Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@. Skimlinks & other affiliated links are turned on

Search
  • FIRST POST
    • sparkychris
    • By sparkychris 17th Mar 17, 8:20 PM
    • 501Posts
    • 841Thanks
    sparkychris
    Hundred grand in 23 years
    • #1
    • 17th Mar 17, 8:20 PM
    Hundred grand in 23 years 17th Mar 17 at 8:20 PM
    Hello team!

    I have been awful with money my whole life and up to my neck in debt until a few years ago when I had my light bulb moment and dug myself out of debt.

    I am now allergic to borrowing and rent my home, which is not wise, I know.

    If I want to retire in 23 years time with a lump sum, how would/could I work out how much I would need to accrue, one way or the other that would equate to a hundred grand of today's money?

    I am up to about 20k at the minute, and won't lock my cash away in pensions. I pay into a ls 80 fund, punt on shares and basically just save up!
    lurker
Page 2
    • Eco Miser
    • By Eco Miser 18th Mar 17, 7:29 AM
    • 2,982 Posts
    • 2,760 Thanks
    Eco Miser
    Then they'd not be relying on the state pension alone, they'd be making use of housing benefit as well.

    I don't think this will be any good for the OP if living in a terraced house is beneath him
    Originally posted by masonic
    Round here the social housing (there are no council houses) are semis with gardens, or apartment blocks. The terraces are privately owned.
    Eco Miser
    Saving money for well over half a century
    • Fatbritabroad
    • By Fatbritabroad 18th Mar 17, 8:02 AM
    • 170 Posts
    • 73 Thanks
    Fatbritabroad
    Can I also just say congrats on getting out of debt
    • BananaRepublic
    • By BananaRepublic 18th Mar 17, 8:07 AM
    • 820 Posts
    • 577 Thanks
    BananaRepublic
    Renting rather than buying a home is plain stupid, you are throwing away money. A house is a great investment, so why fund your landlord's retirement? As to the house you can afford, learn to live within your means. And move up in ten years. Or buy a run down place and do it up.

    A pension is good, at age 55 you can take money out, but best not.
    • jdw2000
    • By jdw2000 18th Mar 17, 9:13 AM
    • 415 Posts
    • 109 Thanks
    jdw2000
    I have friends the same age (early 40s) in the same postition. They could have bought properties but chose not to.

    Buying my house was the single best decision I ever made.
    • Bravepants
    • By Bravepants 18th Mar 17, 10:49 AM
    • 246 Posts
    • 270 Thanks
    Bravepants
    I live in a terraced house, it's beautiful, comfortable, has everything my partner and I need. We have space to entertain friends and family, with BBQs and parties, space for private parking, wooden floors, a piano, big TV, mortgage is fully paid off. You don't have to live in a massive house and pay rent to be comfortable or "happy" as you call it.

    I grew up on a crappy council estate as part of a one parent family, on the poverty line, yes I know what it's like to be truly flippin' miserable. I know now I do not intend EVER to go back there and I've worked hard for it, but I still live in a modest house because well that's more than I had when I was a kid, and i'm very comfortable and happy thank you.

    You would be better moving to the North of England (if not already there) buying a terraced house where they are cheap, paying the cheaper mortgage (compared to throwing money away on rent) and then investing in a SIPP if you don't have a work's pension, or an ISA as has been said.

    In the meantime spend some time developing your skills and knowledge to improve yourself and find a better paying job.

    It's a cold hard world out there and people need to fight to survive sometimes.

    But you don't want to be doing your fighting when you are too old or ill to work anymore; do it now while you got 23 years ahead of you before retiring!!

    If you're living beyond your means now, you will definitely be living WELL beyond your means in 23 years time.
    Last edited by Bravepants; 18-03-2017 at 10:56 AM.
    • atush
    • By atush 19th Mar 17, 7:52 AM
    • 16,239 Posts
    • 9,910 Thanks
    atush
    Renting rather than buying a home is plain stupid, you are throwing away money. A house is a great investment, so why fund your landlord's retirement? As to the house you can afford, learn to live within your means. And move up in ten years. Or buy a run down place and do it up.

    A pension is good, at age 55 you can take money out, but best not.
    Originally posted by BananaRepublic
    This.

    Buy yourself a home. Get over your attitude against a terrace if that is all you can afford, you wont be able to afford even that once you retire with just 100K.

    Build up another 20k plus, then get on the ladder.

    In the meantime, try and change your thinking. Having money in a pension where you cant spend it is a great thing. No one can take it from you to pay debts, and no one can make you spend it on living if 'disaster' strikes. Your 20K could suffer one or both of these fates.
    • sparkychris
    • By sparkychris 19th Mar 17, 8:37 AM
    • 501 Posts
    • 841 Thanks
    sparkychris
    Morning team.

    With regards previous posts...

    I don't have an attitude towards terraced homes and I don't consider it beneath me. Like bravepants I was also brought up on a council estate and have seen struggle. I have lived in terraced houses, bedsits, flats, house shares and have been a lodger. I've even lived rough in a sleeping bag. Unlike bravepants it has taken me much longer to get my botty in gear. I'm not a victim and I'm not bitter about anything- I have made all of my own ill informed decisions.

    However, I am now in the position I'm in and can honestly say that living where I live right now has made me the happiest I've ever been in my life and although it would make good economical sense for my to move to Rochdale and buy a terraced house, it's just not going to happen.

    My bills are split 50/50 with my partner, I have one holiday a year in the lakes, my car cost two grand and it has years left in it. When it dies I'll get another two grand car.I have no credit cards or loans. I shop carefully, eat my own sheep and eggs and brew my own beer. I don't feel that I live beyond my means.

    I appreciate the time everyone has taken to reply and have been thinking about this thread and think that I should indeed be looking into a pension now I have my buffer. I think that I have felt so proud of my little nest egg that I have wanted to watch it grow!

    I do think though, that's it's not the worst idea in the whole world to buy a place (perhaps even terrace! ) that I may be happy to live in when i'm old and manky and I've got no teeth and I wee when I laugh and my back is ruined and I'm blind now, and spend the next 23 years (or whatever) renting it out and looking after it, whilst renting my place in the country.

    So... I will be looking at pensions.

    You win

    Thank you.
    lurker
    • AnotherJoe
    • By AnotherJoe 19th Mar 17, 8:40 AM
    • 7,227 Posts
    • 7,737 Thanks
    AnotherJoe
    Hello team!

    I have been awful with money my whole life and up to my neck in debt until a few years ago when I had my light bulb moment and dug myself out of debt.

    I am now allergic to borrowing and rent my home, which is not wise, I know.

    If I want to retire in 23 years time with a lump sum, how would/could I work out how much I would need to accrue, one way or the other that would equate to a hundred grand of today's money?

    I am up to about 20k at the minute, and won't lock my cash away in pensions. I pay into a ls 80 fund, punt on shares and basically just save up!
    Originally posted by sparkychris

    So, you are continuing to be awful with money.

    Really no point advising you, what's the point telling someone best way to save if they burn a fiver each time they save a pound?

    Edit; just seen your last post, so, good decision.
    • atush
    • By atush 19th Mar 17, 9:03 AM
    • 16,239 Posts
    • 9,910 Thanks
    atush
    I agree, you are coming around. And if the terrace you buy to rent is your only home, you will save some of the extra costs BTL investors face now. Basically, you need somewhere (not isolated) to live one you are old, and privately renting is very expensive for pensioners and insecure as you could be told to leave at any time.

    Pensions really are the way forward for you. Are you employed or self employed?

    PS, you c an continue to watch your 20K grow, if you keep putting it in high interest accts available, and consider putting half in a S&S isa for long term growth.
    • ViolaLass
    • By ViolaLass 19th Mar 17, 9:48 AM
    • 5,015 Posts
    • 6,936 Thanks
    ViolaLass

    PS, you c an continue to watch your 20K grow, if you keep putting it in high interest accts available, and consider putting half in a S&S isa for long term growth.
    Originally posted by atush
    You can also watch it grow by putting it in a pension and reading the statements every year.
    • Dird
    • By Dird 19th Mar 17, 1:48 PM
    • 2,607 Posts
    • 1,558 Thanks
    Dird
    My slightly less scary idea is a buy to let so that a tenant would help pay for my property over 20 years or so.
    Originally posted by sparkychris
    I suggest you watch the following:
    - Can't Pay We'll Take It Away
    - Here Come the Sheriffs
    - Nightmare Tenants, Slum Landlords

    There's a real chance that not only would you be paying your £650/month but you'd also be paying the mortgage on your BTL and eviction fees when you get a tenant who stops paying; then rennovation fees to make it presentable to rent again as they typically leave the places in a mess. Also many mortgage providers expect you to own your own home before BTL

    Are you working now? Does your company provide a work pension? If so I'd max out the matched contributions in that then keep the £20k in the bank (filtering some towards Regular Savers paying 5%) with the plan on using it to buy your own house, not a BTL. You say you like a tenant paying your mortgage...the same way you're paying someone else's mortgage right now? There's no major difference between a semi & a terraced
    Mortgage (Nov 15): £79,950 | Cashback sites: £900 | Current accounts: 16
    Mortgage (Sep 17): £75,229 | £30k in 2016: £30,300 (101%) | £25k in 2017: £15,171 (60.6%)
    • Doshwaster
    • By Doshwaster 19th Mar 17, 2:09 PM
    • 4,719 Posts
    • 3,847 Thanks
    Doshwaster
    I rule out pensions because the idea that my money is inaccessable if a disaster should occur is really scary...
    Originally posted by sparkychris
    On the other hand if disaster does strike then your pension pot is protected from anyone who may be wanting money off you.
    • Fatbritabroad
    • By Fatbritabroad 19th Mar 17, 4:24 PM
    • 170 Posts
    • 73 Thanks
    Fatbritabroad
    Another option if you do buy say 3 bedroom terrace is the rent a room scheme. No stamp duty implications and can rent two rooms for 7500 a year tax free.
    • Fatbritabroad
    • By Fatbritabroad 19th Mar 17, 4:25 PM
    • 170 Posts
    • 73 Thanks
    Fatbritabroad
    In total I should say not each mores the pity
    • jamie_02
    • By jamie_02 19th Mar 17, 6:15 PM
    • 86 Posts
    • 50 Thanks
    jamie_02
    Have you factored in inflation? And have you factored in how you're going to pay for things if you live to 100, especially if the last 30 years of that is in an old people's home?
    • BananaRepublic
    • By BananaRepublic 19th Mar 17, 7:34 PM
    • 820 Posts
    • 577 Thanks
    BananaRepublic
    I agree, you are coming around. And if the terrace you buy to rent is your only home, you will save some of the extra costs BTL investors face now. Basically, you need somewhere (not isolated) to live one you are old, and privately renting is very expensive for pensioners and insecure as you could be told to leave at any time.

    Pensions really are the way forward for you. Are you employed or self employed?

    PS, you c an continue to watch your 20K grow, if you keep putting it in high interest accts available, and consider putting half in a S&S isa for long term growth.
    Originally posted by atush
    If you are suggesting that owning only one house as BTL has tax advantages, I think that is incorrect. If you do not live in it, then you pay CGT when you sell, as well as income tax on the rent. Owning your own home is perhaps the best most tax efficient investment out there.

    Renting a home without good reason is utter madness in my view. It is one route to an impoverished old age.
    • shortcrust
    • By shortcrust 19th Mar 17, 7:50 PM
    • 1,324 Posts
    • 1,726 Thanks
    shortcrust
    I'd rather own a tiny terraced house than worry about paying rent when I'm too old to work.
    • Anthorn
    • By Anthorn 19th Mar 17, 9:16 PM
    • 3,097 Posts
    • 796 Thanks
    Anthorn
    Why confine yourself to a hundred grand. Follow the 80's example: Have a good idea, start with capital of £500, double your capital just 11 times and you've got over a million

    You won't get very far just saving. Not these days anyway.
    • atush
    • By atush 19th Mar 17, 9:32 PM
    • 16,239 Posts
    • 9,910 Thanks
    atush
    If you are suggesting that owning only one house as BTL has tax advantages, I think that is incorrect. If you do not live in it, then you pay CGT when you sell, as well as income tax on the rent. Owning your own home is perhaps the best most tax efficient investment out there.

    Renting a home without good reason is utter madness in my view. It is one route to an impoverished old age.
    Originally posted by BananaRepublic
    You are right on CGT, but forgetting other taxes such as the increased stamp duty for those who own more than one home. you re also forgetting that is you move into a home that was formerly rented then CGT is reduced.

    I dont disagree owning your own home is better- i suggested that earlier in t his thread. The OP does not want to move from their rented home where they live (and cannot afford to buy what they want there apparently), so was suggesting some alternatives to renting privately in old age.
    • atush
    • By atush 19th Mar 17, 9:35 PM
    • 16,239 Posts
    • 9,910 Thanks
    atush
    You can also watch it grow by putting it in a pension and reading the statements every year.
    Originally posted by ViolaLass
    Apart from t he fact they cant put it all in and still have an emergency cash fund? Remember, this is a person who just crawled out of debt (and well done for that).
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

386Posts Today

4,481Users online

Martin's Twitter
  • Shana tova umetuka - a sweet Jewish New Year to all celebrating. I won't be online the rest of t'week, as I take the time to be with family

  • Dear Steve. Please note doing a poll to ask people's opinion does not in itself imply an opinion! https://t.co/UGvWlMURxy

  • Luciana is on the advisory board of @mmhpi (we have MPs from most parties) https://t.co/n99NAxGAAQ

  • Follow Martin