Comments on: Structuring Your Finances: A Reader Case Study

By: Michael

Michael — Wed, 26 Sep 2018 10:11:58 +0000

In reply to Nick.

Thank you Nick for your kind comment. Keep them coming!

I have not specified ISA or Pension for Richard as it really depends whether one retires before or after the pension age. For Richard, what I meant was probably ISA, but it doesn’t really make a huge difference.

If something, Richard will be better off investing the money in a pension pot to benefit from the tax break – it’s essentially free money. However, that’s only if you don’t need the money until 55, so it’s good to have some flexibility and liquidity before that point.

My preferred option would be an ISA, since £500 a month means £6,000 a year, well below the £20,000 annual limit.

By: Nick

Nick — Tue, 25 Sep 2018 16:10:23 +0000

Hi Michael,

Long time reader, first time commenter.

Keep it coming, the blog’s an incredible read and you write with such clarity.

QQ: Are you suggesting in the above that he pays the £500 into an ISA or Pension? I’m not quite clear after reading it a few times.

Thanks and keep it coming.

By: Michael

Michael — Thu, 21 Jun 2018 06:50:06 +0000

In reply to Andrei. Your words made my morning Andrei :) Youtube is a great option but it's more time-consuming than writing. I see a shift to video though. But I like writing. Hopefully, it won't die!

By: Andrei

Andrei — Wed, 20 Jun 2018 17:14:16 +0000

you’re the very first blog I ever felt the need to subscribe too
very good info, keep it up and I see a tipping point around the corner
why not youtube?

By: Michael

Michael — Tue, 05 Jun 2018 07:15:44 +0000

In reply to The IG.

Hi IG, great comment! See, I’m happy I made it a blog post so others can propose better / more drastic approaches.

I get what you’re saying about Richard wanting to retire now. Downscaling would certainly make things easier but I find it hard to believe a mortgage-free house and no children will get him there in 2 years. There needs to be invested capital to sustain their living expenses or he’ll end up working away from home. And isn’t this something he already does?

Great article btw!

By: The IG

The IG — Sun, 03 Jun 2018 18:39:07 +0000

Hi Michael, I think Richard will be impressed with all the work you’ve done here, but reading his initial email, I see an undercurrent of ‘I need to stop working ASAP and get my life back’. 15 years takes him to 56 – that’s normal retirement in my book, and I sense Richard needs it a lot sooner. Although there are way too many important variables missing here for me to an offer a more detailed breakdown – ie. salaries / outgoing expenses, value of his LC etc – I do see one major factor that has possibly not been considered.
Two teenage children and nearly 1/4 million mortgage in a property that he doesn’t see capital appreciation in. WAY too much debt here.

However, a simple solution – 5 years max, possibly less, he will need 2 – I’m assuming – less bedrooms as the children leave – at 18/19 it’s time for them go and make their own way in the world- therefore downsize the property – with 250K equity already there, it’s easily enough to buy a 2 bedroom house – and be mortgage free. Work then can be scaled back as / when required.

This article gives some alternative viewpoint/strategies : https://www.getrichslowly.org/types-of-retirement/ which may be worth considering as well if the above appears too drastic (it’s not really though …).