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  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 717Posts
    • 3,184Thanks
    SuperSecretSquirrel
    Onwards to freedom!
    • #1
    • 8th Sep 12, 12:07 PM
    Onwards to freedom! 8th Sep 12 at 12:07 PM
    Hello and welcome to my MFW diary. Not sure how often I'll update as I'm going down the boring 'increase monthly mortgage direct debit' route, not the more interesting to read 'random repayment as and when a bit of extra money is made' route. Still, no harm in starting a diary here, even if it's just for me to look back on in a few years time!

    It seems like a good idea to start with a bit of background, so here goes...

    We bought our house in July 2010 with an 87k repayment mortgage, fixed for 10 years at 5.29%. Nearly two years of 525pm standard repayments allowed us to rebuild our savings, but after 20 monthly payments (over 10k paid out) the mortgage balance had only dropped around 2.5k thanks to all the interest being paid...

    We decided to make a small start on overpaying - small overpayments early on have quite an impact over the long term so why not start small and ramp up later? March 2012 we made our first regular overpayment, 50pm. Amazingly, if we were to keep up with this 50pm over the life of the mortgage we'd be mortgage free nearly four years early (Nov 2031) and save ourselves a tidy bit of interest. Not bad rewards for just 50 a month!

    A few days ago I decided to step things up a notch. From next month the regular overpayments will increase to 250pm, 200 less will find its way into my long term savings (paying 2.8%, minus basic rate tax), 200 more will find its way to the mortgage provider. Makes a lot of sense looking at the interest rates! I'll keep on saving in a normal savings account though and won't be putting every penny into the mortgage - I'm used to seeing my savings grow monthly, and like to try to be prepared for any eventuality, so I'll keep on squirelling away a chunk of my income in savings each month. I know this isn't the most efficient option in terms of reducing interest payments, but it's a balance that keeps me sane, if there's any major disasters the savings are there to fall back on, that kind of peace of mind is well worth a few pounds! Anyway, here's where the numbers get really interesting - by overpaying 250pm for the life of the mortgage we'd be mortgage free nearly eleven years early (Oct 2024). Wow!

    Seeing the massive savings I started looking into this stuff in more detail. We're allowed to overpay up to 10% of the mortgage balance each year without penalty. I don't want to increase overpayments over 250pm right now, but maybe after another year or so of growing my savings I'll step up the overpayments to 500pm. Two years later the overpayment would need to drop to 450pm (to avoid penalty), year after that drop to 400, and the following year drop to 350, and the years after that drop to 250 at which level the op's would have to remain until the end of the fixed period (August 2020). If we were to follow this plan, at the end of the fixed period our mortgage balance would be around about 20k which we could pay off with a lump sum from savings. Mortgage free fifteen years early, at age 36, sounds awesome, and what's incredible is that it also sounds very realistic.

    At the moment overpaying is my project. OH and I have our own accounts that our wages are paid into, and a joint account that we feed monthly to pay the bills. As I earn a little more I also do the grocery shopping, pay a few extra bills, and overpay the mortgage. Beyond feeding the joint account OH's income is none of my business, it can be spent on whatever OH likes, same goes for my income. This works well for us - if I want to splash out on a new computer game or a night out or whatever I can do so without needing to consult OH, and if OH wants to splash out on a night out or clothes or whatever no need to consult me. We're both debt averse and savers by nature, so as long as we spend less than what's coming in and all the bills get paid all is well. I'm hoping that seeing the mortgage balance reduce might convince OH to get involved in overpaying the mortgage (or at least split savings into two pots, one 'spendable' short term pot for holidays and home improvements etc, and a long term one earmarked for paying down a lump sum on the mortagage), but there'll be no pressure, if OH joins in that would be excellent, but if not that's ok.

    Finally, I know life doesn't always go smoothly - anything could happen in the next 8 years, babies, redundancy, armageddon, "the best made plans of mice and men, often go awry"... But if things don't go to plan, nevermind, we'll have made a great start on the mortgage regardless, any overpayments we make early on will benefit us later on, so we may as well give it a shot while circumstances allow It's nice to remember that circumstances can go up as well as down too - maybe there will be payrises and good fortune along the way that make achieveing the target easier, who knows!
    __________

    January 2014 Update:

    Things have changed quite a lot since I first started this diary... The new aim is to hit the MFiT3 target of a 40k mortgage balance by end 2015, and to have 40k in savings by that time too, making us mortgage neutral 20 years early! Anything can happen, but I think it's time to aim high!
    __________

    March 2015 Update:

    We did it! We are mortgage neutral (savings balance higher than outstanding mortgage) and are locked in to achieve the MFiT3 stretch goal of mortgage below 40k by the end of the year I'm going to keep this diary going, the aim is total financial independence now!
    __________

    January 2018 Update:

    Paid the mortgage off in full today (12/01/2018)
    Last edited by SuperSecretSquirrel; 12-01-2018 at 9:42 PM. Reason: We did it! :D
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
Page 31
    • lindez
    • By lindez 5th Aug 18, 11:14 PM
    • 473 Posts
    • 1,966 Thanks
    lindez
    Congratulations SSS,
    what an achievement I stumbled across your diary and read it from start to finish it has taken me a few days. I am in awe of what you have achieved in such a short space of time. Loved the house and the bricks I have been searching for one to no avail.
    I to plan to try and cut my mortgage down I have 10 years left and that will take me to 69 !! Oh no it has to go much sooner that that. Thank you for your inspiration I hope to try and find a way to get this mortgage paid in 5 years.
    Payment A Day Chapter 18:
    MFWB#44
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 6th Aug 18, 9:11 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    Thanks lindez, and good luck with your aim of halving the remaining life of your mortgage! I'd recommend joining the "Mortgage free in three take 5", due to start in January There are annual challenges too for shorter term targets.

    As for the brick house picture, the best approach is to draw up your own in
    a spreadsheet or drawing app, that way you can tailor it to your house value, mortgage balance, etc
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 13th Oct 18, 7:37 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    Hello diary, long time no write

    I've been enjoying an extended digital detox over recent months... Backed right off to fully enjoy summer, and not really got back in the habit since!

    All things financial are ticking over like clockwork. I now have a reduced number of accounts, most payments and transfers are automated, and there are no short term targets to micro manage. My more relaxed approach to tracking our financial world hasn't resulted in the wheels coming off, so I'm more than happy to do a full accounts audit just once a month and post a simplified net worth update here once every three months.

    With that said, the figures for 1st October 2018 were:
    • 291,327.81 net worth (+11,432.80 quarter / +32,212.73 year)
    • 33.2% financially independent (state pension not factored in)
    All good

    I hope you are all well and smashing your personal targets!
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • Lexi-lu
    • By Lexi-lu 13th Oct 18, 9:18 AM
    • 165 Posts
    • 839 Thanks
    Lexi-lu
    Hello SSS

    Good to see that you are making great progress whilst enjoying being able to take a more relaxed approach. Thank you for sharing, your diary has kept me motivated whilst paying off our mortgage (almost there now) and I will likely be taking a similar approach to increase our investments and pensions next

    LL
    Mortgage Balance 0
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 3rd Jan 19, 11:05 PM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    Happy new year all!

    It has been a bit rough out there the past month or two Our figures slammed into reverse, all thanks to the market doing what the market does... Our pensions dropped nearly 7% in the last quarter Oh well, easy come, easy go

    The figures for 1st January 2019 were:
    • 285,393.17 net worth (-5,934.64 quarter / +16,004.34 year)
    • 31.9% financially independent (state pension not factored in)
    I've started mulling over my next 3 year challenge target (mfit). I think it will have to be a total net worth target this time, and very much at the mercy of the markets as a result... Coming up with a target will be as far from an exact science as things get!
    Last edited by SuperSecretSquirrel; 01-02-2019 at 5:27 PM.
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 24th Jan 19, 11:33 PM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    Just submitted my final MFiT4 update... 62,301.47 in liquid assets. The target was 60k, so I'm happy with that

    Planning on signing up for MFiT5 tomorrow!
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 25th Jan 19, 8:19 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    It's that time again, the start of a new MFiT challenge! I'll be going for a savings target, the "savings" value being our total "interest accruing assets" value.

    Our total annual household spend is around 18k in today's money. A good rule of thumb for early retirement is to have 25x that amount saved (in cash, ISAs, pensions, BTLs, etc - in our case that's the sum total value of everything we own excluding our home and cars and day to day "stuff" like clothes, food, furniture, etc). Our target "interest accruing assets" value would therefore be 450k in order for us to be loosely considered financially independent. This would likely be on the high side for us, as the state pension isn't given any consideration. I consider the exclusion of the state pension to be a convenient way of ensuring we don't run dry ahead of time. Later on I'll try to get a bit more scientific about it!

    So, on to MFiT5... By the end of this challenge I would like us to be 50% FI, which means boosting our "interest accruing assets" value from 143,378.17 to 225k within three years That's an increase of over 27k a year - no idea if this is in the least bit realistic!

    I've always had a vague feeling that once we pass the halfway mark to FI that I might have the courage to make some great life changing decisions. We wouldn't really need to earn much, 18k between us to save depleting the pot, some more to keep topping it up to eventually hit 100% FI. That would afford us a huge luxury of choice. I reduced my working hours as a reward when we paid off our mortgage (OH was already working reduced hours). Hitting 50% FI might see us negotiate fewer hours per week again, or embark on career changes, or start a business, or buy a BTL, or take a mini retirement, who knows... There's a chance we won't make any immediate life changing plans and keep on working towards 100% FI once we're half way there, but simply having the option of making big changes is enticing enough a target for now.

    This one could absolutely be a rocky ride. Last MFiT I included my S&S ISA, which dropped by thousands of pounds in value in a matter of days towards the end of last year. This time I'm also including our pensions, their total value saw a five figure drop in those same few days last year! The rises and falls could potentially be quite spectacular this time... Should be fun

    No idea if we can make it, but where's the harm in trying!?
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 25th Jan 19, 9:13 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    In keeping with my drive to "simplify all the things", my MFiT5 updates will be based on valuation snapshots taken on the 1st of each month, not the 24th. I already check balances the 1st of each month, so it makes sense

    Simplified my signature too

    Mtg [2013 64k|2014 51k|2015 38k|2016 26k|2017 14k|2018 Zero!]
    MN [2013-25k|2014-2k|2015+16k|2016+34k|2017+52k|2018+62k]
    NW [2013 126k|2014 156k|2015 190k|2016 228k|2017 269k|2018 285k]
    FI (exc SP) [2013 -1%|2014 3%|2015 7%|2016 13%|2017 18%|2018 32%]


    Has been slimmed right down to only include my current FI focus...
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • VDOT47
    • By VDOT47 25th Jan 19, 9:51 AM
    • 209 Posts
    • 635 Thanks
    VDOT47
    SSS - always enjoy reading your updates.


    FIRE is a mindset that I am starting to really get into. Like you, I am excluding state pension (never certain, and even if it does arrive it won't probably be until we're at least 70!) from my planning. My aim is that by 55 I will have enough in the 'retirement pot' to give us the flexibility to make some potentially major decisions about how to spend our time. I am not necessarily saying retire completely at that age, but have the flexibility that that may be one option, reduced hours, consultancy or career change being others.


    It takes a lot of thinking about though to decide how to prioritise between paying off the mortgage, putting more into pensions or more into savings and other options such as BTL. I think I am starting crystallise things in my mind though, slowly!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (01/02/19) 235,924
    End Date February 2040 Original End Date February 2042
    • trix-a-belle
    • By trix-a-belle 25th Jan 19, 5:00 PM
    • 881 Posts
    • 3,790 Thanks
    trix-a-belle
    Signing in for updates SSS i'm interested in FI/FIRE and given my last 12 months i'm totally up for rocky rides and things not being easy so lets go for it for MFiT-T5
    - Mortgage: 1st one down, 2nd: 114800 95k
    - Student Loan: 7100 0!
    Swagbucks, Neobux, GiffGaff, Roamler, Qmee & Quidco; thank you MSE every little bit helps
    MFiT-T5 building savings up/knocking mortgages down/combination of both
    • edinburgher
    • By edinburgher 25th Jan 19, 8:31 PM
    • 11,388 Posts
    • 60,972 Thanks
    edinburgher
    Rooting for you as always SSS
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Feb 19, 11:14 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    Thank you all for stopping by and posting

    VDOT47, absolutely agree that it can be quite tricky deciding how to cover all the bases. We've fallen into our allocations by accident really. First of all I wanted us to be mortgage free, but our ERCs were quite high in the early years so we ended up aiming for mortgage neutral and paying the full 10% fee free amount each year. OH wanted a certain amount of easy access cash on hand, and I wanted to get started with S&S, so we struck a happy balance between the two. I realised (with edinburghers help!) that my pension contributions were too low, so ramped them up. OH followed suit a few years later. I did consider increasing/reducing pension contributions a while back (increase to max out on the potential upside / reduce to shield from political risk) ended up doing neither, just carrying on with my arbitrarily set 20+5% - doing nothing is easy, and strikes a balance between the potential downsides and upsides... We're just bumbling along really, but it all seems to pretty much fall into place and work out fairly well

    Trix, I'm honoured to have you here!

    Ed, thanks, and of course the same goes from me to you!
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Feb 19, 11:38 AM
    • 717 Posts
    • 3,184 Thanks
    SuperSecretSquirrel
    What a month! Unbelievable pension and S&S rebounds Net worth up 6,456.38 since 1st January...

    If all months were like the last one we'd be done with MFiT5 in the first year Of course, all the other months will absolutely not be repeats of the last one
    Mortgage free 17.5 years early. Totally debt free. Targeting financial independence.
    MFiT-T5: 8.1% (1/36)
    FI (exc SP): 2013 -1%, 2014 3%, 2015 7%, 2016 13%, 2017 18%, 2018 32%, 1/2/19 33.3%
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