Future Proofing my life: Deposit saving then MFW journey in under 13 years

Chiglepig

LadyWithAPlan said:

I did go out in Saturday, saw a friend then another, had a cheap dinner £15 - it still came to £50_just with 3 rounds of drinks over the 7 hours. Amazing how post covid lockdown I am so aware of my bar bills.

Ain't that the truth! We have gone out much less than we used to since restrictions lifted, and are much more aware of what it costs when we do. It is like lockdown put a real firebreak between us and un-mindful entertainment spending . . .

. . . speaking of which, Private Lives tonight - and the bar tariffs at CFT are extortionate.

LadyWithAPlan

@Chiglepig Your evening sounds lovely, Private lives is a fabulous play. I guess we all get to decide what is worthwhile expenditure to ourselves, some spend it on dinners, travel, wine, cars, clothing or indeed art, be it theatre, live music, or purchasing  actual art.
I think the more we can all support the arts from grassroots to the West end version it helps all of us
I have friends who spend £10,000s a year on car racing as a hobby, buying new guitars or that amount in dinners  out. I would not spend so much on such but it is not for me to judge I think as long as its budgeted and we choose what we like to spend it on rather than willy nilly then such treats such be enjoyed and its fun to save for joyous things.


@Suffolk_lass - on your query - What are your timelines for your SIPP/FIRE and receiving income from it?

 On my SIPP strategy I completely understand why many people do buy dividend shares and indeed I know there are a couple on here who track monthly their received dividend income in a focused way so they can see how they are doing on FIRE which is fun and inspirational for them and I think a good game to play
 I may do that in a decade however that is not where I am at at present.

If one is doing FIRE and wanting to reduce work and live off dividend income and that 4% approx  of the full SIPP/ISA/SAVINGS amount so as to not kill off the golden goose then it makes sense to build the income stream funds in ISAs for early access and SIPPs  but for me tax efficiency, the period I am planning to work still and my other goals (home) plus I am often a HR tax payer so SIPP wildly better than a S&S ISA right now.

- my SIPP strategy is mainly about long term growth, then later long term growth and income.  However I realise the single best SIPP/FIRE investing advice is to simply keep investing every month, (especially as a HR tax payer in SIPPS) , but even that 25% HMRC contribution  really adds up and compounding over decades.. 

It has helped since doing my spreadsheet with when DB and SP comes in and me seeing what the 4% estimate on my current SIPP balance is. I am more ahead of the game than I knew (even though I have not yet bought a property and have not focused on SIPPs at all til 18 months ago, amazing how a little focus gets you a long way). I would like to fully fund the £40k SIPP each year  but the house deposit saving has come first - still I added £15800 last year to my SIPP and about £5k so far this year and I continue to do a few hundred a month at least.
Plan is once I buy in 2022 (or 23) then I focus on getting the SIPPS bulked up including using any unused portions of the previous 3 years and get them up to the full 40k.

I buy generally Accumulation funds rather than income funds, so such dividends can roll back in automatically. I can of course choose to manually re-invest which I do on the few income funds and shares I add but 
- it is easy to switch from the acc version to the income version of funds  when I am ready
- I like the ease of the automatic reinvestment, 
- time delay in me reinvesting income, so time out of market. I have not seen any data on whether it is a better deal to receive the dividends rather than auto reinvestment but time, ease and time out of market all add up to better efficiency.
- As I am a current HR tax payer I am not planning to take out any dividends from either a SIPP or ISA as I dont need the cash right no
-  I am not old enough to take any SIPP money out yet - 52 - and the plan is to think about any withdrawals in 15 years. I know some o here take money out to close the mortgage off, but I have not got any hard figures yet on that for myself.
- My DB pension kicks in at 60, that also I am planning to  freeze and allow to grow.
I think I am only missing out by buying acc v income funds in that fun game one can play - as in I have received X per month on dividend income. However I spend less time seeing when dividends are paid in and having to reinvest or add cash due to minimum contribution limits.  It is the same in my S&S ISA.

My current gameification is seeing the % of FIRE I hit each month and round numbers

Rather than me spending hours  learning about new funds and companies I largely choose to invest in funds I already own, having already done the research,  but largely in Vanguard SIPP and I choose each month to weight % across different countries - I was hugely underweight in the UK most  last year, but then started buying some again so did well there and caught the late UK rally  vs the rest of the markets but now no longer investing in UK only but more global funds, I also like ASIA PACIFIC Ex JPN, the Vanguard Germany ALL CAP ETF, Emerging Markets, ESG

I love Vanguard Global Small Cap and buy some every month as well as buy a unit of the dividend fund VHYL as well as it is the big companies. I have very little govt bonds so for me the VHYL allows me to stabilise the portfolio a bit. I have a fair few ETFs in Vanguard as they free to buy and works out slightly cheaper over a lifetime, but where I have to pay to buy ETFs or shares  eg in Fidelity and Harg Lan I really take time to make a decision  as the cost of investing plus I will buy at least £1000 in anything given the dealing costs mean I need to be very clear on why I am buying it rather than just a Vanguard or Ishares or L+G International fund. I dont buy the target retirement or Van Life strategy funds as I would rather do my own mix. I stopped buying US last year as I got the rally but now as it is a 15 year plan I am still buying little bits  (£20) of US each month even though it feels high.

I made 33% in my V sipp in the last 18 months plus of course the additional 25% hmrc contribution AND the extra HR tax payer bonus.


- In my SIPPs I  do have a few dividend receiving shares & funds eg Vanguard VHYL, V3AM and also- Shaftesbury, Supermarket Income REIT, etc and its fun to see the money come in but as there are minimum £25 investment in Harg Lands, often the dividend sits there in cash not in the market so I have to either add more to invest or let it sit there. My main SIPP is in Vanguard but I have the HL one for some shares and property, REIT stuff inc iSHARES GLOBAL PROPERTY and L+G Global Real Estate Dividend Index (but again when I can choose I choose the ACC version) I also like the L+G technology fund and buy some more regularly. I also like Asian property reits as well as the warehouse/storage ones.

There is certainly an argument though that one could buy just 100% Van Global ALL CAP and be done but I like mixing it up.

- My S&S ISA is currently nominated for my house deposit, it will hurt to sell  but I am making great returns on this - approx   22% in the last year alone  and about 25% of my deposit is in the S&S ISA, so its a risk I am taking. However due to the tax benefits I focus on adding to my SIPP ahead of my ISA for pension/FIRE, especially as a HR tax payer.
Once the flat is bought, I will be getting that HMRC contrib to the max £40k p.a for 3 years back then will look at the S&S ISA again for FIRE.

Hope this helps? 



Nov  Groceries Challenge  £107.70/ £140  + £13.87/ £100 bulk 
Went to office  yesterday and unusually I did not take food with me so had some street stall food £6.50 for lunch and snacks £2.40 
But I am aware I have 12 days left of month and £33 to play with in main.. I am entertaining next week, that may have to come from entertainment budget. I have loads in freezer but I will be buying my freezer black Friday weekend (way too excited about a white goods purchase)  so may well be using my bulk fund to stock up more. I think it will be fun to go shopping for my freezer and I think it will stop less trips to grab food. I live in central london so it is about less trips so I dont spend as much rather than availability.

I do need brown rice, DF milks, some veg and fruit, will get a FR Chicken to also make stock for next week.

I had bought some wine for my BIL birthday last month on an offer and I see the wine company Naked Wines has charged me for a wine club DD this month £25 (no warning  it was probably stuffed in tiny T&Cs)) plus gave me £20 voucher. Annoying but rather than try and get it re-added I have just bought a mix of 6 bottles (I could not buy less!) and had them sent as early Xmas Alcohol buying to my parents. What with the £4.99 service charge (as under £100) it has cost me the £25 they took and an additional £11.93 but 6 decent bottles for £37 is not too bad and I can use to cart round Xmas time and odd gift.

savingholmes

Good call on home entertainment

Great boost on your sipp. You are doing great.

Sistergold

@LadyWithAPlan, you are doing great with investing for your future! Well done on the progressing the program, you have really stuck with it! 

Suffolk_lass

Thanks for taking the time to expand on your approach to investing. We have different pots for different risk profiles and DH's S&S ISA is growing at a faster rate than mine, but his account dates back longer and is a riskier set of shares and funds. What I am bad at it both cutting our losses and selling and moving into other things. Still, my self-invested account is returning growth that is twice as high as the managed one for a bit less money in fees. 

LadyWithAPlan

A very exciting morning, I finally saw and purchased a l*dl veg box...woohoo, I had heard of them and like a WILLY WONKA Golden Ticket I have been searching and not finding. Of such small sweet delights a life is made )

 I had to pop out early to get some cleaning stuff as a new cleaner was meant to start at 10am  (my neighbour has her and I wanted a autumn clean and then maybe have her every 3 weeks or so ..) So I popped in to the LIDL as it was next to Poundland.. and there shiny and new were 3 veg boxes
I only bought one but what a bargain
£1.50 box has punnets of grapes, blueberries, raspberries, mushrooms plus 6 bananas, 8 satsumas, a mago, 4 carrots, 2 red peppers and 10 potatoes. #BARGAIN

I am working from home and my neighbour's cleaner has not turned up for either of us as yet, but  I felt a fresh start on cleaning was a great idea. 

Nov  Groceries Challenge  £110.78/ £140  + £13.87/ £100 bulk 
£3.08 lidl - veg box and 2 x DF milk

I also bought some household stuff but that comes from a different budget.

Due to the would be cleaner I am finally sitting and working in my study rather than the lounge where I have  a table, which actually would keep my lounge less messy with work papers such as they are.  My study has become some what of a dumping space so once my programme is done this is the next venture.

I had really hoped my programme was done  by now, I have moved it forward but I will get it out for beg Dec for Xmas. I now think the 2 hours a day plan should be instead now  the work on it 8 hours a day til it is finished   So I will be doing some of that today after my work today and gym.

@Sistergold slowly getting there - just need that last push and focus to get it over the line. 

@savingholmes yes its fun to watch my FIRE % slowly go up. Covent garden and Soho last weekend was beyond packed - like Xmas Eve busy so I expect  the bars and restaurants should all pick up even without my business  

@Suffolk_lass yes cutting your losses is hard, which is why it is easier to buy the big funds rather than shares with the volatility. Good your self managed SIPP is doing well though. Check out the SUPERMARKET REIT and the warehouse storage supermarket  ones as they are all paying dividends and  look stable. 

Happy Friday all 

LadyWithAPlan

TT round up at the end of the week means my  house savings are ...

 19/11/21   £78,103.60 /100K  
Nov  savings  £5309.93 / £3,603.01

My figures are actually better than this as my S&S ISA which is about 20%+ of my deposit is up  £400-500 this month so far but I only add this at the EOM.
The 80k goal pre Xmas is completely doable as long as I get some invoices paid..
Had a chat to my old co accountant on a restructure and she was saying how earning between 100k and 120k is actually an effective 63% tax rate (as you lose your personal allowance). This is not me  (but after my programme is launched v hopefully ...  ) but just shows  how valuable that SIPP HMRC tax benefit is...

The cleaner did not turn up after all that so I got Balthazar my robot vacuum out, just vacuum and then will get him to mop as well tomorrow after vacuum x 2. At least I did an hour of tidying before the cleaner was due  - which was part the reason I booked her so flat looking better for the weekend. 

I did a lot of work this week on 2 projects for my one client so 5 days this week rather than the 3 I have been used to which is good.. Not moved today on programme though but that is tomorrows job, I am off out tomorrow to see a friend for a belated bday celebration so I am having an earliesh night tonight.


I am considering making cottage pie instead of chilli with my defrosted mince, the shepherds pie was so delicious that it may have to be done and not that much extra effort plus I got potatoes in my lidl veg box to use..

savingholmes

Great money news all round. Good plan to blast through the last of your programme stuff especially if it has high income potential.

Enjoy your time out with your friend

Suffolk_lass

How frustrating that the cleaner did not show up. Thanks for the tips, will take a look

LadyWithAPlan

@Suffolk_lass at least I tided up a bit ahead of her potential arrival so ...

@savingholmes I have to get these programme finished it is driving me nuts.

Nov  Groceries Challenge  £125.05/ £140  + £15.07/ £100 bulk 
That £140 limit is nearing ) but I do have loads food in the freezer and my own ready meals. Last moth I had a £160 challenge plus £10 bulk so lets see if it makes me start to empty the freezer for meals.. 

Just popped into local lidl after the gym for some rice ... and of course have ended up cooking a beef hotpot with potatoes instead .. will be able to batch at least one portion..
£4.20 bulk on pulses, passata, DF yogurt, tinned mackerel + £14.27 of Grocery - YS : pork loin, chicken crown & salamis all reduced plus a fair amount of veg, guacamole,  cashew nuts salsa

Off to see a friend for a drink early eve, then a party at a friends for her birthday - so at least a bottle cremant or champagne , maybe few chocolates and  of course a round of drinks at least before.. However hardly spending anything compared tp pre cpvid still on entertainment.