FIRE - Financial Independence Retire Early
Comments
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FIRE is a realistic possibility but you have to aim to achieve it while probably making sacrifices elsewhere.
Most are not prepared to make those sacrifices so it becomes a pipe dream.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
You probably need to start from a base with no student debt and have no kids to do it that early. Salaries in the USA are crazy compared to the UK obviously
My initial reactions are a) what are you retiring from? If you can afford to work less, why don't you find something you enjoy doing to start with?
and b) 60 years is a long time to commit to surviving on a low income. A lot can happen in that time.
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I kind of disagree with you.
If the NHS did not put 24% in your pension, they would offer higher salaries, so you are sacrificing, whether that is formal or just in practice.
The bottom line is that being part of the scheme means you contribute 30% in total, which is more than most schemes, whether they are DB or DC.
I am also not entirely sure you are correct in that if you decline to be part of the scheme, you will not lose the entire 24% employer contribution... you definitively lose some of it, but not all.
left the forum March 20230 -
Again,
It's a choice, one I didn't make but I do not blame others for making.
The only choices I find offensive are large car or appliances finance schemes from folks who then complain they cannot pay the bills, or the mortgage or they moan about how small their pension is.
left the forum March 20230 -
I've just watched the 8 minute video clip.
It's a different perspective to the usual one we see our parents going through, and which a large majority (not everyone!) of us then slip into ourselves.
I can see how it would be viable if you started really early, and had a decent paying job from the outset, but it clearly requires some compromises, but the positives seem to be massive IF you can get there, and live in a country/area where property prices & cost of living is viable to that approach.
So to summarise, I found it quite aspirational, not annoying at all, and my end thought on it, is basically 'well done them for making it happen, and good luck to them in their future endeavours'
I used to have similar aspirations, though a lot less extreme, but since moving to a more expensive (Relocation for work) area, and having a family, I now realise that won't be possible, but I don't regret making those choices.
Felt F70 05 (Turbo)
Marin Palisades Trail 91 and 06
Scott CR1 SL 12
Cannondale Synapse Adventure 15 & 16 Di2
Scott Foil 180 -
I'm not annoyed by it, if people can manage and are happy with a more frugal lifestyle then so be it. Reducing consumption is an environmental bonus too.
I suspect that you'll get a load of lifestyle guru/lifestyle coach types promoting it with unrealistic numbers - i would find them annoying but I'm unlikely to meet them anyway.
I am a little confused by the couple who say they couldn't afford a house on their dual income so invested their money instead - where did they live pre retirement then? They also say they were spending 20,000 a year in the first 5 years of retirement so based on needing 25 times that, they would need to have saved 1/2 million? I can't imagine being able to do that in 10 years of working in a 'normal' wage job unless I was living rent free somehow - in the UK that would be pretty much your entire after tax salary if you earned £75k wouldn't it?
I suspect that some of these people were really quite well paid, or have some other source of income/savings (some still to be working freelance in their 'retirement') but you still have to decide to live well below your means for a while to save the lump sum.
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I'm not at all annoyed by people doing FIRE, if anything I do admire them.
I'm annoyed by people advocating fire AND at the same time refusing to present hard numbers, realistic numbers.
The 20k couple is a good example. They didn't buy housing, so for the rest of their lives they'll live on 20k/yr, and this sum to cover also rental. And 3 leisure trips on different continents. How realistic do you guys find these numbers?
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ok, now I understand more your frustrations.
It should be down the 'press' to push them for actual statistics, but I suspect they (the press) are not that bothered, as they would rather just get a short 8 minute video out there with an attention grabbing strapline.
I've not delved into it at all, never heard of it before this video, but presumably this video is not wholly representative of every fire man or woman, and some people must have some stats and figures up as to how they have achieved it?
Felt F70 05 (Turbo)
Marin Palisades Trail 91 and 06
Scott CR1 SL 12
Cannondale Synapse Adventure 15 & 16 Di2
Scott Foil 180 -
Let's say you are 25 and offered a 60K job and you can live with your parents, I would
Keep the tax free allowance to live off and invest the remaining 47K in a pension for 5 years up to the age of 30. That will give you a pot that when you are 57 will probably be in the range of 7-800K (I am being quite conservative here). So you can sort your pension by the age of 30.
At that point you can decide how you want to diversify your investments to create a pot that will bridge the gap between the age you want to retire (say 45) and the age you can use the pension you have accumulated above (57), in the meantime you also get a mortgage and do the done thing.
It's really not that difficult... all you need is a good salary, a cheap or free place to live at the start and you need to avoid unnecessary expenses.
What people do wrong is to laden themselves with too much debt when they are young, in pursue of the house and family dream and never really recover until they are in their 50s... by then it is too late to fix things. Some will be lucky, in that their property has ballooned in value and they can move, downsize and cash in, others will not be so lucky.
Personally, I think the days when a house was a great investment are gone, now it is just a place to live, it saves you paying a rent and someone else's mortgage, but it is not a way to increase your wealth anymore.
left the forum March 20230 -
what percentage of 25yo today have a 60k/yr job (btw, gross or net?) AND can live rent-free?
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Second paragraph is the nail on the head for me. It's the sort of thing you see "social media influencers" spouting. Very few people will be able to do it with 'normal' lifestyles.
Also, much as I want to retire quite early I also think there is such a thing as retiring too early. Plus, to risk sounding like Rick, it is becoming less and less viable as people on average earnings are struggling to even afford somewhere to live in many parts of the country. I've earned reasonably well since I was around 30, live in a reasonably cheap part of the country, don't have an extravagant lifestyle (nights out are rare, 10 year old car, maybe 1 holiday a year) and have paid into a pension since I was 16 and there's no way I'm retiring before 60 with an income that would make it worthwhile.
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They are talking about retiring in their 30s Ugo. One guy states 7-10 years working to save for retirement at 30 I think.
As for the house, my first flat increased by 40% in the few years I lived in it. Some of that is pure luck of course but it has contributed significantly to my 'wealth', if I were to sell up and retire early, its mostly the house gains that would pay for it.
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Selling up, realising the profits and retirement sounds like a plan. Where are you going to live though?
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
I'm not going to because I have a job and family commitments.
If i did want to though, in a smaller house not in the commuter belt, somehere very cheap and quite remote I guess. I think a lot of people near me in London/commuter belt could probably release £500k of equity by moving out to 'the regions' and downsizing
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It's an option and a personal choice which many make.
I've previously advised against retiring to somewhere remote for practical reasons. Choice is yours.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
If you're retiring early, remote isn't a concern for a while. It's also relative, when we lived in london, my wife thought that 15 minutes walk from the tube was remote 😄 I was thinking more remote from large towns/cities not necessarily remote from humanity.
As I said, it's not an option I'm looking to explore myself.
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There are some big reddit communities on this topic.
https://www.reddit.com/r/FIREUK/top/?t=all
Sidebar on the right of the UK one has some forecasting tools you could use to see how credible you think it is.
Top post is basically saying it's not for most people.
https://www.reddit.com/r/FIREUK/comments/10emejg/is_there_a_credible_path_for_moderately/
- Genesis Croix de Fer
- Dolan Tuono0 -
I think Daniel_b nailed it when he said that their 'refusal' was more down to editorial decisions made within the article than elusiveness of the participants.
Pete aka Mr Money Mustache has blogged more specific details if this would help sooth your outrage: https://www.mrmoneymustache.com/2011/09/15/a-brief-history-of-the-stash-how-we-saved-from-zero-to-retirement-in-ten-years/
He also got divorced a few years later, but that's his business. Actually, no, he blogged about that too:
https://www.mrmoneymustache.com/2018/12/31/divorce/
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Cake is just weakness entering the body0 -
My graduates who end up working in the city get to those figures quite rapidly, some of them come from London, so I assume they can live with their parents if they wish to do so. It's probably not a huge percentage, but again, it is about working in that direction.
left the forum March 20230 -
Retiring in your 30s is significantly more problematic financially and to be honest, I don't see a good reason why you would want to do that. The idea of being unproductive for a further 40 to 50 years doesn't sound particularly appealing to be honest.
If you want to retire at 35, you probably need a 500k pot and no housing costs, more realistically double that if you also want to make the most of your retirement rather than just survive. The younger you retire, the bigger your expectations about retirement will be.
I can't see how you can rack up a million pounds out of paid employment in 10 years. I think 45 is probably the youngest you can get away with, with very careful planning. In the days people used to take big jobs in Dubai with paid accommodation and travel expenses to do that, is it still the case?
left the forum March 20230 -
What is a worthwile income for you? I am prepared to go for < 20k, which is little more than survival, provided I can relocate somewhere nicer than JLRland
left the forum March 20230 -
Specifically in relation to retiring in 30's/40's with a large lump sum. Sounds great in principle, but being younger they are unlikely to be factoring in old age, care requirements etc. I suspect you could end up needing far more, should such a scenario occur.
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Why wouldn't they have? They've been working towards and fine tuning their goals for several years (decades in the case of some). The discussion in these communities is detailed and intense.
I'll drop them a note saying: some rando on a cycling forum says it's all over because you've not thought about long term care. They'll be back at work by Monday I reckon 😉.
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Cake is just weakness entering the body0 -
For me the whole point of retiring early would be to enjoy life. I would guess (just for me and no mortgage to pay) closer to £25k of actual spending money but £20k could possibly do it, obviously need to then allow for inflation every year as £20k after 20 years of retirement is unlikely to be enough. Of course, you could just choose to live off grid in a wooden hut and live off the land for a fraction of that but I think I'd rather continue working than that.
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If you're living off the interest of your pot does the pot still robustly keep up with inflation? Not just in the good times but well enough to keep an 'income for life' for ~40-50 years?
For me a good mix would be working part time in a well paid job, ~3 days a week, live semi-frugally and retire semi-young.
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of course, luckily my pension fund is triple locked.
The main issue for me is being able to move somewhere nice. There are no Departments which would require my expertise located in decent places… arguably Leeds is close enough to nice places, but otherwise only places I would not want to live in. Therefore some form of retirement seems the only viable option… might end up starting a wheels business or trade espresso on a cargo bike… don’t really see myself going on cruises or wine sampling trips
left the forum March 20230 -
the idea is that on averagea good pot might grow 8%, if you withdraw 4 or 5%, then the rest should cover inflation. Of course you will win some years and lose some others… long term should do better than short term, hence why starting early is the best bet
left the forum March 20230 -
A small sample of one but I'm living off £25k with 3 holidays. My wife has a very small pension and state pension total of circa £13k. Her money covers rates, groceries and treats for the grandchildren. I cover everything else. If I was solo then £25k would easily be enough. As a couple £38k appears to be enough but we are mortgage and debt free.
Inflation will be covered by the following heading my way over the next 10 years, (very) long term endowment, state pension and (unfortunately) inheritance.
Bottom line is that on a wealth fund (not including property) of £470k I am wealthier this year than last which means I have been too conservative as my intention is for the fund to taper off downwards towards 90 years of age.
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
5% is a bit fierce: I'd stick to between 3 and 4 if you want to sleep at night.
Cashflow modeling for retirement is notoriously tricky because your appetite for spending is greatest in the early years then tapers sharply as your body gives out leaving a few years where you just need enough for food, heating and a discovery + subscription (plus a possible sharp uptick for long term care).
There's a nightmare outcome referred to as sequence of returns risk whereby your outgoings are at their highest just as the markets are tanking.
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Cake is just weakness entering the body0 -
I've just done my calculations and excluding savings, pension payments and mortgage costs we are spending £26k a year over the past 4 years.
This includes all bills, food, nursery fees and holidays but doesn't include my partners personal spending nor any bike bits I've bought via cyclescheme vouchers.
So i'd need to have paid of the mortgage (£300k) and saved ~£650k to retire according to FIRE if I wanted to stay where I am and live how I'm currently living. I guess I won't be retiring any time soon.
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