Saving half my salary!

DiggerUK

With your time frame till retirement, you should get exposure to gold in your plans..._
http://moneyweek.com/a-beginners-guide-to-investing-in-gold/

Bravepants

xylophone wrote: »

You spend frivolously but you're careful that it's mindfully? That's the way to do it!:)

Ha! No, I meant I am not going to be spending frivolously! I guess part of my intentional living will include brushing up on my writing skills! :rotfl:I can do that for free!

Bravepants

CrabbitDutchie wrote: »

Yes, but like bravepants I'm also desperately trying to make up for a late start to working after 7 years of being a student. Having been in a real job for just under a year I currently have no pension, no mortgage, £6 350 in cash and a hefty but pretty painless student loan.

I'm currently stashing everything that's left after my fairly modest expenses are accounted for (I give myself £600 a month - includes rent, council tax, bills and living, but not the yearly MOT, car tax, car insurance). But even then, my take home pay level means that things are going pretty slowly!

If I could do things again I would start investing earlier in life...even £50 a month stashed away extra at the start would have compounded by now. Get a pension sorted first, then 3 to 6 months cash stashed for emergencies. Some people might suggest the other way around - stash , then pension! But the sooner you start the better. Check out https://www.monevator.com to learn about investing.

Bravepants

Pincher wrote: »

Life is about being really good looking, and have lots of freebies because people want to sleep with you. The moment you think in terms of paying for your own swimming pool, you start paying for everything.

I still haven't got my own swimming pool yet, but if I did, I am not inviting these !!!!!es, who won't sleep with me anyway: not even if I let them use my swimming pool.

Life: A summary
==========

If you have to save for anything, you are just not good looking enough.

The thing about reaching retirement age is that as we get older we all get less good looking. Using a swimming pool later in life, no matter who pays for it, will put your saggy, flabby bits on display for your sleeping partner to ponder over, perhaps resulting in your partner running off with the younger and fitter pool cleaner!

Bravepants

weenie15 wrote: »

I'm a year younger than you Bravepants and whilst my goal is to save on average 50% of my take home salary, it's usually around 40-45%.

My 'extreme' plan is to be able to call it a day (if I wish) at age 56. This does depend on my investments doing well though so a slightly more conservative aim is by age 60 - the extra few years seem to make a difference on my spreadsheet!

Also got a bit of an obstacle to overcome (impending redundancy) but hopefully, I'll be able to secure a decent job fairly quickly and invest most of my severance pay.

Yes, 60 is my backup plan too. There is no effing way I'm working until 68!

CrabbitDutchie

Bravepants wrote: »

If I could do things again I would start investing earlier in life...even £50 a month stashed away extra at the start would have compounded by now. Get a pension sorted first, then 3 to 6 months cash stashed for emergencies. Some people might suggest the other way around - stash , then pension! But the sooner you start the better. Check out [new user so can't quote link] monevator to learn about investing.

As I had pretty much nothing when I started this job(was earning £250-£300 a month during my MSc which was a fairly extreme form of month to month living even without having to pay for council tax!), my priority was definitely to get my old SORNed car back on the road first to make my commute manageable and then to get the emergency fund in place.
The car seems silly until you realise that a couple of my carless uni peers started at the same company at similar times. Now instead of everyone paying £250 a month for a train pass, my fuel gets paid for, I get company, and my only costs are the running costs of the car.
I let the emergency fund get a bit bigger than 6 months expenses (so it's now emergency and general life savings), but it is happily sitting in high interest current accounts.
Set up my pension last month and from next will be paying in 14% (6% employer match on top of that).

Next step is to start looking at investment options and start putting a little each month into a S&S ISA but with the majority still going into high interest current/regular savers accounts for now- I'd rather keep potential house deposits at lower risk. Will be checking out monevator, thanks!

Broken_Biscuits

I save 40% minimum of my take home each month with ambitions of early retirement or at least financial independence. Have been doing this for about 3 years but have always been a saver, just not to the level I'm at now.

You may like the following articles.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

BLB53

I just wondered whether anyone else was stashing half their take home salary away for their future and how their plans are going?

You may get some inspiration from RIT who has saved an average of over 50% of gross for the past 8 years and is now about to retire with over £1m at the grand old age of 43!

http://www.retirementinvestingtoday.com/

GenghisKhan

BLB53 wrote: »

You may get some inspiration from RIT who has saved an average of over 50% of gross for the past 8 years and is now about to retire with over £1m at the grand old age of 43!

http://www.retirementinvestingtoday.com/

Thanks for the hat-tip BLB53.

To the OP.

As BLB mentions I started with next to nothing 8.7 years ago and called myself financially independent (giving me the option of retiring early) 2 weeks ago at age 43. You have 7 years to go if you want to meet your plan but you have a start and also look to have a much coveted DB pension (I didn't). I averaged savings of 52.2% of gross (not take home).

Your post only contains limited information but what are some of my personal learnings now that I'm at the end of my journey. Of course please DYOR and all that.

Firstly, psychologically:
- It's important to start and then be prepared to learn. You've done that so you're already well ahead of most.
- Saving big chunks of income for the long term is going to take some determination as it's a lonely path. Many of those around you in equivalent circles are going to spending the lot including ramping standard of living with any earnings increase.
- Never become a victim or it will all fall apart.

Secondly, mechanically:
- You're already saving 50% of net but can you improve on that. If I look at my net I saved circa 82% for many years. This is critical because by learning to spend less you can save harder but also your retirement wealth number (+DB scheme payout) will become smaller. Some things I've done include a £0 budget. This is where you start at £0 per month/year and need to justify everything that goes in where most budgets look at what your going to take out. Have you done a lowest price grocery shop? Do you really need 2 cars, what about 0 cars?
- Can you increase earnings either in the current job/company or with side hustles etc.
- Earnings - spending = savings. Don't underestimate how much of a contribution savings will make to your wealth journey. For me 64% of my wealth came from savings.
- A diversified portfolio of assets that meet your risk profile. You only show what's in your ISA so maybe you have some property (and I'm not talking BTL, more REIT's) or a small amount of gold elsewhere. I 100% get your VG LS60 choice.
- What are you trying to achieve with your portfolio? For example why are you overweighting biotech and China consumer funds. Do you know something that the sum of the market doesn't. Another example, why are you buying both Acc and Inc funds. I personally just buy the market via index fund investing and target all Inc as I want to live off the dividends in FIRE rather than selling down wealth.
- One area where we differ greatly is investment expenses. After inflation my journey, which included the GFC, has resulted in an annualised real return of circa 4% ex expenses. How much is that Scottish Widows Pension costing you? Could you transfer it to a low cost SIPP. A quick look so I might not have all the costs shows the active funds you show carrying costs between 0.66% and 1.42%. If your portfolio also was to return a real 4% are you happy to give away up to 1/3 of it to a fund manager? Are they really going to be able to outperform a passive index approach for 30 or 40 years. Just one example, your index linked fund carries costs of 0.66% pa. Is it really better than the iShares INXG with 0.25% of Vanguards index linked gilt OEIC with 0.15%.
- You seem to be investing tax efficiently. Just maybe consider the risk of the government changing the rules. For example, what would you do if you couldn't access your private pension at 55 etc etc.

Hope that helps a little.

xylophone

Life is about being really good looking,

The one way trip to Switzerland is the only answer?:eek: