This one is pretty much an obvious follow on to yesterday’s email.
I know of a few people (you may know of some as well) who make literally no money from their job.
They have a gross income which is then taxed pretty heavily, they have student loan repayments, they pay national insurance, they pay into a defined contribution pension, they pay their train season ticket – and then arrive at a net income.
This net income could quite easily be only 60% of that gross number each month.
Now if they’re a working family with say two children aged under five (we were in this situation a couple of years ago) then both parents are heading out to work, and both kids are in paid childcare.
For those reading this outside of the UK, daily childcare rates range between around £50 and £100 per child per day, depending on where you live in the UK.
You’ll get some government assistance (depending on whether the government thinks you ‘earn too much’) when the child is three years old and before he/she heads off to school, and some nurseries will give you a discount for the second child.
But even then, I know of families where the cost of childcare is almost 100% of this net income amount I mentioned earlier.
Which means you make no money from your job.
You would be in the same situation financially if the second parent didn’t go to work and looked after the kids instead.
Which will quite likely ruin any career prospects or ambitions they may have, unless they can generate some income working from home and around the sprogwatching.
If you’re aged under 30 or over 50 this may all seem like nonsense, surely it doesn’t cost that much and people aren’t in this situation?!
Err, yes they are.
What these families could have done is started investing earlier, benefitting from compounding or finding opportunities where the income potential is nice with little start-up capital required.
But to conclude today’s musings, and especially if you can relate to the above, a subscription to Guerrilla Investors will provide you with two almost immediate benefits (as we approach the 31st July deadline).
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All the best,
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