Going into 2013, I was stressed to bits. Through a friend (Ste) I had got into commissioning. Through Ste I had managed to get promoted to Commissioning Engineer on a small Gas platform just off Hull.
I am not the best Electrician and at the time, was nowhere near Engineer level. Although I had my HNC but that was a piece of paper and didn’t make me and Engineer.
I took the job anyway. This was a massive step outside my comfort zone. This ended up with me supervising up to 30 men as we were pushing towards first gas and there was a big push to get the job over the line.
The project was a success and I somehow muddled through and done ok. I would have been lost without the Instrument Engineer who helped me out massively. Chris was good as gold and we worked well together for over 12 months.
Buying our dream home
I am mentioning this particular project because it was a bit of a game changer. In a 4-month period, I spent 12 days at home. It was brutal but it bought us a house that we never thought we would live in.
Up to this point, I’d had a really good year work wise. But the decision to jump in and buy our dream house was a mistake.
We had been to see our home at the back end of 2012 just to be nosey really. And maybe get some interior design ideas for the home we lived in.
What I remember is me and Mrs Duffy sat on the landing saying, ‘Imagine if we could buy this house.’ I even think my better half said she would never want anything again …
A few months later, I was lucky enough to get the deposit money together. I got over excited in early February 2013 and suggested we should go up to our dream estate and buy our dream home.
It felt good seeing how happy my wife was, but it was still the wrong move. I let my emotions take over.
A legit plan B
Chris who I was working with at the time had about 15 houses. That was an excellent plan B for him as he made over £3000 pcm in cashflow from his rental properties. He was on good money, and he invested wisely.
A few months before buying our dream house, I almost got back into property. I went to see 2 or 3 houses and almost put a bid in for one of them. A pitiful effort and I should have known better.
But my negativity towards rental properties was still there. My negative equity had a bigger impact on me than I realised at the time. It must have really bruised my ego.
IF I got back into property at the time …
At this point I am going to imagine I made the wise decision of getting back into property. Just to illustrate the importance of investing your money wisely.
Between 2012 and 2017, I made very good money in commissioning in various different roles. I was fortunate enough to have a good network and I got a lucky break. I might have went back to get some qualifications but I was an average Electrician. But, I made the most of my break and made good money along the way.
At the end of 2012, I had 3 rental properties making me a positive cashflow of £700 pcm. We are going to say that any rentals bought going forward, are going to make me a very conservative £200 pcm.
Let us imagine that me and Mrs Duffy didn’t buy our dream home. Instead, we got the property bug and decided to buy more rental properties.
We decided to get 2 properties a year between 2012 and 2017. That would have been 10 houses to add to the existing three. That would have been £2000 pcm to add to the £700 pcm we were getting initially.
That is a grand total of £32,400 pa. That is an awesome plan B.
Should have, would have, could have …
It would have meant I would have stopped being a dark cloud over money and work in 2012. It would have meant that I wouldn’t have had to work all over the UK and all over the world.
But I didn’t buy any properties during this period and made several mistakes up to about 2018. You can learn from my mistakes in my new book.
The last thing I want is sympathy. I earned very good money and have been very poor at managing my money. Me and personal finance really didn’t get on from 2008 to 2018.
I just wanted to highlight what I should have done. What we done was get the bigger house and we got more expensive cars and generally fell into the consumer trap.
How not to do personal finance!!!!
Getting the big house with the bigger mortgage, put pressure on me to keep earning good money. 2012 to 2014 I earned good money and managed to buy our dream home. I managed to save some money as well.
This continued up to 2016 and I continued to save. I was a contractor and wanted to have some security behind me. Again, I could have bought another rental even after we bought our dream house. My mindset was very poor at the time, and I continued to just focus on work.
2016 was a year my personal finances went South. I decided I ‘d had enough of Offshore as my fear of helicopters was getting worse. Plus, I was spending 50% of my life in the North Sea away from my family.
I managed to get a good job onshore, but my wages dropped significantly. With our high expenses, we were now spending more than we were earning. Spend more than you earn, and worry about it later!
Not only that, but this was also a year we really made a fuss of ourselves. Instead of tightening the purse strings, we buried our head in the sand with our personal finances.
We decided we would buy a log burner. This cost £5000. Not only that we had to get a new settee, new armchair, basically a new front room. The front room cost £10,000 in total. Alarm bells started ringing and this is the time when I discovered spreadsheets.
I was on a job in Chester working in a team of about 10. We had a good team. A team that had been spoilt work wise and were all used to decent money at this point. And we were all shit with money.
We all got into putting all our income and expense on spreadsheets as we didn’t know where our money was going.
This was the start of me half-heartedly telling Mrs Duffy that we needed to change our ways. I was sick of the high outgoings and having to chase the money offshore and now away from home Monday to Friday.
My obsession with spreadsheets was very half-hearted as we pushed on with our horrendous personal finances.
The next little treat was a brand-new Audi Q5. This was on lease and added £400 pcm to our outgoings. Not to mention the cost of running it. We did love this car, but we just didn’t have the spare money to go out and get this upgrade.
Then there was the holidays. Now we felt like we deserved at least one holiday as we both worked hard. And we wanted to treat our girls. But we didn’t have the money.
We just thought we had good savings. We ignored the fact that our outgoings were now devouring our income. So, the savings started to head South very quickly.
The week’s holiday in Spain was about £4000 all in. We loved it don’t get me wrong. But again, we couldn’t afford it.
Then there was Lapland to see Santa Claus. Again, this cost about £4000 all in. And again, we couldn’t afford it.
Putting my poor personal finances aside, I have no regrets about Lapland. It was awesome and me and Mrs Duffy were very grateful to take our girls to see Santa Claus.
This was a once in a lifetime holiday and it was worth every penny. We were well aware of making the most of the kids believing in Santa and this added fuel to the fire. They loved everything about it.
The country where Santa lives (Finland) is beautiful and the cold snowy conditions add a bit of magic. The holiday makers go above and beyond as well and even me, and Mrs Duffy were believing in Santa by the end of the holiday.
Poor spending habits
As we had decent savings still, you could be thinking what is he talking about? Why is he getting worried and why is he getting obsessed with spreadsheets?
The point was our expense were now devouring our income. And I was well aware of this fact. This brought with it a lot of stress and anxiety. I did enjoy our holidays and other luxuries but the nagging thoughts about money and work wouldn’t go away.
Along with our big mortgage, our new spending habits caused me a big headache. One positive from this headache was that I forced myself to focus on my 3 existing rentals.
This was hard to do as I really had a bad relationship with the rentals due to the negative equity. I’d now had enough of my negative equity and decided to overpay my interest only mortgages.
This led to 3 years of aggressive overpayments. Getting back to in the black was a big deal to me. It was a little milestone I was particularly happy with.
What to do
I want you to use my example and try to implement some delayed gratification. If you earn extra money in your job or get a little side hustle, look to invest. Look to invest in property and get your plan B up and running.
Please don’t fall into the trap of letting your expenses match your income. Or worse still, spend more than you earn and worry about it later.
Book of the week: GOOD VIBES, GOOD LIFE, Vex King. Stop trying to impress people. Impress yourself. Stretch yourself. Test yourself. And be the best version of you that you can be with this excellent book.
For a hard copy visit the excellent Imagined Things Bookshop: https://imaginedthings.co.uk