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  • FIRST POST
    • Sweetcake
    • By Sweetcake 3rd May 18, 3:28 PM
    • 98Posts
    • 43Thanks
    Sweetcake
    25 and financially responsible...
    • #1
    • 3rd May 18, 3:28 PM
    25 and financially responsible... 3rd May 18 at 3:28 PM
    Hello all


    Since I turned 25 (in March hehe), I have been a bit obsessed with stacking up my savings and managing my finances well. I've always saved but i mean just more getting on it! I guess turning 25 does make you think about things...Did or did other people feel the same when they were 25? I guess I'm more just changing my attitude about how I think about money, so it can work for me. I'm interested to hear what other MSErs do so they can be the most financially responsible they can be? Like what are your money goals/techniques and what do you do to achieve those? And what advice (for those who are 25+) would you give to a 25 year -old or your 25 year old self looking back?


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    Last edited by MSE Andrea; 08-05-2018 at 10:25 AM.
Page 2
    • sixpence.
    • By sixpence. 4th May 18, 5:53 PM
    • 138 Posts
    • 31 Thanks
    sixpence.
    Mr Money Mustache, Monevator, ChooseFI, Jim Collins, Tim Hale, MadFIentist. Lap it up and act on it all. I was in my mid 30's until I even realised any of that was possible. Not too late but if I'd have know this at 25 I'd be done with working 8-6 for someone else by now!
    Originally posted by Anonymous101
    What specifically would you go back and look at?

    Sometimes I find it tough to know what I am looking for re financial independence.
    • bostonerimus
    • By bostonerimus 4th May 18, 6:46 PM
    • 2,014 Posts
    • 1,334 Thanks
    bostonerimus
    I picked up being thrifty, careful or mean, depending on your perspective, from my Mum. She'd grown up in "The Depression" and controlled all the household finances. She hated any form of debt and was only convinced to buy the house I grew up in because my Dad came up with a plan to build two of them and sell one and live in the other mortgage free......which is what they did.

    I was lucky to go to university when it was paid for by the Government and my first pension was with a US company called TIAA-CREF that was a non-profit set up for teachers and sold great products and gave excellent financial education courses too.....that's where I learned the basics of investing. I still have that original deferred annuity product that now ticks along at 4.8% interest. I'll probably never touch it and will just pass it on to my heirs. I then started to read moire widely and after a flirtation with direct stock investing I found Vanguard and John Bogle. I liked the simplicity and the theory seemed sound and honest to me. So I've basically followed a simple index tracker portfolio for 30 years and have averaged a return of 8.5%. So by saving at least 20% of my salary ( far more in latter years) for 30 years with that sort of return I've managed to become financially independent. It was sometimes hard to do, but conceptually it's been very simple to implement, no Asia Pacific allocations, ITs. managed funds etc. just a few simple trackers, time and aggressive saving.
    Last edited by bostonerimus; 04-05-2018 at 6:51 PM.
    Misanthrope in search of similar for mutual loathing
    • ValiantSon
    • By ValiantSon 4th May 18, 8:47 PM
    • 2,167 Posts
    • 2,041 Thanks
    ValiantSon
    Yep, I have the LIFETIME ISA
    Originally posted by Sweetcake
    Are you intending to use it for a house purchase, or for retirement. If it is for a house purchase then probably best sticking with a cash LISA, but if it is for retirement then it would make most sense to use a S&S LISA.
    • Sweetcake
    • By Sweetcake 4th May 18, 9:36 PM
    • 98 Posts
    • 43 Thanks
    Sweetcake
    Are you intending to use it for a house purchase, or for retirement. If it is for a house purchase then probably best sticking with a cash LISA, but if it is for retirement then it would make most sense to use a S&S LISA.
    Originally posted by ValiantSon
    I'll be using it for a house purchase, and yes i have a cash LISA with Skipton for that exact reason... see I'm pretty clued up!
    • justme111
    • By justme111 4th May 18, 11:00 PM
    • 3,018 Posts
    • 2,914 Thanks
    justme111
    read a lot , strive to understand how the world works and WHY do you want or do that you want or do. Be kind to yourself. that's my advice. Money is not the aim , it is a tool.
    • John-K
    • By John-K 5th May 18, 12:33 AM
    • 654 Posts
    • 1,016 Thanks
    John-K
    One bit of advice that rarely seems to be given is to give some serious thoughts to the income side of the ledger.. itís good to save £50oer week for a rainy day, or drip-feeding an ISA, but why not also take a proper look at what you can do to improve your earnings?

    I switched careers at 25, leaving science, and moving into banking. It would have taken me several lifetimes in my old job to save what I manage yearly in my new one.

    Have you maximised income yet?
    • cashbackproblems
    • By cashbackproblems 5th May 18, 3:10 AM
    • 1,751 Posts
    • 684 Thanks
    cashbackproblems
    agree with the above and that is the most important thing maximising your income, no good investing £100 pm if your earning low wages and no career prospects, invest in yourself first.

    i was lucky i got into buying shares aged 18 and at 21 opened my first S+S ISA since then i have gone for high risk high reward such as emerging markets, specialist sectors e.g. US IT which boomed few years back, as well as other etf's and IT's, and all this paid off massively i was able to buy a property in london with a 6 figure deposit all saved by myself and S+S gains over 8 years investing relative small amounts e.g. 300-400pm. I still invest and this week bought a Russia ETF and Frontier market IT
    • surreysaver
    • By surreysaver 5th May 18, 9:11 AM
    • 2,472 Posts
    • 1,380 Thanks
    surreysaver
    I didn't bother with university, so started my adult life with no debt. I was working and investing from the age of 16, I am now able to pay my mortgage off at the age of 43 (if I wanted to - there's no point, and my investments provide a bigger return than the mortgage interest rate). I am working part-time, and still paying loads into my pension
    I consider myself to be a male feminist. Is that allowed?
    • dawyldthing
    • By dawyldthing 5th May 18, 6:01 PM
    • 2,938 Posts
    • 2,913 Thanks
    dawyldthing
    I started saving at 23 after I left uni as I have a really small family and was like if I don't have somewhere to live when something does happen then I don't know what I'd do to be honest.

    Like others said make the money work for you. A family member gave me a bit of money years ago so I put it in a Halifax account that made more money.

    I've bought a really modest house and now sat here in my early 30s with it paid off, work part time to work to live instead of living for work. Think what's important to you when it comes to housing but buy in a reasonable area but doesn't cost too much. Be savvy. Money takes a long while to earn but is quick to spend.

    Also set yourself challenges/ plan what your saving for. Put it on a sheet somewhere so you can see where you are and where your going.

    Be strugent with money but still live a bit (you can do most things cheaply. I still saved for the house while going on holidays including some big ones as I planned and put it all in pots/ different accounts.)

    When planning things try and work out if you can do it yourself. I had this conversation with a collegue other day but when you do buy if you do a basic decorating course for example you might be able to do it for a couple of hundred rather than paying someone a grand to do it (which takes ages to earn).

    And I agree with some about the pensions but we won't retire until we're 70 or older, so don't make it the be all and end all.

    Keep us all updated!
    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
    • bobobski
    • By bobobski 6th May 18, 1:36 PM
    • 708 Posts
    • 1,638 Thanks
    bobobski
    The biggest thing I've done to turn my finances around is to budget, and specifically I use YNAB. Before YNAB I had no idea where my money was going and therefore how much of it I could have been wasting. With YNAB I am able to plan very far ahead. My savings have dramatically increased over the last 2.5 years I've been using it, and when they don't go up (I work very hard to make sure they don't go down) it's because I've considered the consequences of my spending in light of my overall budget - example is a holiday I booked a couple of weeks ago.

    The other thing I'm proud of doing is maxing out my employer pension.

    For what it's worth, I'm in my late 20s. I live in very expensive part of the country and could afford to buy a property now if I wanted to (indeed, I've tried and failed three times). I have no family money, no inheritance, I started practically from £0 at the end of 2015. But that's my aim - you need to decide what it is you are trying to achieve (house, early retirement, generally being "rich" etc).
    #8: Save 12k in 2018: £4,971.96 / £12,000 (41.43%) | #18: Save 12k in 2017: £12,078.82 / £12,000 (100.65%) | #86: Save £12k in 2016: £8,476.09 / £10,000 (84.76%)
    House deposit by 31/12/2020: £25,643.20
    / £60,000 (42.73%) | Emergency fund by 31/12/2020: £2,450 / £5,000 (49.00%) | "New" car fund: £700 / £6,000 (11.66%)
    • Fatbritabroad
    • By Fatbritabroad 6th May 18, 3:09 PM
    • 403 Posts
    • 204 Thanks
    Fatbritabroad
    I got out of university when I was 25 back in the later 1980s. I had the advantage of there being no fees and getting a grant so I left with around 3k pounds in the bank and no debt. When I got my first job I made the decision to prioritize saving and pension contributions. I've done that for 30 years and it's worked out so that I'm now financially independent. The earlier you start and the more you invest and save then the less worry you will have.
    Originally posted by bostonerimus

    Id say this is key i prioritised saving in a pension over a property. My dad whos a very high earner but imo not that great with money gave me two pieces of advice when i was 18 1) buy the biggest house you can afford and 2) start at 18 and save 5to 10% in your pension. Only one of those was good advice imo. And actually despite losing money on property and getting divorced dad still managed to retire at 62 with over 2m in a pension so it just shows that you can make mistakes and still end up ok
    • darkidoe
    • By darkidoe 9th May 18, 1:28 AM
    • 931 Posts
    • 1,079 Thanks
    darkidoe
    Jump on the property ladder asap. Doesn't matter if it's a shoebox (best decision I ever made).
    Originally posted by DairyQueen
    I am not quite convinced about jumping straight up onto the property ladder. There has to be some thought into this as the property price boom is unlikely to continue on indefinitely as it has over the past few decades. I must say though, policies like the LISA, HTB really help to support the argument for getting into the property to make use of the 'free' bonus'. It takes a few years to build up significant bonus anyway, so it takes some planning.

    Buying a property is a significant commitment for at least a few years (up to 5) and perhaps lifelong, there are opportunity cost involved and also cash flow concerns. The current Price/Rent ratios in the country really makes it perhaps difficult to envision buying property as such an ideal situation.

    I would take a few years to save up for a deposit and bid my time with a watchful eye on any opportunity that is suitable financially and personally.

    Save 12K in 2018 #31 0/15 000
    Save 12K in 2017 # 9 £15,848.84/15 000 (105.65%) Achieved!
    Save 12K in 2016 # 8 £19 721.58/12 000 (164.35%) Achieved!
    • Anonymous101
    • By Anonymous101 9th May 18, 9:26 AM
    • 1,110 Posts
    • 507 Thanks
    Anonymous101
    What specifically would you go back and look at?

    Sometimes I find it tough to know what I am looking for re financial independence.
    Originally posted by sixpence.
    Sorry I missed this until now.

    I just think grasping the idea that once you have invested a certain amount you can live from the growth / dividends is the main thing. Once that's in place and you can get up to saving 50% or more of your income you've cracked it.

    Personally it would be lots of little efficiencies. The bigger the numbers the bigger the impact so housing, car, holidays would be where I'd start. I've never gone into debt but I spent too long not looking past my next month or two's wage and only saving into a pension.
    A house share or cheaper house that could be improved; A slightly older car; and less extravagant holidays could have seen investing and cutting my working life down considerably.
    • Anonymous101
    • By Anonymous101 9th May 18, 9:34 AM
    • 1,110 Posts
    • 507 Thanks
    Anonymous101
    I am not quite convinced about jumping straight up onto the property ladder. There has to be some thought into this as the property price boom is unlikely to continue on indefinitely as it has over the past few decades. I must say though, policies like the LISA, HTB really help to support the argument for getting into the property to make use of the 'free' bonus'. It takes a few years to build up significant bonus anyway, so it takes some planning.

    Buying a property is a significant commitment for at least a few years (up to 5) and perhaps lifelong, there are opportunity cost involved and also cash flow concerns. The current Price/Rent ratios in the country really makes it perhaps difficult to envision buying property as such an ideal situation.

    I would take a few years to save up for a deposit and bid my time with a watchful eye on any opportunity that is suitable financially and personally.
    Originally posted by darkidoe
    I absolutely agree. People don't question the economics of owning your own house enough. There is a huge assumption that its the best things to do when I don't always necessarily agree, sometimes renting is a better financial decision.

    I jumped in 2008 as soon as I could borrow enough money to buy a house. I eventually sold that house in 2016 for the same as what I bought it for.

    If I could go back I'd stay sharing with friends for much longer and save up much more. Buy a wreck of a house at a better time and have the means to improve it.
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