Monthly Budget 2020

A while ago I did a breakdown of what an average month looks like for me and thought it would be interesting to compare how things look today. My life several years ago was pretty extreme. I was sharing a sofa-bed with my ex in someone else's lounge at one point - not something I'd recommend! Things have improved quite a bit since then. But I haven't done a comparison for a while, so this will be interesting for me too...

INCOME

£1943 (Salary after tax and pension contributions)

EXPENSES
 
£600 (Rent, utilities and other household bills - I pay a lump sum for a room in a houseshare)
£10 (Travel - my commuting costs have almost disappeared since getting a job close to home)
£12 (Phone/Internet)
£15 (Clothes/Accessories/Toilettries - I generally either raid charity shops and adjust the items or just make my own from scratch if I need clothes. Slow or non-perishable toilettries I buy in bulk at the start of the year as this gives me a huge discount)
£20 (Work expenses - things like batteries for my keyboard/mouse, a new phone charger)
£0 (Debt / University fees - I paid off everything a few years ago and have paid for any qualifications since then in cash)
£50 (Gifts - Christmas / Birthday presents, socialising and other random expenses - the majority of this goes on presents)

£1943 - £707 = £1236 left for saving / investment

So that's roughly where my money goes each month. I've cut back on a lot of things and have tried to simplify everything else. Being single has helped, as it meant I could easily downsize my living arrangements. And I work within walking distance of my home, so unless it's torrential rain outside then I can walk to and from work (although during lockdown I haven't even needed to do that).

My biggest expense after rent are gifts or social events that I'm expected to attend (birthdays, weddings, etc). I now keep a seperate savings account for these and just siphon away a bit of money each month to cover any random expenses. Anything I don't spend during the year gets reinvested into other assets.

I would still like to increase my salary. I earn an income from investments, but that gets spun back into other assets so I consider that seperate to 'living' money. I have a small hobby company now, but that will take a few years to monetise. So I'm looking into other avenues for extra income in the meantime. If anyone can suggest any (legal) methods then I would love to hear them!

Buy All The Things, All At Once!

Ok, not literally. But I mentioned in previous posts that I've made a habit of buying everything I need for the year (or more) en masse in the January sales. Bulk purchasing items can save you a lot of money in the long run, assuming you follow some simple rules. Failure to adhere to these rules will result in you wasting money, so don't just rush in with your wallet before thinking ahead.

Try before you buy!

This may sound incredibly obvious, but don't buy any items that you haven't already tried and know you like. Splashing out £500 on 30 boxes of random deodorant, only to discover a day later that it leaves the underarms of your t-shirts looking like a bottle of Tippex exploded in the wash is a quick way to lose £500! Only buy products that you have tried in the past and know will be put to good use.

Avoid perishable goods

Another seemingly obvious one, but don't bulk buy anything that will go off long before you get round to using it. 10 crates of blueberries for £20 is a bargain only if you plan to eat, freeze or preserve them immediately. I tend to keep bulk purchases of most food items to a maximum of a few months supply and only do yearly stock ups of items that I know will last a long time. Also, a year of eating the same food can get pretty boring after a while if, like me, you prefer to change things up every now and then. Plan ahead and make sure you can either store or eat anything that could go rotten. Sometimes the amount of time and work needed to properly store it just isn't worth the money you save.

Check you have storage space

Following on from the above rule... if you do plan to store either perishable or non-perishable items, then check you actually have the space to fit it all somewhere. If you live in a tiny bedsit and only have one plastic container and a few empty gaps under the bed, then don't go crazy and fill up the entire place with 1000 loo rolls. Unless you enjoy living in a pretend fortress and want to relive the excitement of hiding in the supermarket stacks as a child (which is entirely understandable). If you're more of a minimalist type that recoils in horror at having a single ornament littering the perfect lines of your otherwise empty home, then make sure you know where all of your supplies will go before buying anything. Having to pay therapist fees for a psychological meltdown will quickly eat up any money you saved!

Shop around or wait for bargains

Buying things in bulk will usually save money anyway, but ideally you want to save additional money buy waiting until the items you need are on offer. Look around for deals before you bulk buy anything. Haggle further if you can, as some suppliers are happy to give you a better deal if you are willing to take a large amount of stock in one go. There are a couple of markets that I frequent where the traders will offer extra reductions if I pay in cash.

The January sales are a good time to pick up a lot of good bargains. Although check you are actually getting a good rate, as some shops will offer 'discounts' that really aren't. Just because the item is included under a big 'SALE' sign, doesn't necessarily mean it's worth buying. Check the price per item first.

For the less mathematically able among us, to calculate the price per item you just take the total price and divide it by the number of items included. For example, if a shop is selling a crate of 80 oranges for £12, then you would divide £12 by 80 to get a cost per individual orange of 15p.

Online cashback or coupon sites

If you prefer to shop online for most things, get into the habit of checking for extra discounts or coupons via sites like Top Cashback rather than going directly to the shop website. Obviously don't buy things just for the cash back, as that defeats the whole purpose. But if you are planning to stock up on an item anyway, then check if you can get a better deal. It's also worth asking around your friends and family in case they have coupons for items they don't use. Sometimes you can swap them for something you won't use. Which leads to...

Network, network, network!

Do you know others in your social circle that are trying to save a bit more money? If so, it might be worth teaming up and buying even bigger stacks of items in one go. You may find you get an even bigger discount if you purchase 40 boxes of something together rather than 20 boxes each as two separate customers. Or perhaps there is an item that both of you use, but you can't justify buying enough of in one go to get any discount. Teaming up with a housemate/colleague/friend/relative could mean that the total purchase qualifies for 5% off, which benefits you both. Just ensure you live close enough that you don't waste all of the money you save on delivering their shopping!

Buying things in en masse can save you quite a bit of money if done right. Just make sure you plan ahead and avoid any hidden costs.

Winter's Coming!

This will only be a quick update, as I've taken on extra work to build up a bigger and faster nest egg. I'm also spending a lot of my free time pouring over old economic data for patterns.

However, I've started to pull some of my european investments and switch for cash in preparation for the coming big R. I remember the previous recession incredibly well. In fact, it has scarred me for life - thankfully! In my case, having very clear memories of the year or two leading up to it means that I notice those same patterns when they repeat themselves. When one or two repeat, it gets my attention but the issue normally resolves itself. But right now, all of the economic data is pointing towards a nearing cliff edge. So I'm getting myself ready.

I'll freely admit, I can't predict how quickly each domino will fall. Every recession behaves a bit differently. 2008 was fairly quick to happen and slow to recover. In fact, those of us who started our careers in 2008 still haven't recovered. But we are also hyper aware of changes in the economy, which is to our benefit.

There are multiple signals that I look out for, but the main ones are:

The Housing Market

Property prices have stagnated this year. In most places, they haven't started to decline yet. But London tends to be a catalyst for changes elsewhere and the London market isn't looking great right now. Outside of London, new buyers (the GenY/Millennial/Gen Z crowd) are too strapped down with student debt, low wages and high rents to consider house purchases. So as the older owners are starting to downsize or die off, fewer young customers are queuing up to buy from them. This problem isn't unique to the UK. Australia, Canada, America and elsewhere appear to be suffering the fallout from the same generational divide in wealth. Their housing markets are starting to feel similar pressure. In fact, many are predicting a downright crash and advising clients to stay away for now. Foreign investors in the UK market have started to pull away, leaving only 5% of housing stock owned by overseas buyers rather than 12% in 2010. It could be argued that a decline in house prices is a good thing, as those in their 30s waiting to buy a home and start a family will finally be able to. However, when viewed in conjunction with other economic signs, it suggests a not-so-rosy near future.

Debt Levels

Debt is always something I pay attention to, regardless of how the economy is doing. I have an abnormally old fashioned view of debt compared to most people (all debt is bad), which I don't expect the rest of society to follow. But while I assume there will always be some state, business and personal debt, there is a scale from 'bad' to 'worse' to 'unmanageable'. At present, the Eurozone is nearing the 'unmanageable' end once again. Several debt figures should get people's attention. Individuals already have more debt, credit companies are lending out more debt and state spending is up (and a growing population means that spending will only increase further).

Unemployment Figures

These are interesting, as the data currently shows generally low unemployment. However, the total figures hide the fact that wage growth has flat-lined (as an example, I haven't had a pay rise in real terms in almost 20 years) and 'employed' includes underemployment (forced part time or unskilled jobs), zero hours, temporary contracts, those who have stopped looking for work or claiming job seeker benefits, those classed as self employed (even if not earning), and anyone else who may have simply fallen into the gap. I would be far more interested to know how many people are in full time, living wage or above jobs. And by 'living wage' I mean a salary that can cover basic rent, travel costs, food, pension savings, healthcare, other everyday bills, money to save for a house deposit within 5-10 years and repayment of the average student debt. I don't think those numbers would be so high!

Stock Market Drive

Last year saw big gains for those who were lucky enough to have timed the market correctly. Both the UK and US markets crashed and bounced back up following Brexit and Trump's win and they have continued to soar upwards ever since. The S&P 500 has broken multiple highs and is currently on its way to 2500, and the FTSE 100 has been bumping around the 7500 mark following a similar pattern. There was a market boom just like this before the 2008 crash. Markets were reaching new highs amid cheers from investors, lenders relaxed their standards for lending to buyers (oh, hang on),  the housing market began to cool off, panic set in as the number of mortgage defaults increased, then the problem spread outwards to other parts of the economy.

Today, we have the added problem of massive student loans (small mortgages in their own right), Brexit, the myriad problems in the EU (which has only very recently come out of the 2008 recession), China acknowledging their own debt problems (albeit a different situation) and a new creature in the form of subprime car loans in the US. This all feels like déjà vu to me. With the added fun of already non-existent interest rates, backing the BoE into a corner.

Good luck everyone and see you on the other side!


* EDIT: Shout out to the owner of Spicer Lemonade Stand at the Lovebox Festival and her parents for encouraging early entrepreneurial skills! I started my working life selling home-grown tomatoes along our street with my brother and sister and it was an excellent way to learn the basics of business. I hope to see you on Dragon's Den in the not too distant future!

When Everyone Decides To Gets Married

I began Monday morning by looking over my accounts for the last few years and congratulating myself on managing to pay off all my debts and save £18k during the worst economic period since the great depression, while on minimum wage (or no wage) jobs, and with zero help. That was an excellent learning experience to have at the very start of my working life and something that will likely influence my financial behaviour for decades to come.

Ok, so I'm miles away from my millionaire goal after a decade of living like a Dickensian pauper, but I know of at least two of my peers that are no longer with us due to the toll that the recession took on my generation. So in comparison I think I'm in a pretty good place and can't complain. There were many times where I came incredibly close to joining them, so I'm glad to at least be alive today.

However, since that morning of congratulation I have received invites or notifications of not one, not two, but six major events (so far) that will undo a lot of that hard work. First of all, my sister got married last November. I was just getting back on my feet after another short period of unemployment between contracts (trying to start a proper career at 30 after a series of McJobs is difficult) and it took a while to repay the favours I had to get from family to attend. Following that, I had two 30th birthdays of close relatives, an 80th, and a 21st (all requiring big gifts - my family love big events and presents). Fortunately, since January I've had a break from using up gift money so I've had time to restock my gift account (yep, I have a savings account just for presents). I have another big wedding in the summer for my cousin, which I've had time to plan for. However, I've now discovered that I need funds for two more weddings, a new baby, a 21st, as well as a 30th and two 60th birthdays. And these are all close family members (yay for huge dynasties), so I can't avoid the parties and gifts without being a social pariah forevermore.

But having so many big events so close together is going to hammer my bank account! I don't earn much above minimum wage, so it takes forever to save up. And my family all earn significantly more than me (or have married wealth), and have homes, cars, all the basics already covered (unlike me). So keeping up with them is incredibly difficult yet expected by everyone. I can't count the number of times I've got into rows over non-attendance at 'important' events or have been accused of being cheap because I couldn't afford to go to some party or dinner. It's a difficult balancing act. I'm hoping after the next 18 months is up, that will be it for weddings, babies and milestone birthdays. Either that or I'll have to emigrate!

My Current Budget

I always like to see the exact figures that people use when budgeting their income. So for the sake of fairness, here's mine for an average month (I put money into seperate accounts for the month and if it isn't spent by the end of the year then it goes into investments) :

Take home pay after tax/NI: £1330

Private SIPP: £40
Other pension: £30
Rent (main bills included) for room in houseshare: £400
Commuting costs: £290
Phone/Internet: £12
Food/Household: £100
Clothing: £10 (if that)
Gifts/Charity: £50
Social (weddings/birthdays, etc): £30
Emergency Fund: £25

The remaining £343 goes into savings/investments.

I'm sure that might seem a bit extreme to some people. I don't have holidays or go out unless it's a big family event. Any clothes I get from charity shops if I can't mend existing ones. I have a very basic package phone/internet on a very old second hand model. I also don't own a car. It's difficult, but I want my own home at some point before I turn 40, so I have to make sacrifices now. That's life.

March Update

I received a lovely surprise yesterday afternoon. When checking my bank balance, it seems that a company I contracted for last spring has given me around £1000 tax return. Thank you Past Tense Self! It may sound odd, but I never check my tax figures until right at the end of the financial year, as I consider it a potential savings account. Although I know the money is mine already, getting a random unexpected payment the next year always cheers me up and acts as additional motivation! It's an illogical, but positive psychological boost.

So altogether my net worth is now £17,250 and earnings per day (passive interest) is £1.20. I know it still isn't anywhere near my million pound goal, but when looking at my progress plotted on a chart over the last decade it's wonderful to see the debt total plunge and completely disappear and the assets total increasing on a gradually steeper curve. Considering all the redundancies, moving around the UK to different jobs and homes, living like a hermit and sacrificing everything to get this far... I'm pretty pleased with those figures.

Asset Review - Ratesetter

I don’t like risk. I don’t get any kick out of casinos, high risk betting, short term stock market investments or even putting a tenner on my friend’s ability to drunkenly run up a wall without face-planting the concrete on a night out. I try to take the same low risk approach with other areas of my life. With bank interest rates currently dragging along the floor and inflation gliding around 1.6% as of today (no, I don’t believe it’s that low either), simply keeping your savings stashed in a regular account or under the mattress is guaranteed to lose you money. That’s an incredibly high level of risk. Far too much risk for my liking! So I try to hunt around for safer places to deposit my earnings.

Ratesetter is one of the peer to peer lending platforms that I’ve used over the last few years and one that I would still recommend today due to its lower than average level of risk. It was brought to life in October 2010 and for a few years I carefully watched my family and friends using it to make a regular income before deciding to take the plunge with my own cash. It has a very basic set up (great for newbie investors like me) with options to auto-lend either capital or capital plus earned interest, options for a 5 or 1 year bond (currently offering 3.5% and 5%) or the ability to lend on a rolling basis. Interest starts to accrue as soon as your money is matched to a loan and the capital and interest is paid out when you sell/withdraw funds.

For the very lazy, Ratesetter does offer the ability to automatically lend your money at whatever average rate the market is accepting at the time. However, I personally prefer to check the 1 and 5 year bond rates each week and set my accepted rolling interest rate somewhere in the middle of these two figures. The automatic rolling rates tend to be quite a bit lower than the bonds (around 2.5% currently), so it’s worth checking and adjusting your own rate on a regular basis (although be aware that if you set your rate too high then it will take longer to get a borrower).

I’ve only used the rolling market option, as I like to have the ability to grab my money and run at short notice if need be. So my review is based entirely on that experience. I know a couple of people who use the 5 and 1 year bonds, but the interest rates on these tend to fluctuate a lot and I don’t want to miss out on added interest. There are also exit fees on the longer term bonds of up to 2.5%, which the rolling market option doesn’t have. Bear in mind, there is still a fee of £1.50 if you use a debit card to invest less than £1000 in a rolling account. You can invest a minimum of £10, but I tend to always keep £1000 in my account (mainly because I’m too cheap to pay the £1.50).

Ratesetter has a nice provision fund that can cover any bad debts by 116% if need be, although default rates are pretty low due to Ratesetter’s underwriting team being fussy about which borrowers they accept. Default rates were 2.78% for 2015 and 0.98% for 2016, which is far short of the 116% covered. But the provision fund is nice to have just in case. With the rolling account, I’ve also had loans repaid early by the borrower fairly frequently and I’ve had the ability to exit loans early if I needed to. I like knowing that I have this option as an extra safety net.

While there is always some amount of risk in any investment, I’d argue Ratesetter is one of the safest options I’ve found so far. It does require a few minutes of work each week if you want to get the best rates, but it is worth the effort in my opinion.


To open your own Ratesetter account:

Sign up for Ratesetter and receive a £100 bonus when you invest £1000 or more for 365 days!

Disclaimer: The above bonus applies to new lenders only. If you sign up through the above link, I receive a small referral fee at no expense to you which means I can continue this blog without having to use annoying advert pop ups!

Dirty Bankers and Their Enormous Assets

Welcome to 2017!

First of all, I haven't added any new posts in a while as I've been busily jumping through hoops to stay employed (such is the new 'gig economy' we have now). Although my 'jumping' has contributed in many ways to the advancement of my financial knowledge, so I now feel as though I have some useful tidbits to add here. Especially to the younger generation, who I feel have been treated incredibly unfairly by pretty much everyone. If any of them accidentally stumble into this blog whilst exploring the deep dark depths of the internet and happen to pick up just a tiny speck of helpful information, then I will feel as if my ramblings have done a bit of good. The education system fails miserably at teaching its charges the basics of money, and today's young people are the ones who will need these skills more than anyone!

So... without going into the boring details, since we last met I've had a big career change, graduated, completed a vocational course at break-neck speed, and I'm now employed to do very geeky things by a nice team of fellow geeks (who I'll avoid naming here in case they throw Lego at me). During my detour I spent some more time within the banking industry (the 'eye of the storm' is always an interesting place) and expanded my understanding of assets vs liabilities, which I will now attempt to explain using the medium of colourful pictures and witty yet informative prose. I apologise in advance for the lack of artistic skill.

Say hello to Ben and Eric...

Ben and Eric are exactly the same age (25), have exactly the same education and student debt (£30,000), began life with exactly the same amount of money (£0) and earn exactly the same wage (£20,000 per year) in the exact same job. Because sometimes life is just crazy like that!

Both Ben and Eric are dating a girl named Jennifer, but we'll avoid that awkward conversation for now.

Both Ben and Eric work hard and are pretty sensible with money. They both decide they want to have as much money in the bank as possible by the time they are 35, so they can afford to buy a house. A small starter home in the local area costs £150,000 and the bank wants a minimum deposit of £25,000. Both Ben and Eric plan to save up the £25,000 over ten years so they can buy the house (they are both equally deluded, but we can admire their optimism for the sake of this story).

Here's a picture of the house: average sized two-bed semi, small garden with patio area, lovely south-facing views from the main bedroom. If you follow me upstairs you'll notice the additional storage space to your left and over there is the entrance to the 2 by 2 square foot attic conversion the owners had installed. Because everyone loves an attic conversion, right? Every self respecting home owner needs somewhere to keep their important-junk-that-will-be-boxed-up-and-undisturbed-until-the-year-2875!

 (I'm aware that it looks like a dolls house - don't judge me!)

Ben and Eric both have £2,000 disposable income left each year after paying tax, rent, commuting costs, bills, food and presents for their always slightly distant girlfriend. Both Ben and Eric are careful to avoid wasting money on any expensive purchases like flashy new cars, holidays abroad, high end gadgets or weekends clubbing. They live like hermits, remaining totally focused and dedicated to the cause. Constantly having landlords sell up and having to move flat gets pricey, so they both decide to live in an abandoned warehouse during the summer months to save a bit extra. Both Ben and Eric know that anything worthwhile in life takes hard work, patience and the odd stint living on the streets. 

For the first three years, both Ben and Eric save £6,000 in a savings account. The interests rates are very low and their savings don't grow all that much. But they keep going, determind to get that house!

However, one cold and frosty winter evening Ben accidentally flicks past a business channel on TV whilst searching for the latest episode of X Factor. The reporter mentions 'assets' and Ben wonders what they mean. He decides to look up that word on a completely nondescript search engine.

'That's interesting', he thinks. After a bit more reading he discovers another useful term: 'liabilities'.

'Maybe I should start buying assets instead of presents for Jennifer?' Ben thinks to himself. 'That way I will still be earning money from my salary, but my money will also be earning money at the same time.'

Ben does a bit more research into the different types of assets he can buy. Many of them are too expensive, but there are some that Ben decides he can afford with money he has saved. Ben leaves £2,000 in his savings account and splits the remaining £4,000 into a £2,000 index fund and £2,000 into a peer-to-peer property investment platform he finds (because he reads that keeping his money diversified is always a good idea). Both assets earn him an average of 7% a month. Instead of adding £100 to his savings account each month, he adds £50 to each of his assets and only £50 to his original savings account.

At the end of year four, Eric has the original £6,000 plus another £2,000 he has saved. So £8,000 in total.

Ben has £2,000 still in his savings account plus another £600 he has added that year. So £2,600 in savings. However, the intitial £4,000 in assets, plus compound interest, plus the £100 a month he has regularly added now total £5,535.65. So altogether Ben has £8,135.65.

Jennifer is no longer talking to Ben. Eric is very smug, but Ben doesn't care. Ben now has a small but growing passive income stream and has entered the matrix of asset growth.

For the next four years Eric continues to add to his savings account. At the end of eight years, he has a total of £16,000. 

For the next four years, Ben continues to add to both his savings account and both assets. At the end of eight years he has £5,000 in his savings account plus his assets are now worth £12,871.55. He has a total of £17,871.55.

After a bit more research, Ben finds two different assets that will earn him a higher interest rate at 8.5% He sells both of his original assets and puts £6,435.78 into each new asset.

Two years later Ben and Eric meet up in the pub one afternoon to celebrate their 35th birthday. Eric is sad because Jennifer has run off with a man she met on holiday named Pedro. Over the last ten years he has saved a total of £20,000. Not enough for a house.

 
Ben is happy because he has saved £6,200 in his savings account and has two assets worth a total of £17,872.07. Altogether he has £24,072.07. Not exactly £25,000, but pretty darn close!

Unfortunately, during this time house prices have risen another 5000%. So neither Ben or Eric can afford to buy a home.

But at least Ben has an extra £4,072.07 to spend on whatever he wants! Or he can leave all of his money in assets to keep growing by themselves while he pays off his student loan. The sensible option.

Ben decides to move to the Greek island of Symi, open up a bar and spend the rest of his days surfing instead.

The morals of this story are all over the place, but the assets part is very useful to know. Whatever you decide to do with your life, if you can make your money make more money while you go off and do other things then you will always be in a better situation financially. At the same time, keep your liabilities to an absolute minimum. Consider if a purchase is going to either depreciate in value or keep costing you more money in the long run. Like many people my age, I was made redundant several times during the recession and learned very quickly that I could never rely on a constant salary. These days I only care about how much I earn while I sleep. Anything else is a nice bonus.

Mid-Month Update

Have just banked all the cheques and paper money I received for my birthday, adding another £260 to the grand total! Happy days!

New Beginnings

Well... one month and one pay day down and things are going pretty well. July's rent was already paid off, so I had the majority of this month's salary to put into savings. I put £900 away in a cash ISA and opened up a high interest savings account with HSBC. The ISA limit is £3600 per financial year, so I will need a good home for the rest of my savings.

I've had to make several changes to my lifestyle in order to save as much money as possible. Firstly, I sat down and drew up a list of income and expenditure for the year and then broke that down into a monthly list. The main thing to go was clothes shopping. I can easily blow £200 in one trip if I'm having a bad day - brings a smile to my face, but a makes a huge dent in my wallet! Next to go was online shopping for DVDs and books. Another £50-£100 gone! Takeaway meals are out too. I've dusted off all the cook books laying around the house and decided to teach myself to use an oven. It's about time I learnt to cook for myself anyway! Other than that, I'm now walking to and from work instead of getting a bus or taxi, taking my own lunch instead of visiting Starbuck's every day and money previously spent on after work drinking is now going into my savings account! I'm feeling pretty pleased with myself and it doesn't even feel like hard work!

I should point out the new 'motivational feature' I've added to this blog - the 'Fortunometer'. I find it helps having something visual to measure my ongoing progress, so I've created this little bar to track how much money I have saved and how far I have to go to reach my ultimate goal. Each month I will update the Fortunometer as a new post is added.

I'm sure my motivation won't last forever and there will be times when I'm tempted to go on a spending binge, but for now life is good, the sun is shining and that million isn't looking so scary after all!

Enjoy the summer and save hard!

Route To Riches

Can you save up a million pounds? Can you save up a million pounds without a well paid job, rich relatives, a lucky break on the stock market or winning the lottery? What about during an economic downturn? How long would it take? How much would you have to sacrifice in order to achieve such a goal? Would inflation decrease the amount so much to make it no longer worthwhile? Is there really a simple, easy method of making a million pound fortune that anyone and everyone could follow?

I am going to find out. I'm going to attempt to do what so may of us dream of and so few accomplish. I want to be a self made millionaire. And I want to do it by the relatively young age of 35!

I have heard stories of 'a friend of a friend of someone who knew this guy who saved all of his dinner money forever and made a million pounds', but I have yet to personally meet anyone who became rich through anything but luck and extraordinarily good business skill. I've known many individuals who have tried the hard work route - slaving away to run their own business, spending every spare second analysing the stock market. Others have tried their hand with property. There were a few minor success stories, but no one who reached that magic six figure mark without some kind of outside help or a lucky break. What about the rest of us? The cleaner, the office slave, the low paid and overworked proletariat. Is the task of saving a million pounds so far out of reach?

I believe it can be done. I believe that anyone, regardless of salary, education, background or contacts can realistically save a million pounds if they really focus. I also believe that it can be done at a relatively young age. Although a million pounds isn't what it used to be, it's a pretty good first stepping stone to have. 'Millionaire' also has a nice ring to it! I am 23 now and my goal is a million pounds in the bank by the age of 35. This has to be pure liquid cash, not assets like cars, property or a company. £1,000,000 in my bank account!

To set the record, I am currently earning £15,000 a year (£12,100 after tax!), owe £4700 in a student loan and £5700 to my parents from college fees. I have no degree and no rich relatives. I do not own any property and do not have my own company. I have a low level office job, which doesn't appear to be going anywhere fast!

I have decided to break up this seemingly mammoth task into smaller goals to make things easier. My first mini goal is to save £5,000 and pay back all of my student loan (£4700) by the end of 2008. Not easy for a university drop out on practically minimum wage, but it can be done. I'm feeling positive! With that I am off to work, to begin my first day as a potential millionaire.

Best of luck to anyone who is thinking of joining me! To everyone else, I hope you are happy, healthy and content.