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Buying flexibility

Stocks and Shares ISA , Choosing funds for ISA's, risk factors for funds etc
Investment strategy discussions not dealt with elsewhere.
TUK020
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Re: Buying flexibility

#419980

Postby TUK020 » June 16th, 2021, 2:40 pm

JuanDB wrote:My rough maths indicates i’d need a 4.8% absolute return (can ignore inflation) to fully cover the mortgage payments without touching capital. A low risk portfolio like Golden Butterfly has returned 6%+ back tested over decades. De risk this by paying a couple of years of the mortgage from salary to reduce sequence of returns risk.

Reiterate - that is 4.8% absolute return post tax

JuanDB
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Re: Buying flexibility

#419992

Postby JuanDB » June 16th, 2021, 3:52 pm

TUK020 wrote:
JuanDB wrote:My rough maths indicates i’d need a 4.8% absolute return (can ignore inflation) to fully cover the mortgage payments without touching capital. A low risk portfolio like Golden Butterfly has returned 6%+ back tested over decades. De risk this by paying a couple of years of the mortgage from salary to reduce sequence of returns risk.

Reiterate - that is 4.8% absolute return post tax


Yes, around £12k per annum in absolute value which we have headroom in CGT to cover. Mrs Juan also has some room in other tax allowances for dividends and income. I don’t anticipate paying any tax.

TUK020
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Re: Buying flexibility

#420016

Postby TUK020 » June 16th, 2021, 5:59 pm

JuanDB wrote:
TUK020 wrote:
JuanDB wrote:My rough maths indicates i’d need a 4.8% absolute return (can ignore inflation) to fully cover the mortgage payments without touching capital. A low risk portfolio like Golden Butterfly has returned 6%+ back tested over decades. De risk this by paying a couple of years of the mortgage from salary to reduce sequence of returns risk.

Reiterate - that is 4.8% absolute return post tax


Yes, around £12k per annum in absolute value which we have headroom in CGT to cover. Mrs Juan also has some room in other tax allowances for dividends and income. I don’t anticipate paying any tax.

Fair point if you can manage everything in capital gains rather than income

torata
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Re: Buying flexibility

#420071

Postby torata » June 16th, 2021, 10:34 pm

JuanDB wrote:
TUK020 wrote:
JuanDB wrote:My rough maths indicates i’d need a 4.8% absolute return (can ignore inflation) to fully cover the mortgage payments without touching capital. A low risk portfolio like Golden Butterfly has returned 6%+ back tested over decades. De risk this by paying a couple of years of the mortgage from salary to reduce sequence of returns risk.

Reiterate - that is 4.8% absolute return post tax


Yes, around £12k per annum in absolute value which we have headroom in CGT to cover. Mrs Juan also has some room in other tax allowances for dividends and income. I don’t anticipate paying any tax.


It sounds to me like you've already decided that you want to go ahead with this.

Nobody pointed out any potential 'financial engineering'-type pitfalls that you hadn't already considered, but you didn't get much, even any, 'social proof'-type backing.

I for one will be interested to hear how it goes.

torata

JuanDB
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Re: Buying flexibility

#422065

Postby JuanDB » June 24th, 2021, 10:36 pm

Despite initially approving my application, this has subsequently been declined. Funds originating from a residential mortgage cannot be used for investment in the stock market.

I shall remain on Plan A and see out my remaining time to full financial independence by conventional means.

I plan to tackle My original issue of being a forced seller of employer restricted by bed and ISAing investments in our taxable accounts at times when the employer stock price is low. We have just under 3 years joint ISA contributions in our GIAs so that will keep me busy for a while. I’m not entirely sure why I didn't think of that approach before.

Thanks again for all the comments.

Cheers,

Juan.


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