Could you retire on £1m

[WNRH]

30 years at £30,000 a year is only 900,000. Of course you could retire on £30,000 a year.

 

[PJMCC1UK]

Probably. Buy 10 houses for 100,000 each. Each would give you £400 rent per month so £4000 a month to live off.

There was a couple on a programme about money the other night who had a property portfolio of 29 houses worth £4.5 million and they only earned £36,000 a year from that.

 

[gordondaviesmoustache]

Probably. Buy 10 houses for 100,000 each. Each would give you £400 rent per month so £4000 a month to live off.

There was a couple on a programme about money the other night who had a property portfolio of 29 houses worth £4.5 million and they only earned £36,000 a year from that.

I imagine that is because they do not own them outright ie they are morgaged.

 

[leighton]

Of course you could retire on that. The prices of property has dropped compared to years ago. As long as you dont buy a huge house you could retire and live off the rest of the money if you wanted to.

 

[Balti]

give me a million and I'll let you know how it goes from my flat in florida

 

[CheesySmoker]

Id think you could, wouldn't mind getting 1 mil and giving it a go

 

[daveduke67]

Re the income bond. Assuming that the bond did manage a return of 7%, you take 5% of that leaving a growth of 2% on the initial capital invested.

What would that make the bond worth in, say, twenty years? Would 5% of that value buy you the same as it would today. Would your initial investment in 2031 be able to buy you what a million would today? This is assuming that returns have exceeded withdrawals - historically has this always happened?

Ok here goes. Assuming the bond out grows the withdrawls by 2% pa, in twenty years the original £1000,000 would be worth £1,491,800. That may or may not worth more than it is now in terms of real value but it would be close either way and certainly have avoided the vast majority of any capital erosion, especially when compared with deposit based accounts which never will.

What has the average investment bond returned the last five years?

The "average" bond has returned just over 6% pa over the last 20 years. THSP managed fund has averaged 9.7% over the last 20 years (a period more tumultuous than any other in history, including black wednesday, dot com bubble burst, 9/11, Iraq/Afghanistan and the credit crunch), so it would be fair to say that similar returns (if not possibly greater) could be forecast going forward.

A 20 year time period is far more reliable to look at than 5 years as the investment would be for a minimum of 20 years to make best use of the annual 5% allowance and allows for good years with 30% growth and bad years with up to 15% loss.

Would you advise that someone invest 100% of their capital in one type of risk based investment - nothing in no risk savings accounts?

The question was "can one retire on £1m", not what is the best advice for someone that has £1M in liquid assets mate.

The FSA best advice is to keep 3x months expenditure in very liquid emergency funds to cover unexpected expenses.

Surely it'd be better to spread the capital into various risk categories and investment types rather than all the eggs in one basket?

A capital investment bond of £1M could, in theory be invested into 200 different funds, and cover a veritable smörgåsbord of risk and investment strategies. Just because it is all ring fenced under the same policy number does not affect that. You could have funds that invest in cash, derivatives, bonds, gilts, equities, property etc (ie all the asset classes) and one would obviously pick the funds to match the investors unique risk profile, goals and aspirations.

My point was that DLBH suggested something that wasn't really the way to maximise potential income - and you came back with something that wouldn't be best advice either. I'm pretty sure you wouldn't advise someone to invest 100% of their capital in one type of bond either with various risk funds within it or with different companies - and I did originally say one typeof investment not a single bond. I am well aware of the fact that you can have multi fund investments.

You said "The question was "can one retire on £1m", not what is the best advice for someone that has £1M in liquid assets mate". I don't see your point with that statement. What are you taking the 'on £1m' to mean? I was assuming that they would be getting their income from a best advice portfolio designed around their circumstaces. Were you saying that there is a bond available that would give £50k (based on 5% p.a. potentially tax free withdrawals) even though in reality you wouldn't actually put eveything into it?

Depending on spending habits someone comfortably retire on DLBH's 3% gross income and another would be dipping into their capital within a few months with your more generous potentially tax free 5%.

I just though you were quick to ridicule his suggestion especially as it wasn't wrong - unlike the 250k a year suggestion - I hope that was just an accidental additional zero rather than a pre LAUTRO/FSA type of quote.



I hope this makes sense as I'm trying to entertain a three year old and make our tea at the same time.

 

[JoeMercer'sWay]

if i won £1m I put a couple of grand aside for less fortunate BMers ie. Billy_Big_Spuds for donations to them as and when they need help.

I'd also hire Sweep to make sure my money was safe and well looked after.

I'd give to my family on a "as needed" basis rather than give them a wad of cash to waste.

I'd then live normally and keep plenty safe so that I always had to plenty to fall back on.

 

[gaudinho's stolen car]

if i won £1m I put a couple of grand aside for less fortunate BMers ie. Billy_Big_Spuds for donations to them as and when they need help.

I'd also hire Sweep to make sure my money was safe and well looked after.

I'd give to my family on a "as needed" basis rather than give them a wad of cash to waste.

I'd then live normally and keep plenty safe so that I always had to plenty to fall back on.

Would you spoil me JMW? Paris, maybe Rome?

 

[ifiwasarichfan]

if i won £1m I put a couple of grand aside for less fortunate BMers ie. Billy_Big_Spuds for donations to them as and when they need help.

I'd also hire Sweep to make sure my money was safe and well looked after.

I'd give to my family on a "as needed" basis rather than give them a wad of cash to waste.

I'd then live normally and keep plenty safe so that I always had to plenty to fall back on.

I cant see any mention there my young friend of you paying back your Student Loans and tuition fees. You should have been from my generation, - we got all that for free.

I actually could live on a lot less than a Million on account of the fact that (A) - I already have all that I want, and
B) - I am a "tight git".

My problem would be Mrs Richfan, who already has her itchy spending finger hovering over my Redundo cheque. I couldn't spoil her and throw in a Lottery win as well.