Packed lunch = retired with £1m by 40.

[Allschoolsareartschools]

https://www.bbc.co.uk/news/articles/cvgdn3qqg7po
AIBU to say I've had a packed lunch for nearly 40 years but I dont have £1m & I'm not retired yet!
Am I doing something wrong?
Seriously how out of touch is this article? Good luck to them but its nothing to do with packed lunches.

🤣🤣🤣🤣🤣

I think the poster means the refusal to put the heating on and turning that into a game, picking vouchers up off the floor and such while they were working sounded joyless.

Not that I'd want to live in Air BnBs to be fair like they do now. That bit sounds crap.

I usually have a packed lunch and I'm careful but my god I'm not living in a cold house, never having a holiday, not enjoying life and going without to then retire to do the same.

They sound like grifters ...

They inflicted short term pain for long term gain. They don’t need heating now as they live around South America for the cold months of the year. Their life is frankly one big holiday.

I don’t disagree that this is indeed how it works , but in my opinion we need to integrate tax and NI , otherwise if everyone did this we would end up with vast amounts of over 55s( going up to 57) not Paying NI but could quite easily be getting £40k a year plus from private pensions and savings ( and yes paying some tax but at 20% rates)and given that earners now are paying previous generations pensions, I don’t see that is sustainable long term -

@ChristmasCwtch I believe the had 1million invested in 2020 and it’s nearer 3 million now. They’ll be just fine !!!

They are old-fashioned DINKs - double income, no kids. It has always been a great recipe for wealth!

@ChristmasCwtch 1 million invested will continue to grow, they are quite open that the 1 million they had retiring in 2019 has now grown to approx 2.5 million invested in global tracker funds. If you draw down 4%per year but the remaining 96%is invested and growing at over 4%your capital will actually have grown not diminished, it is highly unlikely that their capital will shrink until they decide to buy a property again. They have explained the cash from their property sales invested is growing faster than house prices are rising.

They invested their money sensibly and are trying to teach people on all incomes, including modest ones, how to do the same. Low risk, low fee, long term investments.

They earned good salaries but chose not to spend their money on high price stuff.

The one thing I don’t get about this way of living is what if the stock market tanks for a few years. A Wall Street crash or something?

It's not just a packed lunch, it's a whole ethos, a whole way of life. Obviously you need a high enough income in the first place to save a million, but lots of people who "could", don't get that kind of savings because they spend their income.

A minimum wage shop worker will never save a million, but a relatively successful professional could well achieve that by saving like made, not spending, and making sensible investments, etc.

It's like people who sneer at the old "pennywise and pound foolish" saying - they sneer that saving the pennies won't achieve anything, but that's not the point, which is that people who are careful with small amounts get into the habit of shopping around, always looking for offers, always looking for value for money, always carefully considering when buying and not being impulsive etc.

It only matters if you need to cash in your investments during the crash. If you can hold out, hold your nerve, and leave the investments alone, history proves that they bounce back and then grow to higher levels (as long as you have a properly balanced portfolio of investments and havn't invested wholly or mainly in a single company/single country/single sector). Against instinct, it's actually better to continue to invest during crashes as the lower prices mean you can buy more stocks/shares/bonds, so will get an even greater return when they bounce back. It's why perceived wisdom is to make regular investments, say monthly, to benefit from when the markets are depressed.

Yes I agree. It's time to scrap NIC and have higher rates of income tax (and same rates for all income, no different rates for different types of income). Make it simple. Simple taxes work, complicated taxes don't. As the old saying KISS goes - keep it simple, stupid! NIC nothing like it was when it was first introduced, when it was literally a fixed price "stamp" - over the decades it's morphed into just another tax because of the nature of it now being based on income levels, but where it's a complete travesty and what has caused 2/3 decades of evasion/confusion is that it's only on wages - hence why people set up limited companies to pay themselves dividends (no NIC) rather than wages (NIC) or were given shares by employers so they could benefit from NIC free capital gains if the company was sold out/or they sold their shares, etc. Going back to the 90s, there were city bonuses paid in wine, precious metals, etc as back then anything paid other than in cash was NIC free (again, law changed as a result). Successive governments have been tying themselves in knots trying to deal with NIC avoidance and faffing around changing the "credit" qualifications of low earning workers not paid enough to pay NICs but enough to get credits. We have hundreds of pages of "tax law" for NICs that are slightly different in some places and hugely different in others compared with other taxes such as income tax and CGT! It's a complete mess and a minefield. Just scrap it and raise income tax rates for everyone.

They discuss their approach (and other possibilities) here https://rebeldonegans.com/finance/rfs/course-notes/week-9/

Generally people will have a portion of their portfolio in cash, or MMF etc. If there is a market crash the idea is that this is enough for you to live off for a while without having to sell any equities until the market recovers. If you have balanced it correctly it should mean that you don't need to realise a loss, or at least can plan for how to do so.

Hey @Allschoolsareartschools and everyone. Katie from the BBC article here. You are absolutely right, there is a LOT more to it than taking packed lunches to work! The article honed in on that and it was one element of a much wider focus.

We’ve read some of the discussion and a lot of the questions are completely fair: income, children, whether £1m lasts, what we invested in, whether the lifestyle was miserable, and what “retired” means if we still run Rebel Finance School.

The BBC only had space for a tiny slice of the story, so we’re doing a live Ask Us Anything for anyone genuinely curious.

Happy to answer any questions you have.

Live Q&A on Tuesday 7th July 8pm UK time:
https://www.youtube.com/live/cuuf4PuqkjM?si=jIpDQWT-_4zvtqed

Thanks @KatieDonegan
very interesting 👀

I’ve been watching their course and for someone who wasn’t taught much financial literacy, I think it should be taught in school. The spending tracker I made last year has been really helpful. I’ve taught myself about investments. Late to the game in early 40s but still. I intend to have a good retirement from about 60. They don’t have kids (nor do I) which is about a 200000 saving raising them to adulthood. I just really wish I’d known about investing earlier regarding the compounding. More people should know how to make money work for them, rather than they slave for it and then drop dead ahead of a paltry state pension.

The criticism I would give is that this seems to be a long term couple, and things/savings are a lot easier for two.

Pleasure! Hope to see you on the live stream :) xx

Hi @KatieDonegan - I have been following your course on YouTube (at a bit of a lag) and been finding it generally interesting and helpful, especially the money mindset season. (And have said this up-thread.) However, have just got to the end of the compounding session, where you say:

'If you do what's in this course, you will get to a point where your investments grow faster than your spending.'

This is simply not true for me and many people, given our ages, starting points, and financial responsibilities (e.g. for children). Mathematically, even if I did everything you recommended from this point, there is not enough time or money to compound and result in that situation.