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Could you live off a million?

JonnyTwoToes Avatar
banned5y, 5m agoPosted 5 years, 5 months ago
Debate on BBC at the moment about retiring with a million pounds.

Some 'financial adviser' bint on there saying you couldn't and it would only last 8 years. What a croc.

Take Mr Average (that I've just invented) who might have a mortgage of between 50k and 150k. Worse case scenario is that he pays of 150k so he has 850k left.

Bills & utilities and general outgoings should be about £1k a month (remember, no mortgage to pay), so Mr Average needs £12k a year.

Let's add a few holidays, special occasions, emergencies and such and give him £20k a year to live on.

Well, put the £850k (the amount that's left after mortgage is paid off) in a semi decent instant access account (3% at the moment) and you'll get a return of £25.5k.

That's £5.5k more than you need every year so you'll be actually saving money AND you'll still have your £850k capital.

Am I going mad or is this woman talking crap?
JonnyTwoToes Avatar
banned5y, 5m agoPosted 5 years, 5 months ago
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1 Like #1
id buy 5 x 200k houses and rent them for about 800-1k a month, could retire on that!
#2
O_O I think she's talking crap.
#3
hell yeah I could live off a million no trouble at all & still have change when I depart this world for good !
#4
say you earn on average £30k a year after tax for your entire working life (I have guessed 40 years), that's only £1.2million.

The majority earn way less than that after tax, and manage to stay out of the gutter

Edited By: pinkleponkle on Jun 18, 2011 10:17
banned#5
pinkleponkle
say you earn on average £30k a year after tax for your entire working life (I have guessed 40 years), that's only £1.2million.

The majority earn way less than that after tax, and manage to stay out of the gutter


Exactly - this bint was using the PMs wage (£150k odd) as a bench mark. Idiot.
#6
I suppose it depends on the level of living you have become accustomed to.

She may also have included provision for care / old folks home in that calculation which can be very expensive
#7
Too right you could.

You could even afford to buy a decent house outright and live off the interest from the remainder sitting in the bank.
#8
Yes but you arent going to earn a million in your entire working life anyway, so as a lump sum you can earn interest from is something no one will ever encounter
#9
What would be the monthly interest from a million?
#10
It depends on how much you're used to living on I suppose. If I were to just divide the million by my current salary It would be way more than 8 years! (probably about 10 ;))

Edited By: deek72 on Jun 18, 2011 10:32
1 Like #11
Bills & utilities and general outgoings should be about £1k a month (remember, no mortgage to pay), so Mr Average needs £12k a year


Aye, maybe if you're growing weed.
banned#12
Ungreat
What would be the monthly interest from a million?


Based on 3% a year it's £2.5k
banned#13
mumbojumbo
It depends on how that £1million is calculated. If that is the total value of your assets including home, doesn't include future income from investments and you have a spouse to support then it may not be as easy as you think.


£1million cash - such as a lottery win. That was the point on BBC, this guys just won £1.1m on the lottery and he's told his boss to stick his job. This 'financial advisor' was saying it was a silly decision and he'll regret it because the money will run out.


Edited By: JonnyTwoToes on Jun 18, 2011 10:42
#14
deek72
It depends on how much you're used to living on I suppose. If I were to just divide the million by my current salary It would be way more than 8 years! (probably about 10 ;))


Chief exec or summat?
#15
Don't understand these lottery winners who go insane and blow it all. If I was lucky enough to win a jackpot i'd ensure I was comfortable but I wouldn't go and build a Scroodge Mcduck money pool.
#16
move to another country with that million, problem solved.

Edited By: black gerbil1 on Jun 18, 2011 10:51
#17
black gerbil1
move to another country with that million, problem solved.

Yeh, not Dubai though, gonna feel like a pauper there.
#18
It all depends on what type of person you are, some people could and some people couldn't survive with a million pounds. Her example was poor but what she was saying in principle was correct.
#19
Bills & utilities and general outgoings should be about £1k a month (remember, no mortgage to pay), so Mr Average needs £12k a year.
true - there's two of us living on that here - anything over that is savings/holidays/ new cars etc though I do hammer the vouchers, bargains etc :D
banned#20
No. It would probably be quite boring knowing exactly how much money you'd be on for the rest of your life and probably kill off ambition in a lot of people unless you invested it in a business in which case you'd be gambling about one-third of it.

Plus throw in kids and you'd be struggling to pay things like tuition.
#21
I could do it easy.
#22
Easily
banned#23
Absolutely ANYONE could live off a million. Title should be "could you live off a million with your current lifestyle"

Me personally,yes.
#24
DangerGod
Absolutely ANYONE could live off a million. Title should be "could you live off a million with your current lifestyle"

Me personally,yes.

I reckon mine would improve, standard of living wise, due to more free time.
1 Like #25
Of course you could, pay off your debts and live off the wifes wage. :p
#26
I could live off a million, but I wouldn't be living a lavish and opulent life. Probably spend most of the time hanging about the house because most of my friends would still be at work. The girlfriend would also probably have to work as two people living off a million for 35 years would be a bit extreme. Plus may decide to have kids which would increase my expenditure.
#27
The only people that could not live off a million would be people who have absolutely no idea how to spend and save at the same time.

You could have a perfectly nice life, tons of people are carp with money, that is how moneysaving expert makes his money. Some of the suggestions he comes up with, a two year old could work out.

Maybe I should have posted the above on 'most annoying person on TV thread' :D
#28
What the hell, I'll give it a go.
Now if you could just PM me and I'll give you the address to send the money.
banned#29
maccy1
The only people that could not live off a million would be people who have absolutely no idea how to spend and save at the same time.


Or they live in the South.

Or they have plans to send their children to private school (up to £30,000 a term).

It's all about the living standard we are used to.
#30
Depends how old you are and your personal circumstances.

Someone in his twenties, married with 3 kids and a £150k mortgage could 'struggle' in the later years.

Mortgage, couple of cars, holidays, general splash out and gifts to family could see £200-250k go quite easily,

£750k over 50 years is only £15k a year and don't forget that lump is getting smaller every year.

£15k doesn't go far when factoring in bills, food, fuel, kids expenses, new cars further down the line etc.

I'd say you need at least £20-25k a year to live comfortably on so that's about 30 years, so you'd need to be 40+ I reckon to live off it comfortably.
#31
FilthAndFurry
maccy1
The only people that could not live off a million would be people who have absolutely no idea how to spend and save at the same time.


Or they live in the South.

Or they have plans to send their children to private school (up to £30,000 a term).

It's all about the living standard we are used to.


No that many people send their kids to school for £30k a term in fairness.
banned#32
moob
FilthAndFurry
maccy1
The only people that could not live off a million would be people who have absolutely no idea how to spend and save at the same time.


Or they live in the South.

Or they have plans to send their children to private school (up to £30,000 a term).

It's all about the living standard we are used to.


No that many people send their kids to school for £30k a term in fairness.


True, but it just highlights how a million wouldn't be enough for everyone.
1 Like #33
greg_68
£750k over 50 years is only £15k a year and don't forget that lump is getting smaller every year.

£15k doesn't go far when factoring in bills, food, fuel, kids expenses, new cars further down the line etc.

I'd say you need at least £20-25k a year to live comfortably on so that's about 30 years, so you'd need to be 40+ I reckon to live off it comfortably.


umm, interest is +£2,500 per month!
banned 1 Like #34
Popular opinion says - Yes
Filth's opinion says - No

The shock is strong in this thread.
#35
fair point , forgot about that, however the ,ump would be getting smaller (probably) so interest may drop. Also over the next 50 years how much are your outgoings going to increase by. I'd assume your monthly bills for food, utilities etc are going to 5-10 fold. perhaps it's not now but in the distant it becomes a problem. If your bills 10 folded you'd be looking at £120k a year in bills.
#36
Not sure about living in the south bit. From what i've seen it's much of a muchness pricewise. Unless you mean Surrey.....
#37
I think greg_68 makes a fair point, I am in my 40's and probably have everything I need, but I have a mortgage, which would be paid off, the rest invested and happy days - (in my life).

If you have a standard of living that affords you to send your kids to a private school (£30,000 a term), I would hope that you have a lot of savings to do this, if not, it all boils down to again to people living beyond their means, I would think this is one thing you would plan for your children and made provisions for.
#38
greg_68
fair point , forgot about that, however the ,ump would be getting smaller (probably) so interest may drop. Also over the next 50 years how much are your outgoings going to increase by. I'd assume your monthly bills for food, utilities etc are going to 5-10 fold. perhaps it's not now but in the distant it becomes a problem. If your bills 10 folded you'd be looking at £120k a year in bills.

It's impossible to fold a piece of paper (in half) more than 7 times!! Allegedly! :p
#39
Look back at say the early 60's and what their outgoings were then. I wonder what they have gone up by?
Quick google shows petrol was 25p a gallon so that has roughly 24 folded. If it does the same again it will be £150 a gallon by the time someone in their 20's get to their 70's.
Multiply all your outgoings by the average 50 year rise and that miilion doesn't look so rosy now.

Edited By: greg_68 on Jun 18, 2011 12:08
banned#40
maccy1
I think greg_68 makes a fair point, I am in my 40's and probably have everything I need, but I have a mortgage, which would be paid off, the rest invested and happy days - (in my life).

If you have a standard of living that affords you to send your kids to a private school (£30,000 a term), I would hope that you have a lot of savings to do this, if not, it all boils down to again to people living beyond their means, I would think this is one thing you would plan for your children and made provisions for.


Some would see it as an investment in their children's future, especially if you live in an area that doesn't have grammars.

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