25 year old.. How can I retire ASAP?

zagubov

capital0ne wrote: »

It's not surprising without the word Pension.

Two reasons - youngsters don't trust pensions when the hear about Carillion bosses spending it all, BHS non-existent pension fund and so on.

Second reason most people do not understand pensions because no one can explain them in plain English, those who do are seen as being salesmen only out to line their own pockets, again a trust issue.

People get very nervous when someone from the Government says 'We're here to help you!' In fact people get nervous when anyone with a finance background/qualification utters the same words.
Whose fault is that?

School for not including it in the curriculum, the government for allowing this to happen, fraudsters cold calling and ripping you off.

Education is the answer but how to do it I don't know.

You are totally correct that schools should teach that pensions are an essential part of retirement planning.

There used to be a course called Decision Maths which I think was basically a course in logistics and how to plan. Developed skills we could probably all use more of.

economic

MarcoM wrote: »

may i ask what job do you have?

i would feel frustrated if i had a lot of money but was employed in a mediocre job which was not a business or working for others who are a pain. how do you keep yourself motivated?

and to OP, inheritances are a goid thing but do not necessarily factor them in your calculations. government or policy changes could see inheritance tax going up by a lot. someone in treasury will have to find money from somewhere.

Used to work in banking. Now I work in consulting as a contractor. I quit exactly because of what you say. The marginal benefit of working diminishes as you accumulate wealth if your salary doesn’t go up meaningfully. And so you feel like you don’t have to put up with people telling you what to do, mostly people that you don’t like as well. That’s why I ended up quitting.

The thing is everyone needs a purpose in life. Otherwise you risk mental heath issues. But purpose doesn’t have to be a career or job.

With inheritance - there are ways around the tax - you can gift it or just spend it.

mollycat

justme111 wrote: »

why so categorical?
OP is very close to being able to live without working. Why do you think everyone should follow the script of being able to relax only after 3O odd years of a sl9g st work ? what is the merit in that ? I came across someone who had a house ( either inheritance or cheaply bought because of need of work ( who he sublet to lodgers and lived on the proceeds spending his time surfing for 5 hours daily.
Arguably his life is more meaningful than the one of a lemming who postpones living till they are 55.

Im pretty relaxed, and I think I live a meaningful life rather than that of a lemming; but if you know better, fair doos

Its only very recently in human endeavour that the working man has had the luxury of being able to choose a job they find enjoyable/stimulating....this is a good thing obviously, and comes with progress and a more affluent society.

Miners, mill workers, steel workers, shipbuilders and labourers of the past had less options and pretty much worked themselves into an early grave.

My background is factories and NHS......my employment has often been unenjoyable; but I work to live, not vice versa. Thats given me a normal life, holidays, nights out, treats etc, but I have deferred some pleasure for later by also saving hard to retire early.

A "normal" life and retiring early are not mutually exclusive.

The OP asks, "how can I retire at 25", what he/she is really asking is "how can I opt out of working at 25 and still have an okay life".

If the OP wants to opt out at 25, fine by me, its the OPs decision.

Just dont refer to that opting out as "retirement"; retirement is for those who have "done their bit" and are now due a rest.

DairyQueen

Simms92 wrote: »

Apologies if this is in the wrong section, I'm just looking for the best advice for me moving forward. I'm 25, not too far from 26 and I really don't like working. I don't want to be working 8 hours a day for the rest of my life, I want to have the option to stop working and do something that's more fulfilling for me.

I do own my home, which also makes up part of my income (renting rooms). Its worth ~200k with ~130k mortgage left.

My monthly income is made up of £2350 wage and £1100 room rent income (after taxes). So £3450 total. Including all bills/mortgage (£630) and living costs, I spend around £1250 a month, leaving me with £2000 a month (slightly less if I include holidays + treats). I have been overpaying my mortgage for the last year, currently paying off the mortgage at a rate of 24k a year including overpayments. No other debts and I don't own a credit card.

Now my original plan was to keep smashing the overpayments on the house (paid off in around 5 years), but I'm now wondering if this is the right thing to do. Is there a better way I could use the spare money I have each month? Another property?

My girlfriend has a 250k property with 100k mortgage remaining. Eventually I will move in with her, but unsure what to do with my house when I do.

My goal would be to get into a position where I have £2k+ income a month with no debts and without working. As soon as possible. Any ideas?

So, to summarise your financial position:
1) Total Assets = £70k (all property equity)
2) No cash reserve?
3) Unearned income = £1100pm (all from renting rooms)
4) Pension = negligible
5) Years of NI contributions accrued toward SP = around 7 or 8?
6) Current expenditure = £1250pm (excluding discretionary?)

That's a good position for a 25-year-old and a great first step. But it's just a first step.

You would need a pot of around £500k to have any hope of sustaining an income of £24k p.a. (before tax) for around 30 years. This is also the average income for a currently retired household, and those retirees will have worked anything between 30 and 50 years to build sufficient assets and SP.

And your 'retirement' is planned to last around 60 years.

Are you likely to win the lottery? Are your parents elderly and wealthy? If not, you are SOL.

You don't like working?
Err... tough.

You don't want to work 8 hours a day?
Only 8 hours? Things have changed since I was in my 20s.

You want to do something more fulfilling?
Change your job, invest in yourself, retrain.

Working isn't a lifestyle option for a 25-year-old, or a 35-year-old, or a 45-year-old. After decades of hard slog it may be a lifestyle option for a 55-year-old.

Welcome to the real world.

economic

DairyQueen wrote: »

So, to summarise your financial position:
1) Total Assets = £70k (all property equity)
2) No cash reserve?
3) Unearned income = £1100pm (all from renting rooms)
4) Pension = negligible
5) Years of NI contributions accrued toward SP = around 7 or 8?
6) Current expenditure = £1250pm (excluding discretionary?)

That's a good position for a 25-year-old and a great first step. But it's just a first step.

You would need a pot of around £500k to have any hope of sustaining an income of £24k p.a. (before tax) for around 30 years. This is also the average income for a currently retired household, and those retirees will have worked anything between 30 and 50 years to build sufficient assets and SP.

And your 'retirement' is planned to last around 60 years.

Are you likely to win the lottery? Are your parents elderly and wealthy? If not, you are SOL.

You don't like working?
Err... tough.

You don't want to work 8 hours a day?
Only 8 hours? Things have changed since I was in my 20s.

You want to do something more fulfilling?
Change your job, invest in yourself, retrain.

Working isn't a lifestyle option for a 25-year-old, or a 35-year-old, or a 45-year-old. After decades of hard slog it may be a lifestyle option for a 55-year-old.

Welcome to the real world.

im 34 and have accumulated a pot worth over 500k outside of my own home. my home has a mortgage of 250k and equity 350k.

I do not have to work but i chose to work. Many people can be in my position if they wanted to.

MarcoM

OP as you can see there are many jealous individuals out there.

with regards to inheritances i take the view that unless the money lands in my bank account i cannot rely on it.

there are ways around iht now, but who is to say this will be the case in the future, particularly if the socialists get voted in.
a high net wealth individual may still be able to find ways to stem aggressive taxation on an inheritance but people in the 1 million bracket would get hammered by the likes of Mc Donnell and Corbyn as they would be the easy pickings.

economic

MarcoM wrote: »

OP as you can see there are many jealous individuals out there.

with regards to inheritances i take the view that unless the money lands in my bank account i cannot rely on it.

there are ways around iht now, but who is to say this will be the case in the future, particularly if the socialists get voted in.
a high net wealth individual may still be able to find ways to stem aggressive taxation on an inheritance but people in the 1 million bracket would get hammered by the likes of Mc Donnell and Corbyn as they would be the easy pickings.

This is what i am worried about. So i have invested globally via shares rather then in BTL property in the uk. I have informed my parents about IHT. At least any government cant touch pensions which are passed down free of IHT?

TheTracker

These are my favourite threads on MSE.

The righteous indignation of those who have worked hard their whole lives and see all other self funded options as morally questionable.

The sheer befuddlement of someone in their 60s about how someone in their 20s would want to retire in their 40s. As above, even claiming ownership of the word retirement. What you are doing is not retiring, it is being lazy.

Cultural norms are strong. You will get a formal education, a stable job, a partner of the opposite gender, married, put down a house deposit, contribute to a pension, work hard until your 60s, with children along the way.

Hogwash. Plan your life the way that makes you and your loved ones safe and happy.

What such people fail to realise is those who they claim are lazy are often the more ambitious in society. Investing in themselves, working with no corporate trampoline, creating new ways of making wealth. It is from my pursuit of efficiency (you can read laziness) that work has been optional for me not long after 40. No luck involved. You can quibble at perceived unfairness or make a moral judgment but to that I use the same word back - tough.

ValiantSon

economic wrote: »

This is what i am worried about. So i have invested globally via shares rather then in BTL property in the uk. I have informed my parents about IHT. At least any government cant touch pensions which are passed down free of IHT?

What makes you think that? Parliament is sovereign and no government is bound by the decisions of any previous government. If a different government decided to change the law and include pensions in the calculations for IHT, and parliament voted in favour of this change, then that is exactly what would happen.

economic

ValiantSon wrote: »

What makes you think that? Parliament is sovereign and no government is bound by the decisions of any previous government. If a different government decided to change the law and include pensions in the calculations for IHT, and parliament voted in favour of this change, then that is exactly what would happen.

True.

In which case I should get my parents to accelerate making gifts to me and my sibling.