First Steps to Solvency

TheAble

48, 50 tops for me. I only wish I'd been smarter with money when I was younger - could have been done by 30...

getmore4less

Your true success will be measured by the legacy you leave the next generation.
Weath creation takes at least one generation in many cases two.

One reason a lot of family trees are just ticking over is there is no wealth preservation, even relatively low earners can become self sufficient in housing in 3 generations.

People that started out with a big wedge or the knowledge they would inherit loads  take a different path to the rest of us that start with nothing.
Not possible to compete


If you can be in a position that sets up your son and any grandchildren then you have made it.

I expected to be working past 60, over time that changed I set a goal to be in a position to make choices by 55 and was well on target  then some major life disruption changed plans. 

You are well ahead of where I was planing to be a 55, you could wind back now if you wanted but that is not necessary you have 15 years more to work out where you really want to be as your son is likely finishing education and starting out his life. 

I think you do need to consider that over time more of your day to day business activities need to done by others to get to the place where they almost run themselves. 

Thats not too bad timescales to unwind the PG,  I would continue to look at growth but very selective opportunities that can deliver top end yields or good flips.

For now I would make family your hobby.

ryanm8655

alt80 said:

@getmore4less thanks mate. It's difficult sometimes - I know a few people who are doing a lot better than me tbh I've long tried to pretend I'm on their level but they didn't start out with a 100LTV flat and a £5k car lol. One of them is proper old money lives in an inherited 12 bed big f**k off house, wears a Patek, drives a RR lol Vogue spec diesel and 100 he won't have it financed or if it is the money has been offset against something else. Load of investments built over generations not just property. Remember him saying my house was 'nice for what it is', sent me on a massive spiral of inadequacy and wanting a 7 figure place. Winds wife up beyond belief me trying to be on this other guy's level but always taken it to mean she thinks I'm a failure rather than what she really means - he had a start in life that I didn't and I'm setting myself up for feeling like I'm a failure. Doesn't help with the debt tbf.

Lol no way will I retire at 60. Want to be actively working for at least 10 years after that. Will probably be slower pace at 60+ can see that but don't want to sit at home being totally passive about it.

Yes I've done the figures working out with no capital growth accounted for how long it would take to get to the LTV required to remove the PGs - looking at about 4.5 years if I took absolutely nothing which was a bit of an eye opener. Just under 8 years if I took what I do now. Getting those PGs off would take the stress / blurring of business and personal tbh. 

@PassElephant I assume you're referring to the FA on the development. Really not that simple. Shouldn't be an issue and all being well will get the additional finance I need to finish it and sell or exit onto a mortgage. Don't get the additional finance and I can wave goodbye to my income for a few months at least just to get it finished/ ensure everything else is paid. It's not great just another load of stress going on in my life right now. This was also a trigger for realising I need to change my life a bit, lower the debts and have some personal contingency too. It shouldn't be an issue as I say but realising it could be and your whole world would be going on cards if it comes to that focuses the mind.

Can definitely empathise with how you feel about someone you perceive as more successful because they have more. But as you rightly point out, they were massively ahead when they started. Your wife has her head screwed on here and you’re starting to get it as well.

I’ve felt the same and still do to some extent. I know people like that who are loaded through inheritance (driving brand new Bentleys, house in Chelsea etc.) and doing a similar job to me. I’ve also got mates who are doing well money wise, 7 figure properties, amazing lifestyle. Other mates who have shacked up with someone rich and living their lifestyle. It has all made me feel inadequate and like I should be earning more. But it’s like you say, you’re not judging yourself fairly.

My tip is to look down as well as up, have some pride about where you’ve come from, not shame you aren’t higher up. It’s something I’ve thought about quite a bit recently. In my family only my uncle earns more but he’s been made redundant several times over the years so has a far riskier job (plus with maintenance payments etc. his lifestyle isn’t far out of reach). First in my family to go to uni, let alone do well at school. Grew up in a household with lots of drugs and violence, police raiding the house etc. It’s actually a mark of how far I’ve come that I’ve got mates in the position I have. And despite being well off they’re all really nice people, they certainly don’t flaunt the cash or judge me for not being on their level. Most of them I have learned went to the top private schools, parents were CEOs/senior in the army etc. I often wonder whether as a result they have similar insecurities about their own achievements but they probably don’t care. 

Do have some friends a bit like who you talk about, they’re not on that level money wise but they earn 5 figures a month. When I met them they were really down to earth, ashamed of how rich their parents were (gave them a lift home once and they didn’t want me to drop them at their house - talking gated mansion in Wimbledon) and quite coy about it. I did wonder how they afforded to do a masters at LSE and Columbia in New York after uni (talking about £100k+). We lost touch for years, basically only get in touch when they’re low and need a crutch. Now they earn big money they hang around with all their rich, private school chums and they’re all a bit cliquey and snobby. It’s all about status and they’re not very nice people. The sort who would put you down in the same way your friend does. So I just don’t really see that friend anymore. Will chat occasionally but that’s about it. Why hang around with people who put you down? For me friends should be looking out for you and helping you be/feel better. They were also the one friend who made me feel pressure to keep up, insisting on extremely expensive restaurants, ordering expensive wine, “want to go halves on a chateubriand mate”...think I sunk about £300 just on dinner that night We used to go to cheap uni bars and the pub ha.

I’m sure the envy will come back when I’m back in London and surrounded by wealth ha.

There is a balance of course, it’s good to have aspirations and want something from life. A family member annoyed me the other day. I said how I probably should have taken advantage of doing even the boring things more before lockdown II. They suggested those boring things are life and took a bit of an exception to my describing them that way (I was talking about spending more time at the gym working to be outside the house or sitting in Costa and working). I don’t know why but the suggestion I should limit my ambitions to the mundane really annoyed me. What’s the bloody point if all you want to do is live and work in an average job with no enjoyment and then die. What a waste. And no, this family member is not happy. 

One thought is you say you have/had mentors, have you thought about doing the same to get a bit of a kick? I’m really enjoying developing people in my current role. It’s nice to feel like you’re adding value. Might give you a bit of that kick you’re looking for.

P.s. your wife has great taste. I love bois du Portugal. I had it and every time I wore it people asked if I was wearing brut. It’s amazing I think but I can’t pull it off. I’ll go back to it when I’m suave enough. Sartorial by Penhaligons has a similar vibe but bois du Portugal performs well. Have you tried Tom Ford Beau du Jour? That’s a slightly more modern take on that genre, reckon your wife would like that.

RelievedSheff

TheAble said:

48, 50 tops for me. I only wish I'd been smarter with money when I was younger - could have been done by 30...

Similar for me. By 48-50 the mortgage will be paid off and we just won't need to earn the money we do now to service it. At that point we will seriously look at how much money we do need. The other half is older than me by a fair chunk and in a manual job which he can't do forever.

getmore4less

TheAble said:

48, 50 tops for me. I only wish I'd been smarter with money when I was younger - could have been done by 30...

They recon with, spend 1/3, buy a house with 1/3, invest 1/3  you can do it in 20-25 years
A pot around 25 times spending needs 4% returns over inflation, without drawdown(tax can also mess it up a bit if you want high spends)

alt80

Interesting to see how many want to give up work asap tbh. Whilst I can’t see me ever giving it up entirely no doubt will be increasing more passive / strategic than doing fee earners.

@RelievedSheff can understand that when it’s a manual role. Some things you can only do for so long.

@warby68 ha you’re doing worse than me with the spending this week. Mindset still a battle tbh didn’t wake up full of the joys of spring this morning but actively trying to not get angry about it - doesn’t help. Agreed win win on the rental side.

@getmore4less agree re future / winding back. If I cut the expenses living within means rather than getting into debt all the time and made the moves to stop doing fee earners I could still earn well, have money for holidays/ cars/ live in current house etc and do very little - never looked at it like that before tbf but pleased about it in a strange way. Still want more not going to lie and still want to drive forwards.

Not really playing their game re competing with inherited wealth agreed. Hard for me to admit but necessary I think always just thought not good enough before.

100% re portfolio growth. Trying to stop obsessing about number of units and just on right deal or right for someone else but take the management piece of the pie not going to stop wanting deals ha. Straight back into portfolio too so helping to wind back the overall gearing or be ready to invest. Had a few dumb years but back on it now lol.

I am trying to make my family my ‘hobby’ right now. 

@ryanm8655 mate I could have written some of that lol especially trying to keep up. With your background you’ve done really good don’t mean that in a patronising way either. I can have a good laugh about where I came from tbf grew up in a nice part of the world, nice building got me and sister interested in property/ buildings. Parents for all their faults taught us to work hard, on our terms and not give up on what we wanted. Just wanted best for us like any parents sure yours did too. Closest thing we got to a police raid was sister and I walking to the lay-by 1/2 mile away to check for coppers waiting for drunk farmers driving home. Really small time lol.

I really enjoy mentoring - have grads I help get through professional qual. No feeling like it when they get that email tbh. Never been involved in being a mentor to others from a business perspective don’t really feel I’m at that level yet. Self confidence thing really as some of my early mentors were no further than I am now said it was something I’d do if I felt I had crossed into ‘self made’ rather than ‘self getting by’ lol.

Re fragrances she has very good taste generally tbf one of the reasons I married her lol. Not tried the TF, will have to check it out get a sample first can’t just go buying big bottles for the sake of it ha.

enthusiasticsaver

We retired early at 58 and don't really see how we had time to work now.  We had the option to carry on but by then neither of us were enjoying our jobs usually down to poor management which is very common these days. Both of us are fit though, we are active and have a lot of hobbies and daughters and grandchildren locally. 
@alt80 you are not being fair on yourself if you are trying to compare yourself with someone who has inherited loads.  My dad was a CEO of a multi national company and died very young (63) leaving my mum a wealthy widow.  She has been generous with her money to me and my siblings but we used the money to help set our daughters up with houses, fund them through uni and do several long haul holidays.  Our early retirement was funded by doing as someone else said.  Investing long term with a third of our disposable income on pensions, stocks and shares isas and mortgage overpayments, saving a third for the medium term for cars and long haul holidays and home improvements and spend a third on lifestyle living.  Entertainment, country club subscription and annual holidays, gifts etc.  We could have used the lot to buy a bigger house, car etc but neither of us was interested in that. 

alt80

@enthusiasticsaver not so bad when you are the management poor or not ha. Tbf I didn’t manage to stick a full time employed role for long at all!!

Always tried to be a winner doesn’t matter who’s in the race for me but you’re right it’s stupid to try and where some of the age stuff comes from - see dude same age as me with the 7 figure house, massive portfolio easy to feel like a loser.

Rule of thirds is a bit of an interesting concept would literally be putting £31k/a of net into portfolio if I did that obvs wouldn’t do it like that so would be more but would mean living on £2.6k/m (possibly doable with RR paid for idk) and £2.6k/m on a res mortgage would buy me that 7 fig place lol. 

mothsinmywallet_2

How does the rule of thirds work if you're using all of it to keep your head above water? Asking for a friend...

strawb_shortcake

I quite like the idea of these 3rds but not sure I could manage it. It would mean taking £870 a month and locking it away, even with my mortgage being around a 6th of my monthly income it would leave things tight. 
Having 3 children a non working husband and wanting to have a life it just doesn't seem doable at the moment.
But if I could do it coupled with my work pension I'd be a rich old(er) lady