Long Road Home
I never set out with the goal to retire early. I remember sitting down with a financial adviser, retained by my work at the the time, to review my pensions. He was a bit of a blunt Glaswegian, and quickly got to the nitty gritty. “Now Jim, what are your retirement goals. And don’t say “to retire at 55” because every ***** tells me that and none of them ever gets there’.
I resisted the temptation to tell him he might be part of the problem in case he “sank the heid” in me with a Glasgow kiss. I, too, had the vague ambition of having the choice to retire at 55 – the choice, mind you, not the absolute objective. I quite liked my job, but in my industry the casualty rate was high the older you got, so I saw saving and investing as more of a safety net than anything else.
As it turned out I became a casualty myself when I turned 51 when my career ended in “redundancy”. Fortunately, by that time, I’d amassed enough savings to retire – if that’s what I choose to do, which was always my objective.
How did I do it? Well, in the spirit of keeping things simple, I’ve listed below what I think I learned over the years
- Take a company pension, if offered. I signed up on Day One of my employment and never even thought about it. Thirty years later and you wouldn’t believe how often I think about it now (with joy!)
- Save regularly. It doesn’t matter how much. Even a tenner a week will build up. the important thing is to start the habit and continue with it.
- Increase your earnings. Go for that promotion at work. Take that evening job. Build that eBay business from home. Work hard and save the extra it brings.
- Stick with an investment strategy that suits you. Over the long run you’ll come to understand what you’re doing, and why you’re doing it, and build confidence that you have half an idea about what you’re doing too.
- The clearer your goals, the better chance you’ll have of obtaining them. Write down what they might be. Have a plan to get there.
- Be frugal (within reason!) I like saving money and being tight. There is a limit though and it’s important to occasionally treat yourself too. I spent a load of cash on some great holidays over the years and don’t regret it one bit.
I think that they’re the main themes I followed over the almost three decades I was in work. I was pretty fortunate in terms of my career, but if I was to pick one of the points above as being the key one, it would be to save regularly, even if it’s only in a glass jar on your sideboard. The principle, and the pennies, all add up.
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Hey Jim
Somehow, I missed your comment on Huw’s blog so have only just come across your blog – am so glad you’ve decided to put your thoughts where other people can read them! 🙂
Great list there, one that I’m pretty much following, although I’ve not always been so great on the ‘get that promotion’ point. Still, I am hustling a bit to earn money outside of my normal salary and am saving the extra pennies/pounds.
All the best with the blog, I look forward to reading more!
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Thanks Weenie, I’m going to try and post something weekly and will try to keep it as relevant to FIRE as I can (even if I return to the world of work). I don’t want to forget that my situation and the blog were inspired by other people writing about their goals and ambitions on the web.
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Hi Jim
Great to see the perspective from the “other side” of early retirement.
Like Weenie, I agree that your list pretty much sums it up. I would possibly add one extra though, which is to avoid the urge to spend the extra money from pay rises and bonuses (if you are lucky enough to get them). My savings really took off when I made the specific decision that I would save every penny of any bonus I receive, and as I am fortunate enough to have shares in my employing company which distribute money three times a year (not investment banker sized, but also not trivial either) I can actually save a chunk of cash each year without having to deprive myself of some of the nice things in life (particularly holidays which allow me to escape the asylum a few times a year).
I will admit that I am fortunate, as I earn a reasonable salary and then get my share distributions on top, but I am not the only one at work in this position, and most of the other’s who get the same benefit from owning shares (and who generally make a significant purchase immediately after the dates the distributions are paid) moan that they will have to work until they are 75.
I look forward to following your reports from Financial Independence.
FI UK
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Thanks for your comments. I too used to receive bonuses which I invested (but also used to think that, in another way, these paid for the holidays I took in any given year). I often heard other employees say that because it was a bonus, it was going on a “bonus spend”, or treat, that otherwise wouldn’t have been bought. So occasionally I’d see a colleague sporting a new Omega watch or hear them talk about how they’d treated their other half or renovated their home. I pretty much did bank any wage rises too, and kept myself on the same “monthly income” for years. For a long time I thought that mostly everyone did that, so didn’t feel unusual. Little did I know…..
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Hi Jim,
Your list pretty much sums it up the strategy I used over the years too. (I am a saver, no financial expert and don’t trust financial advisers.) I would use my bonus for holidays when I was with my last partner but then when we split, I used to push that money into paying down my mortgage. I took every share save/option scheme offered and saved, saved, saved. I kept within my budgets and didn’t increase my spending when I received a pay rise. As I climbed the corporate ladder I could see how exposed I was and that I could be booted out at any time – scapegoats were rife in my business – so I saved even harder knowing at some point it was likely to hit.
Eventually redundancy did….my newly appointed line manager wanted me out as they didn’t agree with long-service employees and thought churn brings more ideas into the company. So out I went – unceremoniously. I can be grateful I was made redundant, others were pushed out via dismissal. It was horrid and it upset quite a few people in the company. It was this first experience of redundancy that kicked me into the FIRE goal.
I managed to pick up the emotional pieces and another job via networking contacts, only to have the company bought by a private equity firm who asset-stripped it and made me redundant again only two years after the first instance. This time – no payment – I had under two years service.
The second redundancy was not so scary as I felt more financially secure! I am in my late forties so still have 20 years of working life left according to government state pension rules!
I managed to get myself another job – but it was horrid – a toxic aggressive workplace which didn’t suit me – I stuck it out for 6 months then decided to walk. I am now ‘free’ and living an FI life at the moment, I consider it a break rather than a full retirement.
I have the “OMY” and “Enough?” syndrome and worry that I don’t have enough. I don’t have access to my main pension fund until I reach 60.
Look forward to reading more posts!
Enjoy FI freedom,
SparkleBee
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Looking forward to more advice from someone who’s on the other side of the fence 🙂
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