Reply to: Exit Plans?

[willendure]

'mortgage'??
what's that??

Beats me, I've got no idea what it is!

[Ketto]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

Nice one.

The Willendure of old would have celebrated this news by buy purchasing a new BTL.

[Dorkeaux]

We locked into a fixed-term 5-year IO mortgage a few years ago.
Not very much left on it, last of the stupidly low interest rates.

We could pay it off, but we're making more money on interest than we're paying for the same amount of mortgage debt.
It probably makes sense to pay it off when the deal is up in a couple of years. The interest rate will probably be a Squillion by then.

I'd love to say it's because I'm a financial genius, but that would be an obvious lie.

[oliverson]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

Nice one, must feel great.

I imagine when I've sold Spain and paid off the UK mortgage it will be fantastic, both mortgages being settled a few days apart.

[Snooky]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

Congratulations!
We paid off ours last December and, while it had dwindled to a tiny interest payment, it still felt good to be free & clear.

[Dorkeaux]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

On the 4th of July?
Happy Independence Day.
I bet that feels good..

[sadkingbilly]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

'mortgage'??
what's that??

[willendure]

Thats is done. Went into my bank branch today and made the transfer to pay off our entire mortgage. Me and missus are now debt free AND going out for drinks to celebrate. Have great weekend everyone!

[willendure]

That link is really good, though you have to translate the American financial plans (401k etc..) into their British equivalents when they exist.

His advice about maximising all the tax-advantageous pension plans available, and also whatever government / employer contributions are going is spot on.
I'm embarrassed to say I didn't know that the Gummint contributes 25% of whatever you put into a SIPP a year. Until I started one. Just magically appears.

He's also right to avoid actively managed funds. It's actually very hard to beat the market when you are investing. ETFs track the market, by far the best way to invest in companies for the the vast majority of people.

SHould have started sooner, but hey ho.

They don't really contribute 25% to a SIPP, its just that your SIPP contributions are tax free up to £60K. So when I put my SIPP money in from the Ltd, it counts as an expense to the Ltd so not taxed as profit, and it does not count as income to me so no income tax. But if you already payed tax on the contribution because you put it in yourself post tax, then they give you the tax back. It can also be more than 25% if you are paying higher rates because you can claim the higher rate back also (on your tax return).

Yeah, the index card guy is fantastic.

At the moment I am not so convinced that maxing out a tax free pension is a totally sound option. If you are working inside IR35 it is more so because the amount of tax it will save is HUGE. Less so outside IR35. But the risk I see is that this country is broke. We are as deeply in dept relative to GDP as the USA is, but without the economic strength and reserve currency advantages that they hold. Productivity in this country is not keeping pace so it seems highly unlikely that GDP will grow to cover our debt. Which leaves inflation - good for your SIPP if invested in inflation protection assets such as gold. And it leaves financial repression.

Financial repression is where the government acts to stem capital flow out of the country when things are going badly. For example, after WW2 which was the last time debt/gdp levels were as high as now. It means they raise inflation to inflate away the debt, deliberately run negative real rates by keeping interest rates below inflation and yield curve control, and find ways to stop you getting your money out. I can foresee a future where rules change on ISAs and SIPPs that force you to hold a certain amount in UK bonds or other UK investments. The SIPP is particularly vulnerable because you have to lock your money away in it until age 55 minimum, so if they want to steal from you, you will be powerless to stop them doing so over an extended period of time. Just be warned that putting all your eggs in one basket is risky.

I have scaled back my plans to max out my SIPP in light of this, although it is still probably a very good option. I just think it needs to be 1 option out of several. ISA is a good option too. Keeping money in the Ltd and investing in developing and growing a business is also a good option.

[Alf W]

Just noticed it’s my 20th Anniversary of being on here this month.

[Alf W]

Been a while since I posted anything.

I’m in a contract that looks good until at least the end of 2026. However, I’m going to chuck in the towel in either December or March and take early retirement.

Now I’ve cleared my mortgage and got children off the payroll I’ve worked out I can retire and maintain my lifestyle as is paid for by income on my pension so why continue?

To be honest I’m mentally out of the door as my eyes glaze over during ‘important meetings’ with overstressed Millennials.

[Dorkeaux]

Yup. My wife is often on at me to get some free financial advice from my bank. I just laugh. I mean it might not be terrible advice even to buy their product, but no way in hell am I taking financial advice from anyone that is not impartial, and that I respect for being much smarter than me and with much more knowledge and experience of investing. I'm not rich enough for that kind of advice anyway. Even if you are its still worth your while to learn a lot about it yourself.

Most peoples needs can be covered by the "index card": https://www.youtube.com/watch?v=bGeSNsIpJek&t=326s

That link is really good, though you have to translate the American financial plans (401k etc..) into their British equivalents when they exist.

His advice about maximising all the tax-advantageous pension plans available, and also whatever government / employer contributions are going is spot on.
I'm embarrassed to say I didn't know that the Gummint contributes 25% of whatever you put into a SIPP a year. Until I started one. Just magically appears.

He's also right to avoid actively managed funds. It's actually very hard to beat the market when you are investing. ETFs track the market, by far the best way to invest in companies for the the vast majority of people.

SHould have started sooner, but hey ho.

[willendure]

The financial advisor had only one mission; to hard-sell us his pension products.

Yup. My wife is often on at me to get some free financial advice from my bank. I just laugh. I mean it might not be terrible advice even to buy their product, but no way in hell am I taking financial advice from anyone that is not impartial, and that I respect for being much smarter than me and with much more knowledge and experience of investing. I'm not rich enough for that kind of advice anyway. Even if you are its still worth your while to learn a lot about it yourself.

Most peoples needs can be covered by the "index card": https://www.youtube.com/watch?v=bGeSNsIpJek&t=326s

[Dorkeaux]

Same here. Worked in financial systems for investment banks most of my life, on all kinds of asset classes with which I'm far more familiar than I'd like to be, but I don't have a clue about good investments or how much wealth/money I have. So I'm always very cautious about spending large amounts in case I can't afford it!

I need to get all my paperwork together and dump it in front of a financial advisor to tell me when I can retire and what my likely income will be.

It seems a lot of us are on the same road.

Good luck with that, truly. We did that not long ago.
The financial advisor had only one mission; to hard-sell us his pension products.
Also had helpul tips like "make a will", "take out unemployment insurance" (as a company director?!?) and "give me your money".

What I actually wanted was to pay him a fee to explain what our options were to consolidate our pensions and various pots of money from all over the world, what SIPPs and ISAs were, and what would be the most efficient way to structure our contributions given our financial situation and retirement goals.

Maybe with a spreadsheet..

I wound up figuring it out myself.

[Snooky]

All very good points, I reckon.
Although I've done some very detailed and complex work on financial systems for clients, I haven't paid much attention to my personal finances over my career. Isn't that wierd?

Same here. Worked in financial systems for investment banks most of my life, on all kinds of asset classes with which I'm far more familiar than I'd like to be, but I don't have a clue about good investments or how much wealth/money I have. So I'm always very cautious about spending large amounts in case I can't afford it!

I need to get all my paperwork together and dump it in front of a financial advisor to tell me when I can retire and what my likely income will be.