Millionaire Challenge

lessonlearned

Hi Kay...well if it’s interest free maybe there is no hurry to pay off all the debt. You could go half and half, or maybe just keep £1k back in savings and then clear a chunk of debt.

Re investing......I currently have around £55k in “cash” .....£35k in stocks and share ISAs, currently making between 10 to 12% growth and then £20k in Santander earning 1.5%.

I am wondering if that £20k could be put to better use, maybe I’m being too cautious. Realistically just how big an emergency fund does one need......I could, if push came to shove have around £40k at my disposal on my credit cards so I’m beginning to think I don’t need such a large sum sitting earning a measly 1.5 %. Perhaps £5k earning a better rate of interest in a different current account would be enough for an emergency fund.

.But as I might be selling up next year I am tempted to leave it for now. I am toying with the idea that if this house doesn’t sell then I could let it out.........withdraw my equity to buy my new place and take some of that £55k as a deposit on a BTL mortgage.

But can I bothered with the hassle of becoming a landlord, especially as the ISA has such a good return at the moment, with zero effort from me. Anyway I don’t need to make any decisions yet.

I’ve got a heavy month next month. Car mot, dental treatment, I need new glasses and sunglasses, holiday vaccines, a new tap for the kitchen, new guttering, Christmas.....:rotfl: hey ho it happens like that, sometimes everything just comes at once.

Hope you are all well and making lots of money.

PoorGuyNextDoor

Hey guys. Iv fallen way behind with MSE, catching up today. This thread is incredibly motivating. Im here for good now, theres no getting rid of me!

Kayalana99

Thanks LL. I may do something similar and stick a chunk of it in a Santander 1.5% account, but keep a little back for investing. I don't have it in me to invest too much because that 'chunk' is our next house deposit - don't risk what you can't afford to lose as they say.

I'm toying with the idea of just keeping the lump sum and just making a 'game' out of paying back what we owe, I feel it might be easier to pay back monthly then to save up monthly so to speak. I guess if things don't go to plan that way at least I can still use the lump sum. I think I might work out some figures later and see what I can do.

Does it sound silly if I say it gives me something to do? lol. It's not that I don't have enough to do, but I do love playing around with finances....and it might push me to do a few extra hours at work etc to clear it off faster. I'm not sure how tax credits are going to be though, they may insist we pay it off in full and I don't have anything to argue about there. Worst case the money is actually there to pay it off and it's interest only in the mean time.... hmm lol.

To be honest LL I'm not sure what to suggest re 20k, I would be really happy with a 3k E/F personally and if I had 17k spare on top, well I woudl be looking at a B2L. It's not ideal, but you can pay the estate agents to deal with the tennant side of things too then you would just need to shell out for the costs - but that being said the EA's seem to charge a fortune although there is always smaller companies.

+ Way I look at it, we were living in our house for 4 years and we made £16,000 (you have to appreciate solictors costs and house improvements, lets say 10k for a more realistic view) so with a 10k investment (deposit) we have made 25% return a year just by owning the house. Another way to look at it, if we had rented it rather then lived in it, that £250 a month would have gained us around £550 in rent. Now that extra £300 a month would most likely have got swallowed with some costs, but lets say £100 a month is profit then that would have been another 4.5k gain on top.

It's crazy when you put it that way. B2L may be a headache but as my family say, there is nothing as safe as houses.

lessonlearned

Thanks Kay......nice to get other opinions.

I think I’ll get next months expenses out of the way, go on holiday and then I can review everything when I get back.

The more I think about it the more I’m tempted to hang onto this house for a while at least. Like you say I can always get an agent to manage things for me.

It is something of a buyers market here, houses are sticking so I could probably pick up something fairly easily whereas I might have to discount this one quite heavily to get a nice easy sale. So probably better to buy the next one and hold onto this one for a while. Anyway I’ll make a decision next year.

I intend to “get back to work” next year -one way or another and knuckle down again. My “senior gap year” has been fun and tbh I did need the rest to get back to full health. I can see that, after the last decade or so of caring for my oh and then his and my Parents deaths, I was simply burnt out.

The rest and the break have done me the power of good and I’m ready and raring to go. Full retirement isn’t an option for me.....I am still ambitious and driven. :rotfl:

I agree with your idea of paying back your debt out of income rather than savings. I think it’s easier to motivate yourself that way. I hate dipping into savings, like you say it can be hard to replace them.

Thanks for your input.

lessonlearned

Poor Guy.....good to see you back.

Don’t worry we all need a break every so often. Just climb back on the wagon and get cracking.

LuxuryWoman

Hi fellow millionaires in waiting,
LL and Kayalana, you've made me think now about my cash. I have just over 85k earning 1.25%, 10k in S&S ISA which is a new account (June) so I have no idea how that will pan out long term, and just under 8k in premium bonds (part fun/part safety) Maybe I should drip bits into higher interest accounts but I'm scared I'll dip into it, it's a psychological thing I think. Large lump sums seems more untouchable, which doesn't really make sense but it works for me.

Having had a BTL in the past I'm not keen to go down that route again, this is the only money I have and I can't risk it. I'm nervous about house prices, Brexit and the wider economy.

Still working hard on the business, Rome wasn't built in a day but we are doing OK so far, running at a slight loss but that's normal for a new start and I'm hopeful that the run up to Christmas should give us a boost.

It's such a relief to know that my ex can't get his hands on the money and head down the pub, that horrible tense feeling when he'd suggest extravagant holidays every time we got a spare dime and I wanted to pay the council tax up to date, all those £50 drinking sessions on credit.

Onwards though, onwards, I have people to schmooze on social media and a blog to write to try to engage customers. How different things are this year and I love it!

Muhren

Broken_Biscuits wrote: »

I set myself a target of amassing 20k in 2017, taking my net worth to 162k before the year is up, and am there at £162.9k nw as of today. Two more paydays to go so room for improvement too. Pleased with the early result although I did see muhren ( who is a similar age and starting point to me this year) check in at £170k a couple of weeks ago, so I need to push myself a little harder in the the spirit of friendly competition it seems.

Haha, a nice little bit of friendly competition to help push each other along. From memory you have a lot more of your money in investments, whereas a lot of mine is tied up in my house so you may well be ahead of me.

Broken_Biscuits

Muhren wrote: »

Haha, a nice little bit of friendly competition to help push each other along. From memory you have a lot more of your money in investments, whereas a lot of mine is tied up in my house so you may well be ahead of me.

About 90k invested. So yeah that could bring faster returns, but there’s got to be a crash on the horizon... there always is. Be interesting to see what happens to my nerves when a 30 or 40% crash happens. I think I would be ok and just top up. But not really experienced a major crash yet.
Looking at the amount of cash a lot are holding here I could be the biggest risk taker of the group? I don’t earn loads from my 9-5 and so although my savings rate is high I wouldn’t get very far if I combined low return investments with low income. I mean I have some p2p earning 12% that is pretty safe in my opinion, so it would be hard to accept a below inflation return from holding lots of cash.

lessonlearned

BB It’s a tricky one......I too feel that the next crash can’t be far away. That’s why I’m loathe to sink too much into property at the moment and why I don’t want to lock down my investments for a long term.

I can get out of my stocks and shares ISAs relatively quickly if needs be. And I’m happy enough with my current rate of return, currently around 10 %. Not spectacular growth but fairly low risk investments.

I actually do feel that my £20k At 1.5% is seriously under utilised and that I need to make it work harder. I do think I’m holding too much cash in that account.

Having said that house price rises in the East Midlands are enjoying a bit of a boom at the moment. But I think in reality it’s just that they are now playing catch up, they were stagnant for years.

The job market in the EM is pretty buoyant too, it’s as if it is finally waking up from a long slumber.

Kayalana99

Was just catching up but just wanted to add I feel it too. That's the big reason I'm so put off buying esp since our next house will (depending what we find) be in the region of 170-210k ..and given we'd be buying in Sheffield I worry what happens if we end up needing to move again and the market crashs so the house is worth less then the mortagage....but house prices do tend to go upwards eventually.

I still have this property in the back of my head from before, it's still for sale but it would be a real money sink and I'm not sure if it would have been a good house to start on...I can really see high returns on it though...but a high risk...