Personal Development

We all need to have a religion in the broadest sense of the word; a life philosophy we use to navigate and make sense of our journey. Many of us are not formally religious and so, unable to inherit a way to live for whatever reason, we need to develop one of our own.

To recap, if you have no authentic goal or vision (Motivation), if you have fallen down one of the holes of addiction (The Sauce, Over Fat), if you are allowing yourself to be led up a gum tree by those who can’t help and ignoring those who can help (the Art of Advice), if you are not looking after your business/doing your housekeeping (Landlord), if you haven’t got any money or even worse are in bad debt (Investing), if you are entering into the wrong agreements with the wrong people and not entering into the right agreements with the right people (Relationships), if your actual body fat is not in harmony with your own body fat blue print (The Fat Zones), if your material world is cluttered and chaotic (Things) – then for each one of these omissions your emotions will suffer.

But in addition to the previous chapters, I wish to dedicate a chapter specifically to a further set of distinctions that help us to reach and maintain a high level of mental and emotional health.

Quality of life = Quality of Emotions

The quality of the emotions we experience in our life is the quality of our life. And life is an uncertain but finite chunk of time.

We are all experiencing emotions at any point of the day. If for example we wake up and then experience a cup of despair for breakfast, then for a mid morning snack we experience a slice of rage, then for lunch we experience a plate of anxiety, then for afternoon tea we experience a pot of loneliness and for dinner we ingest a large portion of inadequacy, then we are operating at a painful level of mental and emotional well being. All of these emotions belong to the ‘pain’ category.

Whilst I have compassion for someone experiencing life like this they are likely to be pretty stressful to be around. More significantly I believe there is a solution to this kind of suffering and that it is therefore not a necessary way to live in the long term.

Emotional turbulence is widespread and unnecessary, so having control over it is a worthy study

Looking in from the outside, there might not be an obvious reason why someone is in so much pain, and someone with far less materially, someone who you might think is more justified to experience negative emotion, might be feeling much more positive in comparison.

But such a tumultuous daily emotional experience, however unjustified by the circumstances it may seem, like obesity, is not so uncommon. And even for those not as chronically afflicted as the example above, an enquiry into our emotional well being and how to take control of it is therefore extremely valuable.

Assuming that we want to (which not everyone does because some feel they get pay offs from their suffering), how can we improve our emotional quality?

So what is really going on here and what is the solution to this so that we feel better? How do we improve our emotions so that we can experience our time and thus life in a more positive way?

Time spans – past, present and future

Past:

Past mistakes as a cause of present emotional turbulence

Some of the pain is coming from the way we have processed our past.

We all make mistakes and what’s particularly bitter is that some mistakes can have terrible, permanent, life changing and even fatal consequences for ourselves or for another.

This is in no small part attributable to an inescapable truth of the human condition in which our comparatively soft bodies can be injured or terminated at any moment by a whole host of hard or sharp objects as well cease functioning from the inside through some or even no fault of our own. As such one momentary loss of concentration or error in judgement can have devastating, life long consequences.

Even if we have survived the event, or not come out of it too scarred, we have all done things and omitted to do things that we look back on that make us cringe in the present and possibly risked compromising or actually compromised our future.

Another such truth that can lead to pain is that with the passing of time, as we age, certain opportunities that were once available to us, are lost to us forever.

If we complete the past powerfully however, in our minds we can stop these events from leaking out and contaminating our present emotional state.

Note that this process needs to be done continually because the chances are we will keep making mistakes because mistakes are an inseparable part of the life of anyone who is up to something. Ideally, so that we are progressing in life, they should be new mistakes

How to process the past

Forgive yourself, forgive others, extract the learnings, and then archive

The Museum of mistakes

We need to build in our mind a museum of mistakes so that we don’t discard the past but learn from these experiences, and have somewhere to put them so that we aren’t bothered by them in the day to day moment, but can still revisit the learnings whenever we want so that they aren’t wasted and so that we guard against making the same mistakes again.

The Museum of mistakes Exhibit guidelines

Final archiving doesn’t need to be completed in one go as high quality processing takes place over time. The exhibit can be retweaked whenever new understandings come to light as the life journey continues.

The exhibit needs to be compassionately constructed; we need to be our own best friends and forgive ourselves where applicable for being human and less than perfect.

Every cloud has a silver lining and it’s important the exhibit shows what was undoubtedly gained from the mistake or perceived negative event, as well as what it cost. There can be all sorts of gains if you look closely.

Furthermore the mistake, either yours or someone else’s that hurt us, can become an important part of forming who you are and what you now see as important and this needs to be appreciated, honoured and reenforced by the exhibit. Voids create values; desperation is at least as powerful as inspiration.

The exhibit needs to get as close to the truth as we can to uncover why it occurred. There are reasons why we acted the way we did in a particular moment, the exhibit needs to encapsulate the part of us that was expressing itself when we acted or failed to act. This puts us in the best position going forward to make choices that will have a better outcome.

The exhibit needs to come to a conclusion about what the event means to us. No event inherently means anything. We decide ourselves what an event means. If we don’t control this process consciously it will happen subconsciously. The meaning we attribute to an event will hugely effect how we feel about it. The meanings we come to need to empower our present, not weaken us, as they do often do.

The explanation needs to be plausible to the subconscious to create the mental satisfaction required leading to peace. Otherwise the subconscious will reject it as BS.

The museum needs to be locked and bolted so nothing leaks out of it. But remember you always have the key to deliberately open it and tinker with it when you want to. The past is a part of us and doesn’t warrant being thrown away.

Only say ‘never again’ in a specific way

It is very easy to have a painful experience and then throw the baby out with the bath water, wishing never to expose yourself to such an experience ever again. Perhaps you have leant someone money and it wasn’t paid back, it is easy to over react and declare I will never lend anyone any money ever again, but a better mental museum exhibit would be the more specific one of saying, never lend to THAT person again, or next time lend £20 and then £100 before I lend the £1000 that it hurt me so much to lose.

A quality, well-constructed, well managed mental museum of mistakes can help us to grow up. It allows us to integrate our past experiences and have them enrich us but not limit us.

You’ll know when an experience has been archived completely because you then won’t feel that stomach pang and emotional charge when you revisit it.

Sometimes it’s just a museum of the past and not necessarily to do with mistakes

Of course, particularly with the backdrop of death in which we all live, meaning that everything is lost eventually, not all events from our past that can potentially hurt us in the present, fall into the category of mistakes, poor performance or errors of judgment, so these events need exhibiting in the museum too, though perhaps in a different section of the museum from the mistakes wing.

Parents

One of the most critical archives we all have to complete is our past with our parents to whom we are naturally very exposed and vulnerable for a long time growing up. Some parents did the parenting job a lot better than others so completing the archive is a harder job for some than for others. If the parent was loving then that is a huge benefit, if they weren’t then there can be even more work to do to reach completion. Until we can complete our relationships with our parents we can never fully grow up and be our authentic selves and our incompletions will leak out into our present.

Note that some friends will be able to help you to archive your past powerfully and some can’t. If you have one that can, then consider yourself very lucky. But It’s not their responsibility.

Present:

The now – life occurs in the now

Whatever bad things happen to us or don’t happen to us, actually occur in the present moment, in the now, so getting control of your now is key to optimal performance.

Externally looking groomed and sharp calls us into action even with ourselves and helps others to relate to us optimally.

To perform optimally good attention, focus and calm are required to maximise our competency, problem solving & decision making ability and behavioural quality – qualities which will make you stronger and not weaker.

The calm state is one of being centered; in this state we don’t over react or under react; we don’t get too upset about what we see as wrong and we don’t get too happy about what see as right.

One effective way to change emotional state is through the body:

For example great service massage and spas can leave us feeling deeply rejuvenated.

Also, a regular exercise routine – particularly cardio, has a huge effect on how we feel. Any problem you are having feels totally different at 180 heart beats per minute. Adding music intensifies this further. A further benefit of exercise is that it is has the potential to make us stronger which means we are less stressed by challenges and thus we are more difficult to overwhelm. I see the mental equivalent of this as memory – which can also be improved and a good one of which makes life less stressful.

Another way is to guide your thoughts, (language patterns & tonality and self representations) and breath so that you calm down – I.e. some form of guided meditation. In this vain note that some songs work against us in that they guide us into being upset and lost for the rest of our lives with their ‘can’t live without you’ message etc.

Also anything that grabs your focus and thoughts such as a film or a book leads us if we let it. Keep your eye out for the solutions to your ongoing questions as you process the material.

Sleep: Improving our sleep has a great effect on well being. Make the room dark and quiet, without technology, with linen that feels great on the body. Sleeping on one’s own is best to limit disturbance. Write your dreams down as they give great insight into the subconscious mind where emotional pain is leaking from I.e. what still needs archiving in the museum.

Heart Break

Matters of a broken heart deserve a special mention being so widespread and potentially so agonising.

Heart break comes from a perception of loss of something valuable. Once understandings have been reached and it is clear the object of your craving definitely isn’t coming back to you, at least not at this stage of your life, or that a new agreement between you and your person of desire isn’t now possible or workable, we need to archive it in our museum and we need to direct our thoughts and actions towards healing, and away from obsessive thinking about and checking up on that person.

The less we allow ourselves to keep obsessing over a person the less we will obsess over that person as our addiction will stop feeding itself.

In the same way our bodies heal from wounds, our hearts can too, but only if we steer them to. In other words the emotional domain differs from the physical domain in that such heart healing doesn’t occur automatically, however non attachment to any other is perfectly attainable and we can certainly lead ourselves towards changing the nature of our feelings towards another.

If we are in an unrequited love situation, then remembering how painful it would be to be in a relationship with someone who doesn’t want to be in a relationship with us, can be helpful to shake us awake.

Physical Pain

There is no question that the mind and body are connected. We need to manage and process our moment to moment emotions to limit our physical pain. It is entirely possible for blocked, unreleased, fuelled anger and guilt to manifest particularly as neck pain, back pain and shoulder pain – which in turn only makes our emotions worse.

And vice versa – if we live with chronic physical pain it will affect our emotions. Finding solutions where possible to cure or minimise our physical pain is vital to balancing our emotions.

Future:

A positive sense of Future as an antitdote to present emotional turbulence

There needs to be a feeling of positivity about the future. The future impacts the now. If for example you believed that tomorrow you would be executed vs tomorrow you would win the lottery you would feel very different now in the unchanged present.

Whatever is going on now, it’s impossible to feel depressed if you feel positive about your future. Building this sense of positivity requires some work and maintenance.

So how do we build that sense of positivity about the future?

Having something to look forward to

Sometimes it’s as simple as this. Whatever that is for you, remind yourself of it . It might be an exciting for you upcoming sporting event, a social event, a holiday, a new release of something you want to consume.

Problem solving in the present

Problem solving and our faith in our ability to problem solve, whilst harder and less passive, because it requires more of the individual, is vital.

If we encounter what we perceive as an awful problem and feel we will need to live with it permanently for the rest of our lives, it is only natural that we will feel some version of emotional pain – probably inadequacy – which is an awful feeling to live with for a single day let alone a lifetime. But if we see the problem as a hurdle we are or will be able to jump over, jump round, or crawl under so that we may continue our journey, then our feelings instantly change. To insist on or acquiesce to living a life in pain and resignation, collapsed over or even just hanging out nonchalantly at hurdle number 1 or 2, is a helpless and costly perspective.

Problem solving can be tough and not fun and so in order to problem solve we need to learn to be able to work in it and delay gratification enough to get the problem solved in the time frame it needs to be solved by.

The next life – belief and faith

To remain positive in all stages of life as we age, we can extend this idea of a glorious or decent future impacting our present into a life after our earthly projects have expired, that is to say life after death. Whether life after death is true or not, which of course cannot be proven or disproven, if we think a glorious heavenly future awaits us we will emotionally benefit from this in the now, as well as possibly seek comfort in our loved ones already being there with the hope of meeting them again.

…..

Risk – where are you on the scale of risk vs adventure

I perceive an imaginary risk scale, on one side is high emotional risk and on the other is low. In this scale we can control what level of risk we are exposed to by saying ‘yes’ and ‘no’ to different projects and possibilities.

Some people, due to their fearful perspectives about the past, present and future, interact with the world more than others. I am not suggesting that we should all say ‘yes’ to everything in the name of adventure, that would be crazy because saying yes to everything would be saying yes to nothing, but some have learned to have such little faith or interest in the world and their personal possibilities that their ambition is gone and they have become a wall of no’s to all possible projects, activities and suggestions other than the most vanilla of food and drink.

The problem with this approach is that whilst life is then safer in terms of less risk of failure, loss or wasted effort, it becomes narrow and boring and circumstances are no longer pushing us into growing or travelling our life path. This leads to an immature person inhabiting an older person’s body.

Life is essentially an adventure and saying no to all of it is a waste. None of us are getting out of here alive anyway.

Learning to appreciate – pain pleasure associations

Appreciation of some form of beauty or something impressive is a reaction that occurs between two things and at least one of those things needs to be conscious. The Mona Lisa staring at the Sunflowers is just a dead experience. The unconscious item or is not alone able to make you feel appreciative – however tasty the fruit or beautiful the painting. The onus is therefore on the consciousness of the taster/beholder to be able to take in the quality and beauty of what he experiences, including life itself, and experience appreciation.

Without an ability to experience appreciation we are lost because we are unable to enjoy ANYTHING. We just become someone rushing around from one existence to the next feeling apathetic and bored with each of them.

Where we have this problem we don’t have to be stuck with it; we can learn to increase our appreciation capacity. Where we feel we are missing out on an experience we do well to remember that all mammals can be conditioned, as such It is possible to start to like something that you didn’t like, or to start to dislike something that you did like to find joy where there previously was none. This is the root to changing behaviour in the event that we are doing/not something that isn’t/would be working for us.

Will power by contrast is too tiring. Rewiring is far more powerful.

A Meaningful life

If we solely pursue pleasure seeking activities we will not feel pride in ourselves, which is an important emotion to feel. To feel satisfaction we need to be engaging in activities we find meaningful and that give us this sense of pride. Such activities vary from person to person but everyone can find this category of activity inside themselves.

This article is about the inanimate objects in our lives that we own and house.

I have found seizing control over our physical environments to be one of the simplest ways to significantly improve life quality.

The Challenge

As we travel through the world, at all stages of our lives, we all need ‘Things’: a bed on which to sleep, clothes to wear and a whole host of other items essential to our well being, success and enjoyment. These ‘things’ often consume our finite resources of money and, unless they are consumables, consume physical space in our lives too.

And while most items don’t continue to cost money after the initial purchase, they do continue to cost us varying degrees of space, mental as well as physical, whilst they remain in our possession.

In terms of the items we have chosen to surround ourselves with, we live at different levels of lean. But most of us, over time, if we haven’t deliberately introduced disciplined purchasing and clearing out practices, have come to surround ourselves with many ‘things’ which take up an amount of space which is unjustifiable based on the present value these items add to our lives.

The problem, like overfat, clearly exists on a sliding scale, the extreme end of which we find hoarders in a dreadful pickle.

I have come across people:

An underlying theme in each of these scenarios is that a person has become distracted from their life path and less effective. With less efficiency, life becomes more difficult and pain gets associated with important tasks.

Such items can come in many guises: clothes that aren’t worn, old technology that sits about, new technology never switched on, multi media that stays on the shelf, unread books, unused tools and utensils, equipment for sports and games never played, piles of paper – to name some of the more common item categories cluttering up homes up and down the country.

These environments are uncomfortable places to be in and difficult places to work in.

Why does it happen?

There are different reasons why our environments become cluttered and inefficient.

Post box deluge: we are continually deluged with paper format information and solicitations coming through our post boxes. Junk is mixed in with essential items and potentially useful ones.

Failure to respond to change: Items that were once valuable to us no longer have a place in our lives and we haven’t yet taken the sometimes painful decision and action to remove them. This could be due to failure to accept the change or plain old procrastination.

We kid ourselves: we tell ourselves we will do something, buy the associated equipment but then don’t do it.

Impulse buying: we have acted on emotion and bought something that isn’t valuable to us and never will be, or perhaps we have had something sold to us by a skilled seller or beguiling advert.

A loathing of waste: We think of the energy and effort we have invested into buying something in the first place and we don’t want to undermine that by admitting we should never have bought it

Gifts: With budgetary constraints and an inability to mind read, it is frankly very difficult to buy something for someone else that will actually add genuine value to their life and get used. Society has conditioned us to buy and furthermore teaches us that if we don’t buy things for other people at certain times of the year and in certain situations we are bad and wrong and don’t love or care about them. The presupposition abounds from our circles multiple times a year – what will you get X for Y occasion. The answer of ‘nothing’ would be met with judgement. Guilt is a powerful driving force causing us to stuff up each other’s houses.

Inheritances: we have items thrust upon us that we didn’t ask for. These items, like with gifts, can be an emotional anchor so getting rid of them can feel to us like a rejection of a person – which of course it isn’t necessarily.

Obviously sometimes we share our environments with others and it might be someone else who is spoiling our environment – in which case an appeal might be in order.

The ideal

The ideal is to have in our environments only those items that are valuable to us stored sensibly in a place that allows us to benefit from that value. Of course what is perceived as valuable to one is not necessarily perceived as valuable to another, depending on value system variations and the hierarchy thereof.

For an item to pass the ‘is it adding value test?’ it has to be something we USE.

If it’s a mincer that means we are mincing with it, if it’s a tennis racquet that means we are playing tennis with it, if it’s a picture that means it is on the wall and we are looking at it and enjoying it.

Using an item requires differing degrees of effort and skill, which often explains why we aren’t using it.

A decluttering solution

There are different reasons why our physical environments get overloaded with clutter but the solution I find is always the same.

Go through every questionable item in your possession and mentally go through the following process:

So for example, say you come across a snooker cue that you would struggle to remember the last time you used, consider doing the following:

Schedule a game of snooker and take your cue with you so you don’t have to use the public cues. If you don’t want to do that, accept you don’t play snooker anymore and decide to get rid of your cue to make space for something that you are going to use, or just to enjoy the newly liberated space. If this process makes you realise you don’t want to retire from snooker, then schedule that game!

If you still won’t schedule that game, then consider selling your cue on ebay. If that’s painful for you, or if you think you’d get a pittance for it and it isn’t worth the hassle, give it away to someone who would use it. If you can’t even be bothered to do that, then bin it. But don’t every day cohabit with a snooker cue you are never going to use. It is weakening.

Typically most of us have many ‘snooker cues’ in our lives.

The underlying theme is this: in every item we possess there is an inherent responsibility to use it. If we can’t or won’t, then it needs to be relocated.

Items of value vs tat

Most of the items we have, even if they aren’t clutter, are tat. Holiday souvenirs are typically of no market value and have no function making them Useless tat; a quality saucepan on the other hand is an incredibly useful piece of fundamental, functional household kit but the fact remains it has no market value to speak of and market value it had when new drops to zero once it’s second hand. However, a small percentage of items do have real market value and you need to be aware which items in your life they are and treasure them or sell them at the correct market value.

I worked with an auctioneer who spotted an ancient Chinese vase when visiting someone’s house. The owner had no idea it had any value and gave it little respect in his home; and yet it turned out after expert investigation to have an estimated worth of about £40,000,000. Auctions are a pretty easy, though expensive, way to convert items into cash and a local auctioneer will be able to visit you free of charge, inside the understanding you might use his services, and point out to you the saleable from the non saleable items as well as what the items might fetch at auction.

Sentimental and valuable items

Where a valuable item from someone you love comes your way, do your best to integrate it into your life, so you can enjoy it and enjoy the memory of that person when they are no longer with you. Obviously this is easier with smaller items and sometimes easier when the deceased was of the same sex. A chap can’t really be walking around in a lady’s watch. Don’t get rid of an item you might in the future regret having got rid of; think carefully while you still can as once it’s sold it’s gone forever.

Paperwork

Where the item to action comes in the form of paperwork the same general principle applies: if it isn’t a document that needs keeping, action it or accept you won’t ever action it and then throw it in the recycling – shredding if it’s sensitive.

There are however some extra steps to consider with paperwork:

Once this process is in force you’ll be left with a small and manageable quantity of paperwork that needs keeping and storing in a way that is safe and easy to locate when you need it.

Storage space

I identify 4 different areas in a property.

As well as usage justifying storage selection, items need to be stored appropriately based on their size and shape and material.

The smaller your available space the tighter your system needs to be.

Clutter Prevention

Develop an anti procrastination policy called touch it complete it – do it now rather than putting it aside to do later.

Live at a higher degree of honesty. No I won’t do it or yes I will do it. Eliminate the I might do it one day.

Helping others with their physical environments

Many people whose physical environments are cluttered and chaotic will NEVER unstick themselves. The only way to solve the problem is by way of an intervention.

I have become concerned about the physical environments of certain people in my life over the years to the point that I have offered to help. As such I have helped multiple people through this cleanse process and I want to briefly explain a few guidelines I found useful.

If it’s a friend, you might suggest that you have a concern and you can see an opportunity to add value. You can explain and structure that opportunity for them but you must not try to force the process on to them. After hearing you out and having the decluttering process explained they have to ask for your help. If they say ‘ if you want’ you can – don’t do it. They have to say ‘please can you help me out with this?’

Then explain the process to them again and have them agree to it. If they don’t agree to it do not enter into the deal.

If it’s a family member you can push harder to get involved and if they won’t fully enter into the agreement you might want to proceed on a partial basis because they might be deeply suffering – but this is much harder and much more stressful to execute.

Conclusion

Whilst this decluttering process might sound a bit over strict and army like, it is an opportunity to declare what we care about in our lives now and what we don’t care about. To consume our resources of time, money and space on items we will in practice enjoy interacting with and which will help us to achieve our goals.

At the end of our lives, studies of the dying remind us that it is the experiences we have lived that matter to us, not the items we have accumulated that we cannot take with us.

This article concludes the theme started in ‘Over FAT’ and is more specific in terms of defining whether an individual is overfat, the impact, the cause, and most importantly the solution – physically and psychologically. 

There are some contradictions with ‘Over FAT’ which reflects developments in my own understandings during my journey between these two pieces.

I make several statistical references in this article to body fat percentages and height weight ratios; these exact numbers only apply to men but the ideas behind the specific numbers apply equally to women.
 

Which body fat ‘zone’ do you reside in?

We all store some fat inside our bodies as well as subcutaneously; without any of it at all, we would perish. 

To the critical objective observing eye, there are 3 ‘social’ positions we can be in based on how much body fat we carry:

• Perceived as overfat with clothes on – I will refer to this position as the ‘red zone’

• Looks neutral clothed but clearly perceived as overfat when wearing a revealing swimming costume – ‘amber zone’

• Not perceived as overfat unclothed, no risk of being mocked, discriminated against or left out on account of excess body fat – ‘green zone’

So what body weight lands us in the green zone? – A simplistic ideal height/weight (BMI/type) calculation for a man

Note that our weight can vary several kilos depending on hydration level; when I refer to weight I always refer to hydrated weight. Losing a large amount of water weight can be fatal.  

To find an upper limit for a man’s ‘green zone’ take his height in metres, remove the ‘1’ and convert the centimetre measurement to kilograms. So for example a 6ft man, approximately 1.83m tall, has an upper limit according to this scale of 83Kgs (13 stone 2/183lbs.) A highly conditioned man can look like the chiseled V shape of Da Vinci’s Vitruvian Man or Michelangelo’s David at the upper limit of this height/weight ratio, but a higher than average muscle mass is in fact required to pull that look off. Excess fat is no substitute for muscle mass to create size and so for most of us our natural weight is likely to be a little under this upper weight threshold, perhaps 79kg for a medium build 1.83m man. Once a man weighs above the upper limit, he will start to look bulky, significantly under and he will start to look thin.

It is no accident that a great many Hollywood leading male heartthrob actors, designed to attract the ladies and be a role model for the guys, fit snugly inside this range. The same can be said of elite athletes in sports where optimal movement is vital to succeed, (such as tennis, soccer, non heavyweight boxing) and the ultimate athletes that are decathletes and gymnasts, who tend to reside at the very upper end of this weight range in their pursuit for the perfect balance of maximum power AND maximum movement. If we were to have randomly added, say 5kgs of body fat, to Roger Federer’s frame for his 2017 Australian Open campaign, he undoubtedly would not have won it; likewise if Brad Pitt had turned up 5kgs overfat for his first day of Fight Club filming, I would wager he would have been sent away.

A fun specific question, useful in determining our natural weight is to ask, ‘If I were to compete as a professional boxer, which weight class would I fight at?’ Cruiser weight (200 lbs or below, average height of world class professional boxers 6ft 2), Light heavyweight (175lbs or below, average height 6ft 1), Super middleweight (168lbs or below, average height 6ft), Middleweight (161lbs or below, average height 5ft 11.) This question focuses the mind because we wouldn’t want to be carrying any useless weight that forced us to square up against a naturally bigger man.

Bulk tipping a man over this green zone threshold, the vast majority of the time comes from excess fat, but could of course be coming from bone and muscle, in which case the man over this weight threshold is not overfat but powerful, like a typical rugby or American football player.

Ultimately, there is no substitute for measuring a person’s body fat percentage to evaluate whether a person is overfat.

Bodyfat % 

 • Above 20% – red zone. The red zone starts to be a health compromise. Moving into a ‘crimson zone’ as we approach 30%

• 16-20% – amber zone. This amber zone is primarily a presentation compromise. It is useful in giving us a safety net to fall back to that isn’t a health compromise in the event that we wish to be less strict with ourselves, particularly at times in our lives when our primary focus needs to be elsewhere

• 13-15% – green zone; our natural weight. Maximum physical performance, maximum presentation. Moving into an even brighter green as we drop 12%-10% (subject to enough muscle mass). Another amber and then red zone starts to kick in below 10%.

I am not suggesting for 1 second that ‘red zone’ is wrong and ‘green zone’ is right; that is the filth the Third Reich used to shovel. Quite the contrary, I am stating that a slim person on account of being slim, is no more virtuous than a fat one and that there is absolutely nothing inherently wrong with walking through the world at 25 or 30% body fat – or any other higher body fat percentage for that matter. The fat are not sinners and the slim saints. Body fat % is an inherently meaningless statistic which, like skin pigmentation, does nothing to define our value as human beings. Ultimately, whilst we depend on our bodies for survival, we are not our bodies; they are but functional vessels that we inhabit until an external or internal event, sooner or later, ceases that to be the case.

Being 15% body fat certainly does not mean that all life’s problems suddenly go away or that life can finally begin (it has begun already whether we have been playing full out or not); it is simply the absence of 1 problem. But because of the holistic way life works, ceasing to be overfat will have a knock on effect on all of the other areas of life too. This could happen for example due to new found character crossing over into the other areas or perhaps from people relating to us differently.

The Overfat Impact

Stating that being overfat isn’t wrong, is not the same as saying that there is no cost. Our body fat percentage, like the other key areas of life that we can excel at, or be distinctly average at, does undeniably have an impact on our quality of life.

Unlike racism, which thankfully nowadays is illegal in the civilised world, people in the ‘red zone’ are still tacitly or openly discriminated against, ‘fat shamed’ by the slender. I would like to suggest that this stems from an underlying erroneous societal belief that people are overfat because they are greedy and lazy, and that for some would-be taunters, whether they feel they have the right to take the piss out of someone else’s perceived weakness, hinges on whether said individual is an innocent victim of circumstance or whether he has brought his woes upon himself due to a character flaw – which many people believe to be the case with the overfat.

Should a ‘red or amber zoner’ wish to, they can protect themselves from exposure to this taunting and discrimination by not putting themselves in a situation that is unbecoming of their body fat %. For example, keeping their clothes on, choosing darker, looser clothes, not going for the audition, not competing in the sporting event of their choice, not going for a swim, not asking for the date, hiding from cameras – and other forms of self expression suppression.

Ultimate protection is not assigning any negative meaning in your own head about who you are due to negative comments about you. This is much easier to do as an adult than as a child, particularly when it is the adults, who children rely on as a source of wisdom, that are the source of the negative comments.

Aside from the taunting and judgment, above 20% body fat there can be no denying that:

• our movement is increasingly hampered

• our attractiveness is increasingly compromised (more so in the eyes of some than others)

• our bodies ache and buckle under excessive strain as they carry more weight than they were designed to – like an overloaded bridge

• we become at greater risk from certain diseases, such as heart attacks à la James Gandolfini, diabetes and cancer

• we are exhausted from carrying ‘bags of weight’ we cannot put down

• we tend to be ravenous and tired all the time because we aren’t converting to energy what we are eating and the cells of excess adipose tissue are crying out to be fed

• we can become a concern for those that love us and want to see us as the best we can be; not everybody mocks 

All that is no small price to pay. 

These factors combined make walking through the world an entirely different experience feeling for a man at sub 15% body fat, compared with 35% for example. And what can be more important than our feelings? They are the reason behind everything we do.

On the plus side however, these impact pains can be cherry picked for motivation construction.

 

The root cause of overfat – busting the myth

It is not true that people are fat because they are lazy and greedy. Bearing in mind the above impacts it would in fact be more logical to say that they are lazy and greedy because they have become fat. And whilst this is going to be a physiological tendency of the overfat, it isn’t necessarily the case either.

One of the unwritten rules of marathons is that you always get overtaken by someone fatter than you, moreover some pretty fat individuals genuinely do eat quite modestly. Both running a marathon and eating modestly take immense fortitude, particularly if you are overfat.

It is also misleading to state that a person is fat because they are consuming too many calories; this statement perpetuates the myth that all calories are equal, which we instinctively know not to be the case.

In the same way that we are not equal in height, IQ, beauty and all human endeavours for that matter, we are not equal metabolically. Person A and Person B could consume and move identically, Person B’s body converts some ingested calories to energy or to repair muscle tissue but Person A’s does not, leaving Person A with larger fat cells, but still hungry and tired because they have been unable to put the energy to use.

And in the same genetic vein, the body of Person A, quite independently of Person A, might happen to deposit fat on its chest gynecomastically, while the body of a fellow fat storer we will call Person C, might deposit it on its ‘love handles’ or neck.  

Not only does this fat cell regulation and partitioning process vary from person to person but it varies throughout our lives.

So if the root cause of overfat isn’t sloth and gluttony, or a calorie in calorie out imbalance, and if it affects one person and not the other consumption being equal, what is the root cause? 

In a nutshell: insulin secretion.

….

A more scientific explanation

I felt the need to understand myself and then explain the above more scientifically to shine the light on the processes going on inside the body when we fatten because this awareness can help us to stay in control.

Whilst I have had no background in endocrinology, which limits my neurological connections in the subject and increases my dependency on other people’s research, we can all be autodidacts, choosing to learn what we wish at any stage of our lives, long after school has finished. I have in particular relied on Gary Taubes’ body of work to be able complete the following section.

There are dozens of hormones and enzymes that play a role in determining how we use and store what we consume, but by far the most dominant is insulin. Insulin is secreted by the cells of the pancreas in response primarily to eating carbohydrates. Insulin controls the blood sugar level by orchestrating the removal from the blood of the glucose deposited from consuming carbohydrates. Insulin works as a kind of traffic policeman, directing consumed protein, fat and glucose to the body’s different cells (muscle, liver and fat) for use, repair and the storage to ensure we have enough fuel to tide us over between meals.

Elevated insulin causes us to store fat and not mobilise it by:

• stimulating the enzyme lipoprotein lipase (LPL) on fat cells (and conversely suppressing their activity on the muscle cells). LPL sticks out of the membrane of a particular cell and pulls fat out of the bloodstream and into that cell. LPL activity and distribution also determine where we accumulate our fat. Testosterone suppresses LPL in fat cells in the gut which is why, with testosterone levels naturally dropping with age, men tend to get fatter bellies as they get older

• turning on a mechanism in the fat cells causing them to pump in glucose, ensuring the presence of glycerol molecules inside the fat cells so that fatty acid molecules, the format in which the body can use fat as an energy source, bond together to form triglycerides, compounds of fat too large to escape from the fat cell membrane and therefore trapped in long term storage

• powerfully suppressing the enzyme, hormone-sensitive lipase (HSL), which disassembles triglycerides inside the fat cell, back into their fatty acids components so they can be released back into the circulation as fuel

• instructing muscle cells and other cells not to burn fatty acids but to burn blood sugar instead, so when fatty acids do escape from fat cells they can’t be taken up by the muscle cells and used as fuel and consequently have to return to the fat tissue

• preventing our livers from burning fat and insuring fat residing in the liver gets repackaged into triglycerides and sent back to the fat tissue

• creating new fat cells to ensure we have plenty of storage space. Thanks very much insulin!

Insulin locking up our body’s available fuel sources, causes us to feel starved and tired but hungry for carb and sugar because that is the only nutrient the body can use for fuel whilst insulin is elevated, further consumption of which would create a further insulin secretion. Vicious cycle.

 ….

In summary everything insulin does, increases the fat we store and decreases the fat we burn. 

Secreting Insulin is like sticking a stack of new and utterly urgent work on Mr F.T. Burner’s desk for his and his team’s immediate attention and having his normal work consequently pile up until completion.

It therefore follows that to be leaner we need to secrete less insulin, less often and for shorter durations.

We all secrete insulin, so why am I fat and my neighbour isn’t?

Carbohydrate consumption being equal, the amount of insulin our bodies secrete and how our different tissues (muscle, liver, fat) respond to it, varies depending on the individual and is what makes getting and staying lean a much tougher battle for some than for others.

Once insulin is released from eating carbohydrate, a kind of competition is initiated by the different cells for the glucose. The winning tissue is the tissue that happens to be most sensitive to insulin.

So for example, if your muscles are very sensitive to insulin and your fat cells less so, the muscles will absorb the majority of the glucose, which will make you energetic and lean. But if your fat cells are more sensitive to insulin than your muscle cells, then the majority of the glucose will make its home in the fat cells instead, making us fat and sedentary.

These genetic metabolic differences, create two kind of ‘groups,’ one whose members can metabolise their carbohydrates, and a ‘problem group’ whose members gain fat very easily if they eat non fibrous, easy to digest, carbohydrates. There would of course be a grey scale between these two groups.

All our cells tend to become less sensitive to insulin (insulin resistance) as we age, which causes us to secrete more insulin. Our muscle cells are particularly susceptible to insulin resistance, which would result in increasingly more of the energy we consume to be partitioned into fat, leaving less available for the muscles and the organs to use for fuel.

This can ultimately lead to us to becoming involuntary members of the ‘problem group’ later in life.

It might also be that past abuse of carbohydrates, particularly as a child when fat cells were being created, joined us up as a life member of this ‘problem group.’

So if we do insist on criticising and teasing the overfat, in the name of accuracy, instead of calling them some colourful variation of ‘gluttonous, slothful b*****ds’ we would do well to not be iGorant and instead accuse them of being ‘excessive insulin secreting, sugar burning, fat cell insulin sensitive *r**ks.’

 

There is a solution; we all have to get old but we don’t have to get fat 

Just because some people are more predisposed to being over fat than others doesn’t mean it is their destiny to be so. But it does mean that one person might need to have a much stricter diet than his neighbour (or than he used to) in order to achieve the same body fat %. As we know already, life isn’t fair.

To achieve a specific outcome in any area of life we need to incorporate ‘goal achievement’ behaviours. But just as importantly we need to eliminate ‘goal antagonistic’ behaviours. Sometimes we become very fixated on the virtue of activity itself, forgetting that intelligent ‘lazy’ inactivity, is a tandem key to success. Stating we don’t have time to eliminate a behaviour is nonsensical because not doing something doesn’t take up any time.

Applying this idea to this physical part of our lives, activity we need to eliminate/limit is the consumption of the refined unnatural carbohydrates that trigger the majority of the insulin secretions. And activity we need to incorporate is eating as much fat and protein as we want.

These two disciplines will allow us to:

• free our body up to use fatty acids as an energy source

• prevent us from depositing further fat as triglycerides

• keep us feeling satiated during the process

The cost to be lean, if you are a member of the problem group, is not enduring hunger, it is carbohydrate and sugar sacrifice

To be specific the problem carbohydrates include: beer, Coke, cereal, cake, crisps, bread, toast, chocolate, pizza, pasta, noodles, potato, rice, batter, crackers, biscuits, cookies, ice cream, cream, honey – and anything else containing sugar or flour. In the same way that it isn’t wrong to be overfat, neither am I suggesting these foods are inherently bad and wrong; they are simply the cause of the world’s obesity epidemic. Singling out these foods as the cause at the very least prevents the unfortunate event where we are making an effort or sacrifice to eat something we believe is good for us, but which in reality is fattening us.

Building up and maintaining enough focus and motivation to make this (carb.) ‘sacrifice’ is the currency the cost has to be paid in. Paying this price is more intimidating to some than to others. 

Cravings for easy to digest carbs and sugar are psychological, not physiological

It is absolutely unnecessary, positively counterproductive in fact, to fight against the very real physiological need for calories, but to be lean, particularly for people in this ‘problem group’ it is absolutely necessary to fight against carb. and sugar cravings.

The body can use carbohydrate as an immediate energy source, and will do so first if it is present in the blood in order to lower blood sugar, but there is no such thing as an essential carbohydrate. Providing insulin levels aren’t elevated, the body is perfectly happy and able to use its temporarily stored (24hrs) fat as an energy buffer for energy release between meals and overnight. This continuous fat flow in and out of the fat cells is part of the body’s design.

Carb. cravings for the foods listed above, unless your insulin levels are very high from having just eaten carb, are psychological as opposed to physiological and the cravings can therefore be addressed in the mind by changing how we ‘re-present’ these products to ourselves in our brains. Just imagine an infinitesimal grain of poo inside the chocolate cake on offer for example. NLP techniques can be a powerful tool to this end.

Consuming refined carbohydrate belongs to the addictive distraction group of behaviours people typically seek pleasure in (the Sauce, smoking, drugging, sex, gambling, shopping etc) because of the way it can stimulate the reward centres of the brain. Whilst I am not judging these behaviours (in spite of the hugely negative impact abusing them can have on a person’s life) short term gratification is distinct from joy.

Joy I would suggest could instead be found in reaching a ‘meaningful to you’ goal, expanding one’s comfort/freedom zone, making a difference to someone through service, drinking deeply from different forms of art, being with people that love and appreciate us. 

Pleasure is no substitute for joy.
 

10 step guide to staying/becoming lean and/or at peace:

• Set YOUR body fat % goal, find deep meaning in it, maintain the committed Motivation state

• Stay on guard against unsolicited Advice from those who cannot help but share their feedback that you are fatter/thinner than the last time you saw them, still too fat or have lost too much fat already. Clearer sighted third party feedback about how fat we still are or aren’t, often comes from those folk who are meeting us for the first time

• Seek out and keep your mind open to useful informational and motivational input 

• Apply your rules to yourself only, not your Relationships: don’t comment uninvited on others’ food choices and don’t coach adults unless they have asked for coaching. A reminder to myself!

• Plan your day so you eat proteins, fats and green vegetables (non refined carbohydrate) as your core diet, eating as much as you want. Overeating these foods is next to impossible (has anyone ever craved for mackerel and can’t stop eating it once he starts?) and won’t make you fat because they won’t cause you to secrete insulin. Only eat refined carbohydrates to the extent that you are willing to slow, halt or reverse your progress.

• Develop easy and effective ways to relax that do not involve consuming sugar or carbohydrate; this is particularly important for people who have a physiological tendency to resort to eating carb or sugar when under stress

• Everything in life has its dose, even opiates; know your carbohydrate dose. Experiment with natural higher GI foods and the aforementioned problem carbohydrates (if you can control your quantity consumption once started) to see how much of them you can eat and still remain within your chosen zone

• Keep a food diary of everything that passes your lips – this a powerful perspective and accountability tool

• Politely stay on guard against the ubiquitous feeders continually trying to get us to agree to consuming their low quality carbohydrates with their prompts, offerings and suggestions. Feeders come in many guises.

• Once you are making all the sacrifices you are willing to make (and that might well be none), lag time aside while your body is still working on manifesting changes you have already made, accept your body fat as it is so that you can love your body; love and acceptance are intertwined. Accept your fat in spite of any unsolicited advice or comments you might still be the target of. This acceptance allows the physical and psychological sides of ourselves to co-exist in harmony. The alternative to doing this is a painful place to live where a person isn’t willing to make changes but isn’t happy in their own skin either. And it’s whether a person IS actually making changes or not that defines their willingness, not their words.

Committing oneself to these 10 disciplines is committing oneself to a weight control way of life, guiding us as to what we will think, do and won’t do in certain situations  – much like a religion does.

 

A note re exercise 

Exercise has many benefits as we all know, such as its role in building muscle, improving flexibility, strength, endurance, co-ordination, health, mood – but it can also be tiring, dirty, time consuming and we can get injured from it; we might even be unwell at any given time. This means that we often have to take exercise easy or not do it all.

This is why using exercise as a primary tool to get or stay lean, as peddled by shows like The Biggest Loser and the entire fitness industry to a point, is unwise and unsustainable.

To the extent you want to be lean, reduce your consumption of the insulin releasing foods that are making you fat in the first place. Continually experiment to find out how much of the foods you are missing you can get away with eating, to have the body fat % that is acceptable to YOU.

 

Investing strategy

This article is to explain how I invest, i.e. what I do and don’t do and why.

Why invest in the first place?

Whoever we are, men and women alike, and whatever our position in life, we would all do well to develop an investing habit.

Investing is ultimately a way to gain control of our time because, whilst money is obviously not the solution to a great many human challenges, we all need it to live, and investing ultimately has the power to generate money without selling time.

The ultimate aim is not to cease working. Note that people who don’t have jobs often work extremely hard, harder in fact on projects of their own choosing than employees who are sometimes disengaged and unhappy at work or just exhausted from the relentless nature of the rat race.

The aim isn’t even to cease selling our time; it is instead to create the freedom to work at doing what you want to do with your time for your own reasons (beyond those of just trying to earn money) and not to feel you have to agree to things you don’t want to or have someone else force-determine your activities for you in exchange for money you cannot do without.

Children, and perhaps some adults, are not yet ready for the responsibility of deciding for themselves how to fill their time and wouldn’t know how to productively use this freedom for the betterment of themselves and others if they had it. Some people are more comfortable being assigned specific tasks and projects by others – and there is absolutely nothing wrong with any of that.

However, with the exception of a trusted coach I might hire, these days I personally struggle to see the attraction, and virtue even, of anyone force-assigning me activities – particularly should their chosen assignments for me be out of alignment with what I think is a worthy use of my time. Such an assignment is the stuff of a master/slave relationship whereas good relationships are based on a series of mutually beneficial agreements which the need for money can sometimes skew.

Now for the ‘How’ of investing.

 

Asset allocation

The key to successful investing is asset allocation.

This article covers how I personally allocate. How I allocate is certainly not the only (hopefully intelligent) way to allocate, but all robust asset allocation strategies will have certain characteristics in common:

• Money will be allocated to different asset classes and risk categories
• Large proportions of net worth won’t be put on the line in a quest for growth or immediate cash

 

Real estate – ~80% allocation

First and foremost I’m a landlord and this is because I would always invest 80% of my net worth into real estate. Here’s why:

1. Real estate never gets old

Real estate, in a decent location, is a low risk investment because it cannot go out of fashion or favour because of the basic human need for shelter. Whatever new technology comes out this will remain a constant. Not only are you buying the property but you are buying the land/space and God isn’t making any more of that as populations continue to rise.

2. Safe leveraging 

Real estate, through gearing, safely harnesses the power of leveraging in a way that no other asset class I have ever come across safely can.

Say you bought a property for £140,000, you put down a £14,000 deposit, and then over the next five years (investment performance tends to be measured in 5 year cycles) the property increased in value by 10%; you have made 10% of £140,000, i.e £14,000, not 10% of what you actually invested; you have made 100% of what you actually invested.

And if your recently purchased property unfortunately happened to drop 10% or more, that is of no concern to your lender who, provided you keep making your monthly payments of course, won’t bat an eyelid. And they certainly won’t suddenly demand a portion of their loan back in an urgent margin call informing you that your investment has dropped in value, that they therefore cannot lend you as much anymore and that you must either sell some assets or top up your investment account (which is what happens with broker margin accounts). With property you have the luxury of waiting for the value to come back up again. No urgency, no stress.

3. Friendly inflation

Even if you don’t pay down the capital and borrow permanently on an interest only basis, inflation becomes your friend as it erodes the value of your debt over time. £120,000 of mortgage debt now isn’t as intimidating as it used to be and will be even less intimidating in another 20 years. My parents bought their 3 bedroom North West London semi in 1970 for £7650.

4. Always income generating

Although money is tied up in a rental property there is regular income through rent.

Note that if you live in the property yourself as opposed to letting it out, it’s still a hedge against inflation but it is not an investment; rather it is a lifestyle purchase.

 

Stock Market – Refreshingly different from real estate – 20% allocation

With property being an illiquid investment vehicle (slow to enter into and out of) characterised by strict lending criteria and a requirement for large deposits, there is also a place for investing in the stock markets. The stock markets offer a wide array of investments refreshingly free from these 3 characteristics – and no tenant, ‘sorry to bother you but’ emails to boot!

The financial markets to me are also plain fascinating and by investing in them you create a new connection with the world, the wider economy, diverse industries, and a whole raft of companies doing absolutely amazing (and some foolish) things. Everything matters more when there is money on it – as the Sky Sports refrain goes – and as an investor, said connection becomes tangible transforming the way you listen to the news. People can be dismissive of events that don’t affect them personally.

However, because of the predictably unpredictable nature of the stock market, and that consequently leveraging isn’t safe (which in turn minimises upside potential), I consider it an appropriate vehicle for only 20% of my net worth.

 

Two different stock market strategies

This 20% allocated to the markets I further divide into 2 equal portions which I use for 2 very different strategies:

 

Stock market strategy #1 – A diluted risk, dollar cost averaging strategy:  buying strong indexes and low cost multi asset funds, monthly, over decades and refrain from making any withdrawals.

Safe, zero stress, consumes zero time – ~10% net worth allocation

My current chosen pure equity index plays (which I monthly dollar cost average into through a Friends Life platform) are the FTSE 100 and Euro STOXX 50 indexes. They aren’t going to drop or increase 50% overnight. If they both drop 20%, which can possibly happen over a period of time, we’ve already entered a bear market and it’s BIG global news. Like with property, should that happen I am confident both indexes will come back up again gradually and, until they do, some comfort can be derived from buying the next monthly chunk at a discount.

Make the ride even gentler by diversifying with a global multi asset fund that includes bonds and commodities.

By reducing the equity weighting, an investment vehicle becomes more of an all weather product that does less well in a rising market but less badly, and maybe even reasonably, in a falling market.

My personal answer to this currently is a Standard life with profits fund which includes global equities, bonds and some cash, and a Standard Life managed pension fund, which is another global multi asset product, but more heavily equity weighted.

With some funds, weighting of stocks vs bonds can be easily and quickly adjusted online to suit the economic conditions of the moment – like putting your snow chains on one morning.

The markets have a wide range of indexes and funds to select from and likewise there are many different online investment platforms through which to invest in them.

Stock market strategy #1: a proven strategy

Investing monthly into strong indexes and multi asset funds, over decades and therefore varying market conditions, is a tried and tested way to amass wealth and is consequently the structure of private and company pensions funds.

Here I offer some extra considerations to make strategy #1 work as effectively as possible

Time in the market and consistency of payment contribution are the two keys to excellent compounding and therefore success. Naturally the higher percentage of your monthly income you pay in, the greater the growth. The received wisdom is that a 10% monthly investment is a minimum reasonable contribution. I would like to suggest this can always be eked out of one’s income relatively painlessly by way of sensible cost cutting.

It’s never too late to start a monthly saving plan and eventually, if you pay enough in for long enough, this strategy will enable you to create the passive income you will need later in life.

If you don’t have the appetite to invest in real estate you might use this strategy as your primary ~80% vehicle.

Use tax shelters

Owning your stock market investment vehicle inside the wrapping of a pension or an ISA, which you can’t currently do with a property, is tax efficient. With a pension you get tax relief on your deposits but you will pay tax on withdrawals; with ISAs you deposit net cash but pay no tax on withdrawals.

Personally, for all my funds and indexes, I have chosen the pension wrapping over the ISA because that way I simply can’t take any money out before the age of 55, hence removing all temptation to do so.

Minimise fees

Ensure your yearly fund charges (and platform charges if applicable) are as low as possible as these can dramatically eat into your compounding gains over time. An overall charge of more than 1% starts to concern me.

Summary

This diluted risk, dollar cost averaging strategy is a stress free way of investing in the markets: no ongoing research or difficult and fatiguing decision making is required once you have chosen your, easy to choose, indexes and multi asset funds, none of which you are tied to. Keep paying in over time via direct debit, irrespective of market movements and conditions, all of which are largely irrelevant as you aren’t making withdrawals and are continuing to invest monthly until such time your pot is big enough and accessible based on your age.

….

Stock market strategy 2 – characterised by a greater concentration of risk, and active management – the possibility of regular buying and selling. 10% net worth allocation.

Now that we have covered strategy #1 let’s move on to my strategy #2. Whilst I would recommend strategy 1 to everyone, strategy 2 is not necessary to get ahead and might in fact be ill-suited to you.

Who should and shouldn’t participate

I only suggest actively managing your investments if:

• You have a certain net worth at least 10% of which you currently hold in cash with the other 90% already invested and growing in your other, lower risk, investment vehicles

• You are willing to tie up said available cash for an unknown amount of time in order to try to grow it

• You have time to research and review your investments

• You accept you will win some and lose some

• You understand and accept the capricious and imperfect nature of the financial markets

• You are motivated

 

Why strategy 2 might appeal

Paying in monthly and delaying gratification by tying up funds for 30 or 40 years (stock market strategy 1), by which time many of life’s windows of opportunity (possibly even life itself!) will have closed, I am sure you will agree is pretty damn boring.

Sometimes we find ourselves looking for faster gains or gains we want to use in the short term. We want to create income now or generate money for something we want to buy now. Quite rightly so we don’t want to wait until we are 60 before we buy X or go to Y and we have some available money to invest to see if we can turn our desires into reality sooner.

How to execute this strategy

Prepare your lump sum which you will need to initiate your investment. You won’t go very far with a single monthly payment you are diverting from strategy 1. Once you have your lump sum you can then open your brokerage account.

US trading on a US platform

I active manage primarily using North American investment products through a US brokerage because, whilst the dividends are typically low compared to UK equities, the opening hours are convenient, the selection of available products is colossal (and can use ADR’s to buy overseas listings), there is no stamp duty payable when buying, trading costs are inexpensive and because this complements stock market strategy # 1, which in my case is more weighted towards UK and European investment products.

Investing in the US markets, whilst it can be done through a UK broker’s platform, is best done through a US broker. I personally use Charles Schwab but there are other excellent companies.

As an aside it can be a useful strategy to wrap a US equity inside an ISA or SIPP which is made possible by trading US markets through a UK broker.

Investing in the US Dollar

By investing through a US broker it is worth highlighting that cash deposited in sterling will immediately be converted into Dollars exposing you to a fluctuating exchange rate (and of course vice versa with account withdrawals). This introduces an additional timing factor and level of investment diversification which I embrace and can be particularly useful where the majority of your other funds are held in a single currency and that currency isn’t a very strong one in world terms.

Select an investment vehicle with steep potential upside

We need a more concentrated product than a generic index or government bond to invest our lump sum into if we want high percentage gains in a shorter period of time.

Individual equities

Few investment products are more concentrated than that of an individual equity – which, loving to own part of a great business, is my chosen vehicle for active management and which I use alongside the stock’s options to increase flexibility and provide the increased investment complexity I sometimes want. I am not going to endeavour to discuss option derivatives in this article as, although they are a useful adjunct to this strategy, they are not fundamental to it.

Stocks are businesses. You might feel you are just buying a sterile ticker when you buy a stock but you are buying a lot more than that. You are buying into a real life management team, a balance sheet, a product and service scores, maybe thousands, of employees are getting up in the morning 5 days a week for decades to dedicate a huge portion of their lives to providing and creating, trying to make a difference for themselves and their families. As an investor let’s connect with the underlying business and its characters, without getting attached to them.

Notwithstanding this, however high quality the business is, it is undeniable that the increased concentration of a single equity compared to an index brings with it the greater opportunity we crave but also a risk we must be wary of; there are always two sides to every coin.

And this is why we need rules for the game.

..

Active management rules to maximise gains and minimise losses

This section of the article is to explain how I personally run the actively managed part of my portfolio and is based on years of experience and many hundreds of trades – some more successful than others. Where I have made mistakes over the years I have naturally tried to learn from them and have tried to incorporate the learnings into this communication.

For the active management part of your portfolio you need a high level of trading discipline. This is in contrast to strategy 1 where the only discipline required is that of paying in monthly. I propose the following strategies/rules because, quite frankly, if you ignore these you will eventually get a visit from the Pain Doctor.

 

My do’s and don’ts of active management:

Build and manage a complementary and quality team of, in my case, mainly stocks and sometimes ETF’s, which allow you to trade a particular investment cluster as if it were a stock.

Focus on Quality

However big or small the company, always focus on quality: buy into high quality businesses that you believe have a competitive advantage.

20 Maximum

More stocks exist than you can own so choose to set a limit. I suggest a limit of no more than 20 stocks to prevent the portfolio from becoming too hard to manage effectively. If they are well chosen, complementary positions there will be no need for more because 20 is enough to hand pick a diversified selection of different sized companies in different stages of growth and from different market sectors. More than 20 is spreading oneself too thinly and not fully appreciating the companies you have already chosen. If you have more funds to invest and own 20 businesses already, consider buying more of the best buys at the time from your trusted group of 20.

For their strategy 2, some people like to pour all, or a very large proportion of their available funds into just one stock. If you choose a strong company carefully this isn’t the same as going to Vegas, spinning the roulette wheel and putting it all on red because even if you lose/got it wrong you will only lose a percentage as it drops towards your sell stop or sell threshold. Admittedly this strategy can work extremely well if your chosen company happens to hit the ball out of the park (or the market thinks so) in a given moment, but having a diluted portfolio of multiple positions personally suits me better from a risk concentration/sleep at night perspective.

You might argue 20 positions isn’t a concentrated strategy at all and prevents you from  investing fully into what you feel is your best chance of gains at a given time, which is certainly true. But I will allocate resources differently within the 20 stocks, weighting the portfolio in favour of the companies I have more faith in/are showing more promise in a particular season, in order to pick up on some of these gains. Like a kind of football manager.

I would however, hold no more than 10-15% of my portfolio in any one particular stock at any one time based on my own personal risk profile. Yours might be different.

Trade size

I suggest a minimum investment of $2000 per trade to justify the transaction and trading cost.

The price per share of the stock doesn’t matter as a $500 dollar per share stock can move 10% just as readily as a $50 per share stock.

..

Refrain from margin trading

So in other words do not borrow money from your broker, or anyone else for that matter, to trade on the stock market. Borrowing to invest works well with real estate but not with the stock markets because the markets are too imperfect, too capricious, too unpredictable, and like the ocean, would have no qualms in swallowing up your little overloaded boat.

We can develop bad investment habits because high risk and flawed strategies might work well once or for a limited time in certain market conditions but the weather will change (on one, two or all three of the levels I’ll discuss shortly) and you’ll eventually come a cropper if you keep doing it. Margin trading as an investment lifestyle is just another bad overconsumption habit.

Because this is such an important point dear reader I reiterate, if you are in the middle of the Pacific on a small dingy you might be absolutely fine on a lovely sunny, calm day but in reality you are terribly exposed (think tiger sharks nearby, 6 miles of water underneath you and a potential night storm white squall coming) to events outside of your control and you should be working on getting to safety intelligently, calmly (as panic helps nothing) and urgently.

Once you are aware of this risk, margin trading accounts are extremely stressful to own which in turn can affect your emotional availability and well being as well as that of those around you. Margin accounts take considerable time, skill, energy and a very strong stomach to manage well. The higher percentage of margin you use compared with your portfolio balance, the more reckless your behaviour and the more exposed and woeful your situation.

The markets are volatile enough already; for the sake of your boat and anyone tied to it, there is no justifiable need to artificially amplify the size of the waves by 3 or 4 times.

 

This is a section on timing

Buy on a down day sell on an up day

Whilst we can’t hope to time the market, aim to buy your investments at a good time: for example buy on a market down day, sell on a market up day; buy when index valuations are low, sell when they are high.

Don’t attempt to buck the trend

This is NOT to be confused with buying against the market trend – which is a dangerous, badly timed strategy and quite frankly stubborn. What I mean by this is that if the world is moving away from something (like CD’s and DVD’s) and it’s causing a related stock’s value to drop, don’t invest thinking it’s good value because it’s 50% cheaper than it was the last time you looked at it.

Trade in small chunks

Even if you are already convinced you want to own or sell a large quantity of a single stock you already own, buy in small chunks and sell in small chunks to diversify over time and protect yourself if you got the timing wrong.

Build your portfolio slowly

Likewise, buy and increase your 20 different positions gradually and in different market conditions. Procrastinating, unlike in other areas of life, can work very well on the stock markets. Don’t be in a rush to buy your next investment.

Use charts

Whilst I am more of a buy and hold investor than a technical analytical trader, never buy and sell without looking at a stock’s chart. Charts provide a vital sense of perspective that only time can offer.

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Don’t invest any funds you might need to urgently get your hands on

People buy stocks for only one reason but they sell them for many reasons – don’t let this be one of them. The investment up cycle of a stock can take many months or even years longer than you think. Selling before an investment is ripe can lead to missing out on, or even having to sell at a loss, a stock with HUGE upside potential.

Be Tax efficient

Look to use up your capital gains allowance every year by accumulating your losses for when you need them, this can be done by selling your winning portions (for at least 30 days before buying back in so as not to fall foul of the bed and breakfasting rule) and holding your losses.

Losses against stocks and options never expire and can be offset against gains on stocks and options but also gains on property. This is where the real estate and stock market strategies can complement each other if you need them to.

Keep ego in check and cut your losses

Don’t be stubborn, admit when you got it wrong i.e. once you can see what you anticipated hasn’t, and believe won’t ever, come to pass, cut your losses and sell.

Note that your belief that a stock is a write off can be wrong. Therefore, if I can afford to put an investment down to losses even once I have completely lost my faith in it and given up on the reason I bought it, I sometimes retain a small position. Note that if you do continue to hold a position in these circumstances it’s no longer part of the trusted 20. Think of it as a sort of scrap heap you still own.

However, if a potentially severe corruption issue has occurred with regards to a trend stock, I sell my entire position completely, straightaway. They tank like a stone.

 

This is a section on conviction

Build your conviction in a company before buying it and maintain that conviction in it – unless something drastically changes

Build a solid belief in a stock by getting very familiar with the company and its business through different kinds of research.

Building a conviction in your mind about a stock isn’t about uncovering ultimate reality (we don’t have access to that). It’s about building your own relationship with the company and your beliefs about it; in other words a sense of certainty about its investment worthiness. This can be done through different means:

• Tracking its stock movements for a period of time, years even, and getting used to its (evolving) patterns
• Reading about it

• Listening to its leaders

• Listening to business analysts talking about it

• Views of other investors you know and respect

• Reading the company earnings reports

• Listening in on the company conference calls

• Using their products

• Working for them

I find Bloomberg news helpful for a lot of the above.

Obviously misplaced conviction can be very costly so don’t reach the conviction state too quickly or easily through impatience, laziness or false conclusions.

Be clinical, not emotional

If you don’t truly understand a company and its operation and place in the world (and some are much easier to understand than others) – don’t buy it as you can be spooked too easily or be too slow to spot a serious problem. Likewise, when a stock drops there is a natural human impulse to sell but you must not sell from that emotional impulse.

Buying and selling drivers need to come from a clear sighted non emotional place inside of us – not the emotions of fear and greed. Emotion is an absolute killer to ANY good decision making process, not just trading ones. Whilst we all have emotions we must control them when we trade, not have them control us.

As such, sell only when the specific reason you bought a stock has disappeared or been undermined by a specific event or lack thereof; jumping from one stock to another on a hunch or whim is nuts and I cringe when I see people do it. When you truly understand a company, and movements in its valuation, there is much less temptation to do this.

 

Trend stocks vs conviction stocks: Distinguish between a trend stock and conviction stock and treat them accordingly

Treat different stocks with differing and appropriate lengths of rope/trust. You don’t lend to a stranger but to a good friend with a great track record you might if you can.

Conviction stocks

I define a conviction stock as an already well established stock that has already found its place in the world – a sort of Roger Federer of stocks, such as Visa, or Berkshire Hathaway, an Apple or an Amazon. That is to say, an already established results producing juggernaut that has been producing great results for many years already.

Trend stocks

A quality trend stock is one where it’s still unclear to what extent they’ll make it or if they’ll make it at all – like a promising young teenage tennis player. That is to say a lower level but climbing player that can be rocked much more easily and with a far less clear future ahead of them. Obviously a conviction stock was once a fledgling trend stock too; Roger Federer was once just an up and coming teenage player with an uncertain future in the world of tennis. Whilst I don’t want to ignore trend stocks, they need trusting less and putting less faith into until such time as they start to win big tournaments and grand slams – if you will permit me to continue with my tennis analogy.

The reason I don’t want to ignore trend stocks is their huge potential for rises – (think investing cheaply into a 20 year sponsorship deal with a 15 year old Roger Federer having anticipated his future brilliance) hence there being a place in a portfolio for them. But they also have huge potential for falls and failures and simply not blossoming; much more so than conviction stocks.

Note that these trend/conviction labels I am sticking on companies aren’t static: a trend stock can become a conviction stock and a conviction stock can become a trend stock again, or probably more likely an against the trend, over the hill stock trying to fight its way back up the hill (think Blackberry).

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Don’t sell too quickly on the upside

Give your winners freedom to grow – if you sell out at a 20% profit every time you can only make 20% profit. Then you miss out on the big % gains. Gains can be multi baggers: double, triple, decuple, even more. A 1000% percent increase is not impossible over time – provided you haven’t sold prematurely.

Don’t buy too quickly on the downside

Hesitate to double down on a stock you have lost on but you still have conviction in, because it can often drop far more than you think (the technical term for this is catching a falling knife). Wait for it to come back up again first or at least stabilise for a few trading sessions, before buying. This is particularly true for trend stocks which should be bought on the way up not the way down.

Rebalance

Consider rebalancing your portfolio at opportune times. This means if you have had a big win consider taking a portion off the table.

If it’s a very high conviction stock maybe less burning need but if it’s a trend stock this habit is definitely advisable as the market has less confidence in them, doesn’t know them as well, and that confidence can be quickly taken away again. Anything that has become a success overnight is not firmly established yet and can get knocked back down again just as fast. Think One Direction as opposed to Elton John.

Strategy 2 rules summary

 I have provided my rules/guidelines and in hope they might be useful or of interest to you. You might add additional sensible rules as you wish. It’s your game and your hard earned money. I’d always be interested to know what rules others add or remove so I can consider applying them myself.

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Nature of the markets

 I now want to make a few more generic observations about the nature of stock markets to shine more light on why these above do’s and don’ts are necessary.

The 3 reasons for a sudden drop in a company’s share price:

Stocks clearly go up and down, there are no straight lines in the stock markets, but they tend to go up gradually and down very suddenly, in gravitational fashion. Think walking up Kilimanjaro and then going to the top and suddenly launching off it: slow up, fast down.

Furthermore, these often stomach churning drops sometimes occur for no good reason  – just because there are more sellers than buyers at a moment in time (the ultimate reason behind any stock increase is caused by there being more buyers than sellers and any stock decrease is due to more sellers than buyers). Nevertheless the sell off will be being triggered by an event of some kind, normally hitherto unforeseen, and quite possibly overreacted too, at one of the following 3 levels.

1. A company level problem (think a particular ship sailing on the sea where something has happened localised to the boat itself.) For example a company CEO dying or resigning; a profit warning; an e coli outbreak in a restaurant; a lower than expected EPS.

2. A localised problem, such as a particular country or industry issue (think a particular area of sea affecting the ships in that area). For example, an oil over supply will affect all companies involved in the production of oil, through no fault or mismanagement of their own; likewise a slow down in China will affect all Chinese stocks. These events, whilst localized, can of course create wider ripples because of the interconnectedness of everything. For example, if a lot of money has been lost on oil it might be necessary to release funds from elsewhere triggering a sell off, or if China is slowing down an American company whose current focus is on growing in China will be affected. #Everything has a consequence.

3. The entire economy (think all oceans). A major terrorist event, war or global virus. Affects all of the sea and therefore all the ships on it.

Note that different events can occur at all 3 levels simultaneously really punishing a share price!

If the issue exists at a company level be extra wary as a stock can even drop into liquidation over time in cases where the company has just failed to add value and develop or something very undermining has happened to it. If I can personify stocks for a moment this is the up and coming tennis player when you realise he just isn’t going to make it, the train of time is going to leave the station without him and he will need an office job instead or to teach at the local tennis club for a modest hourly rate. Or a pro athlete who suddenly shoots his girlfriend dead in a tragic incident never to compete professionally again. A level 2 or 3 event won’t be fatal or permanent; oil and China won’t go to zero and neither will the global economy.

Managing the macroeconomic climate

Notwithstanding, if the whole sea is tempestuous almost everything will have lost value; these economic storms, whilst temporary, can be longer and intenser than you ever thought possible.

They can be characterised by brutal down day after brutal down day, after brutal down day, after brutal down day, then maybe an up day, then maybe a flat day, then another 4 increasingly brutal back to back down days, and then finally a really good up day after which someone naively suggests to you that everything is ok now that they have seen some green on a (day) chart. But you aren’t feeling a whole lot better just because your 40% loss over the last month is now only a 35% loss.

You need to have a strong foothold and not necessarily blame/give up on a company because its share price has dropped during these storms. Businesses are exposed victims to macroeconomic and geopolitical disasters as much as the shareholders are. These storms are buying opportunities, if you can keep some spare powder in the barrel (as the saying goes) for when they inevitably occur. You have to hold free cash to properly take advantage as any investment you sell to liberate buying monies will have been knocked down too, although some more than others based on the stock’s beta (how volatile it is compared to the market as a whole).

Storms in a tea cup: Most macroeconomic storms are insignificant in the long term

Whilst I now appear to be undermining my previous paragraph, it is very important to maintain perspective. When you are actually in a storm being thrown around it is uncomfortable and painful, but a few weeks later you will have probably forgotten about it provided it didn’t cause you any long term damage – (which you will have if you were trading on margin when the storm hit). Major world wars aside, all these geopolitical and macroeconomic ‘events’ which make noise and send markets plummeting just look like small blips if you chart a 30 year index.

Quarterly earnings reports – the times of year when the sudden movements typically occur

A stock can move hugely on quarterly earnings releases – in particular future guidance issued by the company, as the future we are heading towards is affecting the present moment. If I announce to you, as I sit there in my Armani suit with my Porsche outside and my 34 inch waste, that I feel fine but that the doctor’s diagnosis is that I have a chronic disease, your opinion about me and whether I am a good investment, will suddenly change even though everything is fine right now.

With earnings reports the price drops, or to be fair sometimes increases, after market close and the chances are you won’t be trading in extended hours so you leave the store at 16:00, come in next morning at 09:30 to find your item you still own is now worth half of what it was the previous day at 16:00 and that anyone with market access can now buy it for this new market price. Oh great! Yes that is sarcasm.

All certainty is delusional

As Dirty Harry famously said, opinions are like bottoms (he didn’t use that particular word), every body has one. Everyone has opinions and opinions are cheap and rarely cost us money. But in the world of investing your opinions can cost you dearly.

Many recommendations and opinions are bandied about, including our own, but no one knows for sure what a stock, industry or economy will do. This is true even where stocks are recommended by professionals who sell their advice, or people whose investing competency you trust and know they truly want the best for you.

Anyone who says they know what is going to happen to an individual share price in the short term is simply talking rubbish. This is partly because there is often no real sense behind the swings and movements. In the longer term thoughtful and insightful predictions are more possible but in reality it’s still uncertain. No one has a crystal ball – unless they are Gordon Gekko.

No entitlement

The anonymous market doesn’t care a jot if you lose. I did a market investment seminar in 2004 during which there was an exercise where the room of maybe 4000 participants was split into 2 halves with no explanation. Both halves were subsequently instructed to cross over to the other side of the room while randomly exchanging their money as they did so. I didn’t have loose change on me but wanted to participate so I pulled out a £10 note, a chap saw it, held out his hand and I begrudgingly gave it to him without getting anything back. He then gave it to someone else who then gave it to someone else I think. I lost track. Exercise over, I soon reached the other side of the room empty handed. I hopefully looked around to get my tenner back, looking out for someone to approach me. It soon dawned on me, to my dismay, that it was never coming back.

Officially the best £10 I have ever spent.

Stocks can swing in and out of favour

A stock can drop and come back up – so you can exit at a stomach churning loss and then watch it soar far higher than you ever imagined possible, which is an unbelievably frustrating experience to witness. You bought at 300, it dropped to 60, you sold as you could take no more of the pain, and then it went up to 600 over a period. Ouch. (Netflix)

Like being a passenger on a ship going in the wrong direction for you, you put up with it for ages at tremendous personal cost, only to finally give up and disembark. You walked away dismissing the experience as a bad decision and lesson learned.

Then you read the news a month later to see the ship is now docked up in style in Monte Carlo, exactly where you wanted to go, while you are still in Bognor trying to hitch a ride.

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Some generic warnings

 I want to finish up this section by issuing some generic warnings about strategy 2

• Most of the mistakes you can make come from action rather than inaction. Whilst it might be exciting and look cool to turn your office into a trading station full of screens and lots of activity, it isn’t the way forward
• When people tell you about what great traders they are, they tend to tell you about their winners and not their losers; be wary of your’s and others’ egos
• If you aren’t careful, or even if you are, it is a possibility that you make a sizeable profit on one trade and then a sizeable loss on another – which puts you back to the beginning again

 

Conclusion

Investing is a powerful life tool to develop. We would do well to invest consistently, responsibly, thoughtfully and intelligently as dictated by our individual circumstances. Build a strong foundation first and then earn yourself the right to invest in riskier ways.

 

 

This is an article I have written for landlords or prospective landlords in the hope that you might find it interesting and useful. My experiences are predominantly of being a landlord in the U.K. with its cold and wet climate and its tough eviction laws.

Some people who haven’t ever been a landlord simply see buy to let as an investment that you buy and hopefully increases in value over time – like a share equity trade. But in fact a buy to let property is a business and as such it is made up of the same components all businesses are made up of. It needs financing in place, it has costs and taxable income, customers who are buying a product/service, and people whose services need hiring to ensure that the business can keep operating optimally. There is also a raft of legislation your buy to let business needs to abide by. Finally there is a CEO and owner that needs to take the strategical decisions and assume ultimate responsibility for everything – that’s YOU.

I have structured this article around the different phases a landlord or prospective landlord could be in.

Phase 1: Prior to purchasing
Look to buy at an opportune time

Whilst no prospective investor has the benefit of the 20/20 vision of hindsight, consider waiting before buying. Whilst properties in popular areas such as the South East of England have always gone up in value over time, like any investment, values don’t go up in straight lines and random macroeconomic and geopolitical events can create good value entry points. These windows of opportunities rarely stay open for long so be ready to jump through them quickly when they do come along.

Another point to consider is that certain times of the year are typically harder to sell in than others, which can create buying opportunities where a seller has a time constraint or an aggregate deal they urgently need to release funds for.

If you are wanting to buy multiple properties, to reduce risk, consider spreading out the property purchase dates over time, much like you would if you were dollar cost averaging on the stock market. The economy is ever changing and this is a form of diversification where time is the diversifying factor. Buying properties in different locations is another strategy of diversification worth considering.

Once ready to buy, buy a property that works for you on terms that work for you

Once the timing is right for you to buy, get as clear as possible what your conditions of satisfaction are for a property. Communicate those conditions to the agents so as not to have your time wasted by agents just trying to get you through the door to view properties that could never ever work for you.

Before I have agreed to buying somewhere, I like to take a really negative, picky friend with me to the viewing to help me fault find the property and its location.

Once you have found somewhere you like, negotiate a deal by leveraging your hopefully strong buying position. Buying a buy to let property isn’t easy due mainly to the large deposits required and other strict lending criteria; if you tick all those boxes when others don’t you have an advantage. However, don’t miss out on a great place that would be a real asset to your life for the sake of a few thousand pounds. I have made that mistake. Note that you can often negotiate a more interesting deal for yourself when a property is distressed in some way.

One or two bedroom properties tend to be in most demand with tenants and are therefore easiest to let. A one or two bedroom property in a decent part of town will let out very quickly. I remember what a strong sense of loss I felt when my first ever tenant notified me of their intention to leave, but in reality tenants are not in short supply. A good tenant however is an asset because there is a cost to replacing them.

I personally prefer to invest in houses rather than flats because with community living come leases, potentially high maintenance charges, potential for dreadful service from the managing agent in spite of high charges and certainly less decision making freedom. However, with houses considerably more repairs are required as you are also responsible for the state of the outside: that is to say the driveway, patio, fencing, the neighbour’s fencing that he should take responsibility for but hasn’t, guttering, down pipe, soakaway, roof tiles, flat roof if there is one, soffits, fascias, pointing, rendering, aerial, loft beams – all of which have been problematical and costly to me over the years. However that is not to say a sizeable flat cannot also be a money pit – the larger the property the more there is to go wrong.

Choose a property you want in your life in the long term – some you’ll get fed up with pretty quickly due to mainly (but not solely) location. Properties take time, energy and money to buy and sell so the chances are you are buying it for the long haul. Continually you will be emailed about it, spend money on it, need to take decisions relating to it, and you will need to visit it many times – so choose one that’s a bit special to you in some way. Perhaps it’s in an area you really like, or it’s in close proximity to another property you already own, or it has a garage or it’s close to a station. Aim for your new property purchase to be a jewel in your crown rather than a thorn in your side.

Decide who to buy with, if anyone, and establish working practices with them. Someone who might appear to be a good business partner for you might ultimately not be – so proceed with caution. Like in any relationship, reliability and how easy it is to communicate with them is key. Other key factors to consider are how experienced that person is with regards to property and being a landlord, how clearly they think, how emotional they are, how dominant they are, how efficient they are, where they live; if you are the only one who lives close by a lot of the work will naturally fall to you so it’s good to know that in advance. Of course, like in all relationships, all these factors are dynamic as people and their circumstances change.

On a practical level it can be a godsend to pool resources of time, money and skill sets thus sharing the buying costs and hassle of finding a deposit with someone, not to mention the joy of sharing the stress of the continual repair bills and day to day problems that need solving. A property project that wasn’t otherwise possible can become possible with a highly compatible partner(s). Choosing someone whose strengths complement your weaknesses can be a wonderful gift – two brains are better than one if they are working together supportively and harmoniously.

Arrange the best loan financing possible. Costs are arrangement fee and most significantly mortgage interest – think not just about the discount period but what happens to the rate after that period comes to an end; re-mortgaging can be painful particularly since the 2008 economic crisis. Contrary to common thought consider choosing a mortgage whose terms are uncomfortable for an initial temporary period but actually improve once that period expires.

When your position is less conventional a mortgage broker, as opposed to dealing directly with the lender, can help you find a mortgage, however, their arrangement fees can be higher and hidden by personalities plus they don’t have access to some mortgages/lenders; conversely some mortgages are only available through the brokers.

Phase 2: The period after purchase but before you have a tenant

Preparing the property for let

All properties are going to need at least some preparation before you can let them out. Prepare/renovate the property to a match tough functional standard. If you let out a property before it’s truly ready the tenancy will be less smooth as the service you are providing to the tenant will be substandard.

Preparation normally involves what I like to call property cleansing (removing items that don’t justify the space they take up) and item integration (installing the right items from your life in a useful place in the new property). Do what jobs you can yourself if you like to invest your time and energy to save money, and use contractors where a job is outside of your circle of competence, beyond the scope of your tool kit or where you are not sufficiently motivated. If you are going to do a physical job yourself it needs to be done to a high standard with a good finish. It is costly financially and emotionally working hard to do a job only to have to have it redone because it wasn’t done properly in the first place. The physical world is unforgiving.

Moreover there is such a thing as tenant mentality. Tenants can be picky, particularly when they are paying full whack rent. In a tenant’s mind they are buying a service from you, you bear full responsibility for everything and all they have to do is shout when they feel they aren’t getting what they are entitled to, like you might in a restaurant. Of course if it were their own property they would have to experience first-hand all the hassle and expense of any repair/improvement they required, so they would likely be less demanding. This is the manifestation of the not uncommon human problem of a person being stricter with others than they are with themselves.

I find that tenants who are also homeowners or who have owned their own homes in the past or better still, tenants who are landlords themselves, are more understanding when things break and interrupt their service. They are also better at knowing when you could do better.

Furnished vs unfurnished

With the exception of white goods (which apparently in some parts of the country the landlord isn’t even expected to provide) letting entirely unfurnished is recommended (unless you really don’t want to get your items out of the way for whatever personal reason) because it simplifies the tenancy, significantly reduces tenant queries and because a furnished property doesn’t command a higher rent. More than anything tenants are paying for the location and space – and not your clutter. Even if the first round of tenants is accepting of your spare futon, hat stand and shoe rack and loves the bed and sofa you kindly provided for them, you will eventually find a later round of tenants asks for them to be removed. Also do you really want a long term tenant who can’t afford their own furniture?

On multiple occasions I have sold all my furniture in the property inexpensively to the incoming tenant which worked really well as I didn’t have to do any lugging or further arranging and the tenants naturally took their items with them when they moved out. I find that furniture that works well in one property rarely fits well into another.

Normally the landlord is required to provide curtains and light shades but often I find tenants take them down of their own accord, dump them in the damp shed, and replace them with their own. This naturally affects my motivation to provide them in the first place. If you are thinking of buying new curtains or lampshades check with the new tenants to see if they prefer to buy their own.

Choosing Contractors

Establish relationships with contractors you will be able to trust even in your absence. The trust needs to be mutual. A good contractor needs to be competent AND reliable AND a fair price.

Be aware that worker quality is not equal and so price should not be the only factor to consider when hiring someone to do a job: one chap can fit a new garden gate for half the price of another chap but the gate fitted inexpensively might blow off at the hinges in the next storm. This happened to me. Quality and certainty are key when it comes to problem solving.

Contractors who always work as a packaged team of two, however small the job, tend to charge more overall for a result. Having said that I can understand why it would be more comfortable and convenient to work as a team and in certain stages of some larger jobs it is surely a necessity to have two sets of hands to ensure a positive customer experience.

All people have different rhythms about them and some people just work quicker than others – the slow methodical workers can be extra costly particularly if they are on an hourly rate. A decent worker, whatever his working rhythm, should also be able to provide a price up front for a job so you aren’t costing yourself extra cash if you ‘hold him up’ with a convivial cup of tea and a chat.

I recommend having a local, tenant friendly generic contractor with a set of keys who can turn his hand to most things. In addition I recommend having trusted specialists at your disposal too: so that’s plasterers (who are often also builders), plumbers and electricians. Choose the right type of contractor for each job. For example a plumbing specialist will probably be more effective at plumbing and more up to speed with the constant industry changes and tricks of the trade than a non specialist. Plumbers/gas engineers are key to your business – ~80% of all maintenance issues that arise in a gas fueled property when tenant is in situ are plumbing/heating related in my experience.

A few DIY tips I have learned over the years from, sometimes bitter, experience:

• Buy taps, baths, toilets and basins from a plumber’s merchant as opposed to a DIY store, as otherwise plumbers struggle to obtain spare parts and sizes can be irregular.
• Windows can often be significantly improved inexpensively by getting the glass replaced rather than the whole window.
• Decorating should use the same colour code across your portfolio, that way there is less decision making fatigue and less left over paint that goes off like an out of date cooking ingredient, particularly if stored outside. I use Dulux Almond White (Matt) and Dulux White Satin Wood. All paints are not equal in quality, Dulux trade is my choice of paint. The main cost of any job is the labour so why undermine that expense by using second rate materials.
• Go for LEDS over low voltage spotlights. Less fire risk and no transformers required.
• If a wooden sub floor is fairly uneven opt for carpet over laminate, it’s much more forgiving.
• Don’t try to do the plastering or final coat of rendering yourself – it looks awful. If your plastering will not be on display, hidden behind tiles for example, that’s acceptable but you don’t want anyone waking up every morning to behold poor quality workmanship.
• Don’t do any plumbing yourself unless you really know what you are doing. This is because water damage can be severe and very expensive to put right.
• If in doubt about a tap, replace it – they can leak and cause a lot of damage. I find their life span to be about 10 years.
• Think very carefully before choosing to remove a chimney breast
• All building problems can be solved – for a price.
• Don’t use electrical trunking if you can avoid it as again, it looks awful
• Buy basins for one mixer tap
• In an all electric house consider installing an unvented cylinder upstairs instead of a water tank in the loft as water pressure is better (mains) and space is saved.
• For a gas property consider a combi boiler over a conventional boiler as the pressure is better (mains) and space is saved. Do your research and find a boiler with a good reputation and a long manufacturer’s warranty.
• In an all electric property consider choosing a dynamic heater over a standard convector heater as they look smarter and are a little more economical.
• Don’t buy electrical storage heaters – they are expensive to buy, inflexible to use and ugly to look at.
• Don’t try to revive the original ceiling heating or underfloor heating that has ceased to work in a property. It’s old technology.
• Hard wire in smoke alarms as opposed to installing the battery operated alarms that need replacing periodically
• Bathroom suite should be white
• Paint needs to be mixed with water before you paint new plaster or it will peel
• Measure twice cut once
• Put a strong emphasis on keeping kitchen worktops dry because they rise at the join and bubble up when left wet for long periods and can’t be repaired
• Thermoststic radiator valves block up with silt if not used. Turn on the boiler and turn the valves every few months to ensure they don’t block up 
• Tiles need to be bought as part of the same batch to ensure they are all exactly the same 
• In a wet country provide tenants with dedicated tumble dryers (vented or condensing) to reduce the risk of condensation issues 
• In a cold, wet, country consider providing tenants with dehumidifiers to reduce stress in the landlord tenant relationship where condensation can build up from not opening windows 
• Ceramic hobs don’t turn on if they get wet. When they dry out they work again.  

Note that living in a property while you renovate it/prepare it for letting, can save the considerable cost of running two untenanted homes simultaneously, but it can be a dusty and painful business depending on your physical tolerance and sense of adventure. Localising the project to one area of the house at a time helps. Consider having someone move in with you and help you, particularly if you are also working as a full time employee.

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The Agent – Negotiate a deal that adds maximum value to you.

Find an agent, introduce the property to him in person and establish relationships and working practices together. Agents are businessman and certainly open to wide forms of negotiation. You can cherry pick from the services they offer to build a bespoke package and you can negotiate a fee. You can choose a flat fee or a % of the yearly/monthly rent. All agency fees are subject to the current VAT rate.

I like to find an agent where I have initial contact with, ongoing access to and am on first name terms with the owner, not manager. Only then can negotiations really take place.

There are situations/areas in which the agent doesn’t add value. For example I personally don’t like to buy the agent’s management service for a long term tenancy. What is the point in it? They are being paid for doing nothing when nothing is going wrong and when things do go wrong they won’t fix them, instead they will phone someone else to fix them and both the agent and their contractor probably respond to potentially worsening problems slower than you would on your smartphone with your contractor at the ready. At worst you have two people spending your money for you badly: the agent employee who probably doesn’t know you and your property well, and the mysterious contractor they have chosen. It might work out but I would rather be the one allocating the work, negotiating the price and making the problem solving decisions that will affect me. No one will care about your money, your property and hopefully your tenant as much as you do.

However, without doubt the agent does play a vital role in your business. Here’s how:

An experienced local agent will know the local area and market extremely well and will be able to answer any question you throw at them. A well connected agent might also be able to help with phase 1, helping you decide which property to buy and even keep his ear to the ground for you.

An agent will also attract a higher quality of tenant and also cause the same tenant you could maybe meet outside of that structure (on Gumtree for example) to behave more professionally towards to you and your property. Also going through the intermediary of the agent makes a tenant more understanding of the many viewings organised by your agent towards the end of their tenancy as they were once the viewer in that exact same position.

Choosing the tenant

Despite pressure the agent might try to put on you, you mustn’t just automatically choose the first tenant the agent finds for you. The legal contract is always between landlord and tenant; it is just match-made by the agent. If things go wrong in the tenancy the agent won’t get the majority of the pain (if any) – the landlord will and therefore it must be the landlord who chooses the tenant. Don’t let the agent persuade you to accept an application you have reservations about. I have made that mistake. I will never forget those fateful words from the agent owner: oh Andrew they are such a lovely couple.

There is a conflict of interests between landlord and tenant which the landlord needs to be acutely aware of: the more viewings an agent has to conduct before finding a tenant the landlord will accept, the more of their resources they are burning up and the harder the agent is having to work. The agent receives the fee from you whether you accepted the first application they presented to you or the 20th. Also there is competition within the agency amongst the agent’s staff (known as lettings negotiators) to find you a tenant quickly due to them being partly commission based. So if you reject an application lettings negotiator 1 has recommended and presented to you and then accept the next application presented to you, potentially by lettings negotiator number 2, number 1 has lost out on the commission. In short the negotiator who contacts you with the ‘good news that he has found someone who really wants to rent your property’ badly wants you to accept the application and has a vested interest in you doing so but that application might not be the most suitable one for you or your property or your neighbours and so you might very well be better off waiting for the next application, which will surely be just around the corner.

When an application is nearly right, but not exactly right, consider negotiating terms (with the agent acting as intermediary) with the tenant in order to strike up a win win deal. For example I might ask the tenant to forfeit the standard 6 month break clause because tenant switch over is resource consuming and I want to limit it as much as I can. Or I might ask if the tenant could bring their moving in date forward to shorten my void period between tenancies. More than 2 weeks void is undesirable unless you need significant downtime for a major repair. I might also ask the tenant for a larger deposit than the standard 6 weeks rent.

The tenant might also negotiate terms with YOU so that they can feel better about the deal. You should be open to this.

When a tenant asks for a physical change to be made to the property consider how good a suggestion that is objectively for the property itself. Whilst it’s always easier to say yes than no from a relationship appeasement point of view, you don’t want to spend money effecting a change requested by the current tenant that future tenants won’t appreciate, benefit from or might even want undone. Note that whilst a bad tenant can do tremendous damage to a property, a good tenant, normally in tandem with the landlord, can improve a property.

Key factors the agent might have deprioritised or overlooked when recommending a tenant to you for you to choose:

Is the prospective tenant financially comfortable ENOUGH? The agent’s definition of affordability might not be yours. The agents just use the minimal criteria of the company they use to carry out the tenant credit check.

How educated is the tenant? Does the prospective tenant speak and write English clearly and with a degree of professionalism? To quote Goethe, more harm is done through miscommunications than wickedness. Can you see something they have written before you commit to them? Communication between people who struggle to understand each other is stressful for both parties.

Is the prospective tenant willing to commit to 12 months and forfeit the standard 6 month break clause? This is the litmus test to see if a tenant actually plans to stay a reasonable amount of time. You can’t really think beyond 1 year.

How quickly would this tenant move in? (a delay can eat up any benefit gained in achieving the full rental asking price).

Is the tenant a good physical fit for the property? For example a large family with multiple cars might not be a good fit for a small house in a small road with one designated parking space. Wear and tear levels and demands on limited resources will be higher.

In summary, your choice of tenant is an absolutely crucial one. Tenants are not equal. I look for the most respectful tenant I can find and I look to build the most respectful relationship with them I can.

The contract

You can prepare the contract and insure the deposit yourself if you like but I prefer not to these days as I am often not available to go through this process with a new tenant. Instead I have the agency do both for me and I find it a superior and more professional way of operating.

While it can be tiresome, you need to read the long agency contracts and inventories very carefully prior to signing them – mistakes are made in them by the agent in the bespoke sections of their standard contract, some minor, some major. Most agencies have staff members that are relatively junior and suffer from quite a fast staff turnaround for some of the positions.

Agency contracts, drafted by the agency’s lawyer, are generally pretty sturdy. When I first read one I was surprised by how paranoid they seemed and yet when I read one now with the experienced eyes of a landlord who has had to shovel out from a tenant’s drain, into 7 doubled up black bags (through no fault of the drain but rather what the tenant flushed down the toilet regularly) 3ft deep of their excrement that was nudging up the manhole cover on the patio, I can see exactly why a certain clause to define parameters of responsibility is included.

Agency contracts are more weighted in the favour of the landlord than the standard contract you might get from your solicitor or off the shelf/internet.

Short term lets vs long term lets

Whilst the vast majority of tenant landlord contracts will be best suited to a 12 month AST (Assured Shorthold Tenancy), defined here as a long term let, a short term business model is also possible and might suit you better. The short term contract is not an AST and is no longer than 6 months, normally 3 months from my personal experience.

This is a different way of operating where the landlord would fully furnish the property (including the provision of towels, linen and utensils) and provide and pay for ALL tenant services, much like a hotel owner would.

Rents, paid up front, can be almost double those of a 12 month contract but agency fees will be considerably higher and your landlord task list will be longer. Perhaps most significantly there will be more void periods and these periods are extra costly because not only will you not be getting an income but you will be saddled with all the bills as if someone were living there all inclusively.

For the right property there is however a surprisingly buoyant market for this model. I have identified the following interested groups:

• People who have sold their property but not purchased a new one yet. They moved out before they had bought a new property because they didn’t want the chain they were in to be broken.
• People who are waiting to have work completed on their home, either a construction project of their choosing or an insurance job, prior to moving back in to it.
• Staff of local companies who are on a temporary placement in the area. Your contract might be with the individual who will tenant your property or it might be with the company itself who deploys one of their workers into it.
• People going through the protracted UK eviction process prior to moving back into their property. This process takes about 7 months as different dates are allocated to the landlord by the courts in a long chain of pain. 
• People who have family in the local area and want to visit them on a temporary basis.

As you might have noticed, all these scenarios can be subject to delays and last minute plan changes, so for a short term contract to work as smoothly as possible, in my view the landlord needs to provide the tenant with ‘a maximum flexibility service’ whereby the tenant can extend at the last minute should they want to.

When I attempt to discuss this short term model with non landlords they often say ‘oh what you mean like Airbnb?’ but Airbnb is effectively a website and agreement service only and the onus of handing the tenant the keys and introducing them to the property still lies with the landlord, so is limited in its provision of services. I also currently see Airbnb as more of a tourist product than a professional one and as such more suitable for your typical two week let where the property owner is nearby.

Note that very few agents have real life experience of short term lets. I use Hamptons International which is one of the few who does.

Contents and landlord’s liability insurance for this short term model can be purchased on a holiday let basis.

HMO’s

Note that with both of the models I have covered here you let out the whole property in its entirety to one party. An additional model is that of the HMO (house of multiple occupancy) where each occupant is given their own independent AST but I have no direct experience of that and as such I have not attempted to write about it.
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Buying insurance

Research and choose the right insurance for your needs. Buildings insurance for landlords is a must in a freehold property and a requirement of your mortgage. Definition of ‘buildings’ is wide and includes accidental damage to fixtures and fittings such as a laminate floor or a boiler. The tenants are responsible for their contents.

Bizarrely I find that insurance can be considerably cheaper when setting up a new policy rather than renewing your existing one. Loyalty to existing customers can be lacking it seems. Also, the first quote or renewal quote the insurance company gives you is often not their best offer, so it is worth asking if they can do any better rather than assume their prices are fixed.

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Record keeping

IT strategy – you need to ongoingly collect and track all the information you might need in the future relating to all aspects of your business and safely store it where you can easily access it from anywhere: i.e on the cloud. USB sticks are a thing of the past. This includes all relevant details about the property itself, utilities, professional services you have hired, loans, appliances and their instruction manuals/warranties, other property contents, expenses, agreements and all business related communications with all parties. As per good IT practice all information must also be backed up regularly to avoid single points of information failure.

Phase 3: Once tenanted

Landlord/tenant relationship

Establish an appropriate relationship with the tenant; too close means it’s hard to be professional. Make sure they know how to contact you if they need to, which bank account to pay the rent to and by when that money needs to reach your account (not necessarily the same day the tenant makes the payment). Make sure they know not to hesitate to contact you when issues arise – what you don’t know WILL hurt you. Contrary to the common saying, ignorance is NOT bliss.

Rigorous tenants that contact you very regularly reporting quality issues relating to your property can be a pain but normally the property is safe in their hands.

Where a tenant complaint results in sending out a contractor and the issue has turned out to be a phantom issue or false alarm (but a contractor has raised a call out charge anyway) or definitely caused by a clear cut tenant error, it is important the entirety of those costs are passed on to the tenant in the name of customer education. This happens surprisingly often and with some tenants more than others.

Visit your tenanted property and meet the new tenants at the first opportunity. This makes future landlord tenant communication smoother.

If you can, on the day the tenant moves in, introduce your property and its workings to the new tenant in person because the agent won’t know the property as well as you. I have connected many problems at root, even months after a tenant has moved in, to an imperfect tenant introduction carried out by an agent.

Note that if you really want to know your own property well you need to live in it and sleep in it for a period. Only then will you truly know its features and characteristics, positives and negatives.

Always keeping a vigilant eye out for reported problems that are in fact just easily corrected user errors and not actual faults, use your contractors if necessary to get faults repaired smoothly and swiftly after the tenant reports them through. This is a key tenant service the landlord must provide. And trust me things will BREAK, in particular appliances.

Replace vs repair – dealing with the built in obsolescence of appliances

The appliance that fails more than any other is the washing machine. It’s all the moving parts apparently. Rinsing the filter helps to keep the machine working optimally and prolong its life, so does regular washing with a Calgon tablet or even soda I am told. In an integrated machine the filter is probably located below the kitchen panelling and so the cleaners don’t clean it. Make the extra effort to remove the panelling and clean it yourself occasionally; a filter can be gummed up with all sorts after a 12 month tenancy.

With the exception of boilers and rubber seals on washing machines, don’t consider repairing faulty appliances that are out of warranty – just replace. I apologise to the green campaigners (of which I am also one) but repairing is often subject to delays while parts are sourced, furthermore the call outs and fitting costs of appliance engineers are not minor. I guarantee if you use appliance engineers regularly there will be multiple occasions the engineer comes out, charges you £50 for the call out and then you end up replacing the machine anyway. You’ve spent more and the turnaround was delayed.

To buy new white goods I tend to use the streamlined services of Appliances Online these days who supply, deliver, install and are competitively priced.

These kinds of stores love to sell their product insurance, which complicates your business records and your life and is frankly bad value.

Boilers

Modern boilers, being the King of household appliances and about £1000 just to buy, can normally be sensibly repaired – even if out of warranty. Combi boilers also need the pressure topping up from the filling loop about every 3/6 months. If a boiler needs topping up more often than that then there is a leak somewhere – find it because if it isn’t topped up it can run dry every time a hot tap is turned on and expensive parts inside can then fail which could write the boiler off.

Boiler maintenance and repair: find a reliable plumber/heating engineer and not a British gas Homecare contract – as the experience level of the engineer British Gas send is a lottery and it’s a different person every time. Likewise having British gas install a new boiler is about £3000 as opposed to the £2000 you would pay to a heating engineer you find yourself.

Note that your life as a landlord is made a bit simpler by NOT having gas fuel in your property. The gas fuel means you are obliged to provide a CO alarm and a yearly safety inspection/certificate on which all gas appliances in the property must be listed. Also you are subject to big breakdown costs if a boiler outside of warranty fails. Combi boiler breakdowns are very troubling to tenants as both their supply of hot water and heating depends on the combi and in truth trouble is never very far away. New boilers can come with long warranty periods – as much as 7-10 years for parts and labour. The boiler almost certainly needs servicing yearly to keep the warranty valid.

Routine Property Inspections

Inspect the property yourself approximately every 6 months. Inspect every room and specifically look at any work that was done by your trusted contractors since you last visited the property.

Ask the tenant if anything is annoying or great about living there. The tenant might have got to know your property better than you, plus his feedback might give you an idea of the next improvement or repair work you need to do.

Whilst you can’t hold the tenant to it when you visit, you can get an idea of the tenant’s future plans to stay by asking the question gently.

Rent

Make sure payments arrive on time and speak to the tenant if payment tardiness occurs, particularly regarding the initial payment because that sets the tone for the relationship.

You are certainly within your rights to review the rent every year and this should be included in your contract so as to manage tenant expectation. The monthly rent cannot be increased legally by more than 5% per year for an existing tenant. Market rates do go up (sometimes it’s just inflation devaluing money) and rents for a longstanding tenant certainly need increasing over time. A good tenant should be understanding of this. For an existing tenant I tend to increase rents only very gently and very occasionally whilst keeping aware of and trying not to fall too far behind the current market rate.

Obviously this slightly sensitive issue is disappeared when you remarket the property to a new tenant, which would always be at the current market rate. Marketing at below the current rate can in fact attract the wrong kind of tenant.

Insurance claims

Make any insurance claims you are entitled to, otherwise there is just no point having the insurance in the first place. These claims are time consuming as understandably insurance companies want to ensure they have covered all bases before paying out. Sometimes the loss adjuster requires to meet you and visit the property.

The way the claim is made, and the angle the claimant takes, based on the wording of the specific insurance policy, is key to receiving any monies you might be entitled to. 

I have always had a fairly negative view of insurance feeling that all policies are full of small print and that the insurance companies only cover what DOESN’T go wrong. But in reality I have found Direct Line and their policies to be supportive of my troubles when things have gone pear shaped – and they do sometimes. Even when a conscientious tenant and a conscientious landlord are working together closely, certain issues can indeed slip through the net.

Conveniently, if you have more than one buy to let property, all your properties can be grouped under one policy. Note that if any of your properties are owned with someone else they can’t be under the same insurance policy as those owned solely by you.

Contract renewal

If the tenant chooses to stay on after the initial contracted period expires it is not necessary to issue a new contract and pay the agent fees that entails. This is because the tenancy, if not formally ceased or redrafted, automatically converts to a statutory tenancy. This scenario suits the tenant in particular because as well as saving them the contract re-drafting fee, (which is normally split between the landlord and tenant) once the tenancy has become statutory, the tenant can leave with only one month’s notice. The landlord however, still needs to provide 2 months notice to the tenant if they want to reclaim use of their property.

Note that if the agent holds the deposit, as opposed to the landlord just insuring it (a legal requirement if the landlord wants to hold it) and possibly floating it with his own funds (useful!), there is a chargeable yearly admin fee levied by the deposit schemes to the landlord, even when the tenancy is in a statutory phase. Where a landlord holds the deposit and the tenancy has converted to statutory, this renewal fee is not applicable.

Eviction

Evict tenant if necessary, and sometimes it truly is. A tenant is a good tenant if they do 3 things: pay the rent on time, look after your property and are easy to communicate with or at the very least fairly respectful in their communications to you and your neighbours. Some are neither. Some people are just in dire straits mentally, physically, spiritually, emotionally and financially and whilst they probably don’t mean to do you any harm and of course still need a roof over their heads, they won’t be able to provide any of those 3 services to you. Even though you made the wrong tenant selection decision you now need to make that decision right by evicting. Your tenant won’t be made homeless so don’t worry – and that’s the main reason why the eviction process takes so long.

Government legislation means you must have acted professionally at all times and be able to prove it to the courts, to be able to evict.

If you do have a really appallingly behaved tenant in your property I strongly recommend keeping the channels of communication open with them and being as respectful and helpful as possible even during the eviction process – which incidentally can take 7 months. A tenant has you by the throat when they are occupying your property and they can do far more damage to it than their deposit amounts to. If they don’t have any money, realistically it is only their deposit you will be able to get back from them as you can’t get blood out of a stone even through the UK’s small claims court.

One action I regret in this scenario is my refusal to buy one such tenant a tumble dryer. This decision resulted in a massive amount of clothes being dried inside and resultant mould which I inherited and which cost me a lot more to put right than buying a tumble dryer would have.

Phase 4: Between tenancies

Deposit return: After the tenant moves out, ensure deposit is handled in a way that is fair to both landlord and tenant. Tenants can get ferocious about their deposits that ‘rich landlords are trying to steal from them’ and you using the intermediary of the agent and the distance that creates between landlord and tenant can be helpful. I tend to give the tenant the benefit of the doubt unless there is something blatant they have/have not done. Long term tenants are often folk who would love to own a property but can’t yet so I like to cut them some slack wherever possible.

Ensure that you negotiate at least 1 week between tenancies to allow for the following prior to the new tenant moving in. Anything less than a week is a scramble. When an agent organises a property turnaround (check out, clean and check in) for you they probably need more time than you would if you were doing it yourself.

Improving property integrity: The period between tenancies is an opportunity to fix/improve the non urgent matters which aren’t practical to do when tenant is occupying. It’s the functional failures that will hurt you so focus on those first. Properties, and in particular their fixtures and fittings, even at the best of times are continuously gradually degrading and they sometimes degrade quicker with tenants in situ. You have to continually fight against that gradual degradation by making sometimes non-urgent improvements and this uninhabited period is an ideal time to do it.

Cleaning: in the name of good task sequence, and therefore after the property is fixed up, get a professional clean done just before the new tenant moves in. Have this paid for by the exiting tenant before returning their deposit and subtract the cost from their deposit. Ensure appliance filters are cleaned where possible.

In the event that the tenant arranges the professional clean themselves, stipulate exactly which cleaning company the tenant should use because some are not thorough and do not guarantee their work in the event the incoming tenant is dissatisfied with the standard and send you photos of every dirty nook and cranny they can find on the day they move in.
The property looking great encourages the tenant to treat it better. Keep sensibly improving it when you have the opportunity to do so.

A note on tax
Tax returns – April 

Do your tax return in a timely fashion to eliminate the worry that comes from tax procrastination. Conform to all HMRC rules, but also be smart and ensure you offset everything you are entitled to.

If after reading the detailed HMRC website pages for landlords you still have unanswered questions, talk to a tax advisor to ensure a high standard of work when you do your return or hire the tax advisor do the return for you if you prefer and if you think he is competent and experienced in the areas of tax that affect you.

Note that part of your tax bill generated from non PAYE income this year, might, depending on your specific circumstances, need to be paid in advance for the following year.

Final thoughts

Whilst having a buy to let property business is a lot of work and a lot of hassle, if operated well it can be a rewarding business to you that provides an essential social service to tenants and which creates employment for many because of the need it generates to continually buy many different products and directly hire a wide range of professional services.

 

 

 

 

 

Acquiring any skill requires discipline and practice. As the late Stephen Covey pointed out to us in the 7 Habits with his law of “production and production capacity” there is what is being produced and there is a method by which it is being produced. Although the output is the exciting bit, we have to understand, embrace and ongoingly implement practices and disciplines that work in order to get from where we are to where we want to be (and not move backwards once we get there.)

To be frank, I wish that were not the case and a lazy, no effort, thoughtless approach could yield great results; that we could just swallow a ‘skill pill’ but unfortunately that is not the way the universe works and I’ll dare say that is probably because it wouldn’t support growth.

Therefore you will need to be MOTIVATED to overcome the challenges that you will encounter when you are acquiring the skill – and there will be some! Motivation is your personal answer to ‘why’ am I doing this? It is the energy required to get you up the hill.

Key point: the motivation that empowers you and keeps you interested and moving is in itself a vital part of the required skill set.

People often say I am no good at X compared with Y but on drilling down we find different qualities of motivation rather than differing natural talent.

I remember listening to the great American sprinter turned TV pundit Michael Johnson talking on the BBC a while back and he said “People get their motivation from wherever they get their motivation.” Doesn’t sound like a groundbreaking insight but what I think he was trying to say is that there is no right and wrong when it comes to what motivates us and that what motivates each person is unique because it is intertwined with and moulded to the unique shape of our lives and personalities. In others words motivation is a personal internal process. To set yourself up for success it is therefore necessary for the individual to find, connect with and remain connected with their own sustainable, self-meaningful reasons for taking on a challenge of their choosing.

Take a moment to think about your desire to learn a particular skill, achieve a particular goal or make a particular change; connect with yourself; tune in to your feelings. On a scale of 1-10 how motivated do you FEEL currently?

A note of warning – motivation when you are still innocent and naive about what is involved is one thing, but motivation once you already have some experience and therefore a visceral, realistic sense of the sacrifices you need to make and ‘units of energy’ you need to invest to get specifically where you want to be is quite another. Furthermore prepare yourself by accepting that, due to the duality of life, achieving your result will also bring new problems with it. So it is necessary to keep monitoring your motivation as your journey advances.

If your motivation for a particular project on a scale of 1-10 is anything below, let’s say an 8, you MIGHT possibly get started but there is a risk is you will give up, or at best slow down progressing, become bored, irritated or ineffective and start to make excuses – at which point, to ensure success, your ‘motivation warning system’ needs to kick in so you can identify that this critical internal process has dropped into inefficiency and work to fix it as quickly as possible before you have moved too far off track.

If you can’t sufficiently ramp up your motivation in one area, rather than trying to miserably willpower your way through it, consider choosing a different project to invest your time, energy and awareness into – find one that you DO deeply care about and feel willing to pursue with all the parts of yourself even when the going gets tough. New worthwhile skills are hard enough to develop at the best of times without fighting with your own ambivalence too. There is something sacred about an avenue we feel deeply and passionately drawn to and when you have identified such an avenue perhaps it is the universe whispering to us, inviting us to take a pre-mapped step.

Furthermore, once you start to get noticeable, positive results, motivation transforms. The initial concentration phase of a project, tantamount to a rocket getting off the ground, requires tremendous energy but once the rocket reaches the momentum phase comparatively less fuel is required as we feel ourselves rapidly progressing along our chosen path, our input being rewarded in sometimes excitingly unpredictable ways, almost as if there were a universal conspiracy to help.

We make things easier on ourselves by believing in, identifying and implementing powerful strategies designed to get results as fast as possible with the minimum of pain and wasted resources. Ineffectiveness, where results are negatively disproportionate to invested resources of time, effort and money is debilitating and disheartening; it evokes the image of a car suspended futilely in mid air, consuming petrol, wheels racing, going nowhere.

In conclusion, because powerful motivation is a fundamental ingredient of success, ask yourself honestly: What exactly do I want to achieve? For what reasons? What does it mean to me? How intense are those feelings? How willing am I to get started now?

Anyone setting out on the adventure of improving an aspect of their life they care about; refusing to accept a particular status quo and their ‘almost certain predictable future’ in that area; trying to get to some place new in a conscious, deliberate way is grabbing hold of the steering wheel of their life and seizing control.