We don’t talk about it often but the reason I’m investing is because I want to be financially independent (FI). I’m a quarter of the way through which is a difficult place to be.
It feels like I’m rowing solo across the Atlantic. The planning is done, the course is set and all I gotta do is row.
Behind me are hundreds of miles of flat, grey ocean. There’s nothing on the horizon. In front of me, are thousands of miles of flat, grey ocean. There’s nothing on the horizon.
It’s hard to tell I’m moving at all.
An ancient mariner would pass the time by juggling mortal danger and hallucinations. A modern mariner has the same options as well as their GPS tracker and calls from home.
All four are needed to keep the rowboat on an even keel.
Hallucinations
I keep fantasising that I’ve made it. These episodes may or may not be voluntary but they are definitely an attempt by present me to establish a psychic bridge to future me.
My cycle into work on a Monday morning. Full of grief for the weekend life I’ve left behind. How would this ride feel if it were my last day before FI?
How would it feel if, instead of the daily commute, this was my daily exercise jaunt? If in an hour I’ll turn the bike around and head home for breakfast and smiles? To know that feeling is something I’m willing to take some pain for.
The wave of bliss that washes over you on the eve of holiday. A whole week of being me again. Remembering the joy and zest and curiosity that spring from having hours to yourself. Life for life’s sake.
The serendipity of play reclaiming your living space from the ‘to do’ list. Like nature recolonising an ugly city. How sweet is that place?
Whatever it is I’m going through now, it’s worth it because it brings me closer to there.
Calls from home
I need a self-help group. A crowd to cheer me on. Someone waving the flag for my team.
Going for FI is a lonely pursuit. There aren’t many of us out there. I only know two people in my real life who understand what I’m trying to do: Mrs Accumulator and The Investor.
Others can’t wrap their heads around it. Or wonder what I’ll do with the time. Or imagine it’s a huge risk because, well, what if I have a heart attack in a few years?
What if I don’t?
What if I live to age 84 as per the average life expectancy for males who are already 20 years older than me?
So my self-help group has widened to people I’ve never met but who speak wisely about FI:
Among others.
That’s not to mention the Monevator readers who chime in with their progress reports.
They all help me visualise how my FI life will feel. Their happiness (mostly) confirms that this journey really is about the destination. Their full lives dispel any worries about filling the time.
If anyone really believes the hours will be empty, just have a chat with the retirees in your life.
They’re so hectic, you’d think they were trying to win the American Presidency – hurtling around the place on a frenzied roadshow – packing in friends, holidays, grandchildren, hobbies, life.
Y’know, life.
GPS tracker
One of the things that makes FI socially tough is that there are no outward signs of success. If anything it looks like you’re going backwards.
Especially when much-loved possessions look like the love might be killing them.
If you makeover your house, your friends will coo over your freshly gilded splendour.
Voila! Instant validation.
But inviting the neighbours to take a look at your net worth spreadsheet is no way to impress the Jones’s.
So you need to create your own journey planner that joins the dots from first step to FU.
When a task is huge, scary and covered in razor-sharp spikes then chopping it into manageable taskettes is the only way to go.
For me, that means micro-goals, mid-level goals and BHAGs (Big, Hairy, Audacious goals).
Micro-goals mean taking things a step at a time. Focusing all my energies (negative and positive) on the very next task rather than the vast gulf I’ve yet to cover.
This way the internal monologue switches from: “This is impossible” to “If I can just get to the end of today, it’ll be OK.” Or, “If I can just make it to the end of the week, it’ll be OK.”
It’s a cheap trick but it buys off the brain with the promise of imminent reward. The reward might be real, such as switching off from Python-esque work pressures (both crushing and surreal) because you really can’t have given it any more today. Or the reward might be pretend…
I do the same thing when exercising with kettle bells.
Let’s say I want to do 100 clean and push-presses but I know that’s going to be agony. I tell you what, brain, if I do 50 then we’ll call it quits. Honour served.
- Get to 50. OK, maybe another 25. I can do that.
- Get to 75. OK, no way I’m stopping now, I can make it to 100.
- Get to 100. OK, now I’m having a mini heart attack. I’ll stop now.
Every time. This is the opposite of procrastination. Instead of pacifying a panicking brain with distraction, you quell the rebellion by making yourself believe it will all be over soon.
Mid-level goals are my navigable markers. For me, it’s a four-monthly review of net worth and savings to date. Each checkpoint is far enough apart so that I’m rewarded with significant signs of progress, while being close enough together to keep me on track.
The BHAG is a scary goal that keeps things interesting. In my world that amounts to an annual savings rate of 70% measured at the end of March. I made it this year. Fell short last year. Made it the year before that.
Plug your savings rate and a few other key numbers into Networthify’s calculator and you can see how far you are from FI.
Savings Rate = (annual savings / (expenses + annual savings)) x 100.
With a 70% savings rate, 4% expected investment return and 3% anticipated withdrawal rate, I’m done in eight years. With a 4% withdrawal rate I’m done in five and a half.
If I can push the savings rate up to 75% then I can be done in six years with a 3% withdrawal rate. (I consider a 3% withdrawal rate to be much safer than 4%.)
Saving 75% is a big stretch from here, but not impossible.
Mortal danger
I’m not theatrical enough to believe I face much peril in my life but my limbic system acts like there’s sharks everywhere.
Drama is a great way to speed up time, as I discover whenever I hurtle towards a big deadline like it’s the event horizon of a black hole.
But we should draw more comfort than we do from our daily woes. Because, regardless of the adversity we face, we almost always come out the other side.
It’s worth cataloguing all the challenges we didn’t think we could handle but did. We may have been floored for a while, we may have been knocked back, but we got up and kept going.
We’re tougher than we think. We can do it. And that’s the truth.
Take it steady,
The Accumulator
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Nice article but it makes me feel sad that you aren’t happy at work now.
What you describe feels really alien to me and I’m lucky to be able to have found something I enjoy that also pays me a living. FI for me is something I will need when I’m no longer able to work.
With you all the way. I do find that a virtual community – while not a substitute for sitting-down-with-a-pint friends – makes the journey a lot less lonely that it would have been before the internet.
Also, that’s an extremely impressive savings rate. I’m struggling to reach 45%, and my outgoings are pretty well optimised. Time to focus on making more.
Hi
I find the sea journey useful, but another picture to visualise is climbing hills. You think you see the top but as you get over the brow you realise there is another peak and is still a little way away. It maybe a different peak.
It is important in my view to enjoy the journey
The support/community group is an interesting point and is the reason why I started a blog many years ago (and I guess why you started Monevator?).
But I’ve never really liked the whole save-hard-to-escape-a-crappy-job thing. I know that’s the right answer for a lot of people to the problem of a crappy job, but I always preferred the Steve Jobs approach:
“I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.”
Which for me has mostly meant quitting the crappy job and heading off to do something else, either similar but for a different firm, or completely different. It doesn’t always work out, but it certainly leads to an interesting set of memories rolling around inside your head.
FI is that good, indeed better. But look after yourself. Six to eight years is getting on for 10% of your life and a bigger part of your adult life. Remember to take care of yourself and live a little bit across the intercession too. You are doing all the right things, but keeping balance is also key.
I didn’t get that balance right, but I had only three years to bridge. You started chasing FI earlier in your working life, but paradoxically that means balance is much more important for you. Anyone can sweat through a few years of privation if they want the result hard enough. Doing that for six or more risks burnout. Though you seem a more balanced fellow all round so perhaps the best I can say is good luck, well done and keep up the good work. The FI view is well worth the climb…
@John — Morning! 🙂 You write:
Remember there are *two* main writers of articles at Monevator (I know it’s not always clear, especially if you get the posts by email), myself and “The Accumulator” (TA). Plus some guest stars.
Anyway issue you raise about the ‘escape the crappy job thing’ is interestingly one of the biggest differences between me and TA, and we’ve robustly discussed it.
I’m with you, and think it makes some sense to try to find something you enjoy doing or can at least tolerate with equanimity. I’ve switched what I do 3-4 times for that reason. But I do appreciate (as I’m sure you might) that not everybody feels they have the same options, especially if they want to keep earning at a high enough level to keep the FI dream alive… So a bit of a Faustian pact seems to come into play.
Here’s something I wrote on the subject.
@JOhn You put it much better than I did – and yes it has lead to me doing lots of different things, including short spells of nothing much when things didn’t work out.
Well, its the RIT approach – only really justifiable if you get paid a whole heap of cash
I think theres something to be said for it, i.e. having the grit to stick it out, but I wouldn’t do it. A bit like being impressed by someone really slogging their guts in the tour de france or suchlike, then realising just how miserable it is when you go and try to climb mont ventoux yourself.
I have actually tried, (shit job, not mont ventoux) but my subconcious managed to jeopardize it and quit while my conscious wasn’t looking
That said, I think if you do manage to get on the ‘enjoyable’ career train you have to acknowledge that although you may have aimed for it, you’ve also probably been a bit lucky..
Isn’t the networthify calculator you link to fundamentally flawed? It assumes that your expenses in retirement are the same as they are currently. That’s bonkers – right now I have a mortgage, kids to pay for etc. When I retire my mortgage will be paid off, & kids will have moved out (I hope) and so on. So my expenses will be much less. It really should have a separate field to allow you to specify your expected/desired expenses in retirement, so it can show you how to achieve that.
Mr Money Mustache opened my eyes to the world of aiming for FI/retiring early.
Along the way, I came across Monevator which showed me ‘how’ I could do it, ie via investing (so a big thanks go to you and TI!)
The FI/PF blogging community does mean that aiming for FI is not so lonely but as Michael says, it’s not quite a substitute for sitting down with a pint with friends.
However, I have actually shared a pint or two with fellow like-minded FI wannabes on a few FIRE Escape gatherings arranged by Huw (from Financially Free by Forty), including Jim (SexHealthMoneyDeath).
The people I’ve met are of different ages, different stages of their lives but all are striving for FI (or living it, in Jim’s case) – some closer than others, some (like me) only in the early years of our own journeys. I didn’t get the impression from any of them that they hated their jobs; just that reaching FI will get them ‘choices’, ie continue with work, stop working, change jobs etc.
If you’re interested, I believe Huw will be organising another gathering in the summer.
Anyway, I’m with oldie – I see the journey as climbing hills and I am enjoying the view as I go along!
An engaging reflection on your FI voyage. Take heart that you have built yourself a seaworthy vessel and know where you are going, and will reach that distant shore in a few years – 6 or 7 maybe. Barely a blink of the eye you will find once your perspective is reversed and you look back on your trip. My daughter took on a challenge like that in reality – cycled from London to Auckland – which astonished me. But day be day and week by week she toddled along with her boyfriend and 18 months later they were on the marina in Auckland sipping a well deserved beer. check it out : https://worldcyclingtour.org/ Now it seems like a dream to me, but there are the photos.
I think tough journeys in life are achieveable when you know the destination and have some idea of the timescale involved. Maybe most people don’t have a destination, or lack suitable vessel to deliver them safely there, but bob around in life’s currents and drift along.
I think another benefit of a relatively short term FI goal (<10 years vs 30+) is that the work landscape and ones place in it may be relatively stable over that period. In my experience I was totally dependant on enthusiasm for my work, but over time the work environment seemed to change in ways that sucked the enthusiasm out of me – Ermine had the same kind of experience I think. But being reliant on enthusiasm to remain happy in work I lacked the gritty drive and determination you seem to have to fall back on to see me through to the end. So I was looking at another 7 years which would feel more like drowning than waving. Luckily I was within a few strokes of the beach, and dragged myself out of the surf spluttering and gasping before my leaky little raft was dashed on the rocks. I am currently working out how to build a little shack on the beach with its cracked spars and, though still a bit shaky, relief at surviving is giving way to a renewed interest in exploring my surroundings and finding out what this new land might have to offer.
Bon Voyage!
“you have to acknowledge that although you may have aimed for it, you’ve also probably been a bit lucky”: anyone who has got what he aimed for, whatever it may have been, and denies the role of luck is being a vain chump.
@ The Investor,
After all these years, I didn’t realize there were TWO of you writing! The writer I’m most familiar w/ is the one who didn’t buy real estate, but who is doing fine, is in his late 30s, and lives in London. That’s you right?
What are the key attributes of The Accumulator? 1/4 of the way there… does that mean The Accumulator is around 25-30 years old and just getting started? If so, you can check out my post on FI and how it feels like to get an idea.
Achieving FI sooner, rather than later should be a fun goal. It becomes counterproductive if it is an arduous journey, because when you get to FI, you might just tell yourself “Is this it?” But you will look back on the journey with fondness. Trust me on this!
Financial Samurai is a early financial independence blog that seldom ever talks about early FI anymore b/c it’s about what you do with your time to enjoy life that matters most.
Sam
@FinSam – haha yes its not immediately obvious – it took me a good few years to twig what was going on. I just thought Mr Monevator was suffering from some acute form of schizophrenia. It is mentioned in the about page, but its still not massively clear even in there..
The thing that seems largely unwritten is “to what end”? Assuming for a moment that you’re intending to “retire” in your 40s, what would you do with yourself? Do you hate your career that much – in which case why on earth don’t you just do something else?
I appreciate that independence is not the same thing as retirement, but it seems to be frequently implied.
I did “retire” in my early thirties and it was both boring in the main and mind bendingly expensive in the rest. A lesson learnt.
@TP its a fair point – I do think there is an FI achilles heel in here somewhere which you have to think about carefully.
I think of the FI goal as being a means to financially de-risk your life over time in order that you can incrementally evolve it to be ever more in tune with your individual values.
In other words, as you become less financially burdened you become freed up to make decisions and take opportunities that suit you but would otherwise have been financially nonviable.
When I was younger my ultimate goal was to find a job I enjoyed that paid ‘enough’ – and I put a lot of effort into achieving that goal. My most lucrative decision was to get a passport to a well paid but socially useful profession. Since then, all my decision points have basically involved trading money for more time, in order to ensure that I don’t have too many Steve Jobs bad days (I hadn’t heard that quote before, but I think it is very wise – and memento mori, above all else). I cannot imagine choosing a job just because it paid well – and I don’t think I’d last 5 minutes in a megacorp management position or anywhere near the City…
I suppose I was a little naive in believing that I could find fulfillment through my work. Or perhaps, like Ermine, the work environment has shifted around me such that even professional well paid work has become more of a ‘wage slave’ metrics driven hamster wheel and less something people can find enjoyment and purpose (and most importantly, autonomy) within. Or perhaps its an inevitable consequence of reaching a point in the organisational hierarchy where you realise that status in the workplace isn’t all that…
Anyway I find myself accidentally FI, about 10 years sooner than planned (insofar as I had a plan) and pondering what one does in that situation. Its taking a while to loosen myself from the job – I’m trading in another tranche of money for time imminently – but somehow I can’t imagine not earning anything. I expect I’ll get over that at some point 😉
Regards the TA / TI discussion I’m surprised… Maybe it’s just easier to see on the mobile
@TA … I used to hate my job, really hate it, but I fell in with a guy who just loves life and a little bit of it rubbed off. He got up one morning and didn’t have any shirts to wear, turned to me and said ” Got to iron a shirt, sweet, gives me an activity to do before my shower”. I try and apply that ridiculous attitude to every aspect of my life and believe it or not you can have happier outcomes from the same inputs 😉
@Planting Acorns
Something a bit different happened with me. I got up one morning and thought, ‘Sod it, I hate shirts, and I’m not going to wear them anymore’. Now work is much more enjoyable.
@Tedious Pseudonym
You can have the best, most satisfying career in the world and be but one step away from it being taken away from you
At that unlucky point the financially independent have the option to do nothing for as long they like
Anyone else will not
@algernond – You go into work naked? That is awesome! I bet your a big hit with the opposite sex..
Another great thread and thanks for the encouragement all.
I’m not a big believer in the live every day like it’s your last approach to life – ha, I guess no saver nor investor can be. How many people would really go into an office – any office – even if it’s the office where ipads were invented – if they were down to their last few hours.
Contemporary society requires most of us to specialise and devote vast amounts of energy and time to a niche set of activities. I think there’s more to life than that which is why FI is so attractive to me.
The idea that we’re meant to enjoy our jobs on top of everything else – I think that’s largely a modern myth that flies in the face of the reality for most people. If you love your job and can’t imagine doing anything else with the bulk of your time then that’s amazing and something to cherish.
Most jobs will have some highs, plenty of lows and long periods of grind. Do people really want to spend 8, 10 or 14 hours separated from those they love, from things they love, from play? Research into our happiness and wellbeing levels suggests not.
Living a FI writes well on encountering much the same set of problems – especially politics – at every workplace. Changing job may be a cure but I tend to think it’s just treating the symptoms.
@ IanH – love the image of you expending your last to make it to the beach. Great extension of the metaphor 🙂
@ Tedious – FI to me doesn’t imply spending my time playing golf or lying on the beach. There’s so much to do: learning new skills, building a house, volunteering, goofing around, travelling, playing sport, cooking, reading, learning a language, hanging out with friends, writing, making things… If all that leaves me bored then I’ll just shoot myself in the head 😉
Outstanding post, TA. Excellent!
On the “jam tomorrow” debate — I’m a fan of enjoying life now (and that’s more than enjoying your job — make time for yourself at all stages of your life) and live deliberately: it’s all you can do with the time you’ve got. Of course — we all get caught up in the whirl and forget to do things for ourselves, but it’s worth pausing and getting back on track from time to time.
While FI is a great destination, the journey is a good one.
Some jam today and some tomorrow is my aim.
“Do people really want to spend 8, 10 or 14 hours separated from those they love, from things they love, from play?” Some people contrive to get paid to do what they’d do free, as “play”.
“A master in the art of living draws no sharp distinction between his work and his play; his labor and his leisure; his mind and his body; his education and his recreation. He hardly knows which is which. He simply pursues his vision of excellence through whatever he is doing, and leaves others to determine whether he is working or playing. To himself, he always appears to be doing both.” — Lawrence Pearsall Jacks
A shit load of jam the whole time sounds pretty compelling..
Just to say thanks for being part of my self-help group that nudged me toward the notion of FI and RE. Prior to discovering sites like this I’d never really focused on the end game of investing for myself, it was just something I did. Saving and investing felt constructive, like I was achieving something outside of working for a living. When it dawned on me that I had accumulated enough to actually quit my job it was a bit of an epiphany, and for a couple of years I couldn’t quite believe it. But sites like this helped support my notions and I began to think it was a positive move to make. Discovering the wider community of British bloggers, as Weenie alludes to above, was also an inspiration although I couldn’t resist having a go about blogging about the downsides of Early Retirement. Every silver lining has a cloud, and I wouldn’t be a Scotsman living in Yorkshire without trying to point this out. Keep up the great work providing the information, education and entertainment on a weekly basis though, I’m sure a lot of us are relying on it! Cheers.
@The Rhino
I haven’t quite gone that far yet. I mean I don’t wear shirts with those nasty collars & buttons.
Great to read your thoughts as usual TA.
One thing I’m surprised at is that you’re only 1/4 the way through your voyage?!
I had you down as someone very nearly there or at least someone who has been on the journey for longer than that would suggest.
You’ve been writing for Monevator for as long as I can remember (been reading about 3 years) so with a 70% savings rate that means you only started saving about 3 years ago? Is that really the case or are my assumptions or calculations way off?!
I would second weenies suggestion of going to an FI meetup if you wanted a more tangible form of support network, or simply just want to chat in person about investing and all the other things that FI’ers seem to have in common. I’ve only been to two but they’re pretty chilled out and everyone very pleasant!
Not sure I made my point clear when saying about you writing for Monevator. I meant it would surprise me that someone who had just started investing for FI would get a gig writing for an investment site such as this, and also I’m sure you’ve been writing for much longer than 3 years anyway. So come on what gives, did you accidentally go and buy a Tesla S earlier this year 😉
Ahh. Our motivations for FIRE are really important. For me, I realise No one can do a job forever, everyone has to retire at some point. And it is likely for circumstances to dictate your retirement (age, health, layoff) that you can never predict and choose. Such is the uncertainty in life. I prefer to have the option to be FI and ‘retire’ on my own terms at my own choice. I think if it comes down to it, the escape artist put it in a very good analogy: Basically in all our jobs, we are all working for The Man, even CEOs of big companies. Once we get to FI, we escape from this prison camp and we live for ourselves. I agree that given a choice many people would not choose to stay in their jobs that they find a grind day to day. However I believe people can achieve happiness whilst working too and having FI and the flexibility/option to step away can have a very profound mental release for us all even if we choose to stay at work.
I like the description of the rowing across the vast wide ocean alone. I prefer to think that there are many many others out here fellow strugglers rowing along with me, some ahead of me, some after me and sharing our struggles help us push ourselves that bit more and gives us signposts as we rowing down the same path!
Hope to see you all at the island of Escapees!
On the “work crappy job vs retire later” question I definitely think the Accumulator has a point that for most people doing a job you love every day is unlikely to happen. My solution is to (hopefully) move to working 4 days a week. It will inevitably slow down FI a long way but I like to think of it as having part time early retirement already. There are a lot of people I know who say it can’t be done in my line of work (financial services) but hopefully I’m about to prove them wrong!
I only work 4 (long) days a week now, and have done so for the past 6 years.
It’s pushed my retirement back from 55ish to around about 60. I’ve never once regretted it though. It’s the perfect balance.
Of course you have to have an employer who will allow it ( mine only works 4 days too ), but it’s well worth asking if you can.
@Jaygti
I know a few people in IT in financial services who work 4 days a week. Definitely worth asking, they never offer it ..
I echo PC and Neverland comments.
I do feel sorry for people that really hate their jobs/careers.
Your either in the wrong job or you need to change your attitude towards your work, in my opinion. Dont you think weve all been given gifts talents that are needed out here in the world to make it all turnover. If everyone was FI early and doing as they liked there be no food on the shelves in Asda, no Doctors avaliable to help us when were sick, no police to sort out crime. etc
Im all for FI as we need a back up plan in life and we all will have to give up work at some point so we need our portfolios.
@dawn
Alternatively, imagine if everyone was FI, and only did the work/activities that they found genuinely satisfying.
You’d have the doctors that wanted to be doctoring, the police who wanted to be policing, and everyone would be doing it for the love of the job because they’d prefer to do that than sit at home.
Asda wouldn’t be able to pay shelf stacker crap wages and threaten them with hunger if they didn’t play along. They’d probably need to buy some robots to stack the shelves, but why should people be doing a robot’s (repetitive and physically demanding) work anyway?
And if my particular talents don’t lend themselves to paid work, but make life better for people, if I am FI I can do that without fear of losing a wage. There is a difference between work that is valuable and work that is (well) compensated.
I’ve gone through phases of both loving and hating work; while it’s great to have a job you love, you’re only a new boss or company takeover away from an awful job.
@Sam @All — Yes, I (TI) started the site and wrote exclusively for it for the first 3-4 years, then as I got ever more active with my investing (which I do not think is the right approach for most people) I was very glad to get The Accumulator (TA) on-board to take over most of the passive mantel.
TA was a friend before Monevator and a superb writer as long as I’ve known him. It’s true though that he came to this financial journey later in life. However I didn’t see that as a downside — quite the opposite.
I’m one of those people who left University with some of my grant (i.e. I wasn’t from a wealthy background!) in a high interest savings account. I’ve never been in debt, not even a mortgage, and I find saving and investing trivially easy. It’s genetic, surely.
Most people are not like this, and it’s probably not very interesting to read someone saying “hey it’s easy!” if that’s you.
In contrast, TA has seen both sides of the fence, and he’s had to work at his mindset. (Despite his protestations I suspect he still does need to work at it now and then — perhaps that’s what the protestations are for! 😉 And he’s a very passionate, all-or-nothing sort of guy).
So I think he has been ideal in his role on Monevator, both because of his passive passion (which has expanded his knowledge over the years to the point where I think he’s probably one of the most informed writers on the subject in the UK) and because he’s a man of the people.
I’m an investing nut job who finds saving and investing easy, and considers stock picking and reading company reports play. Most of you wouldn’t want to read a Monevator written only by me (although equally I know very many of the earlier readers did drift off over the years as the active stuff has been dialed back in favour of the passive).
And yes, I am the idiot who never bought the flat (and I was urging TA to buy his own place way back in the mid-1990s! Which, under his own good judgement of course, he soon enough did. 🙂 )
@TheRhino — I love that Jacks quote. It totally describes me and my investing activities. Perhaps I should go easier on myself. 😉
Well I just nicked it from Jacobs site. It is a nice one, sticks in the mind..
As is the other one from heinlein on specialization..
“A human being should be able to change a diaper, plan an invasion, butcher a hog, sail a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects.” —Robert A. Heinlein
I think its good to alternate between going easy and going hard on yourself, variety in all things (except the wife)
I’m with the firestarter on this one – I’m surprised that you’re only 25% of the way there TA!
I’m 20% there with no real effort beyond saving up for a mortgage deposit and sticking with pensions for the last 13-14 years.
Are you one of these people who does all kinds of mental accounting gymnastics to ignore some of the wealth that’s in front of you so that there’s plenty of upside (I’ll ignore my home equity, emergency fund because x)?
Excellent reading 🙂
It’s good to affirm every now and then that there others out there on the ocean, making the same incrementally slow journey. We just can’t see them – communication via the internet radio only.
“… inviting the neighbours to take a look at your net worth spreadsheet is no way to impress the Jones’s” – just the FI Jones’ 😀
But, back to the start, to your point about hallucinating about the destination. I do this a fair amount, sometime as I drift off to sleep, as I walk through the park on the way to work, on the bog, on a Saturday morning.
My initial reaction is always “whoa Mr Z, stop living in the future, live in the now. LIIIIVE!”. But the hallucinations are also positive, just like an athlete visualising the victory, I think visualising FI is a very powerful tool in helping us to achieve that goal.
Not only achieve it, but start getting prepared for it at the same time. It would be shortsighted to presume that FI will lead to an instantly happy life, it’s not just the absence of work that makes it attractive. If it is, maybe you’re just lazy 😉 It seems, to me, that it’s much more about removing income from that equation and seeing where that leaves you
Mr Z
Loving this thread…
@ Rhino – I think that’s a great model to aspire to. Much more doable if you’re incredibly talented, lucky, courageous or don’t need to work for your daily bread. Jacob’s model is the Renaissance Man. I guess there were far more of those among the independently wealthy than the indentured peasantry.
@ JimMcG – Proud to have been of some assistance. You’re the only person I know who regularly blogs on the downsides of FI and it’s making me think hard. I have a feeling I’m vulnerable to the same doubts (never happy and guess what, I’m a Scot too). You’re helping prepare me.
@ Fireplanter – I fully agree that once you have options the workplace may feel very different. There are countless posts out there from people who’ve felt rejuvenated once they’ve asserted a greater measure of control. I’m almost certain to carry on working in some capacity after FI but the balance will be different.
@ Dawn – I think people are happy to work and want to work – even FI-ers – but the question is: under what terms? I fully agree with Playing With Fire’s comments and would add that’s what makes recent debate about Universal Income so interesting. With the essentials covered, many people feel empowered to start new businesses, leave abusive relationships, work for good causes that wouldn’t have previously sustained them financially. Many of the FI-ers I read about aren’t doing nothing. They are contributing, but on their terms.
@ Firestarter & L & Sam – Yes, you’re right, 3 years into the 10-year plan this Aug. The 6 years before that – everything went into paying off the mortgage. That was objective no 1. Tapping in to the FI community made me realise that independence was possible, paying off the mortgage made me believe we (Mrs Accumulator and I) had the gumption do it. I see the two as separate objectives which I guess is the mental accounting backflippery L identifies. The Investor and I have near come to blows over the ‘your house is an asset debate’. I agree that it is, but it’s not on the table cos we want to live in it. We don’t want to downsize. It could be a source of income through a reverse mortgage in the future so let’s put it in the back-up plan bucket. Emergency fund is emergency fund. That can become part of FI plans once there’s no more chance of an emergency.
Before that, I barely had a pension. No Tesla S. More like a Nissan Skyline. Then I had a Damascene Conversion. A bit late, but thank god it came.
An FI meetup sounds like fun. Who should I contact?
@ Mr Z – I couldn’t agree more. I feel like I’m living in the now but working towards goals on multi-levels: day-to-day, mid-term, long-term (that one being FI). Expenditure is largely disconnected from pleasure for me, so I’m pretty happy with what I have most of the time. I try and make the most of the hours that I have, I’d just like more time to broaden my horizons. Is putting 12 hours a week into a blog the best use of my time for example? Should I be pitching manure or butchering a hog instead (thanks, Rhino) – there’s always another candy to try.
Recently I came across some very simple but powerful advice: “Remember to be grateful for what you have.” I find that helps a lot.
TI – All the best with the rowing…and if you ever feel like stopping for a beer / coffee and a chat in the real world, please just email me – TEA
Sorry, that last comment should have been addressed to The Accumulator (TA). I knew there were 2 of you guys! All the best to both of you and keep up the good work. TEA
The concept of financial freedom doesn’t work for me as I suspect that the worriers amongst us can always imagine a scenario which brings everything to risk. For example, a few years of high inflation for those of us about to enjoy middle sized DB pensions with a 5% inflation cap. Then, if you have children, the desire to help and leave something to help them is unconstrained, more would always be better. The possibilities of starvation and penury are not the only threat.
@ The Investor – I always thought you just had a little bit of split personality that’s all! haha.
@ The Accumulator – Don’t worry about only being 25% of the way there. Times your time by 4 and you will be 100% there! But I bet you will look back and miss the journey and say “is this it?”
You might also suffer for the “one more year syndrome” where you just keep on going (linked post). My blog is about financial independence as they come. It’s part of my tagline! But I’m not identified as one because financial independence is NOT always talking about financial independence!
Financial independence is about all the things you do once you are financially independent.
Sam
I would still like the believe that TA is actually a Tyler Durden style figment of TI’s mind, despite all the protestations that they are in fact two different real life people 🙂
@TA – Just go over to Huw’s blog at Financially Free by Forty for more info on the meetups, although I can’t see anything on there about the next one yet.
Of course there is nothing stopping Monevator hosting their own meetup in the meantime. I’m sure that would be wildly popular (maybe too popular!!!) if you guys or guy 😉 were to try to set something up. I remember reading something about TI wanting to remain staunchly anonymous so maybe that would be one for TA to take the reigns with…?
Where are you based, it was down in the west country from memory or am I way off with that (I usually am when it comes down to things I’ve remembered!)
P.s. So icing the mortgage first is the missing piece of the puzzle then… nice work with that! And that enables you to achieve the 70% savings rate and cuts down your timeline to FI considerably from “The Start” just 3 years ago.
Another way of looking at it then, if it helps psychologically at all, would be that you are actually 9 years in to your voyage because many people would start the journey to FI with a mortgage seriously dragging on their financial situation (as I have done), and also let’s face it that is when you started saving hard, you were just investing it into paying off your mortgage rather than stocks.
So in light of that I make you just over the half way stage.
Congrats! 🙂
More TSOL lectures is the way forward, get TI and TA doing one, like a morecambe and wise double act. TEA – how did yours go?
If you really want to push the boat then do a TED.. that would be impressive
@theFIREstarter
“I would still like the believe that TA is actually a Tyler Durden style figment of TI’s mind, despite all the protestations that they are in fact two different real life people”
Haha, brilliant! I will now have that image in my mind as I read future posts on here! What’s the first rule of FIght Club? 🙂
@TA – I knew it!
I’ve also had suspicions for a long time that TA & TI are the same person, but that he/she may not actually know. Along the lines of Billy Milligan (who had 24 distinct personalities).
For those who are arguing that We are a split personality, I’d point out that this comment by TA…
…is not a figure of speech.
Then again, I seem to remember a scene that tackled the mechanics of a one-man boxing match in Fight Club. 😉
We’re not the same person. If we were, what a force! Alas.
We’re quite complementary though, except for our historical tendency to veer close to almighty rows! 😉
This is a great thread – its encouraging to see so many others on the journey.
I got interested in FI because i hated my job and concluded id hate any job so just needed to get out of the whole damn work thing. What ive since learned was i needed to change my way of living, so the remaining years in work are not pure misery. I have started this, and things are beginning to improve.
I still want FI but its less of a Holy Grail and more of a thing i confidently look forward to in around 6 years. We are all different, but id go crackers if i checked the spreadsheet every month to track exact progress. I tell myself that if i stay in a similar type of job and dont do anything crazy, i should get FI by around 50.
Keep up the great work at Monevator. It really is encouraging to see others out in world working at the FI goal. I love the idea of a small boat on the ocean – it doesnt feel as lonely when you read this thread.
@ Firestarter – you’ve got it all wrong. TI is a figment of my imagination. My poor, fevered imagination.
And over the halfway line is a great way to revisualise my journey. I’ve used that a couple of times already today.
@ TEA – I’ll be in touch.
@ Mroptimistic – you’ve definitely won the prize for most ironic pseudonym.
@ L – 🙂
@ SurreyBoy – great to hear from you. Much of what you say chimes with me, aside from the spreadsheet bit. I love my spreadsheet. Can’t imagine any other place where I’d admit that.
In all seriousness, I’m working on my mind too. Slow going though. I’m working with a very thick material, resistant to change.
Gracias, but hang on. Grey seas, flat horizon Mr Pot? As you struggle across the interminable ocean do you not worry that your concept of an end point, a final destination, may not be a true analogy? As you struggle to your nirvana, the landing point constantly recedes to always remain just beyond the horizon. Perhaps you seek peace of mind rather than a quantum of investment grasshopper.
Jusy sayin’
Pleased to meet you Mr Kettle 😉 Sure, I don’t think there’s ‘an answer’. Finish one journey and another begins.
“Behind me are hundreds of miles of flat, grey ocean. There’s nothing on the horizon. In front of me, are thousands of miles of flat, grey ocean”
Couldn’t have put my feelings about this in better language. As I thought about it, suddenly my thoughts of being an adult student doing an undergraduate and then a master’s degree, back to back, while holding down a demanding job came to the fore. They too were like sailing a lonely sea, yet one day the shore was reached.
However, there was a feeling of relief, tinged withe melancholy, after those goals were achieved – wonder if FI will be the same.
@NZflyboy I had a similar experience at the end of juggling a part time Masters at Birkbeck with a demanding job involving a bit of travel.
When it stopped I really missed it .. since then I’ve done lots of less formal learning..
It’s important to me to enjoy the journey ..
“However, there was a feeling of relief, tinged withe melancholy, after those goals were achieved – wonder if FI will be the same.”
I very much doubt it! Why would anyone not wish to be financially independent and free to spend their time as they pleased? If for some reason you didn’t like the feel of it you could always give it all away and start again 🙂
I’ve been living off investments a long time and from a young age too. I’m probably (!) unusual in that while doing my A levels I had no specific career choice or career goals in mind other than to make enough money as quickly as possible, *while doing something I enjoyed*, such that I’d not have to work again if I chose not to. I enjoyed the work I did, saw some fascinating stuff along the way, and would have done some of it for nothing, but I certainly didn’t enjoy it more than being able to now do as I please.
“Doing as I please” sounds self-indulgent and perhaps selfish, which I don’t have a problem with as it can be. Heck, it’s my life. But, one of the things I find myself doing quite a bit is helping out various people, mainly family, in ways I couldn’t have done when grafting long hours for money. That’s been one of the unexpectedly satisfying aspects of having time to live a different way.
Another is having time to actually think. Removed from the hamster wheel you gain time to consider and ponder matters in a deeper manner that you may not have been able to since adulthood’s workload first befell you. I’m of the opinion contemporary life, with its many distractions such as the technology-based information spigots we’re often glued to, leaves many people with little time to think about anything in any depth.
The rapid march of automation is very interesting and I understand the appeal of a citizen’s wage as a possible response. Or perhaps, as in the past, new roles will simply develop ensuring nearly full employment and such thoughts will appear ridiculous. But, if a new era really does beckon (fatal words, normally, I know), and a citizen’s wage ever does arise, I might view today’s early-FI movement as being pathfinders in the vanguard of this trend, one already enabling a swathe of people to bump themselves up Maslow’s pyramid. Maybe in a couple of decades we’ll be watching “Benefits Britain: Self-Actualized Living on the Citizen’s Wage” and marveling at the interesting lives some people are carving out for themselves.
I agree the blogging community around investing / FI is important. It provides me with both knowledge and a sense of encouragement. I got my credit cards and loans (the collateral damage of a misspent 20’s) paid off 3 years ago and then decided to start some sort of savings / investment with the money that was going into debt repayment. Three years into that I’ve started toying with the idea of FI, having read about it here and also over at The Escape Artist. I guess I just imagined my investments would go towards my retirement but have come to build up an idea about what FI is, what it means for me (I think its slightly different for each of us), and what it would be possible to do. I have not set a dedicated route out to it yet, mainly because of a touch of burying my head in the sand; my rough calculations show either I’m FI at or around normal retirement age or I need some serious lifestyle changes, which is fine as far as I’m concerned but I have a wife and daughter who would be affected by those changes.
I have good days and bad days but overall I do love what I do for a living. One thing is clear though – I have to do it. No choice. I don’t think I’d ever really consciously thought of it like that, although clearly deep down I must have always known this was the case. Now, however, I have has those thoughts and, like Pandora’s box, its too late. It’s irreversible and I can never go back to a state of blissful ignorance about my own lack of freedom.
One day I want to go to work in the morning knowing I could have stayed in bed if I wanted to, I want to eat my lunch at my desk knowing that if I wanted to I could swap the pressure for a much less paid job where I have more free time.
I think the wife and I need a serious chat….. 🙂
@ Bnshady – It sounds great. I can’t wait to join you. I think automation will cause a great deal of disruption and even if society is able to adjust, it will take years, probably decades, and be hugely painful for great swathes of society.
@ Sharpespur – It sounds like you’ve come a long way already and your determination will set you fair. There is a certain freedom in loving what you do.
Perhaps ponder on the saying that the rich eat well but sleep poorly?
Cobblers, I’m rich and I sleep through anything.
No you don’t. Tell us about your children. No children? Tell me your regets.
Speaking of which, does anyone know what’s happened to RIT? A disciplined post every weekend or two, but nothing now for about 2 months…
2 children, fairly good at sleeping, and I regret selling various cars I should have hung on to, but hey ho, just like those winning shares I suppose 🙂
@TP @MrOptimistic — Let’s not derail a good thread with a tit-for-tat about unverifiable life details please. 🙂
Well last we heard he was lifting off into space on a rocket so stands to reason we haven’t heard from him since
“With a 70% savings rate, 4% expected investment return and 3% anticipated withdrawal rate, I’m done in eight years. With a 4% withdrawal rate I’m done in five and a half.”
Should this be the other way around ? I read in the Guardian last week (perhaps through a weekly roundup link that just 2.5pc was a ‘safe’ withdrawal rate for the UK, as higher figures come from the US.
I wouldn’t rather work than not, I’m exceptionally happy to have a three day weekend, but I’m glad I put a positive spin on it when I’m there, it helps.
🙂
Hilarious post, thanks.
I am sure you have other goals in life, perhaps learn to dance like the dancers on Justin Bieber’s ‘Sorry’ video or develop your poker playing skills and tour the world’s top casinos putting them to thrilling action. I have a massive list of these types of goals and that is the only reason I would like FI, so that I could fit in and do all the stuff I would love to, perhaps at the expense of a 9-5 job. Losing the 9-5 is not the goal, though. Doing the other stuff is.
Achieving a particular figure/rate etc is useful but can be too heavily focused on, the numbers shouldn’t really be the goal, but the means to your life goals. Life is for living not number crunching! Happy goal planning! 🙂
@ Planting – the order is correct, here’s how it works out:
Say Mrs Accumulator and I anticipate living on £20K per year.
Divide that by your withdrawal rate to find the hoard of assets you’ll need to amass to support your chosen level of income.
20,000 / 0.04 = £500,000
20,000 / 0.03 = £666,666
£500K is easier to accumulate than £666K so the higher the withdrawal rate you’re comfortable with, the sooner you’ll hit FI. Notwithstanding a cavalcade of caveats. (Note, you’ll need to scale these figures by inflation as you go).
As you rightly point out the famous 4% withdrawal rate is based on US investment history. It was also based on a 50:50 equity:bond portfolio, no taxes, no investment costs and a retirement length of no longer than 30 years.
In short, it’s no guarantee of success.
2.5% comes with a whole load of caveats too. It’s worth your while reading the Morningstar research that Guardian story came from.
I’m comfortable with a 3% withdrawal rate as a target because:
I’ll probably continue to earn some money once I hit FI – it won’t all come from my portfolio.
The State Pension will take a huge weight off the portfolio once we reach that threshold.
We’ll use a dynamic withdrawal strategy which gives you more wiggle room than a static withdrawal rate. (One day I’ll write about this on Monevator but in short it provides rules for spending less when your portfolio is down and more when it’s up).
A reverse mortgage can be brought into play.
My portfolio is more globally diversified than the assumed US / UK portfolios commonly quoted.
Choosing to annuitise at some stage can also change the game as well as any income you’re pulling in from other sources.
Finally, and this is somewhat unpalatable, if one or both of us doesn’t last as long as hoped then, well, at least the minimum safe withdrawal rate jacks up.
Lordy, that last sentence was difficult to write, but hopefully I’ve given you a good sense of the many factors in play.
Actual performance and the sequence of returns are hugely important too.
Ah !! Thanks !! I knew I must be wrong because there were 68 comments with no one mentioning it so great to what I missed and how you came about the figures.
I know these are illustrative examples but 666k would be quite the endeavour for ten years saving…importance of starting early I guess…
Nice post, TA.
I find myself now 14 months into my own FI, like Ermine having taken The Man’s shilling for early retirement at 52. In my case I had been planning for FI in principle for about 20 years by paying down the mortgage and saving a decent proportion of our take home pay, and bumping up pension contributions, then really going for it in the last 5 years or so, saving about 50% of our income, as well as all of both my own and my wife’s redundancy payments.
I have the advantage of us both having final salary pensions, mine not due to start for another 18 months, and also we don’t plan on leaving a stack of money so our plan involves planned draw down of our savings. Our heirs can make do with what’s left plus the value of our home, assuming we still have it come the day.
I agree with theFIREstarter, you really should include your 6 years paying off the mortgage as part of your journey to FI as this is a key step to getting there, so I think you are 9 years into your 16 year journey.
FI really is all you hope it will be, as confirmed by many commenters above – and it certainly need not mean stopping doing anything to make a contribution or even work, but it does mean you have the FU money to only do what you want to do.
A great tip I saw to work out how much you need, other than using the 3% or 4% rule was to estimate your life expectancy, multiply it by the actual amount you want to spend each year, minus any pension income, and then put that into long term savings accounts, then with any other cash you have go aggressive with Investment Trusts and similar investments to boost the nice to have spend, and leave your legacy. So if for example you retire at 50 and expect to live to 80, at £20k you need £600k minus 13 years of OAP, at say £15k per year for the two of you (£195k) – so £405k. So if you can get to your £500k you have £95k to invest, which over 30 years should more than double, giving you another 10 years of money, or extra spending power in your earlier years.
(I actually pretty the drawdown 3 or 4% method, but the above is another way to look at things).
Tony
Best of luck
There was an interesting article on this site about your true attitude towards risk, and do you really know what it is. Yes I have constructed spreadsheets to see how it pans out based on one if us getting to 95.
In the past I have sat out maybe 4? Market disruptions, mainly through inertia I might add, but if deep into drawdown will I be comfortable then sitting it out? Not so sure.
Re horizon. Whenever I get too infatuated with FIRE I wake myself up:
The cradle rocks above an abyss, and common sense tells us that our existence is but a brief crack of light between two eternities of darkness. – Nabokov
@TA
Thanks for your interest. My plan is to finish work, spend more time out in the wild with our two big dogs, catch up with my interest in astronomy (not conducive with the 9-5), photography and my neglected motorcycle. I’ve already established that I will need to plan my week’s tasks and recreation, so it doesn’t just lapse into YouTube and couch.
My SO and I have discussed selling up in the city and moving to the country, but that decision is not to be made until we’ve been out of the prison camp for a year.
Living in New Zealand we’ve finally had most of our COVID restrictions lifted, so we’re off to the UK to visit friends and family after 3 years and then cruise from Bordeaux to Barcelona. Already one of the benefits of owning our time has hit – we must disembark the ship at 8am and the best plane home is at 9pm. Rather than wrestle bags at El Prat for 13 hours we’ll add an extra day and leave the following night and park the bags at a hotel.
That simple task of adding a day without consulting a calendar or requesting leave is of towering significance. Of course, I had to explain it to the dogs but they’re direct reports, not management, so I don’t need their approval.
Having been a mover and shaker in my industry for 25 years, when news came of my departure from my company, I was made an extremely attractive offer from a competitor. Pavlovian, I was excited by the potential challenge, captivated by the improvements I could make …… then realised that equals same old crap, different letterhead.
So ultimately, a little dabble in consultancy as a hobby might make sense but if it doesn’t those stars are not going to photograph themselves.
I’ve read many Monevator articles and threads, but this takes 1st prize, it’s just brilliant. Thank you for all you have written and shared over the years, you taught me a great deal and made me think deeply about my own position and caused me to act – I hope land is in sight for you, the wind on you back is the gratitude of all those you have helped on your journey