First Steps to Solvency

monetxchange

I'm still wondering who's going to "take the !!!!!!" for buying a cheaper car? Certainly nobody on here. One thing to address in the coming months is who you surround yourself with. In laws can't be changed, but if you've got "friends" that are all about what you have and how much you spend, I don't think you need me to tell you that they don't have your best interests at heart and you wouldn't see them for dust if you went bust tomorrow. Please don't let your progress be brought down by people making you think you're not enough even more than you do to yourself right now.

ryanm8655

alt80 said:

@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?

Sounds like you don’t need to worry too much on the business front if a lot of your tenants are LHA anyway. Makes it even more strange that your FIL has disdain for your business. Seems a very strange bloke and that’s coming from someone who is often (jokingly) described as a communist by his friends

Haha, yeah feel you on the lifestyle. If I was rich I’d be enjoying it that’s for sure. Though within my means I’d hope, having learned from past experiences. A patek is the dream... I don’t think it’s greedy to want those things, you only live once. Just make sure they’re affordable before you buy them ha. Life is all about balance for me.

Sorry to hear about the wife not reacting well again. Things will get better. 

Great that all of your debt is 0% already. Have you set your DDs to the minimums or a fixed amount totalling £1k? If you haven’t done the latter then do...every little helps and it’ll help with budgeting. Also means you’re clearing £12k a year, which is a decent rate considering all your outgoings.

Sorry to hear you don’t think the counselling is working out. It isn’t for everyone but also can make things tough in the short term for longer term gain. It’s also important to have the right counsellor. I went to a few before I found a good one. Best money I ever spent.

mark55man

Hey there - just thoughts on your post about leveraging.

You are vulnerable to your leveraging, although it has been your friend.  rely on your instincts as a professional landlord that your tenants are OK.  You could possibly look to sell some of your empire - it seems at the moment that prices are holding up and sales are quick because of the stamp duty freeze. To you this will seem like a backward step, but if it gives you more equity to spread (or even a year's mortgage payments) then it doesn't seem like too much of a retrograde step - smaller but more perfectly formed is not the worst strategy when there is uncertainty.  And if it gives you better sleep and less worry so much the better - just don't spaff it up against the wall - a business transaction for your business survival.  Also - you have your OH blessing as she wants you to reduce leverage


In 2 years if you come through strong there will be plenty struggling - then you can rebuild and springboard.  My view is that interest rates will be low for a long time (Japan style) so as long as you stick to improving your domestic situation then I think the above suggestion or similar might help put things into a more stable formation.  

rugbymadfamily

Sorry to hear about the struggles with the counselling, it really can be one of those situations that gets worse before it gets better. But also worth considering is the counselor right for you, sometimes you have to see a few to find the one that you "click" with, like you might do with business relationships.

I hope you are finding this place helpful, certainly no one here to judge (although I know that might be hard to believe after some of the flak you got on the board). Honestly, you're taking control of the situation and have started working towards a better financial future. It won't happen overnight and will be a slog but will be worth it in the long run. Keep your head up.

downshifted

I’ve been reading this and your previous thread with interest. I don’t usually comment on here but I admire those who get to grips with past mistakes and resolve debt issues. I reckon you’re doing a pretty good job, if I were your mum I’d be proud of you. 

Perhaps you could think about buying English sparkling wine instead of champagne? You do know it’s beaten champagne In blind tastings? Support your own country. For your £84, this month, instead of 2 bottles of champagne I’d buy the current chapeldown offer of 6 bottles of Bacchus lightly sparkling, at £85, it’s delicious and would last 3 months if you only drink 2 bottles, giving £168 towards your debts

I’m sorry about your wife’s apparent attitude, everyone deserves to be loved for who they are, not what they earn

Do stick with the counselling (even if you change counsellor) It’s often worse before it gets better and eventually it will leave you in a better place.

Looking forward to watching you reach your goals and enjoy life more 

alt80

Thanks for input re counselling. I have been through counselling before for a completely different issue the weight was almost instantly lifted that time around. This time around it's an issue much more deeply rooted imo. Going to stick with it for the moment and review for November. Not costing me anything personally - through my health insurance. When my sleep suffers my mental health suffers so not been in a good place. 

Spent a bit of time this evening 'polishing' the spreadsheet for October. We are having a new current account which will be spends only - no overdraft, no line of credit, when its gone its gone if either of us overspend this month wife is aware and has said she's no intention of spending anymore of 'the bank's' money. I also paid £1k off one of the cards (sales) - tbf it paid off wife's spends and just under £500 from the capital. Would like to sell a few more things - declutter my home and my mind lol. Got about £1k worth of bits I can think of to sell which shouldn't be too hard to get gone (nothing of wife's).

@ladyholly completely unsupported at home tbh we're living as housemates rather than a married couple right now. Difficult situation because I haven't been the most supportive in the past so I suppose what goes around comes around. I did take a lot of flack but also some great advice too. 

@theoretica that's a good way of looking at things. I have been told to think about what I have / am grateful for. 

@monetxchange other people I know through cars / business associates / friends that aren't really. If I went bust tomorrow I'd have no one. My parents would be supportive tbf as much as one can over the phone from miles away but that's it. Not sure I'd make it through tbh. Thankful that isn't the situation.

@ryanm8655 yes the income from btl is sustainable - just have to keep managing the tenants; some can be hard work lol. Know I'm panicking over nothing about the business paralysed with panic at the moment tbf not helping me at all. Fil says I'm a 'social parasite' as is any other private landlord and believes the state should take all the property off us and bring into state control, rent bmv to tenants basically he's a true dyed in the wool communist. Not even kidding whenever he speaks to my wife on facetime he'll always ask after her then say 'and how is Fergus Wilson?' That's how he's referred to me for years will not say my name. He's mad as a box of frogs mate.

Never once lived within my means just not felt the stress until I was in the position of absolute panic and remoing everything I could without the wife knowing. Managed to ignore it for a bit until the panic set in this time. When I was a bit younger I always thought I was going to make it big not need to worry about a few cars on finance / bit of credit card debt because some big deal was just around the corner. Sure most of us think similar at some point just lasted a long time for me and truly thought I'd be the one arriving in Monaco for the GP on a yacht for a very long time. Slowly accepting it's probably not going to happen but I do have a profitable small business, great staff, quality clients / jobs generally quite happy with that side of my life apart from being a bit overworked and underpaid but aren't we all?

You've got to where I'd like to be; accepting you like nice things but not so fussed you'll f**k up just to have a taste. I would really like to accept the lifestyle I can have on my current income rather than putting myself under a lot of pressure to get to the point of having at least £20k/m. Every time I know someone makes more than I do or someone I know has a home worth more than mine the shame is almost unbearable - 100% aware I need help and this isn't normal.

DDs are the minimums rounded to the nearest £5 tbf would be nice to round up to £1k (£985 currently).

@mark55man I have considered selling a few. Have sold when the time is right in the past - not wedded to any of the property but none I particularly want to move on at the moment or have a great deal waiting. Everything ticking along really well at the moment tbf apart from feeling a bit financially vulnerable generally.

Will definitely want to be buying if there's a real downturn all in leveraged to the absolute max. Also think interest rates will not be back to the kinds of levels I remember when I had my first mortgage (definitely not to the levels those with a few more laps around the sun saw) probably not even in my lifetime.

@rugbymadfamily I'm finding it very useful not to just be around property people tbf. Different perspectives are good sometimes. 🙂

alt80

@downshifted My mum and dad are about my only cheerleaders (from afar) lol so thanks. 

Can't believe the attention the champagne has got on here tbf but open to trying new things. 

ladyholly

Do you have another relative or friend that you can talk honestly to. It does help. I was lucky because although DH told me in traditional terms to "pull myself together" I did have a couple of of other people who I could be honest with.. (DH found out how hard it is a few years later when he had an incident at work with his boss. His employer didnt believe him and his colleagues wouldnt tell the truth because they were scared for their jobs. This led to deep depression which at times he still has) . Keep on with the counelling and if possible try another one as sometime one doesnt help as much as another.

getmore4less

If the income on the rentals is fairly secure and will cover the debt payments with decent surplus then you have some downside on the income.

The issue is when the next refinance happens and you can't get the funding.

Then you need your debt to be below the liquidation value(after tax). 

What's your current leverage against  the money you can get out through liquidation, If I recall from the previous thread you were at around 75% after last refinancing but that won't be on net value. 

If the mortgages are on long full terms with low rates then that gives downside protection on values as long as you can maintain the cashflow. 


Thing is you took £100k out of the rental business to cover the personal debt then went and got another £100k of personal debt not long after and are sucking  £1500pm(after tax) out of that business when cash is king in a recession when  rental business can pick up the forced sales. 

Your business head seems to be playing second fiddle to your personal head.
Time your business head said to your personal head you can't have it. 

If your personal guarantees include your main house the wife must have agreed to that. 

oatmealandraisin

Hope you don’t take this the wrong way, just looking to offer a different perspective and maybe some food for thought. I’ve read a lot of your diary (although I didn’t get to the very end) and I’m struck by a few things. Now hear me out here, but do you know much about Buddhism? I’m not suggesting you convert, shave your head and join a monastery, but I think it might help you to read one or two introductory books on Buddhist philosophy. One of the main themes is that we cause ourselves suffering through “craving and aversion”. Your craving for consumer status symbols and aversion to people’s reactions if you don’t have them “I’ll put my private plate on the Jag so no-one knows it’s a 2005” seem to be at the root of your suffering. 

Most people would consider you a huge success and would love a life like yours. Lovely house, nice car, own business, trophy wife, and healthy satisfied kid who actually wants to spend more time with you. You are living the dream, yet you are unsatisfied. A BMW 440i would be a dream car for many, but you won’t consider it as your family car. You had a Range Rover Sport, another very nice dream car, yet you remained unsatisfied and had to upgrade to the bigger one. A hybrid won’t do, it has to be a V8. Your house sounds lovely, yet you want a “7-bed Georgian mansion with a 10-supercar garage”. None of these things will bring you happiness because then there will be a 10-bed mansion and 15 supercars for you to crave. Or how about a yacht? Or a villa in France etc. There will always be something bigger and better. My concern is that even if you sort out your debt, until you learn to be happy with what you have, you will never eliminate the endless craving that is making you unhappy. I notice you have tried counselling and maybe you have worked on this already.

You also strike me as a somewhat selfish person. You complain about your wife spending £45 on a phone case while you were spending £2100 / month on cars for yourself (the Range Rover and the F Type). Selling the Range Rover would go a long way to solving your debt, and improving your family life, but you refuse to even consider it. You also complain about her wanting a new iPhone every year. So she gets £1000 while you still have the £12000/year Range Rover and she is the issue? You talk about getting a Jaguar instead of the 440i because it is her dream car, but if you are honest with yourself isn’t it really just another toy for you? Has to be the V12 right? Like she’d notice the difference.

I also find it interesting that you mock your FIL for being “anti-capitalist” when you are the biggest victim of capitalism yourself. You have fallen for the capitalist propaganda that you need expensive consumer goods to be happy and that you should borrow money to pay for them. And this has brought you nothing but suffering. 

I’m sounding a little preachy so I’ll admit I’ve fallen victim to the lifestyle inflation trap myself in the past. I’ve recently paid off £22k in debt and learned to be happy with less. I downsized my house and bought a cheaper car. I thought I’d hate it but I don’t. I love it because life is better when you don’t have the stress of living beyond your means.