# savings - how much



## zenzen (31 Aug 2007)

how much should a 26 year old have saved ideally??? what the norm?


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## ClubMan (31 Aug 2007)

There is no norm - it depends on so many different factors - e.g. your income, your current personal/financial situation, your short/medium/long term plans which need to be funded somehow etc. Perhaps if you post more details about your own situation people might be able to comment.


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## GeneralZod (31 Aug 2007)

I'd be willing to bet the modal savings for a representative sample of 26 year olds is very low indeed. 

If you google for [broken link removed] you'll get various ones telling you how wealthy you should be for your age and income level.

Clearly these are only for amusement value as they're based on population averages and don't really  apply in any individual's case.


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## ft5j60j (3 Sep 2007)

€160k savings


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## ClubMan (3 Sep 2007)

zenzen said:


> how much should a 26 year old have saved ideally??? what the norm?





ft5j60j said:


> €160k savings


Why should a 26 year old ideally have that specific amount? Why do you think that this amount is the norm?


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## PMU (3 Sep 2007)

It all depends on your financial goal and how long you have to achieve it. If it’s financial freedom later in life you need to calculate want kind of pension or retirement fund you need and then work out how much you need to save each year towards it; if it’s buying a house in the next few years you need to save enough to cover the deposit, legal fees, insurance, etc. So it’s nothing to do with your age, it’s all to do with your short, medium and long term financial goals.


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## Perplexed (3 Sep 2007)

A lot of 26yr olds have no savings but a lot of debt. Some have had to borrow to do Post Grads etc & are still paying them off. The Irish are lucky as students in the UK & US have much heftier college fees.
Count yourself lucky if you have neither savings or debts. It's a great place to start.
Then, like PMU says think of what your own specific goals are. There's no one fit formula for everyone.


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## foxylady (4 Sep 2007)

I have two siblings, one 26 who is loaded and the other 30 who spends money like its going out of fashion, so everyone is different really.


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## GeneralZod (4 Sep 2007)

How loaded is that? Lots of assets accumulated and high income? Or just reasonable income and living within their means. Are they a "prodigious accumulator of wealth" at 26?


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## foxylady (5 Sep 2007)

GeneralZod said:


> How loaded is that? Lots of assets accumulated and high income? Or just reasonable income and living within their means. Are they a "prodigious accumulator of wealth" at 26?


 
By loaded I really just mean a lot of money saved in various different accounts , not richard branson standards or 160k like mention earleir either


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## ft5j60j (5 Sep 2007)

just alot of hard work and a ok job, got me here


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## GeneralZod (5 Sep 2007)

ft5j60j said:


> just alot of hard work and a ok job, got me here



Over what period was that 160k accumulated and what was the asset allocation? Very impressive.


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## ft5j60j (5 Sep 2007)

since i was a young wee lad! about 10 years of summer jobs then started working full time in 1999 

pension and car also, no house


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## extopia (5 Sep 2007)

To be a so-called Prodigious Accumulator of Wealth at 26, you'd need to have a net worth of 5.2 times your annual salary (before tax, of course). Inherited wealth doesn't count, by the way, so subtract that.

(By the way, that formula is not based on any population averages, it's based on the book "The Millionaire Next Door")


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## ft5j60j (5 Sep 2007)

but im still not do so bad all earned money, noting inherited


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## GeneralZod (6 Sep 2007)

How much of that 160k is capital appreciation achieved over the ten years and are you excluding pension savings from that total?

I assume you skipped 3rd level and went straight into work to be in such a good position early on.


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## ft5j60j (6 Sep 2007)

Yes my pension is seperate to this, skipped college alrite  

sorry whats capital appreciation?


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## demoivre (6 Sep 2007)

ft5j60j said:


> Yes my pension is seperate to this, skipped college alrite
> 
> sorry whats capital appreciation?



You've done remarkably well all right without understanding capital appreciation!

110k on 21/03/06 increasing to
130k on 09/09/06 increasing to
145k on 06/06/2007 dropping to
130k in 08/08/2007 and then rising to  
160k in less than a month ! - and you work in IT - I thought you were Rio Ferdinand .
I had no interest in savings in hard cash in my 20s, in fact I owed £60000 when I was 25 which was borrowings for the first commercial premises I ever bought ( many thought I was mad) - the rent roll from it is currently €52000 p.a.. I'm in my early forties now and am still borrowing for various projects - at the end of the day it's about net worth.


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## ClubMan (6 Sep 2007)

So I guess this thread is not so much about what level of savings somebody of 26 should have (a pointless question in my opinion) and more about people flaunting what they actually have?  

Impressive data mining though _demoivre_!


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## demoivre (6 Sep 2007)

> So I guess this thread is not so much about what level of savings somebody of 26 should have (a pointless question in my opinion)



I agree because it doesn't take account of the overall picture, which was the purpose of the example I used.



> more about people flaunting what they actually have?



That certainly wasn't my intention anyway - as I said already the purpose of the example was to show that because one didn't have much savings in one's twenties doesn't mean one doesn't have or isn't accumulating wealth - personally don't think owning one  commercial premises would be a brag.... ...............unless it was Harrods .


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## KathScan (6 Sep 2007)

Saw a financial advisor (Alvin ???) on TV before and he used recommend that everybody aim to have three months salary saved just in case they should lose their job.


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## ClubMan (6 Sep 2007)

Alvin Hall I presume?


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## KathScan (6 Sep 2007)

ClubMan said:


> Alvin Hall I presume?


 
That's the man. Presented Your Money or Your Life on BBC (pre Eddie Hobbs).


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## GeneralZod (6 Sep 2007)

ft5j60j said:


> sorry whats capital appreciation?



It's the return on your investment. For pure savings it's just the interest paid. For shares or property it's the increase in value.

Judging from the posts demoivre dug up you've kept it in savings and have been earning at a fair pace.


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## ft5j60j (6 Sep 2007)

Now i understand  get just interst from savings no property yet! save at a fast pace!


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## ClubMan (7 Sep 2007)

What are you saving for/towards?


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## ft5j60j (7 Sep 2007)

Building a house for cash no mortgage  

or just take out a loan rather than a mortgage ... 

and then start again


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## GeneralZod (7 Sep 2007)

ft5j60j said:


> Building a house for cash no mortgage
> 
> or just take out a loan rather than a mortgage ...
> 
> and then start again



Are you having us on? You'd take out a (presumably unsecured) personal loan to pay for a house?

That's a rather conservative approach to risk. 

Better to take out a manageable mortgage and then make loads of extra repayments to reduce the principal and minimise the interest bill.  Then sit back with the reasonable expectation over several years of some worthwhile "capital appreciation" on the total value of the house.


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## ClubMan (7 Sep 2007)

As above - if you mean an unsecured loan then that makes no sense compared to a mortgage secured on the property and most likely at a much lower rate of interest. Apart from the relative interest costs, why would you not exploit the fact that you can "leverage" here by securing a mortgage on the property?


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## ein (8 Sep 2007)

_"Multiply your age times your income, and divide by 10. That should equal your net worth -- all you own minus all you owe."_

Based on the above I should be worth 196,000, based on the same, I'm actualy worth 169,000 not doing to bad for a 28yr old 

I hope to do the same as you ft5j60j, just I'll get a mortgage if needs be not a personal loan.


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## ClubMan (8 Sep 2007)

ein said:


> _"Multiply your age times your income, and divide by 10. That should equal your net worth -- all you own minus all you owe."_


 Where does this come from? Sounds meaningless to me.


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## extopia (8 Sep 2007)

Here's one explanation.


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## extopia (8 Sep 2007)

ein said:


> Based on the above I should be worth 196,000, based on the same, I'm actualy worth 169,000 not doing to bad for a 28yr old



The whole point of this particular formula is that it's age independent. You're close, but below the expected value.


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## ft5j60j (8 Sep 2007)

I reckon my self and EIn have good savings for out ages?

Ein do you own a car/ house rent?


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## Stifster (8 Sep 2007)

I had, hmm let me see, nothing at 26. Then again i only qualified at that age.


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## GeneralZod (8 Sep 2007)

At 26 I was out of college a few years and was on the equivalent of €27k unadjusted for inflation (I've got a photocopy of the P60) and had about €10k saved up. Which I then spent most of on a car. Pay has increased a lot since then  and I got some sense so I'm well ahead of the formula now.


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## ein (10 Sep 2007)

extopia said:


> Here's one explanation.


 
Thanks Extopia


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## ein (10 Sep 2007)

extopia said:


> The whole point of this particular formula is that it's age independent. You're close, but below the expected value.


 
Yeah I know, but well a head of most of my family and friends


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## ein (10 Sep 2007)

ft5j60j said:


> I reckon my self and EIn have good savings for out ages?
> 
> Ein do you own a car/ house rent?


 
I try only buy some thing if I have the cash. That of course excludes my house.


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## ClubMan (10 Sep 2007)

ein said:


> Yeah I know, but well a head of most of my family and friends


Is this something that exercises/bothers/motivates you?


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## ein (11 Sep 2007)

ClubMan said:


> Is this something that exercises/bothers/motivates you?


 
I guess to a lesser or greater extent we all like to be ahead of the game. In my mind the security of my very young family is what motivates me. Also my comment was in responce to a statement that I was behind the figure I should be at, but due to the fact alot of my family and friends are of a simlar age, it was easyer to make a statement comparing to them.

Hope that helps you understand a little more?


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## extopia (11 Sep 2007)

It reminds me of that old saw about it better to have one donkey and my neighbour have none, than to have two donkeys and my neighbour have three. 

Or something like that


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## ft5j60j (11 Sep 2007)

well I actually own 3 donkeys  so I could sell you one if your interested?


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## ein (12 Sep 2007)

extopia said:


> It reminds me of that old saw about it better to have one donkey and my neighbour have none, than to have two donkeys and my neighbour have three.
> 
> Or something like that


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## ft5j60j (12 Sep 2007)

well i've one extra !


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