How to become Rich: Children left home/ no children

If this is the first article that you're reading in the How to become Rich series then I encourage you to go back and read The Basics first.

Don't want/ Can't have children but want to become rich

So you chose not to have any children? Here is a brilliant truth: you've just saved yourself about £220,000 per child that you would have / could have had. You really have no excuse but to save a lot more of your income sooner and let compound interest work it's magic!

Children have left home and finances

The typical scenario is that a couple are in their 50s to 60s when their children have left home. This tends to coincide with largest income that the couple will ever earn in their lifetime. Furthermore, having to pay for children and all the added sundry costs, the couple may have found that they did not have a lot of money saved up for retirement. As such, it is time to start seriously saving for your pension. Ideally you need to try to maximise your pension contributions as much as you can. In the UK you are legally allowed to contribute up to 100% of your gross annual salary, up to a maximum of £50,000, into your pension. The tax benefits and potential employer contributions should be enough to encourage you that investing in a pension is critical to your financial freedom when you come to retirement.

Other considerations when building wealth

Living in a large house with a mortgage paid/ soon to be paid off, with no children leads many people to eventually consider downsizing to a smaller property. Here are some alternative solutions:

1. You could take I a lodger or two. The UK Government allows £4,250 tax free income from a lodger per year.
2. You could pay off the mortgage as quickly as possible and then aim to downsize in retirement
3. You could try to build a deposit and aim to downsize without selling your current property. Given that your current property is nearly/ already paid off, any rental income should help to pay for mortgage payments on the new house.

Hopefully this has given you some ideas as to how to adjust your finances once your children have left home.

Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

No comments