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Advice please ?
Old 01-18-2007, 02:17 PM   #1
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Advice please ?

Hi, I have just found this board and am stunned by the high quality of the posts and of the detailed knowledge of the members.

I would like to pose a question and would be very grateful for the thoughts of the esteemed members of the board !

I dream of early retirement, I am 40 years of age and have been able to pull together the sum of 440k british pounds.

I need to be able to draw 30k british pounds for 8 years and then 24k brisitsh pounds for a further 7 years for the standard of living I would like.

After the 15 years above at 55 years of age I have a net pension of 21k british pounds and would like then to be able to spend 30k british pounds for the next 30 ? years.

Also my state pension would kick in after 28 years at the age of 68...

Any help appreciated ?

Chris



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Re: Advice please ?
Old 01-18-2007, 02:35 PM   #2
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Re: Advice please ?

Chris, try plugging the numbers and cash flows yu indicate into firecalc. It will be based on USD and US equity and bond returns, but it will be a starting point.

Alternatively, get yourself a spreadsheet and see if you could do this with inflation-indexed gilts maturing each year.
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Re: Advice please ?
Old 01-18-2007, 02:41 PM   #3
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Re: Advice please ?

Welcome to the board, Chris.

We have a few Canadian posters but I think we're fresh out of British experts. One may pop up in response to your question.

I know that Dimson & Marsh's "Triumph of the Optimists" book discusses British returns, but not in much detail compared to American numbers. Maybe there's a British website with a calculator similar to FIRECalc that uses British financial returns, investment expenses, & inflation data.

Otherwise you're stuck with hoping that the American FIRECalc data resembles your British future...
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Re: Advice please ?
Old 01-18-2007, 02:59 PM   #4
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Re: Advice please ?

Many thanks for your prompt reply !

I guess Ive just been naive in assuming that the plans and thoughts of the members of this board would be the same for Uk Early retirees ...

Thanks again.
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Re: Advice please ?
Old 01-18-2007, 03:31 PM   #5
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Re: Advice please ?

Chris, historically, US equities have performed best over the long term, compared to European and specifically British, equities. So use Firecalc, but select the option where you can enter an estimated portfolio return, and use the expected long term market return in Britain for your asset allocation. I'm not sure what that would be, but a little searching would probably provide you with some estimates.

There are several other software tools that use Monte Carlo simulation. Here is a link to one that can be downloaded for a 30 day free trial. www.eisi.com. If I remember correctly, this software allows you to plug in estimated market returns on each asset class. (My free trial has long since expired, but I have some great data and graphs!).

Your access to the NHS is a financial advantage that our US posters do not have. I will not be drawn into a discussion on the relative merits of international health systems!!!
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Re: Advice please ?
Old 01-18-2007, 04:26 PM   #6
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Re: Advice please ?

Quote:
Originally Posted by romans2
Hi, I have just found this board and am stunned by the high quality of the posts and of the detailed knowledge of the members.

I would like to pose a question and would be very grateful for the thoughts of the esteemed members of the board !

I dream of early retirement, I am 40 years of age and have been able to pull together the sum of 440k british pounds.

I need to be able to draw 30k british pounds for 8 years and then 24k brisitsh pounds for a further 7 years for the standard of living I would like.

After the 15 years above at 55 years of age I have a net pension of 21k british pounds and would like then to be able to spend 30k british pounds for the next 30 ? years.

Also my state pension would kick in after 28 years at the age of 68...

Any help appreciated ?

Chris
Welcome Chris,

When I run your numbers through FIRECalc I get a success rate of 76.9%. This does not take into account your "state pension" since you didn't say what it will pay. Remember that these numbers are based on US market returns and inflation rates. Hope this helps.

jdw_fire
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Re: Advice please ?
Old 01-18-2007, 04:45 PM   #7
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Re: Advice please ?

Well now, lets think about this a bit. We need to find a way to help this poster out. If we can get a good international mix on the board maybe we can work out some good house swapping deals. I have already been dreaming about LaDelfina's place.
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Old 01-18-2007, 08:58 PM   #8
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Re: Advice please ?

Isn't it possible for a Brit to invest in US equities just like an American? That would allow you to get the potentially/historically higher US returns. You would, of course, still be exposed to interest rate risk since your assets would be in US $, but your expenses in UK pounds.
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Old 01-19-2007, 01:12 AM   #9
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Re: Advice please ?

Quote:
Originally Posted by Lifeisgood
Isn't it possible for a Brit to invest in US equities just like an American? That would allow you to get the potentially/historically higher US returns. You would, of course, still be exposed to interest rate risk since your assets would be in US $, but your expenses in UK pounds.
ETFs
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Re: Advice please ?
Old 02-03-2007, 01:45 AM   #10
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Re: Advice please ?

etfs - i agree
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Old 02-03-2007, 12:38 PM   #11
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Re: Advice please ?

Quote:
Originally Posted by Lifeisgood
Isn't it possible for a Brit to invest in US equities just like an American? That would allow you to get the potentially/historically higher US returns. You would, of course, still be exposed to interest rate risk since your assets would be in US $, but your expenses in UK pounds.
Yes, as said, there are Exchange Traded Funds. Another issue to consider is currency hedging. For example, if US equities rise sharply, a corresponding fall in the US dollar relative to the investor's home currency might neutralize the gain (or worse). Of course it works both ways.

Of course that doesn't stop me!!!!
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