DUFF Properties and the prospect of rising interest rates

After reading How to own the world, by Andrew Craig, I’ve been reading Moneyweek for the last few years. One of the constants each week, is that inflation is coming. Whether you believe that to be true or not, it is worth doing some research on the subject.

The Great Financial crisis of 2008, led to QE (quantitative easing). Basically, the likes of the US and the UK printing shit loads of cash. And if you believe what many experts are saying (like experts in MW), this will lead to inflation.

Inflation is basically the decline of purchasing power of a certain currency over time. With rising inflation our pound (here in the UK) is getting weaker.

QE causes inflation because an increase in supply, weakens the value of currency. With this, QE reduces the purchasing power of the pound in the UK. If you look at Bitcoin, the supply is limited to 21 million. This is a reason why many believe the value will increase significantly in the future.

The price of bread also contributes to inflation. If the cost of goods increases (e.g. bread), this again reduces purchasing power of our pound.

Going back to How to own the world, you will learn all about interest rates and inflation. For example, if you earn 2% in your savings for a given year, the inflation rate might be 3%. This mean your real interest on your savings is -1%. Trust me, interest rates and inflation is worth understanding.

What does rising interest rates mean for your properties?

With rising inflation, interest rates tend to rise as they are linked. What if these interest rates went back to the early 90s. In 1992, the interest rates were at about 10%. Imagine your mortgage payments if the interest rate jumped to 10%. This would cause serious pain for property investors who chose a variable mortgage product. Hopefully, this won’t happen, but it is worth doing some research into your mortgage products and the impact of potential inflation.

The current Bank of England base rate is 0.1%. And mortgage products are linked to the Bank of England base rate. According to WHICH, this figure was at 5% before the 2008 financial crisis. Hopefully, this won’t happen, but it is worth doing some research into your mortgage products and the impact of potential inflation.

If you have a variable rate product and the Bank of England base rate goes from 0.1% to 5%, then your mortgage interest is going up by a couple of % also. This means a few hundred pounds when you look further into it. This may eat into your profits or worse still, mean you lose money each month.

Being a wise investor, you might have a fixed rate mortgage product, and this will insulate you from this scenario. At least in the short-term. When you listen to property experts like Simon Zutshi, he recommends 5-year fixed products to insulate you against this type of scenario.

DUFFMONEY’s current mortgage situation

Me and Mrs Duffy like a bit of diversification in our lives. And our mortgage products are no different. Our current portfolio is made up of 7 single lets. We have 4 personal properties in Mrs Duffy’s name, and these are on repayment. And are fixed on 2- or 5-years deals.

With DUFF PROPERTIES, the 3 properties are interest only and are fixed on 2-year deals. Thinking about what could possibly happen with inflation and rising interest rates, I may have made a little mistake with the 2-year deals. Maybe I should have gone with the 5-year deals?

We like this balanced approach because we benefit from positive cashflow (mainly from DUFF PROPERTIES) and the 4 personal properties will be paid off in x amount of years.

Going forward

As I’m writing this week’s blog, I’m thinking that I will stick with interest only with DUFF PROPERTIES. This will mean cashflow that I can use to continue to build the current portfolio. The aim over the next few years is that property can become my full-time job.

This means x number of properties bringing in a certain amount of money pcm. Big rises in interest, will have a negative impact on my plans but I’m hoping my fixed rate products will give me enough short-term insulation. Then it will be a case of over paying the mortgages with any profits from rental income.

One of the things I have learned in the last 19 years of property investing, is that you have to expect the unexpected.

What to do

Don’t just assume that interest rates will remain at rock bottom levels for the foreseeable future. Never assume anything.

Have a good look into inflation and the potential rise in interest rates. Get very familiar with your mortgage products. And hopefully you will be fully aware of the effects that rising interest rates will have on your property business. If you find it hard to understand, speak to a suitable FA (Financial Advisor).

Book of the week: Quit like a millionaire, by Kristy Shen and Bryce Leung. An excellent guide to managing your money and building your wealth. With a mathematically proven approach to saving, investing and spending, this book will help you towards financial independence.

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

Stay calm through any build work

In my 19 years as a landlord, I’ve been involved in a few refurbs. Like the refurb that allowed me to pull all my deposit money from rental No.4 in late 2019.

This little refurb stressed me out to be honest as I was worried about money at the time. But over the last few years, I’ve been working on my mindset and things have improved.

Our little extension

After 3 full years of resistance, I finally gave in and agreed to get an extension on our home. We could have done it a few years earlier, but I convinced Mrs Duffy that we needed to focus on building DUFF PROPERTIES. We needed some more assets so that we could move closer to early FI.

To start with, the first issue was getting in touch with our builder. He was due to start in mid-April and wasn’t answering his phone. His communication skills were poor to say the least.

When we eventually got hold of him, he’d been having a nightmare with the job before ours. There are 2 reasons for his poor communication skills: 1. When he is on a job his only focus is that particular job – old school 2. He is not a fan of phones … Not ideal when you are trying to find out the start date when trying to arrange kitchen fitters etc.

The extension started at the end of May and the builders (x2 brothers) have been good as gold. They are just old school and not a fan of using mobiles.

As well as the delayed start, we have had quite a few delays due to materials and tradesman. We’ve had a leaky roof and a few other issues. The builders covered the flat roof with tarpaulin whilst we waited for the roofer. This was 2 weeks and it pissed down most days and there was a leak in the corner for a few days. The builders sorted it after one of the weekends – I didn’t want to bother our old school builder over the weekend and just got a few pots and pans out for the leaks.

After several delays, we were finally going to get our kitchen installed on Monday the 19th of July. But COVID had other plans. Our kitchen fitter and his apprentice had COVID so that meant another 10 days delay. And 10 days extra without a functioning kitchen.

Me and Mrs Duffy smiled through everything and were able to keep positive throughout. Sometimes you just need the right perspective.

Going forward with BRR (Buy Refurbish Refinance)

BRR is something I am seriously considering going forward. Even though I haven’t fancied it in the past because of tradesman. To be honest, this was partly down to the poor mindset I had (did I mention my negative mindset between 2008 and 2018 …).

Me and Mrs Duffy have had to deal with tradesman regularly over the last few weeks. It wasn’t always smooth and there were lots of delays due to unforeseen circumstances – like materials and COVID. But we remained calm.

Any issues, we genuinely laughed at and even enjoyed the process. And this whole process of getting the extension done, has made me realise that I’m more than capable of overseeing some BRR projects as I move forward.

Working on mindset over the last few years is paying off and this extension has proved it. Shit happens and you must adapt and go with the flow.

DUFF PROPERTIES are looking for investors to come on board and help us grow our portfolio. We will be looking at doing BRR (Buy Refurb Refinance) on properties in Middlesbrough and surrounding areas. If you are interested and want an excellent return on your money, please contact us for more details.

We have a proven track record of refurbs and have 19 years of property experience. See below for a little case study of rental No. 4:

Case study

  • Rental No. 4 on the market for £140k
  • Purchase price £90k (75% LTV therefore £22.5k deposit)
  • Renovation costs £10k
  • Total investment £35k (£22.5k deposit, £10k renovation plus £2.5k legal fees)
  • Profit pa £3.6k (£550 rent – (£180 Mortgage + £20 Insurance + £50 maintenance) = £300 pcm profit … £300 x 12 = £3.6k pa)
  • ROI=3.6k/35k=10.3%
  • 6 Months later we done a re-mortgage to recycle the deposit money
  • House valued at £120k which I thought was low, but I decided against contesting the valuation
  • Mortgage now at £90k so my £22.5k deposit is now recycled
  • Money left in the deal now stands at £12.5k – therefore total investment £12.5k
  • Profit pa £3k ((£550 rent – (£230 Mortgage + £20 Insurance + £50 maintenance) = £250 pcm profit … £250 x 12 = £3k pa)
  • ROI=3k/12.5k=24%

Although the market has been crazy over the last few months, there are still potential deals out there if you look hard enough. Now that the extension is complete, DUFF PROPERTIES are looking for a little BRR project. The aim is to get to 10 properties over the next few months (another x3 properties). At this point, I will either continue with BRR or look at increasing cash flow with HMOs (House of Multiple Occupation).

What to do

Before any property investing, look to work on mindset. Property is not easy. It can be relatively passive (which I have found with BTL properties) but it takes work getting things up and running. You will make mistakes along the way but it’s about remaining calm throughout. Or at least, trying to remain calm.

If you fancy BRR, don’t let self-doubt kick in or procrastination. Get in there and give it a go. You might have issues and you might make mistakes. But if you keep at it, you will make a success of BRR or whatever else you decide to do.

Book of the week: The Monk who sold his Ferrari, by Robin Sharma. There is a reason why this book has sold millions of copies. As far as personal development books go, this is probably the best one I’ve read. If you are a bit stressed out and suffering from overwhelm, this book is a must read.

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

The prep work (in property)

 

‘Prior … preparation … prevents … piss … poor … performance’ a common saying in the British Military

This week’s blog is chapter 15 from the book I am currently writing …. It is all about the prep work involved with buying property

CHAPTER 15

THE PREP WORK

Now, the last thing I want to do is bore you to death with figures. But we absolutely have to do the prep work.

Before we get stuck in, we need to review our goals. 1st our financial goals. Then our property goals.

One of my main goals is to be FI. At the back end of 2018, I set myself a realistic goal of FI before I am 45. If not sooner!! I was 35 so that gave me 10 years.

After giving it some serious thought, I decided that figure would be £4k pcm and £48k pa. But we are doing this book together as a team. And our FI figure is going to be £30k pa as this is the national average wage in the UK as I am sat writing away.

Now we have a realistic goal to aim for, we can start putting the plan in to place.

£30k divided by 12 months = £2.5k pcm required. From my experience, it is very achievable to get £250 pcm per property. This is based on properties in the North East of England so the figures are dependent on your geographical location.

With these Northern figures in mind, we need to get 10 properties to reach our monthly target of £2.5k. To be clear, that is profit after all expenses and tax are taken care of.

Now before we go any further, I want to stop to mention why I am using realistic, achievable goals and expectations. Acquiring 10 properties is very achievable. It’s not very sexy and isn’t going to help you to become a millionaire. But we are a team. And I want to help as many people as possible get into property. And to get into property with solid foundations.

You might reach our target and want to push on and become a property millionaire. That’s all good and I wish you well. The reality is that property isn’t easy and it’s very rare to go out and buy 20 properties in year 1. Or go out and buy 5 HMO’s in year 1 and boom your set for life.

This is what many training companies are selling. They funnel you into expensive training by selling you the dream. I want you to have the dream. But I want you to build your foundations first. After all, Rome wasn’t built in a day.

Back to the prep work and we will start with our target for each property. We are looking for £250 profit pcm. Just to be clear, I am not going to go over tax. Everyone has their own situation and their own tax to consider. Not only that, most people’s accountants have their own interpretation of tax. Well, that is from my experience anyway.

As we touched on in chapter 13, our ROI is the figure we are looking for. To get ROI, we need (profit pa / total investment) x 100 = ROI %. To make sure we are happy with working this out, we will look at rental No. 5.

Case study 2

  • Rental No. 5 on the market for £100k
  • Purchase price £80k (75% LTV therefore £20k deposit)
  • Renovation costs £1.5k
  • Total investment £24.5k (£20k deposit, £1.5k renovation plus approx. £3k legal fees)
  • Profit pa £3.72k (£550 rent – (£170 Mortgage + £20 Insurance + £50 maintenance) = £310 pcm profit … £310 x 12 = £3.6k pa)
  • ROI = 3.72k / 24.5k = 15.2%

This is again an excellent ROI for a single let and is achievable because of house prices in the North of England. And again, because it was secured BMV.

Let us break the calculations down further. From a free property training seminar, I learned ROI at the end of 2019. It had only taken me 17 years as a Landlord. I might be a slow learner, but I get there in the end …

The ROI calculation at the free seminar was profit / total investment. The profit and total investment were broken down like this:

  • Profit = Rent – (M + M + M) … the 3 M’s are Mortgage + Maintenance + Management
  • From my experience, Maintenance is £50 pcm
  • Management is normally 10% of the rent so that would be £50 pcm if the rent received was £500 pcm
  • Mortgage payment is normally about 3.5% of the mortgage if you are limited and your product is interest only
  • Total investment is deposit, solicitor fees, surveyor fees, stamp duty, local authority search etc

From case study 2, DUFF PROPERTIES are making £310 pcm with an ROI of 15.2%. This is another example that £250 pcm in my area, is very achievable. Again, these calculations are not taking tax into account. This is unique to each individual or each individual company and is really a book in itself. For more on property tax, see the book recommendations within the appendix.

Now you know your target profit per property, you can go and find some properties. Personally, my properties are all within a 6-mile radius of where I live. It is possible to go further afield but this will take more time and work.

What is important is that you research the area or areas you want to invest in. You want to be investing in an area of high demand.

From my experience, it is very important to do some prep work before you get stuck into property investing. It is very easy to get swept away with your emotions. You might have had enough of your job and want to be a property millionaire within 12 months. Now this is possible, but not for everyone. Certainly not me currently. But with an obsession with personal development, I believe anything is possible.

Get the prep work done. And build your property business on solid foundations.

Now, as a team we know we need to earn £250 pcm profit per property. And we know we need to get 10 of these houses to achieve our FI in the UK. Again, this gets us £30k pa and this is the average income in the UK as I am writing in mid-2021.

If I don’t do the prep work, I might think a £150k 3 bed house single let will achieve our target £250 profit pcm. This would barely break even and definitely wouldn’t achieve our target profit pcm. That’s the case where I invest anyway.

With this in mind, my price range is £80-120k in the area I invest. The areas I am looking at is Middlesbrough and Redcar in the North East. Your figures will be different depending on your geographical area.

You might live in the midlands for example. That £150k 3 bed single let will get you more rent than in the North East. And will enable you to achieve at least £250 profit pcm.

Even the 2 areas I invest in achieve different rents. Most of my properties are 3-bed in Middlesbrough and most achieve a rent of £500-550 pcm. Even if I got a 4-bed in the same area I would struggle to get over £600 and would probably achieve £550 pcm. Now, rent prices do fluctuate so don’t quote me on these figures. This is from my experience in the area I invest in.

But I could achieve slightly more in Redcar for a 4-bed which is only 5 miles or so from where I live. Towards the back end of 2019, I got an offer accepted on a 4-bed terraced house in Redcar.

If my memory is correct, it was initially up for £110k. This was when I was looking for rental No. 5 and I was obsessed with BMV. I had a few initial bids rejected but finally got an offer of £82k accepted.

This was an awesome deal and the house was also a potential HMO (House of Multiple Occupation). After speaking to a couple of local estate agents, I knew the achievable rent was £650 pcm.

The deal fell through because of the survey report. There was damp and a few other issues and there was an additional £6k to pay before I could even go through with the deal. This showed my total lack of experience at the time. Sorry, not experience because I’d been a landlord for 17 years. It was because I was still an average landlord at that time.

Now I have done some training, I realise that even with this extra £6k it was still a good deal. And there was still a significant discount. Not only that, I could have went back and re-negotiated with the vendor. But, you live and you learn. It was simply because I was obsessed with getting a similar deal to rental No. 4. £50k BMV isn’t always possible and this is a lesson I have had to learn.

The beauty of getting around other investors, is that I’m not just learning from my own mistakes. Stumbling along and learning by trial and error. I’m learning from other investors. I’m learning from their mistakes and picking up on their skills and expertise. It makes a massive difference getting around other investors. I can’t stress this point enough!

Anyway, I’m going off on a bit of a tangent. The point is, different areas will demand different rents. Once you know the calculations and have some local knowledge you can get to your target figures. That target figure of £250 pcm for each property.

I know you can achieve more with serviced accommodation and HMOs and other creative ways of investing. But this book is about building solid foundations with single lets. Once you have that base, you can go off and do your own thing. You can go off and earn more cash flow.

My opinion is that it would be a mistake to rush in and try these creative ways of investing without building your base first.

At this stage, we have now done the essential prep work. Remember the 6 P’s from the British Military.

This might take you a few months. It might take you 6 months or even a year. Trust me, it is worth it.

Just learn from my mistakes. My property journey wasn’t built on solid foundations. It was built on shitty sand. And this led to 3 properties in 16 years. Things have improved over the last few years but I had many years of pain with regards to money and my 3 properties that were in £50k of collective negative equity. And I 100% don’t want you to be an average landlord.

Let’s review:

  • Work out how much you want to earn pcm and pa from your portfolio
  • Break it down so that you know how much you need to earn per property
  • Learn the calculations so you know how much you can afford to pay for a property to reach your profit targets
  • Research the area you want to invest in so that there is a high demand and this makes void periods less likely
  • Ensure you are fully aware of the market value of each property you look at by using up to date comparable data

Don’t even think about being average. You are a professional property investor.

What to do

Let me know what you think of this chapter from my next book – The Dormant Landlord. Any feedback is welcome good or bad and will make a massive difference to the quality if the book.

Book of the week: Rich Dad’s Cashflow Quadrant, Robert Kiyosaki. If you are looking for some early financial independence, this book is an excellent guide. It contains instruction and is easy to digest. Similar to Rich Dad Poor Dad, it is conceptual and helps the reader to understand asset’s, liabilities, income and expenses.

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

A little change to my index funds

As investors, we have to be flexible, and we have to adapt. This is from my experience.

This is what I’ve had to do in recent weeks to enable me to stick to my target of £1000 pcm. £1000 pcm into my LS 80/20 fund. For further info on my particular fund see duffmoney.com – index fund.

New extension

Me regularly investing in my index fund is part of my goals. This was written down in my 1st ever goals at the start of 2019 and I have maintained my monthly investment for over 2 years. And the aim is to continue to do this for the next 20 years at least …

This is because I am all about long-term buy and hold.

Another one of them goals written down at the start of 2019, was to get Mrs Duffy the extension she wanted (the one she had hounded me about for 2-3 years). That extension is almost complete.

To pay for the extension, we’ve had to remortgage our home to finance it. We are both happy with the extension. The issue is that the increase in mortgage has increased my expenses. This has meant my budget has to be adjusted to enable me to keep investing every month into my LS 80/20 fund.

Just to be clear, before the remortgage, I was investing £900 pcm into my ISA and £100 pcm into my SIPP. If you want to know why I invested like this, read my new book. This will help you to understand index investing and how to invest in index investing. And in my opinion, will help you to avoid the state pension

New allocation

Index investing is a big part of duffmoney. It is part of my long-term wealth strategy. My strategy to get some very early Financial Independence and help my family as much as possible.

With this, it was important for me to maintain that £1000 pcm investment. But I can’t afford it because of my new expenses. How do I find the money then?

Out of nowhere, I’ve managed to get a new job through DUFFY ELECTRICAL (a limited company I use for contractor services). This means that I can afford to increase the amount I invest into my SIPP.

The money I invest through DUFFY ELECTRICAL, is tax efficient. This is because it comes off my top-line and therefore reduces my corporation bill. Not only that, but the Government also add 20% to your monthly contribution. This incentive is because they want people in the UK to invest into a pension.

If you have excess money in a limited company, a SIPP is worthwhile for many reasons (including the tax benefits and Government contributions).

Disclaimer: this is not advice. This is information only. Please speak to a financial advisor before making any investment decisions.

My new allocation is £500 pcm into my ISA and £500 pcm into my SIPP.

What this means is that I can afford £500 pcm. The reduced amount I put into my ISA (from my current account) is what I am roughly spending on my new mortgage payment.

Both the £500 into my ISA and the £500 into my SIPP are going into my LS 80/20 funds. They are just different investment vehicles. For example, I can access my ISA money anytime and can only access my SIPP at 57 (currently). If you are not familiar with investing into ISA’s or SIPP’s, this can seem complicated.

If you want some further info on ISA’s and SIPP’s message me on any social media platform and I’ll send you some more info.

What to do

The main points from this week’s blogs are that it is important to have goals and it is important to be flexible. This is only my opinion.

From reading well over 100 personal development books, writing goals down is mentioned all the time!

Investing in Index funds is one of my main goals and is a big part of duffmoney. I have had to be a little bit flexible but thankfully have been able to maintain my index investing target of £1000 pcm.

Have a look into the importance of goal setting.

Have a look into index investing.

Have a look into ISA’s and SIPP’s.

And again, if you have any further questions relating to this weeks blog, message me on any social media platform. Well apart from Tik Tok …

Book of the week: How to Make Money in ISAs and SIPPs, Stephen Sutherland. This is a book on how to invest in tax efficient wrappers (ISAs and SIPPs). Well worth a read and will help you understand ISAs and SIPPs.

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

How to repel money

Apparently the harder you try, the more you repel money. This is from books I have read in recent weeks. Bear with me as from my experience, I think there is some truth in this statement..

Disclaimer: This is not advice. This is information only.

 Have you ever tried too hard for something, and it just feels like you are never going to get what you are after?

I have been pushing hard for Financial Independence over the last few years and maybe I’ve become a little too obsessed. A little too serious. Being too serious in the past is definitely one of my poor traits and I am going to try and be a bit more laid back. Especially with my attempts at FI. I need to go with the flow a bit.

Reek of desperation

Trying too hard reminds me of college …

I chose Statistics, English Language and Geography. With them lesson choices, it is clear I wasn’t there for the education. I was there to have fun and go on nights out.

My 8 months at college was spent playing pool and trying to get a girlfriend.

Emphasis on the word try as I didn’t get a girlfriend. I became quite good at pool, but I was always rubbish at getting myself a girlfriend.

Looking back, I reeked of desperation and this is a contributing factor to me repelling the girls at college.

If only I could go back and tell myself to be aloof and I might have stood a chance.

But I can use this experience now with my obsession of money and FI. I need to calm myself down and be aloof.

Go with the flow

 Being obsessed with single shares in the past didn’t help me. Checking in on my shares every 5 minutes reeked of desperation. The opposite of going with the flow.

Being obsessed with my crypto assets a few weeks ago didn’t help me. It brought anxiety and stress. Checking on my crypto assets every 5 minutes reeked of desperation. The opposite of going with the flow.

I done this sort of thing with my Premium bonds. I was obsessed and was sort of trying to force the money to come to me. Not good and not the way to go. Again, I need to calm myself down and learn to finally go with the flow.

I’m convinced that going with the flow and trusting the process will attract the money I’ve been looking for.

With my strategy of long-term buy and hold I will get to where I am going financially. What I mean is that I will get my FI. I don’t know when, but I will get there. It’s about having a bit of faith in what you are doing and letting things take their natural course.

Just to be transparent, this is advice I’m giving myself as well as the reader. Because my previous mistakes are exactly the opposite of going with the flow. But we live and we learn and hopefully the penny has finally dropped for yours truly …

The thing is good things happen when you least expect them. Like when some of my crypto increased significantly in January 2021. Or when I got a new job a few weeks ago.

They don’t happen when you obsess about what you want. Or by giving too much thought on the how. This is from my experience anyway.

What to do

If you are like me, you want some early FI.

What we are going to do is trust in the process.

We are going to get a financial plan in place. Personally, my plan is long-term buy and hold with property, index investing and ethereum.

With our plan in place, we going to go with the flow and have a little faith.

Book of the week: The subtle art of not giving a fuck, Mark Manson. Personally, I do give a fuck. I give a fuck about personal finance and helping others with their personal finance. Nevertheless, this book is worth a read. It’s funny and might just help you to not give too much of a fuck (like me when I’m being too serious) and to go with the flow a bit more.

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

The expert on how not to invest

I am not an expert on personal finance.

But I am an expert on how not to invest.

And all my old (bad) habits have kicked in over the last few months.

How I invest

Over the last few years I have become an investor. This is after years of being a poor investor. As I say, an expert on how not to invest. Looking at duffmoney, there are numerous examples of poor personal finances – singles shares loss.

With a better relationship with money, I have now put a financial plan in-place. With some much-needed financial literacy, I am confident with the way I invest.

My strategy is long-term buy and hold. That is with property, index funds and Ethereum (crypto asset). This strategy will get me some early financial independence (FI). It is not if, it’s when.

One of my problems in the past was trying get rich quick schemes. I tried this with single shares and became obsessed with checking in on my shares – literally every 5 minutes.

And unfortunately, I have slipped back into this type of investing over the last few months. Dreaming of getting rich quick with my crypto assets. This brought stress and anxiety like when I was investing in single shares in previous years. Please don’t get emotional with your investments.

I do want to become FI but I don’t want stress and anxiety. I need to stick to the plan and get back to being disciplined. Over the last 2 years I have been very disciplined. This 8 week period is a little blip and I have started to get back on track.

Safemoon

Safemoon is an alternative coin that I have been investing in since March 2021. And this alt coin is the main reason for my little blip. I’m not blaming Safemoon it is 100% my responsibility how I invest.

I had a few alt coins in my binance account at this stage and wasn’t really bothered about getting anymore. A few of my colleagues had got in very early (the coin only started in early March) and they were all talking about it. I ignored them for about a week as I stuck to the plan.

But then safemoon Matty convinced me this coin was going to go up. And he was very convincing. He was adamant and had put some serious hours in with his research.

A little bit of FOMO kicked in and I invested. It was hard to get into. You had to open a metamask wallet and pancake swap exchange. I wont go too much into it but it took about an hour of watching a youtube video to get the safemoon tokens into my metamask wallet.

I put $2000 in as I had made some decent profits from another alt coin.

Getting back to being a disciplined investor, I put safemoon to the back of my mind and turned my attention back to property and DUFF PROPERTIES.

This was up until April 21st.

This is a day me and the lads who invested in safemoon will probably always remember. It was a day of gambling and doing exactly the opposite to what an investor should do. But fuck me, it was exciting …

The safemoon retirement plan

Going into April 21st, 10 out of 12 of us in our little commissioning team had invested in safemoon. By the end of the day, it was 12/12 and quite a few more of the lads from the rest of the site.

There was serious FOMO kicking in. The 12 of us from our team thought we were going to retire by the end of the week.

Ultimately, we got very greedy and all egged each other on. Especially our ringleader – Safemoon Matty.

Should of. Would of. Could of.

We all got in at about 0.000000005… Im not sure of the figure, but you get the point, we got in early.

The amount we could have cashed out at was crazy – but non of us cashed out. Big balls or silly little boys? I’m going with the latter.

Safemoon Matty – £11,000 in and that went up to £690,000

Jacko – £10,000 (approx.) in and that went up to £320,000

Jamie – £20,000 (approx..) in and went up to £260,000

Phil – £1000 in and went up to £80,000

Me (the expert on how not to invest) – £1500 in and went up to £65,000

If you look closely at the figures, they are not quite aligned. This is because we all got in at different times and therefore got in at different prices.

In a 10-hour shift, we all spent about 9.5 hours looking at the safemoon price charts. We were going through some serious emotions.

It was exciting, stressful, funny, anxiety kicked in, FOMO kicked in as none of us wanted to cash out and others were trying to get in on it, happy, sad and every other emotion you can think of … Im even getting emotional writing this weeks blog!!!

The price has went down over the last few weeks and we are about 70% down on our April the 21st highs. By the way, no one has cashed out still. The safemoon retirement dream is still there …

What to do

Don’t do what we done during this period.

Get a financial plan in-place. And stick to the plan.

Over the last 2-3 weeks, I have gone back to practising what I preach. I have gone back to duffmoney and my financial plan. I am not anxious like I was and am back to focusing on long-term buy and hold.

A good little rollercoaster ride but I wouldn’t recommend it. Checking on your investments every 5 minutes is not the way to go – unless you like stress and anxiety …

Book of the week: The monk who sold his Ferrari, Robin Sharma. An excellent personal development book that is worth a read! With today’s hectic modern society, it easy to suffer from overwhelm and stress. This book will help you take a look inside and make you realise the importance of living in the present moment.

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

Focus on where we live

Going into 2013, I was stressed to bits. Through a friend (Ste) I had got into commissioning. Through Ste I had managed to get promoted to Commissioning Engineer on a small Gas platform just off Hull.

I am not the best Electrician and at the time, was nowhere near Engineer level. I had my HNC but that was a piece of paper and didn’t make me an Engineer.

I took the job anyway. This was a massive step outside my comfort zone. I ended up supervising up to 30 men as we were pushing towards first gas and there was a big push to get the job over the line.

The project was a success and I somehow muddled through and done ok. I would have been lost without the Instrument Engineer who helped me out massively. Chris was good as gold and we worked well together for over 12 months.

Buying our dream home

I am mentioning this particular project because it was a bit of a game changer. In a 4-month period, I spent 12 days at home. It was brutal but it bought us a house that we never thought we would live in.

Up to this point, I’d had a really good year work wise. But the decision to jump in and buy our dream home was a mistake.

We had been to see the house at the back end of 2012 just to be nosey really. And maybe get some interior design ideas for the home we lived in.

What I remember is me and Mrs Duffy sat on the landing saying, ‘Imagine if we could buy this house.’ I even think my better half said she would never want anything again …

A few months later, I was lucky enough to get the deposit money together. I got over excited in early February 2013 and suggested we should go up to our dream estate and buy our dream home.

It felt good seeing how happy my wife was, but it was still the wrong move. I let my emotions take over.

Chris who I was working with at the time had about 15 houses. That was an excellent plan B for him as he made over £3000 pcm in cashflow from his rental properties. He was on good money, and he invested wisely.

A few months before buying our dream home, I almost got back into property. I went to see 2 or 3 houses and almost put a bid in for one of them. A pitiful effort and I should have known better.

But my negativity towards rental properties was still there. My negative equity had a bigger impact on me than I realised at the time. It must have really bruised my ego.

IF I got back into property at the time …

At this point I am going to imagine I made the wise decision of getting back into property. Just to illustrate the importance of investing your money wisely.

Between 2012 and 2017, I made very good money in commissioning in various different roles. I was fortunate enough to have a good network and I got a lucky break. I might have went back to get some qualifications but I was an average Electrician. But, I made the most of my break and made good money along the way.

At the end of 2012, I had 3 rental properties making me a positive cashflow of £700 pcm. We are going to say that any rentals bought going forward, are going to make me a very conservative £200 pcm.

Let us imagine that me and Mrs Duffy didn’t buy our dream home. Instead, we got the property bug and decided to buy more rental properties.

We decided to get 2 properties a year between 2012 and 2017. That would have been 10 houses to add to the existing three. That would have been £2000 pcm to add to the £700 pcm we were getting initially.

That is a grand total of £32,400 pa. That is an awesome plan B.

It would have meant I would have stopped being a dark cloud over money and work in 2012. It would have meant that I wouldn’t have had to work all over the UK and all over the world.

But I didn’t buy any properties during this period and made several mistakes up to about 2018. You can learn from my mistakes in my new book.

The last thing I want is sympathy. I earned very good money and have been very poor at managing my money. Me and personal finance really didn’t get on from 2008 to 2018.

I just wanted to highlight what I should have done. What we done was get the bigger house and we got more expensive cars and generally fell into the consumer trap.

How not to do personal finance!!!!

Getting the big house with the bigger mortgage, put pressure on me to keep earning good money. 2012 to 2014 I earned good money and managed to buy our dream home. I managed to save some money as well.

This continued up to 2016 and I continued to save. I was a contractor and wanted to have some security behind me. Again, I could have bought another rental even after we bought our dream house. My mindset was very poor at the time, and I continued to just focus on work.

2016 was a year my personal finances went South. I decided I ‘d had enough of Offshore as my fear of helicopters was getting worse. Plus, I was spending 50% of my life in the North Sea away from my family.

I managed to get a good job onshore, but my wages dropped significantly. With our high expenses, we were now spending more than we were earning. Spend more than you earn, and worry about it later!

Not only that, but this was also a year we really made a fuss of ourselves. Instead of tightening the purse strings, we buried our head in the sand with our personal finances.

We decided we would buy a log burner. This cost £5000. Not only that we had to get a new settee, new armchair, basically a new front room. The front room cost £10,000 in total. Alarm bells started ringing and this is the time when I discovered spreadsheets.

I was on a job in Chester working in a team of about 10. We had a good team. A team that had been spoilt work wise and were all used to decent money at this point. And we were all shit with money.

We all got into putting all our income and expense on spreadsheets as we didn’t know where our money was going.

This was the start of me half-heartedly telling Mrs Duffy that we needed to change our ways. I was sick of the high outgoings and having to chase the money offshore and now away from home Monday to Friday.

My obsession with spreadsheets was very half-hearted as we pushed on with our horrendous personal finances.

The next little treat was a brand-new Audi Q5. This was on lease and added £400 pcm to our outgoings. Not to mention the cost of running it. We did love this car, but we just didn’t have the spare money to go out and get this upgrade.

Then there was the holidays. Now we felt like we deserved at least one holiday as we both worked hard. And we wanted to treat our girls. But we didn’t have the money.

We just thought we had good savings. We ignored the fact that our outgoings were now devouring our income. So, the savings started to head South very quickly.

The week’s holiday in Spain was about £4000 all in. We loved it don’t get me wrong. But again, we couldn’t afford it.

Then there was Lapland to see Santa Claus. Again, this cost about £4000 all in. And again, we couldn’t afford it.

Putting my poor personal finances aside, I have no regrets about Lapland. It was awesome and me and Mrs Duffy were very grateful to take our girls to see Santa Claus.

This was a once in a lifetime holiday and it was worth every penny. We were well aware of making the most of the kids believing in Santa and this added fuel to the fire. They loved everything about it.

The country where Santa lives (Finland) is beautiful and the cold snowy conditions add a bit of magic. The holiday makers go above and beyond as well and even me, and Mrs Duffy were believing in Santa by the end of the holiday.

As we had decent savings still, you could be thinking what is he talking about? Why is he getting worried and why is he getting obsessed with spreadsheets?

The point was our expenses were now higher than our income. And I was well aware of this fact. This brought with it a lot of stress and anxiety. I did enjoy our holidays and other luxuries but the nagging thoughts about money and work wouldn’t go away.

Along with our big mortgage, our new spending habits caused me a big headache. One positive from this headache was that I forced myself to focus on my 3 existing rentals.

This was hard to do as I really had a bad relationship with the rentals due to the negative equity. I’d now had enough of my negative equity and decided to overpay my interest only mortgages.

This led to 3 years of aggressive overpayments and being back in the black. This was a little milestone I was particularly happy with.

Personally, I was happy with our 3-bed semi-detached house. But the boss wanted a bigger kitchen and we ended up moving into our dream home.

What to do

I want you to use my example and try to implement some delayed gratification. If you earn extra money in your job or get a little side hustle, look to invest. Look to invest in property and get your plan B up and running.

Please don’t fall into the trap of letting your expenses match your income. Or worse still, spend more than you earn and worry about it later.

Book of the week: GOOD VIBES, GOOD LIFE, Vex King. Stop trying to impress people. Impress yourself. Stretch yourself. Test yourself. And be the best version of you that you  can be with this excellent book.

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

The Dangers of one income

‘Buying or building assets that deliver cash flow is putting your money to work for you. High-paying jobs mean two things: you’re working for money and the taxes you pay will probably increase’– Robert Kiyosaki

Focusing on one income

Back in 2012, I got a big break work wise.

I started my HNC to get into commissioning. I won’t bore you with details of my job, but commissioning was what every contractor I knew was hoping to get into. It was very lucrative, and I was determined to get my break.

Towards the end of my HNC, I got my break. It wasn’t even due to my HNC. I got the break because of my network. Two of my friends are twins, Carl and Chris. Through the twins, I met their uncle Ste.

Anyway, Ste got me my break into commissioning. My money worries were about to disappear. But just because you come into money, doesn’t mean you can manage it. Not only was I a poor excuse of a landlord, but I was also poor at personal finance.

Unfortunately, I spent the next 6 years focusing on my job. Focusing on one income. I earned good money. But I didn’t invest that money.

My income increased. And my expenses increased. Very poor personal finance.

Much needed financial literacy

At this point, I am going to introduce Robert Kiyosaki. If you read the excellent Rich Dad, Poor Dad by Kiyosaki, it will help you to get some much-needed financial literacy. Reading Kiyosaki’s books will lead to a stronger financial IQ.

By educating yourself, you will come to realise that one source of income is risky. From my experience, you could do with at least a plan B. The ideal scenario would be to have multiple streams of income.

What if you had an income from properties? What if you had a side business? What if you managed to get income from affiliate marketing? Or even royalties from a book or series of books? There are many other sources of income you can get other than your main income from your job.

Let’s just say you have managed to secure 10 properties. You earn a conservative £200 pcm after all costs on each property. That is £2000 pcm or £24,000 pa. This means that if you get finished from your job, you have a plan B in-place.

Or you could get 2x HMOs (House of multiple occupancy). This is when you rent out each bedroom. For example, you could have a 5-bed terraced house and make £2000 pcm gross off that one HMO. After all costs, you would easily get £1000 pcm. If you do manage to secure 2x HMOs that is again £2000 pcm or £24,000 pa. Another excellent plan B.

Back in 2012, I didn’t have any idea about plan B’s or multiple streams of income. Even though I had a little plan B in my £700 pcm from my 3 BTL’s. I wasn’t thinking big picture and I wasn’t looking at options if I lost my job.

I made the common mistake of focusing on one income. I put everything into my job.

As a contractor, it is a good idea to get yourself a cash buffer. Even if you have a permanent job, I still recommend you have a cash buffer. If you have 6 months’ worth of expenses, you are in a good place.

At the time, I had 3 months of expenses. It was about £6000 that I had saved from being offshore. I had just set up a limited company as I was getting paid a day rate in my new commissioning role.

My only focus was building my business account as I wanted some security behind me. In that first year, I built my account up. I went from £6000 savings to £26,000 savings in a very short space of time. This is what I had worked hard for. The studying, overtime and working offshore away from my family was starting to really pay off.

Although I thought I had cracked it, I had no clue at all about money or investing. If someone had come and gave me a copy of Rich Dad Poor Dad it would have changed everything. The money I earned would have been invested wisely.

If I could go back to 2012, I would give myself a copy of this book to read 3 or 4 times. Just so the concepts really sunk in. I would have realised that what you get per day isn’t important when you look at the bigger picture. What is important is your net worth. What have you got in terms of assets and liabilities.

Just to be clear, your net worth is your total assets minus your total liabilities.

By relying on one income only, you are at risk. You might have savings, but they are savings for your future, not your monthly expenses. Just look at what happened in 2020 and now again in 2021. COVID has left many people on furlough or worse still without a job. Many people in the UK have been struggling during this difficult period.

I would say 95% of the people I have met at work, rely on one income. They earn good money, but they spend good money as well. And this is exactly what I had done from 2008 until 2018.

You can read about my miserable relationship with money in my New Book. This was a 10 year period that I was able to move past.

Whenever I got an increase in wages, my expenses quickly matched my income. My personal finances were all over the place. I didn’t have a clue about taxes, and I didn’t have a clue about anything financial if I am being honest.

My poor personal finances led to anxiety and stress – My 1st taste of anxiety. Many contractors I have worked with are unhappy. 9 times out of 10 it is due to money issues. Like me they earned good money and spent good money. Please take my advice and don’t fall into this trap.

Otherwise, you will end up in locations all over the world just to pay the bills. Trust me you don’t want to have to work away and spend far too much time away from family and friends.  

What to do

Spend less than you earn and invest the rest. This is a mantra I have heard many times after reading 100+ self-development books about money, business and property. This is a mantra I want planted firmly in your head.

You are not going to make the same mistakes that I have made. You are going to learn from my mistakes and start thinking bigger picture.

Lessons learned:

  • Relying on one income can lead to pain
  • You are going to spend less than you earn and invest the rest
  • Even if you get an increase in income, you will keep the same expenses
  • You will read some books and gain some much-needed financial literacy
  • Property is a very good plan B

Over the years, I have done far too much worrying over money and whether or not I will get on the next job. This is far too common in the UK from what I can see. I see many people stressed out over money and usually it is because they are not educated in money.

If we manage to get a plan B, or even multiple sources of income, I am confident that a lot of people in the UK would breathe a huge sigh of relief.

Book of the week: Multiple streams of property income, by Rob Moore. If property is your thing, this book will help you build more than one income. If you have more than one income, you are in a good place financially and it gives you options if the shit hits the proverbial fan.

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

Put yourself out there

Putting yourself out there is about moving past your insecurities. It’s about getting comfortable with the uncomfortable.

I’m uncomfortable writing blogs.

I’m uncomfortable posting on social media.

I’m very uncomfortable speaking into a microphone in my tiny office and doing the new DUFFMONEY podcast.

But fuck it! I’m obsessed with Financial independence (FI) and am going to find a way to get there – it’s not an if it’s a when!

What is DUFFMONEY all about?

It’s about raising financial awareness.

Personally, I want my FI as soon as possible. I want it yesterday. And I want the same for anyone reading or listening to DUFFMONEY.

My relationship with money in the past, has brought anxiety and stress. How can I afford this or that? When can I get a job at home and not have to work weekends? How do I afford the bills and how will I secure the next job … blah blah blah …

I have seen this poor relationship time and time again with people I know socially or through work. And I’m here to tell you that your relationship with money can be improved.

DUFFMONEY focuses on money mindset, lessons learned, investing fundamentals.

If you are like me, you don’t want to work into your late 50s or even into your 60s. By setting some goals, this can be avoided. Then you can put your financial plan in-place and start heading towards FI.

Fuck the means to an end job and fuck having to do it until your late 50s or 60s! I refuse to accept this scenario! And I want the same for you!

What does FI even mean?

FI will have a different meaning for everyone. We are all different after all.

For me, it’s about working on my terms. I don’t want to retire but I do want to choose my own hours.

I want to spend every night in my own bed (well apart from holidays and weekends away). I want to be there for my wife and kids for every occasion. I want to wake up and do Brasilian Jiu Jitsu, take the kids to school, have breakfast with my wife and then go to work. I want to spend 6 weeks in Spain with my little family and soak up a different culture and learn a new language.

In fact they are not just wants, they are all musts! I must wake up and be happy everyday not just on a weekend.

How will I get FI?

Again, we are all different. We will all have different financial plans and strategies.

As I am writing this blog, I am 38. I will be FI at the age of 45. If not sooner. In fact, when I get some momentum with DUFF PROPETIES I’ll get there much sooner.

See below for my battle plan:

  • DUFF PROPERTIES
  • Index investing
  • Crypto assets – this is an addition and my main focus will be ETH (Ethereum)

For more on my battle plan and how I’m going to get my FI, you can read a copy of my new book – FI Money: Learn the hard way, teach the easy way.

If you want an incentive to focus on your FI, have a good think about the state pension you will receive later in life – State pension.

Book of the week: Change your mindset, change your life, Garrain Jones. This book is for anyone who has ever been knocked down and found a way to get back up again – personally, I love a comeback story. A really good read and a book that I will be re-reading.

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

The DUFFMONEY personal finance podcast

In 2019, I started writing the DUFFMONEY blog. This was to document getting some early financial independence (FI). It was also to try and help other people achieve some early FI.

My plan at this point (mid-2019) was to get some early FI within 10 years. The weekly blog was helping me to get some much-needed financial literacy. It was also helping a few of my colleagues who seemed interested in getting a financial plan in-place.

This was enough for me. I wasn’t bothered about how many people were reading the blog. I just wanted it to help at least some people improve their personal finances. Improve their personal finances and get a financial plan in-place.

DUFFMONEY is all about raising financial awareness. It’s about starting with mindset and improving your relationship with money. Then you can get some financial literacy and can start heading towards financial independence.

The DUFFMONEY personal finance podcast is again about raising financial awareness.

The introvert doing a podcast

Being shy and a little introverted, can be difficult to overcome. It was uncomfortable for me starting the DUFFMONEY blog 2 years ago. It was uncomfortable for me putting DUFFMONEY material on social media. And it’s even more uncomfortable doing the DUFFMONEY personal finance podcast.

Being comfortable at being uncomfortable is something I have been reading about in personal development books over the last 2 years.

I am gradually learning to take myself less seriously!

See below for the podcast description you will read if you subscribe:

DUFFMONEY personal finance is a podcast for anyone looking to learn about money. And for anyone looking for plan B and some financial independence. Basically, you refuse to work until your 70 ish.

DUFFMONEY covers money mindset, lessons learned, investing fundamentals and property investing.

The aim is to help you to understand your relationship with money, learn to avoid common mistakes, get some financial literacy and head towards financial independence.

Hosted by Peter Duffy, we get stuck into single shares, index investing, crypto assets, property investing and much more …

Week 1 there were 5 podcasts released Monday-Friday (31st May to 4th June). After that, there will be 1 per week. Each episode will be 10-15 minutes long and will hopefully help you get some earlier than expected FI.

Why listen?

When it comes to personal finance here is a little list of my credentials:

  • 19 years of experience as a landlord / property investor
  • Currently building up my property portfolio in DUFF PROPERTIES
  • Over 10 years investing experience
  • Tried and failed with single shares
  • Currently investing in index funds via Vanguard – been doing so for 2 years
  • Been investing in crypto assets for 4 years
  • DUFFMONEY blog written for the last 2 years
  • Self-published author – FI Money: Learn the hard way, teach the easy way (New book)

If you read my book, or blog you will know that I have made several mistakes in the past. But you will also know that I have now got my financial house in order.

Most importantly, you will know that I care about you and your financial future. Money can have a negative effect on people if they have no financial literacy and don’t understand their relationship with money.

I was negative for over 10 years and it brought anxiety and stress. If this is you, I feel your pain! And know from experience that you can move past it and improve your relationship with money. You can start heading in the right financial direction. With some goals written down, you can head towards some early FI.

Personally, I am obsessed with FI and I want the same for you. Fi to me is about freedom. It’s about spending time with family and spending time doing what you love. My dream is to wake up on a Monday and be excited to start work. That is working on DUFF PROPERTIES and other businesses I have planned. Not dreading the means to an end!!!

What to do

Obviously, I want you to tune in and listen to the DUFFMONEY personal finance podcast (New podcast). Not only that, I obviously want you to leave a 5* review and tell all your mates …

In all seriousness, if you do listen to the podcast, please leave an honest review.

As I say, DUFFMONEY is about raising financial awareness. My wife asked me why I was doing the podcast the other day …

When I said it is to raise financial awareness it sounded a bit out there and a bit weird. Another way of saying it is that it is part of me getting some early FI. The blog, the book and now the podcast are all documenting how I am working towards FI. And I want to help other people achieve the same.

I have had anxiety over money, and I have seen it time and time again at work and with people I know and love. Fuck worrying and fuck anxiety. Get your head into money and see if you can get some early FI.

Book of the week: Rich Dad Poor Dad, by Robert Kiyoaski. I’ve recommended this book before but I am more than happy to recommend again. If this book (or similar books) were part of the school syllabus it would be a game changer to many peoples lives. It helps you to understand your money from a concept point of view and how beneficial it is to be an investor or be in business.

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