What now?!?

Cruixer

I'll admit to feeling a little guilt about discussing something as though its a problem when so many people are struggling just to get by, or to get on the property ladder etc, but here goes.

Its not as though I was born into wealth and my first job was an unskilled factory worker, but a combination of continually upgrading my education, reasonably frugal living, the ability to do almost all home maintenance myself, and a period of renting out instead of selling houses when I moved area because it was a bad time to sell have led me, or more accurately us, to where I am now. In the last couple of years we sold our respective previous homes which were rented out, so that we could pay off the mortgage on our current home.

I am 46, we are both earning around £50k, have around £60k in the bank left over from our recent sales, still have one of my previous homes rented out overseas with the rent covering the mortgage which I think will be paid off in around 10 years. We are in the house that we expect to stay in until we are of an age that we need something smaller. My wife has a company car, I got rid of my car a few years back and don't really want another, with a 4 year old we don't go out much so our expenses are minimal.

Its all come together financially in the last year and I am definitely not complaining, but I have found myself a little confused about what comes next. At what point do you consider yourself financially independent? Should I change my lifestyle and start spending more money, or should I give up my job, or go part time and have more free time? With the mortgage gone I am not really sure what my financial goals should be now!

Interested in peoples thoughts.

BoGoF

Give up your job at 46 with £60k in the bank.....are you serious?

What's your pension position?

Dazed_and_confused

still have one of my previous homes rented out overseas with the rent covering the mortgage which I think will be paid off in around 10 years.

You might need some of the £60k to pay the extra tax you are likely to have to pay now mortgage loan interest is being phased out as a tax deductible expense.

kidmugsy

BoGoF wrote: »

What's your pension position?

Plus your wife's. And if your wife is under 40 has she got a LISA?

Have you got your insurances all in place? I don't mean trivial things like warranties and vet's bills, but life insurance and permanent health insurance.

jennyjj

Ok. Things look pretty good, but what you describe is a few years away from a life of riley. When you have liquid assets that will support your current lifestyle for a few decades, you'l be a bit closer.
Watch out that second home doesn't mutate into a liability.

Cruixer

Thanks for all the comments.

I should have been clearer. I didn't really mean give up my job now, or certainly not both of us giving up our jobs, but we did consider one of us reducing hours to be able to spend more time with the little one. I was thinking more about what the financial goal should be, because I am in uncharted territory now, having been focussed for decades on paying off the mortgage


So I was seeing the second home as an investment rather than a liability, although I suppose any investment could become a liability. Currently the rent is high enough to offset any issues, its in a commuting area on the edge of Dublin. Would I be better to work towards selling this and putting the money into something else, if so what else?


Wife is also too old for a LISA. Life insurance is tied into work for both of us, and to be honest I am not sure why I need health insurance with the NHS, although maybe I am being overly hopeful of its future!



I guess what I am saying is, now that I have finished putting everything into the mortgage I am not sure what my financial strategy should be. I suspect we could live entirely off part of one salary, so what should I do with the rest of the money. Even the best bank interest rates seem to run below inflation. Should I be thinking about ISA's, but the cash ones also seem to have very low interest rates, so is it stocks and shares ISA's?

BoGoF

You still haven't said what pension provision you have. Paying off the mortgage may give you a warm glow but it doesn't provide an income in retirement.

Spreadsheetman

BoGoF wrote: »

You still haven't said what pension provision you have. Paying off the mortgage may give you a warm glow but it doesn't provide an income in retirement.

This. What is your plan?

kidmugsy

Cruixer wrote: »

I am not sure why I need health insurance with the NHS

Aaaargh! PHI is insurance to replace your earnings if you become too ill to work.

Spreadsheetman

kidmugsy wrote: »

Aaaargh! PHI is insurance to replace your earnings if you become too ill to work.

Yes, that is a very significant risk for people planning to work to SP age. I used to have PHI, but stopped it once my early retirement plans had progressed to the point they made it unnecessary.

Kynthia

Both my OH and I work 4 days a week so that we can spend more time with our children. That could be something to consider and would still leave you with good incomes.

Life insurance and PHI would be a good idea. Maximise your pension provisions and if you have DB work pensions consider a private pension/SIPP to give you the freedom to retire earlier than state pension age or have lump sums for large expenses during your younger years of retirement.