Some guidance on where to begin saving (martins guides confused me)

thomB

nicknameless wrote: »

Or a pension to get that 40% back depending on the aims of your saving?

I am in a work pension where I pay 4% and they put in 8% but I am not sure how much tax i'm saving by doing that.

I am trying to save for a property really so I would need to get at the cash within the next 10 years anyway so a pension being locked away from me until 55 at the earliest (or whatever the age is) might not work out as I would like to rent the property out also as I wanted to buy abroad.

I suppose you could argue that you could rent until you retire then buy a house but who knows what shape the world will be in then (or the pension for that matter) I figure better to buy it while i can get enjoyment out of it

nicknameless

Sorry if I've got this wrong but you are going to rent here so that you can buy a cheaper property overseas?

thomB

nicknameless wrote: »

Sorry if I've got this wrong but you are going to rent here so that you can buy a cheaper property overseas?

No no I rent here in the UK myself, I think the house prices are an absolute joke in this country they are not worth it in the slightest.

I figure I am going to retire oen day and I would like to retire in a warm climate. So what seems to make sense to me is to buy abroad now and rent that out and use it myself in the summer for holidays.

That's the dream anyway and my incentive for saving things may change but for now thats why i want to save some money.

nicknameless

thomB wrote: »

No no I rent here in the UK myself, I think the house prices are an absolute joke in this country they are not worth it in the slightest.

I figure I am going to retire oen day and I would like to retire in a warm climate. So what seems to make sense to me is to buy abroad now and rent that out and use it myself in the summer for holidays.

That's the dream anyway and my incentive for saving things may change but for now thats why i want to save some money.

mmm

personally if my ambition were to retire abroad at some point I would be calculating how to accumulate enough wealth to facilitate that (future income requirements, capital to purchase overseas property). A few thoughts;

Is renting in the UK NOW and at the same time having a mortgage overseas the best way to accumulate enough wealth to retire abroad at some point? Or would purchasing a property here (you need somewhere to live and renting is in all probability more expensive long term than buying) and selling up to move overseas when the time comes to retire if that's still your wish (things have a nasty habit of changing over time) not be a more sensible approach?

If part of a retirement vision wouldn't income (e.g. pension) provision be a better starting point than your hypothetical accommodation however many years hence?

Seems a strange plan to me to purchase what is in effect a holiday home now, when you don't have your own home to live in right now and no plan to accumulate savings, pension etc. to allow you to retire.

Plus how on earth do you know you'll want to retire to that house in that place in however many years time.

Drawing board .........back.......go to?

jimjames

thomB wrote: »

No no I rent here in the UK myself, I think the house prices are an absolute joke in this country they are not worth it in the slightest.

Maybe in London but prices across the UK are not uniform and suggesting that all house prices are so high that it's better to buy abroad just seems crazy.

Buying abroad exposes you to currency risk as well as void periods and tenant issues that are far harder to manage than even having a BTL in the UK.

PenguinJim

thomB wrote: »

I figure I am going to retire oen day and I would like to retire in a warm climate. So what seems to make sense to me is to buy abroad now and rent that out and use it myself in the summer for holidays.

I can't see from your previous posts that you've started a thread on buying abroad, but I recommend you do so, with perhaps your current shortlist of countries that fit your needs.

Buying aboard is complicated for many often-country-specific reasons - for example, foreigners can buy property in Sri Lanka, but they will have to pay tax and fees totalling over 100%! And yet... it's still tenable. Some areas in Mexico are prohibited from foreign ownership, but you can cut special deals with some banks to arrange 50-year leases, which sounds good, but (possibly) isn't! In Thailand a foreign private individual cannot own (more than 50% of) their own property, which is why foreigners often end up buying condos in Thailand - a single condo in a complex is less than 50% of the complex, see? Or they enter a business partnership with a native and... yikes, it gets complicated.

And that's before we get onto the language barriers! In which languages are you (or your partner) fluent?

This all affects your savings now, because it might be a good idea to start saving/investing in your long-term currency (or at least running that currency alongside GBP for diversity).

In_For_A_Penny_2

thomB wrote: »

. So what seems to make sense to me is to buy abroad now and rent that out and use it myself in the summer for holidays .

Just bare in mind that depending on where you buy abroad, renting it out consistently isn't a given, particularly outside holiday season. Plus managing a property from afar isn't easy.

You'd then be paying rent in the UK and a mortgage on an empty house.

If house prices aren't rising particularly fast abroad I don't understand the hurry to buy there (unless you're within a few years of retirement).

thomB

PenguinJim wrote: »

I can't see from your previous posts that you've started a thread on buying abroad, but I recommend you do so, with perhaps your current shortlist of countries that fit your needs.

Buying aboard is complicated for many often-country-specific reasons - for example, foreigners can buy property in Sri Lanka, but they will have to pay tax and fees totalling over 100%! And yet... it's still tenable. Some areas in Mexico are prohibited from foreign ownership, but you can cut special deals with some banks to arrange 50-year leases, which sounds good, but (possibly) isn't! In Thailand a foreign private individual cannot own (more than 50% of) their own property, which is why foreigners often end up buying condos in Thailand - a single condo in a complex is less than 50% of the complex, see? Or they enter a business partnership with a native and... yikes, it gets complicated.

And that's before we get onto the language barriers! In which languages are you (or your partner) fluent?

This all affects your savings now, because it might be a good idea to start saving/investing in your long-term currency (or at least running that currency alongside GBP for diversity).

Thanks Jim great post I will do just that later today :T

thomB

nicknameless wrote: »

mmm
Is renting in the UK NOW and at the same time having a mortgage overseas the best way to accumulate enough wealth to retire abroad at some point? Or would purchasing a property here (you need somewhere to live and renting is in all probability more expensive long term than buying) and selling up to move overseas when the time comes to retire if that's still your wish (things have a nasty habit of changing over time) not be a more sensible approach?

I see your point indeed. Perhaps somewhere else down the line for now maybe saving and renting is the way to go. Food for thought :beer:

Pincher

There is a little perpetual motion scheme based on 0% BT promotions.


Open four Regular Savers, at three months intervals. Pay in £250 per month into each: i.e. £1,000 a month. Typically, one Regular Saver per current account, so you need to open more accounts, or use your spouse's. Obviously, they mature once a year, so you need to start one every three months.


If you start all four at the same time, you will have £12,000 tied up in month 12, and hardly anything earning interest in month 1.


At three months intervals, you will have 3000 + 2250 + 1500 + 750 = £7,500 tied up in month 12, and earning interest.
In month 13, £5,500 will be earning interest.
In month 14, £6,500 will be earning interest


I usually keep about £10,000+ 0% BT going.


The monthly minimum will reduce the balance, naturally,
so I try to spend on that card as well, so the payment will pay off the spend, not the 0% Balance.



Payment history (on time, of course) is good for your credit history.


The thing about 0% Balance Transfer is, most of them will transfer a debt from another credit card, but not let you transfer cash to your current account, thus artificially creating a balance.


If you already have a balance, it's actually really useful for kicking off this set up.