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  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 698Posts
    • 3,102Thanks
    SuperSecretSquirrel
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of £525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, £50pm. Amazingly, if we were to keep up with this £50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just £50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to £250pm, £200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), £200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying £250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over £250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to £500pm. Two years later the overpayment would need to drop to £450pm (to avoid penalty), year after that drop to £400, and the following year drop to £350, and the years after that drop to £250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!
    __________

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!
    __________

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!
    __________

    January 2018 Update:

    Paid the mortgage off in full today (12/01/2018)
    Last edited by SuperSecretSquirrel; 12-01-2018 at 9:42 PM. Reason: We did it! :D

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
Page 24
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 4th Sep 17, 7:33 PM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Thanks KC, yes we've had a really nice time Might not be everyone's idea of a good time, but doing the simpler things with our two small children is what we enjoy the most!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Sep 17, 8:23 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Another small PB win this month

    I've paid a total of £151.34 in money transfer fees, and £6.35 in interest. Received £25.27 cashback, and 2 x £25 premium bond prizes.

    2 months into a 24 month experiment I'm £82.42 down. Plenty of time to break even and then start making a profit. Nothing is guaranteed with PB's, so I could end up being down by £82.42 at the 24 month mark. There's also a vanishingly small chance of ending up around £1m better off. I guess reality will lie somewhere in between.

    Interestingly, a holding of 50k is more likely to hit the £1m jackpot (1 in 28,537) than it is to win nothing (negligible). At least £500 is a virtual certainty, 96.9% chance of at least £750, 63.3% chance of at least £1,000, 7.02% chance of at least £1,500.

    Average luck would see me win £1,000 over the two years (if I don't shift any money out into better options in the meantime). That's a stooze profit of £867.58. Will be fun finding out if my luck is average, below average, or above average

    Interestingly (for me anyway), the chances of hitting a million being 1 in 28,537 doesn't seem all that bad. As a percentage, 0.0035% - never gonna happen. Funny how the same number, written in two different ways, give totally different gut reactions
    Last edited by SuperSecretSquirrel; 06-09-2017 at 1:38 PM.

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Betterthanever
    • By Betterthanever 6th Sep 17, 9:40 AM
    • 526 Posts
    • 3,607 Thanks
    Betterthanever
    Well done on the win....I'm sure it will be an experiment worth doing! And of course, essentially "risk free" so you know you can get your money back if you need it. I'll be watching with interest!!

    Current balance £112,593.71. Offset £2,677.73. £109,951.98 needed to be mortgage neutral!
    End date - 03/29 but aiming for 10/22 - 2018 O/pay £600
    Make £2018 in £2018 = £406.75/£2018
    Former DFW Nerd 230. Determined to be MF. Bring it on!
    • Lexi-lu
    • By Lexi-lu 10th Sep 17, 10:52 AM
    • 156 Posts
    • 786 Thanks
    Lexi-lu
    Hello SSS,

    Congratulations on the win and wishing you lots of luck

    LL
    Mortgage Balance £14889.31
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 21st Sep 17, 7:58 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Thank you both, fingers crossed for the October draw

    Nearly six months worth of detailed spending records under our belts now... Yesterday I realised a couple of cashback payments had been missed off the spending diary. Rather than lump them all into September, I've gone back and added them in the right place. I'll do a mini six month review with the corrected values soon.

    Reviewed my credit club credit score history too: 891 June, 786 July, 650 August, 564 September... Down down deeper and down

    In theory it shouldn't drop any further. No more borrowing or applications planned short term, and repayments slowly reducing the stooze pot... But next on the agenda is closing the mule card and some dormant current accounts, and potentially reducing the credit limit on the slow stooze card. This will reduce my available credit, but it will also result in my used credit percentage shooting up, will be interesting (to me at least) to see how this affects my score

    Not much else to say, other than if we stick to the January lump sum plan we have just 3 mortgage repayments to go!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Oct 17, 7:34 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st October 2017
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    £125,000.00        £0.00        £0.00        £0.00
    Cash:            £41,352.54     -£296.82   -£1,299.36   -£6,016.73
    Pensions:        £72,450.57   -£1,109.01    £2,701.48   £16,020.82
    Car Value:       £15,145.00       £95.00       £60.00    £5,795.00
    S&S:             £22,539.52      £810.38    £3,166.02   £11,378.93
    Mortgage:       -£16,426.36      £756.30    £2,254.03   £11,368.44
    Due to HMRC:       -£432.40      -£20.43      -£20.51       £46.21
    Student Loan:      -£513.79       £66.20      £131.60    £1,829.96
    Total:          £259,115.08      £301.62    £6,993.26   £40,422.63
    86.4% of the way to 300k net worth (2020 challenge), 13.1% mortgage ltv, £47,033.30 beyond mortgage neutral in liquid assets, 16.5% financially independent.

    Barely any change to net worth this month, mostly thanks to pensions taking a hit. Oh well, can't win them all I'm not in the least bit concerned by dips in pension value, though I admit the quarterly/yearly comparison make it clear that this is a very minor blip along the way. I might be a little less sanguine if the year on year value was negative That could easily happen sometime in the future

    I'm happy that everything within our sphere of control is still being handled well. No real progress this month, but through no fault of our own, so there's nothing to be done about it

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Oct 17, 8:40 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Spending Review
    Here are our household spending totals for the past six months:

    Code:
              BILLS     SHOPS     OTHER      TOTAL
    Apr     1278.73    291.91    721.37    2292.01
    May     1526.24    330.91    419.88    2277.03
    Jun     1518.57    304.92    397.63    2221.12
    Jul     1426.33    343.04    759.65    2529.02
    Aug     1167.57    329.88    333.92    1831.37
    Sep     1174.28    425.27    437.43    2036.98
    Total   8091.72   2025.93   3069.88   13187.53
    The bills category is comprised of mortgage, childcare, council tax, electric, gas, water, phone, internet, home insurance, life insurance, tv license, tv subscriptions, mobile top-ups, transport including all costs related to running two cars (fuel, tax, insurance, servicing, repairs, etc). The mortgage is without doubt our largest outgoing, having halved the term we are paying £828.48 per month. £4970.88 of the £8091.72 bills total was spent on mortgage repayments, leaving £3120.84 spent on all the other bills, an average of £520.14 per month. The mortgage line will disappear soon, and our outgoings should drop quite sharply as a result

    The weekly shops category includes all food purchased for preparation at home (including work lunches), basic toiletries, cleaning products, nappies, baby formula, etc. Pretty much all the things you'd have expected to buy from a supermarket around 20 years or so ago (so no clothes, toys, electronics, appliances, etc, just the basics). We tend to buy most of our meat from the local butcher, pretty much everything else comes from the likes of lidl or aldi, though we do use other shops to top-up on the handful of branded must haves. Average spend £337.66 per month. I'm sure it could be a little lower, but nappies and formula aren't particularly cheap, we eat well, and the house and ourselves are immaculately clean, I'm happy with what we're spending and what we get in return.

    The everything else category covers... everything else! £3069.88, or an average of £511.65 per month. Gifts, clothes, books, toys, appliances, entertainment, takeaways, meals out, holidays, days out, furniture, gardening, health and beauty, all the stuff that's over and above scraping out an existence. This area could be cut back on quite a lot should we wish too, but we are happy with the balance we have at the moment. We and the children want for nothing, so we're happy to achieve that on what I think is a relatively small amount of spending, even though it feels quite luxurious.

    My "finger in the air" annual household spending estimate (used in my financial independence calculation) was set at £28800. Six months in it seems as though we're actually spending a couple of hundred pounds a month less than this. Once OH returns to work and we start paying for more childcare I think it'll even out. I'll keep the £28800 figure for now.

    Once the mortgage is gone (soon!), if all else stays the same (it won't!), and we can assume the next six months will match the last six months (they won't!), our average monthly outgoings would be £1369.44. Pretty close to OH's net monthly salary working 30hrs per week. That would leave the sum I bring in as being available to save and invest for the future. That's quite a nice way to think about things, even if it's not how we structure things in reality

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 5th Oct 17, 8:30 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Taking the past six months as an example, stripping out the soon to be settled mortgage, we're spending £1369.44 per month. If we were state pensioners right now, our state pensions would equate to £1382.77 per month. Two full state pensions alone would be enough to cover our current lifestyle. Any personal provision we had made would be an added bonus.

    I doubt the state pension will be quite so generous when we reach state pension age, if we ever reach state pension age... No doubt it will be means tested too. Looking at how things stand, however, it's quite encouraging. Drawdown during early retirement could eat into the capital, and provided we lasted until state pension age before running out completely (since were talking early retirement, earning more money should be an option if this started looking likely!), things would be pretty much ok. Of course if your drawdown amount is set appropriately you shouldn't be eating into the capital in the first place, so that makes for a luxurious retirement with enough cash sloshing around to treat the children and any future grandchildren... and ourselves!

    I'm honestly quite shocked that we're essentially living our lives on the budget of the poorest of OAP couples (assuming they are not repaying a mortgage or renting). It doesn't feel the least bit austere. Of course there would be no slack in the budget to deal with any large unexpected expenses, so it wouldn't be without its stresses, but even accounting for that I'm very surprised!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • greent
    • By greent 5th Oct 17, 9:12 AM
    • 7,152 Posts
    • 72,783 Thanks
    greent
    Is that assuming, though, the new-ish higher rate of state pension @ £155-something/ week?- I thought it was the case that many existing pensioners got less than that, which would bring the joint monthly amount down by possibly £280-300ish/ mth?
    I am the master of my fate; I am the captain of my soul
    Repaid mtge early (orig 11/25) 01/09 £124616 01/10 £104927 01/11 £89873 01/12 £76317 01/13 £52546 01/14 £35356 01/15 £12133 07/15 £NIL
    BTL Mtge 12/16 £69786. 2018 OPs (#18) £2772.47/£4000
    Net sales 2018 £548.92/£1000 PAYDOX18 (#15) Done £18918.90
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Oct 17, 7:52 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Thanks greent, I just looked up state pension amount on the gov.uk site and was unaware of the huge gap between what people that start claiming this year receive compared to those already claiming. Seems a bit unfair, but I guess the tradeoff is they get a higher amount but starting at a later age, so for shorter time if life expectancy stops increasing. If that trend continues I guess I can look forward to a thousand pounds a week from my 120th birthday

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Moneyfordreams
    • By Moneyfordreams 6th Oct 17, 9:37 AM
    • 1,019 Posts
    • 4,959 Thanks
    Moneyfordreams
    hope it won't be means tested, after years of paying the b00gger and saving the last thing they should do is take your entitlement off you.

    Great summary
    Mortgage restart June 2018 £119950
    zero personal cc
    6x166 for sofas ending November 2018
    £2500 on DD1s car cc
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 19th Oct 17, 8:35 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Time will tell I guess MFD, and thanks

    Credit club update has come through - score increased by 47 points in the space of a month, I'm now sat at 611.

    What did I do to achieve this?

    Nothing.

    Minimum repayment DDs have gone out, and that's all. No accounts closed. No credit limits reduced. No active attempts to improve my credit rating at all.

    It's a funny old world, the world of finance, insurance, and credit scoring...

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 1st Nov 17, 5:45 PM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st November 2017
    Code:
                   CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
    House Value:    £125,000.00        £0.00        £0.00        £0.00
    Cash:            £40,918.17     -£434.37   -£1,086.99   -£6,971.75
    Pensions:        £75,837.86    £3,387.29    £4,481.27   £16,483.31
    Car Value:       £15,140.00       -£5.00       £75.00    £5,940.00
    S&S:             £24,173.04    £1,633.52    £3,586.53   £12,335.32
    Mortgage:       -£15,667.31      £759.05    £2,265.90   £11,421.25
    Due to HMRC:       -£450.15      -£17.75      -£61.55       £72.30
    Student Loan:      -£447.54       £66.25      £198.55    £1,825.13
    Total:          £264,504.07    £5,388.99    £9,458.71   £41,105.56
    88.2% of the way to 300k net worth (2020 challenge), 12.5% mortgage ltv, £48,973.75 beyond mortgage neutral in liquid assets, 17.3% financially independent.

    Crikey! What a difference a month makes...

    My last net worth update (1st October) saw us making pretty much zero progress - pensions and S&S took a hit, modest increases in other areas, net effect being very little changed overall. This past month has seen equities race ahead again at quite an alarming rate with over 5k added to net worth in a single month!

    It's hard not to enjoy seeing this kind of monthly net worth increase, but it really does feel like a bit of a rollercoaster ride at times!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Dec 17, 9:56 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Net Worth Update - 1st December 2017
    Code:
                 CURRENTVALUE     +/-MTH     +/-QTR      +/-YOY
    House Value:  £125,000.00      £0.00      £0.00       £0.00
    Cash:          £40,452.92   -£465.25 -£1,196.44  -£7,095.19
    Pensions:      £76,463.77    £625.91  £2,904.19  £18,248.99
    Car Value:     £14,825.00   -£315.00   -£225.00   £5,775.00
    S&S:           £25,174.54  £1,001.50  £3,445.40  £12,887.27
    Mortgage:     -£14,904.43    £762.88  £2,278.23  £11,470.90
    Due to HMRC:     -£483.33    -£33.18    -£71.36     £122.61
    Student Loan:    -£381.21     £66.33    £198.78   £1,814.85
    Total:        £266,147.26  £1,643.19  £7,333.80  £43,224.43
    88.7% of the way to 300k net worth (2020 challenge), 11.9% mortgage ltv, £50,239.70 beyond mortgage neutral in liquid assets, 17.5% financially independent.
    __________________

    Another month flown past!

    Nothing out the ordinary in this months figures, about as steady as they come really. Credit score didn't even budge by a single point!

    We're looking forward to Christmas, and beyond that a juicy OP in January We'll certainly OP the full 10% fee free allowance. Most likely a lot more on top

    If I'm not back here before then - Merry Christmas and a Happy New Year to you all!

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Escapar2020
    • By Escapar2020 3rd Dec 17, 8:57 PM
    • 82 Posts
    • 154 Thanks
    Escapar2020
    Power
    Hi SS
    I've been tracking back over some of your old posts, and found some from 2015 when you became mortgage neutral and started talking about your net worth target. It's been both an enlightening and thought provoking read.

    They say knowledge is power, I often feel like I don't know enough and wonder if I'm doing the right thing!? I'd be interested you your thoughts and those of others!!!8230;

    I'm not looking to achieve complete financial independence, at 44 I think I may have left it too late for that! Equally, another 20+ years working fulltime in a job I don't enjoy feels like a prison sentence!

    I've been overpaying on my mortgage for some years, but in earnest for the last 12 months, since I gained a promotion (and became a high rate tax payer ). My plan is to finish the mortgage early, in around 2 ½ years, but I don't have a plan for after that. My current balance is in my signature, the house is worth about £140k and I don't have any plans to ever move, but an extension might be on the horizon! I have about £12k in an easy access savings account (for the extension) and an LGPS pension, but no other investments.

    Despite the recent rate rise, my standard mortgage payment has dropped to £288pm and I'm op by £712 plus any spare cash each month. Should I be doing something else instead of overpaying?

    I've read a few FIRE blogs, but most seem to have huge net worth targets and be written by people working in the finance or IT sector that plan to start their own consultancies (good for them, but not for me!). Your NW target seems more achievable, how did you set it and why did you choose to include the house value?

    There's too much to read on the internet, it makes my head spin sometimes! Is there anything you'd recommend though? Naturally, I've subscribed to your thread

    Escapar2020
    Jan17: £42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual £29,983. OP offset £27,847. Full off-set £15,911
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 4th Dec 17, 11:36 PM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    Hi Escapar, thanks for posting!

    A good long while ago my finger in the air estimate of household spending (excluding mortgage and childcare) was 1k per month. Assuming a 4% withdrawal rate, that would see us needing 300k squirreled away in order to retire early. I looked into when we could conceivably hit 300k net worth, then brought the date a little closer to make it more of a challenge, and set that as my medium term aim. Ended up aiming for 300k net worth by the end of 2020.

    While I'm confident living on 1k per month would be possible for us, that's not a lifestyle we'd be entirely happy with. Over the past 8 months we've been monitoring every penny spent, and found that on average about £1,300 per month is what it takes to live comfortably as we do now (again, excluding mortgage and childcare). This would not include contingency for large lumpy expenses like car or boiler replacement, or eventually helping our children with university costs or starting a business or buying a home. Also, the house we live in won't be "earning" us any money (but it will save us from having to pay rent for the rest of our days), and its value can't really be drawn down (ignoring equity release as we wouldn't be interested), so it shouldn't really be included in our FI calculation. As a result of all this, it became clear that a net worth of 300k would be nowhere near enough for us call ourselves financially independent! A more realistic figure might be a 400k pot for drawdown (16k pa at 4%), plus a 50k lumpy spends pot, plus a mortgage free home. Then again, that would likely be too high - once we hit state pension age we'd have less need for any personal provision, and we won't need the drawdown pot to last forever so a 4% withdrawal rate may be too low (though others may argue it's too high!). I suppose the real amount needed is somewhere in between the too low 300k net worth figure and the too high 450k plus a house figure. Luckily, what the actual amount needs to be doesn't really matter right now, as whatever the amount is, the point at which we'll realistically hit it is quite far away in the future. Reaching that point isn't something I can plan effectively, just something I can generally steer us towards, so that's good enough for now. I kept the 300k by the end of 2020 target, as even though the 300k figure doesn't have any real significance, it's still a good figure to aim for in the short to medium term

    Last spring I started thinking more about FI, and wanted a more useful measure of our progress towards that eventual goal. I posted about it here, and added some concrete figures for the first time here. The FI% has quickly become my favourite metric to track. I guess it instinctively means that much more than having X amount in the bank, or a mortgage balance of Y, or investments totalling Z... As our outgoings reduce, and our productive savings and investments grow, we earn ourselves a little bit more virtual freedom It's not to be taken too seriously, for the reasons given in the paragraph above, but it does help me put things in perspective.

    I need to work a further 17 years to get the full state pension, and I have two young children. I'd hate to lose out on time with them while they are young, just so I can work and save hard, so that I can retire when I am older, by which time they may have potentially flown the nest. Having that simplistic FI% figure under my nose helps me play around with ideas like reducing my work hours, and as a direct result my salary, in order to spend more time with my children now. For example dropping down from five days a week to four would see me bring in a little over 80% of my current net salary (which still leaves a healthy gap between income and expenditure), I'd still accrue a full year's credit towards my state pension, and the weekends (where I get to spend the best quality time with my family) would be 50% longer - seems like a good idea. Later on, when the children are a bit older and have little interest in spending time with boring old Dad, maybe I'd choose to leave my current job and do something a bit more fulfilling, even if it paid less. If we had already achieved an FI% figure of say 85%, and the opportunity came along to do something I would absolutely love, but it would mean halving my income, then why not go for it? Same options would be available to OH. It's not like the extra money would add anything meaningful to our lives, so why not swap the "suck it up at work monday to friday and live for the weekend" life for something where every day is a joy? I don't suppose it's about retiring early for us, it's more about having balance and options.

    Err, I think I've gone off on a bit of a tangent, sorry...

    How did I set my net worth target? Badly, initially at least, and with a fair sprinkling of fuzzy/loose/flexible/ballpark kind of estimates involved.

    Why did I choose to include house value? Initially because it resulted in numbers that weren't disheartingly low. Now I don't, not really. It's in the net worth figure, but not factored into the FI% figure (and again, that figure has a lot of guesstmating going on so not to be taken too seriously).

    As for the "should you be doing something other than overpaying your mortgage with your spare cash" question... The first thing that springs to mind is that you are a higher rate tax payer, so stuffing a bit more into a pension might be a nice idea, you'd get tax relief at the higher rate so it would almost certainly be the most bang you could get for your buck.

    Finally, are there any blogs I'd recommend? I enjoyed reading the finance zombie's blog, I read the whole archive a month or two ago. Other than that, I've not really read many FIRE blogs recently. Every now and then I check out the list of net worth sharers on rockstar finance (you can filter by country if only interested in UK blogs), so I'll dip in and out of the occasional blog through that list, but there aren't any that I keep up to date with as such. In fact, I find the pure finance stuff can get a little dull at times, and I tend to end up on more lifestyle oriented blogs like the frugal cottage, skint dad, thrifty lesley, frugal queen, the minimalists, etc.

    Thanks for subscribing - I'm already subscribed to your diary and look forward to following your progress

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 5th Dec 17, 8:38 AM
    • 698 Posts
    • 3,102 Thanks
    SuperSecretSquirrel
    I won't become a millionaire this year, but at least I won £25 on the PB's this month!

    Stooze stats as they stand - I've paid a total of £151.34 in money transfer fees, and £6.35 in interest, received £25.27 cashback, and won 3 x £25 prizes. 5 months into a 24 month experiment I'm £57.42 down.

    Mtg [2013 £64k|2014 £51k|2015 £38k|2016 £26k|2017 14k] Zero!
    MN [2013-£25k|2014-£2k|2015+£16k|2016+£34k|2017+£52k] +£56,615.31(MFiT4:+60k)
    NW [2013 £126k|2014 £156k|2015 £190k|2016 £228k|2017 £269k] £278,659.39 (2020:300k)
    FI [2013 -1.2%|2014 2.8%|2015 6.9%|2016 13%|2017 18%] 30.9% (exc SP)
    • Karmacat
    • By Karmacat 5th Dec 17, 9:09 AM
    • 29,440 Posts
    • 168,980 Thanks
    Karmacat
    Wonderful posts, thank you!
    Retired August 2016
    • takingonedayatatime
    • By takingonedayatatime 5th Dec 17, 11:15 AM
    • 29 Posts
    • 221 Thanks
    takingonedayatatime
    Hi SSS

    I have been reading your thread for a while now and love your musings and way of thinking.

    I also have a spreadsheet which monitors our (husband and I's) net worth and in terms of overall net worth it looks great as I have an old DB pension worth circa £200000 and my husband a DB pension currently worth £300000 and fully intends to continue working for the same company. We have a low mortgage of £60000 with a value of £220000. and some £20000 in cash stashed in S&S's. No other debt.

    What this has meant. is that we can live of my husbands salary and I can stay at home with my children. I sometimes get frustrated that our cash reserves do not increase by much each year and that one of us will still have to work for another 15 years before we can retire but your recent post has highlighted the enviable position we are in.

    1) My husband's salary is enough to cover outgoings, food, helping my 18 year old at Uni, clothes, a small UK holiday and some for monthly savings. Salary is in lower tax threshold.
    2) My husband is fortunate enough to work locally, finishes at 4 every day and is home by 4.20 (cycles to and from work so no need for a 2nd car)
    3) I get to stay at home and be with my 8 and 3 year old and my husband and I spend a huge amount of time with them but don't feel the need to spend lots of cash on them.
    4) We can definitely retire at 62 (DH) and 60 (me) without having any drop in monthly income but with no mortgage, but our 3 year old will be starting Uni so will still be able to help her.

    So thank you for reminding me that while FI is something to aim for it is also important to make time for children while they are still young.

    All I need to do now is ignore those people who brag about new kitchens, bathrooms, holidays, and cars while we make do, fix and mend our way through the next 15 years.

    Thank you again and keep posting!
    • Escapar2020
    • By Escapar2020 5th Dec 17, 8:55 PM
    • 82 Posts
    • 154 Thanks
    Escapar2020
    Thanks for your reply SSS. I'll have a mooch around your links and recommended blogs. The idea of an FI% indicator sounds good, I'll have to see if I can calculate mine.

    In the meantime, I've started another thread to help me explore my options before I set my targets for 2018, feel free to stop by : http://forums.moneysavingexpert.com/showthread.php?t=5755807
    Jan17: £42,898 Scheduled end: Jul2028 Planned MF: Sep2020
    Mar18 Actual £29,983. OP offset £27,847. Full off-set £15,911
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