House Purchase Post: Part 1

So much to write on this, so I’m just going to talk about the money side of buying my house first.

Bloody ‘ell, BTL

The plan had originally been to sell my buy-to-let (BTL) flat to fund my house purchase. However, my flat is caught up in the cladding polava and unless I wanted to make a massive loss by selling it to a cash buyer, that route was closed to me.

So plan B was to attempt to remortgage, to release some equity.

Alas, the lender valued my flat at a big fat ZERO as it did not conform to the new fire safety regulations.

To pile on more financial stress, the service maintenance charges on my BTL for the past year have trebled, to pay for a Waking Watch.  Although I believe a new fire alarm system has now been installed resulting in the WW no longer being employed, I have yet to see what the final bill will be to ensure that my flat will fully comply with regulations and secure the coveted EWSI certificate which will allow me to sell the property. I have already been advised that us leaseholders will not qualify for full government rebate, so await with dread on how much more I will have to pay.

Since I couldn’t release any equity, I had no alternative but to accept the loan from my parents and dip into my Future Fund.

The BTL has been a good investment but I will very likely be selling it – receiving rental income isn’t part of my FIRE plan. Assuming prices haven’t plummeted for such properties in the area, the equity I get from the eventual sale should repay the family loan in full and might even fill the hole that has been made in my Future Fund.

Dead Pledge

As per a comment I made on Monevator’s recent post which suggested that making payments on a mortgage was a form of saving, it was with some trepidation that I took on board the biggest debt of my life (on my own) at an age when many are (or close to being) mortgage-free.

At my age (the wrong side of 50), the length of the mortgage term was restricted – I certainly wasn’t offered 30-year deals!

As I went through the application with the mortgage advisor (which was all done online and over the phone, versus the face-to-face interview at the building society which I had for my first mortgage, armed with paper copies of my bank statements and payslips!), I was surprised at how much I could borrow on my own.

Some would say ‘get the biggest house/mortgage you can afford’ with these (current) low interest rates, but since I’m still aiming for FIRE, I was mindful of the size of the mortgage payments. I didn’t want to feel like the mortgage was a noose around my neck, it needed to be affordable and I needed to be comfortable with it.

So in the end, my budget didn’t cater for the biggest house I could get and I ended up with a mortgage with a LTV (loan to value) of 64%, which gave me affordable repayments and a bit of spare which I will need to split between saving for FIRE and a fund for future ‘house renovations’.

There will be some who will think that the deposit I made should have been smaller, that I could have invested the extra cash and made the most of investment returns. I did consider that but knowing me, it would have just caused me both investment stress and stress over higher mortgage payments so I did what I did for better peace of mind.

Anyway, I’m on a 2-year fixed repayment mortgage, 1.25% interest. It makes my mind boggle that the interest rate for my first mortgage over 20 years ago was 8% – let’s hope we never see those kinds of numbers again!

My mortgage term is 22 years so I’ll be in my early 70s when it’s paid off (earlier of course if I make overpayments).

How do I feel about carrying such debt into my old age?

I didn’t feel comfortable with it at first but it’s likely that when my DB pension kicks in at age 65, the 25% lump sum can more or less clear the balance of the mortgage, so I will have options when the time comes.

My mortgage payments will be more than what I am paying my parents for living in their house but at least my utility bills will be lower, which will provide some offset. However, until my parents sell their house, I will be paying 2 lots of bills but I chose to do this rather than be caught in a chain.

My savings rate will unlikely to ever reach its previous dizzy heights but I’m resigned to this – I think if I can achieve a savings rate of around 10%, I will be happy with that until things settle down cost-wise. Need to be smarter with some of my expenses and hope that the stock markets continue to do their thing for my portfolio.

Other House-Buying Costs

I wasn’t planning to get my property during the stamp duty tax holiday so I didn’t join the frantic and desperate race to try to complete before the end of July, although there had been a chance to complete before the end of September to pay a reduced amount. Sadly, this didn’t happen (the seller and then my solicitor were on holiday so three weeks were lost) so it was with a grimace that I paid out over £7k in stamp duty – ouch!

With some time on my hands before I move in, I decided to get all the rooms redecorated/painted, new carpet, floor tiles and fitted wardrobes.

Getting people in to do all the work during such a busy period has been a right pain and the labour costs have not been cheap – I feel like I’m just bleeding cash and will be so glad when it’s all done.

I do have an actual moving in date set but still so much to do (and pay for) before that happens but at least things are moving forwards.

 

Board, not Bored

2020 was a bit of a blur – I think like many, I was just going through the everyday motions of life, doing what I should be doing (work), trying to “stay safe” and attempting to maintain my sanity.

At some point, my eyes must have glazed over from looking at my FIRE and investment spreadsheets too much (what else was there to do back then?) and I decided to make things a bit more visual (and interesting).

I set up a ‘Countdown to FIRE’ Trello board.

Trello is a free to use collaboration tool, generally used for projects – an online equivalent of a whiteboard with a load of sticky notes.

Snapshot

Anyway, I forgot all about it until recently so here’s the updated board in all its glory.

I’d never used one before (for work or other) so it’s pretty basic; I’ve just muddled my way through trying stuff and making the most of copy and paste but I think it might be useful for me to view my goals in a different way, instead of them being hidden away in various spreadsheets.

I use the term ‘useful’ loosely, it’s more a motivation tool, rather than anything which is helping me reach FIRE, or even measuring my progress in a meaningful way.

Interestingly, the goal ‘Buy a home?’ had originally been in the ‘Future Goals (3-5 years)’ section so as mentioned previously, it was always part of my overall plan – it was just brought forward unexpectedly.

Anyone else use Trello or other visual tools to track their progress to FIRE?

4 Years!

 

This month marks FOUR years since I started blogging about my journey to Financial Independence/Retiring Early!

Happy 4th birthday to Quietly Saving! 🙂

With so many new blogs springing up all the time and other blogs falling by the wayside, no longer being updated, I guess this must rank me amongst the ‘veterans’!?

Back Then

Although my first post on this blog was in April 2014, I had made a note of my finances in March – my starting or pre-FI plan numbers!

Here’s the comparison between my starting numbers and my most recent update:

  • March 2014 – Future Fund: £30,075
    March 2018 – Future Fund: £130,574
  • March 2014 – Net Worth: £74,595
    March 2018 – Net Worth: £219,974

The increases have been largely due to me saving hard so that new capital can be invested every month, although I have also been lucky with investment gains from the (mostly) favourable stock markets these past four years. I also reinvest any dividends and interest I receive.

I’ve aimed to save/invest as much of my net salary as possible (averaging around 40-45%), and also put away income generated from cashback, a bit of rental income, the odd bit of gambling, affiliate links and profits from matched betting. Any bonuses I’ve received from work have largely been invested too, plus as I found a job fairly quickly, I was able to save/invest the bulk of the redundancy pay I received in 2016.

I don’t practise extreme frugality – I just don’t spend a lot of money on stuff I deem unnecessary, but splash out on things I enjoy and which are important in my life, eg holidays, eating/drinking out with friends, my gym membership.

Blog Stats and Numbers?

This is where I could probably post some numbers to show how many visitors I’ve had over the years, page views, followers, subscribers etc.

Apart from the first few giddy months of me starting this blog, I have to say that I’m not really interested in such stats. Although my blog is monetised, it’s never been my intention to make any real money out of it so I’ve never felt the need to work at driving a load of traffic here. The bit of income that I do get from Google Ads barely covers the upkeep of my site but that’s enough for me. The bit of affiliate income I receive is detailed in my monthly updates and is lumped in with the rest of my investments.

Someone even contacted me recently to buy my blog (why??) but I wasn’t interested, not even to see what they were going to offer.

My only goal blog-wise has been to document my own progress on a semi-regular basis.

Top Finance Blogs

Some of you may have spotted that I re-added the Modest Money ‘Top Finance Blogs’ badge to my blog some months ago, after ‘losing’ it when I transferred from Blogger to WordPress.

When it was originally on my blog back in 2014, I had a rank of around #260 out of around 500 FI/PF blogs. My ranking has plummeted but the number of blogs is now around 1000, so I guess I’m still around the halfway mark.

I can’t say I’m actively trying to improve my rank, as I don’t have the time or inclination to sweat over analytics, SEO scores, Alexa Rankings or massing gazillions of Twitter followers.

But fair play and massive respect to those who do put in the hard effort and reap the rewards of a decent blog income – I personally just can’t be bothered with it.

As I draft this post, my rank is #596 so it’s probably gone down further by the time I publish this! How low can I go, haha?

For comparison, Monevator is the top UK blog, ranked at #40 (at the time of writing).

Thank You

A massive ‘Thank You’ to all fellow and non bloggers who take the time to read this little blog – I really appreciate your comments and emails.

Thank you very much for helping me keep my focus, keeping me motivated, giving me ideas and helping me stick to my plan!

I will also take this opportunity to give a shout out to the two blogs, Retirement Investing Today and diy investor UK, who between them, have provided nearly 12,000 referrals to my blog!  Cheers, chaps! 🙂

Also, thanks to FIREin’ London and theFIREstarter who have posted the most comments over the years – keep ’em coming!

Next Chapter

This time last year, I was unemployed (or practising living the FIRE life!) and I wrote that I would be entering a new chapter of my life.

The new chapter so far has turned out to be not too different from the old – I’ve settled into my job and am just getting my head down, getting on with my work. Next month, I will have been at my ‘new job’ for a year – I know! That’s bloody gone quick, hasn’t it?

Being settled means I can pretty much set things to ‘automatic pilot’ and continue with my plan for FIRE, barring any unforeseeable obstacles which life may throw at me in the meantime!

Onwards and upwards!

Hope everyone is enjoying the sunshine in the UK, while it lasts!

Spring is finally here, so no more scenes like this on the way to work!

Comparisons

Before embracing it, I very nearly dismissed the whole FIRE (Financial Independence/Retire Early) concept.

The idea had piqued my interest immediately but at first glance, it seemed as if I did not fit into ‘the same mould’ as everyone pursuing FI (or having reached FI).

I looked on in dismay as I compared myself with the entrepreneurs, consultants, engineers, bankers, IT specialists and other high earners who were able to tuck away not just the equivalent of my entire salary year on year, but in some cases, multiples of my salary, for their financial freedom and early retirement. My initial thought was, ‘Crap, I can’t do this, I don’t earn enough and I’m in the wrong sort of job!’

Then I compared ages and everyone seemed so young – people in their 20s and 30s aiming (and on track) to be FI and to ‘retire early’ by 40 or by their early 40s. I was already in my mid-40s by the time I came across MMM – crap, was it all too late for an ‘old girl’ like me? (although it’s a good job I don’t look or act old 🙂 )

Another thing was that it appeared that you needed to make huge sacrifices to become FI. I mean I am and was able to cut back on my spending but I couldn’t see myself taking the extreme route and being a frugal recluse, living a cheap but not very cheerful (in my opinion) life or living like a student again.

More importantly, I didn’t want to be seen as tight-fisted by friends and family. Yeah, I know I shouldn’t care what anyone thinks.  While I don’t mind being a bit different, I do care about what the people I care about think, especially if it may affect my relationships.

So, it would have been no surprise if I had gone about my merry way, thinking FIRE was a nice idea but not for me.

Except that I continued to read about it with an open mind. Why? Because despite my initial misgivings, the whole concept really fascinated me and I couldn’t stop thinking about it!

I ran some basic numbers (on the proverbial back of a fag packet) and it dawned on me that I didn’t need to earn megabucks (no, I don’t need £1 million!) or do exactly what someone else was doing or did – I could just take certain (good) ideas and apply them to my own situation.  Yep, personal finance being what it says on the tin!

FIRE  comparisons are like comparing these two

More Comparisons

However, despite embarking on my FIRE journey, I couldn’t help but continue to compare myself to others.

People whose net worths were waaay bigger than mine after a shorter space of time, people achieving astronomically high savings rates, effortless side hustles and blogs earning income to die for. Some had already reached FI, or they were only X years away and they were only in their 30s etc.

Such comparisons were at times a little disheartening until I eventually realised that it was just  pointless comparing myself to others.  The only comparison worth taking note of is that of comparing my own progress over time.

These days, I can now look at other people’s very high net worths and mega savings rates and admire them and applaud them, without feeling bad about my own attempts and performance.

To say that I never feel any envy would be to lie, but hey, I’m only human – I just don’t dwell on the envy or allow it to become negative, I just focus on what I’m doing myself. Everyone’s situation and circumstances are different, whether it’s their background, age, stage in their lives, different countries, different jobs etc.

Numbers

Not everyone likes to share their actual numbers but I made the decision to do so when I started this blog – I just know that some readers like to see real figures (to compare with their own, I suppose, haha!).

Until around nine years ago, my net worth was a negative number due to my numerous credit card debts. I eventually paid these debts off and by the time I started my FI journey in 2014, my net worth was £74,596.

As at the end of August, it stood at £205,509.

STOP! Try not to compare my net worth with your own – we are different! 🙂

I didn’t even notice that I’d passed the £200k milestone because by itself, it doesn’t actually mean anything, it’s just a number since I’m not using it in any of my calculations. However, it’s good to compare how far I’ve come since those negative days!

[EDIT – I see from some of the comments that I need to make a clarification – my £200k race with John K is with my Future Fund, not my Net Worth. My Future Fund currently stands at £125,946]

Do you compare yourself or your savings/investments progress and how does it make you feel?