Today we’re kicking off our monthly interviews [1] with Monevator readers who’ve achieved financial independence and/or early retirement (aka FIRE [2]). In this debut episode, Mark Greene explains how a pretty conventional work-life and a lot of saving and investing unlocked an early and unusual retirement for himself and his wife. We hope it inspires you.
Also, I want to give a quick shout out to ESI Money, whose interviews with US millionaires [3] inspired this series. Do check them out!
Okay, let’s get this show on the road – appropriately enough, as you’ll see…
A place by the FIRE
Hello Mark, thanks for sharing your life story with Monevator. To start with the basics, how old are you and yours?
I’m 51 and my wife is 57. We’ve been married for 28 years.
Do you have any dependents?
We never had children, and each have one surviving parent – mid-70s and mid-90s. Both are living independently at present and are not hugely reliant on us. Long may that last!
Whereabouts do you live and what’s it like there?
Since early 2020 we’ve been traveling. Most of the time we have been in our own motorhome. At present I am near the beach in the south of France, and it is very pleasant!
Did you have any second thoughts about FIRE – or traveling – given a global pandemic kicked off right at the same time?
If we had known the pandemic – and particularly the travel restrictions – were coming, it’s probable we would have delayed stopping work. That said, it suited both of us to have missed the ‘pivot the way you work’ that everyone else went through in the spring of 2020.
I’ve never had second thoughts about not working, but retiring early to travel was the main motivator for stopping work for my wife. She found the first few months under lockdown hard.
Now though, no regrets on either side!
When do you consider you achieved Financial Independence?
We retired in early 2020. I was 48 and my wife was 55. So I guess that was when we consider we reached financial independence. Whether our pot could have been considered ‘enough’ before there could be a point for discussion, but we worked to a particular date, rather than a particular amount – which we hope is more than enough.
My wife has done some very limited freelance work since, mainly to stimulate the brain than for the money.
I haven’t worked since. We have been filling our time with traveling, when allowed to do so through the pandemic.
Assets: only a little bit racy
What is your net worth?
We currently have about £1.1 million in investments, plus our house which is valued at about £600,000.
What are the assets that make up [4] your net worth? Any mortgages or other debts?
In general terms, our main assets are:
- One SIPP (invested in a range of stock and bond funds) £330,000
- Three ISAs (invested in funds and many individual stocks) £635,000
- Peer-to-peer lending (Funding Circle, Crowdstacker) £30,000
- Property Investment Vehicle (Propertypartner) £55,000
- Premium Bonds/cash £40,000
- House £600,000
- Total £1,690,000
One of us also has a small government pension due at 60. It’s worth a few thousand a year.
We have no mortgage or debts, other than current month credit card bills. These are paid off every month.
What was thinking behind the peer-to-peer investing?
Peer-to-peer was a way to diversify my asset allocation, chase a bit of a higher return, and to experiment with something new.
Tell me more…
Initially it was Funding Circle, which I was a big fan of until about three or four years ago. They diversified the loans automatically to spread risk, it was automated, and it provided good returns.
Funding Circle has switched off retail investors though, and now I’m just running down the balances as loans get repaid.
Crowdstacker was less liquid and very hard to diversify. A couple of loans defaulted and whilst supposedly asset-backed, the platform has had some real struggles realising value from the assets. Credit to Crowdstacker, I think they have managed it brilliantly, but I don’t expect to see much of those loans back.
My other loans with Crowdstacker have performed perfectly well though. I achieved rates of about 7% when the banks’ rates were under 1%.
Property Partner is another innovative finance platform. My investments are made into numerous companies that hold property and take capital gains and rental income, distributing dividends along the way. I really like the platform, and it affords me exposure to property (other than our former home) in a diversified way.
The property market has suffered through the pandemic. But again I’m very happy with how the management of the platform have handled it.
So much for digital property holdings – what about your main bricks-and-mortar residence?
Our former home is an Edwardian three-bed semi in a somewhat rural location in the Home Counties, near a commuter rail station. We own it and it is currently rented to a tenant while we travel.
Do you consider your home an asset, an investment, or something else?
While we are not living in it, we consider it an asset as the rent provides some of our income. Once we return to living in it, I would consider it part asset – as it has value – and part liability – because it costs money to live in.
Earning: doing it the traditional way
Tell us more about your old job…
I was in business consultancy and my wife was in training – of adults for professional exams.
Before this we both worked in local government jobs for a few years. That said, we had both done our last jobs for around 20 years when we retired.
…and your annual income?
Mine varied according to the success of my consultancy – I was self-employed – but probably averaged to about £60,000 of annual salary if it were a normal job. My wife was on a salary, which was about £80,000 at the end.
We have no formal income now. We live off our assets!
How did your career and salary progress over the years – and to what extent was pursuing financial independence (FI) part of your career plans?
We both switched careers and then progressed in earnings terms, though neither of our jobs had a traditional career ladder involving promotions and so on. For a few years my wife reduced her working hours slightly – and sacrificed salary – for a better work-life balance.
Other than seeking to maximise earnings in order to grow our assets, pursuing financial independence didn’t directly influence our plans.
Did you learn anything about building your career and growing income that you wished you’d known earlier?
We realised part way along the journey that it was better to work and earn less but stay sane, rather than go all out for a big income and suffer stress and other effects.
We delayed our FI date by a few years so that we could temper our workload – and spend a bit more on holidays – on the way.
Did you have any sources of income besides your main job?
No, we didn’t. We’ve had no significant sources of money other than our work – no side hustles and no inheritances.
Did pursuing FIRE get in the way of your career?
No, never. In fact the mental discipline required to plan for financial independence, and then execute on the plan every month, proved beneficial when applied to our professional careers too.
Saving: starting with an awesome budget
What is your annual spending? How has this changed over time?
Our baseline budget is just under £40,000. This goes up if we are on a major travel trip, but it’s all planned for in our mother-of-all-spreadsheets.
Do you stick to a budget or otherwise structure your spending?
Since we met 34 years ago, my wife has operated an awe-inspiring level of structure in our spending, so we have always budgeted and have always stuck to it. We allocate so much a month to various buckets of spending – food, drink, going out, bills, and so on – which smooth out big bills over the years and has allowed us to ensure we don’t spend on things we don’t really need, whilst still enjoying life.
What percentage of your gross income did you save over the years?
I have to say, I don’t know. It was lower when we started out as we earnt less and had a mortgage, but we never recorded what it was.
This was way before the days of the FIRE movement and an understanding of such numbers. We just saved as much as possible after we had funded the basic budget mentioned earlier. This meant any bonus, pay rise or a bumper year for my consultancy went into the FI pot – not on vanity purchases.
What’s the secret to saving more money?
My first ever financial advisor told us to find a level of life we were comfortable at, and then stick to that budget even if we earnt more, and to save the rest. That was arguably the best advice I have ever been given. In life and business we strove to spend less than we earned and to use the rest to grow an asset base.
I have also tracked our net worth for well over 20 years. Seeing it gradually increase as we paid down the mortgage and grew our investments was a good motivator to keep going.
Do you have any hints about spending less?
The game changed for us when we decoupled from the materialistic societal norms we are all surrounded by. The less we watched TV, read weekend newspapers or monthly magazines, the less we were exposed to ads telling us we would be happier if we only spent on X, Y, or Z.
Whilst all our peers were buying bigger houses, more cars or funding expensive hobbies, we were focusing on what we valued, which didn’t cost money – time together, simple hobbies, and so on.
Oh, and don’t have kids! That turned out to be a significant factor in our story.
Do you have any passions, hobbies, or vices that eat up your income?
[5]Our one guilty pleasure has been travel, which we have spent a lot on over the years. That said, we tend to travel cheaply – not backpacking, but definitely not five-star hotels and big meals out – so we can have a lot of experiences for what we spend.
We have banked some unbelievable memories from that spending.
Investing: starting outside a pension for early access later
What kind of investor are you?
My financial education started with the original Motley Fool in the mid-1990s, and then was influenced by Warren Buffet. So I have been primarily a buy-and-hold investor.
I started with managed funds, then moved into trackers as they became available and online trading became a thing.
For many years I did choose my own stocks. I’d buy in chunks of about £2,000 and try to build a diverse portfolio – although all were in the UK. Some were stars, and many were dogs…
Over the last ten years, as I learnt more and as the products developed, I have sought to consolidate into passive tracker funds. I’m a big fan now of Vanguard’s LifeStrategy funds.
What was your best investment?
In terms of headline percentage return from specific buys, Games Workshop, Novo Nordisk, and Unite Group have been big winners. But the actual return has hardly been life-changing.
Arguably my best investment decision was made firstly at 22 when I decided not to have a pension and invest in funds instead – so that I could access it early – and then a few years later deciding to manage it myself rather than through an adviser. That has made a huge difference in terms of that compounded percentage return over two decades of investing.
Can you tell us more about that decision not to invest in a pension?
When my decision not to have a pension was made in the mid-90s, SIPPs were never raised – even though they existed – and I’m not sure I knew enough to manage it all then. They were also not accessible at 55 at that time. And I knew I wanted the option to retire early, because of the age difference with my wife.
Once I had embarked on the ISA path, I just stuck with it for me – even when we were putting a lot into my wife’s SIPP.
Did you make any big mistakes on your investing journey?
If I had my time again, I would buy tracker funds from the off, not individual stocks. It was interesting to do, and made it partly a hobby. But for every tenfold grower like Games Workshop, there’s a total wipeout like Carillion or Laura Ashley.
As I mentioned earlier I also made some peer-to-peer loans that were in theory asset-backed, but were not immune to alleged illegal practice by company directors. I’ve mentally written off the loan, but court proceedings are continuing.
That bit where they say “you may not get your capital back” is there for a reason!
What has been your overall return?
My best guess would be an annual return of 4%, though I think it is probably a bit more. This includes keeping a reasonable amount in cash – over 20% of the portfolio – when interest rates were almost negligible, because we were approaching retirement. We wanted the security of knowing we were safe from sequence-of-returns risk in the first few years. It was also kind of handy when Covid broke the month we retired and the markets dropped 20%!
Listening to my own answer it strikes me that 4% doesn’t sound too great… But I have another rough calculation that suggests we more than doubled what we put in, partly through pension tax relief but mostly through compounding, because we’ve been doing this for over 20 years.
How much did you fill of your ISA and pension allowances?
Until we retired we filled our ISA contributions every year for most of the years. That – and compounding – is how we have amassed over £600,000 in ISAs.
I don’t have a pension at all so I never benefited from pension allowances. My wife has a SIPP. In the last few years of her working we maximized the contributions (including backdating) using cash we had accumulated.
That immediate uplift as a higher-rate tax payer is the best return we have ever had!
To what extent did tax incentives and shelters influence your strategy?
The tax rebate on the SIPP definitely influenced our decision to pour money in there in the last few years of working. Although the SIPP is just a wrapper, and the money would have been invested in the same thing in an ISA or in the pension.
How often do you check or tweak your portfolio or other investments?
Overall, I do a full evaluation every month, and have done for 30 years. This enables me to report our position to my wife, and to ensure I have an eye on the performance of individual investments.
In addition, I have a reasonable amount of our portfolio that I use to day trade on the ups and downs of the FTSE 100. This is my non-passive guilty secret!
Because of this part of the strategy, I am prone to checking the FTSE more than once a day. But I only ever do this around what we are already doing for the day.
Sometimes we will be off-grid and I don’t check for a week or more.
Wealth management: making it last
We know how you made your money, but what about keeping it?
The meeting of the two systems used by my wife and I enabled us to keep it.
My long-term spreadsheet and the plan to grow from nothing to our nominal £1 million retirement pot, coupled with her monthly budget and accessing only money available for planned spending meant we overcame the temptation to splurge or to fritter it away.
I was passionate about becoming financially independent and retiring early. That drove our behaviour every month, every week, and every day.
Which is more important, saving or investing?
Well, that depends what you mean by both terms. I see saving as money in the bank, investing as more risky options like funds or stocks. Saving is the essential first discipline, but bank interest rates will not grow enough to retire early. You need to take more risk and therefore invest.
When did you think you’d achieve financial freedom – and was it a goal with a timeline?
I thought it would be in my 50s. But then as the plan developed it became clear that with a fair wind it would be possible before that. The main driver was my wife’s age (she’s older), but I am proud to have got there in my 40s.
For the last ten years or so – once it was a clear goal with a very clear timeline – I told a LOT of people about. We really committed ourselves to it.
Did anything unexpected get in your way?
I’ve invested through three big recessions and crashes, though arguably that was expected – if unwanted – over a 25-year period.
Our life wasn’t without challenges, but from an investing sense nothing really got in the way.
Are you still growing your pot?
As we don’t have kids, our spreadsheet allows us to de-accumulate. But that could stretch out over a 50-year time frame or longer, so I am currently trying to maintain the pot.
With our spending heavily front-loaded so that we can make the most of retiring early – and with the tough market conditions since 2020 – that hasn’t always been easy. But we’re not too far off plan!
Do you have any further financial goals?
Ensuring the pot lasts long enough to pay the funeral bills, and not a moment longer. Who knows how far in the future that will be, so in the meantime I seek to do as well as I can with the assets we have accumulated. The targets are in my spreadsheet!
What would you say to Monevator readers pursuing financial freedom [6]?
I genuinely wish Monevator had existed when I was in my 20s. There is so much more information available now, and it is so much easier to do with online platforms. My investing journey started before the internet.
A danger is though that one can spend too much time reading and learning, and not getting started.
Compounding is our greatest friend so, however small, start straight away and keep learning. Read and absorb and improve your strategy as you go.
Learning: starting young, headed to 100
When did you first start thinking seriously about money and investing?
At 22, when I took my first job and had to decide whether to have the company pension or not.
Did any particular individuals inspire you to become financially free?
My father was terrible with money and I didn’t want to be like him. I wanted the security of knowing I need never work again and I could live. That has always been my driver – because life is too short to waste working, even if you enjoy it.
Can you recommend your favourite resources for anyone chasing the FIRE dream?
Genuinely, Monevator! I think it is excellent and strikes exactly the right tone
If your only source of information – other than detailed personal tax and pension advice – was Monevator, you’d probably do well.
I am also now a massive fan of the Vanguard Life Strategy funds – inexpensive, easy to manage, and they take away the risk of paralysis by analysis. Rather than wasting hours optimizing the perfect asset allocation, trust Vanguard and spend the time earning more, learning more, or just enjoying your family.
Based on my own experience, I would work with a quality business or life coach to understand and plan what you really want from life and how you want to make it happen. The clarity that coaching gave me, on many occasions, changed my life.
What is your attitude towards charity and inheritance?
Being charitable is not just financial. I am intensely aware of our good fortune, and we have a budget (of course!) to make donations that help others.
We also now have the luxury of giving our time – either to support people we know, or to help organisations that have a broader impact. My life plan includes some form of major charitable service after we’ve finished traveling too.
Like everyone should we have also written our wills and they provide for charitable donations and inheritances for people we know who would benefit. We don’t have kids, so I guess we have less societal conditioning about who we leave our wealth to.
What will your finances ideally look like towards the end of your life?
Our plan allows for the money to last past our 100th birthdays. But the one thing I know for sure is that life never perfectly follows your plan.
We intend to enjoy the next 20 or 30 years as much as possible, and then anticipate a slowdown, but with enough funds to still enjoy life. If we go early and our beneficiaries gain, then so be it.
My dislike of the fees charged within the financial sector means we will probably avoid any managed products like annuities – but never say never. I enjoy learning about money and managing our finances, and I hope I have the acuity to do so for a very long time.
I guess the dream remains to have a wonderful life (which we do) without diminishing the pot.
So there you have it readers! FI by 50 and retiring early to travel and enjoy life on the road with his wife while they’re both young enough to make the best of it. Questions and reflections – on the concept of these FIRE-side interviews generally or on Mark’s journey specifically – are welcome below. But please do remember Mark is not a hardened Internet warrior like me and he is just sharing his story to inspire others, not to feed the trolls. Of course you can disagree constructively, but please keep that in mind. Thanks!