This is not a mid-life crisis

fred990

worried_jim wrote: »

You are a long time dead- I would go for it. Find a nice beach and go sit on it for 14 years.

Yup become a beach bum! Why not?
Just be prepared for the envious/jealous types, you won't be conforming to their perceived norms and they'll often resort to irrelevant comments that you didn't ask for or mention!

blues

Sounds great-go for it!

Those who mock and tell you you're immature are probably jealous. Too many people spend their lives slogging away miserably in an office and for what?

Life is not a one size fits all.

Voyager2002

worried_jim wrote: »

You are a long time dead- I would go for it. Find a nice beach and go sit on it for 14 years.

I did that, in the Seychelles.


After a couple of months I got bored, and after a year I could not stand it any more, and returned to the UK.

onwards&upwards

blues wrote: »

Sounds great-go for it!

I agree with one proviso.

Go for it as long as you don’t let it impact negatively on your parents in any way shape or form.

Although I have to say it sounds like you would be better off finding a job you actually enjoy. It is possible, I love mine. You have enough money that you could spend some on retraining or studying.

EthicsGradient

Since your wish is to gradually take the equivalent of £14k over 14 years, then, yes, you ought to be able to do this, using stock market investments, since your time scale is long enough for that to be better than other investments. It is the equivalent of drawing down a pension, except you know you only need it to last 14 years at most. A return of 1% above inflation will be sufficient to make the £200k last the 14 years. Since your need is to take a bit out each year, I don't think there's any point in feeding it in gradually - maximise time in the market by getting it in now, and the withdrawals do the 'averaging' for you, instead of feeding it in gradually.

A standard 'buy-and-forget' strategy here is to put some in a global index ETF, and some in a UK index ETF.

This does assume that you're right that your needs after 60 are taken care of.

Variations on this could include feeding £2880 into a pension each year, which will be made up to £3600 with tax relief, whether or not you're paying tax. You'll be able to start withdrawing this from the age of 57. You might also move the maximum (£20,000 this year) into a stocks and shares ISA, because if you get lucky with the returns, you might end up with more than the capital gains allowance by the end, and you might have thought of something you want to do with all that's left. If any of it is already in a cash ISA, you can just transfer all that across to an ISA to start with.

darkidoe

Sounds like you want to be financially independent. Start with MrMoneyMustache's article on retirement

We look at a lot of numbers and figures and want a number that is 'enough' for us but really we should be asking what kind of a life we want and need. Always good to reevaluate life priorities and maximise happiness.

DairyQueen

Assume huge swings in the stock market over the next 14 years and you won't be far wrong. The two biggest risks you face are inflation (there is only one direction in which it can go) and sequence of returns risk. Signals are pointing toward the end of a long bull run. It will be more than a calculated risk to assume that markets will continue upward in each of the next 5 years, let alone the next 14.

Let's assume that the market drops 20% this year. Your £200k fund is now with £160k. You withdraw £14k and the value is then £146k. Inflation hits 3% so your income requirement for the year following = £14,420. The markets stay down for a couple of years so, by the beginning of year two, your fund is worth £146k - £14.420 = £131,580.

By year three, the markets have recovered 10% so your fund has increased to £144,738 but inflation is still 3% so you need to withdraw £14,852. So, with 11 years before your pension kicks-in, your fund is worth £129,876. If you are feeling stressed at this possibility then the risk is too great for you.

By year 10, your parents decide to downsize and have no room to store your stuff (or you). Then, sadly, in year 12, parent one passes away and parent two enters residential care. Their house is required to fund the fees.

So, there you are at 60. Savings and (possible) inheritance shot and you must pay rent from your occupational pension. You should be fine if you're living in Thailand.

I would aim to draw no more than £7k initially from savings. I also wouldn't rely on my parents maintaining their status quo for the next 10+ years. If that level of risk suits you then bon voyage!

colsten

slapup wrote: »

Thanks for your reply. My level of Occupational Pension will be enough for me. I have little desire to ever give up work completely so a little part time job will be all I need. Yes the terms of my pension are 60. If I stayed in the job it would 55, 60 if you leave. Hah yeah, living with parents....That's not really the plan, is just somewhere to keep possessions. I intend to be off working voluntarily a great deal, which involves free board and lodgings in return for work. I suppose what I'm asking is, is 14 years enough of a period to ride out falls in the stock market if I put say, half my cash into an investment product? If it's not, then I suppose I'd rather sleep at night.

Where are you going to live after you can't get a job with free accommodation any longer? Where do you get such jobs, anyway? You seem to be mainly concerned about the next 14 years, which lead you to 60. Unless you know that for some reason you will not live for 25-30 or more years after 60, I would give those 25-30+ years some more thought, In essence, I think you'll probably find it relatively easy to get through the next 14-20 years, as you will probably still be able to get occasional work if you need it. But there comes a time when you can't work any longer and when you will be dependent on a fixed income, and possibly also on benefits, such as housing benefits. This might be an acceptable life plan for you but most people would probably find it inconceivable to actually plan to be dependent on benefits.

steampowered

slapup wrote: »

At the present time my 200k is sat in a bank accounts earning around 2%. It would be nice if this could increased to 5-6% with little worry.

I appreciate any helpful comments and advice.

Over the 14 year time period you are talking about, you are best off putting your money into stocks (e.g. a low cost Vanguard tracker fund) and leaving it here.

The average long term return on stocks and shares is 8-10%.

You just have to leave your investment well alone. Don't be constantly checking the price. Just leave it there to grow and collect dividends.

Yes stocks go up and down. But over the long term the ups and downs iron out - and are more than compensated for by dividends. Nobody who is invested for 10+ years in stocks loses money, even if investing at exactly the wrong time.

AnotherJoe

steampowered wrote: »

Over the 14 year time period you are talking about, you are best off putting your money into stocks (e.g. a low cost Vanguard tracker fund) and leaving it here.

The average long term return on stocks and shares is 8-10%.

You just have to leave your investment well alone. Don't be constantly checking the price. Just leave it there to grow and collect dividends.

Yes stocks go up and down. But over the long term the ups and downs iron out - and are more than compensated for by dividends. Nobody who is invested for 10+ years in stocks loses money, even if investing at exactly the wrong time.

He cant leave it alone he'll be withdrawing £14k a year from it.