Living off interest

Tayus

Does anybody here live off the interest that there money earns? if so how much do you have in the bank and what amount of interest do you get?

dunstonh

No, but i arrange investments for people that do and I rarely use deposits for that purpose as they dont provide good long term value.

FangKat

Tayus wrote:

Does anybody here live off the interest that there money earns? if so how much do you have in the bank and what amount of interest do you get?

We get about 18k a year interest from bonds/isas/deposits/shares; we live off that and top up from our deposits if necessary/needed.

DilbertJones

jee wiz!!! how much have you got invested to get that return???

I hope one day I can accumulate that much in name!!!

EdInvestor

It's not a good idea to try to live off interest as Dunstonh says - because interest income is volatile ( goes up and down) and the capital gets eroded by inflation. Dividends from shares and other assets are more stable.

Working on the basis of a 5% return on capital, you'd need 400k for an income of 20k -but don't forget if you're retired, the state pension will account for c.100k of that, so that means you need to accumulate c. 300k for the rest.

FangKat

robodan wrote:

jee wiz!!! how much have you got invested to get that return???

I hope one day I can accumulate that much in name!!!

accumulated by a few years of running my own small comms business generally 7 days a week and available for clients any time they wanted me (motor racing etc.)..
figure accumulated a little bit in excess of that mentioned just above. Have not however included pensions stuff cos totally distrust the industry, so though my accountant made me put funds in re 40pc tax I have always expected to not get anything much when the time comes so every penny I do get will be a bonus.

EdInvestor

Hi fangkat,

Interested to hear how you split up your pot re the different kinds of assets, having regard to risk, rising income/capital, inflation etc.

FangKat

EdInvestor wrote:

Hi fangkat,

Interested to hear how you split up your pot re the different kinds of assets, having regard to risk, rising income/capital, inflation etc.

Am not going too much further into detail if u don't mind.
Basically I wanted to stop working at 50 but for various reasons including grumpy clients I continued on til I was 54. At that time we had approx 450k in money stuffed in a variety of prev. mentioned like bonds/cahoots/etc.. No mortgage or other debts. Reckon we need to have about 25k p.a. to live on. Expect to have 3 to 5 holidays a year. Gradually bleeding off the 450k where necessary but my wife has her "old biddy" pension due shortly (am in trub if she sees this post of course). I get an RAF small pension in a few years plus lump sum. My clever accountant is getting us an extra 14k back from the IR somehow..
2 lots of mortgage things due to hand out a few sheckles somewhen - maybe first will be 20k in two years time. second the way things go these days might give me threepence.
Pensions - well since I own one stepladder and have 4 cats plus a fishpond fully expect said companies will find a way of not giving me much when I ask for it.

seems ok to me - can survive I reckon.

EdInvestor

4 cats plus a fishpond

Could be this needs a new thread How do you achieve that without regular drama?

Re splitting up the pot, what I meant was what percentage do you invest in what. For instance I have about 40% in property(BTL and commercial property funds), 40% in shares and the rest in cash. Overall income about 5.5%, the idea being that the capital increases in value, and thus the income too. Extra pensions to come later, like you.

FangKat

EdInvestor wrote:

Could be this needs a new thread How do you achieve that without regular drama?

Re splitting up the pot, what I meant was what percentage do you invest in what. For instance I have about 40% in property(BTL and commercial property funds), 40% in shares and the rest in cash. Overall income about 5.5%, the idea being that the capital increases in value, and thus the income too. Extra pensions to come later, like you.

They are fat cats, possibly like pension fund folk, anyway they hardly stir unless a hot radiator is within inches.

You may gather my distrust of anything except money as in money like in pounds so that is where most of it resides. Guess looming rate reductions is a pain but not a big deal to be honest. Would not though like us in the Euro and have their 2pc or whatever rates, probably have to sell of the wife to get a few extra quid but never the moggies.

thor

FangKat wrote:

Expect to have 3 to 5 holidays a year.

At least that is something I won't have to worry about. I will struggle moneywise when I reitre but having holidays is not a requirement I need or want. I guess I'm lucky as I always see pensioners jetting to expensive holidays and in my eyes at least, wasting their money.
I will have plenty of other things to waste my money on(if I have any that is);-)