FIRE starter

[Mia85]

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.

daisymoo The Money Mage website looks interesting, thanks.

For anyone interested in learning more about investing, Lars Kroijer's Investing Demystified series is supposed to be good.

Wow Esca, that is food for thought, very inspirational!

Thanks for all the links I will have a read of them.

If anyone is looking for a short term part time job that can be done in evenings and weekends then please have a look at census jobs

www.censusjobs.co.uk/search-for-a-job/

I need to be concentrating on getting my holiday cottage fit for rental so would probably be a false economy for me.

For those like me who are into travel, has anyone thought about doing it via house swaps? This is something we are thinking about trying. Some friends did it and are planning on doing it again.

A couple of quick comments before I start 'work' for the day:

Are your boys grown now and did you factor in any financial help for them (University/House deposits etc)?

Yes and yes.

So far, I've got one son through uni and out the other side. He's now working, but had almost a year of unemployment/illness (he's better now) that I helped him through -- at one point, covering his costs was more than my living expenses! You have to factor in contingency funds. I've done some extra work to refill that pot. Good thing too as he's getting married next year!

My other son is at uni after a previous abortive attempt, followed by taking a year out to work and save. He has chosen to be at home while on his first year of a new degree. I don't blame him one bit, and I'm actually glad for the company. I help by having him here rent free (I know that mumsnet is divided on this, but halls fees are over 5k!), and I'll also help with his course's year abroad, if needed, but he's pretty much saved every penny, so I doubt he'll need much. He has a Gamestop share, so he's pretty savvy.

Both of my kids are grafters. It's lovely to be able to help them, and I have the reserves to do so, but neither of them would ask for or expect massive house deposits from their single mum typing in her garret. I think people tie themselves in knots about this when a little bit of struggle and a lot of creative thinking is very good for character development.

We just can't afford to do both - support the DC financially (until they're able to do so themselves) and retire at 55

Thankfully, FIRE doesn't have to be all or nothing. The good thing about school fees/uni etc is that it all comes to an end, and children eventually get jobs. You'll then have years to throw yourself at FI. In the meantime, it sounds like you are thinking seriously. Reconsidering your costs, and increasing your income short-term is never a bad shout. So is approaching early retirement with the anticipation of working one day a week, or so. Creative thinking helps here too.

One of the fallacies about FIRE that I read over and over is about a fear of reduced standard of living. All I can promise you is that I feel rich because I choose how I live now.

Back later to read!

I've been trying to follow this concept for a two or three years now after reading MMM. Was very excited at the beginning, paying off debt, setting up savings, cutting unnecessary things I was wasting money on. Lots of immediate progress and results. Does anyone feel like its more of a slog now? As in its now the boring growth phase, and there's nothing much more you can do actively. I'm probably at the max percentage of salary I can/want to save. Like PP we really value experiences and travel so we spend a lot on that but that's worth it to us and I'm not willing to cut it.

Esca I agree about FIRE not having to be all or nothing, which is why we’re doing our own version of it – thinking carefully about our financial choices and what’s important to us, and saving/investing as much as we can while still enjoying the life we have now and giving the DC opportunities they wouldn't have otherwise. While DH likes the idea of retiring early, he also wants us to be able to support the DC like our parents did with us – and like I said, that’s not compatible with us investing 75% of our income. Yes, the DC will leave school and university and get jobs at some point – but it’ll be too late for us to start saving more for early retirement then as by the time our youngest has graduated, DH will be in his 60s. Hopefully our outgoings will have decreased by the time we get to that point, however (we won’t have the DC in university at the same time for the entire duration), and he should at least have the option of reducing his hours if he wants to. I work part-time at the moment and while I don’t want to stop work in the foreseeable future, it would also be good to have the option of retiring at 60, say, rather than 65.

A1b2 I’m at the same stage; I found it all incredibly exciting three or four years ago after first discovering MMM, followed all the blogs and listened to all the podcasts, looked at areas where we could cut back, and set up a monthly ETF savings plan. I don’t feel like there’s a huge amount I can do now, however – just sit back and watch our investments grow (hopefully!). But I have been finding this thread very motivating, and am wondering whether we can throw a little money at our ETFs. Plus I’m about to start investing for the DC and am going to encourage them to do so themselves as soon as they’re able.

Ooh some likeminded folk!

I discovered FIRE late 2019 and put lots of changes in place last year, reviewed all unnecessary spending & started investing. Its crazy how much progress we made in a year. And that first covid market slump was a great test of our risk tolerance! Saved about 55% of our income last year which would have seemed impossible before.

Things that may rock the boat- first child due soon (lots of that lovely spare cash will be eaten by nursery fees!) And maybe a house move at some point. We're in our first home which is fine but with a growing family and WFH it's feeling a bit small. The true FI thing would be to make do, especially as the next step up would be significant thanks to the area we live in. We will see!

We're early 30s and if it wasn't for babies we'd be looking at mid 40s retirement - but for me its more about the flexibility. I'd hate to have poor health later on and struggle with work, or get laid off when ageism becomes a factor in getting a new job.

Even now its been great to be able to say that DH can take a few months off unpaid in our babies first year, we have the flexibility and back up thanks to our savings and so it's so much easier to ask for this from work!

Look forward to seeing how everyone gets on

ParkandRide I think that's exactly it, the options and flexibility it will provide. I think we're at about the same stage as you - we've worked up to saving 60% of our income, mid thirties, and will probably need to move from our first home in the next year or two as family grows. We don't have big savings like some on here yet, but have made a lot of progress compared to where we were previously.

FrugalFireFly maybe that's just it, its just passive now. Think its great you'll encourage your children and teach them about investing. Whether they choose to do it now or later on, the knowledge will be invaluable plus they'll have seen it working for you.

Lots of veggies / vegans on here. I'm veggie but seem to have an out of control food spend - something I need to work on. Obviously I'm getting the convenience vegan foods also

A1b2 60% is great - it sounds like you're making really good progress, and you have time on your side too. I have an annual spreadsheet that includes our monthly savings rate, and it fluctuates wildly from month to month: in 2020 from -88% to 72%.

Parkandride There's no denying that children are expensive, and more so as they get older I find (nursery fees are very affordable here), but worth it for us. I'm not sure I would have wanted to retire in my 40s, though (if I'd discovered FIRE early enough; am not sure it even existed as much of a concept back then) and everyone's goals are different - for me, it's also about having more flexibility and more options as I get older.

I've just set up portfolios for the DC (we can have up to five different portfolios in our brokerage account), now just need to decide what monthly savings plan to go for... I'm currently deciding between the LifeStrategy 80 and Vanguard All-World, but am tending towards the latter as I don't think they need much in the way of bonds at their age.

How old are the DC FrugalFirefly? I am nervous about putting too much in the names of ours as it's too early to say what they'll be like when they turn 18! I would probably not bother with bonds for children esp as bond prices have been so high recently.

@A1b2c3d4e5f6g7 I haven’t been doing the FIRE side of money management for long but when I was paying off the mortgage and getting savings built up, I found that 90% plus of the money paid back or saved came from the monthly automated payments. I would get paid on the 1st and would have no money left straight away.

But you are tight it’s not motivating or fun and like this, it was a long financial journey, that meant although it was sensible it wasn’t fun. So you need a way to make it fun, I have seen people making posters and colouring in squares (for mortgages the squares were bricks in a house) for this maybe months till retirement.

Personally I like to make a little extra on the side and make additional non scheduled payments doing that and finding ways of having a few free/cheap treats. This keeps me going. When DH came home with a few free but brand new, small sheets of ply that the business next door were about to skip, it made me happy, it was £40 saved and landfill saved. This for keeps me on track and motivated

I have also been looking at figures and I think I will be saving/ investing around 60 to 68% of my take home salary. Plus the 5% forced contribution to the pension, so that’s quite good. I know DH will increase his contributions when the renovations are done. But at the moment he has only increased his by £100 to the ISA, although I’m sure I can get him to increase it

They're teenagers Mia but the account is in our names; we've just opened a couple of "sub-accounts"/separate portfolios for them. It's the only option at the moment as under 18s aren't allowed to hold investments here. We're not likely to have accumulated a huge amount for them by the time they're 18 in any case, but this way we can carry on paying in for them until they need the money to put towards a house purchase etc. - and of course it's not generally recommended to invest for less than 5-10 years anyway.

Having more or less decided on the Vanguard All-World ETF, I read this article by DIY Investor (one of the two bloggers behind Monevator) earlier and am now wondering whether we should go for a more 'environmentally friendly' ETF instead - particularly as we're investing for the DC's future. I'm quite tempted by iShares' Global Clean Energy ETF... decisions, decisions.

So glad I've found this thread. Am a newbie to FIRE but have always had that mindset. Finally this year, I have started to put that into action. Not quite at the 50-75% savings rate yet but every little helps.

Hi all just jumping in, I'm really interested in this and I've started by putting my outgoings into pots and making plans for investments once April rolls around and a cash isa comes out of a fixed rate. Hope to keep up with you all and start dipping my toes into FIRE

This is a really interesting thread, thank you for starting it.

A question, if you don't mind?

I have recently come into an inheritance, of about £350k in the form of a house. We were thinking of buying a bigger house than the one we currently have, mortgage free. But in the long term would we get greater return investing most of that money instead? Perhaps pay off the remaining mortgage on our current house first.

I think you would need to do some detailed calculations firstly how much would you save in interest paying off the current mortgage. How much of that sum you would want to invest in a btl, what the profit would be after fees and taxes and depreciation for carpets, redecoration etc and what a potential rise in house prices in that area could look like, minus selling costs and capital gains tax and what you could get if you invested it, either in Lisa , stocks and share isas or pensions.

It also depends on what you what from life, a lot of Americans in the FIRE movement are all about minimising costs and so would get the smaller house as it would be cheaper to run and you won’t have moving costs, but that’s not to say that’s what you want to do.

Having a rental property isn’t really passive income especially if you cut costs and manage it yourself.

Introducing myself. Discovered MMM about 10-years ago when DH and I realised that our long-term financial situation was precarious. We invested in YNAB to track spending and to manage budget which was also a good way of identifying where we could start saving money (cutting down of subscriptions etc.,). Over the past 10 years, managed to save enough for a house deposit/mortgage last year at the age of 50. We still radically save and trying to build investment portfolio as we don't have a robust pension in place. We have 1 primary school aged DS so need to plan for future university fees etc. The first time we attempted a YNAB budget I cried as we realised how little we could spend on clothing, fun activities if we wanted to meet the saving goals - now we're used to it and the choices that come with it. I had struggled for years to manage the food budget but cracked that last year with a combine of weekly grocery budget in YNAB & the Plan to East app which makes meal planning easy and is worth the subscription because of the savings on not buying food that we don't need.

Thanks dashel that's helpful.

Caringcarer you sound very sorted financially and this is such a good thread.
Being frugal is a way of life for me and if I won the lottery, which I do not do I might add, I would no doubt still look for bargains.
I too am eligible for my Teachers Pension next month , I was planning on simply putting it in my savings which are basically lying in my bank account gathering little interest.
You mention putting it in to your pension to avoid putting yourself in to a highter tax band?
I currently have a H & L SIPP, which I have never invested in, my ex opened it for me without my knowledge which is as strange as it sounds. It has sat there for 15 years and I check it annually. No idea how to make it work for me and I have little understanding of drawdown.
I currently work and will probably have to until I reach state pension age.

I had my large outstanding bill finalised and paid today, I was expecting around £6k to £6.5k and I would need to borrow £2k from DH, although he had offered to give it to me. However it was only £4.3k which I had in my current and savings account so that is paid and from Friday when I get paid, the serious FIRE payments start.

I am so excited! I need to get a bit of cash in my savings as currently they are at £0, so probably just about £200 a month for now. We do have credit cards in case of an emergency and DH has savings and Premium Bonds only take a few days to withdraw, but I would feel better with some cash in the bank. Besides we always use our cash savings for holidays, after paying for it on credit card for protection and points.

Reading about Mustachianism has had me decluttering items into boxes for post lockdown sale or donation. When we moved here we moved lots of stuff that hasn’t been unpacked or missed and also although we decluttered a bit, we still took with us a lot of items that we shouldn’t.

The more I read about this way of life the more I want to know. I just wish I understood finances to the levels that the posters do. I got mortgages, but pensions.... my mind feels blown!

Hi everyone! Can I join? I definitely consider myself a Fire-liter but have been interested in this concept for a couple of years. What kicked it off is a got a job in a payroll department and was amazed each month seeing lots of people paying large sums of money as additional contributions into their pensions. Before then I'd just assumed you joined the pension scheme on a default contribution basis and that was that, I had no idea about AVCs so looked into it more and started making extra contributions myself.

We also around the same time moved to our "forever home" and started overpaying our mortgage, since then I have opened a S&S ISA and put some money into children's savings too.

Unfortunately we're not high earners so all the amounts we put away aren't very large but I try to focus on the fact that we have a mortgage we overpay, children that we put some money away for, jobs with pensions etc. We're mid 30s with two DC in childcare so hopefully when those fees are gone and they're in school we'll be able to up the savings.

Haven’t posted for a few days but wanted to come back and say: I have been reading — and inspired to further FI-oriented action — by a lot of these posts

@CarolinaWeeper I would also describe myself as Firelite. One of the earliest things we started doind was saving half of any extra money e.g. payrise, tax change, smaller standing orders from changing suppliers etc. This has made a real difference and my DH can now retire when I do (he is 6 yrs younger than me) hopefully later this year

Hi all, I haven't posted in a few days either but also feeling very inspired by others posts. It has also been great to find some new podcasts which were recommended by others, so thank you!

I have been trying to not check my Hargreaves Lansdown app as much for the last few days (I got obsessed with checking the value of my index funds) as after a few months of growth, their values have all been falling this week. Just need to ignore and have faith they will go back up again! On the plus side, great time to buy more right before the end of the tax year to make the most of the maximum allowed investment ☺️

Also wanted to recommend the money dashboard app for tracking net worth. You can link most accounts, and add other investments such as premium bonds in manually and it allows you to view your net worth and track it over time- another motivation tool!

Wishing you all a great day.

Checking back in - I get a refund of holiday at work this week (only about £500) and it’s going straight in the new stocks and shares isa. Love seeing it increase!

@CarolinaWeeper I think that was really sensible way to budget. We have never had a hard and fast rule for our budgets. When saving or paying off mortgage, we spent as carefully and minimally as possible and moved some income to holiday savings and bought the occasional treat or meal out.

I too have been ready and listening to a lot of information, whilst trying to get DH more onboard. I think one issue is that he can’t see the cumulative effect of making all the savings. Our credit card bill was £100 last month as we did no DIY requiring additional purchases and ran down the food cupboard. So to him that means we can spend double this month and he is full of good ideas for home improvement. I know it’s good to invest in your home, but I just wish we could leave some of the more expensive ideas for now. At least until we get the holiday let up and running, we can’t do much in there until the plumbers and electrician finish off, which will hopefully be soon.

@Chihuahuacat that’s a great amount to pay in! Is that payment in lieu of working? I wish I could have done that last year.

Can I ask about side hustles? I know that a lot of people on MMM do side hustles from lodgers, dog walking, Swagbucks, present wrapping, writing ebooks etc So is anyone else on here either looking to start earning extra income or already doing it?

For a long time I have been doing surveys, but the vast majority of those are not well paid, I am also in the process of setting up a holiday let (which is one of the reasons we bought this house), I will also declutter the house and sell items when Covid permits. We could get a lodger in the main house but DH would not agree, unless a friend asked. I think I would quite like to sort out some sort of passive income stream, just not quite sure what yet!