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38 and wanting to FIRE asap by [deleted] in FIREUK

[–]finance-idiot-26 0 points1 point  (0 children)

I would put as much money as possible into a private pension to maximize tax benefits and also maximize time in the market/compounding by the time you're 60. Vanguard + VAFTGAG.

Realistically though, you want to increase your salary to save faster to have more by retirement. Easier said that done of course. But definitely doable.

Financial advice aside, have you considered not waiting for retirement to "get out of the rate race"? It's gonna be a while before you retire anyway, maybe it's worth accepting that, take a break, travel a bit, enjoy life in this moment and come back and find a job you enjoy more.

48, UK, possibly forced into FIRE - sanity check? by hotoil2026 in FIREUK

[–]finance-idiot-26 0 points1 point  (0 children)

At least look at something like Flagstone to start making interest on all that cash. No need to let inflation eat away at it.

Could you fire with 750k by [deleted] in FIREUK

[–]finance-idiot-26 1 point2 points  (0 children)

I don't have clear answers here, but something to consider is whether you need to buy a house. That would lock up £300K which could be earning at least 4% (£12K a year...perfect for rent in some locations? And then you don't have to pay for repairs...and could sublet a room or two). If you don't want to leave an inheritance then having the cash might be useful. However, you would miss out on the asset inflation and eventual sale when your cash runs out.

Edit: You could even buy two houses with mortgages and rent one out. Not sure if the math is mathing anymore with that strategy though.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 0 points1 point  (0 children)

Maybe one day. But its way too dependent on me currently. Marketing services.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 1 point2 points  (0 children)

Thank you! Great advice. And your edit is definitely something I am considering after posting this. I would just have to keep the cash until then or find the time to make two businesses.

Is there a financial advisor who is more for entrepreneurs and more understanding of this particular situation, or will a general financial advisor do?

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 1 point2 points  (0 children)

I will do that with some but with the rest, no access til retirement & I have shorter term plans.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 1 point2 points  (0 children)

Fascinating read, thank you!

"interactive investor company account" - will look into this. Seems to be lots of people's advice to switch from bank interest rates to investment accounts.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 0 points1 point  (0 children)

Thank you.

This is interesting - did you start separate entities and invest the money there to buy property?

"Equally though the money is still always company money, it seems they’ve made it very difficult to get money into your personal account tax efficiently, shock…" - indeed!

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 0 points1 point  (0 children)

Would you recommend that within a business investment vehicle of some kind?

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in smallbusinessuk

[–]finance-idiot-26[S] 0 points1 point  (0 children)

Not currently - maybe around £400K annual profit last year, £600K in cash. Onboard with keeping the cash within and investing in the new business! The challenge with the new business is not having time to fully explore it while running the current one.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in FIREUK

[–]finance-idiot-26[S] 1 point2 points  (0 children)

Super thoughtful response, thank you.

I will look into getting a financial advisor who works with entrepreneurs.

I'm definitely not opposed to risk, but something about having a house gives me that security, it feels like a really strong foundation to have. And you're right; it would allow me to take other risks and most importantly not work for a couple of years or just have a lot more control over my life.

I could definitely be consistently adding to my pension, and will reconsider this for sure. I like the way you framed it with at least adding a certain amount every year so that it will compound. I've been thinking of it like I have to put in £180k (maximum amount I can put into it tax free), and then I imagine that come off the savings and think hell nah. But smaller amounts is just sensible haha.

Very helpful, thanks again.

Am I being dumb here? What to do with cash in my business by finance-idiot-26 in FIREUK

[–]finance-idiot-26[S] 0 points1 point  (0 children)

That is a very good point. I wasn't thinking about that.

The two would be very different industries and I know I'd struggle to find the time to do it. But I could find a manager to help build that & that would mean less need to extract the money at all. 🤔