Only freedom will do

slowlyfading

Sounds perfect

bubblycrazy

edinburgher wrote: »

To revisit (boring day at work), the figure was multiplied by 300 because I think a safe withdrawal rate of 4% is reasonable (i.e. how much I can spend from my portfolio each year without exhausting it).

Hi, thanks for the formula. I'm still not sure where you got 300 from? What have you taken 4% of?

Karmacat

Those look so beautiful, Ed! And good heavens, to have one built for £150k complete ... bliss, compared to the prices in southern Englandshire...

I hope MrsEd is home really soon after the procedure, and as for your "awww" moment ... lovely! Sends shivers up the spine, in a good way

edinburgher

To cut a long story short, research involving Monte Carlo simulations for various types of portfolio have shown that 4% (or slightly lower) was the safe withdrawal rate for a portfolio of 50% equities/50% bonds (i.e. the rate at which it would never run out of money).

Monte Carlo situations look at what would have happened to a given portfolio over every year for which data has been recorded.

100% / 4% = 25 - in theory a balanced portfolio that will never run out requires 25x the annual expenses needed.

300 is simply 25 x 12 (because we are talking about monthly expenses).

Those look so beautiful, Ed! And good heavens, to have one built for £150k complete ... bliss, compared to the prices in southern Englandshire...

I know - doubt that would buy me 50% of a nice 2 bed terrace where we used to stay in Bromley :eek:

AlexLK

I didn't realise that office offered online tutorials for Excel, whilst I'm nowhere close to understanding the FV function, thank you for the link. I'm hoping they offer some basic tutorials.

The houses look interesting. My wife thinks properties like the one you linked to should be able to provide an answer to any "property shortages". Whilst I couldn't imagine living in one full time (I have far too many "things" to be living in an open plan space and like the "formality" of an entrance hall, dining room and study) I think one would be really nice as a holiday home.

I hope your wife is OK and baby too.

edinburgher

Yes, SIP houses are becoming more an more common. You can build the shell of one and roof it in about a fortnight for a traditionally designed two story house.

They're also warmer, better for the environment and probably more secure than many of the equivalents.

I particularly like how the inherent strength of the design means that walls can be thinner in relative terms, ceiling beams can be missed out etc. This means you can have stunning vaulted ceiling etc., but still have a cosy house flooded with light.

In addition, your architect can design in any rooms you like, it just adds to the complexity and the cost. Because the panels are assembled in a factory, there's a high degree of control re. the quality of the finished pieces. It would seem to be a case of if you can design it, you can build it.

Mrs E and baby are fine, we even got to eat breakfast together this morning

bubblycrazy

This formula thing fascinates me! When calculating net worth do I put the value of the house or just the equity I have so far? Or should I not count the house as I can't really use this money as I need to live there?!


So say my number is £37, what should I be doing to reach this? Does it mean saving £1110 every month until I retire, either in a pension or savings?

edinburgher

This formula thing fascinates me! When calculating net worth do I put the value of the house or just the equity I have so far? Or should I not count the house as I can't really use this money as I need to live there?!

I count the total value of the house as a credit, but my mortgage as a debit.

So say my number is £37, what should I be doing to reach this? Does it mean saving £1110 every month until I retire, either in a pension or savings?

No, it means increasing your net worth by £1,110 every month until you retire. This could include reducing mortgage or student loan debts, or increasing savings, investments or pensions. You can also reduce your outgoings, which creates a virtuous circle of needing to save less

apple_muncher

edinburgher wrote: »

I know - doubt that would buy me 50% of a nice 2 bed terrace where we used to stay in Bromley :eek:

I wandered past an estate agents in a suburb of Bromley this afternoon and, for once, looked at the prices. Then walked on rather quickly! Admittedly semis, but between 600 and 800k. Shame I do not live in that area, and own one of those properties!

in_need_of_direction

If you did, what size would your mortgage be?