Millionaire Challenge

lessonlearned

Good afternoon fellow millionaires to be. Hope you are all enjoying the fine weather this sunny bank holiday weekend.

Well now what a month I have had.

I have sold my house to FTB so hopefully a nice easy sale and I have found my dream house. Put an offer in on Wednesday which was accepted so keeping my fingers crossed it all goes smoothly.

I could buy it outright but have decided to take out a small mortgage in order to preserve some of my capital, to invest. Not sure whether or not to use some of the capital to fund a BTL. I don't need to make a decision just yet.

My stocks and shares ISA has now fully recovered from the market blip earlier this year and is now making good progress. Phew that's a relief. :rotfl:

Obviously for the next few weeks it's all going to be spend, spend, spend. I now need to sit down and work out all the buying and selling costs involved, I'll get to that later today.

Once I have moved I will also need to rejig all the bank accounts and shop around for good deals on the various utility bills, mobile and broadband.

Hopefully the house won't need shedloads of money spending on it. It's hard to tell of course - it could end up being a money pit.:rotfl: but it looks in reasonable nick. The boiler is just a year old and the present owner has spent a lot of money on fencing, hard landscaping so hopefully I'm not going to have too big a renovation job on my hands.

I really couldn't face living on building site again so I am glad that this one, although a bit shabby and in need of some TLC, is definitely liveable. I can get the work done at a fairly leisurely pace and not spend extra money trying to meet deadlines.

Then once I'm in and reasonably settled it will be time to start making money again.....:rotfl:

lessonlearned

alancsimmons wrote: »

Sounds Interesting, I always wish to be millionaires , but it takes time and ;lots of hard work

Yeah........But it's fun trying.

humptydumptybits

Had to post because I feel like a millionaire! Got my letter today about my state pension, it is due to start in July and will be £680 a month. I retired a few years ago, I've been my husband's carer for nearly 30 years as well as bringing up four children and being the bread winner so needed to stop. I do a small job one morning a week and have a little internet business that brings me in about £150 to £200 a month, I've also got a couple of BTL properties and one still has a mortgage so I have been throwing every spare penny at that. One of the houses has been empty for a few months, a long term tenant moved out, he was there for 7 years and the house was looking tired and it only had storage radiators so I've had gas central heating put in, new carpets and I've decorated from top to bottom. It is looking lovely and I've spent alot of time working on the garden this week and today gave the keys to the agent so hopefully my spending is done and soon I will have the income again.


Maybe I will be a millionaire one day.

Broken_Biscuits

Been looking at remortgage rates. I bought my first home 4.5 years ago. It!!!8217;s 5 year fix runs out January 2019. I took out a 25 year mortgage at 3.59%. Now because of increase of value I can unlock the best rates as I own 40%+ of my home. 1.7% available tops.

Basically I can remortgage at a 30 year mortgage 2 year fix (feels like the term isn!!!8217;t important because I will just remortgage anyway) and end up paying less than I do now a month (because of the increased term and lower rate) and pull out up to £45k too.

Lower monthly payments and £45k seems like a win win. Especially since I can put a lot in guaranteed returns above 1.7%.

Am I being foolish to think this way? Surely if I!!!8217;m confident I can get 1.8% returns or higher it!!!8217;s always a good idea?

I wound be effectively borrowing to invest. There!!!8217;s a few bank accounts with no risk that pay about 5%. I could probably put about 10k Away with minimal risk the rest would carry some risk though.

Would you do the same?

lessonlearned

Hi B.B.

You will probably get loads of different answers on this one. Some will say not to increase your mortgage, and even maybe to start paying it down, some will say take out some equity and use that as a deposit on a BTL and some will agree its a good idea to save and invest the equity you withdraw.

All three options have their merits, athough the last two have more "risk" than the first option.

Are you familiar with the term "opportunity cost". Basically all it means is if you spend the money on one thing then you lose the opportunity to do something else with it.

So, in the case of keeping your money tied up in your primary residence, you then lose the opportunity of doing something else with your capital, ie investing it in something else which could make you more money. Your home will, in all probability, still continue to increase in value anyway but in real terms, as an "investment vehicle", your investment stake will cost you less because you are not tying up so much of your own money, you are using the mortgage company's money.

Would I do it. Well that is just what I'm about to do.

I am currently in the process of selling my house and buying another. I could buy my next house outright but I have decided not to, I will take out a small mortgage. In my case I will have around 75% equity and will borrow 25% so as you have already found out by keeping a decent amount of equity I get to benefit from low interest rates.

This means that I can preserve more capital to reinvest. I have decided not to go for a BTL at the moment but to continue to grow my capital, investing for growth rather than income.

I guess it all boils down to your attitude to risk but, given the current low interest rate climate, then I personally don't think what you are proposing is a high risk strategy.

If you can get a good two year fix, then you can always review the situation at the end of the fix. If interest rates are then less attractive you could use some of your investment gains to reduce the capital sum outstanding on your mortgage. In the meantime you could also use some of the additional saving on your lower mortgage payments to make overpayments (I'm assuming you will be limited to 10% overpayments per year).

I have opted for a five year fix, and may make use of the 10% overpayment facility, so in effect paying down the mortgage. Then again I might not bother. Again it all depends on interest rates and inflation. Low interest rates are good for borrowing and inflation erodes the debt in real terms anyway.

Remember money makes money, but only if you put it to work.

humptydumptybits

Sometimes it is about how it makes you feel. For me paying off the mortgage and knowing it was mine and no way could I lose it (unless I was very very foolish/unfortunate) made me very happy. I was happier to take a risk when I'd paid down the mortgage on my first BTL and I borrowed £40k as a deposit on 2nd BTL. I could easily borrow enough now to buy another 2 but a month off SRP I feel like I don't need the hassle.


I think only you will know how much each element is worth to you, high return investments can be risky, chasing decent interest rates can be difficult with some only paying on relatively small amounts and the need to move money around. I don't think there is a "right" answer so not much help. Sorry.

Broken_Biscuits

Thanks for your replies. I think I will be taking some money out, just not sure how much. When I can get guaranteed 5% with no risk from bank accounts, I!!!8217;d be silly not to take out at least enough to fill those. The risk reward then becomes a bit more hazy when I!!!8217;m taking about stock markets and p2p.

Kayalana99

Two ways of looking at it, it's a no brainer to take the money out at such a low interest rate.

First way, put it in a savings account and take the interest. Safe way, also worth considering what happens in 2 years / 5 years (depending on your term) if interest rates are around 4-5% again. Not saying it would happen, but worst case, you can then pay back the 45k and it's still win / win.. but I just add this in as something to think about if you want to invest.

Second way, take that money and invest it and I would 100% say do this as long as you can afford to lose it. By a B2L or go into P2P lendings, but I'd just do the math and ask yourself if above happened or something else, can you afford to take the dive? Or maybe put 15k in savings and invest 30k in a B2L ( my choice anyway) Basically, my motto is never risk (or lend out haha) what you can't afford to lose - but if you can - I'd dive in because life is too short and the pay off is usually much greater if you win.

Once my term ends in 2 years even at that point, depending on interest rates I'll re-mortgage and take out every penny I can back up to 10% simply to have more money to invest in other things. I guess it's where your mindset is too, but you'd be silly not to go with option 1 here at very least, if the maths is right...

Luke86

tinktay84 wrote: »

I sat pondering on what ive achieved in my 27 years and realised that anything ive ever said I wanted to do or wanted to have I have managed to achieve.

Last year after 10 years in catering I completely changed career and last week I achieved a distinction in painting and decorating. This got me thinking that since I always achieve goals I set myself what could I do next....

Thus the Millionaire challenge!

So phase 1 is opening a savings account and getting money building up...

I work for myself so have a bit of control over my earnings, we have 1 property that we rent out and my husband has a decent (secure) job.

My aim is to get to the million mark by the age of 40 (im 27 now)

So how many of you think im mad and its impossible :rotfl: and how many of you think i'll do it and have ideas to help me :T

Nothing mad about doing something tonnes of other people have done.

Target, Plan, Execute. Done.

Good luck!

runfornoreason

Good morning everyone just ran 10 kilos, ate 1 alive scorpion, a pile of grass and drank it all with still moving salmon's fat. Going to learn some PHP course, wish me luck!
Yeah my past years routine is to get up 4.30 am, cold shower, 10 kilos run, breakfast and programming at bitdegree.org FREE PHP interactive courses for 4 hours. Then I go for part-time work as an administrator in a hotel and come back to eat and programme more. I eat supper, read and do a 30min day revision. During that time I realize many things and everything that I'm suffering for with my goals in years it all comes with return. Despite I'm a young programmer (3 years exp), who started from front-end I already have knowledge of back-end and UX user experience. Every year I progressively earn more than I ever used to. I haven't quit hotel just because of socializing purposes and good conditions. This year I should make ±100k year. But the end is near, as I'm going to the entrepreneurs capital Ubud in Bali soon for a full-time remote working and one day I'll make it 150k+ trust me! TRIPLE D - Determination, Dedication, and Discipline. Everything is possible, and on my way to reach the million as the sky's just a limit!