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[chrisgixer]

Borrowing is a useful tool for making money though. There's always a risk of course, if your investment doesn't pay off. But research and groundwork are key to a sound business decision of course.

Personal finance ime, means keeping options open, and have as many options as possible. I have little faith in pensions, so don't keep all my eggs in the pension basket. This does involve borrowing though.

Ultimately, money is needed to make more money.


A car loan is an investment, as it allows you to make money at work. Although Esta has a handy cap there being a scouser.

[I_want_an_Omega]

The aim was/is aim for 12%overall, less 4% for inflation over 20-25 years

The argument being that although current interest rates are pretty much 0, and not much higher as an average for the last decade, the previous decade averaged 18%. Average growth over the last  80-90 years has typically been near as damn it 12% year on year...

Retirement fund is perhaps more accurate than pension fund. As already said, I will be seeking professional advice before committing to anything, but as a rough idea of what I am considering...

Mutual funds with  proven record of 10+ years growth, split equally

1. Growth and Incomne funds, (Blue Chip).
2. Growth funds, (Equity/S&P500).
3. International funds.
4. Aggressive Growth funds.

As a further thought, presumably there is no reason why instead of paying, say, £500 each month into a pension fund for 25 years, so a total of £150000 hypothetically, that that amount couldn't be saved up and then be invested as a one off amount with a view to allowing it to mature for twenty years

Ok, so jump forward 20 years and you have a fund worth £150k - with steady investment & growth as you have said. Annuity rates are poor (currently), so (based on current rates) that will "only" get you about £7k p.a as a pension ....... Frightening isn't it 

[biggriffin]

what you need to ask is did thid "dave ramsey" make his money from his seceme or from books,or the lottery.
 

[05omegav6]

what you need to ask is did thid "dave ramsey" make his money from his seceme or from books,or the lottery.
 

The plan was devised from his own hard learned lessons. The books and seminars are (from his point of view certainly), gravy, and you are something like 400 times more likely to be struck by lightening that you are to win the lottery.

The book (and concept as a whole) is sold as a step by step way to become debt free and financially secure for life and beyond. The argument being that once you have no debt, you free up your entire income, which can then be spent/invested/donated as you see fit.

The only person the plan depends on is the individual concerned.

The end result should be...

1. Decent insurance against life, so life/medical/disability...
2. A readily accessible amount of cash, (sitting in a bank account, ) for example, to cover 6 months of bills/unexpected events/insurance excesses.
3. Have NO debt, so bills are simply that... Council tax/utilities/food/fuel/car and house maintenance etc.
4. Have the mortgage paid off.
5. A fully funded pension plan.
6. Be financially ready for kids going to University, enabling them to come out the other side completely debt free.

What could you do if you had no mortgage, no credit cards, no car payments? Or should the real question be..

What couldn't you do?

[05omegav6]

Ok, so jump forward 20 years and you have a fund worth £150k - with steady investment & growth as you have said. Annuity rates are poor (currently), so (based on current rates) that will "only" get you about £7k p.a as a pension ....... Frightening isn't it

What I was driving at was if that hypothetical amount would be better of invested as a single amount from the get go, or invested as a fraction month after month?

I suspect the former

[Sir Tigger KC]

Is there any such thing as impartial advice in the pensions and investment industry?   

The money that IFA's, Mortgage Brokers etc can make in terms of commissions and introduction fees can be huge! Even those Car Salesmen on that Channel 4 show will be making £500 commission on a £10,000 finance deal and that's just the commission on the finance not the car! 

So if Rupert the IFA gets someone wanting to invest a £100,000 lump sum or pay in £500 per month into an investment or pension scheme, he's going to be a happy boy!! and who pays the best commission will be part of his decision making process!    Although I believe that these days they have to declare what commissions they receive and lets face it they have to make a living too.... 

[Sir Tigger KC]

Ok, so jump forward 20 years and you have a fund worth £150k - with steady investment & growth as you have said. Annuity rates are poor (currently), so (based on current rates) that will "only" get you about £7k p.a as a pension ....... Frightening isn't it

What I was driving at was if that hypothetical amount would be better of invested as a single amount from the get go, or invested as a fraction month after month?

I suspect the former

Bricks and mortar! 

[05omegav6]

Ok, lets say that house values double every 10 years or so, as should a long term investment attracting interest year on year. The interest, or part of, coulkd be drawn as income, whereas a house would need to be sold to release the equity in it.

Property investment could be gravy on top of everything else...

Guess they key thing is to spread the eggs carefully and broadly

[Sir Tigger KC]

Ok, lets say that house values double every 10 years or so, as should a long term investment attracting interest year on year. The interest, or part of, coulkd be drawn as income, whereas a house would need to be sold to release the equity in it.

Property investment could be gravy on top of everything else...

Guess they key thing is to spread the eggs carefully and broadly

In the mean time you get a rental income from your property, which if you buy carefully could be as much as 10%.  Property investment can be a lot of hassle though! 

I rented a room in shared house in Bristol a few years ago for £300 per month. There were 4 of us living there so the landlord collected £1200 a month from that house and he had 3 other houses on the same street, so in theory he was getting £4800 a month gross.

I looked it up once and he paid between £35,000 and £40,000 for each house in the early 1990's and he's now sold them all in the last 2 or three years for between £220,000 and £240,000!    He's about mid 40's so has done very well, although none of us could have predicted those sort of gains 20 years ago...    and I'm not sure how he raised the cash in the first place as 20 years ago £140,000 -160,000 was a lot of money and I don't think buy to let mortgages existed. 

However he's done it, fair play to him. He was a good landlord and a really nice bloke! 

[Rods2]

Ok, lets say that house values double every 10 years or so, as should a long term investment attracting interest year on year. The interest, or part of, coulkd be drawn as income, whereas a house would need to be sold to release the equity in it.

Property investment could be gravy on top of everything else...

Guess they key thing is to spread the eggs carefully and broadly

In the mean time you get a rental income from your property, which if you buy carefully could be as much as 10%.  Property investment can be a lot of hassle though! 

I rented a room in shared house in Bristol a few years ago for £300 per month. There were 4 of us living there so the landlord collected £1200 a month from that house and he had 3 other houses on the same street, so in theory he was getting £4800 a month gross.

I looked it up once and he paid between £35,000 and £40,000 for each house in the early 1990's and he's now sold them all in the last 2 or three years for between £220,000 and £240,000!    He's about mid 40's so has done very well, although none of us could have predicted those sort of gains 20 years ago...    and I'm not sure how he raised the cash in the first place as 20 years ago £140,000 -160,000 was a lot of money and I don't think buy to let mortgages existed. 

However he's done it, fair play to him. He was a good landlord and a really nice bloke! 

They did as I found out later to my cost. 25% deposit and 75% mortgage. If I had known that at the time I and the Mrs had the money to buy 2 houses and I've always regretted that we didn't.

[albitz]

I had the money to buy a 3 bed house cash when I was 19 (1979). I did what any self respecting 19 year old would do. Bought a flash car instead.
I could say I regret it now,but hindsight knows everything.

[05omegav6]

Ah yes, hindsight

[chrisgixer]

Ok, lets say that house values double every 10 years or so, as should a long term investment attracting interest year on year. The interest, or part of, coulkd be drawn as income, whereas a house would need to be sold to release the equity in it.

Property investment could be gravy on top of everything else...

Guess they key thing is to spread the eggs carefully and broadly

Depends on your target.

Generally, buy to let on a few property's can and does fill the void of the pensions of yesteryear. It can be hard work, but the rewards are there.

Hence the property boom, with its good points and bad.

But once again, money to make money applies, and hence, borrowing/spending for the right reasons.

[chrisgixer]

Ok, lets say that house values double every 10 years or so, as should a long term investment attracting interest year on year. The interest, or part of, coulkd be drawn as income, whereas a house would need to be sold to release the equity in it.

Property investment could be gravy on top of everything else...

Guess they key thing is to spread the eggs carefully and broadly

Depends on your target.

Generally, buy to let on a few property's can and does fill the void of the pensions of yesteryear. It can be hard work, but the rewards are there.

Hence the property boom, with its good points and bad.

But once again, money to make money applies, and hence, borrowing/spending for the right reasons.

To add. Where pensions fail, buy to let "schemes" give an income, if the figures are right. Of course.