Hello and welcome back to Mortgage Advisor on FIRE. This week I look back at my FIRE journey. Also, some updates on my BTL, and my investment approach for the rest of 2023.
Weekly Update
It was my week of working late shifts this week, where I finish at 8pm. I have to work these shifts once every four weeks, and it’s my least favourite shift. Saying that, there are two positives to it, like starting work mid-morning, and having a three-day weekend as I only work those hours Monday through Thursday. It always leaves me exhausted on the Friday, and I felt rough AF this Friday.
Although I was feeling rubbish I had plans to meet up with a friend, and as it had been ages since we last caught up I didn’t want to cancel. We had some lunch and geeked out over our shared Star Trek obsession, as well as sci-fi in general. I was glad I made the effort despite feeling ill, as I had a great time.
I’ve been feeling rough because I’m in the process of completing a “gluten challenge”. This is where you are tasked with eating gluten every day for around 4-6 weeks to see if your body produces the antibodies that signal you have a gluten intolerance. I still have another two and a half weeks to go, and I’m desperate for it to be over.
What is FIRE?
Every so often I like to take stock and look at the progress I’ve made since starting this journey. It’s also a good idea, I feel, to remind myself what I’m doing, and why I’m doing it. So, with that in mind, let’s go back to the beginning and look at what FIRE is.
FIRE stands for Financial Independence, Retire Early. It’s a philosophy, or outlook, that’s geared towards leaving the rat race and securing one’s own independence from working for a living. It’s not an “anti-work” movement. It’s not about being lazy or work-shy. It’s not even about money; it’s about freedom and time.
For the vast majority of people, life revolves around work. The standard full-time working week is between 35 and 40 hours. Add time travelling to and from work, for some people at least, and you can easily have 50 hours a week spent working and travelling because of work. Then, there’s the time to prep for work, and for completing household chores, food shopping, and so on. If we assume that we sleep for 8 hours each night, then between work, the daily logistics of living (shopping, cooking, cleaning, tidying, etc), and sleep, we use up a minimum of 120 hours each week. There are 168 hours each week, and before even considering leisure activities or even just time for doing nothing, we’ve already used over 70% of the time available to us. If we can arrive at a point where we no longer have to work for money, it frees up a vast amount of time for, well, anything.
I’ve told this story before, but I think it’s worth repeating. It’s the story of how I discovered FIRE, and how I started this blog.
A long time ago, maybe 22-23 years previously, I was working out how much money I’d need to have saved in a basic cash ISA to provide £1,000 a year in interest, and then £12,000 a year. I seem to remember calculating it based on an interest rate of 3%, but that could be my faulty memory. The point is, even before I knew anything about investing, stocks, or property, I was already thinking about how to generate an income without working.
Fast forward to 2016. By this time I’d been working in mortgages for a few years. I’d started accumulating shares and was looking at other ways of earning income. I was not in a great place mentally and was gambling, but not at the worst point of my addiction. I started learning about different types of investments but I did not yet fully understand stocks or funds. I dabbled in some crowd-funded property investments, and managed to exit those investments with a slight profit. I was still very much learning about investing and had not yet discovered the FIRE movement.
I can’t remember the first time I heard of FIRE but it was probably sometime in 2018 or early 2019. I started devouring books on investing and finance. I was on a train to Southampton listening to The Millionaire Next Door, and then on my cruise around the Norwegian fjords listening to The Simple Path to Wealth, and Your Money or Your Life, and the idea for this blog started to form in my mind. I had another blog at the time, which was part football, part pop culture, and part political rant, but it hadn’t really taken off. One day on the cruise, I was leaning on the balcony of the ship looking out over the North Sea, and I knew that I couldn’t face year after year, decade after decade, working in the type of job I was in. It was slowly, but relentlessly grinding me down. I was still a year or so away from realising I was autistic, but the voice in my head saying that I was somehow different was moving from an occasional whisper to a more sustained mumble. In the latter months of 2019, and into 2020 things conspired to turn that mumble into a roar, and so started the worst year of my life.
I started this blog on November 1st, 2019 but the earlier posts were very rough around the edges. I like to think that the quality of my writing has improved, and the fact that I’m getting much more traffic now would tend to support that belief. Back then, though, I was enthusiastic and learning new things every week. I went to India in February 2020 and returned just before the first Covid lockdown. My mental breakdown in 2020 was, probably, in some small part related to Covid, but in a very selfish sense the pandemic did me a favour. It led to me working from home, for a start. Had I been in a position where I needed to keep going to an office, I don’t know where I’d be now. What I do know is that masking for eight hours a day, five days a week, was grinding me down.
When my breakdown happened, it came suddenly. It was like being hit by a train. I’m not going to go into the specifics, but I had a series of things happen that hit me so hard that I still don’t feel like I’ve fully recovered. I view that time in 2020 as one of those times where there’s a before, and an after, and the person I was before, and the person I am now, are like two completely different people. One positive I could take from all this is that I never relapsed into gambling after quitting in July 2019.
Following 2020, and the confirmation that I am, in fact, autistic, a lot of things started to make sense. The feeling of being different. The almost physical sense of dread from having to spend hours and hours with other people. The constant baseline level of stress and anxiety that everyone else seems to not have. All these things started to make much more sense when viewed through the autistic lens, as did my need for FIRE. And so, here we are, approaching the middle of 2023, and edging closer to my original goal of achieving FIRE by my 40th birthday.
It was always going to be a tough goal to achieve, going from basically a standing start to financial independence in four years. However, I believe it was better to set that tough goal early on because it motivated me to fundamentally change how I approached money and investing. It’s perhaps a good time to explain my desired version of FIRE, because there are several different types. I just want to get to a position where my investment income meets my basic cost of living. This is in contrast to the more popular approach to FIRE, which is to build up an investment pot that is then “cashed in” over time to fund one’s own cost of living. The idea is that if you only cash in 3%-4% of the total value of the investment pot, it should last for decades because the fund will also be growing in value as you sell off units. I’ve never been a fan of this approach because it goes against one of my personal rules for investing; never sell stocks and never sell property. Many will disagree, and that’s great. It would be boring if we all held the same beliefs. I want to preserve my capital because, when I die, I want to leave much of my wealth to charitable causes that are important to me. As such, my approach is to acquire assets that generate an income without the asset itself needing to be sold.
My FIRE Number
Depending on my mood, my FIRE number is anything from £12,000 to £25,000 income per year. Once again this is something that most FIRE followers view differently. Many people aiming for FIRE have a number for the overall size of their investment pot. This is calculated by taking a safe withdrawal rate (most people seem to use 4%) and working out their annual cost of living. For example, if you wanted to retire with a standard of living that cost £30,000p/a, then using a 4% safe withdrawal rate you would need an investment pot of at least £750,000 (4% of this figure is £30,000).
My preferred brand of FIRE at the moment is Lean FIRE. I don’t have an expensive lifestyle, and my pleasures in life are simple; fresh air, books, and exercise. I don’t need vast amounts of money for this. My investment income over the last few years has been moving in the right direction. I’ve not included 2019 in this, because I only started this blog late in 2019, but have a look at the figures below:
Investment Income
2020: £189.90
2021: £3,771.93
2022: £5,685.20
2023 (estimate): £8,000(ish).
I suspect I need the rest of 2023, and then 2024 and 2025 to accumulate enough income-generating assets to support my version of FIRE. The last four words of the previous sentence are important…
Just because someone is financially independent it does not mean that they will not work again in the future. The key point is that having financial independence means you can pick and choose the work that appeals. Rather than working for money, you can work for satisfaction and fulfilment. What I’ve come to realise, knowing now that I’m autistic, is that the overwhelming majority of the baseline stress and anxiety I experience every day will disappear once I no longer have to work in a job that requires hours of speaking to people. Don’t get me wrong, I’m not hostile towards other people. It’s just that my social battery no longer holds a charge like it used to. Interacting with people online, or via messaging apps like Whatsapp is fine. Real-time interaction for more than an hour or two at a time is something I just find absolutely exhausting. I’ve found myself thinking more and more about a quote from Lord of the Rings, where Bilbo is talking to Gandalf. He says, something along the lines of; “I want to see mountains again, Gandalf. Then find somewhere quiet where I can finish my book.” Me too, Bilbo. Me too. Now that I think of it, Bilbo also likens himself to butter being spread thinly over too much bread. Our Bilbo is quite the philosopher, it seems.
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2023 Goals
Click here to see my 2023 progress (opens a new tab).
What Am I Doing?
TV: Picard (Amazon), Unsolved Mysteries (Netflix).
Audiobook: War Lord: Last Kingdom Book 13 by Bernard Cornwell.
As I type this, I’m nearly done with the final Last Kingdom book. I’m not going to spoil things for anyone, and all I’ll say is that it’s been a heck of a journey following Uhtred from his childhood through to old age. I will have to revisit Cornwell’s Arthurian trilogy soon. After that, I may go back to The Cemetary of Forgotten Books series, or possibly Ken Follet’s Century Trilogy.
We now have just one episode left of Picard. I really wanted to like this show. I really wanted to enjoy it, but it’s so incredibly dumb. When any plot relies on the stupidity of characters to progress, it’s a stupid story. The plot should not control the characters. The best stories are those where the characters are fully formed, with layers and complexities, and the plot is a natural progression of what those characters would do in that set of circumstances.
Financial Update
Assets
Premium Bonds: £500.00 (-£37,500.00).
Stocks and Shares ISA: £87,009.02 (+£20,194.68).
Fuck It Fund: £325.00 (no change).
Pensions: £57,633.85 (+£380.95).
Residential Property Value: £226,085.00 (-£1,921.00).
BTL Property Value: £145,893.00 (-£1,240.00).
Total Assets: £517,445.87 (-£20,085.37).
Debts
Credit Card: £0.00 (no change).
Loans: £9,600.00 (-£100.00).
Residential Mortgage: £178,204.93 (no change).
BTL Mortgage: £105,001.75 (no change).
Total Debts: £292,906.68 (-£100.00).
Total Wealth: £224,639.19 (-£19,985.37).
Investment Income in 2023: £662.41 (target £8,500).
The valuations of my properties have been updated with the mortgage lender, and it’s no surprise that they’ve fallen again. It’s a drop of roughly 0.84% and I’m hopeful that the next quarter will see an increase, but that could very well be wishful thinking. The valuations don’t mean much in the short term, as I’m not planning on selling. However, long-term increases in the value of the properties will allow me to release the equity to put towards other investments. Realistically, I think it’s going to be another 18-24 months before I’ll be in a position to borrow against either the BTL or my apartment.
We finally have a tenant in our BTL. They moved in earlier this week, and I’m hopeful they’ll take better care of the property than the last two tenants. Our first tenant left the property flooded, with damage to the walls, ceilings, and blinds, with blood and damp present throughout the house. The second tenant wasn’t quite as bad, but still caused damage that cost over £1,500 to put right.
By next week my investment income for the year should have surpassed £1,000. One of my investment funds pays a monthly dividend, but the April dividend is usually higher. Next week is when I get paid also, so I should be able to increase the value of some of my investments. The next few months are going to be a little more expensive than normal though, so a smaller percentage of my net salary will go towards investing. We have two foreign holidays, and a couple of short UK breaks before the end of the year. Although transport and accommodation are paid for, we still need spending money.
The big financial update for this week was the huge drop in my Premium Bonds balance. I cashed in £37,500 worth of bonds, and paid back my investment partner following the aborted transfer of ownership of the BTL. I used the remaining money to max out my ISA. So, a significant change to my balance sheet this week.
That’s all for this week, thank you for reading, and I hope you have a good week ahead.
Disclaimer
The views and opinions in this blog are my own, and do not represent the views or opinions of my employer, nor should they be considered advice.
If you want personalised financial advice, seek an appropriate professional. If you are in financial difficulty, seek advice via the resources below:
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Thank you for taking us back to your FIRE beginning, a great read. Keep up the good work!
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Thank you!
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