At what point do you stop saving?

Paul_1977

I have seen it so many times, people that have saved all their lives and have no idea what for.

I know of two people who had at least 250k in the bank (I know because I was asked to be a witness for their wills), and they never did anything with it, they just died and never got to enjoy it. It all went to distant relatives that never even bothered to come and see them.

I used to say to them, why don't you go on a world cruise or something like that. They always said "next year I will" or "I should do", but never did.

They both died suddenly in their 70's, saving all their lives for nothing, it has got me thinking, when should you stop saving?

Do you save for a house or deposit and then stop, and just save for small things, I mean if you are paying into a decent pension why save any more, you might as well just spend it.

I don't know, its really made me think.

ChesterDog

Saving gives the prospect of financial security no matter what life throws at you. That in itself is worth a huge amount.

Some of the people who build large reserves of capital and assets are able to do so at least in part, precisely because they do not get pleasure from spending for the sake of it.

I was idly thinking along these lines this very afternoon while out for a misty, chilly walk. For perspective, my net assets are about £1.3m, with only the 0.3 tied up in my house. Right now, I thought to myself while walking, I could be having a relaxing and indulgent massage at Sandals.

The question is, would I really be getting more out of life by doing so? Hmm... Naah. :-)

Paul_1977

ChesterDog wrote: »

Saving gives the prospect of financial security no matter what life throws at you. That in itself is worth a huge amount.

Some of the people who build large reserves of capital and assets are able to do so at least in part, precisely because they do not get pleasure from spending for the sake of it.

I was idly thinking along these lines this very afternoon while out for a misty, chilly walk. For perspective, my net assets are about £1.3m, with only the 0.3 tied up in my house. Right now, I thought to myself while walking, I could be having a relaxing and indulgent massage at Sandals.

The question is, would I really be getting more out of life by doing so? Hmm... Naah. :-)

No, I could not sit in the sun for ever either, I don't think many could. And I would not spend for the sake of it, what I was trying to get at, is you get people that have vast amounts in the bank and live as though they don't have a penny. I would certainly at least go on a few good holiday a few times a year or start a business etc.

I personally could not allow monies to sit in an account not doing anything. I understand the value of savings, I have fallen back on them a few times due to illness etc, without them I would of been on the dole.

But when you are speaking about hundreds of thousands and you own your home etc, I would have to do something with it. These people did not own their own home, they choose to live in local authority housing, nothing wrong with that, but not my style. Maybe that's why they had such savings.:rotfl:

bowlhead99

I know people on 6-figure salaries who have negative net worth and people on 4 figure salaries who have 6 figure net worth.

The people with 250k in the bank that you refer to, are certainly better equipped to spend their last decade on this earth in the relative comfort of a nice nursing home than those who have the high incomes when healthy but spend it hand over fist and do not have a nest egg. As you suggest, the first step to having more money later is to spend less money now.

Presumably, "dying suddenly in their 70s" was not the game plan which is why they preferred to have the resources to go on a cruise each year from the age of 75 to 95 rather than going on the cruise every year from 50 to 75 and needing state funding to get bare bones care in the last couple of decades after the cash runs out.

You're right of course, it's a balance. Those who think they are being frugal will have other people accuse them of being stingy; but to some people being cautious is part of human nature while to others it is madness not to guarantee you get to enjoy every penny of your hard-earned, by spending it as soon as it looks like you might be able to spare it.

ChesterDog

On the subject of the money 'not doing anything', all of mine is working. Some is working really hard, some is working less hard, but none of it is doing nothing.

I do take your point, but the best things in life - while not actually free in many cases - can be very inexpensive.

PeacefulWaters

When you're retired and:

1. Your indexed income exceeds your outgoings comfortably
2. You have a lump sum behind you

You can then gradually run down the lump sums treating yourselves.

ColdIron

ChesterDog wrote: »

I could be having a relaxing and indulgent massage at Sandals

What is this Sandals you speak of? All that google could come up with was lumpy footwear

Mattygroves2

In my case I am saving (or rather investing) to enable me to have enough income in retirement to be able to fund everything I want to do without having to touch the capital - which will include holidays in the early years.

So I will be saving until retirement and after that only if the income generated exceeds the needs for any one year. There should be capital appreciation though so I suspect my net wealth will be increasing until the day I die - unless I die in the middle of a stockmarket crash !

nearlyrich

I have been saving to retire at 55 coming up 54 this year and the plan is coming together nicely. We paid off the mortgage several years ago, I have helped my DD buy a house and I am contributing to her wedding. DS has had help through uni and help towards a car with a little more set aside to make it fair. Whilst saving we have had great holiday sometimes 3 or more a year we eat well go out and we enjoy the here and now...I like the security of no mortgage and money in the bank I am a bit scared of having no regular income but I feel confident that I have enough to be comfortable in my retirement. I don't plan to die at 70 but you never know do you?

Freecall

At what point do you stop saving?


Never, saving is not so much about accumulating assets as a philosophy and general attitude to life.

:beer:

ChesterDog

Well this thread has inspired me to blow some cash on a Chinese tonight! :-)