You’re going to need at least 10% capital appreciation to break even, what with standard stamp duty, 3% second home additional stamp duty and other miscellaneous stuff.Originally Posted by MartynJC (UK)
You don’t need to be geared to lose money. If I had (say) £200k I wouldn’t be putting it in property right now.
You’d be taking a bath in the South East if you did. A capital loss is a capital loss whether your are geared or not.
Another IR rise coming soon should mean you should be able to get 2.5% on your money risk free, and lose the crap of keeping tenants happy.
I’m getting a 6% dividend return on my oil industry shares at the moment.
Exactly what I did. We’re lucky locally in that there are a shortage of BTLs so you can really pick your tenant, and there is a steady supply of them.
The capital increase if of no interest to me, but a 7/8% yield (before tax) is enough for me.
Capital is secure, even if not rising, and interest rates have no bearing.
I’ll be adding several more as my means to retire.
Id disagree. It’s all age dependent.
If you had the cash to buy one property, then you probably have close to the ability to add some cash and buy say three properties with around 35% down and rents to cover most of fees and mortgage over 15-25 years, then at the end you would have 3 fully paid properties. You’d have a fairly nice income from three decent properties being rented in an ok area. How else are you going to achieve that with the same capital, and using a combination of the Bank’s and your tenants’ money? There is also the very real possibility of capital growth over those 15-25 years.
Id rather achieve 7-11% rentals, with the very real possibility of capital appreciation and a more comfortable retirement living of the yields when the time comes.
It's just a matter of time...
I’d also add that another IR increase soon is not guaranteed at all.
Also some mates who are estate agents in West London are saying the market is picking up again. Let’s see
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Got to love EAs. They do have vested interest in pumping the market.
https://www.theguardian.com/business...e_iOSApp_Other
If it’s one of the parts of W London that the Crossrail will serve it’s entirely possible that the market is rising in the area.
I'm in a similar position to your's by the sound of it. Our problem is that we are probably 3-5 years behind the ideal timing. So although my wife and I have funds in our SIPPs we can't get to them for another 2 and 5 years respectively.
We've got a modest amount of cash, property equity and then the SIPP funds available in the future. At the moment we're considering buying a house somewhere outright and live off our cash but it means our budget for a house is upto £200k. This means looking further away from where we are at the moment but it would remove the need to work for a few years until we can dip into pension savings.
For me the real motivator in all of this is a greater degree of freedom. Free from a mortgage, freedom to choose whether and when to work rather than being constrained by both. 30+ years behind a desk takes its toll and our main outcome realisation over the next couple of years is to lose the bad habits and stress associated with climbing the greasy pole. Though I might well choose to take some contract work in the future if the opportunity presents itself and its right for us.
This is my first post and it takes me one step nearer the sales corner
I've said it before: it's great being retired and doing back something for the community. I'm often in the workshop and I teach 9hrs/week.
Every morning from 8 - 10. And on Friday from 8-9 AM. There's a big teachers-shortage here in Holland. So I've been asked to pick up teaching again. But on my conditions! Both my classes are Final Year pupils, working for their exam program. My first moments went a little like this: "I'm not here to make a living. It's for fun. You need my experience more than I need the money! Apart from that: I have nearly 40 yrs teaching experience, so ask away!" And from day one, the whole atmosphere is perfect: they're convinced that work for themselves and that I'm here to help them to achieve their goals.
I run it like a company: Work meeting on Monday; all behind a sort of conference room somewhere in the school, with coffee and tea. Setting personal targets for the week/semester. Keeping track on a whiteboard. Evaluation on Friday. Most fun I've ever had! And parents love it as well.
Menno
That sounds like a brilliant set-up.
Completely agree.
I'm 40 too and always said I would retire by the time I'm 45.
Life is far to short.
Thought about packing up five years ago when I was 58, house paid for no loans etc so all in all a clean slate. My son in law wanted to come into the business, so he took over all the site supervision along with another guy. I now pick and choose what contracts we do, usually the money making ones.
I now do the office work at home, and carry site visits to suit my five times a week cycling and swimming. We holiday three times a year and enjoy gourmet weekends away, and best of all I get to pick my two grandchildren up from school three days a week.
It all about keeping the two in harmony and sometimes it may not workout as I would want, but the financial rewards more then make up for that. The one thing I do insist on is if I wake and think I don’t want to go out today I don’t.
Just remember work stress is one of lives biggest killers
I got a quote for a CETV earlier this year when i turned 60 but it wasn't enough so then i got quotes for early retirement.
Finishing 5 years early I'd suffer a reduction factor of over a third.
So now I'm going to finish at 61 and live of savings and another small pension till i turn 62.
I'm still going to lose money but I hate my job and my joints are getting nackered from being stood up all shift.
Maybe you might enjoy your work? I could easily afford to retire (i'm 55) but I quite enjoy going in for my 3 days a week. Knowing that I could jack it all in if I wanted to, without worrying about finances, is quite liberating
I think that’s the definition of a modern retirement (you just haven’t realised...)
Sounds great!
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So, as this post has been bumped and time has ticked on a bit, I’m curious to know if the OP is now retired with a farm in Portugal...?
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Hopefully afford to retire when I'm 70, pension pot should see me good to about 75 when I plan on passing.
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Grim.
I retired at 58. Like you, I was increasingly disillusioned. If I had still enjoyed working I would have stayed. My wife has continued working and although I wish she would retire, as menno has said, that's for her.
I don't regret packing work in - I do some voluntary work and have the house and dog to look after. Plus I enjoy my motorbike. For me, hobbies and projects are key to enjoying the days.
ATB with whatever you decide
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I don't disagree, and I enjoy my work.
But I can think of other things I'd enjoy more...
That said, I'll not retire completely. I'll continue to do something part-time too, on my terms, as I'm happy when I'm active.
Grim reality
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It’s ok to aspire to retire from work but don’t retire from life!
Having technically retired at 45 I find the combination of a enjoyable part time job and doing constructive things means I am busier now than ever but when I say busy I can be very busy procrastinating which is a full time job in itself.
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For less than £200k you can get a brand new 4 bed detached house here in AmbleI'm in a similar position to your's by the sound of it. Our problem is that we are probably 3-5 years behind the ideal timing. So although my wife and I have funds in our SIPPs we can't get to them for another 2 and 5 years respectively.
We've got a modest amount of cash, property equity and then the SIPP funds available in the future. At the moment we're considering buying a house somewhere outright and live off our cash but it means our budget for a house is upto £200k. This means looking further away from where we are at the moment but it would remove the need to work for a few years until we can dip into pension savings.
For me the real motivator in all of this is a greater degree of freedom. Free from a mortgage, freedom to choose whether and when to work rather than being constrained by both. 30+ years behind a desk takes its toll and our main outcome realisation over the next couple of years is to lose the bad habits and stress associated with climbing the greasy pole. Though I might well choose to take some contract work in the future if the opportunity presents itself and its right for us.
This is my first post and it takes me one step nearer the sales corner
That’s what we did cost of living cheaper up here too!
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Chatting to a mate about retiring who said I was lucky to retire at 42, he said he couldn’t wait for the day when he popped to the shop for the milk and a paper for a morning brew and a read.
That’s great I replied, then you just have to figure out what to do with the other 16 hours in the day.
his face was a picture.
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The one thing I get very clearly from this thread which for me rings very true is that retirement = flexibility/choice and not specifically anything to do with work per se.
Once you are choosing (as opposed to feeling you have to do something for the money etc) what you are doing with your time, whatever it is, it gets a lot more enjoyable !
I'll have a look, thanks
nail hit firmly on the head.
My experience of those who work for more money then they truly need is that they replace the lack of life with stuff they don’t need to impress people who don’t like them. They usually have a similar circle of friends who are all competing with each other often without realising but at some point they realise no one gives a shit and they are still a twat just a twat with a few quid who hasn’t really lived anything other than a consuming lifestyle that made them more unhealthy as individuals than they will ever realise.
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Ooowwww brutal but very true. I think there's a sliding scale of consumerism and you need to put yourself on it somewhere. I know many people at the 68 reg 4x4, flat screen TV, patio furniture end - as I like to think of it - who never seem satisfied. Always wanting something else.
I do think it's important to have enough funds to travel occasionally, and I don't necessarily mean Machu Picchu either, and to pursue modest hobbies.
Nothing's worth more than your freedom.
Exactly!
Hi. Wife and I are taking a week in Portugal next week to look at some properties. However, my plans have formed up somewhat. Wife’s health is not good so need to pay for some expensive medical private bills. Still working out what is needed - all depends on some MRI scans next month. So may need to extend my salaried job a few months to cover those expenses.
I have been diverting the balance of my salary to savings to see if we can live off my pension amounts (keeping the DB scheme as a paid out pension). All good so far.
So plan:
is to resign from my current job in February after the poltry ‘bonus’ rounds are in my account. My HR pointed out I’d lose any bonuses if I handed in my notice before then, even though it’s retrospective.
We plan to rent down in Portugal for a month or two in the area we like - rather than buy, to experience living there longer than a week or two. And maybe try different areas.
The annoying thing is February is very close and I am finding it difficult to keep my motivation going now at work - now that the finish line is in site!! Still there is Christmas to look forward to.
Will keep uou posted. We may fall in love with a property next week! I can be impulsive (as per watch purchases).
Martyn.
Sorry to hear and hope all goes well for you both. It’s a reminder that health over wealth matters.
If you are investing money into watches, cars, and lifestyle then make you invest heavily in your physical
And mental well-being. Both of which can be greatly enhanced without the drug that it cash
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Your company might be different but our bonus is paid in March are there are always people who resign when the money hits their account on the 25th. However they're supposed to remain as employees, not in a notice period, until the end of the year. Therefore only actually hand your notice in on the 1 April otherwise they can get funny, if they want to, about it and it looks like you have already been given the heads up in this regard.
How much is it reduced by?
I had another look at my reduction factors and to go at 60 it'd be nearly 37%
It depends what scheme you are on, the link below gives all details of benefits and reductions to benefits when retiring early (I went end of April at 58
https://www.nhsbsa.nhs.uk/sites/defa...1-%28V4%29.pdf
Buying stuff we don't need to impress people we don't like/ don't like us...one of the themes in "Fight Club".
"Getting and spending, we lay waste our powers"
Wordsworth.
Mine are deferred ones from 1974-1996 in the private sector. When i first started paying in it was a matter of a few pennies so I'm happy enough, but not the reduction factor.It depends what scheme you are on, the link below gives all details of benefits and reductions to benefits when retiring early (I went end of April at 58
https://www.nhsbsa.nhs.uk/sites/defa...1-%28V4%29.pdf
Sounds like you’ve worked everything out very well so far - good luck!
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Word
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You must have been over to the ‘What do you drive’ thread recently.
I don’t think a person alive can be satisfied with patio furniture.
Work a month for some crap rattan effect monstrosity that looks even worse after 3 years.
Which should say ‘what do you rent to impress the neighbours’
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Haha! A friend was only talking about this yesterday.
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It looks like the property in Portugal came long.
Well done, Martyn.
R
Ignorance breeds Fear. Fear breeds Hatred. Hatred breeds Ignorance. Break the chain.
I retired about 18 months ago, aged 55. I took a 25% hit on my NHS pension, but it still gives me about 50% of the income (after tax) that I was bringing in when working full-time. Income tax is a great leveller.
For several years in the run-up to retiring, I was living on about 30% of my take-home pay, the rest was shoveled into paying down my mortgage early, and an ISA. Once I was debt-free (in early 2017), I checked and rechecked my sums, and thought why not?
I have to confess that I am back in work, but this time it's on my terms, and it's great knowing that I can pack it in at any time I like. I'm basically waiting for my partner to retire, and I was getting bored alone in the house all day.
If I could find some sort of hobby (collecting watches doesn't count) which occupied my daytime hours, I'd probably quit once more as I really do not need the extra income. So far I have been unable to come up with anything.
When my wife retires (could be another ten years) we'd like to travel the world.
My wife isn't planning to stop eighter. She runs her company and that runs like an oiled machine, expanding (basically: from Europe -> US East Coast and Ontario). I love tinkering with cars and I've taken a 'job' as a volunteer to educate refugee children, 2 mornings/week. (Heart-breaking background stories, I tell you). In all, I'm 4 days/week busy with all sorts of things!
Early retirement only works when you find something to do.
Menno
Good for you. Most who ‘retire’ early - go out and do another job “just for something to do” - but carefully avoid charity or community work - for free.
Well, I am originally a schoolteacher and with time on my hand... I must say that this sort of teaching 13, 14 y/o boys and girls is something else. I tried to explain it to my wife like this: it's like exploring the world with our kids when they were 3, 4 y/o. Main difference is the tone of voice I use addressing them: not childish.
M.
Working because you choose to is very different to working because you have to. I saw this when I worked in youth facility. Some zero hours contract staff, who had other full time jobs, moved to full time at the facility. They all said how different it was in the new circumstance.
When I retire I may do some work that I enjoy, but will not have to do it.
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A wise man once gave me this definition: True financial independence is the point in time that you have enough assets or capital at work for you to ensure your future life-style is affordable, i.e. if you work beyond that point you are doing so because you choose to and not because you need to. (He refused to talk about or even refer to the 'retirement', citing it as a very negative connotation and I now fully understand that).
That helped me to make some significant changes in my life years ago, ones which I have greatly benefitted from since then.
R
Ignorance breeds Fear. Fear breeds Hatred. Hatred breeds Ignorance. Break the chain.
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