20 Years Of Tracked Spending And How It Helps Me Plan For The Future

[IrishHusk]

@LS400 if you are remotely in a position to retire and step away from work do it now, one thing you won't get back is time. I was in a similar position a few years ago but just kept saying" one more year and they won't be able to run the business without me" now 4 years later my wife/partner of 46 years is gone after a year fighting a terminal illness. I have all the money I need and know one to share it with. What I would give for those few years back. So do it now and don't end up with regrets. Sorry for a depressing post but sometimes we get preoccupied with money and forget what are the important things in life.

All it takes is a routine set of blood results from the doctor to go the wrong way and all the planning is irrelevant. In my opinion family medical history is your barometer to when you need to think of retirement

 

[Cervelo]

The fact that you have no children @Cervelo is in this scenario of controlling spending a major factor.

Would totally agree with you here with it just been the two of us and been of the same mindset and values, financial decisions are easy
and I'd go as far as to say it's easier then if I was single, God knows what sort of trouble I'd have gotten myself into if it weren't for Mrs C

But when you have to factor in children, it adds an extra level of financial planning that I've never had to consider
And when that child is going to be very dependant on their parents both financially and even emotionally for their future wellbeing
it adds a level of complexity to the whole situation that I'm sure would melt the mind of most people, I know it would for me

 

[Cervelo]

If you are remotely in a position to retire and step away from work do it now, one thing you won't get back is time.

Thank you for your post and I'm very sorry to hear of your loss
I'm with Mrs C, 26 years now and it upsets me greatly when I think about what inevitably is going to happen, so much so that I have to consciously stop what I'm thinking and do something that occupies my thoughts in another area, so after 46 years of togetherness, I can't fathom your loss

I, 100% agree with underlying message in you post and rather then me, try and explain it in a long winded dyslexia way,
I'll let this vid that popped up in my YouTube feed the other day do it!!

 

[misemoi]

This thread is so informative as I start another week of work. To balance the books is a delicate matter and while a lot of us on here find ourselves rich in money, the same richness has to be found in time and relationships too. It will be very hard to let go of a regular salary when I reach target retirement age but I need to start getting into the mindset.

 

[Louisval]

This thread is so informative as I start another week of work..........while a lot of us on here find ourselves rich in money, the same richness has to be found in time and relationships too.

Ain't that the truth! The OP seems like a multi-multi-millionaire in terms of time and his primary relationship. Very, very helpful thread of widespread benefit.

 

[Cervelo]

I wanted to come back to this thread and talk a little about how I’m financing my life and show why I'm not really concerned about decumulation of wealth

I don’t know about the rest of you but all through my life I’ve found people are very reluctant to talk about their finances in any detail nearly to the level that it’s a taboo subject or even rude to discuss it on an individual level

We’ve lots of statistics and averages about what we spend and own and how wealthy we all are but very little of actual figures on an individual basis and for the most part I get that although we live the same life's we all live different ones

I’ve also found as I’m sure most of you have at some stage when talking money with friends’ family and or strangers that you’ll never get the truth when it comes to finances and purchases. Over the years I’ve asked many people how much they’ve paid for something or what return their getting or what rate their been charged on this and 90% of the time their getting some unbelievable deal that I know for sure can’t be true

I’ve made no secret on here in AAM about the figures I’m playing with, in fact my first thread here was a question “Is a million enough for a couple at 50 to retire on” to which I got some interesting answers from both sides of the discussion but mainly fell on the yes side.

I’ve seen similar questions been asked recently and the answers now seem to be generally falling on the side of I don’t think so, but I’d have to run the numbers or the people I see enjoying their retirement the most are the ones spending €100k plus pre year. Which to me seems absurd given that most people at normal retirement age will probably have a pension pot of less then half of that and most definitely won’t be able to afford a €100k a year lifestyle

At the end of 2014 I found myself at the age of 47 in the enviable position of been mortgage free of our home worth €500k and basically a million euros split between €180k in a PRSA and €820 in cash. So, we did what most people would have done and went and spoke to a financial advisor and ended up giving them the PRSA and €510k in cash, the €10k was the “hello money” and we looked after the balance

It soon became obvious that the returns from the FA were not where we were expecting them to be, so we started to unchain ourselves from them in 2019 and took over the investing ourselves. In total we got back from our time with the FA €200k on the PRSA and €520 in cash

In 2020 I gave the PRSA back to Zurich and Mrs C started investing the cash mainly in the stock market in individual shares with a rough breakdown of 40% dividend 40% growth and 20% high risk

As of the end of 2024 and the age of 57 we currently are worth €1.65 million which is more than we were worth 10 years ago, but the breakdown is different, the house is now €750k, the pension is €348K and between stocks and cash another €552k but also in those 10 years we have spent €336K

Now the quick amongst you will be fast to point out that the growth has mainly come from the house and PRSA but that the cash I had at the end of ’14 has fallen in line with spending but in my eyes this is what the €800k was/is supposed to do, it’s there to get me to 66 when the state pension and my PRSA will kick in and replenish my dwindling fund

I’m hoping that by the time I get to pension age there’ll be about €150k maybe €200k left from the €800k, the PRSA will be worth somewhere between €450k to €500k and then the added bonus of the state pension will be enough for all future spending, But what if it’s not, well that’s where the house might kick in, although I feel the equity in our home is “notional equity” and the house probably won’t generate enough funds to warrant downsizing and the compromises that would come with downsizing there are other ways to tap into that equity which would be looked at when closer to the time should the need arise

So to sum up what I’m trying to get across in this thread is that by understanding your finances on an individual level from tracking your spending, understanding how your investments and pensions work and using common sense in your day to day life you can remove a lot of the stress and anxiety in the run up to and during your retirement and just get on with enjoying your life

 

[ClubMan]

So, we did what most people would have done and went and spoke to a financial advisor and ended up giving them the PRSA and €510 in cash, the €10k was the “hello money” and we looked after the balance

You mean that they got paid €10K up front? Plus ongoing fees or not? What sort of "financial advisor" was this?

 

[Cervelo]

You mean that they got paid €10K up front? Plus ongoing fees or not? What sort of "financial advisor" was this?

Yes up front, in the supermarket trade long ago we used to call it "hello money until it was banned and then went by another name!!
And yes there was on ongoing yearly management charge of 1%
Is this not normal, that there would be upfront charges and ongoing fees when dealing with financial advisors in situations like mine ??
In pensions you pay something on your yearly contributions and an ongoing yearly charge so why would I be treated any different??

 

[ClubMan]

Is this not normal, that there would be upfront charges and ongoing fees when dealing with financial advisors in situations like mine ??

I doubt that most people pay €10K plus ongoing charges for financial advice.

 

[Billybob]

€10k aside Cervelo, I’m with you all the way on your analysis.

 

[Cervelo]

I doubt that most people pay €10K plus ongoing charges for financial advice.

But it wasn't just financial advise, I could have got that for a few hundred euro for basic advise, more for more complex advise
This was setting up an balanced investment portfolio and managing it for me, these things have a cost
Much in the same way when the time comes for my PRSA to be converted into a ARF there will be a cost

Maybe one of the FA's that post here could clarify is there normally a set up charge and ongoing fees for this type of investment/service??

 

[CharlieMac]

You were very lucky tho weren't you? 2014, you were cash rich. The property market just starting to recover after imploding during the great recession and you had a house in Dublin with no mortgage. A 10 year global bull market run just beginning. Entitled to full state pension at 66 tho you stopped working at 47. Of course you earned these things but I think you were exceptionally lucky too.

 

[Cervelo]

I think you were exceptionally lucky too

Yes luck played a huge part in acquiring the wealth
But I also think good management and an understanding of what can be achieved played a huge role
Looking forward over the next few years with Trump on a roll, things might not play out with the same results but there's always options

 

[CharlieMac]

Thanks @Cervelo. It's because of this thread that I started up my own spreadsheet to record my daily living expenses. It's a pain but as you say knowing how much I actually need to be comfortable will hopefully take some of the stress out of planning for how much I need to save for retirement.

 

[Persia]

£9.7m lottery winner Michael Carroll lost all of his money in just eight years

Carroll won £9.7 million on the lottery in 2002. Eight years later he was bankrupt.

www.ladbible.com

You were very lucky tho weren't you? 2014, you were cash rich.

Luck is only a small part to play, it's like the 20 year in the making "overnight success story".

Michael Carroll was exceptionally lucky to win 9 million or whatever then blew it all.

It's hanging on to the accumulated money/assets, protecting them and critically growing them...that's the tricky part.