100k in ten years

Broken_Biscuits

looking purely at the math of the challenge...
assuming you can achieve a steady 5% return on your money and compounding is taking place, you need to save around 625 - 650 a month.

now this assumes the same payments over 120 months. You would have to hope that at 25 and being on minimum wage that you will be at the lowest point of your career. Payments should be able to be increased going forward, meaning you could pay slightly less per month now or perhaps reach your target earlier.

100k in 10 years, in my opinion, is not a stretching target. You should achieve it.

for a different point of view, have you considered that if traditional classroom and books style education was not for you that you could use your age, living conditions and general lack of responsibilities that you have now and take on something like an apprenticeship? Less pay now but you will learn a trade that will pay you considerably more in the long run?

saving £650 a month will leave you around £300 a month to spend assuming a 35 hour week.

£10 a day with no bills to pay isn't really that frugal to be honest. you could live off half that under your circumstances. Less again if your parents feed you for free.

motorguy

100kintenyears wrote: »

I don't know what I would want to spend the money on and every person above 30 I speak to tells me their biggest regret is not saving more in their 20's. The property ladder is a risky and taxing business and something I don't to engage in until I'm at least in my 30's and somewhat financially secure. I understand that I'm in a very fortunate situation with my rent and bills but it is what it is and it's a positive thing for me in terms of saving so obviously I'll take it and try to reach my goal through hard work and frugality. Even though I'm not attempting to move out there are a lot worse things a 25 year old could do with their money other than saving it up until they reach a larger amount and are 10 years older and wiser. I also have to take into account that my job is a hard job and the unwanted reality that at some point redundancy could be a possibility, having tried so hard last time for 6 months and literally getting absolutely nowhere in my search for a job I think it is wise to save as much as I possibly can.

Thanks for your honesty but I was expecting the feedback from writing a post about how I want to save all the money I make for 10 years starting in my mid 20's would be more positive than this considering this is a boost your income forum within a money saving website. Lastly I wouldn't consider my parents to be rich or wealthy only quite well off, they don't have nice cars or even big savings as they choose to spend their money on other things. Their combined wages are nearer to the average London wage for a single person than to a CEO. Maybe my attitude does show some sense of entitlement but naturally I want to save as much as I can from as many honest revenues as possible and since they do give a lot to charity and friends and I had a positive goal I was just hoping for some assistance.

So you're basically proposing continuing the next 10 years as you've lived the last 25? Being subsidised by your parents?

See when those people say they wish they'd saved more in their 20s i would say if you asked them to extrapolate that they mean "as well as" getting on with their lives, rather than living at home and sucking up their parents resources.

You're not really achieving a great deal by saving money that your parents are otherwise going to have to spend on your upkeep.

You're 25, its long past time to be starting to be self sufficient. Move out as soon as you can afford to rather than leaning on mum and dad. They may put a smiling face on the idea of you living there until middle age, but the reality is, they've their lives to live too and it doesnt involve some 35 year old sponging son still being there.

Trust me on this.

My son is 21 btw. He worked part time in a call centre to help fund HIMSELF through university, and in that role he got a promotion to a lead agent. In his final year he studied abroad for six months as part of his course - in Slovenia and he toured round Bosnia, Montenegro, Croatia and Serbia. All self funded. His car is worth around £10,000 and that was self funded too. All his own CASH.

I've helped him along the way, yes, but not sponsored his life.

Hes now got his finals in May and hes got a "Plan A" of a graduate trainee role for one of the large companies, and a "Plan B" of going back to call centre work and working his way up. He and two of his friends are going to rent an appartment which is going to work out around £250 each per month. And that will be him out in the big bad world living his life. Granted we'll be there for him if needs be.

And yes, we're quite well off. So he doesnt have to do any of this. No way we'd ever "make" him move out.

None of this "oh oh i'm going to live at home until i'm 35" nonsense.

Will he have £100K in the bank when hes 35? Probably not, no. Will he be making his own way in life and LIVING, most definitely YES.

motorguy

Broken_Biscuits wrote: »

looking purely at the math of the challenge...
assuming you can achieve a steady 5% return on your money and compounding is taking place, you need to save around 625 - 650 a month.

now this assumes the same payments over 120 months. You would have to hope that at 25 and being on minimum wage that you will be at the lowest point of your career. Payments should be able to be increased going forward, meaning you could pay slightly less per month now or perhaps reach your target earlier.

100k in 10 years, in my opinion, is not a stretching target. You should achieve it.

for a different point of view, have you considered that if traditional classroom and books style education was not for you that you could use your age, living conditions and general lack of responsibilities that you have now and take on something like an apprenticeship? Less pay now but you will learn a trade that will pay you considerably more in the long run?

saving £650 a month will leave you around £300 a month to spend assuming a 35 hour week.

£10 a day with no bills to pay isn't really that frugal to be honest. you could live off half that under your circumstances. Less again if your parents feed you for free.

I dont get this at all? Whats the big fascination with putting your life on hold to live at home during the best years of your life eeking out a frugal existence just so you can have £100,000 in the bank (and at the expense of your parents bank account / sanity)

And then at that point point deciding on what "life experience" you will have?

Seriously? You're life will be half over by then.

AND the reality is, the longer this persists the more odd its going to be to friends and prospective girlfriends.

Broken_Biscuits

motorguy wrote: »

I dont get this at all? Whats the big fascination with putting your life on hold to live at home during the best years of your life eeking out a frugal existence just so you can have £100,000 in the bank (and at the expense of your parents bank account / sanity)

And then at that point point deciding on what "life experience" you will have?

Seriously? You're life will be half over by then.

AND the reality is, the longer this persists the more odd its going to be to friends and prospective girlfriends.

i am not here to tell someone how to live their life. My answer purely related to the numbers involved in the challenge set.

personally i moved out at 17 in to the cheapest shared house i could find and got on with life. Never gone back to parents looking for handouts or help. ive worked with a few over the years that have never moved out and are late 20s mostly... One was late 30s but he was very introvert. I don't think it was a money thing.

after a couple of years of living on 30% or less of your wage you will probably come to your own conclusions that moving out could be more fun. At that point you could have 10k plus. A deposit on a flat or at least a nice cash cushion.

Armorica

Some very odd reactions on this thread.

I don’t see what the problem is what the OP being up front about planning to live at home until 35. Many people do that unintentionally given the state of the housing market. Equally, it is common for parents to help with mortgage deposit etc. well into 30s; so it is better to pay money to parents now who don’t want it, but receive probably most of it back in 10 years to help with a house deposit….or is it better not to pay them and save house deposit in your own name.

(Of course, sensitive to state of the housing market in the area of the country you live in!)

I’m in my 30s and not saving more in my 20s certainly wasn’t my biggest regret. Saving significant sums wasn’t an option given I had a mortgage by 25 and supporting 4 kids.

My problem is the same as some of the more recent posters. Ten years is a long time and it sounds like your existence will be quite frugal. At 35, I don’t think I’d be happy looking at a bank balance of 100k but not having really lived. While it’s a worthy ambition, you may want to set some goals/ambitions for 3-5 years as well that might, for example, include foreign travel or further training/education, or setting up a part-time business as a separate income stream etc..

100k is a significant sum of money - what are you going to do with it once you’ve got it? It may be more realistic to identify what you’re saving for e.g. xk = 6 - 18 months living expenses to cover the risk of redundancy/illness; yk as a house deposit; zk for a once in a life time holiday etc.

Broken_Biscuits

just to throw some perspective on inflation too...
assuming an inflation rate of 2-3% 100k will have the buying power of 75k to 80k of todays money in 10 years time.

the most important thing is getting your savings into inflation beating investment vehicles.

i would say tsb's 5% account is the perfect starting point. That's your first 2k covered.
ratesetter is the lowest risk of the peer to peer sites. Above 6% returns are available. Id put a similar amount in there. at the rate of saving described above we should be about 6 months down the line with about 4k. In that 6 months you should have been learning and getting familiar with how to use stocks and shares.

that's what i would do... But would be interested to know your plans?

sew109

Good luck to you fella I dont see what the problem is as long as you are happy to live at home being supported by your partenst this is no buisness of anyone other than you and your parents.

I left home at 18 moved back for 6 months to save for a deposit (thats all it took in 1990) and am very happy with the course I have taken (aside from running up massive CC debt rather stupidly that took me 8 years to clear)

Wizzbang

Some of the posters can't see how culture is colouring their point of view. In the UK and a lot of Western cultures, independence is valued at the expense of everything else. It's not the be all and the end all for someone to move out of home at 18, 21 or before they are 30. In other cultures, children would probably always live at home and then look after their parents in their old age.

Anyway, you'd have to be financially pretty stupid in this day and age to move out as soon as you were 16 or 18 or whatever, on a minimum wage job. Sure fire way to get into massive debt. You'd do well to read some of Dave Ramsay- "Live like no-one else now, so you can live like no-one else later". You'll make your goal of saving £10K and you'll have the rest of your life to lead as you want to-debt free, hopefully.

You most certainly can plan to live at home until you're 35, if that's what you want to do. Western culture has moved to valuing travel and 'life experience' as some of the other posters are espousing. If that's not for you, then there's nothing wrong with living at home and leading a simple existence.

However I do see the value in having a goal for this money. Will you use it as a deposit on a house? Probably the most sensible option in my view. Or, to start a business, invest etc?

Some of the posters here have a very fixed view of the world and can't see that others might not share it. If your parents have no problem with their child living at home, then who has any right to question it. Equally, if you want to stay there- it's your life, live it your way.

100kintenyears

Broken_Biscuits wrote: »

looking purely at the math of the challenge...
assuming you can achieve a steady 5% return on your money and compounding is taking place, you need to save around 625 - 650 a month.

now this assumes the same payments over 120 months. You would have to hope that at 25 and being on minimum wage that you will be at the lowest point of your career. Payments should be able to be increased going forward, meaning you could pay slightly less per month now or perhaps reach your target earlier.

100k in 10 years, in my opinion, is not a stretching target. You should achieve it.

for a different point of view, have you considered that if traditional classroom and books style education was not for you that you could use your age, living conditions and general lack of responsibilities that you have now and take on something like an apprenticeship? Less pay now but you will learn a trade that will pay you considerably more in the long run?

saving £650 a month will leave you around £300 a month to spend assuming a 35 hour week.

£10 a day with no bills to pay isn't really that frugal to be honest. you could live off half that under your circumstances. Less again if your parents feed you for free.

Broken_Biscuits wrote: »

just to throw some perspective on inflation too...
assuming an inflation rate of 2-3% 100k will have the buying power of 75k to 80k of todays money in 10 years time.

the most important thing is getting your savings into inflation beating investment vehicles.

i would say tsb's 5% account is the perfect starting point. That's your first 2k covered.
ratesetter is the lowest risk of the peer to peer sites. Above 6% returns are available. Id put a similar amount in there. at the rate of saving described above we should be about 6 months down the line with about 4k. In that 6 months you should have been learning and getting familiar with how to use stocks and shares.

that's what i would do... But would be interested to know your plans?

Wow thanks, it's like having a free financial advisor.

My initial plan when applying for jobs was to attempt to get on site as a labourer and work my way up, I tried for an apprenticeship last year before I decided to do the college course but there were none available to me locally. I've also recently heard about many people who have taken this route being ripped off and let go as soon as they have the qualifications to earn a full time wage and a new line of apprenticeships coming in to join the company.

Before attempting to get on site I passed a health and safety course and also gained my CSCS card by passing a separate course as you need these to work in construction. After this I visited or phoned every local construction/labouring site but was told that in order to work there I needed a level 2 *insert trade* qualification as these are the only people they are currently taking on. Of course to get the level 2 qualification you need 2 years of working in said trade which is basically another way of the construction industry saying "Unless you are put forward by someone who works here and is held in high esteem you're not getting in", to be fair this seems to be the attitude with the majority of professions/businesses from what I have seen and heard.

With regards to inflation I'm not too concerned, I think the main motivation is to see the 100k in my bank balance. 100k will always be a large sum of money but always be worth less than it was 10 years ago, It's just a nice round number to keep me motivated.

I am interested in gaining as much interest as I can however and recently changed my Isa from an out of date 0.25% to a 1%. I'm quite brand loyal and have never had s problem with my current bank so unless there was an extrodinary savings offer such as 10% on all money saved I wouldn't really consider switching. I've also done a bit of research on stocks and shares and apparently it takes more luck than poker to get it right. Whether that's true or not my main focus of increasing income will be to do well at my job and earn a promotion, eventually (perhaps when I reach my second £100,000 through smart investments and general economical decisions) I would consider using some money to start up a top of the range, niche website or app and try to make money through this as I think in terms of making money through entrepreneurial ownership (which I would be more comfortable with than working the housing market, stocks, etc) the internet will be at the forefront.

Sugarplum634

It's good you know where to focus your energy. Have you thought about setting up a regular saver? X amount every month for 12 months at a higher interest rate. Mine is automatic now I've set it up but it's locked away for the 12 months so you need to know you can survive without it. I'm all for making money work for you and knowing that your strength isn't stocks and shares etc is a good place to be. It'll save you making mistakes. £10k a year is definitely doable especially as you're working and your outgoings are very low. You sound cautious which is better in some ways tha being risky and loosing a chunk of cash and with the economy in the state it's in, you're not like to loose out on investments as happened to a lot of us when the economy went bell up.

There are lots of threads on here about boosting your income with PTC sites or surveys and although slow burning they do all add up.

Good luck and keep us posted!