Early-retirement wannabe

kidmugsy

Why not use your new wealth to let you find and take up a job you do enjoy? It might do far more for your health and happiness than having an unloved job and the hassle of three BTLs.

andrewm1981

Kidmugsy,

The job is ok, long hours, and I used to live it, and I hope to again. I don't want to squander the money and be working till I'm 70. Rather grind it out till I'm 50 and relax (as relaxed as I can be with 3 buy-to -lets anyway!)

gallygirl

Well as someone planning to live on btl income I'm not going to disagree with your plans. You may get advised to have interest only mortgages but I've always gone for repayment as we haven't needed the rental income day to day.

Make sure you make it clear that you want all overpayments to be used to reduce the term rather than the monthly payment - that way you will maximise your tax relief each year.

Sounds like sad circumstances behind it, but am sure they would be pleased you're using it in such a constructive way.

kidmugsy

andrewm1981 wrote: »

Rather grind it out till I'm 50

Being rich and unhappy wouldn't be my choice but it's your shout.

Buying four properties, one owner-occupied and three BTL, is the opposite of diversification. Is it wise?

Moby

Marine_life wrote: »

Well... there's a coincidence. Was sitting here thinking that I have not updated my status on here and then the thread pops up all of its own accord.

A couple of things have happened over the last fews months.

First of all on the positive side I have now passed my earliest possible 'quit-my-job' date (which was 1 April) the importance being that now with my contract on six months notice from the end of the quarter, I can't actually miss accruing my full pension entitlement. Over the next six months I need to make sure that the entitlement is what I think it is so that I don't make a huge mistake! Basically its a difference betwween a pension of EUR 25k per annum and EUR 45 k per annum (at age 62), so pretty important.

So potentially I could be on for a retirement of end of October which would give me only 192 days to go. Amazing how time flies when you're having fun! However, whilst that's a possibility i suspect that I will hang around until June 2015 or possibly a little longer - that depends on a number of work related things.

Finances seem to be coming together and our whole plan is built on having around EUR 1 million in cash and savings in order to keep us for the years between retiring and when our pensions kick in. We are on target for that figure.

However, personally things are an absolute mess!

We had planned to move back to the UK and went a long way down the road of purchasing a UK property but then got cold feet and pulled out. Why? Well....to be honest, the reason we want to come back to the uk is a. The children are there and b. If we do want to do some casual work, it will be much easier if we are in the UK. But everytime I really think about going back to the UK I get a sick feeling in my stomach. Mrs Marine_life really does not want to go back so we found ourselves in limbo again.

I feel we are still looking for an adventure and will be giving it some serious thought over the next few months. Watch this space.

Also some serious family news. My mother-in-law has been told she has lung cancer and after some soul searching she decided not to have treatment. So its now a question of time and how long she has. That means our lives will be on hold until then.

It brings it home to me that finances are only one part of the retirement equation.

Your post made me think of this Woody Allen line:
“If you want to make God laugh, tell him about your plans.”

Some of us have worked out our retirement plans to the last detail and can produce excel sheets showing all sorts of variables. It can be fun to do this but often life intervenes.

andrewm1981

Gallygirl, I'm definitely wanting repayment. The idea is not to speculate for capital growth but simply to own it by the time I'm 50, so logic sends me towards repayment. Financially I'm fine now, I want to money in 15 years time! Great point about the term though, I'll remember that!!

Kidmusby, good point about diversification. I guess that all I'm betting on is that over 50 years, rental prices won't crash. It's a gamble, but one that should be ok. I'll have £80k in cash isas/accounts, £20k in shares growing at 7k/ year, and £18k/year going not a pension scheme so my eggs aren't entirely in one basket though.

ognum

andrewm1981 wrote: »

Gallygirl, I'm definitely wanting repayment. The idea is not to speculate for capital growth but simply to own it by the time I'm 50, so logic sends me towards repayment. Financially I'm fine now, I want to money in 15 years time! Great point about the term though, I'll remember that!!

Kidmusby, good point about diversification. I guess that all I'm betting on is that over 50 years, rental prices won't crash. It's a gamble, but one that should be ok. I'll have £80k in cash isas/accounts, £20k in shares growing at 7k/ year, and £18k/year going not a pension scheme so my eggs aren't entirely in one basket though.

You will of course be paying 40% tax you rental profit while working, will you be marrying your girlfriend, what kind of income does she have, does she pay 40% tax!

andrewm1981

Hi, yup well aware of the rental income tax, probably going to do £12k into pension AVCs a year to stop the taxman getting his paws on as much as possible.

Yup, plan to marry gf in a year or 2, she's earning £25k /year but may well drop that down if kids arrive afew years after that

Farmer-Giles

An interesting flurry of recent posts.
I had intended retiring at 50 (reasonably common practice with my employers DB FS scheme until Gordon Brown took it to 55 - and possibly moving further from grasp in future years).
A few yeas ago I found out I had Crohns Disease, and although manageable at the time, I got rid of all debt and had a re-think on a few lifestyle expenses (mortgage paid off, no loans or credit card balance), as it might eventually impact on my normal work.

Just as well, as a couple of complications mean I now can't pass an industry specific medical for my normal work and have used up my sick leave allowance whilst the possibility of partial incapacity pension from my employers scheme, versus 'reasonable alternative' employment / relocation is discussed (based on recent medical reports to Occ Health and 29 years service).
As this process isn't exactly rushed, I'm (carefully) drawing on savings whilst on zero pay, considering ESA to cover National Insurance and £71 a week and the hassle of potential ATOS assessments and capital in excess of the threshold. It's an interesting wait...

There is a theory that certain professions add weighting to car insurance, but I don't know for sure.
For people who have retired but work part time, I would make sure your car policy specifically covers you for "journeys back and to your place of work" and if you carry anything or anyone as part of that work, then make sure the business use is included...

Daniel54

andrewm1981 wrote: »

. I'll have £80k in cash isas/accounts, £20k in shares growing at 7k/ year, and £18k/year going not a pension scheme so my eggs aren't entirely in one basket though.

Compared with your planned £820k exposure to property these are prettty small numbers,particularly as your plan involves an eye watering £530k of debt.

If I were you I would want to be less leveraged overall, especially regarding the mortgage on your home.

Marriage and children alter perspectives and priorities ( and your bank balance).I would be really cautious about locking so much capital away in BTLs.

Don't forget CGT by the way.