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  • lukeparsons5

How To Earn £250k on The National Living Wage

Updated: Nov 19, 2021


That's a pretty bonkers headline right? Well, just hear me out.


The current National Living Wage at the time of writing is an unflattering £8.72 an hour.


So if you work 40 hours a week for a month, your take home salary would be around £1.3k.


Now whether this is a true living wage or not is outside the scope of this website, nonetheless I wanted to show you that this is still enough to be able to build long term wealth.


For this little experiment I am going to make a fair few assumptions, so there's a lot of variables involved. Regardless, I still think you might find this an interesting thing to think about!


The assumptions I've made are that this NLW-earning person is...


25 years old

Lives with a partner or spouse with no kids (so bills are split between two people)

Has initial savings of £500.00

Can contribute £80 a month to investments


And as with any long-term calculation like this on my site, I will assume an average annual return of 8%.


So our target balance for our investments is £250,000.00. To work out how long it would take to get there with the conditions above, we need to use a compound interest calculator.


After putting in the initial deposit of £500, plus £80 monthly contributions with an 8% annual return, here is what we get...


(Initial balance on the chart is the initial deposit of £500, plus the first years contributions of £80 a month, so £500 + £960 = £1,460)


As you can see, it would take 40 years to earn over £250,000.00.


So this financially savvy 25 year old would have a quarter of a million pounds by the time they are 65, which is 1 year below the current retirement age!


How cool is that?


Happy retirement indeed!


The point I am trying to make with this article is that building long term wealth is possible for you with the right mindset. Your levels of income, expenses and savings do not matter. All that matters is that you start TODAY!


Investing is the most accessible it has ever been, literally anyone can start. As long as you're 18 years old and have a bank account, you can set up a Stocks & Shares ISA and begin your path to financial freedom!

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