What sort of a return can I get on £650k?
Discussion
XJSJohn said:
Low risk (lets say 3%) (19,500pa)
Medium risk (lets say 7%) (45,000pa) <-- also is 7% considered medium risk?
High risk - sky is your limits
how financially savy are you?Medium risk (lets say 7%) (45,000pa) <-- also is 7% considered medium risk?
High risk - sky is your limits
are you talking about absolute return or return after allowing for inflation?
when you talk about risk, what do you mean?
Corporate bonds - little or no maintenance - around 5% for established big player like Tesco.
Risk - can be best measured in likleyhood to lose a big chunk of your capital.
So by this definition bitcoin would be very high risk.
The advantage with property is the capital gain, should match inflation and over decades this matters.
Risk - can be best measured in likleyhood to lose a big chunk of your capital.
So by this definition bitcoin would be very high risk.
The advantage with property is the capital gain, should match inflation and over decades this matters.
j80jpw said:
Don’t forget the potential increase in value of the current property if you keep it and rent it out.
Yes, although that's looking a bit hit and miss at the moment!However, we are leaning more towards this route at the moment, mainly because if we get bored with life in norfolk we can always move back.
Btw, I have no financial knowledge at all, which is why I asked the question in the first place
tescorank said:
med risk-bit coin as they have stabilised
Genuine question, someone hands you £650k and you allocate a chunk as "medium risk".Rather than "Stocks & Shares" you'd put it into Bitcoin and consider that medium risk?
Have I missed something about Bitcoin or might as well you tell the chap to just go play roulette?
^ I'd defo suggest roulette over ThickCoin, you get the sandwiches and "experience", rather than keeping your fingers crossed the transaction has worked, that you can remember how to access your wallet, that no-one else is accessing your wallet, and that the numerous service providers involved (and charging for their apparent service) will still be there tomorrow.
xeny said:
XJSJohn said:
Low risk (lets say 3%) (19,500pa)
Medium risk (lets say 7%) (45,000pa) <-- also is 7% considered medium risk?
High risk - sky is your limits
how financially savy are you?Medium risk (lets say 7%) (45,000pa) <-- also is 7% considered medium risk?
High risk - sky is your limits
are you talking about absolute return or return after allowing for inflation?
when you talk about risk, what do you mean?
For simplicity lets just look at a flat annual return.
How much risk do you have to take to get these sort of returns ?? Would one have to gamble with the yield or teh principle as well? (after all many people say that property is the "low risk" yet you still run teh risk of loosing a percentage of your principle if property collapses .... )
anonymous said:
[redacted]
Thanks, appreciate the suggestions.We are not pensionable age yet. I'll be 64 this year and the wife is 62. Once we get there, living off of our income will be no problem, having been paying in all our lives.
We had maxed out on Premium Bonds on and off over the years, although that amount has been drastically reduced recently due to extensive house renovations! We once won £25k on money I put aside for the tax man many years ago. so you never know.
The downside with living off a single income from a single property should be fairly obvious, it's about as undiversified as you could get and in my opinion not only incredibly risky but also incredibly illiquid. Should circumstances change, either yours or the market, your essentially left with your cock waving in the wind for months on end.
There are plenty of income generating funds, from simple FTSE trackers which should yield ~3% a year at near zero cost to monthly paying mixed commodity diverse income funds, targeted and guaranteed income and property funds that should yield around the magic 4%. You could even think about an annuity with a sum of cash like that.
Get some advice and educate yourself, after all going into retirement you can't afford to get it wrong.
There are plenty of income generating funds, from simple FTSE trackers which should yield ~3% a year at near zero cost to monthly paying mixed commodity diverse income funds, targeted and guaranteed income and property funds that should yield around the magic 4%. You could even think about an annuity with a sum of cash like that.
Get some advice and educate yourself, after all going into retirement you can't afford to get it wrong.
Mr Pointy said:
well using the 4% rule you should get about £26k a year on average without depleting the capital.
This isn't what the 4% rule says.The rule says that you can draw down 4% per annum and be incredibly unlikely to run out of money during your retirement period. It does not mean that you won't deplete the capital.
If you wanted to draw down 4% p.a. without depleting the capital, you'd have to realise a return of at least 4%, clearly.
xeny said:
Phooey said:
4% Risk free? Out of interest where?
Not risk free - I'm pretty sure they're referring to this concept https://www.mrmoneymustache.com/2012/05/29/how-muc...A recent article by Morning Star indicated that for the UK market the Safe Withdrawal Rate should be set more towards 2.5 - 3.0%, which would give you a return of between £16250 - £19,500.
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hstewie said:
hstewie said:tescorank said:
med risk-bit coin as they have stabilised
Genuine question, someone hands you £650k and you allocate a chunk as "medium risk".Rather than "Stocks & Shares" you'd put it into Bitcoin and consider that medium risk?
Have I missed something about Bitcoin or might as well you tell the chap to just go play roulette?
Bitcoin....seriouslyBlatter said:
xeny said:
Phooey said:
4% Risk free? Out of interest where?
Not risk free - I'm pretty sure they're referring to this concept https://www.mrmoneymustache.com/2012/05/29/how-muc...A recent article by Morning Star indicated that for the UK market the Safe Withdrawal Rate should be set more towards 2.5 - 3.0%, which would give you a return of between £16250 - £19,500.
However if you are already 60 (sounds like the OP is older) then honestly, unless you intend to pass some of it down there is little risk.
However, that said, if you read MMM in detail you will see that most people just go with a balanced outlook.
They draw down what they need, which often is less than 4%. They re-invest the extra (ISA or whatever) and take things year by year. In the bad years or if they need a bit extra money they raid the re-invested money and don't touch the actual "pot". There are many, many people on MMM who are well into FIRE and they have more money now than when they retired and that's spending the money in the pot.
The main issue is your cost of living. If someone has a COL of £40kPA and a pot of £1M they are very much borderline. Someone who has a COL of £12k but has a £1M pot can be way more flexible with how they do things. That's what MMM is actually really about, being frugal.
supercommuter said:
bhstewie said:
hstewie said:tescorank said:
med risk-bit coin as they have stabilised
Genuine question, someone hands you £650k and you allocate a chunk as "medium risk".Rather than "Stocks & Shares" you'd put it into Bitcoin and consider that medium risk?
Have I missed something about Bitcoin or might as well you tell the chap to just go play roulette?
Bitcoin....seriously
On some forums, I see people (with no financial experience) raving about bitcoin like it's going to make them a millionaire overnight, they see the massive fluctuations as opportunities to double their money in a day and don't see that it could easily halve, too.
Personally I see it as a bit like the gold rush, it builds up and booms then all of a sudden its gone.
The people who got rich were the early doors guys who were in there during the build up.
Those who went in during the boom usually went in as rich men but came out with nothing due to gold fever.
The people who got rich were the early doors guys who were in there during the build up.
Those who went in during the boom usually went in as rich men but came out with nothing due to gold fever.
trowelhead said:
If you do decide to buy to let - get rent guarantee insurance. Couple of hundred quid a year and ensures your income from your property is paid out even if your tenants don't fancy paying.
That sounds incredibly optimistic! For £200 a year it must be caveated to the point of being worthless, otherwise I'd have heard about the scam of renting a property to a mate who pays the rent in cash and......red_slr said:
Personally I see it as a bit like the gold rush, it builds up and booms then all of a sudden its gone.
The people who got rich were the early doors guys who were in there during the build up.
Those who went in during the boom usually went in as rich men but came out with nothing due to gold fever.
Yeah and the GPU and PC kit manufacturers have booming sales and stock prices, thanks to all the hardware sales ...just like the gold rush, the guys selling the shovels made the real money The people who got rich were the early doors guys who were in there during the build up.
Those who went in during the boom usually went in as rich men but came out with nothing due to gold fever.
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