Financial Independence Retire Early (FIRE)

[FNG]

To be honest I have been hearing the same about software engineering all my career. Whilst AI might cause some changes, someone that can't do software engineering still won't be able to using AI. As a tool to help get answers it is useful, but over the next 5 yrs I can't seeing it become more than that. Could be completely wrong though

 

[xaldub]

I, essentially, retired in my 40's due to Long Covid. It wasn't what I planned ... was aiming for retirement somewhere between 55 and no later than 60. Thankfully I made a sufficient recovery from illness to restart work part-time ( in my previous area of expertise ) which has helped bolster finances during these difficult times. Planning for retirement, my initial focus was to pay off my mortgage, and I achieved that in my early 40's. Have a good DB pension scheme, and have also been paying into a private pension scheme since the age of 24 ( which becomes accessible at age 55 ). I've always been quite sensible with my money and invested in stocks and shares from my early 20's too ... some in a general investment account and slowly over time built up a large ISA fund ( when the Govt. changed the allowance to £20K per year that really helped ). As things stand now, my two pension schemes and the interest from my savings provides a good steady income, and if all hell were to break loose with Trump destroying the world economy I could survive with my savings hidden under my bed. I haven't even factored the State Pension into my thinking ... miles away from that age, and who knows if I'll survive long enough to draw it down ?

 

[adam cool dude]

I am firmly in the reduce days camp. I was fortunate to be able to afford to go down to 4 days last year (approx 46 yes old). I could have stayed working full time and retired a few years earlier, but if I can keep working in my current job (software engineer) I actually mostly enjoy it and the 3 day weekends make a huge difference to my life.

I am 38 and only work 3.5 days a week on average and have done that since I was 30. I work less than half the year. It gives me plenty of time to do other things. I still do 40 hours a week but it is condensed into 10-12 hours days. I work a maximum 3 days consecutively and have every other weekend off as a 3 day Fri-Sun. I only need to use two days holiday to get 7 days off in total.

I think the typical 9-5 Monday to Friday is an archaic way of working tbh. Working longer days but fewer is much better. You spend less time and money on commuting and find I am way more efficient with my time.

I will start work at 5am and finish anywhere between 14:30-1700 most days. That still leaves me 5 hours before bed (10pm) to have dinner, go exercise, watch a movie etc and I still get a solid 6 hours sleep before work.

 

[One More Solo]

Houses were cheaper in 2009-2010. A lot of my friends were in negative equity with 2006/7 prices for a good half decade at least. Not through any fault of their own. I just lucked out buying 18 months later.

We bought a 3 bed detached house with both of us on average wage with a 3 year old in tow. Mortgage to finish by 40 years old.

Pipe dream for a 23 year old now. Even where I live. House is double the price and wages are basically the same.

I massively felt this the other week. Our neighbours are about 14 years older than us, have two university age kids and jointly run a small local retail business. They bought their house at the turn of the millennium for *inflation adjusted* just over a third of the price of ours. They've long since paid off their mortgage and own a small apartment in France.

We have no plans to have kids, both earn six figure salaries and our mortgage is eye watering. We will not pay it off early without a huge change in circumstances. The shift from generation to generation is insane, because I recognise we have it hugely better than people even 5-10 years younger than us.

 

[MichaelAwkward]

We have no plans to have kids, both earn six figure salaries and our mortgage is eye watering. We will not pay it off early without a huge change in circumstances. The shift from generation to generation is insane, because I recognise we have it hugely better than people even 5-10 years younger than us.

Don't mean to pick on you but more often than not, the people who complain about how hard things are now compared to previous generations are also the people making terrible financial decisions and wasting money left right and centre. If you earn even modestly above average, it's easy to save money and build a foundation for financial independent, if not early retirement, in the UK.

If your location is correct, it doesn't make any sense unless you've chosen to have lots of land or a house much bigger than you'll ever need for whatever reason. In which case, why are you complaining? Two 6 figures incomes in the north should let you save almost your entire incomes or live like Kings, especially without plans for children!

 

[adam cool dude]

Don't mean to pick on you but more often than not, the people who complain about how hard things are now compared to previous generations are also the people making terrible financial decisions and wasting money left right and centre. If you earn even modestly above average, it's easy to save money and build a foundation for financial independent, if not early retirement, in the UK.

If your location is correct, it doesn't make any sense unless you've chosen to have lots of land or a house much bigger than you'll ever need for whatever reason. In which case, why are you complaining? Two 6 figures incomes in the north should let you save almost your entire incomes or live like Kings, especially without plans for children!

It is a fair point to make though regardless of salary. In the past 5-10 years houses have gone up by around 100-150k from what they were worth.

That 100-150k into a pension is helpful for anyone in retirement or at the very least will give a couple a lifetime of experiences which is part of what life is about.

Putting that money into bricks and mortar doesn't benefit you at all but 150k into a pension would allow me to retire 10 years earlier easily.

 

[MichaelAwkward]

It is a fair point to make though regardless of salary. In the past 5-10 years houses have gone up by around 100-150k from what they were worth.

That 100-150k into a pension is helpful for anyone in retirement or at the very least will give a couple a lifetime of experiences which is part of what life is about.

Putting that money into bricks and mortar doesn't benefit you at all but 150k into a pension would allow me to retire 10 years earlier easily.

I don't think it's that simple - https://www.ons.gov.uk/peoplepopula.../housingaffordabilityinenglandandwales/latest

If you scroll down there you can see in figure 1 that we're actually at about the same level of affordability as in 2015! Remember median monthly earnings have increased by 50% as well.

There is a lot of noise around housing and house prices but a lot of it doesn't bear out under scrutiny. Obviously that's not to say houses are cheap or that there isn't significant regional variations.

 

[nomadd]

FWIW, I fired 5 years ago at 56. It's been wonderful. It was a lot to commit to keep topping up the ISAs and the pension over all those years - especially through the "lost decade" of the noughties - but what goes around comes around.. eventually. Best of luck to you all - there is life after work, I can assure you.

 

[EvilRob]

FWIW, I fired 5 years ago at 56. It's been wonderful. It was a lot to commit to keep topping up the ISAs and the pension over all those years - especially through the "lost decade" of the noughties - but what goes around comes around.. eventually. Best of luck to you all - there is life after work, I can assure you.

Amazing! Would you be willing to share any detail about the lifestyle you have, how much it costs to achieve it and the kind of investments you have to support it?

 

[nomadd]

Amazing! Would you be willing to share any detail about the lifestyle you have, how much it costs to achieve it and the kind of investments you have to support it?

Lifestyle is lean fire, as I've never been a great spender. Major hobbies are reading, DIY and gaming, which don't cost too much - I'm not a 5090 kind of guy.

Basic living costs plus some reasonable spend on travel ~£20k. SIPP + ISAs + State Pension (in 5.25 years) bring in vastly more than that at a 4% SWR. SIPP is still pure global equity, ISAs a 60/40 mix of stocks and bonds. Also maintain a 4-5 year cash buffer to cope with Buffoons in the White House and other Black Swan events. No kids or luxurious wife(s) to support, thank goodness!

 

[D.P.]

Lifestyle is lean fire, as I've never been a great spender. Major hobbies are reading, DIY and gaming, which don't cost too much - I'm not a 5090 kind of guy.

Basic living costs plus some reasonable spend on travel ~£20k. SIPP + ISAs + State Pension (in 5.25 years) bring in vastly more than that at a 4% SWR. SIPP is still pure global equity, ISAs a 60/40 mix of stocks and bonds. Also maintain a 4-5 year cash buffer to cope with Buffoons in the White House and other Black Swan events. No kids or luxurious wife(s) to support, thank goodness!

You let the truth slip out there - no family makes FIRE immeasurably more feasible.

Put it this way, i was paying £4600 per month for my 2 kids to go to the local day care/creche for many years. That has dropped now they are olde, still close to 2k. There are other costs, e.g. Easter break do they are both at a camp for 1k per week. Daughter is at a fairly serious level of ski racing - totalled nearly 16k of training weekends , coaching, hotels and equipment.

Then there is the fact i had to pay several hundred K extra to buy a house with a bedroom each in an area with a good school.

The ability to save basically only starts once the kids leave to Uni - so about 50 for me

 

[slinxy]

You let the truth slip out there - no family makes FIRE immeasurably more feasible.

I don’t think anyone isn’t under the impression that FIRE isn’t a lifestyle choice and children is another one of those choices as they are one of the most expensive investments anyone could make.

My brother and sister in law has retired five years ago in their 55s, so that they can provide child care for their grand kids. They had a two business which they sold and then started again each time, now they are leasing out their third business along with renting out three of their four houses to fund their retirement.

They had three kids that went to a good public school, two of them went to university and the youngest did a scholarship in accounting.. the lad was on the books of Man Utd and was travelling to games all over the place with school and club football.

The choice that they made was to have kids when they was young, which was quite the norm when they started, child care was provided by grand parents… we even used to drive up to Manchester to pick them up for school breaks when they was still younger.

My brother keeps moaning that he’s not used to be so limited in his spending but he gets more spending money than I give myself.. lol. But he’s thinking of working part time once all the grand kids are at school full time.

The reason why I said investment, is that the kids know how hard their parents worked for them to provide and help them get on the property ladder. So they help provide for their parents now… they pay for family holidays, mobile phones and contracts.. all the tv streaming services but to think that’s for their kids to watch cartoons.. insurance.. maintenance on rental properties, knowing that they are likely to inherit them at some point.

But like all investments, there’s a level of risk. It’s great that all his kids married good people, have good professional careers and are fully independent, as I hear that others families ain’t so lucky where children are still living at home till they are in their 30s.

 

[One More Solo]

Don't mean to pick on you but more often than not, the people who complain about how hard things are now compared to previous generations are also the people making terrible financial decisions and wasting money left right and centre. If you earn even modestly above average, it's easy to save money and build a foundation for financial independent, if not early retirement, in the UK.

If your location is correct, it doesn't make any sense unless you've chosen to have lots of land or a house much bigger than you'll ever need for whatever reason. In which case, why are you complaining? Two 6 figures incomes in the north should let you save almost your entire incomes or live like Kings, especially without plans for children!

That wasn’t in the context of my own early retirement, more just pointing out why FIRE for a 20 or 30 something is much harder. We chose to move to a bigger house with land for lifestyle reasons and have replaced kids with animals (soon to include a horse) so our disposable income is restricted accordingly. We save a good chunk each month and put extra money in our pensions but even if we redirected that to the house, early repayment would be a long time off. However, given we’re not planning early retirement at this point, we’re happy with a savings buffer and other investments.

To add my own example, we bought our first house for £165k in 2015 and sold it 6 years later for £278k. A FTBer is already £100k behind us in just 6 years - and that was a pretty modest house in south Manchester.

 

[MookJong]

Why do you feel you need 30k in your cash ISA?

It's a big part of my cash savings but it's instant access just in case I suddenly need that cash.

 

[nomadd]

You let the truth slip out there - no family makes FIRE immeasurably more feasible.

Put it this way, i was paying £4600 per month for my 2 kids to go to the local day care/creche for many years. That has dropped now they are olde, still close to 2k. There are other costs, e.g. Easter break do they are both at a camp for 1k per week. Daughter is at a fairly serious level of ski racing - totalled nearly 16k of training weekends , coaching, hotels and equipment.

Then there is the fact i had to pay several hundred K extra to buy a house with a bedroom each in an area with a good school.

You let the truth slip out there - you need to start measuring your lifestyle in 5090 FE's. There's at least a hundred in there so far!

 

[Uther]

You let the truth slip out there - you need to start measuring your lifestyle in 5090 FE's. There's at least a hundred in there so far!

It's why some people don't seem to think they can retire unless they have 100k a year coming in. Lifestyle creep is a thing.
Loving my lean fire lifestyle tbh.

 

[D.P.]

It's why some people don't seem to think they can retire unless they have 100k a year coming in. Lifestyle creep is a thing.
Loving my lean fire lifestyle tbh.

Having children is not a lifestyle choice comparable to choosing exotic vacations or luxury cars. I live an extremely modest lifestyle. My car is 11 years, purchased 2nd hand. We bought the smallest and cheapest house we could that still endured privacy for the kids without sharing a single bedroom.


It just a fact that having children makes FIRE far harder

 

[D.P.]

You let the truth slip out there - you need to start measuring your lifestyle in 5090 FE's. There's at least a hundred in there so far!

i have no gaming PC, they seem far too expensive. I have a PS5 i got for free from work!

Kids are expensive!

 

[Uther]

Having children is not a lifestyle choice comparable to choosing exotic vacations or luxury cars. I live an extremely modest lifestyle. My car is 11 years, purchased 2nd hand. We bought the smallest and cheapest house we could that still endured privacy for the kids without sharing a single bedroom.


It just a fact that having children makes FIRE far harder

They do, luckily mine's an adult now though.

 

[D.P.]

They do, luckily mine's an adult now though.

Their impact unfortunately is timing when you can really start investing significantly and the compound growth opportunities that you miss you on.

In 2023 it cost on average £166,000 to raise 1 child.

How much does it cost to raise a child in the UK? - Moneyfarm

How much does it cost to raise a child in the UK? Find out what the average cost is, and the cost of a child by age on Moneyfarm's website!

blog.moneyfarm.com

So for a typical 2 child family , 330k and growth over 20 years is gone.

That easily delays FIRE by 10+ years