Life after contracting

[Lockhouse]

please provide alternatives to this model, or holes in the model

thanks,

Milan.

Can't see any; Also if you BTL on a repayment mortgage, all the capital repaid is effectively going straight into your pocket so even if you don't make on capital appreciation and rent, someone's effectively bought you a house for free. Boomed!

[milanbenes]

Lockhouse,

my plans - not necessarily in revenue order...

a, contracting

b, growing plan b

c, giving consideration that a) and b) can be thought of as businesses,
income drawn is very low and profits from a) and b) re-invested in b)
to support b)'s growth plans, but, this does not mean a more sustainable income come rain or shine, hence, c) will eventually begin and will be funded by monies drawn from a) and b) when b) is big enough and does not require funds from a), c) will be buying apartments and houses/properties for rental



Milan.

[oracleslave]

c, giving consideration that a) and b) can be thought of as businesses,
income drawn is very low and profits from a) and b) re-invested in b)
to support b)'s growth plans, but, this does not mean a more sustainable income come rain or shine, hence, c) will eventually begin and will be funded by monies drawn from a) and b) when b) is big enough and does not require funds from a), c) will be buying apartments and houses/properties for rental

Reminded me of this Milan

http://forums.contractoruk.com/gener...ew-letter.html

Which is in itself a reminder that females can screw with even the best laid plans.

[milanbenes]

sure, the best laid plans of mice and men

we can but do our best and see what happens

enjoy the journey, the journey is the destination

Milan.

[pzz76077]

Shim,

granted.

One thing which is interesting and which is my fear is, plan as we might today to be able to retire on 25k a year at 52, the 25k a year needs to be index linked, otherwise it ain't gonna buy much when the time comes

and thinking further, how to build a sustainable pot, which will provide an index linked income, with index linked growth on the underlying pot, while also as much as possible being immune to the whims of big companies which raid the pensions ala as has been seen in the past,

giving consideration to the above, I find only one solution (when looking at the long term - ignoring year on year short term fluctuations), I see one solution,

buying apartments/houses and renting them, finding interesting areas, student cities, student neighbourhoods, first timers etc

the properties - on the long term - will rise in value index linked

the rental income will be index linked

your group of properties cannot be plundered ala maxwell etc


please provide alternatives to this model, or holes in the model

thanks,

Milan.

One small one - it is highly likely that future governments will impose taxation on BTL's to prop up their ailing finanances. Like everything else it is not wise to put all your eggs in one basket & diversification is the name of the game.

PZZ

[SuperZ]

Anyone else thinking about attempting to cross the channel in a canoe with no paddle and a hole in it, with a nice insurance policy in place?

who knows when you`ll die. A relative aimed to retire by a certain age and looked forward to it. They saved a lot but then died suddenly shortly after retiring.......lifes a bi***.

Just a quick thought. If you had 750k banked, invested wisely that could potentially quite easily generate a 10% return per year. Many could live on a lot less than 75k a year.

[milanbenes]

thank you,

agreed.

Remember folks, buy to let does not have to be restricted by goegraphy,
this is also a way of avoiding putting all eggs into one geographical basket.

Milan.

[milanbenes]

SuperZ,

'If you had 750k banked, invested wisely that could potentially quite easily generate a 10% return per year. Many could live on a lot less than 75k a year.',

please advise where we can get a 10% return every year.

Secondly, the return is not index linked, the pot will always stay at 750k and the 10% will always be 75k, which in a few years time will not buy what it will buy today

on the other side, over the long term, property is index linked and will rise with inflation as will rents





Milan.

[DimPrawn]

SuperZ,


on the other side, over the long term, property is index linked and will rise with inflation as will rents





Milan.

Wow I think you've hit on a foolproof formula there. Shall we call it Buy-To-Let?

Boomed!

[expat]

...
Just a quick thought. If you had 750k banked, invested wisely that could potentially quite easily generate a 10% return per year. Many could live on a lot less than 75k a year.

If you are planning a long retirement funded by capital, then annual return is not in itself a useful figure. What you need to know is the safe withdrawal rate (SWR). This is related to many variables including return, which is itself variable in the course of time. Indeed it is this that defines SWR: the need to preserve your capital over bad times is paramount.

This is partly a function of the period you are planning for, although any period over about 30 years produced similar results so you may work on that.

It is also a function of the % chance that the withdrawal rate will actually be safe, i.e. that your withdrawal rate will be sustainable over that period. Disappointingly, 100% safety does not compute! 95% is quite feasible, and I respectfully suggest that any attempt to plan a higher rate for your entire future in peace, security, and prosperity, would be to ignore the lessons of history.

So you might have 27 of your 30 years of retirement in a world where 10% return is possible (and possible to keep away from those who would take it from you). But the other 3 bad years could wipe out your capital or reduce it to a point that you can never recover from.

Analysis of previous years' data for 95% success over 30 years suggests that a 4% withdrawal rate is sustainable. You could do better if you seriously reduce your withdrawals when necessary, but that is a good figure to work with.

There is plenty about this on the web. Google "retire early home page", intercst (a pioneer in this calculation) etc.

BTW it is telling that most of the google results for early retirement on your own money are American. Most UK sites for that search are for public sector workers!