Reply to: Saving Ideas vs Pension

[alreadypacked]

Property - no mortgage.

Got land to build on.

Pension pot not worth a fck.

Investing in art, antiques and space collectibles, great return over ten years or so, now averaging 500% profit or more and getting better at spotting the good stuff as I get more experienced but ask for advice when I need it from people in the know.

Examples; picked up a 1960's aerospace item for £400 at an auction three months ago and this week was offered £4k+ by two other collectors when I asked around for more information on it. Not ready to sell yet as it will only get more valuable. Bought a contemporary painting a year ago for £850, now valued double at least as the artist is making a name for himself and have a deal with the gallery to get first crack at any new and interesting items as they get them.

Plenty more examples like that plus the music royalties added into the mix should see me alright in the coming years.

Have to ask, are you single

[Lockhouse]

BTL all the way for me - a mixed property portfolio in different areas. Some ISA income as well but gave up paying into a pension years ago. 50 this year.

[dundeedude]

I've decided to look into purchasing a house or flat in the next year - house prices seem to be falling in Scotland, so there's plenty on offer in the main cities.

I do have investments in some BRIC funds, but they have been relatively flat over the last couple of years, unsurprisingly.

Have decided to avoid wasting the money on a metal boxy car and will see if I can get some confidence together to buy a property. I do feel that a 50% to 80% contribution to a mortgage is a good idea, especially if I could just save money the next couple of years. I don't like the way in which the UK's system doesn't encourage saving cash for a commitment, such as a mortgage deposit. Taxing savings income of 3% just seems pathetic and pedantic.

I'm one of those people for whom spending large sums of money induces guilt, which is why I feel happier saving it

[dundeedude]

Fook me, OLLI, YOLO

28 and thinking of pensions? Are you Scottish? Get a life, have some fun, have a life. Long time dead, and what are you looking at doing when you're retired? I will be retiring as a spent force, and will need food alone. £300 a week for the both of us will be grand.

Ah, this is explains it... I am indeed Scottish

[Old Hack]

you have no debts, you dont want a mortgage, and you want to save.

you are far too sensible.

The problems with isas and financial stuff, is the rules and rates can change. With a property, its fixed and ownership is certain. So barring a war or some terrible disaster, buying property may not be sexy, but its more certain.

I have a lovely property you may like...

[EternalOptimist]

Hi there.

Having had a good look around, I can see that there are people firmly in the anti-pension camp and those in the pro-pension camp.

I'm 28, currently have good day-rate and am averse to using standard savings accounts. I have some share and fund investments and have used my cash ISA allowance.

Owning no property, I consider whether I should just save as much as possible and buy a house/flat outright with no mortgage, or whether I should really be using my Limited Co to contribute a significant (£2k per month or more) contribution to an existing personal pension I have open.

My outgoings are less then a grand a month, whilst statistically pulling in >£6k a month in.

I'm going to pay off my £8k student loan within the next month, but am very confused as to how to now save money I have coming in. If you were my age again, or are roughly my age, what would/do you do?

Single, reasonable car, flexibly working away from home at the minute.

Thanks for any input!

you have no debts, you dont want a mortgage, and you want to save.

you are far too sensible.

The problems with isas and financial stuff, is the rules and rates can change. With a property, its fixed and ownership is certain. So barring a war or some terrible disaster, buying property may not be sexy, but its more certain.

[Cliphead]

Property - no mortgage.

Got land to build on.

Pension pot not worth a fck.

Investing in art, antiques and space collectibles, great return over ten years or so, now averaging 500% profit or more and getting better at spotting the good stuff as I get more experienced but ask for advice when I need it from people in the know.

Examples; picked up a 1960's aerospace item for £400 at an auction three months ago and this week was offered £4k+ by two other collectors when I asked around for more information on it. Not ready to sell yet as it will only get more valuable. Bought a contemporary painting a year ago for £850, now valued double at least as the artist is making a name for himself and have a deal with the gallery to get first crack at any new and interesting items as they get them.

Plenty more examples like that plus the music royalties added into the mix should see me alright in the coming years.

[Old Hack]

Fook me, OLLI, YOLO

28 and thinking of pensions? Are you Scottish? Get a life, have some fun, have a life. Long time dead, and what are you looking at doing when you're retired? I will be retiring as a spent force, and will need food alone. £300 a week for the both of us will be grand.

[hyperD]

My plan is to marry a millionaire octogenarian without any dependants. Female preferably.

The upside is the brittle boned risky sex, the post coital Senior Service cigarettes and the ritualistic joint hacking of the phlegms, the shuffles in the park, the mutual massaging of weathered skin in carbonic soap, the drooling, sloppy gumless kisses, the times when we laugh when we've forgotten where we've put the powdered egg and reminiscing to dear old Dame Vera.

The downside will be the removal of my eyeballs, olfactory system and what little remains of my sense of dignity.

[SimonMac]

My plan is three fold.

Small CS pension worth about £5k a year from permiedom
Property - At the moment its self sufficient paying off the mortgage, by the time I come to retire this will be woth £6k a year
SIPP, £500 a month at a conservative 4% per annum will give me a pot of about £170k, which will be worth an annuity of about £11k a year

If I can't live of £20k a year when I am 50 with most other outgoings payed I'd better give up now!


This plan would also allow me to lump sum profits at the end of my financial year after taking out any dividends into either my Mortgage if outstanding or my SIPP

[doodab]

That's almost exactly where I'm at

Only 3 more zeros to go eh?

[sasguru]

Have a financial objective: for example, aim to have £2,000 residual income coming in by the time you are 40. This would be made up of all your investments, whatever they are... and would be counted after your main mortgage is paid off.
.

That's almost exactly where I'm at

[ChimpMaster]

<snip>I should add that I expect we're going to have a major stock-market crash, to compliment the downwards trend, in the next few years, which is another reason I have no idea how to save now.

I'm guessing most of you don't place much money in standard savings accounts?

Personally I think you're right to ignore the pension, but ignore it forever as it's an inflexible rip off that you have very little control over. I also think the stock market will crash, after rising for the next few months first. Long term, you should have some of your portfolio in shares, perhaps 10% - 20%.

Stick to a few choice funds that are likely to grow over the next 20 to 30 years - think long term like China perhaps.

Aside from that, the bulk of my investments are in property. Aside from where I live, we own a small number of BTLs that will eventually become mortgage free and provide income during our later years, or for when our kids University fees need paying etc. You can buy a BTL with 15% down and let the rental income pay off the mortgage.

Age is an important factor but it seems like you are probably mid-20s? So you're starting young and that is the best thing you could do. I didn't start until I was in my early 30s, dammit.

Have a financial objective: for example, aim to have £2,000 residual income coming in by the time you are 40. This would be made up of all your investments, whatever they are... and would be counted after your main mortgage is paid off.

Remember 2 things though:
1) Be prepared for benchtime.
2) Have some fun along the way - you're only young/single/free once.

[Mich the Tester]

Personally I've always thought that the best thing to do, if possible, is to get a roof over your head that is paid off.
This give you the flexibility to do what you want to do with your life. No one can kick out and you won't be paying extortionate rent for the rest of your life.
Plus a property can act as a self-contained income in perpuity if it is in the right area/condition.

If you happen to buy at the bottom of a trough, even better - but the above advice will always remain true on this crowded island, barring a black swan event.

Shocking maybe, but I agree with SG. The sooner you pay off your mortgage and any other debts the better; then you don't have the pressure of needing well paid, stressful employment and you can happily go back to college, become a rather slow, doddering old bike mechanic or write a book about the world's finest spicy sausages.

However there's still a risk; governments desperate for money who then try to tax your arse off for owning paid up property. That might happen here in NL seeing as thanks to the abject incompetence of the current Prime Minister, the former communist party are now leading the polls with a couple of months to go to an election. So once you've paid it all off, perhaps a good idea to piss off to somewhere more civilised that has UK style property protection, universal healthcare, no chavs and lots of sunshine; Tonga looks like a good place to be, and I've heard good things about Trinidad and Tobago.

[sasguru]

Personally I've always thought that the best thing to do, if possible, is to get a roof over your head that is paid off.
This give you the flexibility to do what you want to do with your life. No one can kick out and you won't be paying extortionate rent for the rest of your life.
Plus a property can act as a self-contained income in perpuity if it is in the right area/condition.

If you happen to buy at the bottom of a trough, even better - but the above advice will always remain true on this crowded island, barring a black swan event.