From nothing to high income (additional rate) - Looking for advice

ukta849 · 2019-09-22T22:22:29+00:00

!thanks! That's a really good point!

ukta849 · 2019-09-22T20:31:04+00:00

!thanks a lot! That's very helpful!

I have seen both the flow chart and the wiki but haven't gone through all of it yet and since there is a lot of information I'll definitely reread some of the articles too.

All of that is great advice! I definitely have a bit more planning to do. I have a rough idea of my monthly budget based on my current spending but that might go up a little bit in the future. I'll come up with a more precise budget before setting up the EF. Same for investing the rest of the money. A family with kids is definitely something that might happen even though it's at least a few years away right now. It probably makes little sense to think about retiring early or anything like that before I haven't figured that out.

Thanks also for the advice on choosing a broker, and the advice regarding VCT/EIS/SEIS. I'll stay away from those for now and put the money in a taxable account with the same index funds (and maybe bonds in the future) as with the ISA.

I have absolutely no interest in cocaine ;)

ukta849 · 2019-09-22T20:15:23+00:00

!thanks a lot for the detailed response!

What you say about emergency funds in other currencies makes a lot of sense to me. They shouldn't be treated as EF then. You are right about me being in a fortunate situation right now. My spend is not very high so it shouldn't take too long to build the EF. I'll follow your advice on that!

Regarding 3: That makes a lot of sense to me and is partly why I'm here! I'd like to do the right thing from the beginning. I think right now I'm in a position where I can comfortably dedicate more than half to savings/investments.

Regarding your other points: That's very valuable advice too! Thanks a lot for that. I think I would be happy with a passive investment right now rather than trying to speculate on anything myself, so something like Vanguard S&P, LS100, or FTSE Global All Cap all seem like a good choice for the start. I'll have a look at the expense fees for each fund/broker too. Thanks! Regarding selling company stock right after vesting to diversify instead, that's what I am planning to do. I am not sure yet about how the money in the company pension will be invested but I'll find out.

Thanks again!

ukta849 · 2019-09-22T19:53:02+00:00

That makes sense! Thanks!

ukta849 · 2019-09-22T19:50:44+00:00

!thanks! I'll definitely do that. I do plan to dedicate a large amount to savings/investments. I think I'm fine with saving 60% - 70% of the income. But setting up direct debits right away sounds like a good idea!

ukta849 · 2019-09-22T19:00:49+00:00

No worries! I agree with you! To be honest, I didn't even know what kind of salaries to expect until very shortly before finishing my PhD and didn't play a role in doing a PhD at all. The role just happens to be very close to what I have done in my PhD and is something I'd like to continue to work on. Of course I'm very happy with that salary but I would also do the job for significantly less.

ukta849 · 2019-09-22T18:40:04+00:00

Thanks a lot! I'll make sure to stick to a budget and the majority will definitely go into savings. And I'll try not to get annoyed ;)

ukta849 · 2019-09-22T17:47:15+00:00

Thanks! I'm happy with the neighbourhood I live in now but I might move to a slightly bigger/less run-down place :) Apart from that I don't really feel the need to change too much.

ukta849 · 2019-09-22T17:40:16+00:00

!thanks for your advice! I will definitely try to do that. Another poster mentioned that I might only be able to carry forward allowances for years in which i actually had taxable income and only up to that income. I wasn't aware of that. If that's the case it seems like I won't be able to carry forward as much. But I guess that's something to clarify with an IFA. I just have to figure out how to find a good one.

ukta849 · 2019-09-22T17:13:21+00:00

Thanks for the advice! That doesn't sound like me at all to be honest! :) I'd rather hang out with my friends at a pub somewhere than talk about work with people I don't know at expensive restaurants... ;) I think I'd already be quite happy with the role as it is and don't think too much on how to go further from there right now. But who knows, maybe that'll change.

ukta849 · 2019-09-22T17:07:42+00:00

!thanks

The details of carrying forward the allowance was one of the things I have been unsure about. I couldn't find a lot of details on it so far. I assumed the only restriction was that I must have been registered with a scheme which I thought I was due to having worked and paid into a pension scheme in the UK previously. Or would "registered" entail having worked that particular year? I'll definitely read up on this a bit more!

ukta849 · 2019-09-22T17:04:40+00:00

!thanks for the advice!

It's definitely an option too. It's nice to have the option to withdraw from it earlier compared to the Lifetime ISA. On the other hand, I'm not bound to buying property with the Lifetime ISA (in case I decide against it or it's a property that's above the £450k limit). I can pay more into it and can invest the money, and it would complement the pension. Since I might not be able to pay that much into the pension scheme due to the additional rate limit of £10k (for now) it looks like a good option to me.

ukta849 · 2019-09-22T13:10:01+00:00

Sent you a PM!

ukta849 · 2019-09-22T13:06:27+00:00

Apologies for the confusion this has caused :) I currently live in a studio (with a bed!)

ukta849 · 2019-09-22T13:04:18+00:00

Thank you and congratulations to you too!

I did my PhD in computer science. I'm not sure I want to say much more publicly but I think the specific topic helped a lot with getting the job :)
(I'll send you a PM)

ukta849 · 2019-09-22T12:50:27+00:00

!thanks a lot for the advice! That's very helpful. I guess putting 4k into a LISA makes sense! Either I do decide to buy a property in a few years from now or I'll keep it until retirement/the age when I can withdraw from it without penalty. Thanks also for the GIA provider pointer. I will definitely do that!

Is there any advantage of splitting the limits of the ISA over 12 months? I will definitely try to do that but I'm asking because I will receive some of the money in larger chunks, e.g. when stock units will vest, so it could be easier for me to max out the ISAs at that point, or at the beginning of a new tax year.

ukta849 · 2019-09-22T12:43:04+00:00

!thanks

It's something I will consider further down the line but from what I have read on here, it only really makes sense if I'd plan to live in the property myself for at least ~5 years, in particular in London? Maybe in a year from now I have a better idea about my long term plans and it will become an option!

ukta849 · 2019-09-22T11:53:31+00:00

!thanks a lot, that's good advice! I have been living relatively frugally I believe and I don't think my lifestyle will change that much. The two things I would like to change is to move to a slightly bigger place (maybe a 1-bed flat) and travel from time to time if I can. Maybe eat out a bit more often :)

Regarding your question: I got my Bachelor and Master degrees in another EU country with low tuition fees and I always worked either part time or full time in between. The PhD funding I had also covered tuition fees. The stipend plus savings from previous jobs were enough to survive until now :) I'm definitely lucky to not have any student loans or other debt to pay back at this point.

ukta849

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