I would recommend speaking to an qualifed recommended IFA.

Darren

 

I'd definitely recommend looking into an account in Luxembourg - Like a Swiss account, but better...

And sorry to **** on your chips, but I honestly don't think £1m is enough to retire on these days. Obviously it's totally dependant upon your age, but (at the risk of sounding like a complete twit) £1m is not a lot of money in this current day

 

Some of you guys are obviously in a different league to me.

Your biggest expenditure per month is probably your mortgage. If you've paid cash for the house and car, you don't have that. So although you talk about being on 45k pa, just look at how much your disposable income goes up within that. (Maybe the calculation already took that into account).

BTW, if you can buy a house in scotland for 20k, who the hell pays 400pcm to rent it?

Brendan (clearly not playing with the Big Boys)

 

FAO Milo - have a look here:-


www.tspc.co.uk do a property search in dundee see loads of flats between 10 and 30 grand.

Then search for rental flats in Dundee and look at the prices.


P/M me I'll give you some advice on areas good for long term rentals.

 

Sorry, I didn't see the bit about a millionaire lifestyle, only about improving life. I'd think that for a million you could basically have a nice house and car, not work, and have pretty much the life you have already, perhaps with better holidays; so you get freedom and stress relief (certain lottery winners and retirees call this boredom) but not necessarily much of a step up in material standards. Millionaire lifestyle - well, FFS look how much a yacht or jet costs to maintain, you're talking a massive income needed for that. Eddie Irvine anyone?

 

You need to read up on the effects of compound interest. If you put 650K in the right yearly adjusted mix of bonds and index trackers you'd be able to draw a decent income off it until you die. If you want flashy watches, 200 quid shirts and other 'millionaire lifestyle' fluff then forget it, but if you want to be financially independent and not *need* to work it's more than doable, for most people. It just takes more discipline than the living paycheque to paycheque, must have it all now lifestyle most people seem to adopt.

I'll be 33 when I retire. I drive a cheap Japanese car (WRX) and owe no money to anyone for anything and will never need to again. It's debt that keeps people trapped. If you don't have to service debt you don't need so much money to live on. And you get taxed on income not wealth, remember.

Alternatively go get a loan for the new car, keep working to pay for the loan, keep getting taxed on that income, keep paying all the expenses associated with working. Which are taxed too. Gordon Brown loves it

 

It's not 40 lots of interest on 650K though, the interest compounds and gets dramatic over time. Someone in their 30s with a mil invested properly could draw 40K/year (inflation linked) off it until they die, and still end up with a lump of 30M (on average) at the end (so in reality you can have much more than 40K/year as you get older).

(I think my favourite compounding example is the couple who have smoked one pack of Marlboro per day each for the last 30 years. Had they invested that money in Phillip Morris stock each time they held bought a pack of ****, and held it all and reinvested the dividends, they'd have $2.1M today).

I'm just a regular computer geek, like a lot of people here.

 

yeah but while 45k pa sounds good now... in 15-20 years time, when the value of that has halved, you're screwed.

you'd have to spend the rate of interest LESS inflation... which would give you around 2-3% at best if you're "investing" in an account. thats more like 20k/year. which, even if your house is paid for, is not an awful lot, especially as you'll get taxed on that. it's also going to be frustrating as hell with a mil in the bank and only taking having like 1500pm to spend.

you're also screwed a million times over if inflation goes up to say 10%, and interest rates don't rise much above it.

better to invest the mil on a long-term appreciating asset, like property, which also gives you a monthly income. shares is the other way.

but even then, retiring on a mil would take some serious self-discipline.

 

1 mil, properly invested in balanced allocations of trackers and bonds (and adjusted annually), would allow a 35 year old to retire on 45K pa INFLATION LINKED until they die. Give or take a few grand pa - I'm not going to crunch the numbers but as a ballpark figure that's about right.

If a non-working person can't live on happily on 45K pa they need to drop the cocaine habit

 

i'm 25, not 35, so that rules that out for me, like many on here.


largely it depends on what you're used to and how you want to live your life.

 

You could downgrade to Bolivian, I guess You're absolutley right that it depends on how you want to live your life. Spending 50 hours a week in an office for the next 40 years writing TPS reports (or whatever) sounds like hell to me. YMMV. However, you might be an F1 driver or something cool.

 

You start with 1 million pound and draw 40k income every year for 40 years and you seriously reckon you'd end up with 30 million?

That's £725,000 a year on average!

You avving a larrrrff!!

 

You're right, not 30M. I ran the numbers. $27,979,055 on average.

And it's for a 35 year old living until they're 95, so 60 years not 40.

The $27,979,055 is not inflation adjusted BTW.

 

Gareth- Over 60 years drawing an income of 40k every year you'll be lucky to see between 3 and 4 million at the end taking your route.

That's 26-27 million short on your original figure.

Anybody with a financial interest should be able to see immediately when calculating that 30m was a wild figure.

You'll be retiring at 93 now if you have used your own calculations and not 33 as you stated.

 

seems to have thrown up some interesting answers. See, dancing in vegas can pay off (lol )

I tend to agree with those that say that one million is not enough, and maybe I sound greedy. I'd want a 'nice' house, nothing too extravagant, mabye 4 bedrooms, double garage, nice area, that kind of thing, oh and in my home town, and you're probably talking around 300k plus for that, so if I had just a million, that's 30 percent gone already, and that's without me possibly wanting to spend 500k on a house, again 50 percent gone. So, I'm left with 500k, with which I would want to furnish said house, and I can easilly spend 20k plus on a home cinema setup, another 5k on a computer, and as for beds, sofa's, pool tables, other bits, you're probably looking at the thick end of 90 - 100k.
So, we're left with lets say 400k. Next comes cars, well, I've always wanted a 911, so say 70 - 100k for a nice 911 (would probably go overboard and talk to RUF), plus I have to get a scooby, so let's see, maybe 40k for a very nicely and well modified Type 25 (yes I AM silly enough to pay that for a scooby, but hey I'd be rich so ) so, we're looking at 300k now, for the rest of my life, hmm, if I 'pay' myself 30k a year, that's 10 years of spending, which is not bad, but I'm 29, and so in 10 years, at 29 I'd need a job, hmm, "do you want fries with that?" I don't think so.
Plus this 30k for 10 year does not factor in possible wage increases or bonuses I would get when working. Also, should the right lady come along, I'd be the gent an marry her (so there goes 20k for a ring ) and thus a wedding would take around 20k, and honeymoon for around 5 - 8k, and of course, I'd spoil her rotten, and when the kids come along, I'd do that also.

So, in the real world, a million aint gonna cut it.

Thinking about it, It would have to be a min of around 3 mil before I'd consider giving up work, but realistically maybe 5 - 10, just to be safe.

hmm, right, I've got a sawn-off and a ski mask, who wants in on a nice bank job then?

 

Spoon is right

Take full use of ISA allowances
then put £30k in premium bonds and £30k extra if you are married

Then it all depends on your attitude to risk

I'd firstly look for high dividend return shares that are a relatively safe(ish) bet - e.g. Lloyds TSB is a very high payer

Then I would look at high interest earning company bonds that are with safer companies

You need to mix the portfolio..........

So I'd invest say about £250k in Property - uk as well as oversees (consider the countries going into the EU - they will still have a long way to rise in the coming years, alos consider SAfrica...........)

Put a bit into higher risk Venture capital trusts (you can roll over CGT into these and get a 20% tax rebate on investments up to £100k - or at least you used to - so if you invest £10k in a new VCT you would get £2k in tax rebated to you (thats if you had paid at least £2k in tax))

You should always take financial advice - £1m is enough to retire on if you know what your doing............

Dont accept retuns like 4.5%.... you should be able to get more......... live abroad permanently and avoid the tax.......... or rather chose a country where tax is minimised (and I dont mean take extended hols abroad!)

 

Trading a million will more than cut it, in fact it will package it too.

 

Markus - I've worked it out m8 - you can never ever ever have enough to retire - I think back to my first job on 9k a year - All I wanted was 12k to make me happy. I think back to my last job on 40k plus benefits. All I wanted was 60k to make me happy. If you factor in a 30 meter yacht with all the bits then 10 mill is going nowhere .... anyway - you would get bored in no time - you need to have something to aim for - otherwise you would be stuck with the wrong answer to 'What if this is as good as it gets?'

 

FB - damn right there! however, my thought is this, if I was to win 18 mil on the lottery then I'd not only spend most of my time at the 'ring but I'd invest quite a bit in a nice little performance car workshop type place, maybe even learn how to fix cars too

 

Spoon - you need to check your math. 4% pa compounded over 60 years on 1M is 10M, and you should be able to get near 10% pa AVERAGE return. Your 3 to 4M after 60 years *might* be close inflation adjusted.

 

you not like yachts then Markus - Minimum spend for a decent spec is about a million a meter. I might be in the market for a luxury jet ski soon (A very very short one )

 

Gareth- You still haven't allowed for the deduction of income of 40k/annum which hammers your compounding.

So what's it to be? Check my maths or that I'm close?

I surely won't be 27million out Gareth like you said more than once because I know about this subject and don't just pretend to know.
That isn't meant to sound harsh but I could see immediately that you haven't really got a clue.

 

unfortunately Spoon is correct - much as it pains me to say so

 

Get back to the other thread and try and worm your way out that!!

 

Ooooh harsh

Did you miss this "The $27,979,055 is not inflation adjusted BTW."??

When I say you might be close, I mean my non-adjusted 27M might be close to your 3-4M if you allow for inflation over 60 years.

I'm allowing for a 4% annual withdrawl from a portfolio that averages 10% pa for the next 60 years. Do the math.

I've got more clues than Lionel Blair.

 

Think thats an expensive one! my sis oversees this sort a build amels in holland last one 70m -no more than 30 mil-not cheap to run mind with 28 crew -cheaper to charter 100k a week

 

30 mil for a 70 meter????? Can I get her number

I've been on a 75 meter yacht that cost 75 million. (only for about 3 minutes though) It used to belong to the guy who invented NCP carparks. I swear that every whim is catered for. You can't think of anything that would make it better. Voice controlled wine jukebox that delivers your chosen bottle to your chosen destination on the 'boat'

Imagine sitting in front of your PC, saying 'cold beer, PC desk' and a cold beer pops out of a slot about 2 inches from your right hand.

The thing was afeckimazing. Apparently he sold it cos he got a better model