i used to work at London law firm, in the database side (so full access to everything)
Start aged 24 on £45k, then up £70k on qualification (aged 26). Work hard for a few years, get to be partner and start to pull in £500k. Top partners were on £2m
Yet even after 30 years of being a partner, they'd still be coming in at 7am, and going home at 9pm. Then home to the big house, to see the wife and family you never see. Couple of hours sleep, and repeat
What is the point? Seriously? You may have a lot of money, but for what?
Surprised no-one has suggested a financial advisor. They'd probably make you more money than the amount they charge you.
I'm nowhere near your level of wealth but we earn more than we spend and starting to struggle with whether to put it into mortgage/savings/pensions/coke/hookers - an IFA really helped us to work out what our priorities are, and now she's busy unravelling the crazy hodgepodge of financial stuff we've done and giving us sane and understandable choices that will help us towards our goals.
I was put in front of an IFA once and he wanted 10% of my contributions just to start a SIPP and gave me some BS about risk profiles and such. IIRC you need no qualifications to be an IFA.
I can't see the point now because there are so many products (funds of funds, etc) ready for you off the shelf. Shares, funds, trackers etc., isn't a dark art like it was pre-internet. There are no secrets now.
@glenh you don’t do enough to help people, I’ve decided knowing no facts, shame on you.
10% of all your contributions? Wow that's insane.
Mine is charging £1k, flat rate. Like you say, I don't need help choosing products, but I do need some help working out what's most effective between sticking it all in my pension (and what to do with them all), or my mortgage, or into a low risk thing or a high risk thing, and if and when I can buy a hut in the alps and/or put my daughter through uni and/or help her get on the housing ladder and/or retire early.
I thought I could do it myself, but there are too many variables, and having an expert provide some advice is good, and saves time and money, and I'd rather be riding my bike and have a bit of peace of mind.
Well, I'm just suspicious of them, although it would seem to make some sense when matters are very complex, otoh that might be a job for an accountant. It seems to me that a lot of their general advise is just stuff you can find anywhere. The specificity of moving money around, closing or opening pensions, all the tax stuff can be complex though.
Anyway jealous hat off, my answer would be whichever is more accessible so you can use the cash when you need it. Think about what you want as a family and do it, whether that being eating out more often, an extra holiday, setting up your kids, a better bike, working fewer days so you can help in the community. What ever floats your boat. Enjoy!
What’s classed as a good pension? I thought the £150k I’m working towards sounded great. Guess not.
150k is around 5k per annum in an annuity. Even with state pension on top, I'm hoping to get to more than that
150k is around 5k per annum in an annuity. Even with state pension on top, I’m hoping to get to more than that
Cheers yeah that’s not great, not really sure what my options are, still I’ll be far from the poorest in the social housing queue. Same with this shitty help to buy isa ive got, if they’d said get an S&S isa I’d have been way better off.
150k is around 5k per annum in an annuity.
Is that really all? That's only 3% - which should be fairly achievable just as returns.
I mean, even just as capital, you could take out 5k a year for 30 years.
In the OPs position I would be looking at comfort in retirement alongside tax efficiency, whilst making life easy for family.
Doesn't sound like you are going to be able to spend all that you have and will have, when you or wife dies you can inherit nil tax bands and use allowances on main properties but you may well be creating a liability for your kids.
Being in this position right now I can tell you it is really stressful (long story short I am dealing with 4 estates over 2 generations with 2 of those estates falling into one below it).
The right financial advisor / financial planner should come up with a proposal that safeguards the above and makes it easy for those left behind.
Before deciding on how to help your kids through university, read everything on the Martin Lewis site about how student loans work, especially the repayment. They are likely to never pay it off unless in a role where they earn a high amount in their early career. It probably won't be a good investement for you to pay it off (or pay it for them so they don't have to take it out). If you are going to help them, treat it as a long term tax they have to pay, and put your help towards getting them a house deposit.
My thoughts...
Set up a ltd company with you and your wife as directors. Loan the company the £190k.
Use the capital as deposit/legal/stamp duty for several BTL apartments somewhere like Manchester.
You'll get a £135k appt with capital of £40k ish so you could potentially get 5 if you were prepared to stump up an additional £10k or so.
Each of these will generate a net profit of around £350 pcm. Pay yourself by repaying the loan you gave to the company (tax free) from the ltd company and you're more than covering your mortgage commitments. Make your kids shareholders when they are old enough and eventually they'll own the business, gives them a load of options.
Interest rates are at all time lows and will be for some time - it makes sense to make the money work for you whilst taking advantage of this.
Or - use it to buy a place in the Alps and rinse it for riding and holidays...
SMT is the only way for us mere plebs to gain investment exposure to Stripe right now!
Very interesting on the Student Loans thing. Slightly different in my time (and we did have [small] loans then). Basically the kids can bear the brunt of that, and I guess I'd prefer to help them with a house/flat.
But I don't think I'm up for the setting up the property business. That may give decent returns, but it sounds like a lot of work to me. And the only downside with holiday homes is you feel the need to go to the same place year after year, holiday after holiday. There's a whole world out there (if we were allowed to go). I'd prefer to be 60, and backpacking around asia with the wife again over feeling the need to back to the same spot.
As I say, anything over and above what we need would be for the kids more. We're comfortable/happy now. They'll need it more than us
I thought the £150k I’m working towards sounded great.
It's almost certainly more than the average person will end up with. IIRC the average UK pension pot is only about £60k.
It’s almost certainly more than the average person will end up with. IIRC the average UK pension pot is only about £60k
Lol! Probably leaves me in a worse position as they’ll get propped up the state whilst I’ll be told I have enough. The classic Tory tactic of letting people live just above the poverty line.
Looks like there is another similar post which might offer further advice OP.
I'd caution greatly against buying flats for BTL especially in Manchester. They are likely to be most sensitive to any drama in the market, and from what I saw in my old job, the leaseholders should budget for expensive lifts, M&E, roofs etc., that will go wrong much sooner than they are supposed to in these new builds, and there is the prickly problem of cladding which isn't ironed out yet. Don't expect the paltry service charge to cover a new lift, for example, they will come after you with a Section 20. The flats going up are built like crap believe me.
