My quest to have £100k Net Worth by 26

MyLastFiver

As someone pointed out 225000 today will be worth a million in 2060 when I am 69.

:eek: Eeek - no. That's not what he was saying.

Inflation eats away at the buying power of your money. This means that the value of your money (measured in what you can buy with it) is constantly decreasing. What the other poster was saying is that, in 2060 you'll need a million pounds in order to have the same buying power as £225000 today.

But anyway - this is all academic. What £225000 will be worth in 2060 is completely irrelevant, because you do not have £225000. You have minus £12000.

As I say - making plans and having dreams is all good fun but it's no substitute for actually putting something away each month.

rictus123

MyLastFiver wrote: »

Rictus, I remember your thread from 2010 in which you planned to start saving £1000 per month:



So here you are 15 months later, and instead of being on your way to being a millionaire, you have acquired £12000 of debt

Having ambitious targets is good fun, but I think you need to focus more on the month-to-month acquisition of wealth. In other words, actually putting some money away, and reining in your spending. Otherwise, your dreams will stay just dreams

Yep that was the original plan and would also have had me over the £100k net worth aim i still have. I spent the £14,000 debts i took on and £2,000 savings i put in on stuff(that i would not like to go into) so i could actually include the value of them but i am not going to as will not be selling anytime soon. It was all bought with the intention to increase my income and it has paid off as my income is over £2,800 net a month. Some calander months have an extra pay in it so pay is over £4,000. A month to month basis is how i will be working in future. Aiming to get £1,500 a month better off every month.

Whether this is paying off debts,pension,mortgage etc aslong as this is minimum a month i will get there. It does seem a long slog but worth it and its what i want to work for.

MyLastFiver

rictus123 wrote: »

Yep that was the original plan and would also have had me over the £100k net worth aim i still have. I spent the £14,000 debts i took on and £2,000 savings i put in on stuff(that i would not like to go into) so i could actually include the value of them but i am not going to as will not be selling anytime soon. It was all bought with the intention to increase my income and it has paid off as my income is over £2,800 net a month. Some calander months have an extra pay in it so pay is over £4,000. A month to month basis is how i will be working in future. Aiming to get £1,500 a month better off every month.

Whether this is paying off debts,pension,mortgage etc aslong as this is minimum a month i will get there. It does seem a long slog but worth it and its what i want to work for.

Rictus, your posting history is riddled with contradictory and dubious boasts about your income. Whatever your true income, the figure doesn't really matter because whatever amount you have, you spend. Whatever impressive figure your bank balance is at the beginning of the month, at the end of the month it is always zero.

If having money in the bank is your aim, then it really is very simple: Put money in the bank.

somethingcorporate

I think that is slightly harsh, Rictus is still young so cut him some slack. I agree that they have gone backwards since they started their plan last year but life does get in the way.

Let's give him the benefit of the doubt and see where he is in 12 months time - unfair to write off a 10 year plan based on one years performance. Even if he falls 50% short of his overall target he will still have £50k in the bank, about £50k more than most 30 year olds. Hopefully this diary will give him some of the impetus he needs to put the plan into action.

rictus123

Thanks somethingcorporate. One step back but it will allow many more forward with the extra income it is and will continue to bring. Once the debt is gone the surplus will be there to start putting the money away as soon as it hits my account on payday as i will not need it as have very little direct debits. Give me 12 months and i will be well underway,the debt will just be a bad memory but a lesson learned at that.

Rob_192

Rictus

Can I also wish you luck in your mission. I have followed your comments on here for some time and it's fair to say you have a very positive and mature attitude for one so young, even if some of your comments are a bit nieve. Than't not a criticism, you only learn through experience and mistakes.

There was some previous discussion about how net worth should be calculated. The way I do it is to consider what I would be worth if I could liquidate all my savings and investments etc. I know things like pension pots can't actually be liquidated (but they would be if I died!). Also, because my pensions are money purchase rather than final salery, I consider them investments. If for instance I transfer a sum of money from my Isa into my pension, I haven't sudenly lost the money, I've just put it in a different tax wrapper and I need to be able to track where my money has gone, so for me it would be ridiculous not to include my pension in my net worth calculation.

As for things like chatels and cars, I tend to leave these out of it, but in theory, they should be included. The propblem is you would spend a lot of time working out the depretiation etc, so I just leave them out. This does however throw up the odd anomoly when I draw out a sum of money to buy a major purchase and it distorts my spreadsheet.

If you have not already done so, start a spreadsheet showing your new worth now. This is a very important psychological tool and one which has encouraged me to save over the years. I do my net worth calculation every month on a spreadsheet - I simply add a column every month and update the figures. By doing this, you can instantly glance back and see where you were this time last year or two years ago or whatever. I actually have mine set up to do a rolling calculation which gives a 'year on year' improvement. By doing this you get a good feeling, seeing how you're steadily improving. Somethimes you have a bad month and go backwards, but you can look at your spreadsheet and say hey, so I went backward by a few hundred last month, but I'm £5k up on this time last year - it's a great boost and keeps you on track.

The other thing to say is don't underestimate the power of compounding - when you first start, it seems hard to accumulate wealth, but after a few years it all starts accelerating as you build up a pot and get interest or divi's on an ever increasing sum. Stands to reason, but it's worth mentioning nevertheless.

Best wishes

Rob

rictus123

Cheers Rob, fantastic advice. I admit my head is in the clouds reading back some of the posts i have put up. Just feel i have time on my side so i can make my money work for me and the art of compounding interest should be kicking in after i hit this £100k mark and money will start to make more money. Who knows what will happen. I have my spreadsheet set up!! Will be keeping at it and making sure the positve months are massively outweighing the negitave and i wont go far off track from hitting my target eventually.

Like above i would like to try and achieve a minimum increase of net worth of £1,500 a month over the 5 year period.

I may not hit the £100k quite as early as id like but i will give it a good go, the sooner the better so the money can start making more money. I thought there would be alot more people hating this thread and bitterness would show in alot of posts, it hasnt been to bad though and even the minority are helping in some way. Someone to prove wrong Yet another reason to go for it. The number one reason ofcourse is doing it for myself and my future.

atush

somethingcorporate wrote: »

I think that is slightly harsh, Rictus is still young so cut him some slack. I agree that they have gone backwards since they started their plan last year but life does get in the way.

Let's give him the benefit of the doubt and see where he is in 12 months time - unfair to write off a 10 year plan based on one years performance. Even if he falls 50% short of his overall target he will still have £50k in the bank, about £50k more than most 30 year olds. Hopefully this diary will give him some of the impetus he needs to put the plan into action.

Iamnot as suspicious as some, so didn't look up all past posts. andI agree they are a bit alarming.

I am all for benefit of doubt, but the alarm bells were ringing for me here after some explanations (such as higher debt than before/structure/number, and a US holiday booked which really should not have been or could have been cancelled etc).:eek:

I agree, we should wait to hear in 6-12months if the debt is paid. but given the inconsistancies, and half truths here over debt, structure, income etc I think this post should end for 3 months until we see where the OP is at (as that will be the proof of the pudding so to speak).

I am confident, that If things are as he describes then he will be on his way (but IMO a longer timesale as his original target didn't take into acct the debt and holiday).

If lastfive is right, then it is all an overspender's pipe dream. But a pipe dream is perhaps better than no dream in some cases.

We will wait 3-6 and see.;)

rictus123

I will settle down and calm the posts down until i can come back with a much better looking financial position/at least 50% of debt paid off from where i am at now. I have posted some very stupid things in the past and have been in a bit of a cycle, get money, spend money, borrow money, get money, pay off borrowed money, borrow money etc etc, at least the recent debt that has been taken on was for a purpose, not just to have money. We shall give it time, after all that is my main advantage here with this challenge.

atush

Good luck and do get back to us.

Knowing where you went wrong in the past is half the battle.