Financial Independence Retire Early (FIRE)

[Nasher]

ISA is ok if you have a lot to dump in and leave it, but it's only about 4-5% and that's going to drop. Better of sticking it in bitcoin as it's probably going to go up 10x over the next decade. Especially with nations planning on stockpiling it.

ISAs are peanuts the government is throwing us and Labour doesn't even want to do that.

 

[Uther]

ISA is ok if you have a lot to dump in and leave it, but it's only about 4-5% and that's going to drop. Better of sticking it in bitcoin as it's probably going to go up 10x over the next decade. Especially with nations planning on stockpiling it.

ISAs are peanuts the government is throwing us and Labour doesn't even want to do that.

Theres a lot of people that probably can't save £10 a month, £20k is more than generous.

 

[200sols]

ISA is ok if you have a lot to dump in and leave it, but it's only about 4-5% and that's going to drop. Better of sticking it in bitcoin as it's probably going to go up 10x over the next decade. Especially with nations planning on stockpiling it.

ISAs are peanuts the government is throwing us and Labour doesn't even want to do that.

Stocks and shares ISA is insanely powerful dude. You are so wrong its quite unfathomable really.

 

[Nasher]

Stocks and shares ISA is insanely powerful dude. You are so wrong its quite unfathomable really.

Not at the moment it's not...

 

[Mekrel]

I would hardly call an ISA a perfect tax reduction tool. You've already paid tax on the income before it's paid in, so whilst the interest isn't taxed, the capital going in has already been taxed.

 

[200sols]

Not at the moment it's not...

You don't understand compounding over multiple years and decades do you? Who cares about the last month or the last year, thats just noise.

 

[Nasher]

You don't understand compounding over multiple years and decades do you? Who cares about the last month or the last year, thats just noise.

Still peanuts really. Do you want to make a few 1000 or a million?

 

[200sols]

Still peanuts really. Do you want to make a few 1000 or a million?

A million obviously... Inside an ISA.

As I said, you don't understand compounding.

 

[D.P.]

But you aren't going to get anywhere with what the government is providing. They don't want people being financially independent and not having to work.

Actually, the government doesn't care if you are financial independent. In fact that is a benefit to them, lower costs.

But this gets back to the circular point i raised earlier. People who want to FIRE are entirely dependent on most of the population either not wanting to or not able to.

As it is you can exploit the system and have the general population work and pay taxes while you can live on beans and toast doing FIRE

 

[D.P.]

Still peanuts really. Do you want to make a few 1000 or a million?

ISA limit is 20k a year. If you paid this monthly and assuming a standard 7% average growth in a world tracker ETF, you would hit 1 million within about 21 years and can FIRE with an annual draw down of 40K per year (using FIRE 4% rule) plus whatever state pension once old enough.

You could FIRE in your early 40s quite easily with the power of ISA and tax free compounding

 

[throwaway4372]

yea the problem is you have to buy a house n stuff

 

[Lopéz]

Exactly, i could only dream of something as flexible as an ISA. In Switzerland the main pension (pillar 2) is mandatory znd goes into a pension fund which offers precisely zero control over the money. I literally only get a return of 1.25% , and that only on a portion of the pension. Overall it has provided less than inflation returns for the last few years.

I would so love to have an ISA! Investing here is a disaster.

 

[D.P.]

I would so love to have an ISA! Investing here is a disaster.

In Switzerland it is mixed, but i would also love an ISA. As i said above, the mandatory pension has lower than inflation returns and there is absolutely zero flexibility. Really good employer matching, but the money sits there doing nothing until you retire.

On the flip side, in Switzerland there is no capital gains tax so i can invest in growth stocks with my personal savings very effectively.

 

[D.P.]

yea the problem is you have to buy a house n stuff

But that is irrespective of where you live. The conversation about UK being bad for FIRE is not true really .

FIRE only ever works for people with way above average salary and minimal expenditure, i.e. no kids. And you have to be happy eating beans on toast znd never leaving your house

 

[Jupiter]

But you aren't going to get anywhere with what the government is providing. They don't want people being financially independent and not having to work.

Very true. The two issues are somewhat related I sense

 

[slinxy]

Actually, the government doesn't care if you are financial independent. In fact that is a benefit to them, lower costs.

But this gets back to the circular point i raised earlier. People who want to FIRE are entirely dependent on most of the population either not wanting to or not able to.

As it is you can exploit the system and have the general population work and pay taxes while you can live on beans and toast doing FIRE

The government does care.. casing point covid gave us a vision of what will be like if a load of people just stopped working.

The government needed the schools to be open, so the parents could work.
They wanted the parents to work for the taxes and the counties GDP

Even after covid, they were actively trying to get people back into the offices.
More people travelling, more fuel tax, more footfall for shops, more consumption.

They where saying that the shops where going out of business due to the lack of footfall customers but at the same time saying that their wasn’t enough people for the job in shops, bars and cafes. some of that maybe down to brexit. But why do does the shop need more staff when at the same time, they are saying there’s no customers, why do we need all those shops anyway?

The government was also actively trying to get a load of people in the 50s who retired early back into the workforce, it was all over the news… positions couldn’t be filled. Those people must have achieved FIRE and just didn’t know it until the capitalist cycle halted.

I think there’s two main types of people that want to achieve fire, those who want to be rich enough to continue their consumer lifestyle and not have to work for it, and those who just want to remove themselves from the capitalist cycle.

I still think my original point remains, while some people switch funds to save 1 or even 0.01% of fees. Some are too institutionalised to see that the government pays their own wages by taking a large slice (20/40/45%) from the top of the cake. I certainly think it’s easier to fire, if their took their portion as we take whatever slices we want to eat, when we want to eat it.

Anyway, I hit one of my fire milestones yesterday and celebrated by buying a £140 pound cardigan along with a load of other stuff lol
In a way, I love the capitalist lifestyle.. without it the company I work for wouldn’t need me but I dream of the time where I don’t need to work.

 

[D.P.]

The government does care.. casing point covid gave us a vision of what will be like if a load of people just stopped working.

The government needed the schools to be open, so the parents could work.
They wanted the parents to work for the taxes and the counties GDP

Even after covid, they were actively trying to get people back into the offices.
More people travelling, more fuel tax, more footfall for shops, more consumption.

They where saying that the shops where going out of business due to the lack of footfall customers but at the same time saying that their wasn’t enough people for the job in shops, bars and cafes. some of that maybe down to brexit. But why do does the shop need more staff when at the same time, they are saying there’s no customers, why do we need all those shops anyway?

The government was also actively trying to get a load of people in the 50s who retired early back into the workforce, it was all over the news… positions couldn’t be filled. Those people must have achieved FIRE and just didn’t know it until the capitalist cycle halted.

I think there’s two main types of people that want to achieve fire, those who want to be rich enough to continue their consumer lifestyle and not have to work for it, and those who just want to remove themselves from the capitalist cycle.

I still think my original point remains, while some people switch funds to save 1 or even 0.01% of fees. Some are too institutionalised to see that the government pays their own wages by taking a large slice (20/40/45%) from the top of the cake. I certainly think it’s easier to fire, if their took their portion as we take whatever slices we want to eat, when we want to eat it.

Anyway, I hit one of my fire milestones yesterday and celebrated by buying a £140 pound cardigan along with a load of other stuff lol
In a way, I love the capitalist lifestyle.. without it the company I work for wouldn’t need me but I dream of the time where I don’t need to work.

You are co flat

The government does care.. casing point covid gave us a vision of what will be like if a load of people just stopped working.

The government needed the schools to be open, so the parents could work.
They wanted the parents to work for the taxes and the counties GDP

Even after covid, they were actively trying to get people back into the offices.
More people travelling, more fuel tax, more footfall for shops, more consumption.

They where saying that the shops where going out of business due to the lack of footfall customers but at the same time saying that their wasn’t enough people for the job in shops, bars and cafes. some of that maybe down to brexit. But why do does the shop need more staff when at the same time, they are saying there’s no customers, why do we need all those shops anyway?

The government was also actively trying to get a load of people in the 50s who retired early back into the workforce, it was all over the news… positions couldn’t be filled. Those people must have achieved FIRE and just didn’t know it until the capitalist cycle halted.

I think there’s two main types of people that want to achieve fire, those who want to be rich enough to continue their consumer lifestyle and not have to work for it, and those who just want to remove themselves from the capitalist cycle.

I still think my original point remains, while some people switch funds to save 1 or even 0.01% of fees. Some are too institutionalised to see that the government pays their own wages by taking a large slice (20/40/45%) from the top of the cake. I certainly think it’s easier to fire, if their took their portion as we take whatever slices we want to eat, when we want to eat it.

Anyway, I hit one of my fire milestones yesterday and celebrated by buying a £140 pound cardigan along with a load of other stuff lol
In a way, I love the capitalist lifestyle.. without it the company I work for wouldn’t need me but I dream of the time where I don’t need to wo

You are conflating individuals coming out of the labour market and being financially independent versus the whole of society not working. The government doesn't care about the former, but the entire country would collapse if no one worked.
But it is essentially impossible for most people to FIRE purely based on economics.


Yes at certain times the government will want certain workers to stay active or come out of retirement. This isn't some nefarious dep state scheme to suppress the populace, just simple requirements. We need teachers and doctors etc., motivating these workers to remain active has obvious benefits.

Your understanding of tax is fundamentally flawed. I mean, it would be easier to FIRE if you never paid any tax, so what? Tax is a necessity for society. Compared to other developed countries, the UK has relatively low income tax and high consumption tax and non existent wealth taxes. Certainly the UK could shift dome income tax to wealth tax, but given the equal tax requirements this wont necessarily make FIRE any easier.

EDIT: at the end of the day it just sounds like you want to pay less taxes and have other people pay more taxes to fund your early retirement. Just don't expect much sympathy.

 

[slinxy]

Just worked out that I've spent £23869.76 last year which is £2000 per month.
This includes a £1000 per month on a mortage.

I'm on route for 48k pension per year not including my own personal ISA if I continue to pay into my pension like I am at the moment, so I'm defo retrie early.

 

[delta0]

I’m a big FIRE follower and have been since 2019/2020. The chaos in the market at the moment came at a good time for the S&S ISA allowance renewal. Got a few more years to go to cross the line.

 

[Brumboy]

Hello everyone, nice to see a thread about FIRE on here!

With what's going on at the moment I'm not sure if I should be excited due to low accumulation costs or worried that this may cause a stagnant decade of stock market performance.

Does anyone here have a heavy preference to S&S ISA's rather than a pension? Interested to know.

And for people who are retiring before 55, are you making sure you've got the full 35 years NI contributions?