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  • FIRST POST
    • adonis10
    • By adonis10 2nd Oct 17, 11:54 AM
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    adonis10
    People in their 30's - future financial plans?
    • #1
    • 2nd Oct 17, 11:54 AM
    People in their 30's - future financial plans? 2nd Oct 17 at 11:54 AM
    Having read a couple of interesting threads this morning ('over 50's how did you accumulate wealth' and 'a couple of questions for those retired') it made me want to get opinions of people in a similar situation to myself. Obviously, we face different financial challenges (worse pensions, less chance of profiting so much from property, automation killing jobs and industries etc.) and so I am keen to understand what people in their 30's* are planning on doing to secure their financial future.


    Personally, I feel that I am well behind what I need to secure a relatively comfortable future, especially given the uncertainty around the state pension which will most likely not exist in 30 years time. Many older people seem to have multiple pensions to call upon but how is this possible? Is it tax efficient? Where is the best place to start?


    My circumstances:
    - Salary is a modest 32k. OH's salary circa 35k.
    - Good workplace pension (e'er contributes 16%, I contribute 13%), OH's is a teacher's pension so I think she is sorted!
    - Relatively low mortgage (144k on a 350k property, which is joint with partner) @2.14% fixed until July 2021.
    - Circa 60k in cash and investments. Relative to my income, I think my cash position is ok (but who knows what will happen work wise so I want to keep this and add to it as much as possible) so I need to think about investment growth now and potentially a private pension, however I do think that this is 2nd choice to maximising S&S ISA contributions.
    - Future inheritance will be circa 300-400k based on what is known now, however this could change dramatically with future unknowns (potential care costs etc.) so I am not factoring this into my plans.


    Really keen to hear the thoughts/plans of others.


    *this thread is not discriminating against those outside of their 30's but I've tried to target those in a similar boat to me as naturally one's plans will usually be different depending on which decade of life they are in.



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    Last edited by MSE Andrea; 18-10-2017 at 1:22 PM.
Page 4
    • economic
    • By economic 5th Oct 17, 11:05 AM
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    • 938 Thanks
    economic
    Firstly, incredible position to be in. I am incredibly envious, but it is what is is.



    Totally agree, but the part about increasing the income is really rather difficult at this stage of life. Been through an accountancy qualification and I find myself at 34 on 32k which is obviously quite depressing. Short of retraining (and taking a big pay cut for 5 years) I don't see where significant increases in income will come from so I guess I need to go down the frugality route.
    Originally posted by adonis10
    im in a position where i dont really know where the next stages of my life will go. i left finance hoping to never go back but then i am left with not knowing what to do so i end up applying for finance jobs. i keep thinking only a few more years in finance will enable to be a bit more financially comfortable.

    thats not really the right attitude one should have. i know it is quite tough for those with lower savings and income (im not saying you, im just generalising) but its better to focus on doing things that make you happy, keep the spending less and saving more goals as well, but also develop your skills in areas you like and see what happens. if you like accounting then maybe you can setup your own practice? what about moving to a bigger practice or london for higher wages? or if you dont like accounting then try something you do like and see what happens. of course easy for me to say this and i do think its very difficult / impossible for those who are financially "just getting by".
    • adonis10
    • By adonis10 5th Oct 17, 11:15 AM
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    adonis10
    im in a position where i dont really know where the next stages of my life will go. i left finance hoping to never go back but then i am left with not knowing what to do so i end up applying for finance jobs. i keep thinking only a few more years in finance will enable to be a bit more financially comfortable.
    Originally posted by economic

    True, must be difficult if that is all you've known. You've clearly done the decade of city banking work, been well paid but have been one of the smart ones who has clearly invested well and not just squandered all the cash. Fair play for that as it gives you an incredible platform at 34. I can understand how you get drawn back to applying for finance jobs if that is all you have known career wise (making an assumption) and I have experienced the same with accountancy.

    thats not really the right attitude one should have. i know it is quite tough for those with lower savings and income (im not saying you, im just generalising) but its better to focus on doing things that make you happy, keep the spending less and saving more goals as well, but also develop your skills in areas you like and see what happens. if you like accounting then maybe you can setup your own practice? what about moving to a bigger practice or london for higher wages? or if you dont like accounting then try something you do like and see what happens. of course easy for me to say this and i do think its very difficult / impossible for those who are financially "just getting by".
    Originally posted by economic
    Agree, but I am a realist and there really isn't much out there that I can do to earn the same or more hence why I stick with it. Things that are enjoyable generally tend not to be well paid so I am old and wise enough to know that there is no fairytale to be had there.


    Moved out of practice as it wasn't for me (pensions and benefits are terrible in that arena!) overall so am working as a Finance Business PArtner in a large organisation. I like it, but don't love it. Don't have enough passion for it to move up and up and up, and may not have the ability to anyhow.


    I think we are digressing here and moving into a different topic, but interesting all the same.
    • justme111
    • By justme111 5th Oct 17, 11:25 AM
    • 2,820 Posts
    • 2,710 Thanks
    justme111
    I find myself at 34 on 32k which is obviously quite depressing. .
    Originally posted by adonis10
    please please keep some perspective
    there ALWAYS will be more successful people than one if by success you understand income wealth. it is so sad that you class your income as depressing. please do not forget that the vast majority of earth population either has lived or is living in conditions unthinkable to you - they are no less desrving than you are , they just been born jn a different era and place. please appreciate what you have and don't class it as "depressing" because someone else got more. You are not any less valuable than economic is.
    • bugslet
    • By bugslet 5th Oct 17, 11:34 AM
    • 5,544 Posts
    • 27,432 Thanks
    bugslet
    Firstly, incredible position to be in. I am incredibly envious, but it is what is is.



    Totally agree, but the part about increasing the income is really rather difficult at this stage of life. Been through an accountancy qualification and I find myself at 34 on 32k which is obviously quite depressing. Short of retraining (and taking a big pay cut for 5 years) I don't see where significant increases in income will come from so I guess I need to go down the frugality route.
    Originally posted by adonis10
    It's curious how much perception plays a part. 32k is above average, albeit not a lot and you are certainly savvy with your money as you are waaay ahead of a lot of individuals on the same money that have been more spendy.

    At 34, I was probably earning around 15k so that was mid - late 90s. It wasn't until my mid40s - late 2000s - that I earned distinctly more. But I felt comfortably off, probably because I live in a poor area and some of my friends are financially worse off than me. Some are better off, though not by a huge amount.

    So I wonder if the area you live in and the people you are friends with, make you feel richer or poorer. Not that I recommend going to live on a council estate and hobnob with only minimum wage earners.

    Edit - cross posted with justme - we both think the same!
    • andrewf75
    • By andrewf75 5th Oct 17, 11:34 AM
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    andrewf75
    I find myself at 34 on 32k which is obviously quite depressing
    Originally posted by adonis10
    I find it depressing that someone earning well above the average wage and still young enough to change careers is depressed!
    As the above post, we live in a country with huge differences between rich and poor so everything is relative, but being money savvy on an ordinary income is worth a lot. I know plenty of people earning more who just spend it all and have nothing.
    Last edited by andrewf75; 05-10-2017 at 11:37 AM.
    • JoeCrystal
    • By JoeCrystal 5th Oct 17, 11:37 AM
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    JoeCrystal
    Makes sense. So the e'er contribution method works the same, for example the Local Authority pays in x% as an e'er contribution and that, in addition to her contributions, goes towards paying for the 24k per year in retirement?
    Originally posted by adonis10
    Not exactly. LGPS Fund is a funded pension scheme (one of the largest in the world with £217 billion in asset) and at overall funding level of 85% of the liabilities, it is quite healthy and the only public sector pension scheme that I do not complain about (along with the military). The rest however...

    Your partner on other hand is paying toward the pensioners instead. All the contributions that these public sector are paid directly to the pensioners. If there is a shortfall, then the Treasury (aka the taxpayers) fund the rest. According to the TPS account for 16/17, the income for it was £6.3 billion (both employee's and employer's contributions), and TPS paid out £7.8 billion as pension (if I am reading its annual report correctly?).
    Last edited by JoeCrystal; 05-10-2017 at 11:56 AM.
    • adonis10
    • By adonis10 5th Oct 17, 11:39 AM
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    • 181 Thanks
    adonis10
    I find it depressing that someone earning well above the average wage and still young enough to change careers is depressed!
    Originally posted by andrewf75
    Maybe young enough to but another 5-6 years of starting on circa 20k and moving up doesn't really reconcile with my current financial commitments and aspirations. I started accountancy late (in the sense of when I qualified) so understand the impact it has to start a 'career' job late and am already playing catch up so unsure I can afford to do it again.


    It's curious how much perception plays a part. 32k is above average, albeit not a lot and you are certainly savvy with your money as you are waaay ahead of a lot of individuals on the same money that have been more spendy.

    So I wonder if the area you live in and the people you are friends with, make you feel richer or poorer. Not that I recommend going to live on a council estate and hobnob with only minimum wage earners.
    Originally posted by bugslet

    Most earn more, so I guess peer envy plays a part. Live in quite an expensive area so I guess this increases my perception that 32k is not a lot.
    Last edited by adonis10; 05-10-2017 at 11:44 AM.
    • andrewf75
    • By andrewf75 5th Oct 17, 11:55 AM
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    andrewf75
    I'm surprised there aren't more opportunities for a qualified accountant to earn more. I'm on a similar salary to you in my 40s but with no real career type work qualifications and one of the things I'd looked at to re-train into was accountancy!
    • PensionPost
    • By PensionPost 5th Oct 17, 12:19 PM
    • 3 Posts
    • 4 Thanks
    PensionPost
    Regular poster but using a new account as I don't want my finances linked to my main account.


    Me - 33 - Accountant, on £80k + bonus which in the last few years have been £30k-£50k range, with 10% ee pension contributions


    Wife - 28 - Accountant, on £75k + bonus which in the last few years have been £8k-£10k with 11% ee pension contributions.


    I put 16% into pension for a total 26%, wife puts 9% to make hers 20%


    After a long while studying, doing more qualifications, we are now in the jobs that will let us plan for our eventual retirement.


    Current position.


    House recently bought for £700k with a £250k mortgage (£450k equity)
    £140k combined pension posts (only started hammering cash into these in the last few years)
    Investments of £100k, split between S&S ISA and cash ISA (which is our safety net of 24 months expenditure, excessive I know, but it would also cover a car if one went pop).


    Plan,
    I max out pension contributions to keep me under £100k, wife increases contributions to match pay rises, we save/invest the rest in S&S ISA's to bridge the gap between retirement and pension access date.


    All done as soon as possible as you never know when the pension drawbridge will be pulled up.


    Planning to retire at 55 but will be disappointed if I haven't gone sooner.


    We both earn really really well, but we also live like we did when we were on half the money, which means we save like crazy, we drive sensible cars, holidays are our main weakness, but we could be a lot worse, 3 holidays a year, but not crazy extravagant.


    I was brought up poor, and had getting value for money drilled into me, and I haven't changed.
    • JoeCrystal
    • By JoeCrystal 5th Oct 17, 12:27 PM
    • 1,276 Posts
    • 728 Thanks
    JoeCrystal
    Totally agree, but the part about increasing the income is really rather difficult at this stage of life. Been through an accountancy qualification and I find myself at 34 on 32k which is obviously quite depressing.
    Originally posted by adonis10
    Don't think like that! You have done well to get to that point. According to provisional 2016 ASHE table, the median annual gross income (without bonus or overtime) for all employee jobs is £23,099. The 70th percentile is £32,244. So an employee on that income is already better than two third of the employees in the country. (To be in top 90%, an employee would be earning £50,220 at least)
    Last edited by JoeCrystal; 05-10-2017 at 12:43 PM.
    • ex-pat scot
    • By ex-pat scot 5th Oct 17, 12:37 PM
    • 207 Posts
    • 228 Thanks
    ex-pat scot
    I'm surprised there aren't more opportunities for a qualified accountant to earn more. I'm on a similar salary to you in my 40s but with no real career type work qualifications and one of the things I'd looked at to re-train into was accountancy!
    Originally posted by andrewf75

    There are many many flavours of accountants and of accounting roles.
    I have found that your choice of industry, whether you work in practice, your flexibility and willingness to move around all pay a big element in your marketability.
    Location is the biggest differentiator. I have worked for many years in the regions and there's quite a ceiling for both salary and seniority of roles, whereas in London there's a huge uplift and potential for advancement.


    There's no right answer, but I have found that staff willing to travel, work away from home, and willing to move regularly, are those who progress and have the best packages.


    I moved from a regional FS business to a London consultancy, and more than doubled my package, but have to travel a lot and stay away from home 4 days a week.
    • Farel01
    • By Farel01 5th Oct 17, 12:43 PM
    • 93 Posts
    • 114 Thanks
    Farel01
    I'm 32, OH 37. We've only really been saving since I took over our finances 4 years ago, before that we were on lower paid jobs, always overspending on holidays etc. and my OH just doesn't have a head for it. So the current position now is:

    Salary: 40K + 10% bonus
    OH Salary: 80K + 30% bonus this year

    - about 75k in combined pensions. I pay 20% in (10% by employer), OH pays 10% in (5% by employer)
    - 48k in S&S ISA
    - 85k in 1 year savings account (to pay off CGT and house)
    - 5k in P2P
    -150K in equity (90k mortgage on a 240k house (will pay off with above savings next year)

    So all in all not unhappy Could be better if we'd been smarter, but have also had a massively good time so **** it

    We don't have children and not sure whether that's in the cards for us, but I think we'd be ok. I'm planning to retire 6 years early at the same time as my OH, that's what the S&S ISA is for. I could put that in my pension or a lisa as well, but if anything happens and we need to take it out before 55 we still have that flexibility.
    Debt free as per 22/12/16 -
    • PensionPost
    • By PensionPost 5th Oct 17, 12:44 PM
    • 3 Posts
    • 4 Thanks
    PensionPost
    There are many many flavours of accountants and of accounting roles.
    I have found that your choice of industry, whether you work in practice, your flexibility and willingness to move around all pay a big element in your marketability.
    Location is the biggest differentiator. I have worked for many years in the regions and there's quite a ceiling for both salary and seniority of roles, whereas in London there's a huge uplift and potential for advancement.


    There's no right answer, but I have found that staff willing to travel, work away from home, and willing to move regularly, are those who progress and have the best packages.


    I moved from a regional FS business to a London consultancy, and more than doubled my package, but have to travel a lot and stay away from home 4 days a week.
    Originally posted by ex-pat scot

    I agree with this, I've found the sweet spot to be the home counties, pressure isn't as intense as in the city, but packages are in line given the lower costs (relative to London, still crazy!).


    We both (wife and I) did the usual Practice for Chartered, then jumped to FC commercial roles in industry, and moved up pretty quickly without moving companies too much.
    • adonis10
    • By adonis10 5th Oct 17, 12:50 PM
    • 1,455 Posts
    • 181 Thanks
    adonis10
    I agree with this, I've found the sweet spot to be the home counties, pressure isn't as intense as in the city, but packages are in line given the lower costs (relative to London, still crazy!).


    We both (wife and I) did the usual Practice for Chartered, then jumped to FC commercial roles in industry, and moved up pretty quickly without moving companies too much.
    Originally posted by PensionPost
    Sounds good, worked out well.

    I am limiting myself currently by not being willing to move but this is my history:
    - 6 years in various practice roles
    - Finance Business Partner for past 2 years in large charity.


    I need to continue to learn and update my skills but need to strike the right balance between staying somewhere and stagnating and jumping ship every 18 months for a payrise.
    • AlanP
    • By AlanP 5th Oct 17, 1:14 PM
    • 938 Posts
    • 644 Thanks
    AlanP
    Sounds good, worked out well.

    I am limiting myself currently by not being willing to move but this is my history:
    - 6 years in various practice roles
    - Finance Business Partner for past 2 years in large charity.


    I need to continue to learn and update my skills but need to strike the right balance between staying somewhere and stagnating and jumping ship every 18 months for a payrise.
    Originally posted by adonis10
    My daughter has started working in the charity sector this year after leaving Uni with a solid 2.1 from a good university.

    Salary is not what attracted her to the sector, she could get paid a lot more if she went into finance/industry/public sector but that isn't what she wants to do with her life.

    Charity sector will typically be a lower paying sector for all roles.

    Have you looked at what the local authorities near you are recruiting for? Finance Business Partners are always in demand where my wife and I work.
    • louloubelle79
    • By louloubelle79 5th Oct 17, 1:34 PM
    • 196 Posts
    • 91 Thanks
    louloubelle79
    I have put off posting here as felt in s different league to everyone else but sure others feel the same. I am 38 and have only got financially savvy last few years. Deciding to OP mortgage on our small terraced house, just started pension last year as been in and out of work as a nurse raising kids and doing degrees in nursing. Husband not started pension yet (also 38) got appt to arrange next month. Yes we are very behind everyone else and can only dream of your positions. Husband earns £31k and I earn £13k pa part time nurse. I have always believed that wealth and health need to be balanced. Seeing family die before retirement and people work in jobs they hate all their lives makes me reevaluate what life is about. I intend to save as much as I can in order to stay healthy physically and mentally but also enjoy life along the way x I'm looking forward to hearing your journeys and tips on how to save for our futures
    Hoping to be mortgage free by 2026 age 47
    Current rate 2.79% fixed for 10 years
    Current mortgage end date: 03/10/2043
    MFW Starting Mortgage Jan 17 - £114,703
    • andrewf75
    • By andrewf75 5th Oct 17, 2:00 PM
    • 7,590 Posts
    • 12,644 Thanks
    andrewf75
    Yes we are very behind everyone else and can only dream of your positions.
    Originally posted by louloubelle79
    you're ahead of many as well, don't forget that there will be a huge bias here towards people who earn good money and plan meticulously for the future.
    • chucknorris
    • By chucknorris 5th Oct 17, 4:44 PM
    • 9,211 Posts
    • 13,831 Thanks
    chucknorris
    I am turning 30 later this month unfortunately.

    Salary £38k, I have the following so far:

    LGPS £4k per annum and AVC of £2k, contribute £250 per month.
    S&S ISA/S&S LISA/IFISA/SIPP £21k, contribute £750 per month.
    Premium Bonds £5k emergency fund.

    My wife (also 30) and earns a bit less pays into the RPS and BRASS, she also has a S&S ISA/S&S LISA/SIPP worth £6k and pays £110 per month.

    Our rent is £9k a year but to buy a similar house would cost £450k. At those valuations I am not interested in buying. A house price crash could change our minds (expensive part of London).

    I dont know if I am doing well based on this thread! If you value the DB pension at 20 times then I am worth over £100k and doing alright, if you take it at face value it all looks a bit meager.

    That being said now im up to £750 per month the investments should start to grow a bit faster.
    Originally posted by Drp8713
    I think that it is worth much more than X20, I know that this is used for the LTA calculation (and X16 for the annual allowance), but I think that is quite generous. I realise that when using it to calculate net worth it becomes quite subjective, but I use X28.5 (which I still think is on the conservative side for me).
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • chucknorris
    • By chucknorris 5th Oct 17, 4:56 PM
    • 9,211 Posts
    • 13,831 Thanks
    chucknorris
    Exactly, I post extensively on other boards (and this one), unfortunately I find that if people get wind of a high earner they view advice and comments in an entirely different light, hence the new account, and I've unfortunately been proved right to do it.


    happy to not post again though, thought my post was quite nice cant see how it could be taken as a troll post.
    Originally posted by PensionPost
    Sorry that was my fault, I missed at first what you said about being regular poster etc. When I noticed it, I immediately deleted my post, but the OP had also almost immediately replied to my post.

    I know what you mean, I am quite wealthy and it does bring hassle, but I decided to just ignore the jealousy, once again sorry, my bad.
    Chuck Norris can kill two stones with one bird
    The only time Chuck Norris was wrong was when he thought he had made a mistake
    Chuck Norris puts the "laughter" in "manslaughter".
    After running injuries I now also hike, cycle and swim, less impact on my joints.

    For the avoidance of doubt Chuck Norris is an actor and an ex martial artist (not me)
    • Alexland
    • By Alexland 5th Oct 17, 10:08 PM
    • 445 Posts
    • 262 Thanks
    Alexland
    I also admit to being a part qualified management accountant. I only do the exams occasionally (buying the books on Amazon and taking the public exams) as a hobby as I am already an expert in my main career path which provides me sufficient income. Still I find it interesting and over the years it has generally helped my career by delivering results for my employer.
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