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Money that you never spend #finance

I have written about discretionary income before, which is the money left over after you have paid for all the essentials like a place to live, food to eat and taxes! That is the money that you spend on all the luxuries that make life worth living. If you can double your discretionary income with income from investments or increase it by being a bit thrifty when buying the essentials, you can effectively double your standard of living. What is this money that you never spend?

money that you never spend

Money that you never spend

So what is this money that you never spend? That is your investments that you hope you never need to sell, at least not in a hurry. If you have a diverse range of investments that is your capital, the return from which should increase your discretionary income and give you a better standard of living. It also gives you peace of mind because you can sell all your investments should disaster strike and you need money to get out of trouble.

Debt

If you have debt you’re wasting money paying interest to the bank. The exceptions are buying on a credit card and paying it off before interest has accrued. You can also borrow to invest sometimes if the return on your investment is guaranteed to be higher than the interest rate you will be paying.

This week

I keep accounts using spreadsheets so I know how much I have invested and I also set targets. I’ve been exceeding my targets and so overall I’m doing OK. I was below my targets because of Carillion and then Immupharma soared to over 180 a share and I was doing great again. Then Immupharma did that placing that trashed the share price again. That is the ups and downs of the stock market and it always favours the institutional investors, not the small investors.

Think positive

Yes, we have to think positive and we have to try to guess the market. I learned an important lesson from Immupharma. I should have sold when it went high. It could go up close to 180 again and any one of my other AIM shares could soar at any time. Much as I would like to stick with an AIM company through thick and thin until they make it big; I have to take the high prices before they trash the share price with a placing. I shall be watching Immupharma, Verona Pharma and Solo Oil so I am ready to sell if they soar and offer me a good return. Tesco has been falling this week despite the Booker takeover going through. I hope it will recover so I can sell this month and reduce my exposure to the market. Brexit still seems to be a problem and the pound appreciating is making many FTSE 100 companies less attractive because of falling profits (in sterling).

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Optibiotix

I’ve been watching Optibiotix who culture bacteria and develop them for medicinal use. They seem to be onto some good ideas. This is my graph of their share price and it seems quite stable and might be worth buying on a dip (under 60). Of course, it is advisable to invest far less in an AIM company than you would in a company on the main market. If I was buying on the main market, I would go for Lloyd’s or Barclay’s. Brexit won’t affect them as much as has been speculated.

I am still being quite thrifty and yes, I shop at Aldi. I saw an executive that I photographed last summer on the car park this week so it isn’t just people who are short of a few quid who shop there! The reduced prices help me eat well and get my 5-a-day of fruit and veg. The special offers are genuine as well. The gluten-free sausages I bought this week were 1-89. In Asda, you have to buy 2 for £4 now and they’re not as good.

That’s it for this week, just enter your email address at the top of the sidebar if you would like to follow and receive an email each time I post.

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