Happy Sunday guys! I hope this video was useful, for me all of the strategies are important, but some are just easier to achieve as your progress through the income levels. Let me know your best financial strategies down in the comments section below! Also thanks to HelloFresh for sponsoring todays video, here is a link for 60% off if you're interested: www.hellofresh.co.uk/MITCH60
Just to correct a few things: APR is the rate after it has compounded each month for a year. The 4% rule doesn't say that your portfolio shouldn't go down in value, it's that you shouldn't run out of money over a typical retirement length.
Thank you for raising how hard it is for single people. I live on my own and it can be hard, but in the north i can just about cover my expenses for 3 months of bills. Keeping out of expensive debt is really key. But finding a permanent iob that allows progression is even harder. I dont know how people in more expensive areas cope 😢
I agree with pay yourself 1st ...it's transformed my habits ...wierd how you can think you're skint but in fact you spend in a silly way ...switching to that mentality I've saved 5.5k in just over 6 months ...I'm on £32k
Buying tyres should be in your budget, not an emergency, they wear out slowly over time so it's obvious when they'll need replacing with planning. An emergency would be if you needed to replace a tyre when you get a puncture, but it's not worn out yet, so wouldnt normally need replacing.
Thankyou for including the relatively lower paid. I'm one of those "between" people, below state pension age and able to manage on a low yet adequate income from public sector pensions. I value having free time. However much of what you are saying is still relevant to me.
Agreed, it just goes to show how poor financial literacy is in this country , Andrew Craig goes deep into this in his channel, the fact that Brits dont invest in the stock market would be our downfall.
@@PeacockRhinowell rent is burned money with 0 chance to pull out something, but own property could go down in price as well, so it becomes better (if you not starting to renovate it straight away etc.) also depends on household income.. tbh you can cover a lot of points so it very controversial
@@MultiLogina You’re right from the avoiding rent and bad landlords point of view. I think people over buy in Britain though. By the time you factor in mortgage interest and maintenance costs it’s not always the best option. And you can only realise a gain by losing your home.
Many people get into financial trouble when they get a pay rise as they don't allow for tax and workplace pension deductions. Many people think that getting a £1000 pay rise means an extra £1000 in their pocket, whereas it'll be nearer 67% after 20% income tax, 8% NI & 5% pension contributions. One of the best hedges against inflation is to buy extra groceries each week. Especially if its on offer. It's surprising how that extra £10 spent on every shop on things like coffee, soup, beans, etc, can help in the long term, and will help see you through when the shops run out in times of panic, etc. Obviously longer life products such as in jars, tins and packets, providing you can afford it and have somewhere suitable to store it.
Also, although the capital appreciation on property may only be 5.8% per annum, you have put down 25% and 75% is the mortgage. However, you gain the 5.8% on the whole property value, not just your deposit/investment 👍🏼
how much have you saved as you would be better off having a LISA as the Government will give you a free £1000 every financial year if you managed to save £4000 per year. The money saved would need to be used to purchase your first home or for retirement and if you choose retirement saving then you would be able to access the funds aged 60 plus. The only downside is if you wanted your money for something other than a home or retirement you would have to pay a substantial penalty fee.
Not going to lie I want to try and live at home for as long as possible maybe till I'm 28 🤷♂️ I want to put atleast half down on a house and then buy a nice car aswell because I'm a big car fan 🤣
Thats the way to be, I did exactly the same at your age, unfortunately this is not the behaviour of most teenagers and twentysomethings. The first job I ever had as a teenager earned me around 7.5k a year, I probably saved at least 7k of this, however the other teenagers at the same place I worked had no money left from their monthly salary by the middle of the month.
Great video as always Mitch! Totally agree regarding lifestyle inflation. My outgoings haven't increased all that much over the last 6 years (apart from inflation in bills etc) but my salary has increased from £34k to £80k. The compound effect is also kicking in now too when I started out I was making a few quid per month in dividends, next month, my dividends alone will be over £500, which will all be reinvested :) Start small and grow from there! Everyone has to start somewhere, whether that be your first £400 in VUSA or, in my case, £100 in Lloyds shares!
Love how the sponsor is Hello Fresh which is basically a service where the user is paying a premium for their food. I understand you have to have sponsors to help fund your videos but seems counterintuitive and misleading promoting such company.
Thanks for the feedback, I get it, but another thing to consider is the cost of your time, especially as your progress through the income levels. If you value your time at £100 an hour, and it takes 1 hour a week to do a food shop, you’d be better off paying a premium for convenience, but certainly understand where you’re coming from!
Great video Mitch. With high interest rates at present, I think it would have been great to make people aware of how PSA applies and maybe don’t just keep your money in a Savings Account ie. Work out what the PSA threshold is and use some ISA allowance (if possible).
I am not entirely convinced that the amount you earn should have a dramatic influence on how you save/invest. Most people will live a life based on how much they earn and spend accordingly and lifestyle creep on increased earning is the financial killer. I know enough people earning far more than myself and are in a far worse financial position. I believe that age, circumstances, and location are far more important. As myself as an example I earn below the UK average wage, so when I finally looked at my finances and in particular my pension, even though decades off, I saw that my current trajectory was going to be unpleasant. So it was about getting my ducks in a row to create surplus. I know influencers talk about multiple income streams, but for the average person that is bollocks. For me, reducing my rent and travel expenses was the way ahead, and so moving closer to my job which was 35 miles away, and reducing my rent to having a mortgage of half that amount, gave me enough surplus that future wage increases were not eaten by a higher rent and fuel bill, but went into saving/investing.
Interesting video, however at £100k income you need to consider tax effeciency and planning. Pension is hard to beat at the 40% tax threshold. In addition once you have £500k/£1m individual/couple of assets outside a pension you are in scope of IHT. Perhaps morbid to think about, but having a 40% risk on excess is worth thinking about. Also as you get older it can be harder to pivot assets from inside estate to pension. Personally I'd like the government to increase IHT and just include a pensions component to simplify, but now there is no pension LTA this majes pensions a tax planning tool, although arguably it shouldn't be. I've seen on your other video that you have £160k, but with the way you are accumulating, you could have an IHT problem yourself in the next 5-10 years!
Yeah it’s a super important point, something I haven’t really thought about if I’m honest at this point! I’ll need to do some digging on that as the years roll on
@@MitchShoesmithI was the same, though one day my wife and I noticed we had "accidentally" become technical millionnaires, not that we live that lifestyle! It was more because our properties had appreciated, the mortgages were paid off and our ISA's grown, along with some winfall money due to redundancy and then taking on more lucrative work. In fact we both asked our parents to disinherit us and leave it to our kids, as we didn't want a bigger "problem". Most of our money now goes straight to pension and will probably stop that in a few years too. Looking to work less and now live more. The concept of living life with 40% off I think is apt once you hit the UK wealth wall!
At £100k you have to also take into account the 60% tax trap as you lose your personal allowance - between 100k - 125k makes even more sense to stash money into a pension for the tax relief.
I don't understand why you would ever chose to be a landlord when you have to leverage yourself, have the risk of tenant's not paying and damages, all for 8-10% yield on an asset that is very non liquid. Why not just have a QMMF or higher stock portfolio and make a similar amount with none of the headache? Please do help me understand your thinking, as I hope to one day be in your position financially.
Because I have the money tied up in a business account so it’s one of the ways I can move the money to buy assets. I would caveat this with everyone has their own appetite to risk and leverage and investment properties certainly aren’t for everyone
Thanks for the feedback, I get it, but another thing to consider is the cost of your time, especially as your progress through the income levels. If you value your time at £100 an hour, and it takes 1 hour a week to do a food shop, you’d be better off paying a premium for convenience. Sometimes it not purely about saving and what the opportunity cost is, but certainly understand where you’re coming from!
@@MitchShoesmith 😂😂😂 how many of your viewers do you realistically feel that relates to 😂😂😂 just own the fact you sold out and chased the sponsorship money. Hello fresh wouldn't be of benefit positively to the majority of your viewers and we both know that to be true, embarrassing that you're trying to justify it. You sold out for the payday. Fact.
Hey Mitch , very good video . I can do better editing in your videos which can help you to get more engagement in your videos . Pls lmk what do you think ?
When I go into the supermarket and finally pay for my goods the amount people pay for their groceries on their credit cards is frightening. I wished in my 20s to my 40s I was more frogol with my money but I am glad I took out a private pension in my early 20s Excellent video 👍
Are you one of the first people in your family to start investing? whenever i mention it it just gets put down as its seen as too much “hassle” or a gamble, the uk needs more people learning their financial futures to set them up for life.
Yeah literally the first person to do it consistently and outside the realms of workplace pension, I definitely agree with you, I wish they taught it in schools, just trying to do my bit through the medium of this channel to help in any way I can!
Credit cards are not always bad. My employer is very tight. I have to spend my business expenses on my personal credit card and then claim my expenses and get paid the following month. If I avoided credit cards, I'd be spending for flights and hotels on my debit card, leaving me out of pocket all month.
@@KS-jn5pv stfu, learning involves critical thinking and research, not parroting some random youtuber and his "trust me bro" logic... I suggest you go away and learn, if you have the thinking capacity...
@@KS-jn5pv poor you, did i burst your bubble of delusion, keep it factual if you want to provide information. Doubling the numbers from the outset is a surefire way to make all the numbers wrong... retrd.
How’s about actually enjoying life instead of focusing so much on investing or saving? All of our priorities changed once we had children. The memories we make with them are way more valuable that scrimping just to save/invest hundreds or thousands every month. Live life to the full, as you could get hit by a bus tomorrow…
Hello fresh sponsorship? Seems against the whole theming of the channel, frugal money saving ideas you normally suggest? Instead overpriced convenience? Whats next tell us we are better off going for a starbucks everyday instead of coffee making at home???Sold out to the highest bidder I guess.
@@rob_h_7 post a month worth of hello fresh meals that result in £1.26 a portion, there own website even states in bulk for 2 people it being much much higher than what you've stayed, so post how you'd do a month with them for 1.26 a portion, you cant and won't
![[MV] A leap of faith...ความเชื่อใจครั้งสุดท้าย (From "Petrichor the series")](http://i.ytimg.com/vi/U1piZH2CNXA/mqdefault.jpg)
Happy Sunday guys! I hope this video was useful, for me all of the strategies are important, but some are just easier to achieve as your progress through the income levels. Let me know your best financial strategies down in the comments section below! Also thanks to HelloFresh for sponsoring todays video, here is a link for 60% off if you're interested: www.hellofresh.co.uk/MITCH60
Just to correct a few things:
APR is the rate after it has compounded each month for a year.
The 4% rule doesn't say that your portfolio shouldn't go down in value, it's that you shouldn't run out of money over a typical retirement length.
Thank you for raising how hard it is for single people. I live on my own and it can be hard, but in the north i can just about cover my expenses for 3 months of bills. Keeping out of expensive debt is really key. But finding a permanent iob that allows progression is even harder. I dont know how people in more expensive areas cope 😢
I agree with pay yourself 1st ...it's transformed my habits ...wierd how you can think you're skint but in fact you spend in a silly way ...switching to that mentality I've saved 5.5k in just over 6 months ...I'm on £32k
Smashing it 💪🏼
Buying tyres should be in your budget, not an emergency, they wear out slowly over time so it's obvious when they'll need replacing with planning. An emergency would be if you needed to replace a tyre when you get a puncture, but it's not worn out yet, so wouldnt normally need replacing.
I understand what you're saying, principally hopefully I explained what I meant correctly!
Thankyou for including the relatively lower paid. I'm one of those "between" people, below state pension age and able to manage on a low yet adequate income from public sector pensions. I value having free time. However much of what you are saying is still relevant to me.
Far too many people in the UK think investing in the stock market is like gambling - keep getting the truth out there!
Agreed, it just goes to show how poor financial literacy is in this country , Andrew Craig goes deep into this in his channel, the fact that Brits dont invest in the stock market would be our downfall.
People make the big mistake of thinking that the house they live in is an investment.
@@PeacockRhinowell rent is burned money with 0 chance to pull out something, but own property could go down in price as well, so it becomes better (if you not starting to renovate it straight away etc.) also depends on household income.. tbh you can cover a lot of points so it very controversial
@@MultiLogina You’re right from the avoiding rent and bad landlords point of view. I think people over buy in Britain though. By the time you factor in mortgage interest and maintenance costs it’s not always the best option. And you can only realise a gain by losing your home.
@@PeacockRhino you can remortgage and take out some gains
Many people get into financial trouble when they get a pay rise as they don't allow for tax and workplace pension deductions.
Many people think that getting a £1000 pay rise means an extra £1000 in their pocket, whereas it'll be nearer 67% after 20% income tax, 8% NI & 5% pension contributions.
One of the best hedges against inflation is to buy extra groceries each week. Especially if its on offer.
It's surprising how that extra £10 spent on every shop on things like coffee, soup, beans, etc, can help in the long term, and will help see you through when the shops run out in times of panic, etc.
Obviously longer life products such as in jars, tins and packets, providing you can afford it and have somewhere suitable to store it.
Good tips all round 💪🏼
Also, although the capital appreciation on property may only be 5.8% per annum, you have put down 25% and 75% is the mortgage. However, you gain the 5.8% on the whole property value, not just your deposit/investment 👍🏼
Yeah exactly, good way to positively leverage other people’s money (the banks) IMO!
And as for credit card debt...be savvy ...very savvy ...I've just save a small fortune taking a 0% cash transfer to pay down my 8.7% mortgage
Explain please
Not heard of this before.. would be interested to hear more
Why how did your mortgage interest rate get so high?
I save/ invest about 90% of my money, im 19 and living at home so trying to build up a big down payment on a house over the years im living at home :)
how much have you saved as you would be better off having a LISA as the Government will give you a free £1000 every financial year if you managed to save £4000 per year. The money saved would need to be used to purchase your first home or for retirement and if you choose retirement saving then you would be able to access the funds aged 60 plus. The only downside is if you wanted your money for something other than a home or retirement you would have to pay a substantial penalty fee.
Not going to lie I want to try and live at home for as long as possible maybe till I'm 28 🤷♂️ I want to put atleast half down on a house and then buy a nice car aswell because I'm a big car fan 🤣
Smashing it mate, stay disciplined 💪🏼
@@MitchShoesmith thank you 🙏
Thats the way to be, I did exactly the same at your age, unfortunately this is not the behaviour of most teenagers and twentysomethings. The first job I ever had as a teenager earned me around 7.5k a year, I probably saved at least 7k of this, however the other teenagers at the same place I worked had no money left from their monthly salary by the middle of the month.
Great video as always Mitch!
Totally agree regarding lifestyle inflation. My outgoings haven't increased all that much over the last 6 years (apart from inflation in bills etc) but my salary has increased from £34k to £80k.
The compound effect is also kicking in now too when I started out I was making a few quid per month in dividends, next month, my dividends alone will be over £500, which will all be reinvested :)
Start small and grow from there! Everyone has to start somewhere, whether that be your first £400 in VUSA or, in my case, £100 in Lloyds shares!
Love that Tom, keep going mate 💪🏼
Love how the sponsor is Hello Fresh which is basically a service where the user is paying a premium for their food. I understand you have to have sponsors to help fund your videos but seems counterintuitive and misleading promoting such company.
Thanks for the feedback, I get it, but another thing to consider is the cost of your time, especially as your progress through the income levels. If you value your time at £100 an hour, and it takes 1 hour a week to do a food shop, you’d be better off paying a premium for convenience, but certainly understand where you’re coming from!
@@MitchShoesmith other than that another great video!
Great video Mitch. With high interest rates at present, I think it would have been great to make people aware of how PSA applies and maybe don’t just keep your money in a Savings Account ie. Work out what the PSA threshold is and use some ISA allowance (if possible).
Been enjoying watching your progress over the last couple of years.........impressive buddy
Thanks Will, appreciate it!
I am not entirely convinced that the amount you earn should have a dramatic influence on how you save/invest. Most people will live a life based on how much they earn and spend accordingly and lifestyle creep on increased earning is the financial killer. I know enough people earning far more than myself and are in a far worse financial position.
I believe that age, circumstances, and location are far more important.
As myself as an example I earn below the UK average wage, so when I finally looked at my finances and in particular my pension, even though decades off, I saw that my current trajectory was going to be unpleasant. So it was about getting my ducks in a row to create surplus. I know influencers talk about multiple income streams, but for the average person that is bollocks.
For me, reducing my rent and travel expenses was the way ahead, and so moving closer to my job which was 35 miles away, and reducing my rent to having a mortgage of half that amount, gave me enough surplus that future wage increases were not eaten by a higher rent and fuel bill, but went into saving/investing.
Don't forget that if you contribute via salary sacrifice you save NI too. Not just 40% tax but NI as well.
Interesting video, however at £100k income you need to consider tax effeciency and planning. Pension is hard to beat at the 40% tax threshold.
In addition once you have £500k/£1m individual/couple of assets outside a pension you are in scope of IHT.
Perhaps morbid to think about, but having a 40% risk on excess is worth thinking about. Also as you get older it can be harder to pivot assets from inside estate to pension.
Personally I'd like the government to increase IHT and just include a pensions component to simplify, but now there is no pension LTA this majes pensions a tax planning tool, although arguably it shouldn't be.
I've seen on your other video that you have £160k, but with the way you are accumulating, you could have an IHT problem yourself in the next 5-10 years!
Yeah it’s a super important point, something I haven’t really thought about if I’m honest at this point! I’ll need to do some digging on that as the years roll on
@@MitchShoesmithI was the same, though one day my wife and I noticed we had "accidentally" become technical millionnaires, not that we live that lifestyle!
It was more because our properties had appreciated, the mortgages were paid off and our ISA's grown, along with some winfall money due to redundancy and then taking on more lucrative work. In fact we both asked our parents to disinherit us and leave it to our kids, as we didn't want a bigger "problem".
Most of our money now goes straight to pension and will probably stop that in a few years too. Looking to work less and now live more.
The concept of living life with 40% off I think is apt once you hit the UK wealth wall!
At £100k you have to also take into account the 60% tax trap as you lose your personal allowance - between 100k - 125k makes even more sense to stash money into a pension for the tax relief.
Good insight here Mitch
Thanks dude
I don't understand why you would ever chose to be a landlord when you have to leverage yourself, have the risk of tenant's not paying and damages, all for 8-10% yield on an asset that is very non liquid. Why not just have a QMMF or higher stock portfolio and make a similar amount with none of the headache? Please do help me understand your thinking, as I hope to one day be in your position financially.
Because I have the money tied up in a business account so it’s one of the ways I can move the money to buy assets. I would caveat this with everyone has their own appetite to risk and leverage and investment properties certainly aren’t for everyone
@@MitchShoesmith That makes alot of sense, thanks 👍
@@MitchShoesmith As a company director you can pay loads into your pension and reduce the company’s corporate tax.
@@MitchShoesmithMorally though, it sits ok with you?
you’re thoughts on Palntr?
Long term hold!
How save money . Don't buy from hello fresh . Shop locally n save money. Tip no1
Thanks for the feedback, I get it, but another thing to consider is the cost of your time, especially as your progress through the income levels. If you value your time at £100 an hour, and it takes 1 hour a week to do a food shop, you’d be better off paying a premium for convenience. Sometimes it not purely about saving and what the opportunity cost is, but certainly understand where you’re coming from!
@@MitchShoesmith as someone who was self employed, I know time is money ,
You don't get a kick back from hello fresh by any chance....
@@c40uk98 not for any sign ups no
@@MitchShoesmith 😂😂😂 how many of your viewers do you realistically feel that relates to 😂😂😂 just own the fact you sold out and chased the sponsorship money. Hello fresh wouldn't be of benefit positively to the majority of your viewers and we both know that to be true, embarrassing that you're trying to justify it. You sold out for the payday. Fact.
Where did you buy the house??
It’s a flat in the midlands in a place called Sutton Coldfield.
Hey Mitch , very good video . I can do better editing in your videos which can help you to get more engagement in your videos . Pls lmk what do you think ?
When I go into the supermarket and finally pay for my goods the amount people pay for their groceries on their credit cards is frightening. I wished in my 20s to my 40s I was more frogol with my money but I am glad I took out a private pension in my early 20s
Excellent video 👍
@@CJMVector321190 So very disciplined unfortunately not everyone is and cannot stretch their wages 👀
Very valuable advice- Thank you.
Mitch is an absolute legend
Appreciate you Max!
Are you one of the first people in your family to start investing? whenever i mention it it just gets put down as its seen as too much “hassle” or a gamble, the uk needs more people learning their financial futures to set them up for life.
Yeah literally the first person to do it consistently and outside the realms of workplace pension, I definitely agree with you, I wish they taught it in schools, just trying to do my bit through the medium of this channel to help in any way I can!
I'm on £0 a year but have £30k in savings. Great, eh?
Credit cards are not always bad. My employer is very tight. I have to spend my business expenses on my personal credit card and then claim my expenses and get paid the following month. If I avoided credit cards, I'd be spending for flights and hotels on my debit card, leaving me out of pocket all month.
Yeah that’s the perfect reason to have a credit card, just make sure you pay it off each month!
Its ironic that you are sponsored by a company that wants to reel you into monthly commitments.
Because youtubers are full of shit
The average salary figure does not count minimum wage zero hour contract type jobs, 16k is closer to reality...
Either come here to learn or go moan somewhere else mate.
@@KS-jn5pv stfu, learning involves critical thinking and research, not parroting some random youtuber and his "trust me bro" logic...
I suggest you go away and learn, if you have the thinking capacity...
@@KS-jn5pv I stated a simple fact, don't hate me for doing such a thing, how can anyone learn from your misinformation.
@@KS-jn5pv poor you, did i burst your bubble of delusion, keep it factual if you want to provide information.
Doubling the numbers from the outset is a surefire way to make all the numbers wrong...
retrd.
How’s about actually enjoying life instead of focusing so much on investing or saving? All of our priorities changed once we had children. The memories we make with them are way more valuable that scrimping just to save/invest hundreds or thousands every month. Live life to the full, as you could get hit by a bus tomorrow…
I certainly don’t compromise life experiences to save a few extra quid, there is certainly a balance!
I know it's good financial advice, but welp, buying car in cash == me on a bus till my 90s.
Great video, BTW.
Thanks dude! Could always get a cheaper car?
@@MitchShoesmith you're right. I'm setting more realistic expectations AtM 😅
Great video, thanks Mitch! :)
Hello fresh sponsorship? Seems against the whole theming of the channel, frugal money saving ideas you normally suggest? Instead overpriced convenience?
Whats next tell us we are better off going for a starbucks everyday instead of coffee making at home???Sold out to the highest bidder I guess.
meals starting from £1.26 per person is hardly going against the ethos of the channel and 'selling out'
@@rob_h_7 love to see you design a meal plan for a month at £1.26 a meal from a business trying to make money from you don't talk so much tosh
@@rob_h_7 post a month worth of hello fresh meals that result in £1.26 a portion, there own website even states in bulk for 2 people it being much much higher than what you've stayed, so post how you'd do a month with them for 1.26 a portion, you cant and won't
Slick haircut
Thanks 😆
If you want your channel to grow quicker add timestamps to all videos
I do usually, I think I forgot on this one
No way you went from 28k to 100k in 4/5 years time ….
In the spirit of transparency it went from £28k to well over £100k
I’m guessing majority of it or at least 50k is from TH-cam.
I could do a more in depth earnings breakdown if it’s of interest / value add?
@@MitchShoesmith would be a great video, something different for the community.