It's time to start digging up those Squirrelled Nuts!!!!

Sea_Shell

cfw1994 said:

Sea_Shell said:

cfw1994 said:

My past self would have benefited from being told to not lock cash up in ISAs, but to always use S&S ISA instead.
In your shoes, with plenty of cash available, I would certainly go S&S ISA.  

My personal preference is to always drip it in over several months, even though history shows that around 2/3rds of the time you are better dumping it all in.  I prefer to apply “pounds-cost averaging” to avoid the risk of a sudden dip after a single investment.  I know that my logic is flawed, but that is okay!

Yes, any money that we put in the ISA's would be in S&S, not cash.   Just debating which class of fund to use.   Cash would be in bank/savings/PB's.

I suppose the question comes back to how much cash in case of a downturn should we keep "handy".

We'd originally saved the £60k (£54k plus interest), in a 5 year account, to mature and provide us with 4 years spends, if markets had plummeted. (I was still working at that point)   I guess that potential risk hasn't changed, but, we do have an overall pot that is now nearly £200k larger than when we opened that account in 2016!!!

Keeping £60k cash would equate to approx. 10% of our overall portfolio.   Equities would be 60% and the other 30% would be "other" (bonds and stuff), which is pretty much where we are now....so we'd just be maintaining our current position.

I think £60k (10%) in your case remains reasonable.   
Never going to be any perfect answer to these sort of questions: it is opinions and what feels right for you.

I do, however, think you should seriously adjust your lifestyle that to make it only 3 years worth of cash though.....perhaps a new car, camper, or luxurious holidays in 2022 beckon 😂🍾😎

Our goal is for us to keep around 2-3 years worth of funds in cash accounts.  Currently this is in PBs, but the aforementioned cash ISAs mature next May, so we will be looking for ways to re-invest at that point.

We really are going to try and spend a bit more, from hereon in, but we won't spend just for the sake of it....

So far in August we've spent £1280.

Our car, although a 2015, has only done 18500 miles, and is like new, so that's not going to need changing any time soon (unless it gets written off!).     Camper....no thanks.

Luxury holidays, now that I may be able to work with!!!     Although whilst we're sticking to UK trips, "luxury" is a difficult one to nail down, especially if you don't just want a hotel room.    We're hoping to cram 3/4 trips away over the Autumn...probably all to lodge parks, some of which have pools, and they are very well equipped.   

If you want to go off walking for a week, with all your gear, it's handy to have space to dry clothes and/or wash them.    

We will definitely "up the budget" if we do just want the odd night away somewhere.

Also, we're going to start getting tradesmen in to do jobs rather than DIY and curse our way through them.

Stubod

I agree with your plan and think you should be "spending more" as we are in a similar position, (under spending against budget), only problem is that UK luxury holidays seem to be in short supply as are (good) tradesman!!

Originally our plan was to consider a camper van but the current prices are just silly and we have an aversion to being ripped off!!

cfw1994

I know a lovely cottage on the Isle of Wight...message me for details 😉

Yes, holiday costs are challenging, and van/campers crazy: I reckon that will die down in about 12 months....maybe

I'll happily get trades in for things like plumbing (or extension work, now done!)....but my problem is I quite like the DIY stuff - that is part of why I wanted time to do things.   I also figure I can amass some decent tools (have about 10 different Ryobi One+ tools now) at less than the price I would have paid people!
Spent a few days recently thoroughly decorating the new smaller office, including popping trim round 3 x Billy bookcases to make them look built-in (ready for the old study to become an Arts & Craft room!). 
This sort of thing:




I once put nice quality laminate throughout our ground floor because I knew trades would not make as neat a job on the skirting edges at a price I'd want to pay....also cut in flat speaker cable to the thin underlay to allow for surround sound speakers....took me a year, but still looks great (IMHO 🤪), & that was perhaps 15 years ago!

But....luxury breaks - sound good to me 😎👍

Sea_Shell

Maybe I should have "spend 22 in 22" as a goal for next year!!😁😎


£1833 a month.... quite the challenge!!🤔🍾🥂



As long as it doesn't turn into "bread and dripping for tea in 23" 😉😲

DT2001

michaels said:

Unless the underlying assets are going up by at least inflation then this 'natural yield' strategy seems doomed to failure?

Only in the long term if it doesn’t keep up with inflation. The strategy was suggested to cover the short/medium term and ‘ignore’ market fluctuations. Even with a declining real return the replenishing  ‘cash pot’ would last until (or close to) the date of the DB’s?

ex-pat_scot

It's certainly a nice problem to have!

I think it will take a long time to move from the scarcity mindset to the abundance mindset, in a similar way that the accumulation mindset is very different from the decumulation one.

By that I mean the thinking that "if I can do something, then I must do it myself rather than paying for someone else to do it for me. I need to shepherd my scarce resources for the things I cannot do myself".  I am very guilty of this, and whilst I have picked up lots of skills (and Ryobi One tools also!), much of it has been time-inefficient, frustrating and of sometimes variable end quality.
Even once I have surpluses, I will still feel guilty for a long time and frivolous if I spend on anything that I could be achieving myself.  
I know I will enjoy many / most of the challenges, particularly once I will no longer have my employment as the competing priority for my time, and will have fewer day to day commitments with the children once they spread their wings.

I suppose the way to approach it is something like the following:
- set a rough budget / burn rate / SWR and earmark that as "to be spent"
- any unspent goes into a "fun" bucket, to be spent on camper / holiday / extension / sports car / cleaner / gardener / handy(wo)man etc
- keep under review 

I'm hoping to actually have some surpluses; it will be novel after many years. Even with a good salary, four children have been ruinous for my day to day cashflow.  Even as adults, I expect the costs to continue to quite some extent.

bluenose1

cfw1994 said:

I know a lovely cottage on the Isle of Wight...message me for details 😉

Yes, holiday costs are challenging, and van/campers crazy: I reckon that will die down in about 12 months....maybe

I'll happily get trades in for things like plumbing (or extension work, now done!)....but my problem is I quite like the DIY stuff - that is part of why I wanted time to do things.   I also figure I can amass some decent tools (have about 10 different Ryobi One+ tools now) at less than the price I would have paid people!
Spent a few days recently thoroughly decorating the new smaller office, including popping trim round 3 x Billy bookcases to make them look built-in (ready for the old study to become an Arts & Craft room!). 
This sort of thing:




I once put nice quality laminate throughout our ground floor because I knew trades would not make as neat a job on the skirting edges at a price I'd want to pay....also cut in flat speaker cable to the thin underlay to allow for surround sound speakers....took me a year, but still looks great (IMHO 🤪), & that was perhaps 15 years ago!

But....luxury breaks - sound good to me 😎👍

Wow, love what you have done to your Billy bookcases, very professional.
I want to have one lounge wall of this DIY MDF panelling /wainscoting I keep seeing on Instagram etc doesn’t look to complicated but I just can’t motivate myself. We will probably ask a joiner to do it knowing us.😳

shinytop

bluenose1 said:

cfw1994 said:

I know a lovely cottage on the Isle of Wight...message me for details 😉

Yes, holiday costs are challenging, and van/campers crazy: I reckon that will die down in about 12 months....maybe

I'll happily get trades in for things like plumbing (or extension work, now done!)....but my problem is I quite like the DIY stuff - that is part of why I wanted time to do things.   I also figure I can amass some decent tools (have about 10 different Ryobi One+ tools now) at less than the price I would have paid people!
Spent a few days recently thoroughly decorating the new smaller office, including popping trim round 3 x Billy bookcases to make them look built-in (ready for the old study to become an Arts & Craft room!). 
This sort of thing:




I once put nice quality laminate throughout our ground floor because I knew trades would not make as neat a job on the skirting edges at a price I'd want to pay....also cut in flat speaker cable to the thin underlay to allow for surround sound speakers....took me a year, but still looks great (IMHO 🤪), & that was perhaps 15 years ago!

But....luxury breaks - sound good to me 😎👍

Wow, love what you have done to your Billy bookcases, very professional.
I want to have one lounge wall of this DIY MDF panelling /wainscoting I keep seeing on Instagram etc doesn’t look to complicated but I just can’t motivate myself. We will probably ask a joiner to do it knowing us.😳

You can go half way.  We are getting some MDF 'panelling' cut to our design and size and we just need to stick it on.  There is a chap who provides this service through Ebay.  Sound good in theory but let's see how it works out.    

Sea_Shell

Sea_Shell said:

Well we've squirrelled away our final "spare " £2000 into our ISA.   This is "shouldn't need before September" money, but we're keeping it in cash, just in case we do.   If we don't then we'll invest it in September.     We literally now have £9000 to last until then, when a 5 year fixed term saver matures.   It'll be sad to see the end of a 2.2% interest rate!!

It appears I was a little too tight on our cashflow budget (following decision to have boiler replaced - £3k), so I've had to withdraw that cash back out!!

No harm no foul, as we're not now going to be filling our ISAs this tax year, so we can put it back later.

It was just all looking a bit too tight, especially if our maturity funds were late!!

We'd have had literally £30 cash left!!

I can relax knowing everything's covered now. 😇

michaels

Sea_Shell said:

Sea_Shell said:

Well we've squirrelled away our final "spare " £2000 into our ISA.   This is "shouldn't need before September" money, but we're keeping it in cash, just in case we do.   If we don't then we'll invest it in September.     We literally now have £9000 to last until then, when a 5 year fixed term saver matures.   It'll be sad to see the end of a 2.2% interest rate!!

It appears I was a little too tight on our cashflow budget (following decision to have boiler replaced - £3k), so I've had to withdraw that cash back out!!

No harm no foul, as we're not now going to be filling our ISAs this tax year, so we can put it back later.

It was just all looking a bit too tight, especially if our maturity funds were late!!

We'd have had literally £30 cash left!!

I can relax knowing everything's covered now. 😇

WE use a credit card for everyday spending as the rewards/cashback can be quite valuable and it would obviously help with cashflow, being referred by a friend can sweeten the deal even further .

Also with my green evangelist hat on I would be grateful if you checked out whether you could get a heat pump instead of a new fossil fuel boiler, there are grants available (RHI) that should mean the overall cost is similar. Thanks