Remember Jake, who used geo-arbitrage to escape the rat race? We’re back in the Monevator snug to hear from the man himself whether his FIRE reality has lived up to the dream, one year on.
I have often found myself reflecting on life during the last 12 months. Especially so at a funeral I recently attended.
It was nice to hear all the stories and kind words that people had to say about this individual. Inspiring to hear how positive they were during their lifetime. A glass half-full kind of person.
I have had inflection points like this before. Unfortunately over time the light dims on them.
This time I aspire to be more intentional. There are only a limited number of good healthy years left.
FIRE by the numbers
Financially our first 12 months of FIRE went well. Our net worth on 1 Jan 2024 stood at £964,000.
For the sake of clarity, the net worth in my original FIRE-side chat was the value I took on a random day in early 2023. Specifically our net worth (excluding our house) on 1 Jan 2023 was £845,000.
This net worth figure climbed above £900,000 (again excluding our house) for the first time in June and stayed above that level for most of the rest of the year, with the brief exception of October.
We spent just under £32,000 during the year. That amounts to a 3.77% withdrawal rate.
We had been heading for a 3.30% withdrawal rate with a total spend of just under £28,000. But at the end of December we booked a 2024 family holiday at a cost of £4,000.
One caveat to our 2023 spending is we did not go on holiday. Instead we had plenty of family days out during the school holidays. Although we did book and pay for that 2024 holiday, we’ve yet to enjoy it!
There was approximately £3,000 of spending on a few (hopefully) non-regular bits, including some plumbing and insulation work.
Investing in the face of inflation
All the asset values in our net worth are nominal, and of course our net worth in real terms has been impacted by the recent high inflation.
We are heavily invested in equities, which hopefully will offset some of the negative effects of inflation.
Still no bonds and we’re still overweight America. I know this goes against the conventional wisdom out there. But currently I seem to have a mental block as I can’t bring myself to diversify into bonds and a world tracker. I may have to learn this lesson the hard way.
Having neither worked nor received any salary for a year, it’s a slightly surreal feeling that our nominal net worth has increased during this time – despite 12 month’s worth of spending being deducted.
It’s notable too that thanks to the price of most things we buy going up with high inflation, our bills are bigger than I might have expected had inflation remained subdued.
We are in the fortunate position that we don’t have a mortgage, and thus have not suffered at the hands of higher interest rates like so many homeowners.
Undercover escapees
During the past year I’ve attempted to adjust my mindset towards being more flexible with our spending, as opposed to my previous accumulation, saving, and investing mindset. The decisions and actions we took before are not necessarily what’s appropriate in our de-accumulation life.
I don’t mean spending large amounts of money on unnecessarily expensive items. Rather, spending little and often so we can enjoy days out together as a family, especially while our children are young.
I still look for value for money. But I want to put more emphasis on the joy that our family will gain from these experiences.
We’ve still not told people in our local area of our situation as financially independent early retirees. Only our family and old friends are aware we’re no longer working.
Most of the people we know in our local area are parents whom we’ve met via our children. I’ve observed the way some of them talk about money, finances, and wealthy acquaintances. The impression I have is that a lot of our new network are middle-earners who appear to put more emphasis on spending money, rather than saving and investing.
I think some may have mindsets too entrenched to appreciate the long-term hard work, planning, difficult decisions, grit, and delayed gratification that helped us arrive at where we currently are.
In contrast, having lived through it I’m obviously well aware of all the work I did that provided the money that I then invested, which in turn enabled me to leave that world in the rear-view mirror.
During the last couple of years at work I had an on-going internal debate of when enough was enough. I could have carried on for another year or two for the extra money, or because I was scared and fearful of the risks involved. But mentally I felt I was in the fast lane to burnout. I needed to end the journey.
Going with the flow
It’s surprisingly difficult to explain how we’ve spent our time since I left work.
Our days are still structured around our children and the school run. Which, for example, stops us from spending the whole day away from home. But I really treasure the time on the school run. Children grow up so quickly and I missed this in the early years.
Some of my time has been spent recovering from the stress, anxiety, and tension that I felt daily while in the corporate world. I’m learning to try and look after and understand myself more. To be kinder to myself, to not to be so self-critical, or to put myself under unnecessary pressure. I keep reminding myself that I can slow down.
There are some days when I don’t want to do anything, so I don’t. My mood may be low. Doubts and negative thoughts can creep in. Then there are other days when I feel the need to accomplish something. It’s nice to be able to listen to my body and mind when deciding what to do for the day. Rather than having the decision taken out of my hands by the corporate machine, as in my previous life.
I often spend time outside in the garden tidying up or going for walks around the local area. This enables us to enjoy the simple pleasure of observing the changing seasons. I’m fishing again, which is a wonderful way to spend time outdoors close to nature. If the weather restricts me to indoors, I will potter about, listening to music, reading, catching up on Monevator articles, doing household admin (I still write to-do lists), planning little projects. Sometimes I like to just sit down in peace alone with my thoughts.
This may not sound as exciting as some envisage their future post-work life to be. The excitement comes in different forms. Being able to observe our children develop and grow – witnessing those moments that bring them joy and intrigue without the interruption of the next urgent work emergency – is priceless.
Five things that went as planned
Financially we were fortunate that the winds of the American markets were behind us in our first year. This helped ease the initial fears of dealing with the de-accumulation phase and sequence of return risk.
My wife and I are in this together as a team. We have a joint objective to enjoy and make the most of our new family lifestyle.
In moments of contemplation, I’ve realised that giving up employment is not as scary as I had built it up to be. It’s easy to focus on the worst-case scenarios and ignore the potential benefits.
There is a feeling of freedom to finally have control and independence over our time, finances, and our direction of travel as a family.
The work-related stress has disappeared and hopefully over time this will benefit my long-term health. I sometimes smile to myself at a distant memory of a former boss misunderstanding me once again.
Five things I’ve learned or recalibrated
I had a fear that my work had become the main part of my identity over such a long period of time. It was a very stressful and demanding role that I found little enjoyment and even less meaning in. The jury is still out as to whether I’ve managed to re-discover who I was before my sentence in the corporate world.
There is not as much time available as you dream there will be, especially with children. I have multiple ever-increasing to-do lists on the go at the same time. I’m not sure how we ever managed pre-FIRE!
I’m still trying to understand if I need more structure in my day, in addition to the school run. Fortunately, there are no imposed deadlines on discovering what works in my new reality.
I suspect I haven’t fully decompressed since leaving employment. Being able to relax is a skill I am slowing re-acquainting myself with.
I wrestle with the dilemma of whether I should tell people that I’m no longer working. I have almost been caught out on a couple of occasions when people have asked how work is going, or whether we have any time off over the holiday period.
Closing thoughts
After a long and sometimes frustrating journey, we arrived at destination FIRE. And just like that, we are already advancing into our second year of early retirement.
We have the freedom to live the life we want on our own terms. There are potential risks on the horizon and plenty of challenges to overcome. But we feel we’re in a better place to prosper as a family.
Thanks so much to Jake for letting us know how he’s faring with FIRE. It’s good to hear from the other side of the rainbow! But what do you think readers? Should we make such occasional post-FIRE follow-ups a feature of the FIRE-side chats, or would you rather we focused on new stories? Please let us know in the comments below, along with any reflections or questions about Jake’s experience.
All (FIRE)power to Jake’s elbow! I too managed to escape from a career in a big corporate, although not till I reached the ripe old age of 60. I had already paid off my mortgage – thank goodness I’d signed up for a standard repayment loan because I didn’t understand those new-fangled endowment thingies.
My single tip for anyone contemplating FIRE is to have (or find) opportunities to volunteer for activities you enjoy, be it sports or charities or whatever ticks your box. I get huge amounts of “job” satisfaction from applying my hard-won management skills to benefit other people. And if I stop enjoying it, there’s no corporate machine forcing my nose to the grindstone – I can just walk away. That’s what I call freedom!
“It’s surprisingly difficult to explain how we’ve spent our time since I left work” and your description about how you spend your time is so refreshing to hear. I similarly moved to East Anglia, so perhaps it’s something in the air. But I’ve always struggled with explaining to people how I spend my time, when the truth is that I spend it exactly as you seem to do: school runs, indoor and outdoor pottering, looking after my health. And for now, I love it. I dont have any board seats. I dont have a new venture to scale. I am slowing the F down. I’m grateful for the chance to do it, but the hardest part is explaining / justifying it to folks. Your description was wonderful to hear. Thank you.
“There is not as much time available as you dream there will be”
Damn right! 16 months into early retirement here and the days just zip by with plenty left on the to do list come bed time. Busy people are that by nature.
I had no idea where I would be and what I would be doing now 16 months ago. My social life, which was one of my initial worries about leaving the work environment – where I had good relations with my colleagues, is busier that I could have hoped for with many, many new contacts, hobbies and activities. It seems I just needed the time.
The smile is yet to leave my face, long may it last.
I went back into work this morning to help an ex colleague struggling on a project for a half hour. It was nice to see the old faces, but the stress of the job was the first thing apparent in the conversation. No change there.
I would need a damn good reason before I contemplated returning.
Best of luck with it all Jake- Long may it last 🙂
JimJim
Thank you for this update and great to hear the first year’s gone OK! I found your reflections on the psychological aspects particularly interesting: taking time to adjust, varying moods, learning to slow down. I FIRE’d myself about 18 months ago (early 40s, single, London) and can relate to a lot of it. Also very much to @DJBOND (#2) about how it’s hard to explain to people where the time goes!
Supporting a family of four on £32,000 a year is great! I am particularly interested in the expenses of children, if it’s possible to say any more there. I tend to assume this will add up quickly – clothes, food, toys, outings – though I can also imagine how family life outside a city could also be simpler and lower cost than life in the city.
Thanks for sharing your experience Jake. I follow all the fire-side stories with interest. I fire’d this time last year, it’s good to compare notes. A catch-up to see how things are going is a great idea, if people are still willing to share.
Great to hear some follow-up, especially when clearly such a big success. Super to hear that Jake is enjoying East Anglia, I’m very envious – as a native East Anglian I made the inverse move (for work!) thirty years ago, but still consider Suffolk to be home.
Very interesting to read the numbers, as they are similar to ours, although like Chris, as FI/Rose (only slightly early!) our proximity to state pension hopefully reduces the required pot size a little.
Reading the success stories gives a warm glow, not just of joy to the FIREes, but in the anticipation of now being within touching distance. It completely changes the outlook on work knowing that we’re fattening the pot for comfort and could just about press the button if push came to shove. Wishing you a long, happy and clearly well earned retirement, Jake.
Lovely feedback, Jake. You and your wife’s lives sound appealing. We do not know your children’s ages. Perhaps they are young enough to need ferrying to and from school. Or are you living too far away from school for them to walk or cycle there? What is the right balance, do you think, between children hardly ever seeing their (stressed) parents and receiving their full-time attention?
Re: “Having neither worked nor received any salary for a year, it’s a slightly surreal feeling that our nominal net worth has increased during this time – despite 12 month’s worth of spending being deducted.”
If you are anything like me, you probably suspect that this is a bit of a one-off. FWIW, I have found it useful/interesting to also track real net worth.
Great to read your update and best of luck going forwards.
I love these stories. I will never be the kind of blogger who focuses on tips and tricks to get to FI and I pretty much prefer blog posts of how people lives look, post FI.
I was forced to retire due to disability at 43 and honestly I feel like since I had already been planning to retire early that it was a short period of adjustment for me. My husband will be retired this spring at 51 and it will be interesting to compare our experiences.
Thank you for sharing. If you were to tell people that you have retired early, what is it you fear?
Hi Jake thanks for sharing your experience and how you’re finding it. It’s encouraging and motivating to read success stories like yours!
One question I had was on how you view your withdrawal rate. It looks like you calculate it including your SIPPs which in your mid 40s you can’t access until 57 or later. Your withdrawal rate on your available assets (isa’s, cash etc) is therefore much higher. Does this give you any concern or how have you got comfortable with this?
I am a similar age to you, but concerned future governments might continue to increase the age I can access pension savings. Not sure if I’m just making excuses to myself!
Would be interested in how anyone else views pension savings which may be some time off being accessible.
Thanks
Thanks Jake for sharing your reflections on your year 1 of RE element FIRE. I have pretty much been here for a couple of years longer, but can relate to much of what your experiencing, both the ups but also the occasional downs.
I think we all have some idea of the supposed nirvana whilst we are in the accumulation phase, but in my experience there are a new set of “challenges” to run alongside the RE experience, and you have highlighted a few.
Thanks for sharing them, and in so doing sparking a nice set of responses from others.
Good luck with your year 2 !
@cantseethewoodforthetrees
I was interested in your concern about basing a withdrawal rate on all assets incl presently inaccessible SIPPs.
Logic says count the SIPPs on the basis that they are last in line to be spent, provided sufficient funds are available to carry you along until you are old enough to access the SIPPs
My concern with my SIPPs is that in order to minimise tax we only draw sufficient from them to the personal allowance limit after allowing for other taxable income.
Given state pensions will come along in time, we are spending below the growth rate of the SIPPs and with far more in the ISA’s , then the SIPPs will very likely become orphan assets , largely untouched because we can draw tax free income from the ISAs. There comes a point where concern for having enough fades and realisation that you have enough and then you probably have more than enough.
Despite best efforts travelling there is only so much that we can spend, the long process of getting to FIRE tends to prevent reckless spending later !
Great to read a follow up I for one like the update where its relevant (wouldn’t be in my case -more of the same!)
A question I had is you say your family and close friends no you’re no longer working I’d be very interested in the reactions you got from them
I’ve often discussed retiring early and while my father is supportive I think he thinks it’s bonkers as ‘you’d get bored’ I wonder if you have experienced something similar or if people are envious?
@HS (#13):
I see your point [re ‘enough’] and understand your SIPP dilemma. The way things are going, a full [new] state pension will soon be greater than the personal allowance. Collecting the income tax due in this scenario [on folks SP] will be a real challenge for HMRC.
I assume you got tax relief when you filled your SIPPs; so any particular reason why you are averse to paying some BR tax on the way out or do you just want to pass them on?
It is great to have an update on Jake’s progress – congratulations on all that has gone well in your first year.
I will soon have done four years (having FIREd at 48). I have been very up front about not working (including for years beforehand) and never found it an issue with other people. Only you know your circle of acquaintances, so I’m not judging your decision, just hopefully reassuring you that it may not be as bad as you fear.
Best wishes for year 2!
@All – Thank you for your kind comments and sharing your own experiences.
@Chris Stephens (#1) – Thank you for the tip regarding volunteering. This is something that I am interested to explore further down the track.
@DJBOND (#2) & @JimJim (#3) – It is interesting to hear from others who have encountered similar feelings/experiences since they walked away from the corporate world.
@Southbank (#4) – I hope your first 18 months of FIRE have gone well. Having children is certainly an added expense, and costs can add up quickly if you are not careful. I remember the shock of the initial financial outlay when preparing for our first born!
Currently a large part of what we spend on our children in terms of time and money goes towards their activities and clubs.
During the festive period there were many experiences available for a family at different price levels. We try and pick a different one each year.
@petejh (#5) – It sounds like we are on a similar time scale with our post-FIRE journey. How have you found your first year, are there many similarities between our stories?
@2 more years (#6) – East Anglia is a lovely part of the country, and our family are very happy to call it home. I am glad you enjoyed the follow-up article.
@Grumblebum (#7) – Our eldest is now also enjoying some independence walking to school with a friend!
It is an interesting question regarding not enough/too much time spent with your children. Our daily routine once the children are home from school, involves homework, and then out to one of their various activities/clubs.
I prefer our current situation compared to the pre-covid working days. When I was on my way to work while they were still in bed, and then arriving home shattered with little time or energy for the family.
@Al Cam (#8) – Thank you for your comment on my update.
Thankfully our first year went well financially. I suspect the waters ahead will be a little choppier!
Thanks Jake, an interesting update and one that I can very much relate to. I’m in my first 6 months of FIRE, and luvin it.
I’m not decompressed and ‘taking it easy’ is an understatement, especially at this time of year. Likewise, the school run and general internal/external pottering are enjoyable and are an end in themselves. We’re spending far more time on just living our lives. For example walking the dog, planning and preparing a meal, DIY – these type of activities are now enjoyed, not squeezed into short snippets of spare time during evenings and weekends. Doing the same things as before, but enjoying them. Simple pleasures.
For us, a <4% withdrawal is quite manageable. Whilst we do have additional emergency funds, I do have long term concerns about potentially large expenditures, like buying a new car or getting our house re-roofed (for example). The emergency funds are great, but ultimately the withdrawals will need to cover all eventualities. Inflation was a concern, but less so recently.
FIREing needs a change of mindset, a slowing down and a belief in the financial planning you did (at great length!) pre-FIRE. I don't think I'm there yet, but I know this and am working on it.
We work for many years, and it's a big part of our lives. Not working is taking some adjustments. I do have a curiosity about how things are going at work, which is something I'm trying to wean myself away from.
@Hariseldon (#13) my biggest fear is pulling the rip cord and FIREing then coming up short a few years before i can access the SIPPs and having to return to the workplace!
My concern stems purely from my own risk aversion, i’ve not developed psychohistory so feel less confident in predicting the future! Something I need to deal with, which is why hearing other peoples views is so helpful to challenge myself. I am worried with some way to go that future governments change the pension rules and access to SIPPs is later or PCLS is reduced from 25% to make it less attractive. I don’t feel confident to rely on access.
One area seldom mentioned is access to free (or cheap) life insurance (pension death in service) and private health insurance that many employees offer. Jake is this something you benefited from when in work? have you replaced it since exiting?
Thanks
Great piece, with useful insights for somebody looking forward to the FIRElit uplands. The ‘explaining to others’ challenge is one that I can already see coming.
Our not-particularly-early-retirement by FIRE standards has been on the cards for a while, I’ve mentioned it to a few close friends as a way of trying to make the target date stickier in our own minds but my wife has told me to stop doing it as it seems to wind the friends up. The whole ‘you are defined by your job’ thing is damn deeply embedded, at least in the toiling elements of society – I can’t imagine the truly idle rich ever worried overly much that they don’t have a job to describe themselves by.
@ Cantseethewoodforthetrees
I lost my life cover and family private medical 8 years ago.
My view was that if we could afford to Fire then we didn’t really need Life cover – if I had very young children AND was worried about the DB spouse pension reduction then I would have considered some level of term cover.
PMI was a nice to have so didn’t even get a quote – I did have to wait 2 years for a minor op, but the private cost would have been reasonable. NHS plus Fire money should be enough in my opinion.
Bumped into an 80 year old friend who had just cancelled his BUPA – they wanted £800 pcm!
Thanks for the update Jake. I was a huge fan of your previous post and we had some interesting exchanges in the comments. It’s great to hear you have had a largely successful year. It’s a testament to the work you put in and your mental strength to stick to the plan. It was a shaky couple of years so well done you.
It’s brilliant you are starting to slow down and enjoy things. Are you planning long term for future plans or are you merely enjoying every day as it comes?
As mentioned in the previous post I sold my business in 2021 and have been ‘lean fire’ since but not currently drawing down and still doing some part time work (I have equity in a growing business which is relatively hands-off for me). I work around the school runs and like yourself I find it incredible how fast time goes. It seems to be 2:30pm before I know it and I’m preparing to walk to pick the kids up.
I also struggle with telling people our situation. Like yourself, we seem to live in a very middle-class consumer-driven society so our friends perhaps don’t even consider that we may be wealthy. Or perhaps they are just playing out their own show and don’t care! Who knows but we haven’t ever told anyone of our situation.
I would be interested to know whether you think you will return to some type of paid work in the future. Even if it’s part-time working somewhere like the National Trust? Or is it a case of taking every day as it comes?
I sometimes wrestle with the fact we technically have enough money to never work again but because of the part-time work I’m in some weird purgatory where work is optional but some days it’s hard to motivate myself. Hard to pin this down in a comment!
Thanks again for the update. It’s incredibly refreshing and I wish you all the best for the year ahead.
@Always Late (#10) – There is probably an element of feeling uncomfortable with the unknown. What reactions are we going to receive, are people going to see/judge us differently, and thinking that we may have to justify our actions to others.
I am unsure why there is a difference in my approach, between telling our family and old friends, and acquaintances who don’t know us as well.
Maybe subconsciously I wanted to give myself some time to adapt to our new lifestyle without having to worry about the reactions around us.
My wife and I have discussed this topic previously, it might be the right time to revisit it.
@Cantseethewoodforthetrees (#11) & @Hariseldon (#13) – I have indeed calculated my withdrawal rate on the whole of our net worth (excluding our house). You are correct that the withdrawal rate on just the pre-SIPP element is much higher. If I look at this in isolation, it is a much scarier rate.
I have calculated various forecasts that show our pre-SIPP investments will hopefully see us through to when we can access our SIPPs.
As each year passes and new challenges present themselves. I will continue to monitor the situation and adapt as required.
@Gary P. (#12) – It is nice to hear that you can relate to some of my feelings. I would be interested to hear what other challenges/surprises you have come across and how you have reacted to them?
@Fatbritabroad (#14) – Good to hear from you.
Our situation was split across two phases. The first was our relocation to East Anglia. In my opinion this was the more problematic phase for us. Some family members could not understand why we wanted to move away to a different part of the country. I understood some of the resistance from their point of view as we were moving further away from family connections.
I left the corporate world a couple of years later after our relocation and working from home during covid. Once the decision was made, we informed our family and then our old friends.
There were varying reactions from family members. Ranging from questions regarding when I would be getting another job. To reactions of surprise that we could afford to do it, and what are we going to do with all our spare time. Interestingly I felt the response was softer than when we announced we were moving.
Now all family members are fine with it, maybe one or two of the younger ones are slightly envious or possibly intrigued. So far, none of them have asked any deeper questions regarding the mechanics of how we did it.
However, I have had in-depth conversations with some of our old friends explaining how we achieved our freedom.
@Mark (#16) – Thank you for the reassurance, and best wishes, it is much appreciated. It is nice to hear from others who have been in similar situations and how they dealt with it.
After reading about your experience and as per my above reply to @Always Late (#10). This may be the prompt that we need, to discuss if a change of approach would be beneficial.
Do you mind if I ask how your first four years of FIRE have gone? Any regrets or unexpected twists?
Thank you so much for posting an update on your first year of FIRE, Jake – a most enjoyable read. Incredible to hear that your net worth is still up despite your spending.
Your post work life, of doing what you fancy when you fancy doing it sounds like a dream to me!
Interesting that a year later, you are still decompressing but with work being so all-encompassing while we’re ‘doing it’, I guess it’s no real surprise.
The guy at work who’s retiring soon (at age 60) is going to tell his neighbours that he is on a sabbatical as he wants to avoid green-eyed envy!
Wishing you continued success and happiness for you and your family in FIRE!
@Monevator team – am happy with FIRE follow-ups and new stories, if you can fit them in!
@AboutToPressTheButton said “The whole ‘you are defined by your job’ thing is damn deeply embedded, at least in the toiling elements of society”. I’ve been a volunteer in a national sport organisation since retiring from paid work, and I’ve found it helps to ease the discussion in certain circles by saying it’s my job (I don’t mention the zero salary). To be honest, there’s probably a bit of self-esteem there too – who am I? What am I good for?
If you don’t have ready answers, perhaps you need more preparation for FIRE!
@Jake (#23)My immediate response to you asking was “no regrets whatsoever”, but I thought you deserved a bit more consideration – so I asked my wife the question over breakfast. We genuinely struggled to come up with any! Changing family circumstances have meant one double-edged sword: not working has meant my wife can see more of her very elderly father, but that means I have to see more of my sister-in-law (who he lives with)!
After four years of winding down cash accumulated in the run up to FIRE, including the lump sum from a SIPP, one thing I have noticed is how accustomed I was to having readily available money if required. I have an emergency pot, but when I needed 4K quickly recently (I wrote off said sister-in-law’s car!), it took more juggling than I’m used to. Very lucky to have such a first world problem, I totally recognise!
In terms of numbers, our income from investments has more than covered normal expenses. We’re doing some big travelling and the extra for those hasn’t quite been covered, but that was all in the spreadsheet. Capital has also grown about 3% a year (even having taken out our expenses). Given the economic headwinds (we FIREd the weekend of the first lockdown in March 2020), I am happy with that. We’re fractionally behind my master plan, but one good week in the markets would put us on track…
Overall, I feel immense good fortune to be free from the mental burden of working and earning – that was what I dreamt of as we built towards FIRE.
@Willieman (#18) – Great comment and congratulations on your first six months of FIRE.
You make a very good point regarding having time, not rushing, and enjoying the activities that were once maybe more of a chore due to time constraints.
I understand your concerns with potentially large unplanned for costs. We spent some money on our new home before I left work. So those costs were covered while I had a monthly salary.
We arrived at the conclusion that we shouldn’t allow potential worst-case scenarios prevent us from living the life we wanted. These fears can feed the one more year syndrome.
I think it is natural to have thoughts about your last employer in the first few months of FIRE. My experience is that this urge has faded, every now and then it pops into my thoughts. But thankfully no longer on a regular basis.
@Cantseethewoodforthetrees (#19) – My employer did provide life insurance (pension death in service) and private health insurance. I have not replaced either since leaving.
Similar to @Boltt (#21) comments. I personally don’t see the need for life insurance as we are mortgage free. When one of us passes away, the other will receive the assets that are currently in the others name.
@AboutToPressTheButton (#20) – Interesting to hear that your talk of early retirement may annoy some of your friends. This possibly demonstrates the context and situation is different to each individual and group of friends/acquaintances.
@weenie (#24) – It is nice to hear that you enjoyed the follow-up article and thank you for your kind wishes.
We are very thankful that our net worth performed well in the first year. The true test will be in future years when our net worth is hit by dramatic plunges in value.
I hope your FIRE journey is going well. When do you hope to leave the employment world?
@Ryan (#22) – Apologies, I have only just seen your comment after writing the above replies. I will reply to you over the weekend. Have a good evening.
A tad facetious on my part but it seems that being “Fired” is similar to that of a academic working in a univeristy (at least in my “lived” experience). Good Times and good luck. Enjoy.
@Hak, I have to be curious about which university you worked in.
That isn’t a statement anyone would make where I have worked.
And also thanks to @Jake for sharing, our situation is different (mix of occupational pensions and investment pot) but some of the emotions are similar.
@Ryan (#22) – It is great to hear from you again, thank you for your support. I hope all is well with you.
There are currently no long-term plans. The furthest we have thought ahead is a family holiday later in the year. We find the days and weeks fly by. So, we take each day/week as it comes, subject to mood, motivation, and weather.
That is impressive that you have not had to draw down on any of your investments yet. The combination of part-time work and lean fire seem to be working well for you.
Often, I lose track of time and end up rushing to the school to make sure I am not late for pick up!
When you say you haven’t told anyone about your situation. Does that include your family and close friends? I explained a little about family reactions in a previous comment. My wife and I are currently discussing the possibility of starting to inform our acquaintances.
You make a good point, that others around you may also be in a similar situation but don’t advertise the fact. You just never really know how other people are financially living their lives.
Presently I have no interest in working again. I cannot see that changing in the next few years. But you never know. One day I may find myself working a few hours a week in a nice local family business.
When writing this follow-up article, I did struggle at times to find the right words to explain my feelings, experiences, and how we have spent our time. I was worried that it may come across as a little uninspiring. I wanted it to be a true reflection, so hopefully it provides an insight to others.
@Jake (#30):
Re: “That is impressive that you have not had to draw down on any of your investments yet.”
A question if I may: are you living exclusively from your investments or is there anything else in play, such as, say: a windfall, a severance deal, or similar? Thanks in advance for any info you wish to share.
@Al Cam (#31) – So far, our living expenses have been covered using a combination of cash in our current accounts, 0% credit cards, and selling some units from our general trading accounts.
We also have cash in a savings account and premium bonds. Which can be used to top-up our current accounts and pay off the 0% credit cards when the time comes.
I understand from comments you have posted in the past. That you have been retired for some time. Do you mind me asking how long, and how you fund your yearly living expenses? Has your strategy changed since the first few years of retirement?
Lastly, do you have any wise words for someone that is new to the de-accumulation stage of FIRE?
Jake,
Congratulations on your first year and thank you for sharing your story.
With regards to your de-accumulation stage as times are good why not accumulate a bit more…. as you are to a degree with your investments outpacing your spending?
Our little Tribe took FIRE a good 10 years ago at age 37 with 2 and 5yr olds in tow. Our first year was about de-stressing, winding down, enjoying time as a family and exploring a new area. We had relocated somewhere cheaper, like you.
We have had similar concerns about spending down our investments. In order to avoid sales we originally relied on dividends for an income, managed a cash pile for fluctuations and have now added a small side hustle.
We have driven down our living costs without really impacting our lifestyle through investments in energy efficiency (such as wood heating, LPG car) and growing a bit of our own food. Not living in a consumerist area has helped with the kids – the designer fad does not seem to be a thing where we are (SW France). Holidays are local by car from the Atlantic to Med from the Countryside to the Mountains.
Investments such as these are obviously different than keeping the money in the stock market, some actually have a high rate of return like the LPG car. They reduce living costs avoiding the need to sell assets or search for more income (after taxes), freeing up income to re-invest or spend.
The dividend approach has avoided selling at the wrong time yet obviously comes with the downside of missing out on growth. This “missing growth” is tempered by our pension investments that are in funds, which we do not have access to yet.
We do not fully believe in the 60:40 approach, 4% rule, or global vanguard stock tracking – to us it does not seem to be diversified enough (only stocks and bonds…what about other asset classes?) and actually err on the side of Morgan Housel’s having a cash pile approach (can be deployed as opportunities arise or used in a time of need) and Harry Brown’s Permanent Portfolio – a mix of assets.
We don’t really intend to de-accumulate as in the “Die with Zero” approach – I would probably make a big mess of it. The idea of the go-go then go-slow followed by the no-go years do highlight that you only live once so you should invest in memories and experiences.
Taking FIRE to be with the children growing up has been priceless and worth the loss in status and wages in our opinion. As for spending all our wealth in one way or another before we die is food for thought. Perhaps leave the tax free inheritance intact for the children and spend the rest…..
Congrats and enjoy your FI!
@Jake (#32):
Thanks for those extra details.
Re my approach, changes, suggestions, etc can I refer you to my various comments at this recent Monevator post https://monevator.com/should-you-build-an-index-linked-gilt-ladder/ rather than repeating it hereabouts.
FWIW, funding my initial few years was definitely eased by severance money, a notable tax refund, and share options maturing early.
@Jake Thanks again for the response Jake.
I admire your approach of no long-term planning. I think because I have always built businesses my mindset is goal-driven however I have changed that considerably since the sale and it’s focused on our children, health, fitness and experiences. I completely agree with you on the subject of time flying by. I sometimes get to Friday in disbelief that another week has gone by. I can also echo your thoughts re the school run!
I think I’ve been lucky in that I took equity in the business in exchange for my skillset before I sold my primary business and the startup then happened to grow considerably. It was the main motivator around my business sale as I knew I could reach lean fire and still have an income to cover our expenses.
Apologies I didn’t explain this part well. I’ve told family members we sold the business but haven’t gone into finances. I’ve also told two close friends who also run their own businesses (and can relate) about the sale. I was referring more to newfound school friends. I did randomly make a friend via a website similar to this who weirdly lived around the corner from me and is part of the Fire movement. Small world indeed but a great connection.
Do you have any plans for future hobbies and aspirations or is your overarching goal to live life on your own terms like you seem to be doing so well now 🙂
I don’t think it’s boring at all. I think the beauty of this website and space is that you get the ‘WHY’ from people and their perspective of life. It’s refreshing and incredibly enjoyable to read.
@Ryan,
Interesting to hear about your careful approach with friends about your new situation. Good to hear you have a FIRE proponent close to you to discuss the implications.
Before I left London 10 years ago the Fire movement was just getting stated in the UK. People were beginning to meet up to discuss it. It was very niche.
Discussing with some friends, at the time, they found it a less than pleasing idea in the way it clashes with societies norms, too young, risky and giving up a career. I did have one local friend, who was working part time, to spend more time with the family who I did manage to discuss it with but that was it.
Since then we have shared our situation with a wider group, ghosting has occurred, which we can fully understand. We moved out of the city as well – out of sight out of mind. Work culture is very ingrained in the psyche and so important that not “working / working” can marginalize a FIRE seeker? We have had replies that is not possible for me and the conversation goes no further. Yet we still convey that we “work” in different ways that we choose yet these are not fully accepted as they are not associated with paid employment.
Perhaps FIRE aligns with the 80:20 rule where the majority stick to the status quo where a small group beg to differ….. Dropping out of consumer culture and keeping up with the Jonese’s naturally changes your group / tribe.
It is interesting meeting new people and having the usual question of “what do you do?” then seeing the odd expression on their face when I say parent, teacher, builder, gardener, investor and the like.
I look forward to hearing how you find the transition yourself.
@Jake (#27) FIRE journey is going ok thanks, but alas my goalposts have moved to keep up with rising costs. Maybe full-time employment for another 3 more years or so? Sooner would be nice depending on how investments go.
Stories like yours keeps me motivated!
@Contender (#33) – Thank you for your interesting and informative comment.
It sounds like you have made a great success of your FIRE journey. It is very inspiring.
As you point out our investments have performed well in our first year. Much of our net worth remains invested in equities. In the good years, hopefully, our net worth will continue upwards. But this approach naturally will see periods of great volatility.
Do you mind me asking what percentage, or how many months of your living costs are covered by dividends?
We do have an investment in a single company that pays out dividends, which are automatically re-invested. I have been wondering whether we should start taking the dividends as income in a year or two. Currently the total yearly payout would possibly cover 2-3 months of normal living expenses. This would reduce the number of units that we need to sell from our funds in the future.
@ALL – I am very interested to hear from others in the de-accumulation stage regarding their financial strategies. For example, what has and hasn’t worked, have you changed approach over time, and if so, why?
Thank you in advance to everyone willing to share their experiences.
@Jake
When we first arrived our dividends fully covered our “basic” living costs – housing food, school fees, transport and utilities – approx £1K per month at the time. We had a separate pot of money for property purchase and a significant safety net.
Basically we just wanted out of the rat race and decided we would work out problems as we go; like moving country :)…….
Income has evolved as we now have a small side hustle and a small amount of property income. Currently our dividends cover 9 months of basic living costs as we sold some stocks to “diversify” – we had the new income streams to cover the drop.
The dividend stocks have been country diversified by adding US and French companies via a French investment account using some of the sold UK stock money. The rest of the money is parked in cash (multiple currencies) and some was alternatively invested in things like solar panels and the LPG car. We add a small amount of new shares each year and keep ISA’s for the children in the UK (still allowed last time I checked).
To your question what has and has not worked.
1. The dividend companies that were dividend kings continue to raise their dividends each year.
2. Other dividend paying stocks in the UK have seen their dividends swing up and down a lot – this has not worked so well. Some cancelled for a period of time during the crisis.
3. Some speculative dividend stocks failed completely and we have missed out on significant growth due to not re-investing dividends. As we have not owned the whole stock market we lost the option of catching the big winners that drive the market in our income portfolio. Probably costly….
4. Pensions by default have been left alone in global funds and have performed well and we should be able to access our private pensions at age 50 as stated by my company…… hopefully.
5. The return on investment of our home and transport improvements have negated a large part of the steep rise in inflation. We get free electricity for 8 months of the year, heat with wood (eco boiler system – little to no ash / emissions and supposedly 91% efficient) – some wood is harvested from our land. Our hot water is solar. The LPG for the car is currently 60% cheaper than petrol. We also get free fruit and vegetables from the garden in the summer.
6. Moving south means less heating and holidays on our doorstep. Its currently ski season, a day trip with the local club with ski hire for the 4 of us is around 200 Euros.
7. Changing countries negated ISA tax breaks we pay a fixed rate of 17.7% tax on dividend income (we were aware of this before we left the UK – the tax rate was lower at the time….) and capital gains tax in France. The side hustle is taxed at 25%.
8. Private school is very cheap in France £350pcm in total for both children.
9. Culture shock but still able to order some UK food and drink.
Overall we have not de-accumulated more like re-deployed…and cluttered – kids!
I hope this give some context and alternative views to de-accumulation and changing approaches whilst FI.
@contender Would be great to pick up this conversation via email vs public comments. You can find me at ryan(AT)gibbo(dot)name
I would love to answer your questions and also learn more about your life in France. We spend all of Easter & the Summer in the South Of France and it’s become a bit of a home-from home for us.
Ryan
Hi Jake
Thanks so much for your candour and willingness to come below the line. And most of all – congratulations.
I don’t yet feel the need to aim for full on FIRE. That is largely influenced by the fact that my job is relatively low stress while being well paid, and due to WFH I spend lots of time with my 3 young children. And also one other thing, which I fret about.
This is my uncertainty around how much I will need to fund my childrens’ education post-18 and subsequent feet-finding years. I’d be interested to learn how have you mentally framed or accounted for this?
Thanks
Thanks for the post, a really insightful look at how post FI life can be.
I am post FI, I stopped working at the end of 2019. I was going to have a break then get a part time job but lockdowns hit and the work world just collapsed around me, so I just stayed work free.
It took time to decompress and forget about work and the status it gave. So many people judge you by your work which is why I do not say much about my non working status.
I few of my friends would look on with envy but some have now retired from working too, so things are not so bad now. It takes time to slow down and find the right path and as you say you still need to monitor and track your progress and make sure the FI funds continue to support you.
Hopefully you can post another update in a year and you can look back at how far you have travelled along the FI path.
The FI path is a journey that does not stop when you reach the ‘enough’ target.
@Contender (#39) – Great comment, thank you very much for the extra details.
It is interesting to hear your view and approach to de-accumulation.
@Naked_Stockbroker (#41) – Thank you for your comment.
You have a good balance with a low stress well paid job, while being able to work from home.
I share your uncertainty regarding assisting our children once they are of the age to decide if they want to go to university, require a car, help with potential property purchases etc…
Our children have junior ISAs, but they would probably only assist with a year or two of university costs before they were gone. I would also prefer them to keep their ISAs as a long-term investment.
I think maybe subconsciously this is one of the reasons I have remained so heavily invested in equities.
@SparkleB (#42) – Thank you for sharing your experience.
It is interesting to hear that some of your friends have also now retired. Do you think that has helped with your transition into your new lifestyle?
Do you mind me asking how the first four years have gone financially? Do you have dividends covering your yearly expenses, or are you selling some of your investments?
Hi Jake,
I had a rental property so had the rent from that and the dividends from ex-employer shares which covered my base line costs (house, council tax, utilities, food, car, etc) for the first few years. My main house is mortgage free which helps to keep costs low.
When I first stopped working this income became tax free as my personal allowance and dividend/savings allowances covered this income. I fill in a SA every year due to my rental – not sure when I will be able to stop doing this now I have sold it – but still living within tax allowances at the moment.
I sold the rental last year (part of my original plan when I gave up work and dropped to BR tax band) and have used part of that to fund my next few years and invested the rest.
I kept my costs low during the first few years, although lockdown also prevented me doing anything. I have no kids, so less pressure on expenses. I am living this year off my cash holding and using a kind of ladder approach to run a cash buffer and keep the main bulk of my money working in ISA and SIPP accounts. I am just selling the ex-employer shares which are in a GIA so taxable, utilising my annual tax allowances.
I am now number crunching to work out how much more I can draw by selling some ISA (and can now access SIPP if I need to due to my age). I use a 3% SWR as a guide but may increase this for some ‘go-go’ years then drop back to 3%.
I want to do more holidays/activities and not run out or suffer due to the cost of living inflation shock which had increased my basic costs more than expected. I also feared the first few years especially during lockdown when investments crashed but things are looking brighter now.