The post-FIRE 1 day euphoria lasted two weeks. My spirit level of happiness flattened out after a fortnight.
At that point I realised the novelty of life without work had worn off.
So this was it. The place I’d spent seven years dreaming about.
Was it worth it?
Oh god, yes.
I go to bed happy. I wake up excited. Sometimes I catch myself smiling for no apparent reason.
Close friends ask me what I’m doing. There’s a faint sub-text of: “Well, tell me what life in seventh heaven is like. Tell me about the harps, the ambrosia, and bungee-jumping off the Burj Khalifa.”
“Well, GO ON THEN!”
It’s difficult to explain. Life post-FIRE is simultaneously very ordinary and extraordinary.
I haven’t boarded a log flume ride of perpetual hedonism. But I have found joy in the everyday.
The border fence between work and play has come down. Stuff I’d previously classify as a chore no longer seems like an obstacle between me and the good life.
That’s because I’m a sucker for flow. That serene mental state where you’re completely immersed in a task. You come to the surface after what feels like minutes, only to discover time has passed without friction, as if you were in hypersleep.
Now I slip into flow easily because I can do things at my own speed, in my own way, and to the standard I want.
It doesn’t matter what the task is. What matters is that I choose to do it. And that I’m not under some crushing deadline to get it done.
If I can strap the task to some notion that I’m making life slightly better for me, or someone I care about, then I’m happy.
Flights of fancy
In this way, I’ve inhabited a surprisingly small world so far. But my imagination has been free to wander via podcasts and books.
I can lodge my mind in space travel, politics, quantum physics, genetics, the evolutionary history of the octopus, or whatever else fires my curiosity neurons.
I’ve always had a broad range of interests, but there was never enough time in the day. Now there still isn’t enough time, but I don’t want the day to stop.
I’m both less focussed and less distracted. Less focussed because there isn’t a ton of BS (client, business, and asshat-related) to deal with every day. Less distracted because there isn’t a ton of BS to deal with every day.
Humans reputedly thrive when they have mastery, autonomy, and purpose.
I don’t know about the mastery part. But autonomy and purpose mean everything to me.
Other good things about FIRE
I sleep better.
That low-level, chronic stress that afflicts every contemporary workplace: it’s gone.
My physical health is better. There wasn’t much wrong with me that not sitting at a desk for 10 hours a day wouldn’t fix. Now I don’t do any single thing for 10 hours a day.
I’m not worrying about money. I’m not obsessively checking my portfolio or fretting about spending.
I feel carefree again. For the first time since leaving school.
I’m staying in touch with people. Jumping on my bike to see old friends, catching up for breakfast, or having a natter in the garden.
There’s no fixed routine. No longer do I just ‘work, eat, sleep’ repeat.
Mrs Accumulator is happier, she reports. (I didn’t make her fill in an extensive questionnaire, I swear!)
We get to spend proper time together every day, instead of only at weekends and holidays. The weekdays when our only exchange was a bleary, “My god, what time is it?” at stupid ‘o’ clock are but a memory.
So it’s all rainbows post-FIRE?
Like anyone, I’m subject to negative thoughts even when quite content. They turn up like trains at my mind’s central station.
These trains may be on their way to You Should Be Earning More City or You’ve Given Up Street. The doors open, I decide not to board, and the train of thought departs. It’s followed by another one – usually more positive – seconds later.
I think this is normal? It’s part of the human condition, at least as I experience it. As long as I don’t take these thoughts seriously then they disappear.
Maybe I’m fooling myself. I could still be on a Financial Independence high. The real test could be lying in wait. Perhaps in six months, as the seasons turn colder.
We’ll see. Right now I think FIRE is the right prescription for me.
Hopefully I don’t sound too giddy. I genuinely don’t feel that way. I’m just in a good place.
This article on your kids’ financial future comes courtesy of Long Weekend from Team Monevator.Check back every Monday for more fresh perspectives from the Team.
Generation Alpha parents – those with kids born between 2010 and 2025 – need to get creative. Based on the traditional adult measures of success, our kids are screwed. They face monster student debt, job insecurity, and house prices to the moon.
Excelling in the school system may or may not pay off. Taking a job is being replaced by the entrepreneurial making of a job. Kids will need to cultivate a toolkit of strategic thinking and collaboration skills in order to solve new world problems in novel ways.
I don’t know about you but I was not familiar with this language – let alone the principles – until I entered the workplace.
In this brave new world, sitting down to plan your children’s accompanying money blueprint will never be time wasted.
Here are three ideas 1 for building your kids’ financial future.
1: Open a Junior ISA
The Junior ISA limit is now a generous £9,000 a year. That is a punchy number to fill every year, especially if there are siblings.
However let’s say you were able to put in the maximum from birth until your child(ren) hit 18 years. They would then leave school with a pot of £350,000, based on a 7% growth rate.
These kind of sums are only achievable by investing in the stock market via a stocks and shares JISA. In contrast, with a cash JISA your child will probably end up with less money than you invest in real terms, due to inflation.
Once you have overcome the first hurdle of saving £9,000 per child, you hit the second JISA challenge.
In the words of Gandalf the Grey “with great (investing) power, comes great responsibility”.
Your kids’ financial future in your hands
As the parent or guardian, you have a limited time window to positively influence your children’s financial literacy and hence your kids’ financial future.
They can access their JISA money in their late teens. Before then you’ll need to impart your hard-won wisdom on delayed gratification, saving for something special, giving to worthy causes, the power of compound interest, and budgeting.
They are not going to learn this stuff at school. It’s on you.
Regular automatic investing into a stocks & shares JISA sets your children up for success on their next adventure. That could be university, starting a business, or a deposit for a house. They will have money to put to work.
If you are new to investing, a JISA is a great training ground for buying and holding for the long-term. Once invested, only the junior recipient can access the funds on turning 18. This removes your ability to withdraw and hopefully the temptation to sell or tinker.
How to set up a Junior ISA
Estimated admin time: 1 hour
Select a low-cost broker from Monevator’sbroker table. I choose Charles Stanley Direct. Open the account online. This requires proof of ID and you’ll need to set yourself up as the nominated contributor to pay in funds.
Choose a low-cost fund, with global exposure. Do you own research but for ease take a look at Vanguard Lifestrategy 80% (accumulation). Invest a lump sum, or select monthly payments.
Save your the log-in details in LastPass. Then forget about the account, at least until the next tax year.
2: Open a Junior SIPP
My mum scoffed at me setting up a Junior pension for my daughter. The timeline of 60-plus years seemed meaningless. My mum argued that by the time my daughter could access the pension, she’d have her own money.
I see it differently. A Junior Self Invested Personal Pension (SIPP) is a wise investment.
Firstly, as with an adult pension, the government pays tax relief on a kid’s pension. This is the equivalent of 20% free money from the Government.
Parents or guardians can can pay in £2,880 and this is topped up to £3,600 per year. I will always take free money from the Government, thank you very much.
Secondly, the power of compounding works best on a long-time line. Sixty years is about as long as it gets!
Use the Monevator compound interest calculator to get a sense of what’s possible. An investment of £3,600 x 18 years, which is then left to compound 2 (no further contributions) until they are 60-years-old would give your precious a pension pot of £2.2million, from an initial investment of £50,000.
That is not a typo.
Admittedly £2m will be worth a whole lot less in 60 years. But it’s still a very generous patronage.
I plan to only tell my daughter about her family-funded pension when she’s established herself both personally and professionally. Imagine being told, aged 35-40 year, that there is money put aside that will allow you to pursue your passions, pay off your mortgage, and invest in your children’s and grandchildren’s future!
I’ll need to wait a long time to be proved right. That said, I’m feeling pretty bullish.
How to set up a Junior Pension
Estimated admin time: 1 hour
As per the ISA, select a low-cost broker. For the purposes of diversification and protection from Internet hacking, choose a different provider. For example Best Invest. Its pension performs well in terms of low fees
Again, choose a low-cost fund, with global exposure. Given the long investment timeline, you might help your kids’ future by choosing an ESG fund, too. Vanguard’s own ESG fund saw returns of 34% over the last 12 months. This growth isn’t sustainable (excuse the pun) but it proves that ESG investments needn’t inevitably compromise returns.
It will take roughly a month from investing to receive the extra Government 20% (max £720) into the account. Set a reminder to invest that, and then forget it until next year
3: School of Life investing
We’re witnessing explosive growth in DeFi (decentralised finance). If my child were in their late teens and obsessed with Roblox, Fortnite, and Axie, I would be tempted to set them up with a little money in an account, subscriptions to newsletters such as Real Vision and The Defiant, and suggest they put their metaverse skills to work.
With supervision, it’d be a fun, gamified, way to learn about returns, lending, and yields. It also flexes their research skills. It will help them find authentic and knowledgeable voices for advice. Most significantly, Defi is your kids’ financial future. It will impact their work, money and investing, communications, and ownership. Starting this learning journey early is only going to help.
In her coming secondary school years years, I also intend to gift my daughter roughly £1,000 to set up a business during the summer holidays.
Again, the learning curve is huge, from selecting a product or service, learning how to sell, problem solving, managing a budget, branding and IP.
I’ll be rooting for what she creates and hope her business succeeds.
But in this instance the journey will be more important than the destination.
In time you will be able to see all Long Weekend’s articles in her dedicated archive.
I’m not an accountant or financial advisor. I’m a mum who’s educated herself on personal finance. Please do your own research and make your own investment decisions.[↩]
This is based on the assumption that the annual investment of £2,880 remains the same for 18 years with an annualised return of 7% per year.[↩]
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Like Lennon and McCartney, sweet and sour pork, and Matt Hancock and his job, there are multiple tensions at the heart of Monevator.
Of course, both of us are full-square behind achieving financial independence – the FI component of FIRE.
That goes without saying!
Being so ill-versed in the FIRE community and lingo I only just discovered that the kids call my version of reaching it ‘Slow FIRE’.
Monevator reader Ian pointed me towards an article from Business Insider, which explains:
Slow FIRE practitioners focus on designing and achieving their FIRE lifestyle now.
This may include working remotely in order to create more flexibility in their lives.
It’s also a nod to the fact they will work longer in order to hit their FIRE number.
There’s no work-shaming because work factors heavily into Slow FIRE.
Yes! This is what I was trying to get at in You Don’t Have To Go Nuclear On Working For a Living. (In retrospect not such a catchy name for a movement, compared to Slow FIRE.)
I often read retirement bloggers saying they quit work because they couldn’t take kowtowing to The Man anymore.
Yes – The Man sucks – but it’s not a good reason to quit working.
Especially if you’re impoverishing yourself for the rest of your life to do so.
I believed that mostly working from home, mostly on projects I enjoyed, and on my own schedule was a more sustainable way to spend my life than:
killing myself in the rat race, or
jumping off a cliff like an exhausted lemming as soon as I believed I could meet my minimum spending requirements from some vast pool of cash I’d accumulated, just out of sight of my bedsit or RV.
I’ve got nothing against people retiring in their 40s after 20 years of frugality if they choose.
I don’t think it’s morally wrong, or anything silly like that.
You do you.
I’m just saying be sure you’ve thought about all the options first.
Not so shy and retiring
Someday I’ll make my case for this Slow FIRE business more coherently.
In the meantime, Party at the Moontower this week explained why he too is against the ‘retire early’ part of the mantra.
Despite his apparently just now retiring early!
Like me he’s sceptical that sustainable withdrawal rates (SWRs) are a golden bullet to ‘the hardest problem in finance’:
Solving for how much you need to save and for how long, solving for how much you can withdraw annually and for how long, all so you don’t outlive your money.
If you have walked through the Moontower Retirement Model you learned the levers — savings rates, longevity, and post-tax inflation-adjusted returns.
Every one of those terms is impossible to forecast. The problem suffers from intractable amounts of garbage inputs.
The value of the exercise is not the outputs, it’s for articulating the problem in the first place and gaining a low-res appreciation for the sensitivities.
Thinking about your likely SWR is indeed super-valuable. It makes you consider all the variables.
Also, if you’ve never encountered the idea of living off your investments before, then applying 4% to a pot of ‘some number’ can be mindblowing.
Fighting FIRE with fire
However beyond their thoughtprovoking, SWRs only do a perfect job of telling you how you would have done in the past.
Worse, they crumple the edges.
Their fans declare “of course you wouldn’t actually spend your money if you saw it was running out”…
Um, okay.
I’m practically a dinosaur in that I believe investing for income is a more intellectually credible way to prep your finances for a long period of living off them. I also hate the idea of spending my capital.
This means more money is needed, and perhaps some active management. Again, more on that some other day.
But none of this is to discredit The Accumulator’s wonderful work on SWRs.
I think his is probably the most readable deep take on the Internet.
The Accumulator has read widely – proper academic research papers and all . In contrast, as ever I’m a bundle of notions and hunches.
So you should certainly read through everything he says on the subject – it’s a goldmine – even if you reach a different conclusion.
Fee FI fo fum
The other solution to getting an income in your later years is to keep doing some work for money.
RE goes out the window, but FI remains front and centre in giving you options and buffers.
To again quote Moontower:
The idea that you can work until you are 75 or 80 is freeing IF you can do it on your terms. If you can take a break for a year sometimes. If you can work 4 days a week, or from wherever you want. If you actually enjoy bringing your uniqueness to the job to be done.
The definition of a sustainable life is one you actually want to sustain.
Nobody wants to sprint forever, and sprinting for a short while doesn’t make the scarcity mindset go away even if you “win”.
This is partly why rich people fear inflation. They thought they were “done”. What is “done” anyway?
Past experience tells me that plenty of you will disagree (which is fine!)
Smart and articulate people tell me they couldn’t do work they half-like on their own terms, although I’ve done just that for 20 years. Their only option is to cane it at a job they hate for the best years of their life, and to smell the roses at the weekends. And then to hope their SWR doesn’t blow up.
Again, okay…
Just be aware what you’re saying: can’t, won’t, will.
You’re just saying it in a different order to me.
Maybe it’s all a question of where we choose to put our limits and our faith and to see the uncertainties.
Happiness is a warm run in the stock market
I’m no zealot. The truth is after quitting my ‘big gig’ last year I’ve not put a lot of effort into ramping up my hours and income to replace it.
So maybe I’m leaning a bit more towards RE than I care to admit?
To his credit The Accumulator has also shifted over the years. He is at least trying out doing some work post-retirement.
Again, financial independence lets us both look for our middle ground.
I suppose I’m saying that 40-50 years is a long time to plan to drop out. I doubt even Lennon would have managed that, though sadly he never got the chance.
Too much leisure time is probably counterproductive, anyway. Studies suggest there’s a sweet spot:
Employed people’s ratings of their satisfaction with life peaked when they had in the neighborhood of two and a half hours of free time a day.
For people who didn’t work, the optimal amount was four hours and 45 minutes.
Working for just a couple of hours a day – or a couple of full days a week – leaves you abundant time to learn Swahili or to see your grandkids.
And a small amount of income is worth a lot. Many years ago I pointed out that £5 a day was worth around £90,000. Today it’d be even more.
Earning to keep FIRE burning
Consider planning to earn a couple of hundred quid a week indefinitely. I suspect you’ll be happier.
It doesn’t have to be working from home or side hustling, either.
A sociable friend of mine wants to retire in her 50s to do a couple of days a week in an independent coffee shop. Some of her fondest memories are of part-time work at Starbucks as a student.
There was seeing the regulars, the free coffees, the short walk to the ‘office’, the lack of responsibility, and being usefully whacked at the end of the day.
It’s not my bag. But then, writing this post on a sunny Saturday morning in bed wouldn’t be hers.
You’re too late to get into buy-to-let. It had a good run, but the party’s over.
I graduated from university in the early 1990s. I got a job in The City, moved down to London, and shared a rented house with a few friends.
After a year of renting – and spurred on by a combination of parental pressure, MIRAS 1, and (ludicrously) a mortgage interest subsidy from my employer – I bought a house.
Did I have a big inheritance? No. I saved up for the deposit in my first year of work.
Okay, that’s not actually quite true. I also had some profits from punting my student loan on the stock market, the proceeds of a systematic building society carpet-bagging operation, and a well-timed cash withdrawal on my credit card.
Combined this took me over the line into buying my own house.
And yes, I do mean a house – as opposed to a flat, let alone a bedsit.
My deposit plus salary secured a three-bedroom, freehold house with a garden and garage, in Zone 1, 30 minutes walk from my job in the City.
Even I cringe a bit as I write this. Sorry, millennials.
I paid £130,000 for this house and spent the autumn weekends decorating it to the incessant radio play of Whigfield’s Saturday Night.
Then, for a while, I just couldn’t get enough of the things.
My property portfolio balloons
I got my first ‘proper’ bonus (two figures!) soon after I bought that first property.
While my colleagues were spending their windfalls in Clerkenwell dives doing shots from lap-dancers’ bellybuttons, I was at home eating toast, reading about newly-launched buy-to-let mortgages, and perusing the property section of the Evening Standard.
And so, barely two years after buying my first house, I bought a second.
This one was an ex-local authority three-to-four bedroom property. I picked it up for £75,000. After a lick-of-paint I let it out for £600 a month.
That’s a starting gross yield of nearly 10%.
Soon afterwards, newly married, I left London for a pointless dormitory town in the commuter belt. I moved into a house I bought with my wife, for which I paid – cough – less than I earned that year.
And of course I kept my original home in London to let out.
Because why would I not?
Buy-to-let boom
In those open and liberal Blair years London was booming. As the de facto financial capital of the European Union, it sucked in talent and money from all over the world.
From American investment bankers and French derivatives traders to Polish plumbers and Italian waiters, everyone wanted to be in London.
Which meant London property prices were going through the roof:
Shortly after leaving London, I bought three more properties in a single year. My wife still reminds me of the time I went out for a newspaper one Saturday morning and came back with a two-bedroom flat.
By this time I’d worked it out. I raised equity against my steadily appreciating London properties for a deposit on the local ones. This way I put no money down.
It was like I’d discovered a perpetual money machine!
Only… the machine started to sputter a bit. The problem was that while house prices kept going up, rents did not. Starting yields were decreasing.
This was largely a story of falling interest rates. Property was like a very long duration lightly-inflation-linked bond. Prices moved accordingly.
The landlord game was also getting more competitive because more people were doing it.
Buy-to-let had become… a thing.
Too late to get into buy-to-let for big bucks
You know the old adage that an optimist is someone without much experience?
Well, that was me.
I started out on my property ‘journey’ as YouTube pundits call it by guessing that my costs would be about 10% of the rent. That wasn’t far off, to begin with.
But as rents increased more slowly than my expenses, the economics got steadily worse.
Then there’s the ‘exceptional’ costs that nobody warns you about. Or, if they do, you don’t think they’ll happen to you.
What sort of expenses? This sort of thing:
Double-crossing agent
The agent for a London property reports the tenants aren’t paying the rent. Letters and threats of legal action are (supposedly) sent to the tenants. Rent is received sporadically over the next couple of years. It turned out the tenants were paying the rent all along. The agent kept it himself. Agent declares bankruptcy, directors leave the country. Loss to me? About £18,000.
Shit happens
Tenant moves in, pays deposit and the first month’s rent. Never pays a penny more. Takes 14 months to get them out of my property through the courts. On taking possession I find their dog has eaten all of the internal woodwork. And when I say all, I mean all: doors, skirting, architrave, even the window sills. The back garden had been destroyed. It was like some combination of a First World War trench and 14 months worth of dog shit. I still wake up in a cold sweat, thinking about that day I spent in a HazMat suit digging out two-foot of shit to replace it with topsoil. Loss to me? About £15,000 (not including sleepless nights).
Size matters
That first rental I bought in London, which I’d always let to three sharers, is suddenly designated a ‘HMO’ by the local authority. (It’s not). So obviously I have to pay them £500 and spend several hours filling in pointless forms. Oh, and I can only let it to two people now – because of some arcane bedroom size restrictions. (Ironically it was the local authority that built this property…) Perpetual rental income reduced by a third. It’s hard to quantify the loss here – what discount rate to use? It’s a lot, anyway.
Party walls
My personal favorite – not because of the cost, but because of the timing. A builder is completely refurbishing a London property for me. It’s a big job, including moving walls and bathrooms and so on. Randomly I get a bill, in the post, from the police, for something like £300. They’ve attended an ‘incident’ at the property. Turns out that unbeknownst to me the builder’s laborers had been sleeping on-site. They’d got drunk one night, had a fight, and the police were called. When did this bill arrive? I think you can guess – the day after I’d paid the builder his final payment.
Once you factor this sort of thing in, along with the more regular stuff – the boilers, the double-glazing, the roof replacement, the damp that just WILL NOT go away – my 10% expense estimate was hopelessly naive.
Too late to get into buy-to-let – and too much hassle
I can now look back at more than 25 years of accounts from my modest buy-to-let empire. Starting with one property, with seven at the peak and with three remaining today.
Which means I can tell you, exactly, how much the non-interest costs were as a fraction of the rent:
31.4%!
Call it a third. Wow.
I do use agents to fully manage the properties, and they are expensive. But I will not be being phoned in the middle because of a blocked toilet. Not when I’m working 16 hours a day at an investment bank. (Okay, I don’t do that anymore, but I’m still not going to field those calls).
And this is why it is too late to get into buy-to-let. Along with falling rental yields, the trend in costs is only rising.
There have been lots rule changes over the years that have made things worse:
The PRA’s CP11/16 (which means you can’t borrow as easily)
Arbitrary and retrospective ‘HMO’ rules
All-sorts of safety and environmental regulations
So called ‘right-to-rent’ law that compels landlords to be a tool for the government’s cruel and damaging immigration policies
That was all off the top of my head – I didn’t even need to consult a list.
Now, don’t get me wrong. In isolation there’s nothing inherently wrong with most these rules (the exception being the last one) and the health and safety aspects are especially reasonable.
But the mood music is pretty clear. The government believes it can impose these costs on landlords because we are all loaded.
It’s not 1994 anymore
How loaded?
The average gross yield on my property portfolio is now – checks notes – 3.4%. Which implies that the long-run post-cost (excluding financing) yield is about 2.3%.
That is… not enough. Especially as there’s no tax shelter.
My property portfolio has been an enormous accelerator of my wealth over the years. But the easy times are over. My success came about almost completely as a result of falling interest rates.
I simply got leveraged lucky.
Some newcomers may try to make the maths work by getting into buy-to-let via a limited company or whatnot. I’d question whether it’s worth the hassle. In my view it’s too late to get into buy-to-let to make a killing. It’s not 1994 anymore.
Whigfield is more likely to have another global hit than you are to get rich investing in property at today’s starting yields. “Da ba da dan dee dee dee da nee na na na” indeed.
If you enjoyed this, follow Finumus on Twitter or read his other articles for Monevator.
Mortgage Interest Relief At Source, a defunct tax relief scheme to encourage home ownership in the UK.[↩]
