Sell shares to pay off credit card? Advice please

pqrdef

theJenster wrote: »

I would be aiming to replace the £3k again when I could, but it's not as simple as ensuring I buy shares at less than I sold them for is it? Or is it?

Buy them as cheap as you can get them, bearing in mind that you're losing dividends while you wait.

So far you've made a profit, if you take it. You don't have to keep the shares to keep the profit. On the contrary, it's rather likely that at some point your shares will slide back to where they were and you'll be back to square one, apart from the dividends. Or maybe even including the dividends. A tracker, unlike a managed fund, has no possible mechanism to lock in gains. Every fall wipes out previous gains, so it's only ever as good as its most recent good run.

The Footsie is above 6000 and many think it's propped up by extreme monetary policies rather than business prospects. There has to be a fair chance it'll be cheaper later. Even if you have to buy back dearer, it's unlikely to cost as much as the interest.

theJenster_2

Thanks to everyone for helping me figure things out, esp pqrdef and N1AK. I've decided to pay off the card balance.

N1AK

Loughton_Monkey wrote: »

I worked for 34 years - and retired early - having (on average) well exceeded 25% of gross income. I have very detailed accounts for every year of my working life (in financial services) and have sufficiently accurate records on pension contributions/values of both myself and [mainly - lucky for me] my employers.

I would underline it by saying that it is generally taken as 'fact' that to provide a person with a 2/3rd final salary pension at age 65 will definitely have cost between 20% and 25% of gross earnings (opinions differ as to exact amount). Shave just 1% per annum off this type of figure and compound that for 40 years and see the resulting lower figure of pension. Frightening!

Shortened your post to save reading space, not because I disagree with any of it. I'm sure the figures you have given are accurate. I think the risk is that if you suggest people save 25% of gross income for life they'll either find it, or believe it, to be impossible. Additionally, as you yourself have shown, it is possible to save this money outside of a formal pension fund.

To give an example, based on my own current situation. Our combined household income is £4,700 a month. We contribute ~12.5% of gross income to pension funds (including the employers contributions).

Each month we spend ~£1,000 (21% gross income) on costs that will end in time:
£250 Student Loans
£525 Rent (now have deposit and are looking to buy)
£300 Petrol (due to work commutes)

We additionally save ~£1,800 per month (~40%) of gross income.

As you can probably guess that doesn't leave all that much else

However what it does show is that of our gross income ~65-70% isn't required in retirement. Producing ~35% of our gross income via a pension will also decrease the taxation and NI, further decreasing the size of income required.

Based on this I'm comfortable with our pension arrangement. That said, if my employer matched a higher contribution I would likely take advantage of it. If they, as intended, bring in a salary sacrifice mechanism that is worthwhile, I will take advantage of that as well.

N1AK

theJenster wrote: »

Thanks to everyone for helping me figure things out, esp pqrdef and N1AK. I've decided to pay off the card balance.

Glad it helped you make your decision. I hope it all works out for you