What caught my eye this week.

I admit that marking the work of the Bank of England is probably above my pay grade.

However listening to this week’s episode of A Long Time In Finance didn’t exactly have me reaching for gold stars for the Old Lady.

The title – The Great QE Rip-Off – sets the tone for where the podcast is coming from, as does the show’s blurb:

Christopher Mahon of Columbia Threadneedle talks to Jonathan and Neil about how the Bank of England bought government stocks and sold them back at a loss.

One example: paying £101 (QE) and later selling it for £28 (QT).

The cost of this insane behaviour to the taxpayer? Probably over £115 billion.

It’s an interesting listen for sure. However I’d suggest the podcast makes things harder to follow than they need be.

That’s because it’s only at the end of the episode that Mr. Mahon explains how the Bank’s chosen course of action is directly costing the taxpayer.

Mahon’s contention is that by dumping long duration gilts into a pretty illiquid market that doesn’t hugely want them, the Bank is putting upwards pressure on yields.

This is increasing government (/taxpayer) borrowing costs – and at a time when we can ill-afford the extra burden.

Cue poor returns

Such market timing and yield curve distortion issues aside, it seems to me the BoE bought its expected returns when it made its gilt purchases, just like any of us do when we buy a portfolio of bonds.

And those returns were never going to be pretty, given it was buying near-zero yield bonds in 2020, for instance.

However QE1 was done for a reason.

You remember? It was to ward off a depression during the financial crisis years, and to support an economy that was all but switched off at times with Covid.

Hence any proper accounting of ‘the cost to the taxpayer’ from the BoE’s profit and loss agnostic bond trading strategy should take into account what would have happened if the Bank had bought different bonds or assets. Or even if it had done nothing at all.

Who knows? £115bn might be a snip compared to the cost of going into a depression.

Perhaps with all the unknowns, working out the true cost and benefit of QE and QT2 is beyond everyone’s pay grade.

At least if the bond rout of 2022 left you feeling bruised and befuddled then you might be comforted to hear the Bank of England doesn’t seem to have gotten through the regime change any better!

Related reading:

• Is the long gilt sell-off an opportunity? – Interactive Investor [Affiliate link]
• Europe can escape a bond doom loop. The US, not so much – Reuters

Have a great weekend!

[continue reading…]

1. Quantitative Easing. [↩]
2. Quantitative Tightening. [↩]

Welcome back to the Monevator den! This time we’re talking to ‘Part-time Analyst’, a longtime reader and newly-minted very early retiree who was able to quit work when his employer was acquired. What happens when you make work optional many years before your 40th birthday?

A place by the FIRE

Hello! How do you feel about taking stock of your financial life today?

I feel good. Getting into this position has taken a lot of work – at times probably too much work. But the outcome feels a good one.

Looking forwards, my goal is to have a good enough financial situation, and for life to be more enjoyable again.

How old are you?

I’m 35. The young’uns will consider me old. But for many older readers I’m probably still just a baby.

I’m at that age where my body starts to hurt if I don’t look after myself – and where that third pint requires deep consideration!

Do you have any dependents?

No. This could have happened by now without much change in circumstances, but it hasn’t.

Whereabouts do you live and what’s it like there?

I live in the north of England. Near one of the fairly numerous national parks, but in a suburban area. Houses are cheap, but I would like to move somewhere more rural at some point. The south might have its fancy jobs, but the north is a beautiful place.

I did not grow up here. I moved for work, but there was no real plan. I was open to opportunities, and this is what happened.

I graduated after the financial crash, so it was a brutal graduate market. You just had to find a job wherever someone would take you.

It felt a lot easier once I had that first job and had ‘paid my dues’.

When do you consider you achieved Financial Independence and why?

I entered that territory in the last couple of years. It helps that I prefer to spend time rather than money.

I got a boost two years ago as the company I worked for was sold, and stock options were a key part of my renumeration.

My final year of work was a strong one financially, which was a helpful boost too.

Since then I’ve had over a year without employment. I broke even when considering income, investments gains and expenses in the financial year to April 2025, but things have been much more positive since.

Mr Trump’s tariff obsessions impacted the year-end, and everything has since bounced back. All the same I hope there will be less silliness going forwards. 

What about Retired Early?

I guess I ‘retired’ one year ago. I was worn out by work, needed something different and the whole 9-5 thing wasn’t working for me.

I don’t think I could have continued working without some sort of break or extended time off. A sabbatical was discussed, but I just wasn’t feeling it. And so the more nuclear option. 

I have a nice routine beyond the world of work – and to be honest a return from here back to a 9-5 would be intolerable. I can pursue whatever projects I want and I get to enjoy the sunshine even if it fails to come on a weekend.

It took a bit of adapting, but this new world is a world of increased freedom. 

I could return to doing projects without doing the whole 9-5 thing, but while the skills are still there, the fire has gone out.

To quote The Matrix: “You have been down there, Neo. You know that road. You know exactly where it ends.”

I feel I’ve experienced all I wanted to experience in that world. Time for something new.

Did you expect to get an outsized early payout from joining the startup? Were there any trade-offs, such as the potential for a higher starting salary elsewhere?

No. I don’t think I can stress enough how little companies wanted to employ me upon graduating.

I had a very good degree and so I found that frustrating. But in the end I just started searching for roles with few other applicants.

This one had very few. It wasn’t the best role or salary, but it was a starting point.

I worked for quite a number of years before there became a possibility of any outsized payout. In the early years I didn’t worry too much, and never pushed for more salary. I was developing rapidly and the company was developing rapidly too.

As time went by, it was obvious that I was able to perform at a much higher than normal level. Then stock options came along as a way to keep me tied to the business long-term.

Assets: altogether now

What’s your current net worth?

I retain a small stake in the company that bought the one I worked for. That will provide additional capital one day. But I’m no longer close enough to have a feel for a realistic value.

In all honesty, I’m happier to treat it like it doesn’t exist, rather than speculate on it. In a Bleak House sort of way, that type of speculation can make you unhappy.

Otherwise at my assumed rates of returns I should cross over the £2m threshold this time next year. This includes all my non-company assets, including my home.

The latter was relatively inexpensive, and so the majority of my assets are productive, and income-generating. 

I ultimately got into this position through career success, and by not having much in the way of wasteful spending. I didn’t really have any spare energy to focus on investing money and there are no abnormal returns in my backstory.

It was tiring enough just getting through the working week.

What makes up your net worth?

Using the latest value from Zoopla, 17% of my wealth is in my home.

If I use the cost price plus interest paid, then 15% of my wealth has gone into my home.

I could have moved somewhere nicer, but it’s pleasant to live here. I’ve been very happy.

Excluding the home component:

• 41% of what remains is in some form of cash
• 25% in passive investments (Vanguard funds)
• 20% in active investments (outside of tax shelters)
• 10% in a pension or LISA (both with active investments)
• 5% in an ISA (active investments)

If I go back two years the same percentages are:

• 56% cash
• 23% passive investments
• 10% active investments
• 8% pension (Nest at this point)
• 3% ISA (active investments)

I have historically focused on cash. A year from now, I’m expecting the cash percentage to drop to 24%, and for the active investment allocation to have risen considerably.

I want to be sure about active investments before I push that allocation further. Otherwise it will go towards passive investing.

What’s your main residence like?

It’s nice. It wasn’t that expensive. Just over a quarter of a million pounds.

I own it outright. I paid extra each month on the mortgage and paid it off reasonably fast, so the total interest payments were not high.

It probably wasn’t financially optimal but it felt good to pay-off the mortgage early. That had some motivational value.

The garden is large for a suburban area, but it needed a lot of work. I mostly did it myself.

It’s the nicest house I could have hoped for in this price range. I could stay here forever and be reasonably happy. The house is just about big enough to accommodate whatever turns life takes.

Do you consider your home an asset, an investment, or something else?

You have to live somewhere – so the part of your home that covers somewhere to live and basic maintenance is a liability and cost.

Beyond that it’s an investment of excess capital in your personal happiness.

Unless you have a lodger, you have no cash yield from a home. So it’s not as useful as other investments financially. 

Earning: a little then a lot

What was your job?

Aside from summer jobs, I only ever had one employer. I would largely just slot in wherever I was most needed at the time.

This meant a very diverse role. I was happy to do anything and would focus on whatever added the most value to the business.

The company was incredibly small when I joined it. While it had customers and revenues, it was a modest setup. I came in after the founders of the business, but as time went by I earned a special status from having been part of the early efforts to establish the business as something more substantial.

Fundamentally, I was a good analyst, who at a secondary level could take to anything to a reasonable standard. A blend of software, analytics, and sales was where I focused – and where I would encourage any younger reader to position themselves. If you want to be effective and/or well-paid, you shouldn’t skip the commercial capability.

The software side has been made much easier by AI. That largely replaces a site called Stack Overflow, which us oldies used for learning or getting something to function properly.

Focusing on software without analytical or commercial skills is possibly risky these days. But I have a lot of admiration for the elite top-tier software guys.

What was your annual income?

The structure of my renumeration was I’d get a relatively low level of guaranteed income. Then I’d get stock options and bonuses based upon the overall business performance.

So, basic salary for most of my time in employment averaged around £40-50,000 – increasing in later years as cost-of-living rises fed through. Bonuses were highly variable and could push me up into six-figures. But ultimately renumeration was weighted towards stock options.

Options have very favourable tax implications – especially as my scheme was eligible for Entrepreneurs Relief – but on the flip-side there are emotional implications to having your income focused down such a route. Towards the end I felt the weight of the uncertainty. 

It was an unusual approach, and I don’t remember there being much discussion about how it was structured. It just evolved over time. The business valued me. It wanted to keep me around and motivated. In return I took the success of the company seriously.

Once I knew a sale was a strong possibility, I focused all my energies on helping the company through the sale process as smoothly as possible. This took a lot of effort, but the additional effort put in at this time also helped when it became time for me to leave.

It was stressful for everyone involved, and not something I’d be excited to repeat again.

How did your career and salary progress over the years?

I was good at my job and progressed quickly. But I was better at making decisions than being told what to do, which could cause issues. When I was told what to do, I often suffered with selective hearing. But I got enough right to get away with my approach. 

Despite otherwise having a natural aptitude for the work, I found it tiring and overwhelming. I found it hard to work without maximum intensity, so being able to step back was always on my mind.

My original plan was to seek reduced hours, rather than to stop so soon. But in the end I felt too tired to go down that route. 

In my role I took a lot of responsibility for making sure that everything was progressing, everything was working, and that customers were as happy as they could be. There are financial benefits to this sort of role, but it’s a lot tougher mentally than one where you come in and perform a function. 

If I had done a more functional role, I would almost certainly still be working – but I’d probably also be happier to still be working.

Maybe I also would have picked up investments earlier as a sideline and worked my way out via that route.

Did you learn anything about building your career and growing income that you wished you’d known earlier?

Not really, no. I was well-informed. I did additional accountancy and management modules at university, which were incredibly useful. So I was well-prepared.

It really does help if you can build that core skill base early.

Do you have any other sources of income?

All my income is from assets and investments. I have some projects that might ultimately produce an income, but which so far just consume time and effort. I don’t take them particularly seriously. They are just fun to do.

In cash terms I have a consistent post-tax income of around £50-60,000 per annum – and my belief is I should average about £80-90,000 post-tax per annum, including gains.

The gains component is very up and down. Last year was terrible, this year feels like it will be excellent – although now as we head into September the market has its negative hat back on, so we’ll have to see. Overall it will be unpredictable!

You have to adjust to the emotional impact of the volatility. As humans I think we find it hard when things are not progressing in a linear way.

The reality is that over a few months you can see a drop in asset values that exceeds what you expect to earn annually. Those months can feel uncomfortable. You have to find something else to do – other ways to keep your mind busy.

Did pursuing FIRE get in the way of your career?

No – it was all tied in as one neat package. Success at work was the biggest step towards financial independence. I went all-in for that success. 

Saving: modest outgoings

What is your annual spending? How has this changed over time?

The last three years – including an estimate for 2025-26 – total spending sits in the £20-22,000 range. The prior two years it was about £15-16,000. 

If I ignore one-off items, over this five-year period there has been a steadier climb from spending £11,000 in the first year, to £13,000 two years ago, before a jump to £18,000 in the last two years. That’s more reflective of the underlying changes in my spending activity. Going further back my pre-rent or pre-mortgage spending was about £10-11,000.

There are no mortgage costs in any of those figures to maintain consistency. If added on, the first two years would be increased by £3,000 and £2,000. I’ve spent a chunk of money fixing things around the house in recent years. These have driven a lot of the one-off costs. But everything is now in very good condition, so these costs should not continue.

The last two years I’ve also spent more on food and travel. Extra travel adds around £4,000 per year, so that is the main uplift. I’ve made lots of trips out over one, two, or sometimes three days. I find these slot into life without too much disruption and add a lot of joy.

I’ve always been increasing spending on food. This has been about buying better quality produce, rather than due to the impact of cost inflation.

Do you stick to a budget or otherwise structure your spending?

I use Snoop to keep track of what I spend. It automatically categorises most spending. I feed that into software that I also use to track investments, asset positions, and to do tax calculations.

I like to see what I am doing, but I set no budgets. Without spending money pointlessly, I’m happy to increase spending.

Are you using the 4% rule or similar to manage your drawdown and spending?

The cash kicked off by investments and other assets covers spending and leaves an excess that can be fed into new investments. So long as my investments don’t make a loss bigger than that excess I’m in growth mode. 

What percentage of your gross income did you save over the years?

I’ve always saved some money – otherwise you are working for nothing on a net basis.

Initially this was about 10-15% when my income was low. It stayed flat for the first few years. As my income grew, the percentage climbed significantly. However it would vary year-to-year with overall income levels.

On a cash basis I retained 37% of income last year. But on an overall basis, including investment gains, there was nothing saved, as losses offset that net income.

This year I expect to retain 49% in cash terms – and including investment gains I expect to retain about 70%. This second figure will change and cannot be predicted accurately.

I’m still getting used to this new way of doing things, but the reliability of cash returns does make it all much easier to manage.

I have learned not to read too much into investment gains. They can come and go in very extreme ways.

What’s the secret to saving more money?

If your income is low, you might be able to maximise your situation by not having a daily coffee. But everything comes down to personal priorities, and not spending money where it doesn’t contribute anything.

If a daily coffee means a lot to you, go out and buy it. But if it’s a habit that stems from laziness, then there is a potential improvement to be made.

If you’re being lazy out of tiredness, you may also need to go easy on yourself and accept your situation. It’s too easy to shout advice from an ivory tower and to be critical.

Do you have any specific hints about spending less?

Probably just don’t buy that thing you will use twice and never use again! Save your money for things you will use regularly. Sometimes spending is more a habit than a requirement.

If you have something you’ve spent good money on and never used, maybe put it in the hallway as a memorial to your earlier stupidity. We all have these items in our homes somewhere. I also find giving them away helps to stop me being so wasteful in future.

Do you have any passions or vices that eat up your income?

Mostly trips out. Those are trips I really enjoy though.

I do short trips on a regular basis from April through to October, weather permitting. The winter months are my time for doing anything productive.

My trips are mostly spent walking. Over the past year I’ve been lucky enough to explore numerous new areas of the UK. I’ve gone further afield for some trips, but it generally fits better alongside day-to-day life if I stay within the UK.

Investing: exploration mode

What kind of investor are you?

As a young lad in my twenties I was very interested in active investing and it was what I wanted for a career. But I went and did other things.

Throughout employment I had a Nest pension, which I’ve been impressed by in terms of its relentless consistency. 

I also wrote an investing blog at this time. Thankfully it was deleted, and no record exists. I find it hard to look back on anything I wrote in my early 20s without cringing. I don’t think I would like meeting younger me.

The success of my Nest pension has moderated my active tendencies somewhat, and I’m much more cautious these days. But equally I still have that arrogance and belief in my analytical capabilities – if given enough time and energy. This may be my downfall, or it may be the further making of me.

My passive investments are my best performing investments so far. I’m now heavily UK-focused, with a 78% allocation.

Until a year ago I had more of a spread across the world, and an even stock-bond split. But I perceive risks in other markets that I just don’t see in the UK. The UK market also has a lot of exposure to globally active companies. You aren’t really losing anything except exposure to the big tech monstrosities.

My passive investments are now also 100% stocks. This helped reduce my tax bill without much change in the overall yields.

The rest of the investments are active. I have specialised in taking positions that others find uncomfortable – with positions generally sized around £20,000. But my largest investments can be much bigger, and my smallest can be tiny.

I don’t mind paper losses, and although I do sometimes change my mind, I have more trust in my analysis than in Mr Market’s emotional struggles.

It’s too early to say if I am good at this though.

What was your best investment?

So far, Direct Line. The yield looked strong when I bought in. Although the share price went on a bit of a rollercoaster ride, I’ve pretty much doubled my £20,000 investment. 

I didn’t do much investment analysis. I was more just targeting the weaknesses of the insurance market due to cost inflation, particularly the car insurance market. A company just had to look sufficiently solvent.

If there hadn’t been a takeover – Aviva has just acquired Direct Line at a good price – I suspect I would probably still be net flat on this investment.

Your best investments are the ones where the stars align most easily.

Did you make any big mistakes on your investing journey?

Many! Mostly around very small companies on the AIM market – a.k.a. the pirate kingdom.

AIM has some good and promising companies, but there are also chancers and charlatans. It can be hard to tell the difference, which is a shame. Part of me still wants to try and find the good ones, but I think that is more about the challenge than any rational strategy.

My biggest mistake was investing in an early competitor of WhatsApp back in 2010. It was too speculative for my position size, and their approach was wrong. Obviously, WhatsApp went on to do okay… but I lost a lot of money.

In the early days when you have little capital, it’s tempting to push the risk profile. But you need to trust the process and take it steady – or just get out of investing completely.

What has been your overall return, as best you can tell?

I always had a Nest pension and that always had decent returns, so my first big shift back towards investing was via passive investments, about three years ago. These returned 8.8% in 2023-24, 6.1% in 2024-25, and as I speak are up 9.3% since April 2025. 

Active investing has grown more slowly over time, with more experimentation initially. In this experimentation phase I returned 1.3% over a one-year period to the end of April 2024. I saw some big losses in small AIM companies in a side portfolio. The worst investment was a 100% loss of invested value, and I now avoid these types of companies.

Since May 2024 I’ve had more time to focus on active investing – and I feel I’ve been improving – but the numbers don’t yet report anything too positive.

Weighted for capital deployed, I am down 6.0% since May 2024 – having peaked at +9.3% in November 2024 – and bottoming at -11.9% this April. 

I’m happy with how things are going. But I will track active versus passive over time and adjust allocations accordingly.

How much have you been able to fill your ISA and pensions?

I didn’t use the ISA contributions anywhere near as well as I should have. It just wasn’t a focus, but that is no good excuse.

These days I use every possible allowance religiously. I also have a LISA to correct for my now more limited pension contribution capabilities.

It’s a lot easier to do the right thing when you have more time on your hands.

To what extent did tax incentives and shelters influence your strategy?

I’m more willing to sell a gain inside a tax shelter. Outside I’m more likely to hold and take the yield. 

Otherwise, I try and factor tax into every decision I make. For example, a 3.5% savings bonds yields 2.8% after lower-rate interest tax of 20%, while the FTSE 100 at 3.5% would still yield 3.24%, after the lower-rate dividend tax of 8.75%.

This is something I consider when deciding what to hold. Along with other relevant factors of course.

I also hold Premium Bonds and use tax-free allowances to help keep me below higher-rate tax thresholds.

How often do you check or tweak your portfolio or other investments?

These days the whole process is much more rigorous, but with very few changes to held positions.

When I come across a potential new share of interest, I add it to a list. When I have time, I work through each of the shares I’ve listed to see if they are worth spending more time on. 

If something looks promising, I’ll eventually get round to doing a half day of analysis. I’ll then come up with a buy point, a tax-free sell point, and a sell point. These prices are based upon the underlying profits, cash flows, and the overall asset position. The tax-free sell point applies both to tax shelters and whether I can sell without capital gains, be that through my allowances or offsetting against losses.

This lengthy process slows down the rate of my taking new positions. But I can do a lot of half days of analysis during the cold winter months.

How do you set those various points?

My buy point generally targets 10% underlying cash generation from the business – although I’m increasingly targeting 12-15% as this seems to be more where the market hits lows. The sell point is usually at a 5% underlying cashflow yield.

My buy and sell points may change with company updates. But they generally don’t move much in the near-term. 

I don’t re-invest dividends. Instead, the cash cycles into my bank account. From there it goes into new investments – whether expanding existing positions or taking new positions. 

Software recalculates all the positions each day, and shows an update of which investments are in range to buy or sell. But while some weeks I might be looking at things daily, on others I won’t look at all. It depends on what I am doing at the time – and often on what the weather is doing!

With bigger positions I do a lot more re-analysis on an on-going basis. The cost of an error on these is more significant.

If a big holding is rising, I have a bad habit of watching it go up. But if it’s falling I seem to not have this problem.

How strict are you with these allocations and the process?

Each month I have a calculation which tells me how much – if anything – can be added to the investment pots. This is what ensures a minimum cash buffer is maintained.

I run this as low as I can based upon the next 12 months of expected cash movements. So if I go against it, I’ll likely end up having to dismantle positions to get through the month.

The buffer is usually about £10,000 and currently earns 3.3%. So it’s not a big issue to maintain and I stick to it well.

The focus on yield is ultimately a focus on cash and cash flow. For an individual business I am not quite so strict, as I can go deeper and look into underlying cash flow, extract one-off items, and get a picture of how much underlying cash is being generated by a business. The goal is then to buy at a good multiple to this cash flow – ideally less than ten times – in businesses that should grow and thrive over time.

In some cases this cash will get re-invested by the business in a way that is clearly one-off. But normally there will be a level of yield from the payouts.

My largest individual holding doesn’t actually pay a yield and I don’t require a yield. But I do expect a healthy yield from all investments in future years. 

Shifting to the level of an index fund, overall yield is my indicator of the quality of the index. This may not be perfect, but if businesses can between them pay out 3% of my invested funds in dividends, then between them they are probably well run from a cash perspective. Whereas with a yield at 1% I’m not sure how I really know the same thing.

The cost of this approach is that it will downplay the contribution of re-investing businesses. But from the passive side, I want businesses generating and distributing cash in the here and now, not those relying on what might be at a later date.

In my head some of the businesses must be in a phase where they have excess capital. So a low yield suggests over-retention of funds, or hyped valuations.

Why aren’t you pursuing a total return strategy, where you sell a proportion of capital to generate an income? I wouldn’t either – but it is the standard approach nowadays.

As a way to extract money from capital, dividends are ideal, because at the lower band the tax rate is only 8.75%. If I were selling holdings to get the same money I’d either use precious capital gains allowances, pay higher capital gains tax, or be selling a holding below cost. So it definitely helps to get money out this way.

Interest has been less good because that comes at a price of 20%.

Wealth: big up north

We know how you made your money, but how did you keep it?

The big win for me has been the low cost of housing. This means I haven’t spent much on mortgage interest – and I’ve maximised working capital. This increases the amount of cash flowing into my bank from those assets.

It has helped living up north, as down south the same house would have probably cost at least £500,000 – which could have easily added £250,000 in interest costs on top. You benefit from higher house price appreciation in the south, but it still would have made what I’m doing far more difficult. It helps that I prefer the north.

A photo from FIRE-facilitated summer wanderings. We could write ‘Part-time Analyst opened a gateway to a new life’ as a caption. But we’ll resist. Sort of.

Which is more important, saving or investing, and why?

Initially saving and then investing. You need to get that first real tranche of capital before you start getting meaningful results from investing.

Investing can be a bit pointless until you have enough capital. Also you can get tempted into high-risk opportunities when you don’t have enough money.

When did you think you’d achieve financial freedom – and was it a goal with a timeline?

Five years or so ago I knew I’d pay off the house, and then get enough capital together to have a second income stream. My goal was a phased reduction in work hours, stretching it all out a bit longer – but the faster approach that transpired has worked out so far.

In many ways financial freedom became more of a goal once I actually stopped working. When you do stop, you suddenly realise just how much you had been doing.

My belief now is we get through the working week more on adrenaline than anything else. Once I stopped, my body seemed to realise it could start to pay down that debt of energy.

It’s only now that I am back to full energy levels again.

Did anything unexpected get in your way?

Not really, no. It was all pretty smooth in the end.

And you are still growing your pot?

I’ll be positive: the pot will grow this year.

Do you have any further financial goals?

It would be good to move to a house in the countryside rather than living in the suburbs. I can’t do this with my currently accessible capital without going back to work but I think it will be possible longer term.

What would you say to Monevator readers pursuing financial freedom?

Once you have got enough working capital, the transition from a regular income isn’t as big an issue as you would think.

• I pay dividends and interest into my main account. Then if my main account is short, I top-up from a buffer.
• If I have an excess in my main account, it first refills the buffer, and then additional excess goes into new investments.
• I calculate the buffer required for the next 12 months. That tells me what actions to take.

What you do need is enough of a cash yield from your investments to keep money flowing through the system. If those all fall at one point in the year, that’s fine and you just need a bigger buffer. If not you can get away with a smaller buffer.

On a more negative note, while work is not everything, one thing you realise when you step away from a 9-5 is how much society and people’s lives are centred around the workplace.

Not working a 9-5 can set you apart. I often find it easiest to bend the truth about what I’m doing. So I spend some of my time roleplaying a normal working person, just to fit in.

Hah – how so? Do you claim you’re a consultant? A self-directed investor?

Generally people don’t ask too many questions, although it’s obvious that some aspects make them very curious. Particularly in summer, as then I’m often out and about enjoying the outdoors.

People I know well understand the situation, but to everyone else I just imply that I have flexible working, and if there are questions I normally just say I do software work. No one asks more questions once you say you do software work!

There is something people don’t like about this way of doing things. If people know about it, you tend to get a lot of explanations about how you need work to give you structure and blah blah blah. As a species we seem to like the whole ‘going to work thing’, and don’t like people to venture outside the lines.

So generally I let them wonder. I find that things go a bit smoother – with a bit less life advice – if you’re more controlled in terms of how much you share.

In the weeds: thinking fast and slow

When did you first start thinking about money and investing?

I’ve always been analytical. There is a side of me where I like to prove how smart I am, even if just to myself.

I got more focused on investing at university, thanks to courses on investments. Initially it felt like a good way to prove myself. These days it’s a way to give me what I want from life, and to keep myself entertained while doing something that feels productive. 

It strikes me you were set on a good track in terms of saving and investing, and then your strategy was effectively ‘derailed’ by the windfall.

A nice kind of derailed, sure! But do you ever wonder how things might have progressed along traditional long-term ‘snowball’ lines?

The work I was doing was intense. Really, you don’t do that level of work without some sort of payoff on the horizon. If I’d been the same employee, but without being willing to take on the same responsibilities, then yes – for sure I would have been able to achieve a traditional long-term snowball. I could also have spent more time on side activities.

Under that alternate path, I wouldn’t be so far along yet – but it probably would have been an easier journey.

Maybe it would be fun to start over and do it via the slower route. But a work career is never predictable – as we saw with Ermine’s FIRE story – so I feel it’s probably best just to take the fast route, whenever that becomes possible.

Did any individuals inspire you to become financially free or succeed in your career?

No, it’s more about how I’m wired. My natural instinct is to work too hard – and that is a big negative. The balance is much better now I’ve stopped working. 

Can you recommend your favourite resources for anyone chasing the FIRE dream?

To cover the basics, a book I recommend to everyone is a Financial Times book: The Definitive Companion to Investment and the Financial Markets. This gave me my initial grounding for investments and finance. It’s a great starting point.

For more detail, the resource I’ve used the most is Monevator. I find it particularly useful for reference on obscure rules. There isn’t much else that helps you. 

More conceptually – and as a motivational starting point – I would recommend The Richest Man in Babylon. This focuses more on why you should set some money aside each month, and why you shouldn’t worry too much about losing money as you start out. It’s a bit corny in places, but you can read it for free on the Internet these days.

Going deeper into investing, I think the final recommendation would be Devil Take the Hindmost. It’s a history of bubbles through time. Bubbles are fun to invest in as you get incredible share price appreciation, which looks great on your socials. But it’s also a fabulous way to lose money when the bubble bursts.

What is your attitude towards charity and inheritance?

I don’t know. I’m not ready for mortality yet.

What will your finances ideally look like towards the end of your life?

Again, I don’t spend time on this!

Very early retirement still presents challenges, but I think most of us would take our chances. So congratulations to Part-Time Analyst for winning the game before some even understand they are playing it. Thoughts and reflections welcome in the comments. But do remember Part-Time Analyst is not a seasoned blogger like me – nasty comments or petty gripes will be deleted. And be sure to read all our FIRE-Side Chats to hear about more types of journeys.