Author Topic: Any UK-tailored Mustachian advice for a brand new, budding Mustachianist?  (Read 7350 times)

BritishMustachian

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I hope I have the right section and that this thread is a suitable one to make.

First of all, a little about me...  (If you want to skip the Bible-length story, go to the START HERE for my question)

I am 28, a very late starter to life, and am striving to join the road to FI even if I am way behind most people's starting point.

I was a complainypants non-Mustachian up until 25, living a life of leisure with parents and long-term benefits recipient.  Worse still is that the benefits money would get entirely spent on "luxuries" like the latest video game console and all new games that would release for them.  I got my first job at 25 as a kitchen assistant.  It wasn't the most fulfilling of jobs but I told myself that was my prison for life for leading an entirely loser-like lifestyle up to that point.  I met my girlfriend a few years later while helping at the store she worked at 45 mins from my location, then applied for a job as a Hotel Night Manager local to her so we could move in together.

That was last year and since then I've gone through rapid changes as a person and for the better IMO.  I started losing my desire to sit around wasting time on video games and such around 12 months ago. Slowly my time wasting/video gaming has decreased AND I started saving more of my money and questioning every purchase I've made.

In the past year I've had to battle people calling me tight, even my girlfriend asking me just what I'm saving for.  Since up until a month ago I never really knew why I had this intuitive desire to suddenly start saving and being conservative with money, I have slipped up and bought huge luxury items here and there.  My final one was in May this year (a £1,700/$2,500 gaming PC) and after which I saw my meagre bank balance reduced to zero and I felt that this wasn't who I am any more and these luxury purchases weren't delivering happiness as expected!

Then June and July this year, I saved every penny I could, no more luxuries, game-purchases, cooked instead of having take-aways/restaurant visits, etc, etc.  I was amazed by what I could save in those two months, even if I still didn't understand why I was saving.

Then, I got a Facebook message from a friend right at the end of July, right after a second month of saving, that changed everything... as it if was fate!  It read, "PS: Join the Mustachian ways..." along with a link to the MMM blog.   I noticed the "Start Here" on the main site banner and became utterly absorbed after starting to read it.  "Oh my god... it is possible that if I get a much better career and save harder by not buying things that aren't making me happy any more, I can gain financial freedom before I hit my 70's?!" I thought.  I found a way to go to the earliest blog post after that, and have since read from page 42 to 9.  I have 2 nights off from work and I'm going to read the last 9 pages over the course of them.  It's been one of the most fascinating experiences of my life reading the ideals, stories and advice for this exciting new way of life and I am absolutely and utterly all in. 

=== START HERE TO AVOID BORING LIFE STORY ===

My only issue now is that being the previously life long anti-Mustachianist and uneducated consumerist, I have next to no idea about investing, the stock market or property purchasing/management past what I've read in the MMM blog.  I have my first book from the MMM reading list (Economics Explained) which I intend to read after I'm done with the blog, but I was just wondering if there are any of the key concepts that change dramatically for somebody living in the UK.  I already know we don't pay into a 401(k) and have our pension automatically deducted from pay, but is there anything else that needs to be known?  Being that Vanguard is an American company that invests in American businesses, do we have an equivalent here in Old Blighty that does the same thing?

I know I am coming off as a raging neophite right now, so I'll stop embarrassing myself any further.  I'm mainly looking for some tips and advice from UK Mustachians and some general pointers.

Thanks for taking the time to read!

P.S. I'm aware my terrible salary is no fit way to FI no matter how much I'm able to cut back and save from it, and thanks to MMM's inspiring blog, I am now looking to study on the side so I can acquire entry into an IT career.

daverobev

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Re: Any UK-tailored Mustachian advice for a brand new, budding Mustachianist?
« Reply #1 on: September 10, 2014, 09:29:47 AM »
To get started: open a stocks and shares isa, start depositing large chunks of cash every payday, and buy VUKE/HMCX/IWRD/IGLT.

This is a really simple couch potato portfolio, with UK, international stocks, and gilts.

Of you don't have a pension through work, you can open a SIPP. Have a read on Monevator, Simple Living in Suffolk. I don't know much about SIPPs as I'm no longer in the UK, but basically it's tax deferred - when you put money in, the income tax you'd have paid gets contributed by the govt. You should be able to do this via your work, I think it's mandatory for companies to have stuff available- not sure.

If you're not a higher rate tax payer, the ISA is awesome. Use it.

You will get more specific help on a non-US centric board.

Phil_Moore

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Re: Any UK-tailored Mustachian advice for a brand new, budding Mustachianist?
« Reply #2 on: September 10, 2014, 09:34:09 AM »
I'm not sure what the rules are here on pointing to other sites, but Monevator is an excellent resource for UK investing, pensions, savings etc.

I would also recommend two books from the library which are excellent (and UK focused) Tim Hale’s “Smarter Investing” and Lars Kroijer’s “Investing Demystified”.

Between those three and MMM that should be a pretty solid base.

BritishMustachian

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Re: Any UK-tailored Mustachian advice for a brand new, budding Mustachianist?
« Reply #3 on: September 10, 2014, 10:41:25 AM »
To get started: open a stocks and shares isa, start depositing large chunks of cash every payday, and buy VUKE/HMCX/IWRD/IGLT.

This is a really simple couch potato portfolio, with UK, international stocks, and gilts.

Of you don't have a pension through work, you can open a SIPP. Have a read on Monevator, Simple Living in Suffolk. I don't know much about SIPPs as I'm no longer in the UK, but basically it's tax deferred - when you put money in, the income tax you'd have paid gets contributed by the govt. You should be able to do this via your work, I think it's mandatory for companies to have stuff available- not sure.

If you're not a higher rate tax payer, the ISA is awesome. Use it.

You will get more specific help on a non-US centric board.

Hi Daverobev.  Thanks for the help. It is much appreciated.

I'll start looking into all of those.  I'm lot going to lie, outside the ISA, the rest looks like hieroglyphics to me.  I can see I have a lot of leg work to put in and don't even quite know the fundamentals of investing yet (Oh but I will!). 

Not a higher tax payer at all.  My salary is a measly £18k a year plus 4 weekly bonus, so bring home is about £300 per week.  I live in a one bedroom flat with my gf who I pay split down the middle bills with.  Current 4-weekly bills we divide:

Rent - £429
Gas & Electricity - £65
Council tax - £98
Food - £200
Water - £39
Car Tax = £10

Total = £841 /2 = £420.50

I pay for these myself:

Fuel for work - £60
iPhone contract - £35
Phone & Internet - £20 (She pays car insurance alone while I pay for this).

Total = £115

Both totals = £535.50

£1,200 - £535.50

= £664.50 per 4-weekly to save/invest/etc

The expenses will remain around the same, even if I get into IT and eventually double my earnings.  Though at present, I'm trying to cut the fuel cost by biking to work (13 miles each way), but with IBS I'm sometimes in too much pain to exercise or do anything physical!

I'm not sure what the rules are here on pointing to other sites, but Monevator is an excellent resource for UK investing, pensions, savings etc.

I would also recommend two books from the library which are excellent (and UK focused) Tim Hale’s “Smarter Investing” and Lars Kroijer’s “Investing Demystified”.

Between those three and MMM that should be a pretty solid base.


Thanks, Frugalist!  Those book recommendations sound like exactly what I'm looking for!

Also, I have my free library card on the way after filling out the online form (library is literally 30 seconds walking distance from my flat).

EDIT:

I've now read the "Case Study" sticky at the top. I realise I should have titled and formatted this thread in a way more inkeeping with the rules, and in failing to do so, I've missed out a lot of helpeful information.

I would just like to add, I am completely debt free by the way.  Even though I was anti-Mustachian for many years, even I knew the folly of debt.  It didn't make sense to me to have something that you couldn't afford unless it's a home.  So even though my bank gave me a credit card years ago and always send me a new one when it expires, it's literally never ever used.
« Last Edit: September 10, 2014, 11:10:52 AM by BritishMustachian »

Phil_Moore

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Re: Any UK-tailored Mustachian advice for a brand new, budding Mustachianist?
« Reply #4 on: September 11, 2014, 04:34:40 AM »

Disclaimer - I’m in no way a financial advisor, not particularly mustachian and this is not advice, but this is what I did:

1. Build up a bit of an emergency fund – I go with ~6 months of expenses in a ‘high’ interest account (Santander 1-2-3?) but people have different opinions on how much, if anything, to carry.

2. Open a NISA at a low cost online broker – it sounds like your savings are going to be modest for now so I would start with one that charges a % fee rather than flat fee. Honestly it’s a piece of piss, takes about 5 minutes. I would look at - http://monevator.com/compare-uk-cheapest-online-brokers/

3. Invest up to £15k per year in this ISA. While you are researching investing/pensions and figuring out your risk tolerance and preferred asset allocation I would go with one of the Vanguard Lifestrategy funds, they are (relatively) cheap and well-enough diversified. You won’t have to worry about anything other than adding money to one fund.

4. There are a couple of things I would cut from budget (iphone tariff – I’m looking at you – for £400+ a year I would want a direct line to God), but as you say your real issue is your low income. £18k isn’t great, but my starting salary in proper work was £17.5k so it’s definitely doable. Get networking and finding the right courses. If you are hard working and enthusiastic you should be able to easily double your income.

5. Weight training is usually a very good activity for people with IBS in my experience.

6. ‘Sexy time’ while the £££s pile up.

IT isn’t my field, but I’m sure there are plenty of people out there with tips on that side of things.