saving £100,000 ten years to utopia !!

streethack

hey Chirpchirp

Yeah I have had these thoughts the deals around when this ISA matures are never going to be great I was lucky to get on at 3.1% because at the moment they are alot worse. The lion shares of my ISAs mature April time which is when the best deals are around. I was thinking I may lose interest from October to April but over the course of 8 years of getting a better deal I would be better off in the long run. Somthing to think about.

All this is dependant on me getting a rate of at least 3% annually so far so good. Havnt factor into stocks and shares ISA but will be using my company stocks. Which im hoping will perfom really crap and be very cheap and shoot through the roof after 8 years. So far not good on that front.

streethack

A small post before the new year. As im on track to achieve my goals for 2012

Update

ISA: £15,787
General Savings: £1505
F/D savings: £3,300
Company Shares: £5,870

Happy Christmas to all my fellow money savers and I hope we can all achieve are mortgage free dreams.

streethack

Well Happy new year to all you inspirational people on here. I finshed out 2012 reaching target with a little bit of credit card debt over the Christmas peroid which I dont like, but will be clearing this asap. Plus its only £300 but still not good money savings.

End of year update.
ISA: £15,787
General Savings: £1505
F/D savings: £3,600
Company Shares: £6,378

My 8% first Direct regular saver will be maturing at the end of January so will add a bit more to this years ISA fund. Then its on to April for a good ISA another 4% would be good, what do you think? Nice to start seeing compound interest making its play.

Anyway will update throughout the year and ill be keeping an eagle eye on some great mortgage free wannabe diaries on here. Heres to 2013 bringing good fortune for all.

Bufger

Hi Streethack,
Now you have the best part of £20k to hand in case of emergencies (or to pay against the mortgage) would you now rather overpay your mortgage?

20K could surely last you a few months in the event of job loss. It could last a good scrimping family a whole year. Meanwhile your 150k mortgage is still earning the bank a good deal of interest over the lifetime of the mortgage. Starting to overpay that now will save you £60-£80k in the long run by my very quick calculations (if you wish to pay it by 40)

You're in a great position to do it comfortably now. I cant see why you wouldnt want to save yourself alot of money in the long run.

streethack

What calculations are you using?

These are mine
ISA
on hand £21,000 saving £5,100 per annum at 3% (this is my limit) compound interest by year eight with annual savings = £73,000 short fall of £27,000

Company shares
On hand £6,378 predicted with input from myself and company shares at current rates after year eight minus dividends £29,466

Total predicted* by year eight
£102,466

Mortgage at year eight £113,000, once my fixed rate mortgage ends in three years time I will have to adjust/pay more to bring my mortgage to £100,000 by year eight but im hoping pay rises will allow me to pay more higher mortgage in three years times.

Which will end up with me being mortgage free by 41. I understand this is all a bit wolly and hopeful but thats the aim. I am open to your suggestion though.

streethack

I wonder if you maths wizzs can take a look at my calculations here? It is really possible to save £60,000 - £80,000 over the course of eight years by doing this another way. Can someone point out the maths to me?

streethack

My first direct regular saver matured today so another £125 added to the pot also I have just been got off the phone after opening another 8% regular saver for 2013 and funded it with £300.

ISA: 15,787
General savings: £5,236
F/D savings: £300
Company shares: £7,041

Onward to April and fingers crossed for some decent ISA deals im looking forward to some compound interest from my Sanatander ISA. Not been easy but this thread has really kept me accountable, might even reach page 3 after two years of keeping it going

streethack

Just transfered £3725 from my matured F/D regular saver into my Santander E saver which is at 2.75% but pays interest monthly. Will give me two months worth of interest before transfering it into an ISA come April. Not much but better than nothing.

streethack

Feel like Im drowning in a little bit of debt here, I've got £470 on my credit card and just got hit with a bill for my car for £278. Ouch.

SuperSecretSquirrel

streethack wrote: »

I wonder if you maths wizzs can take a look at my calculations here? It is really possible to save £60,000 - £80,000 over the course of eight years by doing this another way. Can someone point out the maths to me?

Not quite a math wizz but will give it a shot...

http://www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

158k over 25 years at 3.89%, £824 per month, total paid over life of mortgage £247,325 (assuming rate never changes).

Add £425 per month overpayment (£5100/12), shaves off 11.5 years, total paid over life of mortgage £203,356 (assuming rate never changes).

At the end of year 13, having made no overpayments your mortgage balance would be £94,739. Having overpaid £425 a month it'd be £8,351.

You are saving your OP money in an ISA at 3%. If I use http://www.moneysavingexpert.com/savings/savings-accounts-best-interest#calc and set the following otions: start £0, save £425 a month, 3% (again assuming rate never changes), no tax, over 13 years, you'd end up with a savings balance of £80,939.

Knock the savings balance off the no overpayment balance at year 13 (withdraw savings and pay down a huge lump sum on the mortgage) and you get a remaining balance of 13,800.

Overall you would be £5,449 better off overpaying monthly rather than saving and paying down a large lump sum at year 13. But only you can decide if your happy paying this premium for liquidity. You might have opinions on interest rates in the future that might have a bearing on your decision. Not to mention ERC limits etc?

Whichever option you go for you can be safe in the knowledge that you are saving a huge amount over the life of the mortgage. I'm not being totally efficient myself, overpaying some and saving some (at 2% less than interest charged on mortgage), but it's a balance that suits us and I'm happy to take a slight hit to keep a good easy access savings balance

Thanks for your diary by the way, I've enjoyed reading it (your posts are straight to the point, not rambling like mine!). The "drowning in debt" comment especially tickled me, close to 30k savings, but carrying a small credit card balance feels like a sin... This money saving business can have a funny effect on the mind