Anyone else feel down about how long it takes to see meaningful difference to savings?

MovingForwards

Great to see you again @ForestBluebells

I set mini targets within my overall target. Like you, I know how much I want to have at the end and I've broken it down into yearly and monthly savings. It keeps my momentum going, as does my diary. Each year it gets reviewed, reworked and new targets set.

Having some 'good interest' paying regular savers let's that money work for itself. 

I also recently had a wake up call that I was neglecting myself as I'd become so focused on saving and introduced some 'me' time and guilt-free pocket money. 

For the first time I feel I've the right balance of now, short-term and long-term goals.

ForestBluebells

JohnWinder said:

ForestBluebells said:

I’ve got a figure in my head of wanting £100k wealth before I’ll feel a bit more stable, hoping to achieve that in the next 3 years

I wouldn't think a portfolio of £100k would be more stable than one of £50k; indeed, a 20% drop in value would be more significant with the former. But surely rather than wanting your investment returns to steam ahead now you'd want them to fall deeply into negative territory so that all your diligent savings will buy you more assets which when their turn comes to blossom you're holding a lot more of them than otherwise. Think it through. It's blood in the streets you want, figuratively (a Rothchild reference to the battle at Waterloo aftermath).

not really sure why I put it in that allocation other than a strange thought

You'd find the answer to that in an investment policy statement, which sets out your aims, strategy, methods, reasoning, supporting information, or whatever you call them all. Then, during moments of self-doubt you refer back to it to avoid unnecessary changes or mistakes.

I’d love a market crash to be able to buy cheap shares. I have a lot of cash for short term goals which I would plonk in the market if a serious crash happened. I am fully aware of how much the market can fluctuate. In fact I started investing at a great time, my first contributions were February 2020 right before the crash in March so I got to see it on a small scale straight away. 

I’m also fully aware it’s only paper losses and gains until withdrawal and since I actually can’t access the money for many years I’d love a crash to help boost what I’m buying with my money. 

I just want the £100k figure so it feels a more significant amount. If it then crashes after I don’t care I know I have the same underlying investment. My point it that it feels so slow at the start despite my huge effort to save

ForestBluebells

MovingForwards said:

Great to see you again @ForestBluebells

I set mini targets within my overall target. Like you, I know how much I want to have at the end and I've broken it down into yearly and monthly savings. It keeps my momentum going, as does my diary. Each year it gets reviewed, reworked and new targets set.

Having some 'good interest' paying regular savers let's that money work for itself. 

I also recently had a wake up call that I was neglecting myself as I'd become so focused on saving and introduced some 'me' time and guilt-free pocket money. 

For the first time I feel I've the right balance of now, short-term and long-term goals.

Lovely to see you again too. Maybe I should get back on board with my diary as feedback is always helpful. 

I do try to give myself £200 a month spending money but I don’t think I’ve maybe budgeted accurately as that tends to get eaten up on other things and doesn’t leave me with much to actually spend. For example I’ve not purchased new clothes since I started saving nearly 2 years ago. I have plenty of clothes that are functional and I wear them until they are no longer functional. I have wanted to buy myself a new pair of trousers for the last few months as I threw out one pair that needed replacement but I haven’t had the budget left each month so end up just not buying them. 

I’ll hop back on my diary and do an update. Thanks buddy

Albermarle

I have a workplace pension which is 100% equities (80% world ex uk, 20% uk… I’m aware that’s heavily overweighted to the uk, not really sure why I put it in that allocation other than a strange thought uk had more growth to catch up on). My SIPP and S&S ISA 100% FTSE global all cap and my LISA 100% HSBC FTSE all world index.

There is a variety of opinion on what should be a UK weighting . I would not say 20% was 'heavily overweighted ' if you look at most standard pension default funds.

In any case in your SIPP & LISA , you only have about 5% UK , so overall ( which is the way you should look at it ) your UK % will actually be somewhere between 5% and 20% , which seems about right. 

Prism

It took me around 15 years to build up my first £100k in my pension. Over that time period market returns were pretty flat which is partly why it took so long but along the way there was plenty of buying at lows. It felt like a very long slog with contributions having a much bigger effect than market returns. 

Eventually there is a tipping point until you reach a point where the markets do all of the work, up and down, and contributions are just a relatively minor blip.

MaxiRobriguez

Prism said:

It took me around 15 years to build up my first £100k in my pension. Over that time period market returns were pretty flat which is partly why it took so long but along the way there was plenty of buying at lows. It felt like a very long slog with contributions having a much bigger effect than market returns. 

Eventually there is a tipping point until you reach a point where the markets do all of the work, up and down, and contributions are just a relatively minor blip.

Good advice for those who feel it's slow progress.

Similar story for me, I'm 12 years into my journey now and I've built up £200k, but at the halfway point I was at £50k.

Things can change quite rapidly (in both directions!) but the first decade is all about your contributions and unfortunately that does mean the growth you see is largely limited to have much you can put in, and for most people starting out it's not as much as it is later on, when you also then start to see the impact of portfolio gains.

Keep going, you'll be surprised how one day you look back and think "wow how did that happen?"

Edit: The other thing, if you do start to build a fairly sizable pot and then there's a wider market sell off, don't get disheartened that you spent ages building it and then you're back where you were a couple of years ago. As long as you're still in the accumulation phase with at least a few years before you want to access the money then share price falls are a good thing for you as it allows you to buy more units. These current high prices aren't good for the likes of you and I. 

Thrugelmir

ForestBluebells said:

How does everyone else keep motivated? I know it’s a long journey anyway but kind of lost my enthusiasm. 

Don't forget to enjoy life along the way. These have been difficult times for everyone in some way or another. Mental health is an issue for many. Even though they might not realise it themselves even. 

The real gains when investing are generated by the power of compounding. The longer you leave money invested the larger it will grow. Stick 10,000 into a calculator and compound it by 5% over 30 years. You might be surprised by the result. Even though the early years seem sluggish. 

ForestBluebells

Thank you everyone. I know I can’t expect to be retired 2 years after starting and I was just frustrated at what felt like slow progress but I also know I previously was only saving £1,200 a year and then spending it anyway and now I’m saving £15-£20k a year which I would never have thought possible before I gave myself a good talking to. I guess I’ll look back in another 5 years and feel way more proud of what i have achieved on my own. 

ForestBluebells

Thrugelmir said:

ForestBluebells said:

How does everyone else keep motivated? I know it’s a long journey anyway but kind of lost my enthusiasm. 

Don't forget to enjoy life along the way. These have been difficult times for everyone in some way or another. Mental health is an issue for many. Even though they might not realise it themselves even. 

The real gains when investing are generated by the power of compounding. The longer you leave money invested the larger it will grow. Stick 10,000 into a calculator and compound it by 5% over 30 years. You might be surprised by the result. Even though the early years seem sluggish. 

I definitely need to allow myself a bit more enjoyment as I feel bad buying myself anything as that money could be invested to help me get back on track with my retirement savings although I did allow myself to spend on one of my hobbies recently (I swapped all my hobbies to free ones instead of paid for ones so figured I could allow myself some spending as it’s free ongoing). 

I’m going to go and play with the compound interest calculator again. I guess I may not be able to retire early but I should be able to have a good retirement with my change in saving rate now. I just may not be able to also move to my dream home too. That might be sentencing me to a life of frugality to achieve that though. 

Sea_Shell

MaxiRobriguez said:

Prism said:

It took me around 15 years to build up my first £100k in my pension. Over that time period market returns were pretty flat which is partly why it took so long but along the way there was plenty of buying at lows. It felt like a very long slog with contributions having a much bigger effect than market returns. 

Eventually there is a tipping point until you reach a point where the markets do all of the work, up and down, and contributions are just a relatively minor blip.

Keep going, you'll be surprised how one day you look back and think "wow how did that happen?"

I agree!!

I'm still asking myself the same question.

Sometimes it doesn't feel like "real" money, as it's at the mercy of the markets, but over the long term growth eventually gets "baked in" to a certain extent.