How to get to £1M in ten years?

Old_Lifer

A moment's reflection.

As  I have mentioned previously ,  I know a number of people who are disabled and live in group homes with 24 hour carer support.  As the Festive Season has just ended, I would like to thank all those who have continued to provide care throughout this period,  especially those who have spent time away from their own families on Christmas Day and overnight in order to continue  caring for the vulnerable.

Life is not just about money.

itwasntme001

coastline said:

itwasntme001 said:

coastline said:

itwasntme001 said:

Audaxer said:

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

So IF inflation ran at 2% for 10 years, as is roughly expected, your £1m would be worth £800k roughly in real terms in 10 years.  Yeh I would probably be ok with that but its still not really £1m is it?

What if inflation ran at 5% for 10 years?  The £1m would be worth less than half that in real terms in 10 years.  I am not so sure I would be happy with that...

Put it this way . If somebody said to me there's £1m pack your job in I'd be off like a shot. It's makes me wonder when people get concerned about SWRates in pension pots when they are loaded. Millions of older people are very happy on limited savings and the state pension. I was more concerned about my feet being cold in bed last night than my savings. Just wait until you get a bit older and I've got a few years for the state pension yet.

But the question was not about having £1m now (which by the way you would need to invest wisely to maintain the real purchasing power), but about having £100k now and growing it to £1m in 10 years.  If inflation runs at 5% a year for the next 10 years, that £1m would not even be worth half that in real terms in 10 years.

OP mentions £250k now and additional payments of £2k every month which I think makes £1m within reach . Global Indices aren't too far away although you'll probably need some winning funds or single stocks to get there. Most investors will be somewhere between the two in the link.
Chart Tool | Trustnet
Regarding £1m lets say you start a pension at £300 a month which is more than 10% of the average UK salary. £3600 yearly at 6% return over 40 years gives £550K. With a bit luck your employer adds to your pot and you add more as you go which should cover your inflation concerns. Well short of £1m and most people would be very happy. 
Never had 500K when I left and I'm still doing fine. Bumped into two friends from work a couple of years ago and both had left in their 50's with near £500K transfer values. Both over the moon. One was off to book a cheap holiday which you can when not working. Also said he'd never get through his pot. Saw the same fella recently and his pot was up. Still smiling.

The problem with your argument is that you assume inflation will remain stable at current levels more or less.  But if inflation does rise and stays higher, it will be easier to get higher nominal returns but in real terms you may very well fall short by quite some margin.

People like to extrapolate the recent past.  I am not so sure that is a good idea.

mooneysaver

Old_Lifer said:

A moment's reflection.

As  I have mentioned previously ,  I know a number of people who are disabled and live in group homes with 24 hour carer support.  As the Festive Season has just ended, I would like to thank all those who have continued to provide care throughout this period,  especially those who have spent time away from their own families on Christmas Day and overnight in order to continue  caring for the vulnerable.

Life is not just about money.

Not really viable I'm afraid. Whilst care homes have seen an above average return of investment most are privately owned and therefore not a realistic investment for your average private investor.

garmeg

coastline said:

itwasntme001 said:

coastline said:

itwasntme001 said:

Audaxer said:

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

So IF inflation ran at 2% for 10 years, as is roughly expected, your £1m would be worth £800k roughly in real terms in 10 years.  Yeh I would probably be ok with that but its still not really £1m is it?

What if inflation ran at 5% for 10 years?  The £1m would be worth less than half that in real terms in 10 years.  I am not so sure I would be happy with that...

Put it this way . If somebody said to me there's £1m pack your job in I'd be off like a shot. It's makes me wonder when people get concerned about SWRates in pension pots when they are loaded. Millions of older people are very happy on limited savings and the state pension. I was more concerned about my feet being cold in bed last night than my savings. Just wait until you get a bit older and I've got a few years for the state pension yet.

But the question was not about having £1m now (which by the way you would need to invest wisely to maintain the real purchasing power), but about having £100k now and growing it to £1m in 10 years.  If inflation runs at 5% a year for the next 10 years, that £1m would not even be worth half that in real terms in 10 years.

OP mentions £250k now and additional payments of £2k every month which I think makes £1m within reach . Global Indices aren't too far away although you'll probably need some winning funds or single stocks to get there. Most investors will be somewhere between the two in the link.
Chart Tool | Trustnet
Regarding £1m lets say you start a pension at £300 a month which is more than 10% of the average UK salary. £3600 yearly at 6% return over 40 years gives £550K. With a bit luck your employer adds to your pot and you add more as you go which should cover your inflation concerns. Well short of £1m and most people would be very happy. 
Never had 500K when I left and I'm still doing fine. Bumped into two friends from work a couple of years ago and both had left in their 50's with near £500K transfer values. Both over the moon. One was off to book a cheap holiday which you can when not working. Also said he'd never get through his pot. Saw the same fella recently and his pot was up. Still smiling.

I have crystallised funds of £580k, uncrystallised funds (post £40k LTA charge) of £120k and a DB of £11k in payment and I still feel that I cannot retire even though we are mortgage free!

Username999

Old_Lifer said:

A moment's reflection.

As  I have mentioned previously ,  I know a number of people who are disabled and live in group homes with 24 hour carer support.  As the Festive Season has just ended, I would like to thank all those who have continued to provide care throughout this period,  especially those who have spent time away from their own families on Christmas Day and overnight in order to continue  caring for the vulnerable.

Life is not just about money.

Well said.
Caregiving is the hardest of jobs.

Old_Lifer

mooneysaver  -   my post is not about care homes and is not about making money.

Retireby40

Old_Lifer said:

mooneysaver  -   my post is not about care homes and is not about making money.

And this thread is about making money. So while your sentiments are all well and good you're in the wrong place. 

Apodemus

Retireby40 said:

Old_Lifer said:

mooneysaver  -   my post is not about care homes and is not about making money.

And this thread is about making money. So while your sentiments are all well and good you're in the wrong place. 

He did start by saying " A moment's reflection", so there is no need to fear a permanent end to the main purpose of the thread.

MaxiRobriguez

garmeg said:

coastline said:

itwasntme001 said:

coastline said:

itwasntme001 said:

Audaxer said:

DireEmblem said:

Global equities have returned what 8-10% on average a year, gets you close...

Problem being by the time you get to 1m(if you do), you probably haven't factored in inflation.

If you were to get from £250k to £1m in 10 years, I think that would have covered inflation okay,

So IF inflation ran at 2% for 10 years, as is roughly expected, your £1m would be worth £800k roughly in real terms in 10 years.  Yeh I would probably be ok with that but its still not really £1m is it?

What if inflation ran at 5% for 10 years?  The £1m would be worth less than half that in real terms in 10 years.  I am not so sure I would be happy with that...

Put it this way . If somebody said to me there's £1m pack your job in I'd be off like a shot. It's makes me wonder when people get concerned about SWRates in pension pots when they are loaded. Millions of older people are very happy on limited savings and the state pension. I was more concerned about my feet being cold in bed last night than my savings. Just wait until you get a bit older and I've got a few years for the state pension yet.

But the question was not about having £1m now (which by the way you would need to invest wisely to maintain the real purchasing power), but about having £100k now and growing it to £1m in 10 years.  If inflation runs at 5% a year for the next 10 years, that £1m would not even be worth half that in real terms in 10 years.

OP mentions £250k now and additional payments of £2k every month which I think makes £1m within reach . Global Indices aren't too far away although you'll probably need some winning funds or single stocks to get there. Most investors will be somewhere between the two in the link.
Chart Tool | Trustnet
Regarding £1m lets say you start a pension at £300 a month which is more than 10% of the average UK salary. £3600 yearly at 6% return over 40 years gives £550K. With a bit luck your employer adds to your pot and you add more as you go which should cover your inflation concerns. Well short of £1m and most people would be very happy. 
Never had 500K when I left and I'm still doing fine. Bumped into two friends from work a couple of years ago and both had left in their 50's with near £500K transfer values. Both over the moon. One was off to book a cheap holiday which you can when not working. Also said he'd never get through his pot. Saw the same fella recently and his pot was up. Still smiling.

I have crystallised funds of £580k, uncrystallised funds (post £40k LTA charge) of £120k and a DB of £11k in payment and I still feel that I cannot retire even though we are mortgage free!

You have enough to retire modestly. Do it if you haven't already (and want to).

Retireby40

Apodemus said:

Retireby40 said:

Old_Lifer said:

mooneysaver  -   my post is not about care homes and is not about making money.

And this thread is about making money. So while your sentiments are all well and good you're in the wrong place. 

He did start by saying " A moment's reflection", so there is no need to fear a permanent end to the main purpose of the thread.

No fear at all its just random and serves for no purpose in the thread. You could literally write a million things in here for reflection.

A moments reflection about the thousands of families living in poverty in the UK. Maybe hundreds of thousands.

A moments reflection of people who have lost loved ones at Christmas. I know a man with 3 kids who is now left to raise them alone as his wife lost her life on 2nd January because of cancer. He is 36 and she was 29.

The list can go on.