Looking for ideas here, to minimise what is about to probably become my most expensive cost. I wouldn’t count my mortgage, as most of my monthly outgoings are capital.
Currently thinking about a Nissan Leaf, 39kwh model for £293 a month, but with my mileage realistically of 10,000 would amount to costs of 323pcm, so £3876 a year.
Would I be right in saying if I shoot for assets returning 5%, then 3876 / 5% would mean that I need a whopping 77k investment ?!?!?
Pretty much, yes. Although you’d be looking at a perpetuity here, while the car may not be; ie. the investment would still be fully there many years past the car useful life.
But of course, if looking for some perpetual lease, then yeah, it’s correct.
Honestly depending on your age I wouldn’t use the dividend income, my dividends could cover insurance costs but it’s worth more reinvesting but if you can normally pay it it’s just worth to reinvest and just add the expenses into your budget and work around around it.
Although most likely a big jump like a car would force either a reduction in your savings/investment rate anyway if you’ve optimized things well already.
Also just a note as I know you like investing into UK divs (I do too- they also pay more), UK companies have a lot less qualms about cutting dividends/reducing temporarily during hard times (sometimes pressured by regulators) so you might find yourself forking out money regardless.
To sum up, if you are an older individual, go ahead imo.