Still shit at getting my point across

This week I have been working in the desert in Southern Tunisia. I am located in a military zone 30km away from Libya and roughly the same from Algeria. Not the nicest sandwich I have been involved in!

If I can take anything from 2019, it is the fact that I will literally go anywhere to get my house in order financially. As usual, I have been reading my books and have been trying to improve my financial literacy.

Although the location isn’t the best, the food is horrendous and I am in a fucking desert in the run up to Christmas, the lads are all sound and this is making the job that much more bearable.

One of the Tiffy’s was talking to me in the cabin (our little hideout for coffee and to look busy) about stocks and shares. Like me he is splitting his investments between his ISA and his SIPP. And like me, is investing roughly £1000 a month.

We get on to single shares, and as usual, we talk about Sirius Minerals. After being burned in the past, we both have the view that single shares are not the way to go. That being said, at 3p a share (Sirius Minerals) my inner gambler is screaming at me to add £1000 to the £500 I put in during the summer. For now, I am remaining disciplined and sticking with my Life Strategy 80/20 fund.

The following day the Tiffy is back up the road to Tunis on his way home for Christmas. I am now talking stocks and shares again with the 3 electrical lads I am working with. Only this time, they seem to prefer the single share option.

We exchange a few stories about money we have lost on single shares (and pretty much anything we touch) and it is clear that we have all been guilty of gambling our money away.

I try and explain about having a fund in an ISA or a SIPP. I even show them my compound interest calculator and go into how much they can make with a few hundred a month. They will get 7-8% if they think long term. It even sounds boring to me but fuck it, I have definitely had my fill of gambling my money away.

The other three have a different view and are not buying into my monotone attempt at getting them to invest for the long term.

One of them is going to invest £1000 a month into Sirius while he is on this current job. The other is looking at getting a loan to pay his tax bill as he had too many ‘class A’ drugs this year and wasn’t really watching his spending. And the other didn’t really get involved with the money talk and was more interested in stories about shagging and taking too many ‘class A’ drugs.

We are all different. They are sat thinking that I am an absolute bore who needs to let his hair down. And I am sat thinking I am pissing against the wind talking to these party animals about investments. To be fair, the stories coming from them were class and we had a good laugh.

It is ok to learn about money and even to teach other people what you know. What I don’t want to do is ram my opinion down anyone’s throat. If someone wants to get into investing I will help with the little financial knowledge I have. I will go over the basics and get them thinking about the long term and how it has the potential to make a massive difference a few years down the line.

Although my inner gambler maybe wants another little dabble with single shares, I am staying strong and am quite happy with my set and forget strategy.

When the costs remove the profits

Very recently I almost made another financial mistake in the form of rental no.5. This time, with a little help from Mrs Duffy and my Financial advisor, I managed to avoid the mistake and was fully aware of all costs before moving forward with the purchase.

Over the last few months, I have been patiently waiting for funds from rental no.4 and the money would be used for my deposit for my next rental.

After 3 months of form filling, and document sending, I finally got rental no. 4 re-mortgaged and the funds were transferred over to my current account. Boom, I was ready to go.

With over 40 books read this year (maybe 20 on property), what seemed like 100s of visits to rightmove and purplebricks and a couple of property seminars, I was up to speed with all things property, or at least I thought.

Now I knew exactly how to work out the ROI of each investment (see my blog ‘Property Crash Course’ for further info), I was even aware of the % my deposit would earn each year. The houses that I was viewing would get me 15-20% ROI, if any of the offers were accepted.

If I had the money in October, I would have potentially bought a property from an auction for around £35k but shit happens and I missed out. This made me a little more open to auctions and I found an apartment in Huddersfield for £70k.

It was time to do my research or due diligence if you speak to anyone in the property world. I found out it was bought for £140k around 10 years before. The rent would be £650 pcm and the demand was high according to x2 local estate agents. The Apartment building overlooked a river and was close to the town center and had very good transport links nearby. Not to mention the fact the town had a decent sized University.

If I could agree a price of £65k my ROI would be 20% and I would make over £250 pcm in profit after all other costs were taken into account. After a couple of low bids and speaking to the on-line auction team (via purple bricks), I was informed the vendor would accept £66k. Jackpot!

Before finalizing the deal, I went to the boss to get the ok. As soon as I mentioned apartment, Mrs Duffy asked me about all the charges involved. This got alarm bells ringing and I knew I hadn’t factored everything in. The next day, my FA told me I needed to double check the ground rent and service fees.

So I went back to the auction team and asked for info on all fees associated with the apartment building. They told me that combined it would be £2200 per year or £183 pcm. Putting this into my calculations meant the profit was down to around £75 pcm. Not what I am hoping to achieve for rental no.5.

The lesson is to make sure you do your research on what it is your buying. Although, I have no previous experience of flats or apartments, it is no excuse and wouldn’t have helped me if the deal had gone through. Another lesson (if you’re a man) is to discuss big investments with your wife. I am a firm believer that 2 heads are better than 1!