what do you do when you have cleared all debts?

want2bmortgage3

i'm sure there are people here who have paid off their mortgages and other loans, but i was wondering what's next? i'm desperately trying to pay my mortgage off as quick as i can. i'm not sure what i will do when i finally get there, all i know is i want the freedom to not have to work. it's not that i want to laze about all day and do nothing, i just want to have the freedom to do whatever takes my interest and not have my life ruled by money.

so, who here has become debt free and what are you up to now? do you still work?

getmore4less

To be able to stop work you need an altrenative income to cover your expenses.

A pot 20-25 times the expenses is about right as a starting goal so if you spend £1kpm thats £12kpy or a pot £240k-£300k, once you have that then you stop work.

I am trying to save that pot.

Dithering_Dad

Do you have a pension plan? As far as I'm concerned this is far more important than paying down your mortgage.

want2bmortgage3

i am planning to buy a 2nd property as my pension plan, i have no money in standard pensions......

Dithering_Dad

Are you sure you want to put all of your retirement planning into something as ill-liquid as property?

How do you see the second property providing an income? I looked into BTL a while back while I was trying to create a balanced retirement portfolio of traditional pension (invested in funds), ISAs (funds and individual shares) and one or two BTL properties.

The trouble was that I just couldn't get the sums to work for me. Once I'd factored in the cost of buying the property (deposit, stamp duty, legal costs, estate agent costs, mortgage arrangement fees), the cost of renting out the property (Buildings Insurance, more mortgage arrangement fees as each deal lapses, property maintenance, gas & electicity checks, management costs - typically 15% for full managed property, mortgage interest) and the cost of selling the property eventually (legal costs, estate agent costs, capital gains tax, mortgage redemption fees) against the income from renting (which should also account for periods when the property is empty, and also possible legal costs due to bad tenants).

The returns just didn't add up and I would have been better off putting my initial BTL deposit into a good cash ISA and have zero hassles.

seven-day-weekend

We cleared all our debts/mortgage from the proceeds of the sale of an investment property, took early retirement, moved to Spain and live on my husband's Teachers' Pension of £7,5k a year plus reduced Incapacity Benefit.

We could not live on this income in the UK (and if the euro-pound exchange rate falls much more we'll be pushing it to live on it in rural Spain!).

We also still have our UK house which is lived in by our son and two lodgers. This property has been mortgage-free since the mid-90s.

We both have full State Pensions to come plus my small Local Government pension.

So....that's what we did and our forward planning after paying off our mortgage/debts!

want2bmortgage3

seven day - thats great! you must wake up every day with a smile on your face?? what a relief to not be slave to the wage anymore?? well done!

gallygirl

seven-day-weekend wrote: »

We cleared all our debts/mortgage from the proceeds of the sale of an investment property, took early retirement, moved to Spain and live on my husband's Teachers' Pension of £7,5k a year plus reduced Incapacity Benefit.

We could not live on this income in the UK (and if the euro-pound exchange rate falls much more we'll be pushing it to live on it in rural Spain!).

We also still have our UK house which is lived in by our son and two lodgers. This property has been mortgage-free since the mid-90s.

We both have full State Pensions to come plus my small Local Government pension.

So....that's what we did and our forward planning after paying off our mortgage/debts!

Move over I'm on my way . 40 months to pay main mortgage off, a further 60 months :eek: to save up enough to pay off 2 BTL mortgages then rent out own home as well & live on income. Already got place to go to. Of course by then we'll have a large savings pot as well.... doh, back to the drawing board......

Seriously, that's the plan. Done and dusted by the time I'm 55 .....

seven-day-weekend

want2bmortgage3 wrote: »

seven day - thats great! you must wake up every day with a smile on your face?? what a relief to not be slave to the wage anymore?? well done!

Yes....I must admit it's a huge relief to know that no-one can take our home away.

My husband's job was detrimental to his mental health, so it was good he was able to take early retirement at 55.

Yes....we're very happy.

seven-day-weekend

ali007 wrote: »

Move over I'm on my way . 40 months to pay main mortgage off, a further 60 months :eek: to save up enough to pay off 2 BTL mortgages then rent out own home as well & live on income. Already got place to go to. Of course by then we'll have a large savings pot as well.... doh, back to the drawing board......

Seriously, that's the plan. Done and dusted by the time I'm 55 .....

Yes, we were 54 and 55 - go for it Ali!

Where are you going?

Catbells

Sorry but I'm a newbie and embarking on investing some of the proceeds from the sale of the family home in a pension. Several here have talked about BTLs. What are BTLs please?