fasty
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Post by fasty on Mar 21, 2017 23:08:28 GMT
I've been happily non-working for a couple of years now. Not a care in the world until last week. I went to fill in a form for a BA AMEX Card (need to get the 241 voucher to start burning some AVIOS and see the world etc). Applying for credit cards is something I've always done without much thought ..... and then I got to the "income" box. I'm non-working, too young to draw a pension, but have £3m+ spread across pensions and savings and just draw out what I need whenever I need it (in the most tax efficient way). I was so worried about being turned down that I gave up and got really angry with myself, life and the universe. So, can people like me get new credit cards ? Or am I now a bad risk ? This can be a problem. A while ago my Dad fancied getting a credit card like mine which has zero fees on foreign exchange so very handy to use abroad. Despite earning twice as much as me (even in retirement), he was flat refused. It seems that because he's been wealthy enough not to need credit, he now isn't eligible for it...
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Mar 22, 2017 8:51:18 GMT
About 15 years ago we bought a house after 5 years living on a narrowboat. I went down to the local Nationwide office to apply for a credit card with auto monthly repayment but was refused. Having just paid cash for a house was not something their computer considered relevant.
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pom
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Post by pom on Mar 22, 2017 9:22:04 GMT
About 15 years ago we bought a house after 5 years living on a narrowboat. I went down to the local Nationwide office to apply for a credit card with auto monthly repayment but was refused. Having just paid cash for a house was not something their computer considered relevant. In fairness they probably also weren't very keen on your interesting address history? This can be a problem. A while ago my Dad fancied getting a credit card like mine which has zero fees on foreign exchange so very handy to use abroad. Despite earning twice as much as me (even in retirement), he was flat refused. It seems that because he's been wealthy enough not to need credit, he now isn't eligible for it... So I think the moral of these stories are, if you have credit cards don't be in a hurry to get rid of them, and if you haven't, get at least one before you leave employment.
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SteveT
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Post by SteveT on Mar 22, 2017 9:37:34 GMT
Life once "Otherwise Employed" (I refuse to call it "Early Retired" until I at least pass 50) is much simpler if you appoint yourself Director of your own Ltd company (investing in P2P; what else?) and pay yourself a small but regular annual salary from its profits, sufficient to continue earning State Pension credits without incurring IT or NI (so between £5,824 and £8,060 this year). Application forms are then a doddle (Status = Employed, Job Title = Company Director, etc.), financial institutions continue to accept you as a "normal" person, if one of modest means, and the default answer to the dreary "What do you do for a living?" question from people you've little interest in becomes "I run a boutique finance business, specialising in secured lending and trade finance". That's usually enough to divert the conversation elsewhere...
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r00lish67
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Post by r00lish67 on Mar 22, 2017 9:39:54 GMT
About 15 years ago we bought a house after 5 years living on a narrowboat. I went down to the local Nationwide office to apply for a credit card with auto monthly repayment but was refused. Having just paid cash for a house was not something their computer considered relevant. In fairness they probably also weren't very keen on your interesting address history? This can be a problem. A while ago my Dad fancied getting a credit card like mine which has zero fees on foreign exchange so very handy to use abroad. Despite earning twice as much as me (even in retirement), he was flat refused. It seems that because he's been wealthy enough not to need credit, he now isn't eligible for it... So I think the moral of these stories are, if you have credit cards don't be in a hurry to get rid of them, and if you haven't, get at least one before you leave employment. Exactly. Essentials in my view are: At least one more turn at the Amex preferred rewards gold (20,000 membership points (=20,000 avios) after spending £2k in 1st 3 months + 2 free lounge passes). Halifax Clarity, or another fee free one. Btw, as far as my account goes, you can top this up in advance and use as a totally fee-free cash card. If you can be bothered, a big fat 0% purchase card to spend on and pay off at the end. And don't forget Quidco/TCB/friend referrals too!
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star dust
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Post by star dust on Mar 22, 2017 13:51:02 GMT
So I think the moral of these stories are, if you have credit cards don't be in a hurry to get rid of them, and if you haven't, get at least one before you leave employment. Yep, I've had several new credit cards since very early 'retirement', no real problem getting them (I obviously manage to say the right things ), but they do have considerably smaller limits. Fortunately, I still have a pre-retirement one with a very high credit limit that although never used anywhere near up to the limit, as it's fee free, I still hang onto just in case. Actually, credit in general is worth thinking twice about. I was going to downsize just after said early 'retirement' and decided the best way of doing this would be as a 'rent to buy', with a relatively small mortgage to service. Again, it wasn't impossible, but far more expensive and restrictive without the employed status income to support it. In the end it didn't happen for other reasons, but it did make me realise that I should have thought more carefully about these sorts of scenarios whilst still employed.
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Post by saraph on Mar 23, 2017 21:12:56 GMT
Life once "Otherwise Employed" (I refuse to call it "Early Retired" until I at least pass 50) is much simpler if you appoint yourself Director of your own Ltd company (investing in P2P; what else?) and pay yourself a small but regular annual salary from its profits, sufficient to continue earning State Pension credits without incurring IT or NI (so between £5,824 and £8,060 this year). Application forms are then a doddle (Status = Employed, Job Title = Company Director, etc.), financial institutions continue to accept you as a "normal" person, if one of modest means, and the default answer to the dreary "What do you do for a living?" question from people you've little interest in becomes "I run a boutique finance business, specialising in secured lending and trade finance". That's usually enough to divert the conversation elsewhere... Why go through such a trouble just to "look good" to companies? They're people too. Let's say you're already making twice the average pay in your country. Should they really refuse you? It's all in the attitude. If you go around with the "retired" attitude, it makes worse first impression than it deserves. Cherry on a cake: in English you can't spell "retired" without "tired". "What do you do for a living?" "I buy yachts."
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pom
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Post by pom on Mar 24, 2017 9:03:35 GMT
Life once "Otherwise Employed" (I refuse to call it "Early Retired" until I at least pass 50) is much simpler if you appoint yourself Director of your own Ltd company (investing in P2P; what else?) and pay yourself a small but regular annual salary from its profits, sufficient to continue earning State Pension credits without incurring IT or NI (so between £5,824 and £8,060 this year). Application forms are then a doddle (Status = Employed, Job Title = Company Director, etc.), financial institutions continue to accept you as a "normal" person, if one of modest means, and the default answer to the dreary "What do you do for a living?" question from people you've little interest in becomes "I run a boutique finance business, specialising in secured lending and trade finance". That's usually enough to divert the conversation elsewhere... Why go through such a trouble just to "look good" to companies? They're people too. Let's say you're already making twice the average pay in your country. Should they really refuse you? It's all in the attitude. If you go around with the "retired" attitude, it makes worse first impression than it deserves. Cherry on a cake: in English you can't spell "retired" without "tired". "What do you do for a living?" "I buy yachts." Somehow I rather suspect SteveT 's motivation was more about tax efficiency and that the job title etc was more a beneficial side effect.... the state pension credits alone make it potentially interesting to me given I only have 28yrs towards my state pension so am a few short...but I am also thinking it might be less hassle to just make the voluntary payments.
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SteveT
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Post by SteveT on Mar 24, 2017 9:15:03 GMT
Somehow I rather suspect SteveT 's motivation was more about tax efficiency and that the job title etc was more a beneficial side effect.... the state pension credits alone make it potentially interesting to me given I only have 28yrs towards my state pension so am a few short...but I am also thinking it might be less hassle to just make the voluntary payments. Indeed. I was fortunate already to have a (more or less dormant) Ltd company that I could simply re-purpose for P2P, and also to be married to my Company Sec / book-keeper. The reasons for doing it that way were mainly financial but there are other advantages too
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pom
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Post by pom on Mar 24, 2017 9:28:40 GMT
Somehow I rather suspect SteveT 's motivation was more about tax efficiency and that the job title etc was more a beneficial side effect.... the state pension credits alone make it potentially interesting to me given I only have 28yrs towards my state pension so am a few short...but I am also thinking it might be less hassle to just make the voluntary payments. Indeed. I was fortunate already to have a (more or less dormant) Ltd company that I could simply re-purpose for P2P, and also to be married to my Company Sec / book-keeper. The reasons for doing it that way were mainly financial but there are other advantages too So if you'd had to start from scratch would you have bothered?
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SteveT
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Post by SteveT on Mar 24, 2017 9:40:54 GMT
So if you'd had to start from scratch would you have bothered? Hard to say. I used to do a fair bit of business consultancy work and still use the company to invoice occasional projects, as well as the P2P. If I was having to pay for an external accountant then the financial benefits in isolation might be marginal but, once set up, the company admin is actually pretty straightforward. I'll PM you about another potential opportunity it affords.
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pom
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Post by pom on Mar 24, 2017 9:48:40 GMT
So if you'd had to start from scratch would you have bothered? Hard to say. I used to do a fair bit of business consultancy work and still use the company to invoice occasional projects, as well as the P2P. If I was having to pay for an external accountant then the financial benefits in isolation might be marginal but, once set up, the company admin is actually pretty straightforward. I'll PM you about another potential opportunity it affords. Hmm so my initial knee jerk reaction of "that looks like more hassle than it's worth" when I started looking up what it might entail might not have been far off then!! Specially as if I end up doing any consultancy I doubt it'll be much so self employed will probably be simpler. Well we shall see, plenty of avenues to explore yet before I pull the plug and take the plunge.
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ramblin rose
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“Some people grumble that roses have thorns; I am grateful that thorns have roses.” — Alphonse Karr
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Post by ramblin rose on Apr 15, 2017 12:25:33 GMT
I've been happily non-working for a couple of years now. Not a care in the world until last week. I went to fill in a form for a BA AMEX Card (need to get the 241 voucher to start burning some AVIOS and see the world etc). Applying for credit cards is something I've always done without much thought ..... and then I got to the "income" box. I'm non-working, too young to draw a pension, but have £3m+ spread across pensions and savings and just draw out what I need whenever I need it (in the most tax efficient way). I was so worried about being turned down that I gave up and got really angry with myself, life and the universe. So, can people like me get new credit cards ? Or am I now a bad risk ? I'd like to think the initial application might bounce and then you'd be asked for further proof.....but it worries me too, specially as I'm about to give up on one of my CCs in disgust. And I fear that although in the past you could probably rely on them doing that, technology is probably so good now that they don't "need" to, so if "computer says no" that's it. The other thing I wondered about was possible future mobile phone contracts - heard something on the radio a couple of years or so ago about some super-rich aristo who was refused one. I lost track of this conversation a while back, so sorry for the late interjection at this point. I haven't tried applying for new credit cards or phone contracts since I started living purely off investment income but in situations requiring me to give my income I just give a reasonable estimate of what the annual income is, as has been suggested by someone, and in most life situation it will work. However, I can confirm that you become a total persona non grata in any of the situations that require you to prove your income if you are savvy enough to keep most of it tax-free and therefore not declarable on a tax form. In the enforced house move I had last year it was the source of a deal of the stress I mentioned. No mortgage company will consider your investment income and therefore it's impossible to get a mortgage so if you can't, or don't wish to, put all your cash into a house purchase, you can't make one. (One mortgage broker a year or so ago told me that there's nothing to stop me spending the investments, so none of the mortgagors will accept their income. The fact that a working person can lose their job tomorrow doesn't seem to rank as such a risk. With a charge over a property, I'm quite frankly baffled by it, but it is how it is - and if anyone knows different then I'd like to know about it.) No problem, I'm happy renting and my previous rental agent used a referencing agency that accepted 'inpedendent means' as a source of income. But, it turns out that many of them now use referencing agencies who don't. Despite me having a faultless record as a tenant over now a great many years, with landlords all happy to confirm I have never been so much as day late with rent and always leave a house cleaner than I found it, I was deemed not trustworthy enough as a tenant, not only by the computer but by the nice person pushing it's buttons too and told I would be turned down and there was nothing she could do. To obtain my current tenancy involved me insisting on talking to the director of the company and not letting him put the phone down until I'd effectively worn him down and bludgeoned him about an hour later into accepting that the various statements of income should be accepted as adequate proof. A no-brainer to me, but I've long accepted that being non-standard makes you suspect to standard people. So, these things do require adequate forethought. I had in fact considered getting a flexible mortgage before finishing work for just that reason, but I'd have needed a portable one like I used to have years ago because I knew I was going to have to move to the other end of the country some time shortly afterwards - I found that at the time these no longer existed. Don't know if that's still the case.
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gibmike
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What is a cynic? A man who knows the price of everything and the value of nothing.
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Post by gibmike on Apr 15, 2017 14:43:25 GMT
Not sure if this adds any help but I use my accountant to introduce me to banks, financial services and the like. This way I tend to end up talking to the right people who understand where I am coming from.
I've run companies since I was around 25 (a lot older now!) and this was always an issue until I started going through the accountants I used. Then everything stopped being an issue.
As an aside, I think there is a market for mortgage companies and the like to offer services to early retirees...
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adrianc
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Post by adrianc on Apr 18, 2017 8:57:31 GMT
However, I can confirm that you become a total persona non grata in any of the situations that require you to prove your income if you are savvy enough to keep most of it tax-free and therefore not declarable on a tax form. In the enforced house move I had last year it was the source of a deal of the stress I mentioned. No mortgage company will consider your investment income and therefore it's impossible to get a mortgage so if you can't, or don't wish to, put all your cash into a house purchase, you can't make one. (One mortgage broker a year or so ago told me that there's nothing to stop me spending the investments, so none of the mortgagors will accept their income. The fact that a working person can lose their job tomorrow doesn't seem to rank as such a risk. With a charge over a property, I'm quite frankly baffled by it, but it is how it is - and if anyone knows different then I'd like to know about it.) The problem there is, of course, that "self-certified" mortgages, where the lender simply takes your word for your income, were one of the factors that led to 2008's shenanigans. And, since you don't have any paperwork to prove your income...
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