Sell five more childhood toys. Sell five more car parts – Failure
Develop a single spreadsheet for all my financial data/ graphs etc – Success
Finish my Investment Strategy Statement – Success
Check our household green credentials – Success
Check utilities for potential savings – Success
Checking the assets and liabilities:
These are taken from my Beast Budget spreadsheet. This month my net worth grew by £867 (~3%), so that I’m now sitting just under £30k. It was a pretty poor month on the savings front with no overtime or extra shifts, the added expense of a holiday and the GMC and Royal College both deciding to take their pound of flesh. I’ve saved another £200 on my 5% Santander saver, and started paying down our wedding loan to a family member, but the Royal College bill went on the credit card (slap on wrist) nudging my debt up. February will also be lean as I start a new job and wait for a new payday. Luckily my new pay should be a fair bit more thanks to the vagaries of the NHS. Got to love a nationalised monopoly! Goals: Goal failed: Sell five more childhood toys. Sell five more car parts
I continue to fail here, and I wonder if that’s because I’m trying to sell lots of unusual oddments and expecting everyone else to want my old shit. I have gradually increased the amount of stuff listed on eBay, and have sold ~£20 quid worth of kit. I’ve also braved Facebook and Gumtree, with some success. I’m going to change this for next month and make it a more achievable sell £50 worth of stuff. Goal achieved: Develop a single spreadsheet for all my financial data/ graphs etc
I’ve streamlined our various household spreadsheets into a new, improved Beast Budget, adding some new functions and graphs at the same time.
Goal achieved: Finish my Investment Strategy Statement
Now complete and to be found here. Goal achieved: Check our household green credentials
This was a really interesting exercise, and exposed where I’m lying to myself in my bourgeois way. I ran our household information through the WWF Carbon Footprint calculator (1).
Oh dear. Where’s it all going?
Ah. Breaking it down:
Home – We’re doing pretty well. Our energy is supplied by Bulb (message me for a £50 referral bonus), which is 100% renewable electricity and 10% renewable (bio)gas. All our lightbulbs are LED, our boiler is old but regularly serviced, our white goods are low-energy and the whole house is well insulated with double glazing etc.
Stuff – We don’t buy much in the way of clothes or consumerist claptrap, and I think this is mainly raised by the fact we bought new appliances when moving into our house.
Food – We’re doing reasonably here too. We eat meat three or four times a week, but I want to get this down to two. We eat a varied seasonal diet from local organic sources, and I want to grow and preserve more at home.
Travel – Oh bugger. This’ll be the (count ’em) four short haul, four medium haul and two very-long haul flights we’ve made in the last year. Seriously bad for the environment and won’t be doing that in 2019! I also need to get my bike serviced and start using it for local journeys.
This has been useful enough as an audit exercise that I’m going to check my progress quarterly for 2019 to see how I get on improving matters. Goal achieved:Check utilities for potential savings
I try to check for potential savings every 3-6 months. Uswitch and MoneySavingExpert reckon we can save £45 over the year if we switch to EDF, Lumo or Octopus (2). I’m really happy with the customer service with Bulb (fanboi), and I’m willing to suck up £45 to know my energy is coming from renewable sources. Our previous Plusnet connection went from £27 to £38 in December, so I called their retention department who couldn’t match Virgins 100mbp for £22/month offer. We’ll wait and see whether the reality matches the quoted service. Budgets:
Groceries – Budget £300, spent £185.03, last month N/A. We had lots of Christmas food left over, but happy with this!
Entertainment – Budget £300, spent £97.30, last month N/A. Going to look into entertainment spending this month.
Transport – Budget £460, spent £103.12, last month £233.69. Remarkably little this month, but MOTs and tuning costs loom.
Holiday – £150, spent £133.09, last month £0. Went skiing, fully catered chalet kept £ costs low and moods high.
I’m mid-way through building the raised beds and I’ve prepared the greenhouse ready for seedtrays next month. The raised beds are 2 foot high (to ward off carrotfly) and constructed from old pallets I’ve scavenged with tanalised upright supports. I’m collecting a load of free topsoil found on Gumtree next week to fill them up and then they should be ready for planting.
Goals for next month:
Sell £50 worth of stuff
Calculate and set a budget for Entertainment
Reduce consumption of single use plastics
Finish the raised beds
Set up an account with an investment platform
What’s in the pipeline:
Stoicism, Ascetism and the modern world
Property Renovation Lessons Part III
Frugal Motoring – Should I buy a Hybrid?
Plus the usual Full English Accompaniments and other drivel…
The above question appears to be a recurring theme in our little niche of the financial blogging community. High-profile, mainstream public-facing blogs like MMM and the Frugalwoods argue that anyone and everyone can potentially be financially independent and retire early, if they take the right steps (1). It’s great for selling the story and motivating potential readers, but to me it’s selling an impossible dream.
To explain let’s draw up some basic sums. The amount most people can save towards an early retirement can be defined as:
For the sake of simplicity we’ll ignore tax rebates, dividend payments, inheritance etc. I’m not even going to bother running this on a minimum wage. Instead we’ll start at the UK Living Wage, currently £9.00/hr (2). This is built on the Minimum Income Standard, which calculates the cost of the average basket of goods required for a household to afford an acceptable standard of living (3).
A 23 year old working a 37.5hr week on £9/hr that will see a yearly salary of £17,550. Plug that into a salary calculator, incorporating 8% pension contribution with an 8% employer match. That’s D and E. The Living Wage is based upon a minimum acceptable standard of lifestyle, so we’ll use that figure again for B, with £0 lifestyle inflation cost and we get (4):
A = ((£76.79 X 2)+£1214.81) – (£1214.81+£0)
How does that lifestyle cost compare? Well the average UK 1 bed flat costs £600, but that’s skewed by London’s ridiculous prices (5). Say instead you’re sharing or living in an area with cheaper housing, it’s more likely to be £400/month, this represents ~30% of your earnings and so if a fairly accurate representation given the UK average is 25% of earnings spent on accommodation (6). If you get can by on another £600/month for all other expenses then well done, you can save £215. Add in your generous pension contributions and you’re up to £365/month put aside for the future, or £4,380 annually. Run that number through a rough early retirement calculator and we get that you can retire in 33 years. So that’s early retirement at 56 for a lifetime spent in a one bed flat and minimum acceptable standard of living.
Not realistic? Lets work another example. Example 2:
30 year old earning median UK disposable household income (2017) of £27,300 (7). Same sums, same aggressive pension match, £1715.31 take home. This time our 30 year old has got bored of living in digs, and is instead renting a two bed new build in a LCOL area. £750/month for rent gets you access to homes in 67% of the UK, so compared to Example 1 you’ll pay £350 more/month (8). Your lifestyle has inflated a bit, but not much, just a few beers now and then, a better phone, a decent tv and slightly better food. Say £100/month? So, let’s punch that into our equations and calculators:
A = ((£141.79 X 2)+£1715.31) – (£1214.81+£450)
A = £334
Retire in 44 years
Ouch. That lifestyle inflation has hit hard. Your early retirement age is now 74. So what do you do? Cut back on the house size or go back to shared accommodation? Stop drinking and eat 7p basics noodles? We know that actually, due to the benefits from our taxation system and social support services, a moderate increase in income in the lower quartiles makes little difference to disposable income (available for savings). Lifestyle inflation at this end quickly gobbles up the extra earnings as you are now comfortable, not just-about-managing. Do you make yourself uncomfortable to retire early? That requires a special type of motivation (9, 10, 11).
You have to be a high earner to achieve the % savings rates required for early retirement without living uncomfortably in some way. Ignoring this fact is dreaming. Most people will not achieve early retirement without either lifestyle discomfort or a serious increase in their earning power. That’s FIREs dirty little secret (11). To say otherwise is to sell a dream.
I don’t think this is a bad thing.
Because the world is driven by soundbites and nicely packaged information, easily digestible and understandable. The majority of the FI blogs pitched to the mainstream do just that, make it easily digestible, understandable and relate-able. A cynic would argue it funds their early retirement through a customer-facing monetised website (12). But I’m not that cynic, this is a good thing, more people should be thinking about their money matters. The UK household savings ratio is currently stuck around 4%, and has been for several years (13):
The financial choices required for early retirement are for everyone.
The’ye just a good idea. Just by thinking about your finances you’re ahead of those ignoring their accounts. To crib my fellow medical colleague, the female money doc (14):
Know your numbers
Build assets
Get out of debt
Buffer it
Consider extra income streams
Anyone could achieve financial independence, but not everyone can. The effort can only be a good thing. No shame in trying!
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:
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.
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.
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
Does the property have a wet system (i.e. radiators and a water boiler)?
Is it gas, oil, coal, calor gas, solid?
How old is it?
Does it have a hot water cylinder or on demand?
Has it been serviced?
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.
I was having an interesting chat this week about the high street with a colleague. We were trying to work out why we would actually go into the town centre. There’s a continuous roll-call in the press of ailing high street chains, the most recent HMV, while Debenhams looks wobbly (1, 2). As an aside I’m intrigued to see where Mike Ashley is dragging all these fallen chains. Some collective Brit-megastore in China?
We came up with the following four things we would actually bother going into town for:
an activity – e.g. a bar, an escape room, a haircut, etc
inspiration for an item – e.g. Waterstones for a book, John Lewis for a gift, etc
items needed NOW – e.g. running around like a blue-arsed fly for a dress shirt
items not available online – e.g. local produce from a market, packaging-free items like the avocado-smashing millennial wanker I am
I guess that’s what brand and PR people chat about when stating people want experiences. Most home or clothing goods now gets ordered online as it’s quicker, usually cheaper and I don’t have to deal with the rigmarole of parking/ avoiding mouth-breathers. The bars in our town seem to be doing alright, and there’s restaurants and stores offering activities like VR gaming and a chance to sit-in and touch that chintzy MG Rover (Roewe) springing up left, right and centre. So are town centres becoming more experiential?
Well let’s not forget that the concept of a High Street or shopping centre is pretty modern in civilisation terms. Prior to the 17th century you had taverns, inns and pubs, and a town market a few times a week, but otherwise you had to go to a specific place to seek out a vendor for your chosen items. Leather workers near tanneries etc. The 17th and 18th centuries saw the true growth of the High Street as a destination to be seen to be shopping (3). The money and riches of the empire fuelled the golden age in the 19th century (4). The start of the downturn came with out-of-town shopping. Prices have been driven down, and quality is now following. Online shopping has undoubtedly taken the wind from the High Street’s sails, but I think it’s overblown. Mail order was around before online shopping. Online is more convenient and offers greater choice than any bricks-and-mortar retailer could, but catalogues have long-offered variety when the High Street couldn’t.
I look forward to a smaller city centre full of things to do, and smaller shops selling local produce not cheap garms for tuppence from Bangladesh. I spoke to MrsShrink about this, and she massively disagrees. She loves shopping, or more specifically she loves rifling through sale-racks looking for discounted items trying to find things her life is incomplete without. So maybe there’s life in the old dog yet.
Sell five more childhood toys. Sell five more car parts – Failure
Set a realistic monthly budget target for motoring – Success
Establish weekly and monthly joint grocery account expenses – Success
Finish reading Tim Hale’s Smarter Investing – Success
Checking the assets and liabilities:
These are taken from my Beast Budget spreadsheet. This month my net worth grew by £1392 (~5%), briefly hitting £30k. I’m happy with this considering it’s Christmas and so a lot of gifts, hosting and celebrating meant I spent more going out and cooking in than most months. I saved another £200 on my 5% Santander saver, £200 into a Starling 1% interest emergency fund pot, plus the usual pensions etc
Goals:.
Goal achieved: Finish reading Tim Hale’s Smarter Investing
Goal achieved:Set a realistic monthly budget target for motoring
To do this I went back through my financial records for the whole year. In total I spent £6480.55 this year on transportation in varying guises. Of this I’m removing £179.36 which is what I’ve paid for public transport, parking and that bloody Severn crossing toll over the year. That leaves the following:
The change in job in August really halved my petrol spend, but this will go back up with a further job change next month. I’m going to allocate £150/month to that, plus a further £50/month for car tax. I gave up my second garage last month, which will see me save £120/month. My insurance costs aren’t terrible as I keep one car garaged, live in a reasonable area and have 10 years of NCB. Rather than taking it on the nose I’m going to put £60 aside a month for 2019 to hold enough on hand to cover it as and when it arises.
The elephant in the room is the parts and labour costs. My reliable daily cost me £1031.16 over the year for it’s ~10,000 miles, which is MOT plus related work, a major service, a large amount of suspension work, two tyres and various other cosmetic bits. It comes out to £86/month, competitive with any PCP or lease deal before considering depreciation. On that, the old girl depreciated about £300 over the year, so call it £110/month to run about in a powerful estate. Or to look at it another way, I spend 12p/mile on parts and labour, 16p/mile on fuel. Reasonable Bangernomics but could do better.
And then there’s the Red Car. This was £1650 spent to complete a restoration which still has some minor niggles to sort. Money that has been spent for a fun hobby, but in no way recoverable on a car worth £2500 on a good day. Bugger. I’m going to continue to tinker the final issues, but plan to sell and recoup some costs before replacing with something less of a financial sinkhole. I also plan to replace the green car next year with something a bit newer to keep in my perceived sweet spot of depreciation vs reliability (for me 10-15 years).
With the plan to sell both cars and buy replacements in 2019 I will assign:
£50/month Car tax
£150/month Fuel
£60/month Insurance
£200/month put aside for parts, labour, MOT and replacements
If I can keep to £460/month then by the end of 2019 I’ll have saved £980 over what I’ve spent in 2018 on cars. Not vast, but an achievable goal I think, whilst also retaining a fun little hobby.
Goal achieved: Establish weekly and monthly joint grocery account expenses
I’m going to cover this in the Q4 Quarterly Returns update, as I’ve run a lot of numbers to complete an accurate budget.
Goal failed: Sell five more childhood toys. Sell five more car parts
Not without trying. I’ve had a fair amount of interest on eBay, Gumtree and (shudder) Facebook marketplace. Despite lots of assurances people definitely want stuff, no-one has actually turned up to take it off me. I’ll carry this over and attack it next month.
Budgets:
Daily living and entertainment – Budget £600(!), spent £131, last month £?
Transport – budget £300, spent £233.69, last month £126.12.
Holiday – £150, spent £209, last month £lots. Going skiing this month, so paying in advance.
Personal – £50/ £42.21/ £20.64
Loans/ Credit – £200/ £556.57/ £571.77. Paying any new additions plus £350 off my credit card every month now.
Misc – £50/ £20/ £16.40.
In the garden:
We ate the last of our late potatoes with our Christmas dinner, which was a real treat. The last of the winter salad veg is running to seed or bolting now, so I’ve had to cut back the lettuces etc. Still a bit of spinach beet and lambs lettuce surviving. I’ve repaired broken panes in our greenhouse and started staking out the new raised beds.
Goals for next month:
Sell five more childhood toys. Sell five more car parts.
Develop a single spreadsheet for all my financial data/ graphs etc
With most blogs falling silent at this time of year, it seems we all go into a state of contemplative reflection. Or maybe it’s a cumulative cheese, booze, chocolate and sprout hangover. Because of this I’ve expanded my net of blogs in the side orders section, so readers may find someone new of interest.
Many blogs, including this one, are publishing year end posts looking back on all they’ve achieved. For me that included jumping aboard the financial independence bandwagon, and starting this blog as a journal and lodestone. It’s important to reflect and remember how lucky we are. Financial independence, despite what some people say, is not for everyone (1). While some of the frugal lessons run both ways, having an emergency fund in the bank is a dream for many. A study this year by the Social Metrics Commission found 4.5 million children in the UK are living in poverty (2). The number of people relying on food banks has risen by 13% since this time last year (3). Figures only tell half of the story, which is why I’d recommend reading last week’s ‘How I spend it’ in the Guardian (4). It’s a human story, the experiences of a mother, an asylum seeker, trafficked to the UK and now forced to live on a £100/week allowance.
As we sit in our warm homes, eating our Christmas dinner and swigging our New Year’s plonk, let’s not forget the message of that classic, A Muppet Christmas Carol. Love and care to our fellow people, lest we all become FIRE Scrooges.
Have a great 2019,
The Shrink
N.B. I’ve had a bit of a restructure of the top menu this week, to make the site easier to navigate. Apologies for RSS spam!
This picture, from meta-aggregation site Reddit, triggered me.
The Shrink comes from an old family. We have an extensive family tree taking up many interconnected A1 sheets, and several books have been written about both maternal and paternal ancestors. These families are not rich. They fell from grace long before my parents came around, and many of the extended family survive at the mercy of universal credit. This is one of the reasons for my peculiar attitude to wealth. I have learnt from my family that all that is won can be lost by your children. Attitude is more important than cash. The Shrink’s great x 5 grandfather may have been a Victorian Buffett, but he didn’t teach his grandson not to splash it all on fine wine and pheasants.
This created an underlying distrust of overt displays of wealth. Encounters with people classically defined as aristocrats reinforced this. No lord gives a damn about your 68-plate Landrover. Wealth whispers.
I feel this attitude sits well with financial independence. You don’t maintain great wealth by spending it frivolously. To an extent, I think the financial independence movement needs to credit the millionaire next door concept as part of it’s roots. The original 1996 Millionaire Next Door book found that millionaires were disproportionately clustered in blue-collar neighbourhoods due to white-collar professions spending on luxury goods and status items (1). The follow-up focused on how financial attitudes (and advertising/ cultural shifts) pushed people to live a pseudo-affluent lifestyle of “freedom to consume” (2). Credit and loans means you can consume whatever you want, when you want, and deal with the consequences later. Consumerism and debt props up a stagnating economy by borrowing from future prosperity. Lifestyle magazines and the media focus on self-made stars (footballers, rockstars etc) encourages people to believe that anyone can rise to the top and have everything. And even if you don’t get that million-pound AC Milan contract you can emulate your favourite footballer by buying a Merc C-class. You just have to get finance at 18.9% APR to do it, paid for by your job managing a Vodafone call centre. Other brands are available.
Across the ages debts don’t make a person rich. Greeks and Romans knew the value of saving. Samuel Pepys turned £25 to £10,000 by working hard and saving (3). The core concepts of saving, spending only what you can afford, keeping debts and credit lines small cross-cut history and movements. Modern articles on how to be the millionaire next door could be copy-pasted to FI (4). The lesson is that you can’t get rich by ‘flashing the cash’.
