June 2021 – FIRE as an expression of self-actualisation

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

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

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

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

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

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

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

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

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

June’s Finances

Checking the assets and liabilities:

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

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

Budgets:

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

In the garden:

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

Happy July everyone!

The Shrink

References:

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

May 2021 – r/wallstreetbets, Gamestop and millennial investors

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

GME

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

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

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

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

WSB nonsense (5)

Millennial Investors

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

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

The roaring twenties

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

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

Play the game

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

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

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

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

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

May’s Finances

Checking the assets and liabilities:

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

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

Budgets:

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

In the garden:

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

Happy June everyone!

The Shrink

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

References:

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

April 2021 – Political Realignment and Class

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

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

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

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

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

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

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

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

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

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

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

We live, as always, in interesting times.

Goals

The goals for April were:

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

Checking the assets and liabilities:

Assets and Liabilities for April 2021

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

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

Goals:

Goal failed: Simplify and improve flexibility of online investment tracker 

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

Goal passed: 16/8 fasting

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

Goal passed: Set up new ISA

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

Goal passed: Finish repainting and touches to downstairs rooms

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

Budgets:

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

In the garden:

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

Happy May everyone!

The Shrink

References:

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

The Financial Dashboard – March 2021

The goals for March were:

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

Checking the assets and liabilities:

March Assets and Liabilities

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

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

Goals:

Goal passed: Update online investment tracker and calculate rebalancing required

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

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

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

Goal failed: ?Modified paleo

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

Budgets:

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

In the garden:

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

Goals for next month:

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

Happy April everyone!

The Shrink

The Financial Dashboard – February 2021

The goals for February were:

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

Checking the assets and liabilities:

February’s Assets and Liabilities

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

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

Goals:

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

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

Goal passed: Test intermittent fasting

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

Goal passed: Organise remortgage

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

Budgets:

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

In the garden:

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

Goals for next month:

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

Happy March everyone!

The Shrink

References:

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

The Financial Dashboard – January 2021

The goals for January were:

  • Cut down on takeaway spend
  • Make plan for clearing credit card debt
  • Exercise five days/ week
  • Revisit emergency fund allocation

Checking the assets and liabilities:

January’s Assets and Liabilities

These are taken, as always, from my Beast Budget spreadsheet. Wales continues in lockdown (six weeks and counting), so there’s no frivolous spending on dining out or trips away. I managed to save just under 30% of my salary, as much went to recoup some ‘float’ funds which were spent over Christmas (I don’t count this as saving). I’ve opened a new regular savings account, but for this month my money went to paydown my 0% interest credit card. New investment money in the Freetrade S&S ISA went to increase previous holdings.

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

Goals:

Goal passed: Cut down on takeaway spend

Bit of a simple one this, and passed easily, partly by ordering cheaper takeaway (swap that indian for a fish and chips), and partly by reducing the number. We’ve had a lot of vouchers come through from JustEat and Deliveroo, but that is a very slippery slope.

Goal passed: Make a plan for clearing credit card debt

As of the end of January my credit card debt stands at £3,431. This was one transaction – buying new windows for our house – and is on a 0% interest card with 20 months interest free left to run. With this in mind I’ve decided to pay it down over minimum twelve months. I will pay £100 a month direct into the account, and a further £250 into a Principality Thank You savings account (1). This is an online regular savings account available to NHS staff in South Wales with a 1.40% interest rate. I’ll stooze the interest rate, and at the end of the year pay off the credit card (2). I’m also working a fair bit of overtime here and there, so that will go direct into the credit card (currently about £100-300/month after tax).

Goal passed: Exercise five days/ week

I’ve now got a routine where I exercise before work every day, and I feel fresher and healthier for it. It also makes weekend lie-ins a proper treat.

Goal passed: Revisit emergency fund allocation

I last looked at how my cash savings and emergency funds were flowing back in November 2019. Since then I’ve moved my accounts around, the savings landscape has changed (3% interest rate on my old Monmouthshire account!) and I’m close to hitting my emergency fund goal. With that in mind, I’ve redrawn my cash flow and how I’m going to structure my emergency funds.

Cash flow. Amazing what you can do in Powerpoint.

This gives a rough idea of where my money flows. I use two main bank accounts to distribute my expenses and provide a predictable and trackable flow. Bills and investments are paid first. I use ‘pots’ for predictable future expenses; saving cash for things like MOT and car servicing, professional bills etc. I also run a £500 float ‘pot’ in my secondary account, which acts like an overdraft of just-in-case money each month. Beyond that my emergency funds are split into instant access, <24 hours to receipt and 3-5 days to receipt accounts (i.e. the money arriving in my main bank account). I ultimately want to have a division of £500 float, £5,500 <24 hours, £6,000 three-five days. From where I’m currently sat I’ll need a further £1,500 premium bonds and £1,300 in cash savings accounts. A goal for this year as part of my annual plan.

Budgets:

  • Groceries – Budget £200, spent £181.70, last month £331.35 – Back on track
  • Entertainment – Budget £100, spent £100, last month £70
  • Transport – Budget £250, spent £123, last month £455.11
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £78/ £359
  • Loans/ Credit – £50/ £255/ £89
  • Misc – £50/ £96/ £50
  • Fees – £300 /£302/ £304

In the garden:

Working over raised beds with new compost (and removing a lot of general rubbish) where they got thrown together with anything I could get my hands on previously. General mooching.

Goals for next month:

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

Happy February everyone!

The Shrink

References:

  1. https://www.principality.co.uk/savings-accounts/everyday-savings-accounts/thank-you-online-saver
  2. https://www.moneysavingexpert.com/credit-cards/stooze-cash-credit-cards/

The Financial Dashboard – December 2020

The goals for December were:

  • Clear the garage and store the project car
  • Read a book three evenings a week
  • Cut down on takeaway spend

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. December was predictably expensive. Here in Wales we’ve been under full lockdown since before Christmas. I appear to have made up for my inability to go out or visit friends in purchasing gifts and wine. Despite this I managed a 26% savings rate, with a paltry 1.12% increase in my net worth. This month also sees me top my all time max net worth, previously set in September prior to lots of DIY spending. My Monmouthshire regular saver has now matured, and instead I’ll probably direct that cash to pay off the new 0% credit card. I chose to pay for new windows on a 0% card rather than raiding emergency savings so it would preserve my buffer. New investment money in the Freetrade S&S ISA went to increase previous holdings.

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

Goals:

Goal passed: Clear the garage and store the project car

We had been using the garage as a dumping ground for materials and waste while we continued renovations. With the house work done the state of the garage was making my skin crawl. This was compounded by a call from a family member to evacuate a 6ft by 6ft by 4ft family heirloom for storage. Clearing the garage took the full week between Christmas and New Year, and two trips to the dump (thank God they were open). I get anxious that the garage-queen project car will dissolve at the sight of road salt, so now she’s safely tucked up with the trickle-charger hooked up, surrounded by properly sorted tools. Bliss.

Goal passed: Read a book thee evenings a week

Continued to read Dan Jones’ The Plantagenets, which is taking a while given it’s an absolute monster of a book. I’ve really enjoyed making this wind-down time in the evening, and feel better for it. Need to include more positive goals like this.

Goal failed: Cut down on takeaway spend

Not a chance. Welsh national lockdown prompted us into another round of takeaways ‘as a treat’. There’s not much else to do to mark the passing of the weeks or have as a little treat. Will have to keep attacking this.

Budgets:

  • Groceries – Budget £200, spent £331.35, last month £218.11 – Christmas exuberance
  • Entertainment – Budget £100, spent £70, last month £74.50 
  • Transport – Budget £250, spent £455.11, last month £470.33 – Van hire to rescue the heirloom
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £359.05/ £108.46 – Presents, presents for everyone!
  • Loans/ Credit – £50/ £89/ £98
  • Misc – £50/ £47/ £442.05
  • Fees – £300 /£303.99/ £131.98 – A GMC Christmas present

In the garden:

Built a new log shed! And generally turning over the soil and tidying. Put up bird netting to separate the wild birds from our fowl. Planning for the spring.

Goals for next month:

  • Cut down on takeaway spend
  • Make plan for clearing credit card debt
  • Exercise five days/ week
  • Revisit emergency fund allocation

Happy January everyone!

The Shrink

The Financial Dashboard – November 2020

The goals for November were:

  • Fix the bits on the cars I’ve already bought parts for
  • Sell five things
  • Read a book thee evenings a week
  • Cut down on takeaway spend

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. A bit of ship steadying after the wobbles since the change of employer. My salary appears to have stabilised, and most of our home improvements are now done and paid for (or on a 0% credit card). I managed a 30% savings rate, with a 2.47% increase in my net worth. My previously smooth curve on my net worth graph has had a jagged section, but I’m back to all time highs. The usual cash regular savers were topped up, although my 3% regular saver with the Monmouthshire is due to end next month, and new money in the Freetrade S&S ISA went to increase previous holdings.

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

Goals:

Goal passed: Fix the bits on the cars I’ve already bought parts for

Success, I actually got round to doing these things in time for the MOT. The old daily will continue to soldier on, as it flew through with only a couple of minor points, and I’ve worked out I’ve done 1,500 miles in the six months since the job change. I’m rewarding it by ordering yet more parts (which hopefully won’t sit in the garage for months). Next goal is to get the garage cleared for the project car to return to hibernation.

Goal failed: Sell five things

I’m giving up on this for the time being, as all I’m doing at the moment is monthly dump runs.

Goal passed: Read a book thee evenings a week

I’ve been reading Dan Jones’ The Plantagenets, which is a bit of a beast and not my usual fare; I don’t generally read non-fiction unless it’s for a purpose. It’s interesting stuff, and making the time in the evenings has been relaxing. I want to keep this up, so I’m going to roll this goal over.

Goal failed(ish): Cut down on takeaway spend

We got into a bad habit in October of ordering takeaway every time we saw friends. Prior to the event we would usually go out for food once a week with various people. With that off the table we’re using takeaway instead, and actually I should just make the food. In September we spent about £180 on takeaway(!), and this has came down a bit to £130 for October, but it’s still superfluous spending, and the further £80 we spent in November is too much.

Budgets:

  • Groceries – Budget £200, spent £218.11, last month £216.97
  • Entertainment – Budget £100, spent £74.50, last month £65 
  • Transport – Budget £250, spent £470.33, last month £129.54 – MOT time!
  • Holiday – £150, spent £0, last month £17.63
  • Personal – £100/ £2108.46/ £280.50
  • Loans/ Credit – £50/ £98/ £43.70
  • Misc – £50/ £442.02/ £705.75 – The sooner these end the better
  • Fees – £300 /£131.98/ £629.75

In the garden:

Just ticking over now. Planning to dig over the raised beds and add compost over the Christmas break.

Goals for next month:

  • Clear the garage and store the project car
  • Read a book three evenings a week
  • Cut down on takeaway spend

Happy December everyone!

The Shrink

The Financial Dashboard – October 2020

The goals for October were:

  • Fix the bits on the cars I’ve already bought parts for – I’m terrible at buying parts and then never fitting them
  • Sell five things
  • Read a book thee evenings a week

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. This was a tough month. My employer has finally remembered they overpaid me, and took the overpayment off this month’s salary. I’m going to dip into the money I set aside when I was overpaid to cover me for the month. We also had a large number of expenses relating to the renovations, some unexpected, which led us to dip into our emergency fund. Given all this my savings rate for this month was -18.14%. There’s more renovation costs to come, and some health issues might require a private medical expense, so it’s going to be a lean couple of months. The usual cash regular savers were topped up, and new money in the Freetrade S&S ISA went to increase previous holdings.

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

Goals:

Goal failed: Fix the bits on the cars I’ve already bought parts for

Goal failed: Sell five things

Goal failed: Read a book thee evenings a week

These were all write-offs. I’ve been doing a 90-hour work week, with renovation work on top. Roll on next month.

Budgets:

  • Groceries – Budget £200, spent £216.97, last month £181.42
  • Entertainment – Budget £100, spent £65, last month £97.16 – Still spending too much on takeaways, easy to do when the house is full of dust and chaos.
  • Transport – Budget £250, spent £129.54, last month £147.72
  • Holiday – £150, spent £17.63, last month £118.99 
  • Personal – £100/ £280.50/ £87.26
  • Loans/ Credit – £50/ £43.70/ £50
  • Misc – £50/ £705.75/ £604.72 – Further renovation costs
  • Fees – £300 /£629.75/ £268.60

In the garden:

Shut everything down for the winter, harvesting off the last of the squashes. I’ve got chinese cabbage, kale and winter lettuces on the go in the greenhouse.

Goals for next month:

  • Fix the bits on the cars I’ve already bought parts for – I’m terrible at buying parts and then never fitting them
  • Sell five things
  • Read a book thee evenings a week
  • Cut down on takeaway spend

Happy November everyone!

The Shrink

The Financial Dashboard – September 2020

The goals for September were:

  • Fix the bits on the cars I’ve already bought parts for – I’m terrible at buying parts and then never fitting them
  • Exercise four times a week
  • Sell five things

Checking the assets and liabilities:

These are taken, as always, from my Beast Budget spreadsheet. My pay appears to have levelled out, but yet to be asked to pay back the previous excess. After a couple of months of falling net worth as we spent on house renovations (new windows, some structural stuff, remodelling two rooms), my net worth increased by 5.23%. This was entirely due to an increase in the (paper) valuation of my home, which I take from Zoopla/ Nationwide data. My savings rate for this month was 21.93%, not too shabby considering the spending. The usual cash regular savers were topped up, and new money in the Freetrade S&S ISA went to increase previous holdings.

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

Goals:

Goal failed: Fix the bits on the cars I’ve already bought parts for

I continue to collect car parts, but work life has been busy and home renovations take up the majority of my spare time. Hopefully next month this will happen.

Goal achieved: Exercise four times a week

Regular exercise continues to have a huge impact on my general wellbeing. I’ve tried to get four sessions a week in exactly, but life is too unpredictable, so only an average has been possible. Now I’m in the habit hopefully it remains.

Goal failed: Sell five things

Again, too caught up in other things, but I did at least give some items away. Once renovation work is finished I should able to have a proper clear out.

Budgets:

  • Groceries – Budget £200, spent £181.42, last month £175.55
  • Entertainment – Budget £100, spent £97.16, last month £84.95 – Mainly takeaways and eating out with friends whilst we still could
  • Transport – Budget £250, spent £147.72, last month £144.72 – Minimal travel these days
  • Holiday – £150, spent £118.99, last month £78.44 – A little holiday
  • Personal – £100/ £87.26/ £123.76
  • Loans/ Credit – £50/ £50/ £50 – Repayments begin
  • Misc – £50/ £604.72/ £70.25
  • Fees – £300 /£268.60/ £129.97– Another month, another pound of flesh to work

In the garden:

Left to run wild. Marrows the size of your thigh. Time to get the scythe and spade out.

Goals for next month:

  • Fix the bits on the cars I’ve already bought parts for – I’m terrible at buying parts and then never fitting them
  • Sell five things
  • Read a book thee evenings a week

Happy October everyone!

The Shrink