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Pommygranite

5,759 posts

102 months

[news] 
Wednesday 16th May 2012 quote quote all
Doofus said:
Pommygranite said:
To those who reason that you couldnt retire look at it a different way.

If you want a 700k house, 458 and a big holiday, no, obviously you couldnt retire. However my last point was 'beer money - beer lifestyle'.

The average UK wage is probably around 30k - take home? About 23k i think (havent been in UK for a few years to know the tax. But every month you have about 2k.

The average UK mortgage is around 150k and lets say the average rent or mortgage payment is perhaps 1k. I'm guessing but follow the gist of this.

That means you only have 1k to live on after main expense is paid.

Now if you won 1m then you could pay off your 150k mortgage, lets say 20k on other debt, 50k on new cars and 50k on doing your house up, holidays, possessions. This comes to 270k which leaves 730k in the bank.

With 730k you can achieve 3% as a minimum, 5% if you go abroad. so lets call a middle ground of 4% = 29,200 per annum. Almost the same as you receive in gross wage now.

However, you dont now have a mortgage debt of 1k per month, so the entire c.2,400 take home is yours to keep for bills. You have new cars but if you want to change in 3 years then you can lease one from the 2400, want a holiday then from the 2400. Its just like a wage...obviously.

And you still have your 730k, so theres your retirement pot.

People who say there is no capital appreciation? Well kind of but you're presuming you spend all 2400 per month.

Its totally doable but its all about beer money - beer lifestyle.

p.s 50k gets you a BMW M3 and a Ferrari 355 Spyder. Not exatly shabby and probably way out of your current working league.
And every year, inflation of, say, 3% (after all, we're just guessing at the numbers, aren't we?) will erode your income by 2.1%, so by year two, you'll be needing to eat into your remaining capital just to stand still. On that basis, the whole lot would be gone in 30 years.

And you're only 'earning' the national average all that time, assuming that it doesn't outstrip inflation itself...
You're presuming every penny gets spent and there is no surplus, nor asset increase or the fact that you can diversify into markets with low risk products providing an income that do that plus cover inflation.6

Cheib

9,133 posts

61 months

[news] 
Wednesday 16th May 2012 quote quote all
F458 said:
Looking at these replies it seems that the advice from PH is that investing in property is THE best investment from now till the end of time!! Can't believe how many want to 'pay off mortgages' and 'pay for a property outright' - there is probably not a better time to borrow money, how long are interest rates going to be at 0.50% for?

You can borrow large sums for 3% p/a with a decent deposit! Why pay off your mortgage unless it is at a v high rate currently, even if it was then use some of the £1M to reduce your current high rate by providing a larger deposit with it. Why is there so much confidence in the housing market? where can you all see house prices going in the next 5/10/20 years? Do you know something I don't?

Surely the answer is invest the £1M in a diversified portfolio which does not include JUST property and either rent a nice house or get a cheap mortgage on one.

By 'paying off the mortgage' and 'buying houses for cash' you are putting all your eggs in one basket and not maximising your capital.
The trouble is with this argument is that that you cant take long term investment decisions based on current interest rates. I'd also love to know where you can borrow 3% money against anything other than your primary residence and obviously if it's your primary residence you borrow against it's not tax efficient.

I'd invest it in property because it's a pretty good self-indexing investment if bought in the right areas and provides decent capital appreciation as well as an income. Though I'd be buying in this case for the income. I've also already got plenty of other investments elsewhere so the property investment is actually a diversification.

13th

3,165 posts

99 months

[news] 
Wednesday 16th May 2012 quote quote all
Well I'm not going to worry about Friday's draw;

I WON, I WON, I WON!!!!!!

YAY £4.70! at this moment I'm deciding between paying off the mortgage, running for the coast or having extra cheese on my lunchtime sandwich!

I really never thought it would happen to me; so very VERY excited cloud9

Hairspray

6,214 posts

93 months

[news] 
Wednesday 16th May 2012 quote quote all
Well, I'm only 19 so I couldn't (and wouldn't) want to retire.

It would give me the ability to get a start in my industry without having to worry too much about the horrific wages, and I would intend on working my whole life anyway. As would the OH.

A mil would give me:

400K- to buy and do up a house. Probably not 'dream home' level (not around here anyway), but it would do for 20 years or so.
This would do- http://www.primelocation.com/uk-property-for-sale/...
Or this (more parking)- http://www.primelocation.com/uk-property-for-sale/...
Or- http://www.primelocation.com/uk-property-for-sale/...

50K- 12K MINI Cooper S Convertible. http://www.pistonheads.com/sales/3825610.htm
28K Porsche 997 Vert. http://www.pistonheads.com/sales/3875950.htm
0.5K Volvo 245GL (tip runs, the dog etc... plus I love old Volvos. I want an orange one like my granddad had). -
http://www.carandclassic.co.uk/car/C301544
7K Mercedes 350SL - http://www.carandclassic.co.uk/car/C289140
2.5K Mini Cooper. - http://www.carandclassic.co.uk/car/C301593

40K- 20K each to my mum and dad.

200K- student let. My landlord makes almost 25K a year out of me and my housemates, and certainly doesn't spend that on fixing it.

150K- start property developing with the OH (his career choice).

Remaining 160K in the bank.




MrJuice

234 posts

42 months

[news] 
Wednesday 16th May 2012 quote quote all
I would carry on pretty much as normal but would put 200k into a property (rest from my previous earnings) and give at least 500k to charity and 300k in the bank to invest when the right opportunity presents itself.
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pablo

12,150 posts

159 months

[news] 
Wednesday 16th May 2012 quote quote all
Cheib said:
F458 said:
Looking at these replies it seems that the advice from PH is that investing in property is THE best investment from now till the end of time!! Can't believe how many want to 'pay off mortgages' and 'pay for a property outright' - there is probably not a better time to borrow money, how long are interest rates going to be at 0.50% for?

You can borrow large sums for 3% p/a with a decent deposit! Why pay off your mortgage unless it is at a v high rate currently, even if it was then use some of the £1M to reduce your current high rate by providing a larger deposit with it. Why is there so much confidence in the housing market? where can you all see house prices going in the next 5/10/20 years? Do you know something I don't?

Surely the answer is invest the £1M in a diversified portfolio which does not include JUST property and either rent a nice house or get a cheap mortgage on one.

By 'paying off the mortgage' and 'buying houses for cash' you are putting all your eggs in one basket and not maximising your capital.
The trouble is with this argument is that that you cant take long term investment decisions based on current interest rates. I'd also love to know where you can borrow 3% money against anything other than your primary residence and obviously if it's your primary residence you borrow against it's not tax efficient.

I'd invest it in property because it's a pretty good self-indexing investment if bought in the right areas and provides decent capital appreciation as well as an income. Though I'd be buying in this case for the income. I've also already got plenty of other investments elsewhere so the property investment is actually a diversification.
i want to pay off my mortgage because it means i have somewhere to live until i choose to move or sell, emigrate etc. there is an assumption made by many that everyone who buys a house is desperate for it to rise in value but to be honest, i have never understood that. i just dont want to be at the mercy of scumbag landlords anymore.

it does make me laugh when people moan about the value of their house not rising as much or as fast as they would hope. when you buy a house to live in, i would have thought its primarily for security and not becuase its an an asset that might appreciate in value? if it does go up in value then its a bonus surely?? its a greed mentality. i appreciate buying to let as an investment or buying to fix, repair and sell on is slightly different but people dont buy anything else and expect it to rise in value quite like their houses...

Cotty

27,698 posts

170 months

[news] 
Wednesday 16th May 2012 quote quote all
MrJuice said:
I would carry on pretty much as normal but would put 200k into a property (rest from my previous earnings) and give at least 500k to charity and 300k in the bank to invest when the right opportunity presents itself.
500k to charity eek

oobster

5,318 posts

97 months

[news] 
Wednesday 16th May 2012 quote quote all
Same as a lot of others, detached 4-bedroom house with double or triple-size garage, 911 as the weekend/summer toy with a Range Rover or Audi A/S8 for tooling about in, rest left in the. bank to slowly fritter away/live comfortably on - watches, holidays, F1 trips etc.

hollydog

1,030 posts

78 months

[news] 
Wednesday 16th May 2012 quote quote all
Cotty said:
500k to charity eek
Good on you for giving to a charity .Iam sure the person at the top of the charity would be greatfull for any help to buy his next bentley . soapbox

Cyder

5,442 posts

106 months

[news] 
Wednesday 16th May 2012 quote quote all
hollydog said:
Cotty said:
500k to charity eek
Good on you for giving to a charity .Iam sure the person at the top of the charity would be greatfull for any help to buy his next bentley . soapbox
This ^^

Is exactly why I wouldn't give the money to charity.

JAHetfield

443 posts

35 months

[news] 
Wednesday 16th May 2012 quote quote all
Cyder said:
hollydog said:
Cotty said:
500k to charity eek
Good on you for giving to a charity .Iam sure the person at the top of the charity would be greatfull for any help to buy his next bentley . soapbox
This ^^

Is exactly why I wouldn't give the money to charity.
I stopped giving to charity after reading through the job ads and seeing £40-£50k positions advertised. That's money that should be going to someone who needs it.

Tango13

3,329 posts

62 months

[news] 
Wednesday 16th May 2012 quote quote all
JAHetfield said:
Cyder said:
hollydog said:
Cotty said:
500k to charity eek
Good on you for giving to a charity .Iam sure the person at the top of the charity would be greatfull for any help to buy his next bentley . soapbox
This ^^

Is exactly why I wouldn't give the money to charity.
I stopped giving to charity after reading through the job ads and seeing £40-£50k positions advertised. That's money that should be going to someone who needs it.
Many years ago I went on a 'pet run' with the local BMF. A pet run is a thinly disguised excuse to get a load of blokes together on bikes and hoon across the county to an animal sanctuary.

When we arrived at the local Blue Cross we deposited large quantities of assorted cat and dog foods plus other stuff like toys and bedding in a neat pile on their front lawn. The manager bloke was almost in tears as he'd never seen such generosity.

He said that foodstuffs were of more use than money as cash donations had to go through the books which meant lots of paperwork etc but with the food they could just get on and feed the animals. I used to give them my old Evening Standards when I worked nights, they were always grateful for papers as they were a needed but overlooked commodity.

I wouldn't give any money to charity but I would give them equipment that they could use.

Mark.H

4,496 posts

92 months

[news] 
Wednesday 16th May 2012 quote quote all
Go to vegas, bang it all on black.

Dalto123

2,667 posts

49 months

[news] 
Wednesday 16th May 2012 quote quote all
1. Put a bit aside to buy myself a nice flat - about £200k let's say.
2. I need to furnish the flat and I have no idea what that costs! But let's say for the moment 10K (I'm sure I can get a few nice things in that price range)
3. I don't want to go mad car wise so I'll stick £50k on the side for the next 3-4 years worth of motoring. Maybe I'll add a bit more later depending on what takes my fancy.
4. I want to invest some money bu have no idea how to so I'll trust some money with those people who invest it for you. See if I can get some momey back after! - I'll start on £250k now and if I'm successfully I'll reinvest more.
5. Lavish gifts on friends and family smile £10k.
6. Donate a bit to various charities £15k.
7. Save the remaining £465k in the bank.

Now for several people to shout at me for not buying a million pounds worth of cars wink

devnull

1,102 posts

43 months

[news] 
Wednesday 16th May 2012 quote quote all
Tango13 said:
I wouldn't give any money to charity but I would give them equipment that they could use.
This exactly. Ive had a bit of an eye opener to the way some of the bigger ones are run. Best to give the stuff to people who really need it at the coalface.

GT03ROB

3,190 posts

107 months

[news] 
Wednesday 16th May 2012 quote quote all
A million would be great to win, hell anything would be great to win, but it's a sort of no mans land of a win. It's really not eough to retire on with a good lifestyle for anyone less than 60ish, yet it's enough to make life more comfortable on a day to day basis. You won't be buying new Porsches evey few years, but you now have no reason to have a mortgage.

For me it would clear the mortgage; thoroughly refurb the house to a high standard; put together a portfolio of investments to make retirement a bit better and ensure that I can have 5* holidays of sun & skiing every year, but probably not a lot more!

Stopping work would need substantially more than £1m, probably more like £5m.

Jasandjules

51,353 posts

115 months

[news] 
Wednesday 16th May 2012 quote quote all
I am more interested in the 50m......

welshjohn

958 posts

67 months

[news] 
Wednesday 16th May 2012 quote quote all
For me is simple 150k max will get you a nice 3 bed house with garage and a bit of land around my parts.
5k on a new bike
50k max on two cars his and hers
25k to kit out house
Total 250k i dont need flash thingssmile

Guvernator

3,447 posts

51 months

[news] 
Wednesday 16th May 2012 quote quote all
GT03ROB said:
Stopping work would need substantially more than £1m, probably more like £5m.
Still say this is entirely possible if you expand your horizons a bit. £1m is A LOT of money in certain countries and would enable you to live like a king in many nice parts of the world if you used it wisely. Possibly not straight away but I certainly wouldn't be planning on working for the next 20\25 years with a £1m windfall, I'd probably be able to retire in less than 3-4 years and move somewhere warmer.

I know examples of people who have accumalated around the £1m through investments\business and used it to set themselve up and now live a comfortable lifestyle in a mediteranean climate with no more money worries so it can be done.

GT03ROB

3,190 posts

107 months

[news] 
Wednesday 16th May 2012 quote quote all
Guvernator said:
GT03ROB said:
Stopping work would need substantially more than £1m, probably more like £5m.
Still say this is entirely possible if you expand your horizons a bit. £1m is A LOT of money in certain countries and would enable you to live like a king in many nice parts of the world if you used it wisely. Possibly not straight away but I certainly wouldn't be planning on working for the next 20\25 years with a £1m windfall, I'd probably be able to retire in less than 3-4 years and move somewhere warmer.

I know examples of people who have accumalated around the £1m through investments\business and used it to set themselve up and now live a comfortable lifestyle in a mediteranean climate with no more money worries so it can be done.
You are probably right. And £1m is a lot of money here in the UK too, it's just not quite as much as many think! Personally I wouldn't be happy to pack up & live overseas, I like the UK too much. I'd be happy to have a place overseas with the freedom to go as & when I wished.
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