Work hard now to pay off your mortgage by 30, and retire by 40

[Ieattoomuchsugar]

And to buy a house at 19/20 whatever age

Maybe exaggerating with the ages a bit but these are examples I've seen.

People who've gone without holidays, new clothes etc, lived with the bare minimum and worked endless overtime for years in order to achieve the above.

Has anybody actually done this or in the process of doing it?

I do see the appeal but I personally wouldn't want/wouldn't have wanted to spend my 20s and 30s living that way. I do think life is to be enjoyed, I of course want to save but I am not prepared to go without things I enjoy for such a long time. I think it's better to strike a balance, and I'd rather enjoy life now just as much as when I am 50/60.

@Whatayear81 Believe it or not, 50% of londoners live in flats including those with children. A lot of flats in zone 1/2 are a million so could easily buy a house in z4 and outwards without the expensive season ticket costs. Families live in them. And a lot of flats in my area have private gardens as they are converted from large houses. The sound proofing isn't so great in them though!

@lljkk

My stocks & shares ISA (multi fund pooled) plummeted in value in last 2 yrs. I guess now might be very cheap or you could lose your shirt.

Mines just at 9% right now, hope you didnt withdraw it during a global pandemic, that was the time to buy not sell

DH wants to retire from his career in his 40's but pick up a less stressful job.
We could pay off the mortgage, it's quite small as we've moved house lots, each time renovating and making a decent profit. We wouldn't though. Our investments are making us more in interest than what our mortgage is costing so it makes no sense to pay it off. It seems to be something to really aim for on here but it's not the best option for everyone.

@elastamum I think what you describe is the ideal of early retirement. The problem I have seen in my own family is of having money but no interests (DB1) or interests and no money (DB2).

My plan for retirement is to spend a lot more time on our allotment. We are in the process of making sure we will be able to work it for as long as possible (paths, soil improvement, weed suppression).

[quote onlychildhamster]@Whatayear81 Believe it or not, 50% of londoners live in flats including those with children. A lot of flats in zone 1/2 are a million so could easily buy a house in z4 and outwards without the expensive season ticket costs. Families live in them. And a lot of flats in my area have private gardens as they are converted from large houses. The sound proofing isn't so great in them though![/quote]
I was one of them
Loved it
Moved out
Realise that the garden for my children is just their heaven. Outside. Alone often. Getting up to all kinds of mischief. Very physical.

The idea of having to recreate that but always getting them up ready and put the door to go to the park… shudder

I wouldn't like to retire at 40 but I can see the appeal of planning as if you retire at 40! It may mean that you can go back to university/retrain in a different field without worrying that you can't pay the bills with a salary cut. And yes some people do get sick at 40 plus, three of my aunts/uncles got cancer at that age so evidently runs in the family. So it may be a forced retirement...

Logically though, it wouldn't work out very well for the country if everyone did it. The country needs taxpayers, it already suffers from a lack of people paying high income taxes due to high wages being concentrated in London/SE which actually accounts for only 18 out of 67 million people. Someone needs to earn 30k as a single person to be a net contributer to the system, so you can imagine how many high earners we would need in order to fund NHS and a decent welfare state (which I hope we would have) in the future even as medical costs and lifespans increase. And if high earners all FIRE, you can imagine the impact.

Which is another thing- what if NHS doesn't exist in 30 years time. Would someone who FIRE have the money to pay medical bills? Or even if NHS does exist, would someone who was previously on a decent income be ok with having to wait months for treatment. Health conditions may prevent you from working, but as any American would tell you, not being covered by your employer's medical insurance is very very dangerous... Even though the cover isn't very good, at least i have private medical insurance and its quite standard in many jobs. my DH got an operation privately and honestly if it had been a serious condition and he had to wait for the nhs, that would not have been good...So it may be good to stay in some form of work so you can continue paying Bupa which I expect would have increasing premiums...

I live in a garden flat btw

We became mortgage free (I was 37, dh a bit older). Dh bought first house (70k) when he was 20 in a cheap area in SE (no parental help- just saved a deposit). Didn't go to uni, left college and got a job in tech. By the time I'd met him he was onto his 3rd house. We bought together before we married and we sold that house last year for 550k. We had a 100k mortgage left on it. We relocated to my home town and bought a bigger better house in a nicer area for 300k. Whacked 50k into dh's pension. Had we stayed in previous house we would have paid mortgage off within 10 years anyway.

@whatayear81, I have 3dc. They are mid to late teens now and they were all born in a flat. We moved because "won't someone think of the children!" and I thought that I was doing them a massive disservice. Whilst the garden was good to have they all much preferred going to the local parks, which we did on a daily basis.

Home from school… my two in the summer would dump bags and be in the garden for a couple of hours, then dinner out there. Bliss. Day in day out.

Winter…. No bloody way did I want to sit around the park in freezing cold. They’d be in and out of the garden all day.

@Whatayear81 a lot of the flats in my area are garden flats. there isn't a significant prize difference, i will probably live in one of them simply because of supply. they are not terribly different from the garden of a terraced house (but the terraced house is a million).

If we were in America, I would have said American dream, rather than' house with garden'. There is no British dream as far as I know, but if we were silly enough to have such a term lol, it would probably be 'everyone has the ability to buy a house with garden in a picturesque market town, next to stunning countryside'. But I do think that as humans are social, we are influenced by certain impressions that we have of how our lives should be; 'house with garden' is just one that I can think of at the top of my head. There are probably better examples but I am quite oblivious to such things!

Generally its supply and demand; if everyone wants a certain thing, you pay more for it. Like when everyone was holidaying in cornwall in 2020, the prices reached epic proportions. DH and I holidayed in manchester (got a really good deal on a spa hotel), and everyone was aghast, they thought we were insane cos apparently 'who holidays in manchester?' But if you go through life just following trends, it doesn't matter how much you earn, it is very easy for it to be swallowed up. Hence why FIRE's focus is on being a little odd and thinking out of the box.

Many seem to think FIRE and similar stuff is always about working yourself to the bone when your young and then retiring early (when you’ll inevitably drop dead). But it can be thinking about how to enable yourself more time to do the things you enjoy better. The option to work part time, rather than full time; to take the less stressful (but lower paid) job and spend more time with your family; or to set up your small business, study or write your book.

For me, thinking about what you truly want to spend your money enables you to do more while you are younger, not less. But it might mean having less stuff. I’m not a FIRE follower but I do believe in thoughtfully spending your money. There are a lot of things out there designed to make you think you “need” things that you truly might not even want.

I do agree though that this is a privileged position - higher earners will obviously find this a lot, lot easier to do (for some it will be largely impossible). And our economic model is based on people spending and spending and spending…. I can’t deny that we’d need to answer some big q’s if more people took this approach (not necessarily a bad thing but a difficult one…)

I think there are different types of people. Some people will retire and be really bored really quickly because work was a massive chunk of their personality. So they might have little or no hobbies or interests.

If you have lots of hobbies and interests when you are younger you probably won’t be that bored in retirement either. I think it’s just different types of people not an age thing. Bored people will be bored (in their own) when they were young too.

I noticed this during furlough and lockdown. Lots of people saying they were bored.

For me personally I am never bored and I never will be bored until I have

• read all the books
• watched all the films
• learnt languages
• learnt how to play musical instruments
• visited the country and the world
• etc

@Whatayear81

Home from school… my two in the summer would dump bags and be in the garden for a couple of hours, then dinner out there. Bliss. Day in day out.

Winter…. No bloody way did I want to sit around the park in freezing cold. They’d be in and out of the garden all day.

I need your secret. We have a lovely garden with trampoline but my two will build forts, play cards, read and mess up the house moving furniture around... day in day out. 100% indoors. Even I'm summer when we are out there doing chores. They'll only run out if they're hungry or want something.

Winter, we drag them out to park or woodlands for OUR sanity using bribes. The only time they go to the garden is if their friends are over, weirdly.

[quote onlychildhamster]@Whatayear81 we have a sofa dining bench- made Flynn dining bench and a dining table in our reception. We don't have a TV (or a TV licence) so we are usually at our desks using the computer/laptop or in bed. We might watch something on the projector while eating dinner but usually stop watching once dinner is done. I don't think it's money saving at all; I mean I am looking at a leather dining bench for the other side of the table which would be £££ but just an illustration of how we buy for our needs rather than what everyone else has. I mean 97% of the UK has TVs but we don't buy one just because everyone else has one!

I do think peer pressure is responsible for a lot of spending. Society believes you need a house with garden for a child so a lot of people move out to the sticks to get one (despite high commuting fares and the need for 2 cars) which make the overall cost more expensive than living centrally in a smaller space. I calculated it would be cheaper to buy a flat in London zone 3 and when we need more space, we would just upgrade to another flat so we can continue to live car free and not pay rail season tickets.

I wouldn't call myself frugal in the least but for me it's obvious that you should only buy things if you really need it or really value them. If you are 50/50 about something, then surely it's better not to spend the money?[/quote]
We might watch something on the projector while eating dinner

Sorry I am nosy but I have to ask - what kind of things do you watch on a projector?

[quote onlychildhamster]@Whatayear81 the point wasn't whether people should or should not have sofas or gardens or TVs. The whole early retirement movement was counter cultural in a way, it was telling people you didn't need to do things that were well established practices and doing that would save you significant money so that you could retire earlier. If you look at some of the advice given by people like mr money mustache , he told people to stop paying for TV. He calculated how much it cost to live faraway from work and fuel costs- he advocated living as close to work as possible. Living in urban areas usually means living in apartments esp if you are trying to save money in the first place. As a FTB with 400k budget, I would have a flat with communal garden if I lived near work. The lack of sofa I think is linked to the fact I don't pay for TV and try to keep my apartment as minimalist as I can (with 2 people WFH and in need of WFH set up ).

I am not subscribed to FIRE but I do try to keep my basic costs low. As it's easier for me to cut out discretionary one off consumer purchases than if I had high ongoing fixed expenses I.e. car, bigger house to heat.[/quote]
Whenever I tell DH, oh people on Mumsnet say you need a garden for kids (but 95% of people in my home country never had one), or oh people on mumsnet said you absolutely need a sofa! He looked at me and went- so you want a house with garden/sofa cos someone online said you should have it? He has a point...

Yet you believe Mr Money Mustache ?

@onlychildhamster

I wouldn't like to retire at 40 but I can see the appeal of planning as if you retire at 40! It may mean that you can go back to university/retrain in a different field without worrying that you can't pay the bills with a salary cut. And yes some people do get sick at 40 plus, three of my aunts/uncles got cancer at that age so evidently runs in the family. So it may be a forced retirement...

Logically though, it wouldn't work out very well for the country if everyone did it. The country needs taxpayers, it already suffers from a lack of people paying high income taxes due to high wages being concentrated in London/SE which actually accounts for only 18 out of 67 million people. Someone needs to earn 30k as a single person to be a net contributer to the system, so you can imagine how many high earners we would need in order to fund NHS and a decent welfare state (which I hope we would have) in the future even as medical costs and lifespans increase. And if high earners all FIRE, you can imagine the impact.

Which is another thing- what if NHS doesn't exist in 30 years time. Would someone who FIRE have the money to pay medical bills? Or even if NHS does exist, would someone who was previously on a decent income be ok with having to wait months for treatment. Health conditions may prevent you from working, but as any American would tell you, not being covered by your employer's medical insurance is very very dangerous... Even though the cover isn't very good, at least i have private medical insurance and its quite standard in many jobs. my DH got an operation privately and honestly if it had been a serious condition and he had to wait for the nhs, that would not have been good...So it may be good to stay in some form of work so you can continue paying Bupa which I expect would have increasing premiums...

This is one of the things that springs out at me from Mr Mustache - it is essentially a bit leech like. He expects everyone else to do the graft and he benefits from it eg

Since we retired just before he was born, he has grown up with the idea of financial independence – if you own assets like rental houses or shares of businesses, they provide income which means you don’t have to leave home for 9 hours every day and commute to an office unless this is your idea of fun

@IamGusFring You can watch anything from a projector! Its hooked up to DH's PC. youtube, netflix etc! I actually like watching from laptop but DH loves the projector.

Well I am definitely not following most of MMM's savings tips. I have bought pizza before! I wear makeup (which he probably thinks is frivolous). I don't bike around everywhere, i use public transport or walk. But he is someone who has achieved something that a lot of people are aspiring towards- early retirement. It might not be your dream or mine, but it is important to a lot of people for a variety of reasons. I do like the idea of saving money and living below your means.

A lot of people on good incomes have investments and rental income just like MMM, but they can't afford to retire or might even feel 'poor' even though it sounds insane. This is because of lifestyle inflation. none of DH's senior colleagues send their kids to state school, my DH said a lot don't even consider it as an option. They all have large houses in v desirable places in the SE. Thats just the tip of the iceberg, there are always social expectations and there is an infinite number of ways to spend your money. Most of which can be quite damaging to the environment. Frugal living is kinder to the environment.

Also to be fair though, if we got rich people to all give up their big cars (or at least 1 of them), to travel less, to buy less stuff, to use less gas to heat their large houses, this would have a positive impact on the environment. After all, its the richest 10% who have the biggest impact on the environment. its not so good for taxes, pensions or the economy.

@onlychildhamster Thanks. All I could think of was old school days and having to watch people's holiday slides years ago . 😂

@DeepaBeesKit

I want financial security.... but I don't want to retire that early. People who retire that early often stop using their brain. The ones I know who have done this have aged faster & lost touch with technology trends etc. I also think the vast majority of early retirers significantly underestimate the extent to which they need a lot of money to keep pace with inflation.

Im 51 and will be locked in to working for another 16 years, but i want to disconnect from technology trends and get out the sewing machine, make clothes, make little clay figures, do up my house, read philosophy! I dont see losing first touch with technology trends as any kind of slow death.

It's irrelevant for me as I'd never want to do conventional retirement. Sounds boring. Even if it's just 1-2 days a week I'll always be working. But I wouldn't mind "retiring" from compulsory work, that if I didn't need the money I could do something else I actually enjoyed.

Probably not in our 40s but we are looking to retire by mid 50s

It's all about balance..I have the capacity to use my experience and life skills to keep a good job with pension and keep paying into my state pension..and invest and pay off mortgage. But I've also pushed myself so hard in my twenties that I might have long term health issues so that's definitely on the mind

At the same time, I am also child bearing age where I want children, so I'm going to find a way to do both reasonably. Because as much as I want to be able to give my children everything emotionally, I also have to think of beyond 18+ and potentially retire EARLIER because that would be so much better for my husband and both our long term old age health.

We regularly talk about the future proofing and downsizing when time is right and how we deal with our annual and monthly investments, however large or small before we agree on disposable income. That's not to say we don't enjoy life when we can in terms of quality of food, holidays, clothing, we just spend it in a way so that we have a buffer always.

Oh we also use various investment and pension calculators and put our per annum goal on per year (in retirement) that we hope we live on so it keeps our goals in line..at the mo, it's a loose goal. All these tools helps.

This has actually been a really useful thread to me as it's prompted me to get figures for all my pensions and work out what my annual and monthly income is likely to be on retirement ( hopefully 60).
Thanks for defined benefit pensions and sizeable Additional Voluntary Contributions I should have a comfortable,if not exotic retirement.

That's with 3 defined benefit pensions , monthly AVC contributions for the past 5 years of £200 per month and a small self employment pension. If I retire at 60, I'll have been working for 37 years in total.

Everyone needs to start thinking about their pensions a lot earlier than they usually do.

I think there are different types of people. Some people will retire and be really bored really quickly because work was a massive chunk of their personality. So they might have little or no hobbies or interests.

 I'm  ancient so  I know a LOT of retired people. People who retired early like us or at pension age or late.  Still active and engaged . 

  By far the commonest remark  I've ever heard from the kind of retired people I know, is   " I'm so busy  I just don't know how I ever had time to  go to work".

 I see retired people from every walk of life   redeploying  their old  WORK skills and experience   in completely  different  arenas.   Food banks,   soup kitchens, community gardens,   fund raising,  public relations,  local politics,  mentoring, voluntary work, delivery drivers,  personal shoppers  and drivers.