Opinion
By
Bobby Seagull
Locking in a cheap mortgage, when rates were low, was one of my best decisions
February 16, 2024 6:00 am(Updated 9:24 am)
We must all take the rough with the smooth, it is said, which is something I thought of when reflecting on my financial journey over the years.
Not long ago, I shared with i readers some of the worst financial decisions I have ever made, to show we are all fallible and illustrate that mistakes are something we can all learn from.
But for any avoidance of doubt, I have made some very good ones too, so it is only fair to share them. Here are my best financial decisions.
Fixing my mortgage for five years
Despite having a sufficient deposit to purchase my own place in the late 2000s, I dilly-dallied until November 2021. I had the option of choosing a tracker deal on a standard variable rate, which are often more expensive deals, or between a fixed rate at two or five years.
The two-year rate offered was just 1.1 per cent while the five-year rate was a still generous 1.29 per cent. The gambler in me was tempted for the cheaper two-year rate.
However, words of wisdom from my mortgage adviser reverberated: “Bobby, you’ll get peace of mind knowing your mortgage outgoings are fixed for five years”. That alone made me opt for it.
The Bank of England base rate in November 2021 was at an all-time low of 0.1 per cent but it ticked up to 0.25 per cent on 16 December and steadily upwards to 5.25 per cent by August 2023.
It may have appeared as the financial equivalent of the decision by Noah to pre-empt the biblical flood with his ark building, but I pass credit to the sage advice of my mortgage broker.
Health is wealth
“The first wealth is health,” American philosopher Ralph Waldo Emerson wrote in 1860. There is perhaps a contradiction in being financially savvy and driving yourself to an early grave through poor health decisions. Money should offer us the ability to enjoy our lives.
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I’ve never been shy of splashing the cash on my active lifestyle. I pay to be part of two separate gyms. One is a tiny venue, a stone’s throw away from my house and convenient for a quick throwing around of metal weights while listening to Iron Maiden.
The other gym is a bit of a walk but offers a smorgasbord of group classes like spin cycle, circuits and step. I also occasionally indulge in pricey weekend fitness retreats.
As a keen runner, I’m also part of two running clubs (one for locality and the other closer to my parent’s home). While there is a plethora of free YouTube workouts and pounding the pavement yourself doesn’t cost anything, I enjoy working out in the presence of others.
All in all, this costs me around £1,000 a year.
As I’ve just turned 40, it makes sense for me to invest in my physical health to minimise the likelihood of having to rely on our ailing health service to bail me out.
Isa Isa baby
Back in 1999, when Britney Spears was just emerging as a fledgling pop star, then chancellor Gordon Brown introduced the Isa, the independent savings account. Gains you make from interest of investment returns are tax-free. It’s a legally sanctioned way of keeping your money away from the tax man.
Since my gap year aged 18 with accountancy firm KPMG in 2002, the date of 5 April might as well be a tattoo on my forehead.
Before the stroke of midnight on that date, I always transfer any spare dosh into a new Isa. Over two decades, this habit has built my financial safety blanket.
There are multiple types of Isa including cash, stocks and shares, innovative finance and lifetime. You can save up to a maximum of £20,000 and can split the allowance across different types of Isa or just keep it in one.
Use your library
Growing up in financially challenging conditions in an east London council estate, our library was a paradise.
Our dad used to take us all to East Ham library every Saturday. We spent hours sprawled on the floor, voraciously absorbing books on anything from South American rainforests, Victorian engineering marvels or fantasy literature.
Even as an adult as part of two different book clubs, I regularly borrow books for free my local library.
While I pride myself on having an aesthetically pleasing personal bookshelf, it doesn’t take a mathematical genius to calculate the thousands of pounds I have saved on using my library card rather than my credit cards on books over the years.
Those who can, teach
My peak earnings in the City saw me handsomely rewarded, earning six figures for my time as a trader at investment banks Lehman Brothers and Nomura and as a chartered accountant at PwC.
However at PwC, I took a sabbatical to teach new graduates. This experience opened up my eyes to my true calling: education. By 2014, I left the City and went to Cambridge University and invested in my teacher training, masters and starting my research doctorate.
While there was a precipitous drop in income, the richness of educating young people more than made up for it.
After my enthusiasm on BBC quiz show University Challenge unexpectedly won the hearts of the nation, I’ve built a portfolio career across teaching and media – presenting my own TV shows, publishing books, host radio shows and even participating in celebrity reality shows.
It just goes to show that following your passion could leave you earning more in not only pounds – but also in job satisfaction.
