Anyone doing FIRE? How's it going?

[BigTittyLife]

I'm aiming for a fat FIRE at 48. We're 38.
We're hoping to have a £1m pot by that age spread across different investments - some accessible at 48, others tied up until later on. On top of those investments, we have a house worth about £340K which we've paid off. We also have shares in a company which may or may not sell for a decent price at some point.

I wouldn't say we're particularly frugal and we certainly don't go to the extents of some FIRE people. I guess our biggest savings compared to others are that we don't go on holiday at the moment because of our elderly dog, and that we don't have housing costs because we live in a modest house that we've fully paid off.

We're currently putting away about 79% of our income without trying too hard.

We're invested mostly in shares-based retirement tracker funds. We're dabbling in higher risk investments but only amounts that we can afford to lose. We have private pension pots but we don't put a huge amount into those. We both have decent-ish workplace pensions which will give an income of some size at some point.

Is anyone else doing FIRE? I'm on some FIRE forums but they're quite US-dominated and can be a bit weird. I'm wondering if any MNers are FIRE-ing?

I think you would also get Starting Rate for Savings of £5000 and Personal Savings Allowance £1000 as well Sarkyandcynical.

LITRG.org.uk website has examples of how the various allowances can be combined when you have a low income.

@LabradorPacMan I completely agree about not talking about it. My husband is almost evangelical about savings and investments and doesn’t understand why everyone doesn’t do it!
We are very vague when discussing anything financial but I know we are more financially secure than most of our friends, even ones whose income has been much higher over the years. This is due to planning, investing and consistently saving for decades (obviously easier to do if you are child-free).
A few people we know know that we invest a bit and have asked for advice. Our answer is always low-fee trackers and consistently putting money in and waiting for the compounding to take effect, but most people just want a quick and easy solution.

It's OK, I already run my own consultancy and have done for over ten years, usually alongside a full time job. So I'm used to turning work down or sharing/handing it over to an associate. That associate has a far bigger consultancy than me and he will have work for me if I want it.

I'm happy with my decision on taking the lump sum. I plan to use my tax free allowance for the next few years with my new part time role, then from my consultancy. And, in a few years, I draw a salary from the consultancy without actually doing much work as money will have built up there. But the £150k will top that up, at £2k pm.
I'm aware of flexible drawdown.

For now, it's part time with two companies, and then when one drops away, use up the inheritance first as that won't be tax sheltered (I've run out of tax allowances, until 6th April).

@nannynick Thanks for this, I’ll take a look at that. I am learning as I go and am not always sure where to start. I’ve tried the government websites but find the intricacies of their tax sections a bit impenetrable!

Yes, we’ve been very very fortunate.

What do you do with your time now? Do you mind sharing anything about your story to achieving that?

Financial Independence Retire Early = FIRE.

It’s basically focusing any spare income on achieving a retirement income that allows you to retire early.

Interesting article on Medium (here is 1st para)

"As someone who drank the Kool Aid, I saved religiously, invested periodically into index funds and lived frugally. I ticked every box of the FIRE movement (Financial Independence and Retire Early), but like the majority on an average salary, I realized the dream of early retirement was just a fantasy. High hopes turned to disillusionment and this prompted me to look into some of the most prominent FIRE bloggers and promoters. I discovered that they continuously spread half-truths and myths, while concealing their true sources of income — which is you. I want to reveal how I and legions of eager followers have been duped and fed a tantalizing vision of early retirement that is attainable even on the modest of salaries."

https://christopheroleary.medium.com/the-fire-movement-financial-independent-and-retire-early-is-a-pyramid-scheme-43af54ab5572

I think the best way to achieving it is to create a successful company, invest. Don’t buy into luxury brands, focus on wealth generation and maintaining that wealth.

I feel your pain, as a (less senior than you) teacher whose family circs are otherwise the same as yours.

I feel like we could use a separate thread on Lean Fire, since the six figure earners on here who (perhaps understandably) don"t see thw point of frugality, are rather a long way from our experience!

I've been following FIRE blogs for years and I've.used MMM/ERE principles to buy a very cheap house outright (not in the UK). Actual financial security, never mind FI, still seems rather elusive!

Extremely Lean FIRE... is that such a thing? I am forecasting income of around £17k when not working. In my entire working years I have never earned more than £25k, often a lot less.

I watch videos and listen to podcasts where £700k+ pension pots are mentioned. My pension pot may is currently £100k ish, so at nearly 50 I cannot see that getting anywhere near the figures many videos/podcasts mention.

If your expenses are low though, you don't need so much. If come age 55 you have £200k in pension and £100k in ISA, if your expenses are £17k, then you can probably stop working.

It really does look like snake oil of the 'there's one born every minute' variety. I had a friend who was into schemes like this. I say 'had'.

It's superficially interesting, but crap. Lucky for the author that Pete Adeney isn't very litigious, given the inaccuracies in the article. Firstly, MMM retired at 30 and he's got a couple of years on me, so he would have retired in 2005-ish, yet O'Leary alleges that he (MMM) gave up work in order to start the blog that, as he admits, didn't appear until 2011, so that's one hell of a discrepancy. Secondly, the affiliate marketing is very transparent. Thirdly, MMM has published no books (in spite of being a genuinely outstanding writer) and sells no courses, so he's leaving a lot of money on the table. He used to publish his blog earnings and annual spending, and he's always behaved with total honesty and decency as far as I'm aware. He's got a social conscience, funds good causes and won't even badmouth his ex-wife, for.goodness' sake, so.he's really an appalling choice if you want to paint FIRE bloggers as grabby unpleasant human beings!

I think he's wrong about Financial Samurai too. I don't like the guy personally - arrogant little Fat Fire so-and-so (although I think he publicly renounced the RE part) - but he has never tried to conceal the fact that he was a high earner from a young age - he's basically built his brand around it.

I can't really evaluate what he said about the Millionaire Teacher (if that's who he was talking about?) because I don't really understand US teachers' pay structure, so I haven't followed his blog/podcast/whatever. But if O'Leary's accusations are as accurate as the rest of the article , I think we can safely take them with a pinch of salt!

It's not snake oil. My parents did it, it was just called "living beneath their means" in their day.

They lived an (adjusted for inflation) £30k lifestyle on a combined £100k salary, saved early and consistently, and paid into good pension schemes, so naturally could stop working earlier than others on the same salary who did not do these things.

No magic to it.

Not everyone wants to live like this. That's fine too.

What makes you say that? Sure there will be some charlatans selling a lifestyle on the internet, just as there are in any area of life. But in essence FIRE boils down to living below your means and investing the rest sensibly and cheaply. It's not get rich quick and it's not complicated; it's simple maths. The people I've talked to who are doing it are generally using excel spreadsheets and Vanguard, not buying into some 'scheme'.

Thanks for the figures! I was going to ask about your FIRE number, and there it all is. What an amazing achievement to have done so much with such modest resources.

(I thinkJ'm not so much Extremely Lean Fire as Armchair Fire: I devour the blogs and podcasts but I don't currently have a big or stable enough income to get started, alas!)

I started doing the Rebel Finance School personal finance course which is based around FIRE. It's free and run by a lovely British couple. I'm mid 40s and not a high earner but it's given me a lot of confidence. Will definitely end up better off.

Armchair FIRE. That sounds like a nice thing but maybe it is not.
I think a FI number is 25x the annual spend, so £425k in my case. ISA/Savings + Pension has just got to £300k mark this month, so not to my FI number yet. Though that is just a number.

@nooobeginnings I haven't done that but I know the Donegans from their podcast. I don't know if it's been shelved now, although they are still on YT etc. Alan gives the soundest advice of any podcaster I've ever heard. Totally lovely people.

Rebel Finance School is great. JL Collins often makes an appearance - author of The Simple Path To Wealth.

The more people understand about using pension and Stocks & Shares ISA to build wealth the better. Getting started with investing is the hardest thing, took me ages to go from using a cash ISA to having investments.

Weird.

So, my saving and living below my means, tracking those savings, investing in cheap funds (Vanguard amongst them as someone else said) and being in a position to retire at 56 is somehow not true and I've been conned.

I wonder how?

Maybe I'm suffering from the lack of designer handbags and driving an eight year old car is bad for my health, or something?

The June 2024 RFS is running now. Not sure about the podcast.

@mynamechangemyrules you need a side gig!

Anyone with a low income, you need to maximise income and minimise spending. So don’t fall into accidental spending keeping up with people around you. I found other people’s acceptance of spending £15-£20 on a trip to Costa for coffee and a catch up very limiting. Two coffee and piece of cake, some got cake and hot chocolate for kids as well and they didn’t even finish it. Madness. Or at least, different priorities.

Wetherspoons with unlimited coffee, or Ikea, is more my speed. I’m going for the socialising, not the food and ambience!

Side gigs- baby or dog sitting in the school holidays, if you are able to leave your own DC.
Ebay selling, if you are able to collect stuff and sell it on. DH started with CDs and DVDs, and audio books. I think he sells books as well. It’s surprising how much he turns over.

DS does 3D printing of small figures.

Have a think about side gigs- everything you don’t spend, and everything you earn, counts.

Swapping your bank account to get the welcome bonuses. Signing up for deals and shopping around for insurance.

It all adds up.

I am 43 and about to hit go on CoastFIRE. I have £700k split between pension, S&S ISA, GIA, Cash ISA and premium bonds and DH has £350k in pension so just over £1m excluding house equity.

We have £90k left on our mortgage and two young kids so want to continue to enjoy our lifestyle with them (nice holidays and lots of extra curricular activities) and build the pension pots.

We are planning to fully retire around age 55 but I am about to reduce my work hours to 2 days a week. I was the higher earner for a long time and due to health issues now have to cut back. Having the FIRE nest egg has made this much more possible, and that's the powerful part of the FI- you have more options.

DH coasted in a relatively junior role for a long time but has recently moved jobs with a promotion so it's his turn to be the higher earner for the next 5 years or so and then he can look to reduce his hours as well.

NC for this post!

DH and I are FI and retired early 2 years ago (at 50 for me, 60 for him). Our number is lower than I expected it to need to be but so far, it seems to be working well. We did save hard whilst working but were definitely not frugal.

We have annual income from DB pensions and annuities and dividends of about £60k.
We have DC pensions and other investments (trying to gradually most shift to ISAs) of about £650k. Since retiring we have drawn about £30k per year but it's grown by about £30k so has not shrunk.
I have a spreadsheet tracking our spends and a year by year lifetime plan of income, tax, expenditure, draw and growth and think our pot will last until I am 90 or so with our relatively high level of spending. Our mortgage is paid off (house worth about £800k) and I have ignored possible inheritances. I have included pretty conservative growth. We spend a fortune on travel at the moment & I am conscious our expenditure is about 60% discretionary so we could lower if needed. The spreadsheet is the key to my financial peace of mind!
Children all grown or at Uni, we have just 2 more years to contribute to Uni (about £6k pa).

I highly recommend early retirement!