inheritance question

Fatbritabroad

PasturesNew wrote: »

Sorry for your loss, but I'm going to be blunt here .... your granddad died without having the joy of spending that money - and you are "well loaded". Have you considered using his money to do something fabulous like buying a beach hut at the coast and taking up kayaking... then kick back and relax at weekends either kayaking in the water, or, on stormy days, sitting there with mugs of hot soup in the beach hut watching the scenery unfold?

I don't mind blunt. Yes I had considered that of course and do take your point. i just feel I can use my day to day income for 'frivolous' spending. My main thing is travel which i love and do alot of now.. I don't feel well loaded though I suppose I am for my age ! and I have One eye on trying to retire early. Appreciate you're a long time dead (which is why I do travel now) but the thought of being financially independent in my 50s when I will be able to travel etc while still young and healthy enough to enjoy it is a goal for me and I'd rather honour my grandad who was always very sensible and also took early retirement by having a long term plan for the cash than spending it. Don't worry some will be used for fun stuff

Thrugelmir

Fatbritabroad wrote: »

Ive also fixed my mortgage for ten years at 2.59% last year so don't want to overpay on this

Higher rate of interest than can be earnt on risk free savings. If you were to overpay.

Fatbritabroad

Thrugelmir wrote: »

Higher rate of interest than can be earnt on risk free savings. If you were to overpay.

True but I have Enough in house equity now imo which is tied up and can't be used. Id rather build my non pension savings a bit as ive been prioritising pension payments for tsx and because when i have children id likely reduce my pension payments. I want as much as possible to have as long as possible to compound

Alexland

If you are late 30s and likely to have kids the LISA might enable you to gift them money in their early 20s (when you are 60) to help with house deposit, etc. That's our plan anyway for our son and if we have any more.

Thrugelmir

Fatbritabroad wrote: »

True but I have Enough in house equity now imo which is tied up and can't be used.

Debt is debt though. There's no guarantee when it comes to short term investment returns.

Fatbritabroad

True but its less than 3 times joint salary between my girlfriend and i and less than 4 times my salary and has ten years until the fixed rate ends so I'm hopeful it will make money in the long run. I'll be moving more into cash the closer i get to the time hence I'm keen to get as much invested as early as possible. 5 years out I'll review and if interest rates are rising I'll start pumping money into the mortgage to clear as much as possible before it comes up but with ten years fixed cost it's a calculated risk

Alexland

From what you have described your calculated risk will probably work out fine.

Our mortgage has circa 25 years left to run but is less than 20% of the property value (we used to overpay, have multiple properties, etc) and will soon be overtaken by the ISA valuations so I now hope to keep it for circa 20 years (until early retirement) as low cost leverage. As a percentage of our total assets including retirement savings the mortgage is within the range that an investment trust manager would normally borrow.

Alex.

Fatbritabroad

Yes i got it down to 60% ltv if i do decide to move ill try and use cash rather than a bigger mortgage. I used to want bigger and better but have realised that's a never ending cycle and i really don't want the stress that comes with it

jamesd

It's worth learning about venture capital trusts. Smaller company investing via the VCT, a listed company like investment trusts. As well as the underlying investment performance there's 30% from HMRC in the tax year of purchasing new shares, capped at your income tax liability in that year, has to be repaid if you sell within five years. Their dividends are tax exempt and they aren't liable for capital gains tax. Many look to pay out most of their gains in dividends.

There's a wide range of risk levels available, from highly speculative to VCTs that look to add money to firms with a proven product that want money to grow.

The five year restriction means that you can recycle the money to repeat the tax benefit, plus or minus what the investment performance does. Effectively using them to cut tax on your income by deferring some of it.

Fatbritabroad

Alexland wrote: »

If you are late 30s and likely to have kids the LISA might enable you to gift them money in their early 20s (when you are 60) to help with house deposit, etc. That's our plan anyway for our son and if we have any more.

Thank you Alexland id never really looked at the Lisa for that purpose that's not a bad idea