First Steps to Solvency

ryanm8655

alt80 said:

I’m getting to the point of burnout constant stress going on in my life. Had far too much to drink last night. Not sure about anyone else but I’m really concerned we’re heading for a massive recession next year. Not sure if that’s worry over nothing but the financial stuff is not going away for me anytime soon. Never been spooked by a bit of personal debt and being leveraged before but I am now. Another bad nights sleep I saw people lose everything in my industry during the last recession good lives reduced to having nothing and bankruptcies. Realistically I’m done if I make the wrong moves /the prs goes to !!!!!! /massively reduced client base. Need to get the sleep sorted my secretary has noticed I am stressed thinks it’s just a heavy workload I know it’s not that I’ve always coped fine with it. Can’t tell anyone that I’ve got so much debt over me I don’t think there’d be anyway out if it was my turn for recession to hit. Keep telling myself my business is in a healthy position I’ve got generally decent tenants no real issue with arrears and there’ll always be a demand for property but so stressed I’ll be the unlucky one who won’t weather the storm. Looking at the personal issues has just opened a massive can of worms for me it kicked off with wife about the mortgage debt she reckoned she didn’t realise I was in for as much as I am and it would just all be on the company rather than the company and then me. She’s ‘disgusted’ over the fact I’m ‘swimming in debt’ really not helping at all.

@RelievedSheff thank you I hope I’ll get there.

Again, your wife isn't helping...

I remember the first time I came here with debt a long time ago, me and my long term gf were beginning to talk about moving in together and in the interest of openness I decided to tell her about my debt (was £12k at the time). She also acted disgusted and the shame and anxiousness I felt as a result was crippling. Can only imagine how you must be feeling given this is your wife...but I don't know how she can feign ignorance and claim no responsibility. 

There are plenty of solutions to the problem here, it's not like you've done everything and are running out of options...
1) Your son goes to a state school (Saves £1100 per month and given his age it really isn't the end of the world)
2) Your wife gets a job (Should bring in £1000 or so a month depending on hours and will save a fortune in those bored midweek £140 a day splurges...)
3) Cars - you've already cut back on the F-type but you can get rid of the BMW soon? Get your wife a used (couple of years old) mini, like she wanted and you'll save a small fortune and probably make her a bit happier. Forget the AM Vantage for now... Worst case you can get rid of the Range Rover and get something cheaper (when?)

Those are just three of the biggest options...there are other pretty easy wins, £650 on groceries is easy to cutback on, how much of that gets thrown away? You can sell more stuff, sounds like there are thousands of pounds worth of bags/shoes etc. just laying around.


Recession wise, we're in one. You'll know more about the property market than me but rentals have plummeted in London. That's different though. They're ridiculously expensive and who would pay them when they can go stay with their parents until the office reopens? Plus there is likely to be a long term switch to more home working. Lots of businesses cutting down office space and saying home working is for the longer term, so that is going to reduce demand. I guess the risk to you depends on what your tenants do? Have they been on furlough or have they been working? If they do get made redundant could they afford the rent if on benefits? Unemployment will go up once furlough ends. They've extended support for jobs but a lot of businesses have already made redundancies for the end of furlough and there will likely be more to come given the structure of the support. Haven't checked in a month or so but the last I looked, forecasts were saying 10-12% unemployment by Christmas, which is crazy.


If your friends are in the property game then they'll be in the same boat, so surely your wife's friends will be going through similar. I imagine most of them have a similar amount of credit in their personal lives/if income reduces will struggle to afford the HP on their cars etc. That's why it's so pointless comparing yourself to other people. Everyone is getting themselves into debt trying to keep up with everyone else who is also in debt. It's crazy. 

My wealthiest friend doesn't flaunt it at all. Have a friend who on £50k a year was eating out in fancy London restaurants, posting crap to Instagram that made him look a millionaire, Omega watch etc. but renting a room in a flatshare. My richest friend was embarrassed to tell me about the flat he was buying because he didn't want to appear to be bragging (£1.5m place), has a £200 watch, eats in normal places except for special occasions and never talks about money. The only time we ever talked about money was when I asked as I was looking to move into the same career, otherwise I wouldn't have known... I'd much rather be the second friend with the humble attitude, even though I probably have more in common with the former due to my own insecurities...when !!!!!! hits the fan it's the people who lived within their means who win...

theoretica

As touched on above, I wonder if it would help you budget to move much of your petrol spend and some of groceries into a subcategory under entertainment and take into account the cost of fuel when thinking about the cost of extras and entertainment in your life.  You have chosen to spend a huge chunk of your money on cars and you really ought to ensure you enjoy them enough to justify that.  But a long drive won't come at no added cost, and I don't see it as very helpful mentally to have a SOA which you look at and say 'but I have hardly anything down for entertainment' when this is just because some aspects of entertainment such as petrol or champagne aren't acknowledged as such. 

alt80

@enthusiasticsaver The groceries budget does count more than the bare bones of food. We have 1/2 bottles of champagne a month usually £42 a bottle so not that extravagant on that front lol.

Wouldn't be surprised re wife but not a lot I can do about that. Not really fair re cars when I've given my f-type up. Some people aren't as leveraged, most are but there's nothing wrong with my strategy and I shouldn't be stressed about it. Got to the point of stressing about stuff I need not worry about because its not an issue. Tbf Boris needs to get out and tell people to stop being silly about this virus and for us all to get back to normal unless they've got underlying conditions- think I'll relax a bit when that happens and so will many others. Recessions have a habit of not being kind to my industry generally and finance is not so readily available. Capital values I'm not so concerned about, in for the long haul so should be fine. Current demonisation of anyone in the btl business I am concerned about this conservative government is turning into the tenants rights group.

If you think BMWs are expensive to run wait til you buy a Range Rover lol. Do plan to start a sinking fund properly when the cards have been paid.

@QueenJess Yeah I definitely need to stop panicking. Everything seems so uncertain generally there's no real point in trying to forecast. Emergency fund is one for the future - do often feel on edge about maintaining my home ie I can't really and a bit of an odd scenario can afford to do most big jobs to each of my other properties but anything goes wrong here its on a card. Not going to lie I do find it shameful.

@ohdearhowdidthathappen personal guarantees are very common when operating a btl portfolio through a ltd company. Not really a big deal and tbf there's very little in terms of risk unless being in a situation of negative equity and massive issues with tenant arrears. I'm just feeling a bit more risk adverse than usual but need to clear quite a lot off the mortgages to reduce my personal liability. Personal bankruptcy would end both my businesses and I would face potential expulsion from my profession so am well aware of the need to tread carefully in business. At the point of panicking about something that isn't going to happen lol just in a bad place. The comm mortgage (in current climate) - reliant on rent from other companies) / development finance are a lot more risky than the btls right now imo. 

@Naomim yes I think the counselling is not actually doing me a lot of good - just making me panic more and about stuff I don't actually need to panic about. Wife hates me right now been at her parents all day I'm not working meant to be having a long weekend off but she doesn't want to be around me. Managed to take one of my family tenants out for lunch - they have just had an offer accepted on their first house, long time coming for them so thought I'd be nice. Got another family lined up for the house so no worries there.

Someone on here recommended yolt to me, it's great really pleased with it as an app if not pleased with the negative balances haha. 

@monetxchange I hear you re the expenses. Not going to be burning anywhere near as much petrol as I was tbh I think the £300 is probably more than I will spend on it. If I can get away with one tank in the RR and one in the BMW for personal fuel this will be less than £300.

I know the expected bills etc needs to start getting accounted for. It's all paid monthly at the moment so would almost be like paying for it twice which is a bit of a no go for now. When insurances etc come up I'm thinking I'll put them on a card and pay the card back - 0%. Not ideal I realise this but better than paying interest and hopefully when they roll around again I'll have a separate fund for this type of stuff. All very long term right now - can't really change the credit card which are taking £1k.

alt80

@ryanm8655 she had her suspicions I owed money but yes it's hard for me to deal with right now. She goes running off to her parents' house - not hard to guess their topic of conversation. Not going to lie I'm extremely ashamed about the mess my personal finances are in.

School - can't do a lot about it right now but I hope wife will discuss it with me come January. I agree with you about it not being particularly good value at the moment. 

Wife working - lol. 

Cars - BMW can go next year. Probably will say bye bye. Range Rover could go in 18 months but it won't be. Vantage isn't as much a stupid buy as it sounds - they aren't going to depreciate much more. Appreciate some people will probably take the p*ss for me buying a cheap AM but I can live with that. Servicing / repair bills will be high but would at least give a bit of fun in bleak times. Don't want a mini - she does sometimes use the range so I do drive the bmw. I've no desire for a car that's uncomfortable, slow and a bit Daddy's little princess lol.

London market is very different to here. Res sales are booming at the moment - don't feel it's going to last though tenant demand will remain. Some bleak times on the comm side imo. Tbf my res investments are low value/ high yield type stuff un/semi skilled workers, some are in and out of jobs more than I'm in and out of cars lol. LHA pretty much covers rents for the majority of it. I've got the stage of stressing over stuff that doesn't need to be stressed about. 

Definitely need to stop comparing myself to others - one of my worse traits I'll admit that and I suppose a lot of the people I know are similar - like the lifestyle a bit too much and not overly risk adverse. Think we all know someone in the category of having arrived but not really caring about the toys. Honestly nice if all you want in life is a nice house and security I want that too but I still want the supercars and a patek. Just greedy haha.

@theoretica don't think it really matters how it's categorised if not overspending? Entertainment should probably read miscellaneous?

alt80

October has started for me. Yolt app updated.
Day off and no spends that can't be expensed - win/win there. No plans to spend more than £100 this weekend either, should be less. Enough petrol until next week, food in the house so looks like the month is getting off to a good start money wise. Don't know about the rest of the country but its absolutely freezing here got the fire on spoke to my parents 25degrees sunny in Greece maybe they've got the right idea f**k all but the sun and quiet beaches lol. 

RelievedSheff

alt80 said:

October has started for me. Yolt app updated.
Day off and no spends that can't be expensed - win/win there. No plans to spend more than £100 this weekend either, should be less. Enough petrol until next week, food in the house so looks like the month is getting off to a good start money wise. Don't know about the rest of the country but its absolutely freezing here got the fire on spoke to my parents 25degrees sunny in Greece maybe they've got the right idea f**k all but the sun and quiet beaches lol. 

It has been quite cold here today. I did stick the heating on for an hour earlier just to take the chill off.

shoppingobsessed2020

Been really chilly here as well.  I popped the heating on before we came home so it would take the chill out the air.  Got the dryer on and will be ironing soon so it will soon be short3 and vest top temperatures in the house.

JCS1

It is quite common with counselling to feel worse before you feel better.  You're discussing things which you have no doubt buried for a long time, and it brings all the associated feelings to the surface.

ladyholly

i have to say well done on starting a diary after all the flack given on the main board. I am sorry your mental health is suffering as i have been there. I obviously dont know you or your wife but I do wonder if you are getting the support you need right now. It is not an easy thing to be there without the help of those you love.

theoretica

alt80 said:

@theoretica don't think it really matters how it's categorised if not overspending? Entertainment should probably read miscellaneous?

The numbers don't care how spending is categorised - but as an emotional thing very often people post a SOA and say 'I spend nothing on myself' in a totally unwarranted illusion of having actually cut things to the bare minimum.  I find it much more cheerful to focus on what you do have.