| Real Life Strategies for Building Wealth

health, wealth and success

It is the last day of 2016; and good riddance. I already told you that in the main 2016 is a year best forgotten. As part of my annual review, I mentioned that my words for the year didn’t play at all. This year sucked and it sucked big time; mainly because of large scale political developments that will define our way of life for decades to come; and this is not the kind of life I’d wish on my children and on most people under 30 at the moment.

This aside, 2016 was not that bad for me and my family. So, in the spirit of honesty and fairness for which The Money Principle is known, today I’ll share the things that went well. You’ll see, these are no small things in the small universe of family and personal finance. There was health, wealth and success for our family.

#1. We kept healthy

You know, wealth is nothing without health and we – John and I – are getting to an age when anything could happen. We’ve been really healthy and apart from the occasional cold all is well. Including, my blood pressure regulated after we got Suzi the Dog.

One area of concern for me is that I’m rather heavy; this is why the ‘run’ part of my words stays for next year.

#2. Two sons have jobs

You know that the labour market is messed up, right?

So forgive me if I sound a bit like Mrs. Bennet but sometimes I’d look at John and sigh:

“Fortune has been good to us, John; two sons working.”

Now that our middle son has a job with a great employer all seems to have changed. Our Christmas was lovely because the grown up sons were relaxed and full of purpose.

I feel the need to mention our fifteen years old as well. He is very different and doing really well at school. Next year, he’ll be doing A levels in: maths, further maths, physics and chemistry. His passion is astrophysics which is a great thing to master – as I’ve repeatedly told policy makers, now is the time to put the whole science and innovation budget into finding a new planet and figuring out how to get there.

#3. Sold the apartment in Sofia

I know that I keep going on about this one. Even mentioning it so often should tell you how much it means to me.

On the one hand, I’m very pleased because we sold it with great return: we had this apartment for nineteen years and it increased in value 370%. This is not bad at all. (Yes, some of this is because the GBP is down but all my bills are in GBP.)

On the other hand, my feeling is that there will be trouble on the Balkans; so I think that I’ve got out of Bulgaria on time.

Most importantly, I’m on this quest to simplify my life. Selling this apartment makes me feel so much lighter and able to focus on other things.

#4. Got myself a juicy pay rise

Yes, this as well. In 2016 I negotiated approximately 15% salary pay rise. This is quite a lot and I’ll tell you how I did it in a separate post. What matters to me is that it was fair and it was something I’ve never done before.

One rule guided me in negotiating this: our salary is a reflection of our value to the employer. Contribute, and argue, value and the pay will come.

#5. Investments

Last year I promised myself that in 2016 I’ll start learning about investing and do it for real.

Guess what? I did and followed the broad formula I used when paying off our enormous debt: I learn and acted.

I learnt about index funds and robo-investing

health,wealth and success

We continued to build up our Nutmeg portfolios. Do you remember that in February 2016 my Nutmeg portfolio was 0.46% under what I put in it and I wrote to tell you that I still love these guys enough to stay with them?

I was right. My Nutmeg portfolio not only recovered; it yielded a healthy (for this troubled times) return. I expected that our two portfolios will return £1,500 and they returned £1,777 or approximately 4% for the year.

(Please note that this is a snap shot of my Nutmeg portfolio only. And yes, it is called ‘Freedom fund’. John’s portfolio did better than mine.)

I learnt about value-investing


health, wealth and success

In December 2015 I started a Rule Breakers portfolio with TD Direct Investing. This December I have 14 stocks in pharma and tech companies. My portfolio has returned 6.3% in a year which, I believe, is not too bad for an absolute beginner.

I invested in a local business

Strictly speaking this one should say ‘we’. While the Rule Breakers portfolio is entirely mine (and up to me) and my Nutmeg account is separate as well, the decision to invest in a local business is shared with John.

In April 2016 we bought into a local MOT, car services and sales business with a 50% share. This has returned approximately 20% which has been re-invested in the business. I hold great hopes for this one.

#6. I became a ‘visiting professor’ at a Swedish university

I got the news just before Christmas and John has already started calling ‘professor squared’. Let me say that ‘squared’ is not something I wish to be known for. This is great because of the opportunities it offers to work with colleagues at that university – very helpful during my upcoming sabbatical.

As you can see, 2016 was a bad year in the long run because of the political uncertainty it brought into our lives. For me, 2016 wasn’t very good because I failed to saw the seeds for future success.

It was a year of health, wealth and success and these were still reaping the benefits of our efforts over the last six years. After all, we went from £100,000 worth of debt to approximately £200,000 in new savings and investments; we supported our sons to help them sort their lives out; and I wrote like the devil both for this blog and my academic career.

My only frustration is that we are still in the ‘slow lane’ and acceleration will take the effort I couldn’t muster during 2016. Let’s hope 2017 is better!