Could you retire if you won a million?

[Flinty]

the answer to the question is yes you could retire....but it would not be life changing

 

[Xàbia Shrimper]

I could definitely live off 5,200 euros a month (the current exchange rate converted for £3,500 sterling interest as detailed above). I live a comfortable lifestyle on just under 1,000 euros a month so I can imagine that five times that amount would make me an even happier Shrimper in the sun!

It all amounts to perception of intended lifestyle. If one wants to **** it up the wall each and every night, lavishing gifts on a bevy of lovely ladies whilst being chauffered around the West End in a nice limo then it's possibly not enough. But, for me, just not having to work but being able to sustain (and maybe slightly enhance) my current lifestyle would be more than enough.

 

[Yorkshire Blue]

I could definitely live off 5,200 euros a month (the current exchange rate converted for £3,500 sterling interest as detailed above). I live a comfortable lifestyle on just under 1,000 euros a month so I can imagine that five times that amount would make me an even happier Shrimper in the sun!

It all amounts to perception of intended lifestyle. If one wants to **** it up the wall each and every night, lavishing gifts on a bevy of lovely ladies whilst being chauffered around the West End in a nice limo then it's possibly not enough. But, for me, just not having to work but being able to sustain (and maybe slightly enhance) my current lifestyle would be more than enough.

Living off the interest is all well and good, but it means your capital depreciates in value. Remember you are also going to be taxed on that £3,500a month interest.

I'm not sure what current life expectancy is for a 27 year old, but lets say it is 87, which I think is a fair estimate given the improvements in science, both already and expected. That is another 60 years.

In 60 years time, £3,500 is not likely to be worth anywhere near as much. I imagine £100,000 was considered a hell of a lot of money in 1947, now you couldn't buy a house in Southend with it. Another way to think of it is that most 27 year olds males will earn over £1m in their lifetime. I would have thought that would be a realistic expectation for someone on an average wage, given career development with age and inflation. It works out at an average wage of £25,000 a year for 40 years.

Obviously I wouldn't turn down that sort of money, it would open up a lot of opportunities for myself, but retirement would not at my age be one of them.

 

[Einstein]

Personally, there would be two options for me.

I'd either

a) invest in property

or b) bugger off to somewhere ridiculously cheap and live life of luxury. (South America most likely). When I visited Argentina last year, there were amazingly gorgeous properties overlooking sandy beaches for around 60,000 USD. You could easily live off 20,000 USD a year if you did not live in the 'big cities'.

Option a) is much more complex though, and it's one of those unrealistic aims in life I suppose. You spend a lot of time researching up and coming 'Student Towns'. I'd suspect it'd be up north, you look towards buying several properties based on around 4 bedrooms. These houses do not need to be plush, can be rough x rough areas too. Students can't be overly fussy as most will tell you! Average rent of a private property is around 75 quid a week. (approx 40-50% hike in last 8 years)

The figures are obviously very rough and very distant as I already mentioned, and no doubt someone will shoot me down but I'll still sleep tonight :p

Here goes;

Budget
1,000,000

Cost per property
150,000 x 5
TOTAL = 750,000 (Leaving myself 250,000 for any emergencies)

No. of Tenants
4 x No. of Houses
= 20

Cost a week x tenants x no. of properties
75 x 4 x 5
TOTAL = 1,500 PW

Cost per year
1,500 x 52 weeks
= 78,000 PA

Avg. Maintenance costs PA x Properties
2,500 x 5
= 12,500 PA

Total / Deduction of tax
55,500 / 35%
= 36,075 PA
= 3,006 PM

However, this is where just collecting interests differs against investing in properties. Using a moderate figure of house prices rising by 5% a year. From my initial investment of 750k, in twenty years, it would be worth approximately 1,900,000. While using the same guidelines for renting, my income from said properties would also have risen to over 200k a year before tax & maintanance costs.

So, my theory is while it may not be beneficial in the early years, my income will rise according to inflation and when I get to a certain point in my life I could sell the lot and then just enjoy life while still passing on a healthy inheritance.... Rather than blowing a million within a couple of years and then having to go back to work....

*Wakes up*

 

[shrimpled]

If i was to win £1,000,000 i don't think i would retire and nor would i want to. I plan to move into property development with a friend in about 2 years time and the million would simply mean we could go ahead with the plans now rather than wait. It wouldn't immediately change my life however if it used it wisely it has the capabilities to do so. If you consider that by 2052 the expected average house price will be around 950,000 and the average car price around 40,000 it says to me that you would not be wise to retire with it in the bank, instead putting the dough in a compound interest account and watching your money grow.

 

[Crabby Shrimper]

I'd say it is enough, just as long as you have aa simple lifestyle. It's a dangerous amount though as the temptation is to spend, and chuck your job instantly, which chances are would be the wrong move.

 

[RobM]

Everyone's circumstance is different. I'm 51, no mortgage. A million in the Woolwich would give me £40,000 a year after tax, near enough £800 a week. That would last me 3 weeks currently so the excess would go back into investment.

Interest received = 6%. Inflation 2.5%.

So therefore, assuming current lifestyle I'd be re-investing about £2,500 a month.

Yes please!

 

[BrettieAngell]

If you consider that by 2052 the expected average house price will be around 950,000 and the average car price around 40,000 it says to me that you would not be wise to retire with it in the bank, instead putting the dough in a compound interest account and watching your money grow.

Where on earth did you get those figures from, or was it a joke?

Anyway I would more than likely go and live somewhere dirt cheap and travel aswell for along time, dunno how long a mill would last but it would be fun finding out!

 

[shrimpled]

Where on earth did you get those figures from, or was it a joke?

I can't remember, but had something to do with my sons recent economics homework i seem to recall involving internet research. I'll try and dig it out again.

 

[Jonny_Stokes]

I'd get fookin' bored doing nothing. Eminently plausible to retire on it, but I'd have to do something with it.

 

[jstallan]

I'd take the money and opt for semi-retirement.. Quite like the idea of being a postie - Early start, early finish and the prospects of a strike look good!

For the past 15 years or so, I've been a manager and am sick and tired of having to tell people what to do all the time, finding them work and dealing with their problems. I just want to go back to the 'shop floor' , start at 9 finish at 5 (or 5:30) do what I'm told to and bugger off home.

(Having said all that I'd probably hate it!!)