Depressing. Somehow I thought it would be more than this but years of high London rents, high London taxes have taken their toll. Now childcare. How do you make real wealth without family money to start you off?
Not bad compared to most of the UK though
It’s pretty much impossible, straight up, to have a positive net worth in the UK at the age of 30 assuming your have student loans.
Unless you’ve inherited a boat load of cash.
Family money at 1mil is where it starts as you can purely use fundamentals (although today much more difficult as even Buffett says he couldn’t repeat his success), under that and you have to combine it with technicals to time everything, including the markets (you can) but the problem is you need institutional fintech and experience (like working at top levels of JPMorgan) as doing it manually is a negative return.
A family office can in theory generate much higher returns but rarely do (more 20-30%), attrition is the great game changer of life, again you can as I was incubating a regulated fund to settle at 50%pa on 1mil units but these are top-tier type situations, I was talking to someone the other day and we concluded you need hold times of 7-10yrs and 15-20yrs before your seed (property, gold, stocks) becomes something meaningful using anything normally available.
At 35 with 500k is good compared to most, but it seems as you get older you need more, if you can generate 20%pa on 500k it’s still a pretty good life compared to most and leaves you with opportunity, namely time.
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How to generate 20% on £500k though? This is the question. Most of this is also invested in my home. I earn a lot more than the average but wealth generation turns out to be harder than I thought
This is already pretty good compared to the average peers, eg. same age, same location.
Exploring living elsewhere to lower the rent, or alternatively starting a side business if you do have some time available and invest the proceed from this new side would help to increase this number.
I work in a bank. Life is Wales is not a possibility. Income maximisation is the game
Go for it then, either allocate some capital you have idling on new ventures but stay as passive investor: lending, investing, etc or also if you do have time start something on your own: consulting, import/ export, only shop, …
Under 1mil it always is harder as you can’t just rely on fundamentals, how to generate 20% on 500k, using the oldest trick in the book, buy low and sell high.
Oil at $6 in 2020, Boeing BA at $135 in April (that was a nice trade), S&P when it dipped -20% in this year, Gold at $250/oz in 2000, if you rely on fundamentals you would never book the trade.
UHNW allocate 1% to crypto which averages 600%/yr and makes almost 2/3rds of the gains, assuming you time the entry and the opportunity hasn’t lapsed, the problem is everyone is in fear at those moments, but as Buffett said be greedy when everyone else is fearful.
Compounding at 20% per annum is simply not a realistic goal even for professionals. Warren Buffett has a track record right about there. Similarly buying low and selling high is not a strategy, it’s an aspiration. (source: former multi-asset trader/PM, peak book size $5B)