Millionaire Challenge

YoungBusinessman

Well paid off some more debts, took debts down to £17,000/payments down from £806 to £506.

Minimum payments to end 2013 will have debts down to £13,000. Heading in the right direction at least.
For business, need to invest/keep expanding to keep the income increasing. Im going to raise £9,000(of my own capital, nothing borrowed) for this expansion. I aim to achieve this by the end of April 2013, starting with nothing from 21st December.

If i can get that, income could increase instantly by a few hundred per month. Then i can look into overpaying these debts and clear them by end 2013. I will most likely start up a thread on mortgage free wannabee forum once iv purchased house(completion date 14/12 - 2 weeks tomorrow, fingers crossed!!)

So big plans in place for next year, lets just take it one step at a time, buying a house in 2 weeks!!!

leictina

Hi all

My end of Novmeber update:

Net worth now @ -£9252.94 - this is £18.40 worse that at the end of October but i have taken some extra cash out to buy xmas pressies - so not too bad

lessonlearned

Well done there YB - great progress.

leictina - not to worry - at least you are going in the right direction. This is a very expensive time of year.

Well here's my December round-up.:rotfl:

Meeting with Solicitor on Thursday to sign contracts - so fingers crossed - all still going well. Shall feel happier when exchange takes place and then we are locked in.

Some of you may have heard the old saying Cash is King - it's one of my dad's mantras. Well today I picked up an amazing bargain, purely because I had cash to haggle with.

Bought a brand new bed - still in the wrappings - used to dress a showhouse. Double bed, orthopaedic memory foam mattress - rrp £1200 - mine for £150. I just so happen to have a spare headboard lying around, a rather nice oak little number beautifully carved and just needlng a little TLC. Picked it up for £15 a couple of months ago - perfick!!

Why did I get the bed so cheap. They needed to clear the showhouse quickly, warehousing costs money and they also wanted some cash to treat the men to a pre Christmas knees up. Win-win.:D

The secret to any good buying and selling transaction (although this bed is for my personal use, not resale) is always buy at the lowest price you can.

My tip for December - Always try and keep a wad of cash you can access quickly - you need to be able to take advantage of any fab deals that come your way.

Now if I can do as well with my first house project I will be well chuffed. Fingers crossed. That's why I'm going into rental and conserving my cash. As a cash buyer I can hopefully bag a bargain.;)

YoungBusinessman

Fantastic deal lessonlearned, i do not know what kind of people pay the original prices of £1200...for a bed!!! Same with brand new cars i guess. I always thought companies buy cars new as they dont pay tax on the cost of them, therefore are using money that would be tax, to justify buying new.....is this correct or am i miles out?!

Just posted 2 SOAs of mine over on a thread iv started on savings board so check it out please guys and let me know any way i can improve...besides getting income up higher(which is my only plan so far!)

lessonlearned

I don't know the answer to your query about cars. You need someone with a bit more accounts knowledge than me.

When we had our own business our accountant advised us that it was better to not have a car in the company's name, but to own it privately and then pay ourselves business mileage from the company's earnings. At the time - 2006 was the last year of trading - we could charge the company £0-44p a mile. Because my OH did a fair old mileage this worked out very well. It kept his tax bill down.

So we bought or rather I should say leased a 2 year old Lexus. Lovely. The mileage allowance more or less paid for it.

Similarly when I was working on site as a new build sales negotiator most employers would pay me a mileage allowance, usually pretty generous and of course mileage allowances when paid to an employee are tax exempt. Again this would more or less pay for my car.

Paying yourself a mileage allowance works out better because nowadays if you have a company car or if your company owns the car then you do get taxed on it. It is regarded as a perk. If you are a higher rate tax payer you will pay quite heavily.

The rules may be different for vans - say if you were a plumber for example or if they were fleet or pool cars for your staff. You would need to get advice on that.

MKeynesMoneySaver

http://www.hmrc.gov.uk/paye/exb/a-z/m/mileage-expenses.htm

and

http://www.hmrc.gov.uk/vat/managing/reclaiming/motoring.htm

and

http://www.hmrc.gov.uk/paye/exb/a-z/c/cars.htm

might answer your questions

droopsnoot

lessonlearned wrote: »

and of course mileage allowances when paid to an employee are tax exempt.

As long as they're within the HMRC maximum amounts, they are. I don't think you can just pay yourself a pound a mile (for example) as a mileage allowance and not pay tax on it. The HMRC links from MKMS above will go into details. The most annoying thing I found was that the figures had all been set years ago, and the ever-increasing cost of petrol meant that they are now barely adequate.

Nice reading here though. I haven't contributed as I don't really have any ideas for building wealth myself and am struggling to create goals that are not pie-in-the-sky.

lessonlearned

droopsnoot wrote: »

As long as they're within the HMRC maximum amounts, they are. I don't think you can just pay yourself a pound a mile (for example) as a mileage allowance and not pay tax on it. The HMRC links from MKMS above will go into details. The most annoying thing I found was that the figures had all been set years ago, and the ever-increasing cost of petrol meant that they are now barely adequate.

Nice reading here though. I haven't contributed as I don't really have any ideas for building wealth myself and am struggling to create goals that are not pie-in-the-sky.

You are right, the £0-44 I mentioned for 2006 was the maximum allowable for that year. Not all employers will pay that much. A couple of years prior to that I had one employer offer me a derisory £0-14p. I merely negotiated myself a higher rate of commission for each house sale to compensate.

As you say the limits are set by HMRC but not all employers will offer you the maximum allowed. If you are self employed and using this scheme you can of course set your own limits as long as you work within the parameters set down by HMRC.

Anything over HMRC allowances would be subject to normal tax rules so it would be pointless to try and pay yourself more. More to the point if you are a limited company - which we were - it could be regarded as fraud.

I am sorry if I didn't make this clear. I've never pretended to be a tax expert (far from it) I just shared my own experience as a way of outlining some of the options available and what worked best for me.

Everyone's circumstances are different and of course you all need to take proper advice for your own particular needs.

And yes you are spot on with your observation that mileage allowances have not kept up with the escalating costs of fuel.

Droopsnout - re the goal setting. I can understand you not wanting to set yourself unrealistic "pie in the sky" targets.

I feel that way too. The magic £1m is probably not really achievable at my age. However, by aiming high then I might manage £500K. That will do nicely.;)

The way I see it, if I set myself a high target it makes me work that bit harder and put in that little bit of extra effort. Targets work for me. I like challenges.

I don't know how old you are but if you are young enough then I believe £1m is do-able and not pie in the sky. There's nothing wrong with having a dream or a goal.

My mantra is "never give up". The time I give up dreaming, planning and scheming is the time when I will be ready to start pushing up daisies.

lessonlearned

You're all very quiet - hopefully making lots of money.....

Well this week I made a decision about the small occupational pension I had forgotten about.

They offered me two choices - a small monthly payment or a cash lump sum.

My first reaction was to take the monthly passive income. I intend to live a long time......

Then I decided to drill down. After reading the small print and then phoning the pension provider to check my findings I discovered it was not index linked, so the small monthly payment would remain just that - a small monthly payment with no incremental rises. Inflation would soon decimate that.

So I've decided to opt for the cash lump sum. I will re-invest this myself - my reasoning is I will at least make it do some work and earn some interest or dividends or something. I'm sure I can do better than what was offered.

Just edited to say - the old me would have thought "Ooh a windfall, free money'. I would have "invested" in a flash car or a couple of lavish holidays, new clothes etc. The new more savvy me thinks "ooh a windfall, free money, I will invest this wisely and make it grow".

So - a productive week and another £10K to the pot.:D

I've also changed broadband/tv/phone provider ready for when we move house. About £40 a month saved.

Onwards and upwards....

YoungBusinessman

Well iv been busy, planning our future!!

Exchanging contacts early this week and completing purchase first house this Friday.
Will have a £100k mortgage, im already playing about with "what if" outcomes of us overpaying. The plan is frugal living 2013 and pay off a lump sum next xmas, hopefully at least £5,000 between the 2 of us. Doesnt sound like alot but we have other plans........

Like me, starting up my own LTD company in January and running it along side my full time work. Once i have adequate capital through the company-not drawing any salary/divideds for first 10 months min, all expenses required are advertising- i will then take the plunge and take it on full time. This is just the stepping stones of a big master plan, i wouldnt want to bore you all with it.

Our mortgage is not 100% until we get these contacts signed so wont be happy until Friday and i have keys in hand!! Its a 20 year mortgage, we are aiming to overpay until LTV is at 60%, then saving up a big deposit for the next place, renting this one out.

2013 could be a very very good year for us and a taster of whats to come!!