Financial security

Pal

Has DannyfromManchester posted a great tip on finding wives then?! Where is it?!! I love his posts. Did you know, he's the second most intelligent person posting here?

Tayus - Glad to hear you have your priorities in order. Just remember to spend a little on maintainence now and then.

Also, keep your emergency fund to one side, just in case. There is nothing worse than being forced to give up a "lovely" model and ending up with an old banger, even if it is only a short term runabout until you find something better.

CurryKing_2

To be truly financially secure you need to have an income that doesn't require you to work for it. I.e. a "passive income". For example: royalties from a bestselling financial advice manual, interest payments from the large bond portfolio, ownership of a business that other people run for you.

When the amount of passive income you receive each month is larger than your monthly outgoings, you are financially secure and it doesn't matter whether you lose your job or not. The amount of debt you have is largely irrelevant once you are in that position as long as your passive income allows you to service the debt and meet all your other outgoings.

The vast majority of people do not reach this happy position until they are retired. Their passive income is pensions from the Government and the pensions they built up while working.

Your challenge, should you choose to accept it, is to reach this happy position long before you reach retirement age! Good luck!

As for the short term, any high interest debt that you have will reduce your ability to put money into assets that will earn you an income without your having to work for it, so it is probably better paid off as quickly as possible.

PAL i hope you realise that imo i reckon thats bloody good logic.

I just copied and pasted that onto a word doc and stuck it on the back of my bedroom door to remind me every morning before i go to work ;D ;D ;D

Pat on the back for you

Neil

Pal

Why thank you.

It is always interesting when people talk about their "retirement age". There is no such thing. The day on which you can afford to give up work is the day that your passive income exceeds your outgoings. You are then free to give up work if you want. For many people this coincides with the retirement age of their main pension scheme, but it doesn't have to.

Many people who have not saved for their retirement in some way make the mistake of giving up work at 65 because they think they can, or because they think that the Government wants them to, despite the fact that they cannot afford to do so.

PinkLipstickBabe

Remember that one of the major investments you will need to make in your life is on a wife, and you will need to check out the market before deciding.  As a result you want to makes sure you get top quality "samples" to road test.  

Unfortunately, for this you need to spend some money.  In particular you will need a nice car, deodourant, soap, a lots of alchohol for your "sample" and so on.  

While these items might seem like those that you can cut down on, I highly recommend making a reasonable investment in these areas.  You will find that quality drops very rapidly as soon as you stop spending top dollar.

LOL ;D LOL ;D This post has made me giggle, not an easy thing to do at 7am when I have had no sleep LOL
Top Dollar huh? Well sweetie, you get what you pay for in both women and consumer goods LOL

Tayus

i think that when i have saved £10,000 i will put it away somewhereand forget about it and start again. that can be my Emergency fund.

Leia_Stephens

i think that when i have saved £10,000 i will put it away somewhereand forget about it and start again. that can be my Emergency fund.

£10k is a great Emergency Fund .

donnahaw

Financial security sometimes feels like a non-existent concept. I'm very happy with our savings and to me my partner and I are very secure. However, I've been on the other side of the fence. Nothing in the bank, loans, credit cards, debts. My partner however has never been there. Does he feel financially secure? No. You'd think I'd be the jumpy one but I really think it's all about perspective. That said, he keeps my feet on the ground (and the money in my wallet!) on payday bless him.

Donna

Tayus

just reading through the old posts and thought i push this back to the top to see if anyone else has anymore views on being financially secure???

deemy2004

Absolute Financial security = Interest from savings & investments exceeds total expenditure. With savings pool also growing by 3%. So on a 5% yield 2% would cover total expenditure, 3% added to the pool for indexation. Though I doubt I will reach that state BEFORE I retire.

Still, the closer I get to absolute financial security the easier life feels, i.e. work is a hobby rather than a necessity . Or do some work that produces little or no revenue but is very enjoyable.

Maybe one day I'll decide to scrap it all and go on a spending binge  ;D

Reaper

Absolute Financial security = Interest from savings & investments exceeds total expenditure. With savings pool also growing by 3%. So on a 5% yield 2% would cover total expenditure, 3% added to the pool for indexation.

That would be nice, but when you start to work out the figures you realise how unrealistic it is. The 2% real growth figure sounds correct. Let's say you decide you need £20,000pa to live off. To achieve this you need savings of £1 million!

You could moderate this somewhat if you decide not to leave the kids the money and gradually eat into the capital, predicting how long you will live (or buy an annuity). Even so I think this is out of most people's reach during their working lives.