Mike 53 years old, Manchester Husband of one, Father of three Homeowner with mortgage family home (interest only - expensive interest rate duhhh) Only started my pension savings in 2019 - a legacy of 30 years self employment and stupidity In 2018 I took on full time paid employment for the first time in my life after leading a crazy self employed living from one free lance gig to another for 30 years - I now have my dream job Financial status - Rocky but improving. Once I get … Read More........ about About Me
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Getting Rid Of My Overdraft
Clearing my overdraft
June 2020 – I’ve now got my monthly overdraft down to only £450 – a marvelous effort from the £15,000 of summer 2018.
June 2018 — read below….
I have a short term ambition – to clear my overdraft which has over the years seen me go £15,000 into the red on a frequent basis.
Now that I’m no longer self employed – there is simply no excuse for hitting the red every couple of months. My income whilst self employed was comprised of infrequent but large pay checks. My bank we’re happy to cover the gaps but charged me for the privilege. Now that line of work has dried up, I ended up maxing my overdraft and credit cards out… Now I have to start paying it all back. (my overdraft as of June 2018 stands at just over £10,000 at an interest rate of 35%)
Last month I managed to scrimp my way to a £500 monthly surplus – as I had some back paid work expenses hit my bank account and I’m expecting a further £300 this coming month to come back my way.
That’s going to leave me another £700 to find to get back to staying in credit/in the black at the end of each month.
Today is the 19th August – my ambition is to raise as much extra money as I can by my next pay day on the 20th September by selling off my unused sporting equipment and other assorted goods and junk. Anything I make that’s in excess of the amount needed to clear my overdraft by the 20th September (payday) is going to be put into a new stock/futures trading account.
Ebay is my preferred way of selling off my unwanted stuff – I’ve tried out a few car boot sales over the years and find them to be very frustrating – people make ridiculously low offers on things that I’m trying to sell, I always drive out feeling as though I’ve given my stuff away.
Even though the fees from Ebay/paypal when combined hit about 20% of the sale price of my stuff – at least I feel as though I will be able to set a fair price.
So lets see how I get on – and I will keep updating this page for the next month showing what I’ve sold and how much I’ve received for it.
(current value of investment account £1600)
My Investment Process
My Investment Process is really simple.
My local banks in the UK currently give interest on accounts at around 1% – which is in reality a negative investment when you consider that price inflation is currently around 2.3% … so saving in a bank account and losing 1.3% a year doesn’t appear to be any sort of option
I have had my fingers burnt in the past when investing in individual shares. It was great fun, but the lessons I learnt were all about not have my eggs all in one basket, and also that information is key – and companies can be rather economical with the truth about their true financial position….. Individual investors are always the last to know when things start going wrong.
I’m still a big believer in the stock market – as it gives a financial return far in excess of anything that you can get from a high street account and I have no fear of markets. I just allow a professional investment manager do his stuff, spread investments around and prepare to ride out the bad times and enjoy the good ones.
I am currently investing my £400 a month in my stocks and shares ISA in two companies.
Black Rock Smaller Companies investment Trust – London Ticker BRSC.L
and Polar Capital Technology Investment Trust – London Ticker PCT.L
The UK FTSE 100 index gives an average growth rate of 8.07% with dividends re-invested over the previous 10yrs
Compare that return with this screen grab of an Investment Trust rank tool from my AJ Bell You Invest account
Click on the image to enlarge – As you can see – the average growth rates over 5 and 10 year periods are far in excess of those from bank savings accounts and even the FTSE 100 average
I decided to pick Black Rock Smaller Companies – on the very basic premise that smaller companies tend to grow faster than large ones. So I invest £400 every other month into BRSC.L which has a 5 Yr av growth rate of 20.03%, and a 10 yr av growth rate of 19.37%
The other investment I make for myself on a bi-monthly basis is the Polar Capital Technology Investment Trust – PCT.L This investment trust gives a 5year av growth rate of 23.59% and a 10yr av growth rate of 21.80%
I’ve only £1200 invested so far, so lets see how they roll over the next few years, and if these fantastic growth rates are maintained
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