How much do you need to feel safe?

  • Thread starter Proteus2006
  • Start date
Proteus2006 said:
To have 300,000 in cash by the age of 65, you need to save roughly 200 every week of your working life (after you've bought your house, which will persumably leave you cash-poor).

I know these calculations are a bit crude, but I think the basic point is valid. How can you feel save until you have a huge amount of cash in the bank?

Or am I missing something?
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Yes - private pensions. Recommend you research them without delay.
 
Im in a similar position to yourself and I'm 31 too.

Have a mortgage on a month on a property which is worth approx 3 times what I borrowed on it, a nice few quid in the bank and aiming to have a nice amount of savings soon, have no major debts, loans or credit card bills and no car payments.

All in all, I have a simple enough life, no major needs and tend to keep it that way while enjoying myself.

However, one thing I made sure of from early on when I started working was to have a pension. I now have a fairly decent one and its all done through a company pension scheme so very little costs for me and the company is contributing a large portion of what goes into the pension scheme in an annual basis. I would you start one asap.

As nice as it is to have a nice lump sum in the bank, I dont see it really giving me a decent return so I plan on investing some of my savings, what exactly Im going to invest it in remains to be seen, but I think while a nest egg to cover those rainy days is great, do you really need €100k sitting in the bank?

My advice, start a pension asap and look at investing some of your nest egg to give you a better return.. Another option would be to divert say half of your monthly savings each month towards your mortgage, imaging what an extra 5k a year towards it would do to your mortgage???

I.C
 
Thanks IC, interesting stuff. However, by the sounds of it you're in a different league to me - your net worth must be the best part of half a million, whereas mine is only around 140,000. Of course, that would have seemed like a fortune to me just a few years ago, but your prespective changes, doesn't it?

Perhaps I should re-phrase my original question. At the age of 31, how much does your net worth need to be to qualify you as reasonably well-off?
 
However, by the sounds of it you're in a different league to me
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No not really, my place is down the country where I'm from. I wouldnt be in half as good a shape if I was buying in Dublin.


Perhaps I should re-phrase my original question. At the age of 31, how much does your net worth need to be to qualify you as reasonably well-off?
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Well a survery by an english newspaper last year reckons that to live a lifestyle of a millionaire you would need a minimum of Stg£3.8million in the bank.
Must be a fairly conservative lifestyle if you ask me. :D

Seriously though, different people would have different ideas on what being well off means.

Personally I would class it as having a good lifestyle in that you have a family 2 or 3 kids yet can still go out with friends regularly, holiday at least twice and year, drive a fairly decent car or 2 and change them every 3-4 years, own your own home without being mortgaged to the eyeballs and still have a few quid in savings at the end of it all.

But like I said, I have a fairly simple life and simple needs. Expensive taste, but simple needs (if thats possible!!!) ;)

By the sounds of it, you're really in good shape now for your age and things can only get better if you keep going as you are.

Dont forget to enjoy yourself in between all this planning and saving, see a bit of the world etc. Dont be more proof of the saying:

"Youth is wasted on the young"

I.C
 
Expensive taste, but simple needs (if thats possible!!!)
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I have the simplest tastes. I am always satisfied with the best. Oscar Wilde

It seems you have something in common with Oscar. :)

Marion
 
Persius

you really need to start a pension assuming that you pay higher rate tax and assuming 1% charges on a PRSA - the 48% tax relief you get on day on will allow you to hit your notional 300k target in half the time - read the pensions thread for more detailed analysis of the pensions tax break
 
Irishchappie said:
Im in a similar position to yourself and I'm 31 too.

Have a mortgage which costs me €600 a month on a property which is worth approx 3 times what I borrowed on it, a nice few quid in the bank and aiming to have it up around the €100k mark soon, hopefully within the next 2 years, have no major debts, loans or credit card bills and no car payments.

I.C
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are u married ha ha you would be a good catch
 
"How am I doing? Am I rich? Comfortable? Average? Or should I feel insecure?"

Your health will be be your wealth going forward. Just a thought.

Rgds
Billo
 
...I don't think she was merely complimentary . Pinkie 123 is fairly decisive.
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ok, now Im scared :eek:

...Btw, AAM has a PM sysem.
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Ssshhhh.. dont be encouraging her.. :p

Your health will be be your wealth going forward. Just a thought.
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Have to agree with you there billo.. all the money in the world is no good to you if you dont have your health!!
 
In my opinion being "secure" is more than net worth and savings. The following is just opinion.

There should be a mix of Savings, Investments, Income Insurance, Health Insurance, Life assurance & Pensions in your security plan. As Tony Robbins suggests divide your investments into security, growth and high growth (or dream bucket as he calls it); these should be divided into percentages that suit your current life ambitions. Have enough in your savings to survive 6 - 12 months if your income suddenly stops, consider leaving this in something like a Rabo Account to combat inflation.

Insurance & Assurance arent fun, but they will give you plenty of security and pension contributions means money that otherwise would go to the tax man helps you to have security in your old age.

Having the diverse plan is far more secure than just a cash rainy day fund.
 
dublinsense said:
In my opinion being "secure" is more than net worth and savings. The following is just opinion.

There should be a mix of Savings, Investments, Income Insurance, Health Insurance, Life assurance & Pensions in your
security plan. As Tony Robbins suggests divide your investments into security, growth and high growth (or dream bucket
as he calls it); these should be divided into percentages that suit your current life ambitions. Have enough in your savings
to survive 6 - 12 months if your income suddenly stops, consider leaving this in something like a Rabo Account to combat inflation.

Insurance & Assurance arent fun, but they will give you plenty of security and pension contributions means money that otherwise
would go to the tax man helps you to have security in your old age.

Having the diverse plan is far more secure than just a cash rainy day fund.
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Just going back on what you said there dublinsense.. I would be of the same opinion as yourself when it comes to most of those

- Life and health insurance are a must for both you and your family.

- Pensions are also becoming a necessity with the cost of living today, if you want to maintain any sort of decent liftstyle after
you retire. And as Dublinsense said, it avoids handing over that extra hard earned cash to the taxman.

- Savings and investments do also help for those rainy day scenarios and do allow you to get the little luxury items in life without
borrowing for them. It also works out well in later life.

- I wouldnt class income protection as a necessity personally but it is a good thing for peace of mind.

I think you do need a definite plan and stick to it. This time 5 years ago I was in a completely different place when it came to
finances, up to my eyes in debt, well what a person in their mid 20s would class as that. Didnt have a mortgage to worry about
but my debt was about the equivalent of 80% of my annual income.

It took a serious kick up the behind to get me to take my head out of the sand and see where I was going.

Being secure is a state of mind as well as a state of finances. If you're not happy with your lifestyle and are constantly moving
the proverbial goal posts then no matter how you have invested or saved, you'll never be happy. There is nothing wrong with
wanting and getting more, but do it at your pace and not at the pace of the "Jones" across the road.

I.C
 
You're 31. I think you should loosen up and enjoy yourself more.

You can always earn more money, but you can never take back the time you've lost by being overly cautious.

When you're an old man, lying in the hospital dying, would you rather feel "secure" knowing you have a couple of hundred thousand in the bank, or would you rather feel happy, know you lived your life to the full?

Your insecurity is holding you back. You will regret wasting your life saving money!
 
Irishchappie said:
Personally I would class it as having a good lifestyle in that you have a family 2 or 3 kids yet can still go out with friends regularly, holiday at least twice and year, drive a fairly decent car or 2 and change them every 3-4 years, own your own home without being mortgaged to the eyeballs and still have a few quid in savings at the end of it all.
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Jasus, I'd need €500'000 a year for that...and I thought I was doing OK:(
 
Purple said:
Jasus, I'd need €500'000 a year for that...and I thought I was doing OK:(
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Ah now, how do you figure that out??????

I never said anything about not having a mortgage or not having car finance. These are part of everyday life. The holidays dont have to be over the top.

I would consider a fairly decent car would be a decent size family saloon, doesnt necessarily have to be a top of the range marque..

I know my parents managed it and my father earned no where near €500k a year, no even a fraction of it.. Its all very reachable but again, I suppose it depends on your lifestyle..

I.C
 
Proteus2006 said:
I have a very simple question. How much do you need in today's Ireland to feel well off?

I have 40,000 in savings.
I have a mortgage of 200,000 on a property that is probably worth around 300,000.
My income varies but I usually save around 200 a week.
I am 31, single and have no pension or other investments.

How am I doing? Am I rich? Comfortable? Average? Or should I feel insecure?

I would really appreciate any feedback on this.
Thanks,
Proteus
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i would say you are very well fixed indeed well done ,the 200 euro savings per week i would be inclined to use that to help pay off your mortgage,
im sure not many 31 year olds are in as good a situation as you are at the moment
 
I do think you're doing well, but I'd say you need to go with the pension from now on.... assuming you're on the higher rate of tax you are almost doubling the amount you save, but just deferring its accessability for about 30 years ;-)

Congrats on it, but time to start diversifying, get some investments going.... why leave it in Shares in Irish Banks when you could buy some of their shares and reap the rewards of the low rates they offer borrowers, instead of being hit by it!

I think having a specific sum in mind is the wrong idea, consider instead how many months you can cover. Do you really need 10-15-20 months in the back or would you feels ok with 6 months in the bank and the rest in shares?
 
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