Taxpayer 'Bonus'. £520,000 we don't need to find.

wotsthat

Graham_Devon wrote: »

That's fine doing it from today. But go back 40-50 years (as she didn't start today, clearly) and she wouldn't even have been earning £400, possibly even in a year, let alone a month. So rather impossible to save more money than she would have been earning.

I don't even know why you are bothering to try and argue that she "might" have been doing something else when none of us will ever know, but the absolute greatest liklihood is this amount of wealth didn't come from an NHS nurse pay packet. Thats just, well, blimmin obvious.

I calculated that it was possible, easy in fact, for a single nurse living in the same house for a lifetime, never going on holiday, never having kids, espousing the trappings of modern consumer life to start saving early in a career and accumulating £500k (in today's money) by the time they are ninety.

The reason I did the calculations this way was so the calculation would be like for like. The fact that you mention she wouldn't be earning the same nominal sum as a nurse today shows your basic lack of understanding about how wealth is accumulated.

You'd prefer to believe she accumulated this pot due to luck and maybe she did but it's entirely possible that she saved it.

Graham_Devon

wotsthat wrote: »

I calculated that it was possible, easy in fact, for a single nurse living in the same house for a lifetime, never going on holiday, never having kids, espousing the trappings of modern consumer life to start saving early in a career and accumulating £500k (in today's money) by the time they are ninety.

The reason I did the calculations this way was so the calculation would be like for like. The fact that you mention she wouldn't be earning the same nominal sum as a nurse today shows your basic lack of understanding about how wealth is accumulated.

You'd prefer to believe she accumulated this pot due to luck and maybe she did but it's entirely possible that she saved it.

Good grief do you ever give up with the insults?

You are trying to tell us all that she may well have saved £400 a month from her salary starting from around the 1950's?

Yet she likely wouldn't have even earned £400 a year?

And to top it all off you try and insinuate it's me that doesn't understand?

I'm lost for words, I really am. Sometimes it's best to just acknowledge you made a boo boo.

I understand how wealth is accumulated, and indeed others have suggested it's likely rising asset prices would have been the way she did it. It's YOU who suggested she could have done it on her wages, no one else.

wotsthat

Graham_Devon wrote: »

Good grief do you ever give up with the insults?

You are trying to tell us all that she may well have saved £400 a month from her salary starting from around the 1950's?

Yet she likely wouldn't have even earned £400 a year?

And to top it all off you try and insinuate it's me that doesn't understand?

I'm lost for words, I really am. Sometimes it's best to just acknowledge you made a boo boo.

I understand how wealth is accumulated, and indeed others have suggested it's likely rising asset prices would have been the way she did it. It's YOU who suggested she could have done it on her wages, no one else.

£400/month compounded for 70 years will give you a pot of around £500k in today's money. That's, say, 25% of a nurses take home pay.

Our nurse could have started saving 25% of take home pay 70 years ago and it could easily be worth £500k today.

I'd prefer to think you're on a wind up rather than not understanding.

Graham_Devon

wotsthat wrote: »

£400/month compounded for 70 years will give you a pot of around £500k in today's money. That's, say, 25% of a nurses take home pay.

Our nurse could have started saving 25% of take home pay 70 years ago and it could easily be worth £500k today.

I'd prefer to think you're on a wind up rather than not understanding.

Oh, please. Do show me the math! :T

I'd LOVE to see how you end up at 500k.

Heres the average yearly wage starting from 1930 - 1980. That gives a 50 year working life.

1930 195.80
1931 192.10
1932 188.80
1933 187.60
1934 189.60
1935 192.40
1936 196.80
1937 201.60
1938 208.60
1939 214.11
1940 270.79
1941 296.76
1942 319.20
1943 355.41
1944 376.66
1945 371.54
1946 380.99
1947 416.41
1948 455.77
1949 474.66
1950 496.70
1951 546.69
1952 589.59
1953 625.80
1954 667.13
1955 729.31
1956 786.78
1957 823.77
1958 852.11
1959 890.68
1960 948.93
1961 1,006.00
1962 1,042.21
1963 1,085.51
1964 1,168.23
1965 1,250.95
1966 1,333.67
1967 1,380.94
1968 1,488.98
1969 1,607.16
1970 1,801.30
1971 2,003.88
1972 2,262.18
1973 2,567.74
1974 3,023.55
1975 3,825.44
1976 4,419.69
1977 4,815.42
1978 5,440.25
1979 6,281.70
1980 7,585.53

They don't even add up to 500k in their entirety. Let alone saving 500k from 25% of the take home pay.

Just how much compound interest are you working on?! :rotfl:

I never get the similes out, but you are having a litter of giraffes here!

chucky

Oh dear, he's clearly lost it this time...

wotsthat

Graham_Devon wrote: »

Oh, please. Do show me the math! :T

I'd LOVE to see how you end up at 500k.

Heres the average yearly wage starting from 1930 - 1980. That gives a 50 year working life.

1930 195.80
1931 192.10
1932 188.80
1933 187.60
1934 189.60
1935 192.40
1936 196.80
1937 201.60
1938 208.60
1939 214.11
1940 270.79
1941 296.76
1942 319.20
1943 355.41
1944 376.66
1945 371.54
1946 380.99
1947 416.41
1948 455.77
1949 474.66
1950 496.70
1951 546.69
1952 589.59
1953 625.80
1954 667.13
1955 729.31
1956 786.78
1957 823.77
1958 852.11
1959 890.68
1960 948.93
1961 1,006.00
1962 1,042.21
1963 1,085.51
1964 1,168.23
1965 1,250.95
1966 1,333.67
1967 1,380.94
1968 1,488.98
1969 1,607.16
1970 1,801.30
1971 2,003.88
1972 2,262.18
1973 2,567.74
1974 3,023.55
1975 3,825.44
1976 4,419.69
1977 4,815.42
1978 5,440.25
1979 6,281.70
1980 7,585.53

They don't even add up to 500k in their entirety. Let alone saving 500k from 25% of the take home pay.

Just how much compound interest are you working on?! :rotfl:

I never get the similes out, but you are having a litter of giraffes here!

OK. She starts work in 1930, works for 50 years, saves a quarter of average earnings, retires in 1980, gets a two thirds pension that increases by 3% and continues to save 25% of income.

Compounding at 6.3% would give a pot of £500k at death. Not sure what the average deposit rate is since 1930 but since 1960 it's been 6% exactly.

I've not accounted for tax on interest but if cash on deposit can achieve these returns we're there or thereabouts since worse returns are hard to achieve.

The magic of compounding?

Graham_Devon

wotsthat wrote: »

OK. She starts work in 1930, works for 50 years, saves a quarter of average earnings, retires in 1980, gets a two thirds pension that increases by 3% and continues to save 25% of income.

Compounding at 6.3% would give a pot of £500k at death. Not sure what the average deposit rate is since 1930 but since 1960 it's been 6% exactly.

I've not accounted for tax on interest but if cash on deposit can achieve these returns we're there or thereabouts since worse returns are hard to achieve.

The magic of compounding?

So shes paid into a pension AND saved 25% of her wages? AND saved 25% of the pension.

Amazing women.

Amazing too that you have added 13 years of saving.

BTW, how have you worked it out? Totaled the earnings up and then taken 25%? Thereby creating money from thin air?

In the first 10 years of her working life her pot would only be standing at approx £200 (allowing for take home pay). Yet within 70 years, you've created £500,000

You also appear to have her living past 100 years old (based on her starting her nursing career at 16 years old). As I say, simply amazing women.

wotsthat

Graham_Devon wrote: »

So shes paid into a pension AND saved 25% of her wages? AND saved 25% of the pension.

Amazing women.

All after tax too, I assume, as you stated?

She lived in the same house since childhood, never went on holiday, last updated her kitchen in 1935, didn't have kids and by all accounts lived a very frugal lifestyle. If anyone could afford to live on 75% of earnings it's her.

Somewhat unique circumstances but shows that given time a person on quite modest means can build a substantial pot that 'unbelievably' can exceed total lifetime earnings.

I live on c80% of earnings and aim to live on less in the near future. Let's meet up in 20 years and compare notes.

Graham_Devon

wotsthat wrote: »

She lived in the same house since childhood, never went on holiday, last updated her kitchen in 1935, didn't have kids and by all accounts lived a very frugal lifestyle. If anyone could afford to live on 75% of earnings it's her.

Somewhat unique circumstances but shows that given time a person on quite modest means can build a substantial pot that 'unbelievably' can exceed total lifetime earnings.

I live on c80% of earnings and aim to live on less in the near future. Let's meet up in 20 years and compare notes.

And how long does she live?

J_i_m

Yeah, to be honest.. I was going to retort about the unliklihood (is that even a word?) of that life style, let alone those circumstances. But on balance of probability I decided that wotsthat was being ironic and didn't mean his post to be taken seriously.