Advice on my current situation and how to move forward

JoeBlack78

Hi everyone,

I’m new to the site and wanted to get some advice on my current situation and ideas for moving forward.

Some background info:

I’m 35 years old
I am mortgage free (house value is £235K)
I have 140K in savings (split between 1.5% ish saving accounts and I have one ISA - I only started with ISA’s last year).
I have a very small pension pot (I’ve paid between £50 and £65 per month for probably 10 years - no employer contributions).
I have a girlfriend of nearly 7 years who I live with. We hope to start a family soon.

My money has come from a combination of being a high rate taxpayer / being a good saver and receiving a payout for some company options.

At the end of last year I quit my job because I was totally unhappy with working long hours and I felt life was passing me by. Mid life crisis type stuff.

I have been unemployed since December 2013. I just wanted to take a break and figure out how I wanted my life to be (still am).

I tend to need about £2K a month to get by. House bills, some spending money etc.

I receive roughly £500 a month passive income from a online business, so I am going backwards roughly £1.5K a month. It's not causing my too much anxiety because I can eat that for a bit. But not forever.

I’ve always found it hard to have a long term view to money - hence not investing in a pension. My plan was to work hard, make great money, live frugally and build a big pot so I could retire early. I liked having cash to hand and because I earned and saved very well it was always building.

This has changed a bit since my decision to quit my job. I could walk into another very high paying job if I wanted to, but I’m not sure it’s what I want. I want to enjoy my life more and not take it for granted - so I have to start to get my head around the fact that I may not earn that type of money in the future. I just don’t know right now.

Obviously I still need to make some career decisions and this might impact how I play things.

But I would be interested in any advice on my current situation and anything I could do in the short and long term to make more use of my situation.

Thanks!

The_Earl_of_Streatham

Perhaps your field of employment really is different to others but my instinct in your position would be to get a job, almost any job. You've already got an eight month hole in your employment record which will come up at any interview you have for a job in the future. This may also effect your National Insurance contributions which could have an impact when you come to draw state pension (at 35, though, this may not happen until you're 108).

Most jobs are horrible. Having to work for a living is an assault on our innate nobility, so if you can, get one that pays well.

Best of luck.

xylophone

You have had eight months to think - how much longer do you need?

If you don't want to work for anybody else, expand your online business/start a new business?

http://www.hmrc.gov.uk/incometax/relief-pension.htm

https://www.gov.uk/new-state-pension/overview

JoeBlack78

Thanks for the reply, I appreciate it.

I have worked in online / tech type companies. Senior roles.

Honestly, that doesn't bother me too much.

It's not that unusual for senior type people to tale a sabbatical / break from things. I can put a narrative around it that sounds good. And in any case, even if I couldn't, I would no longer put money/ a job I don't enjoy over happiness.

Not saying I won't go and get a job soon, just that I won't be forced into it.

JoeBlack78

Xylophone - I hear you. Trust me, I didn't expect to do this and take so long. I have had a few other bits going on in my life which I am working on which made it longer than I envisaged.

Thrugelmir

JoeBlack78 wrote: »

It's not that unusual for senior type people to tale a sabbatical / break from things. I can put a narrative around it that sounds good. And in any case, even if I couldn't, I would no longer put money/ a job I don't enjoy over happiness.

Work a few rungs lower back down the ladder. It's extremely satisfying. There's no stress no pressure no long hours. You can help the younger members of the team develop. While earning some income .

TCA

JoeBlack78 wrote: »

Obviously I still need to make some career decisions and this might impact how I play things.

Deciding your next career move is probably key to deciding what to do with your finances. At least as far as knowing your future income, so you know how much of your £140k you want to invest/save.

You'd probably want to keep an emergency cash stash handy and potentially consider the remainder for longer term investment. Stock market investment probably shouldn't be considered for periods of less than 10 years. For that you're looking at stocks & shares ISAs, pension and regular "unwrapped" investments outwith the ISA tax-free envelope.

Which best to choose would depend on your tax situation at the time and whether you want to lock away your money in a pension, despite the new rules allowing access to the lot earlier.

bristol_pilot

OP can't be all THAT senior if house is worth only £235k and £140k savings with no pension to speak of and is possibly kidding himself that he's going to just walk into another job. So my suggestion is concentrate on getting a job and start contributing properly to a pension and putting the max in ISAs. 8 months is a long gap to have on a CV and I would have thought especially so in IT where technology moves so quickly. OP is not 22 any more.

JoeBlack78

bristol_pilot wrote: »

OP can't be all THAT senior if house is worth only £235k and £140k savings with no pension to speak of and is possibly kidding himself that he's going to just walk into another job. So my suggestion is concentrate on getting a job and start contributing properly to a pension and putting the max in ISAs. 8 months is a long gap to have on a CV and I would have thought especially so in IT where technology moves so quickly. OP is not 22 any more.

Obviously no guarantee I could, but bear in mind I progressed in my career quite quickly and still have some time to earn ahead of me.

But that's besides the point really as I'm still trying to figure what I want to do with my life. Perhaps I will want to do something completely different / low earning.

Appreciate your advice. Def gonna look into getting pension and ISA situation sorted.

JoeBlack78

TCA wrote: »

Deciding your next career move is probably key to deciding what to do with your finances. At least as far as knowing your future income, so you know how much of your £140k you want to invest/save.

You'd probably want to keep an emergency cash stash handy and potentially consider the remainder for longer term investment. Stock market investment probably shouldn't be considered for periods of less than 10 years. For that you're looking at stocks & shares ISAs, pension and regular "unwrapped" investments outwith the ISA tax-free envelope.

Which best to choose would depend on your tax situation at the time and whether you want to lock away your money in a pension, despite the new rules allowing access to the lot earlier.

Yes, I was thinking my career decisions would be pivotal to how I decide to play things. Need to resolve that ASAP.

Thanks for your advice, that all makes sense.

JoeBlack78

bristol_pilot wrote: »

OP can't be all THAT senior if house is worth only £235k and £140k savings with no pension to speak of and is possibly kidding himself that he's going to just walk into another job. So my suggestion is concentrate on getting a job and start contributing properly to a pension and putting the max in ISAs. 8 months is a long gap to have on a CV and I would have thought especially so in IT where technology moves so quickly. OP is not 22 any more.

By the way I was not trying to boast. Sorry if it came across like that.