The next 40 years

BlueBarney

I’ve saved for years (maybe I should have taken holidays or bought a new car) as the son of a bankrupt, fear has always been my guide.
In my 50s now with a £900k property and no mortgage and a further £800k in pensions, ISAs etc.
The trouble is the fear kicks in and I never feel safe. It’s not “just” about money but the psychology of it. I don’t want to touch the money in the home because that’s home... but could I do something better with the rest? I’d like that money to grow as I still have two kids to put through university and help them as much as possible.
Thanks!

El_Torro

If you don't want to remortgage that's understandable and probably not necessary in your case either, based on the limited information you have given us.


Maybe you can do better with the £800k you do have, though without knowing where it is and what it's invested / saved in there's not much input we can give you really.


A general rule would be to save what you need to in order to have access to cash when you need it, and invest the rest. It sounds like you already have at least some of the money invested though.

System

BlueBarney wrote: »

In my 50s now with a £900k property and no mortgage and a further £800k in pensions, ISAs etc.
The trouble is the fear kicks in and I never feel safe.
Thanks!

You're set for life. The worst happens you sell the house, move up north, buy a nice 3 bed semi or a bungalow for £150k-£200k, live a very nice life off the remaining £700k and your £800k savings til the day you die. You could literally do that today and without any growth or any further income whatsoever until you hit the state pension age have £37,500 to live on until the state pension age then over £45k a year to live on until your 90s. 3-4% annual growth would see you being able to do that almost in perpetuity.

In short it would take a catastrophic event or financial stupidity of epic proportion for someone in their 50's to make a complete hash of the situation given your current state of affairs.

Albermarle

You need to detail the investments within the pension and the ISA(s) . Most likely they are growing anyway but it could be the balance of the investments could be changed to more suit what you are trying to achieve.
However like the previous poster said you are in a very good financial situation , probably compared to > 95 % of the UK population and >99% of the world population.
Maybe time to stop worrying/saving and start spending . Although I know it is not as easy as it sounds as it is a step change in thinking.

Socajam

At 50 I would start taking holiday and buy myself a new car. Treat yourself maybe to dinner once a week. It does not have to be anything expensive, but at this time do not let fear rule your life.
You have more than enough to give your 2 children a BA. If they want a Masters Degree and you cannot afford it, that's on them.
You have worked hard, treat yourself, because tomorrow is never guaranteed and it is more apparent the older we become.

Terry_Towelling

Sorry, but I don't get it. Why do you suddenly need to do anything 'better with the rest'? What is 'the rest' and what's wrong with what it's doing now? Just how much do you think it is going to cost to put two kids through university? How old are they currently and are you sure they will want to go to university? Why can't they finance themselves and you can consider helping them pay it back if such action proves to be necessary?

Where has this fear come from? It can't have anything to do with your father's supposed financial failings because you've (presumably) bought yourself a very expensive property and managed to repay what was (probably) a sizeable mortgage in very short time, at the same time as amassing £800K in savings/investments/pensions. Don't you view taking on a hefty mortgage or investing as financial things to be feared? What if you finance your kids education and they flunk - how will you feel about having lost that money for nothing?

What are you driving around in these days and how do your kids (and presumably a Mrs BlueBarney) feel about not having had any holidays?

dividendhero

I'm not in a too dissimilar situation to the OP. While I've plenty of capital, no debts etc - I'm mindful of the fact it could be wiped out by a hyperinflation, confiscated by an authoritarian govt etc and the current situation in the UK only heightens these concerns.

tacpot12

There is a level of concern that is healthy and a level that is not. The OP seems to be aware that they might be drifting towards an unhealthy or irrational level of worry.

The UK is a stable and strong economy. The government of the day has relatively limited powers to destabilise the economy due to the number of vested interests in maintaining the status quo. Tambour is right, it would be difficult to derail yourself now, so just keep investing and spending sensibly and you will be fine. Downsize if you want to - if you are going to do so, then the point at which you retire is the best time to do this as you will the time to find a new home, move and settle into your new home. Downsizing in your 80 or 90s is a bit late, as it can all be a bit much at that point.

Albermarle

I'm mindful of the fact it could be wiped out by a hyperinflation, confiscated by an authoritarian govt etc and the current situation in the UK only heightens these concerns.

This is called 'catastrophising' I think .
The UK is the 5th largest economy in the world . Despite current political issues , you don't see any tanks rolling down Whitehall and our legal system is seen as one of the best in the world.
The financial and property laws are some of the toughest in the world , despite occasional problems .

So to be cautious is fine, especially if it is part of your personality, but don't let it affect your rational decision making too much .

dividendhero

Albermarle wrote: »

This is called 'catastrophising' I think .
The UK is the 5th largest economy in the world . Despite current political issues , you don't see any tanks rolling down Whitehall and our legal system is seen as one of the best in the world.
The financial and property laws are some of the toughest in the world , despite occasional problems .

So to be cautious is fine, especially if it is part of your personality, but don't let it affect your rational decision making too much .

I'm not saying the UK WILL go pear shaped, but it's certainly a possibility and it's rather complacent to say "We're worlds 5th largest economy and it will always be so". UK is about to embark on an extremely risky project and it's quite clear that it's not going to plan..if ever there was a plan in the first place.

History provides plenty of examples of countries spiralling out of control very quickly. eg Uruguay enjoyed similar status to a west European country until the 1950's but quickly fell into political and economic chaos

username12345678

I have a lot of empathy with the 'worriers'.

My pension isn't drawn for another 8 years but at today's valuation would support my lifestyle on a 2% withdrawal rate.

The mortgage was paid off 2 years ago.

In 2 years time (49) I will have more than enough to give up work and live comfortably with holidays, new cars etc.

And yet there is no way I will do that...I craft scenarios where working until 55 'just in case' is a perfectly reasonable path.

It's nuts but the same mentality that got me in to my current position will also stop me enjoying it.