For those of you who have been following my (random?) drivel and thinking around insurance, I can confirm that this month I finally pulled the trigger on my income and life assurance insurances.
I had a number of fairly lengthy discussions with my Financial Adviser on this (at zero cost, this is all covered as part of the regular fee he takes out of my contributions). I’ve run all the numbers multiple times, planned out worst case scenarios etc. to make sure this is the right choice.
So earlier this month I cancelled my two direct debits to the insurance companies. Needless to say they are both trying to get hold of me and get me to restart the payments – something I won’t be entertaining.
How do I feel right now? There are some mixed emotions, I will be honest. It is one thing to see a bunch of numbers on a spreadsheet but a very different thing when emotions start to enter it. Will I be able to sell ISA holdings if push comes to shove? I’ll let you know if I ever get to that point!
For the first time since I have owned a property I know now that if the worst case scenario were to happen, we would have to sell our home and move. Granted this would be after a number of years and we have enough equity to buy a smaller home outright, but still leaves me a little uneasy.
On the plus side, I am REALLY looking forward to being able to put those insurance premiums into my ISA, watching them grow and increase in value knowing that they are making me (and not my insurance company) wealthier. It may be a little sad but I really do get a buzz out of that!
So, what am I doing with April’s premiums? Well, actually because of the timing of my investment to GTP ISA, they will simply go into cash reserves whilst I am still “suffering” from my companies Share Scheme, but after that, they will be invested.
I am still working my way through some of the Investment Trusts that I am likely to decide on one from and will post my thinking and findings once I have decided. I could have added it to VWRL but I want to keep these funds separate for my own sanity – showing just how much I have managed to invest by not paying insurance will be a nice feeling in retirement.
The other benefit that I hadn’t fully appreciated, is the difference it will make to my savings rate. I went through and updated my monthly expense tracking spreadsheet to see where I was going to be. I realised that something is going to have to give in April and May as I will be putting money into ISAs and I will not have enough to live on. I will worry about that problem once I know what my pay cheque in the new tax year will look like.
So part 4 of this random drivel (A New Hope again maybe?! :)) I will delve more into the ITs I will be looking at, in the meantime I need to go and start clearing some snow…
Enjoy the snow, and stay nice and warm!
FIREin' London 
Possibly a silly question but have you, would you ever consider selling your house and rent for a period to help you with your financial goals. I seriously considered doing this last year as my mortgage was up. I still live in the house i bought with my ex and was considering selling up and renting for a bit with my new girlfriend. It was really interesting talking to friends and work colleagues most of whom thought was absolutely nuts for considering it. We have (and i include myself in this until recently) an unhealthy fixation with owning our own home normally too much home for what we can afford and be comfortable. My view was i could release over 200k in equity. If i invested it wouldn’t be too hard to generate enough to almost cover renting a similar property leaving me with more money to invest and thus reach fi quicker. Ultimately i decided to fix for ten years, borrow over 32 years and invest rather than overpay in the knowledge that at 2.4% it wouldnt be too hard to beat that. But it was an interesting dilemma for me who had never considered not owning my own home and has never rented
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Hi FBAB,
I would consider it if the situation demanded it however it would only be a last resort. The worst case is we could sell up and downsize, and move out of London and I suspect could be FI, but I wouldn’t be happy.
I am combining the investing and overpaying the mortgage. I like our home and feel like I am at home and happy having friends and family over.
Yes I could probably retire quicker if I downsized etc. (possible given our mortgage is up for change this summer) but to be honest, I am content to add a few more years and keep our current abode.
Cheers,
FiL
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