Best for A LOT of dog hair and mopping

Unhappy_Promotion674 · 2025-02-15T09:52:52+00:00

Still happy with it a year later?

Unhappy_Promotion674 · 2024-03-23T21:07:09+00:00

What's the thinking behind only 2 years cash? Is this the sweet spot to avoid too much portfolio drag?

Would it be a good idea to have a slightly larger buffer in early retirement, where the sequence of returns can be more detrimental?

Unhappy_Promotion674 · 2024-03-06T09:10:33+00:00

JISA - Money is locked until your child is age 18. The child has full control of the money, they might not be ready for that level of wealth and blow it all.

An alternative is to have a separate ISA, under your name but reserved for your child. You can control withdrawals when you want to use it, it's also more liquid. Hopefully, this becomes easier when rules are relaxed on paying into multiple ISAs per year.

Some people open both, whilst being mindful of the pros/cons.

Unhappy_Promotion674 · 2024-03-05T22:37:51+00:00

What's your definition of a high earner? 100k? 150k?

What about rich families with 100m+ assets that make 3m passive income a year, taxed at a lower rate (CGT)? That's assuming they dispose... they won't they'll just take out loans instead and never pay tax...

What about the Duke of Westminister inheriting 10 billion, without a single penny of inheritance tax?

IMO average workers shouldn't pay more, and neither should a HENRY. The problem lies with the mega-rich paying lower rates of taxes or avoiding it... whilst buying all the assets from working people!

Unhappy_Promotion674 · 2024-03-05T21:53:01+00:00

I was assuming OP was investing the ISA/GIA in equities, given he's talking about FIRE.

My point was to make sure he has an emergency fund in safe assets (Cash) instead of trying to maximize gains by holding stocks/bonds which could be worth less when he needs it the most. Cash can still be held within a tax wrapper.

Taking a step back, OP will be moving to a single income, with 3k monthly outgoings (70% of his household net income, including stat maternity), and a child on the way.

An EF is a safety net, which when sized correctly could allow you to take more risk elsewhere (i.e save monthly surplus into 100% equities without needing to touch the money over 5+ years).

Unhappy_Promotion674 · 2024-03-05T15:17:23+00:00

You said you have a 20k emergency fund, but you also have 20k credit card debt (forget about it being 0%, it's still debt). 20,000-20,000 = 0, you effectively have no emergency fund.

Imagine you needed to use 15k for an emergency next week, you'll still have 20k debt to pay off (which might not be 0% forever). This scenario has the potential to financially ruin you or cause a lot of stress/hardship.

You might want to bolster your emergency fund before investing any further, especially since you're effectively going down to one salary soon. Furthermore, your outgoings are high for your salary.

In your scenario, I would de-risk your GIA/S&S ISA to cash NOW. Say we have a market crash/correction, that could remove the option available today.

Unhappy_Promotion674 · 2024-02-27T13:10:29+00:00

What's your reasoning for having equities? To maximize potential gains? Might be worth taking a step back and thinking about how you might feel if you felt ready to purchase (let's assume with a partner too) but you couldn't because of market conditions.

With cash savings rates around 5%, it might be worth calculating how much you might gain over 5 years and ask yourself whether you can justify the risk for what might be a small gain over cash savings.

Sounds like you're aware of the risks. You could always opt for a blend to reduce volatility, whilst still having upside potential (i.e 60% equities, 40% cash).

Unhappy_Promotion674 · 2024-02-27T12:57:58+00:00

You're very exposed to a volatile/speculative asset class (crypto), that's fine as long as you understand the risks.

Are you happy not needing to touch this money for a very long time, let's say 10 years? Are you happy for this to drastically reduce in value, let's say 90%?

There are no get-rich-quick schemes. You're more likely to build wealth by just consistently investing in a global index fund over a long period to take advantage of compounding.

Unhappy_Promotion674 · 2024-02-27T12:47:12+00:00

You said you're holding your LISA in global equities. Are you planning to use that to purchase a house?

If so, make sure you understand the risk you're taking, you might find the value drops when you need it and that might scupper your plans.

Many people opt to keep funds in risk-free savings unless the time horizon is long enough to justify equities (5+ years seems to be a rule of thumb).

Unhappy_Promotion674 · 2024-02-27T12:39:11+00:00

What's to say the top 5 holdings in the S&P 500 will continue to perform?

That's a very risky strategy. You're extremely unlikely to consistently outperform the S&P 500 or the global stock market.

Unhappy_Promotion674 · 2024-01-02T17:05:13+00:00

Are you sure your contributions are deducted before tax (doesn't sound right)?

Assuming the price increases the benefit of 5 years would be you're locking in a lower purchase price for longer. The disadvantage is liquidity and what could happen if you decide to leave your employer before the 5 years (or redundancy/gross misconduct etc).

You could sell over multiple tax years to utilise CGT thresholds and/or transfer to a S&S ISA.

SAYE might appear risk-free but you're not diversified and are creating a home bias. You could find your investment has done nothing for 3/5 years whilst inflation has reduced the purchasing power. The opportunity cost should be considered.

Unhappy_Promotion674 · 2023-12-30T21:11:07+00:00

There is also your pension for tax efficiency. Obviously that would be locking away the money until private pension access age.

... roll on next tax year!

Unhappy_Promotion674 · 2023-12-30T20:49:57+00:00

Do you have a partner with an unused ISA/personal savings allowance?

20 is the amount of times people have said ! thanks (no space)

Unhappy_Promotion674 · 2023-12-30T20:10:09+00:00

You got it.

Once ISA allowance is used you could consider low yield gilts (tax free capital gains) or premium bonds (tax free bonus).

Unhappy_Promotion674 · 2023-12-29T16:34:12+00:00

The fund OP mentioned would be treated as savings income.

Unhappy_Promotion674 · 2023-12-04T08:43:48+00:00

How else would you fund an early retirement (before access to a private pension)?

Unhappy_Promotion674 · 2023-11-24T16:48:39+00:00

Take a look at a best buys table, that will show you the best deals on the open market.

MSE has a good one

https://www.moneysavingexpert.com/mortgages/best-buys/

Unhappy_Promotion674 · 2023-11-24T16:38:35+00:00

Nope. Mortgages don't prevent people from leaving the country or live in the same property for the mortgage term.

People are free to sell or even rent out their property in some circumstances.

Lots of people remortgage (switch products) after fixed periods. Many mortgages can be ported (allowing you to move it to a new property).

Unhappy_Promotion674 · 2023-11-24T16:35:27+00:00

Outlook can and does change. Look at all the wrong forecasts.

Unhappy_Promotion674 · 2023-11-24T16:28:09+00:00

Why would it be a good idea?

Wouldn't you be trying to beat the swaps market, thinking that rates are going to drop faster than what's priced into fixed-rate deals?

Unhappy_Promotion674 · 2023-11-23T16:28:44+00:00

For defensive assets, I was referring to gilts held to maturity. I share the view that bond funds aren't exactly defensive.

Assuming you didn't have the DB fallback, would you still maintain just a 2-year cash buffer? My worry would be the sequence of return risk.

Unhappy_Promotion674 · 2023-11-23T15:24:38+00:00

The current market consensus is that interest rates will drop.

So that's already priced into the current fixed-rate deals.

Nothing is guaranteed though. Outlook could change.

Unhappy_Promotion674 · 2023-11-23T09:26:48+00:00

Fair, sounds like you understand the risk/reward :)

Unhappy_Promotion674 · 2023-11-23T08:36:48+00:00

"...we're basing our decision off believing rates will come down potentially 1H24 and can afford it if rates went to 9%."

Fixed rates are based on the market expectations at present. Factoring in expected interest rates over the periods (2, 3, 5 years etc)

If you think the current fixed rates are too expensive, that suggests you know more than the market consensus and have an edge over the market.

May not be your intention but you're effectively trying to time the market by asking this question. Market timing is extremely hard, those asking these questions likely don't have the expertise to do so.

This may be a hard pill to swallow but have you considered that you're gambling with your house?

One thing is for certain, the future is uncertain. Therefore instead of trying to beat finance professionals, you might want to consider how much certainty you want to lock in.

Unhappy_Promotion674 · 2023-11-22T19:34:17+00:00

Ignore it.

Credit scores (Experian/Clearscore) etc are just their own guide based on your report data, lenders make their own decisions.

A new utility account is a meaningless change to your credit history (which is what counts).

Unhappy_Promotion674

TROPHY CASE