Want to get a grip on your finances? Need a UK Money Management 101? Then you’ll find How To Fund The Life You Want an excellent starting point.
I could imagine this book being the essential companion to an online course that all Britons took in their late twenties. Just imagine! An investment in everyone’s financial future and education.
Alas in our dreary reality – wandering in the political spectrum between the Wild West and the Nanny State – the UK prefers to muddle through.
We’re left to work things out for ourselves.
The trick is to wake up before it’s too late – and to know where to look for help.
Pointing you in the right direction
How To Fund The Life You Want is a great place to begin because:
- Its guidance is sensible, easily digested, up-to-date, and presented so that anyone can tailor it to suit.
- It’s a straightforward read that skates lightly in and around financial industry jargon. Prior expertise is not required.
- The authors have structured the book to provide a route map of the way ahead, with recommendations on additional field trips you might take. For example, exploring the back roads of the tax system, or the cul-de-sacs in your own investing psychology.
- Taking control of your entire financial future is daunting but these guys show it’s achievable.
How To Fund The Life You Want: who it’s for
The book’s authors – Robin Powell and Jonathan Hollow – state upfront:
“We have written this book for people in the UK who feel they don’t know enough about pensions and investing to plan for their retirement.”
Indeed the overall thrust of the book is very much about helping you to retire at a time and income level of your choosing.
However I think the authors’ holistic approach gives the book wider application, as they gently encourage readers to think about their money values (and taboos), and what it’s all actually for – a key part of a full personal finance awakening.
Powell and Hollow introduce the character of our future self as a person worth investing in – versus our overweening current self – in order to break down our natural inclination to under-save and prevaricate about the future.
They also lay out an elegant money management system that could help anyone ensure their income flows first to meet bills and debts, with the remainder channelled to fulfil the needs of both your current and future selves.
And as with the rest of the book, the money management section is written with empathy for the needs of people who are not natural finance ninjas.
This chapter particularly benefits from Hollow’s experience working on the superb Money Helper consumer finance site1, and his own struggle to tame budget-o-phobia with apps and behavioural hacks.
By the final page, the authors have nudged us into considering how to identify scammers and financial sharks, when it makes sense to engage a financial advisor, and how to reconcile your personal need for a result with your ethical values using ESG2 investing.
Good foundations
Long-time Monevator readers will recognise the book’s investing guidance is founded on solid bedrock:
- First grab your day-to-day finances by the scruff.
- Invest in passive investing products and keep your costs low.
- Understand financial markets are a rollercoaster.
- Understand risk is a multi-headed beast.
- Develop the wisdom to accept what you can control and what you cannot.
- Gain a feel for the numbers that can help you fund the life you want.
It’s sound advice that should be mainstream in the UK – yet it isn’t.
The authors aren’t radical FIRE-brands or passive investing zealots. They’ve written this prescription because the evidence leads them to believe it’s the best way for most people to achieve their financial goals.
But they’re careful to remind us that this stuff isn’t set-and-forget. New evidence, products, or regulation may emerge that changes the game.
So stay engaged!
How To Fund The Life You Want: why it’s good
How To Fund The Life You Want is the best entry-level book I’ve read for UK residents who want to take charge of their financial future.
It’s written for those who don’t yet know what path they might take:
- DIY investor?
- Default into some combination of Nest workplace pension and robo-advice solutions?
- May yet decide to engage a financial advisor?
Or perhaps you’ll devise a hybrid plan? One that mix and matches all of the above?
The authors sketch out your many options.
And that leads me to my one note of criticism. Actually more of an observation about the book’s role – and an acknowledgement of the messy reality of the UK’s consumer financial market.
How To Fund The Life You Want covers so much ground that inevitably it covers it lightly.
True, for some people this will be as much detail as they can take. But others may think it skims over important points.
Personally I’m a details man. But even I can see this book is a masterclass of streamlining.
It’s incredibly hard to make the complex seem simple. But Powell and Hollow have clearly thought deeply about when to hold your hand, when to prod you to do your own research, and when to invite you to disentangle your feelings on a money issue. (You can use even their accompanying workbook as a prompt if you’re so inclined).
They also refer the reader to a useful collection of online calculators and other resources they believe can help.
A pillar for your investing bookshelf
The fact is that the scope of UK personal finance is too big for any one book. And no one in their right mind reads a single article, or even an entire book, and believes that’s the last word.
So for me, How To Fund The Life You Want is the ‘big picture’ book for newbie UK investors.
It provides essential onboarding and orientation material if you haven’t invested before – or if you haven’t gotten the memo yet about avoiding market-timing or punting on currencies and crypto.
My recommendation is to read this book if you’re at that stage of your journey. (Or gift it to anyone you know who is!)
I’d suggest you then pair it with a dedicated UK investing book such as Lars Kroijer’s Investing Demystified.
Finally, keep up-to-date through Powell’s own website The Evidence-Based Investor and – though we hate to toot our own horn3 – Monevator’s own passive investing resources.
I enjoyed How To Fund The Life You Want anyway, despite being about as wizened as a UK passive investor can be.
But if I was starting from scratch, this is the UK personal finance book I’d want to read first.
Take it steady,
The Accumulator
Thanks @TA
One for the stocking filler.
Has Hale dropped off the list?
Problem being once you’ve figured out how to fund the life your want, you realise you don’t know what life you want. Or you think you know the life you want, then you get there and realise you don’t.
Non trivial.
“The trouble is, humans do have a knack for choosing precisely those things that are worst for them.”
Note Dumbledore didn’t retire early. Quite the opposite, you had to throw him off the building to get him to stop.
As someone who has never read Harry Potter but knew some of the names I was planning to read all the books over the festive season. No point now really!!
Very good book review.
I have actually gave this book to a friend precisely because it’s a good starter for 10.
The idea of retirement when you want at a level you want us very decisive. All too often I read of people going hell tor leather on ultra lean fire (£125k total NW for one) and aim to retire at ridiculous ages like before your wisdom teeth fully sprout!
For most people the benefits of having a comfortably enriched pensions/savings and the lower stress that comes from it are worth it.
This book helps you do that without FIREshaming you into extreme frugality or (much worse imo) making you want to invest riskily to get rich quick
@bigern – oh no, I’ve inadvertently done a spoiler. In my defence, 99.999% of folks have already digested Potter. But still, please accept my apologies!
Awesome site by the way, a big fan.
@ The Rhino – I was going to link to Hale but the last edition was published in 2013. I still think any new investor would get a lot of value from his book but some may fear they’re missing some vital contemporary insight when reading an ‘old’ book on investing. You and I know that the essentials haven’t really changed but still, I think it’d be a nagging doubt for me if I was just starting out.
@ BigErn – Yep, agreed – that’s Potter and Christmas ruined. Thanks Rhino!
@ GFF – Yes, the book is pretty mainstream. They don’t pretend it’s going to be easy and nor do they advise doing something rad so you’re hanging up your boots by age 30. It’s all sensible stuff.
If I was reading this in my twenties or thirties then I’d conclude I was in for a 25 to 30-year stretch after devoting 15-20% of salary to the cause. That was my conclusion when I read Hale in my thirties. It was only discovering ERE and the FIRE community later on that made me realise it could be done in 10 if I was willing to make sacrifices.
15 years is more than enough time for spoilers to be acceptable.
PS, Keyser Soze is Luke Skywalker’s father.
I wonder if the book goes into much about what is the life you want to fund as well as how to fund it.
By my forties, I realised I’d achieved most of what I wanted to – and it was time to shift a gear. I started asking questions like what are the things I enjoyed doing as a child or wanted to do? What things should I try or get good at which will be more difficult in my 60s or 70s (should I be lucky enough to survive long enough). There was probably some element of further integration via the question “Why?” although it’s not a question asking too many times of one particular activity because the answers might mean you stop doing it.
@ G – the book prompts you to start envisaging what that future life might look like but it’s just a light prompt. The book I know of which goes into that in more depth is How to Retire Happy, Wild, and Free by Ernie Zelinski.
Did you find your initial answers were the right ones or did they keep morphing as you moved on into the next phase of your life?
Thanks TA. I will definitely check that book recommendation out. I’ve only recently turned 50 so the answers haven’t changed much since my mid forties, and frankly more content than ever with my life.
The restless striving has near gone as I’ve been FI for a while, and just dropped my working hours down further to 3 days/week. I’m in a good team at work, working on interesting challenges and managing to avoid most of the things that turn good work into a job. I also have a hobby (which grew out of the answers to those questions) which has become another source of income and much fun.
Where the answers have changed is in the sheer pleasure of gifting and donating as well as buying affordable luxuries (e.g I will splurge on the £4 artisanal bread if I fancy it). The pleasure of seeing someone else enjoy something can be a source of great joy – eg watching someone enthuse about their expensive car does not mean I want one myself. I will still seek out value, but there’s no longer the constant striving to value optimise and get the most out of every penny. I’ve realised I have enough, and it is enough.
Gentleman’s Family Finance mentioned “ultra lean fire (£125k total NW for one) “. Viewers of programmes like Ben Fogle’s New Lives in the Wild will notice that many of the people have made massive compromises that eventually come back to bite them as they get older.
There ain’t no free lunch in “escaping the rat race”.
I got asked the other day how much you need to FIRE, in the UK at least, and I reckon you could do it for as little as £1.25 million total household net worth. £1.5 million certainly. OK, maybe £2-3 million plus if you live in London and/or have a penchant for fast cars and frequent exotic hols.
But so much depends on what kind of property and location you are prepared to live in. That counts even more so than the degree of general frugality in which you conduct your day to day spending.
Whether the Net Worth split is a £250k house and £1 million in investments, a £500k house and £750,000 in investments, or whatever.
The thing is, if you are living frugally and spending a lot of time at home and in the local surrounding area, you don’t want to be living in a craphole.
Or you will be needing lots of expensive holidays to get away from it all.
So there are limits to how low your number is if quality of life is a goal.
@ERN. @The Accumulator – Harry Potter, like life, is about the journey not the destination.
@ G – that is a happy story on a cold mid-winter’s day. Sounds like you’ve got this transition business nailed. This really chimed with me: “managing to avoid most of the things that turn good work into a job.”
I was trying to explain to someone last night that the bits and pieces I do are like a fun hobby that help keep my brain occupied and sharp. Work loses its sting if you can jettison the BS and aren’t relying on the pennies just to pay for the basics.
@ SemiPassive – that’s interesting – I don’t recall seeing much from the UK FIRE community on geographic arbitrage – a topic which figures strongly in the US debate. Have you seen anything good on that? Portugal keeps cropping up in conversations if you expand the scope to Europe, and I know a couple of people who’ve set themselves up in the Balkans.
I’m minded of another recent convo with someone who’s spent years transforming a rundown rural cottage into a dream house. Sounded harrowing at times but they’ve had fun driving diggers and completely reskilling themselves along the way. They weren’t a FIRE-ee but they sounded a bit like Mr Money Mustache – minus the Mustache. And the money.
I haven’t found any particularly good resources on geo arbitrage/strategic relocation. But spookily Portugal does indeed keep cropping up as a great option with its combination of cheap property (especially for Western Europe), reasonable taxes, great climate, and apparently better healthcare and lower crime than Spain for example. They seem to welcome foreigners.
And a short flight time to blighty is an added bonus.
I could probably FIRE much sooner if selling up UK property to relocate there.
Those little custard tarts are nice also.
This looks perfect for my sister’s 21st! Although maybe she won’t read it for 10 years…
@ SemiPassive – thanks for sharing your view on how much you need to FIRE in the UK. That’s in line with my thinking and targets – so somewhat reassuring!