The Anonymous Widower

Zopa: P2P Investors Outperformed The FTSE 100 In 2018

The title of this post is the same as that of this article on Peer2PeerFinance News.

The title is a good summary of the article, which is a must-read.

January 9, 2019 Posted by | Finance | , , | Leave a comment

The Concept Of Hybrid Banking

I have been writing about hybrid trains and locomotives recently.

In Hybrid Power On The Railways, I summarised the current state of development, with brief descriptions of the current hybrid trains and locomotives.

This was my conclusion.

Just as hybrid cars are becoming more numerous, I suspect we’ll be seeing more hybrid trains in the future.

So can hybrid principles be applied to other industries and processes?

A Standard Hybrid Process

In my opinion, one of the best hybrid systems is the transmission of London’s New Routemaster bus. This description of the drive-train is from Wikipedia.

The bus is a hybrid diesel-electric driven by a battery-powered electric motor, charged by a diesel fuelled generator and recovering energy during braking by regenerative braking.

It is a classic serial hybrid vehicle.

Energy is collected in the battery from the diesel generator and regenerative braking and the battery powers the bus.

Hybrid Banking

Could a bank account be designed on similar principles?

  • Money would be collected and stored in a deposit account, where it would earn interest.
  • There would be a wallet, where sufficient money is available to pay bills expected.

I also believe that just as in the bus, there would be a clever control algorithm, that made sure money was in the right place.

  • To pay bills.
  • Earn maximum interest payments.
  • Avoid charges for going overdrawn.

Many would believe, I’m asking for the impossible.

But!

Zopa Or Another Peer-To-Peer Lender As A High Interest Deposit Account

I use Zopa to store my excess cash.

I just add money, when I have spare.

Zopa’s computer decides, who I lend it to, so it’s effectively deposit-and-forget.

Since, I started investing I have earned returns of around five per cent before tax.

Any irrecoverable debts are allowed against earnings.

But the unique property of Zopa and probably some other peer-to-peer lenders, is that each month a certain amount of money becomes available for reinvestment or withdrawal.

These figures show the percentage of money, I’ve had available in the last few months.

  • November 2018 – 6.9%
  • October 2018 – 7.1%
  • September 2018 – 6.7%
  • August 2018 – 7.5%
  • July 2018 – 6.8%

So it looks like for a mature Zopa portfolio, around 6-7 percent is available for reinvestment or withdrawal.

If like me, you have tax bills to pay at various times of the year, you might sometimes take the latter option, as I do!

But if you do withdraw money, your ratio will change.

It should also be noted that a high proportion of Zopa contracts make payments on or around the first of the month. So lenders can get a sizeable payment in the first few days of a month. All very handy!

Nationwide Or Any Other Bank Account As A Wallet

I use Nationwide as my bank account, transferring money between Nationwide and Zopa as required.

I also have a sensible agreed overdraft limit, which gives me an extra amount of flexibility. I think it’s only been used twice in the last couple of years at tax payment time.

As the overdraft limit is lower than the minimum amount of money, I’ll be able to withdraw from Zopa in a month, I know that if I use the overdrsft, I should be able to repay it quickly.

The Control Philosophy

I don’t have a computer to work through the control philosophy, but I can use the brain I was born with.

By about the twentieth of the month, I can see the state of my finances and generally know, whether my pension will cover my expenses for the next month or so, or if I need some help.

So when the Zopa payments kick in around the turn of the month, I withdraw what I think I’ll need.

If I draw out too much, then around the twelfth or so, I put any surplus back into Zopa.

A Hybrid System

I believe that what I have described works in a similar way, as a typical hybrid drive system for a bus, train or car.

  • Zopa backs up the bank account and provides extra finance when needed. This is a similar function to the traction battery in a hybrid vehicle
  • The agreed overdraft facility is there if any extra short term finance is needed. It has a function similar to capacitors in a hybrid vehicle, where they are used to provide a fast smoothing response.

Imagine an on-line banking system, which used artificial intelligence to calculate how much extra money is needed each month and transfer money to and from Zopa accordingly.

 

December 25, 2018 Posted by | Finance | , , , | Leave a comment

Aberdeen Standard Backs Controversial £1bn Bid For Crossrail Fleet

The title of this post, is the same as that of this article on City AM.

This has been mooted for some time and I believe that Transport for London are taking a sensible action to help get round their funding crisis, caused by three factors.

  • The loss of Government subsidy.
  • The lateness of Crossrail.
  • Sadiq Khan’s bribe to the electorate of a fare freeze.

I also think, that this will be advantageous to London in the long term.

This is a paragraph in the article.

TfL would be able to terminate the 35-year lease in 2020, 2025 and 2030, through a break clause, with an ability to acquire the fleet for just £1 in 2044. TfL will announce the winner at the beginning of next year.

Depending on how TfL’s finance progress in the next few years, the break clause may allow them to cancel and acquire new trains, if they felt it best.

But all these trains need a rebuilding at someyime around twenty years old and this will surely be the responsibility of the leasing company.

December 17, 2018 Posted by | Finance, Transport | , , | Leave a comment

Preparing For A No-Deal Brexit

I am doing a few things to make sure, that I survive a no-deal Brexit, as unscathed as possible.

Savings

I keep all of my spare cash in Zopa, moving it in and out as required. Effectively for about seven or eight years now, I have used the first peer-to-peer lender as a high-interest, thirty-day access deposit account.

It has probably paid around five percent before tax in that time and it has safely ridden the peaks and troughs of governments and financial instability.

Today, I calculated how much cash, I need in my current account to see me through to end of the year, and the spare money was tranferred to Zopa. It was a fast painless transaction and now it is available to lend to Zopa’s customers.

Warfarin

Warfarin stops me having another stroke.

As it only comes from Eastbourne, I suspect supply of this comment drug.

But I have enough to last me to until Summer 2019.

INR Testing

I test my own INR, which determines the Warfarin dose.

Today, I ordered enough test strips to get me through to Summer 2019.

Beer

Every time, I go walking around London, I take a large bag, that can hold up to eight bottles of my favourite beer from Marks and Spencer.

Supplies from Adnams in Suffolk seem good at the present and I usually liberate a few from a boring life on the shelves on every trip.

As with other products, I aim to have enough to last me through to Summer 2019, at a rate of three a day.

November 30, 2018 Posted by | Finance, World | , , , , | 2 Comments

World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant

The title of this post, is the same as that of an article in the Business pages of yesterday’s copy of The Times.

It is not often that three words implying something big appear in the same sentence, let alone a headline! Such repetition would more likely appear in a tabloid to describe something sleazy.

Until recently, wind power was just something used by those in remote places. I remember a lady in Suffolk, who had her own turbine in the 1980s. She certainly lived well, although her deep freeze was in the next door farmer’s barn.

Now, with the building of the world’s largest wind farm; Hornsea, which is sixty miles off the coast of East Yorkshire, wind farms are talked of as creating enough energy for millions of homes.

Hornsea Project 1 is the first phase and Wikipedia says this about the turbines.

In mid 2015 DONG selected Siemens Wind Power 7 MW turbines with 154 metres (505 ft) rotor turbines for the project – around 171 turbines would be used for the wind farm.

Note that the iconic Bankside power station, that is now the Tate Modern had a capacity of 300 MW, so when the wind is blowing Hornsea Project 1 is almost four times as large.

When fully developed around 2025, the nameplate capacity will be around 6,000 MW.

The Times article says this about the funding of wind farms.

Wind farms throw off “long-term boring, stable cashflows”, Mr. Murphy said, which was perfect to match Aviva policyholders and annuitants, the ultimate backers of the project. Aviva has bought fixed-rate and inflation-linked bonds, issued by the project. While the coupon paid on the 15-year bonds, has not been disclosed, similar risk projects typically pay an interest rate of about 3 per cent pm their bonds. Projects typically are structured at about 30 per cent equity and 70 per cent debt.

Darryl Murphy is Aviva’s head of infrastructure debt. The article also says, that Aviva will have a billion pounds invested in wind farms by the end of the year.

Call me naive, but I can’t see a loser in all this!

  • Certainly, the UK gets a lot of zero-carbon renewable energy.
  • Aviva’s pensioners get good pensions.
  • Turbines and foundations are built at places like Hull and Billingham, which sustains jobs.
  • The need for onshore wind turbines is reduced.
  • Coal power stations can be closed.

The North Sea just keeps on giving.

  • For centuries it has been fish.
  • Since the 1960s, it has been gas.
  • And then there was oil.
  • Now, we’re reaping the wind.

In the future, there could be even more wind farms like Hornsea.

Ease Of Funding

Large insurance companies and investment funds will continue to fund wind farms, to give their investors and pensioners a return.

Would Aviva be so happy to fund a large nuclear power station?

Large Scale Energy Storage

The one missing piece of the jigsaw is large scale energy storage.

I suspect that spare power could be used to do something useful, that could later be turned into energy.

  • Hydrogen could be created by electrolysis for use in transport or gas grids.
  • Aluminium could be smelted, for either used as a metal or burnt in a power station to produce zero-carbon electricity.
  • Twenty-four hour processes, that use a lot of electricity, could be built to use wind power and perhaps a small modular nuclear reactor.
  • Ice could be created, which can be used to increase the efficiency of large gas-turbine power plants.
  • Unfortunately, we’re not a country blessed with mountains, where more Electric Mountains can be built.
  • Electricity will be increasingly exchanged with countries like Belgium, France, Iceland, Norway and The Netherlands.

There will be other wacky ideas, that will be able to store MWHs of electricity.

These are not wacky.

Storage In Electric Vehicles

Consider that there are three million vehicles in the UK. Suppose half of these were electric or plug-in hybrid and had a average battery size of 50 kWh.

This would be a total energy storage of 75,000 MWh or 75 GWH. It would take the fully developed 6GW Hornsea wind far over twelve hours to charge them all working at full power.

Storage In Electric And Hybrid Buses

London has around 8,500 buses, many of which are hybrid and some of electric.

If each has a 50 kWh batttery, then that is 425 MWh or .0.425 GWH. If all buses in the UK were electric or plug-in hybrid, how much overnight electricity could they consume.

Scaling up from London to the whole country, would certainly be a number of gigawatt-hours.

Storage In Electric Trains

I also believe that the average electric train in a decade or so could have a sizeable battery in each coach.

If we take Bombardier they have an order book of over four hundred Aventra trains, which is a total of nearly 2,500 coaches.

If each coach has an average battery size of 50 kWh, then that is 125 MWh or 0.125 GWH.

When you consider than Vivarail’s two-car Class 230 train has a battery capacity of 400 kWh, if the UK train fleet contains a high-proportion of battery-electric trains, they will be a valuable energy storage resource.

Storage in Housing, Offices and Other Buildings

For a start there are twenty-five million housing units in the UK.

If just half of these had a 10 kWh battery storage system like a Tesla Powerwall, this would be a storage capacity of 125 GWH.

I suspect, just as we are seeing vehicles and trains getting more efficient in their use of electricity, we will see buildings constructed to use less grid electricity and gas.

  • Roofs will have solar panels.
  • Insulation levels will be high.
  • Heating may use devices like ground source heat pumps.
  • Battery and capacitors will be used to store electricity and provide emergency back up.
  • Electric vehicles will be connected into the network.
  • The system will sell electricity back to the grid, as required.

Will anybody want to live in a traditional house, that can’t be updated to take part in the energy revolution?

Will The Electricity Grid Be Able To Cope?

National Grid have been reported as looking into the problems that will happen in the future.

  • Intermittent power from increasing numbers of wind and solar farms.
  • Charging all those electric vehicles.
  • Controlling all of that distributed storage in buildings and vehicles.
  • Maintaining uninterrupted power to high energy users.
  • Managing power flows into and out of the UK on the various interconnectors.

It will be just like an Internet of electricity.

And it will be Europe-wide! and possibly further afield.

Conclusion

The UK will have an interesting future as far as electricity is concerned.

Those that join it like Aviva and people who live in modern, energy efficient houses will do well.

 

November 27, 2018 Posted by | Finance, World | , , , , , , , | 6 Comments

Exclusive Footie Shocker

The title of this post, is the same as that at the top of the front page of today’s Sun.

It is not about the latest Premier League star being found in bed with a bevy of young beautiful ladies or losing his money in casinos, but this.

Kante Pays More Tax Than Amazon & Starbucks

As ever The Sun has got straight to the point.

The BBC shows the front page with this comment.

The Sun leads with a story on Chelsea FC footballer N’Golo Kante, who it says has signed a million pound deal which will see him pay more tax than Amazon and Starbucks combined. The 27-year-old chose not to use a scheme to be paid via offshore firms, meaning he will pay £6.7m in tax.

Luckily, I have no need to use companies like Amazon, Facebook and Starbucks.

November 24, 2018 Posted by | Finance, Sport | , , , , | 3 Comments

Most Zopa Plus Investors Earn “At Or Above” Target Rate

The title of this post is the same as that on this article on Peer2Peer Finance News.

I have not complained and I’ve been an investor for ten years.

November 16, 2018 Posted by | Finance | | Leave a comment

Would You Want To Buy Part Of A Used Insurance Company From This Man?

There is an article in today’s Times, which is entitled Arron Banks Wants To Sell £4million Stake In Firm.

My answer would be a big no!

November 6, 2018 Posted by | Business, Finance | , , | Leave a comment

The City Of London Reaches For The Sky And Keeps More Feet On The Ground

This article on Construction News is entitled City of London To ‘Encourage’ New Skyscrapers.

This is the first two paragraphs.

The City of London Corporation has opened the door to a new wave of towers and an overhaul of one of its main routes as part of draft new local and transport plans.

The local authority wants to encourage the development of new towers able to provide an “iconic image of the City” that will enhance its global standing in the finance, professional services and commerce sectors.

The main route to be upgraded will be Bishopsgate between Liverpool Street station and London Bridge.

  • Pedestrians will have more priority.
  • Cycling and walking will be improved.
  • The public realm will be upgraded.

It the Peak hours, it could become one the busiest walking and cycling routes in the world.

  • At the Northern End, there is Liverpool Street station and Crossrail.
  • At the Southern End, there is London Bridge, London Bridge station, Southwark Cathedral and the River Thames.
  • Just to the West, is the massive Bank station complex.
  • Just to the East, is the soon-to-be-redeveloped Fenchurch Street station.

In addition, the road is fringed on either side with alleys, side streets and the impressive Leadenhall Market, many of which are full of restaurants, cafes, pubs and retail outlets.

Conclusion

In the article, Brexit wasn’t mentioned once, but a large increase in employment wasn’t.

Has the City of London, just put several handfuls of fingers up to the selfish plans of others?

 

 

November 6, 2018 Posted by | Business, Finance, World | , , | Leave a comment

My Preparations For Brexit

My Dalstonian grandmother was caught out by WW1, so she had a hundredweight each of jam and sugar in her cellar for WW2.

I shall be storing my money in Zopa, as it should ride out any storms, as it has done in the past.

October 24, 2018 Posted by | Finance, World | , | Leave a comment