Interview Series: Monevator

I do a lot of reading of other personal finance blogs, and while I share them occasionally in my “Best of the Rest” round-ups, I want to give some shout outs to those who have been consistent commenters and let you get to know them a bit better. Hopefully this will become a regular thing.

Up first in the Interview Series is Monevator, a UK based blogger who gives motivation to armchair investors.

Why did you start a blog? Why Personal Finance?

I guess I started a personal finance blog because if I didn’t, my friends and my then-girlfriend would have killed me for boring them to tears. I’m a bit like Buffett — without quite so many billions! Sure I have other interests — Buffett has steak and coke, too — but the first pages I read of the newspapers are the business pages, the only bulletin boards I’ve ever contributed to are personal finance and investing ones, and so on.

So there was that — it’s 100% my passion, there’s no faking and I probably should have done it for a career (except I hate 9-5 employment! I’m now totally freelance, which pays a bit better too, at the cost of career progression).

I would say that my passion applies most to growing your net worth and achieving financial freedom through small business ideas, passive income and investing. I’m not really a save your coupons kind of guy. I’m naturally very frugal (I’ve saved over 50% of my salary some years, though I was fortunate to earn enough then to do so I concede) but there are other blogs who’ve already got that angle covered.

A bit like the title of Sweating the Big Stuff, I’m more interested in the big picture story. What are you doing about your income? How will you grow it? Where should you invest it? And what’s the end goal?

What is the most important personal finance lesson you have learned?

I’d like to tell you it’s to trust yourself and don’t listen to experts. I was well over 90% invested by the March 2009 lows, despite all the gloomy talk from bloggers and the mainstream media alike. Once I ran out of cash, bonds, REITs and so on to sell to buy stocks, I started selling my real world possessions to try and put more money into the market. (This isn’t including my emergency fund, which is larger than normal because I’m self employed, and which everyone should have and consider sacrosanct).

I didn’t know the market would go up anytime soon – you can never know that. But I did judge it would do someday… stocks were just too cheap, and everyone was panicking like it was Doomsday. (If the worst predictions had come true, cash would have been worthless anyway!)

So I’d like to tell you that. However my main lesson was not buying a house between 1999 and 2004. At first I could have bought something useful, but I wanted an amazing house at a bargain price. Later I thought (after 100% or so more rises in here in London) that prices were out of whack with rents, salaries and so on, so I didn’t buy again. To buy somewhere I could live for say five years would cost me at least £400,000 ($600,000) now. That prevarication probably cost me at least £200,000 ($300,000, or more like $400,000 on the £/$ rate then!) in lost equity that I would have still gain, even after the price falls in 2008.

That’s the most painful lesson — I’m not that smart. (Of course I’m not buying now. So I’ve still not learned!)

What does financial freedom mean to you?

My father paid a fortune into company pensions (well, a fortune for him, relative to his income) and did all the right things, but was stuck in a job he couldn’t leave to access that money for another 4-5 years…this when he had a life-threatening disease lurking in the background waiting to kill him.

I hated that he couldn’t get out, and vowed to be in charge of my own destiny.
Eventually he did retire 12 months early, but a couple of years later he had a massive heart attack and currently suffers all sorts of disabilities and is essentially housebound and in permanent care. I’d guess he got to use about 3 years of that pension money he put away while he was healthy, although my mum benefits, too.

So now I want to be financial free to do what I want, which likely will always involve some work, but will increasingly NOT involve anything I don’t want to do. The aim is to have a big – ahem – ‘screw you’ fund so I can choose to do what I like, and I don’t have to be *allowed* to have access to my money.

What was first personal finance memory?

My first memory is of making pizzas and selling them to my parents for a few pennies. Not much money, but I used their ingredients so I made a healthy profit!

What is your favorite thing about the Yakezie group?

Going up in the Alexa rankings! Seriously, I get a buzz out of it. But a very close second is getting a focus on which of the dozens of personal finance blogs to hone in on, and meeting people (in virtual terms) such as yourself, Sam, Ryan, Neal Frankle, MoneyFunk, and many, many more. I’m not a very sociable blogger, I just like to write really, and I needed to work more on the community side of things. This has helped a lot.

If you could go back and tell your 20 year old self one thing, what would it be?

I’d tell myself having long hair and listening to alternative music while hanging around with my beautiful girlfriend back then was all very well, but in 2-3 years I’d start working and realize that socialism was a charming idea that doesn’t work in the real world because people are inherently lazy and selfish.

I was born a capitalist but I went through that left-wing phase and unfortunately it was when I might have made some more investing-related career choices. Instead I’ve had a very fun and laid back career, but it’s not been as financially rewarding as it might have been, and seeing as I think about stocks 8 hours of the day to be paid for it would have been a bonus!

It was poor timing, but I don’t really regret it. As we say here in the UK: “If you’re not a communist when you’re 20, you haven’t got a heart, and if you’re not a capitalist by the time you’re 30, you haven’t got a head!”

What are your two favorite posts?

My first is this post about replacing your salary with income from investments over time. I think it’s a much more sensible long-term goal for most people than worrying about fluctuating net worth. Income is usually much more stable, and if you want to live off it one day, it can be much more tax efficient to build your investment portfolio that way from day one.

My second choice is a long and self-indulgent one about my father, which puts what I’ve said above into more context. I’m going to pick it because Google doesn’t understand it and so never ever sends anyone to it, and if you’ve got time I think it’s one of the better things I’ve written. It’s called Money Can’t Buy Me love.

Thanks for your great answers, it was a pleasure having you!