What is your long term saving strategies?

edinburgher

So to get the £600,000 by the time im 40 i need to put away £1317 a month starting this summer(when i turn 20) until the time im 40...assuming a return of 6% that will give me the money on my 40th birthday if i start on my 20th...

Assuming a constant 6% rate of return over 20 years is not a good idea. Instant access accounts don't always offer the best rates, but they're barely making anything when you allow for inflation (maybe a fraction of a percent). Granted, this recession won't be around for ever, but you're assuming a real rate tens of times higher than it currently is, for decades. Not going to happen.

My salary will rise with inflation though....so its irrelevant id say?

How can you be so sure?

I'm a civil servant - a career choice derided by many as being cushy and full of perks and great pay rises. We're currently facing a 2 year wage freeze, which is a cut in real terms when you allow for inflation? Now, without meaning to sound like a snobby git, I hadn't realised that builders were living in the lap of luxury with money to burn and that their salaries always kept pace with inflation!

I find it hard to believe that you can save £1600/mth (savings + house deposit) when it's more than I earn in total. I'm on £25k and to save that sort of money I'd need a pay rise to £40k or so...

Accountant_Kerry

I wouldn't bet on your salary rising with inflation, especially as you intend to stay doing the same work, there could be another sustained period such as now that interest rates are below inflation, even the stock market isnt certain.

I recommend you are a little more flexible in your plan as you are currently setting yourself up for failure. Also a more focused career plan is likely to bring higher rewards, bear in mind many builders retire early due to ill health because of the physically demanding nature of the jobs they do. Its fine to have the money when you're older no so good if your body is to knackered to enjoy it.

rictus123

Thanks for your reply kpr11 and edinburgher! While im sure its very good advice im getting regarding pensions, you have stated the exact reason in your post as to why i dont want to touch a pension. I dont think i will every really "retire". By "retire" i mean have absolutely no business going ons. Instead of trying to make money investing(which i do not have a clue about) i should stick to what i know and go into property. I know what im doing as far as the building goes and iv already got a lot of contacts in all asppects of the trade, il have even more by the time im 40. A mixture of buy to lets and self builds would be right up my street. So the money could be invested into that. Even using that money part time to make it work for me could see me net an extra £20k or so a year which will be at least the 6% i was hoping for.

I do not trust pensions. Think the age will be upto at least 60 for retiring by the time i get near 55. Also got alot more options what to do with the money if i have access to it.

Edinburger the job im qualified for in the summer pays £32k a year take home for a 30 hour week and the option for overtime is do as much as you can/like...paid at time and a half. Right now i do double that hours as a minimum. Plus i have homers etc to do...but as its dark early at nights now i can only do overtime on the weekends.


Like iv said if i treat it like i dont have it then i wont miss it...

edinburgher

A mixture of buy to lets and self builds would be right up my street. So the money could be invested into that. Even using that money part time to make it work for me could see me net an extra £20k or so a year which will be at least the 6% i was hoping for.

Have you thought about the tax implications of a property portfolio (or for that matter, are you declaring your earnings for your 'homers'?) I think we both know the answers to both of those questions

DebtWriteOffMaster

rictus123 wrote: »

Not rude or harsh what so ever but alot i disagree with. I have 3 and a half years experience in my job having started a week before i turned 16. Iv done my block release at college and im now just over half a year away from my skills test. I wouldnt have bothered one bit with the above if it wasnt realistic. A 19 year old im afraid is not a kid. Maybe dont have as much life experience as some but your post just sounds like you are bitter. Almost as if you wish that you had done simular when you were my age.

There is actually alot of work around here and my boss is currently half way through his development(14 years just on this job so far and at least 10 to go) So there is plenty of work for me. Even if there wasnt that much work for him, my homers would more than make up the difference. Noone around here that has the ability to do my job would do it for anything like £5.90 an hour, Polish or not.

Even if we were to split, i would still have plenty to get by on myself, saving this wont be overstretching myself.

I hope you are on for the long term because you will come to regret that post as you will be very wrong Just because you cant save £1 million doesnt mean others cant!

:rotfl:
I would have thought that due to the H&S regulations of a building site you wouldnt be able to do it till you are 18,
let alone starting at 15!


But even if you have done a college b-tec course in how to work on a building site i just don't buy it for 1second that you earn £30.80 per hour, working manual labour on a building site, which tbh is barely above working as a binman! LOL

Since if you were paid anywhere close to that you boss would need to have his head checked out!


I know a few blokes who work on a building site a few streets away from where i live, some a polish some english,
they are doing the exact same manual labour building work that you are yet are on £6p/h i think.
(And this is in South Kensington, where the 2bedroom they are building will sell for roughl 500k each!!)


I can see that you want to play your little games for abit longer so il leave you to it though.

Have fun being a millionaire!

rictus123

I would be as they would be enough to make it bearable paying the tax on them. I think i could make £200k really work for me...so maybe this should be my aim? £200k then invest it in myself basically. Anyone reading this thread own more than 1 property? Ie a buy to let?

KPR11

rictus123 wrote: »

A mixture of buy to lets and self builds would be right up my street. So the money could be invested into that. Even using that money part time to make it work for me could see me net an extra £20k or so a year which will be at least the 6% i was hoping for.

Pensions come in all shapes and forms, including being able to manage your own pension and investing in commercial property (you will need a few years and a bit of capital behind you before you can consider that.

rictus123 wrote: »

I do not trust pensions.

Pensions can be as safe (obviously with a small risk) or as risky as you want them

rictus123 wrote: »

Think the age will be upto at least 60 for retiring by the time i get near 55.

Possible

rictus123 wrote: »

Also got alot more options what to do with the money if i have access to it.

Agreed. Hence why as a basic rate payer you get a measley 4.8% net return on your investment returning 6% whilst a pension pot investing in the same gets an instant boost of 25% plus the 6% (and then compounds)!

rictus123 wrote: »

Edinburger the job im qualified for in the summer pays £32k a year take home for a 30 hour week and the option for overtime is do as much as you can/like...paid at time and a half. Right now i do double that hours as a minimum. Plus i have homers etc to do...but as its dark early at nights now i can only do overtime on the weekends.

Excuse my ignorance but I thought majority of the building works weren't through out the year and hence why builders usually got paid a premium?! Secondly, how long will your body allow you to do 60 hour weeks or even 45 hour weeks?

I commend your ambition but I do hope that you are aware that this may not materialise and your dreams may shatter!

KPR11

rictus123 wrote: »

Anyone reading this thread own more than 1 property? Ie a buy to let?

I know a lot of people who have burnt their fingers investing in BLT (does that count?!)!

Lokolo

edinburgher wrote: »

I find it hard to believe that you can save £1600/mth (savings + house deposit) when it's more than I earn in total. I'm on £25k and to save that sort of money I'd need a pay rise to £40k or so...

Last year I earnt £1200 a month and managed to save on average £500 a month, so my expensives where around £500 a month. (less if I wanted a spend month though )

So to save £1,500 I would need to increase my earnings to £2200 a month, which is £35k. So the £32k isn't far off from a realistic target.

edinburgher

I would be as they would be enough to make it bearable paying the tax on them

Yes, but my question was, are you declaring your earnings for the homers, as you're legally obliged to do if you're making any real money?