Financial independence is a state in which an individual or household has sufficient wealth to live on without having to depend on income from some form of employment.
Thanks Wikipedia! When I first stumbled upon the idea of financial independence my mind was blown, quite literally! I’d always aspired to not work until the UK’s set retirement age (currently 65) and be happy with a minimal if still existent state pension. The thought of 40 more years of work, coupled with a love for travel gave me a pretty firm goal.
Until relatively recently, this had been a long-term goal that I thought was attainable but would require a hell of a lot of money to be able to do. For reference, my target had been to retire at 55 with £2.5 million pounds. I started on my investment journey back in December with this still firmly as the end goal. Within the last 3 months or so I’ve discovered the true power of FIRE! FIRE isn’t necessarily about being rich and driving a Ferrari, it’s about the FREEDOM to do whatever you want whenever you want completely independent of a traditional salaried income. As JL Collins puts it so eloquently in his wonderful book The Simple Plan to Wealth; it’s having F-U money.
In terms of what I want this blog to be, initially, I just want to share my journey from where I am now to my new target of £750,000 nett worth. With a 4% withdraw rate a £750,000 portfolio almost guarantees living on £30,000 a year for now and forever without a single bit of salaried income. I’ve also found a lot of the resources and details pertaining to the FIRE movement are US based with a much smaller community over here in the UK. I’ll do this by means of weekly budgets, what I spend my money on and invest in. Plus portfolio updates and regular tips and tricks that I encounter on my journey.
FIRE in mainstream media seems to have taken a bit of a battering recently, with people claiming that it’s only for high earners and for people living on rice and beans but putting away 90% of their income. My personal circumstance; I am paid reasonably well-taking home £30,000 per year before tax. I am not naturally a frugal person, I like spending money. Currently, I am moving between 30-40% of my monthly income into savings and investments, with an aim to get that up to 50% before the middle of next year.
If you want to read along, track my updates through the hopeful ups and inevitable down (the stock market is an unforgiving mistress) then feel free to subscribe below. Otherwise, check back in every now and again to see how things are going.