Prosperous and Creative Soul Year 5

savingholmes

Close to 4 years ago I finalised my divorce and completed on my biggest ever mortgage - £202K and switched from interest only between 2 of us to repayment on my own. I took the term for as long as I could - so 22 years - which means I would be 73.5 by the time I was actually free. 

Then I owed c£1.5K on a 0% but had a £2K EF thanks to a gift from family. This was compared to the £70K of debt we were in at the end of 2016 including 2 cars. That was our third or fourth debt cycle where previous sums had been in the high 20s and early 30Ks. 

So what has happened since?

1. Owe £30.8K less on the mortgage - c£8.1K reduction over the last year.
2. Home equity growth peaked at £45K higher in Dec 2023 before I downsized in Jan 2024 taking me back to '0'. I spent around £30K on my house after moving - but haven't got it re-valued - so I am unsure how much of that I'd get back. General house price growth in my area suggests my equity from price rises alone should be up £20-25K. Which is close to 10% in just under 2 years.
3. Owe approx £22.7 on my CC - but offset by £23.5K in savings - plus have about £900 in my current and business account (at the end of the pay month). So these are pretty neutral over the period. I used this money to pay for the works on my house - and it's all on 0%. I'm earning interest on the money by not repaying in full now. Most has to be repaid by August/Sept next year.
4. My SIPP (pension) has risen £1.5K - with £0.5K of that in the last year. I moved it in Oct 23 - before that it had been losing money.
5. I started an AVC Pension pot to create a fully tax free lump sum in 2022. I started with £350 a month - and now pay £1100 a month. This is now worth close to £31K - with £15.8K of that added in the last year. Overall this pot has had around £6K growth - which in 3 years is pretty impressive. At one point this year the growth element fell by £2K but it has since made that back plus more.
6. I've also had combined defined benefit pensions growth. I estimate it's value in the last 4 years had gone from £13.6K to £21.7K a year - a difference of over 60%. If I live long enough to draw it for 20 years - that's a spectacular increase worth £165K. I will also have had a few hundred pounds increase to a potential lump sum payment.

My goal in recent years has been to create a big enough lump sum to repay my mortgage through point 5 - my AVC pension pot. I wanted to reach financial independence so I can free up more time to pursue art and writing. 

In 2025 my goals have shifted. I've started a business - although I'm not yet selling products - other than through the odd exhibition and my earlier self-published book. I've been doing an online art course - which is increasing my confidence as are a couple of art groups I joined plus social media etc. I've continued book 2 of a trilogy - which I hope will be ready to publish soon.

My aspiration now is do everything I can to replace my current income through my business over the next 13-18 months - and then see if I can either get VR from work (best case) or push the button anyway and leave. My pension is currently acting as both golden handcuffs and also my most viable exit plan - due to the AVC element being fully tax free.

I can draw one pension unreduced at 60 - which would be worth over £5K with a close to £5K lump sum. Or £3.7+K a year with a £26.5K lump sum. My existing government pension is subject to big reductions if I take it early - so that on one level is a last resort - but on another level I can't free up my AVCs without drawing it.

I need to remortgage at the end of next year - but I may move to a retirement interest only mortgage so that I can leave work and pursue art and writing. That way I can still overpay 10% of the balance a year if I have the funds - but I'd have lower outgoings compared with a traditional mortgage if I needed it. 

savingholmes

In the last year I have prioritised art and my skills have improved dramatically. Joining a local life drawing group and a portrait group has made a big difference to my art as has investing £3-4K in an online course and related materials. 

I have started videoing some of my art process with the intention of launching a YTube channel - but haven't quite launched yet. I've also learned editing skills. I'm developing saleable products ready for launch. I've continued writing Book 2 which I hope to release just before Xmas. I now do compressed hours at work which has freed up time for my creative pursuits.

I've also had my son get married and had trips to both Italy and the US. Expanding my comfort zones - and stretching my finances.

Within the next year I want to have had several solo exhibitions and to have launched my website and a YT channel with related shops and courses. Plus have published my book. 

Financially (all being well)

• I will invest at least £13.2K into my AVCs - preferably more. 
• Clear my CCs - partly through monthly payments, partly through savings.
• Go to Oz (free ticket but still need spending money)
• Ideally also go to Italy still

I also want to update my will and put POA - for finance and health in place. I also want to see if it is possible to extend the age of my current life insurance policy.

jwil

Happy new diary!  All sounds great.

beanielou

Happy shiny new diary. 

Blackcats

Ooo a nice new diary.
great reflections and aspirations.

OpalGirl

Happy new diary - a great summary of the last few years and some great goals going forward.

Merlin's_Beard

happy new diary!

Humdinger1

Subscribed @savingholmes and looking forward to cheering you on.  Exciting times ahead love Humdinger xx 

glass_half_full

Happy New diary! Wishing you all the best on the next phase.

powerspowers

Happy New diary SavingHolmes! You have come really far in the last four years, excited to see where the next fourtake you

TallGirl

Lovely to read all the progress and happy new diary. You really have come a long way and sounds like financial freedom is just around the corner. Sending positive vibes for VR I never thought I would get but hey hip I did. Good luck with the exhibition