Millionaire Challenge

The_G_2

Marine_life wrote: »

ok, so my contribution - am a bit older than you lot but am inspired by the optimism and drive of some of the posts. Im 46.

I have been rubbish with money and have always seemed to enter the property market at the peak and get out at the bottom!!

So I have had to rely on salary.

Adding everything together we hit the 1 million this year. That includes:

200k equity in our main property
A holiday home worth 150k
Investment in my business 100k
Cash, shares, investments 650k

Do we feel rich? No. but we are far from struggling.

Despite investing incompetence we have managed to accumlate wealth by increasing salary.

At 29 I was earning 28k per annum
At 31 it was 33k
At 33 it was 39k
at 35 it was 90k

Last year it was 645k

I am clever and have ability but have been lucky and been in the right place at the right time.

Hoping to retire at 50.

Interesting topic and some quite inspiring posts..

I’m 35 and have a net worth of somewhere in the region of £2.1m, to give an idea on timescales I achieved this in:

@25 I had 250k
@28 I had 500k
@30 I had 1m
@34 I had 2m

I would echo the post above in saying that increasing salary is one of the best ways to achieve your £1m goal as no matter how hard you save and live like a miser when earning 25kpa you will never become a millionaire.

A word of caution, many on here seem to thing the only route to riches is getting in debt i.e getting mortgaged up to the hilt on a BTL portfolio, a million pounds worth of debt does not equal rich. Property has done so well over the last 10-15yrs that everyone thinks it is a sure thing when in reality the only thing keeping house prices so over inflated is the lowest interest rates in 300 years, they will rise at some point and a lot of people will get burnt!.

I’m not saying property can’t make you rich but you need to question the logic and try and think different to the masses. If you asked 100 people “how do you get rich?” 95 of them would say property, doesn’t anyone see the problem with this? Not everyone can get rich from property, its just not possible!. Of my current net worth only 150k of that was produced via property.

Another big misconception is going to university and getting a “good education” will make you rich. Of my peer group most of my university educated friends are stuck in sub 40kpa jobs with no prospects of ever improving much on that. Of course there are exceptions to the rule, if you get a degree in economics or law you stand a much better chance than some media studies !!!!!!!! but there is still plenty of lawyers on sub 30kpa

So the key is salary progression, I would advise the best way to do this is start a business. The OP who is doing painting and decorating is a great start. My biggest ‘light bulb’ moment was when I realised that one man's labour can produce only a limited gain. Getting others working for you is the key. Look at Tescos (I hate them btw) they have 10’s of thousands working minimum wage with only the top few making any real money, I don’t agree with this as I think its bad for society but if you want to get rich you need to accept this is the way it works .

To all those talking about doubling one pence thirty times or whatever you may as well give it up now, this is pie in the sky thinking for dreamers! You need to get some skills, be willing to work harder than you ever thought possible, learn about money and how it works, start a business then think how you could structure the business to make growing it possible then learn about tax on how you can legally pay as little as possible.

Many think a 100k salary is rich but you lose almost half of that in tax so 50k net minus living expenses (25k) leaves 25k so would still take a lot of years to reach the magic million!

I would advise against sacrificing the best years of your life (20 to 40) by scrimping and scraping trying to save every penny, it’s not worth it. I have always tried to strike a good balance, I could have made a million far quicker if I had sacrificed more. Since I was 20 I have spent a lot on cars, holidays, going out etc but don’t regret it one bit, I have some amazing memories and wouldn’t swap that for a few more zeros in the bank.

I didn’t come on here to brag (I have a life) but to show it is possible and hopefully inspire some of you.

Good luck to you all. Some of you will make it, most of you wont

The G

p.s Always remember, talk is cheap, doing is what makes it happen..

HAMISH_MCTAVISH

allthingsmustpass wrote: »

But surely these prices have to be within the realm of affordability, they can't just rise up and up forever. If I can't get a mortgage to the amount the seller will accept I can't buy the house, and the seller can't sell it. So they will have to reduce the price to an affordable level, or not sell. This is what we're seeing now, very little is moving due to sellers unrealistic asking prices. They also believe that property just goes up forever... this is true for as long as the banks were lending enormous salary multiples to anyone with a pulse. That's over now, and won't return for the rest of our lifetimes. Watch the news... this irresponsible lending has bankrupt banks and countries! House prices have nowhere to go but down, and perhaps that is unusual.. but this debt crisis is unprecedented. It was always going to end this way, ever rising prices is unsustainable.

Wow.

Where do you lot get this inane nonsense from? Do you have coordinated cue cards or something?

allthingsmustpass

HAMISH_MCTAVISH wrote: »

Wait....

Prices in the USA are down 40% from peak, and in Ireland are down 50% from peak.

Ireland had record low base rates, liquidity support, help for homeowners, bank bailouts, etc yet prices fell off a cliff.

The USA had record low base rates, liquidity support, help for homeowners, bank bailouts, QE, etc, yet prices fell off a cliff.

The UK had the same interventions, and prices rebounded strongly to just 10% below peak and have stagnated ever since.

I don't suppose this may have something to do with it....

Empty housing rates:

USA - 13% and rising

Ireland - 17% and rising

UK - 3% and falling

No.

I believe it is largely to do with the benefits system in the uk and forbearance by the banks, but there are many other factors. I don't believe that if more people chase the same property that money can appear out of thin air.

allthingsmustpass

HAMISH_MCTAVISH wrote: »

Wow.

Where do you lot get this inane nonsense from? Do you have coordinated cue cards or something?

Ok, you're not worth responding to.

Moderators please delete this clowns posts, he is wasting everyones time.

allthingsmustpass

The_G wrote: »

A word of caution, many on here seem to thing the only route to riches is getting in debt i.e getting mortgaged up to the hilt on a BTL portfolio, a million pounds worth of debt does not equal rich. Property has done so well over the last 10-15yrs that everyone thinks it is a sure thing when in reality the only thing keeping house prices so over inflated is the lowest interest rates in 300 years, they will rise at some point and a lot of people will get burnt!.

I’m not saying property can’t make you rich but you need to question the logic and try and think different to the masses. If you asked 100 people “how do you get rich?” 95 of them would say property, doesn’t anyone see the problem with this? Not everyone can get rich from property, its just not possible!. Of my current net worth only 150k of that was produced via property.

Interesting to hear your story, thanks. I've quoted the part that I think will help most on this thread.

Good luck folks, property is not the way.

lessonlearned

Good luck folks, property is not the way.[/QUOTE]

No it isn't - it's just a part of the story. Not having all your eggs in one basket etc, which is why people like Tinktay, Rictus and myself are looking at multiple income streams.

Somehow discussions about making a million seem to have been hijacked by Guitarman who just appeared to be in rant mode about property prices.

I understand that there is already a thread devoted to this topic.

guitarman001

Lessonslearned - I could turn around what you're saying to you. Are you really happy that a one-bedder will cost £1m in future when your boys are looking at average wage in the UK of £25k? Would you be willing to take the 50% hit for the future of your boys and the younger generation? Knuckle down and work hard? They're going to have to resort to selling drugs to try and raise the money needed to buy a shoddy ex-council flat!

Yes, I would see the market crash. People make their own financial choices and I think they've chosen poorly. Again I could turn it around - you think it is ok for people to be priced out, stop them being able to truly afford a roof and start families, so that your properties can stay at high valuations. Two sides to every coin. Right now YOU are willing to see an entire generation crash and burn - they are doing so right now. If property tanked and there were taxes on 2nd/3rd etc homes then youngsters could be able to afford again. I think anybody denying the kids this has their moral compass wrong. Are you willing to ride rough-shod over US if it means house prices remain unaffordable. You've said yourself you wouldn't be able to afford nowadays on the same job - think of how your boys will feel. No chance!

EDIT: You can understand my stance I'm sure. You want to paint me in a bad light but from my end, I find BTL morally reprehensible. As somebody once put it, you're eating your own young. I'm not the one making assumptions about your character as such, only your investment options. On the other hand you are making assumptions that I'm some evil bad-boy who's ready to trample over everybody just so I can get a cheap house. Why is that?

Sorry but supply and demand? If that were true then why are prices still falling? Suggest you correlate bank lending and house price inflation charts.

Hamish, we could both write essays on why the UK still hasn't had a massive fall. It's been a lot more than what you say though, especially inflation-adjusted. Flats in Edinburgh are easily down 30%.


marine_life - impressive!! What is your business?

Same to you, The_G. Those figures are astounding. Any hints at how on Earth you managed that? Must be one in a million...?


At the end of the day, somebody's going to win, and somebody's going to lose. I'm not focussing on housing other than the hope of getting a decent place for a decent price and paying it off as early as possible. After that I want to maximise income - The_G and Marine_life's posts really interested me there.

The_G_2

guitarman001 wrote: »

Lessonslearned - I could turn around what you're saying to you. Are you really happy that a one-bedder will cost £1m in future when your boys are looking at average wage in the UK of £25k? Would you be willing to take the 50% hit for the future of your boys and the younger generation? Knuckle down and work hard? They're going to have to resort to selling drugs to try and raise the money needed to buy a shoddy ex-council flat!

Yes, I would see the market crash. People make their own financial choices and I think they've chosen poorly. Again I could turn it around - you think it is ok for people to be priced out, stop them being able to truly afford a roof and start families, so that your properties can stay at high valuations. Two sides to every coin. Right now YOU are willing to see an entire generation crash and burn - they are doing so right now. If property tanked and there were taxes on 2nd/3rd etc homes then youngsters could be able to afford again. I think anybody denying the kids this has their moral compass wrong. Are you willing to ride rough-shod over US if it means house prices remain unaffordable. You've said yourself you wouldn't be able to afford nowadays on the same job - think of how your boys will feel. No chance!

EDIT: You can understand my stance I'm sure. You want to paint me in a bad light but from my end, I find BTL morally reprehensible. As somebody once put it, you're eating your own young. I'm not the one making assumptions about your character as such, only your investment options. On the other hand you are making assumptions that I'm some evil bad-boy who's ready to trample over everybody just so I can get a cheap house. Why is that?

Sorry but supply and demand? If that were true then why are prices still falling? Suggest you correlate bank lending and house price inflation charts.

Hamish, we could both write essays on why the UK still hasn't had a massive fall. It's been a lot more than what you say though, especially inflation-adjusted. Flats in Edinburgh are easily down 30%.


marine_life - impressive!! What is your business?

Same to you, The_G. Those figures are astounding. Any hints at how on Earth you managed that? Must be one in a million...?


At the end of the day, somebody's going to win, and somebody's going to lose. I'm not focussing on housing other than the hope of getting a decent place for a decent price and paying it off as early as possible. After that I want to maximise income - The_G and Marine_life's posts really interested me there.

Guitarman

I agree with your point about the £1m one bedroom flat, Its just not good for a healthy society. A lot of so called intelligent people just don’t get the fact that just because property has doubled in the last 10 years that it is certain to do so again in the next 10 but unless we see huge wage inflation or 100yr cross generational mortgages this simply wont happen. House prices doubled/tripled on the back of cheap credit, pure and simple and the source of that cheap credit is drying up. Do people not see that it is the reckless lending (not just in mortgages) is what has taken our global financial system to the brink of collapse!?

I believe in heavily taxing the biggest gainers from the property boom, BTL landlords and 2nd homeowners but do you think this will happen? I won’t hold my breath because those same Landlords and 2nd home owners provide the most votes.

I’m not sure we will see big crash that you are hoping for because the UK banking system has become almost too big to fail (hence near zero rates) I also think we will start to see some gradual wage inflation.

As for my figures I doubt I’m one in a million, in addition to my previous post all I can say is I never set out or had a vision to achieve that I just built a business from a young age and worked incredibly hard. I take it you are currently employed? In what field do you work?

The G

lessonlearned

Seeing that you have asked me twice whether or not I would be prepared to accept a 50% hit on the value of my property I will answer you.

It wouldn't concern me at all, because I have no intention of selling it. So the question is totally irrelevant - the "loss" would be a paper one only. It would have no impact on me at all.

However, and this is my point, and this is why I was so shocked that you openly admit to wanting to see the market collapse completely.

There would be hundreds of thousands of people - maybe millions - I have no idea how many - whose lives would be completely ruined.

Set against such a catastrophic scenario your wish does seem both unwise and unfair to a lot of innocent people. Would you really want this on your conscience. I would really like to think you were just joking to make a point but you sound so angry and bitter that I'm rather afraid you meant it.

Plummeting prices aren't really the answer. The likelihood is those same property values would only rise again in the longer term. Personally I would prefer to see a steady "stagflation" to give people like yourself a breathing space and a chance to catch up.

Of course I understand your predicament - my sons are exactly in your position. One had to leave his flat because he couldn't afford the rent on his own. Luckily he has had the good fortune to find someone to do a house share with, the other has come back home to live with me because he cannot afford to rent anywhere.

I let him pay me the princely sum of £50 a week so he can try and save a bit. (Wish someone would keep me for £50 a week:rotfl::rotfl:).

I will say again I've seen this cycle repeat itself several times over the last 40 years. Maybe this time the cycle will take longer - who knows - but I'm pretty sure property values will increase eventually.

I didn't say I thought it was fair, I didn't say I thought it was advisable - in fact I'm of the opinion that it may well have a destabilising effect on society.

I don't have answers as to how you could stop the cycles. I can only assume that if more properties were available then prices would come down. Rather like the price of wheat, coffee or cocoa beans, oil or any other commodity. I could be wrong of course. Maybe a different kind of political and economic system will evolve - who knows.

Guitarman your solution to the problem is just too draconian - that is why I questioned your "moral compass". I was just so shocked to hear someone wish for such a thing.

You know the old saying "Be careful what you wish for". If such a thing were to happen - it would be Armageddon out there.

One final thing about BTL - Landlords do pay taxes. Tax on the rental income and Capital Gains Tax when they sell at a profit.

As to being morally reprehensible - well some maybe. There's good and bad in any profession or business undertaking. There are some lousy landlords and there are some lousy tenants.

Until Local Authorities are prepared to start building council houses again, apart from a few housing associations, without the private sector landlord, there would be no-one else to plug the gap.

No easy answers I'm afraid.

GSMAnon

Hi guys - thought I'd join the thread and accept the challenge.

A bit of information about me:

I'm a 22 year old male, currently pursuing a PhD in Space Systems Engineering (which I started in October 2011), and only recently really beginning to think seriously about money and how to get more of it, and how I intend to live out the rest of my life.

I've quickly realised that my previously assumed path (education, education, education, education -> job) is not the route to riches, and most people who take my route end up in sub-40k jobs, with the biggest earners topping out at £80k. Unfortunately that path was drilled into me from an early age by my well-meaning working class parents who assumed that an education is the thing that they were missing - the missing jigsaw piece that was contraining their earning potential, and convinced me that if I got that missing piece and became well-educated, then I'd make a mint out of my CV. But, as I'm finding out, that's just not the reality.

I enjoy education, it's a big part of my life, and I thoroughly enjoy academic research. But I'm realising that I'd rather be a financially independent individual who does academic research as a passion and life-pursuit, and not a financially depending individual who spends their life doing academic research (or something else related to my qualifications) for the simple reason that I NEED it to sustain myself, and being susceptible to redundancy, industrial decline, etc.

Financially, at the moment, I'm in a decent position (relative to before!). I get a tax-free PhD stipend of £1132.5 pcm, and only spend between 50 and 60% of that. I'm still in my interest-free overdraft from my undergraduate days where I ran a very slight but rather protracted deficit which left me at my £2,500 limit by September 2011. I haven't quite paid it all off yet, but I should be clear of it by March 2012. I have student debt of around £10,000, but the interest rate on that is less than or equal to the rate of inflation at any given time, so the cost of borrowing is nil, and it's not something I'm too worried about.

Apart from that, I'm debt-free. No credit card balances, no loans, no mortgage, etc.

I intend to get my PhD, which I should complete between Summer and Autumn 2014, aged 24/25. This gives my 3 years to think long and hard about how to spend my life in such a way that I'll be a financially independent millionaire by the time I'm 40.

I'm doing a lot of independent studying to become as financially literate as possible. Money is not something I've thought about a let prior to this stage of my life. Before I started University "money" was just something that my family didn't have enough of. During university "money" was just a free hand-out from the government to sustain me. NOW, however, I'm at the beginning of my adult life and I'm beginning to think about money and what it should be able to do for me from now on, and how I can make my money work for me.

Anyway. That's it for now!