Spectre of 1929 crash looms large

chucknorris

MFW_ASAP wrote: »

I checked my portfolio value from 12 months ago and after a few dips and rises, it's back exactly as it was back then. I'm still in the market with my company pension as I'm actively contributing to that one on a monthly basis which averages out any gains/falls.

My SIPP pension, which is my main pension pot and holds all of my previous company pensions is not receiving any contributions, and so I don't benefit from 'cheap stocks' during any falls. I'm therefore happy to miss out on a few percentage gains in the future in order to prtect the large QE fuelled gains made over the past few years.

Once things return to 'normal', I'll return to a normal investing pattern. I don't like being out of a market, but I'm convinced this one is overblown due to QE and 'Savers' who are outside their normal risk patters.

You have to call it the way that you see it.


One of the problems that I have is that shares represent almost all of my liquid assets. So I should probably think about selling some, which would enable me to buy cheaper shares if there was a correction. I am also thinking of extending our home, so it might be better to at least take that money out soon.

Conrad

chucknorris wrote: »

I am also thinking of extending our home, so it might be better to at least take that money out soon.

I know some pretty smart people living in very prosperous areas who's entire retirement plan revolves around having the most expensive home they can and then downsizing to release the tax free equity. Known retirees that have done this. Kind of attractive as it's pretty much hassle free, is tax free and you enjoy the asset day to day.


A few blokes in Surrey I know have retired in their early to mid fifties doing this. No worry of stock markets and they always said if property prices dropped then it's all relative so they don't loose out.

chucknorris

Conrad wrote: »

I know some pretty smart people living in very prosperous areas who's entire retirement plan revolves around having the most expensive home they can and then downsizing to release the tax free equity. Known retirees that have done this. Kind of attractive as it's pretty much hassle free, is tax free and you enjoy the asset day to day.


A few blokes in Surrey I know have retired in their early to mid fifties doing this. No worry of stock markets and they always said if property prices dropped then it's all relative so they don't loose out.

We won't be downsizing, but we are unlikely to stay in this house, and as it is on a large plot and I want to maximise its value. I plan to build a master (4th) bed/ensuite and a lounge (3rd) below. I bounced the ideas off an estate agent last year who agreed that I was adding value in excess of the cost (I'm a chartered quantity surveyor).

MFW_ASAP

Conrad wrote: »

I know some pretty smart people living in very prosperous areas who's entire retirement plan revolves around having the most expensive home they can and then downsizing to release the tax free equity. Known retirees that have done this. Kind of attractive as it's pretty much hassle free, is tax free and you enjoy the asset day to day.


A few blokes in Surrey I know have retired in their early to mid fifties doing this. No worry of stock markets and they always said if property prices dropped then it's all relative so they don't loose out.

This is part of my retirement strategy. We have a house that will be way too large when the kids leave home. We plan to downsize to release tax free equity and either buy a small stone cottage or buy some land and build a 'passiv haus' property that will leave us with very low energy bills when we are retired. Any remainder can go into the pension pot (now that you can withdraw 100% of the balance) or fed into an ISA (now that the ISA allowances are more reasonable).

It's good to have different options at your finger tips.

padington

Conrad wrote: »

I know some pretty smart people living in very prosperous areas who's entire retirement plan revolves around having the most expensive home they can and then downsizing to release the tax free equity. Known retirees that have done this. Kind of attractive as it's pretty much hassle free, is tax free and you enjoy the asset day to day.


A few blokes in Surrey I know have retired in their early to mid fifties doing this. No worry of stock markets and they always said if property prices dropped then it's all relative so they don't loose out.

Attic extension it is then. Good advice.

It's exactly what my uncle did and he traded up an 18k property in the eighties to a 2 million pad today by doing just that from just four upgrades and three trades.

Loughton_Monkey

Conrad wrote: »

I know some pretty smart people living in very prosperous areas who's entire retirement plan revolves around having the most expensive home they can and then downsizing to release the tax free equity. Known retirees that have done this. Kind of attractive as it's pretty much hassle free, is tax free and you enjoy the asset day to day.

A few blokes in Surrey I know have retired in their early to mid fifties doing this. No worry of stock markets and they always said if property prices dropped then it's all relative so they don't loose out.

Eggs and baskets!

I wouldn't necessarily call it smart to use downsizing as the "entire" retirement plan. Although using it as a significant part is not a bad idea. Certainly something I am pleased to have included in my retirement plans.

Retiring with roughly 1/3rd House Value, 1/3rd Pension value, and 1/3rd Cash was about right. Over 9 years, this has become a bit more like 40%, 40%, 20% respectively.

One of the challenges is how to use the one-off large cash value that downsizing will bring. If (when) interest rates recover, such a large wad of cash will produce interest enough to take you into higher rate tax - something I avidly try to avoid. New ISA rules help, but it still takes a while to stuff it all into tax free wrappers.