Our little investors

After 36 years, I realised the importance of understanding money. Financial literacy is massively important.

This led to an obsession to get my house in order. My personal finance skills were embarrassing. Reading over 100 books in 2 years, things have improved. My financial literacy is improving everyday.

Reading books like Rich Dad Poor Dad (Robert Kiyosaki) has helped me understand money. It has helped me to fully understand assets, liabilities, income and expenses.

Kiyosaki and other notable personalities have a lot to say about the education system. This is based at America, but it is safe to say that the UK falls into this bracket. Among other issues, our kids are not taught how to manage money. Financial literacy was definitely not taught at St Peter’s in the late 90s.

This has to change. We have to go out and learn about money for ourselves. There are many ways to do this. Once you start focusing on financial literacy, you will find a way. Trust me. From someone who was terrible with personal finance, I have managed to improve my understanding.

If you understand money and are good with personal finances, you can spread the word: https://duffmoney.com/2020/09/18/spread-the-word/

We can teach our kids about money and encourage them to be little investors. From my personal experience, this is harder than it sounds.

Trying to teach the kids

Notice the sub-title – trying to teach the kids. One thing this horrendous pandemic has done, is give me a new appreciation for school teachers.

I do agree with the fact that the education system needs to change. Especially when it comes to learning about money. But that has nothing to do with teachers as they are given a syllabus to teach with.

During the 1st lockdown I was away in Oman for 12 weeks and Mrs Duffy had to work at home. She also had to do home schooling. Not only that, but she had me reminding her from Oman the importance of our kids’ education

When I got home, I realised how hard it was to home school. And I didn’t have any work on at the same time. This made me realise that my teaching skills were poor.

As well as home schooling, I have also been trying to teach our kids about money over the last 12 months: https://duffmoney.com/2020/05/22/what-to-teach-the-kids/

Inspired by Kiyosaki, I started to play Monopoly with the kids. I even made it part of their school day. My target was 1 game per week and that would turn them into little investors. Just to be transparent, we managed 2 games back in May 2020. They were just not interested. My kids were not feeling Monopoly and this little money lesson was a failure.

I tried a few things. Like the YouTube video I made them watch about concentration (Dandapani). Again, they weren’t too fussed. One of the kids even kicked a drink over as she was fidgeting. Disaster and not how I saw it playing out.

But I will find a way to turn them into investors. I have even set them up with Junior ISA’s. They both have Vanguard 100% share index funds. If you want to set up a Junior ISA, do some research. Don’t settle for the less than 1% you are guaranteed with the high street banks.

Trying to teach the kids … about compounding

99% of Warren Buffet’s net worth came after his 50th birthday; 97% came after he turned 65. This demonstrates the importance of time and the importance of compounding: collaborativefund.com/blog.

This demonstrates what compounding can do for your investing. If you can learn about compounding and teach your kids, you’re a better teacher than me.

My intention is to encourage my two kids to use their ISA and continue to invest: https://duffmoney.com/2020/02/14/long-term-investors/

If they become long-term investors, I am convinced they will have no money issues in their 30s and 40s. To change their mindset, I have a long way to go. To be fair to them, they are currently 12 and 9. I try and keep my money lessons to a minimum.

First-ever financial textbook

This leads me to the first-ever financial textbook introduced in UK schools.

Your Money Matters written by Martin Lewis was first released back in November 2018: https://www.moneysavingexpert.com/news/2020/07/martin-lewis-financial-education-textbook-rolled-out-to-700-scho/

This project initially cost £368,000 and was split between Martin Lewis and The Money and Pensions Service. It is a brilliant idea and the fact that the writer of the book is paying for the distribution to schools is awesome!

See below for a look at the chapters:

  1. Savings– ways to save, interest, money and mental health
  2. Making the most of your money – budgeting, keeping track of your budget, ways to pay, value for money, spending
  3. Borrowing – debt, APR, borrowing products, unmanageable debt
  4. After school, the world of work  student finance, apprenticeships, earnings, tax, pensions, benefits
  5. Risk and reward – investments, gambling, insurance
  6. Security and fraud – identify theft, online fraud, money mules

Just looking at the content I am certain that this will help kids in the UK turn into little investors. Guess what the Duffy girls will be reading.

From reading some of the reviews, it is mainly aimed at 14-16 year olds. I will maybe give them a few years before I start nudging them towards Your Money Matters.  

If you have had stress or anxiety over money like me, look at helping your kids with a bit of knowledge. That’s if you have kids that is. If not, learn about money and tell people who have got kids how important financial literacy is.

Book of the week:

Rich Dad, Poor Dad, by Robert Kiyosaki. This is a brilliant book to improve your financial literacy. If kids in the UK read this book in secondary school, I feel it would have a massively positive impact on their lives.

For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk/

The minerals to leave your 9 to 5

Having the courage to leave your 9-5 takes some serious minerals. Minerals I have yet to discover as I continue with my means to an end job. Following your dreams is possible though.

On a positive note, I do know exactly what I will be doing when I finally leave my means to an end. I will become a full-time property investor.

If I manage to follow my dream over the next few years, readers of https://duffmoney.com/ will be the 1st to know. Not to gloat or to say, ‘I’ve done this’ or ‘I have done that.’ It is to help people realise that anything is possible.

When you hear what other people have achieved it can inspire you and motivate you. That is what happens to me anyway.

Like the 9 PIN (Property Investor Network) meetings I’ve been to on zoom so far in 2021 – https://propertyinvestorsnetwork.co.uk/ There have been a lot of case studies of success stories. People who have done MM (Master mind training) with Simon Zutshi and are smashing it in property.

Anyway, I have an example of someone who is smashing it and she is not involved in property. This lady is my sister, and I am very proud of what she has achieved so far. I am proud to say that she has had the minerals to leave her means to and end and follow her dreams.

Imagined Things

Although Georgia worked hard to get to become a Radiographer, it was never for her. She got the degree and secured a job no doubt earning good money. But that wasn’t the dream!

The dream was to write books and one day open her own bookshop.

This led to Imagined Things in July 2017. Imagined Things is an Independent bookshop in Harrogate.

Imagined things is a beautiful bookshop located in Westminister Arcade, Harrogate. It is just down from Betty’s Tea rooms. When things get back to normal, you can get yourself a cup of tea at Betty’s and head down to Imagined Things Bookstore.

If you are ever in Harrogate (when normality returns), visit this unique bookshop. You won’t be disappointed!!

You can also order online by visiting the Imagined Things website: https://imaginedthings.co.uk/

Not only can you order your books online, but you can also read all about Georgia’s amazing journey so far. Including a viral tweet that made a massive difference to Georgia and her awesome bookshop. She is an inspiration for anyone thinking about leaving their 9-5 job.

Book of the week:

Feel the fear and do it anyway, by Susan Jeffers. Personally, I have always had a fear of failure. This book will give you some insights and tools to massively improve how you tackle your fears.

For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk/

Set and forget investing

Set and forget

Set and forget with index investing

After many years of investment mistakes, I finally realised that set and forget is the strategy that suits me.

Spend less than you earn and invest the rest. This requires some serious discipline and budgeting skills.

Budgeting allows you to do some financial planning. You might have a loan that is preventing you from investing into an ISA or SIPP.

Let us imagine you have 2 cars. ‘What if you could manage with 1 car and bike to work, instead?’ By selling the car you don’t need, you could pay off the loan.

Now you have no loan repayments, and you are saving on fuel, insurance and car tax. This could mean you are able to put £300 pcm into an ISA or SIPP.

There are no guarantees in stocks and shares. I have read over 100 books in 2 years and many books on index investing. I am convinced that you can earn 7% interest per year with index investing. If you are still on the fence, I totally get it. I just want to raise your awareness. There are more options than settling for less than 1% in a high street bank.

The following example will use a low-cost index fund and I will call it retire at 57. Let’s assume that John (our imaginary investor) manages to average 7% interest per year over the next 27 years. Remember, there are no guarantees in the stock market.

Let’s say that John is a 30-year-old who has an effective budget. He has decided to manage with 1 car and now has £300pcm to invest. He is going to invest in the retire at 57 low-cost index fund and will invest for 27 years.

Now, because of John’s tight ass budget, he has been able to invest in a pension fund when previously he had no pension. With a little financial literacy, he was also capable of choosing his low-cost index fund (John is like me and favour’s Vanguard due to their low costs and their proven track record).

So, here’s what a little hard work can do for you … At 57, John has a SIPP that has a value of £268,141. He was on a path towards no pension that would have affected him and his family in his late 50s.

(Note – to work out what you can earn you can google compound interest and add your projected figures. Or you can get a compound interest app for your smartphone)

Now all of a sudden, he is happy in his late 50s because of some intelligent investing decisions he made as a 30-year-old.

To do this, John had to develop his money mindset along the way. He had to become comfortable with delayed gratification. 

More ways to save

When you start looking into your bank statement and start to focus on your expenses, it’s likely you will find out many ways to save each month.

Your TV subscriptions is a good place to start. My sky bill had crept up to £140 pcm without me realising it. With my blasé attitude to personal finance, I assumed it was about £100 pcm.

What was even worse was my BT subscription. The BT I barely even watched. After having BT for about 3 years, I had probably watched 5 Premier League games and 3 UFC fight nights.

The BT was only £10 pcm or at least I thought it was. When I actually looked through my bank statements, the real cost was £30 pcm.

I decided to remove BT Sport. I also removed the sport from my Sky and looked at what else Sky could offer me. The Sky bill was reduced to £84 pcm so with my new Sky bill and with BT removed, I had made a total saving of £86 pcm.

There are other ways of reducing your expenses like looking at old gym memberships you are still paying despite not having went for the last few years. Or you could reduce the takeaways each month or how many times a month you go out for food.

For some extra help with your budgeting, read the excellent book RESET: https://duffmoney.com/2020/11/05/reset-your-personal-finances/

Let’s look at John if he made budget adjustments similar to mine. He now bikes to work so he is healthier and £300 pcm better off. Not only that, but he has also shaved off £86 pcm from his TV subscriptions and another £114 by eating out less and reducing the takeaways he and his family have each month.

With his healthier lifestyle, he also has the added bonus of £500 pcm to invest in his new retire at 57 low-cost index fund.

Here’s a summary of how he is going to invest:

  • As a 30-year-old, he is going to invest for 27 years (as this is his retirement target)
  • He will invest every month and is now able to invest £500 pcm in his fund
  • The fund he chooses is a low-cost index fund and because he is now financially literate, he is confident of achieving 7% interest per year
  • With his new wealth mindset, he is comfortable with delayed gratification and is happy with his retirement plans

With the new £500 pcm investment, he is going to massively increase his pension pot. The pot has now increased to £446,902.

If we look at the contributions, John has invested £162,000 in 27 years. The £284,902 profit is because of the 7% interest that has accumulated over time. This reiterates the effect of compound interest.

From gaining his wealth mindset, John went on to get some much-needed financial literacy. With his goals, he was clear about when he wanted to retire, and this motivated him to get his budget in place at the age of 30.

This £446,902 might not enable him to retire with his current lifestyle but it is better than no pension pot at all. It gives him options.

He could buy 10 rental properties at £100,000 each. With today’s conditions, he would need £250,000 (£25,000 deposit x10). This leaves £196,902 as a backup or holiday fund and gives him security.

With his property knowledge he has acquired over the years, he is confident he can make £200 pcm off each property after all expenses. This is his new pension of £24,000 per year for the rest of his life.

You might think differently and want to use the £446,902 in a way that suits you. I am just using this as an example and illustrating the benefits of having a budget in place as early as possible.

Book of the week

Most of my blogs recently have been about mindset. It is January and many people normally struggle in this depressing month of Mondays. COVID just brings more misery! A book I am going to recommend might help you out and lift your spirits. BE WATER, MY FRIEND – is beautifully written by Shannon Lee. It covers some of Bruce Lee’s teaching’s and is all about mindset, being like water and being able to adapt to whatever life throws your way.

For a hard copy visit my sister’s excellent bookshop online: https://imaginedthings.co.uk/

Picture: https://thecollegeinvestor.com/17810/investing-in-your-30s/

 

 

 

Don’t say anything negative for 30 days

‘Negativity affects you negatively, 100% of the time’ – Trevor Moawad, It takes what it takes

Over the last few years, I have realised the importance of a positive mindset. It is hard, trust me I know as I have been very negative in the past. It is very hard during a pandemic as many people are struggling for a variety of reasons.

This week I am going to invite you to join me in a little challenge. You don’t say anything negative for 30 days.

The challenge

The aim is to remain positive as much as possible during this 30-day period. You are ok to think negative thoughts, but not say them!

You find yourself moaning about someone in the office on day 3, you go back to day 1. You start bitching about someone you don’t like on day 8, straight back to day 1.

The first time I heard this challenge, was an old video from Earl Nightingale: https://www.youtube.com/watch?v=NbBHR_CD56M

This video (The Strangest Secret) was discussing the law of attraction. So, if you are negative, you attract negative. But, on the other hand, if you can manage to be positive, you attract positive.

The main theme of The Strangest Secret is covered with the following points:
1) You will become what you think about
2) Use your imagination and let your mind soar
3) Use courage to think about your goals from all possible angles
4) Save 10% of your income
5) Action – ideas are worthless without action

I have heard this challenge a few times over the last few years – like listening to an audible from Kevin Hart: https://duffmoney.com/2020/10/29/make-the-decision-to-become-positive/

I have even made a few attempts at this challenge but have failed miserably. I had 10 years of being very negative mainly about work and money and it is hard to reverse. It would get to day 3 or 4 and I would say something negative.

Giving it another go

On January 1st, 2021 I decided to give this another go. A few days in and I haven’t said anything negative. But I have been here before!

An example of saying negative

The effects of being negative can be really bad. Have you ever had one of those days when nothing goes right? I have had my fair share and you end up saying things like, ‘Why me’? The more you get down about it, the more s*** happens!

Trevor Moawad talks about the effects of talking negative in his excellent book, It takes what it takes. He really drives home the importance of not talking negatively. He is a famous mindset coach (American) and has coached many top athletes like Russel Wilson so knows what he’s talking about!

As I have been trying to be more positive, I have been trying to stress the importance of it to Mrs Duffy. Up until late 2019, she thought that I was talking nonsense.

That was until our youngest daughter had an accident. At the time, both our girls were going roller skating on a Friday night at the local leisure centre. I must admit that our youngest is accident prone …

Early December 2019, Mrs Duffy started telling one of the other parents exactly that as they started skating. She told the parent how anxious she was and how our daughter was always the one getting hurt. How roller skating was dangerous and that our daughter would probably break her arm …

5 minutes in and our youngest daughter broke her arm! This shows how talking negatively can have a negative effect on you. Now it might sound a little bit out there but just try not saying something like this out loud.

And if you have any doubts, look into Trevor Moawad and some of his strategies on improving mindset.

To have any chance of completing this challenge, you might want to ignore the news. I get that we need to be at least aware of current affairs. Just try and limit how much news you watch because it is mainly negative.

Picture: https://www.pinterest.co.uk/pin/388365167851186731/

Learn the hard way, teach the easy way

FI Money

Book background

This week’s blog focuses on my book. It is a little insight into what the book is about: For your copy, visit Amazon: https://www.amazon.co.uk/dp/B08RP6GQ2K

With too much time on my hands when working in Tunisia (2019), I wrote my 1st book. Or my 1st attempt should I say. This was 84,000 words and took me around 6 weeks.

I soon realised it was very poor. After writing my blog for another 12 months, I felt ready to give it another go.

Using some of the material from the 1st attempt, my 2nd attempt was reduced to 55,000 words. All I can guarantee is it is an improvement. This took another 4 weeks. Then another 4 weeks of working with an editor I found on Upwork – Eluned Murphy (highly recommended).

I was unable to go down the traditional publishing route, so I have decided to go down the self-publishing route. This is a risk and has cost almost £2000.

Financial awareness

Like the DUFFMONEY blog, the book is designed to raise financial awareness.

I have uploaded the book onto Amazon (Kindle) and am getting kbook promotions to market it in mid-January: https://www.kbookpromotions.com/

Book blurb

The book description can be found below:

It is very easy to become worried about your personal finances. If this sounds familiar, it is time to change. It is time to take control of your money and your life with this unique guide.

Money is massively important. It is a tool that enables you to live life on your terms. It gives you the ability to look after yourself, and most importantly the people you love.

With this book, your personal finance knowledge will go from strength to strength. It will help you to spend less than you earn, giving you the freedom to invest the rest.

Learn the hard way, teach the easy way offers the following steps:

  • How to understand your relationship with money
  • Learn from your money mistakes
  • Better still, learn from the author’s mistakes
  • Build mental strength that will guide you in the inevitable bumps in the road
  • Become financially literate
  • Take control of your finances and start heading towards FI (financial independence)

This book cares about your financial future. It shows you how to start heading in the right financial direction with clarity and purpose.