July 2022 Update

OK so this is my first blog post - hurrah!

Now bear with me, it is my first time so please give me a little slack until I ease myself in. I am sure once I am in full swing, I will look back at this and say “wow, I was so bad at writing blogs back then”. Oh well, lets see how it goes.

Living Life

This month has been great. The UK has had some extreme heat this month and the Met Office even issued a “Red Extreme Heat Warning” with temperatures reaching the high 30 degrees Celsius in some parts of the UK. Where are the climate change deniers now?!

To be honest, although long term this type of heat is not really great news, I have quite enjoyed such warm weather during this period. It has felt like being in Spain (and I know this because we also went to Spain for a week this month).

This month the Mrs and I managed to have a trip over the the Lake District and hiked Blencathra with a few friends. It was the first proper hike we had been on since hiking Schiehallion back in May (before that, I think we hadn’t hiked since before COVID!). It was great to get up early in the morning, drink a black coffee and get the blood pumping as we hiked (at a good pace) with some friends - we even managed an ice cold Rekorderlig afterwards (I am not much of a Cider drinker but sometimes they can be great on a hot day).

Blencathra, Lake District

There was a cool festival in the local village. I particularly liked the Sea Monster and the little Asian Girl. The way they performed with the music was amazing. It was really nice to be out seeing performers giving it their all on a lovely Summer day.

The Sea Monster and the Little Asian Girl

And finally, we finished off the month with a trip over to Spain. This is a funny one, we were initially going to travel to a few places in the UK (Bristol, Cardiff, Oxford) but we did some calculations and saw that it would be significantly cheaper for travel and accommodation in Spain. So Spain it was! We flew to Malaga and travelled by bus to Granada. We spent 3 days in Granada and then came back and spent 3 days in Malaga. I had been to Malaga before but not Granada and the Mrs had been to both before. I really enjoyed Granada, a historic and traditional Spanish city. Cobbled streets that take you back in time with a castle in the centre of the city - a bit like a Spanish version of Edinburgh :D. In all seriousness though, the most fun part was going to the traditional tapas bars where every time you buy a drink you also receive a tapas (small snack). The more you drink, the better the tapas gets. The Mrs and I spent one night in a few of these bars and spent €25 for 8 glasses of red wine (4 each), a tapas with each glass and an additional portion of croquettes - what a bargain!

FI Fund

So as everyone that is investing at the moment knows, the markets have been going down and this is the time where it is difficult to stay motivated. But actually the opposite should be true. I always remind myself to trust in the process. Considering I still have a very long time horizon, drops in the market are an opportunity. The stock market will always eventually recover so best just to keep regularly investing and accumulate as much as you can.

I continue to buy stocks but since the start of the year I have also been buying government bonds (UK and US). Since the yield curve has inverted and central banks continue to tighten, there is still a good chance that the markets may go lower. Plus government bonds have sold off significantly. Government bonds normally provide the best hedge against drops in the stock market. My plan is to hold the bonds I am buying until the central banks change their approach and start to ease monetary policy again.

So at the moment, the Mrs and I have the following breakdown of wealth. We also track our progress towards FIRE where our current FIRE number target is £800,000.

The “Progress” for each month relates to our FIRE number split into 12 months of the year. As you can see, we could effectively retire for 4.7 months of the year for the rest of our lives currently. We include our full net worth in our FIRE calculations because we would like to one day sell our house and travel the world. This would mean that all of our wealth would be in liquid assets. Obviously the pension part would not be accessible until we were at pension age.