Peak Fire?

[Adamski]

Inflation 11%, markets down c. 10%. Gap in real terms this year of 21%. Not a good year fo most stockmarket investors.

No wonder fire blog posts I follow are drying up. Is Fire peaked as a movement, and now on way out. Conversely could be a good buying opportunity as market drops have usually been a good time to buy and get in.

[tjh290633]

Inflation 11%, markets down c. 10%. Gap in real terms this year of 21%. Not a good year fo most stockmarket investors.

No wonder fire blog posts I follow are drying up. Is Fire peaked as a movement, and now on way out. Conversely could be a good buying opportunity as market drops have usually been a good time to buy and get in.

Despite the market being down, dividends are up. If you invest for income then things are fine. If you think in terms of TR you may be less happy. Horses for courses and all that.

TJH

[DrFfybes]

There are those who simply retire early, and thse who make money blogging about it.

Like many here, I'd long been working towards early retirement before I'd even heard the term FIRE. I think it used to be called "saving".
Didn't seem odd to me, Dad sold up and retired when I left uni, he was about 60.

Paul

[BullDog]

There are those who simply retire early, and thse who make money blogging about it.

Like many here, I'd long been working towards early retirement before I'd even heard the term FIRE. I think it used to be called "saving".
Didn't seem odd to me, Dad sold up and retired when I left uni, he was about 60.

Paul

Those making money by writing blogs aren't early retired. They've changed careers to become professional bloggers. Simple?

[DrFfybes]

There are those who simply retire early, and thse who make money blogging about it.

Like many here, I'd long been working towards early retirement before I'd even heard the term FIRE. I think it used to be called "saving".
Didn't seem odd to me, Dad sold up and retired when I left uni, he was about 60.

Paul

Those making money by writing blogs aren't early retired. They've changed careers to become professional bloggers. Simple?

You mean people earn a living from dressing up the sort of twaddle we post on here for free?



Paul

[BullDog]

There are those who simply retire early, and thse who make money blogging about it.

Like many here, I'd long been working towards early retirement before I'd even heard the term FIRE. I think it used to be called "saving".
Didn't seem odd to me, Dad sold up and retired when I left uni, he was about 60.

Paul

Those making money by writing blogs aren't early retired. They've changed careers to become professional bloggers. Simple?

You mean people earn a living from dressing up the sort of twaddle we post on here for free?



Paul

[ursaminortaur]

Inflation 11%, markets down c. 10%. Gap in real terms this year of 21%. Not a good year fo most stockmarket investors.

No wonder fire blog posts I follow are drying up. Is Fire peaked as a movement, and now on way out. Conversely could be a good buying opportunity as market drops have usually been a good time to buy and get in.

Despite the market being down, dividends are up. If you invest for income then things are fine. If you think in terms of TR you may be less happy. Horses for courses and all that.

TJH

A recent "This is money" article echoes this idea of investing for income rather than total return

https://www.thisismoney.co.uk/money/pensions/article-11471919/Retirees-told-focus-income-not-volatility.html

Retirees who are using a defined contribution pension plan to help fund their everyday finances are being advised to reappraise how they take money from the scheme – against the backdrop of volatile stock markets and rising interest rates.

A 'white paper' just published by income planners Chancery Lane argues that income-hungry retirees need to ensure the investments in their pension plan are 'sufficiently reliable to meet this single, personal need'.

It argues that too many people in retirement hold investments inside their pension plan on the basis of their ability to generate total return – a mix of capital growth plus income – when the emphasis should be on securing a stable source of income.

[Dod101]

Inflation 11%, markets down c. 10%. Gap in real terms this year of 21%. Not a good year fo most stockmarket investors.

No wonder fire blog posts I follow are drying up. Is Fire peaked as a movement, and now on way out. Conversely could be a good buying opportunity as market drops have usually been a good time to buy and get in.

Despite the market being down, dividends are up. If you invest for income then things are fine. If you think in terms of TR you may be less happy. Horses for courses and all that.

TJH

A recent "This is money" article echoes this idea of investing for income rather than total return

https://www.thisismoney.co.uk/money/pensions/article-11471919/Retirees-told-focus-income-not-volatility.html

Retirees who are using a defined contribution pension plan to help fund their everyday finances are being advised to reappraise how they take money from the scheme – against the backdrop of volatile stock markets and rising interest rates.

A 'white paper' just published by income planners Chancery Lane argues that income-hungry retirees need to ensure the investments in their pension plan are 'sufficiently reliable to meet this single, personal need'.

It argues that too many people in retirement hold investments inside their pension plan on the basis of their ability to generate total return – a mix of capital growth plus income – when the emphasis should be on securing a stable source of income.

Brilliant idea. A retiree needs income? How novel. That is what I have been doing or trying to do for the last 25 years or so.

Dod

[EthicsGradient]

Inflation 11%, markets down c. 10%. Gap in real terms this year of 21%. Not a good year fo most stockmarket investors.

No wonder fire blog posts I follow are drying up. Is Fire peaked as a movement, and now on way out. Conversely could be a good buying opportunity as market drops have usually been a good time to buy and get in.

Despite the market being down, dividends are up. If you invest for income then things are fine. If you think in terms of TR you may be less happy. Horses for courses and all that.

TJH

A recent "This is money" article echoes this idea of investing for income rather than total return

https://www.thisismoney.co.uk/money/pensions/article-11471919/Retirees-told-focus-income-not-volatility.html

Retirees who are using a defined contribution pension plan to help fund their everyday finances are being advised to reappraise how they take money from the scheme – against the backdrop of volatile stock markets and rising interest rates.

A 'white paper' just published by income planners Chancery Lane argues that income-hungry retirees need to ensure the investments in their pension plan are 'sufficiently reliable to meet this single, personal need'.

It argues that too many people in retirement hold investments inside their pension plan on the basis of their ability to generate total return – a mix of capital growth plus income – when the emphasis should be on securing a stable source of income.

Misleading example used in the article: they compare the total return of the FTSE 100 since 1999 with trusts that apparently include international investment (because they mention ones like F&C).

However, looking at the white paper from November, it does also give figures for a world tracker, to end of Dec 2021; that did better than the FTSE 100 tracker (£88k inc, £146,250 left, v. £88k, £62,565 left), but still notably behind the basket of trusts (which, annoyingly, they don't list).

https://static1.squarespace.com/static/ ... r+2022.pdf

[James]

A recent "This is money" article echoes this idea of investing for income rather than total return

https://www.thisismoney.co.uk/money/pensions/article-11471919/Retirees-told-focus-income-not-volatility.html

Retirees who are using a defined contribution pension plan to help fund their everyday finances are being advised to reappraise how they take money from the scheme – against the backdrop of volatile stock markets and rising interest rates.

A 'white paper' just published by income planners Chancery Lane argues that income-hungry retirees need to ensure the investments in their pension plan are 'sufficiently reliable to meet this single, personal need'.

It argues that too many people in retirement hold investments inside their pension plan on the basis of their ability to generate total return – a mix of capital growth plus income – when the emphasis should be on securing a stable source of income.

Mandy Rice-Davies applies.

[airbus330]

I don't think much has changed. You either do the sums and have enough or you don't. I guess that some will have come to the conclusion that they need more to compensate for the current situation or will wait for a signal that the corner has been turned. There being a few less bloggers promoting FIRE is probably a good thing as a lot of the stuff I see is of dubious quality. At the end of the day, those of us that have already FIRE'd, are probably glad to see the end of 2022, but you can't live off an investment portfolio without this sort of shake out happening. Personally, I'd rather be FIRE-ing now than when I did 3 years ago, but at the end of the day, I'm 7% down on the year, which isn't the end of the world. Plus, if this happens again (hopefully in some distant future) I'll be more sanguine about it all and less likely to make some of the errors that I've made over the last year and a bit.
Totally right about the Income needing to be a priority, though. Much easier life if those divs keep rolling in.

[Adamski]

You mean people earn a living from dressing up the sort of twaddle we post on here for free?

Exactly they might even used this forum as source material

[Dod101]

I don't think much has changed. You either do the sums and have enough or you don't. I guess that some will have come to the conclusion that they need more to compensate for the current situation or will wait for a signal that the corner has been turned. There being a few less bloggers promoting FIRE is probably a good thing as a lot of the stuff I see is of dubious quality. At the end of the day, those of us that have already FIRE'd, are probably glad to see the end of 2022, but you can't live off an investment portfolio without this sort of shake out happening. Personally, I'd rather be FIRE-ing now than when I did 3 years ago, but at the end of the day, I'm 7% down on the year, which isn't the end of the world. Plus, if this happens again (hopefully in some distant future) I'll be more sanguine about it all and less likely to make some of the errors that I've made over the last year and a bit.
Totally right about the Income needing to be a priority, though. Much easier life if those divs keep rolling in.

If you mean 7% down in capital that is certainly a long way from being a 'shake out', especially bearing in mind that the end of 2021 was more or less the peak for many. The end of the year is in any case still nearly four weeks away, I suppose about three weeks of trading, but a lot can happen in that time.

I am down a little more on the capital front o date but my income, assured to year end, is up about 10% from 2021.

Dod

[Arborbridge]

So what happened in 2022? - I must have missed it.

Oh, I know, my dividend income was the highest it has ever been and has recovered mightly after the Covid dip which itself was hardly a trauma.

Arb.

[MrFoolish]

If any of you guys are happy to reveal such a thing, are you living off dividends, selling off the capital, or a combination of both?

I expect that when I take early retirement, I'll be taking dividends and some capital from my SIPP up to the tax free threshold (plus tax free lump sums), and taking whatever extra I need from my ISAs. Probably my SIPP will be pretty depleted by my mid 60s (though it depends on the performance), when I'll be taking my state pension and a smallish DB pension, again topped up from the ISAs. Does this sound like a sensible strategy?

[Arborbridge]

If any of you guys are happy to reveal such a thing, are you living off dividends, selling off the capital, or a combination of both?

I expect that when I take early retirement, I'll be taking dividends and some capital from my SIPP up to the tax free threshold (plus tax free lump sums), and taking whatever extra I need from my ISAs. Probably my SIPP will be pretty depleted by my mid 60s (though it depends on the performance), when I'll be taking my state pension and a smallish DB pension, again topped up from the ISAs. Does this sound like a sensible strategy?

I live entirely from dividends - so far haven't needed to sell down capital.

I did not retire early - I was 60 when I went part time for a couple of years (17 years ago) - but I see no reason why, given a big enough "pot" one should not retire decades early and live by using the dividend income. I have no DB pension, and only the State Pension as an extra to my dividend income.

Arb.

[MrFoolish]

I imagine a strong plus-point of living off dividends is not having to think about what to sell.

Though I've traded a fair bit, I've never been a net seller of shares. So to start selling... well I don't know how I will get into the mindset. Do I sell the winners* or the losers? It would be important to minimise selling cost too. I suppose it will have to be a learning process.

*I suspect low yield winners will have to go first.

[airbus330]

If you mean 7% down in capital that is certainly a long way from being a 'shake out', especially bearing in mind that the end of 2021 was more or less the peak for many. The end of the year is in any case still nearly four weeks away, I suppose about three weeks of trading, but a lot can happen in that time.

I am down a little more on the capital front o date but my income, assured to year end, is up about 10% from 2021.

Dod

Down 7% capital at this time, but about double that in September. Things have bounced back pretty quickly. As far as Divi Income is concerned, I'm up about 10% this year and used the dip in September to buy more of my favourite divi shares so next year should, all things being equal, increase my income another 10%. As you say, anything could happen in the next 4 weeks, but reliable divi payers pay the bills and thats what I'm mainly interested in, although my plan is for a drawdown of capital combined with divi's over the years to fund my retirement.

[JohnB]

6 years into FIRE, and my portfolio is still growing in absolute terms (I only think in terms of total return), but I'd expect that because I didn't stop work until my modelling suggested I could weather extreme downturns or aggressive tax, which we've not had, excess income now is like working part-time, which would have been my alternative. Anyone planning FIRE now with the market down can allow for less contingency for further falls, so the numbers don't change as much as you think.

What is harder to handle is inflation, as I tend to look at my net worth, and not imagine its value shrinking with inflation, as mentally I picture my current expenditure continuing flat. I think its very hard to internalise compounding numbers.

[airbus330]

If any of you guys are happy to reveal such a thing, are you living off dividends, selling off the capital, or a combination of both?

I expect that when I take early retirement, I'll be taking dividends and some capital from my SIPP up to the tax free threshold (plus tax free lump sums), and taking whatever extra I need from my ISAs. Probably my SIPP will be pretty depleted by my mid 60s (though it depends on the performance), when I'll be taking my state pension and a smallish DB pension, again topped up from the ISAs. Does this sound like a sensible strategy?

I'm doing pretty much what you describe. Retired at 60. Taking a combination of divi income, capital gain from the SIPP in the form of UFPLS and cash. The plan is to replace the cash drawdown with State Pension at 66. My wifes small DB pension and her state pension will both kick in along the way. We are lucky in that we have had quite a good cash cushion during the turbulence of the last 3 years which has enabled us to not be forced into selling the Sipp units when they have been substantially down. I have always worried that I carry too much cash as it has often been seen as a bad investment policy in previous years, but it gives me a good nights sleep and flexibility to pick up cheap divi shares when they are on sale. This policy seems to have worked for me. Without doubt, I could have been more successful with a different portfolio, but I'm not smart enough as an investor to execute it without the risk being uncomfortable.