planning – Page 3

Mortgage free ?

Mortgage free , a goal a lot of people aspire nowadays. It’s how I got started viewing my finances differently and more specifically my take on risk. I went on paying off as much as I could as fast as I could. The math was extremely simple, I had an interest rate on my mortgage of 5,35 % and was getting 0,25% or thereabouts on my savings acount.

This turned out to be a smart move , especially when bying a new house, there was some money left after selling the old house and clearing the old mortgage. This made the proces easier , there was no need for stretching towards the maximum lending capacity. We carried on paying off the mortgage at the same pace. The math was still in out favor, despite getting a significant lower interest rate of 2,7%. In the mean time the savings account produced only 0,05%. Full disclosure , I do not take into account any tax reductions or other tax advantages because they differ for everyone.

At some point I became aware of the fact that nothing in terms of housing was cheaper than any of the alternatives. Including a maintenance provision. All other alternatives like renting or buying a smaller house are more expensive. Even social housing is costs more , which I do not qualify for.

So all other alternatives are pricier. I started wondering if my extra mortgage payments still made sense. Isn’t it better investing these sums in other more liquid investments ? The mortgage will take care of itself in the remaining time the mortgage still has too run.

For me the answer was yes, simple math with a return of 5% gets me more money at the end of the line and the money is available, it’s more liquid.

Isn’t this simply hedging the mortgage against more riskier investments ? Yes it is , I am using the time and the debt in the house too take on more riskier investments. Brings us back too risk, what is the risk ? I live in the house and in the current market there are no opportunities in finding something cheaper. The biggest risk is I can’t afford the mortgage payments anymore. And this would mean finding cheaper housing when that happens, which isn’t available.

It’s now time for kicking my habit of extra monthly payments and the little voice in my head saying , just get rid of the mortgage ! So I am taking these monthly extra payments and putting them in my ETF portfolio. Then at some point , likely faster I will simply have the remaining mortgage sum in liquid investments , which means I could at that point pay it off in full.

A very reasonable risk if you ask me.

3 years later

It has been 3 years already , since my brain injury, a sort of 3th anniversary combined with my 39th as it were. It has been a year of learning, yet again about dealing with the inevitable limits caused by permanent brain damage. Most notably the realization that there is, in fact a limit in what I can achieve. Building at expanding my activities in the way of work, social life and all other activities is not something I can do limitless. Although this was always in the back of my head, by planning meticulously and adding slowly that I somehow could return to my old levels, and in a way my old self.

As it turns out , that’s not the way it works, last year I upped my working hours towards 8 hours per week, first in 2 days and later on spread out over 3. It all seemed to work out, at least this was the initial feeling. Until the fatigue hit me and it took a couple of months in recovery getting back.

So I will keep it at 6 hours over 2 days. Which means I can recover and get a social or other activity in a week. Which is always fun, especially getting together with family and friends. In my enthusiasm I will go over my limits on such occasions , just because it’s so good having people around. So it’s a bit of a focus this year in getting the most out of that time spent.

In this quest in staying as stable as possible , keeping myself fit is crucial , the fitter I am, the better I can cope with moments were all else fails. Purly on physical strength I can manage to stay afloat. Getting home when I miss a train, It’s way too busy or if I simply forget too rest enough.

Periods in which I could exercise less my overall functionality and recovery was way off. It took ages. Luckily I really enjoy my running sessions, which clear my head like nothing else. It’s the one thing I can really control which is excellent because it’s vital in my ability too function properly.

A discovery which I hadn’t made when I was in my revalidation stage , is that the left side of my body is way worse than it was before. I hadn’t noticed this because I predominately use my right. By getting into exercising and building strength on my left side, I hope too improve this.

The hard part is realizing that I am , most likely at my maximum capacity , and I now know what it takes to stay at this level. A lot of disciple , rest staying fit and planning. It’s very weird not having a full time job , bering dependent on other people for a lot of things and being restricted in crafting your own future.

Nevertheless , I am very lucky being this well off, having a lovely group of family and friends to lean on. This makes me a very happy and fortunate person. Which I am very grateful for.

For the future it’s important too find real acceptance and not too hold on too the past and the vision of getting to were I was before this happened. I have too find progression in a more natural and organic way instead of just pushing my limits.

Find the challenge in things I can control.

Under 3 – Fourth week of training

This week has been a successful one, full training schedule done ! It went very well and although I can’t yet get enough speed this is something that I am working on with extra speed training and short speedy parts during the long runs. But that did not take away the fun , I am very happy I could cope with the Km’s smoothly. No weird pains or sore muscles in between the sessions. Which makes me a very happy person.

Strength training I am still doing via yoga sessions which I like a lot, it’s more tranquil and the continuous movement makes for a more flexible me. Which is an added bonus. Also it is supposed to make you more resilient and thus less prone to injuries. And it makes me more relaxes mentally , which is kind of ideal being me. 4 sessions this week and I am planning to keep this up.

All in all an excellent week. On to the next !

Under 3 – Second and third week of training

Another overview of my training activities, or lack thereof. Week 2 was mostly wasted on a food poisoning , which left just two runs in week 2. Week 3 also started in recovery mode which was rather annoying. At the end of the week I managed a few runs , a bit unfortunate but luckily at the beginning of my training plan and not at the end just before a marathon.

Training itself went well, just slightly slower due too overall weakness from the stint of food poisoning. All in all it held me back for a good 8 days.

Happy to be back and looking forward to week 4 !

Simple steps towards financial stability, pay your bills per year

Well, a new simple step towards more financial stability, It’s only a bit harder getting started. It needs some money upfront. Let me explain. Most insurance, utility, communal taxes and so on we pay per month, but as with all businesses people like to get their money upfront. And usually they give out a discount because of that. First figure out which ones gives discounts.

Discounts vary , generally between 1 and 2 percent of the total amount. It isn’t that much, but as with all little savings, they add up quickly. As long as interest rates on savings accounts are as low as they currently are , this pays off.

All it takes is a start. So most of us have a bit of a nest egg somewhere, so you can start by picking one that you can take out of your savings without making too big of a dent and paying it at once. Then you save the amount for next year every month. In the meantime you can try and save up some more and start paying an extra bill per year the next year. As long as the interest is below the discount this pays off.

It might take a year or two but once you get the ball rolling the savings can add up. And as with all savings you can use them paying off debt and or invest the money.

Optionality

Optionality , one word we don’t come across a lot. At least not in Dutch, more so in the English speaking world. Nonetheless a very interesting concept. When searching for the right way in accessing risk I discovered the work of Nasim Taleb, who has written a lot about risk and fragility in our modern society. In his book antifragility, he explains how fragility in systems work and teaches a lot about risk assessment. At least it was an eye opener for me.

Risk is often misjudged or risks are overlooked. This happens in all sorts of environments, from surgery right up when you sign for your mortgage. My search was mainly focused on finance risks. As it turns out , having options helps a lot and is very important.

It all comes together in how we asses risk , when you have more options, you have more protection against risk. But what does optionality means? And how do you apply this in everyday life?

Optionality is the possibility in making choices without the obligation too choose. Abstract yes, or maybe should I say. Let’s talk about it some more in terms of my favorite topic. Finance. If you have money left at the end of the month , you have options , let’s say you can buy a book , pay off a debt or whatever tickles you. I am not debating what the smart move is here, but options you have. This is not exactly what is meant by optionality, hang on we are getting there.

When you come up short every month, there are no options. You can only borrow beg or steal. All of which are bad options , basically no options. The amount of pressure in finding a solution will most likely work counter productive. Or you can’t see any valid solutions any more let alone think about alternatives.

When you are free to do what you want , or more or less anyway, this is were the real power of optionality comes in play. Imagine that in any given job, as long as it pays minimum wage, you’ll still be able to cover all monthly costs. It will liberate you from a very big pressure in life, the need too making X amount of money for years on end.

Now that stress is out of the way, your job is not one you will have too keep at all cost. Loosing it isn’t life threatening anymore and it opens up your vast brainpower thinking about other options in life. You can change jobs , try out a new position in your company without the fear of failure.

In any case things start moving again, not driven by that sole risk of loosing a job and therefore an X amount of money. Money is no longer the only risk you need too manage. When you have high (financial) stresses it clogs up your brains and devotes a lot of brain power in finding solutions when that sole risk pops up. It also leads your brain in making a lot of wrong short term decisions which will be wrong in hindsight. It most likely make the risks you are trying to avoid bigger instead of smaller. If that’s all out of the way decisions tend too be more balanced, better thought out and make for far better choices over the long term. Some say it unlocks long term thinking.

It leaves space for creative thinking, thinking up new projects , planning all sorts of cool stuff and actually finding time and energy in trying some of those projects. In other words you think of new options. And the projects you do , fail or succes make you think again and come up with even more cool options. The power of the multiplying options if you like.

Lessening financial stress is a very good starting point in search of a life with less stress and more opportunities. Minimizing the necessary monthly cash flow will give a sense of ease and space for you too work on ideas and projects which are buried in the freezer and really get hands on with them. Inevitably this (financial) risk reduction will bring you optionality.

Plan A or B

It’s been a few weeks since the post on the test results and in the meantime I have been spending some time on digesting everything, still a lot of questions need to be answered which I will hopefully get to in the next few weeks.

The recovery is now focussed on getting my concentration better when doing mentally intensive tasks. I have to cut up a task in tiny 10 minute pieces and take 10 minute brakes between them and do this for 1 hour. I then have to write all I experience during and after this hour. Also I have to grade my fatigue and general well being beforehand. Did I sleep well, what did I do the day before? That sort of thing. This is important to get a feel of how I perform and feel during a period of intensive activity.

I must admit last few weeks haven’t been easy , I had a bit of a setback after the ‘pressure’ of work went away , it’s not that they pushed me at work it’s just the fact that you want to perform at the best of your abilities. That being out of the way it became apparent how much energy this took away. After a week or so it started too creep in, being tired more often. Feeling fuzzy and unable to think properly. The people at the recovery centre told me this is normal when people go at it with full force, and thus having a few setbacks during the process. Learning to deal with these episodes is the important part.

One important factor which I always forget is to relax and let go , not constantly trying to figure out ways to improve myself and try to work on it all the time, be it consciously or subconsciously. Working harder isn’t the solution , relaxing more is. Which is an adjustment for me at the moment, but one I need to make.

They also pointed out to me I just started to really process what it means and what has actually happened in the past 7 months or so. After this stage I will have more room to accept it and then move forward again. All contributing to my recovery. So after sprinting in the beginning I am back to basics, simply walking.

It’s really strange how this affects your life , impacting almost everything you do on a day to day basis. Ignoring tell-tale signs of fatigue and pushing on is not the way to go. This also means being flexible enough to throw your ‘plan A’ out of the window and having a ‘plan B’ ready just in case. Which I now try to do when I plan my weeks. So if on any given day in the week I will be too tired for an activity I will have a backup activity in place, thus reducing stress from the pressure you put on yourself wanting to finish something.

Like Hannibal did in the old days, so every day can be concluded with ” I love it , when a plan comes together ” .