24 and wanting to retire early

SarahB16

I'm really enjoying read this thread and seeing all the wonderful advice.

You currently live at home so are not tied to a particular location so you may wish to consider, in time, moving to a city which has good job opportunities (enabling you to progress more quickly up the career ladder due to you applying for other roles in different companies) and it's easier to do this in a larger city.  

In the UK this would be London however you need to avoid paying rent and purchase at least a two bedroom house (if you rent out a room use rent a room relief and you can earn up to £7,500 per year tax free).  Purchasing a property in your twenties is unachievable in London (from what you have told us) therefore you should consider other cities such as Manchester and Birmingham (or another relatively large city).  This will mean you will be able to afford to purchase a house but probably not in the most desirable part of the city at first but don't worry the most important point is that you are on the property ladder.    

You don't say what you do for a career but try to ensure you obtain professional qualifications. 

I really love your mentality of wishing to retire early.  I remember at the age of 21 in one particular job thinking I can't believe I've got at least another 40 years of this until I retire.  The point I'm making is that I was in a job I didn't enjoy.  Do not stay in a job you don't enjoy.  That doesn't mean switching careers it just means work for a different organisation.  You will soon know what feels right for you. 

theoretica

Divorce need not be a major financial negative - if you and spouse have been financially equal throughout the marriage.  It is only if one partner has been the primary grower of capital that splitting 50:50 would seem unequal.

Patrol

FireRetire98 said:

Hi all, I'm 24 and eager to retire early if possible!

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I contribute a lot to my pension (at least for my age). £943 a month goes into a workplace pension - this is before tax so I gain tax savings and employer contributions.

It is a great idea to pre-load your pension while you can to benefit from compound growth and tax efficiencies. Consider where it is being invested though, occupational pensions often have a default fund that might not be the best choice if you are looking to retire early or you may be able to have some in the default investments and some in a wider variety of funds.

Anything you put into your pension will be unavailable to you until at least the age of 57. Depending on your definition of retire early you may want to divert more of your contributions to more accessible places such as your ISA's to bridge the gap between early retirement and 57.

In your shoes I would build a model (spreadsheet) for you pension, ISA's and so on. See whether you would have enough in the pension from 57, how much any other savings could top up pension income or fill the gap. As time goes by, you can track progress and refine where you are heading.

FireRetire98

Are your contributions made by salary sacrifice? That would give you a saving in NI.

Yes, I use salary sacrifice. It cuts down my take home pay, but I save in income tax and national insurance ☺️

Martin_the_Unjust

To be honest (IMHO) if you can afford to do a job you enjoy doing you don’t need to retire early nor will you want to.

DT2001

You can recover from riskier choices when younger if/when they go wrong. I have made and lost money on individual shares, new issues, property and business. My basis for investing was do not invest if you cannot afford to lose it all. I came very close with one business to losing, what was 50% of my net worth, and whilst it was uncomfortable I then knew what I could handle. I diversified limiting my upside and downside.

So know yourself.

Whether you should be employed or self employed I think is down to your personality. I was made redundant from Barclays in the mid 90’s with quite a few colleagues (all in our 30’s) and all initially went self employed. Within 18 months a few had gone back to employment and the safety of knowing £X will be in your account on the same day each month. Some of the self employed worked alone and earned enough without the hassles of employing others whilst others built small, but mainly successful, businesses (which generated more than being employed and in tax efficient ways).

I agree with much that has been said about work life balance. 

If you have children (we have 4) teach them your value of money philosophy! Undoubtedly they have delayed our potential early retirement (not that we want to retire yet) however financially we maybe be better off when we downsize as we needed a larger house when they were younger. They do keep you young and with 4 we hope at least one will look after us in our old age (reducing care costs!).

Overall I think enjoy the present, plan for future (as you are) and learn from your mistakes (we all make them).

Exodi

Gary1984 said:

Don't get married or have kids.

Given that the FIRE movement largely boils down to 'stay living with your parents and don't pay rent', I don't think there will be any risks of getting married and having kids, or having sex at all for that matter.

diystarter7

Exodi said:

Gary1984 said:

Don't get married or have kids.

Given that the FIRE movement largely boils down to 'stay living with your parents and don't pay rent', I don't think there will be any risks of getting married and having kids, or having sex at all for that matter.

In my culture many still do and this is possibly why everyone I know has at least one property free of mortgages or paying a mortgage. Don't run before you can walk and you will be ok, IMHO.

Albermarle

 you may find that when other factors such as impact to quality of life are considered, earning more is less attractive against the sacrifices. 

It can be, but it is not the case  that a higher paying 'professional' type job, will be always more stressful than a lower paid job.

One of the main stress points in employment is having little control over your job or circumstances. This is probably more likely to be the case with a lower paid, lower level job.

Terron

Martin_the_Unjust said:

To be honest (IMHO) if you can afford to do a job you enjoy doing you don’t need to retire early nor will you want to.

True, but many jobs change over time. Being able to leave one that goes bad is good. When you a young you can just start again, but having the funds to retire early helps when you are older.