Saturday 7 April 2018

It’s starting to get Interesting (Part 2)

A lot of very thoughtful comment last week so I thought it might bring some value to the collective if I expand on my musings a little more.  Wandering Star I think hit the nail on the head – for me this FI (Financial Independence) moving to FIRE (Financially Independent Retired Early) lark is no longer about finances but now about psychology and so that’s where I’ll focus today.

I think The Accumulator also makes a good point with “I admire your willingness to play out your doubts in public. It is helpful on a personal level, while at the same time we, your audience, can't help but cheer, hiss, wince and cover our eyes from the galleries.”  I don’t believe I’ve ever claimed to know what I’m doing but what I have tried to always do is learn, experience and then share both the outcome and the journey.  I hope my tossing and turning proves helpful – the other option is to do that behind the scenes and then just communicate surety but I that doesn’t seem as useful from where I sit.  I guess it goes without saying that not for a second did I ever expect to find myself where I am today.  I honestly thought I’d reach FI, soon after convert that into FIRE and then ride off into the Mediterranean sunset.  So just what is going on...

It might be helpful to start with putting some backstory on the table.  I apologise to those who’ve read my book  as you’ll already know some/most of this.  I genuinely come from pretty humble beginnings which means that if I get this wrong I have nowhere to run.  This also means no top up inheritance to come should it all get a bit lean later in FIRE.  Thinking this through and for me it’s more than just a risk to manage.  I’d go so far to say it’s actually a fear.  I have seen and been part of poverty.  It’s not fun.  This is definitely having an impact despite me knowing I have enough.  Shucks, when I look at my wealth today my withdrawal rate if I went today would be less than 2.5% and that comes with knowing that additionally 47% of my spending could become discretionary if/when we see a very bad bear market.  One of the benefits of a quality of life for me costing very little.

To go with that I think it’s important to understand why I started on this journey in the first place.  Way back in 2007 I found myself working in an industry that was being hollowed out, was being off shored to ‘low cost countries’ and where the sword of Damocles around work results was constantly hanging over my head.  When I say work results I’m talking ruthless behaviour where you could perform well in 9 out of 10 areas yet still find yourself without a job.  Importantly, this isn’t a problem with my employer, it’s actually a problem with the industry I’m part of.  Thinking it through I came up with 2 options - the first was to retrain with the second being to have a go at what in subsequent years has become more mainstream and is now termed FIRE.  I chose the second and not for a second do I regret this.

Looking back at that work journey I’d also say there was an element of fear here as well.  Many bloggers talk about feeling a sense of freedom once they have a decent amount of FU Money.  I felt nothing until I achieved full Financial Freedom which looking back I think says something.  So to answer Scott’s comment – “All I'd say is think about your original reasons for wanting FIRE (the RE part in particular), and assess whether they still hold.”  The problem I was trying to solve with my original FIRE pursuit has definitely been solved from where I sit today and I guess that’s also why I feel so good today.

It’s also relevant to look forward as well.  Since achieving Financial Freedom my life, including work, has become very very good.  This is the point I think The Investor was making with his/her comment – “And now you're off the wheel, you can look around.”  I am therefore still so glad that I followed the journey I did but at the same time the urgency is just not what it once was.  I now go into work and can enjoy the good bits, say what I think and ignore the bad bits because they no longer impact me.  If I f*ck up (relatively as history suggests I’m pretty good at what I do) and lose my job or if I’m outsourced it just no longer matters.  We just pack up our bags and ride off into the sunset to live happily ever after.  That is liberating.

On top of this I’ve now been given express permission to do less from an objective perspective.  Right now it won’t mean part time and it will still mean hours above the UK norm but it will give me more home time.  It will also give me time to do the responsibilities I still have much better with doing things well always having been important to me.  I guess looking back that’s why I pursued FIRE with the military precision I have.  I’m cut from the cloth that if I’m going to do something I’m going to do it well.  I also have FIRE to thank for this as speaking freely has definitely enabled this to occur.

Thinking critically about myself I think I’m also now guilty of hedonic adaptation and that’s something I need to deal with as well.  How else could somebody who spends very little in his pursuit of quality of life find himself in a position where 47% of planned FIRE spending is discretionary.  Other FIRE bloggers might even consider it madness.  I think part of what’s going on is that in pulling the FIRE’ing pin at age 45, to me seems like my life is just beginning, meaning I could have 40 or more years of retirement.  Over that time I’m sure to change as a person and in life thus far I’ve always it liberating to have options.

So with all this in mind let me now answer The Accumulators question – “Say the market does crash 25 - 30% in the next six months... What then? Do you stay on a while longer to get back to your target figure?”  I’m beginning to understand that I don’t know the answer to a question until I experience it however based on past form and my musings above I’d say I’d probably work on.  I can hear the boos and hisses now but I don’t think I’ll apologise for that.  I can’t help who or what I am and all I’ll commit to is trying to do the right thing for the RIT family.

With all this in mind I’m not for a second rolling over today and saying another one more year.  I’m just saying life is currently very good, our planned Med FIRE life is also very good and we have plenty more thinking to work through over the coming weeks.

To conclude I’ll just say that right now I feel incredibly fortunate and I have FIRE to thank for that.  With my time again I’d do it exactly the same way again. 


  1. Hi RIT
    Thanks as ever for continuing to share all the details of your journey, even well beyond the crossover point to FI.
    Something that strikes me about the way you write about your employer is that you might have become a bit institutionalised. I've recently left a long term job and it's like a weight has been lifted. What previously seemed normal suddenly seems so unacceptable that I can scarcely believe I put up with it for so long.
    Perhaps you're like me and you always look before you leap, but excessively so, and you just can't imagine a new world until you experience it. This applies to me for small things like turning music on, redecorating at home or arriving on holiday. Leaving work has had the same expansive effect on the way I feel but magnified many times over.
    I wish you the best of luck with whatever you decide, but I hope you do make a genuine choice and don't let yourself be ruled by fear or inertia.
    I will continue to follow your story with interest.

  2. Wandering Star7 April 2018 at 15:02

    This might seem frivolous and so go against the grain but why don't you take a long term rental somewhere abroad now? You have 6 figures over your target so can afford to spend some money to smooth your future. Then visit it as often as you can. Obviously it would help if you could take longer breaks from work in one go, to sample 'living' abroad. It could help you decide where to go or where not to go, so it's not money wasted. One day coming back to the UK from your rental, you will have a sick feeling in your stomach and then know it's time to pack work in. Long term rentals are cost effective compared to holidays anyway and it might help with post Brexit residency etc.

  3. Hi RIT, thanks as ever for sharing your thoughts, feelings and stories. I think what makes your writing so helpful and interesting is that you are living through the journey, sharing all the twists and turns with candor. That things change is not something you should apologise for, rather it's something us readers should be thankful for. It has certainly helped me reflect over the years on my finances, my journey and career and in particular how circumstances and emotions can and do change over time.

  4. I like your honesty and indeed share some of the issues you are facing. I am not so sure being "retired" with nothing to do but spend your investments is a recipe for a happy stress free life even if you never run out of money. We do need something to do with our time so perhaps finding some kind of work in your retirement destination of choice would be productive and would also help mitigate the risk of running out of funds. Doesn't need to be full time but enough to cover your basic costs and give you some free time to enjoy the early retirement. This is what I am planning to do now that we have chosen Marbella as our retirement destination.

    Time is the most valuable resource in life so if you continue to work make sure its because you are enjoying it and is something you want to do and not just for the money. I have moved to 5 different countries over the past 20 years with work and I don't worry too much about choosing the wrong place to live. Trust your intuition.

    Perhaps buy a place to live in your chosen destination and start to prepare for the move over the coming years so that when the time comes you are not making a huge step but already have it all prepared and makes the change easier and less stressful to do.

  5. All this to discover the wisdom of the ancient advice that one should establish a "Get stuffed!" fund.

    1. Be careful of being afraid of what can go wrong so you don't forget to focus on what can go right. An ancient sage.......

  6. It will also give me time to do the responsibilities I still have much better with doing things well always having been important to me

    On top of this I’ve now been given express permission to do less from an objective perspective. Right now it won’t mean part time and it will still mean hours above the UK norm but it will give me more home time. It will also give me time to do the responsibilities I still have much better with doing things well always having been important to me. I guess looking back that’s why I pursued FIRE with the military precision I have. I’m cut from the cloth that if I’m going to do something I’m going to do it well. I also have FIRE to thank for this as speaking freely has definitely enabled this to occur.

    Can you clarify the sentence above??( from the Para above).

  7. Initial reaction to your post. You are not a team player - you mention your family once in the whole of today's post.

    I can’t help who or what I am and all I’ll commit to is trying to do the right thing for the RIT family.

    I think part of what’s going on is that in pulling the FIRE’ing pin at age 45, to me seems like my life is just beginning, meaning I could have 40 or more years of retirement. Over that time I’m sure to change as a person and in life thus far I’ve always it liberating to have options.

    Maybe feeling your life is just beginning is related to what you are now beginning to realise has already " passed you buy "

    Maybe for you this is relevant :-- "Life is what happens when you are busy focussing on other things."

    1. Not the impression I have ever got from RITs posts. You're being a bit nasty.

    2. @mwpt - SV has a love/hate relationship with RIT, he is in turn critical and then supportive, lather, rinse, repeat. I wouldn't worry too much about it..

    3. @ mwpt and @ The Rhino - I realise sometimes I am rather blunt with RIT. I think that is partly due to the frustrations that RIT engenders in me. We are obviously very different people with differing attitudes to life , family , security and investing ( espec active vs passive ) . It is probably also something to do with the rather sycofantic flavour of a number of responders posts. I also think RIT is quite nasty about his employers and colleagues at work and probably has a rather opinionated view of his work capabilities and how well he works alongside the rest of his team . He frquently states things like how much better he is than his colleagues. I worry he is too much out on a limb with these plans and ideas - and never quite sure if his family are even a bit on board or whether he is bullying them into his views.
      However I do admire RIT's honesty and his painstaking attention to detail, also his competitiveness. And like many other responders there is a bit of me that wonders whether I should have left work a lot earlier and let my dreams soar . I am now 68. So - yes - I would say ambivalent - hence the blowing hot and cold on this.

  8. RIT, I was struck your remarks that you'd still working above average working hours on the proposed new arrangement. I was shocked actually.

    For me, in your situation it is a simple equation of do you enjoy work enough to continue to spend most of your quality life time away from your family and friends?

    If you enjoy work enough to continue to prioritise it over time with friends/family and other interests, then all you have really done is create an enormous FU fund.

    For me, I'm going down to four days a week this summer, and if the balance doesn't feel right - I'll go down to 3 days in the winter. Cautious by nature, I'm hoping to enact a tapering off into retirement over the next decade or so while at the same time trying out new hobbies/interests/more time with the wife to see which I get most fulfilment from.

    Sorry for abruptness - but it strikes me as a stark choice now. If a £1m+ fund doesn't give you permission to even work an average week - what will?

    BTW what does Mrs RIT and the kids want you to do?

    1. What is a FU fund ? And NB - £1m + fund excludes owning a house ( an inescapable error in RIT's financial planning )

    2. F*** you fund - enough money to cover your living costs for a period of time so you can "sack" your employer if work proves to be too annoying etc. IMO it's a stepping stone towards FI and provides a strong sense of liberation in itself.

      I will mollify my comments a little to say thank you to RIT for sharing his dilemma. I've certainly been there myself as I too grew up in a very financially poor environment.

      I know it's not easy and it might be that this is what tapering looks like for RIT.

    3. FU money is defined as: any amount of money allowing infinite perpetuation of wealth necessary to maintain a desired lifestyle without needing employment or assistance from anyone.

      Regarding a possible solution for the the house issue. RIT could buy that retirement house in his choice location with views over the ocean and providing its in an area that brings in tourists in the summer he could rent it out for 2 months while he visits his friends and family back in the UK. That should give him a 3% yield on the investment (rental rates in choice tourist areas are much higher during the peak two summer months) so he gets to enjoy living there for 10 months of the year and gets an income yield above his yield from the stock market. It also diversifies his portfolio and reduces risk.

    4. No, no, no! You are defining a retirement stash; FU money can be far less than this, and certainly (and importantly) may not be sufficient for long term independence from work. It _is_ however enough that the DEA of suddenly losing employment holds no particular terror, even though an income may be needed in a few years (insert relevant period of time here) time.

  9. Dear RIT, may I join with all these others in thanking you for your sharing, which must have helped all of us over the years; if not, why would we keep on following your every post? My psychological makeup is very similar to yours, unexpectedly but happily I'm now retired; anything could indeed happen, yes you will change, so will your family members, but you're clearly perfectly capable of continuing to learn as you go, and the only advice I can offer is that that is probably key to your future contentment. You'll know when you're ready, and when you are, let go and go! We're with you in spirit and support. Don't worry, be happy!

  10. Good luck with whatever you decide. You're in a a good position, and I'm fairly confident that whichever road you take will be the right one.

  11. As RL Stevenson said "to travel hopefully is a better thing than to arrive, and the true success is to labour"

    Looks to me that the epic journey to FI has been completed - and a huge well done for that. Funnily enough it may be what comes after is the harder challenge. Work out what nourishes your soul, and then go and spend time doing it. Personally it would not be work in my case, but you do what makes you happy.

    If there is a bit of OMY creeping in here - i wouldnt bother if its just money you get out of working. The market could take that amount from you in one bad afternoon.

    Having strived so hard for freedom, i think your question becomes i know I am free to walk away, but what am I walking towards? Fundamentally its a nice problem, but a problem none the less,

    Keep smiling

  12. * Applause. * I don't know if you found that a hard post to write, but I would have found it excoriating. SurreyBoy is right, the journey to FI is over, it's just that it hasn't yet led to the place we all expected. How many continue to work once they don't need to? Many, many people including some of the most successful in society. Perhaps you have found your freedom now - I for one am cheering you on.

    1. Are you allowed to say how the kid/wife side of things plays into the decisions to be made?

      School situation must weigh pretty heavy? I know I'd be loathed to pull my kids out of school if they were having a good time there..

      maybe the craic could be go part-time until kids hit 18 and beggar off to uni/jobs.

      I think you need to experience what it means to slack off a bit. Probably working less than 40hrs a week as a bare minimum?

      I wouldn't be to averse to sticking in the UK for a bit longer, but on a much more relaxed basis. For sure, theres a shit load more stuff going on in the UK than cyprus - its just not quite as hot.

      I've often thought a sweet solution could be to hit an endless-summer, i.e. ditch jan-feb for somewhere a lot further south (add in dec, mar if you can). UK in summer is actually brilliant, its just the winters that are killer..

      I don't think thats feasible though til the school situation is done and dusted..

  13. Thanks RIT for being honest enough to admit uncertainties and brave enough to write about them in public.

    I wish you luck with your new working arrangement. I was surprised to read whittled down responsibilities still meant working about average hours, but I get the sense your work defines a large part of your identity.

    You have comfortably met the FI definition you have chosen to adopt, and continued to work in the same type of role. That effectively answers the “if you didn’t have to do [Role X] for money, what would you do with your time?” question... at least for the time being. Something to be conscious of, neither good nor bad necessarily.

    It is important to recognise there are a few separate decisions you have faced recently.
    * The work or not question - FI means either becomes a valid option regardless of where you live.
    * the stay in your current job or try a new role/employer/profession/career question - fundamentally a how do you invest your time now the money isn’t the primary driver
    * the where in the world do I live question - a surprisingly difficult question when it isn’t external forces (e.g. career, caring for elderly parents, fleeing the law, etc) driving it. As someone who has migrated 5 times, I don’t envy the uncertainty you must be experiencing on this front!

  14. Thanks for sharing another interesting post. Good to hear you are happier and feeling freer in your work and life. This is what my own journey is all about. I actually quite like what I do at times and enjoy the challenge of achievement that work brings. I just don't want to be forced to do it, so I'm longing and looking towards the day that I have my FI money.

  15. Might I suggest borrowing one of Ernie Zelinski's books from your local library (e.g. How to retire happy wild and free)? You might not find any answers, but it may help to crystalize the questions forming in your head. And congratulations - FI is all about options; having earned it, enjoy it, regardless of your choice.

  16. "A man is born to labour as a bird to fly". I have a psychological need to work. It keeps me 'together', mentally 'toned up'. So, although I am financially independent, I don't welcome the prospect of not being occupied. I know, I know, I could occupy myself in a worthwhile way....but I'm not convinced I would be able to maintain the discipline/sense of purpose etc. etc. That's why 'retirement as discretionary work' is more the definition of retirement I would choose.

  17. Thanks for sharing this with us. Your feelings really struck a chord for me. Reaching FI was all about safety for me too. Once I got there it became clear that having enough money not to have to worry any more was the goal, not necessarily the retirement. Good luck on your journey.

  18. I'm another of the crew who could retire, financially, but chooses to continue working. I had a year out where I thought I wouldn't go back to work, ever, only to find that RE just wasn't the nirvana I thought it would be. I kept asking myself in that year what I was missing, why I wasn't content, and the answer was found in paid employment. But then, I always enjoyed what I did at work, and that makes a big difference!

  19. I’ve got a couple of perspectives on this (from someone who FIRE’d and then decided to carry on working).
    Firstly, I think there is a liberation element to being FI that may cast off some of the concerns. However, there must have been a reason why you started the journey and unless you make a fundamental change won’t those underlying concerns still be there? For me, a lot of this was about pressure and working too hard and guilt for not spending enough time with the family. My revised gig allows me to stay home at least 2 and sometimes 3 days a week which is enough of a change to be meaningful.
    Secondly, from having a safe and secure income to having no income (other than draw down from the pot) is a big step. Our journey has been punctuated by a few mistakes where having a decent income has allowed us to buy ourselves out of ‘trouble’. This has included providing financial help to family which has a satisfaction of its own. Those options reduce once the money stops flowing.
    Thirdly, and this may be more particular for me, stepping away from my career entirely may be a one way ticket out and very difficult to return or at least very difficult to return at the same level. If I’m going to go, I need to be bloody sure it’s the right time to go.
    But finally, as we head along the journey we can only make decisions based on the information we have available at a particular time. Where we were as a family when we started our FI journey back in 2010 is very different to where we are today. Today the right thing to do based on what I know today is to enjoy being FI but not to RE. In 6 months’ time that may be different and I’ll look at the information and maybe make a different decision then. Live life consciously.

  20. Stock market investments never drop by 75% do they? Interesting article and a bit scary. Losing your nest egg is apparently hazardous to your health — very hazardous.

    An analysis involving more than 8,000 Americans found that those who suffered a "negative wealth shock" — defined as losing at least 75 percent of their wealth in two years — faced a 50 percent increased risk of dying over the next two decades.

  21. Thank you for posting such an honest and heartfelt post. I think its hard for those of us who came from poverish beginnings. No matter how much wealth we accumulate, the fear of going back there is still at the forefront of our minds.

    Little Miss Fire

  22. Congrats on the journey thus far RIT

    Some employers let you 'buy' an extra few weeks leave per year. Others have work from home options, I' be looking to add some lifestyle benefits into the mix if you do stay on, afterall its no longer about the money.

    Also rather than blowing the bonus on a depreciating sports car, you might choose a more charming/exotic home? After all even with all the new found hobbies, you will be home a lot more than you are at present, a home you gebuinely love may help drive you out of the uk sooner and help you love Cyprus even more :)

  23. Wow. You could have exchanged the odd detail but this is exactly me.
    I am FI but still waiting to hand my notice in because I am not uncomfortable enough at work to give up the £8k a month it gives me.(salary and benefits). Plus 75% going into pension so little tax.

    I am in this FI position through fear rather than greed and took me 15 years.

    50 next month and probably will have handed my 6 month notice in before then....but it was suppose to be my leaving day. But now I can hand my notice in any Monday the rush to do so left me.

    I get flack from others all saying they would leave....yeah right they are 50, same choices I had but it seems a DFS sofa and big TV was more important to them than saving and leaving. For me it wasn't a pipe was real and I made it happen. I now I am there with all that real desire then the objectives and 'rush to leave' changes.

    Massive plans ahead. Kilimanjaro, Anazin, Australia, California....plenty pulling me and I am leaving soon. But I empathise entirely with you last minute dilly dallying. It's your right to leave when YOU want.

    However, like me....we do have to leave at some point ie 6 mths, 1 yr or even a bit longer. Because if we leave it too late we ate no longer retiring early but just creating wealth.

    I will let you know when my notice goes in

    Pops 321

  24. Great debate. I gave up work last month after achieving FI. Spent 30 years as an expat (Africa 18 years, ME 12 years) and now in Southern Spain in a lovely penthouse overlooking the sea. Its a big step and only for the brave. At 55 health and time for my family were my drivers. I saved hard, lived well below my means and invested heavily in Investment Trusts while learning the investment game from people such as Tim Hale, John Baron and Pete Mathews (meaningful money). I can now choose the life I want to live rather than let it choose me.