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  • FIRST POST
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 8th Sep 12, 12:07 PM
    • 758Posts
    • 3,368Thanks
    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 at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
Page 34
    • Karmacat
    • By Karmacat 2nd Nov 19, 6:04 PM
    • 32,918 Posts
    • 194,700 Thanks
    Karmacat
    I haven't really had much to say the past few months. We're just bobbing along really!
    Originally posted by SuperSecretSquirrel
    Thats what I want! Good to confirm you're doing well, though, SSS, and that everything *is* bobbing along.
    Downsized and paid off mortgage 2010
    Retired August 2016
    Paid off French mortgage September 2018
    New kitchen fully installed June 2019
    • VDOT47
    • By VDOT47 5th Nov 19, 11:58 AM
    • 276 Posts
    • 764 Thanks
    VDOT47
    SSS - great to hear that things are still going well.

    I’ve taken inspiration from your earlier ‘net worth’ tables and started my own. Unfortunately at the moment if I excluded equity in our house, the remaining net worth is currently low but is a work in progress.

    Private pension and S&S ISA are now in place, so fingers crossed for decent growth there.

    I’ve taken 2 weeks of unpaid parental leave in both 2017 and 2018 (none in 2019 as I already had paternity leave this year for second DD) and intend to keep doing so in future years.
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (End 11/19) 226,790
    End Date November 2039 Original End Date February 2042
    • turtlemoose
    • By turtlemoose 14th Nov 19, 4:55 PM
    • 1,543 Posts
    • 4,467 Thanks
    turtlemoose
    I think you saw on my diary that I took (or was planning to take) unpaid parental leave. I did so for the 6 weeks summer holiday this year. For me it worked out a net loss of 41 per day (lost income, but reduced by amount of childcare I would have had to pay) and it was absolutely worth it. I feel very lucky I was in a position to afford to do that. Would highly recommend it! I'm looking forward to next summer already... particularly as a full time worker, that time with the children feels extra special.
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 15th Nov 19, 11:38 AM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Thanks all for stopping by and posting

    KC - bobbing along, although not at all exciting, is fine by me I hope all is well in your world? I try to limit my screen time these days, and unfortunately your thread is far too popular for me to be able to keep up! I can read your "that's what I want" in two ways, I hope the "happy to hear things are bobbing along SSS" is the correct interpretation, not "things are not bobbing along nicely for KC"!

    VDOT - the include or exclude equity question used to rage on the fire blogs. Maybe it still does, I've not been keeping up. Seems a nonsense question to me. Home equity absolutely forms part of your NW. If you had a 500k home with a 1 mortgage, and 500 on a credit card, would you be a net debtor or well off? Simple as that Even if you were house rich and cash poor, do you have a nice fat asset that can be sold to solve your cashflow problem? Home equity in my opinion is 100% part of your net worth. Of course other values could be of use when pondering the future, so measuring more liquid assets, or in my case assets that earn an income, is useful, so I track both NW and interest accruing assets (NW - home - cars). Thanks for the unpaid leave feedback - great to hear from someone who has gone for it and loved it so much they want to keep coming back for more!

    TM - long time no speak! Hope you are well Thank you so much for both opening my eyes to the possibility in the first place, and for reporting back that it was well worth it and something you plan to keep doing! I already use AL to cover Christmas holidays, I'm thinking I might request UL to cover a fortnight in Easter and maybe a fortnight in Summer. Would no doubt be easier to swing with employer as it's a more "normal" holiday length, so less likely to result in them clutching their pearls and reaching for the smelling salts OH could cover remaining school holidays, and we'd have a big fat AL allowance each left to spend on family all together time. I was nervous requesting my reduction in hours, but it all went smoothly and my employer was very accommodating, hopefully it'll be more of the same when requesting UL.

    Worked out my daily gross to be a little over 180, which seems like a lot when I write it down. That's about 3k off my gross if I take 4 weeks UL. We could no doubt source childcare or make the decision that it's far cheaper for OH to take UL, so I should just work through, bring home the bacon, and leave the childrearing to her. That feels all kinds of wrong to me though. I want my children to look back fondly on their childhood with both Mum and Dad. Selfishly I want to look back on their childhoods and remember being present and involved. I'm tempted to say no matter the cost per day I'd still think it's worth it, but what if scenarios are fun to play out... If I had the opportunity to earn a million at the cost of being absent for one year, I'd probably take it. I'd be 100% present after that year, so just an example of delayed gratification really. That's not a realistic prospect though, the kind of money I can earn, taking good chunks regularly over time wins

    I never truly had a proper appreciation of how conflicted women can be over the working mum versus stay at home mum thing. I think I get it now. It seems no matter which way you go, others will vilify you, and you will often find yourself feeling guilty for one reason or another. This whole UL option makes for a massive opportunity to hit the middle ground and feel reasonably happy that you're doing a bit of all the right things - role model, bread winner, carer, friend. Working, but working less, definitely suits me and OH perfectly. We're very fortunate to be able to treat it as an option, I fully understand that's a luxury many people don't have. I'm thankful for our comfortable lives, and that we live in a time where it's becoming more normal for fathers to take on a role other than bread winner. We're a way off equality (gender pay gap, etc), but over time if things become more equitable across the board (time off work, etc) I imagine the traditional disparities would all balance out. Just in time for us all to be made redundant through automation
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • Karmacat
    • By Karmacat 15th Nov 19, 12:43 PM
    • 32,918 Posts
    • 194,700 Thanks
    Karmacat
    KC - bobbing along, although not at all exciting, is fine by me I hope all is well in your world? I try to limit my screen time these days, and unfortunately your thread is far too popular for me to be able to keep up! I can read your "that's what I want" in two ways, I hope the "happy to hear things are bobbing along SSS" is the correct interpretation, not "things are not bobbing along nicely for KC"!
    Originally posted by SuperSecretSquirrel
    Thanks for your update, and for this - your "happy to hear things are bobbing along SSS" *is* the correct interpretation, you're right sorry about that. My thread moves fast because I prattle a lot, I'm afraid but there was a half price Fred Olsen cruise in there recently, focussed on the Baltic, that was fun!
    Downsized and paid off mortgage 2010
    Retired August 2016
    Paid off French mortgage September 2018
    New kitchen fully installed June 2019
    • VDOT47
    • By VDOT47 16th Nov 19, 11:35 AM
    • 276 Posts
    • 764 Thanks
    VDOT47
    It is an interesting discussion re equity - it is obviously an asset for the reasons you mention, but of course if I realised the value now it would need to be used to pay for alternative accommodation. Obviously the view on this changes as we get more equity and closer to retirement, when downsizing and releasing some equity becomes an option.

    Getting a bit obsessive on checking my pension company app every day to see how my (currently very small) pension is performing. How often do you check? I know you used to do quarterly updates on here as part of your net asset calculations, but did you monitor more frequently in between? Just want to know if I’m too obsessive, or if regular checks on performance are normal!!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (End 11/19) 226,790
    End Date November 2039 Original End Date February 2042
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 17th Nov 19, 10:31 AM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Thanks for the clarification KC, glad to hear all is well in your world I've always admired the fact that you get to do a lot of nice things, especially when as I recall there were many naysayers on the pensions board when you discussed your retirement budget. From caravan holidays with your sister to cruising the Baltic, to the more day to day stuff like U3A it sounds like you're packing in a LOT of good times on a budget!

    Hi VDOT

    That's exactly why I monitor two sets of figures - net worth (everything), and the more useful progress towards FI (which assuming we'll always live in a similar house and drive similar cars, can be based on the IAA value). You could always include a suitable fudge factor in the figures if downsizing is definitely part of the plan

    I check bank accounts weekly, and carry out a monthly check on pension, S&S, and PBs. I still have all the figures needed to post the old monthly/quarterly status updates, I just don't think it's worth bothering or that it makes interesting reading any more. No overtime or freelance work these days, steady salary, 1k to S&S each month, same salsac to pension each month, if any left over from monthly spend allowance shift to easy access savings. The monthly spend allowance is pretty tight, so the "extra" saved each month isn't worth mentioning, and is dipped into as needed to pay annual bills like insurances, Christmas, etc. The only real variable movement in NW is as a result of market fluctuations, nothing I can do about those, so minimising the cognitive load and time spent on the subject seems to make sense to me.

    That said, I'm sure I used to check more often and it was a conscious decision to rein it in

    I've been setting up next year's accounts spreadsheet this morning. Our annual spends total is 18k, so all things being equal 750pm covers my share. Interesting to note that all my car related costs average out to exactly 20% of my outgoings, and that all my regular home related bills (tax, gas, electric, water, fibre, TV, etc) come to exactly 30%. That leaves exactly 50% of spends to cover literally everything else. I don't really have a point to make, I was just amused by the fact that my spends across those big macro categories divide so cleanly into such nice round percentages

    I find that 750pm figure to be quite exciting... I could work just 22 hours a week at minimum wage and not need to spend a penny of savings or investments, we'd just bob along on an even keel. If I was happy to start drawing down at 4% to supplement income (conveniently ignoring the inaccessible pension balance), I'd need to earn 208pm, so 6 hours per week at minimum wage would be sufficient. I'm not FI yet, and as a team we're not even half way there yet (though as previously discussed OHs view is quite different in that she's happy to work part time til state pension, so we'd never need to hit 100% team FI), but the bar being set so low really helps me sleep soundly at night!

    Public service announcement - Pay off your mortgage, reduce the monthly nut as far as possible, keep on earning a bit of cash, and invest what you can... You'll never worry about money again!
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • Karmacat
    • By Karmacat 17th Nov 19, 2:14 PM
    • 32,918 Posts
    • 194,700 Thanks
    Karmacat
    Thanks for the clarification KC, glad to hear all is well in your world I've always admired the fact that you get to do a lot of nice things, especially when as I recall there were many naysayers on the pensions board when you discussed your retirement budget. From caravan holidays with your sister to cruising the Baltic, to the more day to day stuff like U3A it sounds like you're packing in a LOT of good times on a budget!
    Originally posted by SuperSecretSquirrel
    Thanks SSS, thats lovely! I could write a loooong editorial about financial choices, but I'm not going to not here

    Public service announcement - Pay off your mortgage, reduce the monthly nut as far as possible, keep on earning a bit of cash, and invest what you can... You'll never worry about money again!
    Perceptive

    Loving your calculations about that 750 p.m., bringing it into the real world.
    Downsized and paid off mortgage 2010
    Retired August 2016
    Paid off French mortgage September 2018
    New kitchen fully installed June 2019
    • VDOT47
    • By VDOT47 17th Nov 19, 7:57 PM
    • 276 Posts
    • 764 Thanks
    VDOT47
    I think, like you, our baseline monthly commitments for all utilities, council tax, food, insurances, phone etc come to about 1500pcm. Sadly, we still have a mortgage commitment of 1200 pcm and credit card repayments of 200, childcare costs etc. So at the moment our real monthly costs are closer to 3000 (and that’s before including holidays, presents, clothes, haircuts, annual car costs and discretionary spending).

    It does mean it is hard to throw as much as I’d like at pension and S&S ISA bit does give me hope that our NUMBER in retirement would be no higher than 30k. Helps keep things in perspective when I think about how much we need to be FI and to allow me to think about going part time or even retiring early altogether (which will hopefully happen between 55 and 60.

    Monthly checks on pension and ISA values is very restrained ��
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (End 11/19) 226,790
    End Date November 2039 Original End Date February 2042
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 20th Nov 19, 8:18 AM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Hi KC and VDOT, thanks for stopping by

    Our 18k figure is all in except childcare (coming to an end soon), though I'm sure the children will become more expensive over time. No mortgage or debt, and very modest holidays are currently key for us. VDOT, your expenses will drop massively once mortgage and childcare are in the rear view You might find that a lower number might be realistic, 1500 core + 500 discretionary monthly budget sounds pretty generous to me, shaving 6k off your annual spend would drop your required pot size by 150k if using a 4% withdrawal rate - you'd get there all the sooner Nothing to say you can't add more years at the end to boost the pot and allow a more luxurious lifestyle, but you'd be making a conscious trade off at that point.

    A lot of people seem to break the journey up by introducing mini targets. Rather than aim for a percentage of total ideal FI, they might aim for a leaner FI first (25x annual "survival" budget, or maybe 25x annual shortfall from a part time low wage job, etc), then ramp up from there. I like imagining possibilities and options. Drives OH nuts, but fixing on an idea and aiming for it works well for me. Over time the end aim will no doubt change a bit, but I don't see any harm in that. Breaking up the journey makes it so much easier, more a series of nice brisk walks than one insane ultra marathon!
    Last edited by SuperSecretSquirrel; 20-11-2019 at 8:46 AM.
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • VDOT47
    • By VDOT47 21st Nov 19, 2:23 PM
    • 276 Posts
    • 764 Thanks
    VDOT47
    Yes, it would be good to have some mid range targets - I’ll have a think!

    I view the next 3 years as ‘base building’ ie. moving house, rebuilding savings and getting at least a small amount into pensions in the meantime. Then have about 15 years hitting the pension as hard as possible in the hope of retiring late 50s! Fingers crossed!
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (End 11/19) 226,790
    End Date November 2039 Original End Date February 2042
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Jan 20, 2:35 PM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Happy New Decade!
    Happy New Year! I hope everyone had a great Christmas

    I've continued with what is now a new year tradition in our home - setting up a fresh spreadsheet for the year ahead, and spending some time looking over our recent (and not quite so recent) history.

    Not posted detailed figures for some time, so thought I'd post the totals for 1st January 2020, plus the equivalent values for the previous six years (as I happen to have them on hand)... I'm definitely happy with the direction of travel

    Code:
                 01/01/2020  01/01/2019  01/01/2018  01/01/2017  01/01/2016  01/01/2015  01/01/2014
    House         125000.00   125000.00   125000.00   125000.00   125000.00   125000.00   125000.00
    Pensions      108995.12    81848.33    78458.66    61324.05    41170.41    31113.46    23737.91
    S&S            56018.64    36823.05    26607.27    13313.37     6488.53     3052.50      510.96
    Cash           26906.74    24858.94    39576.36    47225.02    49581.61    59482.43    44326.80
    Cars           13137.50    17015.00    14715.00     8900.00    10700.00     9000.00    10000.00
    SLC                0.00        0.00     -314.95    -2138.37    -3116.23    -6905.75    -7455.96
    HMRC               0.00     -152.15     -513.23     -380.26    -2483.20   -14088.23    -6374.55
    Mortgage           0.00        0.00   -14140.28   -25662.72   -37716.04   -50546.60   -63931.64
    Total         330058.00   285393.17   269388.83   227581.09   189625.08   156107.81   125813.52
    
    LiquidYears(Self)   8.8         6.4         4.3         3.8         3.0         2.7         1.9
    LiquidYears(Team)   4.6         3.4         2.3         2.1         1.7         1.6         1.2
    
    FI@4%WR(Self)     76.3%       56.4%       33.8%       25.0%       15.0%        8.9%        1.9%
    FI@4%WR(Team)     42.6%       31.9%       18.0%       13.0%        6.9%        2.8%       -1.2%
    
    Total net worth now a smidge under one third of a million, enough liquid savings to see me through nearly nine years without an income, or to see us all through four and a half years without any household income, more than three quarters of the way to selfishly FI (cover my half of spending at 4%WR), more than two fifths of the way to truly FI (cover all our spending at 4%WR). I love the progress shown in the figures, nice leaps forward from one year to the next.

    Plans for the new year/decade... Initially - keep earning, keep saving, keep investing, keep living. Simplify anything that can be simplified. Shed some material goods, try not to acquire too many new ones. Enjoy life. Eventually leave the traditional workforce (or maybe go very part time) and start doing something a bit different with my time, ideally something that does good.

    Best of luck to you all in the upcoming year!
    Last edited by SuperSecretSquirrel; 02-01-2020 at 11:10 PM.
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • Karmacat
    • By Karmacat 2nd Jan 20, 4:20 PM
    • 32,918 Posts
    • 194,700 Thanks
    Karmacat
    Sounds wonderful SSS, as you say, the direction of travel is great.


    One tiny query ... in the table at the bottom, you've got a heading "LiqYrs" and I just can't imagine what it might be! I know it will be something sensible, but can you please put me out of my misery and tell me?
    Downsized and paid off mortgage 2010
    Retired August 2016
    Paid off French mortgage September 2018
    New kitchen fully installed June 2019
    • edinburgher
    • By edinburgher 2nd Jan 20, 7:55 PM
    • 11,573 Posts
    • 61,787 Thanks
    edinburgher
    Assume liquid (I.e. non-pension) years of available money?
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 2nd Jan 20, 10:56 PM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Thanks for posting KC and Ed

    Yep LiqYrs is the number of years we could manage without income by drawing down liquid assets.

    I have enough accessible cash and S&S to my name to cover half our spending for 8.8 years. We have enough in total to cover all household spending for 4.6 years. No intention to start drawing down yet, but just knowing it's there helps in terms of peace of mind
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • Karmacat
    • By Karmacat 3rd Jan 20, 10:26 AM
    • 32,918 Posts
    • 194,700 Thanks
    Karmacat
    Thanks for that - intermediate goals are important. I'm setting up for today to be a finance day, given myself till 10.45, the papers are ready to lay out on a clean table
    Downsized and paid off mortgage 2010
    Retired August 2016
    Paid off French mortgage September 2018
    New kitchen fully installed June 2019
    • VDOT47
    • By VDOT47 6th Jan 20, 2:01 PM
    • 276 Posts
    • 764 Thanks
    VDOT47
    Another great year SSS!

    It must be nice to think that there is enough cash/S&S ISA to cover that many years if absolutely necessary!

    As mentioned above, we’re a few years behind you (largely as a result of such a whopping mortgage - which may increase in the next 6 months as we hope to move house!) but it would be great to use the 2020s as a real engine room for building net worth and FI ��

    Look forward to your next update in a few months ��
    Original Mortgage (Feb '17) 269,995
    Current Mortgage (End 11/19) 226,790
    End Date November 2039 Original End Date February 2042
    • SuperSecretSquirrel
    • By SuperSecretSquirrel 13th Jan 20, 6:24 PM
    • 758 Posts
    • 3,368 Thanks
    SuperSecretSquirrel
    Hi KC and VDOT

    KC, I'd be lost without short and medium term goals... An ultimate aim is nice, but without those up close targets I'd never get there!

    Hope you got all your paperwork done. I've been on something of a mission recently myself - four loads of shredding done, a meticulously organised filing cabinet, and I've even sorted my work bag, car boot, sock drawer, wardrobe, and offloaded some children's toys! Just the small matter of two massive cupboards, a bookcase, a cd and dvd unit, four drawers, the garage, and the loft remaining on my hitlist... It will take some time to get through that little lot!

    VDOT, it sure helps me sleep soundly at night! Love the sound of your 2020 - powering on ahead We've decided to stay put for the foreseeable rather than have any more money tied up in our home. Not sure it's the most lucrative move, but it sits well with us in terms of emergency funds and housing needs for now. Maybe we'll move a few years down the line and regret not going for it sooner, but only time will tell on that. Hope it all works out nicely for you
    _____

    So, I've been doing some thinking... Warning: Huge wall of text incoming!

    I've written in the past about needing to structure early retirement funds in such a way that there's always enough money on hand at each stage of the process. First there's the pre-57 stage - ISAs and savings accounts only. Then there's the 57 to 67 stage - personal pension plus any residual from the previous stage. Then there's the 67+ stage - state pension plus any residual from the previous stages. All stages can be boosted by working a little (I think of "retirement" in fuzzier terms than most). This work could be for an employer, freelance, earnings from a lucrative hobby, btl, etc.

    During the accumulation phase, salary sacrifice pensions are damn near irresistible... A 32% uplift for a basic rate tax payer thanks to tax and ni relief. Add employer contributions for a cherry on top of an already unbeatable cake. This is why I've been sacrificing 25% (+5% employer) to my pension each month. It's a ridiculously good deal that can't be beaten on cold hard numbers alone.

    However... I mustn't forget that personal pensions are heavily restricted. The earliest I can withdraw a penny from my pension is at age 55. Chances are that age could be pushed further out. 57 mooted as fairly likely, further out a possibility.

    Right now I have enough in my personal pension to cover more than 10 years (i.e. 57 to 67) of my share of our expenses. That assumes inflation matching returns only, no further payments in, and steady household spending.

    I have enough in accessible accounts to cover almost 9 years (i.e. 37 to 46) of my share of our expenses.

    Between OH intending to earn at least 9kpa up until state pension age, and me thinking I might earn something from whatever I end up doing during early retirement, there won't ever be a need to cover anywhere near our total expenditure between 57 and 67 from personal pensions. We're sat at around 60% now, will each continue to pay something into pensions as long as we're working, and should hopefully see inflation beating returns over time... Chances are good that we'll eventually hit 100% without trying.

    It seems to me that now might be a good time to scale back the pension contributions in favour of more accessible accounts and start closing that gap between age 46 and 57. I'll lose out on a whole lot of uplift, but it still seems like a sensible move.

    So, yeah, I think there may be a big change in strategy coming soon - reduce pension contributions, increase S&S balance. Overall pace will slow a little due to the loss of "free money", but I'm convinced it's the right move.

    It would be quite nice to get the top three lines of our financial overview table (house, pensions, s&s) into six figures at some point. Not going to happen anytime soon, but it could be a nice aim for some unspecified point in the future Not going to even think about attaching a date to that goal just yet, but I know it'll niggle away at me over time
    Mortgage free at 35. Aiming for FIRE.
    MFiT-T5 (12/36): 59.5%
    SelfFI (Exc SP): 1/1/20 76.3%
    TeamFI (Exc SP): 1/1/20 42.6%
    • crv1963
    • By crv1963 14th Jan 20, 11:21 AM
    • 1,099 Posts
    • 2,433 Thanks
    crv1963
    Hi KC and VDOT

    KC, I'd be lost without short and medium term goals... An ultimate aim is nice, but without those up close targets I'd never get there!


    So, I've been doing some thinking... Warning: Huge wall of text incoming!
    Originally posted by SuperSecretSquirrel
    Hi SSS- You're absolutely right about the short and medium term goals!

    Well done for where you have got so far. I was ready to pull the trigger in May or June this year, but a joint review and hard look at our finances mean we have had to change goals and push back the final "sit back and enjoy the fruits of our labour" by about 3 years.

    We should be able to finally retire before I'm 60 but a lot of saving to do over the next 3 years! In preparing to retire we've started to spend money on the house and garden from savings- biting the bullet while still earning. We plan to take my DB Pension to cover bills and use wages to fill pensions and savings, TFLS from DC pensions to provide a cash sum to cover any market downturn prior to SP kicking at 67.
    CRV1963- Light bulb moment Sept 15- Planning the great escape- aka retirement!
    • edinburgher
    • By edinburgher 15th Jan 20, 9:27 PM
    • 11,573 Posts
    • 61,787 Thanks
    edinburgher
    SSS - saw this and thought of you

    https://monevator.com/how-to-maximise-your-isas-and-sipps-to-reach-financial-independence/
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