The Current State of Affairs

 

While it may be nice to start from zero (for the story if nothing else), the actual fact of the matter is I’m not. In detailing my starting point, I can better reflect the decision and progress made towards the eventual goal. I’m going to lay out my monthly budgets, monthly income, investments currently made and the plan for the future here as a reference point to reflect upon when necessary.

 

Income and Expenditure (monthly)

Joint Income – £3,000

Food – £250

Rent – £550 (going to about £750 in mortgage payments soon)

Council Tax – £140

Utilities (Gas, Elec, Water) – £130

Petrol – £300 (will reduce with move to new house)

Internet – £40 (will reduce when move to new house)

Entertainment – £100 (includes visits to soft play etc for little one)

Gym – £46 (two memberships, will be gone in September)

Phone – £33 (for two people)

Total – £1,589

Savings – £1,411

Savings Rate – 47%

There is a lot of things in here that will be reduced when we move house, we will also increase rent by £200. Some of this will be increasing our net worth though, but some will go towards the interest payable. I’m planning on having savings of about £1,300 once we move but that could change. One of the things that sticks out for me is petrol. Unfortunately, at the moment I have a 100 mile per day round trip but I go on a motorbike that does 65 mpg. This will reduce for me but increase for my partner so I think it’s a net reduction.

I would think the plan would be to find a new job that is much closer to home once we have moved. Will have to wait and see what happens.

Net Worth

I’ve decided to have the value of our home included in this, why will be another post but it seems controversial to do this. I think my reasoning is solid though.

House – £0

Cash – £30,000

Limited Company – £75,000

Shares – £400

Bonds – £0

Tracker Funds – £0

Total – £105,400

So we are holding a lot of cash while we buy another house, this is for the deposit and various other costs associated with moving house. The limited company is a family company that I setup last year with my brothers. We run buy to let housing and my shares are currently worth £75,000 and I hold a director’s position within the company. This should hopefully go up in time.

The shares I hold are from when I was looking at investing a monthly amount. This fell by the wayside when I needed to have cash to buy a house. It will start increasing once things have settled down a bit.

Increasing Income

I’ve just got a new job back in April which gave me a 23% pay rise. So I think I’m done for a while in increasing my main income. I am a member of the Army Reserve which brings in a little extra per month. This isn’t guaranteed so I don’t count it in my main income.

I plan in increase my companies housing portfolio over the coming years so will start to take a salary from that as soon as I feel that the cash flow can handle it.

There are other things I am going to do including matched betting, various blogs and maybe dip my toe in forex trading again. Other options are to write some books about things I love like cooking.

One thing I have been keen to do over the past few years is to learn how to code properly. I use a lot of excel and SQL in my day job so would like to take that further into programming mobile apps and learning other computer languages.

I have a fairly active mind and am always looking for ways that would increase my income. I’m not above stealing other peoples ideas and having a go myself. A wise man once said, you’ve got 10 fingers might as well have one in each pie.

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The Story So Far – Part 3

THE FINANCIAL LEARNING YEARS (Age 28 +)

This is when I started to get serious in paying off my debt. I transferred what I had on my credit card to a 0% interest balance transfer card which gave me 16 months to pay it off. I setup a standing order to pay it off in 15 months and left it do to its thing automatically. I also started reading Martins money saving expert website to give me some hints and tips here and there. Instead of using a credit card to rack up debt, I got a reward credit card to give me a % of my money back every time I spent. I also setup a savings account so that when I spent money on the credit card, I transferred the same amount to the savings so I would always have enough to pay it off.

During this time I was reading the Mortgage Free Wannabe forums on the MSE forum when a few people were mentioning about being financially independent. A little curiosity got the better of me and I started with a google search. Like so many people before me I found Mr Money Mustache which lead me to a variety of other blogs including Living an Fi, 1500days, jhcollins, investmentzen, early retirement guy and Financial Zombie all of which I’m an avid reader of. Its these people that lead me to play around with a spreadsheet too see how early I could retire. This kickstarted when I met Miss. 52F as I would rather be spending time walking along a beach with her than in work.

In some ways, the happiness I found while dating Miss. 52F that made me realise that I spend far too much time in work, and not enough time enjoying myself. It will be for her that I push us both to maximizing our income, reducing our expenses, adding on side hustles and invest the difference.

So this blog is dedicated to our story, to our life, and to breaking free from the rat race together so we can walk down our beach in perpetuity.

The Story So Far – Part 2

UNEMPLOYMENT (Age 22-24)

This was the most depressing thing that I had ever lived through. With no idea of what I wanted to do, and the stark realisation that for the first time in my life I had failed at something, my motivation was at an all-time low. While I was searching for jobs that would suit me, it was difficult to find anything that looked even remotely like a career. Companies just weren’t hiring anyone on a long-term basis, not even to stack shelves. It took me a long time to recover from this but finally finding myself an entry level position in a finance department which gave me a short term, 6 month contract. I needed to impress. Thankfully at the end of it I got a permanent job.

THE SPENDY YEARS (Age 24-30)

So with my first job, came my first pay check and I would like to think I lived fairly responsibly to start with. I didn’t manage to pay down any of my debts but I was getting by and had lofty ideas. I went back to college to study for accountancy exams and ended up staying in this position for 4 years. Not that I was happy there, promotion was hard to come and the job wasn’t challenging at all. Outside of work I moved from rented back to living with my parents, this is where I meet up with some old friends and a drinking culture soon ensued. I wasn’t living beyond my means though and I was, in the slowest possible way, paying down my overdraft. I was spending probably £100 a week on beer, and when you are only getting paid £1,000 a month, that’s a lot of money I was pissing up the wall. Thankfully this only lasted till I learnt to drive at 25 as then I couldn’t drink and drive home.

It was about this time I learnt about credit rating and decided to get myself a credit card for fuel to raise my credit score. While this started out with the best intentions to be paid off in full each month, I soon found myself adding not just petrol but a few beers or a round of golf onto the card. Soon I was living beyond my pay and had racked up a total debt of about £5,000. It took me a good few years to realise the problem before I started paying it off. Luckily I had always paid the minimum amount so these mistakes should affect my future chances of getting a mortgage.

I also learnt to ride a motorbike during this time. While I would categorise this as probably the single best thing I have ever done, it added some financial pressure. I borrowed money from my parents to buy the bike (at 3% interest), as well as taking on the maintenance and upkeep that goes with having a second motorised form of transport. This was a toy that I couldn’t really afford at the time and was typical of my thinking.

Thankfully I cottoned on that this wasn’t sustainable and I had to change my ways if I were to be able to move out of my parents house!

The Story So Far – Part 1

I have a confession. I haven’t bought the house yet, just had an offer accepted. Being the overly optimistic realist that I am, I thought I would announce to the internet that I have and hope everything goes swimmingly. Good things come to those that don’t wait*

What this does do is give me a chance to fill in some background and add a little about myself. So to start at the beginning which I think I’ll call…

THE TUTORIAL (Age 0-18)

From age 0-18 I was in the usual education phase. I was a mediocre student and never really tried to push myself at anything. I did GCSE’s then A-Levels before moving onto uni. I was involved in beavers, scouts and the Air Training Corps outside of school, as well as various clubs in school like football, science and technology.

In general, this is where the training for adult life should take place. Like most people I think I was woefully under prepared at the end. This probably contributed to some financial mistakes later. If only I could go back and tell my younger self a thing or two, like the winning lottery ticket numbers for instance.

I think my upbringing was fairly typical, but as one of 4 kids I was left to do my own thing more often than not. My sister seemed to get quite a lot to the time and attention which left me to my own devices. This has given me a personality where I can entertain myself in my own company for hours, I’m fairly responsible and don’t really differentiate from the normal image of a good guy (or at least I would like to think so!)

HIGHER EDUCATION (Age 18-22)

In the previous part I mentioned that I didn’t really try too hard at anything. It was the same in uni, apart from my natural intelligence wasn’t enough to carry me through. I was too focused on the things that weren’t going to help me in life. Namely beer and computer games. While these things were fun at the time, they didn’t really get me anywhere and I left uni without a degree but with the debt.

It was during this time that I spent all the money I had and more. I took out the maximum student loans, worked full time during the summer months (and spent it all) and spent all of my available £1,600 overdraft. Thankfully the overdraft was at 0% while I was a student but afterwards I was charged something like 12%.

As I was leaving, with a lot of debt and no degree, the 2008 crash hit me straight into unemployment.

 

*This may or may not be the actual saying

The FIRE Start

It’s done. Which means I have to start. Which is probably a little confusing for you right now so I guess I’ll have to throw in some background.

I’ve been interested in this myth of financial independence and retiring early since I started work about 9 years ago. I didn’t know what it was call back then but the ideas I had around it seemed to fit in with a lot of the gurus around now. I remember working out how much money I would need in my bank account to give me my earnings based on the net interest I was getting paid. The figure came back at about £2 million which seems like a mountain of a task. So I gave up trying the savings route instead looking for other opportunities. But first there is the needing of a house.

People in the UK have an obsession about housing. Every Englishman’s home is his castle and that runs true for a lot of us. From the outside looking in it would seem an irrational level of infatuation my countrymen and women have for their house. I must confess I’m no different. So these past couple of weeks I’ve had an offer accepted on a house. A three-bedroom detached bungalow in a quiet little rural village. Perfect.

I’ve promised myself and my partner that once the house situation is sorted out we will save up the money needed to retire early. I also promised myself that I would start a blog to track and record that progress. This is it, the start towards FIRE.

I’m tempted to throw some star trek sound track lyrics here but not wanting to get sued for copyrights infringement on my first post I’ll leave it.

So the mission. Once we have completed on the house, we have 5 years to build up alternative streams of money to support out lifestyle. I’ll go into these things in a little more depth with future posts. But for now, we start.