How to use £160K to support me for the next 30 years?

bristol_pilot

Hemichromis wrote: »

Indeed, Untill very recently putting all your money in our house seemed like a sound investment.

Putting all your money into your own home was never a good strategy for the simple reason that you will always need to live somewhere. Putting money into a second, third or fourth home was an excellent investment until very recently.

Cautious_Investor_3

bristol_pilot wrote: »

Putting all your money into your own home was never a good strategy for the simple reason that you will always need to live somewhere. Putting money into a second, third or fourth home was an excellent investment until very recently.

The counter argument of course is that putting money into your main residence is more tax efficient than buying a series of investment properties (if the properties are sold then CGT may be payable, it isn't on your main residence).

It is possible of course to buy a large main residence and then downsize with the surplus funds invested.

The Cautious Investor

cashbackproblems

As pointed out selling a property and moving abroad wouldnt allow you to live well and isnt the best idea especially as you have no savings and only debt.

If i was in your position and i was CERTAIN that i wanted to do this i would rent out the house and you mentioned youd egt 1500 during holiday season so maybe average it out to 12k per year income, then you could maybe find a part time job in a english friendly country e.g. spain, N America, Canada etc and see how it goes. America it will be impossible to get a visa and things like health care are not readily available so you would have to fly back to the UK for that.

But if your just tired of working in the uk, why not find doing something you enjoy for another 5-10yrs or so then you can properly save up and retire for good.

bristol_pilot

Everyone I know who has moved abroad has said that it only works if you have a steady stream of investment income and/or pension to live off and don't do it if your circumstances are such that you will need to work in the foreign country. As an immigrant you will be the lowest of the low, doing horrible jobs at a very low hourly rate - that's if you can get a job at all.

bristol_pilot

Cautious_Investor wrote: »

It is possible of course to buy a large main residence and then downsize with the surplus funds invested.

This is what many people kid themselves into believing without doing their sums. Often the difference in price between the current house and the minimum property they are prepared to live in simply is not sufficient to generate enough income. Fine if moving from Kensington to Northumberland, but a typical move from a 4-bed to a 2-bed within the same area will not yield enough cash if the retiree has no other source of income. Typical around me, a 4 bed is £500k and a 2-bed is £300k. So £200k to fund 30 years of retirement, I don't think so.

Cautious_Investor_3

bristol_pilot wrote: »

This is what many people kid themselves into believing without doing their sums. Often the difference in price between the current house and the minimum property they are prepared to live in simply is not sufficient to generate enough income. Fine if moving from Kensington to Northumberland, but a typical move from a 4-bed to a 2-bed within the same area will not yield enough cash if the retiree has no other source of income. Typical around me, a 4 bed is £500k and a 2-bed is £300k. So £200k to fund 30 years of retirement, I don't think so.

I would never say that this should be your only source of capital to create an income with. I was simply saying that a main residence is more tax efficient that a buy to let property.

There are as you say significant downsides to this course of action, not least if you rely on your main residence you don't generally have tenents paying rent and therefore the mortgage for you!

hostie

I have met a lot of people on planes that have moved abroad (mainly to Spain) and they always say that you should keep your house at home and rent it out. Those that have sold their houses have bitterly regretted it.

Always_Harassed

bendix wrote: »

Finally a much needed dose of realism.

It seems to me the OP has negative liquid assets - he's in debt, has no savings and no pension and his only asset is a house.

Sorry, mate, but early retirement is not a prospect. You talk about living in a cheap place like India, but you're 57 and - sorry to say this - it doesnt sound as if you're particularly worldly or well-travelled. Living in a third world country - particularly for an old guy - would be a nightmare.

What about your increasing healthcare needs, for example? They don't have the NHS for you over there, you know.

Struggle to see how your "realism" offers any practical help. Believe it or not people still live and breathe at the grand age of 57.

I totally know where he is coming from and might have this sort of existence forced on me soon through redundancy. Thinking about buying a house on the outskirts with a big garden and a working chimney so that can reduce heating and food bills. Planning to sell some stuff on ebay and might go to college to retrain for something that can be self employed so that can have some money but not the 9 to 5.

Loughton_Monkey

bristol_pilot wrote: »

This is what many people kid themselves into believing without doing their sums. Often the difference in price between the current house and the minimum property they are prepared to live in simply is not sufficient to generate enough income. Fine if moving from Kensington to Northumberland, but a typical move from a 4-bed to a 2-bed within the same area will not yield enough cash if the retiree has no other source of income. Typical around me, a 4 bed is £500k and a 2-bed is £300k. So £200k to fund 30 years of retirement, I don't think so.

Some truth in what you say. But I think you are talking at cross purposes with Cautious Investor. He seems to be advocating deliberately buying big on (tax efficient) thereby giving 'room' to downsize. You seem to be describing a situation where someone has few savings and then comes up with the idea of living off downsizing.

I did exactly this, but not necessarily with downsizing being my 'pension scheme'. It was more a case of believing in investing in my main residence simply as a matter of good investment practice. I live in a house, now, that is perfect for Central Line (to get into the City) and for being in the catchment area for good schools (we have no children! It absolutely amazes me the prices parents will pay, these days, simply to qualify for the right school!).

Those two facts alone represent, probably, 30% of the value, but now retired, neither is any 'value' to me. So I can downsize in 5 or 10 years time and release 40%/50% with either (a) roughly same general area and very slightly smaller house, or (b) cheaper general area and exactly same size of house.

LittleVermin

Ally1205 wrote: »

Thanks for the suggestion. You've got a very good point there. Actually the house is located in a beautiful spot with a sea view in Dorset, so I could get about £1500 a month rent for it during the holiday season. I think I may have to do that, as I'm currently £7,000 in debt and struggling to meet the monthly payments, as I'm on a low income. Just one summer of letting could go a long way to paying off that debt, if I manage it successfully. (House needs licking into shape a bit first.) I donl't mind living in my camper van throughout the summer; in fact, I'd enjoy that.

A

Could I suggest a simple website, some nice pics of the area - and a few of the house and view, a bit of spiel about the nearest villages/pubs/beaches, etc - and put this up asap and see whether you get any interest. You can always tweak the website after it's been found by the search engines - and do the 'licking into shape' by next summer (adding extra pics too!).

Friends here in Cornwall did exactly this some years ago - he worked under contract abroad in mining and come the recession mines closed, and contracts dried up .. but still a mortgage to pay. They were stunned at what people would pay to rent the 'lived-in' house (while they lived in a big shed/office down the garden - and could still enjoy the sea views, the surf, and friends, and use the NHS, etc). Not all holiday lets are the chocolate box ones in the brochures! Some are so pristine and pretty visitors would not be able to relax in case they brought sand into the house or spilt a coffee - some holiday!

Good luck!