Millionaire Challenge

Buffythedebtslayer

Just wanted to update on Zopa,

I have been paying £20 a month to zopa for almost two years. I have a ten pound initial payment to open the account so as of this month I had 470 in there. In that time I have "made" 34.99 and paid 3.93 in fees.

In a fit yesterday I sent a further 530 to bring the investment to a 1000. I understand peer to peer lending has a risk and I could lose some if not all of the money. But I am getting old and need to utilise what I can to get a deposit!!

xx
https://www.zopa.com/lending/what-are-the-risks

lessonlearned

Good afternoon, fellow millionaires to be

Good to see you back Biscuits, was wondering how you are. I have joined you on the £12k in 2016. The race is on......:rotfl:

Caz - good luck, you are on the final furlong now. The croft will soon be yours.

Kay - sounds like a good money sort out there. Good idea to take out the loan and keep your cash back. Cash flow is really important and it's nice to have a bit of a cushion for lean times or to snap up a good deal when one crosses your path.

Buffy - you are right - sometimes we do need to up the ante and take a few risks if we want to get better results for our efforts. I have been very cautious until now whilst I've been rebuilding my fortunes. I'm now in quite a good place and am prepared to take a few small risks.

. I have a guaranteed passive income which is plenty for my needs and a lump sum to buy a small house outright next year.

Right ideas on a postcard, what do you guys think.......

Should I buy outright or should I take out a small mortgage. I have been offered a 10 year residential mortgage. I can also take out a btl mortgage for 20 years.

Even with a small residential mortgage I should be able to retain around 80 per cent equity on the property that would be my primary residence. The btl equity would be around 25 percent.

I'm not that fussed about the btl at the moment, it can wait for a while. I'm concentrating on a primary residence first.

The payments are easily affordable and even stress tested to 5 per cent I would still be ok with my current level of passive income. Of course. I do intend to start earning again but I don't want to take Additional earnings into the equation. I just want to base my calculations on my guaranteed income.

I quite like I the idea of retaining a good chunk of capital to reinvest and play with and to maintain a decent cushion.

All ideas and comments welcome.

Had a nice little £75 win on the premium bonds this week.:D

tinktay84

Hi All,


Just sorting my spreadsheets and making sure im covered until end of Jan as I now have no money coming in until Mid Jan at earliest
All bills paid for this month and everything except DDs been paid for Jan (money sat in bank ready for DDs) Ive got about £200 buffer money but that is for fuel etc.
Fella starts new job on 4th Jan so we are trying not to spend now as we aren't sure how his wages will fall - again, he has money sat waiting to cover DDs just in case.


Read an article about BTL the other day saying taxes etc will be changing in 2017 which yet again reinforces my view that they are trying to keep people in the bracket they are in i.e. stop people achieving and make it easier for big corporations to succeed. Not in a pessimistic way, just that as a small business I keep getting hit with new rules and regs, new things I need to pay if I want employees etc and basically every time I start to earn more money or am at a stage to grow, a new 'fee' comes in that holds me back.
Good job im made of tough stuff!haha
Unfortunately I am now in a position that I am going to be spending money on legal costs again but will have to leave details on that for another day. Nothing to worry about though.


Broken biscuits, that's amazing news, keep up the fab work


LL, as you've said yourself, the most successful people seem to borrow as much as possible rather than use their own money but then as you say you are back to paying out each month.


It depends if the small mortgage will help your credit rating or hinder it. My credit rating is at 991 out of 999 but it seems my lack of credit is now hindering me as no one wants to lend to me despite having successfully paid off several loans, credit cards etc

Broken_Biscuits

Buffythedebtslayer wrote: »

Just wanted to update on Zopa,

I have been paying £20 a month to zopa for almost two years. I have a ten pound initial payment to open the account so as of this month I had 470 in there. In that time I have "made" 34.99 and paid 3.93 in fees.

In a fit yesterday I sent a further 530 to bring the investment to a 1000. I understand peer to peer lending has a risk and I could lose some if not all of the money. But I am getting old and need to utilise what I can to get a deposit!!

xx
https://www.zopa.com/lending/what-are-the-risks

I use p2p. Zopa is one of the safest there is.
They only lend to prime lenders, if I ever needed a loan rather than to invest I would Definitely consider them. I would say that they are about as safe as ratesetter but because ratesetter do slightly higher rates I invest with RS over Z. But you are right, they are low risk, not no risk.

My average return at ratesetter is 6.5% in the 5 year market, although rates are about 0.2% or worse lower now. I've got 75% of my money in ratesetter. Around 10% is in abundance generation , a site that specialises in solar, wind... Renewable energy basically. That's getting between 7-9% although one project is giving 12%. Then the remainder if my p2p money is in saving stream. That pays a flat 1% month.

Average p2p return about 7.75% overall.

Beats my ISA returns in 2015 that has actually shrunk in size by 1.1%!

Edit: 75% of my p2p money in ratesetter. Not 75% of all my money. About 5-6% of my networth in p2p. It's still a newish industry...

cazmanian_minx

tinktay84 wrote: »

Hi All,


Read an article about BTL the other day saying taxes etc will be changing in 2017 which yet again reinforces my view that they are trying to keep people in the bracket they are in i.e. stop people achieving and make it easier for big corporations to succeed. Not in a pessimistic way, just that as a small business I keep getting hit with new rules and regs, new things I need to pay if I want employees etc and basically every time I start to earn more money or am at a stage to grow, a new 'fee' comes in that holds me back.
Good job im made of tough stuff!haha
Unfortunately I am now in a position that I am going to be spending money on legal costs again but will have to leave details on that for another day. Nothing to worry about though.

The changes are being phased in from next tax year, but it's transitional over four years. My accountants have put together quite a good short video explaining how the changes affect you, worth watching if you're paying higher rate tax or your income plus your gross rental income would put you into higher rate tax.

https://www.youtube.com/watch?v=N7aSABdpG0M

Kayalana99

This Zoopla is interesting but it feels such a long time to have money locked away for such low return (I appreciate % wise it might make sense and it looks like a good investment but when I hear I'm making £72 a year to have £1,000 locked away it doesn't sound a lot )

I'm considering sticking £10 a month but I'll think about it, I want to get some savings behind me technically I need 4k now for my photography business but I'm hoping if I get this 5k I'll keep 2k as savings somewhere that I have access to it but hopefully earning a bit of interest as I want it in case husband loses his job or the boiler breaks down (Which is going to happen at some point it's an old one)

Then the plan will be to save another 1k and keep that as extra emergency funds like car breaking down etc ...the things that may cost £200-300 sort of jobs and anything else will be play money (but the extra 1k will be saved not out the 5k)

So will leave me 3k to do what I want with so to speak...I'll have to sit down and work out what's most important but there are two lens I need and some lighting equipment and I'll be all set...just need to focus on improving my posing and working with lighting but it's a work in progress and I need to get my hands on the lighting equipment for me to practice using it..!

(That said I haven't had a 100% yes on this money but I reckon it's 99% chance it will be now, I think they know that I don't need it right now so are not rushing to sort it out.)

Really enjoying my break, I do feel a bit down (which last year I went full on depressive lol) but I think my body is just recovering and suffering with being over tired, every so often I get shooting pains down my hand I wonder if I can do this next year physically quite frankly as I may end up doing long term damage if I carry on but I'm looking into other ways of doing it to make it easier on my hand so we'll see.

I honestly wonder where this year could take us as I think it's going to make us financially, in the last 4 and half years since I have met my husband we have had 2 kids got a house got married, he's got a proper job..I've started two businesses..

I think we are just finally settled but working our way up also, feel like I am just waiting for something to go wrong sometimes though!


I'm pulled both ways with your question LL, I would say better to lend it and invest elsewhere but your age is it worth it for how long they will give you a mortgage? I don't know. My view is if you had 100k you could buy a house outright, or you could buy 4 B2L's at 25% deposit...so I would always jump to lend but I think the decision should lie with what else you would use the spare cash for...if it's just going to be sitting there why waste your pennies paying interest ? Or if you are going to be getting a nice return somewhere else then do what you need to do.

Appreciate my last message didn't make much sense but I was still zoned out and tired!!

Buffythedebtslayer

I think I am hoping to forget about it - the money in Zopa and notice in ten years that I have a small pot to do with as I wish?

I am hoping that is what happens anyhow!

Plus I relend everything so hopefully it will end up more money too. slow and long investment.....

lessonlearned

Thanks for the input Kaya - and yes you did make perfect sense.

Returns on "safe" investments are pitiful aren't they - hardly keeping up with inflation - so yes a btl does make sense. I'm just not sure I can be bothered with the hassle .......

Yes I know that makes me sound lazy but as I shall be 65 next birthday I want less stress in my life not more......:rotfl:

I can get a 10 year mortgage, as you say not all that long in investment terms to put capital to work. Not long enough for compound interest to really work its magic.

I guess a lot of it depends on what interest rates are likely to do in the next couple of years.

Crystal ball anyone??? :rotfl:

Maybe a trip to the casino.....put it all on red .......only joking.

My friend won £500 on bingo this week.:D

Buffythedebtslayer

( whispers, what is compound interest?)

I vaguely consider buy to lets every so often. long conversations with all my closest friends this Christmas have really made me think about what the hell I am going to do next.

XX

lessonlearned

Buffythedebtslayer wrote: »

( whispers, what is compound interest?)

XX

:rotfl::rotfl:

It's magic........

I wish I had learned This little wheeze years ago. I should have paid more attention in maths class.;)

Visit https://www.thecalculatorsite.com for a detailed and (relatively) simple explanation.

Basically it means in year one your capital accrues interest. If you allow it to be added to your capital then in year 2 you receive interest on your capital plus the Interest you have added, and so on.

Over time this really builds up. After a long time, I think it's 41 years the growth becomes exponential, within a couple of years after that it practically goes off the charts.

In my defence I always struggled with maths. It didn't help that my teachers thought I was thick and wrote me off when in fact I have dyscalculus.

It's like dyslexia only with numbers instead of letters.

What I didn't appreciate (and neither did anyone else at the time) was that although I struggled to recognise numbers I do understand how they work and I can grasp quite complex concepts.

I astonished myself when I realised I could understand tax guides :rotfl: I saved my husband a small fortune in tax once I took over as Finance Director of his company.

Another very simple equation which you might find useful is called The Rule of 72. It is the length of time it takes to double your investment.

72/rate of interest equals time

So if you want to double your money in 10 years the rate of interest required would be 7.2

72/7.2 equals 10 years

At 6 per cent it takes 12 years

72/6 equals 12

At 2 per cent it would take 36 years

72/2 equals 36

And so on.

if I had learned these simple basic rules when I was half my current age I would be well placed now.

I should have taken half the profits from my first successful property development, invested them and then left them for compound interest to work its magic.

Instead I bought a car for cash rather than taking out a loan. Silly me........

Hindsight is a wonderful thing.