Financial Independence / Early Retirement (FIRE)
Discussion
I retired age 50 with the mortgage paid off and redundancy money savings. My mother was terminally ill and lived 250 miles away, I was able to visit regularly and give my father some respite time, which I couldn't do if I'd taken another job. I learnt how to play golf, clay pigeon shooting, archery and tennis. After 6 months I became semi-retired and set up a dog walking/pet sitting business which I've enjoyed doing for the last 7 years, and still do 
I still consider myself semi-retired and have plenty of 'me time' to enjoy hobbies. Earlier this year I joined a new health club and after a morning's dog walking, like to visit the pool and spa.
I still consider myself semi-retired and have plenty of 'me time' to enjoy hobbies. Earlier this year I joined a new health club and after a morning's dog walking, like to visit the pool and spa.
Looking to overpay and clear mortgage as fast as possible now. I had a real lightbulb moment a while back when I bought out an ex and the house became mine. A friend who is far better with figures than I am sat down and we went through just how much impact overpayment can make and how it snowballs.
I'm on 2.4% for another 2 and a half years, overpaying £40 PCM currently but about to go up to £90 as I'd been doing 40 and saving up a bulk to pay down every 6 months or so in case of emergencies. I can't find anything with a better interest rate to save/invest in that has no real risk and is worth the faff. My savings are about solid enough now that the 90 pcm overpayment shouldn't blindside me.
I wish, wish, WISH this stuff was PROPERLY taught to kids, young people and anyone starting out financially such as the raft of kids buying brand new hatchbacks and phones and god knows what else that just isn't needed. Debt truly is the currency of slavery.
I'm on 2.4% for another 2 and a half years, overpaying £40 PCM currently but about to go up to £90 as I'd been doing 40 and saving up a bulk to pay down every 6 months or so in case of emergencies. I can't find anything with a better interest rate to save/invest in that has no real risk and is worth the faff. My savings are about solid enough now that the 90 pcm overpayment shouldn't blindside me.
I wish, wish, WISH this stuff was PROPERLY taught to kids, young people and anyone starting out financially such as the raft of kids buying brand new hatchbacks and phones and god knows what else that just isn't needed. Debt truly is the currency of slavery.
4159265 said:
Jon39 said:
Welshbeef said:
I'm very keen on running out and not re raising any debt (as in non mortgage). So even though the pull is very hard on changing /upgrading cars it might well be to simply run them far longer than we have done previously.
'run them for longer'
Excellent - that is what I have always done. Not to save money, but because I just don't want to waste considerable amounts on depreciation. Vehicle depreciation during a persons lifetime, must total a huge sum of money.
Why do so many people feel the need to always use a car that is less than 3 years old, and why (we are told) are 80% of new cars obtained using debt?
I doubt that people who fly in British Airways 747 jumbo jets ever say, I must not be seen in this, because it is 20 years old.
One of my cars was initially bought as a spare. It cost only £800 and since then has driven 60,000 trouble free miles !
Current car is from 2011 and runs fine, however we need a bigger one
plan is to buy one a couple of years old and run it for about 8.A colleague just bought a very nice M4, I'd love one but I just can't get over the cost - especially if you take the Warren B snowball approach and calculate how much spending on a car like that is really costing you.
I'll stop before I go onto how the current generation are bending themselves over for the future and can't distinguish between affording something and being able to pay for it.
My numbers passion has me wondering, just how much a lifetime of 3 year car changes might be spent on depreciation.
Obviously this ignores the inflationary aspect, but the result might surprise us.
Let's use two popular cars, Skoda Octavia and Mercedes-Benz C class.
Skoda.
New about £17,000
3 year old trade value about £7,000.
=£10,000.
Mercedes-Benz.
New about £30,000.
3 year old trade value about £12,000.
=£18,000.
Let's take a theoretical 3 year car change from age 25 to 75 = 16 cars.
Total amount spent on Skoda = £160,000.
Total amount spent on Mercedes-Benz = £288,000.
Goodness, no wonder the motor industry encourages everyone to keep thinking about fuel consumption !
Jon39 said:
My numbers passion has me wondering, just how much a lifetime of 3 year car changes might be spent on depreciation.
Obviously this ignores the inflationary aspect, but the result might surprise us.
Let's use two popular cars, Skoda Octavia and Mercedes-Benz C class.
Skoda.
New about £17,000
3 year old trade value about £7,000.
=£10,000.
Mercedes-Benz.
New about £30,000.
3 year old trade value about £12,000.
=£18,000.
Let's take a theoretical 3 year car change from age 25 to 75 = 16 cars.
Total amount spent on Skoda = £160,000.
Total amount spent on Mercedes-Benz = £288,000.
10 year old Lamborghini Gallardo - £69K, Obviously this ignores the inflationary aspect, but the result might surprise us.
Let's use two popular cars, Skoda Octavia and Mercedes-Benz C class.
Skoda.
New about £17,000
3 year old trade value about £7,000.
=£10,000.
Mercedes-Benz.
New about £30,000.
3 year old trade value about £12,000.
=£18,000.
Let's take a theoretical 3 year car change from age 25 to 75 = 16 cars.
Total amount spent on Skoda = £160,000.
Total amount spent on Mercedes-Benz = £288,000.
13 year old Lamborghini Gallardo - £69K,
Total Amount spent on Lambo ownership
= £0
0 x 16 = £0
I'm in....
(also applies to Aston Martin AMV8s, BMW M3 coupes, BMW breadvans and certain TVRs).... Free motoring ....#ManMaths
Bob
Vincefox said:
Looking to overpay and clear mortgage as fast as possible now. I had a real lightbulb moment a while back when I bought out an ex and the house became mine. A friend who is far better with figures than I am sat down and we went through just how much impact overpayment can make and how it snowballs.
I'm on 2.4% for another 2 and a half years, overpaying £40 PCM currently but about to go up to £90 as I'd been doing 40 and saving up a bulk to pay down every 6 months or so in case of emergencies. I can't find anything with a better interest rate to save/invest in that has no real risk and is worth the faff. My savings are about solid enough now that the 90 pcm overpayment shouldn't blindside me.
I wish, wish, WISH this stuff was PROPERLY taught to kids, young people and anyone starting out financially such as the raft of kids buying brand new hatchbacks and phones and god knows what else that just isn't needed. Debt truly is the currency of slavery.
Really valid last point. I'm on 2.4% for another 2 and a half years, overpaying £40 PCM currently but about to go up to £90 as I'd been doing 40 and saving up a bulk to pay down every 6 months or so in case of emergencies. I can't find anything with a better interest rate to save/invest in that has no real risk and is worth the faff. My savings are about solid enough now that the 90 pcm overpayment shouldn't blindside me.
I wish, wish, WISH this stuff was PROPERLY taught to kids, young people and anyone starting out financially such as the raft of kids buying brand new hatchbacks and phones and god knows what else that just isn't needed. Debt truly is the currency of slavery.
Kids essentially rely on parents or mates advice and get by / waste so much cash - some get lucky and work it out quickly some never ever do.
As great as learning say French / German / Religious education is having the absolute basics taught to you about Finance would be life enhancing to all. You can learn the previous mentioned at any time in your life if you so choose but f up the finances and it could take decades to rectify.
As posted earlier, my plan is less about "retirement" than financial independence.
I am not expecting to stop work at my target of 50. Rather, I want to choose work in something I really want to do with no issues if it can't give me a full income.
I'd also echo the point made about cars and depreciation. I recently worked out that in 16 years of motoring, my costs have averaged £338ish per month for everything apart from fuel and insurance.
I thought that sounded quite reasonable, until I expressed it as £65k over that time. It could have been at least 50% less if I'd bought fewer cars and kept them longer, without really having much less by way of enjoyment.
I am not expecting to stop work at my target of 50. Rather, I want to choose work in something I really want to do with no issues if it can't give me a full income.
I'd also echo the point made about cars and depreciation. I recently worked out that in 16 years of motoring, my costs have averaged £338ish per month for everything apart from fuel and insurance.
I thought that sounded quite reasonable, until I expressed it as £65k over that time. It could have been at least 50% less if I'd bought fewer cars and kept them longer, without really having much less by way of enjoyment.
red_slr said:
Side gig is not my term, its MrM's!
I would prefer not to work at all, however a few days a month doing something you enjoy can boost your "fun money" pot quite substantially. A lot of people FIRE with excellent post FIRE income, via investments, property etc and they don't need to work. Others will FIRE on a much tighter budget, still able to cover all their costs of course forever (that's the whole idea behind FIRE) but any luxuries like an unplanned holiday would not be affordable. So a few days work here and there can bring in a few thousand a year and suddenly their fun money goes from a few hundred to a few thousand..
I think the term gig comes into it from a) the gig economy but also b) people tend to only do stuff they enjoy. So for example someone might go from working 90 hours a week as a welder to working 8 hours a week as a dog walker. IYSWIM.
Its all on MMM... nothing new really.
Yeah I read that MrMM site ages ago. I would prefer not to work at all, however a few days a month doing something you enjoy can boost your "fun money" pot quite substantially. A lot of people FIRE with excellent post FIRE income, via investments, property etc and they don't need to work. Others will FIRE on a much tighter budget, still able to cover all their costs of course forever (that's the whole idea behind FIRE) but any luxuries like an unplanned holiday would not be affordable. So a few days work here and there can bring in a few thousand a year and suddenly their fun money goes from a few hundred to a few thousand..
I think the term gig comes into it from a) the gig economy but also b) people tend to only do stuff they enjoy. So for example someone might go from working 90 hours a week as a welder to working 8 hours a week as a dog walker. IYSWIM.
Its all on MMM... nothing new really.
The 'side gig' thing is how I foresee a lot of people in the future will turn a 'survival retirement' into a comfy one.
But the rest of it is really nothing new. Years ago it was called "dropping out" and some people did it straight from school and never dropped back in again. Others did it for a while or at least until they developed 'ambitions'.
Obviously the "trick" is to be able to do it without depending on state handouts. And the second part of the "trick" is being able to establish a satisfying quality of life at as low a material level as possible. But that's where it gets complicated because obviously different people have different ideas of what they consider a satisfying quality of life.
One thing MrMM certainly does is it opens up an alternative way to think about materialism. That's all to be encouraged, especially where it deals with prioritisation.
Jon39 said:
My numbers passion has me wondering, just how much a lifetime of 3 year car changes might be spent on depreciation.
Obviously this ignores the inflationary aspect, but the result might surprise us.
Let's use two popular cars, Skoda Octavia and Mercedes-Benz C class.
Skoda.
New about £17,000
3 year old trade value about £7,000.
=£10,000.
Mercedes-Benz.
New about £30,000.
3 year old trade value about £12,000.
=£18,000.
Let's take a theoretical 3 year car change from age 25 to 75 = 16 cars.
Total amount spent on Skoda = £160,000.
Total amount spent on Mercedes-Benz = £288,000.
Goodness, no wonder the motor industry encourages everyone to keep thinking about fuel consumption !
red_slr said:
PurpleMoonlight said:
What do you do with your time if you retire mid 50's?
I would be bored to death.
Then FIRE is not for you.I would be bored to death.
But the reality is most people post FIRE don't know how they ever had time for work. Between kids, friends, travel, sports and gym and pets....
Its also worth remembering peoples work lives can be very different. Mine is flat out 6 days a week for 50-51 weeks of the year depending where Christmas lands. Will be 51 weeks worked this year.
I've spent the last 18 months creating a wildflower meadow and pond for wildlife to thrive.
I'm outside working/enjoying it every hour of decent weather I get. I've had more contact with, and learned about, birds, plants, amphibians, butterflies, moths and bees in the last 12 months than the previous 50 years of my life.
Just came back from 5 glorious days in the Yorkshire moors being in even more open spaces chocked full of wildlife. Managed a few lovely pints as well!
I would not have the time to work now
fat80b said:
10 year old Lamborghini Gallardo - £69K,
13 year old Lamborghini Gallardo - £69K,
Total Amount spent on Lambo ownership
= £0
0 x 16 = £0
I'm in....
(also applies to Aston Martin AMV8s, BMW M3 coupes, BMW breadvans and certain TVRs).... Free motoring ....#ManMaths
Bob
13 year old Lamborghini Gallardo - £69K,
Total Amount spent on Lambo ownership
= £0
0 x 16 = £0
I'm in....
(also applies to Aston Martin AMV8s, BMW M3 coupes, BMW breadvans and certain TVRs).... Free motoring ....#ManMaths
Bob
I have discovered that Bob. Just wanted the car to keep, had not researched the lack of secondary depreciation.
Not quite zero depreciation, but I purchased my AM at 3 years old, after depreciation of over 40%. Ouch!
Hardly used at 8,000 miles, and just like new. After another 5 years, I notice that the retail price has hardly changed.
However, if an owner bought a new one every three years, the total depreciation would be far worse than the C class.
I think what you have probably highlighted, is buy at 3 years old, not new.
Edited by Jon39 on Friday 1st September 14:21
Jon39 said:
I have discovered that Bob. Just wanted the car to keep, had not researched the lack of secondary depreciation.
Not quite zero depreciation, but I purchased my AM at 3 years old, after depreciation of over 40%. Ouch!
Hardly used at 8,000 miles, and just like new. After another 5 years, I notice that the retail price has hardly changed.
However, if an owner bought a new one every three years, the total depreciation would be far worse than the C class.
I think what you have probably highlighted, is buy at 3 years old, not new.
Edited by Jon39 on Friday 1st September 14:21
Know a few who do this and self service from brand new knowing resale is irrelevant it will be scrapped at the end. They save a fortune in servicing plus these (mechanics or good DIY mechanics) take pride in knowing the job is done properly/hobby.
Or just buy one of those £7k brand new Dacia Dusters 3 years warranty how can you possibly lose? Compromise on the fact it's not the best thing since sliced bread but a to b motoring simply comes no cheaper unless buying a shed.
I retired 7 years ago, 60 now. I'd paid off the mortgage and saved £130k. Drawing 2 final salary pensions, I figured I'd be set for a life of hobbies.
I got bored.
I now work 2 days a week and run a small business. Enough income to live on, so I bought a bigger house and a 911.
I'm now considering moving to France, buying a run down farm complex or similar to convert to gites. Joint venture with younger siblings.
I got bored.
I now work 2 days a week and run a small business. Enough income to live on, so I bought a bigger house and a 911.
I'm now considering moving to France, buying a run down farm complex or similar to convert to gites. Joint venture with younger siblings.
Welshbeef said:
Jon39 said:
I have discovered that Bob. Just wanted the car to keep, so had not researched the lack of secondary depreciation.
Not quite zero depreciation, but I purchased my AM at 3 years old, after depreciation of over 40%. Ouch!
Hardly used at 8,000 miles, and just like new. After another 5 years, I notice now that the retail price has hardly changed.
However, if an owner bought a new one every three years, the total depreciation would be far worse than the C class in my example.
I think what you have probably highlighted, is buy at 3 years old, not new.
Or you buy brand new (discounted) with the exact spec you want and then run it until it drops. My old man does this - he has hardly ever had a 2nd hand car but the average age it probably pushing 10years.
Know a few who do this and self service from brand new knowing resale is irrelevant it will be scrapped at the end. They save a fortune in servicing plus these (mechanics or good DIY mechanics) take pride in knowing the job is done properly/hobby.
Yes Welshbeef, maximising the ownership period is the key, but I did not want to buy that car new (a) because by then the model had been given a body facelift (personally not impressed) and (b) there was a saving of £40,000. I was very lucky though and eventually found an every detail exact spec car.
If your father's cars only last 10 years (have I understood correctly), perhaps he does a high mileage.
I have two daily drivers in use now, one 22 years old going well, and a 17 year old M-B (lovely V6 power), which is just as good now as when first purchased as a 3 year old. Funnily enough, after owning the M-B for 14 years, I suddenly noticed this week that the driver's door mirror glass was hot. I never knew before that it has automatic door mirror heaters. Both cars still have perfect original paintwork, but although neither has any value, why throw away?
Don't think I am off topic. This all helps in achieving financial independence.
Edited by Jon39 on Friday 1st September 17:48
coyft said:
PurpleMoonlight said:
What do you do with your time if you retire mid 50's?
I would be bored to death.
You have no imagination!I would be bored to death.
I had the option to retire in 07 due to a business sale. I was 36 at the time.
In the end I settled with 'keeping my hand in' and did whatever work that came my way that I thought would be interesting.
Have helped a few businesses get on their way, but I did get sucked back in and worked more than my plan.
Most of the people I know who are retired do a bit here and there. But I can also see that If you had a passion you could do without work.
BOING!
Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
Croutons said:
BOING!
Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
I reckon now isn’t the best time to track those equities.....Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
....but in a morbid car-crash kind of way, I’ve been following my main pension pot as it shed 6.7% over about 10 days. Only because the start of that was my quarterly check on things....maybe it’ll crawl back up...who knows.
Equity, cash (including ISAs, P.Bonds just in case), bonds, gilts....general spread of stuff.
I strongly agree we need to educate kids better. Mine are both at Uni, and are aghast how many of their pals are into overdrafts despite the loans. We helped them craft a budget to live on, then they shift a weekly amount from their interest-earning current accts to a Monzo card (others are available!). Say that is £80 for the week, for everything. If (as they seem to be managing) they have an amount left, say £20, then they only transfer 60 for the next week (start each week with 80). They understand that is the way to control and manage spending. Not rocket science! Many of their pals just throw money away. I have family members who aren’t clear on how to budget...
MrMoneyMustache is great for realising there is value in living frugally. I’m not a great example of a frugal person....work in tech, gadgets galore, but I do understand the value of it. We have always done lots of walking and camping: great way to see places on a budget!
mikeiow said:
Croutons said:
BOING!
Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
I reckon now isn’t the best time to track those equities.....Is everyone using ISA’s and funds like the Vanguard FTSE global all cap index fund?
Or are you elsewhere/ taking a different risk profile?
My more “typical” PH darling funds (Lindsell Train et al) are taking a hammering at the moment, but they have a longer horizon than my FIRE plans.
....but in a morbid car-crash kind of way, I’ve been following my main pension pot as it shed 6.7% over about 10 days. Only because the start of that was my quarterly check on things....maybe it’ll crawl back up...who knows.
Equity, cash (including ISAs, P.Bonds just in case), bonds, gilts....general spread of stuff.
I strongly agree we need to educate kids better. Mine are both at Uni, and are aghast how many of their pals are into overdrafts despite the loans. We helped them craft a budget to live on, then they shift a weekly amount from their interest-earning current accts to a Monzo card (others are available!). Say that is £80 for the week, for everything. If (as they seem to be managing) they have an amount left, say £20, then they only transfer 60 for the next week (start each week with 80). They understand that is the way to control and manage spending. Not rocket science! Many of their pals just throw money away. I have family members who aren’t clear on how to budget...
MrMoneyMustache is great for realising there is value in living frugally. I’m not a great example of a frugal person....work in tech, gadgets galore, but I do understand the value of it. We have always done lots of walking and camping: great way to see places on a budget!
WolfieBot said:
Maybe it's changed since I was there 12 years ago. But the £3k par annum maintenance loan was largely used up to pay for my accomodation, so I don't know how I couldn't have been in my overdraft! It was just treated as an interest free loan. Holidays were spent working my ass off trying to pay it down to zero again ready to start the next term!
I wonder how many do work weekends evenings and holidays these days to pay it down OR focus harder on maximising studying time to enhance degree outcomes And or on clubs teams ski trips etc which might make a difference when securing a proper job. I went for a blend of weekend working plus as many clubs as possible with loads of boozing.... not much time spare.
WolfieBot said:
Maybe it's changed since I was there 12 years ago. But the £3k par annum maintenance loan was largely used up to pay for my accomodation, so I don't know how I couldn't have been in my overdraft! It was just treated as an interest free loan. Holidays were spent working my ass off trying to pay it down to zero again ready to start the next term!
Understood.....but parents are meant to make up the loan amount by £X. (for those with parents on low wage, there are maintenance grants to make that up....effectively additional loans, I believe).Of course no-one forces the parents to, so some won't, but I'm saying many 'kids' who have the "full whack" are often still struggling to understand the need (& self-control!!) to budget.....& that is a broader education thing.
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