One of the first posts I wrote for this site was The Ultimate Dream, which outlines our hopes for the future. It doesn’t dwell on any particular facts or figures, but merely states that the ultimate dream for me and my husband is to retire fully by the age of 50. In order to do this, we need savings/income to cover our expenses until other savings/pensions start to kick in when we reach our late 60s. A while later, I then wrote The Ultimate Dream Part Two: Early Retirement which breaks down the goals and discusses the figures needed to accomplish a goal. I wrote these two posts in June and July 2014 and then promptly forgot all about them. Not about the idea, but the specifics within the two posts.
In the second post, I work through the figures we would need to retire at 50, and the savings/investing we would need to do from that moment on, every month, until we hit the magic target. Each and every month, to ensure that we reach our target at the age of 50 and be free from the trappings of traditional work, we needed to have saved £1,630 (and I wrote this post back in July of last year) to reach our target. So that, over time, compound interest and/or dividend payments will play a pivotal role in that journey.
And our total amount so far? £0. Yep, that’s right, nothing at all.
I seem to have got so caught up with short term goals and the more immediate future, that the long term plans have been pushed to one side. I am struggling to manage to balance the here and now, with the ideas of the future, which are not even guaranteed. I read various financial freedom blogs, both out of interest and, I’ll admit it, a little envy. They seem to do so well and are so focused, that nothing appears to get in the way. Now I know, as a reader, that all I can take them on is their word, that there are no hiccups and set backs along the road. In some ways, I wish I could find someone who is at a similar stage of their journey as us, and who might have a slower, longer journey. The ones I read are aiming to be free in five years or less, which whilst very admiral and I shall enjoy reading their journey, seems an impossible feat. for us to complete. In fact, I know it is; we just don’t bring in enough money or live on so little to make it work for us.
Have I given up on my dreams? Absolutely not. But I must admit to feeling a bit out of my depth. I feel like I do not really know where to start, in terms of that first step of setting up savings which we cannot touch. We have an Emergency Fund, we are saving for various things in the short term, but apart from our work pensions, we have nothing. A big, fat zero of a fund.
I know that starting something off is the hardest step. The toughest journey begins with that first movement towards an end goal. I know what I need to do, but I seem to be faltering at the first hurdle. I keep putting off looking at registering as self-employed so I can take on some side work and I have no idea why I am avoiding it. Is it because I don’t want to fail? I know that there’s no harm in trying something, but the world of extra income and therefore additional tax/national insurance payments and hiring an accountant, and all of that, seems very scary. I find myself very reluctant to venture into the unknown.
Therefore, I am going to pledge that in the next month or so, I am going to sit and work out a definite plan and put that plan into action. Even if it’s a minimal amount to begin with (i.e. nowhere near the numbers I talked about previously) then it’s a start. It might not be what I need, but it is a start. Some of the most difficult things in life can be the most rewarding.
How is your financial freedom journey going? Have you got any advice or tips to help? I’d love to hear from you in the comments!
I wish I could offer you some advice but we are in a similar position except I am 50( just!)
We have been so living in the present I hadnt even contemplated retirement until just recently – when I worked out that on our current trajectory we will only pay of our mortgages at 73!!!!
Now I dont want to live to work until I am in my 70s so its heads down bottoms up for me to make the changes necessary to ‘retire’ much sooner than that.
Thank you for making a comment 🙂 Good luck with your journey – the realisation of time and the lack of it can be a massive motivator! Let me know how you’re getting on.
Hi FC,
I sometimes feel you regarding getting discouraged when comparing yourself to others’ progress, especially if you’re comparing yourself to the ‘big names’ in the FI blogosphere.
My wife, Marie, and I are in a similar boat–we’ve made pretty decent progress and have made steady progress on eliminating debt and building our independence fund, but we’re still looking at a 12+ year timeline to retirement unless we get our income up–and that’s hard to do given our line of work.
It’s a long road, but we have to start with a first step!
Keep on saving,
Charles
Hello and thanks for stopping by!
I definitely shouldn’t compare myself to some of the bigger names that I read in the FI blogosphere, as it does make me feel downhearted and discouraged, but I need to remember that we’re just at the beginning of our journey and have a lot to learn.
Thank you for sharing your link – I shall go and have a read now 🙂 It’s hard to get an income increase in the jobs me and my husband do too, which obviously makes savings rates and budgeting even more important.
Thank you; same to you!
Nicola
I think we all go through different bumps at times and become unsure of what to do. Keep up the perseverance!
Thank you for stopping by and leaving a comment! And yes, ups and downs on the journey are inevitable I guess, just need to keep plodding along 🙂
I’m right there with you. We had to pay off debt on less than $40,000 a year. Debt we only had because of student loans and medical problems.
We finally got it paid off, and I was able to find a job despite my disability. Still, now my husband is on disability, so we’re essentially a one-income household.
Not to mention that we bought a house a little earlier than expected because my in-laws were about to become homeless. And the fact that it’s an older house and therefore has required repairs.
Oh, and my husband’s teeth. This is the year he gets full dental implants. We’ve managed to save nearly $10,000 in savings (despite various repairs and suddenly needing a new-to-us car last year). But we still have several thousand to save by this fall in order to pay in cash.
Nose to the grindstone time.
We’re also limited in terms of what we can do to be frugal because of health problems. So it’s an uphill struggle for us. The one boon has been my amazing boss. He’s very generous, which is how we’ve gotten even this far.
That said, it’ll always be harder for us than a lot of people, I think.
Thank you for stopping by 🙂 I hope you manage to save what you need so that you can pay off what you need to. Life can be a challenge at times, that’s for sure.
I make plans to retire at 52. But I find out later that o was expecting at 42. This child changes everything. Now I have a new plan that it will be done in 9 years. Do you think to be s mother in the future?? Believe me .everything will change drastically
Good Luck.
I love your pure honesty! Yes, so many seem to have it all together and I begin to think what in the world is wrong with us. Lol! I’m not sure of your age and how many years you have to the big 50 but it’s never too early to save! The only reason we have retirement savings is because it comes out of the hubbie’s check automatically. Otherwise, I’m certain we would have had something else to spend it on.
I have this blog so I can be honest 🙂 I’m afraid we’ve left it too late re: savings already – it does make me slightly anxious sometimes. But, better late than never I suppose.
Great post! I fully understand the confusing nature of planning for early retirement… My tentative plan is to retire at 50 (I’m 30 now). I will be using my workplace pension and potentially a SIPP for retirement savings that we can access at age 55. I’ll probably use a mixture of cash and stocks&shares ISAs for other savings, maybe some gov bonds but I have no experience of those so need to read more! I love to read the Monevator website which has helped me loads in developing a plan as a UK based investor. Looking forward to gearing more about your plans 🙂
Nicola,
I’m sorry to hear you’ve managed to put anything towards your early retirement. Don’t despair though, I’m sure you’ll find a way to make it work. All beginnings are difficult!
You mention that you got caught up in short-term issues. Maybe try making a large over-arching and long-term plan and then apply some quick and short-term wins to get to where you need to be in the long-run. If it works for businesses, it could potentially also work for your own financial situation.
Best of luck,
NMW
A good suggestion – thank you. I am finding increasingly that everyday issues are taking over and taking more of our budget, even when I don’t intend them too. I think I may also do a fiscal fast for April to see just how little we can live on, for the month. I’m going to try and do a long term, over-arching plan like you suggest, I will let you know how it goes 🙂
If you’re feeling particularly brave you can always post here or on /r/financialindependance on reddit your actual numbers, not the %’s. It’s a touch terrifying but the feedback can be quite worth it.
One thing I’d like to point out is that you’re spending 39% of your variable income on “stuff”. Your budget was unclear as to where your personal products go, are they under food or shopping? If you add in the “Anything else” section this number climbs to 47% of variable spending.
And of course if you’d like to be retired by 50 http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ and https://lab.madfientist.com/ are rather helpful. I personally use a more conservative 3% withdrawal rate for my calculations. While the sites are American the principles and math apply regardless of currency. Just pretend the $ is a ₤ 😉
Good luck on your journey!
Thanks for stopping by and commenting 🙂 Our personal products are just bought at the supermarket, so they go under general shopping – we don’t spend a lot in this category so it seemed a bit silly to put it in its own category. Though, as you point out, added all together, these are 47% worth of our budget, which is a bit shocking when I think about it. Lots to think about and put into practice!