JollyScot's Journey Starts

Where are you and where are you going?
Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sat Sep 23, 2017 3:49 pm

When I bought the flat the plan was to stay in it for the longer term, now that I am not likely to be doing that I am looking at it more in terms of a long term investment view. When I bought the flat the rental yield worked out at 6.75% relative to the price I paid, which is pretty good for the UK. Since then the modifications I have made should have added some value and I have noticed a few more of the properties in my building selling for higher values (I think holiday let landlords have been moving in due to the gym and swimming pool).

So now I will look at the gross rental yield again and see where it is at, if it is still up at the 6.75% range I will propbably keep the flat and rent it out. If however that has dropped down nearer the 5% mark then it might be a good idea to capitalise on the rush to buy that has been happening in the block. I could go down the Airbnb route, but I have been watching the tide turn on the service and the city is starting to look at stopping the free for all that has been going on so far with it.

So yeah it all come down to the numbers, if the yield is good I will rent it out, if there is a quick tax free capital gain that can be made then maybe thats the best idea. As for emotional reasons, the only one I would have is that buying a property was annoying and I wouldn't want to go through it again if we did decide to return to UK in the future.

Yeah not sure what way I am leaning yet, I suspect it will land somewhere in the middle as opposed to an obvious "best" choice

Posts: 788
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: JollyScot's Journey Starts

Post by wolf » Sun Sep 24, 2017 12:27 am

JollyScot wrote:
Sat Sep 23, 2017 3:49 pm
...As for emotional reasons, the only one I would have is that buying a property was annoying and I wouldn't want to go through it again if we did decide to return to UK in the future.
Was there a UK specific reason why it was annoying? Or was ist because of the sellers? I am interested into the real estate market, but I don't have any experience with buying, renting, selling. I live in Germany, so I guess there are also certain laws and regulations. Well, but if you don't mind sharing what was annoying, it would be quite useful. Of course only if you like, because as you said it was an emotional reason, so I don't want to dig into that any deeper as needed.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sun Sep 24, 2017 7:44 am

There are a few reasons that are probably UK specific and the way in which the system is set up.

In the UK the sellers can go to what is called a “closing date” when there is a few people interested in a property. This basically requires anyone who wants to bid on the property to put in the highest bid they are willing to pay in a sealed bid process. The seller will then pick (usually the highest) offer that they want.

For me I just won’t take part in this process, if I bid on a property I generally wanted the sale agreed with 24/48 hours. The issue was that as soon as I put in a bid the estate agents would convince the seller to go to a closing date. So the very offer I made would end up leading to the process of escalating up the price. So I would be left waiting up to a week to hear if my offer was accepted and not sure if I would offer on other potential places that came up.

Eventually any offers I made were along the lines of “I am offering X and this offer stands for the next 24 hours. If the owner decides on a closing date my offer is withdrawn and no further offers will be made”. The offers I put in were always what I thought it was worth and I would never move on the price if there were counter offers or anything else.

In addition to this people in the UK just now aren’t selling their properties. People are I think waiting to see what happens with Brexit before they make a move. With potential mortgages rates of 0.89%, it is pretty cheap for them to just sit on their hands. With the small number of places for sale it means a lot of people go and see what is available.

Combine the lack of properties with investors starting to shift out of the London market to Scotland. The increase of people buying up properties for holiday lets and there is a big squeeze going on. Which is leading to the estate agents not really needing to do a good job to sell what they are listing. This makes the whole experience very frustrating for someone who is trying to buy an actual home I think.

I’m not sure how this would compare to Germany as I have read you guys give tenants a lot more rights and that prices are therefore kept down. For the UK though the housing market here is a bit of a mess to navigate. With lack of houses being built, lack of current houses up for sale, increased foreign investments, increase in properties moving to holiday lets there's a big crunch.

Scotlands system is at least a bit better than what goes on in England. When a sale is agreed here then it is in effect legally binding and both parties can’t back out. In England thats not the case and you have cases where sellers demand a price increase the day before the move date or they will relist or a buyer will demand a price drop the day before move date or they will walk away. The issue with this is people may require the sale of their house to buy the next house or the buyer may be “homeless” because they expected to move in. It basically allows horrible people to be horrible.

I dunno this may just sound like a rant but I think I have highlighted the issues with it that annoys me. I would happily rent a property but that process here is almost as bad. So for anyone looking at the UK they should be aware that the property market here is a bit of a disgrace. It is very heavily skewed towards being beneficial to those who own multiple places I think.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Thu Oct 19, 2017 12:50 am

Wedding is now all organised and after a few days of being pestered by people wanting to have "input" that's now all died down. They have finally all accepted that they don't have any say in what is going on. There still ended up being a reasonably big hit with family members demanding to attend. That said we will all get a 10 day holiday out of it for the family and the actual days cost is pretty negligible.

So far for the year my expenses are a fair bit higher than last year due to a few extra expenses, looks like it will be £6,000 higher for the year. Several months of travel resulted in flight costs and slightly higher accomodation and food costs. The wedding also added a fair bit extra, mainly because I'm covering the families accomodation for the trip too. In general though the "base" expenses with these items stripped out have been ok.

So the work on my flat is slowly coming along with the new bedroom almost done and the prep for the upgraded kitchen complete and waiting for install. Found an issue with a broken/noisy extractor system in the walls which is annoying but hopefully I can get that fixed but will probably need to create a hatch into the service shaft that contains the system.

This week I had a look at the communal insurance policy for my building. I noticed that it does not allow individuals to run holiday lets on residential properties, currently there are five in the building listed on Airbnb. This basically means the building is actually currently uninsured because of places being used for non residential purposes.

As I mentioned earlier a few people have been buying up places for holiday lets, I don't really care if people make a holiday let or not. If however by doing so my flat becomes unisured because of it then I have issues with it a little more. As such I will raise the issue with those who manage the building, hassle I didn't want but I am not going to pay insurance costs for nothing. My guess is that currently they are under the assumption that an insurer would still pay out, but anyone whos worked with an insurance company before will know that is not how they work.

I had the flat valued by a few estate agents and the rental yield I could get is at the 6.5% mark so it looks like I will probably keep the flat and rent it. If I were to sell it the profit looks like it would come out at about 2 years of rent, which is pretty good but I think I would prefer the income. I have added the house renovation costs to the value of the property and so haven't marked them down as costs. This will end up totalling about £10,000, but if I update my networth to account for the estate agent valuations then it was money well spent I think.

Some of my other investments took a tumble though so as of now the increase in property value is cancelled out by other things. Still I am not plannig to sell anything so it doesn't really matter as of now.

On the work front I managed to get the Zero Hours contract agreed and signed and it should result in maybe 20 hours of work a month being sent my way. It will also allow me to work from wherever I want, this should make the relocating to somewhere other than the UK a bit easier as the work will cover more or less all expenses and my savings can sit and build up more.

Over the last two years of officially leaving my full time job (although I found contract work) I still haven't really pinned down what to do next. I've tried a few bits and pieces but nothing has really stuck yet. I have had a stint of travelling which was fun and the contract work stopped the initial progress I made on other interests. Hopefully once I move and settle somewhere for a more extended period I can start getting some proper progress going again.

Partner is finally coming round to the fact that she can also go and try other things and maybe build something. She always insisted that she was going to get a job, took me a while to bring her round to the fact that she didn't need to. Maybe she will still end up getting one but at least now she knows it is not a requirement if she would rather do something else. It is up to her, she is currently trying to figure out what she wants to do. This seems to involve try every possible class or training that she can think of, hopefully she finds one she enjoys.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sat Dec 16, 2017 7:27 pm

So a few things have happened since the last update.

Got married and the day was nice in that it was very stress free and only had to deal with our immediate family for the trip. Although initially I wasn't keen on any of them coming along and adding to the planning and stress of the day it ended up being a good holiday. The costs for my partner and I for the whole thing was about £2,500. Considering this included the 10 day holiday around the wedding as well. As per Jason’s description we managed to stop most clowns from turning up and just enjoyed the time instead.

Now trying to process our paperwork to permanently relocate to another EU country before UK leave properly, as with everything this involves a lot of bureaucratic nonsense and going round in circles. Hopefully this is almost complete and can finally settle somewhere for a while. I try to avoid news about Brexit as in general the whole thing is embarrassing to watch and I just get upset watching it.

Even though we have managed to collect and almost deal with the official side of paperwork we are now hitting a small wall of dealing with estate agents. Conversations go along the lines of.

“We would like to rent this flat”
“You don’t have a job”
“Here is proof of cash equivalent of 6 years of rent payments”
“You don’t have a job”
“Here are dividend payments and rental income over the last 2 years from company and 1 year rental contract with income amount”
“You don’t have a job though”
“I can pay 3x the deposit and first 3 months in rent upfront”
“You don’t have a job”

Maybe we will eventually be forced into just buying a property when our paperwork is done. We are having drinks with some people from the area and maybe they can point us in a more productive direction.

On the doing work from home front I have been approach regarding a 6 month more or less full time role. I’m not sure what I will do yet, but will probably set a higher price and see if they will agree to it. It will come under the zero hour contract I agreed, but just a lot more hours than expected.

My flat is now 100% finished and rented out to someone, so I have a 3rd stream of income now. It went within the first week that it was listed, possibly could have asked for more but a couple of teachers rented it so hopefully works out fine.

My net worth would have taken a bit of a hit over the last couple of months with the wedding, paperwork fees and temporary rental. However, bitcoin went a bit mental and I sold half of what I had. It wasn’t many but that small number suddenly became worth a lot and did so quickly. Even though something in your head shouts tulips at you when you see what is happening there is still enough behind the technology that I will keep some as a “what if” scenario. I could maybe see more benefit in learning and working with the underlying block chain technology rather than investing in the coins. I wouldn’t buy more I think, the small amount I bought a few years ago is enough of a win for me.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Tue Jan 23, 2018 7:22 am

We have finally managed to organise a place to stay and done all the paperwork to be a permanent resident. Turns out you can get this all sorted with savings only within the EU. I think some of the states are more awkward about letting it happen but where we are it was annoying gathering paperwork but once done it was fine.

Slowly starting to build my way into some kind of daily schedule. The last year has largely been a bit aimless although fun.

I am setting a prescribed wake up time again as though I had work. I think not having this has caused me to be a bit of a mess around when I wake and then go back to sleep. To aid the waking up early I have been continuing with the cold showers. They are now at the point where they don't even bother me when get in and has the added benefit of I feel better when I get out.

Over the next few months I will be joining a language class I think. I am trying to decide between online lessons 1-1 or actually going to a class. The costs probably works out about the same. I think the 1-1 would help me learn faster but the class would mean meeting a few other people who are new to the area.

The work that I was asked to do ended up not working out. After finding out I was actually happy that I wasn't going to have to do something. Maybe that is enough of a reaction for me to finally turn away from agreeing to anything. It is hard to do when the price is high. Even though I moved past the point of needing it there is still something in my head that says I should keep going. Maybe I need to look closer as to why that is, I'm sure there are valid psychological reasons.

I did get a message over the Christmas break from someone I used to work with. He has recently resigned from his job and retired. Seems he watched what I did and listened to why I was savings so much and decided to try the same. A combination of high savings, a small inheritance and buying a house when it was "cheap" means he has gotten their quite quick. So kudos to him and it seems not everyone I worked with thought I was a moron.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sun Feb 11, 2018 7:55 am

We are settling into our new place and have been getting a routine up and running.

First is our meals are planned on a Sunday for Monday shopping trip. We pick, some sort of staple, a sauce, whether we want meat and finally pick 3-5 vegetables. This is done on odd days, even days we will have either sandwiches, soup or salad along with leftovers. On the Sundays we will have takeaway or eat out. I starting to think we should reserve Sundays for cooking things we don't usually have.

Most meals out we could make ourselves and its whether the cost of not doing it is worth it. After having a recent curry that was 12x the price of homemade. The rest of the weeks food came in at less than that one meal. Even time wise I don't think it saves that much, takes about an hour to make the meal vs about and hour to go to a place/order takeaway. I am starting to lean towards just eating out when we are meeting friends rather than regularly. Even though I retired early I never really stopped the going out for food, maybe because the savings rate was still high.

For the last maybe 18 months I have been eating 1 meal a day so the plan above works well for me. After the first week or so of my brain telling me i was starving now I usually get hungry about 4pm.

I have started to spend 4 hours in the morning doing work. A combination of learning some programming and reading all the books I have added to kindle over the last year (63 on the list). Read so far:

The Meditations of Markus Aurelius
The Obstacle is the Way
The Subtle Art of not Giving a F***
Deep Work: Rules for Focused success in a distracted world
The Startup Playbook
Anything You want: 40 Lessons for a New Kind of Entrepreneur
Instant Motivation: The surprising truth behind what really drives top performance
Business Adventures
Elon Musk biography
Slicing Pie: Fund your company without funds
Be Obsessed or be Average
Choose yourself

The business type books I am not sure how much I get out of them. There are some interesting stories but they ultimately boils down to, I work hard, work really hard, I'm great because I work hard. Exception would be slicing pie, its an interesting way to split a company that seems largely fair. If I ever go down this route I would consider it.

Deep work caused me to change my 4 hours to have the Internet off and phones in a different room. There have been times when I get stuck and can't search for answers. I am still trying to decide if this results in a more productive session, I think in the long term it probably is. It could lead me to having more resources I might need available upfront

Stoicism books are interesting, I might read more but the comments of "it changed my life" I hear from some I don't get out of it. They seem to be books on common sense and thinking about the world around you. I guess if you have never done that they may have more of an impact. Then again I have only read a couple so my view is somewhat shallow on the topic.

After the morning I will then either go out for a walk or do something a bit more difficult (tennis, running, swimming, weights). The rest of my day I view as guilt free. sometimes I do more work but generally catch up on TV, computer games, comics, mindless Internet browsing, getting upset at news and so on. I could shift around my work time to take out the simpler "work" items that don't need much thought. Add those to the afternoons.

I have been tracking exactly what I have been working on, it has been useful to see. I thought I was spending a lot of time doing accounts and managing the business I have up and running when in reality it comes in at 10 hours a month. When reading books it also give me the exact time to completion. Been averaging about 337 wpm. I know some say speed reading is a thing and I looked into it when I was at university. I came to the conclusion that it was nonsense and if I increased my speed it resulted in an equal fall in my understanding. The only thing I do that is recommended is to follow my finger across the page, but I have always done that.

Not started on the language learning yet...oops

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Wed Jul 04, 2018 6:18 am

Been a while since I posted and we have been plodding along trying to figure out the whole retirement thing.

We have started to look at a few houses out here. I think I would rather rent but there is this complete refusal to deal with our situation where we are. Income from dividend, rents and company pay they just don't want to deal consider. We could eventually find someone who understands and is willing to do a deal (like now) but it limits what we could get in a large way.

There are some nice places where we are. We could get a nice 3 bed flat for around about the £180,000 range. We would then be able to rent out the spare rooms and have our housing cost drop to zero. We looked at the 1-2 bed places and relative to renting these didn’t make sense. We would be better just staying in the more expensive than we need place we are now than making a purchase.

We still have in the back of our minds the option to go back to the UK and live in the property I have. Even though I am enjoying the time here there is an overhead associated with it. Dealing with health insurance, learning new taxes, registering paperwork, figuring out new rental rules a few other items I don’t remember offhand. I think I would rather cut those items out of my life. The perma-travel of a few months in various places is easier than an outright move as the “citizen” based requirements just don’t factor in.

If we were to go back to the UK the flat there is worth £150,000 and we could rent out the spare room at £650 a month. Which if we look at the 4% number would be the equivalent of a £195,000 investment. So, in the UK we are more than living for free in the flat. With the added benefit of no new country overhead and the gym, pool and so on that’s in the building.

We will see, the decision will be made at the end of the year when the initial rental contract we have runs out.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sun Feb 03, 2019 9:13 am

So it's been a few months since I have commented but have a general update for the year of living in EU and after the 12 months we have actually bit the bullet and processed the paperwork to go back to the UK. A few people suggested I hang on and wait until Brexit is over but with my flat being owned outright and large portions of my meals coming from staples, even if it is a disaster it won't really impact me quite as much.

Anyway the target date for moving back is sometime in March and then hopefully we can sort out a pretty nice routine for ourselves.

I have our combined expenses for the year and relative to my previous it was a bit of a disaster at £34,144. That said it was between two of us, so really £17,000 per person. My wife covered her own health insurance so its a little higher than this. EU health insurance is nowhere near US costs so it wasn't too bad.

I did pick up some work at the end of the year and along with dividends and some rent from my UK flat I have just about broken even.

Pay: £12,660
Dividends: £12,003.73
Interest: £144.66
Gifts: £350
Rent: £7,150

Total: £32,308.39

Bank Fees: £87.94
Bills: £1,810.51
UK Flat: £2,840.46
Clothes: £535.12
Electronics: £645.03
Entertainment: £343.82
Food - Out: £1030.11
Gifts: £817.96
Groceries: £1,709.36
Holiday: £1,376.74
House: £4,459.53
Learning: £485.32
Medical: £216.25
Other: £4,079.88
Rent: £11,339.88
Travel: £2,368.01

Total: £34,144,91

Now although this is all very bad to look at there are a few costs in there that are about to disappear.

House - this is mainly an upgrade that was done to the bathroom and will not be repeated
Other - this is all the costs of processing the UK visa application
Rent - about to drop to zero
Travel - a few trips back to UK for family visits that will stop soon too (not to zero though)
Bills and bank fees - these are EU specific bills that will go away and just have UK Flat costs once moved

So removing these brings costs down to around £14,000 ish a year. Still areas for improvement but a much more manageable base level.

We don't regret doing the year in EU instead of going straight to the UK but it has given me a different perspective of what I like about UK. Even though my country is having its mini breakdown just now. If I can manage to just ignore the news then life will pretty much go on as is. No TV will be the first rule of the flat I think.

Posts: 788
Joined: Fri Jan 06, 2017 5:09 pm
Location: Germany

Re: JollyScot's Journey Starts

Post by wolf » Sun Feb 03, 2019 11:04 am

HI JollyScot! Thanks for the update.
Yeah, Brexit did shake a few things up in Europe. Where haven you been in the EU? And what did you learn wrt to "different perspective"?
How much assets have you invested to gain 12k dividends from it? That's pretty high!
Take care. And I wish you a smooth move to UK.

Posts: 52
Joined: Thu Feb 26, 2015 3:44 am

Re: JollyScot's Journey Starts

Post by JollyScot » Sun Feb 03, 2019 2:43 pm

Ah yeah the dividends maybe could be split out a bit as it is not 100% investment income. It comes from about £240,000 in assets plus a dividend payment from the company I own.

Shares: £7,003.73
Company Dividend: £5,000

The investments I have now in the run up to Brexit date are
30% bullion,
25% UK stocks,
40% international,
5% cash

I should probably have less UK stocks because of Brexit, but I think my Bullion holding will help if a disaster strikes, and a large number of large UK companies make their money outwith the UK. So a fall in the £ can make them rise, depends on how much of a mess the leaving is. If there is a disaster then I could pick up some cheap stocks. I'll wait and see, in general i don't want to spend the time really thinking about it. On the actual leaving date though it is probably worth spending the time.

The other £5,000 "dividend" is really from my own company so should probably be counted as pay or salary I guess. That's not how I record it though or what it is in practice.

As for where we are in the EU it is France. So i have now a reasonable experience of what it is like in UK, France, Switzerland and Spain.

There are pros and cons of them all. For the UK specifically I like:

Access to high quality university libraries
Higher food selection and choices
Easier day to day navigation
People happily speaking to you day to day (may be Scotland specific, London certainly is not like that)
Large number of festivals and things going on
Already have a high quality flat I can live in
Company already up and running and easy to maintain (although our government is doing its best to make it harder)
With my family there we end up with reasonably regular trips back and repeated flying gets annoying

I'm sure the places I have lived have some of that too, but for what I do in general the UK is just an easier place to live. France specifically has this large administrative overhead for everything that I don't like. I would rather have a months holiday here than live here full time now.

If I can just ignore the bad new cycle of doom then day to day life in UK doesn't have too many annoyances really.

It really comes down to do I want to spend the next 6-7 years getting a second passport or not. Considering I really don't want to get a proper job again it is starting to look like the answer is no. You don't know if you don't jump in and try I guess.

Post Reply