June 2017 Savings, plus Other Updates

I have two sets of friends with whom I socialise on a regular basis so I ended up celebrating my birthday twice on the town this month!

Why not celebrate with both sets of friends together to save time and money? It has been considered several times in the past but dealing with potential clashes of characters and personalities (with alcohol involved!) really won’t be worth the money saved and is not my idea of fun!

I had a couple of great nights out, and inevitably suffered the consequences afterwards! However, I think I was more worried about my liver/kidneys, rather than my finances!

A Bit About Work

Am pretty settled in now, the days are flying by as I continue to get to grips with different processes, procedures and people.

At the last place I worked, there were quite a lot of folk who were in their 40s or older. At my new place, I’m definitely one of the few ‘oldies’, with most people sitting around me in their early to mid-twenties.

In the run-up to pay day, talk was just of what they were going to spend all their money on – mostly socialising and buying ‘stuff’, with one young chap ordering a pair of shoes costing over £500 (some ‘must-have’ brand I’d never heard of). I didn’t join in when the others had a go at him for wasting his money, for fear I would go into ‘FIRE mode’ haha! Ah to be young and so carelessfree with money!

With both my boss and the rest of the team not being based in the same office apart from on the odd occasion, I’m working pretty autonomously, more so than in my previous job. I think I will appreciate this more as time goes by, although I have to admit that I am actually starting to enjoy my work – not so clueless any more!

I still think it’s bloody hard – coming from a highly regulated environment to one that is not so (yet) regulated isn’t easy and my boss warned me that it could get a little frustrating but to be patient as things were moving towards more regulations and controls. I look at their processes and see so many things which would fail an audit.

I think I’m one of the few people who actually abides by the clear desk policy, which isn’t enforced but it’s how I’ve been working for the past ten years so I continue to do so. Still, it’s far too soon for me to be making major suggestions of improvements but I’ve been making notes for the future, ideas for projects and such like.

The lifts weren’t working the other day so I had to take the stairs. I realised that walking up to the 5th floor isn’t too bad and is a great workout, so from now on, I will climb the stairs every day.

Anyway, I got paid in full this month so how much of my net salary did I save? (no £500 shoes for me!)

I saved 54.6%! My average for the year is now 47.8% so slowly creeping up to my goal of an average 50%.

The above savings includes £100 from matched betting profits, £25 from my Premium Bonds win, £20 lotto win and £57.08 affiliate income from OddsMonkey (thanks to all those who joined via my link – much appreciated!).

When I saw the my wage hitting my bank account, I was pleasantly surprised. Until I realised that this is my pay without any corporate benefits deducted – I’ve yet to join the company pension scheme (although the contribution will be low) and I no longer have the ‘premium benefits’ I used to enjoy, namely medical, life insurance and critical illness cover. Oh and my corporate gym membership was also deducted via salary sacrifice.

Another birthday celebrated, another year older – although I keep myself pretty fit and healthy and have a fairly balanced diet, age will catch up at some point so perhaps I need to consider my own medical cover seeing as I no longer have it. I was given a quote by the insurers who used to provide my company medical cover but it was nearly 4 times what I used to pay! What a rip off! I’ll do a bit of research, methinks.

Future Fund 

I have now shifted what’s left of my severance pay into my Future Fund, giving it a decent boost and it now stands at £119,717. A good step towards reaching my next big milestone!

Dividends and Other Income

Dividends received this month (which will be reinvested): Continue reading

Millionaire Next Door

I purchased the book ‘The Millionaire Next Door‘ by Thomas J Stanley  & William Danko second-hand, from Amazon.

Inside was a handwritten inscription:

“Cindy,
Merry Christmas 1999.
Here’s to the First Million!
Love [unreadable name]”

At first glance, it looked like ‘Cindy’ hadn’t even bothered to open the book as it was in pristine condition, with no creasing in the spine or cover and it had all the appearance of having been left on a shelf with other unread books.

However, throughout the book, there were a few handwritten notes and certain paragraphs were underlined, so she did at least have a read of it.

Millionaire Folk

In a nutshell, from the results of an extensive survey, the book depicts how folk on above average salaries (mostly but not exclusively entrepreneurs/self-employed) become millionaires and maintain their millionaire status by living below their means, budgeting, not succumbing to consumerism, investing their money and making the most of opportunities to make money.

Sound familiar?

Those who regularly read the various FI/PF blogs will feel like they’ve read all this before and bought the t-shirt – I found that the book did seem to be covering some ‘old ground’ but  there were interesting examples and stats.

I guess it was worth reading first hand the book which many people have cited as being inspiring and changing their way of thinking how they live their lives and how they view ‘wealthy’ or ‘rich’ folk.  None of  the millionaires in question achieved their wealth via inheritance or lottery wins.

It had me checking out my own neighbours and wondering which ones were possibly millionaires.

Becoming a Millionaire

It sounds like the person who bought this book for Cindy thought that it would be a guide on how to become a millionaire.

Perhaps it is, but in order to become a millionaire, it helps if:

  • you earn a decent income ($70,000 per year is cited, although the book was written in 1998, so a much higher salary might be needed today);
  • you marry someone who is good at budgeting and is frugal;
  • your grown up children (if you have any) are also frugal;
  • you buy your cars second-hand instead of new;
  • you invest your money and spend time planning your investments

What If?

I’ve never had any real aspirations to become a millionaire – it has only ever been a dream for me and sadly, a dream which involved winning the lottery!

I did wonder what would have happened if, like Cindy, someone had gifted this book to me in 1999, a time when I was probably at my most ‘spendy’ and deep in credit card debt.

If I had read it back then, it would certainly have been a complete revelation and could have changed my financial outlook – I could have been well on my way to achieving FI much earlier in life.

The reality however is that I probably wouldn’t have even bothered to read it and it would have been on a bookshelf gathering dust. The person I was in 1999 would not have been mentally prepared for a lifestyle change, nor I’d say, be willing to change.

The good news is that I don’t need to be millionaire to retire early. Or even a half-millionaire (Semi-millionaire? I’m making up words here!).

Like the successful millionaires interviewed in the book, I think I know what my “enough” is and I’ve shown over these last couple of years that I won’t succumb to life-style inflation.

I just need to keep plugging away at the savings and investing to keep my wealth ticking up.

I wonder if Cindy ever became a millionaire?

Anyway, the completion of this book means that I have achieved one of my reading goals – yay!

Whoops!

As recommended by various people, I read “Whoops!: Why Everyone Owes Everyone And No One Can Pay” by John Lanchester this month. As I borrowed it from the library, that’s another step closer to my library book-reading goal!

whoops

I’d say it was probably the most fascinating non-fiction book I’ve read in a long, long time!

It basically describes and explains how the global economy was brought to the edge of destruction in 2008. Ooh, those naughty banks!

Where was I in 2008?

Well, this was the year I sold the house that I owned with my ex and I finally paid off my credit card debts so I was in a good place financially – finally! The proceeds of the sale were left sitting in a high interest bank account (yes, they existed back then!) and I had virtually no investments whatsoever (I say virtually as I discovered years later that I had a small holding in an investment trust!).

Whilst I do remember the global economy collapsing and the hysteria in the news, I didn’t really understand why or how it happened, except that the banks were largely to blame. How so? Something or other to do with ‘sub-prime’ mortgages but to tell you the truth, I wasn’t really that interested at the time.

I also naively didn’t think the financial crash would affect me since I had no investments (that I knew of) that were affected by the plummet in the stock market…until my job became ‘at risk’ and Old Co axed around 120 people in one go and had to be bailed out by Warren Buffet. Those days at work weren’t great…

Years later, I would still feel the aftereffects of the crash, with regulatory overkill forming a huge part of my working life and environment – audits upon audits!

So what’s in the Book?

The book is easy to read as it assumes you know nothing so explains lots of things in a clear, uncomplicated way; things which my eyes probably glossed over when I saw them in newspapers back in 2008.

I also found it pretty scary – scary at how the banks were so powerful that they pretty much made up their own rules and when even those rules didn’t suit them, they just bent them and nobody stopped them.  Regulators were just regulators in name only – they were next to useless against the almighty banks.

People think pay day loans are bad but they’re nothing compared to the mortgages that were handed out almost like candy to people known to have patchy credit history. It wasn’t just the value of the mortgages, it was the sheer number of mortgages that were handed as it was so easy for anyone to get a loan.

For example:

‘Stated income’ loans were where the borrower just stated what their income was and the lender took their word for it…yes, really!

‘Ninja loans’ –  where people who had ‘No Income, No Jobs or Assets’ were able to borrow a pile of money…

It really sounds made up and unbelievable but the scary truth is that this all happened, though not in some corrupt third world country – it happened in the rich western countries and nearly destroyed the global economy.

So, who or what was to blame?

Greed, stupidity, Governments or Banks?

Probably all of the above.

Have lessons been learnt?

Well the book was written six years ago and there’s still the ticking time bomb of Deutsche Bank (still the most dangerous bank in the world?) to name but one.

Only time will tell before the next financial crisis happens due to some new loophole that will get exploited, though of course, actual Brexit and the result of the US elections could cause some disruption.

Anyway, a highly recommended read.

August 2016 Savings, plus other Updates

The weeks have flown by in the blink of an eye and it’s time for another update.

aug16saved

I managed a savings rate of 39.4% – entertainment/social costs with the family, and birthday outings added to the expenses.

My average savings rate has continued to plummet –  it’s now at 47.1%.  It’s not been easy keeping to my usual spending routine with family around. Still pretty good I guess but I don’t have many months left in the year now to try to drag it up to my target of 50%. I’ll just try to get as close as possible in that case.

This month’s income was boosted by £50 from rent received and £20.42 from TopCashback*. I also channelled another £300 of matched betting profits into Property Moose (property crowdfunding).

Future Fund 

The markets continue to be buoyant in the face of Brexit doom-gloomers and my portfolio now stands at £81,511, a gain of over 4.8% from last month. It didn’t seem that long ago that I broke the £70k barrier, yet here I am sliding past the £80k mark – a combination of new investment capital and investment gains. I know that this figure could just as easily drop (eg when Brexit actually happens) but right now, my portfolios are heading in the right direction.

Dividends and Other Income

Dividends received this month (which will be reinvested): Continue reading