more done on projects and hobbies, and felt more relaxed without the internal cognitive pressure and subsequent procrastination. Fewer goals and more downtime.

Goal failed: ?Modified paleo

A bit of an odd goal. A few years ago I went paleo for a couple of months, but having dug into the evidence base wasn’t convinced by the literature or the theory. I also tried 5:2, where the evidence of the benefits of fasting on hormone response (particularly insulin and the steroid-aldosterone pathways) and cell senescence is much more solid. That stalled when I struggled with brain fog and general hanger – it was a serious challenge on night shifts! Over the past few months I’ve been reading a variety of books about nutrition, particularly ‘The Warrior Diet’ (reasonable concept, shit scientific background and execution) and stuff on 16/8 fasting. I’ve changed some of my diet, but need to take this a bit further.

Budgets:

  • Groceries – Budget £200, spent £274.70, last month £187.75 – Not really groceries, just lots of stuff from the middle of Lidl/Aldi
  • Entertainment – Budget £100, spent £127.98, last month £117.88 – Since the new COVID changes in Wales we’ve been doing lots of garden/park coffees and takeaways (fish and chips FTW) with friends. Whoops!
  • Transport – Budget £250, spent £294.80, last month £123 – Given this includes a full years insurance I’m pretty happy with a slight overspend
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £54.62/ £210.55
  • Loans/ Credit – £50/ £200/ £250
  • Misc – £50/ £325.34/ £65 – Bits for the house
  • Fees – £300 /£103.62/ £144

In the garden:

Finishing digging over soil, and first outdoor peas gone in (potentially a bit early given the recent snow). Raked over the lawn and re-sown. Mulched flower beds. Greenhouse glass cleaned, and it’s now packed with germinating seeds.

Goals for next month:

  • Simplify and improve flexibility of online investment tracker
  • 16/8 fasting
  • Set up new ISA
  • Final repainting and touches to downstairs rooms

Happy April everyone!

The Shrink

The Financial Dashboard – February 2021

The goals for February were:

  • Make a few hours each week to enjoy hobbies without pressure
  • Test intermittent fasting
  • Organise remortgage

Checking the assets and liabilities:

February’s Assets and Liabilities

These are taken, as always, from my Beast Budget spreadsheet. February started pretty miserable, the cold weather and lockdown leaving me in a proper funk, little motivation to do anything. Reading blogs like Weenie’s, it sounds like I wasn’t the only one (1). I’m not one to spend my way out of a malaise, so it was actually a pretty frugal month. I saved over 40% of my salary, and I’ve been making some overpayments on my credit card plan from overtime money. New investment money went into my Freetrade account, where it’s sat while I work out where it needs to go based on my rebalancing act/plan.

If you fancy a free share, sign up to Freetrade with this link (I also get one).

Goals:

Goal passed: Make a few hours each week to enjoy hobbies without pressure

This is something I would recommend for everyone. I’m a very goal driven person, and I motivate myself by setting goals and internal deadlines. This can lead me to get stressed over my ‘made up’ deadlines for doing essentially irrelevant things; repainting a wall, repotting daffodils. By making a few hours a week to just do things if/ when I feel like it, a lot of things which felt like chores I now enjoy again. It’s theoretically a ‘mindful’ process, focusing on the moment rather than wider requirements and activities, but mindfulness has definitely got overblown.

Goal passed: Test intermittent fasting

This wasn’t particularly to lose weight, but because I’ve been reading lots about cell senescence recently, and the cardiovascular and glucose-metabolism benefits of periods of fasting. I tried this month, and it definitely doesn’t work for me. In the past I’ve tried 5:2 fasting on a friends recommendation, but found I get indescribably hangry, and lose all ability to concentrate. This time I tried a 16 hour fast four days a week, going 8pm to 12 noon. I didn’t get hangry, but I did lose all productivity. I also found I was ravenous by noon, and tended to eat twice what I would normally for lunch/dinner. I don’t think this is a good thing for me; it seems to suggest I’m highly dependent on dietary intake to maintain my blood sugar for functioning, but in the absence of a couple of weeks off to fast without productivity consequences I’m a bit stuck. I went through a period of eating a diet which could best be described as ‘modified paleo’ a few years back, so I might go back to that drawing board and do some further reading.

Goal passed: Organise remortgage

For various administrative reasons we have been on a split pot mortgage since we moved into our current property. This meant two different interest rates, fixed for two different periods, with different charges. One came out of it’s fixed rate offer last year, and the other (the larger) is due to revert to standard tracker rate in June. It’s therefore time to change. We had a look through the usual price comparison sites, and then spoke to a specialist financial advice company for medical types, who put us on to their broker. Who were London & Country (2). Who seem to be the people pretty much everyone use. Either way, we’re moving from the combo of 4.09% (small pot)/ 1.68% (big pot) to a combined 1.65% mortgage, fixed for five years, which will start from the day our old deal ends (fingers crossed). Wholly satisfactory result.

Budgets:

  • Groceries – Budget £200, spent £187.75, last month £181.70
  • Entertainment – Budget £100, spent £117.88, last month £100
  • Transport – Budget £250, spent £123, last month £123 – remarkable consistency given it’s mostly odd eBay parts
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £210.55/ £78 – Gifts for friends
  • Loans/ Credit – £50/ £250/ £255
  • Misc – £50/ £65/ £96
  • Fees – £300 /£144/ £302

In the garden:

Continued tidying ahead of spring, but also started to germinate my first lettuces and other early crops. The bluebells and daffodils are starting to come up, and everything feels a little bit more alive.

Goals for next month:

  • Update online investment tracker and calculate rebalancing required
  • Make a few hours each week to enjoy hobbies without pressure
  • ?Modified paleo

Happy March everyone!

The Shrink

References:

  1. https://quietlysaving.co.uk/2021/03/02/february-2021-plus-other-updates/#more-5951#
  2. https://www.landc.co.uk/

A Shrink’s Financial Origin Story

Inspired by an amazing post by The Accumulator from December 2020, Indeedably has challenged finance bloggers to pen their financial origin, and the course that led them to blogging about finance (mostly FIRE if we’re honest) (1, 2). You can find the other contributors at his latest venture, the excellent Sovereign Quest (2).

The mix of people’s experiences seems to be split into different camps – exemplified by The Accumulator and The Investor. Some bloggers ended up here because they’re wired to save, they always have, and it feels natural (e.g. Dr Fire, TI) (3, 4). Some have experienced the full-fat lifestyle and found it wanting (e.g. FatBritAbroad, Saving Ninja) (5, 6). Money is not the route to fulfillment. Others have learnt from personal or family experience, bumping against the limits of financial constraint and vowing never again (e.g. Weenie, Cashflow Cop) (7, 8). Or a combination of the above.

My story is possibly a combination of the latter two, but I’ll let the reader decide. I suspect it is certainly different.

Personal motivators

I was brought up in an averagely wealthy family, in an expensive part of the UK. Neither of my parents went to university; one a teacher, the other a tradesperson. I have vague memories of the impacts of economic recessions in my childhood, but my parents never let it effect us. Money was spent when there was some, and the belt tightened when there wasn’t; e.g. holidays camping in Cornwall one year, then a villa in Tuscany the next. Both were enjoyable to me as a child, and I knew no different. My parents have lived fairly financially uneventful lives. They never had a desire to ‘keep up with the Joneses’, but we always had good quality stuff, usually second hand.

When a grandparent died while I was in my teens, my parents used the inheritance from the resultant house sale to pull me out of the very poor local comprehensive, and put me through private school. The cost of this was not hidden, and my parents framed it as an investment. I was not as fish-out-of-water as I could have been, for reasons soon explained. I progressed academically, and went off to study medicine.

Throughout my childhood I was taught the value of money. This went from 50p pocket money on sweets in the village shop, to paper rounds, to pub work in my later teens. My parents fell in that awkward bracket where you don’t receive a student bursary, and the student’s living costs are expected to be supplemented by the parents. Mine didn’t, so I worked to pay my way. I also partied hard (medic, obvs), so had to always keep a rough budget and worked in cash. Despite the budget, when I graduated I had around £2k in a student overdraft and £2k in credit card debt. I paid it off sharpish, and then wondered where to go next with my money. So far so normal…

Family motivators

My family is not wealthy. My extended family is not wealthy. My ancestors were eye-wateringly wealthy. Family crest, motto, estates… the works. My parents are the first in many generations in those family lines not to go to university. One of my grandparents (from the wealthiest ancestral line) used to talk about what they would get the servants for Christmas, and hunting over the estates. Two hundred years ago, on both my mother’s and my father’s sides, my family would have been in the Times Rich List of the day. One side through inherited very old money. The other through banking and investing during the industrial revolution.

It’s now all gone.

My parents’ cousins were the last ones with inherited wealth, the male heirs holding the last farms. Now sold to pay for their retirement.

Those parts of the family didn’t work. The family had never worked. Not in generations. The estates provided for the lavish lifestyle.

When death dues came knocking a few fields were sold off. Then the Caravaggio. When the bills for the 70 room manor got too high they downsized, buying a few farms, one for each offspring. My great-uncle sold off the last of the London estates in the 1960s to pay farming bills.

Multiply this down the generations and there’s nothing left to live off, and no work ethic to acquire more.

Our family get-togethers would involve reminiscing on faded glory. I was brought up on an odd diet of old money opinion; the nouveau riche were to be looked down upon, anyone who needed to flaunt wealth had no class, quality was everything. There was a reason we didn’t keep up with the Joneses. That was for the proletariat.

It cast long shadows on Joe Bloggs arriving at private school in daddy’s Porsche, then skiving the day off to smoke and shag behind the bikesheds. Earning loads of dosh, flashing it about, building a nest egg, multigenerational wealth plans, it all didn’t matter if your kids or grandkids frittered it away. Common sense and financial literacy mattered more than millions in the bank.

I grew up very conscious of all that had led to where we were. As I started earning I set goals to not drain from the family coffers, but to stand financially independent. The wealth of past generations may be gone, but I could acquire more.

And maybe, one day, I might buy back the family silver.

The Shrink

Other posts (also collated at Sovereign Quest):

References/ Links:

  1. https://monevator.com/financial-origin-story/
  2. https://sovereignquest.com/
  3. https://drfire.co.uk/wednesday-reads-financial-origin-story/
  4. https://monevator.com/financial-origin-story/#comment-1232471
  5. https://sovereignquest.com/fatbritabroad-the-financial-origin-story
  6. https://www.1500days.com/guest-post-fi-by-any-means-necessary/
  7. http://quietlysaving.co.uk/2014/04/17/intro/
  8. https://cashflowcop.com/financial-origin/
  9. https://indeedably.com/origin/
  10. https://medfiblog.wordpress.com/2021/02/16/evolution/
  11. https://fireandwide.com/playing-the-cards/
  12. https://centbycent.co.uk/financial-origin-story
  13. https://fireplant.net/origins/
  14. https://mortgagefreebythesea.com/a-life-less-ordinary/
  15. https://achatwithkat.com/financial-origins-always-a-saver-new-to-investing/
  16. https://myquietfi.com/my-money-story-part-i-a-prologue-to-the-preamble/