Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • mystic_trev
    • By mystic_trev 9th Jul 17, 1:36 PM
    • 5,147Posts
    • 15,366Thanks
    mystic_trev
    How to retire at 40
    • #1
    • 9th Jul 17, 1:36 PM
    How to retire at 40 9th Jul 17 at 1:36 PM
    Program on C4 tomorrow night at 20.30.

    http://www.channel4.com/programmes/how-to-retire-at-40

    http://www.independent.co.uk/life-style/how-to-retire-at-40-tips-plan-saving-earning-average-salary-a7828801.html

    http://www.dailymail.co.uk/femail/article-4673030/How-retire-40-don-t-earn-fortune.html

    I managed it at the age of 42 nearly 21 years ago. It was done with a lot of hard work, and a little bit of luck, having been involved in a Company MBO 10 years previously.Friends thought I was mad and would run out of money in my 50's. Now, aged nearly 63, my net worth is well excess of that when I retired, thanks to some canny investing.

    The last 21 years has given me the ability to do many things that would probably have been more difficult if I'd waited to retirement at 60.
Page 2
    • runninglea
    • By runninglea 10th Jul 17, 9:12 PM
    • 788 Posts
    • 1,142 Thanks
    runninglea
    Another one of those programs that people sit down to watch hoping they can learn something. Having watched it found out that they have learnt nothing.

    Rather like that program on how to get mortgage free. Both seemed to say that living in a camper van or bus is the way to go
    Year 2017 (11,900/£17000mortgage repayment)Overall mortgage (51,0000/165568) (30
    .8%) (30/100) payments made. Total paid 2017 year £11,900

    Total paid 2017 year £11,900
    • Bravepants
    • By Bravepants 10th Jul 17, 9:34 PM
    • 272 Posts
    • 318 Thanks
    Bravepants
    I would have liked them to have said something more about index trackers, which were mentioned once by the Canadian couple at the beginning.

    Let's face it most reasonable people aren't going to sell potatoes with a felt tipped message for £3.99 a pop. And if you are the sort of person to spend £3.99 on one of those, you're not going to be retiring any time soon!

    My GF pointed out that we have some spuds in our fridge and a couple of Sharpies though, so I am tempted! I think we have some carrots somewhere too...I hope so because I'm not going to be spending anything for the next 4 days!
    • Stubod
    • By Stubod 10th Jul 17, 9:40 PM
    • 427 Posts
    • 265 Thanks
    Stubod
    ..what a crap programme...nothing of any interest or use....

    ..and can somebody explain the maths behind saving "75%" of your income for 7 years and never having to work again?????

    Age 25 and living with parents for 7 years on a really "tight" budget earning £30k * .75 = 22,500 *7 = £157,500 to last from 32 until retirement!!...I am not sure how useful a piece of advise that is....
    Last edited by Stubod; 10-07-2017 at 9:42 PM.
    • Spreadsheetman
    • By Spreadsheetman 10th Jul 17, 9:43 PM
    • 50 Posts
    • 39 Thanks
    Spreadsheetman
    ..what a crap programme...nothing of any interest or use....

    ..and can somebody explain the maths behind saving "75%" of your income for 7 years and never having to work again?????

    Age 25 and living with parents for 7 years on a really "tight" budget earning £30k * .75 = 22,500 *7 = £157,500 to last from 32 until retirement!!...I am not sure how useful a piece of advise that is....
    Originally posted by Stubod
    http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/
    • TomSurrey
    • By TomSurrey 10th Jul 17, 10:02 PM
    • 20 Posts
    • 16 Thanks
    TomSurrey
    I think the point about the saving rate is your spending is then 75% lower, so your spending would then be 25% of £30k so £7.5k. The second key point is its not just about saving the money its about investing it, if you'd put that 157k in stocks and shares over 7 years at 6% growth rate it would be worth £200k, at a 4% draw down rate that would give you £8k, more than what you've been living on for the last 7 years....

    The maths don't work as well for those who are single, and work much better for those earning a bit more or with some existing assets.
    • Bravepants
    • By Bravepants 10th Jul 17, 10:07 PM
    • 272 Posts
    • 318 Thanks
    Bravepants
    Yes, the aim is to save 75% and spend 25%, but assumes you will continue to live on the portion that is 25% per annum during retirement, plus any gains from investment as part of your drawdown.
    • Spreadsheetman
    • By Spreadsheetman 10th Jul 17, 10:16 PM
    • 50 Posts
    • 39 Thanks
    Spreadsheetman
    ....

    The maths don't work as well for those who are single, and work much better for those earning a bit more or with some existing assets.
    Originally posted by TomSurrey
    Yes, in the FI community there is a bit of a glossing over the fact that this works best for people with simple tastes, low expenses and very high incomes - at least for the "retire in 10 years" case.

    The 20-30 years range is a whole lot more achievable I think.
    • brewerdave
    • By brewerdave 11th Jul 17, 9:16 AM
    • 4,561 Posts
    • 1,887 Thanks
    brewerdave
    The Canadian couple from the start of the programme must have been earning shedloads of $$ in their 20s - even with modest lifestyles,renting etc investing for ~ 10 years in "index trackers" then living on the passive yield???
    • Spreadsheetman
    • By Spreadsheetman 11th Jul 17, 9:33 AM
    • 50 Posts
    • 39 Thanks
    Spreadsheetman
    The Canadian couple from the start of the programme must have been earning shedloads of $$ in their 20s - even with modest lifestyles,renting etc investing for ~ 10 years in "index trackers" then living on the passive yield???
    Originally posted by brewerdave
    They probably had software jobs like a lot of the people on the US FIRE forums - salaries in that field are huge compared to the UK.
    • Triumph13
    • By Triumph13 11th Jul 17, 10:11 AM
    • 1,104 Posts
    • 1,352 Thanks
    Triumph13
    Well, that was lightweight.

    For unintentional comedy there was a payday loan advert in the halftime ad break - er, won't be retiring if you go there then ;-)
    Originally posted by Spreadsheetman
    Even worse was the fact that the main sponsor, with an ad before and after every segment, was pushing a credit card with the message 'you can have whatever you want if you put it on a credit card'. The cynical part of me wonders if the total lack of any sensible advice was to avoid upsetting that sponsor.
    The only person who did have anything useful to say was the guy trying to explain the 25x spending rule and how that relates to your savings rate and that was basically greeted by the presenter with 'Argh! Maths! Scary!'.
    The only bright spot for me was the woman in the early vox pop saying if she was retired she could get on top of the ironing. Now THAT I can relate to.
    • michaels
    • By michaels 11th Jul 17, 10:49 AM
    • 19,737 Posts
    • 90,169 Thanks
    michaels
    We pension saved 100% of income for 2 years, as much as possible by salary sacrifice - very lucrative in terms of employer NI contributions, tax credits etc (so net household income including pension was way more than gross salary) but then ran out of carry forward allowance so are now capped at 40k pa. Still can't see us having a big enough pot to retire on in less than another 8 years though.
    Cool heads and compromise
    • Ganga
    • By Ganga 11th Jul 17, 10:55 AM
    • 808 Posts
    • 396 Thanks
    Ganga
    I also found the program a total let down,as for the two lads buying a property in London together to make/save money,no one pointed out what would happen if we have another property boom reversal!
    Mind after retiring at nearly 66 i wish i could have done it 10 years earlier.
    ITS NOT EASY TO GET EVERYTHING WRONG ,I HAVE TO WORK HARD TO DO IT!
    • Wednesday2000
    • By Wednesday2000 11th Jul 17, 10:56 AM
    • 1,238 Posts
    • 6,567 Thanks
    Wednesday2000
    I recorded it and haven't watched it yet. Will watch it later. I am planning to retire by age 50, but we don't have any kids. Not to save money, we just didn't want them.
    "It doesn't cost any more to dream big."
    • Spreadsheetman
    • By Spreadsheetman 11th Jul 17, 11:23 AM
    • 50 Posts
    • 39 Thanks
    Spreadsheetman
    I also found the program a total let down,as for the two lads buying a property in London together to make/save money,no one pointed out what would happen if we have another property boom reversal!
    Mind after retiring at nearly 66 i wish i could have done it 10 years earlier.
    Originally posted by Ganga
    Yes, that property bit was nonsense. If they wanted to show something that fitted with the premise of the program it should have been people with multiple rentals that could live on the rent income.

    That is the other common FIRE technique aside from equities that people on the US forums use. Mind you, they have the advantage that there are places in the US that have both a good job market and low-cost property. Not like here in the UK!
    • atush
    • By atush 11th Jul 17, 12:23 PM
    • 16,333 Posts
    • 10,081 Thanks
    atush
    I looked in on it briefly. They were talking about buying a house to live in with a friend. And then said there were companies who matched you with a Stranger to buy a house.

    Honestly, financial madness.
    • Bravepants
    • By Bravepants 11th Jul 17, 1:49 PM
    • 272 Posts
    • 318 Thanks
    Bravepants
    I had also heard of the "not spending for 5 days" rule. But the guy who presented that particular subject made out that it was such a hardship; walking for 3 hours to a job interview and then surviving for 2 days on a bit of old bread and veg...the point is that you need to plan.


    I reckon they tried to squeeze too much into a single episode, while trying to keep it entertaining! It would have been more useful to commission a 6 part series that could tackle each specific subject area in a single episode...so one episode would focus on high savings rates and what to do with the money, another on rental properties (upside and downside). I also felt that the "taking a risk" portions didn't make sense. So quit your job to do another job? OK fine, but that's not early retirement. They mentioned a statistic about 66% (?) of people setting up their own business, but never mentioned the fact that most startups fail in the first year. I think the show failed because it needed to take itself a bit more seriously, not treat the whole idea of early retirement as some sort of "shhyeah right!" joke.
    • BeatTheSystem
    • By BeatTheSystem 11th Jul 17, 4:32 PM
    • 142 Posts
    • 78 Thanks
    BeatTheSystem
    The gentleman (barney) that explained the 75% 7 year scenario runs a blog, https://theescapeartist.me/ it is one of the better blogs on the subject of FI that is both humorous and full of practical advice.
    • jerrysimon
    • By jerrysimon 11th Jul 17, 9:12 PM
    • 251 Posts
    • 185 Thanks
    jerrysimon
    The presenters drove me crazy, all hype and over the top reactions. I also thought the show content was actually quite poor.

    I have retired this year at 56. I have two daughters 28/30 and as per others retiring at 40 would have been a challenge. I would also have missed the last 16 years of the best job I had!

    Jerry
    Last edited by jerrysimon; 11-07-2017 at 9:15 PM.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

190Posts Today

1,516Users online

Martin's Twitter