First Steps to Solvency

enthusiasticsaver

alt80 said:

@woahsoah plan to release equity from my home is in a couple of years time - fix for about 1.65% I think for 2 years when the fix is due for renewal in January then at the end of that term remo back to 60% - can ‘pay off’ the BTL remo which paid my original card debt. RR is a different issue entirely... if you’re prepared to buy a Renault twizzy I can see why you can’t fathom it haha. 

@enthusiasticsaver I will be very happy if we get the £15k - if that isn’t quite achieved not the end of my world. Tbf it’s stuff we either use so little or have never even opened so we don’t think we’re going to miss it and might as well go to putting some of this mess right. 

The total for the RR is £48.5k to find - I think I can find £20k by the end of the term but would wind up financing the rest. We can definitely find the money to pay the bmw balloon off - actually thinking about just selling it at the end of the term and if we’ve put the £17k away to buy it just using that to buy a really nice V12 XJS or put a few £k on 0% cards and get an equivalent DB7 (neither will depreciate and are timeless whereas the bmw will age and go through the phase where it’s worth pennies And the cycle starts again).

Tbh I don’t feel I’m going to need a lot of money when I’m 85 or whatever age - what are you going to be doing really? Res home will be paid for can release equity from that without paying to the bank whilst you’re alive so makes no difference - just as good as mortgage free. I’ll have at least the amount of BTLs I have now with no desire to grow so can take all the profit from those (Don’t atm). Probably not going to be doing much with your days maybe drive in the Range and a bit of walking into town for a coffee. Not going to be bothered about clothes etc as let’s face it you’re past your best at that age anyway and probably won’t be bothered about holidays. I’ve paid enough tax over my lifetime that I won’t feel guilty if the state is paying for the council tax/ running costs on my res home and petrol in the Range (if we can still get petrol).

School told me it wouldn’t even be worth trying. She didn’t seem to appreciate that whilst the incoming is ok the outgoings are too high, basically an attitude of ‘that’s your problem’. Not helpful. 

I think you were being a bit cheeky even asking for help from the school bursar to be frank so I am not in the least surprised she was not helpful.  It is your financial choices which make your outgoings high and they are  so much higher than most normal people that the position you find yourself in is entirely your fault.  I get you are trying to change in small steps but sending your son to an independent school is not a necessity, neither are three high performance cars. You could have plenty of discretionary income if you made better choices but not everyone's priorities are the same and it is your money.  

I suppose if you intend working until 85 then yes you may well be too decrepit to enjoy retirement so I guess you won't need much although I know many in their 80s who are active and well so your view of old age is different from mine.  As I have said before our goal was always to retire in our late 50s (60 by latest) and ideally still be in good health. We retired at 57/58.  Most of our money goes on travelling (although due to the virus plans this year had to change).  We were supposed to do East coast of Canada to West Coast now and would have been there now had circumstances been normal. Hopefully next year.  We do not skimp now on travel so 4/5 star hotels are not cheap and business class flights, gold leaf Rocky Mountaineer ( I am tearing up now LOL) all come to a pretty penny but for us it is a once only journey not because of the cost but the distance to travel.  We did do a Caribbean cruise in February but our family holiday in Centre Parcs June also had to be postponed.  My point being that if you want to  travel and want to treat yourself a substantial pension or savings in retirement will be needed.  In normal circumstances we also eat out a lot, go to the theatre, cycling on ebikes etc and have an expensive country club membership which is part of our social life as well as being able to play golf, swim, use the spa and gym and classes. They all cost and most of the money needed in retirement is the early stages from 50s to late 70s when you are hopefully fit and healthy.  After that yes  outgoings may decrease but you may need to buy in help or want a decent quality retirement home which are also expensive. Fine if you are happy to put up with wherever you get put if you have nothing left by then but I have seen both ends of the scale.  The very upmarket one my stepdad recuperated in after being seriously ill in hospital and the one my mother in law died in which was council and smelt to high heaven and the most depressing place ever.  I do not buy that you do not care about environment at that age. My stepdad did so well he was able to come home and live with my mum again. We also help our children and grandchildren out as my mum has done with us. Weddings, grandchildren, university, houses and cars all cost.  

Living for today is fine but you may regret it tomorrow if you have not prepared for a comfortable old age. As I have said previously we did many trips before retirement too when our children were growing up so I don't agree with only saving for the future.  There needs to be a certain amount of living in between.  My dad died at 62 before he retired and died wealthy but he also enjoyed life along the way (perhaps a bit too much to the detriment of his health). You have obviously always thought short term so planning for the future may well be alien to you but at least you are thinking about it now. I am assuming if you run a business you cannot run that entirely without a future plan. 

You are betting presumably that house prices will rise if you intend remortgaging to realise the money you used to pay off credit cards the first time? 

alt80

@monetxchange / @ryanm8655 / @ohdearhowdidthathappen Hardship was a dumb choice of word tbf. Yes, I know what true financial hardship is from tenants and very thankful I’m not in that position. I’ve got accounts showing a £3k/m deficit in my accounts so thought I’d give it a try hoping they might think let’s give this guy a break. Always a trier lol.

A lot of people have given me tales of relatively young people having strokes / heart attacks etc from stress / work. That’s one of my main reasons for wanting to try to reduce the stress. Actually main reason for sorting this personal financial situation out - the constant payments definitely contribute to my levels of stress. I struggle to switch off emails on all the time and respond at stupid times even weekends. Promised wife I’m going to switch notifications off a bit more - have been considering if what I’m doing is always productive. Working towards greater productivity is my aim right now and cut the hours a bit. 

BTLs should see me through retirement and I plan to be involved with my other business as long as possible - not the same as being employed. Hoping my son wants to take it on but if not will have to find some other plan of succession - no pressure on him to at all. Of course I want to help out son / future grandchildren but I’m not going to give them a lifestyle - they need to know the value of working for what they’ve got imo - some may disagree I’m sure.

enthusiasticsaver

alt80 said:

Coming to the realisation my ability to spend money far surpasses my ability to make it lol and I’ve probably been worse for the clothes than wife, I just notice it more when she buys tbf. 

Had to go into JL today to get something for work (100% genuine lol) also picked up two shirts and a pair of boots (not the ones I want but close) it was a good job i was third in the queue and had a moment of conscience so didn’t end up buying. Wife would have lost it - told her we are spending max £50 of entertainment budget this week iirc we would be -£300ish for entertainment with three weeks to go if I’d bought the stuff. She’s properly serious about the no clothes / no new tech etc right now we’ll wait and see when iphone 12 comes out though. First time I’ve ever gone in JL for work stuff and walked out just having bought the work stuff so a win there for the cards.

That is certainly a win and yes I think your wife would be justified in getting pretty mad if she is giving up things and you are carrying on as normal. Having spent almost half the entertainment budget on Saturday on literally the 3rd day of the month if you had then gone on to not only clear it out completely but take it into £300 deficit on clothes you obviously don't need would scupper your plans on the very first month. I am a bit aghast as well you have £15k of stuff which has hardly ever or never been used or sometimes even opened.  Have you added up how much you spent on it in the first place? You will never be an environmentalist, even without the thirsty cars. I am reading On the Beach by Nevil Shute which is literally an end of the world book with no petrol available so no cars/vehicles could be used.  Makes you think a bit about the world we are leaving for our grandchildren and generations to come. 

Seriously though well done on coming to your senses and showing some restraint. 

alt80

@enthusiasticsaver I’m not as bothered about v expensive holidays as you are tbh. Had a few they were great but would much rather enjoy my RR and a nice house everyday than see something once if I need to make the choice. Would rather not need to make the choice but I knew where my priorities lie if I do.

No desire to stop running my business / being involved. Appreciate I will have to slow down but the idea of retiring mid fifties is 100% not on my radar. Just doesn’t interest me. Short term thinking personally but I do plan short / mid / long term in business maybe not recently but did until a couple of years ago and have started to again.

Not necessarily - my ltv will go down with the next 2 years payments, will just remo back up to 60/65%ltv in just over two years time if values are up all the better helps my ltv.

warby68

@alt80
You must have some cheeky chappy charm in real life to get away with begging from the bursar in your circumstances. I would love to know the exact words they chose to politely decline you. 
Seriously, you didn't think that was on did you?
Our school was probably like most fee paying - the income threshold for bursary help is quite harsh, its income only, expenses are your choice and there is a very lengthy application form plus interview by way of 'deterrent' also. They actually also vet your assets and business interests to ensure you have taken a proportionate share of the pain on these too, believe it or not. There are a couple of non means tested academic scholarships but that's all out of 900 or so boys. They will agree payment plans for periods of temporary difficulty but that's not much help to you either. You used to be able to pay up front for a discount as well but that went by the way. Its very common to only use fee paying from 11+. our feeder schools only provide just under half the annual intake - the rest come from far and wide. There is also a small local trend to move children to private for years 5 and 6 to better the chance for acceptance for senior school, mainly for the 'dunces' though to be honest. Its common to use a tutor for the entrance exams if moving from state but the school looks for boys with wide interests and social skills even more, as in the exam only gets them the interview. Just some thoughts as you consider options/stages for your son,

theoretica

alt80 said:

 Of course I want to help out son / future grandchildren but I’m not going to give them a lifestyle - they need to know the value of working for what they’ve got imo - some may disagree I’m sure.

Had a chuckle over that - it's usually phrased 'working for what they want'.

monetxchange

I remember in another thread you said you'd put your son through university (all being that he wants to go) and then buy him a house when he graduates. Doesn't really sound like working for it by my book, but anyway my point is that won't be cheap and you'd probably want to do the same for any grandchildren/dare I say it further kids of your own too. All adds up and needs to be saved for.

The bursary thing touched a nerve as I'm several kinds of minority, so I know well how presumably white middle class boys with well off parents continually have a place at the table so really didn't like the idea that it would be taken from someone who really deserved it. Glad you've taken that on board.

alt80

@enthusiasticsaver Thanks. No not added up how much originally spent - I don’t want to know. No desire to be an environmentalist, sounds an incredibly boring and self righteous way to live. As for the no petrol book - hopefully not in my lifetime lol.

@warby68 I hoped with corona etc they might be feeling generous. Wife refused to get involved haha. No idea what we will be doing going forwards. Son isn’t a ‘dunce’ but isn’t outstandingly intelligent - he’s just a normal kid. I don’t mean that in a bad way either - quite pleased he’s not at the extremes. 

@theoretica oh I am very sorry, miss. My bets on you either are or were a schoolteacher lol.

@monetxchange No I won’t buy him a house. I put money into his account which will total about £20k by the time he graduates - even account for it in my budget have put this money away for him since birth. As he gets older it will be his choice if he tops that up by working part time for me / in other employment and up to him if he chooses to help him get on the ladder or spends it on games or whatever. I’m not going to give him a free ride far from it, we’re talking about a low deposit on a property - I had the benefit of 100%LTV he likely won’t. As for uni if he chooses to go I won’t be paying tuition but will help with living if he gets a job. Otherwise I’d happily put him through a degree apprenticeship if he chose to work for me. Up to him, his life and so many years to go right now so not worth speculating. I’ll be happy if my son is a bricklayer or a surgeon - not my life, so long as he has a good one I’m happy with that. 

I take an objection to the ‘really deserves it’ tbf - yes my son is white, male and probably regarded as middle class (isn’t everyone now?) and you’re implying he doesn’t deserve a place at the school he’s at due to his sex, ethnicity and socio-economic background unless I pay the full fee for the whole duration of his education whether I can afford to or not? Yet if we replace the sex with female, ethnicity with black and parents who claim UC that child ‘deserves’ the place and therefore the parents ‘deserve’ help with the fees.

ryanm8655

alt80 said:

@enthusiasticsaver Thanks. No not added up how much originally spent - I don’t want to know. No desire to be an environmentalist, sounds an incredibly boring and self righteous way to live. As for the no petrol book - hopefully not in my lifetime lol.

@warby68 I hoped with corona etc they might be feeling generous. Wife refused to get involved haha. No idea what we will be doing going forwards. Son isn’t a ‘dunce’ but isn’t outstandingly intelligent - he’s just a normal kid. I don’t mean that in a bad way either - quite pleased he’s not at the extremes. 

@theoretica oh I am very sorry, miss. My bets on you either are or were a schoolteacher lol.

@monetxchange No I won’t buy him a house. I put money into his account which will total about £20k by the time he graduates - even account for it in my budget have put this money away for him since birth. As he gets older it will be his choice if he tops that up by working part time for me / in other employment and up to him if he chooses to help him get on the ladder or spends it on games or whatever. I’m not going to give him a free ride far from it, we’re talking about a low deposit on a property - I had the benefit of 100%LTV he likely won’t. As for uni if he chooses to go I won’t be paying tuition but will help with living if he gets a job. Otherwise I’d happily put him through a degree apprenticeship if he chose to work for me. Up to him, his life and so many years to go right now so not worth speculating. I’ll be happy if my son is a bricklayer or a surgeon - not my life, so long as he has a good one I’m happy with that. 

I take an objection to the ‘really deserves it’ tbf - yes my son is white, male and probably regarded as middle class (isn’t everyone now?) and you’re implying he doesn’t deserve a place at the school he’s at due to his sex, ethnicity and socio-economic background unless I pay the full fee for the whole duration of his education whether I can afford to or not? Yet if we replace the sex with female, ethnicity with black and parents who claim UC that child ‘deserves’ the place and therefore the parents ‘deserve’ help with the fees.

I think his point was that your son already has a lot of advantages in life. So to be getting school fees paid on the basis of being in financial hardship when in your situation would be a kick in the nuts to those who really need it and don’t have those some advantages, statistically.

ladyholly

I hate to tell you but as I understand it you will be expected to contribute to university living exes as you have a good income. I dont know the current rules but I am sure someone on here will or are you planning on your son living on fresh air if his uni is distant so he can't work for you.