I'm Back - and better! Final Push to Go...

Exerbusi2 wrote: »

Hi Mel! Thanks for the compliment! It hasn't always been easy and I've certainly learnt a lot along the way. The forum (and site as a whole) certainly helps.


Now, here's where my approach is perhaps slightly different to others. I'm a believer that the most positive way to get out of debt is to grow your income, rather than cut, cut and cut some more. All work and no play makes Jack a dull boy and all that.

Cutting your expenses is important. In fact, scrap that - it's vital. But by growing your income you can still enjoy a few luxuries.

I started by taking on some extra work outside of my normal job. I used that money to do two things...

1. Pay down debt quicker.
2. Build some savings.

After a while my extra work became my full employment. I quit my job, started my business and haven't looked back.

There are people on the forum who would (perhaps rightly, depending on your thinking) use all of their available money to pay off debt, citing its expense as the reason. The logic being, if your debt is at, say 5% but your bank only pays you 0.1%, it's better value for money.

I get that, but I think there is something else at play.

Psychologically, it helps if we can see some kind of positive in life, and a growing saving pot is that. Additionally, if you use all of your available money to pay off debt, when 'life' happens and you have car costs etc, you've got no spare money and end up having to use debt to cover life costs.

Ergo - you remain in debt.

This is my thinking behind wanting to accrue some savings along the way. I obviously want to clear the debts, which is why I am here, but I have some debts set up on repayment plans already (they aren't accruing any interest) and feel that rather than overpay too much it would be better to overpay a smaller amount and save with the rest. I somehow feels more of a positive, rather then just the correction of a negative

It's in a normal account. I use it as a cash buffer for the business. Given the returns even from an ISA are terrible, I keep my cash at hand for business use and save the excess in the stock market where the dividends and share price growth means there are real returns.
So I typically buy big, boring companies that pay a regular dividend. I do have a few growth shares (small companies you buy cheaply and gain a return from the shares going up in value).

I'm not willing to gamble on companies I don't really understand, so to give you a roundup of the kind of companies I own shares in....

Money Supermarket (who own this very site!)
Vodafone
Centrica (owns British Gas)
NCC (Online security - had them years, bought them when the shares were pennies!)
RBS (bought just after the collapse, so they are worth A LOT more than I paid for them!)
National Grid
Lloyds Bank (again, bought after the collapse)
Tesco (again, after the accounting scandal)

I like big, stable companies and often buy when something goes wrong. If the business is fundamentally sound but is going through a bad patch, I buy them. Often the price is a temporary blip and given I tend to hold onto share for years, the prices always recovers in time.

I started through my bank. I bank with HSBC and use their 'Share Dealing' option. I can't remember if I had to register for the account or not (I started investing a few years ago) and I only buy shares when I see a company I like at a price I like.

I always re-invest the dividends too.

It's actually really fun (if you make good decisions that is!) Always do your research and only invest what you don't need.

Hope that helps!