Quarterly Returns – Q4 and 2019 in Review

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

Year two of tracking down, time for another review. After the tumult of 2018, 2019 has been a year of consolidation. There were no house moves, no big projects or events, and only one foreign holiday. It’s been a year focusing on finances and career, steadying and preparing for some big bills and life changes in 2020. But how did I get on for my 2019 goals?

Q4 Returns:

Net Worth

  • Cash Savings Accounts £7,600 (+3,200)
  • Investments £2,990 (+£1,440)
  • Property £40,500 (+£6,100)
  • Cars £2500 (£0)

My net worth now sits at £~49,700, a significant increase of £20k over the course of the year. I set a goal as part of my yearly targets to save 25% of my income in 2019. I narrowly missed out when you look at raw saved cash and investments, saving only 23.53% (15.59% pre-pension).

Yearly Targets:

Goal 1: Build an emergency fund

My first 2019 goal was to build an emergency fund, as per the r/UKpersonalfinance flow chart (1). My goal emergency fund is three months total household expenses (£6k) in my name, plus a further three months (£6k) held jointly.

I now currently hold £6,700 in my name, and £1,800 held jointly. I reached the £6k figure as I’d hoped, but I’m not going to rest on my laurels. I currently hold over half of my emergency fund in high interest current accounts, and I’ve found it irritating to meet the requirements of my FlexDirect account (certain amount of transactions, certain amount in/out). The FlexDirect bonus rate is up fairly soon, and most of the high interest current accounts have dried up with rates falling back to those matching regular savings accounts (2, 3). When the interest period is up I’ll move it over to somewhere like Marcus. I also have £1.5k in my Starling account. Some of that is saved for a new car rather than a simple emergency fund, and in anticipation of that expense I’m going to be paying into my 3% Monmouthshire Regular Saver for the next ten months. Our joint account also pays into a regular saver, and I need to have a think about how I’m going to increase our joint emergency fund alongside paying for some property renovation work in the next few months. This will therefore remain a goal for 2020.

Goal 2: Pay off short-term debts


This was achieved in Q3, but I may yet make a dip into short-term borrowing to buy a replacement car or to pay for building costs. Some of you may be screeching ‘lifestyle inflation’, and I take the criticism. My reasoning is this: as described in the Bangernomics 2019 post, my current car is due some a serious amount of repair work and pro-active maintenance. This will cost more than it is worth. Rather than spending this money for no gain, the temptation is to trade in for the next cheap and cheerful daily. I am as yet undecided, and while I am deciding I accrue further savings to purchase outright. As for the property matter, we have renovated six of the eight rooms in our house. One of the final two needs some structural work, and is generally vile. The work is going to cost maximum £8-10k. With that done we will have a finished home in a sought-after area, which will be readily marketable if we ever had to sell quickly. Getting the work done ASAP will give us a generally nicer life, and increase our liquidity. We’ll use a combination of savings, 0% interest credit cards and possibly borrow again from family. Not ideal, but it fits our joint choices.

Goal 3: Save 25% of my earnings

Savings Rate

I calculate my savings rate using this formula:

Savings rate as % = ((Income – spend) + Cash savings + Investments + Pension contributions) / (Income + Pension contributions)

So I sort of missed this goal. Remember how I said my raw saved cash and investments, for 2019 was only 23.53% (15.59% pre-pension). It’s always bugged me that my savings rate doesn’t include my mortgage payments. The increase in equity from the principle payment is a form of savings, right? So I changed my formula…

Savings rate as % = ((Income – spend) + Cash savings + Investments + Pension contributions + (half of principle mortgage payment)) / (Income + Pension contributions)

This makes more sense to me, as it means my savings rate comes closer to my absolute increase in net worth. Based on those numbers, my average savings rate for 2019 was 29.61%. My net worth saw a tasty 69% increase over the year, helped in part by increased equity as our property value went up. With this new formula, and a plan for incremental improvements, I aim to save 30% of my income in 2020.

Goal 4: Live more sustainably

Way back in January I took the WWF Carbon Footprint calculator, and we had a whopping 169% of our target footprint. At the end of the year, the calculator estimates we’re now down to 108% of the UK Average.

Carbon Footprint


The main improvement has been from reducing my travel footprint through fewer flights. Our diet is more healthy, more local and seasonal. We lose points for the new furniture we’ve bought, our meat consumption (I have many thoughts challenging this, but for another time), and my work car commute. I refuse to damage my cavity walls with insulation. I think the loose top line goal has helped with all the simple changes we can make, so now it’s time to look in a little more in depth way. First, I want to know how much I’m saving by growing my own. Second, I want to look at changes I can make to reduce my carbon footprint.

Goal 5: Commence investing

As a yearly goal, this is a win. I’ve gone from nought to £2,990 in investment accounts and seen a healthy return on my invested capital. I’m aware this is pretty small potatoes for most FIRE bloggers, but this is not a pension or a SIPP. The NHS pension provides me with (theoretically) something better (supposedly) than either. This is me breaking the psychological initiation barrier on a good old ISA. The next step will be to reduce cognitive drag, and automate.


My investments remain solely in Crowdfunding and my Vanguard ISA. I have a small amount in my FreeTrade account, mainly there to be available for the free share offer. If you want a free share for joining FreeTrade, drop me an email.


In the passive core of my investments, I paid irregular sums into my existing holdings (Developed World ex-UK and FTSE Global All Cap). Automating my investments should regulate the amounts, and following my incremental plan, I’m going to increase the amount I try to put in every month by £50. Looking at the graphs would suggest I’m US-heavy, as the market would expect. This visual representation bothers me, because although it’s true of my ‘portfolio’, it’s not true of my net worth. The vast majority of my that is in the UK housing market. I find myself talking across purposes, with goals and targets that differ depending on whether I’m talking about the ‘portfolio’ or total net worth. This is something I’ll be looking at in 2020, as I try to build my investments to diversify away from UK savings and property equity.

All this talk leaves me with the following 2020 Goals:

  • Goal 1: Build an emergency fund
  • Goal 2: Save 30% of my income
  • Goal 3: Calculate savings made by growing my own food
  • Goal 4: Make changes to reduce carbon footprint
  • Goal 5: Automate investments and savings

Good luck to everyone with their own 2020 targets,

The Shrink


  1. https://www.reddit.com/r/UKPersonalFinance/
  2. https://www.bankaccountsavings.co.uk/calculator
  3. https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
  4. https://footprint.wwf.org.uk/#/

The Financial Dashboard – December 2019

The goals for December were:

  • Continue to exercise 4x a week
  • Keep a record of all dietary intake (what gets measured gets managed)
  • Sell 5 items (need to get back on my de-clutter)
  • Save 30% of my salary

Checking the assets and liabilities:

Dec 2019 AssetsDec 2019 Liabilities

These are taken, as always, from my Beast Budget spreadsheet. This month my net worth grew by 14.42%, though not due to any stonking savings rate. Instead it was down to a house revaluation, which brought our equity up in our home up by £20k. My savings rate missed my goal at a measly 23.85%, leaving my average for the 12 months at 23.52%.


Goal failed: Continue to exercise 4x a week

Work, Christmas parties and a break away to stay with family meant that I only managed three times a week. There’s a recurring theme this month…

Goal failed: Keep a record of all dietary intake

Failed at this too. I’ve downloaded an app to try for January.

Goal failed: Sell 5 items

Nope. Next…

Goal failed: Save 30% of my salary

Not even close. Should and could have been, however we had a plumbing emergency the week before Christmas, requiring a dip into the emergency fund. A couple of years ago this would have gone on a credit card, and hung around my head like a noose for the following year. Now the £2k could be paid immediately, without breaking a sweat, and the emergency fund topped straight back up at the end of the month.


  • Groceries – Budget £200, spent £195.46, last month £157.76 – This probably should have been more, but we ate out a lot and didn’t host for Christmas
  • Entertainment – Budget £100, spent £242.95, last month £119 – Christmas parties, breaks away, beers, beers and prosecco!
  • Transport – Budget £460, spent £406.16, last month £394.05 – More work to the daily, and it needs further if I’m not to replace it soon
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £56.99/ £102.90
  • Loans/ Credit – £0/ £0/ £0
  • Misc – £50/ £25.50/ £109.16
  • Fees – £70 /£109.49/ £135.40

In the garden:

Harvesting root veg, and now tidying up in preparation for planting next year.

Goals for next month… take 2:

  • Continue to exercise 4x a week
  • Keep a record of all dietary intake
  • Sell 5 items 
  • Fix my car

Happy New Year everyone,

The Shrink

The Financial Dashboard – November 2019

The goals for November were:

  • Exercise at least 4x a week
  • Automate investments
  • Repair pushbike
  • Look at new emergency fund accounts

Checking the assets and liabilities:

November AssetsNovember Liabilities

These are taken, as always, from my Beast Budget spreadsheet. This month my net worth grew by 3.46%, as my good run came to an end. My savings rate was also a paltry 21.86%, dragging my yearly average down to 23.64%. My payroll is still incorrect, so I’m paying PAYE tax, pension and student loan contributions incorrectly. Despite hounding the payroll departments they continue to get it wrong every month. We also bought some furniture for the house which dragged the savings down.


Goal achieved: Exercise at least 4x a week

I actually managed this, surprisingly myself. Self-motivation must be improving; like a muscle the more you exercise it the stronger it gets. I’ve yet to decide if paying for the extra local gym is worth the added cost for the convenience, but it has meant I can squeeze in early morning workouts with ease. Need to focus on diet now to achieve some of my goals.

Goal achieved: Automate investments

Going back to the investing basics, I decided I needed to make my investments automatic and also use the paying myself first approach (1. 2, 3). As such I’ve set up a standing order to my regular investment platform, and another to my new emergency fund account. These will go out on the day I get paid, and I can use the spare cash for discretionary spending.

Goal achieved(ish): Repair pushbike

Took it to the local charity workshop for a quote, likely to be £150+, may get it fixed, may buy a crappy skip bike to replace it. Most importantly it’s no longer sat in my garage.

Goal achieved: Look at new emergency fund accounts

After a few months of poor cash savings, I decided to set up a new emergency fund account. I had been using a savings pot as an emergency fund in the Starling bank account I use for my day to day spending. This returns 0.5% and is generally a bit naff. I also found myself dipping into it for discretionary spending. I have a high interest current account with a further £2.5k sitting returning 5%, but I find moving money every month to satisfy the requirements of the account a bit of a faff. Therefore the new plan was to set up another regular saver. The local Monmouthshire Building Society offers a 3% regular saver, so I popped down to the local store to set one up. This was like stepping back in time thirty years, and I take some re-assurance from their old-fashioned safety procedures. This is how my income savings structure now looks:

Savings breakdown.JPG


  • Groceries – Budget £200, spent £157.76, last month £176.39 – We ate out more and spent less thanks to weekly meal planning
  • Entertainment – Budget £100, spent £119, last month £101
  • Transport – Budget £460, spent £394.05, last month £301.82 – Daily car passed it’s MOT with only minor work. Not bad for an old snotter.
  • Holiday – £150, spent £0, last month £336.40
  • Personal – £100/ £102.90/ £46.56 – Black Friday wardrobe updates
  • Loans/ Credit – £0/ £0/ £140
  • Misc – £50/ £100/ £215.15 – Christmas gifts now!
  • Fees – £70 /£135.40/ £177.91

In the garden:

Everything quiet now apart from some overwintering veg settled in the ground

Goals for next month:

  • Continue to exercise 4x a week
  • Keep a record of all dietary intake (what gets measured gets managed)
  • Sell 5 items (need to get back on my de-clutter)
  • Save 30% of my salary

Happy December everyone,

The Shrink


  1. https://monevator.com/the-investing-basics/
  2. https://monevator.com/no-time-to-invest/
  3. https://www.investopedia.com/terms/p/payyourselffirst.asp

The Financial Dashboard – October 2019

The goals for October were:

  • Adopt a weekly meal plan
  • Exercise 4x a week
  • Get six blogposts out across the month
  • Repair pushbike
  • De-clutter spare room for the charity shop

Checking the assets and liabilities:

October AssetsOctober Liabilities

These are taken, as always, from my Beast Budget spreadsheet. This month my net worth grew by 4.35%, continuing a good run. My savings rate, not including mortgage repayment, was 45.13%, making my average for the year now 23.82%. I’m taking this with a pinch of salt, as HR continue to make a mess of my pension contributions, tax and student loans. I’m paying all three, but my tax code has been wrong for the last three months. The pension contributions are even more of a mess, as I continue to pay into DB schemes, but HR/ Payroll disagree which. Tiresome.


Goal achieved: Adopt a weekly meal plan

We’ve been planning our weeks meals every Sunday, and it’s already having an impact on some of my time available during the week. By setting out a list of what we’re making I’m not having to think when I get home what I can make, and often MrsShrink has been helping to cook and prepare lunches on busier days. A bit of preparatory planning is having a huge effect.

Goal failed: Exercise at least 4x a week

Too busy to manage this, as I managed to keep to the three from last month, but struggled to consistently get a fourth session in. One to carry over for next month, as I’m noticing the difference consistent exercise is making.

Goal failed: Get six blogposts out across the month

I think I managed five in October, but this goal has really highlighted a problem for me. I enjoy writing content and still have a lot more to say, but I’m currently struggling to find the time to write. Winter pressures on the NHS are here, I’m working 60+ hours a week and I’m squeezing exercise and other activities that keep me sane and relaxed into my spare time. As the amount of hours I’m having to work has ramped up it’s decreased my time to work on posts. If I’m writing content I want it to be of a high standard and well-referenced, and that isn’t quick to knock out. The last few months I have pressured myself to maintain content flow here, but it’s taking the joy out of blogging. I’ve therefore decided to take a sabbatical until the New Year from the majority of my blogging. I will still update monthly and quarterly figures, but the Full English and other content is on hold until I can give it the time it deserves.

Goal failed: Repair Pushbike

Found a shop to do it. Closed all the time I’m not working. Will take some time off to do this.

Goal achieved: De-clutter spare room for charity shop

Looking much tidier, and will be working towards the loft in the New Year.


  • Groceries – Budget £200, spent £176.39, last month £144.75
  • Entertainment – Budget £100, spent £101, last month £101
  • Transport – Budget £460, spent £301.82, last month £257.49 – Got an expensive month coming up with an MOT
  • Holiday – £150, spent £336.40, last month £0 – Had a short break away
  • Personal – £100/ £46.56/ £87.75
  • Loans/ Credit – £0/ £140/ £152.25
  • Misc – £50/ £215.15/ £75.65 – Lots of birthday gifts
  • Fees – £70 /£177.91/ £110.40 – The GMC have taken some of their pound of flesh

In the garden:

The winter crops are starting to come through, but otherwise it’s been mainly clearing away and making ready for winter.

Goals for next month:

  • Exercise at least 4x a week
  • Automate investments
  • Repair pushbike
  • Look at new emergency fund accounts

Happy November everyone,

The Shrink

The Full English Accompaniment – Pensions problems show societal flaws

I’ve whinged about the NHS Pension situation before, so this week I’ve been following Dr Kate Lovett’s threads on Twitter with interest. The Dean of the Royal College of Psychiatrists, this year she was the recipient of an incremental increase in salary due to experience and an excellence in practice award. This has resulted in a tax bill 120% of her annual salary. How?

As an unfunded DC scheme that has been raided multiple times by the Government, the whole situation is ludicrously punitive. There is no pot of cash which grows, it is all dependent on the pension scheme remaining the same by the time you retire, plus the calculations for tax being correct (1). If you’ve ever dealt with public sector HR you’ll have your own thoughts about this. The taper cap doesn’t work when applied to DC schemes, and in the medical profession it’s demoralising. There’s a whiff that the intention was to drive people out of the NHS scheme and into SIPPs or similar. A drive for a smaller government.

These pushes towards self-invested pensions are important for the self-employed. Despite continuous suggestions and prompting, most self-employed people are not paying into a pension (2). In previous times, a decent state pension could cover you, however our state pension has fallen to one of the lowest in Europe, again evidence of a smaller government dogma. Couple this with the expectation from some parties that the state pension/ national insurance should operate like a DC pension, not an insurance policy, and we see how people have become more ‘me first’ (3). I can understand the drive for a small government, but there will always be some who slip through the cracks or don’t understand. Encouraging everyone just to think about themselves risks leaving those individuals behind. How long can the state pension last in the face of dogma?

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading:

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.


  1. https://www.hsj.co.uk/workforce/top-doctor-reveals-huge-tax-bill/7026227.article
  2. https://www.thisismoney.co.uk/money/pensions/article-7554943/Self-employed-nudged-save-2-50-day-pensions.html
  3. https://www.thisismoney.co.uk/money/pensions/article-7538347/Im-terminally-ill-60-state-pension-just-lost.html
  4. https://www.independent.co.uk/voices/brexit-pound-sterling-fall-no-deal-boris-johnson-trade-a9145701.html
  5. https://www.bbc.co.uk/news/business-49959237
  6. https://www.theguardian.com/artanddesign/2019/oct/08/stirling-prize-architecture-goldsmith-street-norwich-council-houses
  7. https://www.theguardian.com/environment/2019/oct/09/revealed-20-firms-third-carbon-emissions
  8. https://www.theguardian.com/environment/2019/oct/12/top-three-asset-managers-fossil-fuel-investments
  9. https://www.bbc.co.uk/news/business-49998074
  10. https://www.thisismoney.co.uk/money/saving/article-7558523/Three-quirky-savings-accounts-better-rate.html
  11. https://www.independent.co.uk/life-style/gadgets-and-tech/news/spider-robot-moon-uk-lunar-mission-space-spacebit-nasa-a9150641.html
  12. https://www.bloomberg.com/news/articles/2019-10-12/is-the-world-economy-sliding-into-first-recession-since-2009
  13. https://www.theguardian.com/business/2019/oct/14/renewable-electricity-overtakes-fossil-fuels-in-uk-for-first-time
  14. https://www.theguardian.com/environment/2019/oct/13/firms-ignoring-climate-crisis-bankrupt-mark-carney-bank-england-governor
  15. https://www.theguardian.com/business/2019/oct/13/entrepreneurs-seek-venture-capital-despite-high-profile-tech-flops
  16. https://www.bbc.co.uk/news/business-50052375
  17. https://www.thisismoney.co.uk/money/news/article-7578721/Woodfords-empire-collapses-loses-three-funds-shuts-firm.html
  18. https://www.theguardian.com/business/2019/oct/16/global-economy-faces-19tn-corporate-debt-timebomb-warns-imf
  19. https://www.bbc.co.uk/news/business-50089887
  20. https://www.theguardian.com/technology/2019/oct/23/tesla-q3-earnings-elon-musk
  21. https://www.vanguardinvestor.co.uk/articles/latest-thoughts/investing-success/fee-cuts-show-vanguard-commitment?cmpgn=ET1019UKPALBR0001
  22. https://www.bbc.co.uk/news/business-50094982
  23. https://nypost.com/2019/10/08/inside-the-strange-secretive-lives-of-rich-millennial-cheapskates/
  24. https://www.foxbusiness.com/personal-finance/millennials-fire-saving-retirement
  25. https://www.foxbusiness.com/money/millennial-millionaire-retired-30
  26. https://www.forbes.com/sites/ryanderousseau/2019/10/22/why-happiness-grew-after-abandoned-early-retirement/
  27. https://www.lifehack.org/340263/aware-these-cognitive-biases-and-youll-much-more-successful
  28. https://www.theguardian.com/science/2019/oct/15/diy-drugs-should-hospitals-make-their-own-medicine
  29. https://moneyweek.com/516430/another-october-stockmarket-crash/
  30. https://www.bloomberg.com/news/articles/2019-10-17/a-guy-on-reddit-turns-766-into-107-758-on-two-options-trades
  31. https://www.ft.com/content/6dff9670-cf26-11e9-b018-ca4456540ea6?shareType=nongift
  32. https://www.ukvalueinvestor.com/2019/10/woodford-closure-ftse-100.html/
  33. https://www.ukvalueinvestor.com/2019/10/how-to-measure-your-portfolios-returns.html/
  34. https://monevator.com/10-year-retrospective-commodities-the-lost-asset-class/
  35. https://theescapeartist.me/2019/10/18/the-inestimable-advantages-of-living-a-more-natural-life-part-2/
  36. http://quietlysaving.co.uk/2019/10/24/dogs-nightmare-and-random-shares-update/
  37. https://firevlondon.com/2019/10/24/angel-investing-2-what-happens-next/
  38. https://www.reddit.com/r/FIREUK/comments/dn3opn/weekly_fireuk_blog_posts/
  39. https://lovelygreens.com/spicy-green-tomato-chutney/
  40. https://agentsoffield.com/2019/10/13/an-autumn-special/


The Financial Dashboard – September 2019

The goals for September were:

  • Plan healthy weekly dinners
  • Exercise at least 3x a week
  • Get two more blogposts out
  • Look for a skip bike to use for short local journeys
  • De-clutter spare room for charity shop

Checking the assets and liabilities:

September AssetsSeptember Liabilities

These are taken, as always, from my Beast Budget spreadsheet. This month my net worth grew by 3.32%, modest but enough to push me over the £40k barrier. My savings rate, not including mortgage repayment, was 43.76%, pushing my average up to 21.48%. That’s my best savings rate of the year.


Goal achieved: Plan healthy weekly dinners

Within the confines of eating out/ in with friends, and the times when we’ve been away, I think this has been achieved. We’ve eaten less oven or ready meals, and more stuff fresh from scratch using our home grown ingredients. I want to build on this, by adopting a meal plan – a goal for next month.

Goal achieved: Exercise at least 3x a week

This was actually really hard. Life has a tendency to throw curveballs, and trying to fit in three workouts every week around work commitments, socialising, house chores and sleep has been challenging. Again I want to build on this – for next month it’s 4x a week.

Goal failed: Get two more blogposts out

Slightly better. June and July were a real lull, with only three and four posts, compared to eight in one month at the start of the year. I managed five in August, but still not back to my old standard. I’m going to aim for six this month.

Goal failed: Look for a skip bike to use for short local journeys

I decided not to do this, as I don’t need more stuff. I’m going to get my old bike repaired again instead.

Goal failed: De-clutter spare room for charity shop

Still a work in progress.


  • Groceries – Budget £200, spent £144.75, last month £299.90
  • Entertainment – Budget £100, spent £101, last month £81
  • Transport – Budget £460, spent £257.49, last month £241.97
  • Holiday – £150, spent £0, last month £0
  • Personal – £100/ £87.75/ £62.99
  • Loans/ Credit – £0/ £152.25/ £152.25
  • Misc – £50/ £75.65/ £30 – Gifts mainly
  • Fees – £70 /£110.40/ £209.75 – Vets fees

In the garden:

More chutneys this month as our tomatoes and beans come to an end. A few courgettes still soldiering on, but I think this weeks weather might kill them off. Despite a strong start my pumpkins are sadly the size of plums. I’ve planted a lot of new stuff this month; winter potatoes, onions for spring, spinach beet, carrots and spring cabbage.

Goals for next month:

  • Adopt a weekly meal plan
  • Exercise 4x a week
  • Get six blogposts out across the month
  • Repair pushbike
  • De-clutter spare room for the charity shop

What’s in the pipeline: (Hopefully a couple this month)

  • Stoicism and the finance world
  • Should I buy an electric car?
  • Q3 2019 – Steady as she goes
  • Property Renovation Lessons Part III
  • Plus the usual Full English Accompaniments and other drivel…

Happy October everyone,

The Shrink

The Full English – The Crowdfunded Bubble

Calling economic bubbles is a no-lose situation for a blogger. If you’re correct, whoop-de-do, celebrate your foresight. If you’re wrong, you’re a grumpy pessimist but no worse off. With that caveat readers may recall a couple of weeks ago, in the last Full English, I mentioned that Curve had completed crowdfunding with a pre-money valuation of £201,000,000 (1). Yes, that is the correct number of decimal spaces. It left me asking, how the hell are people valuing these companies?

Turns out I’m not alone in wondering that (2). The hard data suggests that the price paid for a percentage of the company by the crowd is far higher than private equity pays (3). For your more expensive price you get B class shares and rarely see information about the valuation in the prospectus. How did we reach this point?

In a world of low interest rates investors are looking for returns. We’ve all read Smarter Investing, we know we should be avoiding active funds that would typically partake of Venture Capital. We exist in an economic climate that favours growth over value strategies. We see success stories like Facebook, Instagram, Monzo, Brewdog, Uber. We want a slice of that growth, and there are new and exciting ways to access it (4). So we apply some cognitive biases; illusion of control and confirmation bias. We can surely pick the winners.

We look to platforms like CrowdCube, Seedrs, etc to find a way in at the ground floor of the next unicorn. Because our purchase is fuelled by optimism (and a whole lot of sales psychology), we’re willing to pay over the odds for the ground floor. This drives competition for shares and increases the valuation of the company. Basic economics. When the company lists on the stock market you get off at the penthouse suite, suddenly a millionaire. The tech IPO procession continues (5).

But that competition for a slice of the pie ignores the companies bottom line. Crowdfunding platforms are slick presentations to consumers, not like the due diligence of a traditional capital firm. The position of power is with the listing company, not the lender. This again drives up the valuation of the market.

The companies, overvalued with optimism, get valued by the market fairly and fall from their listing price. The tech companies that have gone through the IPO process are losing money (6). And people are taking notice. IPOs are being shelved, most notably the recent WeWork delay (7, 8). Traditional institutions do not want an overvalued investment, because in the long run they won’t get a return. They don’t want to see their shares costing billions of dollars through the efficient market (9). While the stock is unlisted the return and gain/loss is not realised.

This isn’t stopping profitable and strong companies going public. AirBnB continues to voice that it will soon, now setting a timeline for next year (10). However as Crowdfunding grows it will continue to offer a window into murky investments, promising a lot but with little to report. It will continue to inflate prices with optimistic opinions of growth. At some point all the optimism becomes a little too sweet, and it’ll be interesting to see if we end up in a crowdfunded private-company rerun of the dot-com crash.

Have a great week,

The Shrink

Other News

Opinion/ blogs:

The kitchen garden:

What I’m reading (affiliate links):

Food Of The Gods: The Search for the Original Tree of Knowledge: A Radical History of Plants, Drugs and Human Evolution – Terence McKenna – An ethnobotanist explores humanitys’ fascination with hallucinogenics, and the role of altered states of consciousness on the development of human society.


  1. https://www.crowdfundinsider.com/2019/09/151157-fastest-startup-to-ever-hit-4-million-crowdfunding-on-crowdcube-curve-kills-it-now-at-5-5-million/
  2. https://en.wikipedia.org/wiki/Unicorn_bubble
  3. https://www.forbes.com/sites/goncalodevasconcelos/2015/05/27/valuations-in-crowdfunding-are-we-all-barking-mad/
  4. https://monevator.com/venture-capital-investing/
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