Posted August 30, 2016 How on earth do you have a mortgage when on £8,250 a year? Isn't that less than minimum wage? It's a little over minimum wage but I'm only contracted 25 hours a week. The missus earns a little more than me. But I still pay my way. It just leaves me with about £200 for the rest of the month. Share this post Link to post Share on other sites
Posted August 30, 2016 I'd buy property. Probably half of it on a nice place in Tokyo and then the rest on rental properties in the UK. The idea being that the rental places would cover general expenditure and I could focus more on trying to do some independent stuff rather than being a slave to the big office. Would be nice to have the fallback to be able to concentrate on something a bit more creative for a while and see what managed to take off. Share this post Link to post Share on other sites
Posted August 30, 2016 £1m isn't anywhere near enough to give up work for. Maybe if you were 60, you'd retire early, but if you're in your 20s, £1m won't go far. Yes it would. Put it in the banks and you'll get £30-40k a year. That puts you in the top 20-30% of earners. Much higher than the average salary of £26,500. Sure you won't be buying mansions and supercars, but You can live fairly comfortably without ever actually dipping into your £1,000,000. Share this post Link to post Share on other sites
Posted August 30, 2016 (edited) Rummy's suggestion (which he no doubt stole off Moogle) sounds much more attractive than anything else. I hate the idea of buying up loads of property just to rent out. Career landlords annoy me somewhat. I'd probably tell close friends and family, but leave it at that. Maybe I'd come on here and rub it all in your faces too. (Phrasing) Edited August 30, 2016 by 130131301364 Share this post Link to post Share on other sites
Posted August 30, 2016 It's a little over minimum wage but I'm only contracted 25 hours a week. The missus earns a little more than me. But I still pay my way. It just leaves me with about £200 for the rest of the month. Christ, where do you live? Me and my partner have a combined income of nearly 60k and we're not able to get on the property ladder yet! ./cambridgeproblems Share this post Link to post Share on other sites
Posted August 30, 2016 Moogles suggestion sounds much more attractive than anything else. I hate the idea of buying up loads of property just to rent out. Career landlords annoy me somewhat. I'd probably tell close friends and family, but leave it at that. Maybe I'd come on here and rub it all in your faces too. (Phrasing) Well fuck you very much, doctor. Share this post Link to post Share on other sites
Posted August 30, 2016 Well fuck you very much, doctor. Fine. Edited. Share this post Link to post Share on other sites
Posted August 30, 2016 Christ, where do you live? Me and my partner have a combined income of nearly 60k and we're not able to get on the property ladder yet! ./cambridgeproblems Nottingham Massive. Share this post Link to post Share on other sites
Posted August 30, 2016 I'd probably spend most of it on my house and my neighbour's house, with plans to merge them together. A bit of remodelling the garden to make it suitable for a driveway and get driving lessons and a car. I probably wouldn't have much left after that, but I imagine I'd be set up pretty well. Share this post Link to post Share on other sites
Posted August 30, 2016 Well fuck you very much, doctor. That awkward moment when you realise somebody has you on their ignore list. Share this post Link to post Share on other sites
Posted August 31, 2016 (edited) I've recently been looking into early retirement, or FIRE - Financial Independence Retire Early, and I've learnt some interesting stuff. The value of £1M decreases with inflation. To make 1M last forever, and live off the interest, you need to generate enough interest to cover inflation and living expenses. You would struggle to do that with a high street bank savings account, where most are offering somewhere between 0.25% and 1% interest. In most years that wouldn't cover inflation. To generate that much interest you need to take some risk (P2P loans, Property, Stocks & Shares). Right now, in my retirement planning, I'm going with stocks and shares. P2P is a new, and unregulated thing. Property (being a UK landlord) has just had a lot of changes made to it regarding tax and now it's less financially viable. Stocks and Shares come with risk, but index trackers tend to do well over long periods of time, e.g. the US stock market has returned about 7% per year (over 145 years, after adjusting for inflation). Source: With the £1M I'd pay off my mortgage (technically not the best thing to do with money, as you'd likely get a better return elsewhere, but then I'd always have a house) then invest the remaining amount in an 85/15 equity/bonds portfolio and live off a safe withdrawal rate of about 3.5% (initial withdrawal £31.5K). This should last forever, and with no mortgage I'd live comfortably in retirement. Edited August 31, 2016 by Mr_Odwin Share this post Link to post Share on other sites
Posted August 31, 2016 I'd hire @Mr_Odwin to tell me what to do with my money. Share this post Link to post Share on other sites
Posted August 31, 2016 I'd quite like early retirement too. Presumably, step 1 is earn a lot of money though? Share this post Link to post Share on other sites
Posted August 31, 2016 I'd quite like early retirement too. Presumably, step 1 is earn a lot of money though? You really need about 25 times your living costs to stand a decent chance at retiring permanently. That corresponds to a 4% withdrawal rate from a portfolio. Share this post Link to post Share on other sites
Posted August 31, 2016 Surely the earlier you retire, the larger that needs to be though? Share this post Link to post Share on other sites
Posted August 31, 2016 Surely the earlier you retire, the larger that needs to be though? On average, the interest you generate on your portfolio should be enough to cover your 4% living expenses and to also increase the portfolio according to inflation. This means that it should last forever. Still, 25 x your annual living expenses is a big sum to aim for. Share this post Link to post Share on other sites
Posted August 31, 2016 Yeah, I reckon £1 million should just about cover it. Apparently, the first million is the hardest, so imma start on the second million and work backwards. Share this post Link to post Share on other sites
Posted August 31, 2016 It's all about your savings rate from your net pay. If you can stash away 50% of your net pay then you'll only need 16.6 years to be able to retire. https://networthify.com/calculator/earlyretirement?income=100000&initialBalance=0&expenses=50000&annualPct=5&withdrawalRate=4 That's the same for someone earning 100K or 10K. (If you're happy having the same standard of living for retirement.) Share this post Link to post Share on other sites
