skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Apr 8, 2017 16:14:02 GMT
Length is the subject and the standard SI unit for length is abbrev. to m, do you really need to ask?
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7d7
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Post by 7d7 on Apr 8, 2017 18:10:43 GMT
Its worth a read of this thread p2pindependentforum.com/thread/8138/early-retirement for encouragement that (very) early retirement is indeed feasible ! As to how much money is required, as others have said it really is "how long is a piece of string". A well balanced diversified portfolio containing equity, bonds (or p2p), and property should as a long run average yield around 2.5% pa after allowing for inflation. If you take £15k-£20k as the income needed by a single person* that implies net wealth of between £600k and £800k is required to provide steady income without drawing down capital. Retiring at 45, and maintaining an active healthy lifestyle could mean 50+ years of retirement, so the aim should be to maintain capital in real terms for as long as possible. £600k-£800k is actually not an unachievable figure when you factor in the value of pensions (multiply final salary pa pension by 20 to get a capital value). However, this implies a degree of willingness and competence in managing an investment portfolio. * assuming living in a mortgage/rent free property. Interestingly, recent surveys conducted among current retirees point towards the amounts you've mentioned above i.e. a capital of £700k-£1m with a net yield of 2%, which provides a steady income of £15K-£20k per year. They equally report that many misjudge how much they need for retirement and consequently don't bother formulating a viable plan in good time. As for adrianc's queries: No property? So he's going to be renting, or buying? He plans to rent. Where in the world is he thinking of living? As mentioned previously, he'll start out in London to sort a few things out. In fact, he's well travelled so the world is his parish. As the political situation in many regions can change abruptly, he's not committing himself to one country. What order of magnitude are his savings? At present, about £400k. He's single and planning on staying that way? No idea! The question posed is how much does a single person need to retire at 45. Of course, things can change. Marriage or death could come knocking anytime. How expensive are his tastes in life? Basically, he's not hedonistic. And Jamesfrance: There is a saying that I always disliked but it seems to fit that scenario perfectly and that would be that he should "Get a life". To be fair, he's got loads of things to occupy him round the world so perhaps he's already got a life. Overall, I guess he'll need to up his investments or win the lottery to attain the magic £700k as he's got no other source of income. I've been trying to lure him to P2P but he considers it a high risk investment. Would you agree? Cheers!
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stevio
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Post by stevio on Apr 8, 2017 20:45:33 GMT
Seems 15-20k is banded about
Be interesting how that is broken down, then be able see better how realistic that is?
How much for couple?
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Post by peerlessperil on Apr 8, 2017 20:53:21 GMT
The equation is as follows:
1. If you are under 55 and need to ask the price then you probably can't afford it. 2. If you are over 55, then get a quote for an annuity (and then discover it is very unlikely that you can afford it) 3. If you have kids then it doesn't matter how wealthy you are...you can't afford it.
There are some very clever models out there that aim to model future inflation and do monte carlo analyses of investment returns, but they don't really get you very far because nobody can answer the following questions accurately:
1. The expected lifespan of a specific individual now (as opposed to the statistical distribution across a population, such that actuaries can model averages quite accurately) 2. How that may change as the medical profession and genetic research extend our lifespans - and what that will cost us (to assume the NHS can cover this is a heroic assumption) 3. How the government will tax earnings, investment returns & pensions going forward. Fiscal drift is one thing, but those who lined up a buy-to-let portfolio for their autumn years are now discovering that consistency is not a major consideration when a government needs to raise money? 4. How standards of living will rise. Have you budgeted for that household robot that will be affordable in a decade's time that will need servicing yearly, not to mention the self-driving car and upgrading to holographic TV?
If anyone can answer those questions then I can probably calculate something sensible....
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Liz
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Post by Liz on Apr 8, 2017 23:20:04 GMT
Buy a property for £200K, stick £200K in SS/L @12% PF fund protected, earning £24K! What could go wrong I agree what was said before, don't retire just work for yourself P/T supplementing with savings income. In this scenario not owning a property is a big drag. I'm just trying to work out how much I need to retire at 68!!! It is crazy what sort of figures you need to maintain your pot and increase it with inflation, with £1m you can probably safely draw 3%pa, so £30k of income. This is probably the minimum your friend would need if he needs to rent in London. £1m is a crazy number to most folks, we have 1 pension that pays out £7.5k a year at 65. In-laws/parents have next to no pensions. Your friend has high class problems.
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Post by brokenbiscuits on Apr 9, 2017 17:16:07 GMT
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7d7
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Post by 7d7 on Apr 9, 2017 19:21:38 GMT
Buy a property for £200K, stick £200K in SS/L @12% PF fund protected, earning £24K! What could go wrong I agree what was said before, don't retire just work for yourself P/T supplementing with savings income. In this scenario not owning a property is a big drag. I'm just trying to work out how much I need to retire at 68!!! It is crazy what sort of figures you need to maintain your pot and increase it with inflation, with £1m you can probably safely draw 3%pa, so £30k of income. This is probably the minimum your friend would need if he needs to rent in London. £1m is a crazy number to most folks, we have 1 pension that pays out £7.5k a year at 65. In-laws/parents have next to no pensions. Your friend has high class problems. Well, in terms of risk, I've gathered that property and P2P are ranked in the same bracket as stocks. Retails bonds are considered to be slightly safer with deposits and NS&I at the top end.
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r00lish67
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Post by r00lish67 on Apr 9, 2017 20:54:56 GMT
Does he actually want to retire from all work and chill out in his bedsit all day, or just quit his tedious job with a hazy view of doing something he'd like to do which he thinks might make some money? If the latter, with £400k in my pocket, I'd just go for it. Unless he has particularly expensive tastes, £400k is quite a safety blanket. Perhaps just rent the studio (sorry I can't bear to say bedsit anymore, it's too depressing) for a while? If the former, and the goal was not to make a penny more aside from investments/saving, then I'd personally find a very cheap ramshackle little cottage on an unloved island somewhere warm and with a low cost of living (Kalymnos). Or, if he's a cosmopolitan city type, move to Tbilisi - incredible city to be in. I'm just talking nonsense now anyway. It'd be good to understand his motives - a studio in London with £400k minus whatever it cost and no other form of employment sounds awful and maybe not even possible. I'm sure that's not really his plan though, does he want to write or something? Edit: When you hear the word bedsit, does anyone else imagine peering into a dark room, with the thin slice of light cast from the door you've just opened revealing a half-eaten Fray Bentos pie on a chipboard table, a mangy cat reluctantly eating the pie, and a 5"11 silhouette swaying gently back and forth on the far wall cast from something you don't want to see in the plastic inbuilt 2ft x 2ft WC/shower unit? No? just me? I'm sure some are very nice indeed.
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adrianc
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Post by adrianc on Apr 10, 2017 8:05:27 GMT
I've been trying to lure him to P2P but he considers it a high risk investment. Would you agree? Relatively high? Yes, compared to very low-risk investments. High in absolute terms? No, not with sensible DD. Risk vs return? Not really. TBH, though, if his attitude is so safe and low-risk, I don't hold out much hope for his quality of life after such an early retirement, and with such (sorry to be frank here, but) stultifyingly dull aspirations for the second half of his life.
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Post by yorkshireman on Apr 10, 2017 9:44:52 GMT
Or, if he's a cosmopolitan city type, move to Tbilisi - incredible city to be in. I agree, an interesting city, fine until Putin starts his next imperial venture but then where?
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Liz
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Post by Liz on Apr 10, 2017 19:23:41 GMT
Or, if he's a cosmopolitan city type, move to Tbilisi - incredible city to be in. I agree, an interesting city, fine until Putin starts his next imperial venture but then where? I hear Yorkshire is nice, or maybe Derbyshire if you are posh(Matlock maybe) I would love to retire to Bakewell, just for the tarts.
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adrianc
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Post by adrianc on Apr 11, 2017 8:11:21 GMT
I would love to retire to Bakewell, just for the tarts. Having grown up there, I went to school with the Bakewell tarts. Or you can buy Bakewell puddings in the shops.
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kaya
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Post by kaya on Apr 11, 2017 10:47:35 GMT
Plenty of cheap tarts available where I live.
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markr
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Post by markr on Apr 11, 2017 13:38:48 GMT
With all due respect to adrianc, there are nicer places than Bakewell in the Peak District. When I retire, I'd like to live in Hope.
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adrianc
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Post by adrianc on Apr 11, 2017 14:33:42 GMT
With all due respect to adrianc, there are nicer places than Bakewell in the Peak District. Well, I wasn't actually IN town. Unless I was at school, obv. Wouldn't we all...?
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