Retirement funded by BTL - Reality after 1 year.

[drainbrain]

Ozzie Osmond said:

Not as bizarre as your first post in this thread. You've been well and truly found out.

OzOs

Well what YOU'VE found out (I hope) is that it's perfectly possible to satisfactorily fund life in retirement solely with btl income. I think you've previously doubted that. Now you have living proof. I hope you don't have difficulty accepting it.

[drainbrain]

DonkeyApple said:

You're only one year in and as a 63 year old Glaswegian you've got to keep it all going for at least another year before you can claim it worked for your whole retirement.

Lol!! 65nb which would probably be some kind of methuselah in Shettleston or Possil!

But trust me, even if it takes being kept alive by life support machine I am 110% determined to live long enough to get my cash back at £66 per month from the annuity barstwards who conned me out of my paltry pension pot. Can't really recall tbh but I think that's gonna take another 5 years.

To illustrate how useless an annuity is as an "investment", the tax free lump sum 14 years ago provided the deposits for two dungeons. Now long burden free, these produce +/- £700 per month which is only £100 less than the annuity produces in a year!

Annuity companies must be fabulously profitable. But they're really just for suckers now aren't they? What a good business to own, though. Suckers give you their pension pot. You use your city expertise to invest it. You give the sucker a few crumbs from the returns. You pocket the rest. And then when the sucker dies you flipping' KEEP the pot!!

Younger viewers maybe don't know but not that long ago you HAD to buy an annuity with the pot. What a scandal!

[drainbrain]

Hey I just got offered a job!! So did my ex-partner from the taxis!! By the guy who's bought the taxi business from us who owns a number of taxi businesses. The ex-partner's now the CEO of another and even bigger firm and I've been asked to join him if I want!

But the missus says no And tbh I'd like to leave it for 6 months. But hey! Nice to know that not everyone thinks you're a clueless old ass.

We can also buy it if we like. But we've only got part of the dough. So we'd need a 3rd investment partner. A sleeper. It's been established for many many years. It's got 380 cars. 200 are owned by the firm. Weighin's £120 a week. And a car's £165 to rent. So there's about £75k a week flowing in potentially which experience tells me means £65k in reality. VAT's funny in taxis but I'd guess at £120k a quarter or £10k+/- a week. Running costs are +/- £15k a week. And we'd like to pay our potential sleeping partner £6k a week. £312kpa.

We've got a shedload of expert financial strategists and skilled risk assessors on this forum. Or have we? Because I'd like their opinion on what it would be worth investing for a £312kpa completely hands off income plus of course 33% interest in the business itself. So give me those expert opinions, guys.

Just remember I am a talentless and worthless financial dummy BUT I am seriously serially lucky in businesses and have been for many years. And I'm being offered a job by a really very wealthy self made man who seems confident that I can be lucky once again. Because I'm stupid the only risk I can see the investor runs is that the business gets run into failure and his stake becomes worthless. Given me and ex-honcho built a taxi firm from zero to 300 drivers in 9 years I'd say in the balance of probability it's not likely we'd make a fist of this one.

[drainbrain]

emicen said:

Just for a change of pace;
- Rutherglen is splitting hairs, yes I know it's North Lanarkshire not Glasgow City, but come on now
- Motherwell is certainly not Glasgow, at double the size of Staines it's hardly unrecognisable
- I don't know much about London garages at £50k, but Glasgow suburb garages can quite easily do £100pcm on £10k purchase

OI!! You stupid ignoramus!! You haven't the first clue about ANYTHING do you??? You're so stupid I wonder how you manage to dress yourself!! And I'm an expert in stupid so I know stupid when I see it….'ll! (Sorry, just slipped on my PH financial expert hat for a sec. )

But seriously, my brother and fellow weegie….Rutherglen in North Lanarkshire?? Not last time I looked. Try South Lanarks. M'well's in NL.

Yeah those wee garages are ok. We sold a few as agents not long ago and they rent very well especially to punters whose newish-build houses have attached garages that can't squeeze a big motorbike into them. Do for stores too, and £100 is on the money as is £10k purchase.

[drainbrain]

trickywoo said:

Op - if you can talk the way you type you should be on the get rich seminar circuit.

It would bring you more money than your properties and a more adoring audience than you'll find on here.

Roll up! Roll up!! Get your Herbalife here!! Become a distributor and leave those pension worries behind!!

Or…. Become a real international property player!! By just following these few simple steps you too could make a bigger fortune from property than Ajay Ahuja and the Duke of Westminster combined!! And remember we've always got sourced bargains available for you!! All you need is a credit card for the 10% deposit plus our reasonable 3 grand sourcing fee and our offshore lending partner The Bank of Nigeria will see you good for the balance. Plus our expert letting team- albeit based in Romania - will handle the rest. The only thing you'll ever need to do is spend the guaranteed rent proceeds which will get sent directly to your bank. Millionaire in no time!! Just give Mr O'Konta here your credit card and account details and he'll have you up and running before you get home!!

How does that sound?

Or what about this..

Worried about retirement?? Don't be. Just give us the entire proceeds of your pension pot. We'll invest it and reinvest it compounding our gain over the years and we'll pay you a non-compounded rate of a fraction of our investment returns till you die. Then we'll steal…erm, sorry, I mean keep the pot we hugely benefit from investing and your survivors can be comforted by the fact that we at least will continue to live in luxury even if they regrettably sink into irreversible poverty. We call it the " Trickywoo Retirement Annuity Purchase" or TRAP for short.

Personally I like the last one. So who do we grease for a permit to start?

[drainbrain]

WindyCommon said:

Sure. Here you go:

Applying Uber's estimated revenue multiple of 15x, the equity is worth approx £51m so £17m for 33%.
The loan structure (viewing the £312k pa as interest at [say]10.4%pa) adds another £3m

So £20m.

Hmmmm, close…….in the same way that New Zealand is close to The Orkneys….

I like Uber. I've even found a song for their ads. What do you think?

https://www.youtube.com/watch?v=hoD_8qDU4Jw

[drainbrain]

Zoon said:

So have you been offered a job or has someone offered you a failing business for sale?
If it's doing so well why would anyone want to sell it?
Also why get a third investor? Buy it from the guy and pay him from the profits that you'd give to the third investor and yourself. After all you don't need a wage as the BTL's are taking care of that.

Nope it's a real good'un. The seller buys and sells so no doubt he wants some funds for something else and he owns many Scottish taxi firms including most of the private hire firms in Edinburgh. Needs investor because he doesn't do 'pay-ups' and we don't have the asking.

[drainbrain]

DonkeyApple said:

You are 63 years old and this insecure? Groak, seriously, starting this thread trying to out of the blue convince strangers on the internet that you are good at what you do and then it slowly descends to repeated posts shouting about your brilliance in the face of imaginary people who are telling you you're a failure?

No one has said that you are stupid but I suspect people are beginning to think that you're not well.

Well what a nice post!! Take it there wasn't good news in the morning mail.

Why do you financial gurus take such a hump at people illustrating that BTL is a perfectly good way to fund retirement and in fact may be a far better way to fund it than any financial instrument can provide?

Because as you know, I hope, nothing I've said aims to convince anyone I'm especially good never mind brilliant at anything. What I AM is perfectly capable of creating and organising successful (because they are profitable) businesses. Indeed what is illustrated is how something fairly easy and ordinarily successful can provide a reasonably comfortable perpetual income for people who may find their options dissatisfying and difficult to manage.

I've told you that I've got a few dozen rented properties in an unburdened portfolio. And also that I have recently sold a 300 car taxi business I built up with another. I am surprised that you confuse this with some idea that in my opinion this makes me something of a brilliant success. Clearly we have a different standard of 'brilliance' and 'success'.

So you don't remain confused, here is what I certainly would call a brilliant success in the world of property:

www.lrp.co.uk

THAT is outstanding success.

To further clarify my opinion of outstanding success in the private hire trade click here:

www.addisonlee.com

Now THAT is brilliant.

I'm afraid YOUR understanding of it - if you think I'm brilliantly successful or even think myself to be brilliantly successful- falls a measure or two shorter.

Now retired I am destined never to achieve outstanding success, tho in days gone by I've kissed its coat-tails. But what I have 'achieved' is the ability to generate a retirement income from BTL.

You and others here - though not by any means all contributors- are fond of emphasising how others lack some sophisticated understanding without which even managing their own affairs is a dead duck. Well, may this thread be of some comfort to them.

And as to you and your fellow idiot savants, here's the lesson next time BTL funding retirement arises as a topic. Yes of course it can be a way to fund retirement. And no it doesn't have to be part of a diversified portfolio of investment. I am living proof of it. More difficult for you to accept, though, is that even a person who is variously described as "only lucky", "financially inept ignorant and naive" and now "insecure" and even possibly "Ill" (I take it you mean mentally) can fund a reasonable retirement with btl. Hardly bears thinking what experts like yourselves could achieve if an inadequate like me can do it!

Addison Lee and LRP beware! Some of the true giants of finance are hot on your tail!

As if.

[drainbrain]

NickCQ said:

Uber's a bad comp, venture capital valuations are crazy. I'd look at this business as a sum-of-the-parts, so:
200 vehicles at whatever, £5-10k; plus
the profit stream from 380 drivers, seems to about £2.5k pa per driver on a net basis

Correct multiple for the driver earnings seems to be about 5-6x based on the Carlye / Addison Lee transaction (2013), so I get £8 mm for the whole business, 12.5% initial cashflow yield (but declining over time as the vehicles depreciate).

I just think it's a dying business - you are fked as soon as any of the big guys (Uber, Lyft etc) come into your area. Plus the regulatory risk if you have to pay drivers minimum wage / they can't be self-employed etc.

Nick, there is good news and not so good news.

1) Using your assessment you are only a PM away from being able to grab yourself a great bargain. Seriously.

2) Hate to sound like the forum know-alls, but your last para doesn't illustrate much understanding of oobah-boobah and its relationship with the private hire trade.

Uber have been here for some time now. And everyone's got an app. these days. The yank battle approach fell a bit embarrassingly on its ass. It has now accepted that it's a training station for drivers who move on to well organised local ph firms. It is also useful in getting the local council to adapt its licensing applications to technological changes. It does not entirely enjoy being a training station and has now begun to accept that to survive meaningfully it has to find it's niche alongside some pretty nifty priv.hire firms and the hacks (with whom it more directly competes). As they chill more uber'll find it gets better for them and they're already aware of this and are settling down quite nicely into the general atmosphere of co-operation that makes for such good business.

The big changes in the industry will be to driverless and electric vehicles. The adaptations are already beginning.

[drainbrain]

FredClogs said:

Dude, you're not addressing what people are saying, which is, "you've not retired!"

If I wasn't retired what on earth do you think I'd be doing on here at this time? What do you think I am? Some lowlife who sits talking crap on the internet when I should be working? Or running some dead business with nothing more interesting to do?

Come now.

By the way, I think I've found Sidicks alter ego. His wife thinks he's off to work selling pensions. And his boss thinks he's tapping away on the computer compiling sales scripts. But yet, in reality, here he is…...


https://uk.video.search.yahoo.com/search/video?fr=...

I spent some quality time with Jerry in the early '80's. What a nice guy he is. Never forgotten! (and a very seriously good magician too)

Edited by drainbrain on Friday 28th October 11:48

[drainbrain]

Zoon said:

So you had 80 less taxis than a business that is making a million a year profit?
How much did you get for it?
I'd wager you'd be making more from the interest of the business sale than you would from BTL. Or should be.

Now THERE's a story!!!! It's a good'un too (don't worry Mr Donkey it's not THAT good). But we need the investor to fill in the bit between what we sold and what we're (maybe) buying, i.e. 80 drivers + 200 cars + a premises + better goodwill.

[drainbrain]

richardxjr said:

Is that 300 car taxi business that you sold the same one that you are trying to buy back?

Still not quite sure whether you are here to
a) tell us all how we can retire as BTLers, even though you haven't retired.
b) find some greedy mug punter to buy back your taxi business for you
c) resurrect an online fantasy that was temporarily halted by stupid bankers?

Meanwhile, in a complex alternative reality in a far-off galaxy…..

[drainbrain]

Guys, I have to go out now, but more later…..

[drainbrain]

sidicks said:

DonkeyApple said:

You're just proving the point. Your issue with 'financial gurus' is exactly that, your personal issue.

Easy to be intimidated by something you don't understand!

(And invent strawman arguments to try and justify your own approach!)

OI!! Get back to work! You're not being paid to sit on the internet talking tripe!

Shoooo!!

[drainbrain]

NickCQ said:

NickCQ said:

drainbrain said:

Nick, there is good news and not so good news.

1) Using your assessment you are only a PM away from being able to grab yourself a great bargain. Seriously.

2) Hate to sound like the forum know-alls, but your last para doesn't illustrate much understanding of oobah-boobah and its relationship with the private hire trade.

1) My valuation is based on your cashflow projections as read - do I believe them? Not a chance!
2) The drivers can do what they like but when passengers get into the habit of using Uber, they never go back. Perhaps Addison Lee with an enormous marketing budget, deep-pocketed PE owners, international reach and corporate client base can compete, but your average mom-and-pop minicab firm is dying. Electric and driverless cars will just hasten the demise.

Do a proper valuation of the vehicles, buy it for a 20% discount to that number and liquidate it ASAP.

Yep, did a little dredge on the cashflows;

groak said:

Across the board I net £500-£1k per car per year. Without the 'economy-of-scale' facilities I'd make next to nothing, and probably lose money on some.

http://www.pistonheads.com/gassing/topic.asp?h=0&t=1036403&r=18694707&hm=166082&mid=166082#18694707

So cut my valuation down to £3.5 mm on that basis (if the cars really are worth £10k each).

Your actually not far out here Nick. I'm impressed. BUT. I was never great at operating the vehicles and really never realised their full potential. A pro could almost certainly do better than me. Especially a pro connected enough to be able to reduce the prohibitive insurance costs and take repairs in-house. I'd say £2kpa per unit wouldn't be too hard.

Obviously we assess the value of a ph firm the 'trade way' rather than the finance pro way. They change hands not infrequently. Currently the rate here is £10k per driver, which comes to £3.8M. In this case the asking balance on the cars is £0.6M which is a not unreasonable (tho not over generous) £3k per.

So total of £4.4M

That's it usually. Obviously if there's property involved that's a separate issue. But that's how it's done. £10k a skull. Vehicles by separate assessment

I imagine (tho to be fair don't know) that this figure varies from place to place. So Manchester or Birmingham ph firms probably price differently.

I think you're very wrong in your earlier pessimistic assessment of the trade. And today's sensational news is going to rock Uber UK to the foundations. What you may not be aware of is that Uber don't really operate the normal ph way. They take the fares and they pay drivers weekly. That's quite possibly a main reason why they lost the ruling on employment status. In normal ph as I know it all the firm does is hire "radios" to the drivers. What they do with them and when is their own business. Firms also create business for the drivers, but it's them who the end users pay other than for account work. You should also know that other operating differences between Uber and ph definitely do raise issues of whether or not they really are ph. I don't think they are. I think they're something new.

What you'd also possibly be interested to know is that in provincial cities (tho maybe not London) they don't create even the smallest of dents in the income of ph firms. Quite the opposite. Attracted by their marketing, many people decide to take up driving for Uber. But many of these newbies quickly disappear to local ph firms instead. Have a peek at any Uber driver forums and you'll get the idea of why.

I also think it'll be phenomenally difficult for them to become profitable in the UK and I'd say today's ruling makes it next to impossible. So what local firms find is that Uber's presence actually stimulates business a bit. Not only because of escaping drivers but also because of escaping punters. Why would you pay considerably more for an Uber car than for a quicker better cheaper service from local ph? I appreciate it's not the same in London where they may be cost competitive, but here and I suspect in all the provincial cities they're not providing any competitive threat. Especially not for the very lucrative account market including monster contracts like council and NHS. Uber don't do accounts. And that, mate, is just crazy.

[drainbrain]

sideways sid said:

Forgive me if I've misunderstood, but you're saying you bought 4 cheap properties out of your (evidently substantial) disposable income. So you're demonstrating compound returns, as you could have bought shares or any other investment out of existing investment income.

The main message is that in retirement, you're not spending it fast enough!

Sid, you haven't misunderstood. And I would like to invest in something other than more bloody properties but into what? Pensions? Sipps? Isas? Bonds? S&S direct? Premium bonds?

What I read on here and elsewhere doesn't exactly inspire any confidence in any of it. Much talk of returns. Pretty crap sounding tbh unless of course you want to 'go hi-risk' yadda yadda yadda. Much talk of fees. Much talk of the specialist expertise and insight and understanding required to make it go well. Much talk of something vaguely scummy accruing to the advice/fee/ charge aspects. Whereas a flipping' monkey can buy a shop, get an agent, rent it out and make 10% ROI with perfectly reasonable expectation of value retention and even of increasing income. You don't even have to set foot in the place.

The point (once again) of the thread is to reassure anyone who may have been put off by the frankly ridiculous anti-btl assertions on here (and elsewhere) that it is in some way risk fraught and inadvisable as something to depend on for retirement income. Of course anything from sex to driving to btl'ing can be risk fraught and inadvisable if done in a silly way. But especially these days it would be pretty hard - as witnessed by the many many people who actually do it in reality and are happy with it. And I'm one of them.

I've very recently (against my own advice) started an ISA and will obviously see how it goes. Hopefully I learn something useful from it and can get more involved. But I've got a suspicion it'll be no different from previous efforts to use these things as a punter does.

Edited by drainbrain on Friday 28th October 18:36

[drainbrain]

DoubleSix said:

You really need to get your head around the difference between an investment and a tax wrapper, fast...

Nope. I don't. I really need to get my head round a glass or two of this bottle of McGuigan Handmade 2012 that my missus has just produced, slow. And then decide whether or not to buy that Zenith El Primero Rainbow Flyback Chronograph watches.co.uk has secondhand and slightly marked for a glove under 3 large.

It's Friday night. Take an old man's advice. Go out and enjoy yourself.

[drainbrain]

DoubleSix said:

Oh dear... this is heading towards cringe thread territory with unbridled velocity.

This seemed to have worked on another recent thread. Hopefully it'll work again here:

Go away please, I hope the free advice you received about your corporate tenant solved the problem.

[drainbrain]

Countdown said:

Countdown said:

You say you've started and ISA and "will see where it goes". Do you know whether it's a stocks & shares ISA or a cash ISA? If it's the latter it won't go very far in the current climate. If it's an S&S how active or passive are you going to be?

Yep started a GingeR fiver a day parmenion isa. S&S. robopassive. The plan is to fully fund it for 10 years, but I'm not really a believer in 10 year plans. In my case they'd be called fantasies. So I'll see where it goes. If after a few years (maybe 3) it's pretty obvious that I'd have been as well sticking the money under my bed in a box, or more realistically, buying more (yawn) property with it then knowing me it'll get stopped and liquidated and squandered or whatever.

Then doubtless I'll have to listen to the yadda yadda yip yip crap about how it's the markets fault not the managers and I'm a clown and don't I know it's just a wrapper and should have picked my investments in it better etc etc But it'll just be another dead dog "investment" like so many other people suffer which is why I'm so happy (yet I admit bored) with the btls.

Y'know I've got a passive "investment" in a purely-for-growth business which the partner and I've agreed will be left to compound on itself until it reaches a certain income potential. And watch the hoots of derision and cries of 'liar' break out, but it is hyper-simple, and I mean HYPER simple and grows at about 40% a year. But the problem with these type of things - I suppose like funding a pension or my silly ISA plan- is that they don't produce any running income like good ole btl does and really and honestly who wants to wait for a decade never mind decades till enjoying the fruits begins?

By the way, that McGuigan is a nice tasty vino. Not too dear either. Suppose the fecked pound is going to boot the price of that simple pleasure into outer space soon.

[drainbrain]

Man who enjoys his work so much that he wants to stop it intends to do the things he really always wanted to do once his best years are past.

This is called 'living the rehearsal life 'isn't it? Where you daily rehearse how you really want to live and intend to live in the future and make considerable sacrifice in the present so that you can fund it once you're able to escape from the thing you want to stop doing.

I live next door to a retired ex-headmistress whose retired husband is scared of flying. She travels the globe for a week here and a fortnight there with her friends. Most of that globe hates us these days so it's limited to the usual places we all go to. But it's not fun I see in her face it's desperation.

Retirement's a bullst concept.

If you're fit, healthy and enjoy what you do for an income and the company of the people you do it with why would you ever want to stop or even consider living the 'rehearsal life' ?

Come on, what does it take to realise why the Sugars and Bransons and Buffets and a million other old duffers like them don't "retire"? And why don't the Zuckerbergs and a host of other young rich people retire either? Because each and every day they enjoy themselves in their work. Is there something hard to understand here, or that countless people who aren't mega wealthy feel exactly the same?