Discussion in 'Business Discussions' started by markb, Mar 22, 2016.
Following on from Edwin
Debt investing secured against property on things like lendinvest
Thanks for the responses guys. The peer to peer sites and landinvest look like good rates but obviously they are very risky. Has anyone used a decent wealth management company like coutts or similar, and what kind of interest rates can they get over the standard savings accounts?
I was thinking about investing in physical things like property, artwork, gold etc... but it would all be very time consuming and risky.
Are there websites out there where you can invest in start ups and actually own a share of the company, rather than the usual peer to peer lending sites where you do not own a share of the company.
I would also suggest that, before you invest in property "for other people", you consider investing in property for yourself. In other words, if you have a good feel for where you'd like to live for the next few years, why not invest some of the money into buying a property outright.
That makes everything else "safer" because your largest monthly expense is normally going to be a mortgage payment or rent payment, so if neither apply any more then you "need" much less to keep the lights on.
So even if you spent 1/4-1/3 of that theoretical £3 million on a super property (or something small if in London) you might be more secure than if you kept it all producing "income" but had a large outgoing for property each month.
Glad to see this wasn't a hypothetical
It's worth modelling what happens over time if you decide that it's acceptable to reduce the capital, rather than just focusing on the interest.
For example, if you start off with £3,000,000 and you take £120,000 out on 1 January and move that to your "spending money" account, giving you effectively £10K/month to live on, and invest the rest at 3% then you'll still have about £1,000,000 in capital left after 30 years.
Depending on how old you are, how long you think you're likely to live, and who else might be depending on the money, it could be a perfectly legitimate idea to "die broke" (not "die because you're broke", but "die without much in the bank") which boosts what you could spend every month without putting yourself in financial difficulty - or ever running the risk of having to work again.
No. You will still need to work.
Just wondering how much people would think they need in the bank to be able to retire now and lead a very comfortable life. In this example, say you have already paid your mortgage off, and you do not want to work.
1. Your intended lifestyle
2. How long you plan to live aforesaid
I think I read 5m minimum needed. Problem is with 5m in the bank difficult to resist a big house, fast cars etc.
Income is more important than capital, unless you are happy to spend spend spend ...
Invest in yourself.
Dividends pay 3% , rent everything to preserve capital , live frugally. Bit boring though.
I can't imagine not wanting to work in some capacity or other. I get a lot from what I do - self worth, sense of achievement, etc.
I'm just trying to get an idea of how much I would need in the bank to be able live comfortably off the interest without having to reply on working. However, personally I would still work by developing websites and other things, but you cannot guarantee that any website you make will be successful and earn good revenue.
Depends where you are in life I guess. The lifestyle you desire, whether you have kids and other obligations, where you live in the world, your tolerance of risk, all sorts.
I think I worked out based on today's interest rates, I personally would need around 7 Million in the bank to be able to live a very good comfortable lifestyle, with several yearly holidays and never have to worry about working again. I wouldn't want to eat in to my capital, as I would want to pass it on to my children.
I would agree 5m not life-changing , maybe short-term , I know some who blew 5m on yachts etc. Now back at work to pay for work on the big houses. And divorces ..
Two very different questions, big pot of money with lifestyle to match, versus big pot of money treating it as a means to earn an average wage through interest.
Personally for me, aside from fast cars (seen as both fun and investments if chosen carefully), my family can live off lets say £30k per year with one nice holiday. That could be achieved on £1-2mil.
However, I have no desire to follow that route, I love working and keeping my mind busy!
don't forget to allow for inflation (erosion of capital) and tax on your income ...
There are some remarkably large numbers being thrown around in this thread! I'm not convinced it would even take £3 million to retire on comfortably if it's invested with a little bit of care...
Yes, there must be some wealthy people on here. If the average person had £3m they would definitely be able to retire. I suppose it all depends on what lifestyle and income you currently have and what lifestyle you want in the future.
If you knew what you were doing in share investment, you could probably make about 3% a year from dividends, plus any capital growth you get. That would give you a pre-tax income of £90,000. If you pay a fund manager, you are going to have management fees as well.
Whatever you end up doing, you are going to be safer diversifying than putting all your eggs in one basket - and if you hand over all your money to one money manager (e.g. Coutts) you're narrowing your options even if you ask them to spread the money in various ways.
It's really not that hard to open multiple bank accounts, share accounts etc. so it's almost certainly worth doing the legwork once to diversify properly at the beginning, then just let everything run automagically from then on (and chuck a few hundred pounds from your annual windfall at an accountant to keep track of all the interest payments, dividends, etc. and file the appropriate info with HMRC)
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