I’m currently obsessed with the whole FIRE planning and spend a fair amount of time reading up on the various strategies people are using, but you are right, regular contributions plus compound interest is a game changer
I always said mid 50's, but having changed jobs in 2020 and took a bit of a step back in responsibilities hours etc (although that seems to be creeping back upwards!) I'm enjoying work more than I have in probably 15-20 years. So no plans just yet, but I'll review at 55 and will likely do a more reduced hours at least.
FIRE is fine, just don't take it too far.
My very simple financial advice has always been, if you can (as at the lower earnings end or at certain times in your life it's not always possible) live your life as if your salary is 80% of what it really is.
So that means living to that, to include savings and pensions, everything. The extra 20% is your extra investments/savings. I've been doing that broadly since my early to mid 30's and is a large reason I am where I am.
Conversely I have worked with people earning 3/4/5/10x what I do so some well into the millions who are literally cash and investment poor. All they do is spend to their limit and a bit more. £250k cars, £100k on holidays a year, mostly stuff that devalues.
Imagine you earned £2m a year and couldn't live as if you earned £1.6m! With that extra £200k net invested after 10 years and growth at about 8% you'd have approaching £3m.
Some people will always live to or beyond their means. I've literally know people earning £80k who have more investments and wealth than people earning £1m.
Basically just be sensible, save what you can, watch what you spend, and let compound do it's job.
Usually agree with much of what you say and whilst I appreciate that this is a thread on investments, to me a holiday never "devalues". Life is about memories, you can't take the cash with you. I would spend £100K on holidays every year if I could afford it. They are the best of times and best of memories.
I took the family for 9 weeks to Asia last year with 2 young children. Memories that will last my life time and theirs.
In monetary terms it cost a lot and meant I had to take unpaid leave but I was lucky enough that as a one off I could afford it (partially through one small "investment" with Paddy power)! The holiday was undoubtedly the best investment decision I have ever made.
One of my best friends from school has spent most of his adult life travelling the world and doing cash jobs to get along on a tiny budget. He has lived in more countries than I care to remember and visited much of the planet, met tonnes of people and lived an incredible life. He will never have a family (doesn't want one), and will likely die at a relatively young age given the life choices he makes (I'm surprised he has made it to 46!) but I know he wouldn't change a single piece of it and has accepted that if he lives to a good age he will be potless at the end of it but have spent his "good" years living his best life (sorry, awful phrase!).
Totally agree, my reference was to people who really are living beyond their means "All they do is spend to their limit and a bit more." These are also the same people whose lifestyles will hugely nose dive in later years, much to their disgust and disbelief.
Liken it to a footballer on £3m a year who spends the lot every year (and a bit more) and a year after their career ends is declared bankrupt.
Your mate sounds like my kind of guy, nothing wrong with what he's doing
Is this right? I have just received a letter from Virgin returning money to me as I had opened a 2nd cash ISA in the tax year. I had opened a fixed rate ISA in January for £5k. I then opened a 2nd with them in March. They have returned this latter money. I had always been under the impression that you can only use one provider but CAN do it in stages. Seems I'm wrong.
I would have to go into the one you originally opened. You can not have 2 ISA's of the same ilk in the same tax year. Even if it's with the same provider.
That's correct as at tax year 2023/24. Different now though - as of 6 April 2024 you can do just that. I believe I've understood the new arrangements correctly but please correct me if I'm wrong.
Is this right? I have just received a letter from Virgin returning money to me as I had opened a 2nd cash ISA in the tax year. I had opened a fixed rate ISA in January for £5k. I then opened a 2nd with them in March. They have returned this latter money. I had always been under the impression that you can only use one provider but CAN do it in stages. Seems I'm wrong.
I would have to go into the one you originally opened. You can not have 2 ISA's of the same ilk in the same tax year. Even if it's with the same provider.
That's correct as at tax year 2023/24. Different now though - as of 6 April 2024 you can do just that. I believe I've understood the new arrangements correctly but please correct me if I'm wrong.
Is this right? I have just received a letter from Virgin returning money to me as I had opened a 2nd cash ISA in the tax year. I had opened a fixed rate ISA in January for £5k. I then opened a 2nd with them in March. They have returned this latter money. I had always been under the impression that you can only use one provider but CAN do it in stages. Seems I'm wrong.
I would have to go into the one you originally opened. You can not have 2 ISA's of the same ilk in the same tax year. Even if it's with the same provider.
That's correct as at tax year 2023/24. Different now though - as of 6 April 2024 you can do just that. I believe I've understood the new arrangements correctly but please correct me if I'm wrong.
I’m currently obsessed with the whole FIRE planning and spend a fair amount of time reading up on the various strategies people are using, but you are right, regular contributions plus compound interest is a game changer
I always said mid 50's, but having changed jobs in 2020 and took a bit of a step back in responsibilities hours etc (although that seems to be creeping back upwards!) I'm enjoying work more than I have in probably 15-20 years. So no plans just yet, but I'll review at 55 and will likely do a more reduced hours at least.
FIRE is fine, just don't take it too far.
My very simple financial advice has always been, if you can (as at the lower earnings end or at certain times in your life it's not always possible) live your life as if your salary is 80% of what it really is.
So that means living to that, to include savings and pensions, everything. The extra 20% is your extra investments/savings. I've been doing that broadly since my early to mid 30's and is a large reason I am where I am.
Conversely I have worked with people earning 3/4/5/10x what I do so some well into the millions who are literally cash and investment poor. All they do is spend to their limit and a bit more. £250k cars, £100k on holidays a year, mostly stuff that devalues.
Imagine you earned £2m a year and couldn't live as if you earned £1.6m! With that extra £200k net invested after 10 years and growth at about 8% you'd have approaching £3m.
Some people will always live to or beyond their means. I've literally know people earning £80k who have more investments and wealth than people earning £1m.
Basically just be sensible, save what you can, watch what you spend, and let compound do it's job.
Usually agree with much of what you say and whilst I appreciate that this is a thread on investments, to me a holiday never "devalues". Life is about memories, you can't take the cash with you. I would spend £100K on holidays every year if I could afford it. They are the best of times and best of memories.
I took the family for 9 weeks to Asia last year with 2 young children. Memories that will last my life time and theirs.
In monetary terms it cost a lot and meant I had to take unpaid leave but I was lucky enough that as a one off I could afford it (partially through one small "investment" with Paddy power)! The holiday was undoubtedly the best investment decision I have ever made.
One of my best friends from school has spent most of his adult life travelling the world and doing cash jobs to get along on a tiny budget. He has lived in more countries than I care to remember and visited much of the planet, met tonnes of people and lived an incredible life. He will never have a family (doesn't want one), and will likely die at a relatively young age given the life choices he makes (I'm surprised he has made it to 46!) but I know he wouldn't change a single piece of it and has accepted that if he lives to a good age he will be potless at the end of it but have spent his "good" years living his best life (sorry, awful phrase!).
Is this right? I have just received a letter from Virgin returning money to me as I had opened a 2nd cash ISA in the tax year. I had opened a fixed rate ISA in January for £5k. I then opened a 2nd with them in March. They have returned this latter money. I had always been under the impression that you can only use one provider but CAN do it in stages. Seems I'm wrong.
I would have to go into the one you originally opened. You can not have 2 ISA's of the same ilk in the same tax year. Even if it's with the same provider.
That's correct as at tax year 2023/24. Different now though - as of 6 April 2024 you can do just that. I believe I've understood the new arrangements correctly but please correct me if I'm wrong.
Correct, except LISA's
I believe the company offering the ISA can choose which of the rules they wish to apply to their products. So can refuse to accept ISA transfer from another provider, can refuse withdrawal and reinvest in same year (flexi ISA) an can refuse to allow a customer more than one ISA per year even if £20,000 not invested.
I’m currently obsessed with the whole FIRE planning and spend a fair amount of time reading up on the various strategies people are using, but you are right, regular contributions plus compound interest is a game changer
I always said mid 50's, but having changed jobs in 2020 and took a bit of a step back in responsibilities hours etc (although that seems to be creeping back upwards!) I'm enjoying work more than I have in probably 15-20 years. So no plans just yet, but I'll review at 55 and will likely do a more reduced hours at least.
FIRE is fine, just don't take it too far.
My very simple financial advice has always been, if you can (as at the lower earnings end or at certain times in your life it's not always possible) live your life as if your salary is 80% of what it really is.
So that means living to that, to include savings and pensions, everything. The extra 20% is your extra investments/savings. I've been doing that broadly since my early to mid 30's and is a large reason I am where I am.
Conversely I have worked with people earning 3/4/5/10x what I do so some well into the millions who are literally cash and investment poor. All they do is spend to their limit and a bit more. £250k cars, £100k on holidays a year, mostly stuff that devalues.
Imagine you earned £2m a year and couldn't live as if you earned £1.6m! With that extra £200k net invested after 10 years and growth at about 8% you'd have approaching £3m.
Some people will always live to or beyond their means. I've literally know people earning £80k who have more investments and wealth than people earning £1m.
Basically just be sensible, save what you can, watch what you spend, and let compound do it's job.
Usually agree with much of what you say and whilst I appreciate that this is a thread on investments, to me a holiday never "devalues". Life is about memories, you can't take the cash with you. I would spend £100K on holidays every year if I could afford it. They are the best of times and best of memories.
I took the family for 9 weeks to Asia last year with 2 young children. Memories that will last my life time and theirs.
In monetary terms it cost a lot and meant I had to take unpaid leave but I was lucky enough that as a one off I could afford it (partially through one small "investment" with Paddy power)! The holiday was undoubtedly the best investment decision I have ever made.
One of my best friends from school has spent most of his adult life travelling the world and doing cash jobs to get along on a tiny budget. He has lived in more countries than I care to remember and visited much of the planet, met tonnes of people and lived an incredible life. He will never have a family (doesn't want one), and will likely die at a relatively young age given the life choices he makes (I'm surprised he has made it to 46!) but I know he wouldn't change a single piece of it and has accepted that if he lives to a good age he will be potless at the end of it but have spent his "good" years living his best life (sorry, awful phrase!).
What's your mate doing now, for example?
Hats off to him
Right now he is painting houses for cash in the north island of NZ which is his adopted country - has has been back there 3 months and for the first time in 2yrs. He comes back to Europe in May, will pass through England quickly to say hello and is likely to spend 6-8 months or so in Eastern Europe. After that, no idea but if it follows last year then he will stay in Europe until December/January time and then head to India for a yoga retreat for a month or two before going to the Whitsundays in Oz to paint some more houses. He worked the ski season in Aspen for a few years and summers on the boats in Florida; slept on beaches in Guatamala, travelled through Central and Southern America... I could go on but you get my drift. I love travelling but his life would not be for me; he is a self confessed selfish man who does everything his way and fair play to him. You only get one go at happiness and this world. (Sorry for de-railing the thread a little!).
The easing down of Middle East tensions has helped push the footsie to a new record. An still the believe by some experts that London is under valued compared to other world indices…..
Seriously considering may be time to reduce my share/fund holdings.
The easing down of Middle East tensions has helped push the footsie to a new record. An still the believe by some experts that London is under valued compared to other world indices…..
Seriously considering may be time to reduce my share/fund holdings.
I think the fall in the pound vs the dollar has had a big part to play in that! But yeah it's been a fantastic day.
The easing down of Middle East tensions has helped push the footsie to a new record. An still the believe by some experts that London is under valued compared to other world indices…..
Seriously considering may be time to reduce my share/fund holdings.
I think the fall in the pound vs the dollar has had a big part to play in that! But yeah it's been a fantastic day.
It'll be a sea of red tomorrow. Come on, you know how these things work!
Looking for some general guidance as a bit of a novice in the investing game.
I’ve got myself into what I think is a decent situation for my age (36) where I don’t have any debt outside of mortgage and have been able to save fairly well.
For years I held off on investing as I was saving for as big a deposit as possible for my house, which I now have. Now I want to do a bit more with my savings so it’s not all just sitting there in cash.
I’ve maxed out Premium Bonds and happy to let that sit there without any risk. I’ve just maxed out last years allowance for Cash ISA with my bank. First time I’ve opened one. I did that in bit of a rush just to use up the allowance as I didn’t want to miss out.
Now I’m thinking of how I can invest in a way that’s a bit more ‘advanced’ without doing anything too complicated or too risky. I’ve been a 45% tax payer the last few years and expecting this year could be similar.
My gut feel is saying that a Stocks and Shares ISA is the way to go as a way of getting started. Potentially then with a view to doing a bit more with stocks once I learn the ropes.
Is my thinking along the right lines here, or is there something more obvious I should be looking at (pension for example)?
Looking for some general guidance as a bit of a novice in the investing game.
I’ve got myself into what I think is a decent situation for my age (36) where I don’t have any debt outside of mortgage and have been able to save fairly well.
For years I held off on investing as I was saving for as big a deposit as possible for my house, which I now have. Now I want to do a bit more with my savings so it’s not all just sitting there in cash.
I’ve maxed out Premium Bonds and happy to let that sit there without any risk. I’ve just maxed out last years allowance for Cash ISA with my bank. First time I’ve opened one. I did that in bit of a rush just to use up the allowance as I didn’t want to miss out.
Now I’m thinking of how I can invest in a way that’s a bit more ‘advanced’ without doing anything too complicated or too risky. I’ve been a 45% tax payer the last few years and expecting this year could be similar.
My gut feel is saying that a Stocks and Shares ISA is the way to go as a way of getting started. Potentially then with a view to doing a bit more with stocks once I learn the ropes.
Is my thinking along the right lines here, or is there something more obvious I should be looking at (pension for example)?
Any ideas much appreciated.
I would usually say ISA first before pension. Yes, a pension gets very good tax relief but at your age it means locking the money up for more than 20 years.
An ISA is much more flexible & if you are lucky enough to save £20k pa over time you'll build up a tidy tax free amount.
Where to invest is the big question. And for that we would need to know your appetite for risk, time horizons & your plans for the future (near & far).
Some people say just put it in a global tracker & forget about it. But trust me, regular reviews really do help.
Agree that you’re young and having access to the money in the next 25 years is important. So taking out another ISA top of the list. However,……
I know Golfie is far more experienced than me, but if your paying 45% tax, then I’d certainly be thinking pension. You don’t say what you’re paying in now, or what your employer contributes. However, you only sacrifice 55p take home pay to get £1 in the pension. So giving up £110 in your take home puts £200 into your pension. At your age that has plenty of time to grow. An you can cut that down or stop that contribution anytime you like, if circumstances change.
I’ve only recently started contributing more into pension. My contribution and employer contribution combined is about £1,500 a month (of which about £1,100 is my part).
Up until a year ago my contribution was much smaller - just the default amount. So part of me feels like I’m playing catch up on that side now.
Ideally I want to be able to tackle both pension (long term plan) and ISA (short term and long term plans) and not miss out on the benefits of either.
I’ve only recently started contributing more into pension. My contribution and employer contribution combined is about £1,500 a month (of which about £1,100 is my part).
Up until a year ago my contribution was much smaller - just the default amount. So part of me feels like I’m playing catch up on that side now.
Ideally I want to be able to tackle both pension (long term plan) and ISA (short term and long term plans) and not miss out on the benefits of either.
Before you read and pay more attention to this than you should, golfie and most of the others on here seem to really know their shit, I can only talk in layman terms I understand.
In your situation, I would be paying more into my pension, let the compound do its thing. Much better to overpay now with more years for those compound seeds to grow into beanstalks and oak trees.
ISAs the money is paid in AFTER you have paid tax on it so whilst I think they are brilliant. if you can pay a decent amount in its win win
I’ve only recently started contributing more into pension. My contribution and employer contribution combined is about £1,500 a month (of which about £1,100 is my part).
Up until a year ago my contribution was much smaller - just the default amount. So part of me feels like I’m playing catch up on that side now.
Ideally I want to be able to tackle both pension (long term plan) and ISA (short term and long term plans) and not miss out on the benefits of either.
Before you read and pay more attention to this than you should, golfie and most of the others on here seem to really know their shit, I can only talk in layman terms I understand.
In your situation, I would be paying more into my pension, let the compound do its thing. Much better to overpay now with more years for those compound seeds to grow into beanstalks and oak trees.
ISAs the money is paid in AFTER you have paid tax on it so whilst I think they are brilliant. if you can pay a decent amount in its win win
Although this is sort of right, it's not quite as simple. If you're a 45% taxpayer, that is the tax relief you are getting on pension contributions. When you come to take it out you will be taxed depending on your tax rates. Also you can get 25% of it tax free, so effectively if you drawdown when you are a 40% taxpayer, effective tax rate is 30%. You can't draw pension money down until you reach a certain age (was 55 although may be a little higher now. Compared to ISA's where the money you pay in after tax and NI, but when you draw it it is tax free. I always think a simple rule can be that if you think you want the money within 5 years a cash ISA may be safer but for more long term a stocks and shares ISA may be better. Personally until you build a pot I would avoid fees and go with an index tracker but I know Golfie (who is an expert) wouldn't agree.
Looking for some general guidance as a bit of a novice in the investing game.
I’ve got myself into what I think is a decent situation for my age (36) where I don’t have any debt outside of mortgage and have been able to save fairly well.
For years I held off on investing as I was saving for as big a deposit as possible for my house, which I now have. Now I want to do a bit more with my savings so it’s not all just sitting there in cash.
I’ve maxed out Premium Bonds and happy to let that sit there without any risk. I’ve just maxed out last years allowance for Cash ISA with my bank. First time I’ve opened one. I did that in bit of a rush just to use up the allowance as I didn’t want to miss out.
Now I’m thinking of how I can invest in a way that’s a bit more ‘advanced’ without doing anything too complicated or too risky. I’ve been a 45% tax payer the last few years and expecting this year could be similar.
My gut feel is saying that a Stocks and Shares ISA is the way to go as a way of getting started. Potentially then with a view to doing a bit more with stocks once I learn the ropes.
Is my thinking along the right lines here, or is there something more obvious I should be looking at (pension for example)?
Any ideas much appreciated.
I've never been tempted to dip into my ISA so I see it similar to my pension, but you are a lot younger than me (56) so this may not apply. For me, pension contributions make sense as there's an instant 'gain' of more than 30% because you don't pay 45% income tax on your contributions.
When you take your private pension at 55 or later you have 25% tax free and the rest you drawdown just enough to keep you under the 40% tax band (~50k a year) if you wanted. I try to put money in my ISA only after I've maxed my pension allowance. If I do, I put it on Exchange Traded Funds, which trade like shares but track indices like the S&P 500 rather than individual companies; I also have funds that pay relatively high dividends, and some bond funds.
I would also recommend repaying your mortgage quickly if the interest rate is high.
And finally consider investing in a second property to rent out if you can handle being a landlord. You get capital appreciation, rental income and leverage e.g. a 25k deposit buys you a 250k property, where the full 250k property appreciates, funded by the interest on the 225k mortgage. House prices in some places have doubled every 10 years or so. The main downside is that you have to pay capital gains tax when you sell the house.
Good luck.
Disclaimer: I'm not a financial, tax or pension advisor.
This might be of interst to some of you.....or to your children depending on age.
Accord have just launched a 99% mortgage. Basically you only need a £5k deposit - maximum loan is £495k. Usual underwriting but they typically lend around 4.5x income. Not available on flats or shared ownership - houses only.
Would suit those on decent incomes but dont have a good deposit (2/3 bed house costing £300k would usually need a 10% deposit = £30k). Lots of lenders do 95% loans but Accord is the first lender I know that is offering just a £5k deposit.
Only available on a 5 year fixed & interest rate is 5.99%.
This might be of interst to some of you.....or to your children depending on age.
Accord have just launched a 99% mortgage. Basically you only need a £5k deposit - maximum loan is £495k. Usual underwriting but they typically lend around 4.5x income. Not available on flats or shared ownership - houses only.
Would suit those on decent incomes but dont have a good deposit (2/3 bed house costing £300k would usually need a 10% deposit = £30k). Lots of lenders do 95% loans but Accord is the first lender I know that is offering just a £5k deposit.
Only available on a 5 year fixed & interest rate is 5.99%.
Sort of related, Golfie, a few of us were having a debate about the impact of rising rates and why we're not necessarily seeing delinquencies rising (I'm sure they are but it's not enough to be news yet and banks' provisions aren't rising massively).
The main theory was that banks are re-mortgaging to 30, 35 years. Is that something you are seeing?
Been a while since I've been in the top 3. FWIW, I think this is a breakout and, whilst they'll be twists and turns, the FTSE will be well up by the end of the year now. I'm still sticking to FTSE250 though.
On another note, I had a nice breakdown of all the costs, fees and charges that hit my SIPP account from Interactive brokers in the last tax year. Even including spreads, the total annual costs, all in were 0.25%. And even that was 80% covered by interest payments. On top of that, I have to pay a flat £400 to a SIPP administrator. All-in that is so, so much cheaper than Hargreaves.
This might be of interst to some of you.....or to your children depending on age.
Accord have just launched a 99% mortgage. Basically you only need a £5k deposit - maximum loan is £495k. Usual underwriting but they typically lend around 4.5x income. Not available on flats or shared ownership - houses only.
Would suit those on decent incomes but dont have a good deposit (2/3 bed house costing £300k would usually need a 10% deposit = £30k). Lots of lenders do 95% loans but Accord is the first lender I know that is offering just a £5k deposit.
Only available on a 5 year fixed & interest rate is 5.99%.
Not bad that. 2 of you on combined income £100k. £450000 mortgage of 35 years £2500 a month
Been a while since I've been in the top 3. FWIW, I think this is a breakout and, whilst they'll be twists and turns, the FTSE will be well up by the end of the year now. I'm still sticking to FTSE250 though.
On another note, I had a nice breakdown of all the costs, fees and charges that hit my SIPP account from Interactive brokers in the last tax year. Even including spreads, the total annual costs, all in were 0.25%. And even that was 80% covered by interest payments. On top of that, I have to pay a flat £400 to a SIPP administrator. All-in that is so, so much cheaper than Hargreaves.
Do you mean Interactive Brokers or Interactive Investors? My SIPP is still being managed through/by the transferring IFA/Standard Life as it couldn't initially be avoided, due to a transfer from my defined benefit pension. The overall charges in total are around 2% pa and the fund is 6.2% down since opening in November 2021, which is partly due to the charges.
This might be of interst to some of you.....or to your children depending on age.
Accord have just launched a 99% mortgage. Basically you only need a £5k deposit - maximum loan is £495k. Usual underwriting but they typically lend around 4.5x income. Not available on flats or shared ownership - houses only.
Would suit those on decent incomes but dont have a good deposit (2/3 bed house costing £300k would usually need a 10% deposit = £30k). Lots of lenders do 95% loans but Accord is the first lender I know that is offering just a £5k deposit.
Only available on a 5 year fixed & interest rate is 5.99%.
Sort of related, Golfie, a few of us were having a debate about the impact of rising rates and why we're not necessarily seeing delinquencies rising (I'm sure they are but it's not enough to be news yet and banks' provisions aren't rising massively).
The main theory was that banks are re-mortgaging to 30, 35 years. Is that something you are seeing?
Yes definitely. Most lenders will go up to age 70 or even 75, so if you are in your mid to late 30's and having to now remortgage from sub 2% to almost 5% then stretching the loan to 30 or even 35 is not uncommon. Most mortgages I've done recently (either new or remortgage) have been for more than 25 years. Typical new loan is 30 years.
Has anyone on here used Zopa for their cash ISA and are they okay? My bank wouldn’t let me transfer money over to them.
Not for a cash ISA but for some cash savings. I've found it really easy to use, and withdrawals are back in my linked account almost instantly - much better than Raisin or HL can manage. Had no problems transferring initial deposits to them either.
Been a while since I've been in the top 3. FWIW, I think this is a breakout and, whilst they'll be twists and turns, the FTSE will be well up by the end of the year now. I'm still sticking to FTSE250 though.
On another note, I had a nice breakdown of all the costs, fees and charges that hit my SIPP account from Interactive brokers in the last tax year. Even including spreads, the total annual costs, all in were 0.25%. And even that was 80% covered by interest payments. On top of that, I have to pay a flat £400 to a SIPP administrator. All-in that is so, so much cheaper than Hargreaves.
Do you mean Interactive Brokers or Interactive Investors? My SIPP is still being managed through/by the transferring IFA/Standard Life as it couldn't initially be avoided, due to a transfer from my defined benefit pension. The overall charges in total are around 2% pa and the fund is 6.2% down since opening in November 2021, which is partly due to the charges.
Interactive Brokers (IBKR). US firm. Now support SIPPs and ISAs. I don't think they do junior ISAs and they definitely don't do LISAs. But only a year ago they didn't do ISAs, so they are expanding. It's execution only. Don't be too put off by the complexity when you see it - it's relatively straightforward if you want it to be.
Comments
Liken it to a footballer on £3m a year who spends the lot every year (and a bit more) and a year after their career ends is declared bankrupt.
Your mate sounds like my kind of guy, nothing wrong with what he's doing
That's correct as at tax year 2023/24. Different now though - as of 6 April 2024 you can do just that. I believe I've understood the new arrangements correctly but please correct me if I'm wrong.
Hats off to him
so need to shop around…..
Right now he is painting houses for cash in the north island of NZ which is his adopted country - has has been back there 3 months and for the first time in 2yrs. He comes back to Europe in May, will pass through England quickly to say hello and is likely to spend 6-8 months or so in Eastern Europe.
After that, no idea but if it follows last year then he will stay in Europe until December/January time and then head to India for a yoga retreat for a month or two before going to the Whitsundays in Oz to paint some more houses.
He worked the ski season in Aspen for a few years and summers on the boats in Florida; slept on beaches in Guatamala, travelled through Central and Southern America... I could go on but you get my drift.
I love travelling but his life would not be for me; he is a self confessed selfish man who does everything his way and fair play to him. You only get one go at happiness and this world.
(Sorry for de-railing the thread a little!).
The easing down of Middle East tensions has helped push the footsie to a new record. An still the believe by some experts that London is under valued compared to other world indices…..
Seriously considering may be time to reduce my share/fund holdings.
I’ve got myself into what I think is a decent situation for my age (36) where I don’t have any debt outside of mortgage and have been able to save fairly well.
I’ve maxed out Premium Bonds and happy to let that sit there without any risk. I’ve just maxed out last years allowance for Cash ISA with my bank. First time I’ve opened one. I did that in bit of a rush just to use up the allowance as I didn’t want to miss out.
Now I’m thinking of how I can invest in a way that’s a bit more ‘advanced’ without doing anything too complicated or too risky. I’ve been a 45% tax payer the last few years and expecting this year could be similar.
Is my thinking along the right lines here, or is there something more obvious I should be looking at (pension for example)?
Any ideas much appreciated.
An ISA is much more flexible & if you are lucky enough to save £20k pa over time you'll build up a tidy tax free amount.
Where to invest is the big question. And for that we would need to know your appetite for risk, time horizons & your plans for the future (near & far).
Some people say just put it in a global tracker & forget about it. But trust me, regular reviews really do help.
I know Golfie is far more experienced than me, but if your paying 45% tax, then I’d certainly be thinking pension. You don’t say what you’re paying in now, or what your employer contributes. However, you only sacrifice 55p take home pay to get £1 in the pension. So giving up £110 in your take home puts £200 into your pension. At your age that has plenty of time to grow. An you can cut that down or stop that contribution anytime you like, if circumstances change.
Up until a year ago my contribution was much smaller - just the default amount. So part of me feels like I’m playing catch up on that side now.
In your situation, I would be paying more into my pension, let the compound do its thing. Much better to overpay now with more years for those compound seeds to grow into beanstalks and oak trees.
ISAs the money is paid in AFTER you have paid tax on it so whilst I think they are brilliant. if you can pay a decent amount in its win win
Compared to ISA's where the money you pay in after tax and NI, but when you draw it it is tax free. I always think a simple rule can be that if you think you want the money within 5 years a cash ISA may be safer but for more long term a stocks and shares ISA may be better.
Personally until you build a pot I would avoid fees and go with an index tracker but I know Golfie (who is an expert) wouldn't agree.
When you take your private pension at 55 or later you have 25% tax free and the rest you drawdown just enough to keep you under the 40% tax band (~50k a year) if you wanted. I try to put money in my ISA only after I've maxed my pension allowance. If I do, I put it on Exchange Traded Funds, which trade like shares but track indices like the S&P 500 rather than individual companies; I also have funds that pay relatively high dividends, and some bond funds.
I would also recommend repaying your mortgage quickly if the interest rate is high.
And finally consider investing in a second property to rent out if you can handle being a landlord. You get capital appreciation, rental income and leverage e.g. a 25k deposit buys you a 250k property, where the full 250k property appreciates, funded by the interest on the 225k mortgage. House prices in some places have doubled every 10 years or so. The main downside is that you have to pay capital gains tax when you sell the house.
Good luck.
Disclaimer: I'm not a financial, tax or pension advisor.
Accord have just launched a 99% mortgage. Basically you only need a £5k deposit - maximum loan is £495k. Usual underwriting but they typically lend around 4.5x income. Not available on flats or shared ownership - houses only.
Would suit those on decent incomes but dont have a good deposit (2/3 bed house costing £300k would usually need a 10% deposit = £30k). Lots of lenders do 95% loans but Accord is the first lender I know that is offering just a £5k deposit.
Only available on a 5 year fixed & interest rate is 5.99%.
The main theory was that banks are re-mortgaging to 30, 35 years. Is that something you are seeing?
On another note, I had a nice breakdown of all the costs, fees and charges that hit my SIPP account from Interactive brokers in the last tax year. Even including spreads, the total annual costs, all in were 0.25%. And even that was 80% covered by interest payments. On top of that, I have to pay a flat £400 to a SIPP administrator. All-in that is so, so much cheaper than Hargreaves.
2 of you on combined income £100k.
£450000 mortgage of 35 years £2500 a month
My SIPP is still being managed through/by the transferring IFA/Standard Life as it couldn't initially be avoided, due to a transfer from my defined benefit pension.
The overall charges in total are around 2% pa and the fund is 6.2% down since opening in November 2021, which is partly due to the charges.