Significant Increase in Salary – What to do?

FoxEye said:
I don't get why people do this to themselves.

How about a nice cat? A cat is fine too. More enjoyable, less drama, less cost. Win/win/win.
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A cat more enjoyable than children?

Come on. They call them crazy cat ladies for a reason.

Also those that go to private school tend to do a lot better not just marginally better than those that don't.

There is no excuses that way. It's the number 1 best opportunity you could give them.

You sound like fun to be around at a party. Glass half empty type of guy
 
Psycho Sonny said:
A cat more enjoyable than children?

Come on. They call them crazy cat ladies for a reason.

Also those that go to private school tend to do a lot better not just marginally better than those that don't.

There is no excuses that way. It's the number 1 best opportunity you could give them.

You sound like fun to be around at a party. Glass half empty type of guy
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Hah. Whenever I speak to parents they say the same thing, "We don't regret having kids but they are a huge pain in the ass. And expensive."

It's obviously not a logical decision to have them from a "how do they benefit me" evaluation. It's just your biological drives kicking in, telling you you must reproduce.

But in fact kids are nothing more than a drain when looked at in the cold light of day. A drain you might end up being proud of, one day. Or you might not.

And obviously the demands of being a parent - the responsibility - are immense (if you're doing it well).
 
Colonel_Klinck said:
I agree and if he has a moral problem with that then he shouldnt do it. Until the Gov legislates to stop it happening it is still the best investment. I wish they would as properly prices in this country are a joke.
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I appreciate that this is a tangent, but my funds have done a lot better than my properties over the last few years. The properties also have the pain of dealing with tenants and maintenance required to keep them happy, and to keep them fit for sale if i wanted to cash them out. I am actually thinking about selling up when you also factor in the negative legislation which is also slowly coming in. My brother is already doing so, although this is partly influenced by him no longer living in the UK which adds hassle for him. I will be slightly envious when he no longer has the burden, though.
 
FoxEye said:
Hah. Whenever I speak to parents they say the same thing, "We don't regret having kids but they are a huge pain in the ass. And expensive."

.

And obviously the demands of being a parent - the responsibility - are immense (if you're doing it well).
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Don't forget the "can you babysit fri/sat night question that frequently pops up. My first thought when i get that is "Why did you have kids knowing you still wanted to be out most weekends?'
 
With interest rates the way they are at the moment I'd overpay as much as you can. In the long run you'd save more money on interest than sticking it in an ISA.

I personally have enough savings to cover my mortgage and bills for 6 months should I lose my job. The rest goes straight on the mortgage.
 
Jez said:
I appreciate that this is a tangent, but my funds have done a lot better than my properties over the last few years. The properties also have the pain of dealing with tenants and maintenance required to keep them happy, and to keep them fit for sale if i wanted to cash them out. I am actually thinking about selling up when you also factor in the negative legislation which is also slowly coming in. My brother is already doing so, although this is partly influenced by him no longer living in the UK which adds hassle for him. I will be slightly envious when he no longer has the burden, though.
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I sold my two properties a while ago - they were just a nightmare to deal with and a massive timesink. I re-invested into a campsite with fishing lake and that returned way more than the properties ever did and I barely had to be there at all as I had a very capable site manager, it was very "hands off".

TLDR - there are better investment opportunities than property, especially rental.
 
Thanks for all the comments guys.

To clear a few things up:

It wouldn't be a brand new car, purely for the reason of losing circa half the money immediately.
I've gone from 23 to 50. As mentioned, pennies to what I've seen people on here earn, but significant for myself.
We have around 10k between us in the bank now. So I feel we have a stable situation ready for kids etc.

As people have mentioned, its getting the balance right on having fun/being sensible. We will do the holidays etc and the car as mentioned. But couldn't live with myself if I'd had this salary for most of my life (currently 25 and assuming I don't get the boot!) and find myself in a bad financial position in later life, unfortunately like my parents and so many others!

I liked the the idea of buying another property and as immoral as it is, letting someone pay the mortgage for me. I can't help but think house prices at the moment though make this a silly choice. Surely the bubble must burst soon!? For this reason, I will probably just max out my mortgage over payments at the mo. I understand rates are low and putting it in other investment options may earn more, but it just feels safer paying debt off first!
 
amigafan2003 said:
I sold my two properties a while ago - they were just a nightmare to deal with and a massive timesink. I re-invested into a campsite with fishing lake and that returned way more than the properties ever did and I barely had to be there at all as I had a very capable site manager, it was very "hands off".

TLDR - there are better investment opportunities than property, especially rental.
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Wait, you were a BTL landlord?

And you stopped "providing a service" when it stopped returning cash hand over fist?

So you weren't doing it for the benefit of the proles then. Given your political leanings.

How you do surprise me. I guess you're only following the example of beloved Labour MPs with millions in property portfolios. Because they care about the proles too.

Funny how people abandon their (alleged) principles if they think they can make some cold, hard, cash. Hah.
 
I have no kids myself so this is what I do.

Overpay my mortgage
Save
Go abroad every 6 to 8 weeks. Not stupid expensive holidays as you can fly to some nice countries for cheap when out of term. You don't any kids yet, so take advantage now!
Kept my pension contributions the same as I was told don't pay no more than you need to, especially if you was born after 1980 like I was.
 
Congrats on the new job (and extra cash).

If you are sure about kids in the near future, then i would recommend travel, travel, travel.

You never know if you will be able to later on in life.

oh and obviously overpay on the mortgage to the limit, maximise pension contribution, get any debt in order and just enjoy what life brings.
 
amigafan2003 said:
I sold my two properties a while ago - they were just a nightmare to deal with and a massive timesink. I re-invested into a campsite with fishing lake and that returned way more than the properties ever did and I barely had to be there at all as I had a very capable site manager, it was very "hands off".

TLDR - there are better investment opportunities than property, especially rental.
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I have no appetite for things like a campsite but i am with you on potentially getting rid of them. These days i prefer to be totally hands off as i have a family and a very busy job let alone things like building work on my own house.

As i say i will be almost envious of my brother once he has cashed out of his, i may follow you both especially if the market picks up a bit when something gets agreed on Brexit.
 
Always keep at least three months salary as savings just in case for a rainy day and then overpay your mortgage.
 
Jez said:
I appreciate that this is a tangent, but my funds have done a lot better than my properties over the last few years. The properties also have the pain of dealing with tenants and maintenance required to keep them happy, and to keep them fit for sale if i wanted to cash them out. I am actually thinking about selling up when you also factor in the negative legislation which is also slowly coming in. My brother is already doing so, although this is partly influenced by him no longer living in the UK which adds hassle for him. I will be slightly envious when he no longer has the burden, though.
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In the long term, a simple FTSE tracker should do better than a BTL property. This is intuitively right otherwise far less people would bother with shares and investors would all be in to property.

For BTL to work you also have to do a lot of work yourself and save on costs. You then have to weigh up what your time is worth
 
dowie said:
Unlike the other poster's suggestions I’d probably not bother with the mortgage overpayments as rates are rather low at the moment, it could be rather pointless/inefficient and you could well be better off with your cash invested instead - unless you only have a small amount of equity and are paying a high rate so could move to a much cheaper deal quicker.
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I was going to say this. As well, you're already paying it so servicing that debt is not a problem. Maximising your savings and investments in the most tax efficient way would be my go to choice.
 
The amount of time that comes off your mortgage repayment period even with a small overpayment can be staggering. Conversely to what some have said, whilst rates are low at the moment I'd be looking to overpay so that when rates do go up, you are impacted less.

As others have said maximising your pension contributions are a no-brainer if you are in the higher tax rate.
 
D.P. said:
In the long term, a simple FTSE tracker should do better than a BTL property. This is intuitively right otherwise far less people would bother with shares and investors would all be in to property.
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Yes, you're right. As well as being wrapped up tax efficiently (e.g. an ISA, or a SIPP - depending on your exact needs/requirements), BTL is definitely not as good as it used to be, primarily because of the tax implications now. I got into BTL to help my children get on the ladder in 10-20 years time, but it is no gravy train and takes up significantly more of my time than my ISA and other investments!
 
I actually looked at alternative investments including wine, art and watches in actual funds (rather than just going and buying a case of plonk and a casio) and the returns are c. 8-10% per year. It depends how longterm the investments are though, but they seem to be a fairly "stable" alternative and interesting alternative. Unsure of the capital required to start though, compared to your standard funds
 
Definitely go on holiday every few months. Once you have kids becomes much more difficult.

Any money left over overpay your mortgage.
 
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