My Bitcoin up 1,348%

Bitcoin 2017 ChartIt was back in December 2013 when I purchased £500 worth of Bitcoin which at the time gave me 0.7 BTC. I kept it to £500 as this was the amount I would initially invest in a single company, larger amounts for investments funds. I was tempted to round things up to to a whole Bitcoin, nonetheless I stuck to my rules and was happy with 0.7 of a Bitcoin.

You can read my post at the time Taking a punt with Bitcoin here.

The value of my Bitcoin fell shortly afterwards and I forgot about it in a kind of ‘just ignore it’ sort of way. Until 2017!

So currently (31/12/17) my 0.7 BTC is worth £7,240.85, a whopping 1,348% increase! Earlier this month it was even higher at over £10,000!

There has been a lot of talk about digital currency this year surrounding the rise of Bitcoin throughout 2017. A number of other digital currencies have come on the scene such as Ethereum and Litecoin, but for now at least, I will stick with my original Bitcoin investment. I am interested to see how far this will go, I am reading everything from a Bitcoin crash to a Bitcoin being worth £1 Million in 5 years. At least for now anyway, I am finding it entertaining and a great source of conversation.

2017 my first £1 Million milestone

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Cafe in Nice at the time my portfolio passed the £1 Million mark

I couldn’t have been in a better location when my overall portfolio of shares and property passed £1 Million net value. I was in the South of France, in the beautiful city of Nice having a few days away following a busy first part of the year. It was a particularly good week on the markets, I was sat outside a cafe enjoying the company of my partner and watching the world go by, we had ordered champagne for no reason other than ‘why not’! It was May 6th 2017 at around 6:40pm when I checked the progress of my shares which had increased sufficiently to push my overall portfolio across the £1 Million mark. My first instinct was to message my old business partner, however in my excitement and after one or two glasses of bubbles I sent the message to the wrong person!

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Investment, Patek Philippe Nautilus

I wanted to mark the occasion and I always thought that I would buy myself something, perhaps an item that would appreciate in value. A friend had introduced the watch brand Patek Philippe to me, having researched I found that these watches can be a good investment. Later that year I took a trip to London and purchased a Patek Philippe Nautilus, a second hand model from Burlington Arcade which bizarrely was considerably more expensive than a new one. However, having visited the Patek Philippe shop on Bond Street I was quickly illuminated to the 8 year waiting list for a new Nautilus which is currently closed to new names!

I loved buying this watch, I love wearing it, I love what it stands for. I feel an immense sense of appreciation every day that I hold and wear it. I think of my life so far and all its blessings, particularly those that light me today. I hope one day to pass it and its story to a younger Barraclough generation.

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Portfolio screen shot at the time it passed £1 Million

My overall portfolio is spread across property and shares, at the time more weighted to property. I have since sold some property and moved the cash into shares, the mix today (31/12/2017) aprox. £550,000 (net value) in property (excluding my own house) and £450,000 in shares. There is also £50,000 in what I call ‘other’ investments. Albeit still weighted to property, I expect the shares portion to catch up over next few years giving me an even balance between the two.

I have a conservative value on my properties, a realistic price, if anything slightly undervalued. I keep a regular eye on similar properties for sale and sold in each area, adjusting my valuations accordingly.

Losing £40,000 in 6 months

There I was with more cash than I had before, it was 2007 and we (my partners and I) had just sold a business, now what to do with some of the money. The first thing was to give family members £1000 each with one proviso, they had to spend it. I had a family in new trainers, and the fags were being crashed (sharing cigarettes) left right and centre! The second was a family trip to Disney World, duty-free fags and ‘all you can eat’ lobster! I often reminisce and smile about taking my brother to a lobster buffet in Florida for the first time. After getting to grips with the idea that he could eat as many lobsters that he was able to stomach, it was a joy watching him devour lobster after lobster, pausing between tails to excrete profanities of delight, he even smuggled one out under his coat for later.

Then there was the stock market.

I was already feeling like a pro investor on the back of my property portfolio and reading an investment supplement. It was all nonsense, I didn’t really know anything! Did I mention I was cocky, OK not so much these days but looking back, boy have I been arrogant.

I opened an online account with broker Hargreaves Lansdown shovelled some cash across and began trading, I say trading because I’m waltzing around thinking I’m some super day-trader. I was buying shares in banks and other big name brands, watching the share price increase thinking why did I only buy so many and then buying more. As a rule I would buy £5000 standard in any one company, I bought Northern Rock, Alliance & Leicester, Bradford & Bingley among others. I was hearing faltering news on the banks and economy but of course I’m thinking these companies aren’t going anywhere, in fact when Northern Rock started to fall I bought more! I don’t know the exact figure but I had ploughed something around £75,000 into UK stocks within a few months.

The economic events that followed are well documented. Over the following 6 months or so I saw almost all of my shares fall and in many cases wipe out completely. In my first attempt at the stock market, I lost £40,000.

Building a £1 Million property portfolio without a plan

My first real step into investing, like many was a house, a straight forward 3 bed semi-detached in Cowplain, Hampshire. I bought it in 1999 as somewhere for me to live and not as an investment or with any plan to buy more. A solid family home in a pleasant neighbourhood with good local schools, qualities I didn’t seek out at the time but have since proved valuable. My mortgage was interest only plus an endowment policy, both with Abbey National, now Santander.

Building work on mums house

Renovating mums house

Two years later in 2001 I bought my mums house in Birmingham, it was a council house at a great price. Mum was very happy living there, mainly because she had spent years on her garden, a good-sized plot that had matured beautifully, she would often refer to it as her tonic, especially during Spring. We were talking about doing some work on the house which felt emotive not owning the property so I decided to buy it. At such a good price I was able to buy it with a personal loan, the interest payments were higher than a mortgage but I didn’t see it as long-term repayment, I wanted to pay it off within 5yrs. With it being a personal loan I didn’t need a deposit or have to jump through any hoops to get a second mortgage. This house remains my happiest buy, I had a wonderful time with mum turning her little old council house into something special. She would often hold church meetings in her newly extended open-plan state-of-the-art kitchen-diner looking out to her fabulous garden. Her showing off always made me feel great, she was very happy there.

Interior of my apartment in Gunwharf Quays being built

Gunwharf Quays apartment being built

The property market was doing well and by 2004 I had gained real equity in both properties. There was a local development at the seafront in Portsmouth called Gunwharf Quays. I used to go there most weekends to browse and shop, go to Starbucks, visit the cinema and often eat at one of the many restaurants. I liked the idea of owning one of the stylish apartments being built. This was the time that I started to think investment, I already had a couple of properties both of which had equity, I was feeling confident. I went to a mortgage broker and found a buy-to-let mortgage with Mortgage Express, I needed a £23k deposit so I remortgaged my first house. I had my third property, a very stylish seafront apartment (or flat, if like me you’re from a council house). Someone told me if you are buying to let, buy somewhere near a hospital, a university or a station, Gunwharf Quays is right next to Portsmouth University and a train station, I have yet to experience a problem finding tenants.

Meanwhile, business was growing and we soon moved from a small rented office to something a little bigger, along with my two business partners we set up a separate company to buy a commercial unit in Luton that we rented to ourselves. Business continued to grow and we bought the unit next door and soon after a larger unit within the same business park, spreading our company across the three properties. We sold the business in 2008, we still own the properties which we now lease.

I was working in Luton and living over 100 miles away in Cowplain, although I have always been able to work from pretty much anywhere, I decided to buy a small place closer to the office where I could stay during the week. With the idea that I may rent it out in the future I bought a small cottage in a village called Harlington, a few minutes walk from the train station with a direct line to London. This was in 2008 just before the financial crisis, within 6months I was down some £25k on the price I had paid for it. This property was bought cash and since moved to a buy-to-let mortgage with The Mortgage Works.

In 2010 mum died. Unable to take care of himself my brother was living with her at the time, I moved back to Birmingham. The prospect of living with my brother long-term wasn’t practical for me although I needed to keep a close eye on him for a time. I put in an offer on the house next door to me which was accepted. It was a cash buy and the sale went through very quickly, I was able to move my brother into his own little place right next door to me. He has since moved on from the property and I now have tenants.

I noted someone say “buy what you can, sell nothing”, something that pops up in my head when considering what to do about a house. Even though I do look forward to having a lovely big home (I call it the end house), the idea of building a property portfolio has been more interesting to me than selling and upgrading. Although my last two properties were bought cash, I had enough equity to raise the deposit required for buy-to-let mortgages. The only deposit I had to find out of my savings was £5000 for the first house I bought in Cowplain, the rest came from equity gained in a buoyant property market between 1999 and 2008. Today the portfolio, including share of the commercial property business, is worth more than £1 Million with over 60% equity.

I have a soft spot for property, it’s an asset you can see and feel. A house can bring income from rent as well as capital growth. It’s an investment that’s easy to understand, I have always felt secure with bricks and mortar, the investment term ‘safe as houses’ has proved true to me. I feel that now is a good time to buy again.

Year 1 review, up 11.78%

I started the year with £165,001.87 and ending with £194,460.47, up £29,458.60. I added £10,020 cash gaining £!9,438.60, 11.78%. Apart from the odd week here and there I kept to weekly summaries as planned and went live with my blog early January 2014. I am feeling happy with the first year results, my worst week losing -£5,924.53, my best week gaining £4,945.21 with an average weekly gain of £388.80. Excluding cash that I have added to the fund I am up 11.78%, lower than my target of 13.7% but I am pretty happy with it.

I like to keep an eye on the average weekly gain because it allows me to compare potential income/gain from other sources mainly property. An option for me is to buy a property and get income from the rent and capital gain as the property increases in value. I have roughly calculated based on my experience with buy-to-let a house worth £195,000 (current fund value) would give me rent of around £180 per week. Taking into consideration the increase in property value in addition to the £180 per week rent, I am happy to keep the money in shares for two reasons, I make more money and the fund is more liquid i.e. it’s easier to turn shares back into cash than it is to sell a house.

As for the annual gain of 11.78%, that’s better than any savings account that is currently available and better than the FTSE 100 performance over the past 12months, confirming that my cash was in the right place. Yes it is below my target due to a couple of bad weeks in the market at the end of my year 1, but I’m cool with that.

I am feeling good, confident even. I’m not a Champagne drinker so I’ll toast the year with a large glass of Rioja, cheers!

Taking a punt with bitcoin

Screen shot of the bitbargain.co.uk trading page

Bitbargain.co.uk trading page

I have ventured into buying aprox. £500 worth of bitcoin, as more people have purchased this new currency its value has increased significantly over the past few months. I think it will continue to gain as people understand it more and feel more at ease purchasing bitcoins and then buying goods with them on the internet. As its popularity grows so will demand, I am speculating it’s value to increase against the £Sterling to then sell and make a profit.

I purchased 0.3 BTC for £232.50 on 01/12/13 and 0.4 BTC for £288 on 05/12/13.

The process of buying was a bit daunting. After a little searching and reading I found bitbargain.co.uk, a trustworthy online marketplace for trading bitcoins in the UK. After registering I was able to search sellers by entering the amount I wanted to buy. You don’t have to buy 1 whole bitcoin, you can search and buy such as 0.01 bitcoin or 0.5 bitcoin. When you agree to buy, a transaction window pops up with the sellers bank account details, sort code etc. You then go to your online banking and make a cash transfer to the sellers account, all the time the transaction window stays open. The seller monitors his/her bank account and waits for the money to come in, as soon as it does, he/she confirms receipt and you are credited the bitcoin to your bitbargain.co.uk account… Phew!

I then discovered that I needed to do something else. Bitbargain.co.uk charges for keeping bitcoin in your account after a short period, I needed to transfer my bitcoin out of bitbargain.co.uk and into something called a digital wallet. After a little searching and reading I found Blockchain.info, created a wallet and transferred the bitcoin from my bitbargain.co.uk account into my wallet… Phew!

The bitcoin now sits in my digital wallet from which I can buy goods from companies that accept bitcoins, or in my case leave it and see what happens.

For more info on bitcoin, this web site is a good place to start: www.weusecoins.com

Trading update

I sold my India fund (Jupiter India Accumulation) this week, it hasn’t done much for a while apart from fall (down 20%). Recent unexciting news about India has tipped me to sell with a growing personal confidence in moving the money into company shares I want to buy that may give a greater return in the short-term. I have purchased shares in RSA Insurance (RSA) and British Sky Broadcasting (BSY), both have taken a bit of a hammering recently, solid companies with a good dividend at a bargain price.

I purchased shares in Xaar (XAR) and Norcros (NXR), fund managers on the Hargreaves Lansdown web site spoke about these in an interview. I think that if a fund manager puts his/her name to an individual stock they must have confidence in it. I don’t invest much this way, however it does introduce me to companies I wouldn’t have looked at, so far this strategy has worked OK for me, such as WANdisco (WAND) was discussed in a similar interview, this week the stock is up over 80% in 5 months.

I bought shares in Whitbread (WTB), mainly because I like their Premier Inn product, thinking as businesses pick-up so will business trips and coffee drinking (they have COSTA also). Bought shares in Taylor Wimpey (TW.) on the back of the housing market picking up, I already have shares in house builder Barratt Developments (BDEV) following recommendation from Hargreaves Lansdown 6months ago, the stock is up 42% this week. I have also bought shares in Microsoft (MSFT), Boeing (BA), Resolution (RSL) and Reed Elsevier (REL), these companies have been on my research radar for a few months.