The FTSE

ChicagoBlue said:
My son just graduated from Uni, lives at home, and those bills are currently being covered by moi.

He “lives” off his taxable earnings from investments, while using the Federal tax code to put away currently low-taxed dollars for MILLIONS in TAX-FREE dollars in later life.

In short, he’s using parental and Govt subsidies to become a millionaire well before he reaches normal retirement age.

That not only gives him choices AS he ages, but (IMHO) is also a FAR better use of my money than trying to leave him and his sister any inheritance.
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My mum n dad let me live rent free to save for a house deposit, guess That’s way better than getting it when there pass away , but i wish I saved far more into funds
 
Hutchymcfc said:
Ah I get what you mean , so your example if I have 150 k to invest in 15 , 20, 25 years at say 7% it will be worth this much at 10% it will be worth this much
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Exactly!

And, the important point is that the relationship between 7% returns and 10% returns is NOT LINEAR, it is more exponential.

Just plug the numbers into the Moneychimp calculator I posted and you’ll see for yourself.

e.g.

$100,000 over 25 yrs, no additional investment during the 25 yrs

7% = $ 543,000
10% = $ 1.08M

DOUBLE the money for a 3% difference over time!!!
 
ChicagoBlue said:
Once you get on the right trajectory, it quickly stops being 80%, because your income is rising.

In addition, knowing what you have when allows you the freedom to do what you want when you want.

There’s a sign in a local sandwich shop that says, “Do what you need to do when you need to do it, so you can do what you want to do when you want to do it” or something like that!

And, at 13%, that $117M would “only” be about $58M at age 60, and “only” $29M at age 54, and “only” $15M at age 48, and “only” $8M at age 42....

I imagine you might feel you could squeeze out a vacation here or there, safe in the knowledge you’ve got a little financial “backstop” if you splurge for that extra cocktail on the beach!

The numbers are not a “one size fits all” roadmap. Rather, they are for illustrative purposes only, to highlight the power of compounding...the most powerful force in the universe!
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The eighth wonder of the world according to Einstein "He who understands it, earns it. He who doesn't, pays it"

I'm not sure how it works over there, but in the UK apart from under exceptional circumstance, or without paying hefty penalties, you can't currently access your pension until your 55 and I think that is to be raised soon. Personally I'd want more flexibility with my cash, so while being all for planning for the future I'm not in favor of locking much away besides what makes obvious sense for tax purposes. I'm lucky in that I can still build a decent pot doing that.

I've seen people have all these plans about retirement but then not live to see it. I think you shouldn't forgo too much when you're young, it's all about getting the balance right. If you have the knowledge it's much easier to achieve that balance. I think it's great you've made sure your children have that knowledge. That knowledge will hopefully turn into power in their lives to do more of what they want.

We were never taught about things like compound interest in school. I don't know why as it wouldn't take long and is such an important lesson.
 
Wafty Cranker said:
The eighth wonder of the world according to Einstein "He who understands it, earns it. He who doesn't, pays it"

I'm not sure how it works over there, but in the UK apart from under exceptional circumstance, or without paying hefty penalties, you can't currently access your pension until your 55 and I think that is to be raised soon. Personally I'd want more flexibility with my cash, so while being all for planning for the future I'm not in favor of locking much away besides what makes obvious sense for tax purposes. I'm lucky in that I can still build a decent pot doing that.

I've seen people have all these plans about retirement but then not live to see it. I think you shouldn't forgo too much when you're young, it's all about getting the balance right. If you have the knowledge it's much easier to achieve that balance. I think it's great you've made sure your children have that knowledge. That knowledge will hopefully turn into power in their lives to do more of what they want.

We were never taught about things like compound interest in school. I don't know why as it wouldn't take long and is such an important lesson.
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Money management should be a compulsory lesson in schools.

Most kids leave school with zero understanding of finance and unfortunately, for many, the understanding never improves.

Still as long as you can tie dye a T shirt or play a recorder, who cares!
 
Millwallawayveteran1988 said:
Money management should be a compulsory lesson in schools.

Most kids leave school with zero understanding of finance and unfortunately, for many, the understanding never improves.

Still as long as you can tie dye a T shirt or play a recorder, who cares!
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This is spot on but you get to learn pointless stuff in school but money is a life skill I think nutrition should be taught also
 
Wafty Cranker said:
The eighth wonder of the world according to Einstein "He who understands it, earns it. He who doesn't, pays it"

I'm not sure how it works over there, but in the UK apart from under exceptional circumstance, or without paying hefty penalties, you can't currently access your pension until your 55 and I think that is to be raised soon. Personally I'd want more flexibility with my cash, so while being all for planning for the future I'm not in favor of locking much away besides what makes obvious sense for tax purposes. I'm lucky in that I can still build a decent pot doing that.

I've seen people have all these plans about retirement but then not live to see it. I think you shouldn't forgo too much when you're young, it's all about getting the balance right. If you have the knowledge it's much easier to achieve that balance. I think it's great you've made sure your children have that knowledge. That knowledge will hopefully turn into power in their lives to do more of what they want.

We were never taught about things like compound interest in school. I don't know why as it wouldn't take long and is such an important lesson.
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If you can afford it, any additional money you can invest should be done through an ISA. It may be an inferior way of long term investment but it has one big advantage over pensions. Pension schemes die when you do whereas your ISA remains within your estate.
 
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