The English Investor Top Resolutions for 2019

Intuitively, I’m not the biggest fan of New Year resolutions. If you need to make important changes in your life, why wait January 1?

And yet, I do also believe that, if you don’t write down your goals, it’s easy to lose track of them. Measuring progress every now and then is critical in achieving anything.

It’s also useful to take the time to assess where we are, review the progress we made and determine if we’re happy with it. If this time of self-reflection comes once a year as a New Year ritual, that’s better than nothing.

Lastly, how ambitious should one be? Being complacent will not move the needle. But hoping for too much without a clear path can become depressing. I believe you should try to overshoot slightly.

After all, achieving a goal knowing that it was achievable will dampen the sense of achievement. You’re following me, right?

Top Financial Resolutions for 2019

Resolution #0: Cover the basics.

Maximum pension contributions and ISA contributions up to the maximum allowance for each product. In my case, my employer and I can only contribute a total of £10,000, which goes quickly. I will also contribute the full allowance for my ISA (£20,000). This is resolution ) because I see it as mandatory. Nothing else can happen until I achieve this. Let’s say that it’s the bare minimum to get closer to financial independence.

Resolution #1: Save $100,000 in cash.

It’s not just the nominal amount that makes this goal very ambitious. Assuming I can find a venue on time, I am getting married next year. I anticipate that my spending will increase significantly because of my wedding so it is important that I build-up my cash buffer asap!

Now, it’s worth clarifying a few things here. Yes, this amount will take into account the £20,000 I intend to contribute to my cash ISA. And yes, the target amount is in US dollars because the same amount in pounds would be unfeasible to me. Finally, this is the amount to be saved, not the amount to be held in cash at all times. Based on whether I make any investments and how much I will spend on my wedding, the cash amount actually sitting in my bank account is likely to be less than $100,000.

Resolution #2: Keep lifestyle inflation in check.

I’m keenly aware of the dangers of lifestyle inflation. As I’m writing this, I am somewhere in the air using the complimentary wifi provided by Emirates for business class passengers. In this case, I had anticipated this expense for a long time. As a result, my budget included the cost of this extravagant flight and I don’t feel too bad about it. If I had not planned this properly, buying a business class ticket would have been a prime example of lifestyle inflation.

Budget it. If whatever you budget compromises your financial goals, then you cannot afford it. Period.

Resolution #3: Take more risks.

I tend to be conservative. It’s probably due to the fact that I’m a lawyer, a very conservative breed of people. The reality is that there can be no win without risks. Also, when you clock close to 100 hours at work in a week (yes, it happened a few times), you tend to be a lot more conservative because earning that money was painful.

I’m not quite sure how I intend to take more risks. This is something I’m still trying to figure out. I do love start-up investments as they tend to be exciting projects and you can capture significant tax relief along the way. Yet, there are still incredibly risky and the investment is illiquid for at least 5 years or so. Not the best idea when you believe that the macro picture is about to get worse.

Another possibility is property. However, the government murdered the buy-to-let. Managing a decent rental yield is, therefore, a lot harder. Purchasing a home for myself is a better idea but the London housing market is falling. Timing the dip is tricky but I can imagine London property prices soaring significantly in the next 12 months, absent a reversal of the 2016 referendum.

Resolution #4: Diversify my income streams.

I have one income stream that accounts for over 50% of my taxable income. That’s too much. As nothing is eternal, it makes sense to seek and grow other income streams. It can take years for an income stream to reach its full potential so starting early is a requirement.

Purchasing property is the easiest way of adding a new income stream as the rent provides you immediate income to service the mortgage. Also, house prices tend to trend upwards in the long-term (20 years +) so the equity is likely to appreciate. At least, that’s the theory. However, property is very location-centric and what can be a good investment in one place can be a terrible one a few blocks away.

Resolution #5: Make one small Venture Capital investments.

As part of taking more risks, I intend to make one small VC investment. Besides crowdfunding, it is my understanding that it’s hard to invest with less than £25,000. That’s probably a bit much for me in 2019. I will be closer to budgeting £5,000 to £10,000 depending on the risk profile of the investment.

I know investing such a small amount won’t turn me into the next VC angel investor. Based on the number of start-ups that fail within three years, I might even lose the entire investment. What I’m looking for here is to improve and fine-tune the limited experience I have in this field.

I know the theory on how to value a company, what to look for and how to be comfortable with the risks. But the theory is one thing, and practice is another. Spending £25,000 on a cool project is not something that I would do lightly. The business case must be strong and there must be some prospect of generating a profit in a few years down the road.

Finally, I want skin in the game. Readers are not stupid. If I preach something and then don’t follow suit, how can I be credible? In addition to the credibility issue, I feel it’s a lot more interesting when the investment is real. Practice is usually a lot more entertaining than theory!

Top Blogging Resolutions for 2019

When I started The English Investor, I just wanted to share my views on a few topics. With over 6 years of leveraged finance, I think I know a few things that could be useful to others.

I soon realize that blogging can truly be a full time job. From mastering WordPress to promoting posts and interacting with readers, you could spend the entire day blogging.

Therefore, I decided to step up my game. The intention is not to be a pro and do this full time. I intend to continue to practice law. For compliance reasons, I would rather stay anonymous for now. Maybe this will change in the future. So here are my top resolutions when it comes to blogging.

Resolution #1: Post twice a week.

This might not seem to be a very ambitious goal. But writing a comprehensive post really does take time. I will always choose quality over quantity, hence the twice a week schedule.

It’s not just about the number of times a week or the quality of the posts. It’s about regularity. I want to stay engaged with readers and I feel it’s probably significantly harder to do so when nothing gets published for four consecutive weeks.

Resolution #2: Redesign the blog.

I can neither paint, nor draw. It should not come too much as a surprise that I’m quite bad at website design. When I launched the blog, I was excited to publish content. The reasoning was the following: if there is no content, people have no reasons to show up and stare at an empty but beautifully designed website. If there is content and it sucks, then nobody will come back and having a nicely designed site is still useful.

But I know the design is hurting your eyes so I will do my best to fix it one way or the other. I want to modernize the layout of and improve the site/s navigation (i.e. how to discover older posts and engage with other readers).

Resolution #3: Double traffic on the blog.

As you can imagine, the first few months were very slow. However, traffic picked in the past month without heavy promotion, which I find encouraging. If I’m a bit more regular in posting and stick to my schedule, I see no reasons why traffic wouldn’t pick up.

Resolution #4: Stay true to the original vision I had for this blog.

I want traffic to increase because I believe that some of those posts could be useful to some readers. They might save some money when claiming tax relief or become more aware of the need to set up a financial safety net.

But I don’t want traffic to increase at all costs. If this means writing posts on the best interest rate available, then I’m not interested. I also don’t want to promote affiliate links of products that I’ve not tried and approved myself. It’s fine to share my experiences and help you to get a decent deal on something. It’s another matter to turn this blog into an advertising platform for affiliates.

Resolution #5: Send love to the mailing list.

The mailing list was originally supposed to be the easiest and quickest way to be notified of new blog posts. While this works well, the set up makes the email a bit impersonal. I want to improve the way emails are delivered to readers. I also want to add more exclusive content that is only available to readers who bothered to subscribe.

Some last minute resolutions

Resolution #1: Be happy with my loved ones.

It’s always hard when loved ones are involved because the standard is so high. You are not trying to keep someone happy for a day or even a week. You are trying to keep everybody happy every day and every week. It never stops and it can sometimes be difficult to manage.

By taking a step back and assessing the situation, I hope that I can make the right choices for me and the ones I love.

Resolution #2: Play more guitar.

There is one John Mayer riff in “Come when I call” that I really want to master. That should be achievable.

Resolution #3: Be a rockstar at work.

Talking about guitars… It’s time to be a at work.

With more companies entering seeking a restructuring of their debt and capital structure, it seems increasingly likely that the good times are over. 2019 will continue to be volatile, especially if the yield curve continues to flatten.

To make sure that I don’t get the boot first at work, I need to be versatile and to perform at the best level I can. Firms that are listed will have paid attention to their falling share price and the rates increases of the Fed (two more scheduled for 2019!). Those firms could reduce their spending and investments as a result, and this includes paying bills for non-essential legal services.

If you find a better opportunity, quit your job and seize it. Be my guest. But if you are simply dissatisfied with your job and were thinking of quitting, do me a favor: don’t. Make sure you figure out your game plan first.

Happy New Year 2019! I wish you the very best.

Yours truly,

The English Investor