I was horrified to realise it’s been an inexplicable 18 months since I last published a blog post. A lot has happened in that time on my journey towards financial independence (or early retirement, or call it what you will). So much so, I’m not quite sure where to start. But in short:
- I re-focused and drafted an accelerated plan for financial independence (FI) numerous times over.
- I decided to strive for a halfway house, a semi-FI. By that, I mean quit the full-on corporate job and move out of London so we could own a home outright in a cheaper area of the UK. Then find a way to bridge the wealth gap that remains to achieving full FI, hopefully working part-time from home on projects I can enjoy.
- I endured an awful job for decent money while pursuing this plan in more detail and putting the building blocks in place to make it happen.
- I eventually found us a lovely little house 250 miles north of London that fitted the plan really well.
- We bought the house, I quit my job and we moved.
It sounds quite simple when laid out as five bullet points like that but it feels like it’s been anything but simple.
A few weeks ago we packed up our belongings in Surrey to make the move up north. I travelled back down to see out the final days of my job in London from the discomfort of a cheap Croydon hotel. I did very little actual work but the company seemed pretty insistent I was there for the full duration. To the very last, the corporate blood-suckers of modern city living know no bounds. I finally made my permanent escape late on a Friday evening back to my wife and our two cats in our new home feeling giddy, exhausted and strangely on edge.
The new home has cost us £150k. It’s a very old, quirky 2-bed terraced cottage on a west Yorkshire hillside that’s brutally and beautifully exposed to the raw elements.We could just about buy it outright with the proceeds of our house sale down south after repaying the outstanding mortgage on that place. Having no mortgage is an unbelievable relief to me. There were so many mornings I’d trudge into work thinking there’s no other way to pay the £1600 per month mortgage-noose around my neck than do this – the 14-hour daily grind.
I also have some money invested in stock portfolios. See My Investments page for a latest summary. It won’t be enough to keep us going. I calculate that as a bare minimum I’ll need to earn around £50k over the next 10 years. (At that point I can start drawing on my pension which, given average expected investment growth, should be just about enough to cover our expenses from then on).
The estimated £50k extra needed over the next 10 years is based on a pretty slim budget. If there are big unforeseens in that 10 year period, like health problems or house problems or lord knows what, that we want to spend big money fixing, then that sum rises accordingly. Let’s face it, there are always unknowns and unforeseens in life, so I’ve calculated that the £50k should become more like £100k. That’s an average of £10k a year gross (there should be no need to pay income tax on that amount if it’s earned in a fairly regular and consistent way).
How and when I earn that I’m not yet sure but I’m confident I could sustainably earn around £200 per month from matched betting and £100 from buying and selling niche items. That’s £3,600 a year, so £6,400 a year more needed.
I’ll keep in good contact with certain old work colleagues anyway and see if I can pick up occasional freelance work through that network. Being located up north in a cheaper part of the UK and having no bills to pay means I can be very competitive on freelance rates and fortunately the nature of my work means I can do most jobs remotely.
I also believe that with my new-found freedom and, most importantly, time, I’ll start channeling my energies into new endeavours, which are likely to present opportunities to earn money that I’d never previously considered properly.
Over the last 18 months I’ve been constantly re-evaluating these numbers, seeing how soon we could make the move, how big a hole I’d risk leaving in our finances without having a job or another form of concrete income plan to securely plug the gap. But after all this frenzied meticulous recalibrating, I settled on the figurative £100k shortfall for no great reason whatsoever, other than it just felt like an amount I could live with and take a chance on.
Giving up a well-paid job and moving to a very different part of the country without a job to go to was a little scary. But giving up that same horrendous, life-sapping, spirit-crushing job was pretty euphoric. And the closer it felt to becoming a reality the more eager I was to ‘just do it’.
Now it’s happened, now that we’ve moved, it seems ridiculously easy and straightforward. I feel I could and maybe should have done it sooner, taking more risk. Having an even bigger shortfall in the finances would have been a minor sacrifice, given the liberty, release and freshness I’ve felt since the big move.
Yes, it’s going to take some adjusting. And I may struggle to find a source of income at times, especially if I’ve chosen to do no work for a year or so within that 10 year period. But hey, we don’t have kids so the risk and responsibility is far less than if we did. Plus, I believe in my resourcefulness to earn a crust in an interesting and experimental way, one that keeps me away from the mundanity of office life and commuting routes.
Most FI-seekers I’ve obsessively read about are a lot more cautious than this. They tend to save up way more than the projected sum they need for a safe margin on their passive investments, working years after that passive income outweighs the household expenditure to be absolutely sure they have enough in the tank. I really didn’t want to wait that long. I don’t want to spend another 5 years labouring to build up a super-safety net. I’d rather get out early with some risks on my shoulders. I craved even half an escape so desperately I guess.
I’m glad we’ve taken the plunge. For now it feels very very right. Everyone is different and I would stress to anyone going through a similar journey towards FI that it is exactly that – a journey, a very personal journey. Like all long life journeys, they evolve and have surprises, some good and some bad. You need to navigate them, refuel and take a different route if there’s a roadblock. Don’t get overly fixed on one plan, one route to FI or one solution for getting there. Stay open-minded and be flexible with your options. Above all, be brave. Or you might live to regret it.