How much money do you need a year to do the things you want to do?

If you had a million pound and had it in a high yielding dividend fund, let’s say it would pay you 5%, you’d get £50k per year.

From the age of 20, you would have to put £500 a month aside and assuming you can earn 5% interest a year, you’d have £1m by the age of 65.

That’s a lot isn’t it? I don’t think many 20 year olds can afford to put £500 a month away.

So how can you hit that £1m egg nest by the time you’re 65?

Firstly you need to buy a house - as you can leverage your investment.

You can put 10% down on a property and get an average return of 5% - 10% 

Then you put any savings in a low cost well diversified fund.

Then with the remainder you try to double, treble or ten bag your money with small, micro or nano caps.

How much money do you allocate to this?

Depends on your age.

Take your age and add half. This should be your portfolio’s exposure to a well diversified low cost fund.

The rest you dabble on wealth creators - these are high risk / reward stocks - that could potentially top up your retirement fund.

So how much should you have allocated to a low cost diversified fund?

40 + 20 = 60%

50 + 25 = 75%

60 + 30 = 90%