Monthly Update #17 – January

January always feels like a kick in the nuts and this year was no different. New Year Blues were in full force and I even quit blogging (well for a few days anyway) such were clouds above me. Thankfully, January is now behind us and I march onwards. Time for another monthly update and a roundup of January 2020!

Personal Life – What’s Been Happening?

New Year Planning

The turn of the year began with a lot of planning for the year ahead, reviewing 2019 spending and thrashing out goals and objectives for the months to follow. While I don’t micro-budget, I do make informed judgments over key categories and consider what may be different this year from last. With a plan in place, this was immediately put on the back foot thanks to an unexpected tax bill 🙂

I don’t know about you, but it seems I owe HMRC every year without fail and while I set aside a provision for this, it came in much higher than expected. I think this largely comes down to issues with my U.S. employer and how they manage payroll for non-U.S. employees. It seems to impact most of us in the London office. Oh well…. death and taxes and all that.

The End of The Road?

Torn between the will to carry on blogging and facing a severe lack of time to do so, I temporarily quit this blog in mid-January. I’m an all-or-nothing-sort-of-person and I feel that if I cant do something to the best of my ability, then don’t do it at all.

That’s perhaps a harsh way of looking at things and thus I hastily decided to quit blogging mid-month. I wrote a goodbye note explaining my thinking and plastered it to the front of my site. A day or two later I regretted the decision and quickly put things back together again.

I think I had just grown frustrated that I can’t be better at blogging, mainly due to the lack of time. So, I just have to accept that I’ll blog when I can and if and when I can’t… well that’s okay too. Yes my site is far from perfect and if I had more time it would be much better but I’ll just do my best and give it another 6 months or so to see how things go.

If you were quick you may have caught a glimpse of this announcement – I even tweeted it out. While everything I wrote is true, I’ve decided there is nothing to be gained by jacking it all in even if posts will be irregular. I’ll be hanging around a while yet 🙂

New Forest Getaway

On a happier note, it was my wife’s birthday in early January and we enjoyed a nice weekend break away in the New Forest. With it just being an hour from home, it is somewhere we go and visit a couple of times per year and on this occasion, we were child-free, which was an added bonus!

We stayed in the centre of Lyndhurst at The Crown Manor House Hotel and enjoyed a great evening meal out at an excellent restaurant – Surfing Moo Moo, and then put in some decent miles walking around the forest the next day, before finishing up our stay at Limewood Hotel & Spa, where we had a nice drink and an exquisite lunch.

Angela Hartnett is the resident chef there – one of the most decorated female chefs in the world and I’d highly recommend it as a treat. We bought my sister and her husband a meal voucher there for their Christmas present and there are deals frequently throughout the year.

It was a lovely weekend and nice to have some chill time after a busy Christmas period. While it was cold, the weather was sunny and it’s amazing what a few good long walks in beautiful scenery can do to lift the mood. Here is a suitably moody snap – quite apt for January 😉

MBA Graduation

Early January also marked my official graduation for my Executive MBA. I just missed out on a distinction but overall had a really strong mark across the curriculum and thoroughly enjoyed the entire process.

I had applied for this off my own back and did not want to involve my employer initially. However, having made an announcement of my achievement to a few colleagues, the co-head of my office strongly recommended that I reach out to our HR department and seek a retrospective refund for any costs I incurred.

I had already received some scholarship financial award to contribute to the costs but I was still required to pay several thousand myself. Having answered a few simple questions, my employer agreed to cover my costs and refunded the amount I paid. So, I paid ZERO for an MBA which is frankly awesome. The only condition is that should I leave the firm within 12 months I’ll have to repay some of that back – fair enough… I can wait it out 😉

Right, enough of the life updates. Let’s look at some numbers.

Net Worth Snapshot

Here is a snapshot as things stood at the end of January. As usual, I break down my current financial assets as at the end of the month and compare these to the previous period (December 2019) and then also relative to 1-year ago (January 2019).

So, since the turn of the year, my total net worth has nudged a little higher to a record £660,894 – an increase of 0.4% in January. However, excluding property, that translates into a marginal drop of 0.1% to £363,638.

Not a great deal to report this month. Concerns over the coronavirus hit global stock markets in the latter half of January and both pension and investment pots took a slight hit, while house prices seemingly continued their mini-recovery leading to a slight uptick in home equity.

As I write this in mid-February, it looks like the stock market has completely discounted the coronavirus as an event, having rebounded sharply in the first week of February. While the accuracy of data is questionable coming from official sources in China, an aggregation of all those sources now closely monitoring new cases of the virus all point to a stabilization in new cases and an increased recovery rate for those that have it. Yes, the death-rate continues to climb, but the trajectory is flattening out and it’s that which the markets, at least for now, appear to take confidence from.

S&P 500 Index – Year to Date Performance as of February 11th (month-end marked)

I’ve actually just returned from a week away in our Boston office, 2 days of which was an investment offsite where a number of our portfolio managers, strategists and economists presented their views on the market as well as themes in their portfolios. As you’d expect, the coronavirus was a big theme and it was really interesting to hear their views from an investment and risk perspective.

One portfolio manager even claimed he has a contact in Wuhan who reports that the morgue and cemeteries there are receiving, burying or burning bodies at a rate of 10x the official government figures and that this would be even more pronounced outside the big cities and in rural areas. So who really knows, but things remain sensitive in terms of the market outlook.

So how does this impact the longer-term picture? Compared to a year prior, my total net worth now stands 25.3% higher (+£133,459) and, excluding property, that’s an overall increase of 27.2% (+£77,185). While month-to-month is subject to lots of noise, the annualized longer-term numbers remain on a positive footing so I’m happy with my progress here.

Here is a snapshot of the evolution in net worth since I started tracking it religiously back in 2015 and the annualized rates of growth on the right.

Onwards and Upwards 🙂

Other updates

Helping a Friend in Need

It seems that January also had many others down in the dumps, not least a good friend of mine who shall remain nameless. Having caught up a number of times over the holidays, he reached out to learn more about all this ‘FIRE-stuff’ as he called it after I had encouraged him to watch the Playing with FIRE documentary. While he did not admit it at the time, I think it had quite the effect on him in a ‘Holy-Shit’ kinda way!

He went quiet for a few weeks and when we caught up over some beers he opened up about his money worries and whether I could help him make sense of his situation today so that he had a footing, from which to make better decisions in 2020 and beyond. Naturally, I was more than happy to help.

Since December, I’ve been helping him pick through his many accounts to draw out some overall themes, most of which only serve to confirm his situation is arguably worse than he first thought. The upside is that it provided the jolt he needed and he’s now making very thoughtful and well-considered choices about his financial future. Luckily he has enough levers available to him to turn things around in relatively short order. He is a high earner, and a high spender too, and so he has plenty he can chop away from his outgoings.

This is really the first time a friend or a family member has sought advice on a deeper level and I’ve found it quite a rewarding experience. Sure, I’m always being asked for advice on the fly, tips and tricks and so forth, but nobody has yet opened up to such a degree in a cry for help. That is probably because not many people know I write a blog on these topics. I’m still largely anonymous.

My friend has given me permission to write a post about him and his finances and the steps we took to make sense of his situation as long as I don’t name him. So keep an eye out for that. I showed him a few fast-track methods to aggregate several accounts using Google Sheets or Money Dashboard and find the answers to the big questions – namely, was his salaried income alone covering his spending per year and did his annual bonus really bail him out as he thought might be the case.

Many people, my friend included, get put off by the idea of having to wade through thousands of transactions and categorize them and yes, this can be a tedious task. Money Dashboard and equivalent services can certainly do most of the heavy lifting.

What I showed my friend was simple and focused on the aggregate money in vs. money out question; isolating salaried income from other sources of positive cashflow, stripping out the between account transfers (which introduce a lot of traffic and noise into the figures) allowing us to pinpoint exactly his total spend for the year and examine the shortfalls. He can now go away and work out where all that money went to whichever level of granularity he chooses – this is really a secondary exercise to the big question we’ve answered together.

Betting & Trading

Tennis trading continues to be a focus and January proved to be quite profitable on a number of fronts with an overall ROI of 18.3%. I posted an article on multiples betting and this was largely the approach I used for the month with some in-play trading thrown in for good measure.

This strategy seeks to find potential value selections by taking surface-adjusted Elo rankings for every player playing on a given day. My Google sheet then pairs up the players facing each other in a given matchup and uses these surface and opponent inputs to extrapolate the implied probabilities of winning for both players.

These can then be converted into the expected decimal odds – essentially fair odds. A screen is then performed against the available prices on the main bookmakers. These typically align quite well but every day I find 4-5 selections that offer good value – whether that be favourites priced too high (i.e. backing opportunities); favourites priced too short (laying opportunities) and similar scenarios for the underdogs.

If the prices are above 1.45 I take these as standalone single selections but also seek to combine a variety of value selections into a treble, four-fold or more. I’ve had quite a bit of success with this as have some others I’ve been sharing my daily sheets with. An example sheet is shown below along with some of the best wins this month.

Some nice treble success

Well, I’ll finish there. I hope January was kind to you and that everything is going well so far in 2020.

Catch you later!



This Post Has 12 Comments

  1. SavingNinja

    I’m glad you’ve decided to stay Dan.

    I got married in the New Forest, it’s such a beautiful place. I’ve also stayed in that hotel in Lyndhurst, a very awesome medieval feel – loved the little nooks in the lounge area!

    It’s really great that you’re helping your friend, I can’t wait to read that series.

    1. Pursue FIRE

      Thanks Ninja – They always seem to have good deals down in Lyndhurst so we will stay there again for sure and to have everything on the high street a few seconds walk was ideal. I imagine you’ll be back there over the years given its special meaning around the wedding.

      The post concerning my friend is coming soon – it’s long so it may be a two-parter; the first on what we were trying to solve for and the steps we took, and then a second, longer look back at trends and action steps (we are still talking on those!). I’ve been following this process for a year or two now and while its second nature to me, I realised in walking someone through it, that it can be less obvious to some.

  2. cgc

    Dan I used your strategy to look for value using Elo rankings with some encouraging results on paper. I’ll monitor for a bit longer before committing to some tentative bets in the near future so thanks for that.
    I’m intrigued by your Google Sheet posted above and have been doing manually most of what your sheet appears to do automatically. I’ll be investigating this functionality this week. But my question is about two columns in particular; Favourites Aligned and Fav Value. My ex-Maths teacher wife and I have struggled to decipher what your percentages in the latter of these represent. And I’ll admit to not understanding what you mean by Favourites Aligned. Are these things you can shed some light on?

  3. cgc

    Dan I’ve worked out that Favourites Aligned is simply whether the Elo implied favourite is the same as the bookie favourite.

    I’m still puzzled by the Fav Value figures. I assume they are a metric of the extent by which the bookie odds differ from the Elo implied odds but they don’t appear to be directly related, i.e (bookie odds -1)-(implied odds-1)/(implied odds -1)*100. This works (just about) for when favourites are aligned but doesn’t when they aren’t. Are you able to elaborate?

  4. Pursue FIRE

    Hi CGC – I apologise for the delay in replying. Busy weekends with the little ones as always but thank you for your question on the tennis strategy! I’m glad that you are having some success with this, albeit paper trading it. That’s the best way to get comfortable with any strategy before committing real money. Okay, first things first. I can see that you have since worked out that the ‘favourites aligned’ column is simply an alert to instances where the Elo and the bookmaker disagree on who is the favourite is. I should state that the Fav and Dog prices shown for the bookmaker are the favourite and dog as per bookmaker prices rather than Elo. You’ll see that the Elo-implied favourite for a given match is highlighted in green in either the SA Elo (A) and SA Elo (B) columns. Similarly, the bookmaker favourite is the player whose name is in bold. Most of the time these are aligned – i.e. both Elo and the bookmakers are picking the same player to be the likely winner. But sometimes they differ and so the ‘favourites aligned’ column is there to flag those up to me. This is important because I am essentially always siding with what Elo-implies. So, when there is an instance where the Elo favourite is being viewed as the underdog by the bookmaker the Fav Value column needs to make a slightly altered calculation because that player is the dog price, rather than the fav price with the bookmaker and needs to measure the value relative to that price rather than the fav price (in instances where Elo and bookmaker align). Does that make sense?

  5. Pursue FIRE

    CGC – seeing as you are referencing the sheet in the post above, let’s use the number 1 ranked Dog Value selection as a walk-through example – the match between Federico Coria and Andrej Martin in the ATP at Cordoba (Argentina). Surface-adjusted Elo rankings for both are pulled in automatically at 1613 and 1575 respectively. Having a higher rank, Elo, therefore, implies Coria is the slim favourite here. The absolute difference in their Elo rankings is just 38. This can be extrapolated (with an Elo-specific calculation) to imply that Coria has a 55% win probability against Martin on this surface. That gives implied win odds of 1.80 for Coria versus 2.25 for Martin. However, Bet 365 had Martin as the favourite going into this match, pricing him at 1.66 – so favourites don’t align between Elo and Bet 365. Because Bet 365 has Martin priced at 1.66 (and our Elo implied price for him is 2.25) we can say he would represent poor value. Likewise, Elo thinks a fair price for Coria is 1.80, yet he is available at Bet 365 at 2.10. If we are siding with Elo in principle, then Coria looks great value. The ‘Fav Value’ and ‘Dog Value’ is taking the Bet 365 implied favourite or underdog and comparing their prices to where they fall within Elo. E.g. If Elo and Bet 365 agree, the Fav Value column will take the Bet 365 fav price and contrast to the Elo implied fav price. However, when they disagree the Bet 365 fav price will contrast to the Elo underdog price (due to the lack of alignment) and vice versa. So, concluding this example, Coria was the value pick (dog price in Bet 365 / Fav price in Elo) e.g. (1-2.1)/(1-1.80) -1 = 37%

  6. Pursue FIRE

    Let me know if that makes sense – happy to have a follow up email conversation if not clear. Thanks Dan

  7. cgc

    Dan thanks for the reply and yes, I now understand what you are doing. What I still don’t quite grasp though is why you would use odds assigned to a particular individual to determine the value of betting on a different individual. I appreciate that the bookie odds are of course based on relative probabilities determined by comparing the attributes of players to their opponents. So I think you might be suggesting that the differential between the players, as determined by the bookies, is valid and should feature in any calculations, hence using bookie-determined dog odds in the Fav Value calculation. You can probably tell I’m not a gambler!
    Thanks to your blog I’ve designed my own spreadsheet to automatically determine the difference, implied probability, implied odds and value in response to my input of the Elo ratings and the bookie odds. I now have to work out how to get it to automatically adjust the calculation of value when the favourites are not aligned. Any tips?

    1. Pursue FIRE

      Given Tennis is a head-to-head contest, only one player can win and there are no other variables (e.g. a draw) each players prices have to reflect the respective probabilities of each player. That collective probability has to (in theory and ignoring the bookmakers overround added in) equate to 1. This is, of course, vastly different to other team-based sports with many more variables from a probability standpoint. So if the bookmaker thinks, based on all their analysis of form, surface, weather etc etc that I should be priced with a 90% win probability, then you have to be priced with a 10% probability accordingly.

      The second question is simply a case of inserting an IF statement in the fav and dog value columns that says if the fav aligned column equals yes, take the bookmaker favourite price (1-Price) and divide it by the Elo implied favourite price (1-Price) because they are aligned. If you Fav aligned column says No, instead take bookmaker favourite price and divide against the Elo dog price (because they are not aligned). Then do the equivalent for the dog value column. Let me know if you get it sorted

  8. sarah

    I’m glad you decided to take up your blog again. After reading it I decided to take up each way betting and am pleased to report I’ve been making an average of £450 a month since September. Hardly life changing but a great little side hustle for less than an hour a day’s work – and my favourite part is that it’s all tax free. Certainly beats working at Primark in the evenings after my day job. Thanks for the inspiration

  9. Pursue FIRE

    Hi Sarah – thank you for the nice comments and I’m thrilled to see you are making some decent money from each way betting. £450 a month tax-free is nothing to be sniffed at. While it can certainly grow to more I’d almost advocate sticking at around this level for account longevity – have you encountered any account restrictions yet? Keep it up Sarah!

  10. Sarah

    Betfred closed my account and stake restricted with Bet365 (after 6 months) Fortunately my son has accounts with them, so hopefully will get a further 6 months or so. Am only able to do weekends now so will see how it goes but hoping that will stave off the restrictions for a while. Might have to start looking for a new side hustle in the near future though. Thinking about online poker

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Hello and welcome to Pursue FIRE. My name is Dan and I am the owner and author of all content on this site. I am passionate about personal finance and look forward to engaging with you.
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