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

patrickbateman

I'm 30 years old and have been saving since I can remember. I live well within my means and drip feed money into savings every month.
I work in the public sector, am underpaid against the private sector in my profession by about 40% (I earn low 30's, and private sector comparison for a similar job is mid-high 40's). However, despite it being ponzi, I have faith that paying into a final salary, soon to be care pension scheme is a good idea. I also think I am very good at what I do, and hope that opportunities will open to progress eventually. I may not quite be CEO material, but I am confident that I should make Director level with a bit of luck.
I live with parents which keeps costs down significantly, though I am constantly offering to help them more with bills etc, and I am quite picky with relationships, which has meant I don't get beyond dating.
I have about £100K in savings, which I will offset against a mortgage when prices are right. The market is currently too high, and the politicians need to address this before another generation is trapped. Prices will fall, eventually, suppressed interest rates is not a long term solution. Get rich quick schemes always rip off the little guy at the bottom, and so I have always been an advocate of compound interest and getting comfortable slowly.
I balance living with saving, have travelled quite a lot compared to my peers, done a lot of things, and prioritise my spending rather than splashing the cash on any old tat. I enjoy researching and getting a bargain. Too many people seem to think others owe them, my philosophy is that I owe myself and that I acheive through a pleasant and high work ethic. I have a plan, it might not be the right one for everyone, but financially at least it works for me.

guitarman001

Got to admit I get pretty green seeing younger people then me (28) with eye-watering levels of savings! I would have had £50k by now but lost £20k of it on the stock market - a desperate gamble due to high house prices in the UK. So, back down to £30k but recently got a 45% pay rise so can't complain too much. From now on, no more stock investing! I've been living at my parents forever but am going to move out to my girlfriends - life's too short and I can't bear living at home anymore. It will mean a train ticket into work every day (close to £1200 a year whilst still running the car to get to the station) but to hell with it (my savings staying at home would be pushed to £1500 a month as opposed to £1000 or so a month staying with my girlfriend). I also subscribe to the few posts here that place people & life above money. I have one big holiday a year and try not to scrimp TOO much! I like a nice pair of shoes, to eat out at the weekend etc. I think the examples in this thread are definitely not representative of the population as a whole! One question: as you get pushed into the higher tax bracket, do you simply shut up and pay the extra taxes on the savigns in your accounts? Do you use a S&S ISA to put as much as possible into an ISA - if so, what safe bet is there for the stocks part!? I'm very wary of that now. I don't plan to put any more into pension - I pay 4% and employers pays 8% so that will do. Main goal will be emigration/house fund (I am NOT into parasitic BTL). Advice appreciated.

gadgetmind

guitarman001 wrote: »

lost £20k of it on the stock market

I'd be interested to know how. Did you take on too much risk?

From now on, no more stock investing!

At your age, sensible investing via drip-feeding into diversified assets can work very well.

One question: as you get pushed into the higher tax bracket, do you simply shut up and pay the extra taxes on the savigns in your accounts? Do you use a S&S ISA to put as much as possible into an ISA - if so, what safe bet is there for the stocks part!?

Pension contributions are the first thing to look at (assuming you have a good cash buffer) and then cash ISAs and S&S ISAs.

There is no such thing as a totally safe bet, but as long as you diversify, and don't panic and flog the lot if prices have a wobble or two, then you won't go too far wrong.

black_taxi_2

stock market----here's a great site

It's about investing in indexes---long term

http://www.bogleheads.org/forum/index.php?sid=bee3347c5f6bc690feb1adc8e7aae571

take your time to read thru forum---fantastic knowledge an long term help

innovate

it's a very US-centric site though, so many threads are not relevant if you are a UK resident

Places like monevator.com are more UK-specific

Wobblydeb

guitarman001 wrote: »

One question: as you get pushed into the higher tax bracket, do you simply shut up and pay the extra taxes on the savigns in your accounts? Do you use a S&S ISA to put as much as possible into an ISA - if so, what safe bet is there for the stocks part!? I'm very wary of that now. I don't plan to put any more into pension - I pay 4% and employers pays 8% so that will do. Main goal will be emigration/house fund (I am NOT into parasitic BTL). Advice appreciated.

I salary sacrifice into a SIPP pension to bring myself back under the higher tax bracket. I then also fill my ISA each year - usually a mix of shares and cash, and then transfer the cash element into shares in a later year. Those two together mean that I don't have to do a tax return. :T

There is no safe bet on the stocks, but if you're willing to take a long view, and build a diversified portfolio, you should be okay in the long-term. The reality is that there is a lot of reading and research to do if you are to self invest successfully. If you do not enjoy that, or find yourself prone to following "tips" instead, then investing in individual shares is probably not for you.

You can however do a reasonable amount through passive investing, and I would +1 innovate's recommendation to read monevator.com. He has regular articles written from a UK perspective.

YoungBusinessman

Will read up on monevator! Cheers for that suggestion. Diversifying stocks sounds like my general plan for financial income, diversify and spread the risk, spreading my risk. I have a first goal set out of £10k in current account and use that as my 0. I know a current account won't pay the top interest but it will be a reminder I have a good bit of money behind me if I work hard and don't spend. Seeing the money will be a good motivator!

Zekko

YoungBusinessman wrote: »

I know a current account won't pay the top interest

On the contrary. Refer to Lloyds Vantage.

YoungBusinessman

I'v heard about them, will definitely look into it. Find out mortgage answer on Tuesday, either way I need to save £20,000 in 2013, will be decent foundations for the future. I want income like an offshore worker, work a few weeks non stop and then a few laid back weeks, get paid for it all!

I'v many plans, I'm going to keep this thread going so I can get help as I go and track progress.

YoungBusinessman

Just done 2 SOAs, one is me if i dont buy hous

The second one is if i do buy a house(estimate of my costs....not 100% sure of these so roughly)

Both show a good surplus.

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 3000
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 500
Total monthly income.................... 3500

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 200
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 35
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 30
Clothing................................ 20
Petrol/diesel........................... 150
Road tax................................ 10
Car Insurance........................... 50
Car maintenance (including MOT)......... 20
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 30
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 645


Assets
Cash.................................... 12000
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 2000
Total Assets............................ 21000

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
17000 total 2 loans............17000.....506.......0
Total unsecured debts..........17000.....506.......-


Monthly Budget Summary
Total monthly income.................... 3,500
Expenses (including HP & secured debts). 645
Available for debt repayments........... 2,855
Monthly UNsecured debt repayments....... 506
Amount left after debt repayments....... 2,349

Personal Balance Sheet Summary
Total assets (things you own)........... 21,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -17,000
Net Assets.............................. 4,000

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using Firefox browser.