Bristol ERE journal.

Where are you and where are you going?
Noedig
Posts: 178
Joined: Tue Aug 26, 2014 10:15 pm

Re: Bristol ERE journal.

Post by Noedig » Fri Jun 16, 2017 10:52 pm

Wotcher, Bristoldude.

Glad things are going well. As a long time contractor I observe it's getting trickier to take money out of your company. In the wider scheme of things this is rightly so, but personally it is an embuggerance.

One thing I would say, is use expenses where you can, as it is all tax free. Your other efficient options are limited to: the small-and-shrinking-from-5k dividend allowance; the unbelieveably generous 40k direct pension contribution abilities; a small salary (useful for the NI) and then dividends.

Likely you know that all already, I mention as I recall it took me a while to tune in to the possibilities, as I was distracted spending too many years just grafting, while the kids were young, building up what you refer to somewhere in your blog as a 'cushion' and I have always mentally referred to as a 'stern wave' that will keep the dinghy moving forwards when the motor cuts out for a while.

The dinghy's a bit barnacle-encrusted at this point: I'm in the endgame and frankly knackered, working crunch time on an immense Digital programme writing UX epics & stories. Tough week.

You are a keen young spod with life before you and I salute your efforts. You have wised up to ERE a couple of decades before I did.

I see your earlier and forthcoming trips to Espana: just been to Zaragoza (wrote on it in my Journal) and now I finally understand, why Brits move to Spain. Doubly so, what with that and sodding Brexit. That said, nothing wrong with Brum, and a good Balti curry is something for which I am Jonesing fiercely.

Good luck me lad.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Thu Jun 22, 2017 12:36 am

Thanks for the tips Noedig,

I think I've got it all nailed down apart from the pension, which will probably come into play this year.
That's a split I'll need to think about more, if it's worth just shoving everything above £43k into the pension for the (not too distant) future. I'll leave that discussion for another time though, it won't be a consideration until I've got another couple of months work in.

I could certainly see myself moving to Spain, Granada I could live in, and I'd like to explore some of the northern coast as I have very fond memories of visiting as a child. I guess we'll have to see where we are after the current brexit mess.

Thanks for the encouragement, it feels like it's moving in the right direction.
Currently reading YMOYL and planning to sort out my loose expense tracking.

fingeek
Posts: 25
Joined: Wed May 24, 2017 8:16 am
Location: South Wales

Re: Bristol ERE journal.

Post by fingeek » Thu Jun 22, 2017 8:03 am

Reading with interest! I'm just over the pond from you (where you were at least), am an IT guy too. Currently salaried and seriously considering contracting as a next-step to free up time (and do something different). How's the contracting market for you? Any thoughts of moving back to Bristol?

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Fri Jun 23, 2017 1:54 pm

The contracting market in my little niche seems very good at the moment, certainly around Bristol, London and Belgium, Germany.

I'm getting into the intermittent nature of the job as well, and having an undefined length of time off in the next 1 to 4 months is something I'm looking forward to.

I'm actually planning a move up to Scotland to be with my partner during their masters course, which will likely shrink my earnings significantly.

Hopefully I can land some remote work and make up some of the difference through lower housing costs and living with/like a student.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Thu Jul 06, 2017 11:04 pm

Quick one for June as I'm feeling short of time. Trying to clear my months long to do list or just remove items I don't care about to give more brain space.

in: £2,966.23
out: £1,993.23

better than last month but still a lot of drinking, takeaways and stuff in here. I did get some new hiking boots I hope will last many years..

I've promised myself July spending will be considered and tracked and categorised so we'll see how that goes.

Currently in negotiations to take my current gig remote, and extend for another 3 to 6 months which would see this years income heading pretty close to 6 figures.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Sun Sep 03, 2017 8:35 am

July and august were a couple of strange months. Split up with GF. here are some numbers:

July
in: £4,839.82
Out: £1,554.07

August
in: £6,578.94
out: £2,679.61

Augusts expense is due to not having a house and drinking too much alcohol. month of skipping around hotels and friends sofas.

The housing situation is now resolved, and I've decided to stop drinking for a month while I take stock of situation.

currently at 1.3 years expenses, expect that to shoot up as paying attention should bring me back to under 1000 a month.

Noedig
Posts: 178
Joined: Tue Aug 26, 2014 10:15 pm

Re: Bristol ERE journal.

Post by Noedig » Sun Sep 03, 2017 1:13 pm

Wotcher again Bristoldude (or is it Birminghamdude now?)

My commiserations on the split, whatever the reason there will be some jangly cut nerves there. Relationships, eh? <pauses and tries to think of something true but not hackneyed to say on topic, finds nothing good enough to offer, decides against it>

Some of my work colleagues are based in Brum as it happens. I had a good pub session with them just talking about the tantalizing different kinds of kebab available there: I understand there are two particular Brum specialities - the "Red Meat" pre-spiced kebab, and the "German kebab" which is a kebab only even meatier. That conversation had me practically slavering. Fortunately for my (already somewhat considerable) weight I live far away in London and can pretend those things are unavailable, rare regional specialities like the famous Brummie Balti curry, or the Glaswegian deep-fried Mars Bar.

My own contract is just coming to an end for me and some colleagues - I received email notice halfway through my two week holiday at 17.01 this Friday! Now, I am old hand and have seen nearly everything in this game, and my circumstances are such that this is not a problem. But I mention to you because it is further evidence that you cannot take the future for granted as a contractor: that indeed is somewhat the point - you are acquired in the first place *because* you are flexible disposable resource. So gather ye the raining soup, while it raineth! For the future is uncertain.

Translated into ERE-speak, that means keep up the savings rate, and build the cushion, it will give you more freedom to manoeuvre in the future.

I recommend the free MoneyDashboard tool for taking 90% of the work out of tracking expenses (it sucks records from your accounts and does a rough categorisation on them for you to tweak).

Have you opened that SIPP yet? As Arnold says "Do it! DO IT NOUGHH!" https://www.youtube.com/watch?v=a6P40wLThbc

ducknalddon
Posts: 225
Joined: Fri May 20, 2016 5:55 am

Re: Bristol ERE journal.

Post by ducknalddon » Mon Sep 04, 2017 3:17 am

A SIPP isn't going to be much good if you want to retire early, you can't access it until 55, maybe even later for @bristolsdude.

Noedig
Posts: 178
Joined: Tue Aug 26, 2014 10:15 pm

Re: Bristol ERE journal.

Post by Noedig » Mon Sep 04, 2017 6:16 pm

@ducknaldon, good point. Suits earlyish retirement, but nowhere near extreme.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Tue Sep 05, 2017 2:52 pm

I've certainly been considering a SIPP for some of the remaining money once I max out my standard rate tax allowance.
I figure there's little incentive for the withdrawal age for private pensions to move back, and £40-60k going in over the next year or two could give me a nice cushion to roll into after 24 years of compounding..

The obvious alternative (paying 40% tax to get it out directly) isn't too appealing, although leaving enough in the company to pay out for a couple of years after I'm done seems like a good plan.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Tue Oct 10, 2017 12:48 pm

September:

Spending went down a little but not as far as it should have. Plenty of excuses could be made but wont.
OUT: £2,022.00

Still plenty coming in as I head towards the higher rate tax bracket. I'll likely reach that in the next two months and then need to decide what amount to put into a SIPP and what to do with the remainder.
IN: £7,979.00
Tax: £2,384.75 Personal tax for the financial year that ended in April, I could have held onto this until January but as it's not going to any productive use I've paid it off to clear the brain space.

Up to 1.5 years expenses saved.

I put £500 into bitcoin on a whim when I saw its value drop mid September, it dropped further but rallied and I'm ahead again.

Started dealing with some health issues that have been ignored and building up. One of which being borderline obesity. Paying attention to diet and alcohol and hoping to see some progress.

I need to consider options for investing going forward, as I am almost entirely in cash at the moment, having sold the index's in last years ISA when I thought there was chance of a house purchase.

Planning for a very cheap October and will see how that goes.

fingeek
Posts: 25
Joined: Wed May 24, 2017 8:16 am
Location: South Wales

Re: Bristol ERE journal.

Post by fingeek » Tue Oct 10, 2017 1:26 pm

Wow, £8k in - great!

FWIW, I'm also not convinced about SIPP investment at an early age. Are you filling your ISA allowance each year? If not, that's worth looking at - Even if you fill a cash ISA, that gives you an option to move it into an S&S ISA when you choose to.

ducknalddon
Posts: 225
Joined: Fri May 20, 2016 5:55 am

Re: Bristol ERE journal.

Post by ducknalddon » Thu Oct 12, 2017 11:47 am

bristoldude wrote:
Tue Sep 05, 2017 2:52 pm

although leaving enough in the company to pay out for a couple of years after I'm done seems like a good plan.
If you continue to draw a salary after you finish working I'm pretty sure that could be considered a loss and you can claim it back against previous corporation tax payments up to 3 years. However I'm not an accountant so not absolutely sure on this.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Thu Oct 12, 2017 1:25 pm

@fingeek the ISA will be full for the year, yes.

The question is what to do with the rest, especially the section that would be in the higher rate tax band. As my income is from my own LTD company I'm able to choose exactly.

Given the basic rate of £45,000 fills the ISA, pays for the years expenses with hopefully a fair bit left over.

Anything else I take this year above that (and I expect there to be a fair bit above) would be taxed 32.5% personally on top of corporation tax. This is the point I'm thinking about switching into a SIPP.
I guess I'll see where I am at the end of the tax year. I don't feel any urgency about it at the moment.

Taking a salary for a few years and offsetting against tax is very interesting.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Mon Oct 30, 2017 2:48 pm

I think I've settled on putting £10k into a SIPP this year and leaving the rest of the Profit that's over the higher rate of tax to take out at the start of the next tax year.
Essentially this will mean shifting my years income to the beginning of the financial year, allowing me to take the money out about a year earlier.. I'll then save up to do the same the following year and consider anything above that for next year's SIPP.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Fri Nov 10, 2017 5:15 am

October update before I forget.

Better than last month, but still quite ridiculous. November will be very expensive as I've just started learning to drive.

OUT: £1830

IN: £6823
Current gig has been extended until January with the possibility of April, though there have been the beginnings of rumblings about ramping up the search for a full timer to replace me. No particular worries on my part about this. April and beyond would be nice, but I've already made such good progress this year and net-worth increases from this gig I wouldn't be too worried. It would be nice to be able to stay in the current house for a whole year, it feels like a while since I've done that..
Should have two more months around this level of income before I get to my limit and then only ~£600 a month until the next tax year. That's already in the (company) bank and the rest of the work this year is already going towards next year.

bristoldude
Posts: 72
Joined: Tue May 27, 2014 1:01 pm

Re: Bristol ERE journal.

Post by bristoldude » Sat Dec 02, 2017 1:00 pm

This is spending is getting embarrassing on the Extreme forums.
Out: £2,962
including: £560 on alcohol and eating out.
£900 on hopefully all the driving lessons I'll ever need.
£200 on food

Driving lessons should be a one off but the alcohol / eating out is the thing that stands out as stupid so I'll make an effort to attack that first.

everything else apart from the food seem relativity tight, so I'll try and give my attention to those for a few months and see if I can get some improvements in without becoming a hermit.

In: £7695.00
Good news here again.. One more month of this before I get up to the higher rate tax band for the year. Noises about expensive contractors continue in the office but nothing too worrying yet.

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