What next.

capstain411

Dear all,

I need some advice on how to save for the future.

Bit of background. Early 40s. Planning to retire at 65. Currently combined family income of £130k. NHS permanent jobs. Both me and wife have SIPP and employers pension. 2 children  4 and 8. No debt of any kind. 

Our current monthly outgoing is approx £1100. 

I would think I am very well diversified.

£100k current value stocks via isa/lisa/ sipp.
£10k crypto.
£90k cash savings in various savings products.
£100k in limited company which is not generating any further income as I no longer locum.

My house might need extension in next 3 years. I am budgeting 50k for that  worst case scenario.

My children if they don't get through good secondary school might need private schooling...not sure what to budget for this. 

A friend suggested investing in buy to let. What do you suggest. 

Please if you are going to judge, we worked very very hard and saved without leading a very frugal life. I still have 3 jobs. I am very blessed to be in position I am in. But this was not handed to me, we put ourselves in this position.

Dazed_and_C0nfused

A friend suggested investing in buy to let

Do you really want the hassle?

Do you understand the tax changes in recent years which mean you can no longer claim finance costs such as mortgage interest as an expense? 

capstain411

Dazed_and_C0nfused said:

A friend suggested investing in buy to let

Do you really want the hassle?

Do you understand the tax changes in recent years which mean you can no longer claim finance costs such as mortgage interest as an expense? 

Yes. I was thinking cash purchase of small terraced or semi- detached in b18 area of Birmingham. In close postcode commercial dist will host lot of companies moving out of London. HSBC  goldmam etc. So rental potential might be good.

I genuinely think property price next two decade will grow which will be good diversified option.

Thrugelmir

£1,100 per month spend? Enjoy life a little perhaps. Time cannot be bought.  

kuratowski

capstain411 said:

My house might need extension in next 3 years. I am budgeting 50k for that  worst case scenario.

My children if they don't get through good secondary school might need private schooling...not sure what to budget for this. 

A friend suggested investing in buy to let. What do you suggest. 

Save cash for the extension. Use your premium
bonds allowance, if not already taken. 

You didn’t say where in the country you live. An example of an independent school is HABS, which costs over £21k per year.  But there are other less expensive options, especially if you’re not in London. 

On this savings and investment board, there are only a few fans of buy-to-let. On the house buying selling and renting board, there are many. Given you already have NHS pensions, using both spouse’s S&S ISA allowances would seem sensible. 

jimjames

If your SIPP & ISA combined is only £100k then that might be something to increase especially with that salary level. BTL isn't great from tax perspective any more especially compared to SIPP Or ISA

DoublePolaroid

You might love your job and want to work as long as possible but in your position I’d be looking to retire years earlier than 65. 

capstain411

Thrugelmir said:

£1,100 per month spend? Enjoy life a little perhaps. Time cannot be bought.  

It's doable buddy. Me and wife cycle pretty much all thoughout the year, no debt. We eat out max 6 times a month. No gyms, coffee or subscription tv or TV licence.

Our tech and fashion 2 years old is fine with us  don't need latest.

We always buy proactively, only when there its a good price. Can't be bothered with waitroses and types when lidl is best. Blind test  you won't notice the difference.

I teach my kids to swim, run and cycle and tutor them myself. So minimal spend there as well. I spend more time with them that way. They do go karate and Ballet which I gladly cannot teach.

Not having overseas holiday perhaps skews monthly spend. 

Thrugelmir

capstain411 said:

Thrugelmir said:

£1,100 per month spend? Enjoy life a little perhaps. Time cannot be bought.  

It's doable buddy. Me and wife cycle pretty much all thoughout the year, no debt. We eat out max 6 times a month. No gyms, coffee or subscription tv or TV licence.

Our tech and fashion 2 years old is fine with us  don't need latest.

We always buy proactively, only when there its a good price. Can't be bothered with waitroses and types when lidl is best. Blind test  you won't notice the difference.

I teach my kids to swim, run and cycle and tutor them myself. So minimal spend there as well. I spend more time with them that way. They do go karate and Ballet which I gladly cannot teach.

Not having overseas holiday perhaps skews monthly spend. 

You are missing my point entirely. What are you saving money for?  We all live life by a thread. The thread can be cut at any time. I've plenty of experience of close acquaintances who'll never reach their retirement years........

Aretnap

Also... if you really are happy spending £1100 a month, your NHS pensions are going to easily cover that and more. So you have no actual need to save more or invest for your retirement.

So what is the goal? Just the extension - which you already have covered? Early retirement? Start spending more (eg start taking foreign holidays) in the future? Leave behind a large amount of money so that your children can enjoy a more extravagant lifestyle than you do? Or is money just a means of keeping score in life?

It's not intended as a dig at your lifestyle - it's a serious question about your goals. How and when you plan to spend the money has a big impact on how you should save/invest it. And if you never plan to spend it, it doesn't really make any difference how you invest it. It's a truism to say that you can't take it with you after all...

capstain411

Irony of working in NHS in my role  I totally get what you mean. Trust me happiness is very subjective. 

It would be very safe to assume at this  point we are OK. When kids grow a bit older I might have more expenses. 

I certainly have things like Disney   although not crucial to any child's growing up, on the plan.  

I don't think long term spending will be anywhere near £1100, I mean it will be lot more. I firmly believe in buying when I can afford with least amount of credit. Since pandemic we did not go on holidays. But 2 holidays a year is what I would hope for.Also if no grammar school, then pvt school costs. 

I would certainly like to gift both my children deposit for their 1st homes. These sort of things don't materialise overnight, and only possible if I start now.

As I insinuated before, whilst not compromising too much on quality of life, I would always like to cover the unknown and hopes.