Author Topic: My introduction.....and a plea for advice.  (Read 2133 times)

SupersavingMMM

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My introduction.....and a plea for advice.
« on: May 29, 2018, 12:56:27 PM »
Hi,

Have attached a typed out a Word doc....hope it works because I donít know how to copy and paste on an iPad!

😊

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #1 on: May 29, 2018, 01:03:13 PM »
Blushing madly....I canít open the link so guessing no one else can either.

First bit of advice needed is how to post!

How do you copy and paste from Word on an iPad?

😊

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #2 on: May 29, 2018, 01:10:57 PM »
Hello everyone.

What an amazing experience it has been of lateÖto go from musings of general disquiet and sadness that my life is just a long lonely drudge of work and sleepÖto gradual awareness that actually, I am in an enviable position to be able to potentially step out of the rat race and become free.

I am going to try and keep this short (ish).

I am unexpectedly single.  I lost my beloved just over a year ago.  We werenít married so technically not a widow but feel like one, none the less, just without the ring.  I am in my early 40s.  It was (and still is, to be honest) a huge shock after a relatively short illness.  I mention this because I feel like it has (in a roundabout manner) lead me here.  We Ďwastedí so much time at work Ė like everyone does, I suppose, before the lightbulb moment.  I now feel like I am doing a fine job of continuing that waste of time by working long hours for little pleasure. 

I have 2 children Ė both currently at uni. 

The good newsÖÖ.
I have a small mortgage (through choice as I could/can pay it off but the interest rate is cheapÖas it is tied to BoE and is currently 1.99% (it went up from 1.74% last Dec).  About £8k left to pay over 10 years.  This is my only debt apart from Student Finance.

The bad newsÖÖ
My home ownership is complicated a tad and realistically (and emotionally) I wonít want move from here unless I have to for health reasons in my (hopefully) old age.  It is worth roughly £140k.

I discovered this revelatory and wondrous idea of not being a full time wage hound too late to do two things that in now seem in flagrant opposition to the ethos of FIRE (hindsight being 20-20 and all that).

1 Ė I needed a new car in FebÖ.so bought one that seemed like a good punt (low depreciation and in for the long haul as expect to run it for ever)Öbut now seems a tad extravagant at just over £9k.  In my defenceÖI have to travel 20 motorway miles each way for work and with occasional travel further afield.  I also visit my children at UniÖboth of which require a fair trek so wanted a safe and economical, reliable carÖ.stillÖI can imagine some serious eye-rolling out there right now!

2 Ė I maxed out last years ISA allowance and this years, in first week of April.  Both in a 5 yr fixed cash.  This was me thinking how prudent it would beÖ.now after further weeks of trawling through the various blogs and advice, I am thinking it perhaps wasnít the best idea after all.  In my defence, it was sat in a savings account doing nothing whilst I tried to get my head around the dramatic and depressing enforced change of circumstances.  That, by the way, is still very much an ongoing process.

So Ė to my request!

If I canít open a S&S ISA until next April, what do I do with my money?  So much talk of investment and I am a literal virgin in all of that jazz.

I have £25k in premium bonds Ė put in about a month ago.  Thinking it can sit there until next April.

I have an NS&I 3 yr bond for £3k bought earlier in the year.

I have a pension (workplace) that apparently I can pay into on top of what goes in from my pay (but not sure about the benefit of doing that).  It currently only has about £11k in it and is with Aegon (I believe it is a SIPP). It is matched up to 6% and that is the current amount I am paying in.

I have £80k doing nothing, in a  savings account. 

My take home pay is roughly £1450 after all deductions. I am working about 45-50 hours a week and am salaried so this figure is static. I am potentially in line for a 12% of salary bonus (I got it this yearÖwhich went towards my car!) but they have tightened up the criteria this year so, combined with current business trends, I am not pinning any realistic hope of getting it next year.

My spending does need a bit of work (something I am just getting to grips withÖmicro managing my budget!) but isnít massively flagrant.  Roughly £800 or so a month.  Think I could get it down to 6-700 and not suffer too much.

I am putting £250 a month in Halifax & Nationwide savers (and have maxed the Nationwide current @£2.5k)

I know it isnít exactly lottery winnings but not only is it a daunting amount to me (never had a lot as a kid and was the epitome of a struggling broke young family only a few short years ago).   Also, it goes without saying that I would swap every penny I own to have my beloved back with meÖ.which also makes dealing with this and being rational about it quite challenging.  But I have learned the hard way that we only get one go at this living malarkey Ö and donít want to waste any more of my turn at it.

How would you very experienced people look at ensuring you can step out of daily toil and swap to a life of gardening, dog walking (would dearly love a hound but not until I can give it the company and time it deserves!), and general freedom.  58 seems a long way off at the moment but after losing my beloved at that exact age, I donít want to wait that long.

Thanks for reading.

Your kindness in replying will be appreciated immeasurably.

former player

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Re: My introduction.....and a plea for advice.
« Reply #3 on: May 29, 2018, 01:40:12 PM »
Hello and welcome. 

I'm sorry for your loss.

Turning to finances, I am not enough of an investor to give you good advice, but there are other UK people on the forum who are and I expect will chime in.  It did occur to me that if you want to start tax-free investing before your ISA allowance comes up again in April next year then your SIPP would be the way to do it.  I would suggest that you look up the information on how it is currently invested and what the fees are, so that you can think about whether this is a good place to put more money, or if it is not then what it is you need to do to get your current pension money invested in low cost index funds.

The other financial thing that occurs to me is that you have a long commute for long hours at work and a not very high salary.  As you are not looking to move home, you might think about looking to move jobs to something better paid and nearer to home, especially if your current salary is static and the bonuses decreasing.  I get that your circumstances up to now haven't been conducive to thinking about a change of job but at some point either now or in the future they will be.

never give up

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Re: My introduction.....and a plea for advice.
« Reply #4 on: May 29, 2018, 01:48:29 PM »
Hi SupersavingMMM.

Welcome and well done for working out how to copy and paste from word on an iPad. Iím not sure I could do that if put on the spot!

Iím so sorry for your loss but admire greatly your courage and enthusiasm to make the best of your life. It is exciting isnít it when the possibilities of FIRE sink in. Gardening and dog walking sound fine ways to spend some time and are on my to do list too.

There are people in here far cleverer than me so I wonít even try to pretend to offer the best way forward as someone far more qualified will be along in a moment. However a few things:

1.  Donít be too hard on yourself about the car. You didnít buy a £30k SUV or a Porsche or something. Just keep it a long time.

2. The single best thing I have done since joining these forums is to understand my expenses inside out. I mean really understand them. Itís a great excuse to create a wonderful spreadsheet. Track everything, understand what gives you value and eliminate those expenses that donít.

The less you need, the smaller the FIRE total required meaning the sooner you can get out of full time employment. Another major decision to make is whether you are willing to do a more fun part time job. If you are this gets you out of full time employment quicker and again reduces the amount your FIRE total needs to reach.

3. Assuming there are no penalties I would probably pay the mortgage off just to simplify things a bit and to reduce expenses. Iím probably in the minority here and at that interest rate I think most would just let it ride.

4. Check the T&Cís of your cash ISAís. I think if you transfer to Vanguard or someone you will only miss out on the interest since you have opened them. This will let you get all of this invested in a stocks and shares ISA now.

5. There is loads of good investment advice on the UK Tax board and I also recommend reading the JL Collins stock series and the UK Monevator site. Read those and use this forum to ask more questions.

6. Hopefully the cash is in an account paying a reasonable amount of interest? Many would argue investing this in a taxable account right away but Iím quite cautious and with the run markets have been on I am uncertain the best way to proceed here. Pensions have great tax advantages on the way in but then you are restricted age wise with when you can access the money. ISAís are your friend for retiring pre-58 but the money has been taxed as income. A balance is required between the two vehicles but I wonít try to advise here as Iím no expert and know there are more knowledgeable people on here than me.

Well done for asking these types of questions and taking positive steps. You will achieve your goals it will just take a little while to muddle through to work out the best way of doing it.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #5 on: May 29, 2018, 02:32:28 PM »
Thank you both for your replies.

There is so much to learn and read about and think about, so everyone who chips in to support is greatly appreciated.

I donít think that there is Ďone size fits allí solution as we all have different behaviours and risk aversions. 

I am going to the monevator site now (not been there yet!) - so thank you for the recommendation.  I have bounced between American sites and MSE so this is all quite revelatory at the moment.

I have considered changing my job, of late.  My current reluctance to jump ship is because they have been incredibly supportive when i couldnít be there.  And, whilst the job can be demanding and all consuming, the people I work with have made it worthwhile. Some have become invaluable.  Of course, I wouldnít have to give up those friendships with the job, but the loyalty to the company, along with the lack of desire to change anything else I my life has kept me there....but not forever now....that is for sure! 

I have been using an app called Fudget to monitor my spending but it is a bit of a chore....I think I am going to do an Excel....I actually like Excel and use it a bit at work so that is another thing on the to-do list.

And, interesting about the ISA thing....I really thought that was it for the 5 years!  Shows how uneducated I am, I suppose. 

Lots and lots of learning to get on to.

Again, warmest thanks for your replies.

I am sure there will be questions over the coming days/weeks/months.



« Last Edit: May 29, 2018, 02:38:11 PM by SupersavingMMM »

never give up

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Re: My introduction.....and a plea for advice.
« Reply #6 on: May 29, 2018, 02:37:56 PM »
Not uneducated, just a new area to become an expert in :-)

Donít be overawed by all the information. You donít need to make any big decisions imminently. Control your spending and read and learn are all you need to do in the very short term and the path will start to become clearer. Others will respond on this thread Iím sure and youíll be able to start to piece together a plan.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #7 on: May 29, 2018, 02:44:31 PM »
You hit the nail on the head there, NeverGiveUp.  Overawed is the exact word.  Glad to have found this little corner of the internet to mull it all over.

I always thought I would be working forever....to think I might be able to step off the treadmill...albeit in entirely different circumstances to my past life?  Food for thought, indeed.

Happiness is a stretch at the moment....but contentment, with peace and quiet solace with a pupster....gardens and long walks, reading and writing in the dark cold months.....well, that sounds doable - and thatís a good a goal as any, I am sure!


Thanks again.

frugledoc

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Re: My introduction.....and a plea for advice.
« Reply #8 on: May 29, 2018, 03:02:03 PM »
Welcome.

Donít obsess about ISAS.  You can invest large sums in non ISA taxable accounts.

Currently in the U.K. if you invest in stocks and shares outside an isa you can get 2k / year dividends tax free and 11.5k capital gains/ year tax free.

Obviously fill your isa allowance before using taxable.

I use one ETF for investing which is vanguard all world VWRL

Clodagh

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Re: My introduction.....and a plea for advice.
« Reply #9 on: May 29, 2018, 04:34:15 PM »
Hello SupersavingMMM and welcome.  Firstly I am so very sorry for your loss.  How brave you are to be posting to this site and to be looking forward to dog walks, gardening and keeping cosy in winter.  I wish you all the best.

I can't really comment on your situation as I am a recent first time poster and, like you, am also making a plea for help and answers on this forum.  But I just want to say that what Never Give Up told you sounds like good advice.

I have been mildly obsessed with getting everything sorted and in order but I've stopped being so hard on myself.  By working through it bit by bit (tracking expenses, maxing out ISAs and now trying to sort out SIPPS) I am getting there and it sounds as if you are right on track too.

The only thing I will say is that change is hard and particularly so after such a huge loss.  Sticking to your routines (workplace, etc) is probably a good idea for the time being.  This forum and Monevator and other blogs will give you lots to mull over and anyway working through the steps to FI is somewhat time consuming!

I look forward to hearing more from you and learning alongside you on this forum.  Best of luck to you!

PhilB

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Re: My introduction.....and a plea for advice.
« Reply #10 on: May 30, 2018, 02:43:00 AM »
Firstly, condolences on you loss.  As regards your finances, you are in a very good position with low spending and, if I calculate correctly, about £150k of savings, net of the mortgage.  You say you would be comfortable getting your spending down to £700 a month which is an excellent place to be as that is the amount of the new state pension so you only really need to be thinking about having enough to live on until then.  You don't give your exact age, but if we assume 42 you have 26 years spending to cover until 68 and about 17.5 years of that already saved up.  Retirement at 50 or even before should be easily achievable.
Does your employer offer salary sacrifice to allow you to save NI on your contributions?  If so then you should be looking to increase your contributions until your salary comes down to minimum wage levels.  I would suggest you also open a separate pension so that you can contribute to if from your after-tax income on which the scheme then claims tax relief for you.  This allows you to get tax relief even on that part of your income which wasn't taxed (strange but true!).  This is important because you almost certainly want to put much more of your income into a pension than you are currently taxed on.  You need enough in there to cover the period between when you can access it (probably 58) and when you get your state pension at 68.  If you want to work a little longer to have more than £700 per month to spend then then pension is still the place for it as you will still be below your personal allowance in retirement and so able to get the pension money out tax free.

A rough calculation to show the kind of numbers you might be thinking about and how to get there:
If you are 42 and want to retire at 50, lets say that in 6 of those 8 working years you put 100% of your salary into your pensions.  If you want to stick with your current spending levels - say £833 a month or £10k a year - then your current non pension savings, plus your income from the 2 years you don't put everything into pensions, would support that spend from 42 to 58 with about £15k left over.  This assumes that your non-pension savings just keep pace with inflation and ignores any bonuses.
Ignoring any investment growth, you would have built a pension pot of about £155k.  £85 k of that goes to replace the state pension between 58 and 68.  £50k invested for drawdown with a conservative SWR of 3% gives you the other £1,500 a year so that you have your £10k spending for life.  That leaves £20k extra for what you will.
I haven't included the cost of a few additional years NI contributions to get your full SP, but more importantly I haven't included any investment growth.  If your pensions assets grew at 3% pa real then when you came to access those pension funds at 58 they'd be nearly £230k not £155k.

I'm sure you'll have hours of fun playing with excel trying out different combinations of when to retire and how much to spend - if you are happy with just £700 per month you could possibly retire in 2 or 3 years time by putting 100% of earnings into pensions.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #11 on: May 30, 2018, 03:13:57 AM »
Thank you so much PhilB for such a considered response. And FrugalDoc for your comment too.

If I understand you, (after reading twice, slowly!) you think a good option would be to fully max out my contributions on pensions whilst living frugally on savings?  I actually emailed HR about extra contributions and I had a one line response Ď[Company] will match up to 6% salary contributions.  Kind regards.  I had even mentioned Salary Sacrifice and NI savings in my email, but there was no relevant info...I will fish further.

I can live simply but donít want to live like a pauper.  Some tapering of work life with part time work could be possible if I max out every penny in the next 8 years (BTW - I am 42 so good guess).

What about ISA allowances? I get the impression here and elsewhere, that they are the Holy Grail of UK FIRE plans....although I do appreciate my personal current pension set up is not good and needs work (to say the least!).

 My goodness, it looks like I have found the right place for knowledge and support here.  After 2 hours last night of reading NGUís journal and dipping into other peopleís posts, I feel incredibly motivated towards doing something both beneficial and practical for the first time in nearly 2 years.  It is a good feeling. Glad I wonít be the only one, Clodagh.

And, I now know how to copy and paste block text on an iPad!

Again, thanks a thousand to you all thus far.

Work soon.....but will be spending my free time in the next week or two doing some serious budgeting, spending reviews, reading, questioning and general lurking in order to be one of you!

Thank you 🙂

PhilB

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Re: My introduction.....and a plea for advice.
« Reply #12 on: May 30, 2018, 05:25:46 AM »
I can live simply but donít want to live like a pauper.
Sorry, my calculations above were based on what you had quoted for expenses.  If you feel you need more then your first key step is to work out what you 'number' is - what annual income do you need in retirement?

Quote
What about ISA allowances? I get the impression here and elsewhere, that they are the Holy Grail of UK FIRE plans
That very much depends on the size of the 'E' in your 'FIRE'!  If you have a very big E and are looking to emulate Mr Money Mustache himself and retire by 35, then ISAs are very much the way to go for your stock market investments  - for the simple reason that the gap until you can access any pension funds is so huge.  If you are aiming for 25x income but need to get through 23 years before accessing the pension funds there is no point putting more than the minimum into a pension.
If your E is much more modest - kind of FIRe then pensions get much more attractive because the gap is much shorter and so the tax advantages outweigh all other considerations.  I have no S&S ISAs at all as I'll be retiring this year at 52 so only need to bridge 3 years until I access my pension funds (and DW is 2 years older than me so it's only a 1 year gap for her).  We'll shift loads from pensions to S&S ISAs as the years go on, but in the accumulation phase pensions work much better for me.
Depending on how big an income you want (and therefore how late you stop working) you are going to be somewhere in between.  At least until you will have enough income to fully utilise your personal allowance post pension access age, your priority should be to get as much into pensions as possible whilst leaving enough income / savings outside to cover your cashflow between now and pension access age.   Because you will be getting it out tax free if your retirement income is below the PA you get an instant 25% return on investment by putting it into a pension (£80 becomes £100).  Once you become a taxpayer in retirement it is much more marginal (£80 becomes £85 after you've paid 20% tax on 75% of it)

Playing with Fire UK

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Re: My introduction.....and a plea for advice.
« Reply #13 on: May 30, 2018, 05:56:22 AM »
What about ISA allowances? I get the impression here and elsewhere, that they are the Holy Grail of UK FIRE plans....although I do appreciate my personal current pension set up is not good and needs work (to say the least!).

There are two awesome things about S&S ISAs:

1) Growth and dividends from stocks and funds is far better (on average) than interest from cash accounts. It is also riskier in the short term. Using broad funds or ETFs (like lifestrategy80 and vanguard all world VWRL) reduces the risk in the long term.

2) The growth is tax-free. This also means you don't need to keep records to tell HMRC about it.

You can get all the benefits of 1) from taxable investment accounts. It will be tax-free until you have a LOT in there, but you will need to work slightly harder to keep it tax-free. Even if you do end up paying tax, you'll probably be ahead compared to a Cash ISA.

Do check how much of a penalty there is for taking money out of your 5 year Cash ISA. You can then open a S&S ISA and TRANSFER (do not withdraw and re-deposit) the money into the S&S ISA.

If you are thinking of changing jobs, maybe hold off on the aggressive pension building. You get more benefit if you could be getting NI employer savings as well. It will be easier to top up your pension savings in the last few years that you work than to get money out of the pension early if you put too much in.

Might be an idea to hold off on big changes in general - be kind to yourself.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #14 on: May 31, 2018, 01:13:10 AM »
Thanks PlayingWithFire. 

And thank you all, for your kindnesses alongside your advice.

I am very much in research mode so no big changes on the horizon.  If there is a general take home message here then it is all about the planning.

I will be following advice here, doing my own reading and will be taking baby steps.  Although, listening to the radio yesterday about markets in relation to Italy instability did make me think about people here perhaps advocating it being a good time to get in there. It also highlighted again both my ignorance (stark) and, perhaps more annoyingly, my previous uncaring attitude before recent weeks of really delving down the rabbit hole that is retirement planning!  Markets/finance news was barely listened to until recently. 😳

I have a little ĎTo Doí list.

1. Monitor my spending more closely (as in, to the penny and per item) along side increasing (again) my frugal measures and the like.  I already look at generalised spending but it isnít thorough enough.  And doesnít take into account anything that might increase spending post FIRE.  Eg. I like the theatre and concerts but very infrequently attend at the moment....canít be a hermit forever though!  Then I can identify a true figure of comfort and actually start playing with facts instead of estimates when planning.

2.  Clarify exactly what my workplace pension is and itís worth - with a view to evaluating increasing my contributions.  Identify final payouts, taking into account that I will be reducing my time paying into it with matching contributions.

3.  Check out if/when transferring Cash ISA holdings into S&S is feasible.

4.  Find out a better place to hold onto the £80k that is literally eroding (due to inflation) as we speak. 

5.  Chat here to people that are clearly lovely and helpful....read all your journals and soak up the stashing vibes.  And laugh at some of NGUís antics.....loved your journal and laughed several times!

I think that is plenty to be getting on with in the next few days/weeks.

Thank you all, once more.

If anyone has any further comment, I will be here a lot and more than happy to discuss.

PhilB

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Re: My introduction.....and a plea for advice.
« Reply #15 on: May 31, 2018, 02:44:15 AM »
That sounds like a good approach, especially the baby steps part.  Take some time to work out where you want to be then you can swing into action to get there.

Manchester

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Re: My introduction.....and a plea for advice.
« Reply #16 on: May 31, 2018, 03:45:22 AM »
Hi SuperSaving.  It's nice to have another member in our community.  I'm terribly sorry to hear about your partner. 

There are definitely people who come to this forum in a much worse financial position.  You're definitely on the right track. 

Richardp10

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Re: My introduction.....and a plea for advice.
« Reply #17 on: May 31, 2018, 07:59:35 AM »
Hi, very sorry for your loss.

The 80k in cash us clearly bothering you. Why not move 25k into premium bonds to Mac your holding. They are immediate access, no risk to capital and returns avg 1.3% I think but you can of course do better than average!

On the cash isas you can definitely transfer them into a stocks and shares isa, check if there is a penalty meaning you would be losing some of your 44k capital, I donít think there will be.

Then you need to decide the risk profile and how to invest. Assuming you are looking at a 5-10 year timeline to need this money then the best way would be to dump the 44k in index funds tomorrow and leave it, then add a further 22k each April for a new isa.

Read the jlcollins stock series for info on index fund investing. You need to decide which index funds. Uk, USA etc.

You can also earn 1000 a year tax free in interest on savings accounts. Check out money supermarket or money saving expert for best rates and split some if your cash around.

Hope that helps :)

PhilB

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Re: My introduction.....and a plea for advice.
« Reply #18 on: May 31, 2018, 10:13:31 AM »
Hi, very sorry for your loss.

The 80k in cash us clearly bothering you. Why not move 25k into premium bonds to Mac your holding. They are immediate access, no risk to capital and returns avg 1.3% I think but you can of course do better than average!

On the cash isas you can definitely transfer them into a stocks and shares isa, check if there is a penalty meaning you would be losing some of your 44k capital, I donít think there will be.

Then you need to decide the risk profile and how to invest. Assuming you are looking at a 5-10 year timeline to need this money then the best way would be to dump the 44k in index funds tomorrow and leave it, then add a further 22k each April for a new isa.

Read the jlcollins stock series for info on index fund investing. You need to decide which index funds. Uk, USA etc.

You can also earn 1000 a year tax free in interest on savings accounts. Check out money supermarket or money saving expert for best rates and split some if your cash around.

Hope that helps :)
If it is 10 years rather than 5 then pension ranks well above ISA as she would only need 6 years spending outside of a pension if she is planning to retire at 52.  She has a couple of years to decide, but after that the rule that pension contributions can't exceed earnings will start to bite.

never give up

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Re: My introduction.....and a plea for advice.
« Reply #19 on: May 31, 2018, 10:20:41 AM »
I like your to do list SupersavingMMM. I think your approach is good here.

I wouldn't worry too much about what's in the news. The Italy instability is one thing but pick any month from any year over the last 100 years and there will always have been something going on to worry about. It's all just noise really. The graph from the below article shows that despite all of the wars, terrible financial news, scandals, natural disasters etc the market goes up. It has its drops, but it recovers. To trust in the markets to invest in a pension and follow whatever safe withdrawal rate we want to shows we trust that this will continue to be the case. I personally avoid too much financial sensationalist news because its more likely to turn me from cautious to scaredy cat. I instead focus on these forums and less headline grabbing sites.

http://jlcollinsnh.com/2012/04/19/stocks-part-ii-the-market-always-goes-up/

The great thing with investing passively using low cost index funds is that we are not trying to time the market and make a fortune. We are happy with the average that the market gives us. As a result we don't need any skill, any advantages, any wisdom above everyone else to invest. Fidelity did a great study that is often referred to on here. They found their most successful investors were those that had either lost the details to their accounts or had died I.e. the people that didn't sell in down turns and had just bought and held their investments for the long term.

Most of us end up with a cash emergency fund that covers things like cars breaking down, or plumbing debacles at home. It will also cover expenses if we were to lose our jobs. Most seem to think it is good to have at least 6 months expenses here. The regular savings accounts are good to churn this money through and/or a high interest current account. SIPPS and company pensions, ISA's and the state pension are then doing most of the heavy lifting. Due to the various age related restrictions and tax implications, its the balance between these that is key, as PhilB explained so well.

The good thing here however scary or daunting investments feel, is that you can get a globally diversified portfolio from a single fund. So your investments don't need to be complicated.

I expect in time you probably won't want to keep the Premium Bonds etc as they will fall behind inflation. It just depends on your point of view. There is a good article on MSE about Premium Bonds.

https://www.moneysavingexpert.com/savings/premium-bonds#final

You're right to focus on expenses and working out how much you need to live on in retirement first. This is the main thing to concentrate on right now. Theatres and concerts all sound lovely. Make sure you know how much you would need to spend on these so your annual expenses cover your basic expenses and your luxury/fun items. Keep reading and sorry to bombard you with links.

I'm glad you liked my journal. Laugh lots. If this fool can do this FIRE stuff then you'll manage it easily :-)
« Last Edit: May 31, 2018, 12:35:57 PM by never give up »

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #20 on: June 23, 2018, 04:18:08 AM »
A little update from me.

Again, many thanks for the advice and links and support from all.  I have just re-read this thread.  It makes a bit more sense to me now I have done some further research and copious amounts of reading.

I think, for me to look at maybe retiring at 50 (or possibly 52...but, letís not beat about the bush...I would tomorrow if feasible, despite not actually minding my job too much!!).....
1.  I need to have money to get me from FIRE date to pension access date.
2.  I need a reasonable amount to live off/draw down from, in private pension to get me from pension at 55 (or possibly 57/58?) to when I get some assistance via state pension at 67/68.
3. For this to happen, I need to frugalise my approach to life, in order to need less of the crap stuff and maximise my enjoyment of the good stuff.
4.  I also need to look at my earning potential to ensure I get the most out of the next few years work.

So....what have I done this month?
1.  Itemised my spending so far....been both pleased and horrified by some items.  Will wait until the end of the month to do a bit of an update a-la NeverGiveUp style, on my journal.
2.  For better or (probably worse) I have cleared my mortgage.  I know it was a good rate, but, as some here have mentioned...it felt right to do so.  Debt/interest paid, albeit small, seemed a bit silly in the context of saving the pennies.  Especially as it literally was my only debt. 
3.  Maxed (for now) the number of bank accounts I can feasibly keep track of and put money into to get higher interest on my cash. 
4.  Carrying on paying the max into the regular savings that come with the bank accounts.
5.  Opened an easy saver to put in little bits of Ďextraí money not budgeted for, that I have received.  This will be used to give me a little incentive to try and max out my Ďearning potentialí in small ways wherever I can, with a view to moving it regularly into something that will be more beneficial.
6.  Signed up to the Frugalwoods July challenge.

Which brings me to the inevitable question.....

I am ready to open an investment account.  It wonít be a S&S ISA until next April...this is the earliest I can transfer my ISA holdings without actually losing money....it is 365 days interest I would lose so would get out less that I put in.  Everyone and his dog talks Vanguard here....but, in the UK there is lots of Hargreaves Landsdown talk too....so.........which one is best?  I have both websites open and I canít determine if I open a Lifeguard direct with Vanguard, or an account with HL....OR BOTH?

PS - havenít forgotten about my pension plan....I will be looking to pay more into that as soon as my transfers there are complete and I can speak to them about paying in extra.  My plan with that is to match my years income out of the savings this year (or the maximum I can get tax relief/credit on.

Any advice extremely gratefully received.

Thanks for reading!

former player

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Re: My introduction.....and a plea for advice.
« Reply #21 on: June 23, 2018, 04:29:26 AM »
Hargreaves Lansdown has expensive charges and a very rich owner.  Good marketing.

Halifax will let you select an ISA Vanguard fund for £12.50 in annual admin and £12.50 for investing £20k.  There may be better deals out there than that.

never give up

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Re: My introduction.....and a plea for advice.
« Reply #22 on: June 23, 2018, 04:36:09 AM »
Congratulations on being mortgage free! What a relief and a great achievement. I think this simplifies things a bit and you can get used to a monthly expense level now that doesnít have such a large expense as part of it.

It all sounds as though you have a good plan coming together. It does take a while. It took me ages but the more you keep chipping away the less difficult things seem to become.

I think Monevator has a good comparison of investment companies. I think from memory HL is expensive for mutual funds but cheaper for ETFís. Iím not completely sure of the difference here. Costs aside I think the main difference is that HL is a fund supermarket where Vanguard only sell their own funds. If you are only interested in VG funds I think it makes sense to go with VG but if you want a much wider choice from different investment houses then HL, Fidelity or others of that type make more sense.

Well done. Keep going, youíre doing great.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #23 on: June 23, 2018, 04:36:40 AM »
Thanks FormerPlayer....I didnít know that...do you think they allow transfers from their own cash ISAs? Something else to look at.  I have a Halifax a/c and ISAs are with them.

So, HL or direct from Vanguard themselves is not the best way to go?  This is where my nativity/ignorance show, I guess.  You would think that the best deal would be from the source.  And JLCollins touts the Vanguard option a lot! 

Who do you use?


SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #24 on: June 23, 2018, 04:42:51 AM »
Hi NGU,

You really are kindness exemplified.

Just when I think I might know enough to make a bold move....more confusion! I will look at it as an opportunity for more reading and research.  I simply donít know enough about the options on the table for me to be making fully informed decisions.  No wonder people donít do this as often as they should....itís hard!  Who/where do you put your money in?  Are the vast majority here just doing the pension/ISA thing?

You read some people/sites/blogs etc and they make it sound so easy...open this account, pay into it, then go for a walk in the woods and forget about it until you are rich one day.  There is definitely a tad more to it than that!!!!

Hope the sun is shining down there for you and you are enjoying the weekend.

never give up

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Re: My introduction.....and a plea for advice.
« Reply #25 on: June 23, 2018, 04:56:30 AM »
Yes I think it is the sort of thing that once you have it sorted you can then forget about it. As with many things getting started is always the most difficult.

Here is the good comparison that I was talking about.

http://monevator.com/compare-uk-cheapest-online-brokers/

I think the primary difference is the larger investment companies seem to charge a percentage of the amount you have invested with them where as per former players suggestion some charge a fixed fee and some sort of fee for each transaction or amount invested. Iím assuming for those with hundreds of thousands the percentage approach must really add up although they are capped at a certain point.

My company pension is obviously through work so therefore Iím invested where they see fit. My ISA is with VG directly and I must confess I didnít do too much research here. Having been used to actively managed funds and their charges VG seemed really cheap but I suspect there is a cheaper way to invest in their funds. I was only interested in VG funds, I liked their website so I have just gone that route. I was happy enough with the fees I will pay.

Brokers may change their charging approach more frequently than companies like VG so there  is then the issue I find of trying to keep up to date with where is the cheapest. I didnít want to have to keep switching things about. So I went with simplicity here but appreciate I may be paying slightly more for it.

Thatís just what I do. Iím not saying itís the right thing to do and as always itís a case of doing our own research but ultimately make a decision. There is no point in deliberating for too long here. You are ahead of the game by doing some reading and putting the effort in that you are.

Yep weather has been great for ages. Hope itís good up there too.
« Last Edit: June 23, 2018, 05:00:00 AM by never give up »

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #26 on: June 23, 2018, 06:21:21 AM »
The weather is an absolute delight....which will make going to work in an hour even more tedious.  Still, with a bit more planning, I will have the number of months/weeks/even days left at work all worked out soon and can mentally cross them off.  I have already worked out that there is another 88 pay days until I turn 50 and my potential savings rate can get me in a pretty good place by then, even without salary increases/bonuses/potential side earnings (although car boot sales might not be the most impressive return on my time, every little will help).  My work schedule is erratic which challenges me to come up with something I could do to increase earning outside of it.  A second job would be hard to commit to unfortunately, or I would for the next couple of years.

I actually loaded up the Vanguard T&Cs to double check them all before going in for the kill....just held off on the crucial ĎGo for ití application button until coming here.  I am very interested in the Halifax option as I already bank with them.  There may be potential for going in now on the Vanguard one, and just transferring the cash ISAs I hold within Halifax at a later date. 

One thing that concerns me.  The amount held in one institution.  I suppose it is a needless worry if you are sticking with the big boys (no risky P2P lending here!).  If your holdings with Vanguard exceed 50k, what are the chances of being left a pauper if things go bad.  I know there was a good comment in the JL Collins blog about ĎArmageddoní style disasters rendering it a moot point, but it seems a bit scary holding in excess of 50k in shares in the same way it isnít recommended to put more than 85k in a single institution/bank.  Same with pensions....letís say I build up my work pension....it seems even scarier to invest in it with huge sums, when you read about BHS pensions or (back in the day) Mirror Group pensions.  I think this is why people like the comfort blanket of cash ISA holdings and savings, despite inflation eroding them.

There is no doubt a link to an article somewhere that will allay these fears...itís like jumping in at the deep end for the very first time after being told you can swim good enough to go in there.  Or driving a car without dual controls for the first time....

Anyway, I blather....thanks for reading again, lovely people.




never give up

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Re: My introduction.....and a plea for advice.
« Reply #27 on: June 23, 2018, 02:09:37 PM »
The topic around the amount to hold and compensation in terms of disasters is covered to some extent in the ďshould I move to Vanguard UKĒ thread in the UK Tax board. It is a bit of a confusing area to be honest.

Playing with Fire UK

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Re: My introduction.....and a plea for advice.
« Reply #28 on: June 24, 2018, 02:02:50 AM »
If you are thinking about going to Halifax, try calling them and asking them to waive the penalty interest if you transfer to an investment ISA. It's a bit of a long shot but worth trying.

From my perspective, keeping holdings below 50k per institution increases the risk. I'm more likely to lose paperwork or forget about an account the more I have and I consider the absolute risk of an institution going broke AND having not ring-fenced money to be pretty low. When you consider the increased fees I'm not interested at all. 

I do think it is sensible to have access to a second account - more for TSB-style meltdowns or access problems than the money being gone forever.

SupersavingMMM

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Re: My introduction.....and a plea for advice.
« Reply #29 on: July 03, 2018, 04:02:35 PM »
Thanks again to all....I canít tell you how lovely it is to have my space here to be honest and forthright about both my plans and my lack of knowledge.  There is no one I know in real life I can talk to about this so, again thanks.

A little update.

I have opened a Vanguard Life Strategty 60 account. Straight down the middle!  I think it is ever so slightly higher in fees than some other options but it seems like a simple approach and I am all for simple!

It feels quite liberating to know I am making these steps to a life of my own choosing.  Even a small baby step (I havenít put many thousands in, yet...just wanted to get it up and running!)

Have a great week, everyone.  Enjoy the sun (if you can).