Including Financial Independence and Retiring Early (FIRE)
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Postby tjh290633 » December 7th, 2016, 5:25 pm

Just one word of caution. I have looked at theoretical gilt ladders and found them to be a recipe for losing money at this time.

Comments have been made that I needed to be higher up the yield curve, but they don't tell you that, as far as I can see.


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Postby Radiccio » December 9th, 2016, 11:42 am

Wow - arrived here late as I had slowed down my visits to the old place, but a thread that resonates with a lot of issues here...

I'm in my late forties and have been in IT since university. Not quite as techie as some here, but gradually moved away from the coal face into consultancy and now do contract project management work.

There is a niche in my area for people who are presentable, can explain things clearly and who can get things done. There will always be cheaper people but there's often a big gulf between IT and its customers (or indeed between IT and common sense) and there will always be a demand for people to bridge this gap.

I started reading the fool about eight years ago and FI is still five to eight years away. Like others, after fiddling with HYP or individual shares, I've settled on a basket of ETF's and trackers which seems to be plodding nicely (although I'm not sure of the bonds any more - see my other posts).

I see the RE part of the equation as having the option not to work: long holidays, going abroad over the winter maybe but if something interesting comes up, then why not?

One area I am interested in is reducing my working hours. A four day week would give me some of the benefits of RE already and while it would hit my savings rate, I would happily wait a bit longer for 'full' RE...

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Postby gadgetmind » December 9th, 2016, 12:51 pm

Dropping to a four day week was a no brainer for me. It took me out of personal allowance claw back and also pension taper so saved £30kpa in tax while letting me put more into pension. I now don't work Mondays. Having 20% fewer working days is good, but having 50% longer weekends even better!

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Postby Gfplux » December 15th, 2016, 10:29 am

TheRIT wrote:
kodokan wrote:Introducing myself as part of the FIRE camp.

I was a longtime Fool poster through the 2000s, but drifted away in recent years as we moved to the US so the UK financial environment became less relevant to me. A few years ago, I came across the (more active in the US) concept of FiRE, thanks to Jacob Lund Fisker's book and the blogging efforts of MMM and others.

Hubby and I are in our mid-40s so are never going to quite hit the 'early' part of ER, but we're aiming for a finish to paid work in about 7 years, to coincide with our youngest finishing schooling. Our financial planning is a little more complex than usual, as it incorporates:
- a number of defined benefit/ contribution pensions from the UK
- state pensions/ Social Security from the UK, the US and Switzerland (we lived there for a few years before moving to the US)
- US 401k tax-deferred, age-locked pension-style accounts
- taxable assets invested in US mutual funds

These varying income streams will kick in at different points between ages 55-70, in three different currencies, subject to a variety of tax regimes and cross-border agreements. I have a huge, lovely spreadsheet covering now until I'm 100 (but even the best spreadsheeting doesn't allow for things like Brexit suddenly reducing my projected UK income by 15-20% overnight).

We are also not entirely sure where we might live in retirement, once we are no longer tied to a job-based geographical location.

Consequently, I feel I have a foot in both UK and US retirement planning camps - I lurk and semi-post on a few US ones, but am glad to find this board and hopefully be part of the discussions here too.

Clearly a very well travelled couple. I know you say you don't know where you'll end up in FIRE but would be interested to know if you have a shortlist?

I ask as I'm at a critical point where where I'm between FI and FIRE and it's now time to pick our next 'home' as we no longer want to be in the South East of England. For many years we'd targeted the Med with the shortlist down to Cyprus (Paphos area), Spain (Marbella area) and Malta. We'd then been working our way to a final choice with selected visits. Then Brexit appeared and brought into question healthcare arrangements at State Pension age, uplifting of State Pensions, simply getting a visa and a big £ devaluation making a home purchase all of a sudden a lot more expensive. Since then we've investigated Herefordshire and loved it. So right now the world is about to become our oyster and we're a bit deer in headlights.

We are far, far down the road as I have been (ER) retired for 20 years however living in Luxembourg became slightly less relaxing after Brexit. We live in interesting times.

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Postby Gfplux » December 15th, 2016, 10:35 am

TopOnePercent wrote:
thebarns wrote:£5 million for FIRE and pay the children''s schooling/uni !

For 60k pa.

Strikes me as an enormous sum, well beyond the attainment of your average or indeed considerably above average investor and would put off the vast majority from ever considering FIRE !
I am sure many at or contemplating FIRE will be looking at considerably smaller capital sums.

Out of interest, would any posters close to or post FIRE care to divulge the minimum capital sum they'd consider necessary?

I will say it can be less than you think.

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Postby Gfplux » December 15th, 2016, 10:44 am

funduffer wrote:Thread has gone a bit quiet, but I thought I would add my experience of FIRE.

I FIRE'd at 58, which is not that young, but I would still class as retiring early. I am now 61, and live off a DB pension and my investments (mainly dividend-paying shares and IT's, mainly in ISA's). However, I thought I would mention a few non-financial aspects of FIRE:

1. Get social. Unless you have a very active social life already, you will find you miss the day-to-day office banter with work colleagues. Go and find some clubs/organisations/voluntary groups to join for the social interaction. If they are during the working week, you will find you are amongst the youngest in these groups, so be prepared to interact socially with people 10 or 20 years older than yourself. I have joined a male voice choir, and have made many new friends from this.

2. Keep active. You should have more time, so use some of it to get fitter and healthier. I now walk to many places I used to drive to, and also cycle and swim. I have lost a fair amount of weight since retiring and feel much healthier than when I worked (which was basically a sedentary job in an office).

3. Be intellectually challenged. Keep your brain active, by taking part in something that stretches your mind. This might be further education, or some club with an intellectual challange - eg discussion groups. I joined a local discussion forum, and a medical research committee, from which I have learned a lot and kept my brain active.

4. Be worthwhile. Do something to maintain/gain self-esteem, which is all part of your overall personal well-being. Voluntary work is the obvious thing here - I volunteered for the local Air Ambulance charity as a speaker, which took me to all sorts of places, and made me feel I was still being useful to society.

5. See the world. If you can afford it, go and see the world, or the country, or your local region. Do it before you get too old. Start with long haul, as your horizons will reduce as you age. I have identified about 10 places I want to visit before I reach 70.

6. Stay solvent. The biggest thing approaching FIRE is to understand what you will spend, and therefore what income you will need. I under-estimated how much cheaper it is to live after FIRE, and have generally been too cautious in my spending. I hadn't quite realised how much tax, NI and work expenses were taking from my income when I worked. Also, after FIRE,you have more time to scrutinise what you spend, and I have found I have made very large savings in what I spend simply by finding bargains, changing bank accounts, switching energy suppliers and the like. I have been so successful, I am now struggling to spend up each month without generating new savings that I do not really need. The change in mindset from saving/investing as much as possible in achieving FIRE, to spending to enhance your quality of life has taken me some time to achieve.

Overall, enjoy FIRE - I do.


Excellent post, having been ER for 20 years I could have almost written the same post. ER is not ALL about money.

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Postby Gfplux » December 15th, 2016, 10:52 am

TahiPanas wrote:
TopOnePercent wrote:Perhaps I might suggest speaking to a good tax accountant? That you are relocating to the UK does not necessarily require that your assets do the same, and repatriating only what you require to spend may allow the remaining income to legally find a tax free home on some shady island.


I will do so, thanks. However, my understanding is that UK residents are liable for their worldwide income. I have read nothing so far over the years that suggests there are any,, loopholes. What features were you thinking of?

I am resident in Luxembourg and pay my taxes here (not much different to the UK)
To become Tax resident in another country is quite easy. You have to persuade HMRC that you truly live in your adopted country. To ensure domicile (which might be important) you would also have to cut ties to the UK which might mean no longer owning property there.

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Postby dspp » December 15th, 2016, 11:45 am

TopOnePercent wrote:
thebarns wrote:Out of interest, would any posters close to or post FIRE care to divulge the minimum capital sum they'd consider necessary?
I will say it can be less than you think.

If you look at my post in this thread on 10 Nov 2016 viewtopic.php?f=30&t=99&start=60#p3262 you can see that I posited a level of £200k as being perfectly reasonable, before taking into account any private pensions or other incomes which might reduce it further. It all depends on lifestyle and I set out some sums for a median lifestyle.

regards, dspp

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