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.

There is a lot more to this couple than appears in this article. They are behind Rebel Finance School and have loads of information about themselves and their businesses https://rebeldonegans.com I think they are now worth about £2.5M, they put up regular information on their finances. They certainly don't appear to have a miserable life.

A friend of ours retired at 52. He's had a few family things go on and the amount he socialises has declined and along with it his social skills. A mutual friend said he had been behaving really oddly at the weekend, which we agree with, but to come from our mutual friend was a shock because that's not like him to say something like that. It seems like the retired friend isn't as happy as he makes out. He keeps himself busy but his attitude has changed and he doesn't really have much pride in what he does anymore. The sense of doing things well that he had has gone. He just can't be arsed with life at all from what it seems. The spark has gone completely out of him.

We've looked at him and DH has gone very firmly, I'm not retiring young. DH would like to drop the hours he does at some point so he can do other things he likes but he doesn't think it's a healthy thing to aspire to. For DH he'd last about 5 mins before getting bored and driving me absolutely around the bend.

What a lot of free advertising they are now getting too.

I love that the names are all exciting-sounding like FIRE and Rebel Finance, as compared to the rest of us dullards who are stupid enough to work for other people and not save enough money to amass £1 million pounds.

It depends on what they do with it. It could last indefinitely.

Or, they found a gap in the market for providing free financial advice to absolutely anyone that wants it and encourage people to think rationally about how they want their money to work for them, no matter how little someone has.

No poor schmucks are paying for their lifestyle!

I couldn’t be as extreme as them, but wish we’d had Rebel Finance School available when we were in our 20s. We came very late to the financial adviser party, but even having had 8 years advice has meant we were able to retire early in our late 50s with a sound strategy from then to state pension age.

We don’t sit around bored either. Both of us have two hobbies each that get us out of each other’s hair daily 🤣

It absolutely will when invested in the stock market. It’s the power of compounding, they live off the growth and don’t touch the capital.

Most people work to live. Those who love their work are blessed, I hated my job for 40 years.

I think there's a balance to be had.
DH retired at 58 and so did I, albeit a few years later.
Avoid lifestyle inflation especially when you get a pay rise.
We bought a house well below what we could afford.
We have always lived modestly rather than frugally.
Reliable but not fancy cars.
DH spends a lot of time on managing investments.
Yes to packed lunches and thinking before spending.
But in contrast, we give money to our adult DC, have always had plenty of good holidays and travel, good quality food, if I do spend money I don't stint.

OP, that’s exactly what I thought when I first read the article this morning!

I don't see what's to get het up about. They earn well - that's allowed. Presumably pay the taxes they're required to - that's allowed. Live a lifestyle they choose within that income - that's allowed.

Other people have smaller incomes and choose to spend more - that's allowed too.

I'm not full on FIRE, but I really enjoyed the book The Moneyless Man. It's about a man who chose to live without cash for a year. Whilst I don't want to do that myself, it's definitely a healthy review of what we consider essential spending.

My friend went self-employed and now puts her full 60k into pensions a year plus other investments, has fab holidays and so on but is still tightening her belt in various ways. Still lives in a very ordinary house in a cheap location when others might have moved.

I'm going self-employed myself, and would consider myself a fool if I couldn't talk to her honestly about work and investments just because she has more than me.

I think it's good for everyone to challenge their perceptions on what they can do. I'm still proud of the fact that I told my friend she was Cambridge material - she scoffed, but then she went, and is now a highly paid lawyer!

The key to FIRE is that you don't spend the capital. You invest it with the aim that it grows (on average) by more than inflation and that compounds over time. When you want to live off it, the idea is that you can take something like 3-4% a year and the capital will keep growing so that you can keep withdrawing for decades without losing the capital. There's a lot of discussion about exactly how to calculate it but the basic founding idea is here https://www.mrmoneymustache.com/2012/05/29/how-much-do-i-need-for-retirement/

Even if you don't follow FIRE to extremes, that core idea can be transformational.

What tosh. Whether you have a packed lunch or not, to save £1m by 40 you needed to be putting away £50k a year for 20 years. Allowing for tax and the unavoidable costs of living (rent, utilities, food, etc) that’s an average base gross salary of £120-150k, isn’t it?

Sorry, but very very few people could achieve this on a normal salary and to promote this twaddle as realistically achievable is insulting to ordinary working people - and just fuels a cultural divide.

Find me a nurse and a teacher couple who've done this and I'll be really impressed.

Its all well and good talking about taking a packed lunch to facilitate saving a million quid in barely 15 years, but someone on 25k literally can't do that, even if they did not spend a penny of what they earned on feeding themselves and housing themselves (so... Not possible) they would not have a million pounds after 15 years because they arent paid enough.

Actuaries are phenomenally well paid, not to mention that if your job role involves investments you are going to have much more confidence and know-how in investing your money to achieve more with it, than most people.

This couple also i think went to uni before the days of huge fees so weren't saddled with the massive student debts most graduates are now either.

Im sure they've been careful with their money, but scrabbling about using other peoples discarded nectar vouchers (fraud, i might add, as they are linked to individual cards) doesn't paid them in a great light does it.

I mean, good for them however they did it.

Not sure I would choose to plaster it all over the papers though "look at meeeeee"

Based on this, you're assuming their investments haven't grown at all. 2k per month saved at a modest growth rate of 8% is 1.2 Million after 20 years. Very achievable for two adults on high salaries. In fact if they each maxed out their ISA's each year, 1 mill is doable in 14 years.

Agree @pragmatismuniversalsentimentalist it is like telling someone on a low income "oh dear have you tried cutting the caviar and holidaying to Spain instead of the Maldives?"

People on low (or even average) incomes arent spending money in pret a manger every day. But it's not because they want save a £1m pension pot - it's because they dont want to be in the red and the end of the month.

To recommend thrift to the poor is both grotesque and insulting. It is like advising a man who is starving to eat less.” — Oscar Wilde

I hate things like this!!

I read one about a couple who bought a home at 25 and easy it is for anyone to do it.

Of course they both had money from their families and were given the deposit and had guarantors 🙄

Of course if you are 2 working adults, with no children, no caring responsibilities, no disabilities etc then you can maximise your income and reduce your outgoings and save and retire early but for most it’s simply impossible.

Absolutely this!! 👏👏👏

Yes - ‘for two adults on high salaries’ is my point.

Most households aren’t two adults with high salaries, no kids, investments and (in the current market) they are increasingly unlikely to include homes that will appreciate at the rate they have in the past 20 years.

So, like I say, not accessible to most people reading today especially those in their twenties and wondering whether this is possible for them - and so just feeds discontent.

Agreed. It sounds like a very limited blinkered life to me.

If I disliked my job so much I couldn’t fathom doing it beyond 40 I’d look to change job or career. Not work out how to live a boring frugal life for the next 30-40 years.

I also think this viewpoint ignores the many benefits working can bring. I’m not going to pretend I love every minute of my job but beyond money it does provide structure, challenge, identity etc. I also really appreciate having opportunities to work with and get to know people of all ages and backgrounds. Retiring from work young would cut off all of these.

I suppose the difference is I take packed lunches because I don't have £4 a day (£8 for two) to spend.

But if you were in a position where you do have it and then invest it, they are probably right. It's 20k over 10 years assuming a £4 a day spend. Add in coffees and take aways and the interest from investing it and it could be £80k (not a million obviously but they only state 80k from this in the article).

But most of us need to use that money to cover other outgoings rather than having it so spare it can be locked away for a decade, even if we are putting it in a rainy day fund.

Exactly.

Unless there is more here than they are saying this couple face the rest of their life shivering under blankets and being stingy with food.

And what is the point of having all that free time if you can't afford to do anything fun? DH and I retired nearly 5 years ago in our late 50s/early 60s but we have enough to enjoy our free time. Lots of hobbies and holidays not grubbing about on the supermarket floor for discarded vouchers.

This is all fine, I think- they're not claiming that they've made £1m through packed lunches alone- that's a £40k saving over 10 years, which sounds about right. And £1m can of course fund retirement from 40- invested wisely it's likely to last pretty much indefinitely. Some of the posts on this thread are a good argument for better financial education.

Well I guess they enjoy that ? Takes all
sorts

But most of us don't even earn £60k before tax, so cannot possibly put that much into pensions.

They're not 'retired' though - they run the Rebel Finance thing as a business and are making loads through that and passive earnings.

These articles always grate because try saving up through your 20s when you've been kicked out of home and have to fend for yourself from the age of 17. Some of us have never had any kind of financial cushion and without one, it's REALLY hard not to end up with debts that making saving significant amounts almost impossible.