Ross was a 40-year-old instructor on £47,000… and that is is his funding plan to retire earlier than he hits 60 – with a £750,000 pot

Primary school teacher Ross Williams, 40, had never thought about investing. But after seeing his father struggle to enjoy his retirement at 68 due to ill health, he is now investing hard to be able to stop work in less than two decades.

His ambition is to retire early at 58 – a decade before his state pension is due – and travel around Europe in a motor home.

To try to achieve that Ross has leant into the part of the stock market that some worry is over-valued and decided to double down by investing a substantial amount each month.

He invests around £700 a month into a fund of tech stocks through his investment app Plum. So far this has paid off, as he has seen extraordinary returns of around 15 to 16 per cent per year.

The fund backs tech stocks, such as Apple, Microsoft and Nvidia, which already constitute a substantial part of the broader US and global stock markets. 

Ross’s portfolio is a classic example of how some investors are reaping big rewards even as worries abound that the AI and tech bubble could spectacularly burst.

The US tech giants and their peers have skyrocketed in value in recent years but this is a high-risk strategy. This growth cannot be guaranteed in the future, and some predict a crash in the tech industry. 

Investment experts strongly recommend splitting your holdings across a diverse range of sectors and countries precisely to protect against such events.  

However, Ross is sticking to his guns. ‘I don’t believe, and I could be proven wrong, but I can’t imagine these companies will completely nosedive and lose all of their value,’ he says. 

‘I might be naïve to think this but I don’t think tech is going to go away. 

‘I don’t think it’s going to crash. If it does, I think it will pick itself up quite quickly because I think we’re in an economy where we all need tech to survive.’ 

With the advent of artificial intelligence, tech firms have outperformed other companies and this has driven growth in major funds such as the S&P 500. 

Firms in what is known as the ‘Magnificent Seven’ group of tech stocks have seen rocketing growth in the past five years. 

Computer chip firm Nvidia has seen its share price rise by 920 per cent, while Apple has risen 107 per cent over the past five years.

Ross has currently built up a £19,000 pot. If he continues to invest £700 a month and sees a high rate of return at 12.5 per cent, as he predicts, he should be able to retire at 58 with £750,000.  

He makes around £47,000 as a primary school teacher in Cornwall. 

He also has a private pension which will be worth around £10,000 a year when he reaches the state retirement age of 68, along with the state pension. That is currently worth £12,548 per year. 

If Ross were to get a more standard rate of return at around 7 per cent, he would retire at 58 with £368,242. 

 But regardless of risk, Ross is keen to encourage more people to invest after seeing his own success. 

‘I think there’s a taboo that you have to earn a certain amount of money to invest. I was earning around £40,000 when I started and I’m quite happy with where my pot is already,’ says Ross. 

Ross felt confident enough to put a significant chunk of his salary into savings because he had built a buffer of emergency cash savings worth around £10,000.

He also has £5,000 in a Lifetime Isa, and a wedding fund of around £2,500.  

He made sure to cut out any ‘unnecessary’ spending, such as subscriptions, so that he could put money towards his investments.

Ross says: ‘The dream is to retire early and buy a mobile home and explore Europe in the warmer months with my partner and my dog.

‘I just want to future-proof myself. I’ve looked at my dad, who’s not particularly healthy at the moment. He worked until he was 68 and he wanted to do all these nice things with his retirement but unfortunately he can’t because he’s not well enough. 

‘I just don’t want to be like that.’ 

But experts say that Ross might be too optimistic with his target. 

Dan Coatsworth, head of markets at AJ Bell said: ‘We’ve seen an extraordinary run for tech stocks over the past decade or so. There is a risk this bull-run gives certain investors the false impression that tech returns will always be outstanding.

‘There are growing concerns that tech’s stellar run is unsustainable and that a market correction is overdue. No-one knows for certain if or when that will happen.

‘Investing in a tech fund provides diversification which is important with investing. However, doing so would still confine the investor to a single sector if they didn’t have any other investments.

‘In contrast, investing in a global equity fund would still provide large tech exposure but it would also spread risks across other industries. Should a tech sell-off happen, someone invested in a global fund would have other sectors that could potentially act as a cushion and protect the portfolio.’

Savings expert James Blower says Ross should try and put more money into a private pension – to get more benefit of tax relief on the contributions.  

Last week, This is Money revealed that investors have on average four times the wealth of cash savers – even if they are on a modest income.

Households in the £20,000 or below earning category who have only cash savings have on average £24,559 in wealth, while investors have £103,025 on average, research from St. James’s Place claimed. 

It’s important to note that some of this group could be pensioners, who have a small income but live off a large pot of savings and investments built up while still in work.

It could also include business owners who draw a small salary but pay themselves in dividends. 

One in four people believe investing is for those with wealthy or privileged backgrounds, according to research by Plum. 

However, it is worth considering for those of all income levels, as long as they already have a pot of easily-accessible cash savings for emergencies. The recommended amount is three to six months of essential spending.  

The average person keeps cash savings of around £22,431. If they kept that money in a high-interest savings account paying 5 per cent, they could have £28,700 after five years – but many accounts pay far  less. 

If they got a typical annual investment return of around 7 per cent on that cash, they could have around £31,800 in five years. 

While the returns can be better than cash savings in the long term, it is recommended that you only invest money you will not need to access for at least five years to ride out market ups and downs.  

Will Bryant, director of wealth strategy at Plum said: ‘Too often, investing and wealth-building have felt like something reserved for a select few. 

‘Yes, investing comes with risks but it’s been proven historically to be the most reliable route to achieving inflation-beating returns and major financial goals over the long-term, like retirement planning.’

Plum is also launching a new AI-powered guidance tool to help people who don’t feel confident about investing.

Bryant added: ‘We’ve combined the power of AI with our financial expertise to create something that works in customers’ best interests – giving people clear, practical steps they can act on straight away.’