10 Year Retirement Plan - Mortgage Free too

Denzel09uk · 11 July 2017 at 1:10PM

So, Hi. Let me introduce myself.
My name is Daniel, or people like to call me Denz.
Ive been toying with the idea to start my retirement journey.
So now i`ve started it and wanted to share this journey with you and hopefully give you the inspiration to join me.
I will be sharing my ideas, thoughts and what im doing to create a passive income.
Passive income is where you earn money by doing nothing or very little for you to get paid.
Updates will happen on Monday afternoons with my experiences, plans and thoughts.

First things first
Find out my financial position,
Do I have Debt (Unsecured or Secured)
How much free cash flow do I have?
How much monthly passive income do i need to generate in order to live the current lifestyle?
How much is need to clear the mortgage and be mortgage free?
These are the questions that I have asked myself,
So here goes!
Current Mortgage Balance (Secured)- £189,606.98
Loans/Credit Cards (Unsecured Debt) = £0
Overdraft (Unsecured Debt) = £768.28
Total Debt = £190,375.26

Passive income needed after Mortgage is cleared £1400
This covers monthly DD payments like Council Tax / Utilities etc
Free Cash flow as it stands now is £700

I do have a flat that is generating around £400 a month after fees on rental income. Plus we are able to put aside £300 a month.

Current Investments - To provide Dividends for Future, I will be adding to this every other month and paying off my mortgage every alternative month. Increase my investments and decreasing my mortgages

ITV - 42 Shares @ 176.40 (p) = 74.21
United Utilites - 24 Shares @ 902p = 216.48
Vodafone - 42 Shares @ 222p = 93.24
SF adventurous Fund (Acc) = £750.96
Total Investments = £1,134.89

I have a great spreadsheet that projects my 12 months spend and income.

I have a facebook page too if anybody wants to follow that, just search "My 10 Year Retirement Journey"

This is all still very much a steep learning curve but I've been in the finance industry for 17 years.

All advice will be greatly appreciated.

Denz

Kittenkirst · 11 July 2017 at 8:19PM

Hi Denz, welcome to the boards!

Without being too cheeky can I ask your age (approx)? Helps with knowing if your retirement plans are early retirement or standar retirement

Denzel09uk · 13 July 2017 at 12:44PM

Hi KittenKirst

Nice to meet you virtually.

Im currently 35, I dont have any children which definitely helps.

Regards

Denz

Denzel09uk · 1 August 2017 at 12:16PM

Mortgage is down to £188,858.70 after making our monthly payment and also an overpayment of £250

Overdraft has been cleared (For now)

Investments are up as i added to the ITV shares i bought.

ITV - 139 @ 172.10 = £239.22
United Utilities - 24 @ 895 = £214.80
Vodafone - 42 @ 222.30 = £93.37
Adventurous Fund - 430.7461 @ 174.27 = 750.66
Total Investments = £1,298.05

ITV should be paying a dividend soon as they announced.

Just had my car insurance renewal through and breakdown cover through.

Ive also checked my company pension and i could potentially release £70,400 as a one off and receive £828 per month,

Lets get this mortgage cleared by the time im 45

Any questions please let me know.

I do have a facebook page set up with updates too, please search "My 10 year retirement plan" and hit that like button.

Denz

zzzt · 1 August 2017 at 2:55PM

Do you really think you can pay off £189k and have a retirement fund for the rest of your life by saving £700 per month for 10 years and having £1000 of investments?

I don't understand how that works. Are you already sitting on a substantial amount of net worth?

Denzel09uk · 2 August 2017 at 12:31PM

It will be a mixture of investments / overpaying the mortgage.

clearing down each of these mortgages will allow more funds available to over pay / invest

I have a flat in Nottingham which is mortgage free so income from this will.

Its definitely a tough task but patience and discipline.

All of my investments are on a DRIP so the dividend is re-invested back into the shares i receive the dividend on

getmore4less · 2 August 2017 at 3:44PM

As a very rough guide you need a pot 20x-25x the income you want(4%-5%) yield after inflation.

£1400pm needs a pot of around £340k-£420k

on a 4% yield over 10y that's a savings rate of £2500pm

to clear a £190k mortgage @ 3% is £1800pm.

is 10y a viable plan?

edit .

missed there is a flat so your investments are already started.
also your pension pot must be fairly substantial but that won't be accessible in 10y so that tops up later the initial pot can have drawdown.

getmore4less · 2 August 2017 at 7:05PM

a good rough guide for a 20 y plan.

spend 1/3, save 1/3, buy a house with 1/3.

getmore4less · 3 August 2017 at 4:57AM

Time to update the BTL thread

http://forums.moneysavingexpert.com/showthread.php?t=5128706&page=2

2 years should have a good handle on gross and net yields on that one by now.

getmore4less · 3 August 2017 at 6:07AM

£189,606.98 mortgage is down to £188,858.70 after making our monthly payment and also an overpayment of £250

lets go with £189,600->£188,850 £750 reduction, normal payment £500 reduction.

if we set a highish rate 3% that's normal payment of around £974.
(1.5% it would be £737)

lets round that up to £1k and add £250pm

In 10 years you still owe £81k

Starting now you need a minimum of £1,600pm on the mortgage before interest even on a decent rate like 1.5% you need £1,700

if you pay around £1,250 for a year that £1,700 goes up to £1,760 for the next 9 years.

if you are on a lower rate say 1.5% and normal payment is lower with overpayment total £1k in 10y you still owe £90k and paying 1k for a year the 9y payment is now £1,785.

Denzel09uk · 4 August 2017 at 1:54PM

getmore4less wrote: »

missed there is a flat so your investments are already started.
also your pension pot must be fairly substantial but that won't be accessible in 10y so that tops up later the initial pot can have drawdown.

Yes generating around £400 a month at the moment, Pension pot at present is about £65k

After the mortgage is cleared ill need about £900 a month to live the current lifestyle which includes bills.

10 Year Retirement Plan - Mortgage Free too

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free