Millionaire Challenge

Broken_Biscuits · 14 November 2014 at 2:14PM

table doesnt display very well. but if you invested at 6% for 30 years... look at the 30 year section. go to the second number. 1st number is for 4% , 3rd number is for 8% etc

compound interest is king. anyone looking at saving now in their early 20's for say 40 years or more could make the magic number a few times over!

YoungBusinessman · 17 November 2014 at 11:43PM

I'm early....ish 20s at 23! Just away to start up a side business that I will hopefully generate enough income from to pay off all my debts and build an emergency fund of at least 6 months expenses, ideally double that. With a full time salary coming in...and trying to boost it in 2015 which could see upto 5k net extra income along with having time for the business starting up and building along side, it's finally my time to get the wheels in motion, the ball will be rolling by the end of next month so iv got 2015 too absolutely smash it.

Iv spoke with an accountant regarding starting up a business as I don't have the capital to go down franchise route(most of them tend to expect you to be "mon-fri 9-5" anyway!!) I'm starting out with very little so havnt got much cash to risk....first few months will be slow but hopefully once I get going I can build on it month on month and achieve enough income to make it worthwhile.

lessonlearned · 18 November 2014 at 12:04AM

A sideline business is a great idea, especially if you don't have to risk much capital.

Good luck with the launch.

Karmacat · 18 November 2014 at 9:51AM

Definitely, good luck YB!

Kayalana99 · 20 November 2014 at 10:24PM

Hey guys,

Things are going well...I'm sitting on 2k in the business account when it's never really been over 1k for very long due to me reinvesting.

I say this because I can feel myself slipping down the spending route... I just randomly said to my OH a couple days ago oh I know lets go away for a weekend!! Thinking to myself I'm making money now and we hadn't been away for a while....and my OH suggested that he is off for xmas week so we could go away just after xmas.

Now I'm thinking what the hell did I say that for? Why go away in this weather? We'd probably enjoy it as you would if going away but for the sake of £200 or so for a weekend in this weather ...we've got the wedding / honey moon coming up in 6 months so that would be a proper break for us anyway.

Now that I'm seeing the profit I can feel myself wanting to spend the money and I know that this is how the 'rat race' works...you make more money you spend more money as a wanna be millionaire this is the time to start investing!!

I have four choices, one reinvest back in the business (which right now I have neither the time to do but I am sure I could just pile it till I did), take some out and pay down the mortgage a bit, spend it (wooo fun!) or just let it pile up for now.

I think I intend to do the latter for now but the scare is that I will spend it if I don't do something with it.... I really really need a new phone and it could do with being an iPhone as I use it for eBay (people send stuff to me for free iphone to iphone..it's proved a real hit) but I can't justify £25 a month for 24 months...ugh!! Is that me wanting to spend money or is it justified? I don't know..my current contract is only £7 a month but my phone won't charge unless I put it in a certain way and only through my computer, the button won't work unless I press it down full force and the screen is all cracked.....I do think it's had it's day!! That said my OH has an old iPhone4 so I could use that one but would have to spend money to get that up to scratch and it really has had it's use to.. (nothing like mine though lol)

I think paying down the mortgage would be a good start but then I am thinking if I want to grow my business letting the money pile up for now might be the better option. Top goal is to get on the ladder (for the 2nd house renting) but if I dribble out the money it will probably take longer then reinvesting it into the business, so when the business is making more money then start taking it out to pay down the mortgage. (Aim to get the mortgage down 7k so I can turn this into a buy to let and buy a second for us to live in so need about 17k I think)

I did think about a rule that whatever I take out the business for spending, I had to double up to the mortgage savings account (I.e take £50 out spending, £50 off the mortgage) so at least I wouldn't deplete the account without getting something out of it!!

gallygirl · 21 November 2014 at 8:57AM

Kayalana99 wrote: »

I really really need a new phone and it could do with being an iPhone as I use it for eBay (people send stuff to me for free iphone to iphone..it's proved a real hit) but I can't justify £25 a month for 24 months...ugh!

You don't need a new phone, you could use hubby's without upgrading it. However:

1. You do need a new tool to help you trade more efficiently. Will it bring in £25 worth of business (including repeat business and goodwill)?

2. Or, to put it another way, how much is your time worth? How much time are you currently wasting standing on one leg in the bath with your laptop over your head singing the Star Spangled Banner while you try to charge your phone - wouldn't that time be better invested elsewhere :rotfl:.

3. Anyway, it's a business need so comes out of your business account and reduces your taxable profit.

Taking those 3 into consideration I reckon it will cost you more than £25 a month NOT to buy the phone. So there

.

(Oh gawd I'm good at this. Best not look at sports cars for myself over the weekend

)

PS - great news on the 'what to spend the money on' problem

Karmacat · 21 November 2014 at 10:42AM

Can't give any feedback on mobiles - its only in the last few months I've gone onto a contract from payg (and the contract is less than £6 a month!) but I *do* like the idea of spend £50, pay the same off the mortgage.

lessonlearned · 21 November 2014 at 11:35AM

Hi there I'm not a tekkie so cannot discuss the merits of phones, i used to leave all that side of our business to my OH. DS2 has now assumed the role of Technical Support.

However, I did learn from OH that any such decision has to be based on a cost analysis, does it add value to the business. Also don't forget the tax angle, if you can argue that is a true business expense then you can fund it from your business account and claim it as a tax deductible expense, thus reducing your tax bill. Maybe not so important right now but once those profits start rolling in then efficient tax planning will help you build your business.

A weekend away??

Well you know the answer to that one.:rotfl:

However, you might get a good deal in January/February so if you can hang on for a few weeks.

There's always two sides to the holiday argument......

1. They are a pointless frivolous waste of money.
2. They are a wonderful way to recharge your batteries, clear your mind and just catch up with yourself and or invest in your relationship, making you feel refreshed and raring to go when you come back.

My husband and I did used to take regular trips.

We found that often it was the only way to get a proper break, if we stayed at home we didn't get the same benefit because we always found something needed our attention or just had to be done.

However, we did not leave our mobiles switched on. When we went away we were incommunicado (obviously we did leave someone our hotel phone number for emergencies).

We did find that a holiday or short break allowed us thinking and planning time and we would often get our most creative ideas whilst we were away. I think this was because we had allowed ourselves the luxury of time out, away from the normal every day routines thus allowing our imaginations some space and freedom to roam.

I also think it was good for our relationship too, just spending time together as a family. It's too easy to take our loved ones for granted sometimes, especially when you everyone is so busy., bogged down with work, housework, kids homework and just general stuff. You can end up as ships that pass in the night if you are not careful. Time spent as either a couple or as a family just hanging out and doing fun stuff is precious.

We always had a two week break at Christmas. Usually we didn't go abroad but we would spend time with our extended family and friends.

It's too easy to get bogged down with work and neglect partners, families and friends. Quality time together is precious and once lost can never be regained.

My OH died too soon and too young but at least we had lots of fun times. We worked hard yes, but we never forgot to play hard too.

My advice?. Well I think you can guess. Look out for a deal, take a couple of days to have some fun - just don't spend the lot on an expensive blow out in Las Vegas. :rotfl:

lessonlearned · 21 November 2014 at 11:59AM

Gally - come on you are not trying.

Surely you can argue the case that a sports car is an essential business expense.:rotfl::rotfl:

What do you fancy. Put in the wish list and make it one of your goals.

My OH was never that bothered with cars, I was the petrol head.
We had a Renault 5 campus for 17 years.

When my husband landed a contract that required a lot of travel we realised that poor old Rosie the Renault wasn't up for the task so we had to get another car. OH leased a Lexus. The tax deductible mileage allowance at the time was £0-44 per mile. This more than covered the lease payments and running costs.

morocha · 21 November 2014 at 3:04PM

Kaya, what do you do if you dont mind me asking ?

I used to take a lot of breaks with my ex. It was lovely time spent away from everything and everyone. I Think I would let my money increase then try to grow my business, if it was going well.

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