Wealth update – 30/06/2020

It’s been three months since my last wealth update (30 March 2020). As you all know, the markets have gone up since then and this has helped improve my net wealth.

So what’s changed? One of the things I noticed is that some of my EIS shares have gone up a fair bit. I only have 3 EIS investments. One of them – Den (smart light switches and sockets with an app) – has already gone bust i.e. all the way to zero. I only invested £500 and got 30% tax relief on it (where I should get some loss relief)… so my loss will be about £300ish. The other two investments have done much better as the share price estimates have gone up and my EIS shares have now more than doubled (Yay… I guess!).

In all seriousness, I want to get out of my EIS holdings and just cash them in as I’m quite uncomfortable with the illiquid nature of these investments. I simply have no exit strategy. This worries me.

I crossed a big milestone on 1st July 2020 – my net worth exceeded £100,000. Apparently, the first £100K is a bitch to save up as it’s mostly made up of your savings rate, not investment returns. After that investment returns will do more of the heavy lifting in the portfolio. I’m looking forward to that.

My flat buying plans have changed. We are not buying anything this year. Instead, we decided to move and rent for a bit longer. This will reduce our costs a bit as the rent drops from £1,500 pcm for a studio flat in Central London to £1,150 pcm for a one bedroom flat in Zone 2. However, our travel costs will increase a bit (although these will still be minimal for a couple of months as we continue to work from home). There will also be a small increase in council tax. In the end we will have more flat for less money.

The new flat was listed for £1,250 pcm and we offered £100 less. At first, the landlord’s agent asked us to increase the offer but we decided to stay firm and told them we are happy to walk away if they do not accept. A few short minutes later we got an email confirming the landlord has accepted our offer. It was that easy. I would encourage everybody to negotiate a bit. This additional £100 pcm saving will add up over time.

We’ve had some redundancies at my workplace. Naturally, that worries me. However, both of us are still employed and continue to get a paycheck. It’s good to reduce our biggest expense (rent) as we’re early in this recession and I expect things to get much worse.

Let’s see how things go.