The road to financial independence.

atush

And of course, property (at least one you live in).

Most of my net wealth to date has come from an advantageous self build many years ago.

This wasn't why I did it (I needed a place to live), but it has a larger effect on my net wealth at this point than cash investments and pensions.

Student_of_£

atush wrote: »

And of course, property (at least one you live in).

Most of my net wealth to date has come from an advantageous self build many years ago.

This wasn't why I did it (I needed a place to live), but it has a larger effect on my net wealth at this point than cash investments and pensions.

I envisage I'll be renting for a few years before I get on the property ladder. I imagine I could buy really cheap houses, improve them and sell or rent them out!?

If your house provides the majority of your net worth, what do you plan on doing when you retire? Downsize?

caveman38

In your opinion, what would be the best way to finance retirement? Especially as it is obvious that one has to look to oneself in order to finance retirement.
My main goal is not to get to retirement and realise I have to work for 15-20 years more. I want to know I can sustain myself indefinately.

I am no expert but have come to realise that it costs a lot just to live well. A token input to retirement would be all that I would commit and most probarly if I was your age that is all I would have to commit.
When I was your age an in paid skilled employment (not self employed) we worked little and were paid well and there was no unemployment. That is not the case now and we how lost of our industries to the third world.
What we are left with is the Civil Service, Construction, Banking & Insurance and The Service Industries mainly.
Finding yourself a good job and holding on to it would be your first "goal".
Assuming you acheive your ambition of say a linguist with a £30k salary that rises to £50K at 35. What expendable income do you think you will have on PAYE. In time everyone will be paing 40% of their salaries in Tax and NI. What is left will have to finance a £200K + mortgage and pay your bills. Add to that the possibility of having children and I can asure you your dream of saving 50% will be no more than a dream. 10% will be more realistic which would be the 5% in your comapny pension scheme and another 5% of your own.
I am trying to not be pessimistic but I have two lads in their thirties both like you with university degrees. Ones an engineer the other a broker in the city and both on £50K+. With their mortgages and other committments they have very little left for long term planning.
Instead they both enjoy a limited social life and holidays before they start families.

kidmugsy

The time to contribute to pensions is when your contribution brings an employer's contribution with it, or when it lets you avoid higher rate tax or, by salary sacrifice, National Insurance Contributions. Don't do it until then.

P.S. For God's sake choose your spouse carefully. That matters a great deal more than wondering where to put your assets.

Student_of_£

caveman38 wrote: »

I am no expert but have come to realise that it costs a lot just to live well. A token input to retirement would be all that I would commit and most probarly if I was your age that is all I would have to commit.
When I was your age an in paid skilled employment (not self employed) we worked little and were paid well and there was no unemployment. That is not the case now and we how lost of our industries to the third world.
What we are left with is the Civil Service, Construction, Banking & Insurance and The Service Industries mainly.
Finding yourself a good job and holding on to it would be your first "goal".
Assuming you acheive your ambition of say a linguist with a £30k salary that rises to £50K at 35. What expendable income do you think you will have on PAYE. In time everyone will be paing 40% of their salaries in Tax and NI. What is left will have to finance a £200K + mortgage and pay your bills. Add to that the possibility of having children and I can asure you your dream of saving 50% will be no more than a dream. 10% will be more realistic which would be the 5% in your comapny pension scheme and another 5% of your own.
I am trying to not be pessimistic but I have two lads in their thirties both like you with university degrees. Ones an engineer the other a broker in the city and both on £50K+. With their mortgages and other committments they have very little left for long term planning.
Instead they both enjoy a limited social life and holidays before they start families.

That does sound more manageable, The city is VERY expensive, and I honesty can't imagine myself living in Landan.

caveman38

kidmugsy wrote: »

The time to contribute to pensions is when your contribution brings an employer's contribution with it, or when it lets you avoid higher rate tax or, by salary sacrifice, National Insurance Contributions. Don't do it until then.

P.S. For God's sake choose your spouse carefully. That matters a great deal more than wondering where to put your assets.

Is that the post of a bitter "fleeced" man?

lvader

Student_of_£ wrote: »

In your opinion, what would be the best way to finance retirement? Especially as it is obvious that one has to look to oneself in order to finance retirement.
My main goal is not to get to retirement and realise I have to work for 15-20 years more. I want to know I can sustain myself indefinately.

My plans is to reach financial independence at 55, meaning I could retire if I wanted to and would only do work that I enjoy. To reach that goal I have a mixture of pension incomes that will come into play starting at 55, then 60 and finally the state pension at 66. To allow flexibility I also have savings going into a S&S ISA and will build a cash position as I get closer.

srcandas

Student_of_£ wrote: »

As for my career I think I'd like to be a translator/interpreter but I have a burgeoning interest in banking so I'd like to think my language skills could help me get a career their. I think education is a no no for me, kids are VERY cruel!

Don't want to home in on your situation specifically; you seem a level headed thinker so I can't worry about you too much :cool:

But more generally translation I think will be a tough way to earn a living. As an example in the IT trade I haven't used a professional interpreter since 1987.

In Spain at the moment many expats are taking translation courses and gaining qualifications. They study say legal, medical or whatever translation. Even qualified the pay is not much more than the thousands of brit expats who think as they speak english they can teach it. This must be common to Portugal, Italy, Spain and many other countries.

You mention banking. Can you not gain a qualification (degree) in that (open university possibly)? I could see a combo of skills being very valuable. A much better investment than an ISA.

The talent I'd hunt for, which I think is probably more of a mindset, is adaptability. The chances in the future of one career uni to retirement I think is minimal.

Well tx for a great entertaining thread OP :beer:

killerpeaty

Caveman38: While I don't think (or at least I hope) that money is something that people consider when first starting out in a relationship. I do think that it can put a lot of stress on a relationship if you're both constantly disagreeing on when money is well spent. I believe that was a factor in the failing of my last relationship, but it isn't only the woman who spends! I was the female frugal(ish) partner.

@student of £; I think it's good to have the ambition, I also think it's good to think long term. My long term (domestic) ambition to set up a low imput/passive income of £1k a month for my retirement. My business ambitions are rather different.

JoeCrystal

kidmugsy wrote: »

P.S. For God's sake choose your spouse carefully. That matters a great deal more than wondering where to put your assets.

Well, that is one route of getting financial independence, do not have a partner/spouse and kids! Less stressful and costly.

Cheers,
Joe