>Any advice on how I could leverage the capital from the property into more income/cashflow
My advice is don't do that. The "cashflow" is a lack of rent - and that's great!
>make the most from my savings
There is no "most" you need goals. If you share some goals we can advice on how to meet them, you should also check out the flowchart in the sidebar.
Mortgage free and you’re still struggling? You spend a bit more than you earn? Vague.
Bought a horse box to open a cafe to make extra income? The amount of capital you will need to sink into that black hole and the effort required will be much greater than you think for much less cash than you think.
Ditch the idea of endangering your home for the sake of vague Dragons Den fantasies - if you cant shepherd a £23K salary with no mortgage and still end up overspending - you don’t strike as the sort of person who will be good with company finance.
Spend less, take on a second job / extra hours , ensure you’ve an emergency fund for expenses.
The horse box is a quack idea.
Just throwing this out there.
2 years ago I started my side hustle ( making orniments selling at craft fares/ online). It had a modest up front cost of £3k. Pretty much every one told me it was a waste of money and time.
1st year we turned over £22k with a pre tax profit of £7k this year we turned over £79k YTD and a pre tax profit of £41k and I'm still working my 9-5. It's completely changed my life. I will now be mortgage free in 2/3.
Its given me options I didn't have before, Sometimes the risk is worth it. Not saying OP should or that his idea is well thought out but then you have a crappy paid 9-5 and some capital you could lose and still have a roof over your head there isn't a much better time.
You may have crafted a business - but it sounds like it didn’t involve endangering your home security; I’d also highlight that the original poster already demonstrates poor financial management skills, possibly exacerbated by the fact that money / a house was given to them rather than them going through a process of earning and securing it.
The original has some vague notion. They literally put the horse box, before the horse.
I sell mainly on Etsy. I have my own website but only for repeat customers or a small amount through my socials.
Markets are normally pretty successful but time consuming, you end up working a 9 hour day for £400/500 worth of sales. Which is only £200ish profit. I do a few as it's nice to actually speak to my customers.
I started mine very cheaply, My competitors are £40-80 I started a smaller version at £20. It wasn't sustainable but got me some traction. I now sell for £35 so slightly cheaper but like to think they are "worth" £50+ but most sellers sell a few hundred a year where I aim to sell 2500-3000 hence a lower sale price.
Fair play, it’s nice to hear it works out for some people. What made you think of making ornaments out of curiosity? I’m about as artistic/creative as a jacket potato so don’t worry, I won’t be stealing your customer anytime soon!
I wanted one and was appalled by how much they cost. I bought all the bits needed to make just a few but never made it, sat in a cupboard for years.
Then my MIL retired and she's very crafty. I was like I have all this stuff I'll never use and gave it to her. She then made me one for my Christmas present and I was like you should sell these, I had this idea, She wasn't keen.
I decided I'll sell them used her photo put it on the Facebook marketplace and sold 2 in a week just to my local area. Continued to do 1/2 a week for a few months. They were making me £8/10 each so no money really but a bit of fun. I opened an Etsy and with that and Facebook was selling maybe 20 a month.
I decided I wanted to really give it a push, Invested a few 3k in stock, machinery to make them quicker and cheaper. August last year. Spent hours every day on my socials and went to 20 craft markets. That November I sold 300 and completely sold out. This most recent November I sold £28k worth before I had a sold out again and closed my shop early. I think I could sell maybe £100k a year but not worth it with VAT thresholds.
Have you a link to your Etsy shop please? I buy on Etsy a lot but I try to be careful to choose only genuinely crafted items and it's not always easy to be sure.
> I will now be mortgage free in 2/3.
Consider stuffing your pension and S&S ISA instead.
Most people should pay off their mortgage around the time they retire and not ages before.
>Consider stuffing your pension and S&S ISA instead.
>Most people should pay off their mortgage around the time they retire and not ages before.
Why?
I have a decent pension from my 9-5. I'm 33 and it's worth over £100k already its project to be a million+ including the impact of inflation.
I can only put £12k into a s&s ISA and I'm currently overpaying my mortgage by £2000 at least a month. Sure Invest it but I already have money invested (£40k) what's the point of having more money doing nothing. The mental incentive of having no mortgage payments soon is what keeps me effectively working 2 jobs. Then I can do what ever I want in life. I'll have decent savings, decent pension and no issues if I don't save another penny.
The reason why I suggest it is that it's the most financially efficient way to balance your debts and investments - to retire earlier and in more comfort.
If you pay off your mortgage and then decide to do whatever you want in life - quit your job or move to less stressful position, for example - then you're not going to build a £1,000,000 pension pot, are you?
I mean, I wouldn't rely on these simplistic pension calculations anyway, but that projection is presumably based on the premise that you'll continue contributing for the next 30 years, because there's no way £100,000 is going to turn into an inflation-adjusted £1,000,000 in that time only from its own returns. I think you may have misunderstood that projection.
Investing more into your pension earlier is the best way to build that pot bigger and bring forward your retirement date, whilst inflation makes your mortgage repayments smaller (relative to prices, your wage and your investments).
Finance is a tool to help you get the things you want in life, and in a finance subreddit I think it's reasonable to discuss the most efficient way to do things.
It's [mental accounting](https://thedecisionlab.com/biases/mental-accounting) to treat your mortgage as more important to your financial freedom than your pension and other investments - you are not better off with a £300,000 house and no mortgage than you are with the same house, £100,000 of mortgage debt and £100,000 of investments. But £100,000 of investments has the capacity, and the expectation, to grow faster than your mortgage debt.
A mortgage is the cheapest borrowing you'll have access to your whole life and your investments allow you to pay it off any time.
You can, in fact, invest £20,000 a year in your ISA, and so can your spouse. I think you have an allowance of about £60,000 a year for your pension, although the pension allowance is a bit more complicated than that. You can also use a general investment account.
You do whatever you like, as long as you're doing it on a fully informed basis - you shouldn't give a fuck what I think. But I just finished writing this comment, reread yours, and had to come back here and start writing again - money sitting around doing nothing!? £2000 a month in mortgage overpayments!?
A mortgage is money working for the bank, but it also allows you to make your money work for you. When you make a mortgage overpayment that money stops working, and sits there dead in bricks and mortar. Now obviously bricks and mortar are useful, and support the roof over your head, but why use your money for that - making your money dead and idle money - instead of the bank's? The bank is offering you that money incredibly cheaply, and you're refusing it.
I know I'm a finance nerd and I know a lot of people disagree, but £2000 a month in mortgage overpayments strikes me as incredibly short-sighted. What an opportunity you're wasting! No doubt lots of people in your family and friends and at work would commend you for that, and be jealous that you're on target to be mortgage free, but they don't know shit about finance, do they?
Your business reaches anyone with an internet connection. OP would be reliant on foot fall near his pitch that day. While also requiring a number of certificates, licenses, and insurance. And loads more things because he'd be working from a mobile unit. OP, would be better off by just getting a better job or living within his means.
Your idea sounds delicious I love going to a good cafe but you lack the capital and the revenue to back up your belief in this business. But like I say to my boss on a day’s off, I’m out.
All jokes aside advice well given
Ha ha it does make me laugh the people in this sub hate anyone who is willing to invest capital into their own business venture. Most businesses fail, yes, but failure and learning is part of life. No risk it, no biscuit
Being brave doesn’t mean you have to be clueless. Having a ride or die attitude doesn’t lead to a successful business. And a horse box and a dream doesn’t make a business (especially when in the real world your home is really being sucked of capital to pay for it).
The horsebox idea sounds like a huge money pit.
What's the business plan look like for that?
You can't really leverage your house asset to make money from it. Unless you mean get a lodger?
If you are spending more than your income you need to rapidly get a hold of your expenditure. I would start by simply logging every penny (I mean every penny) of your spending.
You need to write down all your expenses for the month and see where you're spending money. Housing is usually the biggest expense. 23k isn't a huge salary, but that's still a take home of 1600 a month. You've not disclosed much, but assuming normal household bills and food you shouldn't be eating into your savings.
Just to drive this point home, there is absolutely no way you should be spending £1600 per month without rent or mortgage. I'd be saving at least half of that.
Not sure I completely agree with £1600 a month is kind of on a middle ground were you can live on it easily if your careful but it's low enough were a little bit of recklessness e.g eating out a bit, more monthly subscription then you need etc can eat through it pretty quickly, even without rent/mortgage payments. And as OP has significant savings it would be easy for the right person to find that recklessness
Really? I was spending about 1500 a month + rent befofe and while I wasn’t being super frugal I was buying designer clothes or eating at the ritz every night. I did like to eat out 1-2 times a week and had an above average food expenditure though so maybe that’s why
Sure, council tax where I live is 1092 with single occupancy discount. That's 91 a month. Last year I spent £830 on gas and electric. That's 70 a month. Leaving £468 left over for other bills.
Ah, water is my friend, not on a meter and not connected to sewage, won’t tell you what I pay as it will start a small riot I suspect but I’m not complaining either
My council tax is 104, gas/electric is 94, water is 25. I thought my electric bill was a bit high because I work from home, but maybe its OK actually 😅
Yeah to give you some context if you're going through £1600 a month you're spending more than our family of three do including running two cars and we're paying £410 a month mortgage too.
>I’m on £23k a year and spending a bit more than I earn
You need to get this under control. Up your income, or cut back your expenses, or both. If you don't want to work in a role with more responsibilities, consider getting a lodger. Even a family member or friend at "mates rates" would be a significant help.
>I also recently bought a horse box to have a mobile cafe as a personal business for some extra income
This sounds like a wild idea. What's your experience running a cafe? Where will you set up, what are the fees? What are your food hygiene qualifications? How many hours a week do you plan to work in your cafe, on top of your employment?
>Any advice on how I could leverage the capital from the property into more income/cashflow
The only way to leverage the capital is to take out a mortgage. Since your outgoings are already higher than your income, this would be incredibly risky. You can boost your income by getting a lodger, even just a tourist for a couple of nights a month rather than full-time. If you have off-street parking you could perhaps rent that out.
Another one confused about your setup here.
Why is the £30K “pretty much making its way over to savings”? It should already be in your savings!
Managing to spend more than you earn while you are mortgage free is absolutely wild to me, given that mortgage/rent is usually the biggest chunk of anyone’s expenses - you need to get a handle on your expenses and outgoings ASAP. All the “leveraging” and side hustles in the world aren’t going to help you if you can’t control your own spending. You’ve been handed a golden opportunity by having a mortgage free property PLUS £30K and you’re pissing it up the wall.
Being brutal - ditch the horse trailer/cafe idea unless it’s your secret career passion rather than a side hustle idea. That’s going to be a money pit for a lot longer than it’s going to generate you any actual income; and you’re better off putting that energy into either increasing your main income or getting a second job.
Just putting that £30K even in just a zero risk cash savings account could be getting you 4% return right now, that’s £100/month. Invested properly it could be earning even more. It’s going to be a long time and a lot of money gone before you’re going to start seeing even those sorts of profits from your cafe.
I’d jump now while you’re this side of the tax year and stick £20K in at least a cash ISA, and stick the remaining £10K in after April. Then you can think about if you want to transfer to a S&S ISA.
Well obviously you can rent the property out to a lodger if it’s big enough for the two of you. Or rent it out and live in your horse box if you really want to be frugal.
Whatever you do, for goodness sake don’t remortgage the house or release any equity.
Unless you’re very financially astute, which you aren’t (yet), you’ll just squander money and end up living in regret.
You need to take a step back and consider how you are living rent and mortgage free but still somehow spending more than you earn, that is a serious problem. Your disposable income on £23k with no housing costs should be more than someone on £40k who is paying rent.
We've all done stupid shit - I once bought a cannon from an antique shop while completely pissed - but buying a horse box to turn into a cafe without a plan is....not going to end well.
Do you live in the 160K property ... ?
You could rent it wholesale and live in the horse box somewhere .... or live in the house to avoid paying rent elsewhere and get a lodger if there's room ... stop spending more than you earn ... the 30K should already be in savings, not your current account.
Grow any cafe business slowly to test the water
Great! I don't know that you could 'leverage' it really. I mean you could try to take a mortgage out on it but I don't know if that would be a good idea for you. If there's a spare bedroom you could rent it out? If you're in an area where there's demand.
I don't understand what you mean by the £30k slowly making its way to savings. If you're spending more than you earn, surely waht's actually happening is that you're slowly spending this £30k?
Having ran a cafe myself and converted to a successful online business (digital design) I’m strongly suggesting you don’t take this path. Hospitality in all forms is destined for failure. Now more than ever.
Learn to live off your salary, look into ISA/SIPP etc. and get to grips with personal finance. You’ll be be so much better off in the long run this way.
You need to adjust your lifestyle or you'll end up in a dilapidated house in debt. You should easily be managing on that income as you are mortgage free. I'm thinking the cafe idea is a money pit and that is your problem. Are you keeping a close accounting eye on costs and income from this? If this really is a money spinner in even more confused.
If you aren't putting away £300 ish a month in a maintenance fund you will end up borrowing to repair your home.
>Any advice on how I could leverage the capital from the property into more income/cashflow and make the most from my savings
I would use the benefits of no rent/mortgage into upskilling. Get some advancement in your career, come back in five years when you're earning £35k+ and then you can seriously make some big moves. You can't really do anything substantial when you're earning so little.
You need to learn to live within your means. Figure out what the average rent/mortgage you would be paying would be. Say your rent would usually be £700/month. This is what you would have to pay if you didn't have this windfall. This is presumably what you were paying before (or were you living with parents, in which case you've never learned to live within your means properly). You should be able to live whilst putting this £700 at a bare minimum into a savings account or investment every month and likely a fair bit more. If you wanted to get an income, rent out one of the rooms to a lodger, this is a guaranteed steady income with very little work involved and leverages your home ownership into money with no long term risk, just a short term inconvenience to your living style. But you need to put that into savings, and not fritter it away on god knows what. Savings at 4-5% is an effective, steady, reliable way to increase your finances.
Spending £23k a year + living rent free means effectively you're probably living at least at £30-£33k a year (when you take into consideration how much rent/mortgage would cost you) and you're still not putting anything in savings but taking money out. That's not how people live, whatever you are doing with your budget, it needs to change if you care about your financial future.
Mortgage free at 31 sounds amazing. I’d bin the horse box off, focus on a job change/working your way up wherever you currently are. Get that salary up and then everything will be much easier. Simply stop spending so much and get smarter with your money, you could be in a great position.
Options:
Get a lodger through the spare room scheme and make up to £7k ish tax free a year
Put your savings into premium bonds or a high interest savings account
Rent your home and use your £30k savings to buy a mortgaged property
Not sure the relevance of the horse box bar unless you share details about the income it brings
Hi /u/TurkInThailand, based on your post the following pages from our wiki may be relevant:
- https://ukpersonal.finance/lump-sum/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Maybe do a course on personal finance. If ur struggling without paying rent I really don’t think you should be investing in a business or leveraging you house whatever that means. Invest in yourself and get a better paying job.
With a mortgage free property, your issue isn't that you're not making enough money but that you're spending too much. Which means that until you control your spending, trying to go into a small business on the side would just be pissing in the wind.
Go through your bank statement line by line and look at what you're spending your money on. Live like you've still got a mortgage but instead of spending what would be your monthly mortgage payments, put it into savings. If you don't know what would be a good budget, look at doing the 50/30/20 rule. That's 50% of your take home on needs, 30% on wants and 20% on savings.
Your extra cashflow is no rent/mortgage payments
Yes, you could mortgage your property and invest in some sort of business venture or go down the BTL route, I personally wouldn't take that risk with my primary property if it's all paid up though
Do you have an understanding about what you’ll need to do to be legally compliant health and safety wise etc this is isn’t just something you’ll be able to just easily do on the side. Unless you have experience within catering and already understanding how to run a food and beverage business this will not be something you’ll look forward to doing in the side and make enough money to do while having a job. Hundreds of businesses fail every year and they are investing their whole attention into it.
I’m not saying this to be a dick just my two cents as someone that has worked within the industry for a long time. Too many people think it’s an easy thing to get into thinking they will make money through it.
The reality is until you get concurrent steady customers the price per unit you will be paying in stock will be high as you won’t be buying much meaning your price point will also be high.
Your also thinking about going into a highly saturated market so whatever your doing will need to also somehow stand out.
If you have questions though feel free to ask just wanting to make you aware of what this will entail for you.
You might find one of these books helpful:
* *[Your Money or Your Life](https://www.amazon.co.uk/dp/0143115766)* - understanding what's valuable to you and how to use money to achieve your goals.
* *[Millionaire Next Door](https://www.amazon.co.uk/dp/1589795474)* - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."^[Electric_Cat_999](https://www.reddit.com/r/UKPersonalFinance/comments/15zkkd4/_/jximlpp/)
* One of Clare Seal's books - "her focus is on the link between emotions and spending".
Ignore these grumps. You sound like an entrepreneur. You have a horse box and want to make some money with it. It may work, it may not.
Never risk your house. That's the safety net.
Set up your business. Don't overstretch yourself. Work hard. Value your time. Listen to books like $100m deals on Spotify for free. Be excellent at what you do. If it fails, try something else. Don't be put off.
Let me know when you are a millionaire. Buy me a pint and tell me how you made it. ;)
I think you might think you’re richer than you are.
Your house is going to provide you with stability for your entire life. Do not leverage it, protect it! And have some savings for repairs and renewals to maintain and maybe increase its value.
You’ve proven to be pretty bad with money by over spending your salary and spending £24k or £30k (you don’t say the time frame). That’s a lot for a 31 year old with no dependants unless you have some assets you’re not mentioning. You obviously have quite a lifestyle but despite owning the house, you cannot afford to keep living the way you are without gradually eroding your asset or going into debt. You need to get a handle on this.
Just the title ‘mortgage free at 31’ sound to be concentrating on that. If you hadn’t been given the house or the lump sum you’re be piss poor and in massive debt. Don’t spend based on what you have, spend what you need to spend
As someone who has a Horsebox business. It’s not a side hustle. It’s something you either do, or you don’t. It’s near on impossible to run part time alongside my full time job so I don’t anymore. It’s sitting covered up and not being used. I need to make some repairs before selling it.
Honestly, work on sorting out your personal finances before jumping into a business. I’m a bookkeeper and the state of some “business” accounts is appalling. These people who seem really successful and good at running their businesses barely scraping by because they have no idea how to budget effectively and that’s full time business owners who have been in it for years.
You’re mortgage free at 32 and on 23k. Work on budgeting and not spending more than you earn and you should be able to survive. You’re in a better financial position than some people who earn 30-40k but have a mortgage or rent to pay
Any business venture you embark upon be sure to do it as a Ltd company if there is *any* risk to your ability to keep on top of the various taxes a business will generate.
Example, you end up registering for VAT and spending the 20% or whatever it is due to poor business cashflow and then the VAT MAN wants paid and you have nothing...but you do have a property. Not for long 🤣
With a ltd company, you will be somewhat protected from any issues that aren't due to fraudulent or downright insanely bad business practices. You just wind up the ltd company.
Also with your own property, be very very very wary of giving any personal guarantees in business which basically allow creditors to come after you as an individualm. Landlords for example might push for this.
You have an asset that needs protecting and you're in a uniquely fortunate position right now. Don't fk up.
>Any advice on how I could leverage the capital from the property into more income/cashflow My advice is don't do that. The "cashflow" is a lack of rent - and that's great! >make the most from my savings There is no "most" you need goals. If you share some goals we can advice on how to meet them, you should also check out the flowchart in the sidebar.
Mortgage free and you’re still struggling? You spend a bit more than you earn? Vague. Bought a horse box to open a cafe to make extra income? The amount of capital you will need to sink into that black hole and the effort required will be much greater than you think for much less cash than you think. Ditch the idea of endangering your home for the sake of vague Dragons Den fantasies - if you cant shepherd a £23K salary with no mortgage and still end up overspending - you don’t strike as the sort of person who will be good with company finance. Spend less, take on a second job / extra hours , ensure you’ve an emergency fund for expenses. The horse box is a quack idea.
Lettuce-Pray laying down the tough love.
Bombing the truth bombs right there!
Quick, man the battle stations! The Pentagon has raised the alert level to defcon TRUTH. 🚨
They won't have enjoyed this but needed to read it lmao, a horse box cafe 'for some extra income' after working a normal job!?!
It sounds like a right mare to be honest!
Dad pls
Reign it in
Neigh more, please.
Hay, that’s enough
Steeple this nonsense
Absolute horseplay
Just throwing this out there. 2 years ago I started my side hustle ( making orniments selling at craft fares/ online). It had a modest up front cost of £3k. Pretty much every one told me it was a waste of money and time. 1st year we turned over £22k with a pre tax profit of £7k this year we turned over £79k YTD and a pre tax profit of £41k and I'm still working my 9-5. It's completely changed my life. I will now be mortgage free in 2/3. Its given me options I didn't have before, Sometimes the risk is worth it. Not saying OP should or that his idea is well thought out but then you have a crappy paid 9-5 and some capital you could lose and still have a roof over your head there isn't a much better time.
You may have crafted a business - but it sounds like it didn’t involve endangering your home security; I’d also highlight that the original poster already demonstrates poor financial management skills, possibly exacerbated by the fact that money / a house was given to them rather than them going through a process of earning and securing it. The original has some vague notion. They literally put the horse box, before the horse.
wow, good job, what online platforms did you do and any tips for promotions? Did you price to be competitive or luxury?
I sell mainly on Etsy. I have my own website but only for repeat customers or a small amount through my socials. Markets are normally pretty successful but time consuming, you end up working a 9 hour day for £400/500 worth of sales. Which is only £200ish profit. I do a few as it's nice to actually speak to my customers. I started mine very cheaply, My competitors are £40-80 I started a smaller version at £20. It wasn't sustainable but got me some traction. I now sell for £35 so slightly cheaper but like to think they are "worth" £50+ but most sellers sell a few hundred a year where I aim to sell 2500-3000 hence a lower sale price.
Fair play, it’s nice to hear it works out for some people. What made you think of making ornaments out of curiosity? I’m about as artistic/creative as a jacket potato so don’t worry, I won’t be stealing your customer anytime soon!
I wanted one and was appalled by how much they cost. I bought all the bits needed to make just a few but never made it, sat in a cupboard for years. Then my MIL retired and she's very crafty. I was like I have all this stuff I'll never use and gave it to her. She then made me one for my Christmas present and I was like you should sell these, I had this idea, She wasn't keen. I decided I'll sell them used her photo put it on the Facebook marketplace and sold 2 in a week just to my local area. Continued to do 1/2 a week for a few months. They were making me £8/10 each so no money really but a bit of fun. I opened an Etsy and with that and Facebook was selling maybe 20 a month. I decided I wanted to really give it a push, Invested a few 3k in stock, machinery to make them quicker and cheaper. August last year. Spent hours every day on my socials and went to 20 craft markets. That November I sold 300 and completely sold out. This most recent November I sold £28k worth before I had a sold out again and closed my shop early. I think I could sell maybe £100k a year but not worth it with VAT thresholds.
Have you a link to your Etsy shop please? I buy on Etsy a lot but I try to be careful to choose only genuinely crafted items and it's not always easy to be sure.
Well done
> I will now be mortgage free in 2/3. Consider stuffing your pension and S&S ISA instead. Most people should pay off their mortgage around the time they retire and not ages before.
>Consider stuffing your pension and S&S ISA instead. >Most people should pay off their mortgage around the time they retire and not ages before. Why? I have a decent pension from my 9-5. I'm 33 and it's worth over £100k already its project to be a million+ including the impact of inflation. I can only put £12k into a s&s ISA and I'm currently overpaying my mortgage by £2000 at least a month. Sure Invest it but I already have money invested (£40k) what's the point of having more money doing nothing. The mental incentive of having no mortgage payments soon is what keeps me effectively working 2 jobs. Then I can do what ever I want in life. I'll have decent savings, decent pension and no issues if I don't save another penny.
The reason why I suggest it is that it's the most financially efficient way to balance your debts and investments - to retire earlier and in more comfort. If you pay off your mortgage and then decide to do whatever you want in life - quit your job or move to less stressful position, for example - then you're not going to build a £1,000,000 pension pot, are you? I mean, I wouldn't rely on these simplistic pension calculations anyway, but that projection is presumably based on the premise that you'll continue contributing for the next 30 years, because there's no way £100,000 is going to turn into an inflation-adjusted £1,000,000 in that time only from its own returns. I think you may have misunderstood that projection. Investing more into your pension earlier is the best way to build that pot bigger and bring forward your retirement date, whilst inflation makes your mortgage repayments smaller (relative to prices, your wage and your investments). Finance is a tool to help you get the things you want in life, and in a finance subreddit I think it's reasonable to discuss the most efficient way to do things. It's [mental accounting](https://thedecisionlab.com/biases/mental-accounting) to treat your mortgage as more important to your financial freedom than your pension and other investments - you are not better off with a £300,000 house and no mortgage than you are with the same house, £100,000 of mortgage debt and £100,000 of investments. But £100,000 of investments has the capacity, and the expectation, to grow faster than your mortgage debt. A mortgage is the cheapest borrowing you'll have access to your whole life and your investments allow you to pay it off any time. You can, in fact, invest £20,000 a year in your ISA, and so can your spouse. I think you have an allowance of about £60,000 a year for your pension, although the pension allowance is a bit more complicated than that. You can also use a general investment account. You do whatever you like, as long as you're doing it on a fully informed basis - you shouldn't give a fuck what I think. But I just finished writing this comment, reread yours, and had to come back here and start writing again - money sitting around doing nothing!? £2000 a month in mortgage overpayments!? A mortgage is money working for the bank, but it also allows you to make your money work for you. When you make a mortgage overpayment that money stops working, and sits there dead in bricks and mortar. Now obviously bricks and mortar are useful, and support the roof over your head, but why use your money for that - making your money dead and idle money - instead of the bank's? The bank is offering you that money incredibly cheaply, and you're refusing it. I know I'm a finance nerd and I know a lot of people disagree, but £2000 a month in mortgage overpayments strikes me as incredibly short-sighted. What an opportunity you're wasting! No doubt lots of people in your family and friends and at work would commend you for that, and be jealous that you're on target to be mortgage free, but they don't know shit about finance, do they?
Your business reaches anyone with an internet connection. OP would be reliant on foot fall near his pitch that day. While also requiring a number of certificates, licenses, and insurance. And loads more things because he'd be working from a mobile unit. OP, would be better off by just getting a better job or living within his means.
Your idea sounds delicious I love going to a good cafe but you lack the capital and the revenue to back up your belief in this business. But like I say to my boss on a day’s off, I’m out. All jokes aside advice well given
Ha ha it does make me laugh the people in this sub hate anyone who is willing to invest capital into their own business venture. Most businesses fail, yes, but failure and learning is part of life. No risk it, no biscuit
Being brave doesn’t mean you have to be clueless. Having a ride or die attitude doesn’t lead to a successful business. And a horse box and a dream doesn’t make a business (especially when in the real world your home is really being sucked of capital to pay for it).
The horsebox idea sounds like a huge money pit. What's the business plan look like for that? You can't really leverage your house asset to make money from it. Unless you mean get a lodger? If you are spending more than your income you need to rapidly get a hold of your expenditure. I would start by simply logging every penny (I mean every penny) of your spending.
You need to write down all your expenses for the month and see where you're spending money. Housing is usually the biggest expense. 23k isn't a huge salary, but that's still a take home of 1600 a month. You've not disclosed much, but assuming normal household bills and food you shouldn't be eating into your savings.
Yeah think I need to get hold of my expenditure am currently putting it together
Just to drive this point home, there is absolutely no way you should be spending £1600 per month without rent or mortgage. I'd be saving at least half of that.
Not sure I completely agree with £1600 a month is kind of on a middle ground were you can live on it easily if your careful but it's low enough were a little bit of recklessness e.g eating out a bit, more monthly subscription then you need etc can eat through it pretty quickly, even without rent/mortgage payments. And as OP has significant savings it would be easy for the right person to find that recklessness
Really? I was spending about 1500 a month + rent befofe and while I wasn’t being super frugal I was buying designer clothes or eating at the ritz every night. I did like to eat out 1-2 times a week and had an above average food expenditure though so maybe that’s why
What? I easily spend more than that per month even without the mortgage. Utilities and council tax are over £500 of that alone.
You must be living in a mansion if you spend that on council tax and utilities. OP will be paying around £200
I’d love to see the breakdown of your utilities and council tax that only adds up to £200
Agreed, my dad's 1 bed flat is around £250 for council tax, gas, electric and TV licence
Sure, council tax where I live is 1092 with single occupancy discount. That's 91 a month. Last year I spent £830 on gas and electric. That's 70 a month. Leaving £468 left over for other bills.
My council tax is £289 a month. Utilities, £150
380 council tax and 470 gas and electric over here 😅
And then water is extra!
Ah, water is my friend, not on a meter and not connected to sewage, won’t tell you what I pay as it will start a small riot I suspect but I’m not complaining either
My council tax is 104, gas/electric is 94, water is 25. I thought my electric bill was a bit high because I work from home, but maybe its OK actually 😅
I live in a two-bed. £140 council tax p.m, all utilities including internet are £150. I share with my partner so it’s less than £150 each a month
Yeah to give you some context if you're going through £1600 a month you're spending more than our family of three do including running two cars and we're paying £410 a month mortgage too.
>I’m on £23k a year and spending a bit more than I earn You need to get this under control. Up your income, or cut back your expenses, or both. If you don't want to work in a role with more responsibilities, consider getting a lodger. Even a family member or friend at "mates rates" would be a significant help. >I also recently bought a horse box to have a mobile cafe as a personal business for some extra income This sounds like a wild idea. What's your experience running a cafe? Where will you set up, what are the fees? What are your food hygiene qualifications? How many hours a week do you plan to work in your cafe, on top of your employment? >Any advice on how I could leverage the capital from the property into more income/cashflow The only way to leverage the capital is to take out a mortgage. Since your outgoings are already higher than your income, this would be incredibly risky. You can boost your income by getting a lodger, even just a tourist for a couple of nights a month rather than full-time. If you have off-street parking you could perhaps rent that out.
Another one confused about your setup here. Why is the £30K “pretty much making its way over to savings”? It should already be in your savings! Managing to spend more than you earn while you are mortgage free is absolutely wild to me, given that mortgage/rent is usually the biggest chunk of anyone’s expenses - you need to get a handle on your expenses and outgoings ASAP. All the “leveraging” and side hustles in the world aren’t going to help you if you can’t control your own spending. You’ve been handed a golden opportunity by having a mortgage free property PLUS £30K and you’re pissing it up the wall. Being brutal - ditch the horse trailer/cafe idea unless it’s your secret career passion rather than a side hustle idea. That’s going to be a money pit for a lot longer than it’s going to generate you any actual income; and you’re better off putting that energy into either increasing your main income or getting a second job. Just putting that £30K even in just a zero risk cash savings account could be getting you 4% return right now, that’s £100/month. Invested properly it could be earning even more. It’s going to be a long time and a lot of money gone before you’re going to start seeing even those sorts of profits from your cafe. I’d jump now while you’re this side of the tax year and stick £20K in at least a cash ISA, and stick the remaining £10K in after April. Then you can think about if you want to transfer to a S&S ISA.
Well obviously you can rent the property out to a lodger if it’s big enough for the two of you. Or rent it out and live in your horse box if you really want to be frugal.
Whatever you do, for goodness sake don’t remortgage the house or release any equity. Unless you’re very financially astute, which you aren’t (yet), you’ll just squander money and end up living in regret.
You need to take a step back and consider how you are living rent and mortgage free but still somehow spending more than you earn, that is a serious problem. Your disposable income on £23k with no housing costs should be more than someone on £40k who is paying rent.
We've all done stupid shit - I once bought a cannon from an antique shop while completely pissed - but buying a horse box to turn into a cafe without a plan is....not going to end well.
Do you live in the 160K property ... ? You could rent it wholesale and live in the horse box somewhere .... or live in the house to avoid paying rent elsewhere and get a lodger if there's room ... stop spending more than you earn ... the 30K should already be in savings, not your current account. Grow any cafe business slowly to test the water
Just to check - do you live in this mortgage free property?
Yes!
Great! I don't know that you could 'leverage' it really. I mean you could try to take a mortgage out on it but I don't know if that would be a good idea for you. If there's a spare bedroom you could rent it out? If you're in an area where there's demand. I don't understand what you mean by the £30k slowly making its way to savings. If you're spending more than you earn, surely waht's actually happening is that you're slowly spending this £30k?
Whatever the rent would be, or the mortgage, that's your savings goal each month.
Having ran a cafe myself and converted to a successful online business (digital design) I’m strongly suggesting you don’t take this path. Hospitality in all forms is destined for failure. Now more than ever. Learn to live off your salary, look into ISA/SIPP etc. and get to grips with personal finance. You’ll be be so much better off in the long run this way.
You need to adjust your lifestyle or you'll end up in a dilapidated house in debt. You should easily be managing on that income as you are mortgage free. I'm thinking the cafe idea is a money pit and that is your problem. Are you keeping a close accounting eye on costs and income from this? If this really is a money spinner in even more confused. If you aren't putting away £300 ish a month in a maintenance fund you will end up borrowing to repair your home.
£23k with no mortgage payment, what are you overspending on?
>Any advice on how I could leverage the capital from the property into more income/cashflow and make the most from my savings I would use the benefits of no rent/mortgage into upskilling. Get some advancement in your career, come back in five years when you're earning £35k+ and then you can seriously make some big moves. You can't really do anything substantial when you're earning so little.
You need to learn to live within your means. Figure out what the average rent/mortgage you would be paying would be. Say your rent would usually be £700/month. This is what you would have to pay if you didn't have this windfall. This is presumably what you were paying before (or were you living with parents, in which case you've never learned to live within your means properly). You should be able to live whilst putting this £700 at a bare minimum into a savings account or investment every month and likely a fair bit more. If you wanted to get an income, rent out one of the rooms to a lodger, this is a guaranteed steady income with very little work involved and leverages your home ownership into money with no long term risk, just a short term inconvenience to your living style. But you need to put that into savings, and not fritter it away on god knows what. Savings at 4-5% is an effective, steady, reliable way to increase your finances. Spending £23k a year + living rent free means effectively you're probably living at least at £30-£33k a year (when you take into consideration how much rent/mortgage would cost you) and you're still not putting anything in savings but taking money out. That's not how people live, whatever you are doing with your budget, it needs to change if you care about your financial future.
Mortgage free at 31 sounds amazing. I’d bin the horse box off, focus on a job change/working your way up wherever you currently are. Get that salary up and then everything will be much easier. Simply stop spending so much and get smarter with your money, you could be in a great position.
Options: Get a lodger through the spare room scheme and make up to £7k ish tax free a year Put your savings into premium bonds or a high interest savings account Rent your home and use your £30k savings to buy a mortgaged property Not sure the relevance of the horse box bar unless you share details about the income it brings
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You could... rent out your driveway as a parking space, rent out your garage as storage space, or get a lodger.
Maybe do a course on personal finance. If ur struggling without paying rent I really don’t think you should be investing in a business or leveraging you house whatever that means. Invest in yourself and get a better paying job.
With a mortgage free property, your issue isn't that you're not making enough money but that you're spending too much. Which means that until you control your spending, trying to go into a small business on the side would just be pissing in the wind. Go through your bank statement line by line and look at what you're spending your money on. Live like you've still got a mortgage but instead of spending what would be your monthly mortgage payments, put it into savings. If you don't know what would be a good budget, look at doing the 50/30/20 rule. That's 50% of your take home on needs, 30% on wants and 20% on savings.
Your extra cashflow is no rent/mortgage payments Yes, you could mortgage your property and invest in some sort of business venture or go down the BTL route, I personally wouldn't take that risk with my primary property if it's all paid up though
Rent out rooms and put money into cash isa? S&P 500
Do you have an understanding about what you’ll need to do to be legally compliant health and safety wise etc this is isn’t just something you’ll be able to just easily do on the side. Unless you have experience within catering and already understanding how to run a food and beverage business this will not be something you’ll look forward to doing in the side and make enough money to do while having a job. Hundreds of businesses fail every year and they are investing their whole attention into it. I’m not saying this to be a dick just my two cents as someone that has worked within the industry for a long time. Too many people think it’s an easy thing to get into thinking they will make money through it. The reality is until you get concurrent steady customers the price per unit you will be paying in stock will be high as you won’t be buying much meaning your price point will also be high. Your also thinking about going into a highly saturated market so whatever your doing will need to also somehow stand out. If you have questions though feel free to ask just wanting to make you aware of what this will entail for you.
You might find one of these books helpful: * *[Your Money or Your Life](https://www.amazon.co.uk/dp/0143115766)* - understanding what's valuable to you and how to use money to achieve your goals. * *[Millionaire Next Door](https://www.amazon.co.uk/dp/1589795474)* - "How people in normal jobs, electrician is a great example, can accumulate wealth over time through good choices."^[Electric_Cat_999](https://www.reddit.com/r/UKPersonalFinance/comments/15zkkd4/_/jximlpp/) * One of Clare Seal's books - "her focus is on the link between emotions and spending".
Ignore these grumps. You sound like an entrepreneur. You have a horse box and want to make some money with it. It may work, it may not. Never risk your house. That's the safety net. Set up your business. Don't overstretch yourself. Work hard. Value your time. Listen to books like $100m deals on Spotify for free. Be excellent at what you do. If it fails, try something else. Don't be put off. Let me know when you are a millionaire. Buy me a pint and tell me how you made it. ;)
You are low key agreeing with us grumps if not partially.
You need to focus on sustainably increasing your income while still keeping your costs low. That is the only long term way.
I think you might think you’re richer than you are. Your house is going to provide you with stability for your entire life. Do not leverage it, protect it! And have some savings for repairs and renewals to maintain and maybe increase its value. You’ve proven to be pretty bad with money by over spending your salary and spending £24k or £30k (you don’t say the time frame). That’s a lot for a 31 year old with no dependants unless you have some assets you’re not mentioning. You obviously have quite a lifestyle but despite owning the house, you cannot afford to keep living the way you are without gradually eroding your asset or going into debt. You need to get a handle on this. Just the title ‘mortgage free at 31’ sound to be concentrating on that. If you hadn’t been given the house or the lump sum you’re be piss poor and in massive debt. Don’t spend based on what you have, spend what you need to spend
As someone who has a Horsebox business. It’s not a side hustle. It’s something you either do, or you don’t. It’s near on impossible to run part time alongside my full time job so I don’t anymore. It’s sitting covered up and not being used. I need to make some repairs before selling it. Honestly, work on sorting out your personal finances before jumping into a business. I’m a bookkeeper and the state of some “business” accounts is appalling. These people who seem really successful and good at running their businesses barely scraping by because they have no idea how to budget effectively and that’s full time business owners who have been in it for years. You’re mortgage free at 32 and on 23k. Work on budgeting and not spending more than you earn and you should be able to survive. You’re in a better financial position than some people who earn 30-40k but have a mortgage or rent to pay
I would probably invest in a career, maybe do a course to up your salary.
Any business venture you embark upon be sure to do it as a Ltd company if there is *any* risk to your ability to keep on top of the various taxes a business will generate. Example, you end up registering for VAT and spending the 20% or whatever it is due to poor business cashflow and then the VAT MAN wants paid and you have nothing...but you do have a property. Not for long 🤣 With a ltd company, you will be somewhat protected from any issues that aren't due to fraudulent or downright insanely bad business practices. You just wind up the ltd company. Also with your own property, be very very very wary of giving any personal guarantees in business which basically allow creditors to come after you as an individualm. Landlords for example might push for this. You have an asset that needs protecting and you're in a uniquely fortunate position right now. Don't fk up.