tag:blogger.com,1999:blog-2875915890415125655.post2410903277408382625..comments2023-05-18T10:37:34.608+01:00Comments on <a href="http://www.retirementinvestingtoday.com">Retirement Investing Today</a>: Where’s the snowball – why you’d better save if you want to FIRERetirementInvestingTodayhttp://www.blogger.com/profile/03088383743670046657noreply@blogger.comBlogger27125tag:blogger.com,1999:blog-2875915890415125655.post-23483597804964369692016-12-20T21:19:06.087+00:002016-12-20T21:19:06.087+00:00Oh man. That is indisputable. You mean we need to ...Oh man. That is indisputable. You mean we need to work hard and be frugal - now that is something you won't see on a get rich fast site. Preach it!!Phttp://www.paying-for-private-school.com/noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-57088238607951028222016-11-17T22:11:14.634+00:002016-11-17T22:11:14.634+00:00:( you've just destroyed my hero Mr Compound I...:( you've just destroyed my hero Mr Compound Interest! Cut down in his prime by Dr Logic!<br />What a shame! But building wealth was always going to have to be a slog - prioritising savings was always the key. Compounding is the icing on the cake!Mr. Moneybankshttps://www.blogger.com/profile/06282110634600238880noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-70539488311315766822016-11-17T19:57:21.189+00:002016-11-17T19:57:21.189+00:00Should add thats only if you're in funds. Quit...Should add thats only if you're in funds. Quite reasonable for shares, ITs, ETFsThe rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-70840588491821805662016-11-17T11:06:11.596+00:002016-11-17T11:06:11.596+00:00HL will most likely sell what you need, they'r...HL will most likely sell what you need, they're pretty comprehensive. Note that at £60k+ their charges start looking expensive. <br /><br />On what trackers to invest in, reading Smarter Investing by Tim Hale, and/or Investing Demystified by Lars Kroijer should help. <br /><br />You could get by just reading relevant Monevator articles also..<br /><br />As anonymous mentions, the key is to The Rhinohttp://www.thenewrhino.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-73475047966095854142016-11-16T17:00:34.017+00:002016-11-16T17:00:34.017+00:00@James In my view being invested in equities, rath...@James In my view being invested in equities, rather than not being invested, is more important than what you invest in, so long as you are diversified and not wholly in specialist funds . Monevator, RIT and other websites will have guidance on trackers. DAnonymoushttps://www.blogger.com/profile/03868287308087642449noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-54469841567114436282016-11-16T11:56:29.398+00:002016-11-16T11:56:29.398+00:00Thanks Anonymous, I guess the tricky part is what ...Thanks Anonymous, I guess the tricky part is what trackers to invest in and do HL offer them for sale in their SIPP?Jamesnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-57470482656135385242016-11-16T01:09:14.315+00:002016-11-16T01:09:14.315+00:00@James. If you have six months expenditure held in...@James. If you have six months expenditure held in cash and feel positive about your job and your employability, then the balance of your savings could be placed in equities now or within the next year. Future cash savings could be invested in equities each month. You should expect to hold and not sell for five or more years to ride out any volatility. DAnonymoushttps://www.blogger.com/profile/03868287308087642449noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-76395064611694794072016-11-15T22:13:40.861+00:002016-11-15T22:13:40.861+00:00Am in my mid 30s and a year and a half into my sav...Am in my mid 30s and a year and a half into my savings journey. I have close to £75k spread amongst savings accts and ISAS and have been salary sacrificing my bonuses into my Hargreaves Lansdowne SIPP (£60k in cash). My goal is to continue on this path and build up a bigger emergency fund in readily available cash, while maximising my SIPP allowance.<br /><br />Would be good to get some advise Jamesnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-10468990839257202262016-11-14T17:21:04.407+00:002016-11-14T17:21:04.407+00:00Sorry I've not had time to read all the commen...Sorry I've not had time to read all the comment, so excuse if this has been covered. Does that average 5.1% saving rate come after mortgage repayments for the average person? I'm wondering if that might give an unfavorable comparison because the higher saving rates are presumably only achievable through renting, but after X years, presumably Mr Average has paid off his mortgage, and hasDavidBhttps://www.blogger.com/profile/01142403842337456694noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-12355836574745367302016-11-13T10:41:18.717+00:002016-11-13T10:41:18.717+00:00Interesting article.
Ten years certainly isn'...Interesting article. <br /><br />Ten years certainly isn't long-enough to feel great benefits from compounding.<br /><br />There seem to be two groups of people aiming for FIRE - those who want to quit as soon as possible and those who don't want to be working when they are old (-ish).<br /><br />I quit at 50 and I certainly noticed a big snowball effect over my last 10 years. That was Mike 7 Circleshttp://the7circles.uknoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-85316080266070251772016-11-12T20:31:11.373+00:002016-11-12T20:31:11.373+00:00Superb article, I hope to share this to all the pe...Superb article, I hope to share this to all the people on twitter banging on about how their dividends are going to allow them to retire in three years. I would have liked to see how things panned out post retirement in the examples. FrugalFoxhttp://hotelsandmoney.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-38610302066657929122016-11-12T18:49:55.573+00:002016-11-12T18:49:55.573+00:00Great post - and a call to reality for many of us....Great post - and a call to reality for many of us. Striving for a portfolio of well diversified, low cost tracker funds is really important, and yes compound interest will help over a lifetime. But the real, hard, grinding slog is that if you want FIRE within 10-20 years you have to save hard.<br /><br />If earnings are modest then its a damned lot harder - but then the question is how much do SurreyBoynoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-43212282449302374002016-11-12T17:48:51.804+00:002016-11-12T17:48:51.804+00:00I did similar to you, saved all salary and bonus, ...I did similar to you, saved all salary and bonus, maximised pension contribution tax relief etc. Compound Interest was a minor contributor to my wealth and should not be relied upon as the driver of wealth creation, I am not in financial services, just an engineer. Looking back it was only possible with a supportive partner, living off her modest salary. Some poor souls are saddled with Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-59060980474863357472016-11-12T16:14:02.853+00:002016-11-12T16:14:02.853+00:00I think a fourth example would be interesting. Hig...I think a fourth example would be interesting. High-ish earnings (moving from graduate average up to a top 10% earner for several years but not top 1%), high saving (building up quickly to 30% of take home pay), and good investment returns (6% real after inflation returns). I think it would take less than thirty years to reach your target, and growth would contribute more than savings (maybe 60% Anonymoushttps://www.blogger.com/profile/03868287308087642449noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-80604214597999023112016-11-12T13:48:48.828+00:002016-11-12T13:48:48.828+00:00There is a lot to be said for setting your own pri...There is a lot to be said for setting your own priorities - rather than leaving things to chance . But you must be honest with yourself about the priorities - there are hard choices to be made . It is all very well looking at graphs and charts of wealth creation - but it says nothing about the pain , worry and sacrifices that might go along with each scenario.<br /><br />I think most people find stringvestnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-78526792163484474532016-11-12T12:45:09.074+00:002016-11-12T12:45:09.074+00:00yes in a couple.
I dont see real term pay rises fo...yes in a couple.<br />I dont see real term pay rises for another 5 years, only loosing out to the real cost of living.<br />Both myself and my partner have pushed for pay rises, thankfully my partner has recently been successful. <br />My timing (asking for a raise on Friday, with redundancies announced on Monday) was not ideal. And also shows that asking for raises is not always a risk free Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-64268516412704583742016-11-12T12:26:47.279+00:002016-11-12T12:26:47.279+00:00Well said ermine.
A lot of people, even readers...Well said ermine. <br /><br />A lot of people, even readers on this blog, really do challenge the earnings piece. I'm on the other side of it and I metaphorically shout in frustration every time they do as I'm nothing special but at the same time have proven it's possible. You could walk by me in the street today and I 100% guarantee no reader would think of me as anything but a 44RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-12160253184192080262016-11-12T12:18:50.879+00:002016-11-12T12:18:50.879+00:00It's just maths so scale as required.
That sa...It's just maths so scale as required.<br /><br />That said and hopefully without going to far off topic I wouldn't encourage people to limit their beliefs to +20%. <br /><br />As somebody who's on the other side I can say that:<br />- You don't need a magic job in sales, IT or finance to make good money. I don't give my profession away on this blog but I have previously RetirementInvestingTodayhttps://www.blogger.com/profile/03088383743670046657noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-57529055659639188982016-11-12T12:16:09.781+00:002016-11-12T12:16:09.781+00:00Good for you taking a stick to the compound intere...Good for you taking a stick to the compound interest shibboleth. It isn't to be sneezed at if you save over a 30 year working life at a real return of 4% and never get any career progression it will roughly double your capital, and if you're prepared to work 40 years on that basis it will roughly triple it. But you have to ask yourself some tough questions if you're still earning the erminehttp://simple-living-in-suffolk.co.uk/noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-15612966598889738692016-11-12T11:42:25.602+00:002016-11-12T11:42:25.602+00:00Yes, I'd say the "miracle" of compou...Yes, I'd say the "miracle" of compound interest is that it enables somebody to save a fairly modest amount of money and retire *at around normal retirement age* pretty well-off.<br /><br />Most people don't intuitively understand how saving say £300 a month could possibly enable them to do that. Which is why the likes of me bang on about it.<br /><br />But clearly compound The Investor @ Monevatorhttp://monevator.comnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-81068825807004787122016-11-12T11:18:32.068+00:002016-11-12T11:18:32.068+00:00You won't inspire people to save if just base ...You won't inspire people to save if just base your examples based on your own high income. You'd be better off quoting what Mr Average could achieve if he earned 20% more (with overtime, or taking the job with the foreign travel) and saved the extra. That's the kind of 'working hard' people understand, rather than getting that magic job in sales, IT or finance which pays so vicaragehttps://www.blogger.com/profile/13615013686081830604noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-8467761080767602872016-11-12T11:12:42.809+00:002016-11-12T11:12:42.809+00:00I feel for you, and as someone two decades older t...I feel for you, and as someone two decades older than you and in FIRE, I recognise how much more fortunate I've been to have been young at a time when house prices in particular were more reasonable.<br /><br />But... a few thoughts to consider:<br /><br />1. I don't know where in the country you live, but <£200k for a family house in a safe area tells me it's not the south east. Mark Bishophttps://www.blogger.com/profile/06446924775948855423noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-52138301418438836202016-11-12T11:07:18.175+00:002016-11-12T11:07:18.175+00:00Thanks for the interesting post RIT.
It's wo...Thanks for the interesting post RIT. <br /><br />It's worth observing that somebody retiring and electing to live off the dividend stream would see a similar profile to the TheRIT, with very little benefit from compounding. <br /><br />Motley Fool have a useful <a href="https://g.foolcdn.com/editorial/images/120670/boomerdivs1982adj_large.png" rel="nofollow">chart</a> that highlights this, Slow Dadhttps://www.blogger.com/profile/00740050684344962720noreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-6108745191537267692016-11-12T10:57:02.758+00:002016-11-12T10:57:02.758+00:00yeah. Not looking great with the high asset prices...yeah. Not looking great with the high asset prices. Turn 28 in a week.<br />I have saved up a 34% deposit (60k) a house but that still leaves at least 115 grand worth of debt (and interest). I have STEM degree. Thats for a house big enough for children in a less 'stabby' area. <br /><br />so i will be left servicing the debt for a large number of years. Which then means for the last 15-20Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2875915890415125655.post-44210626117557854242016-11-12T10:53:22.540+00:002016-11-12T10:53:22.540+00:00I agree with your observations. What's more, t...I agree with your observations. What's more, there's another factor that people aiming for FIRE should consider: volatility.<br /><br />Whatever the mean annual return a prospective early retiree expects on his or her capital, it's just that - the mean. There can be considerable variance around it, particularly for the highest-return (and hence highest-risk) strategies.<br /><br />Mark Bishophttps://www.blogger.com/profile/06446924775948855423noreply@blogger.com