Living off savings - any advice ?

Discussion in 'Money makeover' started by fishfingers, Mar 24, 2012.

  1. fishfingers

    fishfingers New Member

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    Hi Money Makeover people, I would be very grateful for any advice or suggestions on what I could do in my rather unusual situation.

    I am male, 45, single, homeowner (with no mortgage), no loans or debts, and have some Irish savings bonds and certificates which are now worth about 260,000 and also have a Rabo savings bank account with about 30,000 in it, and a current account with 5,000 in it. All tallied ammounts to 300,000. I am unskilled, currently working part time - earning 191 a week, plus extra bank holiday wages which brings it up to 11,000 per year (and at the moment living off this aprox 11,000 a year income very happily). My original plan had been to live off the part time job income, and keep the savings bonds and certificates rolling over every few years so they would be my pension for retirement about 60.

    My situation has now changed and is that my job is coming to an end in a couple of months, and so I am going to need to figure out some way to make my 300,000 last as long as possible as I won't be entitled to any unemployment assistance or anything as I would fail the means test. (I'm not sure if I may be able to "sign on for credits"). And at my age I have had no luck at all finding any new job either full or part time.

    So I would welcome any advice or suggestions on what I could do to "stretch" this 300,000 out or to use/invest it in a different way. My own projections are to spend 11,000 per year, increasing it by about 500 euros every year for inflation, though this projection means all the capital would run out by about age 70 allowing for some build up of interest in the early years before the capital falls too much.

    Other factors and expenses : I don't have a car, My biggest expenses at the moment each year are home heating oil (600 euros), house insurance (500 euros), Food & drink at aprox 10 euros a day (3650 euros). Electric : (800 euros) Cinema (300 euros), internet (300 euros), Other items : 3000 covering public transport, presents, clothes and shoes, TV licence etc. plus I'm making a provision in my projected budgets for the Household charge rising to about 1000 a year and water charges of about 500 euros from 2013/14 onwards. I previously had health insurance but am not planning on re-newing it from this year onwards.

    I'm looking at all kinds of options and would be very grateful for any suggestions or advice. Ideally I'd like to stay in Ireland, but if neccessary I may need to try and move abroad to somewhere cheaper (I would esspecially welcome any advice or suggestions on places that might be possible to move to to live pretty cheaply off savings such as I have. In that case I would try and let out my house here and rent somewhere cheaper in another location - maybe spain ?).

    I'd welcome any suggestions or ideas.

    Thanks for any advice.
     
  2. DrMoriarty

    DrMoriarty Moderator

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    Welcome to AAM, fishfingers.

    I don't suppose you're on the lookout for a good valet/p.a.? ;)

    If I was in your shoes I would certainly think about (a) living abroad, and (b) diversifying that €260,000 in Irish Govt. savings bonds and certificates. I'll leave it to others to suggest what to do with it.
     
  3. Ann1

    Ann1 Frequent Poster

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  4. The Ghoul

    The Ghoul Frequent Poster

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    trasneoir likes this.
  5. browtal

    browtal Frequent Poster

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    Hi Fishfingers,
    I agree with cashier, you are far too young to think of being retired full time. What will you do to fill in the time?
    Life begins at 40. There are always opportunities to do things if only on a voluntary basis. Training for something different, a craft or art, playing golf, or studying something. Doing Community work. Help with the elderly - there is always a need. Older People are always in need of company for a chat.
    You have heard the saying 'use it or loose it'.
    You will find your brain going dim, your health will remain good if you remain active.
    There are lots of people in your situation who will face the same challenge. Good luck, too early to retire there is always something round the corner to interest you. Good luck
    Browtal
     
  6. The Ghoul

    The Ghoul Frequent Poster

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    He never said anything about retiring from life just retiring from paid work. Maybe he does plan to do voluntary work or play golf.

    In many ways he is in a very good position. 300k in the bank, no debt, owns his house and doesn't have/need a car. If he can get that 300k working for him rather than him being a wage slave he could have an exceptionally happy life ahead of him doing what he wants.
     
    trasneoir likes this.
  7. browtal

    browtal Frequent Poster

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    The Goul,
    I think most people would see work as a very enjoyable part of life and not a 'wage slave'.
    Having to think about whether your savings would last your lifetime would, for most people, cause tress. A wage will keep the investments topped up and give a better chance of making the capital sum adequate for his lifetime. Also we too change and our needs might demand more income.
    Times change if we were to hit another financial crisis or the current one does not improve he could be left with a very meager existence. Being out of the job market for any length of time can make it very difficult to return to it, confidence can wain quickly
    .
    Who would have thought that Banks and other guilt edge investments could have taken the savings of so many Older People recently with their collapse.
    If the working life of a person is not fulfilling try a change. I don't know where 'Fishfingers' would get the money for golf, it might upset his budget to much, it can be an expensive hobby, he might love it and want to play in many open competitions, and the social bit can prove expensive.
    I hope he makes the right decision for his future. Browtlal
     
  8. mtk

    mtk Frequent Poster

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    first well done to own your own place and have 300k stashed @45!
    i think you got GOOD advice here
    1) you may get unemployment benefit which is not means tested
    2) dont give up on work just yet - see how you feel and if you managed to stash 300k i am sure another job/career is not beyon your ability . BELIEVE!
    3) you need to do lots of research 2 websites suggested
    4) a crisis can upset your plans....

    My Advice :
    You meniontion living cheaply abroad have alook at http://retirecheap.asia
    which loooks at retiring to thailand (whih i would do if single and coudl stand the heat !)
    you need to think as you say about voluntary contribs. re state pension so u get contrib. pension

    mtk
     
  9. fishfingers

    fishfingers New Member

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    Thanks very much for all the really useful information and advice. I appreciate your feedback and suggestions.

    I should explain - I definetly would prefer to be able to get another job (either full or part time) rather than having to rely on using up the capital. My original plan was to only retire at 60 or later. So this plan is in case I can't get another job here or abroad and have to try and live off the savings.

    I am also thinking along the lines now of somehow investing some portion of the capital in some small business, which would in effect ''create'' a job for myself. Maybe a small hotel or guesthouse, travel agency or something like that where I could provide both capital into an already established business and also be a staff member to generate an annual income.
     
  10. browtal

    browtal Frequent Poster

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    Last edited: Mar 28, 2012
    Hi Fishfinger,
    I think many employers would be lucky to have you. If you dont secure employment immediately why not consider further eduction there are lots of courses on offer to people unemployed.
    There is also the scheme whereby you work giving the benefit of your experience and claim unemployment benefit also including an extra €50 per week. This scheme can lead to employment. Also do continue to sign on for credits when you are no longer signing on for unemployment, that will keep you in benefit for your pension rights.
    Good luck. Browtal
     
    Last edited: Mar 28, 2012
  11. james j

    james j Frequent Poster

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    Best of luck

    I think you have done exceptionaly well for yourself and I think if You use your talents and have a look at investing 50000 of your savings in creating a job for yourself and maybe another it is something I would do.,for me it would be in the fishing industry for you who knows?
     
  12. Bronco Lane

    Bronco Lane Frequent Poster

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    I retired at age 50 with no mortgage or debts and a similar sum of money. I drink very little. I don't smoke. I'm not hugely interested in eating out in expensive restaurants. I have no interest in fashion. My needs are fairly basic. My wife would be the same.
    We have an income of about €20k per annum.
    It is now 10 years on and I have not regretted one moment of my decision. During the Tiger years we carried on as normal. Our only extravagance was when we gorged on the cheap 1c Ryanair flights that were available. We spent about €6k per annum on holidays. We also watched the value of our house soar to a huge and obscene sum of money. This gave us the confidence to think. "Well if the worst comes to the worst we can always sell, downsize or move abroad". Realistically we knew that this would not happen because we both love our home our garden and Ireland. We also like having our immediate family close.
    Over the past 10 years there has been some dent in our savings. We lost about one third of our stock market investments but thankfully kept the other two thirds liquid.. The value of our house has collapsed, so any thoughts of selling up and moving abroad has gone. Thankfully we are in good health.
    I had thought of investing in a few businesses over the years but never took them beyond the planning stage. Mainly because we enjoy living a very simple life without too much hassle. We grow our own veg. We subscribe to various "bargain" offers that are available in all areas and enjoy living off the spray as they say.We are always available to each other and to our immediate family.
    There is the worry of property taxes, increasing utility bills, energy costs, health care, old age costs etc Things that are outside our control. We are also aware that we do not have huge sums of money to give to our children for weddings etc. We help them out a little and they will inherit something.
    Over the years we both did various courses in college/adult education. I have thoroughy enjoyed the past 10 years. It gave me the opportunity to see and do things that I would not have done if I was on a 9 to 5 job. For the next 10 years I want more of the same. Planning to walk the Camino to Santiago is a thought in the head at the moment. Maybe not.
    This has been good for us. I could not have done it without the backing of savings and being debt free and having a sort of financial plan.
     
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  13. irishmoss

    irishmoss Frequent Poster

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    Whatever you decide make sure you like what area you go into. You have the capital so choose wisely. How about looking at a franchise?

    Talk to your local County Enterprise Board, they always run courses on setting up your own business

    Personally I think 45 is far too young to start eating into your savings.




     
  14. Knuttell

    Knuttell Frequent Poster

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    Have yon considered renting out a few of your rooms in the short term,this would go a long way to providing you with a few quid and sharing the bills also do you buy yearly travel pass that covers bus dart luas etc,I would imagine there would be a considerable saving there (if you live in Dublin)

    45 is not old by stretch, don't write yourself off just yet,have you considered investing in education at degree level,it could turn out to be the best investment you will ever make.
     
  15. mtk

    mtk Frequent Poster

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    great post combining financail education with a touch of romance. well done
    May i ask is 20k from savings or from a pension i.e are you using up your savings day to day ?
     
  16. Bronco Lane

    Bronco Lane Frequent Poster

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    €20k is from a mix of dividends plus interest plus small pension (very small). I can actually save money from this €20k income. About two years ago I had to replace all white goods in the house plus a T.V. I also needed to purchase a new carpet plus sofa for a room in the house. I waited for sales and special offers and also did some bargaining and got good value in the end. All this came out of my savings. We own two cars that are getting older and older but the truth of the matter is is that we only really need the one. When one or other claps out it will be disposed of and not renewed.
    We are not travelling overseas as much but I just managed to book two return flights with Ryanair for €80 and got a hotel for 4 nights full board for €187 all in for two people. Not a bad price for 4 nights away in Spain to include flights for two people. If you look hard enough you will get good value breaks away in nice places.
    With Daily Deals available through Boards, Living and Social, Pigsback and GrabOne you can also avail of one or two nights away in nice hotels in Ireland for two people for less than €60. I am not ashamed to hand in coupons in the supermarket and also have a rummage through their "reduced to sell" items.
    It's kind of fun looking out for the bargains out there. I don't consider myself a scabby so and so for doing this. I am happy to splurge as needs be.
    There are lots of people living off the spray. If you can work for six months of the year and enjoy the other six months at leisure seems a good idea to me. I remember seeing a programme on T.V. where this guy worked for 6 months then went to Goa for the other 6 months and lived pretty well. Even working a 4 day week with 3 days off...
     
  17. mtk

    mtk Frequent Poster

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    thank you for your insights
    What does off the spray mean as i never heard this expression and google doesn't recognise it either:)
     
  18. Bronco Lane

    Bronco Lane Frequent Poster

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    Many years ago I heard someone use the expression Living off the Splash or Living off the Spray. It relates to those creatures that live on the shoreline, neither on land or on sea and feed off the various tides, sea sprays etc that come their way.
    I always thought that it was a nice expression and a nice way to live if you could apply it to modern life using modern conveniences and methods.
    The Hunter-Gatherer modern style....
     
  19. serotoninsid

    serotoninsid Frequent Poster

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    Your right - it is a good turn of phrase. I must admit that I hadn't heard of it either and like mtk, I assumed google would provide examples but no dice....so maybe whomever you heard it from coined the phrase.

    Been reading your posts on this thread with interest and admire the position you have managed to get yourself into - together with the simplicity and lack of extravagance..
     
  20. The Ghoul

    The Ghoul Frequent Poster

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    I hadn't hear that expression either but it is a good one. I think MrMoneyMustache would like it too :)