Ok, I've just won £3.2 million on the lottery. (Don't get excited, it's only hypothetical.) Once you've spent all you're going to spend initially (clearing debts, buying a Jag etc.), what do you do with the rest - in terms of avoiding as much tax as possible, and keeping it low risk?
"Adam Mulvey" wrote
What "rest"?? There'd be none left, it would be soooo easy to spend just
3.2m !! ["Once you've spent all you're going to spend"]
Choose which country has the best tax, cost of living and quality of life environment and go and live there ? Monte Carlo seems popular but he cost of living there probably nullifies much of the tax advantages due to it's popularity.
I wonder if there's a comparison anywhere.
ISTR spam emails at one time talking about 'perpetual travelers' as a tax avoidance strategy.
Daytona
Pay attention at the back! ["going to spend initially"]
Actually, I'm not sure "avoiding as much tax as possible" is necessarily that good a strategy. After all, since tax correlates with earnings, you should just concentrate on maximising your gross investment returns, which (under any given tax regime) will still tend to maximise the net returns. That's all that matters, and the fact that it also happens to maximise the tax liability is really neither here nor there.
Also, with that much loot, why bother investing? You'll probably never spend it all anyway, so why waste time and effort managing it? Just concentrate on enjoying your retirement.
"Ronald Raygun" wrote
I believe I was&am paying attention already! [sitting comfortably at the front :-) ]
OK - full quote: "Once you've spent all you're going to spend initially (clearing debts, buying a Jag etc.)" Well, if you can include the "Jag etc" then you should be able to include all the other goodies like the 1-2m luxury pad, full of all the goodies you've always wanted.
I'd buy these "initially" as well - so where wasn't I listening??
Who was it (some famous celebrity I think) that, when asked how he spent all the money he had earned during his career, was quoted as saying, "I spent most of it on wine, women and fast cars; the rest I just wasted."? I love that quote!
- Julian
George Best?
You were just being obtuse and initially overlooked the "initially" by seeking to infer from "all you're going to spend" that when it's all spent then it's all gone. And even if you did pay enough attention not to overlook the "initially", you turned a blind eye to Adam's clear premise that after the initial spending spree there still would be a non-zero rest, else why would he ask what to do with it?
Not everybody shares your lack of self control. They can do without the luxury pad and other goodies. Well, at least initially!
Now go and stand in the corner in silence for the rest of the lesson.
"Ronald Raygun" wrote
This was not my intention - sorry if you found it that way!
"Ronald Raygun" wrote
I can assure you that I did not!
"Ronald Raygun" wrote
Nope not at all - hadn't thought of that - I inferred from the "Once
*you've* spent all *you're* going to spend initially" (my empahsis) that it applied to what would happen if *I* (Tim) won the 3.2m. Did I read this wrong? Well, perhaps Adam meant to say: "once *I've* spent all *I'm* going to spend initially" - but then again, he didn't."Ronald Raygun" wrote
It was a hypothetical question apparently aimed at the reader. The premise, in the terms of the reader (me) at the time, was certainly not clear.
"Ronald Raygun" wrote
Harsh words indeed! As I'm sure you will realise RR, and as I know you do sometimes too, at the time of writing "my tongue was not necessarily very far from the side of my mouth"!!
I took "you" in the sense of "one".
The premise was clearly implied, since it explicitly referred to a rest. Now, if you took "you" as meaning your good self, and your psychological predisposition is such that this premise would not have applied to you because you'd have blown the lot on day one, then clearly the rest of the question, i.e. what you'd do with the rest, doesn't apply to you, and so you should have bitten your tongue, instead of licking the inside of your damned cheek with it.
In article , Adam Mulvey writes
I have thought about this many times so:
Say I spent £900K - yacht - £300K, house/flat - £250K, gizmos - ??? say £50K, property loans - £300K, (leaving me with an income from properties of about £60K p.a..
So I've got £2.3 million left.
at say 4% p.a. interest = £92,000, less tax @ 40% (£36,800) = £55,200.
So I could have an income after tax of around £100K - I could live on that without touching the capital.
Or, say i eroded the capital at £46K p.a. as well as spending the above, I could have a £150K p.a. debt free lifestyle until I'm 93.
Add in the odd property deal....
Sounds good to me.
"Ronald Raygun" wrote
Tee hee!
Yes, I had a feeling it might be him. Thanks,
- Julian
I'm sure that there were some 70's Pools winners who though exactly the same thing. Then along came 20% pa inflation and their "enough money to last a lifetime" was barely enough to buy a single house to live in and back to work it was.
Tim .
>"Richard Faulkner" wrote
Couple of thoughts :-
(1) Assuming you are 43 now ( 2.3m/46K = 50yrs), when you've "used up" half the capital in 25yrs time - you won't be getting 55.2K interest anymore, would you?
(2) Allowing for an average future inflation rate of (say) 5%pa, then 150K in 50yrs time would be equivalent to only around 13K now. I'm not sure how much of a luxurious lifestyle you could lead on that?
[I realise the property investments may give a real return, but the money on deposit will not...]In article , Tim writes
I know it's not that simple
I suppose the sensible answer for me would be that I would invest all but rainy day money in property, employ a management company, and live off the income.
The income should grow roughly with inflation, as should the capital values.
I think I should have said "all you *need* to spend" on clearing your debts - credit cards, mortgages, etc. The you buy a house and a car - maybe a mansion in Tuscany and a supercharged Bentley, but still just a house and a car, right? Obviously you can then go on to chuck it around in as delirious a fashion as you like - a helicopter, anyone? - but I'll bet you there's not many on this newsgroup who wouldn't get beady-eyed and devious once the golden cheque appears. Even you, Tim!
Adam
In message , Richard Faulkner writes
Shove the £2.3m in a cheap offshore bond investing in a cash account. Get 4% gross, and withdraw (£55.2k+£46k)= £101.2K and keep going until the year 2063.
Why offshore, for a UK domiciled person?
In message , John Smith writes
Gross roll up.
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