Your Financial Setup

jimjames

Trying to do this as percentages.

Assets:

House (main residence) 55%
BTL 20%
Investments 22%
Cash Savings <1%
Cars 2%

Total 100%

Liabilities are 25% of assets and are approx 99% mortgage debt.

We've been quite fortunate as had fairly high joint income of approx £75k early on in careers which dropped in 2000s and even now have not matched the amount we were earning in 1999.

lisyloo

Sorry I was just using a simple exampe as to why many would opt to pay off debt ahead of investing. I don't think I've explained myself very well though.

I would agree with you, that for most people it makes sense to pay off debt rather than save. However 2 notable exceptions.

1) It's really important to start a pension or some other "retirement savings plan". Could be property, doesn't have to be in a pension wrapper but you need a plan for retirement.
2) There needs to be some rainy day money available for emergencies. I'd say 6 months living costs as a rule of thumb in this economic environment (my OH was out of work for 9 months) but you need to apply to your circumstances. Perhaps less when jobs are plentiful, more in a recession.

Cotta

Just realised that I didn't input my setup.

Single, aged 30 - no dependants.

Assets

House (Let out due to moving away for work) - £259,000.

Rental Income - £13k p/a.

Premium Bonds - £200

Salary - £30k.

Pension - £6k.

Current Account - £2k.

Liabilities

£110k - Mortgage.

£5k - Student Loan.

As you can see things are very tight at the moment.

big_questions

The_White_Horse wrote: »

This thread makes me feel like I have not saved enough. Despite having a decent salary - at the moment, with a non-working wife and two kids under 6 I just don't have anything left each month to save. Maybe when my wife returns to work we will be able to save more - that said, when she does, we need to move to a bigger house.

Hang in there White Horse! I'm in exactly the same situation. These are the dark years ;-) Barring redundancy/illness/other unexpected randomness, I don't think you're ever as stretched as you are with a young family. I have a decent salary, a very modest mortgage, and a definite 'need not want' attitude, but with two kids and one income, outgoings every month are eye-watering.

The way we think of it: at the moment, we just about balance the books. But the moment my wife returns to work, ALL of that money is 'savings'. Even a part-time income of, say, £15k, would mean we'd suddenly have a MUCH bigger savings pot than we ever had on two incomes.

black_taxi_2

http://www.econtalk.org/

this site is great for diff speakers,various subjects,life,finance

Its not like politicians who come out with what you want to hear,but well thought out argument.


click on diff category

racing_blue

The rooster has three heads. 115k, black taxi and Cotta - you will thank me for this insight.

Cotta

Personally think this has been one of the most worthwhile threads on MSE.

black_taxi_2

not many are handed serious wealth
It's years of hard work,long hours,risk
I didn't have the education,mindset or personality to go for it.

the mse,apple,iPad,twitter(fav website)deserve their wealth,made my life easier,enjoyable.

myself 20k net doesn't sound great,but with budgeting,no debt,paid off mortgage,I will hav 1k disposable income each month after expenses.
I will feel rich,and probably am rich on world scale.

I totaly understand those who don't see mortgage as debt,but as a future longterm asset.

dano17439

black_taxi wrote: »

I totaly understand those who don't see mortgage as debt,but as a future longterm asset.

I don't, try not paying for a couple of months and see what happens!

black_taxi_2

I don't either,but plenty do