Careers/saving money

dancingfairy

I'm just wondering how you all are able to save so much money. I've just got a new job but it doesn't pay a great deal, sadly. Hopefully over time I will move up the ladder and have more money to save.
I'm trying to put as much in my pension as I can and will try and build up an emergency fund.
How did you become in a position to invest money? Is it through cutting all expenses right back? inheritance? Moving up the career ladder?

Any hints and tips appreciated.

df

Freecall

Well you have to remember that posters on here self-select. In other words it will tend to be those who have some assets to invest who come here and post. You could go over onto the 'Bankruptcy & Living with it' board and ask how people end up with so much debt.

Over time of course some will move from one area to the other. This could be in either direction but the fact that the whole site attracts people who have an interest in (and maybe a desire to learn about) money I would expect them to tend to move towards saving and investing.

Finally, although I have no evidence for this, I would imagine that the median age profile of posters on here reflects people who are at a time of their lives where they are well into the asset accumulation phase.

Then again, maybe we all just got lucky at Ladbrokes!!

:beer:

Prothet_of_Doom

Maslow's Heirarchy of Needs.

You start off with nothing, you need a job to pay the rent, buy food, and buy gas and electric to keep you warm and safe.
You get a job, you have a bit spare, so you need a TV and a Phone, and some stuff, because you want to be comfortable, but you also want a buffer, in the bank (a SHTF fund) just in case the job goes tits up.
Then you want more, so you work hard, invest in your career, get a better job, and save like merry hell for a deposit.
This goes on, children and promotions, until eventually, if and it's a big IF, you are lucky, you find that you're financial commitments PLUS your immediate wants, and lower than your income, and you are able to start saving again.

So the OP has pretty much got it figured out :

How did you become in a position to invest money? Is it through cutting all expenses right back? inheritance? Moving up the career ladder?

YES, YES, and YES.

Start with the building of a SHTF fund, try to keep expences low, whilst learning, studying, reading, brown nosing the boss a little, carve out some promotions, and suddenly there's enough money to start saving, and DON'T expect anyone to name you in thier will (LOL?).

You have to live today, so don't make your life miserable today, whilst you save 40 years until retirement, but have a balance.
Some fun is free BTW

guitarman001

Basically live at home for years and years and save a lot (whilst working hard and getting a pay rise). I wonder if going to London and earning a mega-salary would see me better off; hard to say. Check out "list your job and wage" thread on this very mse forum.

racing_blue

The gradual accumulation of pensions have made the biggest contribution to our net wealth.

After that, asset appreciation, particularly of the homes we owned between 1998 and 2004. A repayment mortgage is a kind of leveraged savings vehicle, although levers work two ways.

Windfall of £50k = inheritance

The gap between income and expenidture (=savings) has been quite a small overall contributor

big_questions

An interesting question.

Technically, my investment money came from an inheritance.

But, the thing that has meant I think of myself as 'an investor' was actually all the more day-to-day moneysaving stuff in the 15 yrs before:
- keeping mortgage debt sensible (ie, we've only ever worked out our mortgage based on one income, keeping in mind there was gonna be a time where my wife would be looking after our kids for a few years)
- saving up for stuff, rather than racking up credit card debt (this has the twin advantages of limiting big impulse purchases, as well as making some things instantly 'not for me' cos it'd take too long to save up)
- understanding the nuts and bolts of money: knowing how childcare vouchers, ISAs, pensions etc worked -- and the basics of what 'investing' meant (though no detail at all.)

So, when I got my inheritance (which was sudden and sad) the money instantly had 'its place': invest it.

I've known friends and family who've had similar income levels, outgoings, etc and inherited money, and have just spanked the lot on stuff which they'd never previously thought of as necessary (brand new car, house extension etc). All power to them. It's just to say it's first and foremost the mind-set, not the spare cash.

Linton

Key factors for us:

- keeping our standard of living pretty constant as our careers progressed and saving/investing the additional income.

- luckily having a pension with what can now be seen as a foolishly generous guaranteed annual return and annuity rate.

- being a couple. Saving on a single salary is much more difficult.

- no kids.

Wilkins

The most important thing has been automatic saving via DD or SO over many years, being thrifty (but not tiresomely frugal) and having a partner who shares the mindset. If you treat savings as an unavoidable expense the pattern gets ingrained.

Most of my working life I've lived on around 80% of my income. Since I always had savings and never had a loan (apart from a mortgage) I learned how to invest and hence to understand my attitude to risk.

Having accumulated around £100k over twenty-five years, this meant that when I got an inheritance and, later, a redundancy payoff (both similar sums) I knew how to handle the money and did not need an IFA.

SliAbhaile

I've always managed to save, even when I was a student I had a low-pay Saturday job stacking shelves but it gave me disposable cash.

It always irritated me that my friends who were in full-time employment, earning ten or twenty times what I was earning, never had a penny to their names and were forever borrowing from me.

It's a mindset.

lisyloo

Some key factors I would say.

1. Live below your means (see 2).
2. Plan for the worst to a reasonable degree. So consider death, accident, redundancy, rainy days etc. That doesn't mean you should buy every insurance cover on the planet, but you should consider the consequences.
3. If you are not a sophisticated investor (most of us aren't) then having a repayment mortgage is a fantastic thing to do. You won't see it immediately but in 25 years or so you'll have a house compared to no house if you didn't. You get used to not having the money.
4. If you are not a sophisticated investor then get yourself a pension, If you can't afford much then start small,you'll get used to it and can increase alter. Again in 25/30 years time you'll have possibly a 6 figure sum without noticing pretty much compared with nothing. These things make a massive difference and you do adjust to money you're never really had (to spend).
5. Invest some time in reading books and websites. A good book is a few quid and could change your life. Amazon is a good place to look and read the reviews.

atush

We probably all started off where you were. We started saving/investing 25 per month, once we had a pension and an emergency fund. Then went to 50, 100 etc as and when it could be afforded.

That, and upping the pension was done each time we had a pay rise- as if you don't get used to having extra cash, you don't get used to spending it. So upped saving the minute the new larger salary was paid. The day (or the day after ) it was paid- NOT the end of the month.