How to fall in love with saving money

Porcupine

Here's a handy motivational thought.

Think of that £2 coffee you were going to buy. It's only £2 right?

Now don't think of it as a coffee, think of what you're stealing from your pension by spending it.

Let's say you're 20 and you're going to retire at 70 (thanks Mr Chancellor). Imagine if you invested your £2 in a fund that grew at 5% a year (a conservative estimate) or 10% a year (a wildly optimistic figure).

If you invested it at 5% a year, by the time you retire it'll be £22.93. If at 10% a year it'll be £234.78.

So £2 today or £234.78 on your pension?
Scary thought.

atush

Is that with compounded returns?

Porcupine

Yes. Though who knows what kind of return you'll actually get.

WantToBeSE

Mini goal of having £600 in bank by the end of 2013 has been smashed.
Total stands at £765

cathybird

WantToBeSE wrote: »

Mini goal of having £600 in bank by the end of 2013 has been smashed.
Total stands at £765

Flippin eck WantToBeSE, that's fantastic!!! :T:T:T:T:T:beer::) Well done you

cathybird

Porcupine wrote: »

Here's a handy motivational thought.

Think of that £2 coffee you were going to buy. It's only £2 right?

Now don't think of it as a coffee, think of what you're stealing from your pension by spending it.

Let's say you're 20 and you're going to retire at 70 (thanks Mr Chancellor). Imagine if you invested your £2 in a fund that grew at 5% a year (a conservative estimate) or 10% a year (a wildly optimistic figure).

If you invested it at 5% a year, by the time you retire it'll be £22.93. If at 10% a year it'll be £234.78.

So £2 today or £234.78 on your pension?
Scary thought.

Well, you know, there are some mornings I would willingly pay £22.93 for a coffee :rotfl:However, it gets scarier if you have a coffee habit (say you buy it twice a day), meaning your repeated spendage of £2 comes to, say, £1,350 a year, which adds up to £16,361.17 (if you'd invested it over 50 years at 5%), just for year one of your coffee drinking habit. So if you add up the repeated years of spending it clearly ends up well into the hundreds of thousands of quid. I can say all this smugly* because I did give up the coffee habit many a long year ago. :rotfl:

*sort of. Not thinking about all my other spending habits ...

cathybird

I have a day off today and am going to use some of the time to have a look round at stocks and shares isas and apply to open one if I can find one that fits what I want. Time to start bunging some spare income into it.

YoungBusinessman

:jPayday today means one thing....more money to the savings

atush

Cathy, try Hargreves lansdown and Cavendish online?

cathybird

Thanks atush. In fact I have tracked down some incredibly useful threads on here about S&S Isas - it partly depends on the investing strategy as to which is the best and cheapest one though, and I haven't quite got it all nailed down yet. I have looked at HL previously but not Cavendish - I'll check them out. Am also thinking I should start a SIPP, which may influence the choice.