All the money in the world

I’m reflecting on 24 hours in my life, last Sunday.

Mrs FvL was away for the weekend, no kids are around, and I’m home alone. While I’d organised a couple of things on the Sunday, I had nothing planned on the Saturday night.

On the Saturday evening, having had a decent lunch in central London with an old friend, I decided, on a whim, to go to the cinema by myself to see a movie – an inane movie Mrs FvL would have no interest in anyway. I have a choice of four cinemas within walking distance, including two of the upmarket Everyman chain, so I took my pick of location, time and movie and booked a ticket. My favourite is a particular local Everyman, who don’t do popcorn and do do far nicer sweet and savoury goodies plus a range of wines – served to your comfy sofa/seat with waiter service. What’s not to like? It comes with a £20 ticket price, naturellement, but as with many things I chalk that one up as the price of quality.

The following Sunday morning I had two errands scheduled. One was to do with some minor remedial work that my Dream Home needs. Minor work this may be, but it is in a conservation area and is of quite a technical nature which is controlled by the local council. If I don’t abide by the council’s protections, the maximum penalty is a jail term. So I’m abiding. This too is the price of quality. Thankfully I’ve managed to arrange two builder/ planning experts to meet me on a Sunday morning to discuss.

Next up, I take my builder on a five minute drive across the local park, to the Previous House. Traffic is light and, as usual, I can park <10m from the house even though I no longer have residents’ parking. I’ve decided this is the day to repair/replace the Previous House’s garden fence, which is quite a specialist job due to the stipulations of Mrs FvL. It’s becoming a nice sunny day, and the Previous House abutts the local green space, so it’s a nice place to hang out. Soon after we arrive my tenant emerges from the Previous House; she is a lovely character and offers us tea/coffees/etc. All smiles.

My builder and I assess the work and agree what raw materials we will need for the fence. I leave him to start the heavy lifting and I head off to the nearest B&Q/similar. I have a choice of three B&Qs within 15 minutes’ drive and opt for one about 10 minutes’ drive away. I find what I need, which barely fits in the car, and have it back at the Previous House – along with some refreshments for my builder – forty minutes later.

In my absence, my builder has had a discusssion with the neighbour whose house borders one of my fences. Soon enough, the neighbour reappears, offers us both a drink, and we have a bit of a chat about the work I’m doing as well as some other work on the road he and I have been discussing. He asks me to make sure that the fence looks better from his side than my side; this is North London after all. He disappears.

I leave my builder to crack on and I return to the Dream Home for some lunch. The neighbourhood has woken up and is grinning in the sunlight on my brief drive through. I bump into some of the neighbours of the Dream Home who have lived there for longer than I’ve been alive. They have been in poor health so I haven’t seen much of them and we have a bit of a catch up.

After my own lunch I return to the Previous House, and find my builder has made good progress. Another neighbour waves a greeting and we exchange a few words.

My builder then asks for some garden wire, which we don’t have to hand. So I go a few doors along where I disturb one of my favourite former neighbours who is getting ready for a long haul holiday he starts this evening. He takes the trouble to scour his garage for some garden wire and gives me something roughly suitable, which I scurry off with.

The bordering neighbour reappears. He points out that the fence by this point looks a lot better on my side and, erm, much less good on his side. He’s right. We spend half an hour tarting up the fence on his side. The neighbour, very much mollified by now, offers us another drink.

As we are starting to pack up, a ‘distant’ neighbour appears who I hardly see. We get into quite a deep-and-meaningful conversation. Time passes. Eventually she moves on.

Finally we wrap up on the fence building project. I drop my builder at the nearby station (<5 mins drive) and then head home (<5 mins further).

I finish the day by strolling back across the park to the pub, where I enjoy a couple of drinks with the locals, who I know quite well by now.

It’s been a good day to be alive, and it’s one of those days to appreciate how lucky I am.

I have, literally, world class facilities all around me within walking distance or a few minutes travel. I have access to professional services pretty much 24/7. I live firmly within arguably the greatest metropolis on Earth. I didn’t grow up in London, and we didn’t have the sort of facilities and convenience I simply take for granted these days.

And yet, I have beautiful countryside around me – between me and my local pub, for instance. I live in a community, in which I have formed strong bonds. My local neighbours provide friendships, support, security and the occasional pint. I do the same for them.

We didn’t have the same quality of community in the local village where I grew up. Which is ironic because my local ‘hood has the type of community commonly associated with villages, and not commonly associated with large cities like London.

I wouldn’t leave London for all the money in the world.

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How to invest a lump sum ?

I’ve just had a windfall gain land in my bank account.

What is a windfall gain?

What do I mean by a windfall? I think of it has a material, lumpy sum of money that arrived somewhat unexpectedly.  Many of us can expected windfalls at some point in our lives, but they remain unexpected in amount and timing. Some are happy events – winning a lottery.  Probably more are the silver lining on a sad cloud – such as inheritance, compensation payments, etc.

This particular windfall is because a company that I ‘angel invested’ in a few years ago has just been acquired.  The company has done well and my shares have grown in value a lot – over 10-fold.  I’ve been forced, by the investment transaction, to sell my shares.  Thanks to the generous UK tax breaks for angel investors, this large gain is subsidised by the taxman.  My gain is almost completely tax free.

These shares were in a private UK company, so they were extremely illiquid.  I don’t treat such investments as part of my tracked investment portfolio – I treat such ‘angel’ investments as ‘flushing money down the drain’ and thus truly consider any gains I eventually receive as money from heaven.   I usually can’t choose to sell, can’t choose what price to take, and often have very little information about the business – in this case, a lot less information than the acquirer. Indeed in this particular case a portion of my money has been retained in an escrow account for 12 months pending ‘warranty claims’ by the buyer, so I don’t even have all my money yet.

In any case, in this particular situation I am in the happy position of a six figure sum landing serendipitously in my bank account.  This sum isn’t enough to change my life – in fact it is a smaller sum than the decrease in my portfolio’s value in the first three months of 2018 – but it is a much larger amount of cash than I normally have at hand.  What to do with such a sum?

The perils of good fortune

Academics will tell you we are more likely to spend windfalls than other equivalent sums.  I remember a long time ago, when I first made some serious money and had a life-changing windfall to celebrate, how a friend of mine was pushing me to buy an Aston Martin.  His psychology was, and is, very different from mine. But even I have found over the years that if you aren’t careful some of your ‘easy come’ money does ‘easily go’, and you can forget some of your (e.g. tax) liabilities, and the next thing you know your good fortune has become a painful cash shortage.

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April 2018: All eyes on Asia.

April saw a marked change in the dismal stockmarket performance this year. How come?

It’s not every month that a 60+ year war appears to have concluded.  I’m all in favour of wrapping up these geopolitical loose ends, but I don’t think my portfolio cared that much about the history being made in Korea.

Tech has had a good month.  Trump has been momentarily distracted from Amazon-bashing; Netflix reported strong growth; so did Google, and so on. My small Tech portfolio was up 8% on the month.

Trump has also had, dare I say it, a relatively good month on his trade bashing.  Sentiment is starting to move in his favour on this, at least in what I read, helped by the sense that some important tariffs may fall under his assault on China/etc.  Shareholders of Boeing, anything Russian etc haven’t had much fun but the rest of us have got plenty to celebrate.

Overall equities in most markets were up.  FTSE gained almost 6% on the month.  The US dollar rose 2% and its stock market climbed by more than that.  Other main equity markets that I track – notably Eurozone and Australia – gained 4%.  At this rate the stock markets have almost recovered the losses so far in the year.

Bonds dropped but only slightly. Overall the blended markets I track rose by 5% in April; 4% in constant currencies, and a 1% uplift provided by the USD.

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