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

Grogged

LadyWithAPlan said:

I also have a much smaller HL SIPP as well  to hold some property trusts, ( 2 x international) and a Asian property ETF , a UK property REIT,  and also a Supermarket REIT which is providing growth and dividends plus a couple shares. Happy to give you the names as I researched a lot. 

I went with BCPT, EPIC and WHR which have proved to be good investments for me.
I branched out when it was cheaper to use a fixed price provider than VG due to the size of the SIPP and could choose other investments round my core VG.
I've not gone international, just stuck to the UK, so I'd be interested in seeing what you picked.

LadyWithAPlan

7 Day  anniversary part two

 Hope all is well with everyone.

Not  NSD - £2.60

I was in the office today - I now pop in one day a week and wfh a couple others. I took my food in to eat (win!)  but could not sleep last night and I had a lot of maths to do, so my brain was not happy . Hence a sugar/treat run ..

Could be worse £2.60 but was planning a NSD…

Having seen some MSE 24 or 25 NSD on the MF roll of honour – an area I need to work on. However never tried a NSD before the last week so..

so Grocery Challenge to 31/08  £2.60/£70

Selling stuff £20 –woohoo

I put on my local neighbourhood group 3 beauty things to sell and one is sold £20 so that going to house deposit fund  - to   £68,625! Not updated it as yet as waiting for her to pick up tomorrow. I actually have 2 of them so she may want the second.  The other one is set to go on ebay Friday so…

 I need to draft some ebay things in the hope there is a final listings free weekend at the end of the month

Inspired by all the declutter 2021/2021 goals  I will join in some way that makes sense  eg I will go back to the minalism game I like. Did 3/5 things yesterday and nothing today

 Selling aim        £20 /£1395

The robot vacuum has arrived – Names?

I have just see my robot vacuum but too tired so I have just hugged the box. Will get going in the morning as I don’t want to loose any bits.

 

I am debating between

Sneezy (one of Snow Whites dwarves singing ‘hi ho hi ho, its off to work we go)

Or R2D3

Or Ben as discussed.

I will decide when I see him moving.

 

 

Mortgage Fears - Nightmare on XXX Street Pt 2.

 As per my post earlier where I realised this stepping up to buy is a real new blueprint or idea I need to get used to..

 

 I have just done a huge spreadsheet extrapolating last years returns, this years income  so far (lower as  3 days not 5) and expenses so far, calculated the business expenses, added my SIPP contrib. so far, worked out the tax … and looks like I will end up just  under the 50k and a LR tax payer if I continue on my 3.5 to 4 days a week plan – NO!! and  made a rough SOA.

The expenses are pretty accurate – some of them are allowable as part of my business  and then I have already been away this year and had major dental work – a bit more to do. Plus I have one wedding booked in but then no more!

 

On my G sheet I can then adjust  amounts I pay out so grocery, gifts and all that each month.

I have then looked at  mortgage sizes and years terms to see if these huge £380k /£300k mortgage sizes are doable. They are but a lot of strain – I would argue too much unless I get working more.

Immediate focuses to buy my home: - If I stay on  current income  - I need a  mix of a
smaller cheaper flat, further out?
a larger deposit 
really focused budgeting

 

 

Better solutions are
- increasing my income to last years- current company is restructuring  and could be 5 days by Xmas but not now. I have been ignoring it as it just slowed my savings rate  but I cant  keep my head OSTRICH LIKE if I want to buy seriously

-       Get a 2 day a week or couple shorter full  projects as well before Xmas
- Working further on my programme – getting it ready for sale by Aug 31st is a must but not worked on it in over a week!

-       Get work again  in my other career – been on hold and got some bits but need to start pushing that aga and contacting people. Extra income.

-       Carry on Matched Betting – avg  £4k To 4.5k the last 2 years each and tax free

-       Start comping again for gifts, experience and the odd thing to sell

-       Declutter and sell to make money to increase savings.

 

I do feel calmer now I have seen the spreadsheet numbers. They are scary but clear. I have looked even at the difference between my current rent, increases in CT and service charges and  after projected mortgage payments on £380, £350k, £300 and £280k … it will leave me with  extra between £500 and £1000 a month for savings and OP. I already have included 10% net salary as SIPP contributions – really not enough either.

 

I cant take on a £380k mortgage and expect to work 3 days a week and be comfortable. It is just viable but the payments would be 50/58% of take home pay or more.. Not a good plan.

 

So income up is first focus. I am lucky I have lots of ways to earn.

 

I need to finish  and put up for sale my programme, keep to my ever tightening budget and then get CV updated and out there. I also need daily declutter (minimalism game) and listing things I really do not need.

 

So actually looking at the plan and the maths I have extraordinary clarity, less fear – more I need to do X if I want to do Y stuff..  and what do I need to pause for the next 12 months on this process.

 

Reading thru a lot of the Roll Of Honour showed how many people did short term sprints to finish lines, celebrated then went hard again.

 

The first finish line is getting the house deposit  up to £70,000 ideally without my normal income – so  £1375..

 All I need now is to have a great nights sleep and turn up in my life and goals fully!!

South_coast

You're putting a lot of pressure on yourself, maybe tracking NSD's is something you could ease off on? Personally, they're not something I've ever tracked, setting a budget and sticking to it is the important thing to me - if that means I spend a bit of money every day then I couldn't care less, as long as I'm not blowing the budget. With everything else you've got going on, seeing you beat yourself up about spending £2.60 that you really wanted to spend and had in your budget but it was on the wrong day of the week makes me worry you're going to burn yourself out x

Grogged

Being prepared is the key and you look very well prepared.

Whilst your goal is to pay off your new mortgage before you retire, have you also worked out paying off the balance on the day you retire?

As it stands for us, we can make more from investments than making large OPs.
To ensure an upside, we just fix the rate for as long as we feel comfortable.
The aim was to be mortgage neutral - knowing we had enough to pay it off on our target date.
You can then take a longer mortgage, with lower repayments, knowing that it would be paid off when you want to, not the end date of the mortgage.
You'd have created your own offset mortgage.

Just another way of thinking about it.

LadyWithAPlan

South_coast said:

You're putting a lot of pressure on yourself, maybe tracking NSD's is something you could ease off on? Personally, they're not something I've ever tracked, setting a budget and sticking to it is the important thing to me - if that means I spend a bit of money every day then I couldn't care less, as long as I'm not blowing the budget. With everything else you've got going on, seeing you beat yourself up about spending £2.60 that you really wanted to spend and had in your budget but it was on the wrong day of the week makes me worry you're going to burn yourself out x

Thanks for this hope you are well.
I will have a think. Yes 2.60 is well in my budget, I normally have spare blow money and 200 a month grocery.. I guess I am a newbie and raring to go and try all the new tricks at once. 

So I will treat NSD  as a light hearted  game. 

I am also trying the grocery challenge. I will see how it goes this month and then see.

I do like a challenge but there are a lot of goals here all pointed towards the big one so this is definitely a learning process. 

Suffolk_lass

Hi @LadyWithAPlan, I saw you over on Grocery Challenge and thought I would have a bit of a read (and subscribe).

I was wondering if you had compared staying with your current low cost rental while you throw everything at saving for longer, so that you buy much later and possibly mostly for cash (and have greater certainty about where, affordability etc)? You suggested your interest would be roughly the same as your rental costs. Another set of extrapolations for a sleepness night perhaps.

I was wondering where "further out" would be in terms of commute (if you do) from a train terminus or tube line, compared with now, and why and whether London is your long term aim (just exploring other variables I suppose). Commuting (if you do), versus cost of property, quality of neighbourhood, proximity to friends, quality of local services and facilities, and so on.

I also wondered if you have any Premium Bonds? with a 0.6% savings rate on your Marcus account, you might consider a large bond to see what return you get in return. I get about 1% on average, but do not have the maximum £50k

Also, with Tilly Tidying, I round to the nearest £10 now and they grow quite a lot faster (but I am now debt free and no longer working). Just saying, it can be rewarding and addictive...

Our vacuum thing is always called Herbert (the hoover), and also what my auntie used to call my cousin (real name Robert). No we never knew why, either.

I have often referred to my "smug filter" - I spend too much if I am too comfortable (and eat too much of the treat stuff after a certain amount of weight loss) and feel the need to apply a certain amount of pressure on myself - moving money I want to save earlier in the month, to increase pressure on my bank account and make my spending a bit more conscious. I do always keep an accessible emergency pot close by (my TT pot) but I hate tapping it. I wondered if that might work for you in terms of practicing feeling the pressure and stretching yourself without high risk consequences, while you are saving, if you see what I mean.

LadyWithAPlan

Grogged said:

Being prepared is the key and you look very well prepared.

Whilst your goal is to pay off your new mortgage before you retire, have you also worked out paying off the balance on the day you retire?

As it stands for us, we can make more from investments than making large OPs.
To ensure an upside, we just fix the rate for as long as we feel comfortable.
The aim was to be mortgage neutral - knowing we had enough to pay it off on our target date.
You can then take a longer mortgage, with lower repayments, knowing that it would be paid off when you want to, not the end date of the mortgage.
You'd have created your own offset mortgage.

Just another way of thinking about it.

Hi  - you are a genius   This is a great calculation suggestion -and makes it all seem doable.
 I am so appreciating everyone's calm and focused wisdom on this.

I have this dream of 13 years MFW but actually in theory 67  retirement is only 15 years away  so 2036  (really not sure how my age crept up!) so I have had a look at your suggestion.

I was hoping for a 15 year mortgage but the monthly will be too high just as I am freelance and single.

Starting Jan 1st 2022
Starting A 23 year mortgage on worse case scenario £380,000 mortgage £450k place  - I would be 75!  .. at 2% (obv a variable as well!) 

Payments £1718.80 (which is completely doable - I was so freaked yesterday but the £380k number is scary not the monthly's actually cos of their impact on my life. and choices)

No OP  would mean balance at 67 retirement age is £159,651
With a £300 OP from month 4 (I will not be able to resist adding something) it is less than 100k!! £99,952

Saving for under £100k payable in 15 years against the mortgage is an achievable number. I have saved up £68k in  2 years so. .. on a budget yes but there is room to tighten and focus I can see and get going on surveys, ebay sales, earning more, my side hustles etc.

Starting A 23 year mortgage on scenario £330,000 mortgage  so £400k place
Payment £1492.64 - so very doable.
At 67 it would be £138,644  w/o OP
With a £300 OP from month 4, only £78,945.

I am comfortable with investing and would need to be clear on what the tax implications are for SIPPs at that point of paying off the mortgage  etc but this has definitely calmed me down I am sure I can invest and get £100k in 15 years plus with extra hopefully to live on top of current pensions. 

I have a currently £6636 DB from 60 - which I will delay I think whilst I am still earning and a full State pension from 67 so I have a bed rock. It turns out I really am a lady with a plan

LadyWithAPlan

Suffolk_lass said:

Hi @LadyWithAPlan, I saw you over on Grocery Challenge and thought I would have a bit of a read (and subscribe).

I was wondering if you had compared staying with your current low cost rental while you throw everything at saving for longer, so that you buy much later and possibly mostly for cash (and have greater certainty about where, affordability etc)? You suggested your interest would be roughly the same as your rental costs. Another set of extrapolations for a sleepness night perhaps.

I was wondering where "further out" would be in terms of commute (if you do) from a train terminus or tube line, compared with now, and why and whether London is your long term aim (just exploring other variables I suppose). Commuting (if you do), versus cost of property, quality of neighbourhood, proximity to friends, quality of local services and facilities, and so on.

I also wondered if you have any Premium Bonds? with a 0.6% savings rate on your Marcus account, you might consider a large bond to see what return you get in return. I get about 1% on average, but do not have the maximum £50k

Also, with Tilly Tidying, I round to the nearest £10 now and they grow quite a lot faster (but I am now debt free and no longer working). Just saying, it can be rewarding and addictive...

Our vacuum thing is always called Herbert (the hoover), and also what my auntie used to call my cousin (real name Robert). No we never knew why, either.

I have often referred to my "smug filter" - I spend too much if I am too comfortable (and eat too much of the treat stuff after a certain amount of weight loss) and feel the need to apply a certain amount of pressure on myself - moving money I want to save earlier in the month, to increase pressure on my bank account and make my spending a bit more conscious. I do always keep an accessible emergency pot close by (my TT pot) but I hate tapping it. I wondered if that might work for you in terms of practicing feeling the pressure and stretching yourself without high risk consequences, while you are saving, if you see what I mean.

Thanks for popping by and taking the time to share your wisdom.

Can I ask on the tilly tidy - its all new to me. 
- do you do this weekly? monthly? the round to £10?
- do you do it across all or just certain nominated bank accts?
- I have been balancing my overall savings money to be 00, rather than tilly tidying my bank accts to the nearest 0. What has worked best for you as you obviously had some real success with it.
- do you TT into another acct and move that over then once a month into savings? As you say it has become your easy EF?  I am not clear on this.
- on your smug filter do you thus take your bank balance down to a tight level just enough to cover dd's so you have to move money back from a EF in in case of overspending - this might really work for me?


I had not considered premium bonds so thanks for making me look at that again.  I think reading MSE guide that I can try and move say £10k over of my house savings to try , as yes I need to be easy access. I have 25% of the savings in my S&S ISA mkt, returns are 22% so far and I am comfortable with that level of risk.

I was wondering if you had compared staying with your current low cost rental while you throw everything at saving for longer,
I have been staying in my current low rent situation exactly for those reasons but the Dave Ramsey cash plan would be wonderful but with my income v London property prices v house market  crazy .. I think waiting 6 years is too long. I think within the year needs to be a target.

I also have realised that I have been a bit lax on my savings,(no smug filter to stop me!)  I have saved but my 3 days a week work has been fine as I am in a low rent situation - less than £700 pm for rent and council tax... I need to push myself to focus and saving for and then getting a mortgage is the push I need.

I am starting to look a bit further out in London as 2 beds by me are £600k plus or awful.  So educating myself abut where i am prepared to live, I often work in central london and in the evenings too so too far away is not workable at present, but circumstances change so.

LadyWithAPlan

Grogged said:

LadyWithAPlan said:

I also have a much smaller HL SIPP as well  to hold some property trusts, ( 2 x international) and a Asian property ETF , a UK property REIT,  and also a Supermarket REIT which is providing growth and dividends plus a couple shares. Happy to give you the names as I researched a lot. 

I went with BCPT, EPIC and WHR which have proved to be good investments for me.
I branched out when it was cheaper to use a fixed price provider than VG due to the size of the SIPP and could choose other investments round my core VG.
I've not gone international, just stuck to the UK, so I'd be interested in seeing what you picked.

I will check out your REITS in detail - just looked quickly they look good.

I have both in my SIPP & my S&S ISA  - they have done well and as a non property owner I like the fact I am in some property at least this way.
iShares Global Property Secs. Eq. Index  0.17% annual charge
Legal & General Global Real Estate Dividend Index 0.15% annual charge
They largely cover the same area. They provide a combination of income and capital growth in line with global developed market property companies and Real Estate Investment Trusts (REITs). The fund will achieve this objective by aiming to track the performance of the FTSE EPRA/NAREIT Developed Dividend Plus Index. The fund will invest primarily in property company shares and REITs.

Also I have 
Legal & General UK Property Fund I Dist  - a trust not a REIT...- its not on fire but looks cheap and is paying dividends. 
Top ten holdings inc industrial and retail parks so..
Lichfield - Fradley Park 150-200 Dunstable - Woodside Industrial Estate 125-150 Gateshead - Follingsby Park 100-125 Exeter - Into Exeter 60-70 Leeds - Birstall Shopping Park, Birstall 60-70 Hammersmith - The Aircraft Factory 60-70 Stansted - Hampton By Hilton 40-50 Manchester - North Tower, Deansgate Square 40-50 London - 120 Aldersgate Street 40-50 Bristol - Redcliffe Quay, Redcliffe Street 30-40 T

ISHARES II PLC,ASIA PROPERTY YIELD ETF USD DIST GBP(IASP) -
Property in  Australasia, Developed Asia  and Japan plus a few others. 



My favourite share is Shaftesbury SHB  - 
Shaftesbury is a Real Estate Investment Trust (REIT) which invests exclusively in the heart of London’s West End. Our 16-acre ownership of c.600 buildings is clustered mainly in Carnaby, Seven Dials and Chinatown, but also includes substantial ownerships in east and west Covent Garden, Soho and Fitzrovia. So residential, retail, f&b and the theatres .
 I cherry picked it for my SIPP for long term, I bought cheap last year  twice but may go in again and buy some more, it still looks cheap to me on a 10 year basis. It has finally paid a small dividend but for me its current value long term property growth in a property area that will always have footfall. Soho is now packed again with people.

On the share front I also have  some restaurants chain shares bought earlier this year so they flat or slightly down still .I bought them with an eye for 5 years - they are in my SIPP again so less risk gven the govt boost

Supermarket Income REIT plc SUPR - 

Paying quarterly dividends and doing well.
Supermarket Income REIT plc is a real estate investment trust dedicated to investing in supermarket property forming a key part of the future model of UK grocery. 

Grogged

Thanks @LadyWithAPlan, I'll take a look at them.
After hearing the horror stories of those locked out of property funds during the pandemic I much prefer REITs over open ended funds.
Glad the DIY offset idea was useful.