Saving 50%salary

Mojisola

livilove wrote: »

I want to work further 20 years of my life and then retire.

The idea I am impressed with is that I save at least 50% of salary very month and each year I save additional year of working life.

sorcerer wrote: »

Good luck, but i think like the others said, you need to live your life as well, what you want is a good balance, invest for your future, but also don't forgot about today.

I'm with sorcerer - get a balance in your life.

You don't know what the future holds. I'd rather get to 2032 with a few good memories and a smaller amount of savings and maybe have to work a few more years. You could get ill or die young. Make sure you've lived a little first!

livilove

lvm wrote: »

Hey,

Seems like you're on track and know what you're doing with your goals.

Why not draw up an SOA with all your income and outgoings to see if you can keep up with your savings?

Something I'm finding good is if you set up a smaller savings account and treat yourself occasionally. E.g I've saved up for the new iPhone (£500-600) or it could be something smaller like a weekend away.

What's your living situation as it doesn't seem you're paying much rent/mortgage?

And what's your plans for your retirement?

Good luck with the saving goals!

I checked up soa and its possible to save 50% my salary if I do following,
No take aways
No Ready meals
No shopping at expensive shops
No throwing food because I cooked too much or did not bother to cook, it staled in the fridge.
Not doing wise shopping. Being lazy and one stop shopping

The changes I introduced In my life recently

Most of the times , having weekend lunches tea, biscuits , drinks outside but no dinners
6 nights cooking meal at home, organic eggs, milk and non organic veg properly washed.
Packed lunch ( I had first one today)
Saving £65 a month gym membership by joining meetup


Yes you are right, I don't pay rent, mortgage , only bills n councils tax, which is a big plus.

I plan to retire in 20 years time by saving and investing in property, gold, oil, or reusable energy. I am not sure yet.

livilove

edinburgher wrote: »

I'm intrigued - 50% savings rate earning £1369 a month is a very impressive target!

Living on £684.50 a month for 20 years seems pretty difficult to manage in modern Britain. If it's not too personal a question, do you have a partner to split the costs with?

Some great suggestions so far - lvm suggests writing up a SOA - if you were willing to share that we might find some cost savings in your budget.

Reaper's suggestion also sounds ideal for you. If you're an impetuous, flighty creative (paraphrasing here!) tying your money up might be for the best. With a SIPP, you should be able to access your investments from age 55 and you could take advantage of the 25% lump sum for some of the fun things you'll need to curtail in the interim.

Realistically, you will need to invest (regardless of what you invest in). Cash savings for 20 years will be lucky to keep pace with inflation and while that's not a real issue in a short term scenaris when you're making hefty savings payments from your salary every month, over 20 years your retirement funds could be hit badly.

It's a nice idea, but I suppose you have to be honest and ask whether this goal is something that you will be able to apply yourself to for a prolonged period of time. If you're looking for some more radical tips, the book 'Early Retirement Extreme' is worth a peek

Yes you are right, I don't plan to save money in isa for longer than 5 years.
I plan to save 555£ for four years, it will be like 20 k. Which is enough to put for mortgage for an auctioned retail unit. I plan to give that unit on rent and let the tennant pay the mortgage.
Property rises with 222% in last few years, it's safer and if on a reasonable location, it's perfect. When I am retired in 20 years , the retail unit will be fully paid. So multiplying that 20k to about 60 k.

After four years my £555 in isa , I will collect it further 4 years, that's 20 k emergency fund.

Now 12 years of £555 I will put possibly in govt bonds which is 100% safe and also portion of it in Investment in gold, oil etc.


So all eggs will be hatching in different baskets, risk will be diluted and in 20 years time, I will have steady sources of income. With early retirement pension (which I am paying) and all that money coming in.
Its tentative plan so far.

200£ / month, thought to put away for emergency fund and short term investment is now changed, yes fun is part of life so thinking to put £100 for short term investment and £100 for little treats.

livilove

Reaper wrote: »

Just a thought but have you considered a pension instead of an ISA? The main benefit from your point of view is that you are unable to take the money back out of it before you retire so there is no question of being tempted.

You would need an emergency fund as well of course, but it sounds like you already have a plan for that.

Yes, I am paying pension, but again , I can't access it therefore using isa for temporary pot. For investment purposes.

livilove

Today I bought £8 scissors and £7 mousse loreal, i am planning to colour and cut my hair on weekend.
Saving £40 .

I walked to home from work, 30 minute walk saved me
£4 on hamster machine in gym ( good to think it did save, actually, I was not planning to go to the gym anyway)
1.40p ( yeyyy)

My head is nagging, I am kinda person who saves pennies and loose pounds. Better I be not.

grey_gym_sock

walking home is great if it's free exercise. it's less good if it's just to save the bus fair - £1.40 for half an hour is like being paid £2.80 per hour. it sounds like it was a good move this time. but if some time you've had enough of it, and it's raining, ...

it's a question of finding what expenditure is worthwhile to you; everybody is different on this ...

livilove

Thank you very much MSE community, I understand life is not working all the time , and doing what you don't want to do, so Primark Xmas temp idea is binned, same purpose, increasing income but with fun element is inn.

I like photography, so plan is.

Doing the best job in the world as a part time job, because best jobs don't pay the bills but can fetch a little money depending on how dedicated and good one is at his/ her hobby..


Plan : put advert for free occasion photography and build a portfolio,
Set web page and ebay, pictures and see if somebody got the real eye to appreciate it , freelance with a local newspaper.

Aim: to set up all by next Friday -


Creature of whim, it's not my fault, my brain is right sided.


Dont know for sure if my hatching eggs idea, or this one has any worth? I can't see further than my own perception- Any thoughts , much appreciated.

Reaper

livilove wrote: »

Now 12 years of £555 I will put possibly in govt bonds which is 100% safe and also portion of it in Investment in gold, oil etc.

If you are talking about real govt bonds (also known as gilts in the UK) they are not 100% safe. Greek and Spanish bonds for example hold a real risk of default.

If you mean UK bonds then even they are not 100% safe as they can and probably will go down in value. Currently the yield on a 10 year UK government bond is a pathetic 1.73%, or significantly below inflation so you will be losing money in real terms. Secondly if you sell before the maturity date (if there is one) you will get more or less than the price you paid. As bond prices are artificially high at the moment (QE buying has pushed prices higher plus market fears have driven people to safer investments) the chances are it will be less, particularly if inflation and/or interest rates start to rise.

Gold and oil are likewise speculative. You are gambling whether the price tomorrow will be more or less than the price today.

Elsewhere you mention buying a commercial retail property. That is definitely high risk in a recession. You might struggle to find a tenant and even if you do recently many businesses on the verge of bankruptcy have been re-negotiating rents downwards with their landlords. If you really want to go into such a risky area I would suggest investing in a REIT fund so that you money is spread across many properties instead of having all your eggs in one basket.

Some of your proposals might turn out to be the right choices but don't be under the illusion any of them are safe. You have put a lot of work into how to save the money, and I think you would do well to put an equal amount of work into researching where best to invest it.

edinburgher

Thank you very much MSE community, I understand life is not working all the time , and doing what you don't want to do, so Primark Xmas temp idea is binned, same purpose, increasing income but with fun element is inn.

Why not try it for a while to build up a quick boost to your savings, get whatever useful experience and transferable skills you can and then leave when it suits you? You mention photography - why not volunteer to help their display designers (no idea what you call the people who set up mannequins!)?

I've recently started a job working in a store that sells tropical fish - I've no particular ambition to sell guppies to little George and Olivia, but the experience of animal care, stock margins and technical knowledge is great. I'm being paid for my hobby and would love to plow someday retirement cash into running my own franchise.

If you're dead set on having a 50% savings rate, your common sense, practical side will need to win out over your creative side quite a lot.

No doubt there are lots of talented self-employed photographers out there who make good money - but it's very hard work to establish yourself. Sometimes I think it's better the devil you know - an established company can still offer you good learning experiences (as well as reliable income).

livilove

Reaper wrote: »

If you are talking about real govt bonds (also known as gilts in the UK) they are not 100% safe. Greek and Spanish bonds for example hold a real risk of default.

If you mean UK bonds then even they are not 100% safe as they can and probably will go down in value. Currently the yield on a 10 year UK government bond is a pathetic 1.73%, or significantly below inflation so you will be losing money in real terms. Secondly if you sell before the maturity date (if there is one) you will get more or less than the price you paid. As bond prices are artificially high at the moment (QE buying has pushed prices higher plus market fears have driven people to safer investments) the chances are it will be less, particularly if inflation and/or interest rates start to rise.

Gold and oil are likewise speculative. You are gambling whether the price tomorrow will be more or less than the price today.

Elsewhere you mention buying a commercial retail property. That is definitely high risk in a recession. You might struggle to find a tenant and even if you do recently many businesses on the verge of bankruptcy have been re-negotiating rents downwards with their landlords. If you really want to go into such a risky area I would suggest investing in a REIT fund so that you money is spread across many properties instead of having all your eggs in one basket.

Some of your proposals might turn out to be the right choices but don't be under the illusion any of them are safe. You have put a lot of work into how to save the money, and I think you would do well to put an equal amount of work into researching where best to invest it.

Thanks reaper for the sharing the insight. REIT is something I never knew before today and I had a look , it sounds much safer option. Govt bond , mayboot be as safe as I thought they were, I live in a paradise of day dreaming..
Gold bulions , still I find it attractive option and buying shares of oil gas.... May be yes too. What about Chinese companies shares, they are growing like so muchhhhhhhh. . .?