My impressions on my journey so far.

Hello again, long time no see!

Lots going on in my life at the minute so I have been ignoring the website for a while. However, I wanted to share what I am thinking of my saving and investing journey so far.

It’s slow and repetitive

Yes, progress is slow going. As I rely on my monthly wage to save and invest, I am currently only contributing to my stocks and shares ISA once a month. The numbers aren’t going up very fast I can tell you.

At one time, I used to obsessively chart every single penny that I earned and if I spent less than a certain amount a week I would transfer it to a savings account . However, with all that is going on at the minute (viruses and stuff) I don’t really have the mental space to do this at the minute. I check my accounts when I think about it and let the automatic payments do their job to contribute for me.

It is working though as I have 0.19% of my goal invested at the minute with a 4% return (at least that was yesterday, it could be -1% for all I know).

It’s boring and hard work

Okay, this one is probably my fault. I am probably not as passionate about my goal as I was 6 months ago. And that is probably because the gap between what is portrayed on YouTube/Instagram and social media in general and the reality of actually saving/investing are very different, at least for me.

I loved reading Fruglewoods blog posts and their excellent book explaining how they changed their life. Tales of doing home haircuts (which I have learned to do thanks to Covid), packed lunches (they because a necessity at work as our cafe closed) and buying second hand clothes (I have to admit I don’t always do this) hide the daily reality that convenience goes out of the window. In an already hectic life I don’t always have the time, mental space or energy to really engage with this.

(I like my takeaways on a Friday!)

My takeaway from this

You can maybe tell by this post that I am borderline burnt out at the minute and that I am feeling quite overwhelmed by everything that is going on.

This post shouldn’t discourage you to save and invest because the payoff down the road will be immense! I just think that in many of the websites or YouTube channels about FIRE they seem at times to gloss over the daily grind of giving up convenience and how microscopic progress can be discouraging at times.

Conclusion

Keep going! It will be worth it. In the mean time, I know how you feel and how the daily reality of it differs from the highlight reels of Instagram and YouTube.

Dave Ramsey’s take on how to become a millionaire

The other day on Youtube, I typed ‘Invest £100 a month’. I was trying to find examples or testimonials of people who invested this much a month because, as I have said before, becoming a millionaire £100 at a time would take more than a lifetime.

Well, Youtube didn’t disappoint; I wasn’t prepared for this though! XD

Obviously, if I am breaching copyright I am happy to take this down. However, this video is too good not to share!!! No copyright infringement is intended and all credit of this video goes to Dave Ramsey.

Investing £100 a month, my own – uneducated – calculations

Dave Ramsey here is assuming 12% interest.

I do not pretend to know much about the stock market just now, so I prefer to project using 7% interest. The results I get are very decent and manage to hit my own minimal Financial Independence for retirement. But as the title of the blog suggests, I would be a lot happier with a million pounds.

Investing 15% of income, my calculations

I have just had a small raise of £54 from this month and was wondering how to calculate this amount. I had two options.

Option 1: the first was to just calculate 15% of the new salary.

Option 2: the second was to calculate 15% of the old salary, then add £54 on top of that. That would mean that any raise would get added directly into the investment without tempting me in lifestyle inflation.

In the end, I decided that option 2 would be more in keeping with advice from the FIRE community. Therefore, I entered that particular amount in the calculator, again with 7% interest and 2% inflation.

Again, as you can see, with 7% interest I would probably still not hit a million in 40 years. However, I would end up with a very tidy sum of £742,797,94.

My take away point from crunching the numbers

After playing around with the calculator with some time, I came up with these final, realistic(ish) number.

To retire at the age of 65 with one million pounds, I would have to invest £475 a month (7%, 2% inflation) until then. I better start saving/investing then!

This month I managed to invest £236.74, nearly 50% of that target amount.

So I have some way to go to reach this goal. However, I have hit a milestone this month: I have finally saved up the equivalent of 6 months of salary in my emergency fund!

To conclude: I would love to be more optimistic about the market and have the knowledge that I would need to be able to make similar statements to Dave Ramsey.

One point he did put across powerfully is consistency and discipline are key in this process and that sacrifices can be made to get there.

Now my last question is: after a raise, does my emergency fund need to be topped up to 6 times the new salary?

3 reasons I love watching motivational videos

They have grabby titles, eye catching thumbnails and bold claims on how they can change your mindset: the motivational video movement seems to grow year upon year on video platforms.

Although my introduction sounded a little sarcastic, I genuinely love watching and listening to this type of content. I am listing here three reasons why I love these videos and will link to some of my favourite in this post.

1) Motivational videos are often well edited and pleasing to the eye.

Okay, so this first reason may not be ‘the best’. But hear me out.

You are taking time out of your day to listen to or watch content on the internet. How much more enjoyable is the experience when the background music is epic, there is a cinematic feel of the editing of film extracts and the true grit demonstrated by some of the people in the video makes you feel you could do the exact same thing?

Motivation video

2) Motivational videos give some good advice

There is many a time when I have sat down to watch one of these videos and thought to myself: “Yes, that is indeed good advice”. Who would disagree with the suggestions of watching less television, eating healthier and becoming more proactive in life?

Most of the advice is sound and can be laid out in a different way so as to make it click. Who knew that a change of perspective could give such Aha! moments. I admit that agreeing with the advice doesn’t mean that I always find myself applying it afterward, a fact which I will explore in another post. In the meantime, I am grateful every day that I have such free access to the internet and the billions of tuns of information that comes with it.

3) Motivational videos are … motivational

I love that feeling after watching a motivational video. Finding that gem, then listening intently to all its content and feeling a sense of accomplishment and change. It feels like research, like an essential component to get or keep going. I am bettering myself. I am learning.

Despite the caveats to this that I will explore in another post, I thoroughly enjoy the rush of purposefulness that follows watching this kind of content.

One of the lectures that I have enjoyed watching in the past is the following:

To conclude: I have heavily focused here on positive aspects of this kind of content that I enjoy, but I am sure that you can tell that there is a darker side to all of this… To be continued… 😉