Statement of intent

StuartGMC

Well, my car is still not back with me, [strike]will have to call later to see if any progress is being made, but it all means an increasing bill I'm certain [/strike] update; just had the call, over £500 for fault tracking and a new electronic control module.... :eek:

The good news is that with the scheduled payment and OP, plus the "discretionary" extra OP of £200 I have just set to transfer today our mortgage is now £19868.77 :j:j:j:j

Interest will be added middle of January, but it should only be of the order £20-25 due to the offset so remaining below £20k

Looking back at progress, I see that in:
2007 we reduced the mortgage by £4419.53
2008 we reduced the mortgage by £5410.89

We planned to save £8644 over the year from which £4300 was for our family holiday (increased over 2007 due to €), hence a net target of £4344 increase. This level of savings was lowered in the year due to increased costs and no pay rise in 2008. However we actually increased our savings by year end by £4830, so we exceeded the target by £486 :j

We continued our investments in the S&S ISA funds, but reduced from £370 per month to £220 per month in November, the £150 being used to up the OP on the mortgage, so the OP is £377 per month.

The net position therefore is we are better off by £5410+4830 = £10240 at the end of the year.

S&S ISAs however are the negative part of the picture; value is only £5452.53 with a loss vs investment of -£4383.14 (Jun 2006 to now) which is slightly more than the investment we made in 2008 of £4140. So these haven't helped at all in the full picture but we need to look at how these will move in 2009; some pundits predict a lift in the first part of the year followed by a drop then slow increase 2010 onward, but who knows? #

I did a quick check on the ATM cash withdraws over 2008, and these averaged £246 per month. Now, there are known cash spends each month of:
£12 dd pocket money
£8.50 window cleaning
£67 (approx) my lunches
£50 my pub allowance
£150 "ancillary" costs
Total £287.50
i.e. we must be underspending the "allowance" amount a little. However, this is a slight misrepresentation as things like presents etc are often credit card not cash. If taken as an annual amount though the "ancillary" costs are £1800 per year which is a lot. I'm just not certain I have the time to get into the detail on this spend especially considering all the other things I monitor.

So we now proceed through 2009, with our plans intact. I still have a job, plus I have a pay rise at last from this month. I hope the latter can be used to increase our savings contributions as we had to reduce the monthly amount due to lack of a rise in 2008. Cash ISAs will start FY2009-10

Looking forward, well, as previously noted, we should be 100% offset in the summer and could in theory clear the mortgage in October when it should stand at £14k leaving only a small amount in savings. If we don't then it will be Feb 2010. I recall during a management training exercise we had to highlight some long term plans and I noted "financial freedom by 48" to which the CEO questioned me on having children to look after. Well, we may not be totally free, but, we'll have a lot more wriggle room with the mortgage out of the way!

I am now also thinking it will be time to look into more detail on investments and probably seek some professional advice once I have some more knowledge of the different vehicles available. Once mortgage-free we should be looking at annual savings approaching 44% net salary allocated to different needs. These include immediate needs like holidays, others for medium term like cars and of course, longer term but accessible for dd reaching 18, plus additional long term to augment our company/local government pension provisions.

It is quite a shock to see that we'll be 50 in just 6 years time, and the spreadsheet doesn't need too many annual lines to put us at 60 then 65 (our scheduled retirement dates, 66 for state pension).

Well that is more than enough for now, apologies that I've rambled on!
(I've updated the #1 posting on this thread too http://forums.moneysavingexpert.com/showpost.html?p=11324079&postcount=1)

garan

Stuart,

Under 20k and on target to be fully offset in nine months time.. Congratulations and keep it up!

Cheers,

Garan.

wabbits

Awesome.......do not need to write any more than that!!!

Well done.

Chris

setmefree2

and well done!

StuartGMC

StuartGMC wrote: »

S&S ISAs however are the negative part of the picture; value is only £5452.53 with a loss vs investment of -£4383.14 (Jun 2006 to now) which is slightly more than the investment we made in 2008 of £4140. So these haven't helped at all in the full picture but we need to look at how these will move in 2009; some pundits predict a lift in the first part of the year followed by a drop then slow increase 2010 onward, but who knows?

I don't need more spreadsheets (I can just add more and more pages inside the existing two! :rolleyes::rolleyes::rolleyes:), but I have just had three whole days with the S&S ISAs climbing in value, by a "massive" 10% since 2 Jan. This is so rare I thought I should capture the fact!

Of course, the reality is the markets are swinging a bit and the New Year, plus change of President in the USA etc is affecting sentiments so I am not predicting a "bottom" in the market yet, indeed it is expected to dip further through Spring 2009 I think.

However, it did prompt me to plot some of the historical data on the value of the S&S ISAs since we started them in June 2006 and the graph was interesting to note in terms of trends and the loss position. The funds (UK, Latin America and Russia (latter two only really running since FY2008)) had been generally growing with both investment and some market growth, but April/May 2008 saw this flat line then plummet August (-£1500) to October 2008 (-£4700). As you know we have changed the sum per month paid in and put the difference into increased OP on the mortgage, but hope also to get some pound-averaging in the S&S ISAs. Since October the losses have fluctuated +/- £500 around the -£4300 position, and I hope won't drop significantly below this.

Present situation:
Neptune Russia and Greater Russia 54.59% of value invested
Investec UK Smaller Co 65.02% of value invested
Threadneedle Latin America 69.92% of value invested.

I'll keep a closer eye on things now, (I do have portfolio running on Trustnet, plus my preferred investment supermarket) and will try to capture and plot their position to help in decisions on increased payments into the S&S ISAs in the very near term and for the 5-7 yr period.

Hopefully this plus the other data I have on our finances will assist in discussions with an IFA in the future. This will certainly be an interesting challenge in future in contrast to clearing the mortgage which by its nature has more predictability then investing, but, we all have to take full ownership of our money and can't sit back and wait on someone else to do it for us.

Have just checked NatWest web site and at long last they have changed the rate on their Offset product, dropping from 4.95% to 4.2%. The interest rate on the "savings" is now a whacking 0.2% (which doesn't matter as these are offset but it does impact the effective interest rate). This means our effective interest rate (at today's cash position) drops from 1.13% to 0.93% :D:D Hope this will be confirmed in writing soon but that would mean mortgage interest of £13-14 per month and of course our OP would increase as we'll keep putting in the same amount each month.

setmefree2

Good news about the shares. Fingers crossed for good returns in 2009!:D

StuartGMC

SMF2
A new clip art!

Have had notification formally from NatWest of the new interest rate as 4.20% and thus a reduced minimum payment per month of £269. Thus we are now overpaying £381 per month equivalent to 141.64% OP.

Credit card payment leaves current a/c tonight so interest charged on the mortgage has climbed to 1.42% so await OH pay on 15 Jan to reduce this again. Bill was quite high and hope of a low one mid-month is wiped out by the car problem... :mad:

Anyway, I'm hoping that the Next sales items account will be due for payment after 18 Jan because then it will be on the February credit card bill. This will mean items purchased on 21 December won't need to be paid for until about 9 March, meaning those monies have sat offsetting all that time

StuartGMC

Wow, had to delve back a number of pages to find my thread; it really is an active board here at the moment.

Dropped car in to Jaguar dealer to have the electronic module fitted. The bill was a total of £335, of which only £100 was labour, and when I checked about the previous labour for fault finding they said "well he failed to correctly identify the fault so we won't charge you". I guess it does pay sometimes to stay with a main dealer and it was less than the £500 I was expecting.

I was working on my laptop over the customer wireless connection whilst waiting for the work to be done. Not only did this get some things completed, it stopped me from strolling round the XFs there! Just heard they are launching a 3.0 Diesel S in March with very good performance, economy and emissions data. This may just be the "wish" for my next car, if the lag in acceleration from a standstill has been overcome. (You have to have a dream!)

abouttimetoo

Hi Stuart

Yes, the board is busier than ever isn't it. Good news on the car front and well done you for curbing your desire to wander round. I know exactly what you mean as I love cars and in the past it was the only thing I was complusive about; I've had some lovely cars over the years and it was only when I was down to doing less than 5k miles a year and about to buy yet another group 18/19 insurance car that I had to have stern words with myself and let my head over-rule my heart. As you know I've recently changed the car after having a 10 year banger - if you'd told me 11 years ago the sort of cars I'd next been buying I wouldn't have believed it:rotfl:

I saw you posted on another thread that it's possible that you will be MF this Oct (I think I read it right and now can't re-find the thread:rolleyes: ) so I just wanted to say fantastic news, doesn't sound great to say, "this year"

StuartGMC

ATT
Thanks. I'm in my car for about 1-1.25hrs each work day on a round-trip of 54 miles, and when I take off weeks for holiday away (taxi to/from airport) and time away on business my average annual mileage is 12000-13000 (my spreadsheet shows 12090 ). I could opt for a cheaper vehicle of course, but, I think we all have aims which allow us some "luxury" as our "reward" for working mine just happens to include this type of car.

You are right that about the MFD; if OH agrees that we draw down savings to a "low" level then we should be able to be mortgage-free this year in October. Still this will be tight at the moment, but I would be very disappointed if we don't hit the Feb 2010 date. The thread you refer to BTW is the MFiT-T2 from FB and Maza.