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Clive_Woody

amazon1234 wrote: »

Thanks for that. It's all quite confusing for someone without any experience of all this but you've already all been very helpful.

I would recommend doing some reading around the area of investments/pensions/etc as even when you find an IFA you are happy to work with you need to understand the language they are speaking (trust me, it sounds like English but for the uninitiated it could be Russian for all the sense it might make).

A good IFA should be able to explain in layman's terms the products they are proposing, but it doesn't hurt to go in armed with some knowledge.

There are lots of good websites and books you could read through. I am sure it would be worth investing the time now to help secure your future.



https://www.mrmoneymustache.com/

JoeCrystal

amazon1234 wrote: »

I already feel 100% more informed than I was yesterday. And the SJP advice was extremely useful. It makes me wonder why on Earth they were recommended to us in the first place...

By whom? was it an IFA? :eek: Well, this pension forum is a goldmine of useful information! I don't think there is another retirement planning forum in the UK that is good as this one, in my opinion.

Paul_Herring

amazon1234 wrote: »

Thanks for that. I know £2 million isn't what it used to be but I thought it would give an income of slightly more than 40k.

Well your stipulations were to both preserve the value of the capital, and withdraw an income from it.

The former is reducing the latter a lot.

MEM62

amazon1234 wrote: »

I thought it would give an income of slightly more than 40k.

It will but that's not what you asked for. You stated that you wanted the lump sum to grow. The plan should be that it shrinks and you spend the last penny the day that you expire and you die broke.

Why do you feel the need to protect the capital?

GunJack

...and do you really need to spend £1M on property? If done well, you could end up with a decent forever home (e.g. single-storey for when older) for much, much less...

thickasabrick

Take your time and reflect very carefully about how you want to manage your investments.

I found this article by The Escape Artist (along with the article about "What gets measured, gets managed" ) very useful when reviewing my situation last year.

https://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/

It'll probably lead you to some articles by Lars Kroijer and JL Collins. Worthwhile taking a bit of time perusing their articles and videos, it'll make discussion with your IFA much more valuable and worthwhile.

amazon1234 wrote: »

Thanks for the reply. We will soon come iinto around £3 million (after tax) and have set aside £1 million for property. We'd like to invest the £2 million and take an income from it, and retire (we are in our thirties). We are wondering how much we could expect to receive annually without compromising the value of the lump sum over time. Obviously we will be talking to a financial advisor in time but wanted an idea.

AnotherJoe

amazon1234 wrote: »

I already feel 100% more informed than I was yesterday. And the SJP advice was extremely useful. It makes me wonder why on Earth they were recommended to us in the first place...

I obviously dont know who recommended them to you, but I am sure SJP have many clients who are happy with them, and I suspect the principle reason for that is that they are ignorant of how much its costing them compared to what they could get elsewhere, and they never did a simple sum such as what they will be charged over a lifetime because they probably didnt even think it could be a million Pounds.
I'm not suggesting you dont employ soemone to help you indeed i think you should at least initially, but read this;
https://theescapeartist.me/2014/06/22/is-your-financial-adviser-screwing-you/


including this segment
The Escape Artist is Right and will show his workings. Below is a spreadsheet that I prepared for a friend. He is an intelligent and hard working professional aged about 40 with approx. £750,000 in an actively mismanaged portfolio paying 2.4% per year of costs.
The value of switching to low cost tracker funds for this guy is just under £3 million over 40 years. No, that is not a typo.

AlanP_2

A £1m property, or say 2 if one is a holiday home, will take a fair chunk of change each year for maintenance, rates etc. let lone furnishing.

Spending that £1m on 4/5 BTL properties would probably earn you £40/50k a year as opposed to costing you that - Buy Assets not Liabilities.

bostonerimus

Being in your 30s you'll want to plan for a 50 or 60 year retirement. That's going to reduce the standard 30year drawdown of 4% or 3.5% rule of thumb. So you might be looking at 3% and then if you pay IFA and platform fees of 1% you are now down to 2% as a starting point. Of course that will increase with inflation, but a safe start on 2M for 50 years might be 40k or 50k.
Of course the chances are that you'll be able to withdraw quite a bit more so you need to actively monitor the performance of your portfolio and adjust your spending. There will also be some capital expenditures like a new roof on the house, a new car etc so they have to be budgeted too.

amazon1234

I'm now starting to see the benefits of not using an IFA as opposed to using one, but as someone completely unititiated into this world I wonder if using one - at least in the short-term - would be wise, ensuring I wasn't tied to anything too long-term. Investing that sum of money by myself, no matter how much reading-up I do on the subject, seems out of my reach at the moment.