October 2016

I have been busy out and about and therefore not spending the time writing posts. This time last year I wasn’t working, I was on a break and although I was looking for work I was also taking the time out to relax and get my mind back into some kind of balanced sense. I was posting regularly and doing some reading to relax the mind.

I have just returned from a short break in Birmingham, going to a concert and just chilling out – almost literally with the chilly winds blowing around the city centre streets. Its nice to get the train and have a drink or two in some real ale pubs and watch the world of consumerism whirl by. The christmas retail spin is beginning. Not sure I like the new New Street rail station. The big open plaza is good but the dark rat run platforms and limited exit points only make me feel hemmed in and if there was ever an emergency down there – I just don’t know how people would get out? I was in a big queue trying to get off a platform because only one escalator was working and the signage is rubbish – one guy said he was on his third attempt to get off the platform.

The previous weekend was also a short break, this time to Anglesey. Somewhere I have only visited once to see LanfairPG. That must have been more than 10 years ago when I was on holiday with an old friend and their children. To go and actually circuit the island and see the sites was great. All on the back of a motorbike, my first tour out on a motorbike, one of hopefully many in the future.

Ok, these trips sound like I am spending my money and not focusing on FI but I am doing these trips on a budget and its been great. All the places visited on Anglesey were free entry and some took some finding as they are off the beaten-track and not well sign posted. A good research session before hand and a well marked map made the trip enjoyable.

I also visited Caernarfon Castle to see the ‘weeping window’ – entry was free too! So a great visit and seeing the spectacular installation and walk the walls was a real treat. The weather was on form too – so a wonderful bike trip through the Lanberis pass, with a good view of blue skies,mirror like lakes and Snowdon.

Beats being in an office with no windows!

On the finance front for October, I am recovering from my jury service – I have claimed back all the expenses and allowances permitted and was down by about £400 for the month. So last month’s FI savings took a bit of a dent. This month I have done well on the savings front but my overall net worth is taking a pounding. The turbulent market has knocked the stuffing out of my investments and I am now running at 2% down on last year but up on last month. Even though I am investing monthly in index trackers and ETFs I am down on the value last year. So as I plough money in, it seems to just trickle away. I am hoping the indexes will rise at some point and my individual shares holdings roll around but are still under their levels from last year. Ok, I am buying more units for my money but they rollercoster around each week.

I just need to remember that the investments are long-term and just keep saving, my pension pots seem to be growing quite nicely so I just need to keep my head down, keep saving while I am working and wait for the markets to pick up after the political rumblings have died down – Brexit and US elections. Brexit will have an effect on my employer and could result in big changes if the UK does not have an EU trade deal.

With two redundancies under my belt, I really cannot rule out another just because that now seems to be the way of my working life. I have reached that stage when redundancy is likely and job security is low. I want a buffer to make sure I can feel financially secure if I lose my job again.

 

 

 

 

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April 2016 – Update

The start of a new tax year and the changes are starting to show. My savings account interest is now being paid gross.  I have also noticed the changes to my investment accounts starting to take effect. I now have to pay a service fee for my accounts both my ISA and share accounts. I will not be able to tell until the end of this year how this change has affected their growth.

One thing that is getting annoying is the downward trend on my investment and share accounts. My net worth has crashed by 9% compared with this time last year and it is going downwards by the day regardless of my investment activity; it feels like I am just putting the money down a drain. I do keep investing but the downward trend is off putting and makes you waver in your view that investing is a good idea. Since January, I have seen my net worth drop every month even though I am saving and reducing my expenses. It becomes demoralising and I just need to keep going and ignore the nagging voice that wonders why I am doing this. I feel like I am treading water but still slowly sinking.

I just need to keep going, earning the salary and keep focused on the future. My pension pot is growing well due to the employer contributions and I have a salary now to save. I am glad I took my work break last year as I had a reasonable passive income to use.

The traumas in my working world continues 🙂 . I am not stressed like I was in my last job but I don’t like the office politics in the new one. Under instruction of my boss, I have to ‘play the game’ with the senior managers and selectively tell them things. While the boss does some ‘office politics’ to keep things ticking over in the background. There is a strange environment there and now that they have been bought by another company, the ‘parent’ is starting to arrive and probe their workings. I hope this doesn’t go the same way as a previous job but I cannot foretell how it will pan out for these guys. Changes are a-foot and they do need to change or they will not prosper over the long term. It feels like this new job has provided me with some kind of ‘poison chalice’ role. I could have refused the job but I would have continued to struggle finding any kind of local work and getting a salary is better than none as I need to improve my net worth as I am not free from the shackles yet. I just need to keep my head down, work and collect the salary.

Let’s see how next month affects my net worth figures.

The rise of service charges

I received a letter the other day to say that my bank share service is now going to charge an annual fee. It seems that they cannot offer the service for free any more (you just paid a flat transaction fee) and they will be charging an account fee from next year – which surprisingly enough is in line with the other investment and share platforms fees that have been announced.

So that now means I will be paying about £130 annually in service charges. I could move to one platform  to cut costs,  but I am always skeptical of having all my eggs in one basket. I do wonder about the risks if anything goes wrong with them so I like to spread the risk across different companies, they don’t have the same financial compensation support that savings accounts have.

It is still unclear to me what the change in fees will have on my investment accounts as I have quite a few funds that are being converted. Looking at the historic returns they have been good even with the charges hidden within (7%+ pa), the new funds are not so good (4%+ pa) + charges to pay? I will need to review them and look to move to other funds once things have settled.

To add to this I have had more news:

My credit card company is now changing its interest rate rules. Instead of it being fixed and easy to work out what you interest would be (not that I use that facility, I pay off any balance on my card in full each month) it will be changing to become variable from next year. It will now be linked to the BOE interest rate and will move up and down with this when it changes on a monthly basis. Luckily, the rate has been static for ages but it appears that the credit card company are expecting this to change next year so are changing the rules now in anticipation of future rises.

I wonder how many other companies will start doing this too?

Inner strength – lessons to learn from volatility

With all this uncertainty in the stock market it can be very unsettling and tests even the most hardened investor. My mailbox is being bombarded by messages from investment blogs/companies – saying “it is a buying opportunity”, “is this the time to sell XXX”, “Should you sell now and get out of the market”, “what to buy while the stock markets are low”, “sell X now and buy Y”, etc….

They are out to make their money whatever the state of the market. There are a few things that seem clear, volatility is normal and to be expected. We need to understand this and not emotionally react to the sea of red when stocks drop. It is a hard lesson to learn: how to relax, keep your head and understand where your risk thresholds are.

As someone who is drawing on my FI pot at the moment, seeing its value drop below the “enough” marker is unsettling. If you are someone who is still earning and on your FI path, you see this as an opportunity to buy and invest in stocks at a lower price and if all goes well, ride the increase in value over the long term.

You start to view your stock portfolio carefully and scrutinize the shares – “Have I picked the right companies?”, ” Do I have the right balance?”, “Am I feeling worried and disturbed by the loss in value?”. “Should I cut my losses?”.

Maybe its time to re-evaluate your risk profile first. Are you prepared to ride out the storms and accept the risk? The biggest risk is your emotional self. It is the hardest part of this path and in life, making a decision and accepting the risks and understanding the consequences. It applies to all part of your life, all the choices you do or don’t make. Only you are responsible for the decision you make. You cannot blame and sue others for your mistakes – well you can try and plenty in the US do. Ultimately decisions are down to you.

If you panic, you could possibly be in a worse position than if you carefully considered your options and take your time. A rash decision could take its toll and you could look back later and wonder why you did it. You need to learn from this and understand yourself and what you are happy to accept as the outcome.

Look at your contingencies, if you haven’t got any, then look at creating some. Evaluate your risks and options to cover them. What does volatility mean to you? What would it mean financially? What would stop you thinking this way? Do you need a cash pot / bonds / stable stocks that are not affected by the current volatility?

Start that personal profile review, identify the risks and what you need to do to mitigate them.

Investment rollercoaster

I was hoping the stock markets would settle a bit but they still seem to be running a rollercoaster ride. I have sat back and let them waver and have not invested any of my share sale amounts into the companies I am watching as their prices are fluctuating wildly from day to day. I do want to pick some more shares up at a good price though.

I have managed to buy a few shares with cash sitting in my share ISA. I bought a few Sage shares to top up the holding in there and currently these have increased in value since my purchase. I would like to buy some but I will have to wait a few months until the next dividend payments are due for this ISA account. Having the cash invested now will hopefully pay off in the long-term. Sage was one of my original dividend selections and it hasnt performed too badly over the years.

I guess the investment offices are just beginning to fill with workers now that the summer holiday is over and the kids are back at school. Sitting on that beach watching the stocks has now been swapped for the office environment. I hope that some stability and level-headed control can be implemented to calm the markets.