Onwards to freedom!

SuperSecretSquirrel

[SIZE=2][FONT=Courier New]               CURRENTVALUE       +/-MTH       +/-QTR       +/-YOY
House Value:    [COLOR=Blue]£125,000.00[/COLOR]        £0.00        £0.00        £0.00
Pensions:        [COLOR=Blue]£79,627.82[/COLOR]    £1,169.16    £3,789.96   £17,103.98
S&S:             [COLOR=Blue]£27,394.71[/COLOR]      £787.44    £3,221.67   £13,339.62
Cash:            [COLOR=Blue]£24,489.58[/COLOR]  -£15,086.78  -£16,428.59  -£20,485.95
Car Value:       [COLOR=Blue]£14,725.00[/COLOR]       £10.00     -£415.00   -£2,000.00
Mortgage:             [COLOR=DarkRed]£0.00[/COLOR]   £14,140.28   £15,667.31   £22,438.21
Due to HMRC:       [COLOR=DarkRed]-£170.58[/COLOR]      £342.65      £279.57      £258.28
Student Loan:      [COLOR=DarkRed]-£248.61[/COLOR]       £66.34      £198.93    £1,817.82
[B]Total:          £270,817.92    £1,429.09    £6,313.85   £32,471.96[/B][/FONT][/SIZE]

90.3% of the way to 300k net worth (2020 challenge), 0.0% mortgage ltv, £51,713.71 liquid assets, 29.1% financially independent.
__________________________________________________

We're £1,429.09 ahead of where we stood last month. We paid some large annual expenses in January, and the mortgage ERC, so I'm happy with that

Huge positives:
1) A big fat zero on the mortgage line
2) Sum total of all debt is negligible (stooze not considered debt and is accounted for in the cash line)
3) Over 90% of the way to the end of 2020 challenge target of a 300k net worth
4) Raced ahead to 29.1% FI

I find the last entry to be the most exciting one

Having removed the mortgage from our outgoings, we should be able to live quite happily on around 18k a year. I knock the house and car values off total net worth for a rough and ready interest accruing assets value of £131,092.92. At a 4% withdrawal rate we could spend £5,243.72 a year (if we ignore the fact that the pensions won't be accessible for at least 20 years!), which is 29.1% of the required 18k.

There's still a very long way to go, but it does feel like we're getting there slowly

edinburgher

You are, as the French say, "keeleeng eet"

Also, you have a very conservative set of FI figures. If you accounted for your state pension (which might still exist in some form when we're old geezers), you're probably more like 50-60% there.

VDOT47

Yes, you absolutely have to include state pension in your retirement fund plans!


I must admit, as I read though your diary, I did wonder why you don't include your CC stooze debts on the NW schedule?

gallygirl

SuperSecretSquirrel wrote: »

4) Raced ahead to 29.1% FI

:j:j:j
So when are you projecting 30% and when 33% .

SuperSecretSquirrel

edinburgher wrote: »

You are, as the French say, "keeleeng eet"

Also, you have a very conservative set of FI figures. If you accounted for your state pension (which might still exist in some form when we're old geezers), you're probably more like 50-60% there.

Love the french Ed, have you been taking lessons?

You have a good point regards the figures being too conservative. A 4% withdrawal rate should in theory conserve the capital, so we would have a big chunk of change sitting around when we eventually reached state pension age. If the state pension keeps up with inflation, and the goalposts don't get moved much, we wouldn't be needing much personal provision on top, so we'd have worked longer than necessary. Worse, if the state pension were to be means tested we'd likely be penalised.

Another way of looking at it would be if we retired at 45, with 25x annual expenses behind us, and our state pensions started paying out at 70, our nest egg would only need to keep up with inflation (no additional gains), for us to reach state pension age with zero left in the pot, from which point the state pension would be enough to cover our needs. Investments keeping up with inflation with no real gains is too pessimistic, even for me with my cautious nature!

I think I'll need to think about this properly to come up with a plan that does factor in state pension. Was your 50-60% a simple finger in air estimate, or can you point me in the direction of some resources to help work this stuff out?

I guess it's all pretty academic, since we still intend on working in some capacity for a good few years yet, nowhere near qualifying for the full state pension yet for starters! Having more realistic figures would certainly help with making a decision on when to go part time or go for a career change or whatever we end up doing though. Yes, I definitely need to work on this.

SuperSecretSquirrel

VDOT47 wrote: »

Yes, you absolutely have to include state pension in your retirement fund plans!

I must admit, as I read though your diary, I did wonder why you don't include your CC stooze debts on the NW schedule?

Agreed, omitting the state pension is a mistake. It feels like a zillion years away, and there's plenty of potential for political interference between now and then, but it makes sense to include it, if I can figure out how!

Maybe I'll track two sets of figures, one factoring in state pension, and the other not. The first would be a realistic plan, the second a super cautious one. Both would be useful to me in their own ways.

As for the stooze debts, you may have noticed I have a terrible habit of paying off my debts way ahead of schedule. I paid an up front fee to borrow most of my stooze pot, paying it back early would be entirely counterproductive, so for me it's better that they're not even listed as debts. Then there's the fact that I'm not willing to do anything with the stooze pot funds other than hold in super safe cash accounts, and then when the 0% deals end shift out of cash to pay off in full immediately. A card debts line with a -40k value and a cash line with a +64k value would do me no good - it would look like I needed to do something with some of the cash when in fact the majority of it is only there temporarily and can't be risked. Card debt of zero and cash at 24k makes no difference to the bottom line, and better matches how I actually think about the balances.

Of course, the very same argument could have been made for removing the mortgage line when we hit mortgage neutral, and revise down the cash holding accordingly. I didn't do that. What can I say, my brain is a strange and inconsistent place

Maybe it boils down to the mortgage having always been a debt as far as I'm concerned, whereas the stooze is a clever work of fiction allowing me to get one over on the banks

SuperSecretSquirrel

gallygirl wrote: »

:j:j:j
So when are you projecting 30% and when 33% .

Hi gally

If you had asked me a couple of months ago, I could tell you. My greatly simplified spreadsheet doesn't do much in the way of forecasting, so I honestly don't know would be the answer right now.

Of course, I never did really know... My forecasts have never been particularly accurate. I'm not a pessimist in day to day life, but it seems I am when it comes to projecting future finances!

Couple that with the point by Ed and VDOT47 about state pension, and the earlier post by NM regards the unproductive cash balance, and it seems like a waste of time anyway :rotfl:

I'll try to reconcile these issues, and then come up with a plan or target or forecast or something

Karmacat

Discussion about the projections on retirement is very interesting for me, thanks for this. Didn't feel quite right to post the details on your own thread, SSS, but I've worked out mine (after the fact of retiring, of course ) by allowing for what I need to spend year by year until I get the state pension, including a hefty amount for house maintenance, and *then* worked out the 25 x goal amount. I did that bit in reverse, sort of thing - figured out what I'd have left, and divided it by 25, to see if it was enough. It was - it increases my income after the age of 66 by about two thirds.

And those figures don't include any *potential* money to come to me after the French apartment finally sells, or of releasing money from the house I currently live in (no kids of my own, nephews and niece all doing very well financially, I don't mind giving them a windfall but they're not going to get much, in their terms at any rate).

This ignores any income from becoming the second JK Rowling, of course :rotfl:

edinburgher

It should be relatively straightforward to model if you get a state pension forecast? I've created simple models in the past that consider 25x the value of the current forecast and add that to NW. Of course, that ignores things like the time value of money and inflation, but as pensions are uprated I figure treating it as the stated value in the forecast should work out fairly well. Either that or just look at what happens if you burn down your workplace pensions and ISAs with the expectation of SP filling the gap come 68? for you. In any case, you're lowballing.

State pension (and a couple of DB pensions which work on a similar model (of not bothering to fund the bloody things)) are the reasons I'm simultaneously relaxed and horrified by the prospect of retirement

My most optimistic calculations show that I'm already something like 60% of the way to if not FI proper, something like "Barista FI" where I could coast in a diddy job for 5 years or so to retirement proper. Reasons to be cheerful

Escapar2020

This is all very interesting! I hear different mentions of spreadsheets, is there something good and simple to download rather than starting from scratch?