borofan
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Post by borofan on Jul 7, 2019 8:51:55 GMT
I will make this as brief as possible.
For the last 15 years or so I have made a living from Matched Betting. I don't have a "proper" job.
Now, the income isn't as good as it used to be, and frankly I can't be bothered to sit in front of a PC all day now anyway.
I've just turned 50 and have a decent amount of savings, but I want to maximise the interest/income I get as my Matched Betting income decreases.
By 7-8 years time I want to live on a modest income without having to dip into my savings too much.
At the moment:
20% of my money is in P2P, almost all Zopa (0.5% early adopter bonus) and Ratesetter. After the Lendy debacle, which I have £1k I really can't be bothered with smaller P2P firms.
I'm thinking now that 20% is too much and I should be moving money elsewhere.
10% of my cash is float for Matched Betting. This will probably become less.
The rest is in cash. I max out all the bank switching and linked regular savings account stuff.
The only long term investments I have are:
I put £240 a month into a HL SIPP, this is topped up to £300 with tax relief. I have about £7k in this so far.
I would like to put more in, but I'm led to believe that as a non-tax payer I won't get anymore tax relief so it's pointless putting more in. Maybe someone can confirm this?
It's been doing about 8% per year.
I had about £20k in former company pensions. I've moved this to Pensionbee so I have them in one place and it is being invested in the Blackrock fund.
But as this amount is so small I am not dependent on it.
I also paid around £4k to top up missing NI contributions, so now I will get the max state pension. When I did the calculations the £4k would pay for itself within 18 months of the state pension kicking in, so it was a no-brainer.
So...
I'm thinking I need more longer term investment. Something I won't need to touch until I'm 60 to 65.
If, as I suspect I won't get anymore tax relief on increasing my monthly SIPP amount, then a S&S ISA is the only way to go.
I'm thinking of drip feeding £500-£800 a month into Vanguard funds (probably LS80).
Any opinions on this, or alternative ways to increase my income over the next 10 years?
Thanks.
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SteveT
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Post by SteveT on Jul 7, 2019 9:05:47 GMT
If your investment horizon is 10+ years then your proposal makes good sense. There's no downside to sheltering your equity / bond investments within an ISA and, whilst you probably won't save much in income tax short term, by doing so you'll never need bother declaring income or capital gains in a tax return. Direct investment in Vanguard LS funds is pretty much the lowest cost option in terms of fees; whether you're better off with an 80/20 (LS80) or maybe a 60/40 (LS60) split of equities vs bonds depends largely on which Blackrock fund your pension money is in.
Definitely wiser to invest little and often than to hope to "time the market" with a lump sum, but consider boosting your monthly investments whenever the markets take a significant lurch south.
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borofan
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Post by borofan on Jul 7, 2019 9:14:11 GMT
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borofan
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Post by borofan on Jul 7, 2019 10:14:56 GMT
All told I have about £270k in savings. Around £50k in P2P which I feel is too much.
Also the house is worth about £250k and will be mortgage free in 7 years.
Worse comes to worse I can downsize or equity release, but I don't think it will come to that.
I can do fine on a income of around £15k a year before my state pension kicks in.
At the moment I still make around £10k from Matched Betting a year, (it was about £50k at one point) but it's becoming a slog and I want to do less and less.
Interest from savings accounts (some fixed rate) and P2P is bringing in another £4 to 5k a year.
Not including my SIPP and Pensionbee.
If I totally want to quit Matched Betting and not go back to work, then £5k a year interest is obviously not enough to live on without eating into my savings, and I have another 17 years before I get state pension, which should be around £250 a week by then?
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r00lish67
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Post by r00lish67 on Jul 7, 2019 10:34:52 GMT
All told I have about £270k in savings. Around £50k in P2P which I feel is too much. Also the house is worth about £250k and will be mortgage free in 7 years. Worse comes to worse I can downsize or equity release, but I don't think it will come to that. I can do fine on a income of around £15k a year before my state pension kicks in. At the moment I still make around £10k from Matched Betting a year, (it was about £50k at one point) but it's becoming a slog and I want to do less and less. Interest from savings accounts (some fixed rate) and P2P is bringing in another £4 to 5k a year. Not including my SIPP and Pensionbee. If I totally want to quit Matched Betting and not go back to work, then £5k a year interest is obviously not enough to live on without eating into my savings, and I have another 17 years before I get state pension, which should be around £250 a week by then? Have you heard of FIRE borofan ? Well worth a look into. I'm going to butcher the nuances by saying that you can effectively live off 3-4% of your investments (depending on a whole host of things). You'd have to factor in the fact that you're effectively bridging to state pension age, but the point remains the same. Despite @wallstreet being his usual somewhat abrupt self (no real offence intended, still enjoy your posts  ) it is perfectly possible to live simply off a pot of capital. I'm doing something similar and am younger than you. There's a whole community of people around the world doing this, made the UK papers recently. That said - You need to do the calcs yourself really, but my gut says that you haven't got quite enough. A 3.5% SWR would give you £9,450 per year, you'd need a 5.5% withdrawal rate to support £15k which I think would be way too aggressive in the current climate. The state pension would come to your rescue eventually, but by then your capital could be severely depleted. (the above assumes you're at least 50% invested in equities btw). edit: and yes, you probably do have too much in Zopa and P2P overall.
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bigfoot12
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Post by bigfoot12 on Jul 7, 2019 10:40:48 GMT
I put £240 a month into a HL SIPP, this is topped up to £300 with tax relief. I have about £7k in this so far. I would like to put more in, but I'm led to believe that as a non-tax payer I won't get anymore tax relief so it's pointless putting more in. Maybe someone can confirm this? I don't know the answer to your question, but your pension income will be taxable when you take it, but drawdown from an ISA wouldn't be taxable (might change in the next 30+ years). Pension contributions work best when you are likely to be in a lower tax bracket in the future. If you take a job to supplement your income you might be in a higher bracket. I hadn't heard the term Matched Betting before - is it more than taking free bets from bookmakers and hedging them on Betfair? (I used to do a lot of betting so I'm surprised I haven't heard of it.)
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macq
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Post by macq on Jul 7, 2019 10:42:27 GMT
you say not touch till 60 - 65 but then mention income for 10 years.If your looking for income i would guess without looking that your Blackrock fund which is a target fund to a set date is mainly growth at the moment and the VLS80 will not really help with income (unless selling units in the future)
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scc
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Post by scc on Jul 7, 2019 14:38:17 GMT
Overall, you're probably in a far better position than most 50 year olds. But I'm not quite sure you are over the line. For perspective, I know of a friend targeting similar levels of income and of a similar age with double your savings and a paid off mortgage. They are treating each extra year of working as a chance to have a little more fun between now and when they retire.
I'd give some thought to outgoing minimisation if you haven't already. Would you/could you consider moving to a cheaper area and downsizing? Solar panels aren't quite the deal they were, but they may help with reducing your energy bills. You don't say if you have any dependents etc.
Income wise, if you have the space and inclination - AirBnB or rent a room could provide you with a few extra K a year.
One thing I'm not clear on is how much interest your approx £190K is earning and where from? (assuming the £270K figure includes your company pension, P2P, HL SIPP etc). I sincerely hope you are not including house equity in your savings calculation...
Lastly, appreciate spread betting is getting harder and sitting in front of a computer is losing its appeal - but is there anyway you can apply the 80/20 rule to it. Are certain spread betting activities more profitable than others? Even if you ended up taking a small hit in terms of net income from it, perhaps it would be worth if you could spend a lot less time on it to do other things. Lastly, I wonder if there is a market to be a paid mentor to aspiring spread betters?
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p2pete
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Post by p2pete on Jul 7, 2019 16:27:52 GMT
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Post by propman on Jul 8, 2019 12:38:43 GMT
All told I have about £270k in savings. Around £50k in P2P which I feel is too much. Also the house is worth about £250k and will be mortgage free in 7 years. Worse comes to worse I can downsize or equity release, but I don't think it will come to that. I can do fine on a income of around £15k a year before my state pension kicks in. At the moment I still make around £10k from Matched Betting a year, (it was about £50k at one point) but it's becoming a slog and I want to do less and less. Interest from savings accounts (some fixed rate) and P2P is bringing in another £4 to 5k a year. Not including my SIPP and Pensionbee. If I totally want to quit Matched Betting and not go back to work, then £5k a year interest is obviously not enough to live on without eating into my savings, and I have another 17 years before I get state pension, which should be around £250 a week by then? Have you heard of FIRE borofan ? Well worth a look into. I'm going to butcher the nuances by saying that you can effectively live off 3-4% of your investments (depending on a whole host of things). You'd have to factor in the fact that you're effectively bridging to state pension age, but the point remains the same. Despite @wallstreet being his usual somewhat abrupt self (no real offence intended, still enjoy your posts ) it is perfectly possible to live simply off a pot of capital. I'm doing something similar and am younger than you. There's a whole community of people around the world doing this, made the UK papers recently. That said - You need to do the calcs yourself really, but my gut says that you haven't got quite enough. A 3.5% SWR would give you £9,450 per year, you'd need a 5.5% withdrawal rate to support £15k which I think would be way too aggressive in the current climate. The state pension would come to your rescue eventually, but by then your capital could be severely depleted. (the above assumes you're at least 50% invested in equities btw). edit: and yes, you probably do have too much in Zopa and P2P overall. Have you factored in inflation into your planning? also, wil you increase your expendituire if you have more time after stopping / reducing the matched betting? higher inflation won't necessarily be compensated by higher invesrtment returns, especially on FSCS protected savings. 3% inflation for 10 years would increase £15k pa to £20k pa. What would that do to your plans?
- PM
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) it is perfectly possible to live simply off a pot of capital. I'm doing something similar and am younger than you. There's a whole community of people around the world doing this, made the UK papers recently.