First Steps to Solvency

warby68

I disagree that most people are content with what they've got.
Upward mobility has long been a thing as has the widely varying appetite for risk.
Aspiration to me is like a ladder, like you sometimes see on surveys when asked to place yourself compared to the average. I've always wanted to be one or two steps higher and it keeps us striving but has never been too unrealistic - got us from the 2 bed starter in average area to 4 bed detached double garage in really nice area and school fees but it won't get us to the mansion and never will.  If you try and jump too far up the ladder in one go you're more likely to slip and fall. 
Cars are the ultimate ladder, as this ones like an escalator. Because of massive depreciation you have to keep running up the ladder endlessly or you end up in a heap at the bottom (literally) . If you're lucky the heap with still pass its MOT but maybe not. So if you jump too far up this ladder at once its literally an endless race to stay ahead unless you decide to jump off at some point for a while. That's what OP is doing partly but also why doing it fully will help very immediately and very fast.
Sorry, a bit of a rambling analogy but we like cars too but are very aware that cars are transient for satisfaction. The minute it hits your drive its old and there is always another newer shinier one. The house and the school fees and a happy, balanced relationship with loved ones on the other hand have far reaching value for the most part. 
Great to see OP feeling better as the thinking goes on to include the whole picture and I think its really admirable for someone so image conscious to admit his flaws and to needing a bit of help.
Good luck OP

RelievedSheff

You see would disagree with the cars in certain cases as well. The 1985 Sierra we have in the garage we bought 20 years ago for £600 when they were at their lowest value. It is now sat there worth around £12-15k. The other half's job is a panel beater and he does a lot of classic car restoration at work so this car owes us more time than money and it certainly isn't going anywhere soon.

The other half is fortunate in that he gets to drive and work on a lot of nice cars through work which is perhaps why he isn't so bothered about owning expensive cars himself. My 2005 Nissan Almera is going to be the next car we replace. We have had it from nearly new, it was about 6 months old when we got it. We have said it will go when it fails an MOT in style. Mind you we have been saying that for the last 5 years now and it never fails. It won't get replaced with anything expensive though, we are thinking a nice low mileage R53 Mini Cooper S. 

enthusiasticsaver

ryanm8655 said:

Are they though? I think it’s human nature to want more from life. Though if people just stuck to what they needed then there would be far fewer kids living in poverty around the world (including here), so I admire your sentiment. It’s natural to aspire to more. I know for a fact that if I had the OPs income, I’d likely want more.

And that is the problem when your own self worth is based on what you earn/own. You’re always comparing yourself to others, without any knowledge of their circumstances. That Bentley might be a rental or on finance (almost certainly). There will always be someone better off than you. I’m just beginning to seek satisfaction in other ways rather than moping about what I don’t have (and I don’t mean that in a judgemental way, OP, I completely get your mentality and have a constant battle with myself over the same thing). It’s especially fruitless living in London where, while my wage is decent, it’s a struggle to even afford a flat, let alone a Georgian mansion. It’s also a place where there are people who’s riches you will never reach. I’ve let that mentality beat me up for years. 

I would agree wholeheartedly with that Ryan except most people eventually come to terms with the things they have achieved in life but then I am older than you and was never particularly ambitious although I reached a good level during my career. I think my Dad was an example to me in that he was extremely ambitious, reached the top of his field and rewarded for it in monetary terms but the stress of his career and running his company left him no time to look after his health and he died at 63 with no retirement and the last 5 years he was in poor health. He left my mum a very rich widow but she has never enjoyed the money beyond being able to help her family.

I think the London lifestyle leaves many feeling dissatisfied because there is always someone richer. We moved away from that and are satisfied with our house we have had for more than 30 years, 6 and 7 year old average cars and our hobbies, friends, family and lifestyle. We and our family are healthy, enjoy each other's company and have enough to do the things we want to. Otherwise it just seems as if you are never happy if you are always chasing the next dream. I cannot imagine why I would need a 7 bedroom mansion or a swimming pool or 10 cars even had I the money to acquire them all. We often joke if we won millions on the lottery we would end up giving most away. Boring to some I would think but remembering my Dad money was not everything. He did not even reach the level he did for the money. I think it was the sense of achievement to be the best he was chasing. 

ryanm8655

warby68 said:

I disagree that most people are content with what they've got.
Upward mobility has long been a thing as has the widely varying appetite for risk.
Aspiration to me is like a ladder, like you sometimes see on surveys when asked to place yourself compared to the average. I've always wanted to be one or two steps higher and it keeps us striving but has never been too unrealistic - got us from the 2 bed starter in average area to 4 bed detached double garage in really nice area and school fees but it won't get us to the mansion and never will.  If you try and jump too far up the ladder in one go you're more likely to slip and fall. 
Cars are the ultimate ladder, as this ones like an escalator. Because of massive depreciation you have to keep running up the ladder endlessly or you end up in a heap at the bottom (literally) . If you're lucky the heap with still pass its MOT but maybe not. So if you jump too far up this ladder at once its literally an endless race to stay ahead unless you decide to jump off at some point for a while. That's what OP is doing partly but also why doing it fully will help very immediately and very fast.
Sorry, a bit of a rambling analogy but we like cars too but are very aware that cars are transient for satisfaction. The minute it hits your drive its old and there is always another newer shinier one. The house and the school fees and a happy, balanced relationship with loved ones on the other hand have far reaching value for the most part. 
Great to see OP feeling better as the thinking goes on to include the whole picture and I think its really admirable for someone so image conscious to admit his flaws and to needing a bit of help.
Good luck OP

Completely agree with you.

I grew up with nothing and thought I’d made it when I landed a grad job at a big 4 firm. Then again when I got a £10k raise and became an economist. Only in my late 20s did I start to learn and now in my early 30s this point is really sinking in. 

ryanm8655

enthusiasticsaver said:

ryanm8655 said:

Are they though? I think it’s human nature to want more from life. Though if people just stuck to what they needed then there would be far fewer kids living in poverty around the world (including here), so I admire your sentiment. It’s natural to aspire to more. I know for a fact that if I had the OPs income, I’d likely want more.

And that is the problem when your own self worth is based on what you earn/own. You’re always comparing yourself to others, without any knowledge of their circumstances. That Bentley might be a rental or on finance (almost certainly). There will always be someone better off than you. I’m just beginning to seek satisfaction in other ways rather than moping about what I don’t have (and I don’t mean that in a judgemental way, OP, I completely get your mentality and have a constant battle with myself over the same thing). It’s especially fruitless living in London where, while my wage is decent, it’s a struggle to even afford a flat, let alone a Georgian mansion. It’s also a place where there are people who’s riches you will never reach. I’ve let that mentality beat me up for years. 

I would agree wholeheartedly with that Ryan except most people eventually come to terms with the things they have achieved in life but then I am older than you and was never particularly ambitious although I reached a good level during my career. I think my Dad was an example to me in that he was extremely ambitious, reached the top of his field and rewarded for it in monetary terms but the stress of his career and running his company left him no time to look after his health and he died at 63 with no retirement and the last 5 years he was in poor health. He left my mum a very rich widow but she has never enjoyed the money beyond being able to help her family.

I think the London lifestyle leaves many feeling dissatisfied because there is always someone richer. We moved away from that and are satisfied with our house we have had for more than 30 years, 6 and 7 year old average cars and our hobbies, friends, family and lifestyle. We and our family are healthy, enjoy each other's company and have enough to do the things we want to. Otherwise it just seems as if you are never happy if you are always chasing the next dream. I cannot imagine why I would need a 7 bedroom mansion or a swimming pool or 10 cars even had I the money to acquire them all. We often joke if we won millions on the lottery we would end up giving most away. Boring to some I would think but remembering my Dad money was not everything. He did not even reach the level he did for the money. I think it was the sense of achievement to be the best he was chasing. 

Completely agree with this too. Sorry to hear about your Dad, that’s really sad. I do think there is a point where you come to terms with certain realities and priorities change but while there is still room to grow...and some just never reach that point. It’s like the mega rich CEOs that continue to work themselves into the ground with a new start up even after they’ve made several hundred million from selling their last company.

Your lifestyle sounds ideal to me, I’d love to be in your position once I’ve settled down. I guess as we grow we realise what truly makes us happy and it certainly isn’t £30k of debt

monetxchange

I think there's some truth in a lot of these comments. It's not unnatural to want more, but I also think there comes a stage in life when you realise that not everyone is meant to be millionaires. Actually, only a privileged few ever get to that stage and it's not always because of hard work and determination - a look at the governments of the world will show you how much of an old boys club people with money and power is. This goal of more is more has been sold to us by the people selling these things in the first place.

I know OP you've been looking into getting help to talk through the not good enough thoughts and I fully support this. I think a place to strive to is not "clear the debt and then have money for more stuff"; it's clear the debt and then sort out a safety net. As said before, if your job went tomorrow you'd be on beans and the bus. Working towards accepting lifestyles in different forms than you imagined would be beneficial.

I know of somebody that worked for years with not much, won a large amount of money and died within a year. I'll tell you their family do not care a bit about how much was left behind and would much prefer to have the person instead.

getmore4less

I though the idea of the new thread was to put the car thing into the fight club category

The core issue to sort is everything is done on credit which results in never ending catchup mode.
Its got so bad that even the little things like car insurance are done on credit rather than annual and the say to day spending is going on credit cards.

The trick is to get out of the credit cycle by building up the funds to cover each item.

Start with the day to day and work upto the bigger items with a cash flow buffer

First is to pay the CC off in full every month with this month money,  not next months
then put a bit aside to cover the bigger bills that come in less frequent like the annual insurances.
probably only needs a few £k  topped up every month and it will cover all the big ticket items for the year.

The OP knows knows to do it because they run the BTL business that way.

What happens when you let credit run away is the times for each new batch gets longer, you want something and could save for it in a couple of months but why not do it over 6 month on credit and it feel like you have money left and the cycle repeats.
Although not said how much the big one looking forward beyond the year is  the balloon payments on the car
To get out of the credit cycles that needs saving for, if all of it is a stretch may be 1/2 this time and all for the next car cycle.

Basic rule for any borrowing is the payback period should be less than the cycle time of the thing you are getting.
to break a cycle you can do 1/2 the time so for a annual holiday to pay it over 6 months but plan that money for 12months so by month 12 you have the money for the next holiday.
Then you can either slow the savings or spend more on holidays with the same money.

Same works with cars if you want a £120k car that's £1,200pm put aside £2,400pm get it paid off by Y5 then Y10 you have the £120k for the next one, Y20 you have £240k for your next car.

But then at this level and depreciation I would think that buy the at 5y old and trade up every 5y will get there quicker and feed the itch more often..

alt80

Interesting to see others thoughts on this matter and some being afflicted by similar issues and others not. I agree if I can't address the relentless want for more I'll be in the same position in 10 years time maybe worse. Had an awful night's sleep last night kept waking up thinking about not being able to get this or that and I've put myself into a position where I need to play catch up just to pay for the things I already have. No security.

I realise some of the things I say may make me appear to be insular to what's going on in the world and ungrateful. I'm not. I know I earn well (especially for my area of the country) and am fortunate to have the things I do it just doesn't stop me from wanting more. I derive all my self worth from what I have tbf I'd rather be in a position where I wasn't constantly trying to live up to having everything and fully believe I'd be left completely alone if I lost my income which is let's face it is the only thing that's holding this massive house of cards up. I don't believe for a moment my wife would stick around.

Seen my accountant this morning some options for structure / using wife's tax allowances etc to maximise income (already knew about this and he's told me on more than one occasion to consider) and potential to move the Range Rover from being my personal responsibility but as I already knew big BIK for doing so. Wife came with me and had to tell him I live on the 'never never' and that being the reason we were there. One of the most embarrassing situations I think I've ever been in.

@RelievedSheff funny you should mention your Sierra. My wife's dream car is a Jaguar XJS, she's always loved them and would have one over any supercar. Similarly to your Sierra if we could buy her one to replace the BMW we wouldn't be fighting the depreciation and she'd be very happy.

@getmore4less I'm definitely in never ending catch up mode. Been in the trap for years spending next month's / next year's paycheque. I'm not even sure I can think of a time when I had nothing on credit or planned for a future purchase. I can cope with planning in business because I want the security of being able to weather recessions / an unusually high level of voids / large repair bills / quiet periods etc etc I can't think of anything worse than having to let a staff member go due to financial mismanagement. At least in part its self preservation - I know I'm wholly reliant on the fortunes of the business so am generally careful.

Tried to start working out how I can get to the point of not putting new things on credit and just came to an impasse. Yes it's got so bad I earn £7k/m but can't find £500 to pay an insurance up front without having to resort to using credit for something else.

alt80

Trying to do this month’s spreadsheet and you could say it’s putting into context why I need to do this and change my mindset. I’m really struggling to budget for the rest of the month without using any credit. Not helping thinking like this but it’s shameful. Honestly think we are going to have to buy some food and that’s it for the next couple of weeks. No going anywhere and petrol only for business miles. Don’t want to spend through the money from the sales if we can help it. Lots of payments are still yet to come out - my direct debit list is a very long one I don’t think more than a day goes by without some payment for something. I knew it wasn’t great but tracking over lockdown with a load of payment holidays lulled me into a false sense of security about it.

Wife bought a new phone cover for her iPhone today £45 from Apple because she wanted something as she’s not getting an iPhone 12 and they are being launched today so thought she might as well have a new cover. I know it’s not the iPhone 12 she wanted but it’s still money we really don’t need to be spending at the moment. Not sure if I should be annoyed but I am.

RelievedSheff

You need to tell her that spending on none essential items like that has to stop until your finances are in order. 

You need to lay the figures down in front of her to show her just how tight your budget is going to be.

If it is any consolation we have had an unexpected £240 bill today that has thrown our budget into disarray as well!