Living off my savings and sharedealing

Lokolo

bobbyj wrote: »

what a pathetic comment, what's wrong with sticking 30k in prem bonds? A crap investment i'd agree but always the chance of a big win and I don't miss 30k. Jeeez. Oh and another pleb who has failed to read the thread, where have i mentioned 500k solely in shares?????? Don't reply if you want to try and play the smart !!!!.

Can I have it then please?

And I think what the poster meant was that it doesn't usually make financial sense to put money in PBs until you have exhausted every other possibility. It usually only ends up being worthwhile if you are a higher rate taxpayer. The average return on PBs is 1.8%.

sabretoothtigger

Yes best for higher rates

dividend income count towards your income for income tax purposes

The tax is already paid unless you are one of the afore mentioned

bobbyj_2

I like the fact that i have a very slight chance of a decent win hence 30k of prem bonds. I wouldn't have them if i needed the 30k.

rdtrdt

Your situation is not dissimilar to my own:-

- mortgage-free house ~250k
- cash & shares 500k+
- 6-figure self-select ISA built up over the past 9 years, with an internal rate of return ~ 30% p.a. (though the performance is front-loaded to some extent)
- not worked conventionally for 8+ years, hence unemployable by anyone else.
- always one eye out for business opportunities

Interestingly, I really don't feel very well off at all. I wouldn't underestimate how much a constant income stream contributes towards a feeling of security - assets alone really don't cut the mustard. So I understand why you're looking for income generating investments. for psychological reasons if nothing else.

The obvious problem with investment-based income sources is the risk to capital. I've managed the returns I have by avoiding taking big hits, while still catching a decent amount of the various up-trends over the past decade. If I'd been invested in various "safe" looking income funds during this period, my returns would have been slashed.

So, it's a dilemma I've not yet resolved, and I'm interested to see how your thinking evolves!

Lokolo

rdtrdt wrote: »

Your situation is not dissimilar to my own:-

- mortgage-free house ~250k
- cash & shares 500k+
- 6-figure self-select ISA built up over the past 9 years, with an internal rate of return ~ 30% p.a. (though the performance is front-loaded to some extent)
- not worked conventionally for 8+ years, hence unemployable by anyone else.
- always one eye out for business opportunities

Interestingly, I really don't feel very well off at all. I wouldn't underestimate how much a constant income stream contributes towards a feeling of security - assets alone really don't cut the mustard. So I understand why you're looking for income generating investments. for psychological reasons if nothing else.

The obvious problem with investment-based income sources is the risk to capital. I've managed the returns I have by avoiding taking big hits, while still catching a decent amount of the various up-trends over the past decade. If I'd been invested in various "safe" looking income funds during this period, my returns would have been slashed.

So, it's a dilemma I've not yet resolved, and I'm interested to see how your thinking evolves!

Then give it to me, I'll happily feel well off for you if you give me some of it!

bobbyj_2

great post, will reply in depth and maybe via pm when more time, thanks.

Primrose

Only one question to ask - if you're living off your savings and investments, you're obviously not contributing to any kind of state pension through National Insurance contributions. If you do no further work until state retirement age, what will you live on in old age if there's another or several more stock market collapses? And what happens if you're sick. Are you still covered by the NHS if you're no longer contribution via NI contributions?
How much inflation over the next 40 years are you building into your calculations? What seems like a reasonable income now may, in fact, be pretty meagre by the time you get to retire.

rdtrdt

Pay voluntary class 3 NI contributions (£626 p.a.) for sufficient years to ensure that these, plus your previous years in employment, provide the 30 qualifying years required for a full basic state pension. (no help for state second pension though). No issues re NHS.

Inflation is the killer. And index-linked income (e.g. a job in a field least vulnerable to globalisation-induced wage deflation) probably the best answer!

BeardedMan

I am currently heavily invested in defensive stocks as I also believe the markets will be very volatile this year with cyclical stocks taking the worst of any downturn. My portfolio also has a a couple of speculative gold and oil punts as well for capital growth.

My research mainly focuses around a weekly magazine that I subscribe to and bulliton boards but I am keen to investigate further and more enhanced tools. So I was wondering what investment strategy and tools you use ?

BTW do you have any dependants. Just asking because the level of regular income you need will depend on how many mouths you have to feed. £500k is a sizable pot, but I personally would be a tad uncomfortable relying soley on investments for income.

G_M

I've recently been made redundant and so I'm now living off savings and investments and share dealing. Given I have no income from work I take it I can earn in interest around £6000 before I pay any tax on savings?

I assume ......(deleted)....tax year! Deleted because:

people won’t be as helpful if they think you’re blowing them tosh.

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