Ydobon's Independence Referendum

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IlliniDave
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Re: Ydobon's Independence Referendum

Post by IlliniDave »

Ydobon wrote:Quick straw poll - do people include savings interest/P2P interest/dividend income/bank account bonuses/cashback in their 'income' calculation when calculating savings rate for the month?
I do not, either as income or as savings. I ignore investment returns/losses completely. I look at my paycheck and all my investment contributions from that paycheck (I don't count money that goes into my bank savings account which, while technically savings, is usually for intermediate-term expenses or purchases). Then I compute two numbers. One is (Total Investment Contributions/Gross Income) and the other is (Total Investment Contributions/Income net of income+payroll tax). Those are both a little squishy because some of my investing is done on a pre-tax, tax-deferred basis; but they give me a feel for how I'm doing overall and how I'm doing once the government gets done with me.

Actually, I only compute those numbers annually. My income is fairly steady (salaryman) so I just track/set incremental goals in dollars. The savings rates are interesting, but in the end it's dollars into the financial asset pile that drive my readiness.

Ydobon
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Joined: Fri Aug 29, 2014 9:15 am
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Re: Ydobon's Independence Referendum

Post by Ydobon »

Thanks all, we appear to have a pretty strong consensus.

Tinkering around with my spreadsheets after a frustrating month in which I managed to save very little (house purchase), but in which my net worth went up by £££££ (house sale at higher than expected value, P2P investment returns kicking in).

vexed87
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Location: Yorkshire, UK

Re: Ydobon's Independence Referendum

Post by vexed87 »

I have had a few of these month recently where savings rate falls for various reasons. I think if you are buying tangible assets, you should worry less about your savings rate, as long as your purchases are not wasteful (over priced plywood sofas, depreciating luxury cars etc), hopefully your assets will serve you well and these expenses will not be repeated too often. The only exception I can think of is if most of your money is going on consumables (i.e. luxury holidays), you may well be doing something wrong.

When buying a chest of drawers or the wood working tools to produce your own, or paying down a mortgage, your money isn't vanishing into thin air. It's doing something useful and if it helps save money in the future, it's money well spent. If your asset purchases are well thought out, you should be able to recover your money spent if you ever decide you don't want to keep those assets any more. Some assets can be great hedges against inflation. Just think about things like timeless oak furniture, analogue HiFi speakers, 20kg of rice purchased before a drought etc.

Ydobon
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Re: Ydobon's Independence Referendum

Post by Ydobon »

I don't regret the asset we've purchased, I just regret the cost ;)

I will be sure and look out for that rice drought tho.

vexed87
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Re: Ydobon's Independence Referendum

Post by vexed87 »

Ydobon wrote:I will be sure and look out for that rice drought tho.
You can be very cantankerous Ydobon :twisted:

Ydobon
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Location: Scotland

Re: Ydobon's Independence Referendum

Post by Ydobon »

Constant sarcasm is Britain's gift to the world, I am simply embracing my culture :D

Ydobon
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Re: Ydobon's Independence Referendum

Post by Ydobon »

I haven't been very good at updating this diary, have I?

I would say that the dust has settled on what is likely to be our most expensive purchase ever (£215,000 on a house, approximately $311,000). Behind the dust, however, are a malevolent horde of home improvement demons, brandishing credit card debt and contractor invoices.

Since moving in we have added solar PV panels, replaced the boiler, had large amounts of the electrics replaced, the roof repaired, trees felled and will be having the bathroom replaced next week. This has come at a cost, somewhere in the region of £13,000. After the bathroom is finished we will perhaps be at the half way point in terms of cost, although in terms of work to complete we'll be at maybe 1/3.

We have enough cash available to pay off all credit card bills + pay for the rest (just), but things are very challenging as wife is currently not working as she looks after our beautiful baby daughter. 3 months to go and she will be earning an income again.

I am trying to 'man up' to my financial future (do they use that phrase in the US?) and am making the best of what is, for the moment, a very confusing and expensive time. To demonstrate, the 'highlight' of this months finances will be going from 301 years to FI to 285 :lol:
  • Restarted contributions into S&S ISA (tax privileged account)
  • Opened new pensions for wife and I (using low cost SIPPs to hold bonds that will help to reduce portfolio volatility as we are currently 100% equity in work pensions)
  • Started setting aside £78/month for our daughter, this will hopefully provide a nest egg of £20,000 by the time she reaches the age of majority
  • Dramatically cut my personal spends (for example, I was paid 11 days ago, I've spent less than £15 on stuff/experiences since then)
  • Replaced every light bulb in the house with LEDs + had the electrician install low power downlights in a few rooms
  • Plan to start a compost bin just as soon as we stop getting all of the secondhand storms from the US!

themodernchap
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Re: Ydobon's Independence Referendum

Post by themodernchap »

Congrats on the house purchase! The solar PV will pay for itself before long. If you are still interested in P2P check out Wellesley. They have a mini bond paying 8% and they do P2P bridging loans.

Ydobon
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Location: Scotland

Re: Ydobon's Independence Referendum

Post by Ydobon »

themodernchap wrote:Congrats on the house purchase! The solar PV will pay for itself before long. If you are still interested in P2P check out Wellesley. They have a mini bond paying 8% and they do P2P bridging loans.
Thanks for that - I'll counter suggest with try Rate Setter for a 15%+ return in one year if you invest £1,000 (let me know if you want a referral and I'll split my cut), Money Thing or Saving Stream for 12-13% secured loans.

Solar PV felt like a big mistake for the month of December (we rushed it in to avoid a tariff cut), but it's starting to tick up quite quickly now.

themodernchap
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Re: Ydobon's Independence Referendum

Post by themodernchap »

Those both sound amazing. Looks like I have some research to do. PM me.

Is it cheaper to get it installed in the winter at all? Hopefully we get a summer, then you'll be laughing. Are you going to be feeding back into the grid?

Ydobon
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Re: Ydobon's Independence Referendum

Post by Ydobon »

themodernchap wrote:Those both sound amazing. Looks like I have some research to do. PM me.

Is it cheaper to get it installed in the winter at all? Hopefully we get a summer, then you'll be laughing. Are you going to be feeding back into the grid?
No cheaper to get it installed in winter unfortunately, but the UK govt. cut the incentive for feeding back to the grid somewhat brutally (12.x p/kWh to 4.x p/kWh). As it's a 20 year inflation indexed incentive, it was worth taking a generation hit for a few months to protect the better rate.

We do feed back to the grid, but with current metering arrangements, there's no way of showing how much, so it's assumed that 50% is sent back. On a nice sunny day when we have the washing machine, tumble drier, hoover and TV on that definitely isn't the case :D

Will PM you re. the P2P stuff.

themodernchap
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Re: Ydobon's Independence Referendum

Post by themodernchap »

I'm hoping to end up off grid, and I'm hopefully going to be retraining as a spark, the ideal of feeding back is attractive but so is the idea of being off grid entirely. Hard to do in an urban property, much easier in the countryside.

Do you have any capacity for storing power or does it just feed an inverter and get used rather than your supply? I want to experiment and turn everything off and use just solar to see if the meter stops.

Edit: how many panels and do you know what kind of wattage /amperage is being generated at hypothetical max output?

Ydobon
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Re: Ydobon's Independence Referendum

Post by Ydobon »

themodernchap wrote:I'm hoping to end up off grid, and I'm hopefully going to be retraining as a spark, the ideal of feeding back is attractive but so is the idea of being off grid entirely. Hard to do in an urban property, much easier in the countryside.

Do you have any capacity for storing power or does it just feed an inverter and get used rather than your supply? I want to experiment and turn everything off and use just solar to see if the meter stops.

Edit: how many panels and do you know what kind of wattage /amperage is being generated at hypothetical max output?
The inverter option. To answer your question, the meter goes backwards on a sunny day! 11 * 285W panels.

Ydobon
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Location: Scotland

Re: Ydobon's Independence Referendum

Post by Ydobon »

My savings rate may not be negative this month (the first month where this is the case 7 months after buying our new house)!

I am on tenterhooks :D

Ydobon
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Location: Scotland

Re: Ydobon's Independence Referendum

Post by Ydobon »

Time for an update :)
  • 75%? of home renovations complete, we have stopped using credit to pay for work, which has greatly reduced my stress levels as we are paying as we go. This slows down the pace of work, which is allowing me to spend more time with my wife and daughter (who is now a confident toddler)
  • No debt bar our mortgage and one rewards credit card that is paid off monthly
  • When I posted last May, our NW was one month away from hitting its lowest level since I started tracking it (this hit in June 2016). Since then, it has grown by over 50% thanks to several one-time factors (house price inflation, defined benefit pension updated with 5 years worth of indexation increases, massive stockmarket rise, currency devaluation)
  • We now pay 25% into retirement accounts, which are great value for us (due to reduced tax, national insurance and student loan repayments, each £1 saved costs in the region of £0.66. This will go up to 30% in April
  • Several spreadsheet and portfolio updates led to a total refresh of how we invest. We now treat our defined benefit pensions as a bond fund and are 100% in equities for everything else
  • The share of our NW that is in equities just passed our home equity for the first time, I am very excited by the pivot away from house rich/other assets poor
  • I have started re-training for a career in finance, although progress is slow at the moment

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Egg
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Re: Ydobon's Independence Referendum

Post by Egg »

Hey Ydobon. You still around? Would be interested to hear what you're up to. Did the finance career work out?

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