New year, new job, new challenges! I can’t believe it’s already February! The weather is currently quite cold and we’re starting to miss the warmth from a nice sunny summer day. It’s enough from heavy winter jackets. After just a couple weeks of uncertainty, life…
The Christmas is coming.
November has come and brought with it the start of the much anticipated Christmas season. Everyone did their best to buy a few gifts so that their finances don’t get hit pretty bad on the next December. As soon as the Halloween ended, the shops started setting up their Christmas themes. It was as soon as the 1st of November. Long live the Capitalism.
Everything is going smooth and me and Mrs. WB had a great time on our one week trip back to Portugal at the end of the month. Also, as promised on our last blog post, I would like to talk about the UK money management app, Yolt and also about the money transfer service, Transferwise that we used for the first time to exchange some Pounds into Euros. (Spoiler Alert*) They are both great!
But first our trip back to Portugal. Luckily for us we both live in the south of Portugal, where thousands of Brits fly every day to get some sun and have some delicious – and inexpensive – food by the beach. This has lowered the flight tickets prices a lot. Our return trip flights with Ryanair from Bournemouth to Faro did cost us the ridiculous amount of £30 each.
Being almost December the weather wasn’t that good but it didn’t even rain while we were there. It hasn’t actually rain anything at all during the last 6 months. This is causing some serious problems related with the water shortage on the dams, preventing to irrigate agricultural fields and to feed the cattle properly.
Anyways, we had a great time, met most of our friends and family, had some great food and wines and did manage to get some sun. Nine days gone by in a blink of an eye. Since we’re not going back for the Christmas holidays, we had to buy all the necessary gifts and get them all wrapped up. Between gifts, two night outs, eating out a couple of times, four tickets for our four parents to come visit us next January and special groceries to bring back to the UK, we spent nearly £700. A ridiculous amount of money for a week. Hopefully next time it won’t be that bad. We don’t even know when will it be our next trip there but maybe within four months time.
So about the Yolt application. It’s been quite a few months that i’ve been looking for an application for money management, something similar to the PersonalCapital or Mint which, unfortunately aren’t compatible with the UK banking system. That search is finally over. Yolt is the app that I was looking for. Easy, quick and free to use. After adding your bank credentials it will sync all your account data. Then you can chose for each transaction, which category is it going for. As you do this, the app will get smarter, sorting all the right data into different categories.Of course that before handing over my bank credentials to a not so known app I got concerned about it’s security. Since the app is own by the ING Group, a Dutch multinational banking and financial services corporation with headquarters in Amsterdam, I believe that they have the resources, the know-how and the experience regarding security. The only thing that it’s still missing is the connection with investment management companies, like Charles Stanley or Hargreaves Lansdown. This way we can also have our investment accounts shown on the app. Let’s hope for that feature to be added in a near future. Can’t recommend this app enough.
About the money exchange. We got really excited about using the Transferwise service. Before using their service we would send money over our UK bank to our Portuguese one. With a standard fee of £10, three or four pennies less than the actual exchange rate and a few days to have the money available, we would lose quite a lot of money sending £700 over there. We did this mistake for 2 years. I guess we live to learn. With Transferwise it was just like ordering a pizza. Create an account using my Facebook data, chose how many pounds I would like to send it over (on this step we can see their exchange rate offer, which is barely the same as the current one), insert the IBAN that we would like to send the money and voilà. Nine hours later and the money was available on my Portuguese bank account. It cost us £8 in fees sending £700 on three different transfers (we were transferring as we needed) whereas if it was through the bank we would have payed maybe £80 or more.
Really glad that I finally got sick of the banking system and looked for a smarter way to exchange money.
Regarding our income, both me and Mrs. WB got some regular paychecks which totalled an income of £3,770. Nothing new here. No bonus or even a pay raise on sight for me and Mrs. WB didn’t work any extra shift that could increase our income. Still a solid income for a DINK young couple without any loads.
November wasn’t pretty. There was too many gifts and we ended up spending quite a lot of money with our holidays back home. We thought that staying for one week would be alright, since we were staying at our parents house and having food with them, but the Christmas spirit was kicking in and we bought too many gifts. We did also eat out quite a few times. Everyone asked to go for to a different restaurant, on a different day. We just couldn’t refuse to go. We did also help with the groceries to the big family dinner, which included seafood, good wines, beers and desserts on the menu. It feels really good to gather the whole family in one place right before we leave.
As for our investments, we kept our small £300 contribution while fuelling our emergency fund. Since we are due to increase our monthly contributions I think that it will be a good new year’s resolution to focus a bit more on our budgeting skills and take our investments even more seriously. We’re still trying to figure out how much will that increase be but we’ll probably double it to £600. We’re not with our ideal emergency fund amount setup yet, so there will be some cash going into it.
Get ready for this next month’s blog post as there are some really big news regarding our net worth.
We’re on the right direction. That’s what it looks like from the second month tracking our finances. October was a good month. The Autumn finally kicked in and so did the cold weather. Between the morning mist and the smell of burned wood from people’s…
We made it. After a few months of unexpected expenses, house moving and expensive (but great!) summer holidays in Italy, we finally setup our monthly deposits into our ISAs. As this was our first month as officially investors and since we are still funding our…
It all started at my job’s desk.
During lunch time I usually dive into Reddit.com for my daily update on what’s actually happening with the world. One day, while going through all those subreddits I ended up on /r/personalfinance, where thousands of redditors ask for help every single day on assessing their options, either regarding easy budgeting questions or specific insurance problems.
As I was looking through all those threads, trying to learn from others life experiences, I could see that there were people desperately trying to find a way out of their financial problems. The most common ones were things like ‘how would they get out of their credit card black hole that they got themselves into’ or dealing with unexpected health issues, getting fired from their jobs with no emergency fund set up or even getting dumped from their parents home with no money and no direction.
After months reading dozens of threads every single day, I finally came across the windfall flag and went through quite a few pages where people were asking for advice on how to invest/manage their recently earned fortune. Some were massive amounts of money from inheritances, some from company sell outs.
This, of course, got me thinking about what would I do if I received such a big pile of money, whether from an inheritance (nope, whole family pretty healthy, thankfully) or via a lottery ticket (won’t happen, i’m not spending money on that…).
What I also found out was that, in every comment on their threads, I would always find a particular set of rules:
1) Don’t tell anyone about your windfall;
2) Invest the whole sum into a Vanguard Index Fund and go enjoy your pina-coladas under the sun.
And that was when I fell down into the rabbit hole…
From this point it didn’t took me long enough to find the place where thousands of redditors share their knowledge and looked for the smartest way to get out of the rat race: the /r/financialindependence subreddit. After months of reading all the concepts around index investing (and being a risk averse guy), the whole slowly and steady investing thing had me completely convinced.
With the help of a few online FIRE calculators I quickly realised how “easy” it would be to retire comfortably within 20 years from now without much effort, even sooner if we really committed to it or even if we went leanFIRE. I was amazed by that idea. Never had given any thought on the concept of ‘retirement’, but quickly realised that i wouldn’t want to be forced to work until i’m 67 years old (probably even older by the time we get there).
Before approaching Mrs. WB with this new adventure that we would embark on, I needed to be 100% sure about the whole subject and be ready to answer any questions that she would eventually ask or even calm her down if she freaked out.
It took me about three months of daily reading before thinking about introducing her to this whole new concept and asking if she was fully on board. I was slightly afraid that she would have react like: “OMG! Are you crazy!? Do you wanna gamble all our money!!??” but she didn’t. At first I thought about introducing her the idea during dinner but it ended up being in a night out after 2 shots of tequila and a few beers (you know, just to smooth things a little bit in case it all went south). We weren’t drunk but definitely tipsy. After explaining to her the whole FIRE concept, she asked me for a few days to process all that new stuff, which was perfectly normal since I had compressed three months worth of reading into a one hour talk. I handed her a book called “The Simple Path to Wealth” by J. L. Collins, which I had read before and found it really good for introducing people into the whole FIRE idea. This helped her consolidate all the information and get her fully on board.
After months worth of reading around the FIRE concept and since the majority of its members are located in America, I had to inspect how things would work here in the United Kingdom. Which index funds were available? Which broker would be the right one? Are there any tax implications?
Turns out that we did find what we were really looking for. Through Charles Stanley Direct and using their Vanguard LifeStrategy 100% equity fund, which tracks 10 well diversified Vanguard index funds and is automatically rebalanced regularly, we were able to setup a monthly payment and start treating it like an expenditure in the beginning of each month.
And that was when I realised that in order to keep us disciplined about maintaining our spreadsheets updated, tracking our monthly earnings and expenses, we should share it with an audience, which hopefully will keep us motivated to work smarter and focused during these next exciting years to come.
With all that said, we are looking forward to start sharing our investments progress, life experiences and hopefully we will help some of you getting in the right direction towards financial independence.