What savings should I have?

kkgree1

I'd read this with interest as I think my husband and I have followed both our parents lead in being fairly frugal.

My parents bought their first property in 1971. It was 5k and they saved my mum's full salary (then £800 per year) for 18 months as a deposit and then stretched to get a mortgage for 2.5 times their joint salary. They are in the same house 43 years later. They have updated the kitchen once (10 years ago) and are looking to get their bathroom redone this summer after 20 years.

I have been lucky in that my parents helped me buy at aged 21. 11 years later I'd met my husband and we saved the equivalent to the equity of the house (35k saving and 35k equity) as deposit on our next house.

Been in current house almost 4 years and have 7k mortgage left.

Ultimately, it is all about choices and what is important to you. Most of our friends (mid 30s) are not interested in being "mortgage free" and would rather spend money on days out, restaurants, etc. For us, it's about financial freedom and hopefully we'll have that by the end of the year.

guitarman001

Sky News never published my comment - surprise, surprise!

guitarman001

Colin_Hunt wrote: »

Houses are cheap as chips, if you want to live in an expensive area thats your choice.

Cheap as chips!? Sorry but that's only if you want to live in a bedsit next to junkies playing music all night long - and even then that'd cost £90k+ where I'm based. You can't just say "cheap as chips" and have that taken as fact.

guitarman001

ManofLeisure wrote: »

guitarman001 wrote: »

A lot got it from (if lucky, inherited wealth) property gains which you'll never see.

Any wealth I've accumulated is and will be passed on to my children and their families.
I'm 58 and due to take my state pension at 66. This will be donated to help those who are not so fortunate as myself. Donated to a charity which helps elderly people pay their heating bills etc. Other people I know, also do this.
I retired at 55 and for the past 3 years have been involved with various charities. Giving both my time and money.
What more can I do? Please don't ask for any apolgy for having made lots of dosh. For many years I had 2 jobs to make ends meet. Worked 12 hr days to provide for my wife and children. I took advantage of 'every' opportunity that presented itself. May I add, even if the web had been available back then, I wouldn't have had time to log on.

Good luck in trying to make a better life elsewhere. My son (31) graduated with a MBA, held two posts in London before securing a fantastic job in Amsterdam. He now earns a 6 figure salary. He worked hard to make this happen, to give his wife and baby a better life. There were no hand-outs and he had to battle for a better life - just like most young people.

Sounds like me, then - I'm from a poor background and got two degrees. Not earning a 6-figure salary (I wish - considered LSE but it costs a fortune) but doing well compared to my peers.

Out of interest, what did you do to retire at 55 and was your pension final-salary based? I'm also not saying everybody made money from property and I'm glad you made yours off your own back, as I will be making mine - the hard way.

You worked for that money, I'd be spending it and enjoying yourself, not passing it all on to kids - they should make their own way (and sounds like they are).

Did he do his MBA at LSE, out of interest? I think I'm happy enough staying in engineering.. a move to the States would see a 6-figure salary immediately, and a move to Europe a raise to ~70k Euros (which probably works out about the same considering tax differences etc).

guitarman001

kkgree1 wrote: »

I

I have been lucky in that my parents helped me buy at aged 21.

Ultimately, it is all about choices and what is important to you. Most of our friends (mid 30s) are not interested in being "mortgage free" and would rather spend money on days out, restaurants, etc. For us, it's about financial freedom and hopefully we'll have that by the end of the year.

Most of my friends also had help from parents. Unfortunately nothing is coming to me (to be honest I'm glad they do what they want with their own money - they worked for it and aren't well-off).
My goal is also financial freedom, just like you. Saying that, I do have a good holiday every year (oh god, here come the comments) but this has little impact on savings which stand at just under £60k right now.

Colin_Hunt

guitarman001 wrote: »

Cheap as chips!? Sorry but that's only if you want to live in a bedsit next to junkies playing music all night long - and even then that'd cost £90k+ where I'm based. You can't just say "cheap as chips" and have that taken as fact.

£90k is chicken feed, affordable for a couple on NMW.

Cheap as chips -

http://www.rightmove.co.uk/property-for-sale/property-41158438.html

How many would you like me to post ?

bowlhead99

James_Boyd wrote: »

UK land all should cost the same. I can understand that different places price might be higher, but by 500,000- over millions. really?

UK land should all cost the same is a nonsense.

Somewhere in a desirable part of Kensington or Mayfair next door to all manner of services and high paying service industries is going to have a different price per square foot of land than a patch of land on a mountainside or obscure Scottish peninsula that's a ten mile walk to the nearest village. While some people will pay good money for a relaxing remote lifestyle, they first want to pay money to be near industry, business and infrastructure which will actually get them the money.

If all land cost the same, the ones allocated the nice and/or useful land would have an unfair advantage. What has happened in recent years is that it has become clearer and clearer that some land is more useful / desirable/ inherently valuable than other land and the price has moved to match because you have billions of people in the developed world that could buy a UK place if they wanted it, and they are in competition. So, some people have benefited disproportionately from this when they can sell in a market that recognises all this demand.

The fact that you do not have as much money as them and so are not able to buy their 500k ex-council flat in London, is perceived by you to be unfair. But if their flat was only £20k and your shed five hours from civilisation was also only £20k, you would still never get them to swap theirs for yours, and you would say it was still unfair.

The monster demand to live in their £20k London place compared to your £20k remote place would mean they could rent out a room in their flat for massive money (more than £20k every single year) and make a lot more than you, which would be unfair. And common sense would mean that if a monster rent is available on their property, someone would want to pay a lot of money to buy that income stream off them, more so than they would pay you for your undesirable plot of land.

So sure, you could say that as from tomorrow everyone gets their land and other assets taken off them and reset to zero, and then everyone gets allocated a certain amount of cash allowing them to buy an equal size parcel of land around the country for an equal price, but you can't do that without a lot of people getting seriously screwed and a lot of people getting lucky.

guitarman001

Colin_Hunt wrote: »

£90k is chicken feed, affordable for a couple on NMW.

Cheap as chips -

http://www.rightmove.co.uk/property-for-sale/property-41158438.html

How many would you like me to post ?

Sorry but very poor quality for the money and you'd get far better in other countries for the same money. I get your point but I just think it's poor value for money and not exactly "cheap". 25 year mortgage for a couple on NMW to pay off that place? My friends' parents bought a stunning bungalow with a lot of land for a pittance two decades ago - and she never worked and he was a teacher. I earn in excess of what he did and what I can afford in comparison is a joke. I design things in a very technologically-advanced job that help you do things like look at your computer monitor. I almost guarantee something I've helped designed is in your car. Anyway, back to my cardboard box...

Colin_Hunt

guitarman001 wrote: »

Sorry but very poor quality for the money and you'd get far better in other countries for the same money. I get your point but I just think it's poor value for money and not exactly "cheap". 25 year mortgage for a couple on NMW to pay off that place? My friends' parents bought a stunning bungalow with a lot of land for a pittance two decades ago - and she never worked and he was a teacher. I earn in excess of what he did and what I can afford in comparison is a joke. I design things in a very technologically-advanced job that help you do things like look at your computer monitor. I almost guarantee something I've helped designed is in your car. Anyway, back to my cardboard box...

There you go, problem solved.
Nice that you helped design something in a car, millions of people have consumed products I "helped" to produce, not important at all, it would still have happened had I left (as I did).
The house I linked to is similar to my first property, and for many couples would represent a mortgage on a joint earnings multiple of, erm, one/two.

bowlhead99

guitarman001 wrote: »

Sorry but very poor quality for the money and you'd get far better in other countries for the same money. I get your point but I just think it's poor value for money and not exactly "cheap".

It's not exactly something you can buy with pocket money, but you could buy ten of them for the price of a nice family house in outer London or a small apartment in a top London borough. Maybe you have aspirations to have a nicer place in a cooler area with fancier furnishings and more square footage.

However, that house is 0.1 miles from a primary school, has two other primary schools and two secondary schools within 10-15 mins walk (0.7 miles). You can walk to the town centre relatively easily. You have two bedrooms and a lawned garden. You have two reception rooms of 100-140 sq ft. It's double glazed. A pub and a couple of convenience stores nearby. Some people would grow out of it and upgrade. Others could downsize into it.

25 year mortgage for a couple on NMW to pay off that place?

A couple on the smallest wage legally possible can buy that house with a mortgage that only takes half their working life to pay off (assuming today's school leavers are working for 50 years from age 20 to 70 these days).

Exactly what type of property do you think someone on minimum wage ought to be able to buy? Should the pub a few minutes walk away be a gastropub? Should your first house be three or four bedrooms? There can only be so many awesome places to live, and presumable the people on minimum wage are going to end up in the less awesome ones because they are in competition with people who earn more than the minimum legally permitted.