The Humble Penny saving 56% towards paying off debt. Nothing allocated to investments yet. My savings plan sees me debt free by November 2020 and I’ll be allocating my 56% to investments from then. In fact now that I’ve worked out my savings percentage I’ll make adjustments to get it up to 60%! Thanks for all the great content Ken, stumbled across one of your videos at the weekend and I’ve been binging since then. Much appreciated!
Great video. Could you explain how one who is saving double amount though % is the same does not reduce number of years reaching FI goal please? Thank you
Great content as always Ken, there's something about seeing the figures on the whiteboard that makes it so motivating to invest and continue to work hard.
Hi Stuey, Thank you! I absolutely agree with your point about the white board. It's why it is highly recommended that we write our goals and visions and make them plain. They do something good for the mind 😀
I love your videos because you’re so enthusiastic and it really comes across! Makes it so much more interesting when you’re passionate about what you’re saying. I can tell you really want to help people! I’m saving quite about 40-50% but I struggle to know where to put it. I’m trying to invest for my retirement so want to put away ASAP to let it grow on it’s own over time, but also trying to save for a first time house deposit! Trying to be patient 🙈
Hey Katie, thank you! Tbh, I'm enthusiastic because I know where I've come from to get to where we are. Even with that, I still feel we've just began our journey with much fun life adventures ahead 😀. Welldone for your pretty high savings rate. That's the first battle won. Buying a first home is a special goal. We're going to make a video about this actually :)
Thank you so much for this video. You are an amazing teacher! I've seen withdrawal rates and FI flying about and I never actually understood the calculations to work out the FI number. My mind has been blown! Thank you for this video.
Ken, your ability to inspire and create motivation is unbelievable. Keep up the incredible work! And my future self thanks you! Had very little savings at the beginning of this year before I stumbled across your videos; in a much better place now and Improving every month. Thanks again!
I feel like this video was meant for me. My savings rate is about 20% because my expenses are so high. I'm committed to increasing my savings rate this year. Thanks for another enlightening video!
@@TheHumblePenny Hi Ken, I plan to use my bonus to pay off some of my debt. I can then use that money to go towards my savings. In addition, i'm hoping for a pay increase this year. Paying off debt and having a pay increase should enable me to increase my savings rates to around 40%. However your help is definitely needed when in comes to investing in the stock market to maximise my return. I'm looking forward to gaining access to your courses!
Hi, Currently , including pension, , my savings rate is 63% and has been that high for 3 years now. Aiming to retire early next year(2021). Fortunately my final salary pension will supply 2/3 of my planned retirement income. Keep up the good work. Gary
@@TheHumblePenny I have started an online course on Egyptology which, if carried out the full 7 years, will give me a Masters degree from Manchester Uni. Otherwise; travelling (need to see more of the UK as well as abroad) and devote more time to my hobby of archery.
I now have a emergency fund of approximately 4/5 months of expenses and have been tracking my spending for the last 4 months. 30% of income per month is being invested into wealthsimple and trading 212 ETFs. 35% of income per month is going into a high interest savings account ready for a deposit on a BTL property. Made some small changes to my lifestyle and started 'paying myself' first to increase savings. Will be going into the last year of my apprenticeship this year and will ensure lifestyle creep does not happen and savings will increase. Thank you for your helpful and informative videos.
The 4% rule can effectively be abandoned for the lowest level of savings. If Lucy saves at 10% she will reach FI by the age of 80 as defined by the 4% rule, but by she's 80... she probably isnt going to be around for another 30 year.
I am so happy I found your channel. I am almost 35 and you have just done the math for me 👌🏻 I am literally bing watching all your videos. Thanks so much for all your work.
Great Video Ken , I have previously made that mistake of lifestyle creep and also not being intentional and asking myself what actually the purpose of money is to me. Seeing it on that board really helps.
Moral of the story is "It's not how much you make but how much you save that matters. Always something my parents drilled in us growing up. Thanks for the great content. God bless.
Cheers, Riccardo! 😊. It's all positively overwhelming. Never ever thought in all my life that I'd one day become a UA-camr and listened to by thousands of people. It's a responsibility that I'm taking seriously whilst enjoying the journey.
Loved this video with the examples given. I wish you could something like this showing how to repay debt like in both scenarios where you’ve mentioned before, the snowball effect and the avalanche effect. I wondered if you would recommend saving (at all) if you were a person who was still living in debt...do you think it’s wise to save while in debt or make the goal becoming debt free and then saving.
Hi Ken, I meant to ask you this long time ago, when I first saw the video, but somehow it managed to slip through. Twice! Third time I'm watching this video so now's the time (hope a pandemic does not arrive in this very moment). In your example, Lucy is saving £400/£600.../£1000 etc. My question is: does the spending include the mortgage? If yes, I'm puzzled, how would Lucy be able to include the 7-9 hundreds mortgage and live out of the rest 300? :) Thanks. Adi
Hi Ken, I've just recently stumbled across your channel after seeing you featured on here in that Inside Out video. I really like your way of presenting this information in such a clear and concise way and you're really personable too! Subbed and I hope to one day join the ranks of people living FI :-)
Brilliant video once again but i have a question. As someone who is yet to invest but has full intention to i am concerned that the time taken to become financially independent will not be so easy. Im not financially savy so apologies if my terminology is wrong. Within you calculations you have assumed a 6% return a year. But how likely is this? I would be looking to invest in index funds and etfs which as a historical average 6% is great of course. But couldn't this go the complete other way? You could assume that your investments fall? Which would result in all that money invested would have actually depreciated. Any clarification is much appreciated as i really want to learn as much as i can before i invest. Thanks 😄
Hey Joshua You ask a very good question 😀. 6% is an assumed average over the years it would take someone to become FI. In some years, that number will be less and in others more. That number could easily have been 5% REAL (post inflation), which ofcourse changes all the figures. Becoming Financially Independent is certainly not easy. But it is possible without a doubt for most people with applied learning, taking action, making the right decisions, etc. F.I. is not a short term goal. But the time it takes to get to it can be shortened if one does things in an unconventional way. We did it in 10 years. Given what we know today, if we started again, we'd do it in quicker than 10 years.
@@TheHumblePenny I like your presenting, I binge watched a lot over the last 2 days, this video is one of the best. I'm ACCA but enjoy photography so share that here on UA-cam. I can live like "Lucy" but I wasn't doing anything with the funds left so time to get into action. At 42yr! Thanks for the great channel.
Additionally, the higher your spending requirements you may well require a relatively slightly larger pot as you will never be able to draw down from it as tax-efficiently as you are able to from smaller pot. Someone who requires a 30k income stream will very likely incur some income tax in drawing that income from their investment pots while someone who can live on half that amount can likely escape all income taxes.
Ive spent hours watching videos on this, but im new to investing at 23 and from the UK. I could comfortably invest 1k-2k a month, but i dont want it to go to waste/want to make sure im chosing the best place for it to go. Have you got any reccommendations of index funds/etfs? Or should I consider buying some of apple/mcdonalds ect, and if so how much money? Does more money mean a higher return? Still a little confused!
Hey Chloe, I was very much in the same boat as you - information overload big time for me. I eventually decided to just START! And now I’ve been investing since the beginning of April and I’m documenting my journey on my UA-cam channel - including all the highs and the lows - so come check out the videos if you’re interested! Best of luck on your investing journey! 👍
Hi Chloe Have you seen our other investing videos about invest? We've covered many areas you can look at investing in - Dividend income investing, Index Funds and ETFs, individual stocks, etc. More money could mean a higher monetary return not a % return. e.g. if you invest £100 and £1000 independently, and both went up 5%, the £1,000 investing would result in more money even though the increase was 5% compared to the £100 investment. Make sense? If still struggling, drop me an email - " UA-cam at thehumblepenny.com "
Hello Ken, thank you for your videos they have been really interesting. I have a question: if you were in the position of a University student, with around £25,000 in savings and earning £10,000 a year from a side hustle/part-time job how would you choose to invest? Obviously there are many more variables to consider, but a rough direction would be amazing. Thank you :)
Hi James A very comfy situation there. It would ofcourse depend on my goals. However with that setup, if the focus was on the stock market, one possibility is that I'd do 80% in equities with a passive investing strategy (global focus). I'd use 20% to grow a digital business.
It's nearly impossible so save 60% of your income in the UK if you have no one to help you out or you make £30K, unless you want to live your worst life. Unless you're SUPER savy when it comes to shopping. One bad incidental can screw you up. Just living in relative warmth near (not in) London can set you back ALOT. What's considered basic housing in the UK would be considered below standard in many countries.
Great video! My savings is at least 70% of course combined house hold income. trouble I have is I have no clue with regards to investment. This is an area I am struggling with.
Could Ben reach FI sooner than Lucy if he saves 50% (so lives off 50% i.e. 2k) if he is willing to live off 1/2 that if he retires (i.e. 1k a month outgoings when retires)? I ask as my outgoings now are higher than I would need to retire mainly because the costs of working for me are more than the costs of not. I think that makes sense but just checking!
Hi Ken, First off, thank you so much for these value-drenched videos you consistently put up. I can't believe I didn't find out about you until last month! I'm saving about 30% of my income at the moment which due to the fact that I'm rather late to the FI attainment party, I know this % would have to increase. I watched this video a few days ago and have had these burning questions ever since. It's relating to lifestyle creep. Apologies if you've covered this in another video. Isn't 'lifestyle creep' supposed to happen? Isn't the whole point of depriving yourself now so you can enjoy the lifestyle you really want in the future (delayed gratification)? I don't know anyone who starts out their lives hoping to remain at the same lifestyle level. Let me explain. If your dream has always been to travel around the world, it's likely you would struggle to do this on Lucy's income. But if your income increases, you likely could start, maybe conservatively, to say travel once a year to a different country. However, if I understand you correctly, this would fall under the category of lifestyle creep and even after you achieve FI quicker, to maintain FI you would have to maintain your level of expenses you were on to maintain FI. How do you attain FI and still attain your dream lifestyle? Or are these contradictory to each other? Thank you for taking the time to read. I look forward to your response and enjoying more of your videos KR Tose
Great advice. However, there could be another angle. What if you really cut down on your spending and live off of £1,000 a month so that in 16 years time you could be financially independent, and then for any circumstances your life ends before you reach that 16 year mark? You will have lived and worked your hardest but will have never used that hard earned money. What if you don’t have children and that means that absolutely no one will make the use out of that savings pot? It’s a million pound discussion 🤔☺️
Hey Inga Thank you! That's a great "What If" Scenario to consider 😀. It's certainly a possibility that someone can die before they become Financially Independent. It's also highly probable that they will be alive (just as we are now as I text you) and they might even be alive for many decades more. It's glass half full vs empty
The Humble Penny absolutely! To add to this, in my experience, most of those who do take the risk, end up with rewarding results. It’s about interpreting those results rather than defining them and slotting them into “good” or “bad” categories 💪
Fantastic content as ever Ken, I have a question if I may? Do you consider DC pension contributions to make up a portion of investments from our net income? I noticed that you didn't mention it in the video although I may have missed it.
Hello! Thank you for this video. What do you use as income, gross or net? Because retirement accounts come from gross, and are clearly savings.....thank you!!
Net for this illustration. Gross retirement accounts also count towards Savings ofcourse 😀. I've kept my illustrations simple so that most people can understand it
I'm 15 and interested in investing, and I was confused at 7:52 as to why you multiplied the values by 25 years, because wouldn't some people live longer than only 25 years on top of their age right now, i.e say they retire at age 40. (40+25=65 years). So would they not run out of money to live off at age 65? If you could please answer my query that would be well appreciated, thanks.
Also, how did you calculate 'years to financial independance' because lets say for the scenario where 'lucy' saves 50% (£1000). wouldn't you do (1000×12) = 12000 per year (savings) Then the pot required which is £300,000. Therefore £300,000 / £12000 = 25 years to FI not 16 years 🤷🏻♂️
Its extreme but not undoable if you have a certain set of circumstances. I managed roughly a 85% savings rate last year, and that was including £10k in nursery fees. I have a tax-free side hustle and used that to live on, and put all my regular day-job income to my pension and paid 0% in income tax.
That’s what I did… 75% of salary into a DC salary sacrifice pension scheme, 100% of bonus too, plus more into high interest current and regular savings accounts giving cash that I could access quickly as a buffer.
What percentage of your net income do you currently save and invest each month? Please tell us below 😀
The Humble Penny saving 56% towards paying off debt. Nothing allocated to investments yet.
My savings plan sees me debt free by November 2020 and I’ll be allocating my 56% to investments from then. In fact now that I’ve worked out my savings percentage I’ll make adjustments to get it up to 60%!
Thanks for all the great content Ken, stumbled across one of your videos at the weekend and I’ve been binging since then. Much appreciated!
Much appreciated, Jamie 😀. I love that you're intentional about those numbers. That's what it's all about.
Great video. Could you explain how one who is saving double amount though % is the same does not reduce number of years reaching FI goal please? Thank you
Could you guys do a video on investing in commodities?
H Ken, can i start vanguard index fund with £500 ?
I just started saving at nearly 30. Also following Dave Ramsey’s baby steps.
Great content as always Ken, there's something about seeing the figures on the whiteboard that makes it so motivating to invest and continue to work hard.
Hi Stuey,
Thank you! I absolutely agree with your point about the white board. It's why it is highly recommended that we write our goals and visions and make them plain. They do something good for the mind 😀
I heard a quote years ago which really struck a cord with me… “I will do today what others will not so I can live tomorrow as others can not!”
Ooouh I may have to steal that, Chris! 😀
Live like no-one else today, so that later you can live like no one else - Dave Ramsey
I love your videos because you’re so enthusiastic and it really comes across! Makes it so much more interesting when you’re passionate about what you’re saying. I can tell you really want to help people!
I’m saving quite about 40-50% but I struggle to know where to put it. I’m trying to invest for my retirement so want to put away ASAP to let it grow on it’s own over time, but also trying to save for a first time house deposit! Trying to be patient 🙈
Hey Katie, thank you! Tbh, I'm enthusiastic because I know where I've come from to get to where we are. Even with that, I still feel we've just began our journey with much fun life adventures ahead 😀. Welldone for your pretty high savings rate. That's the first battle won.
Buying a first home is a special goal. We're going to make a video about this actually :)
Thank you so much for this video. You are an amazing teacher! I've seen withdrawal rates and FI flying about and I never actually understood the calculations to work out the FI number. My mind has been blown! Thank you for this video.
That's fab, Shays! 😊
Ken, your ability to inspire and create motivation is unbelievable. Keep up the incredible work! And my future self thanks you! Had very little savings at the beginning of this year before I stumbled across your videos; in a much better place now and Improving every month. Thanks again!
Hey Robert, this really means a lot to me. Thank you 😊
I feel like this video was meant for me. My savings rate is about 20% because my expenses are so high. I'm committed to increasing my savings rate this year. Thanks for another enlightening video!
Cheers, Selina! 20% is a good start. How do you plan to increase the rate?
@@TheHumblePenny Hi Ken, I plan to use my bonus to pay off some of my debt. I can then use that money to go towards my savings. In addition, i'm hoping for a pay increase this year. Paying off debt and having a pay increase should enable me to increase my savings rates to around 40%. However your help is definitely needed when in comes to investing in the stock market to maximise my return. I'm looking forward to gaining access to your courses!
Hi, Currently , including pension, , my savings rate is 63% and has been that high for 3 years now. Aiming to retire early next year(2021). Fortunately my final salary pension will supply 2/3 of my planned retirement income. Keep up the good work. Gary
Whoa, Gary!! That's AMAZING! What do you plan to do when you retire early?
@@TheHumblePenny I have started an online course on Egyptology which, if carried out the full 7 years, will give me a Masters degree from Manchester Uni. Otherwise; travelling (need to see more of the UK as well as abroad) and devote more time to my hobby of archery.
I now have a emergency fund of approximately 4/5 months of expenses and have been tracking my spending for the last 4 months.
30% of income per month is being invested into wealthsimple and trading 212 ETFs. 35% of income per month is going into a high interest savings account ready for a deposit on a BTL property. Made some small changes to my lifestyle and started 'paying myself' first to increase savings. Will be going into the last year of my apprenticeship this year and will ensure lifestyle creep does not happen and savings will increase.
Thank you for your helpful and informative videos.
LOOOVE the intention in your plans, Matthew! 😀✊🏽
Great video. Everyone that would like to retire early should watch this.
Appreciated! 😀
The 4% rule can effectively be abandoned for the lowest level of savings. If Lucy saves at 10% she will reach FI by the age of 80 as defined by the 4% rule, but by she's 80... she probably isnt going to be around for another 30 year.
Yes, good point.
I'd be really interested in any adive on what to do when you turn 18, like credit cards, when I should strat investing and such. Amazing video btw!
Added to the list 😉
I am so happy I found your channel. I am almost 35 and you have just done the math for me 👌🏻 I am literally bing watching all your videos. Thanks so much for all your work.
Great Video Ken , I have previously made that mistake of lifestyle creep and also not being intentional and asking myself what actually the purpose of money is to me. Seeing it on that board really helps.
Moral of the story is "It's not how much you make but how much you save that matters. Always something my parents drilled in us growing up. Thanks for the great content. God bless.
Congrats on the 10K subs. Well deserved!
Cheers, Riccardo! 😊. It's all positively overwhelming. Never ever thought in all my life that I'd one day become a UA-camr and listened to by thousands of people. It's a responsibility that I'm taking seriously whilst enjoying the journey.
Great video and loving the whiteboard breakdown 👍🏾
Cheers, Daniel! I actually enjoy doing the illustrations 😀
Hahah Really liked the video. This shows the hard work behind each videos = consistency !!! Well done Ken We love it. and Thank you
Much love, Andrea! 😊
Loved this video with the examples given. I wish you could something like this showing how to repay debt like in both scenarios where you’ve mentioned before, the snowball effect and the avalanche effect. I wondered if you would recommend saving (at all) if you were a person who was still living in debt...do you think it’s wise to save while in debt or make the goal becoming debt free and then saving.
Good video recommendation, Sandra. I'll make one on this topic 😀.
I'd say always have at least 1 - 3 months of savings. Then focus on expensive debt.
Hi Ken, I meant to ask you this long time ago, when I first saw the video, but somehow it managed to slip through. Twice! Third time I'm watching this video so now's the time (hope a pandemic does not arrive in this very moment).
In your example, Lucy is saving £400/£600.../£1000 etc. My question is: does the spending include the mortgage? If yes, I'm puzzled, how would Lucy be able to include the 7-9 hundreds mortgage and live out of the rest 300? :)
Thanks.
Adi
Hi Ken, I've just recently stumbled across your channel after seeing you featured on here in that Inside Out video. I really like your way of presenting this information in such a clear and concise way and you're really personable too!
Subbed and I hope to one day join the ranks of people living FI :-)
Thanks so much, Steve! 😀. FI is definitely a possibility for you
Thank you, this is so helpful! Hopefully paid off all my debt by October (minus my mortgage) then can start saving!
You're welcome, Jennifer 😀. Keep the momentum going ✊🏽
65%, however only 15% is invested, another 10% in a SIPP. The rest is kept as cash saving up to buy a house.
That's a very good Savings Rate!
Great video, I was quite surprised at the comparison with Ben and Lucy, glad I learned that one for the future when i'll be earning more.
😉
Brilliant video once again but i have a question. As someone who is yet to invest but has full intention to i am concerned that the time taken to become financially independent will not be so easy. Im not financially savy so apologies if my terminology is wrong.
Within you calculations you have assumed a 6% return a year. But how likely is this? I would be looking to invest in index funds and etfs which as a historical average 6% is great of course. But couldn't this go the complete other way? You could assume that your investments fall? Which would result in all that money invested would have actually depreciated.
Any clarification is much appreciated as i really want to learn as much as i can before i invest. Thanks 😄
Hey Joshua
You ask a very good question 😀.
6% is an assumed average over the years it would take someone to become FI. In some years, that number will be less and in others more.
That number could easily have been 5% REAL (post inflation), which ofcourse changes all the figures.
Becoming Financially Independent is certainly not easy. But it is possible without a doubt for most people with applied learning, taking action, making the right decisions, etc.
F.I. is not a short term goal. But the time it takes to get to it can be shortened if one does things in an unconventional way. We did it in 10 years. Given what we know today, if we started again, we'd do it in quicker than 10 years.
Great video!
🙏🏽
@@TheHumblePenny I like your presenting, I binge watched a lot over the last 2 days, this video is one of the best. I'm ACCA but enjoy photography so share that here on UA-cam. I can live like "Lucy" but I wasn't doing anything with the funds left so time to get into action. At 42yr! Thanks for the great channel.
Additionally, the higher your spending requirements you may well require a relatively slightly larger pot as you will never be able to draw down from it as tax-efficiently as you are able to from smaller pot. Someone who requires a 30k income stream will very likely incur some income tax in drawing that income from their investment pots while someone who can live on half that amount can likely escape all income taxes.
Hey Van
Super valid point! 👊🏼
This is so good! Very encouraging!
You're most welcome, Asheika! 😀 Any content requests for the channel?
@@TheHumblePenny You honestly cover the majority of the things I want to know! however I will send my requests through when I have any in the future 😊
very nice and informative content, it is appreciated!
Thanks! :). What is your #1 investing goal at the moment?
@@TheHumblePenny i actually am in the process of paying of a few small debts i have and then the plan is to increase my income and save 50%
Brilliant stuff, thank you
You're welcome, Isley! 😀
Thanks so much Ken - excellent content. Next let's have a video on 'How much invest should I money'
Thank you! 😀
Brilliant video!
Much appreciated! 😀
Very good advice!
👊🏾
Another great video 👏
👊🏼😉
Ive spent hours watching videos on this, but im new to investing at 23 and from the UK.
I could comfortably invest 1k-2k a month, but i dont want it to go to waste/want to make sure im chosing the best place for it to go. Have you got any reccommendations of index funds/etfs? Or should I consider buying some of apple/mcdonalds ect, and if so how much money? Does more money mean a higher return? Still a little confused!
Hey Chloe, I was very much in the same boat as you - information overload big time for me. I eventually decided to just START! And now I’ve been investing since the beginning of April and I’m documenting my journey on my UA-cam channel - including all the highs and the lows - so come check out the videos if you’re interested!
Best of luck on your investing journey! 👍
Hi Chloe
Have you seen our other investing videos about invest? We've covered many areas you can look at investing in - Dividend income investing, Index Funds and ETFs, individual stocks, etc.
More money could mean a higher monetary return not a % return. e.g. if you invest £100 and £1000 independently, and both went up 5%, the £1,000 investing would result in more money even though the increase was 5% compared to the £100 investment. Make sense?
If still struggling, drop me an email - " UA-cam at thehumblepenny.com "
Wow lifestyle creep is so real! So many people I know suffer from this and therefore have to work harder and more hours
Indeed, Luke! Many "educated" "professionals"
Hello Ken, thank you for your videos they have been really interesting. I have a question: if you were in the position of a University student, with around £25,000 in savings and earning £10,000 a year from a side hustle/part-time job how would you choose to invest? Obviously there are many more variables to consider, but a rough direction would be amazing. Thank you :)
Hi James
A very comfy situation there.
It would ofcourse depend on my goals. However with that setup, if the focus was on the stock market, one possibility is that I'd do 80% in equities with a passive investing strategy (global focus). I'd use 20% to grow a digital business.
It's nearly impossible so save 60% of your income in the UK if you have no one to help you out or you make £30K, unless you want to live your worst life. Unless you're SUPER savy when it comes to shopping. One bad incidental can screw you up. Just living in relative warmth near (not in) London can set you back ALOT. What's considered basic housing in the UK would be considered below standard in many countries.
u read my mind - fab video! 15% but need to increase this
15% is definitely a great place to been. It's more than double the average savings rate
Great video! My savings is at least 70% of course combined house hold income. trouble I have is I have no clue with regards to investment. This is an area I am struggling with.
Welldone on that super high savings rate. Investing is a skill worth learning over time. What's your biggest struggle with it?
@@TheHumblePenny
Simply put, not financially literate.
😞. Perhaps I can drop you an email and we can pick it up from there if this is OK with you.
Could Ben reach FI sooner than Lucy if he saves 50% (so lives off 50% i.e. 2k) if he is willing to live off 1/2 that if he retires (i.e. 1k a month outgoings when retires)? I ask as my outgoings now are higher than I would need to retire mainly because the costs of working for me are more than the costs of not. I think that makes sense but just checking!
Yes :)
Hi Ken,
First off, thank you so much for these value-drenched videos you consistently put up. I can't believe I didn't find out about you until last month! I'm saving about 30% of my income at the moment which due to the fact that I'm rather late to the FI attainment party, I know this % would have to increase.
I watched this video a few days ago and have had these burning questions ever since. It's relating to lifestyle creep. Apologies if you've covered this in another video.
Isn't 'lifestyle creep' supposed to happen? Isn't the whole point of depriving yourself now so you can enjoy the lifestyle you really want in the future (delayed gratification)? I don't know anyone who starts out their lives hoping to remain at the same lifestyle level.
Let me explain. If your dream has always been to travel around the world, it's likely you would struggle to do this on Lucy's income. But if your income increases, you likely could start, maybe conservatively, to say travel once a year to a different country. However, if I understand you correctly, this would fall under the category of lifestyle creep and even after you achieve FI quicker, to maintain FI you would have to maintain your level of expenses you were on to maintain FI. How do you attain FI and still attain your dream lifestyle? Or are these contradictory to each other?
Thank you for taking the time to read. I look forward to your response and enjoying more of your videos
KR
Tose
Great advice. However, there could be another angle. What if you really cut down on your spending and live off of £1,000 a month so that in 16 years time you could be financially independent, and then for any circumstances your life ends before you reach that 16 year mark? You will have lived and worked your hardest but will have never used that hard earned money. What if you don’t have children and that means that absolutely no one will make the use out of that savings pot?
It’s a million pound discussion 🤔☺️
Hey Inga
Thank you! That's a great "What If" Scenario to consider 😀.
It's certainly a possibility that someone can die before they become Financially Independent.
It's also highly probable that they will be alive (just as we are now as I text you) and they might even be alive for many decades more.
It's glass half full vs empty
The Humble Penny absolutely! To add to this, in my experience, most of those who do take the risk, end up with rewarding results. It’s about interpreting those results rather than defining them and slotting them into “good” or “bad” categories 💪
Hi please how did you calculate the years to independence please?
Question: how is 240k considered financial independence if the that isn’t even the price of a family home and you would still need a morgage?
Fantastic content as ever Ken, I have a question if I may? Do you consider DC pension contributions to make up a portion of investments from our net income? I noticed that you didn't mention it in the video although I may have missed it.
Thanks, Thomas! Yes, DC pension would. It falls into a broader umbrella of "Savings"
Thanks for clarifying, so I save or invest around 40% of my net income.
wish i knew this 10 yrs ago
It would be good to know how much we spend per month. Have you got any financial/savings spreadsheet that does the job ?
Currently saving 30%. 12 months ago I was at 0%.
HUGE progress there!! 😀
Hello! Thank you for this video. What do you use as income, gross or net? Because retirement accounts come from gross, and are clearly savings.....thank you!!
Net for this illustration.
Gross retirement accounts also count towards Savings ofcourse 😀. I've kept my illustrations simple so that most people can understand it
@@TheHumblePenny ok thank you!
Hi Ken, what is your honest take between FTSE North America UCITS ETF and S&P 500 UCITS ETF?
Beware of lifestyle creep! lol
😉
I'm 15 and interested in investing, and I was confused at 7:52 as to why you multiplied the values by 25 years, because wouldn't some people live longer than only 25 years on top of their age right now, i.e say they retire at age 40. (40+25=65 years). So would they not run out of money to live off at age 65?
If you could please answer my query that would be well appreciated, thanks.
Also, how did you calculate 'years to financial independance' because lets say for the scenario where 'lucy' saves 50% (£1000). wouldn't you do (1000×12) = 12000 per year (savings)
Then the pot required which is £300,000.
Therefore £300,000 / £12000 = 25 years to FI not 16 years 🤷🏻♂️
@@bubblegum8643 ahh, I see. Thank you very much for explaining
What if you save 70% or 80% of your income?
Things get better ofcourse but those are extreme numbers 😉
Its extreme but not undoable if you have a certain set of circumstances. I managed roughly a 85% savings rate last year, and that was including £10k in nursery fees. I have a tax-free side hustle and used that to live on, and put all my regular day-job income to my pension and paid 0% in income tax.
I'm an unemployed 23 year old who wants to travel the world oneday.
That’s what I did… 75% of salary into a DC salary sacrifice pension scheme, 100% of bonus too, plus more into high interest current and regular savings accounts giving cash that I could access quickly as a buffer.
@@TheHumblePenny there's a person name Graham Stephan who made a video on saving 99% of your income. He's American by the way
Need some help with investing been looking at some companies but still confused is it possible to send you an email
Yup. Please do so via our blog :)
I'm 12. Why am i watching this?
Starting early? 😀
@@TheHumblePenny Trying too. Trying out Bitcoin rn
Do you have a email i can contact you on?
This is Indian mantra shown in figures
What's the Indian mantra?