The FIRE Cemetery

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

On life support (>3 months since last post)

  • 3652 Days – Fairly infrequently updated, this has slowed down
  • The Finance Zombie – Last post in February 2019, infrequent prior
  • Early Retirement Guy – First post 2014, most recent June 2019, and that was a six month update
  • Sparklebee – First post June 2014, last in May of this year. At that point their work had been making them ill, so I hope they’re well and taking time.
  • Fire in London – First post in Nov 2016, last in December 2018
  • Deliberate Living UK – First post 2017, last from Wephway was in December 2018

In the morgue (dormant for >1 year)

  • Financially Free by 40 – Huw at FB40 last posted in mid-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

Dead and buried

 

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

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Our wedding price tag

Around this time last year MrsShrink and I tied the knot. In honour of this, I felt I should do the romantic thing and work out how much it cost. The first thing to say is, like our friends Mr and Mrs YFG, we looked at the costs of the average wedding aghast (1). It was actually at one of these £30k+ weddings that MrYFG and I realised we had known each other in real life long before we began commenting on each others blogs. The average wedding in the UK now costs ~£32k, and it’s rising (2). I suspect this is a positively skewed mean, as averages reported elsewhere range from £17.5-30k (3, 4, 5). Either way, no small potatoes. We weren’t willing to hoik ourselves to the eyeballs with credit card debt.

The wants list

Although I’m a bit of a traditionalist at heart, MrsShrink and I could never be called religious. MrsShrink would describe herself as a devout atheist. As such a church wedding was off the cards as to her it would be dishonest. So we sat down and tried to decide:

  • What is the point of a wedding?
  • What makes a good wedding?
  • What makes a wedding memorable and what leaves a sour memory?

The point

We reasoned that the point of a wedding was to celebrate our relationship and commitment to each other. How do you celebrate something in most cultures around the world? Throw a F-off party. The ceremony has symbolic importance to family members and friends, so we planned to include those we love in events as much as we could without being too ceremonial. If we were going to celebrate it was going to be with those we wanted to celebrate with, our closest friends. We both come from large extended families which introduced massive stress and financial implications in deciding who came. How do we tell Uncle S we’re not inviting him because we saw Aunty T more recently? Where do you draw the line? We said brothers, sisters, parents and that was it. No cousin B, who you only see semi-annually when someone who shares partial DNA cops it.

What makes a good wedding? The same ingredients as a good party; good food, free-flowing booze, good music, good people. What leaves a sour memory? An absence of any of the above, and interpersonal grief. Supply the first. Only invite good friends and avoid familial beef for the latter.

What did we do and what did it cost?

We planned a three day long party with our closest family in friends in a remote pile in the country. Free-flowing booze, ample food and pumping basslines. Sandwiched in the middle was a wedding ceremony. We kept a running budget as we went along, and a rough target figure, so now the dust has settled down here’s the numbers it came out at.

Wedding Venue

The average venue hire is apparently £4-5k, with another £500 for a church on top (2, 5) . We set some criteria for what we wanted which reduced our range. Due to our background we have friends all over the country, and if we were inviting them down we figured most would need to stay; therefore onsite or nearby accommodation. A church was off the cards and we wanted something good for all weathers; a stately home or castle set-up. We’ve been to weddings where members of the public are traipsing about gawping; sole use of the venue. None of that comes cheap. Most established venues have set ‘menus’ of wedding options, or slick brochures advertising the ‘packages’ and offers. We wanted to do our own thing; slick wedding packages aren’t particularly individual (to our mind), and you’re paying for the convenience of not planning or thinking. After spending hours of googling the SEO optimised wedding material I had a brainwave. Venues have to be licensed for a wedding…

Check the licensing list.

I pulled up all of the local counties’ government websites and downloaded their lists of registered wedding venues. Among them I found a gem. Minimal online presence, set up to run corporate away-day events in a country house in the middle of nowhere, they had a wedding license and accommodated a few weddings a year. Entire run of the stately home, like a giant self-catering hotel. Sauna, pool, games rooms, en-suite bedrooms for 40+ people. Total cost: £6600 for four days. Blew the budget a bit, but got to love Wales as I think elsewhere in the UK it would have been double that.

Food & Booze

So we’ve got a smallish number of people (~50) for a chilled out, non-stuffy wedding. We opted for a local company using local ingredients, served in an unfussy buffet way. We deliberately over-catered so there would be leftovers. The caterers cost us £1,600, plus a further £250 for waiting staff for the whole day. Significantly less that the £4.5k average (2). We called in favours as chef friends cooked breakfasts and big communal meals on the non-wedding days (2, 6). A family friend made a spectacular cake. Another family friend who runs a brewery supplied beer at cost. We went to Majestic and made the most of their free glass hire and wine delivery service. Alcohol was ultimately paid for by a family member, at a total of around £1000, less than the £1500 average.

Entertainment

The average cost of a four piece band is £1000-1500 for a wedding, plus another £200-800 for a DJ (5). We could have tapped up friends who play in a wedding band, but felt then they couldn’t enjoy the event. We hired a musician to play during the ‘reception’ for a couple of hours for £250, and then a commercial PA/ light system for the evening for £200. I spent a few days putting a Spotify playlist together (14 hour runtime), then cross-fading and mixing transitions. Significant saving, and the music didn’t stop until 4am.

Rings

I had put aside £2,500 for an engagement ring (slightly less than the UK average) (2). There was never an intention to buy new, and MrsShrink likes art deco. After a year spent looking for the right ring, I bought an antique stopgap for 1/10th of the price. She fell in love with it. It’s personal, perfect to her taste, and she doesn’t worry about getting mugged for a massive stone. The wedding rings themselves came from a local jeweller and cost £1100.

Wedding Dress/ Outfit

MrsShrink frankly hated the idea of spending £1,000 on a dress to wear once (2). Many national charities run specialist bridal stores where they collect together donated dresses. MrsShrink won’t tell me what she spent, but she ultimately bought two dresses (she couldn’t decide) for (I think) 1/4 of the average above. I decided that my own suit and that of the groomsmen should be something we could wear again. Why spend £100 each hiring a morning-suit when you can buy something decent from M&S for £150? I spent £400 buying suits, ties and accessories for the chaps, and £550 on a tailor-made suit for myself. One of my groomsmen uses his suit for work. I’ve since worn my suit as best for several events and to interviews, and it fits like a glove.

Photography, flowers and decorations

We spent £1000 on this. The average is apparently £1100-1400 (2, 5). We opted out of engagement/ honeymoon shoots. We were happy with some of the photos but not all, and I do wonder if we shouldn’t have scrimped here. Ultimately we have enough lovely photos for an album, and how many do you need/ how often do you look at them? MrsShrink initially made the save the dates, but when we number-crunched it turned out to be just as cost effective to have the actual invites printed (~£100). Standard wedding flowers apparently start at £250 (5). MrsShrink has an aversion to cut flowers – ‘Why would you think something that’s dying is pretty?’ – instead we ordered dried seasonal flowers. Not only did this come in at £220 for bouquets, corsages, button holes and table decorations, but one year on they’re still looking just as pretty on our mantelpiece. Bunting was sown by family members and dried petal confetti was collected by friends.

The final bill

All told we came in around £14,000, of which £3,000 came from family as gifts. Roughly half the ‘average’. If I’m honest MrsShrink was the main source of budgeting success. I struggle to control my spending in the name of a party. The biggest frugal tips we have:

  • Make a list of what will make your day special to you
  • Use the council wedding licence list to find hidden venues
  • Truly think about who you want there. Does it need to be every cousin and their step-mother-in-law?
  • Posh, class and tradition does not have to mean stuffy or expensive
  • Call on friends talents
  • Second hand items and charity shops are your friend
  • Dried flowers are cheaper and last longer than fresh
  • You’re getting married to the most important person in your life. Who are you trying to impress?

I’m sure we could have been more frugal, but we had a great time, so did our mates, and it’s remembered by everyone as a proper knees-up.

Cheers for reading,

The Shrink

 

References:

  1. https://youngfiguy.com/our-unconventional-and-cheap-wedding/
  2. https://www.hitched.co.uk/wedding-planning/organising-and-planning/the-average-wedding-cost-in-the-uk-revealed/
  3. https://www.independent.co.uk/life-style/love-sex/wedding-cost-uk-average-how-much-marriage-ceremony-bridebook-a8460451.html
  4. https://www.hellomagazine.com/brides/2019021969949/how-much-does-wedding-cost-uk-2019/
  5. https://www.moneyadviceservice.org.uk/blog/how-much-does-an-average-wedding-cost
  6. https://www.moneysavingexpert.com/family/cheaper-weddings/

Thought Experiment #5 – The grid? What grid?

I’ve not participated in the Saving Ninja’s ‘Thought Experiment’ series to date, so this is #1 for me. The premise is a stream of consciousness amble through your response to a hypothetical question. For this one:

Life is good. You finally did it! You pulled the plug on your day job after reaching financial independence. You never have to work for money ever again. But, you’re bored. You need something to do… You need a project! You grab a piece of paper and a pen and start thinking. Now that you’re financially free, what projects do you want to complete? However ambitious, however small, you now have the time to pursue anything that you like, what will you accomplish?

The Expanse

Not the epic sci-fi show now on Amazon Prime. I’m talking about the sudden expanse of time available to me for long awaited projects. Like many other FIRE bloggers, a lot of the things I want to do, the projects, are already started or integral to my current path. I’m not actually sure I’d even retire. I wear many hats in my day job, and some of them I enjoy sufficiently that they don’t feel like work. Even if I didn’t have to work for money I’d probably try and continue a few days a week out of intellectual curiosity.

Beyond the sphere of my work, I have a list of semi-started projects which bring me happiness or satisfaction that I could dedicate more time to. I would:

  • Learn how to and then practise welding and sheet metal working. To spend some of my time buying rotten classic cars and restoring them from the ground up. Maybe racing them, maybe selling for a profit, maybe just to drive. Do some sculpture work in metal.
  • Continue learning languages. But be able to dedicate more time to it, maybe evening classes.
  • Build a suitable vehicle and then go overlanding. Probably some sort of Kamaz or Bedford 6×6. Spend some time, as long as it took, driving the Silk Road, the Panamerican Highway. Maybe Aus and trans-Africa. Detours on the Trans-Siberian Railway and travelling the US and Canada by rail. No rush, no goals, just the road to see. Sate my wanderlust.
  • Return to the UK and complete some more property renovation projects. Working through phases and styles. Maybe convert some industrial buildings. Build an eco house working with a friends company; off mains electric and water, incorporating space for family and guests.
  • Grow, cook, bake and brew. More time on each, growing more food, keeping more animals, experimenting brewing, funding a friends micro-brewery (which doesn’t really need funding as it’s going from strength to strength).

Kids would change the approach but not the direction of travel. There’s other targets in my goals list which don’t feature here, perhaps they’d feature too, there would be no rush. Living for joy and contentment would be my project. Soppy bugger.

Others thoughts:

  1. Indeedably
  2. Cashflow Cop
  3. The Caveman
  4. A Way To Less – a new blog to me
  5. Dr Fire
  6. Marc at Finance your fire
  7. GFF
  8. Sam at A Simple Life – also new to me
  9. Merely curious

References:

  1. https://thesavingninja.com/what-will-i-do-when-i-retire/
  2. https://en.wikipedia.org/wiki/Overlanding
  3. https://indeedably.com/whats-next/
  4. https://cashflowcop.com/beyond-financial-independence-tracing-my-roots/
  5. https://ditchthecave.com/when-i-grow-up/
  6. https://awaytoless.com/thought-experiment-5/
  7. https://drfire.co.uk/what-will-you-do-when-you-retire/
  8. https://financeyourfire.com/2019/04/15/thought-experiment-fire-now-what/
  9. https://gentlemansfamilyfinances.wordpress.com/2019/03/15/saving-ninja-thought-experient5-from-gff/
  10. https://asimplelifewithsam.com/2019/04/15/ninja-thought-experiment-5/
  11. https://merelycurious.me/post/thought-experiment-projects-when-fire

Property Renovation Lessons II

Continuing where we left off, we’ll walk in the front door when viewing a potential house purchase. In part two I’ll cover what I’ve learnt to look for in general interior room condition.
Shut the front door

Before shutting it, take a look at it. It seems a bit odd, but much like shoes tell the story of a person, I reckon a front door tells the story of a house. There’s lots of different styles:

front doors

Look at the construction; is the door PVC/ composite/ wood/ metal? Is the style of the door in-keeping with the age of the property? White PVC doors are very common, because cheap, and if a prior owner has opted for a cheap door they may have opted for other cheap options in the house. Has the owner put a modern door on an old house, perhaps hinting at a major modern refurb. In an older property does it retain it’s original wooden door? If so, look at the state of the paint. Such doors can last hundreds of years with maintenance, but need periodic sanding and repainting to maintain integrity. Again you can learn a lot about the owners attitude to preventative maintenance.

Look at the locks and door furniture. As mentioned in Part I, many insurance companies offer preferential rates for BS 5-lever locks. Most PVC doors are safer as they will have a multi-point locking system. Don’t forget to change the locks when you move in. Look at the door furniture; it can hint at chintz inside. Front doors have changed dramatically over the years, they tell the history of a property, and are an easy way to improve kerb appeal (1, 2, 3).

Flooring

You’re in the front door so look down. Victorian and Edwardian builders knew the importance of first impressions. Older properties will hopefully retain the beautiful parquet or tiled flooring. This can be replaced but it’s expensive and I don’t think it ever looks the same (although we have looked at reclaimed parquet in the past).

Worn parquet can be sanded back and re-varnished, as can original floorboards. This can be a DIY job if you fancy a go, budget at least £150 for a sander for a weekend and varnish. There’s lots of guides and Youtube tutorials which can take you through the process (4). Cover everything in dust sheets. We’re still finding dust three years later.

When viewing houses we would find try to find a neglected corner of carpet, or a piece where it had already come up, and peek at the condition of the floorboards. We were lucky with our first property that the floorboards had been hidden behind 100 years of layers of carpet and were pristine. We also discovered a hidden terrazzo floor in a property we lost out on.

Terrazzo is a polished solid flooring, produced by pouring a mixture of resin/concrete and marble/ stone chips (5). It has similarities with polished concrete and resin floors, which are both very fashionable currently (6, 7).

Laminate and carpet

Both of these I could write entire articles about. Laminate can be beautiful when done well. It also offers a cheap DIY way to update and upgrade a tired space, with ‘click-clack’ self-connecting forms available from most retailers. On the cons, it’s loud underheel, and is used by slum landlords to hide substandard flooring surfaces. Engineered hardwood flooring is the step up from laminate where a layer of real wood is added to a ply backing. This can really make a difference to a space but is understandably more expensive (8).

Carpet again comes in all shapes, sizes and styles. Look out for damage to carpet, lifting, or the carpet moth that will munch it’s way through natural fibre (i.e. wool) carpet in darker spaces. Bare patches in corners with discarded casings and potentially larvae will point towards the moth. We stripped the carpet from our whole house and switched to synthetic fibre to try and eradicate our infestation (9).

Wall and ceiling coverings

Lets talk plaster, paint and wallpaper. We’ll start with that perennial favourite, woodchip. Used in the 60s and 70s to hide poor plaster and imperfections, it’s wallpaper will added chips of wood to provide texture. It’s one of the main things to put potential viewers off a house. It’s a bugger to remove, as those woodchips soak up attempts to chisel it off. It’s super messy, takes ages, but is cheap to do DIY (main cost being a £30 wallpaper steamer from Screwfix etc). There’s plenty of guides on the internet into how to tackle removal (10).

The texture and endurance of woodchip means it can hide a myriad of problems behind it. To an extent any textured wallpaper can do the same, and should be treated as such. Anyone can wallpaper a room, and it’s a quick way to refresh a room or hide problems. Don’t be fooled by Victorian anaglypta’s either, which can look stunning but hide issues.

Another covering you may come across is Artex. This is a further 70s product designed to hide poor plastering finishes behind a textured fascade. To make things even better, pre-1980s Artex was made with our old friend white asbestos (11). Undisturbed behind paint this is fine, but sanding or removal risks hazardous dust. The asbestos can be identified and the Artex removed by a specialist company, using steam or preparatory products (12). Some people tackle it themselves, which I would not recommend unless you are willing to risk Mesothelioma. The other alternative is to plaster over the top to produce a new flat surface.

People also deployed Asbestos (the wonder substance) in tile form on ceilings or where drop ceilings have been installed. This is mainly found in commercial buildings, but we clocked some hiding in a renovation project (a right dogs-dinner of a property) and ran. Again it really needs a specialist company to identify. Some people choose to remove it themselves with commercial-grade PPE, but I would not advise due to the health and legal risks (do as I say not as I do) (13). Asbestos has to be disposed of safely, and rules vary depending on your locality on whether your local tip will take it.

The only real mention I’ll make of paint is lead-based paints. If your house was built before the ’70s it probably contains some lead-based paint. This is only really an issue if the paint is damaged, crumbling, and you go around licking it or sticking it in your mouth. Kids do. It tastes slightly sweet (Darwin at work). Lead accumulation isn’t something to mess about with, so keep on top of it and don’t let your kids peel it off and chow down (14).

Plaster

With the exception of paint, all of the coverings above can mask potential plaster issues. This is one of the reasons in recent property searches I’ve tended to prefer properties where I can see what I’m dealing with. Plaster problems fall into three main areas:

  • Dead Plaster

This is more an appearance than a problem itself. Traditional construction techniques were to use thin lathe battens nailed to the structural upright stud wall or brick. Movement of the wall, damp trapped in the plaster or superficial damage can all cause the plaster to lift away from the lathe. Attempts can be made to repair this by pinning the surround plaster and patching, but often it’s easier to hack off and redo with modern plasterboard and a fresh skim. On a ceiling this can suggest damp ‘falling’ from above, so a leak in a bathroom or roof (see below).

  • Cracked Plaster

Smaller cracks caused by structural movement in the property or just general wear and tear can be dealt with filler and a scraper tool. It’s important to make sure this is not the above, by lightly pressing on the plaster. If there’s a ‘give’ and movement then the plaster may well have peeled away from the underlying lathe, requiring more significant attention (15).

  • Damp

Damp. The blank chequebook to a cowboy builder. You’ll smell damp as soon as you walk into a house, that mouldy, fusty odour. It’s nothing to fear as long as you remember one rule. Damp has to come from somewhere.

Actually two rules. Rule two: rising damp is a sales tool. Don’t believe me? RICS agrees (16, 17). While osmosis happens, water won’t climb up a wall in a warm home because it has to. There’s such a thing as gravity. Damp proof courses are a waste of money. There I said it!

I’m not saying it doesn’t happen, but ground and construction conditions have to be really specific. Rising damp requires hygroscopic salts to be present in the minerals used in the walls construction and surrounding soil to create an environment where water molecules can move through osmosis. They’ll often leave crystals on the wall. ‘Rising damp’ as a ‘diagnosis’ got big in the ’60s and ’70s as a way to fix the problem of damp inside houses, right around the time lots of poor quality houses were being built and older houses being renovated by caking them in impermeable concrete (18). Same goes for cavity wall insulation. Older houses built of brick, stone and lime mortar were permeable. They would absorb moisture, they could ‘breathe’. If a wall was facing the predominantly inclement weather it could get damp, but it would dry out when the weather was dry again. The Victorians and Edwardians solved this by having an air-gap cavity wall. People in the C20th didn’t like the fact that walls would get damp, so they covered them in impermeable concrete render or membranes, plus plastic wall paints. They then added double glazing without air vents. This kept the rain and weather out, but also kept moisture produced by general day-to-day living in. If you breathe on a cold pane of glass it steams up. Multiply that throughout your home and you get condensation. This is the main cause of damp in homes. Other causes include:

  • Insulation – (I look forward to the class action lawsuits in 30 years as swathes of government-grant retrofitted old houses succumb to damp damage)
  • Heating on/off – must be constantly ON, but low temp = 15 degrees C – heating and then cooling creates an environment for condensation
  • Ground levels outside higher than inside
  • Broken guttering or missing downpipes
  • Vegetation growing near the wall
  • Trees creating shade and moist air near a wall
  • Lack of ventilation – double glazing, no vents
  • Blocked chimneys – fireplace blocked up, no vents
  • Furniture against walls creating cold, damp areas (18)

The answer is (as always) preventative maintenance and taking a nuanced approach based on the buildings construction. If you live in an older home you cannot expect it to achieve modern standards of insulation. Ensure you use permeable materials to allow movement of moisture in renovation work. Appreciate your higher utility bills as a trade-off for period features and room sizes. As a slight aside here, if buying a new property ensure that there are air vents in the glazing, air bricks in the walls and plenty of opportunities for air movement. Amongst high-end architectural design the move is towards Passivhaus standards, where moisture, dew points and ventilation are carefully controlled as part of holistic approach to construction (19).

How to tackle damp?

Unsightly mould around windows (like above) or on walls (below)? Check for vents in windows and doors. Check the type of paint or wall covering used. Often this is down to people not opening windows or allowing ventilation in an attempt to keep heat in. Crack the window or buy a dehumidifier (20, 21).

Peeling plaster, cracked and lifting paint? The is more likely to be penetrating damp, or a leaking roof or bathroom plumbing if it’s the ceiling. This is often enough to scare off most buyers, but look carefully. Penetrating damp or a leak has to come from somewhere (22). Is the external ground level higher than the internal wall? Are there boundary walls abutting the internal wall? It could be caused by a sill or beam bridging a wall cavity. Go back outside and look externally for cracks in render, damaged, eroded or poorly pointed brickwork, absent flashing or leaking gutters. This is why it’s often good to view a house in heavy rain. If it’s on the ceiling is there a bathroom above? If so run all the taps and check for drips. Is the roof in good condition, and can you view the loft in rain to check for water ingress? We had penetrating damp in a previous house caused by a) a wooden sill which was exposed to rain which soaked internally, and b) an external garden boundary wall abutting the damp wall, with next-door slightly higher than our ground level. Solved by rebuilding the external wall with damp proof tanking. I worked on another house where a ceiling would get wet when the wind blew from the North-East, as it then forced the rain up a pitch through the roof so it could drip down. Had to put a new roof on to solve that.

Electrics

Fuse board

Fuse boards, or more properly domestic consumer units, are a must check. They ensure electrical safety in your home, preventing you getting shocked (/dying) and the house burning down every time something short circuits. They’ve developed over time with progressive regulation changes. Up to 2001 most homes were fitted with fuse boards like the older Wylex one pictured, containing individual rewire-able fuses plus a main circuit breaker/ isolation switch. Since 2001 regs have mandated individual residual current devices (RCDs) protection for circuits, offering extra protection (23, 24). Any new electrical work being done to a property will require an RCD system to meet regs. Budget £300-400 for installation of this alone. My garage is currently (not working) on an old 1940s cast iron splitter unit like the last image piggybacked off the main RCD. I’m exploring ways to retain the unit as it’s bloody cool (25).

Certificates

Sort of an extension of the above, but it’s important to ensure any electrical work that has been completed to the property has been done so by an accredited person. All work should be certificated and ideally marked as tested. Any changes to circuits like adding new sockets, adding new outlets, changing lighting circuits etc technically needs this (26). Ensure you get these certificates when purchasing the property and when you have any work done. It’s often a requirement for property insurance, it can be in the fine print in the mortgages, and you’ll need it to rent the property out (27). Work without certificates opens up a legal minefield, and can knock serious cash off the property value. Copy and paste this to central heating, gas work and plumbing.

Wiring

One to check out as you look around. First, is wiring (and plumbing) fitted with surface trunking, or properly chased into the wall? Trunking fitted to existing wall is quicker, cheaper but looks less attractive (to me). Chasing into the wall is harder, slower and more expensive, but the flush finish looks smarter (28). This will give you an idea of the costs the owner has spent on this sort of work and the quality they’ve been happy with.

If you can see exposed wiring (try next to the fuseboard or under-stairs cupboards) look at the colour of the wiring. Wiring since 2006 has followed European and Australian code; brown is live, blue is neutral, green/yellow is earth. Prior to that we ran red live, black neutral and green earth (29). Since the 1960s most UK wiring has been sheathed in PVC. You can age your wiring on what it’s sheathed in. Prior to PVC was vulcanised rubber (notable by being black), before that was lead (notable because it’s… lead), and before that it was all sorts of odd stuff including cloth and paper-wrapped wiring (30). The cloth, lead and rubber all degrade, so will all be due replacement.

300px-cable_colours_1179-5

We made a not untidy sum ripping out the rats nest of old wiring in a previous property. Once we’d turned everything off at the main breaker we found cloth-wrapped, lead-sheathed (£££) and 1960s wiring had all been run in parallel circuits under the floor. The joys of renovation!

Other things to look out for are old plug sockets like the one below, featuring the earlier circular three pin plug. There were lots of variants of plug prior to the adoption of the ubiquitous three-prong plug and socket in 1947 (31). This means you can reliably date your wiring and definitely decide it’s due a rewire. The UK’s socket design is the envy of the world (32), so embrace it! Brown bakelite junction boxes, on the other hand, are not something to run from. They’re still in production, still used and definitely serviceable (33). I really like bakelite as I think it’s retro, but then I’m a bit weird.

15380076

586px-jbox_ashley_20a_4933-2

Plumbing

Where’s the stop cock? Check if there’s one in the house as well as one by your meter (if you have one) where it enters the property. You and your neighbours will thank you when you’re not screaming “How do I turn off the bloody water?” at 3am.

Pipes

The water pipe for your property is your responsibility from where it tees off the mains (34). Track it’s path throughout the house if you can, check for leaks and quality. Lead has not been used for pipes since the 1960s but most old houses will retain it somewhere (as it’s a pain to replace for various reasons). Most internal pipes will be stainless steel, copper or plastic. Old pipes may be iron. They all degrade over time (at different rates), so need periodic maintenance (35, 36).

Pipes in the UK for central heating are generally copper or plastic (often white). They come in various sizes. Size of pipe is an important consideration when fitting central heating, as you need to calculate the total thermal load on the boiler (the radiators) and the efficiency and flow rates (based on pipe diameter and water temperature) to ensure that your boiler has enough oomph to actually heat all the radiators (36, 37). There’s online calculators that can help you work out your heating requirement to spec this, such as here: https://www.plumbnation.co.uk/heating-calculator/ (38). Frankly, I just get a plumber.
Heating

While we’re on boilers, check if the property has one. There’s essentially two types of heating; wet and dry.

Wet

  1. Does the property have a wet system (i.e. radiators and a water boiler)?
  2. Is it gas, oil, coal, calor gas, solid?
  3. How old is it?
  4. Does it have a hot water cylinder or on demand?
  5. Has it been serviced?

conventional-boiler-explained

This is a whole other set of posts. Essentially most houses are on gas boilers, of which the most common is combi-boilers which do heating and hot water. There’s system boilers, which have a hot water storage cylinder (so are better for households that have multiple bathrooms and need lots of hot water at once), but are generally less efficient. Then there’s conventional boilers which have a water tank and a hot water cylinder (39, 40). Newer boilers across the range are generally much more efficient. Google the brand and model number and check the reviews. Older boilers can be very reliable if well maintained, so check for service record stickers. Budget between £1-4k for a decent replacement, and remember you really get what you pay for with boilers (40, 41). Budget more for a new install on a property without central heating.

Oil-fired boilers and calor gas systems are generally used for the estimated 4 million households that are not on mains gas. Oil is a bit more fuel efficient than gas, but can cost more to buy as the cost fluctuates and you have to store it in tanks (generally bunded green things) (43, 44). You can also run out if you forget to order more, or the roads are shut. Same rules apply re: servicing and replacement.

Dry

In the UK this basically means electric heating systems in rooms. Other countries and some UK commercial and old buildings will use a central furnace and hot air vent system, but they’re inefficient for our construction practices. Electric heating costs more to run than gas, and should really be considered only where gas is unavailable, where heating is infrequently required or where wet system installation is impractical. We’ve gone through various stages of electric heaters too, with electric radiant heaters (i.e. old bar electric bar fires), electric fan heaters, through night storage, oil filled and panel heaters. Fan, radiant and oil column filled heaters are usually portable and can be used to heat up the room you’re in at the time (45).

Panel heaters can be very minimalist and are therefore currently the fashion choice. They’re generally touted as ‘eco’, but given all electric heating systems convert electricity to heat what that essentially means is they don’t use much electricity as they don’t give off much heat. Night storage heaters look more like a radiator and work by heating up a ceramic brick during the night (when electricity can be cheaper if you’re on Economy 7/10 or similar) and releasing it during the day (46, 47, 48). They work much more like a conventional wet system, and get a room toasty warm. Budget £500 per heater.

There’s also ground-source or air-source heat pumps, solar thermal, district heating, underfloor heating, biomass systems and all sorts of others which I can go into in detail if people are interested (i.e. leave a comment to motivate me to do it!). I may do an eco renovation post in the future.

Summary

In part two I’ve covered most of the general building fabric and utilities considerations. This should give you an idea of what to look for on property viewings and in your own home. In part three I’ll cover room specific considerations (kitchen, bathroom etc), construction (chimneys etc) and layout.

The Shrink

References

  1. http://rockmystyle.co.uk/first-impressions/
  2. http://www.oldenglishdoors.co.uk/latest-news/doors-victorian-era/
  3. https://nonagon.style/the-easy-guide-to-exterior-front-door-styles-and-types/
  4. http://moderncountrystyle.blogspot.com/2016/02/how-to-sand-and-renovate-old.html
  5. https://www.doityourself.com/stry/how-to-repair-marble-floor-chips-and-cracks
  6. https://www.homebuilding.co.uk/polished-concrete-getting-it-right/
  7. https://www.allthingsflooring.com/2017/07/polished-concrete-vs-resin-floors/
  8. https://www.ambiencehardwoodflooring.co.uk/wood-flooring-guide/real-wood-or-laminate-flooring/
  9. https://fivestarfurnishingcare.co.uk/carpet-cleaning/do-my-carpets-have-carpet-moth/
  10. http://lusheclectic.com/woodchip-wallpaper-take-it-off-or-leave-it/
  11. https://en.wikipedia.org/wiki/Artex
  12. https://householdquotes.co.uk/removing-artex/
  13. http://www.asbestosguide.org/asbestos-ceiling-tiles/
  14. https://www.webmd.com/women/lead-paint#1
  15. https://www.homebuilding.co.uk/renovation-assessing-the-potential/
  16. https://www.architectsjournal.co.uk/home/-rising-damp-is-a-myth-says-former-rics-chief/5204095.article
  17. https://www.heritage-house.org/damp-and-condensation/the-fraud-of-rising-damp.html
  18. https://www.heritage-house.org/damp-and-condensation/managing-damp-in-old-buildings.html
  19. https://en.wikipedia.org/wiki/Passive_house
  20. https://www.which.co.uk/reviews/damp/article/dealing-with-damp/what-kind-of-damp-is-affecting-my-home
  21. https://www.theguardian.com/lifeandstyle/2008/mar/01/diy.homes8
  22. https://www.heritage-house.org/damp-and-condensation/types-of-damp-what-have-i-got/penetrating-damp.html
  23. https://en.wikipedia.org/wiki/Consumer_unit
  24. http://www.judgeelectrical.co.uk/domestic-electrical/explanations/about-fuse-boards.html
  25. https://www.flameport.com/electric_museum/old_equipment/revo_15_amp_splitter.cs4
  26. https://www.niceic.com/find-a-contractor/electrics-explained/what-are-the-different-types-of-electrical-certifi
  27. https://www.gov.uk/government/news/new-tougher-electrical-safety-standards-to-protect-private-tenants
  28. http://wiki.diyfaq.org.uk/index.php/Electrics,_Socket_Chasing_(Flush_with_wall)
  29. http://wiki.diyfaq.org.uk/index.php/Wiring_colour_codes
  30. https://www.electriciancourses4u.co.uk/useful-resources/history-of-wiring-colours-cable-sheathing-bs7671/
  31. https://www.plugsocketmuseum.nl/OldBritish3.html
  32. https://www.fastcompany.com/3032807/why-england-has-the-best-wall-sockets-on-earth
  33. https://www.cef.co.uk/catalogue/categories/junction-boxes-bakelite-junction-boxes
  34. https://www.ofwat.gov.uk/households/supply-and-standards/supply-pipes/
  35. https://www.homify.co.uk/ideabooks/564032/choosing-the-right-water-pipes-for-your-home
  36. http://wiki.diyfaq.org.uk/index.php/Plumbing
  37. https://www.diydata.com/planning/ch_design/sizing_pipes.php
  38. https://www.plumbnation.co.uk/heating-calculator/
  39. https://www.uswitch.com/boilers/guides/boiler-guide/
  40. https://www.hometree.co.uk/energy-advice/boilers/types-of-boilers.html
  41. https://www.lovemoney.com/news/12664/how-i-saved-1200-on-my-new-boiler
  42. https://www.boilerguide.co.uk/articles/what-size-boiler-needed
  43. https://www.which.co.uk/reviews/boilers/article/oil-boilers
  44. https://www.which.co.uk/reviews/home-heating-systems/article/home-heating-systems/oil-central-heating
  45. https://www.which.co.uk/reviews/electric-heaters/article/how-to-buy-the-best-electric-heater
  46. https://www.energywise.govt.nz/at-home/heating-and-cooling/types-of-heater/electric-heating/
  47. https://www.which.co.uk/reviews/home-heating-systems/article/home-heating-systems/storage-heaters
  48. https://www.cse.org.uk/advice/advice-and-support/night-storage-heaters

Property Renovation Lessons I

Gather ye round students.

It’s a peculiarly British fascination that we own our homes. Your home is your castle.

The default setting for those with spare-cash in their middle-years appears to be adding to your castle, working up the property ladder or buy-to-let. Yet it’s a route full of pitfalls, and BTL is fast becoming a mug’s game. MrsShrink and I have been fortuitous in turning a £20k deposit in 2014 into a £52k deposit this year (~38% annual return). We did this by buying a fixer-upper and working our socks off in our spare time. MrsShrink comes from a family of serial renovators, and spent some time learning painting and decorating with a professional family member. I come from building trade stock, and have plied the hod and trowel. I know which end to hold a hammer. So here’s the lessons from along the way that we applied to our second house purchase and renovation.

Location Location Location

  • Buy the worst house on the best street in the best neighbourhood you can afford

Classic Sarah Beeny this one. Waiting for the rough looking house to come up can pay dividends, however there’s plenty of property developers also looking to do this who probably have cash on hand to swoop quickly (1). As an alternative look at what has been on the market a long time, work out why and knock them down for it if it’s overpriced. That unappealing quality avocado bathroom could be £15k off the asking price for a fed-up seller. The primary issue here is that due to Sarah Beeny, DIY SOS, The Renovation Game etc every man and his dog thinks they’re a property developer by ripping out a 30 year old fitted kitchen and banging in a Wickes’ budget MDF job (2). Shame that.

  • Check the location using Rightmove’s school checker, look for local shops and public services like bus stops, libraries, parks etc (3).

This again is partly straightforward. Even if you don’t have kids being in a good school catchment improves resale, although worth bearing in mind that schools can turn around quickly. Less thought about are bus stops; schoolkids yelling outside your house can pretty quickly turn a night shift worker potty. Likewise parks and outdoor sports areas.

  • Check the local streets on your councils planning portal and local area development plan

Is your neighbour about to be converted to an HMO? Is that spot of derelict land at the end of the road turning into a block of flats with no parking allocated. This is exactly what is happening a few streets over from us, and the next-door owner is currently selling up as their current uninterrupted view over the city is due to be replaced by six stories of students. Those planning applications may be the prompt for the sale. Also check your councils local area development plan (or equivalent). This may suggest (as for our current location) there are planned infrastructure, zoning or conservation changes which could dramatically impact the appeal of an area.

  • Check long term floodrisk maps

Published by the government, this shortcuts going through the purchase process only to find on your surveys that your new dream home floods any time we get fair-middling drizzle. For England see here, Wales here, Scotland here (4, 5, 6).

  • Google Streetview is your friend

Check the roof, neighbours gardens for a sense of upkeep of the local area, evidence of building work and other nearby extensions. Four doors up may have a single storey extension that makes getting your planning permission in five years time that much easier. What’s the rear access like? Does Streetview show the rear lane blocked by idle taxi drivers?

  • Check the street at rush hour and mid-evening.

This is a bit involved, hell some people buy houses without seeing them! However if you go to a house viewing at 2pm on a Saturday the quiet tree-lined street with great school access may be a different picture to the school-run mummy-chariot car park. Likewise mid-afternoon could get very different to mid-evening if your excellent local gastropub has less than polite clientele.

Kerb appeal

It’s not just about from this (1):

to this:

Though that first impression counts. If the house looks down at the heel then a clean and a coat of paint may do wonders. Here’s a short list of what else to look for:

  • Doors and windows – wood/ PVC/ aluminium?

Is the wood rotten? Is the PVC discoloured or warped? Is the aluminium corroded? Are the windows double glazed and if so what state are they in? If there is misting inside the windows, like below, it suggests the double glazing has ‘blown’, and is no longer sealed (7). This will still be warmer than single glazing, but lets less light in and obscures your view! Budget at least £500/window for decent replacements (8). Sash windows and wooden casements will cost more, but sash are more desirable and wood will last a lot longer if maintained. On older properties original sash windows can be retrofitted with double-glazing by specialist companies, and this can work out cheaper than having new units made (9). Finally, check the state of the external locks, as many insurance companies will give you better rates for a BS-standard 5 lever deadlock.

  • External walls – clad/ brickwork/ render/ pebble-dash/ stone/ other?

We’ll start with brickwork as in many ways it’s simplest, and most of it also applies to stone. Older and underburnt bricks can suffer from years of frost damage and degrade, a process called spalling, so check for evidence of failure like below (10). Stone will also erode over time (particularly limestone in acid rain, and sandstone mislaid with a vertical grain) (11)

Check for evidence of degradation of the mortar in joints which will require re-pointing (12).

Look for external cracking. In previous centuries lime mortar was used which allowed a degree of flex in the joints due to it’s softness, but as building has moved to stronger and easier concrete/ cement the joints have become inflexible and unyielding. Cracking can have multiple causes but it usually down to building settlement. A degree of settlement is normal over the course of a properties lifetime, and particularly after periods of heavy rain or prolonged drought when the soil underlying the foundations moves. Small cracks are nothing to worry about, but bigger ones may suggest faults with the foundations which can require costly underpinning work. When next to gable walls it may suggest the wall is pulling away from the rest of the house, requiring insertion of wall ties and structural work. If around windows/doors then it may suggest rotting, movement or inadequacy of the sill. If in doubt get a professional survey.

 (13) (14)

Render can have similar issues with cracking as above, but is utilised to offer a layer of protection to the underlying stonework. This was traditionally used where unfinished structural stonework was rougher/ cosmetically poor, or in exposed areas – coastal etc. Breathable lime-based renders were used on older buildings, and replacement with concrete can cause damp issues. Newer buildings have concrete render, which will usually last about 20 years. Certain areas of the country (in my experience Cornwall particularly) have issues with render staining which requires cleaning (15). Budget a couple of thousand pounds, plus VAT and scaffolding costs for a re-render (16, 17).

Pebbledash and roughcast are essentially a different form of render where pebbles are sprayed on or added into the render. It came to be used during the Arts and Crafts Movement, but is often associated with ’20s and ’30s housing where it was used to cover cheap and quick brickwork (structurally sound but not aesthetically pleasing) (18). It offers a greater degree of weather protection than standard render. Don’t write off a pebbledash home. Removal is time-consuming (read expensive), but painting can make a huge difference (16)

Cladding is it’s whole other separate post. Replacing cladding is a good way to bring an out-of-fashion exterior bang up to date. Cladding may require planning permission under permitted development rules, or further consideration in conservation or national park areas (19).

  • Check for cavity wall injection points

Cavity walls, where there is an air gap between the inner and outer skins of the wall, became mainstream in the 1920s (20). The two skins are tied together either with bricks placed perpendicular across them, stones, or now with metal ties. The original usage was to prevent the passage of moisture into the building from outside. Insulation in the cavity became compulsory in the 1990s. In older houses is became common to use an injection method to insert insulation into the pre-existing cavity, leaving behind tell-tale holes where drilled (21). Cavity wall insulation divides opinion. The added insulation can in principal save a fair amount on heating. I dislike retro-fitted cavity wall insulation due to the potential for air and moisture-bridging, especially across damp courses lower down in the wall. This allows moisture to track across where there was previously an air gap, or through osmosis past the damp proof course. In modern houses the damp proof course sits below the insulation as it is inserted during construction, and with the use of modern backed insulation boarding it is less of an issue. Do your own research.

What lies above?

  • Check the roof

I won’t go into different roof materials, again it would be a whole other post. Stand on the other side of the street and look at as many elevations as you can see. Are there any slipped slates/ tiles? Any missing ridge tiles? These can all be sources of leaks if the roof lacks underlay (22). Most tile roofs can last 50 years if maintained, while slates can last a hundred (23). Budget £5000+ for new roof. This could escalate if the underlying joists and rafters are warped, damaged or rotten, indicated by a sagging area of roof. If the whole roof appears bowed under weight then it may be less of a worry; this is usually the result of replacement tiles being heavier than the originals, gradual settlement over time, or the effect of weight following a period of heavy snow (24).

Damaged or degraded flashing is a common cause of a leaky roof. I would bring binoculars to look at the roof when I was viewing a house. Lead is generally used and is very durable, but can fatigue or come loose. More rarely zinc, copper, aluminium or galvanised steel has been used. Budget £1000-1500 as a minimum for remedial work including labour, materials and scaffold (25, 26).

Chimneys… where to even start? Apply all of the brickwork damage section here, particularly spalling. The heat expansion and freeze/thaw effects combine to result in rapid degradation. Check for mortar breakdown around flashing at the base, a common source of ‘falling damp’ which is water leaking down the chimney breast. Check for vertical cracks in the chimney, vegetation, nesting animals, degraded cement caps and loose chimney pots or cowls. All can cause problems (27, 28). We’re currently trying to have our chimney repaired as preventative maintenance, with quotes between £1500-2500. Getting the agreement of our neighbour as it is a party wall has proved troublesome (rented property). We can’t go ahead until we have their agreement, but hopefully they’ll go half.

  • Check the gutters, soffits and fascias

Again a multitude of materials and a cause for ‘falling damp’. Traditionally gutters were cast iron and painted. These with maintenance can last many, many years. For a short period there were asbestos and fibre gutters, before moving over to PVC or plastic forms. These don’t last as long but don’t need the maintenance (and are cheaper).

Firstly, check for vegetation or any signs of blockages in the gutters themselves. This causes rainwater to overflow (a cause of damp), but is easily remedied with a ladder (or if you really fancy get a bloke with a pressure washer). Then check downpipes and ground-level drains (gullys). Are they securely attached and are they all connected. Again a common cause of internal damp is a leaking external downpipe (29). I hired an aluminium scaffold tower for a week for £120 this summer and had a great old time digging years of rotting vegetation and a few carcasses out of our blocked gutters, before rodding out the downpipe and running new ground-level pipes. I also took the opportunity to repaint our soffits and fascias. Cheap fixes and maintenance preventing future problems.

Your guttering will be attached to the fascia, with the soffit covering the underhang (30). These used to be made of wood, which would need to be periodically painted. In more recent years they’ve been replaced with PVC. Sometimes this covers and is fixed to a wood board, or is fixed to the older fascia or soffit. Watch out for where people have covered a rotting old fascia with PVC to hide it, as it will continue to rot and the guttering will fall out.

The hidden costs

  • Check utilities services

What do I mean by this? Check where the stopcock and meter are externally if it’s obvious. Check where phonelines enter the building. Both can be a pain to track down. More importantly – check the drains! Where does the external surface water drain to? Are there obvious access hatches to inspection chambers? Learn from my error, when I spent a wintry December week breaking up our concrete yard and digging down two feet to expose a broken salt-glaze pipe containing 12 foot of backed-up liquid faeces. If you’re planning to rework a property then knowing where the utilities is essential for plumbing planning.

  • Check the garden for Japanese Knotweed & other pests.

Look for the plant below, Japanese Knotweed. The effect on the value of the property is massive. It’s an invasive non-native species which is classed as hazardous waste, and any land containing it is counted as contaminated. It’s difficult to get rid of, spreads like wildfire and grows up to 10cm a day (28). A survey by YouGov and Environet UK estimates that 5% of UK homes have Japanese Knotweed (31). Finding Japanese Knotweed will knock 10% off that value of the property (31, 32, 33). Also take the opportunity to spot for evidence of wasps nests, bats, rats or mice.

Finalement

So that’s outdoors briefly covered. In part two I’ll cover indoors, reflecting on what to look for in your first and second viewings when considering a house, and the mistakes we did and didn’t make.

The Shrink

 

References:

  1. https://www.telegraph.co.uk/property/buy/should-buy-worst-house-best-street-turn-ugly-duckling-swan/
  2. https://www.dailymail.co.uk/news/article-3114485/Want-make-money-property-Buy-house-avocado-bathroom-Artex-ceilings-quadruple-investment.html
  3. https://www.rightmove.co.uk/schools.html
  4. https://flood-map-for-planning.service.gov.uk/
  5. https://naturalresources.wales/evidence-and-data/maps/long-term-flood-risk/?lang=en
  6. https://www.sepa.org.uk/environment/water/flooding
  7. https://www.eygwindows.co.uk/lifestyle-blog/why-does-double-glazing-mist-up
  8. https://www.theecoexperts.co.uk/double-glazing-costs
  9. https://www.renovategreen.co.uk/building-fabric/retrofitting-double-glazing-into-old-windows/
  10. https://www.designingbuildings.co.uk/wiki/Defects_in_brickwork
  11. https://www.heritage-house.org/damp-and-condensation/types-of-damp-what-have-i-got/damp-problems-caused-by-cement-pointing-of-brick-or-stone.html
  12. http://www.loughboroughproperty.com/repointing/
  13. https://www.diydoctor.org.uk/projects/settlement.htm
  14. https://gharpedia.com/diagonal-cracks-brick-walls/
  15. http://www.colinsquire.co.uk/red-stained-walls/
  16. https://www.homebuilding.co.uk/render-faqs/
  17. https://www.thegreenage.co.uk/cost-of-external-render/
  18. https://en.wikipedia.org/wiki/Roughcast
  19. https://www.homebuilding.co.uk/cladding-new-facades-for-ugly-homes
  20. https://en.wikipedia.org/wiki/Cavity_wall
  21. https://www.fixmyroof.co.uk/videos-and-guides/pitched-roof/repair-a-slate-roof/
  22. https://www.roof-stores.co.uk/guides/tiles-and-slates/roofing-tiles-slates-lifespan/
  23. https://www.designingbuildings.co.uk/wiki/Flashing_in_building_construction
  24. https://www.homebuilding.co.uk/roof-repairs/
  25. http://essexroofingandfascias.co.uk/portfolio-items/damaged-chimney/
  26. https://www.karnakcorp.com/roof-conditions/damaged-flashing/
  27. https://www.homebuilding.co.uk/repairing-gutters/
  28. https://www.jjroofingsupplies.co.uk/blog/what-are-soffits-and-fascias/
  29. http://surveyingproperty.blogspot.com/2018/#.XAATl9v7SM8
  30. https://www.independent.co.uk/news/business/news/japanese-knotweed-house-prices-property-value-mortgage-insurance-how-to-treat-a8557971.html
  31. https://www.telegraph.co.uk/property/uk/property-buyers-sue-50000-japanese-knotweed-problem-homeowners/
  32. https://www.moneywise.co.uk/news/2018-09-28/japanese-knotweed-blight-has-slashed-uk-house-prices-20bn

 

 

 

Musing On… Motivation: Are you running from or running to?

What motivates your financial choices?

Reading a variety of FI and finance writers, it has occurred that those who blog are a rag-tag bunch. You have to be a bit different to move away from the credit-to-the-eyeballs herd. The reasons to go down the various financial paths, and then write about it are even more nebulous. A scientific mind led to attempts to discern some patterns among the noise. One such pattern is the writers motivation, and where the drive to save/ live frugally/ be financially independent arises.

Running from

For some, it seems the drive to be frugal is innate, inherited, learnt behaviours from early childhood. LittleMissFire talks about it as leaving the ‘shop floor mentality’, the mindset of a household living week-to-week, month-to-month, without financial planning (1). The crux of her post about the ‘shop floor mentality’ is the drive to better oneself, and leave behind the stress, envy, anguish and heartache of poverty (1). Understanding financial planning and making frugal life choices are just a short psychological hop from FI, and there seems a lot of overlap between frugal living and so-called ‘lean-FI’.

This drive to leave behind an unpleasant situation also appears prevalent on the FI forums I frequent, but here it’s less about a memory or experience of struggling for money, and more miserable working environments. For example (2):

And an example reply (2):

Small talk, alarm clocks, office politics, performance reviews, managers talking about you behind your back, tracking metrics, spreadsheets, deadlines, cubicles, dress code, meetings, daily existential crises, passive aggressiveness, emails with manager cc’d, scrum meetings, being taken advantage of, erosion of self esteem, etc. Etc.

I assume it was among those so miserable in their work that the term “Fuck You Money” arose (3). You’ve built up enough cash to say “Fuck You” to that miserable environment and walk away… but what then? How do you adapt your austere lifestyle out of work, with it’s focus on minimising all outgoings, to your new-found freedom (4):

Running towards

I sort of class myself amongst the running towards school-of-thought. I enjoy my job, to the extent that I am happy to go into work every day to perform it (especially after a slight change into a less front-facing role). I would probably keep doing it to some extent even if I wasn’t paid, because it is my ‘ikagai’ – a Japanese word whose closest translation is ‘the reason for which you get up in the morning’ (5, 6). Despite this I think the world is full of wonder, and I could spend whole other lifetimes doing different things. There are too many things to do and not enough time to experience them all whilst also working to support myself. FI, as The Frugal Cottage puts it, “gives you the option of spending your limited time however you want” (7, 8).

Just enjoying the run

This seems to be the final stage in FI nirvana fulfillment. Some suggest that by it’s nature, being frugal has a sort of contrarian cool (9). An echo of the counter-culture in a rejection of consumerism (10)More hippy than hipster I hope. Some bloggers, like TEA, enjoy the journey to FI and beyond because they developed an enjoyment of “the process of wealth building” (11) TEA writes about learning to enjoy these things by using conditional rewards; a big juicy carrot for the FI stick, training your brain to associate putting the financial graft in for a reward (11). Or writers like FIREvLondon, who enjoy the writing about their process, discussing ideas, commenting on experiences (12). This is a far better path to happiness, where any goal you set or any target you make can bring you fulfillment. Enjoying the process of blogging, the sharing of knowledge and community.

Why does it matter?

Understanding your motivation is inherently tied to your ability to complete the goals you set yourself for financial independence and frugal living. If your goal is off from what you truly want you’ll lack motivation, and if you’re motivated for only a specific purpose you may find yourself unfulfilled and lost when you reach that goal, or unable to reach it altogether. As I’m setting my goals, I’ve been noticing many are around things I’d do after being FI. I risk that there will always be one more goal or target. It’s time to think about my enjoyment of the pursuit, and I would urge others to ask, why do I want FI?

References:

  1. https://littlemissfireblog.wordpress.com/2018/03/24/do-you-have-the-shopfloor-money-mentality/
  2. https://www.reddit.com/r/financialindependence/comments/8ogyp8/people_who_are_trying_to_reach_fi_because_they/
  3. https://theescapeartist.me/2018/07/24/the-art-of-wealth-preservation/
  4. https://www.reddit.com/r/financialindependence/comments/94kmku/first_day_of_retirement_at_40_yo
  5. https://www.telegraph.co.uk/health-fitness/mind/finding-ikigai-japanese-secret-health-happiness/
  6. http://monevator.com/weekend-reading-what-is-your-reason-for-being/
  7. http://www.thefrugalcottage.com/everyone-early-retirement/
  8. http://thefirestarter.co.uk/early-retirement-in-5-years-in-the-uk-is-it-possible/
  9. https://www.psychologytoday.com/gb/blog/the-eclectic-professor/201102/the-psychology-thrift-why-not-frugal-cool
  10. http://thefirestarter.co.uk/about-me/
  11. https://theescapeartist.me/2018/02/13/get-rich-with-the-process/
  12. https://firevlondon.com/about/

 

 

The Full English Accompaniment – On Brexit, social psychology and market timing

What’s piqued my interest this week?
I’ve been reading Tim Hales Smarter Investing over the last couple of weeks, which appears considered essential reading by most FI/ passive investment sources (1). It has prompted me to write down a philosophy and a draft set of goals for my investment plans. One of the cautions is against market timing, because it’s very statistically difficult to be good at it, incorporating not a small amount of luck. Much better to go Bogle, and buy then hold a low cost tracker (2). So far, so sold.
There’s another section of the book which documents how one of the most important, most overlooked parts to a portfolio decision is target country allocation. This is where I’m currently stuck, as Brexit presents a big hit of unknown outcomes, and is turning my market timing milk sour. Oh look, another r/UKPersonalFinance post triggered me (I’ll cut out all the Reddit relevant-only bits)…

Everyone, put on your tin-foil hats and join me on a journey considering a Brexit scenario…

I’ve personally suspected that Brexit is being pushed along despite it outwardly, appearing to be in no-one’s interests perhaps as a textbook example of Naomi Klein’s ‘Disaster Capitalism’ but maybe just as a way for massive money to be made from the lurches in exchange rate and FTSE etc.

So one outcome I suspect is that the pound will stay relatively weak to the EUR/USD etc, keeping the FTSE reasonably high, until we suddenly hit a point where it gets revealed we’ll basically stay in the EU (or EEA), perhaps after a 2nd referendum, so…

If the timeline of this is the next 6 months, how will the politicians and their chums be looking to maximise the person financial benefit to themselves? Assuming a, say, 15% increase in the value of the pound, and 10% drop in the FTSE 100, would they be looking to sell most investments, have cash and then be ready to re-invest after the correction?

What would you do in this scenario if you had this inside information? (3)

This is a little tinfoil hat brigade, although the murmuring the Nigel Farage shorted the value of the £ when he found out the result of Brexit before it was officially released could provide some evidence (4). An ex-investment banker wouldn’t call up his mates still in the industry with privy information would he? The main issue I have with the above is that it appears to go against the political wind and public opinion polls. The Conservatives and Labour are both loath to go back on the stated plan to exit (would be seen as weak?), and YouGov’s last poll in July found that a fraction greater percentage thought Brexit was the wrong decision than didn’t (5). Opinion polls may be a pretty poor judge, but they’re not so bad as to miss half the nation suddenly decided they do want to stay in the EU, after all (6).
Brexit therefore represents a challenge to the efficient market hypothesis (7). Pre-Brexit vote, a commentator in Forbes discussed how the referendum would represent an excellent testbed for efficient markets (8). It truly did, as the unexpected (to the city) voter decision was integrated into share prices in a number of hours. The fact that the referendum result was unexpected and therefore prompted such a dramatic shift in the markets challenges the efficient market hypothesis, and specifically what makes it efficient. The efficiency relies upon the sum of all the traders individual access to information. To bring it round to psychological terms, it is a form of social Gestalt theory, where the individual chaotic pieces of information/ action contributes to a total pattern (9, 10). Market traders were unaware of the depth of feeling in favour of Brexit prior to the vote (those pesky polls again), and were suddenly exposed to it and integrated it into the markets on referendum day.
But why were market traders so unaware? I wonder that the possibility of a Leave vote did not comply with the collective conscience of market traders and ‘the city’ and therefore was not appropriately considered by the markets (11). To go back to Durkheim’s original use of collective consciousness (very separate from Jungian collective unconsciousness), it is the ‘general feeling’ towards a position, experienced and perceived by the individuals in the collective (11). A shared unconscious understanding of social norms. In the city, it was a social norm to be pro-EU. In the general populace, not so much. Therefore the true risk of a Leave vote to the markets was a Rumsfeldian ‘unknown unknown’. To be pro-Leave in London pre-Brexit went against social norms, it didn’t fit with the social reality constructed in that environment, even if it did fit with the social norms and social reality of the wider UK (12).
Which brings me to my market timing and allocation conundrum. The market is efficient when it is integrating information which makes sense within it’s system; IPOs, sales data, quarterly returns etc. It appears less efficient at integrating popular opinion and behaviour. The market is vulnerable to collective psychological effects (herd behaviour etc), and changes in the market are made by people. The people who change the market (traders etc) operate in a different social world (‘social reality’) to the general populace, by nature of their social interactions. Yours is visible in day-to-day life in your twitter or social media sphere, which may differ from general public opinion. The markets will therefore be generally running on the market traders social reality, whilst the rest of us live in a slightly different social reality. Politicians span the divide, but take their lauded mandate from the general populace’s social reality. The difference comes to the fore when the market has to integrate decisions which are made by the wider populace that didn’t fit with it’s reality, e.g. Brexit. The reddit comment quoted above appears to sit well within the market reality bubble; we’ll stay in the EU in the end, it’s all a sideshow. My concern is that the general populace appears fairly relaxed about a ‘No-deal’ Brexit. Knowing that we’re a few short months out of formal Brexit, do I choose allocations based on that worry which insulate against this outcome. Does even thinking about this represent market-timing, and I should just bung my cash ‘somewhere’ and sit it out. Your opinion welcome here…
Have a great week,

The Shrink

Side Orders

Other News

Opinion/ blogs:

What I’m reading:

Smarter Investing 3rd edn – Tim Hale – essential reading

Religio Medici and Urne-Buriall by Sir Thomas Browne – the theological and psychological reflections of a C17th doctor. This is turning out to be real heavy-going.

Enchiridion by Epictetus – Bedside reading for a bad day

References:

  1. https://www.amazon.co.uk/gp/product/B00GAYHH8I/ref=as_li_tl?ie=UTF8&camp=1634&creative=6738&creativeASIN=B00GAYHH8I&linkCode=as2&tag=thefireshrink-21&linkId=5a8bfccf506245d47fbac2d871c70c47
  2. https://www.bogleheads.org/wiki/Getting_started
  3. http://www.reddit.com/r/UKPersonalFinance/comments/9cnsqj/the_potential_effect_of_a_massive_shift_in
  4. https://www.theguardian.com/politics/2018/jun/25/nigel-farage-denies-shorting-value-of-sterling-on-night-of-brexit-vote
  5. https://yougov.co.uk/news/2018/06/23/eu-referendum-two-years/
  6. https://www.nature.com/articles/s41562-018-0330-7
  7. https://www.investopedia.com/terms/e/efficientmarkethypothesis.asp
  8. https://www.forbes.com/sites/timworstall/2016/02/22/brexit-uk-financial-markets-and-the-efficient-markets-hypothesis/#31ab82161667
  9. https://www.britannica.com/science/Gestalt-psychology
  10. https://en.wikipedia.org/wiki/Gestalt_psychology
  11. https://en.wikipedia.org/wiki/Collective_consciousness
  12. https://en.wikipedia.org/wiki/Social_reality
  13. https://www.thisismoney.co.uk/money/pensions/article-6130445/Will-council-force-sell-house-cover-dads-care-bills.html
  14. https://www.thisismoney.co.uk/money/cars/article-6138267/A-1979-Lada-Niva-estimated-sell-75-000-goes-just-4K.html
  15. https://www.theguardian.com/money/2018/sep/07/house-prices-rose-at-fastest-rate-in-almost-year-says-halifax-august-north-south
  16. https://www.theguardian.com/uk-news/2018/sep/05/thinktank-calls-for-major-overhaul-of-britains-economy
  17. https://www.thisismoney.co.uk/property/article-6106049/A-downstairs-family-bathroom-lowers-property-value-6.html
  18. https://www.thisismoney.co.uk/money/news/article-6080099/Are-Monzo-Revolut-Starling-Transferwise-safe-bank-with.html
  19. http://monevator.com/10-things-you-can-do-today-to-reset-your-life/
  20. http://monevator.com/weekend-reading-what-is-your-reason-for-being/
  21. http://thefirestarter.co.uk/my-5-years-are-up-how-did-i-do/
  22. http://thefirestarter.co.uk/august-income-expenses-report-a-bit-of-an-odd-one/
  23. https://thefireeng.com/net-worth-update-august-2018/
  24. http://www.msziyou.com/yes-i-am-rich-now/
  25. http://www.msziyou.com/net-worth-updates-august-2018/
  26. http://www.mrmoneymustache.com/2018/09/05/what-really-goes-on-at-mmm-headquarters/
  27. http://theirrelevantinvestor.com/2018/09/04/gold-what-is-it-good-for/
  28. https://www.ukvalueinvestor.com/2018/09/sold-senior-plc-after-recent-share-price-gains.html/