Looking for some outside perspective on my finances and whether there’s anything obvious I’m missing. I have checked the flowchart and wiki.
I’m open to criticism. I’m mainly trying to pressure-test my thinking and make sure I’m not overlooking something obvious.
For example, for the longest time I didn’t even check the fees on my workplace pension (luckily they turned out to be very low, so I didn’t miss out much there).
And for even longer, I assumed property investing was clearly the best route, without properly factoring in opportunity cost vs equities, tax implications, or even thinking in terms of ROE rather than just ROI when judging performance. If I knew what I know now, I probably wouldn't have bought but again, luckily it turned out to still be a good investment.
That’s made me realise there are probably other blind spots I’m not even aware of, so I’d be interested in anything people think I should be looking into and rethinking at this stage.
Lean Financial Independence Age: 33 years old
Based on financial forecasting tools (assuming 7% annual stock market growth and a 4% withdrawal rate), I’m modelling being able to live off roughly £24k/year, around £12k from stock withdrawals and ~£12k net from rental income.
Under those assumptions, I theoretically wouldn’t run out of money.
I don’t actually plan to retire that early, but it’s reassuring to know I potentially could if I wanted to.
Thank you to everyone taking the time to read and respond.
| AGE | 28 | |
|---|---|---|
| COSTS | ||
| Monthly fixed costs | 700 | pm |
| INCOME (COAST FI) | I usually stop working once I hit 50k/pa as I value time and have saved a lot already | |
| Freelance Income (gross) | 50k | pa |
| Average Freelance Income Monthly (gross) | 4200 | pm |
| INVESTMENTS | ||
| Cash emergency fund (Chase 4.5%) | 5k | |
| T212 Stocks ISA (VWRP) | 130k | I max out 20k allowance every year (already maxed out for this financial year) |
| T212 GIA (VWRP) | 15k | |
| Work pension (0.14% total fee) | 40k | |
| SIPP | 0 | |
| LISA | 0 | I know I'd be better of putting 4k in LISA (to get 25% top up) and 16k into Stocks ISA, as mathematically better return but emotionally I struggle with the idea of not being able to access it till pension age as I am still in my 20s.. |
| PROPERTY INVESTMENT (ASSET) | ||
| Market value | 325k | |
| Mortgage | 214k | |
| Repayment (3.34%, 35 years) | 913 pm | |
| Monthly rent | 1700 pm | Return on investment = 15% // Return on equity = 10% / |
| Equity | 111 | Thinking of changing to interest-only BTL mortgage (currently consent to let) and release 30k equity (still 75% LTV for good rates) to put into GIA. It passes the rental stress test and I wouldn't be highly leveraged, even if interest rates hike up to 8%. People advise against this but why? |
| CRYPTO | ||
| Crypto | 20k | ROI 19000% (initial investment was 1k) I don't want to cash it out and change to GIA right now, as I don't want to be hit with higher tax of 40% (wanting to do it in a year where I only earn 30k) Thoughts? |
| OVERALL NET WORTH | 321 |