Reply to: How much is enough?

[Jsecure]

My financial plan called for three months of reserves, at 1K per month. Unfortunately I've been held up for three weeks for a new contract to start, after looking for one month to find the contract, and now (See post Urgent: Can I sue) the three month contract has collapsed.

So I have no reserves, and will be out of cash in about 15 days... I could be going permie, and not at a good salary, within a few weeks unless I find something

[NickFitz]

Anyone got any other decent ideas about providing for later life, whilst still having a reasonable life now?

Ecclesiastes Chapter 8 verse 15:

Then I commended mirth, because a man hath no better thing under the sun, than to eat, and to drink, and to be merry: for that shall abide with him of his labour the days of his life, which God giveth him under the sun.

Isaiah Chapter 22 verse 13:

And behold joy and gladness, slaying oxen, and killing sheep, eating flesh, and drinking wine: let us eat and drink; for tomorrow we shall die.

HTH.

[luke warm]

If you get 10k salary and 10k pension, won't this give hector some ammo in a tax investigation?

[Cheshire Cat]

Assuming I continue to work for the next fews years, and my LtdCo turns over £100k p.a. then I will pay myself a 10K salary. After other expenses, then CT, there should be about £67k profits p.a.
I can draw ~ £30k before higher rate tax (making my personal net income ~ 39k)

That will leave ~ 37k left in LtdCo each year. I could issue further dividends, and lose 22.5% of this to personal tax. So I would see ~ 28k net.
I coudl pay capital off my mortgage balance. Or put £7200 into an ISA and the remaining ~21k into the mortgage.

The ISA option would possibly yield about 6% p.a. tax free interest (at current rates).
Assuming my mortgage is also @ 6%, the advantage of paying into the ISA or reducing the mortgage balance would be comparable.

Alternatively, I could pay directly from my LtdCo into a pension fund (with the obvious restriction that I cannot then access this money until I retire @ 55-65 - unless I emigrate and take my pension "pot" with me).
The advantage of this is that LtdCo tax bill reduces by ~2k, and so the profits available for dividends are reduced by ~8k but there is 10k in the pension fund.

I guess the pension contributions could be the most tax effective route, since it would still allow me to draw some "excess" divs from the company to pay into an ISA and off the mortgage, whilst having a pot that I can't access and spunk on a lamborghini when I have my eventual mid-life crisis.

Anyone got any other decent ideas about providing for later life, whilst still having a reasonable life now? I know the arguments for BTL and also for keeping money in the company to draw on (much) later. Any other efficient ways of saving/investing that other people on here use?

[rootsnall]

About 70 miles north of you Also I bought my 4-bed semi house during the LAST housing crash, so my mortgage is only about £400 a month

How come you've still got a mortgage ?

[backlight]

About 70 miles north of you Also I bought my 4-bed semi house during the LAST housing crash, so my mortgage is only about £400 a month

Lucky you! I do like being close to the office here in London - 20 min commute is nice. But if I go on the bench I'll give you a call to rent your spare room

[TheBigYinJames]

Where do you live - I pay about that for a 1 bedroom flat in London.

About 70 miles north of you Also I bought my 4-bed semi house during the LAST housing crash, so my mortgage is only about £400 a month

[backlight]

Thats what i use for a 'working month' (i.e with petrol and other work related costs) it's nearer £1500 if I'm sitting at home watching Diagnosis Murder. Which means I have enough dosh in the bank to see me through a couple of years of Dick Van Dyke at least.

Where do you live - I pay about that for a 1 bedroom flat in London.

[TheBigYinJames]

I tend to value my outgoings at circa 2,000 a month, to cover all family costs and outgoings (including socialising).

Thats what i use for a 'working month' (i.e with petrol and other work related costs) it's nearer £1500 if I'm sitting at home watching Diagnosis Murder. Which means I have enough dosh in the bank to see me through a couple of years of Dick Van Dyke at least.

[ChimpMaster]

That's a great quote. Just checked the spreadsheet - 16.5 years at current expenditure levels.

That's a lot of money - even if somehow you spend just £1,000 a month (all bills etc included), then you've got £200k in the bank. Buy us a pint guv?

I tend to value my outgoings at circa 2,000 a month, to cover all family costs and outgoings (including socialising).

[Cheshire Cat]

:-)

That's a great quote. Just checked the spreadsheet - 16.5 years at current expenditure levels.

The only problem is the uncertainty over inflation.

Aye, there's the rub. You may soon find yourself down the bank with your 16 years worth of pennies in a wheel barrow and taking that down the market for a loaf of bread and a tin of mackerel.
For which you'll probably get stabbed by some parable-ignorant hoodies.

[bobhope]

If I had the propensity for that level of planning I'm sure I wouldn't have ended up as a contractor.

I'd say about 6 months if the minimum. Any less than that and I'd be taking on rubbish contracts just to get a few pence in the coffers. But I'm a frugal sort, so I've got about 15 years' worth at present.

:-)

That's a great quote. Just checked the spreadsheet - 16.5 years at current expenditure levels.

The only problem is the uncertainty over inflation.

[Bagpuss]

I had a fairly dim Test Analyst with barely a GCSE to his name working for me last year. He was was on 475 a day.

Unlucky.

The only good thing is it's fairly recession proof.

[Gordon Gecko]

Pharma doesn't pay £500 a day :-( , except on rare occasion. although we're not quite in the £200-£300 league. Still that doesn't stop me being a tight barsteward with 10 years money in reserve.

Sometimes I which I hadn't bothered doing an MSc and just gone into financial, they seem to pay 500 a day for the most basic of skills.

I had a fairly dim Test Analyst with barely a GCSE to his name working for me last year. He was was on 475 a day.

Unlucky.

[Bagpuss]

Pharma doesn't pay £500 a day :-( , except on rare occasion. although we're not quite in the £200-£300 league. Still that doesn't stop me being a tight barsteward with 10 years money in reserve.

Sometimes I which I hadn't bothered doing an MSc and just gone into financial, they seem to pay 500 a day for the most basic of skills.