What is your long term saving strategies?

rictus123

Well a while since my last post...iv played about with figures and can see me investing my money into property. Nearly 20 so buy first place at 22, 2nd at 30 and third at 40. I'm not looking for someone to come along and try put me off...bad lodgers etc but this is what I want to do. Eventually be mortgage free on all by 50 and taking an income from 2.


That is one of many routes I can take.

tax-exile

Just spent an hour procrastinating and reading all your posts – I completely empathise with you as I had the same strong goals at 16 and started out nearly in the same career path as you via a modern apprenticeship.

I get the impression that you’ve not prepared a budget sheet to forecast your future finances. i.e. when you hit 25, what are your likely outgoings against what you will be able to save? (including your likely £650/800 pm mortgage for the house you’ll be living in) when I moved out of my parents place, oh boy did my budgets change!

Buy to let,

Buy to let is not what is cracked up to be and you need to apply some maths to your plan which include serious expenses.

I bought my first place aged 19 (I’m now 27), it’s barely gone up in value though it’s in London, and I only achieve a rental yield of 5.04%. At the end of the year, my tax advisor and I scrabble around to collect up all the expenses accumulated thoughout the year to discover that come the end of the year, I don’t owe any tax; as I’ve actually barely broken even with the compulsory expenses which must be covered prior to being able to legally rent the property and keep the damn tenants happy.

Future lump sum value,

As for your £1,000,000 goal, someone quite rightly pointed out inflation…. What costs £1 now will prob cost £3.50 in 25 years, meaning £1,000,000 in 25 years will be peanuts.

I feel for you, as everything you’ve said is what I thought at the same ages. But it is doable; I’m now 27 and have put together £105k (debt free) – BUT with the help of an IFA/Barclays Wealth, who guided on the proper maths required, investments which beat inflation, and kicked my butt if I swerved towards something which’d cause debt.

rictus123

Well changed up my goals a bit, im aiming to be king of MSE in near future:cool:

Putting 25% of net income away for past 2 months...working up in ISA.

Looking to build up £10k in current account and that will be my emergency fund and £10k to me will read as £(1) 0,XXX.XX

So il be living off whatever i have above that £10k while saving quater my income into ISA. Looking to get £10k by 21st..so just over 12 months to go.

somethingcorporate

Interesting thread, whilst I think your plan is a little bit naive, the fact that you have one at 19 I think is pretty bloody marvellous so good on you.

I didn't start thinking about money until I finished Uni and it is amazing what a difference it makes starting early! Good luck.

grumpycrab

rictus123 wrote: »

...
So at 25 my goal is to have £66k personal savings, a mortgage with gf with about £50k equity in our house, and a steady income...

Srry, just read this para. My advice (for what its worth) - very good of you to share your mortgae with gf, but keep everything else close to your chest (unless she's earning >= you).
What line of work r u in?

EDIT: scrub that. What line of work WILL you be in? Oh, and become debt free ASAP.

rictus123

Work in building trade...we will be paying same amount for mortgage deposit,moving costs, furnishing and then half any costs after. All my savings will be seperate. I think we should build a joint emergency for washing machine breaking etc. I am dead set on getting into a great financial position

grumpycrab

rictus123 wrote: »

... I think we should build a joint emergency for washing machine breaking etc...

Don't worry too much about a joint emergency fund; set up a joint "house" account and if you need to put more in, for whatever reason, just put more in.

silver_4444_uk

Hello Rictus123,

I have just seen your thread and I think that it is fantastic that someone as young as yourself is going to try and be "financially comfortable" as early as you intend !

My advice is quite simple and it is to carefully invest as much as you can as early as you can and let compound interest do the rest.

I believe it was a certain well known American Investor who said that every dollar lost today could have become a hundred dollars if it had been given the chance.

Rgds.

Silver

silver_4444_uk

Hello FrankCastle,

Inflation will go up and down over time as will the interest/return that he is receiving on his investments.

But it is the fact that he is starting as young as he is and if keeps reinvesting his gains over time into more investments then compound interest will help him achieve his goal.

rictus123

Well iv reviewed my budget again last night and done a forecast budget..alot more realistic than before...

At the current rate of saving im going at i will have £6,200 cash by the end of October. Also covers cost of road taxing van for another year and mot, both due in September. Also covers a weeks holiday abroad in September which im allowing £800 for. Very realistic i think. After my car payment in October i will have paid over half of the car on finance so i will be allowed to hand it back which is what i plan on doing. This will give me an extra £240.30 a month in my pocket as opposed to theres.

With the overtime and homers i get i plan on using that money to cover birthday presents for OH in september and 2 young family members end of October. I also plan on paying off 2 small credit card debts and small overdraft with money from overtime.

The budget also covers me putting away £250 a month between now and the end of March. This will be 8 monthly payments, the first one being in August. This will give me £2,000 spending money for going away to Florida in April.

I doubt i will spend it all but just incase. Think im going over with an empty suitcase and buying a whole years worth of clothes at once.

I feel i am gradually getting there and one day i will look back at this thread and see where my great fortune all started.

The only 1 thing i have to do now...is Stick to the budget!! And then i cant go wrong!!

Away to look for a decent spreadsheet for tracking income/outgoings for next 3 months.