How to Save A £100,000

In a recent video published to my YouTube channel (highly recommend to watch), I discussed what it takes to reach that magic number of £100,000. Now that seems like a lot of money, well it is a lot of money, but you may be surprised that it doesn’t take as much money as you may think.
 
The key with reaching such big financial milestones is having a clear plan/goal, knowing exactly what you have to do to achieve that goal (i.e. how much do you need to save per month/year), and most importantly, be persistent to save/invest what you set out to.  
 
You can save your way to £100K or you can invest your way to £100K, but the real difference is the likely return you will get with your money. Savings accounts interest rates are laughable nowadays (we are talking 1.5% at best), so investing is becoming more and more attractive, particularly in these times of such high inflation.
 
So what exactly does it take to reach £100,000?
 
Savings Route
For these scenarios, we are going to assume you are saving your money within a savings account with 1.5% annual interest. We are also going to assume that you are going to increase your savings by 2% each year in line with inflation.

• If you were to save £100/month into a savings account, it would take approximately 42 years to reach £100K
• If you were to save £200/month into a savings account, it would take approximately 27 years to reach £100K
• If you were to save £300/month into a savings account, it would take approximately 20 years to reach £100K
• If you were to save £400/month into a savings account, it would take approximately 16 years to reach £100K
• If you were to save £500/month into a savings account, it would take approximately 13.5 years to reach £100K

 
Investing Route
For these scenarios, we are going to assume you are investing your money with an average annual return of 8%. We are also going to assume that you are going to increase your investment savings by 2% each year in line with inflation.

• If you were to invest £100/month into an investment account, it would take approximately 25 years to reach £100K
• If you were to invest £200/month into an investment account, it would take approximately 18 years to reach £100K
• If you were to invest £300/month into an investment account, it would take approximately 14 years to reach £100K
• If you were to invest £400/month into an investment account, it would take approximately 12 years to reach £100K
• If you were to invest £500/month into an investment account, it would take approximately 11 years to reach £100K

 
So there you have it - it’s not as crazy as you would think, is it? Clearly, investing your way to wealth is much easier than saving your way, but of course it does come with risk that you have to be willing to take to reap the rewards. Either way, it is possible to reach that glorious six-figure number, you just have to choose the way in which you want to reach there.
 
Happy saving and investing!