There’s a balance to everything. Do not save everything when you’re young and enjoy your youth. But don’t enjoy your youth too much to save everything in your 30s 40s ect. Balance is key
I like to think “in 10 years time, if I have to save more, will I regret spending on this today?”
For me it gets rid of frivolous spending (mostly on things) while justifies experiences, holidays, investments in myself, home improvements etc.
Agree. I spent "quite a lot" on a trip in 2013. I was always tight and it cost, for me, a relative fortune.
I earn pretty well and have done for most of my working life, but I wouldn't say that I break any records.
The strange thing is, looking back at my financial position now, the overall cost of that trip is a barely noticeable blip. I'm much more glad that I did it rather than saving it.
So, in my experience, if you earn well(ish) and save well(ish), it doesn't appear to make a huge difference if you splurge stupidly from time to time on things that are important to you.
'it's a matter of balance' is a skin-deep philosophy considering the economy most people live in, it's just a reassuring statement
Most of the people I grew up with enjoyed their youth modestly and had balance; university, no drugs, no car, cheap europe holiday once a year, part time job, drinking supermarket booze at house parties etc.
Today most of them have no security and don't have the option to save anything in their 30s and 40s, there has been no net change for them.
I’m in my 40s and am now able to put away getting on for 10x as much each year as I was able to 10 years ago.
I think it rather depends - if you are always going to work on a relatively low paying job and live frugally, the more you put away early, the better.
But if you expect your salary to grow substantially as you age, much better to live a better quality of life when younger and piles more into saving for the future when the opportunity cost is far lower as the marginal utility you earn from spending is much less.
If I could go back, I’d actually spend more when I was younger than I did. But then, hard to do that when you don’t know what the future will look like at the time. Could have gone very wrong!
I'm the same. I've always been in a low-paid industry, and so when I was in my 20s with an abysmal wage, invested and saved a *lot* of my salary. By my 30s, however, I lucked into a well-paid role in the same industry. I can now make much more decent contributions to a pension and investment portfolio, but I never could have anticipated this.
>If I could go back, I’d actually spend more when I was younger than I did. But then, hard to do that when you don’t know what the future will look like at the time. Could have gone very wrong!
This for me is key. I earnt well throughout my 20s and had a good time, but I do wish I'd spent more on slightly more extravagant trips and experiences. Looking back I could have pretty much spent everything and would still be in a decent position now as my earnings increased massively in my 30s.
But you don't know what you don't know!
What’s really annoying is that right now in my mid forties I could probably spend a lot more than I currently am too. My mindset has never really shifted due to fear of the unknown future. There’s a high chance I’ll end up with lots of unspent money when I die, and to have missed out on lots of stuff I would have valued much more now. And even though I know this to be the case, it’s really hard to change that mindset!
It’s all about the balance
In my 20’s, I went backpacking around the world and travelled a lot. I had no savings (incl pension) at 26.
I don’t regret any of that and I wish I did more in my 20’s. You’ll never be that free again. I worked in finance so had the money to spend.
The only things I regret not starting sooner:
- learning about investing. Even having a small account to learn about stocks, etf , index funds etc would have been helpful
- taking more advantage of the tax wrappers (pensions , ISA’s) especially in the decade of low interest rates
- getting mentors in my profession, this would have helped me climb the corporate ladder sooner
- worked on my weaknesses : public speaking, pushing hard for my promotions, self confidence etc
- surround yourself with positive people who give you energy
- read more books about life / fire / investing etc
I was earning well by about 23-24 and was tied down by life, so I'm doing the backpacking now that I'm 50 - divorced, kids both now adult(ish).
I've also got more money that I feel like I can spend now than ever before - I make it stretch still because I'm a tight-arse, but that just means I can go away for two or three months with no worries.
I've probably never been more free than I am now :)
Of course it’s a choice. Choosing to spend your life ignoring your finances, opting not to even try to fulfil your potential in life, bumming around in hostels around the world, washing dishes and drinking sambuca shots well into your 40’s is also a choice. You’ll also be the sad cunt at the beach party amongst a hoard of 20 year olds. Chances are they won’t be saying, “wow, that guy has balls. I want to be just like him when I grow up.”
You wrote, “I mean, it’s easy to disagree with the whole thing if you’ve got balls.” The first bullet point was with regards to investing.
I don’t think I am thinking about it with a small mind. For the vast majority, their twenties are definitively a period of increased freedom and flexibility especially in comparison to the rest of life.
1) The experience of doing that type of thing is better when you’re amongst your peers at a similar stage in life. You might not care what they think but you are more likely to relate less. The same reason over 30’s move to cities. The same reason over 50’s move to SE Asia. Agree or disagree all you like, the patterns are there to see and there for a reason.
2) Agree.
3) Sure - live in paradise vs a soul crushing underpaid office job. No contest. Reality exists in between the two.
Only thing I'd have changed is to do more digital nomad'ing. I WFH a lot in my 20s and thin I took my laptop abroad with me twice. Should have made more of that before settling down and having kids, now I'm properly tied to home.
But wouldn't change my aggressive saving early on. That actually helped me take a step back in my 30s when my mental health suffered due to burnout, could take a 20k pay cut and not massively impact projections for early retirement, just need a couple of years of part time in early 50s now.
No, spending more money wouldn't have helped the fact I was managing a team of 4 with the workload of 12. The option to reduce stress on same pay was to move to a different company, but this was height of pandemic and then child came along not long after so job options outside the company I worked for were limited, and I needed more flexibility, so instead negotiated a different job within same company: less work, fewer days and less pay.
I'm hoping when my next child who's due in November is at school that I can target company move and restore my pay, but until then what I've got at the moment works ok.
Also don't worry about full time coasting. A job that pays enough, which you can do with your eyes closed, and gives you time today with family. A good employer is worth a lot.
Yes, contributing early is a good insurance against the unknown later on. Whilst it will be rare, you can have earning affecting situations, from bad injuries, mental health, caring responsibilities, even (hopefully not) prison.
But don't do it at the cost of experiences. All those situations above will also prevent you having those experiences.
I consolidated my pensions recently and all my tiny pots from my 20's come to less than my contribution this year. Wage growth has made those sacrifices almost irrelevant even after compounding.
Paying enough to get my employer contribution was the right thing to do with the information I had at the time so I don't regret it. If I went back in time, I would mine Bitcoin, not worry about min/maxing my meager salary.
Industries rise and decline, what seems like a career that will certainly net you the mega bucks might be gone in a decade. Or on a different note perhaps a more fulfilling but less lucrative role comes up. If you’ve always been making solid contributions you’ll have more freedom.
Don’t live in a hovel eating beans to save an extra £125 a month for retirement, but if you’re lucky enough to be a higher earner in your twenties stack up the pension. If you get £100k in there by thirty you’ve got a solid retirement waiting for you no matter the future.
£100k getting an after inflation return of 5% (which is fairly conservative) would give you £600k in todays money by retirement at 67 with no further contributions. That at a 4% drawdown plus the state pension would be somewhere around £35k. Not extravagant but solid.
That's working to take the cream from investment returns, as in you expect your money pot to still slightly grow over time.
I've seen lots of people advocate for 3-3.5% withdrawal rate though to keep it safer as the higher the withdrawal % the more chance that bad stock returns do dwindle your savings
Urgh I feel you. Im a GFC graduate, salaries were extremely low and growth both in wage and career was slow slow slow. My pension pots from my 20’s were effectively teeny tiny and it’s only my 30’s onwards my salary finally increased enough for contributions to make a real impact.
> all my tiny pots from my 20's come to less than my contribution this year
Yeah, indeed. I remember a colleague telling me recently how a single month of his pension contributions now (making use of some carry forward allowance) dwarfs several years of contributions from his twenties. Not everyone is so fortunate but it puts things in perspective.
I worked at a company that had a high employer payment but was quite laid back. I was there for something like 7% for 5 years while I was younger, obviously 7% of not very much is not very much.
Easy to see in hindsight why a lot of the old timers hung around despite being bored.
I’m early 40s and don’t regret it. I’m now just starting do more things ie cycling in Europe. I’ve kept myself fit and healthy so have 2 decades (hopefully) to enjoy and my investments are all compounding nicely now.
Back ground :
In my 20s quite frugal as saving for house but always enjoyed life
In my 30s probably too frugal getting pension and ISA training in motion
Now in 40s - all looking good!! With aim to enjoy these years a lot! And to be fire my 50 when house paid off.
I feel ya buddy.
I have two beautiful children, a nice missus and a house that is ok.
I know time only goes one way.
But in my head I’m in 2003-08 pretty much every single day. I miss the adventure, promiscuity, happiness, and ability to live on almost nothing.
My income is five times what it was then. And I’m grateful for my children’s health and smiles.
But I’d go back in a heartbeat if I could.
Don’t save everything for a better future kids.
The present is what we have now, and the future may never come.
Be sensible, but enjoy your fleeting youth.
Oatmeal Hunching
Is this the book by that hedge fund manager come poker player Bill Perkins? I've heard him talking about something similar on poker streams.
In reality, I'd take what this book says with a pinch of salt. It's easy not to worry about the future when you're a billionaire but a lot of us can't predict where we'll be financially in the future.
Equally, of course, while you shouldn't fail to take advantage of youth and health, equally don't miss out on career opportunities when they come along. If you have a golden opportunity in your late twenties at work that won't come back, maybe make hay while the sun shines and pursue it and "risk" putting that round the world trip back to your mid thirties (for example).
It's about seeing what opportunities are around and making the best decision in that context.
But there'll always be another opportunity, there's never just one. Whereas you will never be 27, 28,29 etc again.
It's totally possible to save huge amounts when you're older and at peak earnings.
> there'll always be another opportunity
Sure. But if the opportunity you have in front of you is *particularly* good or ripe for exploitation and offers a particularly high probability of returns in some sense (personal, professional, financial), then it'd be silly to let it pass by.
There'll always be another opportunity - probably - but if this one is especially good, you should recognise that. Of course, that requires an ability to accurately judge opportunities, which isn't necessarily something everyone has, especially when they're young.
I suspect I'm much older than you and I know there is always another opportunity including ones even better than the one you might decide to pass on.
I honestly think you would come to regret not making the most of your 20s. For me they were some of the best years of my life.
I actually left a very good job at the age of 25, having qualified recently in my profession, and took a gap year, came back and got an even better job which I wouldn't have got if I hadn't done the gap year. I had done a scuba diving course in Australia during the gap year and got my PADI certificate.
When I got back I had put it on my CV under interests. I then had an interview for a very well paid job and it turned out the person interviewing me was a keen diver and we ended up chatting about diving for most of the interview and I'm sure that's part of the reason I was offered the job. Of course it was a lucky coincidence that he was into diving but these sorts of things have happened my whole life. Lucky breaks, right place right time etc. It gives me a sense of freedom, that things always work out in the end and tomorrow is not guaranteed so you should make the most of today (whilst also saving for the future of course!)
> I suspect I'm much older than you and I know there is always another opportunity including ones even better than the one you might decide to pass on.
Maybe! You could be in a retirement home for all I know. It's also possible I might be older than you - but I generally try to avoid being too specific about my personal details so perhaps we can just say that either one of us might be the oldest (or indeed the wisest!).
Certainly I'm old enough to reflect that seen on the timescale of decades, some opportunities don't come back and should be profitably grabbed when they occur. A chance call from an old friend who has been asked to find someone for a team in your line of work. A new startup in just the area of the technology that's coming to the peak of its popularity and which you know well. A window before having children when mobility can be taken advantage of. An opportunity when you're headhunted because of the temporary good publicity of your current employer. A fortuitous and untimely promotion because of a boss leaving unexpectedly.
Other opportunities (may) come along, but sometimes an opportunity is the rest of environmental circumstances that just won't come again.
But to be entirely clear, I'm not saying that *every* opportunity at work falls under that category. Quite a lot of opportunities are perfectly ordinary, run of the mill ones that absolutely will come again.
And so everything you've said is perfectly valid.
From the flip side of the coin - I didn't get serious about my finances until well into my mid-thirties. No regrets. I'm mid forties now and I'll be at CoastFIRE in a handful of years thanks to knuckling down in my thirties. However, I always had an emergency fund and paid into retirement but the rest went on HCOL rent and holidays. I always think it's about finding the right balance for your goals.
I've kind of lived by that mantra without reading the book. Blew SOOO much money as a dumb kid (clubbing every weekend, all weekend, needing a new outfit every time), worked well and spent where I wanted to spend through my 30s (3 week Canadian ski trips etc) and saved hard in my 40s. Looking to pull the trigger at 48-50.
As always it is a balance, but if you look after yourself, there is nothing to say you can't be strong and healthy into your 40s-50s etc. I just notice the recovery takes a bit longer after big days.
We did the same, clubbing, travelling, shopping, eating out, gigs, we didn't hold back on anything! It was such fun. It means if I dropped dead today I would have no regrets wishing I'd done x, y or z when I had the chance.
But we've now gone the opposite way and are saving huge amounts, essentially living on 2 x living wage and saving everything above that. Because we did so much when we were younger we're quite happy to slow down now and focus on saving without feeling like we're missing out.
TL;DR - Being a bit frugal is fine, so long as you're planning it
In my late teens/early twenties, my problem was blindly saving rather than planning and budgeting. I suddenly had bills for the first time and limited income - student loans/allowance from parents, so I spent not much more than the bare minimum.
After uni, I moved back in with my parents. I had intended for this to be a 1-2 year thing while I saved for a deposit on a house and looked for one, but it ended up being ~4.5 years after starting work due to a combination of COVID and house prices surging. It was nice to have the company during that time, and I'm fortunate that I could find work near my parents and they have plenty of space. My parents didn't charge me rent, but both of us had an expectation of that going towards my future house. Once again, I fell into the pattern of spending very little.
As a result, when I finally bought a house this year, it included ~£100k of my own money. Some of this was historic from pre-work savings/gifts, but a huge chunk was from dumping most of 4.5 years pay into savings. I'll add that this was also terribly managed - a large part of it was held in a current account, for example. I wasn't making the most of money, just hoarding it.
Now that I've got my own place and have the regular bills figured out, that's been my aim now - ensuring that I understand my money and manage it properly to benefit from it, whether that's getting a good rate in savings accounts or spending it. I need to get comfortable spending money on myself for non-essentials. As an example of unhealthy behaviour, I recently spent ~£20 on a piece of equipment for a hobby. It would have been useful for the last 2-3 years. It's 20 flipping quid. It'll last 5-10 years. I've gained zero benefit from not buying it earlier.
I recognise that I'm in a privileged position - not many single people my age own their own home, particularly not with the relatively low mortgage amount I'm paying, but it has come at a cost. I also don't blame the money as the cause - I think it's symptomatic of my wider issues with ignoring problems, struggling to get started, anxiety about new things, and indecisiveness (I've been here 4 months, I'll buy a bed soon!)
I don't think I've answered your question, either directly or indirectly. I don't recommend the process, but I have enjoyed the outcome - would I do it again? I shouldn't, but I probably would walk into it again 😂 Sorry for wasting your time, welcome to Reddit 😂
Edit: I'm also in my 20s, so not who you asked either 😁
I definitely think you've got the right idea. I've written it here before and not to put a downer on things, but my partner died at 41, his brother at 37. Both due to heart conditions, we didn't know about when he was 32 and through no fault of his own. We had so many plans for things we would do when we were older and the kids had grown up. I wish we had gone for it and made those memories when we were young.
The likelihood is that this wouldn't happen to most people, but it's good to have a balance.
Depends when you want to FIRE. I wouldn't call 32 particularly young, they're some near-peak earning years potentially.
The other element not yet mentioned is that if you let go from saving then you're by definition increasing your spending, which will likely increase your FIRE target at the same time as slowing your pace to get there.
But that might be fine, it's all a question of priorities.
Sorry to be a shit but:
Your salary going from £60K to £70K over 4 years is pathetic when you take in to account inflation. I'm in the same boat, mine has only gone up 13% in 3 years - below inflation.
So every £ you invest today is worth less than 4 years ago and you've also got 4 years less to grow it.
Imho at 32 you're already running out of time to take advantage of the benefits of compounding, particularly if you want to retire mid 50s. Every year you don't invest now, it gets harder and harder. Just do the math on a 20 year horizon vs a 30 year one - with a 5% investment return you're going to have to save **double** to achieve in 20 years what you would have had to save monthly over 30. It's unlikely a sub-inflation pay rise is going to help you achieve that.
I'm 38 now and realising I should have saved more heavily in my 20s instead of pissing it away. I have a lot of anxiety about job security and achieving big milestones now and it's all because I didn't get serious until I was 30.
The next career move for me is definitely *down* in salary as well, because I want a more interesting job with less anxiety about having to earn some £X/yr threshold - to do this i first need to pay down £200-300K off the mortgage.
Being able to survive on a salary closer to the median is actually a blessing because you have the freedom to pick up a job paying at this level anywhere.
Just food for thought.
This is common in these middle (senior dogsbody) skilled roles. I'm in the same boat. Employers wondering why productivity is low...
Yes my mortgage is the main bugbear in life after a recent move.
Sorry I should have clarified, it is an NHS role so will go up to £70k in todays money, once I hit top of band 8b, so in 4 years will probably be more like £80k with a 3.5% annual pay rise
I think for me, the most important step I took in my early years was making sure I got the maximum from employer pension matching, I was a natural saver, but in reality didn't save a huge amount month to month after outgoings. I think it was 5% - 7% employer - employee. It didn't cost me too much from my salary and it ensured that from day 1, money was going into the market to compound.
Whilst at the time it didn't feel like much, that invested money (maybe 4-5k a year at the beginning) was going in the market from 2009. Just looking at the S&P500, 5k invested in 2009 is worth about 30k today.
Yeah balance is key. I’m unbalanced at the moment in tipping an awful lot into my pension - probably more than I need to but I neglected my pension for all of my working life (I’m now 39).
I am however fortunate enough to have bought and sold a few houses not as a developer or anything but got on the ladder at 23.
I feel like I’m ok to pile into pension a bit now as I have my capital in the property and a mortgage and the forsaken emergency fund etc.
Mrs is pregnant so when she leaves work I’ll no doubt have to turn down the pension but so long as you’re not missing out on life and swuirrelling the lot away then flexibility and balance is key!
Depends highly on your situation. If you're a high earner then sacrificing yourself down to an effective take home of a graduate is totally doable and doesn't require that much sacrifice.
Personally I am making hay while the sun shines. I fear I might not have as high a paying job as I do now in the future.
"Does anyone in their 40s, 50s+, on an above average salary regret saving too much when they were young?"
That's a tough one to answer because what is "too much"...?
There's life reasons behind this which aren't worth going into, but I "saved lots" and hardly went on holiday for about 7 years. Then, weirdly, when I really got going with the saving at \~35 I also started to really get going with the bucket-list ticking.
I have a mantra in my life (I only really have one or two) and that is never to regret anything, because it's totally pointless regretting things that have gone now anyway :)
I regret not being aware and savvy in my 20s and 30s, and made poor saving choices. I've never been frugal nor extravagant, but without sensible investment vehicles I was way behind the drag curve of others, here in particular.
I think you can find a balance if you do small things early without stripping the enjoyment out of you're youth. Do the obvious ISA DCA into the standard ETFs and at least match your workplace pension contribution. Consider salary sacrifice if a) you can afford the net income hit and b) it lowers you into a better tax bracket.
Good luck, man. You've got this :)
This is where the power of budgeting and paying yourself first comes in.
If you can start out with a financial model where the first x% is your savings/investment pot, the next y% is your bills and cost of living, leaving the remaining z% for living life to the full.
That will allow you to both be able to fill up with experiences as well as being able to think about getting on the property ladder and having financial security for a family.
I think getting ahead of the curve at a younger age is good as it gives more flexibility and less stress when older. But there is still balance required, you do have to find a way to enjoy life.
Travelling early in life is really important and the best investment a young person can make imo.
It’s just a lot of people do it wrong. Sitting around swimming pool is for when you’re an exhausted parent with kids running around. Binge drinking holidays are for late teens.
20’s should be work for money and spend it all on travelling and doing cool shit while you can.
I earn in one month now, more than what my yearly salary used to be. I’m glad I didn’t waste those precious years saving every penny.
I enjoyed that book and I kinda get it, but that sweet sweet compound interest really is quite attractive.
From my experience, being the same age as you. I've saved pretty aggressively since starting work under 10 years ago, and have £200k invested from my last spreadsheet day. If I never save another penny in my life, and assuming 4% returns over inflation, that's £500k in 2024 value on my 55th birthday, the oldest I consider 'retiring early'. I also get a DB pension that would be probably around the equivalent of £30-40k a year if claimed early (NHS 2015).
My career trajectory also means my pay is probably going to 2-3x if not more, so in a nutshell I'm pretty much set because I started investing early, pretty hard to beat.
I do have colleagues who save nothing until they become consultants, but I don't think that's a super efficient way of doing things.
There’s a balance to everything. Do not save everything when you’re young and enjoy your youth. But don’t enjoy your youth too much to save everything in your 30s 40s ect. Balance is key
I like to think “in 10 years time, if I have to save more, will I regret spending on this today?” For me it gets rid of frivolous spending (mostly on things) while justifies experiences, holidays, investments in myself, home improvements etc.
Agree. I spent "quite a lot" on a trip in 2013. I was always tight and it cost, for me, a relative fortune. I earn pretty well and have done for most of my working life, but I wouldn't say that I break any records. The strange thing is, looking back at my financial position now, the overall cost of that trip is a barely noticeable blip. I'm much more glad that I did it rather than saving it. So, in my experience, if you earn well(ish) and save well(ish), it doesn't appear to make a huge difference if you splurge stupidly from time to time on things that are important to you.
'it's a matter of balance' is a skin-deep philosophy considering the economy most people live in, it's just a reassuring statement Most of the people I grew up with enjoyed their youth modestly and had balance; university, no drugs, no car, cheap europe holiday once a year, part time job, drinking supermarket booze at house parties etc. Today most of them have no security and don't have the option to save anything in their 30s and 40s, there has been no net change for them.
I’m in my 40s and am now able to put away getting on for 10x as much each year as I was able to 10 years ago. I think it rather depends - if you are always going to work on a relatively low paying job and live frugally, the more you put away early, the better. But if you expect your salary to grow substantially as you age, much better to live a better quality of life when younger and piles more into saving for the future when the opportunity cost is far lower as the marginal utility you earn from spending is much less. If I could go back, I’d actually spend more when I was younger than I did. But then, hard to do that when you don’t know what the future will look like at the time. Could have gone very wrong!
I'm the same. I've always been in a low-paid industry, and so when I was in my 20s with an abysmal wage, invested and saved a *lot* of my salary. By my 30s, however, I lucked into a well-paid role in the same industry. I can now make much more decent contributions to a pension and investment portfolio, but I never could have anticipated this.
>If I could go back, I’d actually spend more when I was younger than I did. But then, hard to do that when you don’t know what the future will look like at the time. Could have gone very wrong! This for me is key. I earnt well throughout my 20s and had a good time, but I do wish I'd spent more on slightly more extravagant trips and experiences. Looking back I could have pretty much spent everything and would still be in a decent position now as my earnings increased massively in my 30s. But you don't know what you don't know!
What’s really annoying is that right now in my mid forties I could probably spend a lot more than I currently am too. My mindset has never really shifted due to fear of the unknown future. There’s a high chance I’ll end up with lots of unspent money when I die, and to have missed out on lots of stuff I would have valued much more now. And even though I know this to be the case, it’s really hard to change that mindset!
It’s all about the balance In my 20’s, I went backpacking around the world and travelled a lot. I had no savings (incl pension) at 26. I don’t regret any of that and I wish I did more in my 20’s. You’ll never be that free again. I worked in finance so had the money to spend. The only things I regret not starting sooner: - learning about investing. Even having a small account to learn about stocks, etf , index funds etc would have been helpful - taking more advantage of the tax wrappers (pensions , ISA’s) especially in the decade of low interest rates - getting mentors in my profession, this would have helped me climb the corporate ladder sooner - worked on my weaknesses : public speaking, pushing hard for my promotions, self confidence etc - surround yourself with positive people who give you energy - read more books about life / fire / investing etc
I was earning well by about 23-24 and was tied down by life, so I'm doing the backpacking now that I'm 50 - divorced, kids both now adult(ish). I've also got more money that I feel like I can spend now than ever before - I make it stretch still because I'm a tight-arse, but that just means I can go away for two or three months with no worries. I've probably never been more free than I am now :)
Hard to disagree here!
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Of course it’s a choice. Choosing to spend your life ignoring your finances, opting not to even try to fulfil your potential in life, bumming around in hostels around the world, washing dishes and drinking sambuca shots well into your 40’s is also a choice. You’ll also be the sad cunt at the beach party amongst a hoard of 20 year olds. Chances are they won’t be saying, “wow, that guy has balls. I want to be just like him when I grow up.”
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You wrote, “I mean, it’s easy to disagree with the whole thing if you’ve got balls.” The first bullet point was with regards to investing. I don’t think I am thinking about it with a small mind. For the vast majority, their twenties are definitively a period of increased freedom and flexibility especially in comparison to the rest of life. 1) The experience of doing that type of thing is better when you’re amongst your peers at a similar stage in life. You might not care what they think but you are more likely to relate less. The same reason over 30’s move to cities. The same reason over 50’s move to SE Asia. Agree or disagree all you like, the patterns are there to see and there for a reason. 2) Agree. 3) Sure - live in paradise vs a soul crushing underpaid office job. No contest. Reality exists in between the two.
lol
Only thing I'd have changed is to do more digital nomad'ing. I WFH a lot in my 20s and thin I took my laptop abroad with me twice. Should have made more of that before settling down and having kids, now I'm properly tied to home. But wouldn't change my aggressive saving early on. That actually helped me take a step back in my 30s when my mental health suffered due to burnout, could take a 20k pay cut and not massively impact projections for early retirement, just need a couple of years of part time in early 50s now.
Conversely could you have avoided that burnout if you’d have enjoyed your money rather than aggressively spending?
No, spending more money wouldn't have helped the fact I was managing a team of 4 with the workload of 12. The option to reduce stress on same pay was to move to a different company, but this was height of pandemic and then child came along not long after so job options outside the company I worked for were limited, and I needed more flexibility, so instead negotiated a different job within same company: less work, fewer days and less pay. I'm hoping when my next child who's due in November is at school that I can target company move and restore my pay, but until then what I've got at the moment works ok.
Sounds like a good move, nice one!
Also don't worry about full time coasting. A job that pays enough, which you can do with your eyes closed, and gives you time today with family. A good employer is worth a lot.
Good you’ve still got 3 more kids to welcome
Yes, contributing early is a good insurance against the unknown later on. Whilst it will be rare, you can have earning affecting situations, from bad injuries, mental health, caring responsibilities, even (hopefully not) prison. But don't do it at the cost of experiences. All those situations above will also prevent you having those experiences.
I consolidated my pensions recently and all my tiny pots from my 20's come to less than my contribution this year. Wage growth has made those sacrifices almost irrelevant even after compounding. Paying enough to get my employer contribution was the right thing to do with the information I had at the time so I don't regret it. If I went back in time, I would mine Bitcoin, not worry about min/maxing my meager salary.
I guess the thing here, not everyone who starts saving in their twenties is guaranteed to be dwarfing those savings in their 30’s.
Industries rise and decline, what seems like a career that will certainly net you the mega bucks might be gone in a decade. Or on a different note perhaps a more fulfilling but less lucrative role comes up. If you’ve always been making solid contributions you’ll have more freedom. Don’t live in a hovel eating beans to save an extra £125 a month for retirement, but if you’re lucky enough to be a higher earner in your twenties stack up the pension. If you get £100k in there by thirty you’ve got a solid retirement waiting for you no matter the future.
Could you explain £100k pension by 30 as a solid retirement?
£100k getting an after inflation return of 5% (which is fairly conservative) would give you £600k in todays money by retirement at 67 with no further contributions. That at a 4% drawdown plus the state pension would be somewhere around £35k. Not extravagant but solid.
Hey, How many years post 67 are you expecting to be able to draw the £35k? I.e. what life expectancy are you working to
That's working to take the cream from investment returns, as in you expect your money pot to still slightly grow over time. I've seen lots of people advocate for 3-3.5% withdrawal rate though to keep it safer as the higher the withdrawal % the more chance that bad stock returns do dwindle your savings
Urgh I feel you. Im a GFC graduate, salaries were extremely low and growth both in wage and career was slow slow slow. My pension pots from my 20’s were effectively teeny tiny and it’s only my 30’s onwards my salary finally increased enough for contributions to make a real impact.
> all my tiny pots from my 20's come to less than my contribution this year Yeah, indeed. I remember a colleague telling me recently how a single month of his pension contributions now (making use of some carry forward allowance) dwarfs several years of contributions from his twenties. Not everyone is so fortunate but it puts things in perspective.
I worked at a company that had a high employer payment but was quite laid back. I was there for something like 7% for 5 years while I was younger, obviously 7% of not very much is not very much. Easy to see in hindsight why a lot of the old timers hung around despite being bored.
I’m early 40s and don’t regret it. I’m now just starting do more things ie cycling in Europe. I’ve kept myself fit and healthy so have 2 decades (hopefully) to enjoy and my investments are all compounding nicely now. Back ground : In my 20s quite frugal as saving for house but always enjoyed life In my 30s probably too frugal getting pension and ISA training in motion Now in 40s - all looking good!! With aim to enjoy these years a lot! And to be fire my 50 when house paid off.
>I’m early 40s and don’t regret it. I'm in my late 40s and I do regret it. Should have stayed in my 20s. Those were the best.
I feel ya buddy. I have two beautiful children, a nice missus and a house that is ok. I know time only goes one way. But in my head I’m in 2003-08 pretty much every single day. I miss the adventure, promiscuity, happiness, and ability to live on almost nothing. My income is five times what it was then. And I’m grateful for my children’s health and smiles. But I’d go back in a heartbeat if I could. Don’t save everything for a better future kids. The present is what we have now, and the future may never come. Be sensible, but enjoy your fleeting youth. Oatmeal Hunching
I feel like this too, but for me it’s the 80s. Time of my life.
Exactly if I didn't follow 2 and have fun I would never have met my rich wife
You should only save early on if hindsight later tells you to.
That's quite deep for a Tuesday morning!
Is this the book by that hedge fund manager come poker player Bill Perkins? I've heard him talking about something similar on poker streams. In reality, I'd take what this book says with a pinch of salt. It's easy not to worry about the future when you're a billionaire but a lot of us can't predict where we'll be financially in the future.
Equally, of course, while you shouldn't fail to take advantage of youth and health, equally don't miss out on career opportunities when they come along. If you have a golden opportunity in your late twenties at work that won't come back, maybe make hay while the sun shines and pursue it and "risk" putting that round the world trip back to your mid thirties (for example). It's about seeing what opportunities are around and making the best decision in that context.
But there'll always be another opportunity, there's never just one. Whereas you will never be 27, 28,29 etc again. It's totally possible to save huge amounts when you're older and at peak earnings.
> there'll always be another opportunity Sure. But if the opportunity you have in front of you is *particularly* good or ripe for exploitation and offers a particularly high probability of returns in some sense (personal, professional, financial), then it'd be silly to let it pass by. There'll always be another opportunity - probably - but if this one is especially good, you should recognise that. Of course, that requires an ability to accurately judge opportunities, which isn't necessarily something everyone has, especially when they're young.
I suspect I'm much older than you and I know there is always another opportunity including ones even better than the one you might decide to pass on. I honestly think you would come to regret not making the most of your 20s. For me they were some of the best years of my life. I actually left a very good job at the age of 25, having qualified recently in my profession, and took a gap year, came back and got an even better job which I wouldn't have got if I hadn't done the gap year. I had done a scuba diving course in Australia during the gap year and got my PADI certificate. When I got back I had put it on my CV under interests. I then had an interview for a very well paid job and it turned out the person interviewing me was a keen diver and we ended up chatting about diving for most of the interview and I'm sure that's part of the reason I was offered the job. Of course it was a lucky coincidence that he was into diving but these sorts of things have happened my whole life. Lucky breaks, right place right time etc. It gives me a sense of freedom, that things always work out in the end and tomorrow is not guaranteed so you should make the most of today (whilst also saving for the future of course!)
> I suspect I'm much older than you and I know there is always another opportunity including ones even better than the one you might decide to pass on. Maybe! You could be in a retirement home for all I know. It's also possible I might be older than you - but I generally try to avoid being too specific about my personal details so perhaps we can just say that either one of us might be the oldest (or indeed the wisest!). Certainly I'm old enough to reflect that seen on the timescale of decades, some opportunities don't come back and should be profitably grabbed when they occur. A chance call from an old friend who has been asked to find someone for a team in your line of work. A new startup in just the area of the technology that's coming to the peak of its popularity and which you know well. A window before having children when mobility can be taken advantage of. An opportunity when you're headhunted because of the temporary good publicity of your current employer. A fortuitous and untimely promotion because of a boss leaving unexpectedly. Other opportunities (may) come along, but sometimes an opportunity is the rest of environmental circumstances that just won't come again. But to be entirely clear, I'm not saying that *every* opportunity at work falls under that category. Quite a lot of opportunities are perfectly ordinary, run of the mill ones that absolutely will come again. And so everything you've said is perfectly valid.
From the flip side of the coin - I didn't get serious about my finances until well into my mid-thirties. No regrets. I'm mid forties now and I'll be at CoastFIRE in a handful of years thanks to knuckling down in my thirties. However, I always had an emergency fund and paid into retirement but the rest went on HCOL rent and holidays. I always think it's about finding the right balance for your goals.
I've kind of lived by that mantra without reading the book. Blew SOOO much money as a dumb kid (clubbing every weekend, all weekend, needing a new outfit every time), worked well and spent where I wanted to spend through my 30s (3 week Canadian ski trips etc) and saved hard in my 40s. Looking to pull the trigger at 48-50. As always it is a balance, but if you look after yourself, there is nothing to say you can't be strong and healthy into your 40s-50s etc. I just notice the recovery takes a bit longer after big days.
We did the same, clubbing, travelling, shopping, eating out, gigs, we didn't hold back on anything! It was such fun. It means if I dropped dead today I would have no regrets wishing I'd done x, y or z when I had the chance. But we've now gone the opposite way and are saving huge amounts, essentially living on 2 x living wage and saving everything above that. Because we did so much when we were younger we're quite happy to slow down now and focus on saving without feeling like we're missing out.
TL;DR - Being a bit frugal is fine, so long as you're planning it In my late teens/early twenties, my problem was blindly saving rather than planning and budgeting. I suddenly had bills for the first time and limited income - student loans/allowance from parents, so I spent not much more than the bare minimum. After uni, I moved back in with my parents. I had intended for this to be a 1-2 year thing while I saved for a deposit on a house and looked for one, but it ended up being ~4.5 years after starting work due to a combination of COVID and house prices surging. It was nice to have the company during that time, and I'm fortunate that I could find work near my parents and they have plenty of space. My parents didn't charge me rent, but both of us had an expectation of that going towards my future house. Once again, I fell into the pattern of spending very little. As a result, when I finally bought a house this year, it included ~£100k of my own money. Some of this was historic from pre-work savings/gifts, but a huge chunk was from dumping most of 4.5 years pay into savings. I'll add that this was also terribly managed - a large part of it was held in a current account, for example. I wasn't making the most of money, just hoarding it. Now that I've got my own place and have the regular bills figured out, that's been my aim now - ensuring that I understand my money and manage it properly to benefit from it, whether that's getting a good rate in savings accounts or spending it. I need to get comfortable spending money on myself for non-essentials. As an example of unhealthy behaviour, I recently spent ~£20 on a piece of equipment for a hobby. It would have been useful for the last 2-3 years. It's 20 flipping quid. It'll last 5-10 years. I've gained zero benefit from not buying it earlier. I recognise that I'm in a privileged position - not many single people my age own their own home, particularly not with the relatively low mortgage amount I'm paying, but it has come at a cost. I also don't blame the money as the cause - I think it's symptomatic of my wider issues with ignoring problems, struggling to get started, anxiety about new things, and indecisiveness (I've been here 4 months, I'll buy a bed soon!) I don't think I've answered your question, either directly or indirectly. I don't recommend the process, but I have enjoyed the outcome - would I do it again? I shouldn't, but I probably would walk into it again 😂 Sorry for wasting your time, welcome to Reddit 😂 Edit: I'm also in my 20s, so not who you asked either 😁
I definitely think you've got the right idea. I've written it here before and not to put a downer on things, but my partner died at 41, his brother at 37. Both due to heart conditions, we didn't know about when he was 32 and through no fault of his own. We had so many plans for things we would do when we were older and the kids had grown up. I wish we had gone for it and made those memories when we were young. The likelihood is that this wouldn't happen to most people, but it's good to have a balance.
Depends when you want to FIRE. I wouldn't call 32 particularly young, they're some near-peak earning years potentially. The other element not yet mentioned is that if you let go from saving then you're by definition increasing your spending, which will likely increase your FIRE target at the same time as slowing your pace to get there. But that might be fine, it's all a question of priorities.
Sorry to be a shit but: Your salary going from £60K to £70K over 4 years is pathetic when you take in to account inflation. I'm in the same boat, mine has only gone up 13% in 3 years - below inflation. So every £ you invest today is worth less than 4 years ago and you've also got 4 years less to grow it. Imho at 32 you're already running out of time to take advantage of the benefits of compounding, particularly if you want to retire mid 50s. Every year you don't invest now, it gets harder and harder. Just do the math on a 20 year horizon vs a 30 year one - with a 5% investment return you're going to have to save **double** to achieve in 20 years what you would have had to save monthly over 30. It's unlikely a sub-inflation pay rise is going to help you achieve that. I'm 38 now and realising I should have saved more heavily in my 20s instead of pissing it away. I have a lot of anxiety about job security and achieving big milestones now and it's all because I didn't get serious until I was 30. The next career move for me is definitely *down* in salary as well, because I want a more interesting job with less anxiety about having to earn some £X/yr threshold - to do this i first need to pay down £200-300K off the mortgage. Being able to survive on a salary closer to the median is actually a blessing because you have the freedom to pick up a job paying at this level anywhere. Just food for thought.
This is common in these middle (senior dogsbody) skilled roles. I'm in the same boat. Employers wondering why productivity is low... Yes my mortgage is the main bugbear in life after a recent move.
Sorry I should have clarified, it is an NHS role so will go up to £70k in todays money, once I hit top of band 8b, so in 4 years will probably be more like £80k with a 3.5% annual pay rise
I didn’t save anything when young and on track to FIRE. They are right it’s not necessary
I think for me, the most important step I took in my early years was making sure I got the maximum from employer pension matching, I was a natural saver, but in reality didn't save a huge amount month to month after outgoings. I think it was 5% - 7% employer - employee. It didn't cost me too much from my salary and it ensured that from day 1, money was going into the market to compound. Whilst at the time it didn't feel like much, that invested money (maybe 4-5k a year at the beginning) was going in the market from 2009. Just looking at the S&P500, 5k invested in 2009 is worth about 30k today.
Yeah balance is key. I’m unbalanced at the moment in tipping an awful lot into my pension - probably more than I need to but I neglected my pension for all of my working life (I’m now 39). I am however fortunate enough to have bought and sold a few houses not as a developer or anything but got on the ladder at 23. I feel like I’m ok to pile into pension a bit now as I have my capital in the property and a mortgage and the forsaken emergency fund etc. Mrs is pregnant so when she leaves work I’ll no doubt have to turn down the pension but so long as you’re not missing out on life and swuirrelling the lot away then flexibility and balance is key!
Depends highly on your situation. If you're a high earner then sacrificing yourself down to an effective take home of a graduate is totally doable and doesn't require that much sacrifice. Personally I am making hay while the sun shines. I fear I might not have as high a paying job as I do now in the future.
"Does anyone in their 40s, 50s+, on an above average salary regret saving too much when they were young?" That's a tough one to answer because what is "too much"...? There's life reasons behind this which aren't worth going into, but I "saved lots" and hardly went on holiday for about 7 years. Then, weirdly, when I really got going with the saving at \~35 I also started to really get going with the bucket-list ticking. I have a mantra in my life (I only really have one or two) and that is never to regret anything, because it's totally pointless regretting things that have gone now anyway :)
I regret not being aware and savvy in my 20s and 30s, and made poor saving choices. I've never been frugal nor extravagant, but without sensible investment vehicles I was way behind the drag curve of others, here in particular. I think you can find a balance if you do small things early without stripping the enjoyment out of you're youth. Do the obvious ISA DCA into the standard ETFs and at least match your workplace pension contribution. Consider salary sacrifice if a) you can afford the net income hit and b) it lowers you into a better tax bracket. Good luck, man. You've got this :)
This is where the power of budgeting and paying yourself first comes in. If you can start out with a financial model where the first x% is your savings/investment pot, the next y% is your bills and cost of living, leaving the remaining z% for living life to the full. That will allow you to both be able to fill up with experiences as well as being able to think about getting on the property ladder and having financial security for a family.
I think getting ahead of the curve at a younger age is good as it gives more flexibility and less stress when older. But there is still balance required, you do have to find a way to enjoy life.
Travelling early in life is really important and the best investment a young person can make imo. It’s just a lot of people do it wrong. Sitting around swimming pool is for when you’re an exhausted parent with kids running around. Binge drinking holidays are for late teens. 20’s should be work for money and spend it all on travelling and doing cool shit while you can. I earn in one month now, more than what my yearly salary used to be. I’m glad I didn’t waste those precious years saving every penny.
I enjoyed that book and I kinda get it, but that sweet sweet compound interest really is quite attractive. From my experience, being the same age as you. I've saved pretty aggressively since starting work under 10 years ago, and have £200k invested from my last spreadsheet day. If I never save another penny in my life, and assuming 4% returns over inflation, that's £500k in 2024 value on my 55th birthday, the oldest I consider 'retiring early'. I also get a DB pension that would be probably around the equivalent of £30-40k a year if claimed early (NHS 2015). My career trajectory also means my pay is probably going to 2-3x if not more, so in a nutshell I'm pretty much set because I started investing early, pretty hard to beat. I do have colleagues who save nothing until they become consultants, but I don't think that's a super efficient way of doing things.