Month-End: September 2022

It’s easier to bury bad news. So, by not posting this in over 4 weeks, I’ve avoided the painful reality of what I’m calling an Asset Assault!

Asset Assault

September has seen a massive hit on everyone’s net worth it seems. And that’s before you think about inflation nibbling away at your money.

What I am acutely aware of is that at some point in the near future, it will be the best time to invest – the low point after the fear, capitulation and despair – that’ll be the time to buy.

So, house prices might fall next year say Lloyd’s (whom I’m remortgaging to btw.) Lloyds bank predicts 8% fall in house prices as its profits tumble stock prices are falling at the moment – big stocks like the FAANGs of this world. Putting an end to their stunning growth.

When’s the right time to buy? I don’t know – and I don’t particularly have any spare money anyway.

Net Worth

Five figure drop in a month!!!

We are back to where we were a few months ago in net worth. That’s in pounds. Put it in dollars… ok – it makes much worse reading.
Spending is sort of high at about £4,500 for the month but that’s life it seems. Income is steady although I didn’t actually get paid in September (new contract company being terrible at fixing/paying invoices – a bit of a few flag). I did get paid in October though, so I’m not out.

Assets in listed shares performed very badly with 5 figure drops in pension assets and ISAs/shares.

My beer company shares also were hammered in a recent trading day. But that’s another story.

Burning the Children at Both Ends

Over the last few weeks’ we’ve had a few late nights over the weekend with friends – dinners that end up with drinks until midnight, with the kids going to bed late! The queen of England’s day off school and work for example led to us having late Friday, Saturday and Sunday.

It’s good to finally have both friends to spend time with and kids old enough to play nicely among themselves. However, it’s come at the price of them getting sick – probably from reduced immunity leading to viral infections.

We will need to be careful with it and the easiest solution may be to start drinking earlier in the day so that we are wrecked by the time the kids normally go to bed.

I had an old maxim of no drinking before 6pm – that might need to change to no drinking after 6pm until the kids go to bed.

Spending the Truss Fund



The new government seem to be intent on trashing the currency – I wrote about it here and things are only looking worse.

I’m sort of fortunate to have a lot of our money invested in global ETFs but things like my final salary pension, house, renewable investments are all in GBP and taking a hammering if valued in any other currency. They all have some protection against inflation in different ways – so I’m not too badly affected but it doesn’t feel good to be poorer in both real terms and in EUR/USD or any other major currency.

Remortgaging

One of the lies that we tell ourselves is that having a positive net worth means no debts or no debts to worry about. I’m guilty of this as much as anyone and since my 5 year fixed rate deal comes to an end at the end of the year, I’ve been busy trying to improve the shape of our family finances to get a good deal.

Credit checks don’t give a toss if you have enough in assets to cover your debts (as I do), but if you are foolish enough to stooze – you may end up getting a terrible credit rating and refused a mortgage.

All that means is that you end up paying more money to borrow which is a rather obvious thing to want to avoid.

I’ve paid off my stoozing debts but am anxious that the rate I want (3.69% for a 5 year fix) will be gone in the next week (I can remortgage come September 1st). Our £125,000 mortgage is comparatively small but each 0.5% increase means an extra £50 a month or so. The interest will already be an extra £200 a month in interest that drains our finances – I don’t want to pay much more.

So, wish me luck in getting a good rate because the way things are looking, interest rates might be back up to a level that they’ve not been at for almost a generation.

Turning on the Heat

After a bit of analysis of our energy consumption over the almost 7 years we’ve lived in our house, I’ve got a good idea of how much energy we use and I’m trying to reduce consumption for selfish (£££) and environmental reasons (CO2eq.) as well as political reasons (f**K Putin).

That’s all well and good until it starts to get cold, and you want to turn on the heat. I’m going to try to not turn on the heat until we are back from the mid-term holidays we’ve booked. But it won’t be easy to keep the easy of this Gentleman’s Family happy – since they appear to be cold blooded.

In my favour, our consumption year to date is about 3,000 kWh or almost 25% less than the lowest ever year. Our annual consumption of gas is about 3,000 kWh for water and another 17,000 to 27,000 kWh for heating. It goes to show that cutting my shower time by 2 minutes a day might cut our water heating bill by 10% but that’s 1% of total usage. Better to focus on reducing heating use – but too cold a house boils the Lady’s blood, so it’s a balancing act.

I Gave In

Just before the end of the month, I gave in and turned on the heat for the sake of the kids and family harmony. I think that since our downstairs neighbour is away for the week, we’ve lost our underfloor heating.

But with the weather to get a bit warmer in the days ahead, we might have the heat off again for a bit longer.

Read more later this week with more news about remortgaging madness, family harmony and a falling net worth.

Thanks, GFF.

5 Comments

  1. Being on the receiving end of a significant loss is painful, even if it’s a “paper loss”. Since the start of the year my net worth has probably taken a 6 figure hit but it’s difficult to fully quantify.

    However, I’ll try not to think about it too much as there’s little I can do in the short term to influence the situation. I’ll keep shoving as much as possible into my pension and optimise my tax position wherever possible. If I didn’t shove everything into my pension I’d see an immediate loss of at least 33.5% if I took the income as cash instead.

    I’ve loaded up on 0% stoozing debt that should deliver approximately 2k a year after tax. Curiously I haven’t trashed my credit rating too much despite technically being high 5 figures in credit card debt.

    All my finances are now in place including my mortgage expiration date extension so hopefully it’s a return to the dull journey of hopefully getting richer slowly.

    Liked by 1 person

    1. I’m not really concerned with stock prices these days – but if saving is like slowly climbing up hill, then at some point the rollercoaster ride begins.

      I managed to pass the credit rating checks and all that.
      Oddly, they didn’t take my £40,000 SIPP contribution as proof of income and didn’t count dividends as income either – totally blind imo but they are just following the rules.

      I might stooze again once I am in the clear. At 4.45%, it starts to become worth it.
      But making £2k a year would require £45k in debt – an impressive figure if you are around that level!

      Like

  2. 100k in available credit card “debt” and approximately 50k actually used. Of course, being a good FI person all the used “debt” is simply sitting in other accounts earning interest and has not been exchanged for shiny stuff.

    No real fees involved in accruing that level either due to using one card with a decent limit for a 0 fee cash / money transfer and then on the same day executing a matching 0% and 0 fee balance transfer from another card provider. The money transfer would attract interest if the matching balance transfer doesn’t hit on the same day but that’s rarely happened.

    To be honest getting to that level was more of an exercise in what was possible.

    Explaining it at my mortgage review was also a little “interesting”.

    It’s also “fun” taking money from one financial institution and potentially loaning it back to them for them to pay me interest on it.

    Of course you have to be organised and at least meet the minimum payment each month.

    Liked by 1 person

      1. Absolutely correct but true. As long as the matching balance transfer hits the same day as the cash / money transfer is taken out. If the matching transfer is delayed there will be a small amount of interest to pay.

        It gets even better if you get some Topcashback, Quidco or other associated freebie for taking out the cards too.

        Don’t miss the minimum payment, don’t use the cards for additional purchases and don’t spend the “money”. Don’t tie the free money up in an account that exceeds the 0% balance transfer period. Also remember to fully pay off the balance at the end of the promotional period or flip it to another 0% card if there are any and you qualify.

        Technically easy to do but you need to be organised to avoid any “issues”.

        Like

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