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Saving to the max

I am in my mid 50’s and looking to retire in my 60’s, but if had become an extreme-saver in my 20’s, then I would expect to retire in my early 40’s. This is what the FIRE movement, (Financial Independence Retire Early) aim to do. FIRE breaks the old rule of working for many decades before retiring at 68. Do you want to be part of FIRE movement?

game change

25x is the magic number

Those who believe in financial freedom at a young age cut spending and boost saving through an investment portfolio. The want to save more than 25x annual spending. E.g. you spend £2,500 net pay each month, then you require an investment portfolio worth £625,000.

3 hard steps to success

  • Control spending. Avoid treating money like water from an old tap; letting it leak uncontrollably. You can only invest, if you spend less than you earn. Extreme savers target a savings rate of 50% of net pay.
  • Clear all debts. Once you have removed consumer debt from credit cards etc, you can start to pay the mortgage down.
  • Learn to invest. No need to take nasty risks, as compound growth is the most powerful investment tool. A growth rate of 6% per year, means that your money doubles every 12 years.

Our society is quick to measure success in material goods and treat spending money and running up debt as ways to show-off to family and friends. However, money should be invested for buying freedom and happiness.

For the less committed saver

Here are 5 tips to save money without becoming an extreme saver.

  1. Carpooling, means making trips more affordable, as opposed to flying or taking the train. Connecting people who need to travel with drivers who have empty seats and share the travel costs with trusted passengers.
  2. Cut train fares by a third using railcards. There is a myriad of cards for all ages offering a 30% discount; great for frequent travellers, family and friends.
  3. Bulk buy shops, such as Costco, start to work when split with a neighbour or another family, gaining savings for each party.
  4. Remove unwanted possessions and make money. Your rubbish becomes treasure to someone else, so check those old draws and boxes the attic.
  5. Remove the coffee shop addiction. If your daily coffee bill on the way to work is £3, then you’ll save £720 a year.

Clearly, getting rich quick isn’t going to happen, but following certain rules everyday will make you richer – who knows where your end up.

ChildMax pays your take home salary while you’re on 12 months’ unpaid leave looking after a sick child. Once agreed, ChildMax pays your claim within 30 days and you can choose to return to work on a part- time or other flexible basis.

Visit at www.insurewithmax.com or call the UK call centre 0333 323 0098 for more information.

Important: If you want to become an extreme saver, please seek financial advice and do the research.

Sources:

https://www.lv.com/life-insurance/articles/extreme-savers-ways-to-save-money

https://theescapeartist.me/about/

 

 

Date: 10 May 2019 by Max Robinson