1 Million & Interest

Lopo

Agree with the poor return on just banking it situation:

Not the ideal thing to do obviously by far, however....how does the following sound as a slight improvement over just banking it...

Private Banking Savings accounts be better suited if you were not looking to just stick it in serious real proper investments...

Basically, hopping across to Jersey or some other tax haven once a month to cash withdraw the (tax free) interest made in the previous month and stuff it in your wallet and then return !

Once a month - pop out to the bank via an airport ! 12 times a year....its feasable if you dont care about the routine day trip and also you get tax free shopping trips thrown in to boot!

Domestic flights are pretty cheap these days especially if planned well in advance....

I could be wrong about the overall tax implications and the risk of getting searched at the airport - but its a possible idea perhaps?

Lopo

chris73

So - £2.5k ... might be livable ...

what do you mean "might" many of us do, every month!

LMAO - as a single person working 39 hours per week for £11k a year, I wouldn't mind being a penny behind that figure whilst living a life of leisure!

Mortgage_&_debt_free

dunstonh wrote:

What a waste.



He risks inflation and capital erosion when purchases are made which in turn will reduce the income further. He is also lining the Treasury's pockets.

Whilst he is happy now, that income is going to gradually decrease in real terms.

Yes, but as I say he was happy beforehand. He has no dependants, he still lives at home and while I wouldn't swop my life with anyone's I admire him for it genuinely not changing him.

I agree with you he could get so much more but he really doesn't care & it doesn't really matter as when his relatives who won the money pass on he gets 50% of that as well!

dunstonh

Yes, but as I say he was happy beforehand. He has no dependants, he still lives at home and while I wouldn't swop my life with anyone's I admire him for it genuinely not changing him.

Its one thing to admire it not changing him. Its another to become wasteful.

I agree with you he could get so much more but he really doesn't care & it doesn't really matter as when his relatives who won the money pass on he gets 50% of that as well!

50% of his relatives money after Gordon Brown has taken 40%.

Scully's_Girl

I thought these articles would be fun (albeit slightly off topic)
Theyre articles about people who have won, & then subsequently lost their winnings, usually through squandering them. They are mainly US Lottery based, but the lesson is the same: Enjoy!
http://www.bankrate.com/brm/news/advice/20041108a1.asp

http://www.foxnews.com/story/0,2933,107753,00.html
http://www.thesmokinggun.com/archive/elecialotto1.html

http://donsurber.blogspot.com/2005/10/lottery-loser.html

One particularly good quote:
Going broke is a common malady, particularly with the smaller winners. Say you've won $1 million. What you've really won is a promise to be paid $50,000 a year. People win and they think they're millionaires. They go out and buy houses and cars and before they know it, they're in way over their heads," he says.
That applies to Sterling as well

MPH80

chris73 wrote:

what do you mean "might" many of us do, every month!

LMAO - as a single person working 39 hours per week for £11k a year, I wouldn't mind being a penny behind that figure whilst living a life of leisure!

Sorry Chris - I too earn less than this amount.

My point I was trying (and apparently failing) to convey, was that if someone is a cash millionaire - then they may expect to live a much better lifestyle than they actually good on the income they have from the interest.

Scully's_Girl wrote:

One particularly good quote:
Going broke is a common malady, particularly with the smaller winners. Say you've won $1 million. What you've really won is a promise to be paid $50,000 a year. People win and they think they're millionaires. They go out and buy houses and cars and before they know it, they're in way over their heads," he says.

The difference here is the way the US lotteries work. Ours pays out one lump sum - theirs offers x thousand each year for life. But yes - going broke is one of the major problems because people automatically live above their means or don't think further than the next 2 years.

M.

Gorgeous_George

You'd still be eligible for the 10% and 20% tax bands so the 40% would only be paid on part of the monthly income. Also, some money could be put into tax-free savings within the UK though this is limited. In the end you have to pay some tax (if you want to be legal) but why shouldn't you?

I'd certainly play with £1M much more than simply sticking it in the bank but annuities? Who gets the capital when you peg it with them? Might as well let the relatives have it.

If I wanted advice, I'd find a friend who wasn't an IFA.



GG

Chrismaths

Gorgeous_George wrote:

If I wanted advice, I'd find a friend who wasn't an IFA.

Ho Ho. Get him to defend you in court if you're ever in the dock, and to prescribe you medicine when you are ill. Thanks Gorgeous, I needed a laugh.:T

grumbler

Gorgeous_George wrote:

I'd certainly play with £1M much more than simply sticking it in the bank but annuities? Who gets the capital when you peg it with them? Might as well let the relatives have it.

With annuity it is supposed that during the period of time that you are likely to live all the capital is repaid to you along with the interest. As a result payments are higher than pure interest.

Scully's_Girl

MPH80 wrote:

The difference here is the way the US lotteries work. Ours pays out one lump sum - theirs offers x thousand each year for life. But yes - going broke is one of the major problems because people automatically live above their means or don't think further than the next 2 years.

M.

True, but the principle is the same. If someone got £1M, & put it in a bank at 5% interest, as per his original query, they'd still get £50,000 a year, thats all I meant. Being a millionaire ain't what it used to be.