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?

Thanks everyone ☺️

Yes my plan is to put significantly more into investments now.

I only started investing in June for the first time.

I reckoned I was being really pushy putting in £300 a month.

But now after seeing how much I've been wasting, and realising where I want to get to, I'm planning to put in £2500 a month going forward.

Sounds really crazy.

I'm doing the rebel finance course at the moment, and reading books and listening to podcasts about investing, so once I've completed the rebel finance course I'll open my accounts etc.

I'm fully aware £2500 a month might be too much of a stretch. But I'm trying to live frugally this month to get a head start.

It's much harder than I thought- especially when it comes to social plans.

My one mindset issue I'm finding hard is asking my MD how I can put more money into my pension.

I'm worried he'll think I'm greedy, or that I'm wanting them to contribute more too.

In my last company I only had to talk to the HR assistant about it. But in this much smaller company the MD does all payroll himself.

Do you think I can liaise directly with the pension company over that? Or will I need to ask the MD?

Book in with him for a chat about pensions. Ask if there’s a policy you can see.
Or just message saying you want to maximise your contributions. That’s totally normal, he will be doing the same.

Just email him "dear MD, I would like to increase my pension contribution, please could you let me know what the process is".

If it's too onerous, just set up a SIPP and put the extra into that.

If you're 20% tax rate it's probably just as easy to pay extra directly into your pension. If you have the log in details etc

Thanks all, I will consider emailing my MD then, thank you.

I did think about just overpaying into my sipp, but the benefit of the workplace pension is that the money comes out before tax doesn't it? So it's better value overall.

I don't think they keep matching our contributions if we pay more, but it would be good if they did.

@Blending123 does your pension deduction come out of your pay before tax, after tax or as a salary sacrifice? What is your highest tax rate?

It works out the same paying it in yourself, so if you pay in £80 the amount showing in your pension will be £100. I pay in extra and that's what shows. But totally reasonable to prefer it comes out of your wages and speaking to your md. I just like to be able to increase/decrease the extra amount as I wish.

Joining in if that’s ok… I’m late 30s and really not sure how sustainable my career is long term. Want to be prepared to retire/take a big cut whenever it gets too much- realistically by c10years time.

my husband is older than me but earns less and has paid less into his pension. Our plan would be essentially to draw down mostly on his first to bridge some of the gap to accessing mine - there’s definitely some tax implications on that though as I’m assuming we wouldn’t be able to use my tax free annual allowance against it.

the last 10years has been expensive with house renovations and childcare, we’re now prioritising holidays while the kids still want to come with us.

I definitely need to get better at the frugality side of things. I real enjoyed the Ramit Sethi ‘my rich life’ series - is there anything similar that’s more uk focussed? I do want to balance living with FIRE

It's the same from an income tax point of view (if you're a basic rate tax payer), but salary sacrifice into a workplace pension also saves national insurance payments. You don't get those back if you pay from your post-tax salary.

I believe salary sacrifice also saves the employer some NI contributions. So your MD really won't mind you increasing contributions, Blending - it saves him money.

@NoBinturongsHereMate I didn't think of that!

Our big news is DH should be getting voluntary severance from his job, there is a bit of a tax break. He will get the equivalent of 35 weeks salary. So he is retiring a couple of years earlier than expected. But it was worth it because the pension scheme is changing where he works and he would lose 2.5k per annum pension if he didn’t take the severance now.

@Isyesterdaytomorrowtoday we only replace stuff when it needs it, we prioritised holidays as well and enjoyed a good 20 years of overseas holidays every year with 5 of them being very big trips, month in America and cruises. Often booking last minute for a bargain. We also don’t do stuff if a cost unless we really want to do it. I have zero guilt in turning down stuff I do not want to do. A good example was DH cousin wedding, it would have been £500 to attend, this is a decade ago. We just don’t like him enough, so we didn’t go. I remember MIL trying to do the but all the family will be there guilt trip on us. Knowing your own mind and having strength in those convictions is key.

Thanks @ViciousCurrentBun - I can only live in hope of a well timed redundancy! I think your point on ‘knowing your mind’ was the biggest thing I took from Ramit - agreeing as a family what was valuable to us and what we don’t want to waste money on really helps. My people pleasing tendencies still get in the way though so I have some work to do there

Can I get advice on trying to earn more?

How long do you work at a place without a salary rise before feeling awkward and needing to have the conversation? Inflation has obviously been over 10%(understatement ) the last two years so I'm feeling hard done by, especially as my workload has increased far beyond what it was when I started.

Back in the day I used to get an automatic 3% inflation payrise every year. That stopped like ten years ago and now you have to go cap in hand every so often otherwise you get nothing. How long would you wait before asking?

I've just calculated it and the automatic increase was more like 5% a year! Oh my god, that seems like a parallel universe!

Do you have regular performance reviews? That's always a good time to ask, especially in the context of taking on extra work / responsibilities.

@PerfectYear321 I can't say how long you should work at a place before going to ask for more money. But you should definitely:
(a) Revisit targets set in performance reviews: Have you met and/or exceeded those targets? Did you meet or exceed the targets particularly quickly?
(b) Revisit your contract: What are you actually asked to do in your job? In what ways do you do that particularly (and measurably) well? In what ways do you go beyond your current contractual expectations?
(c) Have a look at your company strategy or ambitions: How are you contributing to them, helping the organisation to realise its aims? How could you do more in the future?
(d) Basically, how are you adding value to your organisation which would justify paying you more?

Your yearly performance review or mentoring meeting or whatever is definitely the place to raise this and potentially explore ways that you could expand your current remit and increase pay commensurate with that.

You could also try to find another job with a higher salary and use that as leverage for a pay rise in your current role.

Depending on what sector you work in, you could look to start up consultancy as a side hustle to boost your pay.

We are close to FIRE, I am 55 but we’ve put two DC through private school got 1 through uni and one to go. Mortgage will be paid in next 2-3 years (LTV is around 8%) and as we are in London we have significant equity. Our BTL are mortgage free and would fund our lean FIRE number comfortably. Pensions, investments and savings are well on track to move us into FatFIRE territory.
I don’t necessarily want to RE but I might change what I do. I may well move from the City into something more Arts based.

Ah great thanks!!

Ok I checked my payslip today and saw I'm contributing under £200 a month to my pension.

I'm poised to email my MD asking if I can contribute more, but I'm unsure what to say I want to contribute.

Is there a limit on this?

Would £800- £1000 be too much? From their point of view?

Is there a %amount do you think?

I seem to vaguely remember my last employer capped their limit for me at 8% but they wouldn't pay more than 5%.

The limit is £60k pa, or your salary if it's lower except if it's done by salary sacrifice as your employer cannot pay you less than minimum wage.

It would be odd for an employer to cap your contribution. But if they do, just open a SIPP and put it in there by direct debit.

I contribute c£3k pm to mine.

Ok thanks for your response @Negroany

I'm now second guessing myself as what if the fund my workplace pension is using isn't the best one.

But the tax benefits make it worthwhile anyway.
I suppose the answer would be that I research the fund options with my workplace pension, optimise that, and then increase investment through work.

I do have a SIPP, but again I'm not 100% sure it's in the best place.

Ah - I have a lot of researching ahead of me!

In terms of workplace funds, there isn't really a best one, I've always used the default - it's fine. None of us can know what's best, if we could we would all be rolling in money.

I change jobs a lot so I simply transfer to my preferred provider and preferred fund at the end of each job. With some schemes you can transfer part and still stay in it - so, maybe every £20k transfer that out (if you're allowed) to where you prefer.

If course, all providers have a range of funds to choose from as well.