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

Thrugelmir

Sea_Shell said:

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?"

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.

Money makes money. The challenge for most people is to build that large pool of capital. Get rich schemes only work for the early instigators. Those that follow later pay the cost. 

balbs

My advice would be to keep a simple spreadsheet and check the value at the start of the month (and restrain yourself from checking day to day) - dont sell investments just because there is a downturn.  I started this ten years ago and wish I had done it before - theres a number of downturns of course but many 05% to 2% upswings - and thats where the compounding kicks in - patience is everything.

ForestBluebells

balbs said:

My advice would be to keep a simple spreadsheet and check the value at the start of the month (and restrain yourself from checking day to day) - dont sell investments just because there is a downturn.  I started this ten years ago and wish I had done it before - theres a number of downturns of course but many 05% to 2% upswings - and thats where the compounding kicks in - patience is everything.

I have a spreadsheet to track my spending to ensure I keep within budget/track total amount in each account monthly but it’s perhaps a bit messy and I’d like it to show me more, may need to try tweak it but I’m not great at spreadsheet layout 

mark13

Well done , keep going on your journey, it can be a hard slog but treat yourself as well . Enjoy the compounding and snowball effect. I started out with growth trusts and moved to a combination of growth and compounding of dividends once I had a substantial pot.  My only advice would be to keep track of your investment / savings and move them if they aren't performing. 

MaxiRobriguez

ForestBluebells said:

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. 

With that sort of capital injection you're talking about £110k in year 5, £250k year 10 and  £420k after 15 years with 4% real returns.

Add another five years it's £620k and you've got enough to withdraw £25k annually and never deplete the portfolio, with state pension £10k to be added on top. Nice healthy retirement income from 20 years worth of contributions.

If you can add more, or get better than 4% real returns, then you're outcome is even better.

ForestBluebells

MaxiRobriguez said:

ForestBluebells said:

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. 

With that sort of capital injection you're talking about £110k in year 5, £250k year 10 and  £420k after 15 years with 4% real returns.

Add another five years it's £620k and you've got enough to withdraw £25k annually and never deplete the portfolio, with state pension £10k to be added on top. Nice healthy retirement income from 20 years worth of contributions.

If you can add more, or get better than 4% real returns, then you're outcome is even better.

Yeah I’m happy I’m on track but not sure it’s all sustainable for 20 years, for example I’m currently doing lots of additional work on top of a full time job to earn more to invest but they are 1 year contracts so I’m in year 2 now but no guarantees I’ll get another contract next year for example. 

Also I feel my job is becoming limited in terms of salary growth now, I was refused a pay rise this year and suspect this will be an ongoing battle from now on. I think I need to look at alternatives for my career but feel trapped in this job currently, pay is ok but if salary gets stuck it won’t help my savings rate. I don’t think I can keep working here for 20 years but stuck on what my next move should be. 

MaxiRobriguez

ForestBluebells said:

MaxiRobriguez said:

ForestBluebells said:

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. 

With that sort of capital injection you're talking about £110k in year 5, £250k year 10 and  £420k after 15 years with 4% real returns.

Add another five years it's £620k and you've got enough to withdraw £25k annually and never deplete the portfolio, with state pension £10k to be added on top. Nice healthy retirement income from 20 years worth of contributions.

If you can add more, or get better than 4% real returns, then you're outcome is even better.

Yeah I’m happy I’m on track but not sure it’s all sustainable for 20 years, for example I’m currently doing lots of additional work on top of a full time job to earn more to invest but they are 1 year contracts so I’m in year 2 now but no guarantees I’ll get another contract next year for example. 

Also I feel my job is becoming limited in terms of salary growth now, I was refused a pay rise this year and suspect this will be an ongoing battle from now on. I think I need to look at alternatives for my career but feel trapped in this job currently, pay is ok but if salary gets stuck it won’t help my savings rate. I don’t think I can keep working here for 20 years but stuck on what my next move should be. 

Similar boat for me - think it's time I need to move on as I'm not going to get above-inflation pay rises here. Currently on about £60-£65k depending on bonuses, but even if I could get up to £75k that brings my planned retirement forward 3-5 years.

QrizB

ForestBluebells said:

Yeah I’m happy I’m on track but not sure it’s all sustainable for 20 years, for example I’m currently doing lots of additional work on top of a full time job to earn more to invest but they are 1 year contracts so I’m in year 2 now but no guarantees I’ll get another contract next year for example. 

Also I feel my job is becoming limited in terms of salary growth now, I was refused a pay rise this year and suspect this will be an ongoing battle from now on. I think I need to look at alternatives for my career but feel trapped in this job currently, pay is ok but if salary gets stuck it won’t help my savings rate. I don’t think I can keep working here for 20 years but stuck on what my next move should be. 

Also, don't forget about life. It gets in the way.
20 years ago Mrs QrizB and I were 30-year-old DINKies and retirement at 50 was a sure thing, 45 was a possibility. Today we're one-and-a-bit incomes, have two teenage kids and we might just about manage retirement at 57-58. I'm not complaining but "no plan survives contact with the enemy".

ForestBluebells

Also, don't forget about life. It gets in the way.

20 years ago Mrs QrizB and I were 30-year-old DINKies and retirement at 50 was a sure thing, 45 was a possibility. Today we're one-and-a-bit incomes, have two teenage kids and we might just about manage retirement at 57-58. I'm not complaining but "no plan survives contact with the enemy".

Totally get this hence why I’m doing everything possible to get as much invested now while I can. 

Realistically I should get inheritance enough to mean I don’t need to save anything at all but I’m basing my savings plan on the assumption I get nothing just in case. And if I do get inheritance as expected then maybe that’s my chance then to buy my dream house if retirement is covered myself 

Ibrahim5

The truth is that FIRE only works really well for high salaries. Most people spend more as they earn more. If you can live a more average lifestyle you can save a lot and retire really early. Without the large income to save a lot you really have to have a poverty lifestyle which can sound really sad. Unless you can boost your income you have to accept that saving massive amounts quickly won't be possible. Live for today and if you have some left over to save that is great. You won't regret it later.