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  • FIRST POST
    • Simms92
    • By Simms92 14th Feb 18, 10:02 AM
    • 7Posts
    • 2Thanks
    Simms92
    25 year old.. How can I retire ASAP?
    • #1
    • 14th Feb 18, 10:02 AM
    25 year old.. How can I retire ASAP? 14th Feb 18 at 10:02 AM
    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?
    Last edited by Simms92; 14-02-2018 at 10:04 AM. Reason: edit
Page 2
    • bostonerimus
    • By bostonerimus 14th Feb 18, 1:47 PM
    • 1,945 Posts
    • 1,283 Thanks
    bostonerimus
    Do a detailed budget and cut your spending to a minimum
    Max out pensions and ISA
    Don't have any children.
    Misanthrope in search of similar for mutual loathing
    • Bravepants
    • By Bravepants 14th Feb 18, 1:58 PM
    • 402 Posts
    • 436 Thanks
    Bravepants
    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.
    Originally posted by Simms92

    Start reading and draw some inspiration...


    www.mrmoneymustache.com


    http://earlyretirementextreme.com/


    https://theescapeartist.me/
    • Alexland
    • By Alexland 14th Feb 18, 2:33 PM
    • 2,594 Posts
    • 1,976 Thanks
    Alexland
    Im 34 and thought i would just "retire" but i got bored and found myself recently back in work. I had 10 years of good income. I have my own home worth 600k (45% ltv) and wealth outside of my own home worth over 500k. I do not consider it a lot to retire on tbh (even though i know i will receive decent inheritances when i am older). So i have got back into work.
    Originally posted by economic
    We are a similar average age and having accumulated similar wealth (ours more weighted in property) with similar inheritance potential and desire to retire it still feels an incredibly long way away!

    Alex.
    • kidmugsy
    • By kidmugsy 14th Feb 18, 2:36 PM
    • 10,890 Posts
    • 7,441 Thanks
    kidmugsy
    Do a detailed budget and cut your spending to a minimum ...

    Don't have any children.
    Originally posted by bostonerimus
    And don't waste money on baccy, cars, gambling, or excessive booze.
    Free the dunston one next time too.
    • economic
    • By economic 14th Feb 18, 2:47 PM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    We are a similar average age and having accumulated similar wealth (ours more weighted in property) with similar inheritance potential and desire to retire it still feels an incredibly long way away!

    Alex.
    Originally posted by Alexland
    I think its because we live in London?

    Having a property is certainly a huge help as is potential inheritances. But i feel its more safer to build more wealth then you estimate to need. Lots of room for error.

    Despite being comfortable financially, i minimize costs as much as possible, am always on the look out for deals!
    • yellow218
    • By yellow218 14th Feb 18, 3:18 PM
    • 89 Posts
    • 159 Thanks
    yellow218
    Retire at 25? Thatís not retirement. Itís unemployment. My mum has just retired early at 55 and even she has had to find something to replace work with. Everyone needs a purpose in life.

    Sounds like you need to find yours. And quickly before not enjoying your job eats you up emotionally and mentally. Life is too short to wish it away. Life has to have meaning and enjoyment.

    Firstly, find a job which you can enjoy, at least most of the time. Something you are good at, as itíll give you confidence and a bit of a buzz at this early stage in your career. Which in turn may push you to challenge yourself.

    Learn how to Ďwork to liveí not Ďlive to workí. Make the most of your time out of work. Set yourself and your girlfriend goals to achieve together. Enjoy the money you work hard for. Enjoy life.
    • Alexland
    • By Alexland 14th Feb 18, 3:34 PM
    • 2,594 Posts
    • 1,976 Thanks
    Alexland
    I think its because we live in London?
    Originally posted by economic
    Well we are in the south but our property wealth comes from purchasing a property each when we were younger, my over payments, my wife upgrading hers at a low cost during the financial crisis (it was probate so the family just wanted a reliable buyer) and a particularly good deal on our current property (again the seller just wanted a reliable buyer as his wife had just died with a big insurance payout).

    So we have done well due to hard work, market timing and giving the sellers confidence.

    Alex.
    • dawyldthing
    • By dawyldthing 14th Feb 18, 5:25 PM
    • 2,925 Posts
    • 2,907 Thanks
    dawyldthing
    I'm 25 too and by the time we reach retirement age, it will probably be 70/71.
    Originally posted by aj23
    Anyone younger than I'd say 40 won't get to retire. What's paid in now is paid out now. It's unaffordable as it as and we borrow more and more to fund it. It won't carry on indefinitely
    My targets to end 2018:
    1) To get down to 11 st 7lbs then treat to a safari. At start 17 stone 7 lbs: *61lbs lost* *30lbs to go*
    1st started SW16st13lbs tues11/7/17 - 38 weeks -53lbs
    2nd sw 14 st 12lbs Fri15/6/18 -> 0 weeks -0lbs
    2) to find new challenges
    • TheShape
    • By TheShape 14th Feb 18, 6:10 PM
    • 1,293 Posts
    • 1,103 Thanks
    TheShape
    Being unproductive for the next 60 years is unlikely to make you happy.
    Originally posted by HappyHarry
    I'm 39 and couldn't think of anything better than to be completely unproductive for the rest of my days. If I won a £40k a year for life scratch-card I'd be done!
    • grey gym sock
    • By grey gym sock 14th Feb 18, 6:47 PM
    • 4,403 Posts
    • 3,956 Thanks
    grey gym sock
    Anyone younger than I'd say 40 won't get to retire. What's paid in now is paid out now. It's unaffordable as it as and we borrow more and more to fund it. It won't carry on indefinitely
    Originally posted by dawyldthing
    a bizarre claim.

    retired people are always supported by the work done by people who are still working. that is how it's always been, and there's no other way to do it. it can also carry on indefinitely, providing (some) people continue to have children.

    there are things each generation can do to help the next generation to support them after they've retired. basically, all kinds of investment - in physical infrastructure, in skills, in knowledge - can help.

    debt and savings are always 2 sides of the same coin. if there's more debt, there's more savings; and vice versa. if there's a lot of debt (i.e. "we're poor!"), there's equally a lot of savings ("we're rich!"). this gets us nowhere.

    however, there are good and bad forms of debt/savings. e.g. debt can be deployed to make productive investments happen. OTOH, if households are over-burdened with debt, their income can sucked away to be hoarded by the 1% . so you have to look at how debt is used. just worrying about the overall level of debt is not sensible.

    but when debt is harmful (which does happen), it's a completely solvable problem. we can choose to cancel debt. this is unlike physical or environmental limits.
    • economic
    • By economic 14th Feb 18, 6:58 PM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    Well we are in the south but our property wealth comes from purchasing a property each when we were younger, my over payments, my wife upgrading hers at a low cost during the financial crisis (it was probate so the family just wanted a reliable buyer) and a particularly good deal on our current property (again the seller just wanted a reliable buyer as his wife had just died with a big insurance payout).

    So we have done well due to hard work, market timing and giving the sellers confidence.

    Alex.
    Originally posted by Alexland
    I wonder at what point i am actually financially independent. I guess if i were to stop working, the worse that can happen is that i eventually run out of money and so i will have to let out my home and move in back with my parents.

    I was thinking about going travelling for a year, let out my flat and move my stuff back in with my parents. Net income a month from the BTL would be about £850, enough to fund my travels.
    • capital0ne
    • By capital0ne 14th Feb 18, 6:58 PM
    • 524 Posts
    • 254 Thanks
    capital0ne
    You are doing very well but it's a bit mind boggling to see threads like this without the word Pension mentioned even once.
    Originally posted by MoneyGeoff
    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.
    • economic
    • By economic 14th Feb 18, 7:02 PM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    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.
    Originally posted by capital0ne
    Well the first step would be to actually teach this kind of stuff in school (if its not already). I remember when i was in school (im 34), there was nothing taught about bank accounts, pensions, shares, interest rates, mortgages etc etc. All i was taught is how ot get a car loan and the costs for it.
    • Broken Biscuits
    • By Broken Biscuits 14th Feb 18, 7:20 PM
    • 348 Posts
    • 664 Thanks
    Broken Biscuits
    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?
    Originally posted by Simms92
    If you genuinely earn £1100 from outside of your 40 hours a week and live off of £1250 a month then you can retire right now.

    You just need to find a way to reduce spending by £150 a month. Or at worst take up a job that allows you to work 1-2 days a week that pays the shortfall from your rental income.

    Itís likely , unless you have kept a budget of what truly gets spent, that you spend more than £1250 a month. Holidays and treats should be a part of your life at least occasionally!

    I would suggest live a year recording spending and working out your true costs. In this time, stop paying off the mortgage and instead invest.

    At 20k+ invested in a year you may find the returns from your investments help make up the shortfall you are looking for.

    Lots of good suggestions here by previous posters re websites to consider on frugality and early retirement. they will have pages of information to read through about how you could retire faster by not paying off your mortgage etc.

    If you decide retirement is not for you after you pulled the plug or you underestimated how happy you would be on the budget you have set... well, itís not like you canít return to work claiming it was just a gap year.

    Best of luck whatever you do. You are in a fantastic position to make positive choices for your life.
    • Alexland
    • By Alexland 14th Feb 18, 7:44 PM
    • 2,594 Posts
    • 1,976 Thanks
    Alexland
    I wonder at what point i am actually financially independent. I guess if i were to stop working, the worse that can happen is that i eventually run out of money and so i will have to let out my home and move in back with my parents.

    I was thinking about going travelling for a year, let out my flat and move my stuff back in with my parents. Net income a month from the BTL would be about £850, enough to fund my travels.
    Originally posted by economic
    No idea I guess it depends on if you are willing to live a very frugal lifestyle and run down your assets? I have a figure in my head of requiring about £1.4m each to give up work in our 30s and maintain a good lifestyle - and we don't have that yet.

    I expect a crossover point in our 40s where we are basically then just working to provide onward inheritance.

    Alex
    Last edited by Alexland; 14-02-2018 at 7:48 PM.
    • ValiantSon
    • By ValiantSon 14th Feb 18, 8:05 PM
    • 2,039 Posts
    • 1,890 Thanks
    ValiantSon
    Well the first step would be to actually teach this kind of stuff in school (if its not already). I remember when i was in school (im 34), there was nothing taught about bank accounts, pensions, shares, interest rates, mortgages etc etc. All i was taught is how ot get a car loan and the costs for it.
    Originally posted by economic
    That's fine, just two slight problems:

    1) Who is going to teach it? A level of expertise is needed and it would be wrong to just assume that all teachers have this.
    2) When would it be taught? The curriculum is already packed full, so no time allocation exists.
    • economic
    • By economic 14th Feb 18, 8:28 PM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    No idea I guess it depends on if you are willing to live a very frugal lifestyle and run down your assets? I have a figure in my head of requiring about £1.4m each to give up work in our 30s and maintain a good lifestyle - and we don't have that yet.

    I expect a crossover point in our 40s where we are basically then just working to provide onward inheritance.

    Alex
    Originally posted by Alexland
    The thing is i have to consider gifts/inheritances i will receive. My parents have a fully paid of house worth 700k, savings/S&S ISA of about 600k, pension of 200k and annuity income of 12k a year. Plus they are due to receive state pension in a few years. Plus my parents will inherit assets worth around 400k themselves.

    the annuity and state pension would be an income of around 32k a year post tax. That's enough for basic living expenses plus a few holidays a year. Care home costs would probably cost quite a bit but even with that it should be covered mainly by the 32k income.

    So they are looking to gift to me and my sibling. As otherwise there probably would be significant IHT liability. Gifts over the next few years plus eventual inheritance would mean i probably do not need to work even now and still have a nice life (highly subjective of course but my hobbies are cheap).

    I also think with technological innovation in many areas, things will get cheaper and more efficient such that there will be not as much of a need to build up wealth. But who knows when that will happen, best to always plan for the worse.
    • economic
    • By economic 14th Feb 18, 8:37 PM
    • 2,940 Posts
    • 1,586 Thanks
    economic
    That's fine, just two slight problems:

    1) Who is going to teach it? A level of expertise is needed and it would be wrong to just assume that all teachers have this.
    2) When would it be taught? The curriculum is already packed full, so no time allocation exists.
    Originally posted by ValiantSon
    1) if you have teachers who can teach maths, those same teachers will be able to teach some basic personal finance stuff. personal finance does not require a lot of expertise. specially at the level you teach 16 year olds.

    2) get rid of the useless stuff to make room for personal finance teaching. useless stuff like religious education. you teach personal finance at GCSE and Alevel as a compulsory course but not graded.
    • chockydavid1983
    • By chockydavid1983 14th Feb 18, 9:08 PM
    • 586 Posts
    • 355 Thanks
    chockydavid1983
    get rid of the useless stuff
    Originally posted by economic
    Wow, they'd only need 1 day a week then :-)
    • ValiantSon
    • By ValiantSon 14th Feb 18, 9:10 PM
    • 2,039 Posts
    • 1,890 Thanks
    ValiantSon
    1) if you have teachers who can teach maths, those same teachers will be able to teach some basic personal finance stuff. personal finance does not require a lot of expertise. specially at the level you teach 16 year olds.
    Originally posted by economic
    Being a mathematician doesn't mean that you are good with money. I know a lot of Maths teachers who are great mathematicians and great teachers, but they are rubbish with money. There is a level of knowledge, temperament and life experience required with managing personal finances that are not necessarily present.

    2) get rid of the useless stuff to make room for personal finance teaching. useless stuff like religious education. you teach personal finance at GCSE and Alevel as a compulsory course but not graded.
    Originally posted by economic
    What you view as useless isn't necessarily useless. I'm not going to get into a long discussion/argument about the relative merits of one subject over another, but if you think that humanities in general are useless then you have taken a very reductivist view of education. Look at the background of many high achievers and you will find that they have a liberal arts/humanities background.

    If it isn't examined then the truth is that modern youth will not consider it important and will therefore not make any effort to learn. It is also technically impossible to have a GCSE or A Level that isn't examined. Furthermore, in your scenario, basic arithmetic is all that is needed, yet the demands of a GCSE or an A Level go well beyond this.

    Your plan is deeply flawed, I'm afraid. Care to try again?
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