Early-retirement wannabe

mark55man

somethingcorporate wrote: »

:rotfl:that's really catchy, have you considered a change of career?

Often, but it never happened, and for now that's fine :beer:

hugheskevi

- DB Benefit (using x20 last estimate) = 50% of assets

Using x20 would be consistent with you being in your 50s or 60s, yet from some of your other posts and signature I got the impression you were younger than that?

racing_blue

mark88man wrote: »

FYI my ratios by total assets
- Emergency Fund = 1%
- Short term savings = 1%
- House (net value - mortgage) = 30%
- DC Pension = 18% (Mainly equities)
- DB Benefit (using x20 last estimate) = 50% of assets

Mark I think in very similar terms to you. Except:

assets:
1. property, gross value
2. equities including DC pensions
3. fixed income including DB pensions 3b) index linked
4. cash

liabilites = mortgages +tax owed + anything else
net assets = assets - liabilities
gearing = liabilities / net assets

I am finding this way of thinking gives clarity as I make choices. Eg whether to use income to balance asset mix vs repay debt

It also makes me realise I COULD retire now aged 40 if I wanted. The trade off would be living in a (different) very small house, with smaller investments, a small income and very little cash! But it would work based on redistribution of assets and a rather spartan lifestyle.

I'm not ready to retire by the way, but the greying boy scout in me says "be prepared"

mark55man

hugheskevi wrote: »

Using x20 would be consistent with you being in your 50s or 60s, yet from some of your other posts and signature I got the impression you were younger than that?

early 50s


My lack of ISAs come from youthful foolishness, a spendthrift nature (now under control), 4 kids (not under control!), and not selling out of the tech boom at the right time

kidmugsy

mark88man wrote: »

Really I meant put aside cash for emergencies ... + anything you know you need to by short term - eg car.


The rest put into your investment portfolio, which will have its blend of assets including cash as part of a considered portfolio. ... I regard my DB as my safe assets.

I see: pretty persuasive. A blog commenter I read recently persuaded me that a reasonable way to look at property is that you shouldn't realistically look at all the value of your house as a financial asset, but you could take that view of the excess you own. In our case, we could say that we have one room that we rarely use, and a garden that's bigger than the minimum we'd accept, and these two things constitute our Property Portfolio. It may be reasonable but I doubt whether it's practical because it depends on the assumption that it would be cheap and easy to "downsize" and realise the value of that room and garden space, as if the rest of the house and its location could be easily replaced one-for-one. It may make sense, though, for people who are determined to move to somewhere cheaper, in a different location, when they retire. They'd better remember to subtract all the costs of the move, though.

gallygirl

The other view on property is that, unless you're earning money from it, it's all a liability not an asset. The bigger the property, the bigger the liability as more to maintain, more equipment needed (ride on lawn mower anyone :cool:), higher running costs etc. Plus all the emotional spends that go with it - 'I live in x street, better fit in/impress the neighbours with a nice car/new summer house etc'.

Technically correct, unless the growth in value exceeds the running costs, but we all need to live somewhere. However, it's worth bearing in mind next time someone you know is boasting about their valuable asset and you suspect they're crippled with mortgage debt.

It also makes me realise I COULD retire now aged 40 if I wanted. The trade off would be living in a (different) very small house, with smaller investments, a small income and very little cash! But it would work based on redistribution of assets and a rather spartan lifestyle.

racing blue - what a great position to be in :T. What will you do when you reach a trade off you'd be comfortable with?

goRt

KrytenIceCubeHead wrote: »

Taking on board advice here, I've opened a stocks & shares ISA and put the remainder of my 2013/14 ISA allowance into it, the rest being already in a cash ISA. I'm going to close another account that holds a matured cash ISA (which has been tootling along at 1.8% PA...) and put that towards the 2014/15 allowance. Glad I enquired here when I did, just in time to not lose this years ISA allowance completely. Guess I'll be staring at e-tickertape a lot more now. Thanks again for the helpful advice.

WRONG, STOP, don't do that you can transfer the old ISA into the new one and still have your full allowance for the next tax year!

KrytenIceCubeHead

Sorry I should have mentioned, the matured ISA was the first one I took out, a 3 year deal. The next year I took out a new cash ISA (not realising you could roll them together), which became the one new annual contributions went into. So the first cash ISA is a 'stand alone' one.

racing_blue

gallygirl wrote: »

racing blue - what a great position to be in. What will you do when you reach a trade off you'd be comfortable with?

Don't get me wrong. Currently, the trade off would be too extreme. Think no car, small flat, rarely leaving our community, few gizmos or non-necessities, ultra-low consumption. My partner and I wouldn't mind a lifestyle like that, but would not necessarily wish to impose it on the kids.

I don't see a trade off as such though, more a win-win. I mostly like the pulse of the working week, it fits well into our family life at present. But I like the feeling that if our patterns of consumption are lean enough, work becomes an active choice rather than an obligation

Prudent

racing_blue wrote: »

Don't get me wrong. Currently, the trade off would be too extreme. Think no car, small flat, rarely leaving our community, few gizmos or non-necessities, ultra-low consumption. My partner and I wouldn't mind a lifestyle like that, but would not necessarily wish to impose it on the kids.

I don't see a trade off as such though, more a win-win. I mostly like the pulse of the working week, it fits well into our family life at present. But I like the feeling that if our patterns of consumption are lean enough, work becomes an active choice rather than an obligation

Thank you for this, it is interesting to find out what other people consider a worthwhile trade off. I am new to this thread, but have been giving this point much thought recently.