24 and wanting to retire early

bostonerimus

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.

I adopted many of the FIRE principles long before I'd heard of FIRE because it's how my Mum and Dad organized their finances. What it gave me was security and options; the option to work, or not. I retired at age 52 with a paid off house and enough money and income to never have to worry about working again. I don't have children so that's an expense (and probably a lot of joy) that I missed, but I did have the financial and emotional hit of a divorce to overcome. Now I work part time to help out an old colleague and his start up and save all the wages. Frankly my biggest problem is going to be giving the money away in a sensible way.

Abbafan1972

Thank you for all the useful information.  I had to look up FIRE to see what it meant, lol. 

L9XSS

That your planning at your age already is commendable. I didn’t really get switched in to savings/pensions until age 40. My salary was at a good level and was on the mortgage ladder. I decided I wanted to be mortgage free and educated myself on how better I could manage my money. I set up SIPPs and managed my own portfolio during the decent growth of the last 15 years. I’ve become better at planning my milestones and how to get there, making my money work a lot harder for me! Jumping off the pcp bandwagon and running two older cars, using the £400 car payment to fund mortgage overpayments etc. I’ve found other ways, buying and selling niche products, putting yearly bonus into pension etc etc. I totally changed my mindset from spending in my 30s to saving in my 40s. 

Anonymous101

I'd say the challenge many have is realising that retiring early is a possibility, and that the individual is in control (through earnings, investments, savings and spending habits). You've realised that earlier in life than most which stands you in really good shape.

I wouldn't want to give any prescriptive advise as there are ranges of what's suitable for the each of us. Generally though the biggest thing that has worked for me is getting to a standard of living that I find comfortable, but not excessive, and then putting every spare pound I earn above that to work. Lifestyle inflation is the biggest reason people aren't wealthy IMO so getting a lid on that early is the key.

Albermarle

Anonymous101 said:

I'd say the challenge many have is realising that retiring early is a possibility, and that the individual is in control (through earnings, investments, savings and spending habits). You've realised that earlier in life than most which stands you in really good shape.

I wouldn't want to give any prescriptive advise as there are ranges of what's suitable for the each of us. Generally though the biggest thing that has worked for me is getting to a standard of living that I find comfortable, but not excessive, and then putting every spare pound I earn above that to work. Lifestyle inflation is the biggest reason people aren't wealthy IMO so getting a lid on that early is the key.

Although if you do manage to build up some wealth by later in life, you can then enjoy a bit of lifestyle inflation. Unless old habits die too hard.

Anonymous101

Albermarle said:

Anonymous101 said:

I'd say the challenge many have is realising that retiring early is a possibility, and that the individual is in control (through earnings, investments, savings and spending habits). You've realised that earlier in life than most which stands you in really good shape.

I wouldn't want to give any prescriptive advise as there are ranges of what's suitable for the each of us. Generally though the biggest thing that has worked for me is getting to a standard of living that I find comfortable, but not excessive, and then putting every spare pound I earn above that to work. Lifestyle inflation is the biggest reason people aren't wealthy IMO so getting a lid on that early is the key.

Although if you do manage to build up some wealth by later in life, you can then enjoy a bit of lifestyle inflation. Unless old habits die too hard.

Too true. Perhaps a better description would have been learning to manage lifestyle inflation.

I think that reaching the realisation that spending more (beyond a point) doesn't make you happier is fundamental. Then there also becomes a point where the money is pretty irrelevant so long as you're not going really crazy.

The biggest benefit to the FIRE movement's way of thinking is the ultimate concept that TIME is the limiting factor in life, not money.

NedS

I wish I'd been as financially savvy as you at 24. Keep learning and following the path you are on, and you won't go far wrong.

enthusiasticsaver

We started planning for early retirement in our 20s when we chose pension schemes for my husband ( I was on a bank retirement scheme and overpaying) and he opted for what they called a booster scheme aimed at people wanting to retire early.  Our motivation was my dad dying really early after no retirement at 62. We did not have children at that point.  

Well done for looking into this early.  We had a property at 24 though and I would caution against spending so much on pensions which you cannot access for at least another 30 years but not addressing the fact you have no home of your own which is a big part of FIRE.  Not having rent or mortgage to pay helps tremendously in reducing outgoings and the aim of FIRE is to marry income from pensions or investments with outgoings. Only then can you retire. 

I also note people say don't have kids and it is true we could have retired earlier than 58 had we not had children but surely the aim of most of us is to lead a  well balanced life.  So whilst we overpaid into pensions and started investing after our mortgage was paid off we also lived our lives enjoying our careers, having children, travelling, buying houses, cars and other consumable goods within our income. Don't spend so much time focusing on tomorrow you forget to live today.  I agree that looking after  your health is also a massive contributor to a fulfilled retirement.  You do not want to retire and not have good health to enjoy it. 

MallyGirl

Absolutely
We didn't deliberately set out for early retirement but husband was more aggressive in his early pension contributions which has made it possible. Coming from an era of much higher interest rates - we both bought at 24 when the mortgage rate was 14% - we focused on paying off the mortgage for a while. After achieving that we made one more big move and were well on the way to paying off again when the pension light bulb moment happened. Along the way we have had nice long haul holidays - before daughter came along - some nice cars, nursery and then private school fees, a good standard of living. You might get hit by a bus tomorrow so don't get the balance wrong and sacrifice too much along the way. Our best man has just been diagnosed with early onset dementia at 54 - he worked for local government so has got his pension through ill health but I don't know how many years he will get to enjoy.

Albermarle

You might get hit by a bus tomorrow 

Or just as likely some unexpected event may happen in your life, that will mean your original plans have to be heavily modified. Like the current terrible saga of Archie Battersbee. You always think that at age 24, this sort of thing always happens to someone else, but you would be lucky in life not to have at least one big curveball thrown at you.