Advice - time to grow up...
Discussion
Right, after years of dicking around, I am getting married. I need to look at my finances, and will be honest here. No problems, but I have no plan/clue about strategy.
Always been someone who spent and saved rather than invested, never had an IFA. Will get one now.
Mortgage - 300k, 0.5% so really not worth paying down unless interest rates rise. Property worth around 600k. All mine, Lady F co-habits and pays £650 monthly rent. She does not own a property. We do not want to move for a couple of years or more.
No other debt. No children yet. 60k in savings, cars worth probably 60k, fully owned.
Household monthly income after pension contributions, income tax, NI etc roughly 12k a month, PAYE. I can expect 75k gross bonus for me, 50k for Lady F. Both of us 50% taxpayers.
Outgoings of 6-8k per month between us, which includes expensive lifestyles involving travel etc. Outgoings will be better managed now that I need to grow up a bit. Extra cash goes into cash ISAs and my savings account. No other investments.
So will rein in spending, and get IFA, obviously.
But this is all new to me. I have realised that we have great income and resources, and I have no idea what to do with them. BTL seems good idea, but massive hassle (we are pretty time poor). What funds/investment vehicles should I read up on? Tax planning? What would you do?
Have realised that I know nothing about personal income strategies. I am late 30s, will likely have kids in the next few years (and have to thus significantly increase mortgage and other outgoings) and really need to start thinking long term...
Always been someone who spent and saved rather than invested, never had an IFA. Will get one now.
Mortgage - 300k, 0.5% so really not worth paying down unless interest rates rise. Property worth around 600k. All mine, Lady F co-habits and pays £650 monthly rent. She does not own a property. We do not want to move for a couple of years or more.
No other debt. No children yet. 60k in savings, cars worth probably 60k, fully owned.
Household monthly income after pension contributions, income tax, NI etc roughly 12k a month, PAYE. I can expect 75k gross bonus for me, 50k for Lady F. Both of us 50% taxpayers.
Outgoings of 6-8k per month between us, which includes expensive lifestyles involving travel etc. Outgoings will be better managed now that I need to grow up a bit. Extra cash goes into cash ISAs and my savings account. No other investments.
So will rein in spending, and get IFA, obviously.
But this is all new to me. I have realised that we have great income and resources, and I have no idea what to do with them. BTL seems good idea, but massive hassle (we are pretty time poor). What funds/investment vehicles should I read up on? Tax planning? What would you do?
Have realised that I know nothing about personal income strategies. I am late 30s, will likely have kids in the next few years (and have to thus significantly increase mortgage and other outgoings) and really need to start thinking long term...
Edited by Harry Flashman on Saturday 3rd January 19:25
Harry,
It's all about reverse engineering, and planning as far ahead as possible.
Where are you going to be at, say, 5 year increments along the way to finishing work, and when you do retire, when will it be, and what do you want (ie; how often do you want to set aside money for a new car, holidays etc)? From those basic tenets, everything else, such as the interlocking wrappers, the depth of the exit strategy, the overlapping tactics and the contingencies all flow. When it comes down to it, the underlying investments become almost an incidental issue.
If you'd like to drop me a line, I'd be glad to help you with an initial steer at least - no pressure or obligation, and regardless of what you decide later on. The only thing I would say at the moment is that you probably shouldn't be committing anything for a few months at least anyway. What you establish in 2015 should be the blueprint for 30 years. Be flexible, but the adage "measure twice, cut once" is useful to bear in mind.
It's all about reverse engineering, and planning as far ahead as possible.
Where are you going to be at, say, 5 year increments along the way to finishing work, and when you do retire, when will it be, and what do you want (ie; how often do you want to set aside money for a new car, holidays etc)? From those basic tenets, everything else, such as the interlocking wrappers, the depth of the exit strategy, the overlapping tactics and the contingencies all flow. When it comes down to it, the underlying investments become almost an incidental issue.
If you'd like to drop me a line, I'd be glad to help you with an initial steer at least - no pressure or obligation, and regardless of what you decide later on. The only thing I would say at the moment is that you probably shouldn't be committing anything for a few months at least anyway. What you establish in 2015 should be the blueprint for 30 years. Be flexible, but the adage "measure twice, cut once" is useful to bear in mind.
Thanks Ginge, I may well do. travelling in the US at the moment but when I return I plan on actually giving myself a kick up the backside. Added complication is that Lady F is American, so there may be double tax liabilities to think of if we own/buy/sell joint assetsor have joint income. We are trying to find someone to advise on this.
crazy, that was not the intention of my post. If any perspective is needed, if I become a parent, I will be an old one, and knuckling down to responsibility at a time when others are relaxing! Instead of planning and settling down in my 20s and 30s I partied like an animal, spent money like a drunken sailor and worked on the career - hence this post as I have to shift into a new gear, and have no idea how. Bet this stuff comes naturally to folk who grasped responsibility earlier than I have...!
crazy, that was not the intention of my post. If any perspective is needed, if I become a parent, I will be an old one, and knuckling down to responsibility at a time when others are relaxing! Instead of planning and settling down in my 20s and 30s I partied like an animal, spent money like a drunken sailor and worked on the career - hence this post as I have to shift into a new gear, and have no idea how. Bet this stuff comes naturally to folk who grasped responsibility earlier than I have...!
Edited by Harry Flashman on Saturday 3rd January 19:26
Harry,
In many ways, those who engage with saving and investing too early on find themselves stuck in a prescriptive and dogmatic mindset and they find it difficult to change. Late 30s is (imho) the ideal time to transition from being a learner, to being a serious earner, before going on to being a wealth burner. So, no kicks up the arse - no need!
Just read the US aspect. IRS has morphed from just snooping into Swiss accounts in an intrusive all pervading, nasty organisation that threatens UK fund managers and various other investments. FBAR will apply and you may be regarded by Uncle Sam as a NRA (Non Resident Alien.. congratulations!).
In many ways, those who engage with saving and investing too early on find themselves stuck in a prescriptive and dogmatic mindset and they find it difficult to change. Late 30s is (imho) the ideal time to transition from being a learner, to being a serious earner, before going on to being a wealth burner. So, no kicks up the arse - no need!
Just read the US aspect. IRS has morphed from just snooping into Swiss accounts in an intrusive all pervading, nasty organisation that threatens UK fund managers and various other investments. FBAR will apply and you may be regarded by Uncle Sam as a NRA (Non Resident Alien.. congratulations!).
Edited by Ginge R on Saturday 3rd January 19:33
economicpygmy said:
So youre considering BTL and investment with 300k of debt! Fair enough, invest and diversify but dont forget that you have this exposure regardless of the current interest rates. Maybe Im just risk adverse...
I hear you, but my income levels for the foreseeable future give me quite a bit of security against interest rate rises, hence I would like to take a risk whilst I can afford to re investments/other properties. But this is why I posted - to hear advice, experience and viewpoints: thank you.
3 suggestions:
1 Get US tax advice (a lore unto itself...but advice is vital)
2 Pay maximum pension contributions (if you aren't already) - tax free and usually a nice kicker from one's employer for salary sacrifice
3 Be very very careful with IFA choice. There are lots of good ones but many with a fine selection of snake oils (still)
I'm probably stating the obvious...and, as such, my apologies if too obvious!
1 Get US tax advice (a lore unto itself...but advice is vital)
2 Pay maximum pension contributions (if you aren't already) - tax free and usually a nice kicker from one's employer for salary sacrifice
3 Be very very careful with IFA choice. There are lots of good ones but many with a fine selection of snake oils (still)
I'm probably stating the obvious...and, as such, my apologies if too obvious!
Flash
I (like many others) could help. However, do any of your friends have an IFA? I always find that most clients are referrals so could be worth asking a few mates? You can also check here - https://www.unbiased.co.uk/
Keep us updated and make you don't get your pants pulled down for fee's.
I (like many others) could help. However, do any of your friends have an IFA? I always find that most clients are referrals so could be worth asking a few mates? You can also check here - https://www.unbiased.co.uk/
Keep us updated and make you don't get your pants pulled down for fee's.
Plenty of threads on here on the pros and cons of BTL and they can be let fully managed for the time poor.
Loads to consider when starting a family will you both be still working full time or relying on one salary? Nursery fees are crazily expensive especially in London I imagine. 300k mortgage may also seem crazy for most but your in London where I guess it's very normal.
All in all it sounds very comfortable to me and a sensible time to be considering the future.
Loads to consider when starting a family will you both be still working full time or relying on one salary? Nursery fees are crazily expensive especially in London I imagine. 300k mortgage may also seem crazy for most but your in London where I guess it's very normal.
All in all it sounds very comfortable to me and a sensible time to be considering the future.
Harry, not wanting to add much to the original discussion all that's been said is pretty good advice.
However, i'd just like to pass on my congratulations and at the same time raise a notional glass to the sad demise of Flashman. Your tails and antics over the years have kept me hugely amused. Your wife to be must be one of hell of a Lady to have finally reined you in.
Good luck to you both going forward.
However, i'd just like to pass on my congratulations and at the same time raise a notional glass to the sad demise of Flashman. Your tails and antics over the years have kept me hugely amused. Your wife to be must be one of hell of a Lady to have finally reined you in.
Good luck to you both going forward.
I'm gonna get flamed for this but...
Read this thread....
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
and then get whatever passes for the most iron clad prenup drawn up! With your assets (and sorry for saying but, legendary past) you are a sitting duck if you have kids and then she turns out to be the devil incarnate or other form of SWT.
Best wishes though and hope it works out - the paranoid stargazer.
Read this thread....
http://www.pistonheads.com/gassing/topic.asp?h=0&a...
and then get whatever passes for the most iron clad prenup drawn up! With your assets (and sorry for saying but, legendary past) you are a sitting duck if you have kids and then she turns out to be the devil incarnate or other form of SWT.
Best wishes though and hope it works out - the paranoid stargazer.
I recently had a similar experience, a bit of a Damascene conversion from a high-spending lifestyle to a saving one. Some good advice on here about planning, definitely work it backwards. You need to know when you want to retire, and what standard of living you want. From there, you can probably figure out how much you need to stash away to achieve that sort of income. US tax liability will be annoying, as simple as that. Definitely get a pro in to advise on efficient ways to handle that.
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