1,252 days down, 1,000 days to go…

When I initially started this FIRE project I set the, somewhat ambitious, goal of achieving financial independence by the end of 2023.  That is looking unlikely, and truth be told I knew that as far back as early 2021.  The long-running impact of Covid, the disaster that was the Truss-Kwarteng government, the war in Ukraine, and a number of other factors have all impacted the economy.  My message has always been the same though; if you follow the process, the results will take care of themselves.  

I have set a new goal of achieving FIRE by the end of 2025.  It just so happens that today, the start of the new financial year, leaves me 1,000 days until 31/12/2025.  It has a nice ring to it; 1,000 days until FIRE.

When I started this blog, the main aim was to keep me honest and keep me focused on my goal.  I had recently given up gambling and knew I needed a project to fill the hole that gambling had left.  This blog ticked a lot of those boxes.  What I did not foresee was that the blog would introduce me to many new people, some of whom would become friends in the real world, whilst others would become friends and acquaintances online.  The FIRE community is generally supportive and welcoming.  The support of you, the readers of this blog, also plays a huge part in keeping me focused, motivated, and on track for FIRE.

I’ve spent much of the last week or so talking with a friend about our FIRE progress.  We are, roughly speaking, at the same sort of stage in our FIRE plan.  We are throwing as much as possible into our investments so that compounding can work its magic.  We are now in that middle part of the journey, where it can feel like you are wading through knee-deep mud.  The early days of hitting one milestone after another, such as your first £1,000, first £10,000, and so on, are long behind us.  The market can swing wildly from one day to the next wiping off a few thousand from the “value” of our investments, and it’s just another day in the week.  It can feel like progress has stalled but this is why it’s so important to stay the course.  

Let’s look at my ISA balances at intervals of 20 weeks, working backwards…

Week 180: £66,814.34 

Week 160: £63,244.80

Week 140: £59,759.03

Over this period, no further investments had been made into my ISA.  This is £7k of pure growth.  It’s easy to get bogged down in the daily, and weekly, fluctuations in investment values, but over the long term the trend is always up.  

If I was to simply stop investing into my ISA and pensions now, and simply let them compound and grow in line with a 7% rate of return, by the time I’d be 60 my investments would be worth roughly £580,000 (this includes the £20,000 I’ll be investing into my ISA after the Easter break).  

So why do I think I’ll be able to achieve FIRE by the end of 2025?  My Lean FIRE number is pretty low.  This year it’s looking like I’ll end up with £7,500-£8,000 investment income.  For Lean FIRE I need a minimum of £9,600 investment income for the year.  For £800 I can meet the essentials of life; food, shelter, and utilities.  That’s the next big milestone, and it’s a strong foundation to build on.  I will have all of 2024, and 2025 to accumulate more assets that generate income.

The thing to remember is that even if I stop working in 2025, it doesn’t mean I have to survive from my investment income for ever.  A few years further down the line I’ll be able to draw on my pensions, which will further supplement my income.  So, the goal is not really to create enough investment income to survive until I’m in my 70s, 80s, or older.  The goal is really to generate enough investment income to see me through to when I can draw my pensions, and then I’ll have an even more comfortable retirement.

The middle of the story is generally where things slow down, but in terms of investments, it’s where the magic happens, and where compounding starts to do the heavy lifting.