Savings - how much should I have by now?

londonman81

I'm 28 years old and with the whole credit crunch situation, I have been thinking more about my savings.

Is there anyone who can give some idea of how much I should have in my savings account by my age in order to consider myself well-off?

I know it'lll depend on my individual lifestyle etc, but is there a rough guide of how much I should have saved by age of 28?

Thanks!

jon3001

http://forums.moneysavingexpert.com/showpost.html?p=16769579&postcount=7

londonman81

http://forums.moneysavingexpert.com/...79&postcount=7

thanks for that. but i'm not sure I believe the results of that formula - seems very high!

I am not sure if the average 26 year old on £35k will really have accumulated £91,000!

Assuming he/she started working at age of 21, they would have to have saved £18200 per year, which when you consider that £35k after tax is really a lot less, also rent/bill...it's unlikely...or am I wrong?

Lokolo

Yes but don't forget thats after 21 years of not earning.

Change that to 35 and the rate/year is obviously a lot lower.

Its not the best formula to go by but its a rough guide. It aims you should be saving at least 10% of your earnings, I aim for higher but thats just me.

What you really need is at least 12 months of salary saved up incase you lose your job or whatever then save as much as you want, but the less you spend the better off you will be.

gozomark

see the replies to that post

http://forums.moneysavingexpert.com/showthread.html?p=16769579#post16769579

amistupid

Your disposable income (take home pay) is spent on necessities, non-essentials or savings. As each individuals necessities can vary enormously I would question the validity of such a simple equation.

jon3001

londonman81 wrote: »

thanks for that. but i'm not sure I believe the results of that formula - seems very high!

I am not sure if the average 26 year old on £35k will really have accumulated £91,000!

Assuming he/she started working at age of 21, they would have to have saved £18200 per year, which when you consider that £35k after tax is really a lot less, also rent/bill...it's unlikely...or am I wrong?

Average or median 26-year old? For each bunch of individuals you describe there'll be a mega-wealthy individual who has built up a valuable business and has kept their realisable taxable income low. This skews the average but statistically the formula stands.

http://en.wikipedia.org/wiki/Mark_Zuckerberg

jon3001

amistupid wrote: »

Your disposable income (take home pay) is spent on necessities, non-essentials or savings. As each individuals necessities can vary enormously I would question the validity of such a simple equation.

There are young people who are building fortunes before they even leave college. They aren't limited to thinking in terms of 'take home pay'.

19-year old student wins over $1M playing poker.

18-year old girl wins $2M as a poker-pro.

21-year old student builds $1M home-page.


These are just some of the more well-reported examples I've come across. There are probably many examples of young entrepreneurs in more mundane businesses (e.g. carwashes, laundrettes) that quitely get on with being wealthy with very little publicity.

amistupid

jon3001 wrote: »

19-year old student wins over $1M playing poker.

18-year old girl wins $2M as a poker-pro.

21-year old student builds $1M home-page.


These are just some of the more well-reported examples I've come across. There are probably many examples of young entrepreneurs in more mundane businesses (e.g. carwashes, laundrettes) that quitely get on with being wealthy with very little publicity.

For every lucky gambler and young student entrepreneur there are probably more than ten thousand hardworking students who leave with a degree, no job (and in the current economic climate no employment prospects) and tens of thousand pounds of debt.

jon3001

amistupid wrote: »

For every lucky gambler and young student entrepreneur there are probably more than ten thousand hardworking students who leave with a degree, no job (and in the current economic climate no employment prospects) and tens of thousand pounds of debt.

If you think these young poker players are merely 'lucky gamblers' then you're massively mistaken. They have a keen understanding of game theory, probability, opponent profiling and psychology.

The formula is based on the regression of statistical data. Just because the experiences of the people you personally deal with differ from the generated outcomes does not render it invalid.

nobby24

I presume they must be talking about single people with no incumbents? How about a 29 year old, married with two kids and with negative equity or waiting for his house to be repossessed or recently made redundant? £91,000! Must be the Old Etonian newsletter!