Why Your SAVINGS RATE is CRITICAL For Financial Independence UK
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- Опубликовано: 2 окт 2024
- Understand WHY Your Savings Rate is the NUMBER 1 metric to track in order to achieve Financial Independence :) ♥. The higher your Savings Rate, the quicker you'll achieve Financial Independence. Learn why visually!
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I'm married to Ken and we have two boys aged 6 and 4. I'm a Londoner, born in Hackney! :)
Day to day, I run the operations of The Humble Penny as a creative - doing everything from marketing to video editing. I studied Multi-media design and technology at Uni
When I'm not creating, I love vegan food, travelling, working out and doing some outdoor fun things with my husband and kids :)
KEN:
I'm a husband, dad, and a First-Generation Immigrant to the UK. I started life poor in the UK and I've spent the last 20 years on a steep journey of Personal Development.
CFO by day with over 12 years experience in the investment business. I'm also a Chartered Accountant and hold an MBA from Cambridge University.
To explore my creativity, I'm a blogger and RUclipsr by night. I create from my experiences as a family man and entrepreneur.
I have a passion for all things Financial Education, Business and Personal Development. I also love Photography, Music, Travel, and Sport.
We became Financially Independent aged 34 and our story has been featured on the BBC, Mail Online, Channel 5, Metro, etc.
We share content to inspire and teach others how to achieve Financial Independence and Freedom too :)
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Savings Rate UK, How to calculate your savings rate, Savings Rate to retire early, savings rate for early retirement, retirement, financial independence retire early, Financial freedom, How to Save Money UK, How to save money,Everyday Things You Should Really Stop Paying For,ways to stop spending money,saving money,ways to save money,ways to save,personal finance,save money hacks,personal finance,money hacks,money saving tips,Ken Okoroafor,Mary Okoroafor,The Humble Penny.
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Best, Mary and Ken Okoroafor
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#SavingsRate #FinancialIndependence #HowToSaveMoney
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★★ LINKS MENTIONED IN THE VIDEO ★★
(02:25) - Financial Independence Course - FIRESuperPower.com
(03:27) - How Much Money Is Enough (4% Rule) - ruclips.net/video/4L3gtYyZwyU/видео.html
I liked even before watching because I’m certain there will be a lot of good nuggets.
You're far too kind! Thanks a lot 😉
Hi Ken, another great video thank you! I am so curious about the formula behind cell E26. It is clearly not annual spending x25, it is a lot more. What a great way to generate interest in your course!
Very insightful videos. You are like the british version of Graham Stephan. Great work you are doing. keep it up 👍
Haha Ravi, I'll take that as a compliment 😉. I appreciate you watching
71%. Going strong! Great video!
Yikes!! Awesome.
Good Video. I'm saving 33% this year and really haven't missed out on anything. It just comes down to buying something that brings you value into your life.
Clarence, I like that.
I have recently achieved a savings rate of ~90% and my target to reach FI is in 7 or 8 years from now. 😁👍
90%? WHOA!!! That's the highest I've ever heard. How did you achieve that and managing to sustain it? What costs are you not paying for?
@@TheHumblePenny I am not paying rent nor mortgage (we are mortgage free 😁, very satisfying indeed), we have no kids so far, it is just my wife and I. We have 2 passive rental incomes that pretty much cover our basic survival expenses. We are what others calls "bare bone" FI, but our goal is within 7 yrs or so to reache full FI for good 😁 We are in our late 30s btw, not so young though. I have found you and your amazing videos quite recently and I am loving it 😁 Very inspiring and helpful indeed. Thank you very much and keep it up 😉 Cheers 👍
Actually that is 90% of my salary income. If I add all incomes (salary + rental) the correct figure would be around 70% 😁
Wow, I love that spreadsheet, how motivational. I'm at about 40% I think at the moment?
Hey Jenni! 40% is a BIG achievement. Especially in the UK. sounds like a lot of progress. Are you doing anything beyond your usual pay to increase it for next year?
Yeh the spreadsheet does really help to paint the picture right in front of you 😀
Is this excel sheet template downloadable anywhere?
It's part of a course:
thehumblepenny.com/FIRESuperPower
However, I'll take a look later this morning at creating the spreadsheet as a standalone thing and I'll let you know. That way you can download it.
It's an excellent analysis. I've done some similar number crunching. One question I have: what percentage of your assets are tied up in pensions? Your saving rate (which I assume from your intro included getting mortgage free) is all about your post-tax spending. By definition, your pension pots are not accessible until your late 50s. If achieving FI in your 40s is the target, it almost makes it a disincentive to use your pension as your primary investment mechanism, despite the generous perks (employer match, 25% tax free lump sum, deducted from gross, etc.).
For the moment, my two main savings are: pension (about 21% of total gross comp) and mortgage overpayments (about 55% of net pay). Four years from now I should be mortgage free, and then I'll turn to other investments like S&S ISA...
Thanks for the upload.
Tom, I love your savings split! 😀
Savings rate, so critical. As you say it has a double effect, save more and reduce the financial independence pot needed at the same time.
I recreated your spreadsheet and in doing so noticed that you increase spending at the same rate as salary increases. I added an extra line in my version to provide for a spending increase rate so that you can see the effect of not increasing your spending over time (or even decreasing spending over time!). It truly allows you to see the problem of lifestyle creep in cold hard numbers.
At 57% savings rate and climbing - FI in 11 years on current projections...
Ah yes! Good spot. I picked this up in this video:
ruclips.net/video/x6ZMlQKdJOk/видео.html
Thanks for the great video, I am self employed and save around 50 percent of my pre tax pay, of course I need to sort out taxes separately as my income is not taxed at source and I have to factor in expenses. My question is if you are investing primarily in tax efficient accounts (investment ISA) since you will not be paying tax on passive income generated from the ISA does that effect what your percentage savings rate means in terms of FI?? My savings rate is 50percent pre tax income, but actually almost double my personal budget due to tax and spending on business expenses. Hope that makes sense!
Ok I think I answered my own question there - double my personal budget is about 66 percent savings rate, the normal calculation is based on income after tax / business expenses. As you can tell I'm new to all this! Thanks again
You've got this, Joe! :)
awesome stuff :) time to work out my saving rate :D
Hehe! Do share 😉
@@TheHumblePenny 50% :)
@@ndog666gaming You're a rarity! 50% is Awesome!
With a mortgage repayment would you split it into 2, savings as any payment towards capital and spending for interest?
Hi Chris
I'm not sure I understand the question.Please elaborate.
@@TheHumblePenny say mortgage repayment is £1000 and £800 is capital and £200 interest. would you calculate the £800 capital payment in your savings total rather than taking £1000 as an expense?