Pushing On!

This blog post was originally written in October 2014 for our sister website – The Money Muppet. We set that site up in January 2014 as we embarked on our journey to financial freedom. The Money Muppet site no loner exists, so we’ve incorporated our financial journey into our travel blog.

Right, I’ve not written in a good while, thought I’d best get something up here!

Our madcap plan to financial independence is slowly, slowly coming together. Some things are going well, some not so well, but all in all, we’re stomping our way along the path:

1. The shop’s refused to let out. Quite a few people have looked at it, but we finally realised after Ju chatted with some of the shop keepers on the street that using an agent is a really bad idea. We let a couple of houses through the same agent, which will provide the main part of our passive income going forwards, so figured we’d use them for the shop too. Problem is, they charge nearly £1000 (£700ish to us, £300 to the tenant) to let a place out. Given the rent’s only £250 a month, and as it’s a small shop tenant turnover will be high, this just doesn’t work. We’ve give notice to the agent and will try to rent it out ourselves. We may need to get creative – my friend Jon keeps suggesting a pop-up shop, selling whatever’s the hot thing at the time. Could be the way forwards.
2. On the plus side, our IT contracting business is going well. The second year’s accounts have come through (the first year we were on the road and made a paper loss). We’ve kept back easily enough money to cover the corporation tax, phew. I’ve a new contract running a good-sized IT project, which will hopefully keep me busy well into 2015, finger’s crossed. We have some other work coming through for the business too, so all is good there.
3. We’ve also opted to pop a solar PV array on the rear roof of the old butchers. It cost £5600 all in, and should generate a passive income of roughly £460 per year (which goes up with inflation, is tax-free, and guaranteed for 20 years), plus any electricity generated which we use will be free. The installation went very well and the kit’s all working nicely, should be a good investment that one.
4. We’ve also popped some more money into the stock market as I get more comfortable with how it all works. This time we’ve gone for more Vanguard ETFs, VUKE (which tracks the UK FTSE 100) and VUSA (which tracks the US Standard and Poor 500). Dividends have popped into our accounts every 3 months as promised, and as expected the capital value of the shares has ridden up and down with the markets, but only by a few percent. Our E.ON and Telecom Plus shares have nose-dived on the other hand, re-enforcing my conviction to invest in funds rather than individual stocks. As we’re going for a buy-and-hold strategy though, it doesn’t matter much as long as the dividends keep coming. We may end up selling those shares at some point and moving over fully to ETFs, we’ll see.
5. Our planning permission to convert the old workshop at the rear of the butchers into a home office/granny flat should be given a decision within the next 3 or 4 weeks (it’s dragged on for 8 weeks so far as the council didn’t validate it for a month). If we get the go-ahead we’ll get detailed drawings done, and then try and sort out when to do the work – possibly spring now. Once it’s done, if the council let us, we may rent it out as a room (it can’t be rented as a separate dwelling, that’s for sure), but either way it should add a good amount of value to this place. Finger’s crossed.

We’re generally doing pretty well on constraining costs too. Our clothes are (almost brand new) from local charity shops. We continue to shop at the fantastic Lidl. Despite living on a road with an Italian, Chinese and Indian restaurant and a pub within a 30 second walk, we’re not eating out (much!). The Smart car’s continuing to do its thing, including carrying me to the other side of Birmingham once a week down the M1, M42, M5 and M6. The heating’s on as the days cool, but we’re using the log burner to heat the one room we spend most of our time in, with the radiators coming on for only an hour at night and in the morning. No gadgets have been bought (I’ve zero desire to buy any), we still have no live TV. I do see off a fair few beers though; fortunately our home budget has no ‘beer’ line!

Cheers folks, Jay

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