Quitting Work And Spending Cash

[StuG III]

So, how to be self employed then?

[justthisbloke]

So, how to be self employed then?

Simplistically (there are other wrinkles):

Set up ltd company.

Company contracts for work.

I do work as employee of company.

Company invoices and receives payment £40k.

Company pays employee (me) £10k.

Company pays shareholders divis (£5k divis on A Shares held by Mrs JTB, and £5k divis on B shares held by me).

£20k held until April 7th 2016 and, even though under-loaded, employees still need paying and the shareholders still need their divis.

NB. I haven't actually done this or even researched it to any depth but it looks that way to a layman. Were I ever to actually do this, I'd pay an accountant for advice!

[crashmonitor]

Just an observation, I think people over save for their retirement and then take it to their grave for someone else to spend. It is encouraged by the Government who require tax drones and the investment industry seeking business.

The missing part of the equation that all savers seem to overlook is that the reaper draws nearer. Each year that passes by is one less year's savings required. However, savers keep saving and once you get passed fifty you are effectively doubling up your savings, another year gone that you won't need money, another amount added nonetheless.

[LC1]

I hear drugs are quite moreish.

Retirement is the new youth.

[StuG III]

Simplistically (there are other wrinkles):

Set up ltd company.

Company contracts for work.

I do work as employee of company.

Company invoices and receives payment £40k.

Company pays employee (me) £10k.

Company pays shareholders divis (£5k divis on A Shares held by Mrs JTB, and £5k divis on B shares held by me).

£20k held until April 7th 2016 and, even though under-loaded, employees still need paying and the shareholders still need their divis.

NB. I haven't actually done this or even researched it to any depth but it looks that way to a layman. Were I ever to actually do this, I'd pay an accountant for advice!

Sure, but what to do to get paid? I could set up a brewery but the capital would wipe me out or I'd be crushed by rent costs.

[Riedquat]

You can still work part time. And then work on your own ideas in the other time. Whats the next big thing? Maybe you could start a internet forum and monetise it for example.

Part time sounds like the thing to do I think. I'll be stuck with full time for a while yet though, and there's not much chance of early retirement (I'm not at all interested in an increasingly crappy job just to get a bit more money, so generally resist any suggestions that I should "advance" my "career" - I have a job, not a career, and distrust people who look at it the other way around).

[porca misèria]

Simplistically (there are other wrinkles):

Set up ltd company.

Company contracts for work.

I do work as employee of company.

Company invoices and receives payment £40k.

Company pays employee (me) £10k.

Company pays shareholders divis (£5k divis on A Shares held by Mrs JTB, and £5k divis on B shares held by me).

£20k held until April 7th 2016 and, even though under-loaded, employees still need paying and the shareholders still need their divis.

NB. I haven't actually done this or even researched it to any depth but it looks that way to a layman. Were I ever to actually do this, I'd pay an accountant for advice!

Not totally unlike what I do. Except I decided on the government's "living wage" as a basic PAYE payment. Surprisingly it really is a living wage even when paying a market rent.

[Boughtin95]

Having been a workaholic for most of my working life, I walked away from a well paid job 18 months ago.

I had concerns that I would get bored however, nothing could have been further from the truth.

I enjoy being able to pursue my hobbies and interests, having no stress and generally enjoying life.

We own our house outright and have a reasonable pension income, this allows us to live comfortably, travel and still save a little.

To top it off, I've just received notification that a mortgage endowment policy I took out 25 years ago will mature next month and that it will pay out more than the target sum, that's a real bonus and will help boost the, yet untapped, retirement fund.

If you can afford to leave work and live comfortably, I thoroughly recommend it.

[MrPin]

Having been a workaholic for most of my working life, I walked away from a well paid job 18 months ago.

I had concerns that I would get bored however, nothing could have been further from the truth.

I enjoy being able to pursue my hobbies and interests, having no stress and generally enjoying life.

We own our house outright and have a reasonable pension income, this allows us to live comfortably, travel and still save a little.

To top it off, I've just received notification that a mortgage endowment policy I took out 25 years ago will mature next month and that it will pay out more than the target sum, that's a real bonus and will help boost the, yet untapped, retirement fund.

If you can afford to leave work and live comfortably, I thoroughly recommend it.

Sounds good to me! I'll be at my new desk on Monday.

[justthisbloke]

Sure, but what to do to get paid? I could set up a brewery but the capital would wipe me out or I'd be crushed by rent costs.

I suppose that depends on your skillset, access to capital (and appetite for risk), and your personal network.

For me it would an be easy choice. I've developed a fairly niche set of business skills - for which companies seem happy to pay reasonable wonga for short term tasks.

It would still be "a job" disguised as a business rather than, in your example, a capital intensive venture such as a brewery.

[crashmonitor]

Sure, but what to do to get paid? I could set up a brewery but the capital would wipe me out or I'd be crushed by rent costs.

A good point about business sets up, if you have got business acumen (and having your own capital goes with the territory) you are not going to risk it against a comfortable retirement. As far as I can see most business sets up these days are fairly useless enterprises relying on tax credits. An Eastern European girl has set up a catering company near me and it appears to be stuff like putting jelly on a pre-bought cheesecake but I guess the tax credits make it all worthwhile.

Of course JTB wouldn't get tax credits, his wife works and like me operates his business with professional skills from home.

[Freeholder]

I last worked in 2011. I started spending my savings in 2014. It was a very strange moment. All my life I had worked to be in a better financial situation at the end of the year than at the beginning. The only year I didn't manage it was the one when I got divorced. In 2014 I withdrew some money and realised I was not going to replace it. I suffered a brief urge to work again, I quickly stifled it. All those years of working and saving and paying for my house, my current happy idleness is my reward. I keep house for my wife who still works, I persue my hobbies and I empathise with my idle elderly cats. I wouldn't change a damn thing.

[durhamborn]

My business is importing and retailing the goods on Ebay,Amazon and my own website.I pay per pallet to store in a 3rd party warehouse.I had to invest capital of course for the stock to start but apart from that i have no long term fixed costs.If i sell all my stock then my costs end.I have already removed my original capital back (and more) into savings so all stock is from profit now.

Given im only aiming for £10k a year income its very very easy as i have no debts,and tiny overheads.I could easily make five to ten times that,but id need to re-invest all capital,and end up with a lot of money in stock,and risk.I dont want risk.

If i stopped importing tomorrow and simply sold off the stock etc i could live for 10 years on savings without counting any income,putting me 2 years short of a small final salary pension.In reality with income probably 14-15 years.

I actually enjoy doing the few hours a week this takes me.It means i keep up with lots of different skills.

Likely i will carry on for maybe five more years then go even smaller.Perhaps only importing things i can store in the attic that make me a few £ a year.The only certain thing i know is il never work for an employer again,and il never make more than the tax allowance.

I couldnt do it if i didnt own outright though,thats why i hate HPI,because it traps other people by design.

[MrPin]

Life is a risk. As well as the two 'retirements' I switched career at thirty before switching back again after three years. Each time I got a new job again a few months after starting looking.

IMO people are wrong to be concerned about this, but most are. I actually have a bias towards recruiting people who don't have an orthodox career path; I find that in general they are more motivated because they have made an active choice rather than just plodding away in the same line of work they fell into aged twenty.

That would be me Frank!

[Bruce Banner]

Have a good think about what you would actually do with your waking hours for the next year.

I have twice 'retired', both times about April, was in heaven for spring and summer but once the cold and dark months kicked in I began to get very very bored indeed. So bored that I got another job.

I retired in April (2008) and have not once regretted it, nor considered for a millisecond returning to work.

The trick is climes. Different climes for different times.

[winkie]

I last worked in 2011. I started spending my savings in 2014. It was a very strange moment. All my life I had worked to be in a better financial situation at the end of the year than at the beginning. The only year I didn't manage it was the one when I got divorced. In 2014 I withdrew some money and realised I was not going to replace it. I suffered a brief urge to work again, I quickly stifled it. All those years of working and saving and paying for my house, my current happy idleness is my reward. I keep house for my wife who still works, I persue my hobbies and I empathise with my idle elderly cats. I wouldn't change a damn thing.

Fail to plan, plan to fail.....build it up, draw it down.

My business is importing and retailing the goods on Ebay,Amazon and my own website.I pay per pallet to store in a 3rd party warehouse.I had to invest capital of course for the stock to start but apart from that i have no long term fixed costs.If i sell all my stock then my costs end.I have already removed my original capital back (and more) into savings so all stock is from profit now.

Given im only aiming for £10k a year income its very very easy as i have no debts,and tiny overheads.I could easily make five to ten times that,but id need to re-invest all capital,and end up with a lot of money in stock,and risk.I dont want risk.

If i stopped importing tomorrow and simply sold off the stock etc i could live for 10 years on savings without counting any income,putting me 2 years short of a small final salary pension.In reality with income probably 14-15 years.

I actually enjoy doing the few hours a week this takes me.It means i keep up with lots of different skills.

Likely i will carry on for maybe five more years then go even smaller.Perhaps only importing things i can store in the attic that make me a few £ a year.The only certain thing i know is il never work for an employer again,and il never make more than the tax allowance.

I couldnt do it if i didnt own outright though,thats why i hate HPI,because it traps other people by design.

That is the way things are going....more will become trapped unless they receive an inheritance usually around the age of their own retirement...most certainly getting harder and harder for people to do it alone in the future without financial help from others.

[council dweller]

Well, there`s a lot that can go wrong and probably will.

Are you doing the right thing? If you have doubts then maybe you should delay it a few years...

This was a public information film on behalf of the Conservative and Labour parties.

[Walton Goggins]

To top it off, I've just received notification that a mortgage endowment policy I took out 25 years ago will mature next month and that it will pay out more than the target sum, that's a real bonus and will help boost the, yet untapped, retirement fund.

Paying out more than target sum must be rarer than unicorn tears these days ?

Well done for that.

I'm guessing not SL ?

(If you don't mind saying )

[workingpoor]

I have taken 2 years out so far after 23 years of full time PAYE from age 16 (now 39) apart from wanting a good break from the world of work my primary driver has been that i wanted to sample retirement and see what it's like.

So even if i go back (have a job to start in the new year) at least i have sampled retirement for a couple of years.

With the constant assault on the state pension retirement age (67 for me) and more hikes around the corner next year with a current review underway my chances of seeing a state pension are diminishing.

[sleepwello'nights]

Simplistically (there are other wrinkles):

Set up ltd company.

Company contracts for work.

I do work as employee of company.

Company invoices and receives payment £40k.

Company pays employee (me) £10k.

Company pays shareholders divis (£5k divis on A Shares held by Mrs JTB, and £5k divis on B shares held by me).

£20k held until April 7th 2016 and, even though under-loaded, employees still need paying and the shareholders still need their divis.

NB. I haven't actually done this or even researched it to any depth but it looks that way to a layman. Were I ever to actually do this, I'd pay an accountant for advice!

That's basically correct. Unfortunately its not quite as tax efficient as it looks here because the company has to pay Corporation Tax (CT) currently 20%, on its profits.

So £40k income less £10k salary (which will incur a small national insurance charge) leaves taxable profit of £30k, CT of £6K, then first £5k of dividends no tax liability, thereafter income tax of 7.5% until standard rate band exceeded.

Basically the tax saving on the Limited Company dividend strategy is because dividends are not subject to national insurance contributions.

[Frank Hovis]

I retired in April (2008) and have not once regretted it, nor considered for a millisecond returning to work.

The trick is climes. Different climes for different times.

Yes, I think you're right. Maybe somewhere small in Menorca.

[workingpoor]

Yes, I think you're right. Maybe somewhere small in Menorca.

Citudella is a nice town

[JoeDavola]

To the op; definitely take the retirement option, even just to see if you enjoy it. Working is over-rated.

I spent about 7 years after graduating in Uber-stressful software jobs. I found it difficult to rise above the stress of office politics and constantly being asked to work long hours and/or perform miracles, and seriously wondered how I was going to stand another 35 years of this.

Then 3 years ago I got a new job. It's not the highest paying IT job, but it's an absolute skive in comparison, and most of the people are really nice. And the holiday entitlements are good; I calculated that with weekends plus other days off, I'm only in work 60% of the days of the year.

So things are pretty sweet at the moment, to the point where I feel semi-retired at the age of 31. And my 'per hour' rate is better than ever. However, if some new management comes in and ends up ruining it all for us, which could well happen, I'll be quitting and retiring. We're only on this earth for a short time and office politics and stressful situations over things that in the big scheme of things don't really matter....aren't worth it. I'll never be putting myself in a stressful job again (by stress I mean a job where you have to deal with abusive or even just annoying stressful people, and unrealistic work loads). I'll never be putting myself up for promotion as it would involve loads more stress for not much more money.

So yes, if you can retire, do that.

I like the idea of living a small flat somewhere relatively dry and sunny. I could play my guitar, read, and go for a cycle every day. Would also cook three meals of unprocessed food a day so would be in good health. Bliss.

I also reckon a 3 hour work day would suit me perfectly. Get up, make my porridge, work like a demon from 9 to 12, and then have the rest of the day off to cycle, play gui....well, you get the idea

[shindigger]

To the op; definitely take the retirement option, even just to see if you enjoy it. Working is over-rated.

I spent about 7 years after graduating in Uber-stressful software jobs. I found it difficult to rise above the stress of office politics and constantly being asked to work long hours and/or perform miracles, and seriously wondered how I was going to stand another 35 years of this.

Then 3 years ago I got a new job. It's not the highest paying IT job, but it's an absolute skive in comparison, and most of the people are really nice. And the holiday entitlements are good; I calculated that with weekends plus other days off, I'm only in work 60% of the days of the year.

So things are pretty sweet at the moment, to the point where I feel semi-retired at the age of 31. And my 'per hour' rate is better than ever. However, if some new management comes in and ends up ruining it all for us, which could well happen, I'll be quitting and retiring. We're only on this earth for a short time and office politics and stressful situations over things that in the big scheme of things don't really matter....aren't worth it. I'll never be putting myself in a stressful job again (by stress I mean a job where you have to deal with abusive or even just annoying stressful people, and unrealistic work loads). I'll never be putting myself up for promotion as it would involve loads more stress for not much more money.

So yes, if you can retire, do that.

I like the idea of living a small flat somewhere relatively dry and sunny. I could play my guitar, read, and go for a cycle every day. Would also cook three meals of unprocessed food a day so would be in good health. Bliss.

I also reckon a 3 hour work day would suit me perfectly. Get up, make my porridge, work like a demon from 9 to 12, and then have the rest of the day off to cycle, play gui....well, you get the idea

This is what happened to me, i knew the train would hit the buffers one day.

So I milked my cash cow so bloody hard it nearly did for me.

I stashed and lived like a gypo for 8 years. Worth it now though.

[MrPin]

Stressful software jobs, are only made more stressful by continually changing goal posts. I've had a few of those. . I wouldn't subject people to that, as they become unproductive and might leave half way through a task. I'd love to quit work and spend cash. Might be a few years hence?