Any advice gratefully received!

Cactus25 · 16 December 2018 at 11:27PM

Dear MSE

I figure in the new year I will go and find a financial advisor and get some "proper" advice, not that I'm saying the advice I hope to get here isn't worth anything, but here seems like a sensible place to start!

My question is basically what would you do next? How would you invest/save/spend?

I found the savings guide on the MSE website a month ago or so and I think I'm following that advice before I read it. We set up a help to buy ISA a few years ago, we have paid back all of debts, we have a couple of bank accounts including a regular saver.

We live in London, we were thinking of saving a bit more and buying a house and renting it out (with a mortgage). However with Brexit uncertainty and the London market showing signs of peaking maybe this isn't a wise move.

Maybe we should buy a wreck of a house and do it up.

Maybe a holiday home in Cornwall and rent it out.

We have about 15k in an ETF, which is making a negligible amount. (At least its not losing anything)
I'm not keen to do much with the stocks/shares as I don't really understand enough. Hence we are in one of these funds which you semi forget about. Maybe I should learn about this whole area.

We have a direct debit for 250(ish) per month for the lottery.

To give you a brief bit of context: Last summer(nearly 18 months ago) my partner and I started a new now job together. It pays well(certainly by our standards) and comes with a house, car and all bills paid. We have a net salary of 6200 per month. My wife makes "high end" cakes on the side, we only take cash payments for them and that's our spending money for gifts/going out/holidays etc.We don't really keep track of the cash but I guess its roughly 15k per year. Its not a declared income, we don't put it in a bank just spend it. I'm sure that's bad/dodgy but it is what it is.

Right now we have 52k in the bank, maybe 9k in cash, 15k in an ETF. Never owned a home, no bad credit, a few credit cards with 0 balance. We don't quite earn enough for "private banking" with the major banks. They seem to come with financial advisors who may solve my question!

Thanks for any help!

Dazed_and_confused · 16 December 2018 at 11:44PM

Highly unlikely anyone replying will agree you should get a "financial advisor", especially from a bank.

Think independent FA instead.

You will no doubt get some interesting responses in relation to your lax attitude to tax

Katiehound · 16 December 2018 at 11:47PM

Do I read that right?

You pay £250 pm by DD for the lottery :eek:
Please tell me I am wrong- this is the MSE forum

If you want a financial advisor you want one that is independent.
First of all you need to decide what you want the money to do for you, and what is your attitude to risk.
I think the taxman might be interested too!!

jamets · 16 December 2018 at 11:59PM

Cactus25 wrote: »

We have a direct debit for 250(ish) per month for the lottery.

Never owned a home,

If you’re considering any kind of mortgage, no lender in hell is going to be happy with that DD going out every month. This might be a good place to start.

Alistair31 · 17 December 2018 at 8:15AM

£250 a month on lottery ? Sounds desperate.

Alexland · 17 December 2018 at 9:19AM

So you are both evading tax on the cash cake business and paying lots of extra tax in your lottery addiction? And you are thinking of paying more tax on renting and owning a BTL?

Your situation is increasingly bonkers.

le_loup · 17 December 2018 at 9:54AM

Cactus25 wrote: »

I'm sure that's bad/dodgy but it is what it is.

No, It's fine.
I'm more than happy to pay for the public services that you enjoy. Don't give it another thought.

Dazed_and_confused · 17 December 2018 at 9:57AM

And you are thinking of paying more tax on renting and owning a BTL?

Maybe the op is moving to the middle ground tax wise, paying stamp duty on the BTL (probably tricky to avoid totally with a solicitors likely involvement) but may not bother telling HMRC about the rental income??

Cactus25 · 17 December 2018 at 10:40AM

Morning all

I thought I'd log in and have 20 different ideas that I hadn't even dreamed of... wasnt expecting a bunch of criticism but c'est la vie!

The 250 on the lottery was an informal syndicate with a few work friends in my last job. 4 Friends and I chipped in 10quid a week and it went through my bank account. When I left and moved to this job I decided to keep it the direct debit rolling without the friends chipping in as it seemed a fairly inconsequential amount. I had no idea a mortgage lender would look badly on a 250 direct debit to the lottery, thinking about it I'm not sure why they would care. People have far larger frivolous expenses like leasing expensive cars on far less of an income than we have, and they are tied into those for years. I can literally cancel that direct debit in 2 minutes. The only other direct debts we have are a 65 for a phone we gave to my mother in law for Christmas last year and 90 to bupa for private health insurance. I actually think we would be good candidates for a mortgage.

I think I like the property route, however I'm not sure London in a sensible place to buy anything, plus anything worth getting we cant afford.

At least 3 of my friends rent out their properties dodgily (have a i made up a word?). They moved in with their new partners and rather than selling their individually owned apartments let it out privately. I know they haven't been caught in the last few years! That being said I have no intention, of intentionally entering into a mortgage under false pretenses. I'm here hoping for advice on what you guys might do in my situation. Is tax on a BTL unhealthily large? I know our HTB isa isnt valid on a BTL property, we would have to buy a normal home which in our circumstances is pointless!

The cash my wife makes from selling a handful of cakes a year has never really registered on our radar as tax avoidance. Maybe we are entroute to being the next Gary Barlow or Vince Cable! :rotfl:

Alexland · 17 December 2018 at 10:51AM

Cactus25 wrote: »

The cash my wife makes from selling a handful of cakes a year has never really registered on our radar as tax avoidance.

Tax avoidance is the legal use of tax laws to reduce one's tax burden. On this forum we often help people arrange their affairs to optimise their tax position. However what you seem so relaxed about is tax evasion on £15k a year of 'cash for cake' income. Now we are being drawn into talking about evasion on property income..... And you wonder why you are getting a negative response?

Alex

Cactus25 · 17 December 2018 at 11:10AM

Evasion on property income is something I clearly said I have no intention of pursuing. Simply I have friends that easily do it and have done for years, and I also suspect won't be caught.

Ultimately these are symptoms and the causes of the broken property market in London!

Trying to drag this back onto my question; What would you do in my sitation?

Any advice gratefully received!

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free