If you have investments, let’s treat those as liquid cash for the sake of argument. Otherwise, the assumption is that you’re not selling property or possessions, but continuing to live as you do now.
About a month should be covered
If I was more devoted to my saving, I could probably last a good long while. Like, maybe a couple years worth of just savings, leaving my job and just living worry free. My expenses are moderately low so it’d be stupid easy.
Right now, until next month’s mortgage payment comes due. Every time I get something in the emergency fund either an emergency happens or a maintenance that will be an emergency if ignored. Just ordered a new set of car tires about an hour ago, as it happens.
1-2 years before I need to look at selling the house, although hoping that the mortgage will drop when our 2 year fix ends which could push that time up a bit as that is by far my largest expense.
Cash only, about 6 months. Selling assets, 20 years.
13 years ago I had to walk 2 hours after work to get home because I didn’t have a pounds to rent a bike (it was a bank holiday and salary was delayed for a day). My family helped me expanding my education and since things skyrocketed.
A couple months, but
Basically I’ve been saving up for years to redo a leaky moldy bathroom. That wouldn’t get done. Maybe ever
I’ve saved what I could to pay for my kids college. I could ruin their entire future to stay alive
I’m coming up in retirement age with way too little savings. I’ve finally able to put aside enough to catch up a little bit I guess that would go pretty quickly too
I don’t use my car much anymore, so would consider that liquid, and could make the kids pay some rent now they are working (not much), if I sold that and nothing in the house needed repaired or maintained (ha ha ha) I am at almost 3 years. So I guess if I had some fatal illness and was willing to run out all of both my &my husband’s retirement money I could stop working. Well, no, nevermind, I couldn’t, because the medical care would bankrupt us. But we would not immediately starve anymore. It only took half a century to get here!
I just ran the numbers for the first time ever, and it adds up to 34 months - which I realize is a pretty privileged place to be. However, I’m by no means rich; I just live well below my means and invest all my savings.
Dude, you are rich.
I used to rent a single bedroom in an overcrowded house share, didn’t learn to drive because I couldn’t afford it.
Had over a year of expenses saved, hardly makes you rich.
Depends on who I compare myself to and how one defines “rich.” To me, it means someone whose passive income exceeds their spending - and I’m nowhere even close to that… yet.
This exact question from this thread is how rich are you and 34 months is quite wealthy.
It’s an important distinction where I’m a potential counter example. I admit it. I earn what ought to be a comfortable living but poor choices in the past (and probably still) mean that I’m only a couple months from financial disaster. And since it would affect my kids education and my old age, the affects would be major. I am clearly not wealthy, mostly due to my own choices
Surely it depends how you live though. A guy spending just £15 a week on food and living in a tent is not wealthy just because they have £2k in the bank which will cover them for a few years.
That’s a bit of an edge case but why not? If they earn enough to live the way they want, are secure from immediate financial catastrophe, and can afford some luxuries, then maybe they are wealthy, despite being subsistence
Meanwhile someone can earn a nice fat six figure salary but be over mortgaged for house and car, not living comfortably, and paycheck to paycheck on the edge of financial disaster. They’re poor, despite it being by their poor choices
Wealth is freedom from want and financial anxiety
Yeah I think that’s where the distinction between rich and wealthy comes in. You still have to work for a living and are closer to homelessness than renting out Venice for a wedding (for instance).
Nearly everybody who speaks English is rich. We just have no clue who poor other parts of the world are and so think of ourselves as poor.
I’m in my mid 40’s.
It’s not particularly uncommon for people in regional Australia to own their own house with no mortgage by my age.
It’s pretty tough to find a family home that costs less than 10x average wage.
So, as a kind of line in the sand I’d say maybe a third of 45 year olds living in regional Australia could “survive” for 10 years with no income.
How do you know how to invest? Asking for a friend.
I don’t. I do it the boring way - buying cheap, highly diversified ETF index funds.
That’s way more than most people know… Also, wtf is an ETF?
Mutual funds and ETFs are both types of investments that represent a group of individual stocks and are generally managed in some way, either by a person or by a fixed algorithm. Mutual funds have some tax implications that can by annoying for people so ETFs tend to be preferred for taxable accounts (in the US at least).
- Open a Vanguard account.
- Buy as much of the thing called VOO as you can each month.
- Come back at retirement age to oodles of money.
Buy into a broad market tracking ETF (something that tracks s&P 500 or 1000 or similar). That way you’re not betting on individual companies, your betting on the collective largest companies in the world doing well. Over a long period of time, which for over a century has averaged ~7% inflation adjusted return yearly.
There are a load of resources online. The UKPersonalFinance subreddit is a good place to start, mainly their wiki and external website, and a lot of the advice is applicable outside of the UK too. If you don’t want to read or think much, then just pick a broad index fund with 0.2% or below of fees and put your savings in there.
Thanks! Yes, I was wondering where would be a good place to start for absolute noobs, thanks for the tip. Investing is a mystery in my life I’ve been conditioned not to try to understand, perhaps it’s time to do something about it.
It’s not too bad. The key thing if your in the UK is to open a stocks and shares ISA (similar to a cash ISA, but for stocks) that means you don’t have to worry about taxes.
Other than that… Be aware that things are very volatile due to trump. He can say something and stocks drop 10% then recover by the end of the month… Or not.
If you are in for the long term, the worst thing you can do is panic and sell when that happens.
Its pretty easy if you go with something like wealthfront, betterment, etc…
But using something like fidelity is also good too.
3 months at the absolute most, likely significantly less, even after cutting out all “luxuries” like paying for internet/phone/electricity/water.
70% of that would go on rent for my 1-bed flat. And no - I don’t live in a big city. I earn more than most. I spend less than most. I don’t use any subscription services and I pirate everything. I don’t drink, and I never go out to pubs, cinema, (insert paid activity here) because all of that is way too expensive.
The UK is fucked.
Literally the only thing that decides how long I can live is whether or not you rent - whatever you do or don’t do as personal responsibility practically does not matter unless you own a house.
The small variations in rent price are also irrelevant, I used to pay more for less, in the grand scheme of things the variance only amounts to £100-200 per year and usually depends on how much you can tolerate free penicillin on the walls.
The blame is only on boomers who hoard property, jack up rents and collect benefits from the gov’t off worker taxes. Virtually no one else is to blame apart from capitalism more generally.
The same boomers will also soon elect the alt-right and things will get a lot worse and everywhere else seems to be on the same general trajectory.
I used to dream of a utopia like Star Trek. Now 28 days later looks like a utopia.
I earn less than average (£26k), live in the south, most of my hobbies are cheap though. Fair bit of outdoor stuff - touching grass is free.
The media really is pushing reform though, it’s crazy how much press they get. The party that wants to remove your human rights…
I used to dream of a utopia like Star Trek.
A month on current funds and maybe a couple more if I started selling off longer term assets.
I ran the numbers and got 19 months.
Although realistically if I stopped receiving any income my monthly spend would drop - I would certainly spend less on food and luxuries, which would buy me at least an extra 2-5 months.
I know you excluded it, but again if my income stopped then at some point I would sell my house. if I used the sale money to pay off the mortgage and then start renting a flat I could go without income for about 8-10 extra years (that surprised me!).
I’m 31. My salary is a bit above average for the uk but not by that much. I just barely ever spend money. It’s quite cheap to be terminally online and stay indoors most of the year.
What do you do about housing/rent?
I’m still recovering from the mistakes I made 8 years ago, for another 3 years maximum, so no savings,
Without cutting back at all, even my frivolous spending and holidays, about six months.
If i cut holidays and frivolous stuff, about twelve months.
If i cut back essentials, sold some stuff, eighteen to twenty four months. If on top i downsized the house, probably five years.
If i could make it to seven years then my private pension would kick in and I can retire. If the government hasn’t already moved the age you can draw a private pension i could be retired already.
The rest of this month.
If im lucky its about 2 months.
