Turning back the clock what would you do at 26?
Discussion
I thought this would be an interesting topic for a few people, and maybe get a few ideas of how to make the most of my "youth" and potential compound interest.
It would be good to see what you would do or do differently turning back the clock to when you were 26?
I have owned my house for 5 years and have £265k left to pay on my mortgage (30 years left) so a long way to go, I have a S&S ISA with a few different ETF'S and a handful of dividend paying FTSE100 companies and I hope to increase this and potentially live off dividends come retirement age.
I currently max out my matched pension contributions but am moving into a final salary role in the next few months.
Is there something you would do on top or instead if you were in my position?
It would be good to see what you would do or do differently turning back the clock to when you were 26?
I have owned my house for 5 years and have £265k left to pay on my mortgage (30 years left) so a long way to go, I have a S&S ISA with a few different ETF'S and a handful of dividend paying FTSE100 companies and I hope to increase this and potentially live off dividends come retirement age.
I currently max out my matched pension contributions but am moving into a final salary role in the next few months.
Is there something you would do on top or instead if you were in my position?
if i had an inkling when i was younger....
wouldn't touch dividend stocks with a bargepole - never say never, but not until i was knocking on retirement door. Dividends tends to mean no uber growth in the company/share price.
biggest thing i'd change if i had a time machine would be to be more hands-on with investing, and i'd take more risk in younger year, as that means lessening risj in lkater years after excellent growth.
i'd not be afraid of owing money on a mortage of elsewhere for that matter - as long as i achieve thru investments it makes no sense ( to me) to pay off loans.
i'd actively manage 40% or so of my pot, i'd keep 50% in market trackers, (10% cash for dips) probs US not UK...and would manage and go in heavy with the 'active' part into ultra growth companies/sectors, and would learn how to trade my fav 2-3 assets against each other and not solely against the £ or $.
IMO pair trading is not done enough against other stocks, only against FIAT currency, which is often daft.....a conservative pair trading approach in a tax free account is a gain in shares held annually for zero extra cost. And isn't rocket science......this part, actively managing, picking stocks that should have a 5+ year shelf life and trading them against one another at 26 yrs old would/could be life changing.
wouldn't touch dividend stocks with a bargepole - never say never, but not until i was knocking on retirement door. Dividends tends to mean no uber growth in the company/share price.
biggest thing i'd change if i had a time machine would be to be more hands-on with investing, and i'd take more risk in younger year, as that means lessening risj in lkater years after excellent growth.
i'd not be afraid of owing money on a mortage of elsewhere for that matter - as long as i achieve thru investments it makes no sense ( to me) to pay off loans.
i'd actively manage 40% or so of my pot, i'd keep 50% in market trackers, (10% cash for dips) probs US not UK...and would manage and go in heavy with the 'active' part into ultra growth companies/sectors, and would learn how to trade my fav 2-3 assets against each other and not solely against the £ or $.
IMO pair trading is not done enough against other stocks, only against FIAT currency, which is often daft.....a conservative pair trading approach in a tax free account is a gain in shares held annually for zero extra cost. And isn't rocket science......this part, actively managing, picking stocks that should have a 5+ year shelf life and trading them against one another at 26 yrs old would/could be life changing.
Not much really. Purchased two houses at that age and landed at the start of the property boom. Mainly flipped houses, has made a good profit alongside my main job allowing my partner and I to retire at 47 & 48. Now play with ISAs and let them pay the bills (at the moment). Happy times.
Yep. If you can afford to tie the money up stick some into a pension rather than an ISA. You will benefit way more from the tax relief.
Make sure you enjoy life too though.
Do a job that you find satisfying.
Travel, do something that scares you now and again.
Help other people.
No point in focussing ONLY on saving and retirement but living a dull, uneventful life.
Good luck.
Make sure you enjoy life too though.
Do a job that you find satisfying.
Travel, do something that scares you now and again.
Help other people.
No point in focussing ONLY on saving and retirement but living a dull, uneventful life.
Good luck.
thebraketester said:
Buy bitcoin.
This- I heard of Bitcoin when it really was in it's infancy and people could fairly easily mine it on a home PC without massive investment required but I did nothing about it. I knew i'd missed the opportunity when I saw people at work who can barely turn on a computer downloading crypto apps and trying to invest.
Best advice I can give is if you do hear of something (legal) and the investment is minimal give it a go.
Paying attention to investments and pensions....especially as I didn't contribute to a pension for a few years in my 20's when contracting (massive mistake from compounding perspective).
Re. Pensions In hindsight would of taken advantage of contributing enough to receive the full 'match' contribution from employer and switching away from the default fund (DC scheme) earlier.
Re. Pensions In hindsight would of taken advantage of contributing enough to receive the full 'match' contribution from employer and switching away from the default fund (DC scheme) earlier.
Edible Roadkill said:
Probably stick more into pension from an earlier age even smaller amounts, now that I appreciate the power of compounding over time.
100% this!See https://www.bogleheads.org/forum/viewtopic.php?t=2...
That said, when you are 26, life is also very much for living….making friends for life, playing sport, enjoy going out: I wouldn’t change anything else I did back then!
Edible Roadkill said:
Probably stick more into pension from an earlier age even smaller amounts, now that I appreciate the power of compounding over time.
This is the big one. Zero risk and a huge benefit when you're older. The simplest option would have been to just put the maximum AVC in to my company pension, which I didn't start doing I was some years older. Use ISA allowances. Once you’re in you can transfer it about, but let it go and it’s gone.
Ashamed to say that I didn’t invest a single pound into an ISA until I was 32.
Given the time of low rates, I also would have gone back and borrowed more money for housing. I’ve made an extra house move recently which I shouldn’t have needed to make, it cost a significant 6 figure sum in stamp duty, all because we didn’t utilise the almost free money in 2020 and buy a house that would have suited for 20 years.
OP a lot of advice is hinged on earnings. What someone on £30k should do vs £130k is very different.
Ashamed to say that I didn’t invest a single pound into an ISA until I was 32.
Given the time of low rates, I also would have gone back and borrowed more money for housing. I’ve made an extra house move recently which I shouldn’t have needed to make, it cost a significant 6 figure sum in stamp duty, all because we didn’t utilise the almost free money in 2020 and buy a house that would have suited for 20 years.
OP a lot of advice is hinged on earnings. What someone on £30k should do vs £130k is very different.
Edited by okgo on Monday 18th November 11:18
Not a great deal really. Apart from buying bitcoin in and around that time (hindsight is great) - it was on my radar but I was very skeptical, so missed the boat.
Other than that I was grafting hard and paid my mortgage off by 28. This allowed me to buy the property we are currently in for about 10% under market value as the seller needed the cash and we could act quickly - completing in around 5 weeks during COVID. We now have a mortgage again, but should be paid off in around 8 years.
It was only around this time I realised/understood the matching contribution from my employer for my pension, so was missing out on free money by maximising that. Something I regret and am now making up for, contributing 18% plus 8% employer contribution.
Now I'm 33, child on the way. Beginning to feel the fruits of my labour. We are far from wealthy but are comfortable and happy with our lot with no financial woes. That said we live fairly frugally and aren't particularly materialistic, he says watching his 16 year old TV and having a 14 year old Skoda fabia in the household.
Other than that I was grafting hard and paid my mortgage off by 28. This allowed me to buy the property we are currently in for about 10% under market value as the seller needed the cash and we could act quickly - completing in around 5 weeks during COVID. We now have a mortgage again, but should be paid off in around 8 years.
It was only around this time I realised/understood the matching contribution from my employer for my pension, so was missing out on free money by maximising that. Something I regret and am now making up for, contributing 18% plus 8% employer contribution.
Now I'm 33, child on the way. Beginning to feel the fruits of my labour. We are far from wealthy but are comfortable and happy with our lot with no financial woes. That said we live fairly frugally and aren't particularly materialistic, he says watching his 16 year old TV and having a 14 year old Skoda fabia in the household.
Jamescrs said:
thebraketester said:
Buy bitcoin.
This- I heard of Bitcoin when it really was in it's infancy and people could fairly easily mine it on a home PC without massive investment required but I did nothing about it. I knew i'd missed the opportunity when I saw people at work who can barely turn on a computer downloading crypto apps and trying to invest.
Best advice I can give is if you do hear of something (legal) and the investment is minimal give it a go.
Follow me for more financial advice.
Financial decisions are made relative to your earnings at the time.
I can sit here now and say that I should have bought Amazon, Tesla and Apple stock and invested a load in Bitcoin.
However, that would have been an enormous risk at the time and wasn't really practical with my relatively low earnings.
I've always lived relatively frugally but I would have made more of my pension I suppose, aswell as going in heavier and earlier on my home in terms of mortgage and risk exposure there. But that is only with the benefit of hindsight.
I can sit here now and say that I should have bought Amazon, Tesla and Apple stock and invested a load in Bitcoin.
However, that would have been an enormous risk at the time and wasn't really practical with my relatively low earnings.
I've always lived relatively frugally but I would have made more of my pension I suppose, aswell as going in heavier and earlier on my home in terms of mortgage and risk exposure there. But that is only with the benefit of hindsight.
26 was about the age I decided to go back to university again. Had also owned my house for a few years then.
Finally took the plunge at a couple of years later. Investing in myself, and creating opportunity for change, was the single most impactful thing I ever did financially.
It all depends what the OP wants. From my perspective I was prepared to work my nuts off for a while if it meant that it set me and my family up. Sure, I probably missed a few holidays and piss-ups but there's quite a lot to be said for getting out of the rat race early and only doing the things you want to...
Finally took the plunge at a couple of years later. Investing in myself, and creating opportunity for change, was the single most impactful thing I ever did financially.
Muzzer79 said:
Financial decisions are made relative to your earnings at the time.
I can sit here now and say that I should have bought Amazon, Tesla and Apple stock and invested a load in Bitcoin.
However, that would have been an enormous risk at the time and wasn't really practical with my relatively low earnings.
That's true to a degree, but that sort of thinking can also trap you in the status quo. If you take a risk in your 20s you have time to rebuild if it goes wrong.I can sit here now and say that I should have bought Amazon, Tesla and Apple stock and invested a load in Bitcoin.
However, that would have been an enormous risk at the time and wasn't really practical with my relatively low earnings.
It all depends what the OP wants. From my perspective I was prepared to work my nuts off for a while if it meant that it set me and my family up. Sure, I probably missed a few holidays and piss-ups but there's quite a lot to be said for getting out of the rat race early and only doing the things you want to...
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