Calling those with a "high" level of savings/investments! (£50,000+)

Rollinghome

jimjames wrote: »

ALways spend less than you earn and you'll be in a good position.

"Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness.

Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery. The blossom is blighted, the leaf is withered, the god of day goes down upon the dreary scene, and, in short, you are for ever floored."

silver_inca

are we talking about paper millionaires? plenty of those about

Seriously, I think the secret to it all is to work hard and not to be too spendthrift, save & invest wisely - but you must also enjoy your money.

However, I see so many people they have laptops, they buy tablets or the latest ipad - do they really really need it?

People have phones, but they must have the latest iphone = big contract. They have all been brainwashed. We are in the i want/i shall have generation. The days of saving to buy something are over.

"drop by drop it becomes a pond".

dtsazza

somethingcorporate wrote: »

Just don't get suckered into what the Jones' are doing

This is, in my experience, the single biggest thing that makes a difference. (Above and beyond actually thinking about financial issues, which you're already doing by posting on here.)

This is quite a long post - if you're not interested in the ins and out, skip to the final paragraph for the conclusion.

When I was in university my finances were a bit of a mess - I was quite happy to "borrow money from my future self" to enjoy my time there. I had a £2000 credit card sitting at its credit limit, even going so far as to withdraw cash on the card (ouch) to deposit in my bank account and pay off the credit card minimum payments...

After I left I went into a job with a very good salary for a graduate. At this point I could have paid off the ~£10k debts I left uni with, but I fell into the trap of thinking "I'm a full-time worker now on a decent salary", and spent how I felt someone in that situation should. I was no longer a student of meagre means, so I could afford to order steak at restaurants, or afford to get a takeaway once a week or so, or afford to buy and run a car, etc. etc. In fact I ended up increasing my debts on "sensible" things, such as taking out a loan for a few thousand to buy a motorbike.

This kept ticking over for a few years, before I moved to London and changed jobs, with a fairly substantial pay rise. Even so, it was just the same thing over again. I was young, well-paid, living in London and free of attachments. I'd go out for drinks quite often after work, and thought nothing of spending £6 a pint in quite swanky places because "this is the life".

Up until that point, my expenditure had grown to encompass all of my earnings. When I was paid more, my thinking was "now I can afford to blow this on more stuff" rather than anything more responsible. Higher earnings meant e.g. buying premium seats at the cinema for double the price just because, even though my enjoyment of the show was barely changed.

At some point, for a reason I can't put my finger on now, I had an "aha" moment. I just realised that I was being completely wasteful with my money, and it wasn't a good way to be. (This might have been helped by my manager, who was on six figures as was his wife, and yet was having troubles paying the mortgage on his fancy seven-figure house while still going out for cocktails most nights.)

As soon as that hit me, I started spending more sensibly, and starting to reduce my debts. In retrospect it was horrific how many thousands of pounds I'd wasted in interest (to finally get compound interest is scary when you've been in debt), but I started to reduce them.

A year or so after that I moved jobs again for a ~£15k pay rise - and this time decided that I was perfectly happy with my lifestyle before, so was going to keep up that level of spending. The signing on bonus cleared the last few stragglers of debt, and the rest of it, plus my extra pay, would go towards savings. I was in a magical new world of actually looking at ISAs, savings accounts and investments. And it was somewhat contagious.



The details from there don't really matter. The one and only thing that separated my responsible self from my spendthrift self was attitude. As soon as you realise it's not necessary to spend 100% of your income - you're saving by default. In the long term interest rates, yields and AMCs etc. matter a fair bit; but for the first few years, for the first £50k, what matters more than anything else is simply setting the capital aside.

lisyloo

Millionaire - almost certainly do-able even as a middle-manager in a big company.

I'm not sure have=ing £1 million makes you rich these days.
With annuity rates at say 3.5% a £1 million pension pot would give you a £35K annual pension. Is that rich?
Not in my book, but as you say depends what you are aiming for.
I'd call that well off, but having £1 million in your 50's is no great shakes these days I'm afraid.
If you were in your 20's or 30's then great, well done.

Depends on what you want to acheive.
Personally I am motivated by freedom, so things like having no debt are important to me rather than a lavish lifestyle.
The place to start is to work out what you want.

YoungBusinessman

Wow, some great posts!! Really glad i started this thread, it is giving me lots to think about and consider applying to my own lifestyle. I am thinking the same, once that few ££ a month interest goes on my balance of savings, it will be a scary(but great) feeling to see it go up almost by doing nothing, just thrifty living and living well withn my means!!

I am spending my evening doing a few bits of paperwork for my job, then i will be going to work on a budget to apply from December to get me living withn my means, asides the debts iv got-that were used to buy machines/equipment/my van- my only outgoings every month right now are mobile phone at £35 a month and digs at £200 a month. Meant to be getting first place next month, mortgage is not yet in place so could fall through.

Either way i was looking to try a budget out for each scenario, get the figures down and see what a difference i can make in just the next few months.

Last time i didnt have a penny to my name i was 18 but i was debt free. Since then i have always had money/access to money but iv been in debt.

The debt allows me a higher income, as i can do more work,easier and faster. In a matter of 25 months i will be debt free with savings and a home to call my own.

I have read rich dad,poor dad. It makes good reading. However you have to draw the line. Once iv enough money in place that it wont make such a dent, i do plan on having a work van near new(not brand new but newer than my current 6 year old one), a nice "Sunday car", a nicely desgined house that i will love to relax in, so im not out spending

Of course its all optimistic and a dream right now, i can do nothing but plan and give it my all.

This thread has been a tremendous help already and its only on the second page, thanks very much everyone who has been posting.

Thrugelmir

YoungBusinessman wrote: »

Some good points. Just trying to get some sort of plan together to set me up for 9 years down the line. Many business folks around my area not working more than 30 hours a week with the fancy car and house, so why not me?

Be prepared to work 24/7 to achieve such an ambiguous goal.

You'll need good luck and a good team around you. Don't expect to get their alone.

POPPYOSCAR

[QUOTE=Thrugelmir;57523519]Be prepared to work 24/7 to achieve such an ambiguous goal.

You'll need good luck and a good team around you. Don't expect to get their alone.[/QUOTE]


That is what we did.

Worked hard and saved hard for years, built our own house, paid off the mortgage, but no holidays abroad, no expensive cars, no fancy gadgets and now we can work a lot less and live partly on our savings and are under no pressure to earn.

YoungBusinessman

I am all up for the working long and hard, see another thread i started only last week - it was getting to me,working so much. Did a 105 hour week. Didnt see a minute of daylight that week that i wasnt working, my only free time in daylight for the 7 days was my half hour at lunch!

Iv a few weeks off over xmas to recharge then il be ready to go again.

Just see older guys in my line of work and their health can be in a really bad way. Perhaps they wouldnt be if they got sensible, didnt spend all their income and winded down/got out the trade before health started declining faster than it should have.

2013 should be a holiday free year, just have to make sure work doesnt get the better of me! Just the odd day off to enjoy my new house and relax.

Im away to do my SOA just now, see where im overspending as it is.

somethingcorporate

lisyloo wrote: »

I'm not sure have=ing £1 million makes you rich these days.
With annuity rates at say 3.5% a £1 million pension pot would give you a £35K annual pension. Is that rich?
Not in my book, but as you say depends what you are aiming for.
I'd call that well off, but having £1 million in your 50's is no great shakes these days I'm afraid.
If you were in your 20's or 30's then great, well done.

Depends on what you want to acheive.
Personally I am motivated by freedom, so things like having no debt are important to me rather than a lavish lifestyle.
The place to start is to work out what you want.

Rich is a completely relative term - compared to bill gates people that are rich beyond your wildest dreams are merely plebs in comparison.

You were the one that said you could not be rich working for someone else - care to quantify what rich is? I bet I can name a person for who that certainly is not rich.

Personally, I would consider someone with £1m as rich. Someone with £1m pounds probably wouldn't.

Rich is generally someone with more money than you.

jimmyjones_2

YoungBusinessman wrote: »

I am all up for the working long and hard, see another thread i started only last week - it was getting to me,working so much. Did a 105 hour week. Didnt see a minute of daylight that week that i wasnt working, my only free time in daylight for the 7 days was my half hour at lunch!

Personally I wouldn't be in such a hurry to grow up, you are only young once and there is a balance to be struck.

I earned a good wage straight from Uni and had a great 5 or so years in my early twenties with nothing to show for it. When I was 26 i got a 100% mortgage and spent a few years steadying the ship and doing up the house. At 30 I started saving in earnest and at 33 I am on the verge of having £50k in savings / investments. I have cut a few things out of my life such as the latest gadgets and new cars but I am just as happy.

Some time ago I read a post on MSE directed at another young gentleman and the advice was to a "Get rich slowly my friend". I would chill out a bit and enjoy life