Living off interest

deemy2004

Well done FangKat

When I retire, hopefully I will be in a similar position,if not better than FangKat (in todays money).

Don't know what the future will bring - But perhaps money generating hobbies that you enjoy in your semi-retirement are also something to include in retirement planning...

I don't think dunstable quite understands, that money savers such as FangKat - who have decades of experience of savings / investing.. aren't suddenly going to see their capital whittle away to nothing in retirement.

I would take a bet ! That your total assets still increase in value despite you being retired or semi retired

As it is a hard habit to break ! I.e. not to see a month on month increase in total liquid assets...

Ive reached the point, many moons ago where I earn a LOT more in interest / capital growth then I spend ...about X2.5 what I spend... So the whole of my earnings / wage is surplus and goes right into the savings / investments.

Add in the extra interest generated by a £50k stoozed pot and there are more £'s then were to stuff them... though offcourse stoozing is a dieing hobby, still plenty to take its place for those extra freebie incomes

FangKat

thor wrote:

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);-)

Ah, but I am not a pensioner, just self-sufficient.

Jetting off to expensive hols - is that a dig at me? Well just in case I WILL defend myself though don't know why I bother really.
Last year we went abroad five times to different Greek and Canary islands. Self catering, most expensive was Symi at about 600 quid for two of us. We go hill walking and usually do about 150 or so miles of it taking photos and then putting it all on our web site. It is a hobby. (see my profile for my website to see I speak truthfully).

Think Sour and Grapes sort of comes to mind Thor.

FangKat

"Add in the extra interest generated by a £50k stoozed pot and there are more £'s then were to stuff them... though offcourse stoozing is a dieing hobby, still plenty to take its place for those extra freebie incomes "

yep old habits, I also cannot resist something which might make me a quid. Been filling out some ugov and it's great to see 50p added to my account, sad really.

EdInvestor

I don't think dunstable quite understands, that money savers such as FangKat - who have decades of experience of savings / investing.. aren't suddenly going to see their capital whittle away to nothing in retirement.I would take a bet ! That your total assets still increase in value despite you being retired or semi retired..

Well done Deemy and Fangkat, me too, so far

Walletwatch

deemy2004 wrote:

I would take a bet ! That your total assets still increase in value despite you being retired or semi retired

As it is a hard habit to break ! I.e. not to see a month on month increase in total liquid assets...

QUOTE]

Something that I always tell the missus when I give her my lecture on Corporate finance management being a metaphor for personal financial management. You want to see the P&L net income increasing month-on-month (well we can afford to look at it MOM, as we are not subject to cyclical sales, etc, due to which corporates sometime have to see it Q-o-Q) You also want to see the net worth (Reserves and Surplus) under the liabilities column increasing progressively. Another not-so-direct measure, but yet a significant one, is the size of your balance sheet (total assets), which is good, but should be accompanied by the net return on that amount to assess the complete picture - this is in line with the questions raised earlier in this thread, and rates in the range of 5.5% being cited for the same.

While on the comparison with Corporate financial statements, other important concepts that can be applied readily are asset-liability mismatch - you cannot afford to put your short-term liabilities into long term assets - viz. using stoozed money to pay off a long term loan, or investing it in a long-term fixed deposit, etc. I do not give the illustration of using short-term debt to buy the house you live in on purpose, as I am with Rich Dad there - the house you live in cannot be considered your asset even if you own it fully, i.e. don't have an outstanding mortgage on it. But then, that is a separate discussion.

Other accounting concepts like materiality, prudence, and conservatism can also be applied to your personal finance statements, as much as they can be to Corporate finance.

On the topic being discussed itself, this is something I am working towards as well, with the only difference being that I'd call it living off 'passive income', as this covers all such sources of income from your assets - dividends, interest income, coupon payments, etc. Am aiming for around £30000 p.a. net, as this gives me a comfortable £2500 per month to live off - and believe me, I'm more than happy to survive on that at today's value. An even better scenario that I am considering is moving to a cheaper country after retirement (targetting retirement at the age of 40 max) and then living like a king on the £2500 per month !!!

FangKat

"An even better scenario that I am considering is moving to a cheaper country after retirement (targetting retirement at the age of 40 max) and then living like a king on the £2500 per month !!!"

I had a real thing about doing that, and a Greek island namely Crete was my target area. However higher authority became somewhat resistant to the idea unless I agreed we would buy a small place here in the UK as well for a bolthole. My feeling was to sell up and leave so the whole issue is on hold. Apart from which places in Greece/Canaries/etc. are way overpriced currently so that helped the decision.
Talk about going off-topic on this thread - bet we all get a right mod. hammering soon. Still like the advert says...

DilbertJones

Well I am reading this with slight envy, I am 25 but dont see me ever being in that position, maybe one day but I doubt it!!

Maybe i'll start with a stooze pot, invest it & see what happens, not my money i'll be losing if it doesn't work.

lush_walrus

FangKat wrote:

Ah, but I am not a pensioner, just self-sufficient.

Jetting off to expensive hols - is that a dig at me? Well just in case I WILL defend myself though don't know why I bother really.
Last year we went abroad five times to different Greek and Canary islands. Self catering, most expensive was Symi at about 600 quid for two of us. We go hill walking and usually do about 150 or so miles of it taking photos and then putting it all on our web site. It is a hobby. (see my profile for my website to see I speak truthfully).

Think Sour and Grapes sort of comes to mind Thor.

Certainly read that way to me too, I have to say I was really enjoying reading everyones inputs till that point in the thread, but alas!.

I say good for you (and you others who are doing so well) and let you be an inspiration for others who are at earlier (definately not meant as a dig of any kind) stages of life / wealth. And you definately do not need to justify or excuse how you spend your money or how much you spend!

My parents have pretty much done the same as what I imagine you have, worked hard until their 40s and then relaxed back on the money they had worked to get. Its definately the way I want to play it too, its a nice position to be in to be able to choose whether to work or not and set the amount you do.

Ive managed to become qualified, work full time in my profession and set up a business which is now running itself thanks to the brilliant efforts of my lovely staff and am proud to have got that far under 30. Hopefully one day I will be able to start a family and be able to step back to an enjoyable pace.

Thanks for all adding your stories, you are all an inspiration!

deemy2004

Slight amendment - I should have said total NET liquid assets.. As only the interested generated from a stoozed pot is your money and not the actual stoozed borrowings at 0%, which can't be counted as your own.

Same for houses as non liquid assets - you would count only the equity as an asset which is the house value net of the mortgage outstanding.

Walletwatch

deemy2004 wrote:

Slight amendment - I should have said total NET liquid assets.. As only the interested generated from a stoozed pot is your money and not the actual stoozed borrowings at 0%, which can't be counted as your own.

Exactly!! Which is why the interest income you generate out of stoozed money is so valuable !!! You have no capital invested of your own, and you're still making money. In Banking terms, this is akin to NFI (Non-Funded Income) like charges or fees, different from funded income, which is the interest banks earn on what they lend out and hence involves a capital investment.

This is the reason I have always maintained that stoozed money is more valuable than the interest income it fetches you - it increases your RoI, as the stoozed capital cannot be part of the denominator, strictly speaking, as it never was your own capital to invest in the first place !!