Category: Investment returns

Apr ’23: Wind and windfalls

FIRE v London1 Comment

April saw the season of long weekends begin here in the UK.

Easter saw me inspired by the Ermine to check out Dorset’s Chesil beach. We struck lucky with the weather and had a fine, distinctly non-London, time, over a very blustery Easter weekend. My walking shoes seem to have shrunk and after a 15km yomp what happened to my toes doesn’t make for blog-suitable content. Maybe I should stick to London after all, where such tribulations don’t seem to happen.

The economy seems to keep inflating along. Inflation has ‘dropped’ to 10.1%, latest figures show. Which really has you wondering what happens to interest rates. Rates seem high right now, but in the real world they are barely half of the rate of inflation. Something has to give – will it be inflation dropping as energy ‘laps’ last year’s price rises, or will wages chase inflation upwards pulling the Bank of England with them? Or will policymakers find ways to prolong this inflationary period, to deflate the country’s record high level of national debt? Time will tell.

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My 20 year property returns

FIRE v London8 Comments

I was pleased to have reached the 10 year point of tracking my investment portfolio last month.

But my net worth includes an important asset class – property – that I don’t normally track, but which I have held in some form for over 20 years.

So, this post takes a look at how my property assets have performed.

Property works completely differently, for me, than my investment portfolio. For starters, I have never bought a home as an investment. But let’s start at the beginning.

My property owning history

I nearly got on the property ladder in the mid 1990s.

I hadn’t realised, until a friend pointed it out a few years too late for me, that in fact one of the easiest times to get on the property ladder was the moment when I graduated and moved to London. My first job earnt a reasonable London salary of just over £20k, and 1 bed flats in a reasonable part of Zone 1 in London were available for under £70k (now £800k-£1m, sigh).

Mortgage rates had dropped from >13% in 1990 to around 7%. The interest costs could have been around £5k, a quarter of my first-job income. That was in the mid 1990s. It didn’t occur to me to buy a place, and of course those property prices were so high…..

By the late 1990s, buying a property had become a lot harder. But once I was earning £40k+ I decided to take the plunge. I found a reasonable 2 bed place very close to Zone 1 for £200k (now £500k). The mortgage (at around 7% interest, i.e. interest costs were £13k, a third of my gross income) and the deposit (£20k, if I remember rightly, for a 90% mortgage) were a massive stretch….. and then I was gazumped. By the time I reorganised, the places I wanted cost £220k+ and I couldn’t quite afford it.

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Jan ’23: Mr Market defuses my tax bombshell

FIRE v London5 Comments

January is always a miserable month to be in London. Thankfully I managed to get away a bit during the month (not to Davos, no), and enjoy myself in London despite the wintry weather.

What you’re paying for in Mayfair these days

Market movements in January

The markets on the other hand were positively hot. There was some general sentiment – in Davos in particular from what I read – that the doom/gloom of Q4 was overdone. Inflationary expectations are declining. And markets, as a result, lifted dramatically. Equities and bonds rose markedly everywhere. In constant currencies, the markets I’m exposed to (with my leverage included) rose 5.0%.

Market movements in January, in constant currencies

The GBP rose slightly against the USD, and dropped a bit against AUD. On balance, foreign currencies dropped 0.94%. So my index rose 4.0% – the currency movements taking a small dent out of the constant currency figures.

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