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FIRE starter

595 replies

Mia85 · 14/02/2021 17:37

This is a thread for discussing FIRE (Financial Independence Retire Early) and supporting each other in planning for the future.

For anyone new to FIRE, the idea is that you live significantly below your income and invest the surplus, usually in low cost funds. The aim is to amass enough that you can live off the returns. At that point you are finanically independent and you are free to spend your time as you wish (which might include working if you want to do that).

There's a huge amount on the internet about it. Lots of news stories e.g. here and here One of the main gurus of the movement is Mr Money Mustache and his website is a good starting point www.mrmoneymustache.com

A lot of the FIRE discussion out there seems to be very US based and/or men in their 20s with no kids trying to retire extremely young so I though it'd be great to talk here and hopefully find likeminded people.

OP posts:
YonWeeLassie · 30/04/2021 17:02

Just came across this thread. I had never heard of this but essentially it's what we did.
DH and I are now retired but wind back to our 30s when we bought this house we borrowed well beneath what we could have. It's a big house but in a cheap part of the UK. We had DC late, I was 40 and DH 48 when DC2 was born.
While they were very young we massively overpaid our mortgage and lived relatively frugally.
This meant we were mortgage free when DH was 55.
He retired at 57 and I retired fully at 58 though was part time before that. He was retired when DC were still in primary school.

We invested in DCs names and importantly taught them how to manage and invest. DS1 bought his own house last year aged 24 and is already aiming to do the same. He borrowed less than he could have and lives in a very cheap part of the UK. He invests via Vanguard mainly and manages to put away a decent amount each month. He's a teacher so not the biggest earner but has always been interested in finance and investments.

MissConductUS · 30/04/2021 21:07

Just came across this thread. I had never heard of this but essentially it's what we did.

@YonWeeLassie, if you look up the thread a bit I posted the same thing. I guess you and I were doing FIRE before FIRE was cool. Grin

RainbowMum11 · 30/04/2021 21:50

Not sure if I count but I am early 40's, no mortgage, a decent pension pot and self employed earning enough to keep me going so I like to think I'm semi-retired.
I am interested in investing to bring an extra income though as savings just aren't earning any interest at all.

MissConductUS · 01/05/2021 00:46

@RainbowMum11, I'm sorry to tell you that there's not much out there at the moment generating much current income. Even junk bonds are only paying about 4%. That's why your savings are yielding so little. Interest rates are quite low.

If you have money you likely won't need for a few years invest in stocks. You could buy a bond fund but if interest rates go up bonds will lose value. There is no free lunch, unfortunately.

RainbowMum11 · 01/05/2021 01:04

But where do you start with stocks?
I want to keep some cash back for a small extension and some more back for a 'rainy day' fund but could still have a smallish chunk, I just don't know where to begin with it really.

MissConductUS · 01/05/2021 01:55

Start here

www.vanguardinvestor.co.uk/investing-explained/stocks-shares-isa

MrsWombat · 01/05/2021 06:40

@RainbowMum11 Take a look here:

flowchart.ukpersonal.finance/

It's not aimed at the FIRE community but it will give you a good financial basis to start on, and obviously, your long term goal will be FIRE. Start with your workplace pension and a 3-6 month emergency fund in cash/premium bonds first.

I would also recommend listening to the entire back catalogue of the Meaningful Money podcasts as he explains a lot about pensions and investing in the UK on there.

Starface · 01/05/2021 07:44

@YonWeeLassie
thanks for your story. That's great. Inspiring, both for thinking about ourselves and our children.
I've benefited a lot from this thread. I've realigned my savings plans for my children and I've looked into the benefits of operating as a ltd company, which will help me in the future. I didn't know much about this, but as I move forward it will definitely help me. Thank you everyone!

MissConductUS · 01/05/2021 10:06

The personal finance forums on Reddit are pretty good, and there's one specifically for the UK

www.reddit.com/r/UKPersonalFinance/

and they link out to this as a list of recommended resources

ukpersonal.finance/recommended-resources/

redmapleleaves1 · 01/05/2021 14:44

Hello all

Great to discover you all here. I've been reading FIRE and frugal blogs for the last 8 years since a difficult marriage breakup, - the credit crunch threads on Mumsnet helped make things feel manageable then when I was very scared about money.

I'm now 55, single mum to two, one at university and second late teens at home. I'm in a reasonably paid job with a good pension scheme - and should have around £850/month from 60, and enough to cover a reasonable frugal lifestyle at 67. I've a S&S isa to bridge the gap, and premium bonds for emergencies/savings. Currently trying to build up a small sideline alongside full time work, in case I decide to go soon after 60.

Wanted to feed in my experience on the overpay mortgage vs investment discussion. When I got divorced and bought this house it all felt very scary. Being responsible for two teens and their security and at that stage being on a fixed term contract. So I threw everything I could at the mortgage, and have brought it down from 21 years to 6 in 6 years. Now things are more secure, and realistically I could switch tack to put the extra into the isa, but the emotional security of knowing that the mortgage is reducing is definitely worth it for me. I had several years worrying if something became more precarious, as on a single income with fixed term contract, it wasn't sure I'd be able to get another mortgage, so wanted to get the LTV rate as good as possible.

Something I think is discussed much too little are the finances for single mums once the children reach 18,. Fortunately another single mum took me to one side a few years before that became the case, and impressed on me the importance of saving, in case they wanted to go to university. (University maintenance and contributions are from the income of the parent they are resident with only, and of course from 18, Child Benefit etc stops too.) Martin Lewis has been vocal on the hidden side of university contributions now needed for living costs. But for me earning £40K, with another child at home, the contributions needed would have been significant if I weren't living frugally and had savings, even though DD has earned and paid her way too. If they are both there together, I've been needing to save £150/month for the last year to help smooth the curve, as it wouldn't be viable to pay for them both from immediate cashflow.

I've loved reading FIRE blogs, and they've kept me motivated through the harder times. My favourites: The Escape Artist, Quietly Saving, MsZhou till she stopped blogging, and Burning Desire for FIRE, an Australian single mum and teacher who has just FIREd after an incredibly inspiring journey.

Mia85 · 04/05/2021 22:17

Welcome redmapleleaves1, it sounds as if you have made incredible progress and are in a really good position. I know what you mean on the emotional security of th mortgage. We have had some very serious health scares and that does make security very attractive.

Does anyone here use any financial planning apps/programmes? I use my own excel sheets that are very useful in that they obviously match my situation and I know the assumptions that went into them but they are not very sophisticated. I was looking at this www.retireeasy.co.uk site which looks great for visualising long term planning and the implications of different strategies but at a minimum of £3 a month it's really doesn't look worth it. Does anyone use anything similar?

OP posts:
whysotriggered · 11/05/2021 22:15

@Mia85 like you, I just track my progress on my own spreadsheet. I have never found an app I felt did such an amazing job that it was worth paying for!

lillg · 11/05/2021 23:30

Hi All,
Apologies if this has already been asked, only read the start and the end of the thread.
I have about £5k invested in shares through free trade (ISA). It seems most people are using HL or vanguard. I like freetrade as I can build my own portfolio (I have a diversified portfolio about 50% low risk, but then I have some specific higher risk shares such as Tesla). What are the benefits of HL or vanguard over freetrade? Am I missing something?

I'm mid 30s and currently have a property mortgage free up north where I work and a main property mortgaged in Suffolk.
DH and I have about £30k in premium bonds and £20k in savings. I have about £70k in DC pension at the moment. I also have some cryptocurrency. I invested £1k in 2018, took that entire investment out late 2020 and now have £1.7k in there which is entirely profit. I'd very much like kids, and if that happens spending time with them will take precedence over retiring early - but if that doesn't happen (and it's been a rough ride so far) then I think we could easily retire at 50.

whysotriggered · 12/05/2021 22:17

@lillg you sound like you are already doing really well.

With regards to HL, for me, I just like the information you have access to and the great customer service. I don't think it's one of the cheapest but I am ok with that. If you are happy with freetrade then stick with them.

whysotriggered · 12/05/2021 22:18

@lillg And I wish you all the best on the kid front.

Mia85 · 12/05/2021 22:23

@lillg do you mean you are investing in individual shares rather than funds/etfs?

OP posts:
lillg · 12/05/2021 23:05

@whysotriggered thanks. Freetrade does seem to be working for me, I just wanted to make sure I'm not missing something. I've been lucky landing a great well paid job. I'm trying to make the most of it as security in the form of money in the bank/investments is so much more valuable to me than stuff

@Mia85 yes. I do have some investments in funds and EFTs through freetrade but also have individual shares.

PensionsYes · 17/05/2021 19:06

Not posted on here for a long while - but feeling inspired by everyone’s frugal schemes, side hustles and investment ideas.

We also avoid BITCOIN due to environmental concerns. I’ve even started deleting old emails for the same reason.

PensionsYes · 17/05/2021 19:24

A question for you knowledgeable investing bods then...

If you’re 53 and hoping to retire at 60 with some cash in ISAs ... is 7 years long enough to put money in the stock market for?!

I’m talking ISAs. Higher rate tax payer and plenty of contributions going that way already but we would need enough cash to live off until we drawdown the pension.

Is there too short a timeframe to invest in the markets?...?

Starface · 17/05/2021 20:42

@PensionsYes

Now I'm not 100% on this. I think anywhere 5 years plus it's worth considering. You might want to be quite conservative with your investments. And you would want to consider if you would really need that money or be able to ride it out if there was a crash/big dip. Markets generally recover, your problem is if you have to consolidate your loss in a downturn.

I am assuming you want to do this because you will continue to earn so you don't want to draw from the pension in the higher rate. I wonder if this means you might not take the money out of the ISA, you just want the option. So it might stay invested. In which case I would invest it. Because knowing me at the moment, I wouldn't actually spend it.

PensionsYes · 17/05/2021 21:12

Good point re bring conservative, @Starface.

whysotriggered · 18/05/2021 11:10

@PensionsYes I agree with @Starface I am assuming you are not planning to withdraw all your ISA funds in one big lump at 60 so the majority of your funds will be invested for longer than 7 years. The FI community in the USA talk a lot about the 4% rule which might be helpful to think about in terms of how much you can withdraw if you want the money to last.

PensionsYes · 18/05/2021 16:17

@whysotriggered

No we would spend the ISAs as slowly as possible but more quickly than the 4pc rule...

Still I think DH is so f*cked off with work he might quit tomorrow... ! Not altogether sure we will make it to working to 60 after all... Can’t even book somewhere hot right now for a bit of a break!

I’m trying to work out a sensible spend rate to get us through to SPA...

If we didn’t have to house the kids it would be easier? Blush

Starface · 18/05/2021 17:24

Well, you can access your private pension pretty soon?

I guess the thing with deaccumulation rates is that they aren't fixed. Not like an annuity. So if the markets drop you can take less. You can be responsive. This helps.

How old are the kids? Quite seriously, if they are working, living rent free, and this is preventing you from downsizing, there is nothing wrong in asking for a contribution. If they are of that age, you can talk to them and explain it all to them. Otherwise literally you are working to house them, and they are what? Saving for a house deposit? Chucking money down the drain? Something there might not be quite right. I do realise that is a huge amount of speculation in the above.

whysotriggered · 18/05/2021 19:09

I think private pensions can be accessed at 57.

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