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.

This was in the early days of stoozing and overpaying mortgages, so I think it’s something the banks didn’t think would occur, so it wasn’t against their rules. I think when the banks became wise to this behaviour, they closed the overpayment ability and made it a lot harder to pay by card

I am quite risk adverse it’s true. But £80k of credit card debit is a lot and without having the cash in the bank to pay it off, I just know I would have been too stressed. I applaud all those who were braver than I was though! We did change mortgages to get the best rate and overpayment options

The key to accomplishing FIRE boils down to simple maths, setting your targets and sticking to them.

If you know where you want to be, and when you want to get there, then you can work out what you need to do.

My plan, currently doing:

1. Overpaying Mortgage, by a lot. (Although, I plan to move again to a bugger house, and pay off my last mortgage by 55).

1. Continuing to invest 20% per year of salary into pension.

1. Invest 10% salary per year into investments.

Can retire at 55.

Or is this too old for "FIRE"?

So there was a point where 80k of mortgage could go on a credit card?

I wouldn't have been able to get the credit, but from my mortgage in 2004, I don' t think it was ever possible, on mine, to pay any payment on a cc.

I'm decluttering and having that weird "will keeping this now save me money later" thing.

Balanced cross post

You move to a bugger house if you like, no judgement 🤷🏻‍♀️😂

I posted earlier about wanting a bigger home, that's an hard target for me to lose but I have made peace with it.

Oops...I really should add under my posts - "Sent from mobile"

@BalancedIndividual

Oops...I really should add under my posts - "Sent from mobile"

Really needed a laugh so thank you!

I think it looks a great plan. We're all going to have very different situations and plans. Mine is much more about frugality than anything else.

Disappointed.

Thought this would be a Prodigy thread 😔

I'm a firestarter, twisted firestarter 🤘

@PlinkPlink

Lol, when I saw the thread title, the 1st thing that popped into my head was the fire starter in my survival kit.

(Yes...im a bit of a prepper)

I FIRED 20 years ago and I am still delighted that I did. I saved aggressively into pensions and overpaid my mortgage so I had a paid for house. I stoozed a lot at a time of high interest rates. I was lucky but driven.
I still live frugally and grow all of my own veggies and most fruit. I am naturally careful with money.
I have hobbies which occupy me and I volunteer quite a lot for a charity.
I am never tempted to have paid work again.
I can afford a decent lifestyle and travel when we are allowed again.
Go for it folks. It is worth it just for the freedom.

yellow lovely to hear from someone who has done it.

Just a thought

I was talking to a lovely boss about FIRE a few years back

At the time, I was hoping for a house by 50 and she said "but many people look to downsize in their 50s so would you end up moving twice - and getting used to extra space and then losing it?"

At the time I thought she was a bit mad but now I get it. Not saying this applies to others but I am unlikely to have spare cash for maintenance etc.

Yellowspanner this is a very personal question but would you mind me asking what kind of income you think is right to aim for for your lifestyle with a paid for house? I know the FIRE approach is to find 'your' number but of course life changes also come with changes in costs. I think I'm likely to be too cautious and this could add years!

Mia85 I think the income you need depends on your lifestyle. I have downsized my house so my expenses are lower. I do like to travel adventurously so that's where my money goes. I reckon I could live very comfortably on 12K but my kids are grown and I am on my own. I have more than that and it goes on travelling in normal times.
I don't drink or go out much but that's because I am not interested. I have no interest in clothes and hate shopping. I drive an oldish car.
I enjoy growing most of what I eat and I preserve or freeze a lot.
I have a log burner with free wood which I saw up so not a lot of heating costs. And I keep bees.
I love my life but it's not for everyone.
I think it's important to decide what you will do when you RE and plan for that.
I follow MMM and planned FIRE from when the DC were small.
Every spare £ went into my pension and savings.

yellow that's interesting

I have 12k as my figure. I don't travel but the management fee for the building is part of my plan, as is the likely need for private health.

Later on, I will need to decide between insurance or just paying as and when. Obviously emergencies have to go via A&E anyway.

For me in South East, my planned amount is £18k pa.

With house fully paid off and kids financially independent...(or out the door at least, xd).

I think £12k you can do it / be okay, but will have to live a frugal life.

I think I will probably need about 16-18k but I need to do more proper calculations. I still have children at home so a lot of my expenses for FIRE are estimates.

@yellowspanner very impressed with your fruit and veg growing

I don’t have a set figure yet as I’m not sure where I’m going to be living, my current home has income generation potential, but if that doesn’t work out, it would be expensive to maintain and heat. Then we could downsize either in the UK or potentially emigrate, so it’s really hard to have a set figure in mind. Any figure would take into consideration a mortgage free house.

I’m calculating around 12 to 20 ish.

Not sure on the number, but I should know...

My calculation was always....as much as possible. So I had side hustles like marking exams and every penny went to my pension because of the tax incentives.
I live comfortably on £12K but I don't worry about unexpected expenses because I have savings.
I live like this because it suits me not because I have to.
I am still eating all of my fruit and veg from last year's harvest. But I have a big garden and love growing food.

Impressed with the food growing

My calculation is also as much as possible...
But maybe next thing to do is to calculate a number based on various retirement age scenarios.

@BalancedIndividual

For me in South East, my planned amount is £18k pa.

With house fully paid off and kids financially independent...(or out the door at least, xd).

I think £12k you can do it / be okay, but will have to live a frugal life.

Yes, frugal is the way here

But it is just me to pay for and I do plan on using savings to pay for things like new boiler etc.

I never calculated things based on different ages because I always had 50 in my head.

The thing is...I grow most of my food now and saw up and chop wood but as I get older I probably (almost certainly) will have to reduce these. But I probably won't travel as much and I won't want to dive all over the world.
Well I probably will still want to but hey ho..there will come a day when money gets moved from one thing to another.
Just not yet.

Does anyone else feel amazed sometimes at what people spend money on?

Not a criticism, just an observation. My best friend says things like "you know my (brand) jeans, I'm going to wear those".

I really can't differentiate between any of her 70 pairs but just say "oh yes" to keep her happy.

Interesting hearing people’s numbers.

I wouldn’t call myself in the FIRE camp really, but I did aim to be mortgage free by 40ish (achieved) and am looking to stop work by 55 which I know is old by FIRE standards. On that basis though, I think we can have a household income from then of £24-30k net. I want £2-2.5k after taxes. I assume all your figures are post tax too...realise those talking £12k won’t be paying any, but those looking at £18k will if it’s a gross figure.

I spoke upthread about my retirement plans and the fact DH and I have defined benefit pensions which will give us good incomes, with some being available from 60 and some 65 and some not until state retirement age at 67/8. We are lucky in that are pensions are really good and crucially they are index linked and the amount is defined and. It tied to the stock market. So for us, the planning is all about bridging gaps from 55 to 60, and then a smaller gap which needs bridging to 65 and a very little one possibly to 67/8...although by 67/8 we will have over £50k per year coming in, so well over the £2.5k. Yes, I know things could be re-jigged and we probably could stop work sooner if our figure was lower.

One of the things I find hard is the idea of stopping accumulating and moving to the spending and drawing down phase. Have those if you who are now no working found that hard? When you’ve spent years saving, to actually start using it and not adding to it must feel very odd. I think too it’s easy to worry you wont have enough or need more...that can keep you working longer than you need to. And it is counter-cultural. When I mention I will stop work at 55 people, people ask ‘but what will you do with all that time’ which implies only being at work is a good use of time. I expect I will be involved in various voluntary projects but I also might choose to sit on MN for hours at a time, and that will be my freedom to do that if I want. It what’s it like when you’re young and have stopped but everyone else your age around you is still working and will be for another 10 or 20 years?

I feel really fortunate. I had never heard of FIRE until about a year ago. By then I’d already paid off my mortgage, bought a buy to let, have pensions on track and a plan for retirement. Okay, it wasn’t to stop by 40 but 55, but I’m happy with that. I think I’m naturally quite frugal and not very materialistic so do t want loads of stuff, plus I’m quite astute with money. I’ve never had highly paid jobs, but have a decent public sector job which pays a decent salary and have never had money worries, buying property first in the late 1990s when it was expensive but not impossible. So I feel really fortunate...but it’s hard to imagine what the stopping work phase will actually feel like.