Saturday, 29 February 2020

Sale! Sale! Sale!

Hello Fire Fans!

I’m back!

Sorry for the long delay since my last post – I’ve just been extremely busy since the new year with a fresh work assignment being around 100 miles away (my door to door commute is 2.5 hours each way!)

This is on top of a now 4-month-old baby and so due to my long days I’ve been pretty exhausted to write new posts – but I thought it is now about time and so here I am!

Sooo, what to talk about?

Well this past week has been quite eventful hasn’t it!

The markets have taken huge hits. Like probably most of you, I’ve also suffered heavy losses and from my previous post (First Portfolio Post!) my Nutmeg ISA is from +£735 (+10.34%) to -£310 (-0.38%) in between this time the value had reached a peak of +£1,020! Likewise, Vanguard is currently -£579.66 (-9.68%) previously it was +£420.06 (+9.15%).

Going Down!

The Coronavirus has had a huge effect on the markets, and I do really hope it gets contained very soon – it is constantly in the news and honestly it does worry me from a health and safety perspective.

I’m not really going to go into further details about the virus as I’m not a doctor or scientist etc. - all I will say is that I hope you all stay safe.

From a FIRE/Investing blog perspective, the markets tanking like this is a Sales Bonanza!

Sale! Sale! Sale!

Due to my long term goals and being in the accumulation phase this is the ideal time to invest more – I currently have a Direct Debit set up for my Vanguard ISA, however from now until the end of tax year I am going to drip feed more funds over the coming weeks to take advantage of the prices on offer.

With my current Direct Debit amount set up, I was not going to reach the full £20,000 allowance for this year (from the screenshot below, you can see I have so far contributed £12,805.60), however with my current work assignment paying more than before I should be able to put the full amount in and hence I will to ensure by the end of tax year I have fully used this year’s allowance.

I am planning to do this once a week for the next few weeks as I am not sure how much further the markets will go down or whether they will even start to rise (personally I don’t think this will be happening until at least a few months down the line).

Looking at the history of share markets I am very confident it will eventually rise back and even overtake the recent all-time highs and as I have potentially up to 20 years to go (hope it turns out less!) I have no concerns

The only time I may have been slightly concerned would be if I was close to retiring or had just recently retired but even at that point I would either delay plans or look to get back to earning money and simply wait it out until the prices recover. My equity exposure would have also been reduced and hopefully my portfolio damage would not be as intense as it is now.

It’s very easy to panic at the moment and you may even feel like cutting your losses and selling your investments (as a lot of investors are doing right now), however if you have a passive/drip feed strategy and you are still a long way to go from retiring I say just weather the storm! Stick to your strategy and think with a clear mind before making rash decisions – trust me now is the time to make a lot of money!



Thursday, 2 January 2020

First Portfolio Post!

Hello fellow Fire Fans!

Happy New Year! Hope you all had a good break and are ready to continue the FIRE journey.

If you remember, I promised in the very first blog post, that we would be sharing our real portfolios, so that you can see exactly how and where we are investing and also keep a track of how they perform with us. I will be looking to do this on a regular basis, hopefully at least once a month.

So let’s get into it!

We have Savings/investments with the following providers: (Values as at today)

Myself
Vanguard ISA
£9,422.40
Nutmeg ISA
£10,760
RateSetter
£18,431.21
Hargreaves Lansdown
£911.12
Santander
£22,302.38
First Direct
£1,001
HSBC
£206.14


Wife
Vanguard ISA
£6,383.33
Nutmeg
£2,829
RateSetter
£6,953.66
Barclays
£3,654.05

Vanguard ISA opened tax year starting April 2019.

Nutmeg ISA opened tax year starting April 2018 (No longer contribute further to this ISA).

Been investing with RateSetter since 2015. I like P2P investing as unlike the stock market the value never falls, however obviously it has its own set of risks. One reason I like this platform is that it has a big provision fund and they mention on the website that since inception, no investor has lost a penny. However, this is no guarantee for the future – but it provides some comfort.

Hargreaves Lansdown - this was my first foray into investing. I read online about the Lindsell Train Fund and went with HL. I wish I had opened this as an ISA but didn’t really know much about investing back then and ended up opening a general account. I was just experimenting with a few hundred quid and don’t contribute much now either. Will probably just let the funds remain in there and let it accumulate.

My Santander account is the 123 Current Account, I treat this as an all-in-one type of account i.e. Savings, Current and Emergency Fund. I always maintain the balance above £20K as I can earn the full 1.5%. (I was very disappointed when the knocked the rate down from 3%! ).

I know deep down I shouldn’t hold this much cash and should take some out and invest it, however due to the nature of my work, I feel I need a slightly higher buffer just in case I’m out of work for a bit and its also ingrained into me to keep the balance above £20K to make the most of it.

The First Direct account I only did as I had a dormant 2nd current account lying around with Santander for years and at the time, First Direct were paying £150 to switch to them. I made the switch and transferred the £150 out. I need to keep the balance above £1,000 else they charge a £10/month fee.

HSBC account is primarily for online purchases. Had this before 123 account and have just kept it open.

Wife’s Barclays account is her current account, we don’t leave much in here as my Santander 123 provides enough emergency cover for both of us.

So these are our savings and investments at this time. The Vanguards ISAs are invested into various different funds and I’ll go through these in another post providing a breakdown into the proportions and reasons why we are invested in them.

Disclaimer: This is just a personal blog and none of the info provided anywhere across the blog should be considered as recommendations or financial advice.



Monday, 23 December 2019

£500+ In a Matter of Minutes!

Hello fellow Fire Fans!

Wanted to share a quick post about a great money saving hack that I did recently!

One of the quickest ways to achieve FIRE is trying to save money wherever possible and then investing the difference.

Keeping this in mind I wanted to let you know how me and my wife will be using our mobile network plans completely free for 2 years as well as earning an extra £208.15!

Easy Money!

Let me go through how we did it:
  • Bought 2 new (24 month) contracts from Mobile Phones Direct at an effective monthly line rental of £3.50 each (normal line rental of £20, however ‘cashback by redemption’ saves us £16.50 a month)
  • Each contract came with a free phone: Honor 20 Lite
  • Using cashback sites Quidco and TopCashback paid us £45.00 & £46.20


Sold the phones on eBay and after fees and postage got £150.73 and £134.22
  £284.95
Cashback totals
+ £91.20
Line rental = £3.50p/m x 2 SIMs = £7.00p/m x 24 months
- £168.00
This makes an impressive
= £208.15

However, there’s more!!

Cancelled our previous tariffs of £6.14 p/m each x 2 SIMs = £12.28 p/m x 24 months
= Saving of £294.72

£208.15 + £294.72£502.87

We are therefore up by £502.87! (it only took a matter of minutes to sign up for the new contracts) and will both be using our 2 new SIMs for FREE for the next 24 months!

Not bad huh?!


There were lots of offers on Black Friday (which is when we bought these). If your mobile phone contracts are coming to an end, I’d highly recommend checking online, I’m sure there will be lots of new offers and opportunities to make some money come this Boxing day!

Finally, I’d just like to wish you all a Merry Christmas and a Happy New Year!



Sunday, 22 December 2019

Time

Hello fellow Fire Fans!

Welcome back and today I am going to get a little bit into our monthly investment amounts and this will also provide you with the length of time we are talking about for achieving our FIRE target.

As already mentioned, our approach is Slow FI at the moment and so you maybe a little shocked at the time limit we are talking about, BUT and this is a BIG BUT, down the line we do hope to be able to increase our monthly contributions and so this time limit could (and man do I really wish it will) come down!



Currently (December 2019) we are putting away £2,350 into various accounts that we will be able to withdraw from with, pretty much, quick access. (Not going to include another £100 that I pay into a personal private pension at the moment as I can only access this after reaching a certain age).

One thing to mention: we won’t be able to put away £2,350 for long, maybe another month or so, as my wife’s income will go down over the next few months (as she is on maternity leave) and she’ll only be getting Statutory Maternity Pay. According to the gov.uk website, this is currently set at £148.68 a week L.

Once these happens, I’ll do an updated post with how much we are able to invest at that time.

But for now, let’s get all the figures together:
  • Value of investments as at today: £55,529
  • Current monthly investment amount: £2,350
  • Target amount: £1m

Using a Compounding Calculator:
  • Starting amount: £55,529
  • Interest rate: 5%
  • Time to grow: 20 years (Entered 20 as an example just to see where we cross the £1m mark)
  • Contributions: £2,350 Monthly




This calculation shows me that in the 19th year we will cross the £1m mark (right towards the end of 19 years).

Told you it was gonna be Slow FI! L
  
19 years seems like a long way away. I would be 49 at the time and my wife 45. It’s not bad (better than retiring in mid to late 60’s) however it could be better!

You must remember, though, that I am being very conservative with the % return. I have only put the interest rate at 5%. As mentioned in a previous post most ‘financial experts/advisors’ say that an average amount would be 7%-8%, and I’m pretty sure I have come across figures being quoted as high as 10%-12% somewhere too!

So, 19 years I take as an absolute worst-case scenario!

Let’s have a look at the results with 7% and 9%. 
  • 7%: £1m breached in 17th year
  • 9%: £1m breached in 15th year



I’m no way going to expect 10%-12%, however in that scenario we could be FI in 13-14 years’ time! A more realistic expectation is probably 7% (17 years). However, me being conservative I will be monitoring at 5% and if we end up getting more then it would be a welcome bonus!

The other thing to factor in is the amount we are contributing. As mentioned, presently this is £2,350. This will go down in the short term due to maternity, but in the long term, we hope that this will increase due to e.g. a pay rise.

Ideally we would like to both be able to maximise our ISA allowances down the line (investing £20K each a year), but in the medium term if we can get to even investing say £2,600 a month, then this would also cut down our time period. 


£2,600 a month at 5% = 18th year

Alas, let’s keep 19 years from now as the worst-case scenario and we being 49 and 45 years of age. At these ages we would still be relatively fit to travel around the world and enjoy many more years of doing whatever we want to do!

What do you guys think? Am I being a little too conservative with my interest rate returns? How much do you guys reckon I should be able to get over the next 15 years plus? I’d be keen to know your thoughts.

See you next time!

Sale! Sale! Sale!

Hello Fire Fans! I’m back! Sorry for the long delay since my last post – I’ve just been extremely busy since the new year with a fr...