Reply to: Contracting for 20 years, should I have made enough to retire on?

[lukemg]

This is family wealth, not all mine, but my missus didn't work for 10 years as the kids were growing up, and has only been part-time for the last 3-4 years. What you say about the house is pretty much spot on though, most of my money is tied up, not working for me. I could re-mortgage quite easily, and it is something that I've considered, if a decent investment opportunity comes along, I probably will.

You HAVE been investing this money, it just doesn't feel like it ! It is invested in property darn-sarf using a leveraged loan basis and with tax-free returns.
You will have done as well as many many people who stuck it in the markets without a clue what they are doing.
That equity CAN generate a return if and when you need it to, although this gets a bit harder to turn into cash as you get older.
You have to start seeing this as part of your overall assets.
I have got less % in property and more in funds and shares that generate income and growth and 'feels' more like available money to provide an income when I need it but it is only perception that makes this different to you.
You are keen to invest in more property and this can work well with leverage again and a rising market, I personally think I have enough in property (own house counts)and want to diversify.

[riffpie]

Why! Once is enough!

Kid kept finding his way back home.

[expat]

OP is lucky he/she's not been slapped in the face with one lives utter disasters, I've been contacting mostly on with occasional off since 1992 so I should have a fortune but had instead:

1. First 8 years didn't know I was contacting - clue bat needed....

2. Divorce

3. Depression - three years effing about sorting out existence.

4. Chasing girls after divorce!

5. Spending loads on worldwide trips broad after divorce...

6. Spending loads on latest Apple Tech for no reason now worthless but still in shed...

7. Parents deaths, massive holes, no massive house/fund/portfolio legacies for us like lots seem to get, doesn't matter, want my mum and dad back more than anything.

So you can stuff your money, nothing personal of course, Maudlin.com: The Best Search Links on the Net!

I can get all of that, in fact I did get quite a lot of it. And some more: (genuine) total income 2009 under £10k, mortgage at that time > £1800 per month.

I don't have a house or a retirement fund. But I'm still standing and enjoying life.

I do have a daughter who is educated and not burdened with debt because I didn't want her to be, and when I told her that there won't be any inheritance coming her way, she said "you have my absolute blessing to spend all your money on you. Just send me postcards from interesting places and be happy. That's inheritance enough!"

I'm not in contracting for the money, in fact I'm not in living for the money.

[doodab]

Sounds like you could semi retire if you wanted and were realistic about your lifestyle.

[Zero Liability]

This is family wealth, not all mine, but my missus didn't work for 10 years as the kids were growing up, and has only been part-time for the last 3-4 years. What you say about the house is pretty much spot on though, most of my money is tied up, not working for me. I could re-mortgage quite easily, and it is something that I've considered, if a decent investment opportunity comes along, I probably will.

There are always decent investment opportunities. It's a matter of having the money to put into them.

[unemployed]

To answer some of the questions. I didn't buy the house for £750K, bought it for £400K 12 years ago,

if i am honest 400k was a poor investment for 12 years someone flipped this he made nearly as much in 6 months



4 bedroom end terrace house for sale in Tolworth Park Road, Tolworth, Surbiton KT6 - 32015840 - Zoopla

[waccoe]

Maybe this is a terribly stupid idea, but at 46 you could still get a mortgage so you could re-mortgage your property for much more, and use the cash to buy other properties/investments.

When you talk about wealth, is that family wealth or yours - does the wife work and/or have savings?

This is family wealth, not all mine, but my missus didn't work for 10 years as the kids were growing up, and has only been part-time for the last 3-4 years. What you say about the house is pretty much spot on though, most of my money is tied up, not working for me. I could re-mortgage quite easily, and it is something that I've considered, if a decent investment opportunity comes along, I probably will.

[d000hg]

Again, the house is the reason you aren't cash-rich - you have been investing in property to the tune of making about £300k but you don't want to realise your investment

You have 600k in the house (after mortgage) and ~£400k in other assets - you are worth a million quid but have disproportionally "invested" it so that 60% of this you're not prepared to sell.

Maybe this is a terribly stupid idea, but at 46 you could still get a mortgage so you could re-mortgage your property for much more, and use the cash to buy other properties/investments.

When you talk about wealth, is that family wealth or yours - does the wife work and/or have savings?

[waccoe]

Wow, lots of replies, and a little divergent. To answer some of the questions. I didn't buy the house for £750K, bought it for £400K 12 years ago, and did pay a big deposit, had a mortgage of £170K back then. The reason I haven't paid off the 90K mortgage that's left is so that I can use the money to invest to try and grow it. I should also say *had* £170K in savings, I'm investing most of it in property that's going through at the moment.

Selling the house and renting I wouldn't even consider, have 2 kids & missus who love living where we do, so letting the house would be out too.

By good to average rates, between £600-700 for the last 3 years, £500-600 for the 5-8 before that.

I'm not saying I want to retire now btw, I still quite enjoy what I'm doing, I'm hypothetically saying should I have made enough that I could retire if I want to. Being freelance isn't strictly 100% about the money either, although it's a big part of it. At my age, to be doing well, I'd almost certainly have to be in some kind of managerial position, which doesn't appeal to me at all.

I know where I went wrong over the years, I spent too long sitting on a big pile of cash that just wasn't growing or working for me. I left too much money in the company account to avoid paying tax on it, when I could have withdrawn more and invested more. I did spend the money I did withdraw on holidays, cars, and nice things though, so I can't really complain.

[stek]

OP is lucky he/she's not been slapped in the face with one lives utter disasters, I've been contacting mostly on with occasional off since 1992 so I should have a fortune but had instead:

1. First 8 years didn't know I was contacting - clue bat needed....

2. Divorce

3. Depression - three years effing about sorting out existence.

4. Chasing girls after divorce!

5. Spending loads on worldwide trips broad after divorce...

6. Spending loads on latest Apple Tech for no reason now worthless but still in shed...

7. Parents deaths, massive holes, no massive house/fund/portfolio legacies for us like lots seem to get, doesn't matter, want my mum and dad back more than anything.

So you can stuff your money, nothing personal of course, Maudlin.com: The Best Search Links on the Net!

[Zero Liability]

Working your life away as a contractor so you can have a little more than the average permie at 50 is a bit depressing. People exaggerate the income a contractor makes, not you won't be retiring at 40 with a Porsche and no mortgage on a mansion in London. I am contracting so I can do a technical job with no stress of managing people and get paid as much as a permie manager married to his job.

Agreed.

[yasockie]

90K mortgage left on a property worth around £750K, personal savings in excess of 175K and around 200K in the company account.

I'd say you can easily retire on that, as long as you're not stuck on the idea of living in london - one the most expensive cities in the world.
Just rent out your property - at that valuation I expect it should fetch no less that £2k pcm which is a good enough lifestyle say in south of Spain - enough to cover renting a small villa with a community pool and eating out everyday etc...

If you can't get that, sell the property and buy two smaller flats that more easy to rent.

[Sausage Surprise]

Hi all,
This July, I will have been contracting for 20 years. I've never been out of work, not even for a week, across the whole 20 years, and never taken an extended sabbatical or holiday, so pretty much 20 years of solid contracting. Everyone has their own reasons for going freelance, to take extended holidays, variety of work etc, etc, mine is plain and simple, to earn the most money that I can I don't want to blow my own trumpet, but I do like to think that I'm good at what I do, C++ & Unix, for the last 18 years in finance. Typically when I get a contract, I tend to stay, and leave if I don't like it or I'm fed up, I've never not been renewed, and have always left on my own accord. The rates in those 20 years have been average to good, I'm based in the South East, not far out of London.

After a few conversations with the other contractors at my current gig, when it come up how long I've been in the game, there were talks of "you should have made enough to retire on", and it got me thinking. Why haven't I made enough to retire on?. I'd say I'm relatively well off, 90K mortgage left on a property worth around £750K, personal savings in excess of 175K and around 200K in the company account. I'll be 46 this year, and I'm not sure how long I can go on earning what I am. I know I've messed up a bit on the way, I should have invested, particularly in property, something which I've only just started over the last year or so. My general questions are,

- How much do you think you need to retire comfortably on. I know it will vary depending on your needs, regardless of that, some kind of income is needed for retirement.
- Do others have an "exit plan", i.e. earn a certain amount, then retire, or go permie
- How long do you intend contracting for?
- What should I have done differently? Has anyone else contracted for this length of time, would be interested to know how much better off they are than me, and what they've done differently.

No wife or kids then?

[Project Monkey]

If your return on investment exceeds the cost of borrowing, then it makes sense to keep the mortgage. for the same reason that companies borrow money / issue bonds while they have large piles of invested cash elsewhere.

Assumption is that "personal savings" means personal saving account(s). No mention of investments in OP.

[Project Monkey]

Why! Once is enough!

+1