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  • FIRST POST
    • Denzel09uk
    • By Denzel09uk 11th Jul 17, 1:10 PM
    • 160Posts
    • 193Thanks
    Denzel09uk
    10 Year Retirement Plan - Mortgage Free too
    • #1
    • 11th Jul 17, 1:10 PM
    10 Year Retirement Plan - Mortgage Free too 11th Jul 17 at 1:10 PM
    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
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
Page 1
    • Kittenkirst
    • By Kittenkirst 11th Jul 17, 8:19 PM
    • 1,523 Posts
    • 7,738 Thanks
    Kittenkirst
    • #2
    • 11th Jul 17, 8:19 PM
    • #2
    • 11th Jul 17, 8:19 PM
    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
    Emergency savings- £3750.96 /£6000
    Mortgage Oct '16- £170.995 LTV- 90% end date Nov 2041
    2016 OPs £255.50/£150
    2017 MFW #20 - OP £1743.34/ £2150. 81%
    Jan- £68.21, Feb- £306.67, March- £272.01 April-£324.05 May £120.33 June £279.15 July: £172.36 Aug: £203.24
    • Denzel09uk
    • By Denzel09uk 13th Jul 17, 12:44 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk
    • #3
    • 13th Jul 17, 12:44 PM
    • #3
    • 13th Jul 17, 12:44 PM
    Hi KittenKirst

    Nice to meet you virtually.

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

    Regards

    Denz
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
    • Denzel09uk
    • By Denzel09uk 1st Aug 17, 12:16 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk
    • #4
    • 1st Aug 17, 12:16 PM
    1st Monthly UPDATE!!!!
    • #4
    • 1st Aug 17, 12:16 PM
    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
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
    • zzzt
    • By zzzt 1st Aug 17, 2:55 PM
    • 187 Posts
    • 192 Thanks
    zzzt
    • #5
    • 1st Aug 17, 2:55 PM
    • #5
    • 1st Aug 17, 2:55 PM
    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
    • By Denzel09uk 2nd Aug 17, 12:31 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk
    • #6
    • 2nd Aug 17, 12:31 PM
    • #6
    • 2nd Aug 17, 12:31 PM
    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
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
    • getmore4less
    • By getmore4less 2nd Aug 17, 3:44 PM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    • #7
    • 2nd Aug 17, 3:44 PM
    • #7
    • 2nd Aug 17, 3:44 PM
    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.
    Last edited by getmore4less; 03-08-2017 at 4:45 AM.
    • getmore4less
    • By getmore4less 2nd Aug 17, 7:05 PM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    • #8
    • 2nd Aug 17, 7:05 PM
    • #8
    • 2nd Aug 17, 7:05 PM
    a good rough guide for a 20 y plan.

    spend 1/3, save 1/3, buy a house with 1/3.
    • getmore4less
    • By getmore4less 3rd Aug 17, 4:57 AM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    • #9
    • 3rd Aug 17, 4:57 AM
    • #9
    • 3rd Aug 17, 4:57 AM
    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
    • By getmore4less 3rd Aug 17, 6:07 AM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    £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
    • By Denzel09uk 4th Aug 17, 1:54 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk
    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.
    Originally posted by getmore4less
    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.
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
    • Denzel09uk
    • By Denzel09uk 4th Aug 17, 2:01 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk

    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.
    Originally posted by getmore4less
    I have 4 separate mortgages all with varying rates, I currently pay £957 a month repayment covering all 4, ranging from 0.94% on my biggest to 1.96% on the smallest.

    Im alternating the investments with Mortgage overpayments of £400pm with a lump sum from my bonus at the end of September, unclear what that is yet. Plus i have a side bookkeeping business that is generating an income, but no where near for me to quit work

    Thanks for your help with the numbers though.

    Regards

    Denz
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
    • getmore4less
    • By getmore4less 4th Aug 17, 2:23 PM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    What's the total free cash flow going into debt reduction and savings?

    I think you need a target of £2.5k-£3kpm to meet the 10y goal debt free and investment income in the £900pm range.
    • getmore4less
    • By getmore4less 4th Aug 17, 2:34 PM
    • 29,490 Posts
    • 17,627 Thanks
    getmore4less
    Passive income needed after Mortgage is cleared £1400
    This covers monthly DD payments like Council Tax / Utilities etc
    ........
    After the mortgage is cleared ill need about £900 a month to live the current lifestyle which includes bills.

    how have you gone from £1,400pm to 900 pm in 3 weeks?
    • Denzel09uk
    • By Denzel09uk 18th Aug 17, 1:34 PM
    • 160 Posts
    • 193 Thanks
    Denzel09uk
    how have you gone from £1,400pm to 900 pm in 3 weeks?
    Originally posted by getmore4less
    Apologies, the 900pcm doesnt includes current levels of savings/Free Cash flow I am putting away.
    Investments - £1,290.62 (Shares on a DRIP Strategy)
    Mortgage Balance - £189,662.09
    Credit Card Debt - CLEARED

    LOAN - CLEARED
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