FIRE Girls Pension Diary - Aim High & Dream Big

Sea_Shell

You got to have a dream, if you don't have a dream, how you gonna have a dream come true.

Good luck with it all.   

It's doable.    Take my example...

Looking back on my spreadsheets in 2008, we had the grand sum in savings of £88,000 (excluding pensions, as I didn't keep track of those back then, but they would have been quite small)

However, we'd paid our mortgage off in 2006, so were saving hard from then on.  *

By 2019, that figure had grown to £232,400.   Plus we'd shoved money in pensions too, and they'd grown to £303k.

We then called "time" on working.  


* As you still have a mortgage, are you going to log the net savings, or the gross.    Personally, I'd log the net of o/s mortgage balance.   So is your starting point really £222,000?  

sgx2000

I wish I had even thought of this 20 years ago....
Probably no FIRE movement then...
64 now and only just started reducing my hours....  
But,
1. When you get to the million - will it be enough or will you want more?
2. When you get to the million will you carry on being frugal?

Note I say 'when you get to a million' - as I am sure you will get there...
The mindset is everything

cfw1994

Firegirl said:

(snip)

The trick is not to change your lifestyle when you get the increased pay.

Nail on head!

Getting to a happy point in your life with possessions and house, and maintaining momentum (earning more, saving more) is a very effective way to go 💪


Complete major expense items on the home, build out your friends and hobbies over the next 10 years too.  That will serve you well when you step away and have all your time to yourselves 👍
Good luck on your journey 😎

Roger175

Firegirl

A fascinating thread, I will follow with interest. Let me just start by saying this is totally achievable. We did something similar and started recoding our total 'net worth' in 1999. Initially it was a bit sporadic but by 2004 I had fully developed my spreadsheet and have religiously updated it every month since - it has been a fantastic tool in terms of a) keeping an accurate record of all savings/investments etc and b) a great tool to give you confidence you are on track and generally moving forward (although doing it monthly really indicated the peeks/troughs on the investment side, but on the other hand doing it annually might actually be worse). It has also been a real morale-booster when you are going through a bad period at work for instance, but can look back and say sod it! we're £xxxk better of now that this time last year, so it's worth all the hassle.

Your figures also indicate what we have experienced, which is that things grow exponentially as you get into the latter years - the compounding effect. I simply can't believe how our net worth has increased in recent years. The great thing here is that if you can get that pot up to a sufficient value, you start being able to live comfortably off the return rather than drawing down the value of the pot.

 

MallyGirl

Sea_Shell said:

You got to have a dream, if you don't have a dream, how you gonna have a dream come true. Happy Talk indeed!

Good luck with it all.   

It's doable.    Take my example...

Looking back on my spreadsheets in 2008, we had the grand sum in savings of £88,000 (excluding pensions, as I didn't keep track of those back then, but they would have been quite small)

However, we'd paid our mortgage off in 2006, so were saving hard from then on.  *

By 2019, that figure had grown to £232,400.   Plus we'd shoved money in pensions too, and they'd grown to £303k.

We then called "time" on working.  


* As you still have a mortgage, are you going to log the net savings, or the gross.    Personally, I'd log the net of o/s mortgage balance.   So is your starting point really £222,000?  

Re the last point - I track all the individual elements but I also bring them together into a single month end position that factors in everything except pensions (ISAs, savings, shares held, pension outstanding, credit card balances, bank account balances.) It makes a nice graph and it was a good day when I crossed the line into positivity. It means that I can pay off the mortgage and then live off the pensions (in simple terms). In practice there will be a strategy to live off pensions/savings/ISAs but the simple idea is comforting.
I used to be a MFW and did pay if off before the last move but then I saw the pensions light and remortgaged at a lovely low rate fixed for 5 years which takes me to my planned early retirement date.
Good luck with your journey

Roger175

Sea_Shell said:

* As you still have a mortgage, are you going to log the net savings, or the gross.    Personally, I'd log the net of o/s mortgage balance.   So is your starting point really £222,000?  

Sea_Shell

We debated how to set up and record our net-worth and ended up recording the property value and mortgage, albeit we have subtotals for Pensions/Isas/Cash Savings and Property, which gives us all the options. In the case of property it use to record the property value and the outstanding mortgage (long since gone).

Property does have the affect of distorting the bottom line from time to time, especially if you move or in our case, we undertook a self-build, so the increased value suddenly appeared in the totals.

It all depends on what you want your figures for - in our case it's a general record of how we're doing, plus a planning tool for retirement and generally long term planning, including inheritance tax planning etc.

There's no wrong or right way, as long as you read your figures correctly. The important thing to me is that you keep such a record. I simply don't know how most people manage without doing this, yet the vast majority of people keep no such records and just bumble along!

enthusiasticsaver

I have subscribed to see how you get on.  A 10 year plan is great and at 45 you are better prepared than I was.  I reviewed every 5 years aiming first to get the mortgage paid off, then get our daughters through University and eventually overpaying my pension and investments  for early retirement.  We should have looked at the pension situation for me earlier although my husband had a fantastic one we had been overpaying since he first started it in the 1980s.  He retired in 2016 at 58 and I went part time and then retired in 2018 also at 58. DH gets his state pension this year but up until now we have been living off DB pensions (paid out at 60) and SIPPS and stocks and shares ISAs and DC pensions. 5 different income streams so far with a further 2 to kick in later on this year and in 2026. 

You have a massive advantage in that you have a lot of disposable income but as you have health issues and your husband has a stressful job giving you the option of retiring early is a good idea. I would also say having a set target in investments did  not work for us.  I mapped out our income streams and our household budget and we retired when we could afford to cover our outgoings with a buffer on top.  Sometimes we draw on investments for unusual expenditure like a big holiday or new car rather than build saving for that from our monthly income. I would also agree that adult children still cost but only obviously if you can afford it.  We have paid towards house deposits, cars, weddings, holidays and grandchildren for our adult daughters but luckily we can afford it.  They don't get cheaper. 

I wish you luck anyway. You already have the right attitude in thinking just because you earn a lot that does not mean you have to spend it all. 

leosayer

Thanks for sharing. A few observations.

You haven't said how you will be invested but with 10+years to go I assume a high equity content. That being the case, there's every chance you will experience some periods with high volalitility where you find yourself significantly short of your target. Are you prepared for that?

Also, you haven't said whether your £1m target is based on the spending power today or not. If inflation stays around 5% per year then the spending power of £1m will almost halve.

Good luck!

Somebody

Firegirl - I'd like to know more about Barrier 4.  How old are your kids?  For us they were expensive, especially when all three were at university and there was one overlapping year in which we paid their accommodation costs.

We said we would retire when 1) mortgage paid off, and 2) kids are all working.  Our youngest 2 are working but still live at home, which we don't mind as we want them to save rather than be part of Generation Rent for now.  They're also lucky in that they mainly WFH, so when people ask us how we fill our time when retired we normally half-jokingly answer "running a B&B for the kids".  

Firegirl

Thanks for all your comments and input. So lovely to refresh and see a flurry of activity and reading things that get me thinking!

@Roger175 would be fantastic to live off the return and keep the pot entact!

@Sea_Shell @MallyGirl since starting the thread I’ve thought about taking off the amount I owe on the mortgage, but I have some offset savings there. Flex offset mortgage.  Also I figure it will just reduce with normal bills and I can put a bit extra there if my MFW vibes set in. I think for now I will think of them as separate to keep me motivated.

Thanks for subscribing and sharing your story @enthusiasticsaver. My kids look like they are going to go into trades rather than university and as I live in Scotland if they do change their minds they don’t have fees. I’ve one potential electrician and another potential brick layer. My group of friends kids….1 hoping to do physio and the others not sure so we joke saying we need a plumber and a joiner. @Somebody Id love run a b&b for my kids.  They are both very independent although it’s hard to get started now. I’ve taught them a lot about savings and do a matching scheme for them. If they save x I match it. Fine at 14 & 16 as they don’t have jobs.  I’ll not keep it up when they are working but I’ll direct them to their pension that does the same hopefully, depending what they do.

@cfw1994 love the tip about hobbies and friends. I have a lot of time for my friends and I have a few wee groups….however I can’t stick to one hobby. Full blast I go and this is my hobby for life, then I drop it like a hot potato. Up side is I’ve plenty tested out that I can go back round to.

Love your positivity @sgx2000

 Question 1.WHEN I get to a million there is no way I will want more. That’s more than my wildest dreams.  If I got higher than that I’d likely help family/charity. Although I still need to work on my draw down plan. Now it’s about plowing money in early for compounding.

Question 2. I don’t feel like I’m as careful now as I was at the beginning of my MFW journey. I really think the way I live now is just the way I’ll live and don’t want for anything more.  I do enjoy holidays but see them as living life and memories more important to me than items.  If I wasn’t working this job I’d be happy reducing holiday expenditures.

@leosayer you have good points!  My portfolios are medium/high risk and I’m well prepared and ready to ride the wave of market volatility. 

Lovely to chat to you all….im gonna scroll back now to see if I missed any nuggets