Wealth update – 31/03/2021

It’s been another very busy two months. I work in financial services and tax year end is extremely busy for me, which has meant that blogging has take a bit of a backseat in terms of priorities.

So, what happened over the last two months?

Gas supply saga

I’ve been struggling to switch gas suppliers and have been paying two providers for gas – both companies claimed that they were supplying gas to my property. This, obviously, can’t be the case. After many angry emails, I decided to escalate my complaint to the Energy Ombudsman.

Like magic, it seems my problem has found a resolution – I got a written apology and a letter about what the gas company will do to put things right. It was received within days of me sending the complaint to the Ombudsman. The provider offered me a £60 goodwill payment for the hassle and promised to correct the issue with the gas supply switch.

I also requested the new provider to refund my gas overpayments as they were not my gas supplier but were charging me for this anyway.

I decided to accept the £60 offer as it seems things were finally getting sorted. I was also promised to get my overpaid gas payments refunded.

The above happened in February and now (April) I can say that the gas supply saga has finally ended. It only took 7 months to switch from my old provider to the new one. Welcome to the United Kingdom!

The lesson I learned is that if an issue doesn’t get resolved within 8 weeks, immediately send a complaint to the Ombudsman. This, it seems, strikes fear into companies’ hearts and gets things sorted.

British citizenship saga

We had to wait for our citizenship ceremony invitations in order to tick off the very last part of the naturalisation process. This finally arrived in mid-March (we waited 2.5 months) and we were able to book the ceremony for the 31st March.

Both I and my girlfriend have now joined the British club. We met the queen, celebrated with a full English breakfast and have been speaking with a British accent ever since. 🙂

Just kidding, we didn’t do any of the above. However, we did get a few photographs of us smiling in front of a picture of the queen with our certificate of naturalisation in hand. What a day it was… one I will share with my grandkids for sure.

New skills

I have dipped into my emergency cash as I decided to acquire new skills to have a bit of a backup when it comes to my employability. I’ve been thinking for a long time that working in financial services isn’t exactly the best fit and there might be other things/careers I should explore.

I decided to put some action behind my thinking and signed up for a training course to retrain as a software developer. A number of my friends work in software development and from my discussions with them, it sounds like it’s something which I could potentially thrive in.

It’s still early days and my studying is taking it’s sweet time. However, I have already achieved my first certificate in HTML and CSS – I do feel that web development isn’t for me though. I’m now on to learning “more serious” languages such as Python, C# and Java, which seems to be more interesting.

There is lot’s to learn but I’m quite excited about it and don’t regret paying almost £2K for the course. OK, maybe there’s a little bit of regret… but paying that money is a bit of a motivator to continue with my studies and pass the exams etc. I want value for my hard earned cash!

Counting my beans

My portfolio went down a little in February (£160,835 i.e. -£4,667 from Jan 2021) but made up for it in March. My net worth as at 31/03/2021 was £173,579 – an increase of £12,744 or 7.92% from end of Feb 2021. This increase includes a £1,600 ISA top-up, £3,344 pension top-up (I sacrificed 100% of my bonus into my pension) and £50 was paid into Premium Bonds.

Tax year end actions

I have also realised some gains in my GIA. In fact I sold all of it to cash to be able to make use of the annual £12,300 CGT exemption. My realised gains were about £11,000.

I’ve kept circa £20,000 in cash (to fund my ISA and LISA tomorrow i.e. on 6/4/2021 – the first day of the 2021/22 tax year) and re-invested the residual in a “similar” portfolio to the one I had previously (this is due to the 30 day CGT rule where sales and purchases within 30 days are matched for the purposes of CGT calculation). I will be switching my GIA back into my “normal” portfolio early in May.

Alright, I hope you had a great Easter holiday and have enjoyed the long weekend and the somewhat good weather!

Wealth update – 31/01/2021

Here’s what’s happened in January 2021:

Gas supply saga

I’ve been struggling to switch gas suppliers and have been paying to two providers for gas – both companies claimed that they were supplying gas to my property. This, obviously, can’t be the case. After many angry emails I decided to escalate my complaint to the Ombudsman.

Like magic, it seems my problem has found a resolution – I got a written apology and a letter about what the gas company will do to put things right. It was received within days of me sending the complaint to the Ombudsman. The provider offered me a £60 goodwill payment for the hassle and promised to correct the issue with the gas supply switch.

I decided to accept the £60 offer as it seems things are finally being sorted.

The lesson I learned is that if an issue doesn’t get resolved within 8 weeks, immediately send a complaint to the Ombudsman. This, it seems, strikes fear into companies’ hearts and gets things sorted.

British citizenship saga

We are still waiting for our British citizenship ceremony invitations…

Counting my beans

My wealth has gone up a little bit in January 2021. My net worth as at 31/01/2021 was £165,511 – an increase of £4,272 or 2.65% from Dec 2020. This increase includes a £1,600 ISA top-up, £292 pension top-up and £50 was paid into Premium Bonds.

January has been a bit of a roller-coaster as my net worth went all the way up to circa £183,000 and then lost most of the gains this week. Oh well… that’s the nature of the beast.

Have a good weekend!

Wealth update – 31/12/2020

It’s the last day of 2020! Here’s a quick update of the last two months as I forgot to do one for November due to being extremely busy with work.

Gas supply saga

I still have no clue what’s happening with my gas supply switch. The new provider has confirmed they have made the switch but I’m still being charged by my old provider and haven’t had a closing bill…

British citizenship saga

Both me and my girlfriend have received an email from the Home Office notifying us that our British citizenship applications were successful. My email came a few days after my girlfriend’s – even though we submitted everything at the same time. I was worried for a little bit but am very pleased with the outcome.

In case you’re wondering, it took us 10-11 weeks to get the emails about the Home Office’s decision from the point we first made our applications (and we gave our biometrics a month after the application).

The final stage of the process is to attend a citizenship ceremony. However, coronavirus has made it difficult to arrange these and there seems to be a bit of a backlog. The councils might be able to arrange virtual video conference ceremonies… we shall see. I expect us to be British between March – May 2021.

It feels good to have one thing less to worry about.

Lifestyle inflation?

I have been shopping! And it feeeeeeels gooood.

I bought a new pair of pants for myself from Lululemon. Yep, it’s that overhyped expensive yoga pants shop. I bought office/work pants from them. These bad boys set me back £118 and are easily the most expensive pair of pantalones I’ve ever bought.

The main reason to buy them was the anti-ball-crushing (ABC) technology, which they promoted on their website. I was sold and immediately bought them.

You must be curious whether the ABC actually works as expected. Sadly, I don’t feel like there’s much of a difference and my crown jewels can totes be crushed when I wear my Lululemons. I wear them every day and it’s not because they’re my only pair of trousers… #ExtremeFrugalism. Seriously though, they are decent trousers but I would recommend going for something cheaper if you can.

The shopping spree didn’t end there. My 4 year old Pixel phone’s battery life was poor and the device felt slower by the day. Therefore, after lots of debating and online researching I decided to upgrade to the new Pixel 5 for £599. I thought this phone would last me another 4 years as it’s got 5G. So far, I’m very happy with the new phone.

Now for Christmas we also bought something for the body. As it’s cold outside and the pandemic is still roaring about (gyms are closed), we decided to buy an indoor exercise bike. We got the JLL IC400 Pro bike for £519.99. Neither of us knew anything about bikes so we bought something in the middle of the expense range hoping that it’s not crap. So far so good. I am totes getting a six-pack in 2021! 🙂 My only gripe is a sore bum from the seat.

Counting my beans

OK. Numbers! My wealth has gone up in both November and December 2020.

November 2020: My net worth as at 30/11/2020 was £142,616 – an increase of £25,064 or 21.3% from Oct 2020.

December 2020: My net worth as at 31/12/2020 was £161,239 – an increase of £18,623 or 13% from November 2020.

In both months I made a £1,600 ISA top-up and £292 pension top-up and £50 was paid into Premium Bonds.

So, both November and December have been positive months and my net wealth is closing for the 2020 year at an all time high. I’ve calculated that my wealth increased by £90,379 (from £70,860 on 1/1/2020) in the 2020 calendar year – of this £26,545 was new money and £63,834 was the investment return – that’s more than £5,300 of gains each month in 2020! Wow! I am very happy with this.

2020 has been a great year for my portfolio, I’m also almost British now and will get a six pack very soon! Pandemic aside, I hope you had a good year too and I wish you a fantastic new year!

Missing the best and the worst days

You may have come across some articles, which go along the lines of “if you missed out on only 10 of the best days in the market then your returns would drop from 8% p.a. to 2% p.a.”. This is usually followed by the conclusion that timing markets doesn’t work and you simply have to be in the markets through thick and thin. That way you are guaranteed to benefit from those best days in the market and make good returns.

What pisses me off is that this analysis is completely one-sided. It is a half-truth. What do you think the market returns would be if you missed out on just 10 of the worst days? Yeah, I just flipped that. Obviously, missing out on the worst 10 days but still benefiting from the best days, will massively increase your portfolio’s annual returns. I have proof!

You can watch a youtube video (by Financial Choices Matter) about this – the analysis was done over an investment period of 107 years (Jan 1900 to Dec 2006) and the results are below:

As you can see, it holds true that missing out on the best days will reduce your returns. But it’s also true that avoiding the worst days massively increases the investment returns. (For clarity, the buy and hold approach turned $100 into $25,746.)

There’s also a good paper by Mebin Faber about this. I found it very interesting.
Excerpt from Meb Faber’s analysis:

He makes very interesting conclusions such as:

  1. the best and worst days tend to cluster together (volatility clustering) – the majority of both the best and worst days happen when the markets are in a down trend (below a 200 day simple moving average) -> therefore, the ride is much calmer when you’re invested during times of the market being above the 200 day simple moving average.
  2. if you miss both the best and worst days, then your annual returns are better than buy and hold.

The above analysis would suggest that market timing can indeed work and that there is HUGE value in eliminating the bad days. Investing during times when the market is above its simple 200 day moving average could eliminate 60-80% of the volatile days (both best and worst days) and then allow you to benefit from the uptrend. It would be a smooth and relatively boring ride, but the data suggests it would work better than buy and hold.

Bi den! 🙂

Becoming British

We had a day trip to East Croydon today to sort out some stuff for British citizenship. This is the last step you need to go through prior to the naturalisation application being sent off.

We’ve never been to Croydon. It’s a shame the first impression was of a hobo asking for £2. Wow, inflation much? What happened to “spare change please”? They go straight to £2 these days.

The experience at the Home Office (or was it SopraSteria?) wasn’t great but not awful. The email, confirming the appointment, stated that we needed to show up with ample time to spare. We showed up around 9:20 for my 10 AM and my girlfriend’s 10:30 AM appointments.

It was easy to find the building. It was the one with the queue out its door. We’re in lockdown now and hardly anything else was open on the street.

It was cold and we all had to wait outside as we slowly made progress in the queue. I disliked that people who didn’t show up early but right on time always got to cut to the top of the queue. An old chap in a high-visibility vest was calling out “anybody here for 9:30” and then all the 9:30 people went straight to the top of the queue…

That was frustrating. What was the point of instructing us to show up early – to spend the time in the cold? Why was the queue needed at all? I’m glad it wasn’t raining.

We were also instructed to bring all of our original paperwork along with us to the appointment. However, they only checked our passports, nothing else. I spent around £30 printing everything in a Ryman having already uploaded all the documents to a portal. What a waste of time and money…

I’m glad the appointment was free of charge. I can’t believe that if we opted for an earlier appointment (i.e. not in 4 weeks’ time) it would have cost us £90 each. All they did was scan the passport, take fingerprints, record a signature and take photos – no more than 10 minutes per person.

Anyway, we’re glad we’ve dealt with the bureaucrat. Let’s wait and see to hear back from them. Fingers crossed the Home Office doesn’t need any additional information and we get a positive answer soon (apparently this can take up to 6 months, Covid-19 will probably increase this timescale further).

Also, I hope Joe Biden wins and Donald Trump goes away. The stock market seemed to like the idea of Joe winning – this almost reversed all of my drawdown from the last two months and I’m back at £140K net worth.

Bye now!