Category Archives: Retirement – Early

On simplifying my diet – A food strategy for early retirement

Part of my early retirement plan involves simplifying what I eat. What I mean by this is reducing the variety of meals that I eat with each meal fulfilling the following characteristics:

  1. Reasonably cheap
  2. Quick and easy to prepare
  3. A high proportion of it fresh, raw or lightly cooked
  4. Nutritious
  5. Delicious – well, I’ve got to like it!

It’s important to me that this is a middle way strategy – I’ve toyed with the idea of extreme diets in the past, such as raw foodism or extreme budget diets, but I have a suspicion that many of these are at least as much about identity construction in the late-modern age as much as they are about what they claim to be about it – What I mean by this is that while people advertising their healthy diets are obviously keen on the supposed health benefits, and while people on extreme money-saving diets are clearly interested in saving money, it is just as much true that the people on these diets have a psychological need to be recognised as a ‘raw foodist’ or the ‘budget cook’ (ok maybe its less the case with the later).

I’m not claiming to be any different by writing posts like this by the way – I really do want to retire early, and this requires renunciation – but I also like the idea of being (in 7 years time) the guy who managed to (semi-) retire at 48 through employing renunciation as part of of his strategy. Somehow blogging about this now motivates me towards this goal.

Anyhow, my food/ diet plan. (BTW I should make it clear my diet I simply mean ‘food plan’ with a goal to simplifying, being healthy and saving some cash, I am not doing this as a means to weight loss – Lord knows I’m thin enough already!

My meal plan –

Breakfast – Everyday 

  • Muesli or porridge with milk or yoghurt – What can I say, I love porridge and I love muesli!

Second Breakfast 

  • Toast
  • Oatcakes
  • Home-made muffins
  • Home made flapjacks
  • Fruit*

Lunch – Some kind of carb with as much salad as I can stomach

  • Bread and soup with as much salad as I can stomach, basically whatever comes off the allotment
  • Whatever I’ve got available in bread (i.e. a sandwich)
  • Sardines on Toast
  • Last nights dinner with cous cous
  • pancakes with fruit
  • Tuna pasta (especially if running l8r)
  • Fruit*

Dinner – some kind of carb with whatever veg comes off the allotment

  • Potatoes with roast veg
  • Ratatouille with rice
  • Stir fry
  • Dahl with courgette
  • Chili
  • Home made pizza if I’ve got the time
  • Beans and eggs on toast
  • Home made muffin(s) and fruit* for dessert

As far as I see it – there’s sufficient variety above – and every single meal type ticks most of the criteria. Sorted.

Eventually I hope to evolve into ‘man of the forest’ and just graze, but that’ll only happen post-work. This is a pragmatic meantime strategy.

*My fruit strategy involves buying about 15 apples and 10 pears and oranges a week as well as having blueberries, strawberries and raspberries from the allotment for about 3 months of the year.

Related Posts

Why Masterchef might make you miserable

Early Retirement April Update

It’s now been nine months since I realised I could realistically (semi-) retire by the time I’m 51, and ambitiously by 48. Here’s my four month in update

 

Reminder of Long Term Financial Goals – Update info in Italics

  • Be mortgage free in 7-10 years (£138k outstanding)
  • Pay over £1000 a month towards the mortgage (15 year term) with a mind to either using savings or ‘trading down’ to pay off early.
  • Save an absolute minimum of £250/ month in additional funds (=£30K after 10 years, without accumulations). Ideally this figure will be significantly higher.
  • Find additional income streams to boost the above figure. Target = £20K in five years. Only just starting – incidentally the reason I’ve stopped blogging here temporarily is because I’m trying to kick start some second income streams
  • Save £200 a month towards a ‘land fund’ – eventually to be used to purchase a van and land on which to establish a forest garden.
  • Continue paying into the Teacher Pension Scheme. NB – Neoliberal shaft 1 (although I new this was coming) – My pension is now effectively split – the bit I’ve got will be worth £7K a year at 60, everything I pay in from now won’t be worth touching until I’m 65. 

April update 1– ‘Spending days compared to non-spending days’

April spending

This is proving to be quite a successful strategy – It prevents me from buying the odd coffee when out or the odd munchie when at work, and makes me think more about buying things.

April update 2 – Summary of average monthly expenditure

  • Frivolities = beer/ coffee/ subscriptions/ transport, (because I only really use transport for ents).
  • Necessities = council tax, services, food, ‘stuff’ (because I’m not a frivolous materialist consumer).
  • Property = mortgage repayments + service charge.
    April exp

It’s not as good as the January update, but then again I guess the novelty has work off. This is a pretty realistic day to day expenditure tally, but it will get slightly worse once I start adding on occasional purchases such as computers and other gadgets which I only buy every few years at most.

Ratio of expenditure to income including mortgage – 30%
Ratio of expenditure to income excluding mortgage – 71%

In summary, after property, my expenditure is actually still only £750 a month. Given that the stress of work causes some of this, once work is ditched I could bring this down a little, say to £700, giving me an annual retirement expenditure of about £8500.

Not bad, I’ll give myself a B grade. Could do better.

Five Strategies to Help You Stop Shopping

If you like this sort of thing then check out my book (only $0.99) – Early Retirement Strategies for The Average Income Earner

I’ve developed a few money saving strategies viz shopping in order to help me reduce my spending – These are as follows:

1. Only allowing myself to shop once every 6 weeks, with the exception of food shopping which I now to once a week.
2. Constructing lists of things I’m going to try and live without for 2015/16 (which I’ll review annually) and also an ‘allowed to buy in 2015’ list.
3. Only food shopping once a week (rather than buying online and dropping in twice a week) – somewhat unexpectedly this has saved me about £50 a month so far this year.
4. Trying to have more non spending than spending days in the year.
5. Keeping track of everything I spend on a daily basis in an excel spreadsheet, analysing this once a month and publishing an overall review of spending once every six months.

The point of all this is because I think it’s more conducive to overall quality of life to not work hard-consume hard, and then work for 40 years. I think it’s better to work hard for 20 years, not consume and then semi-retire at 50 and do constructive non-consumerist things, as outlined here – My early retirement strategy. Anyway – more details on my 5 strategies to help you stop shopping.

Strategy One – On only shopping once every six weeks

Once every six weeks, or thereabouts – that’s my new shopping strategy. The plan is to do one shopping trip/ online purchasing ‘binge’ on the first day of every school holiday, and the reasoning behind this is to stop compulsive shopping and be more in control of my finances. If I want something in the six week build-up, I’ll just put it on a list and then buy it on one of the 7 days I’m now allowing myself to do shopping (I’ve added one in to the end of the summer holiday, given that this is a six week period). This applies not only to shopping but also to browsing and choosing (idle surfing) so this should not only save me money, but time and exposure to advertising.

Strategy Two – Lists I’ve constructed to help me reduce my consumption

The Hold out until 2016/ 2017 list

These are things that I would normally buy because they need replacing (just due to ordinary wear and tear), but I’m trying not to for a year. The longer I can make something last the fewer of them I’ll have to buy throughout my lifetime. Instead of purchasing, I’m going to try and ‘repair put up with’ until it becomes economically irrational to do so.

Also, what I’ve just learnt from populating this list is that there’s very little I actually want/ need anyways!

Hold out until 2016

  • New day to day bag for work/ walking
  • All shoes except for running shoes.
  • New work trousers
  • New arm band for musical device
  • Headphones
  • Books (I’ve got a significant unread pile)
  • Ipad

Hold out until 2017 or later

  • All running gear except for trainers
  • Posh gloves
  • Work shoes (Docs)
  • Lap Top
  • New Winter Jacket the waterproofing on mine’s going
  • New Garmin Forerunner (I can’t see it lasting that much longer)

The just do without List

Things I want but I’m just going to try and live without for a longer time. These are just a list of wants I’ve had for a long time. Here I’ll try and find alternatives, or just do without. If I stumble on a windfall, I might buy these!

  • Replacement Polar heart rate monitor
  • Swanky coffee machine
  • Posh netting for fruit cage

The allowed to buy in 2015 allowed list

New things or replacement items I will probably allow myself to my. Most of these are already overdue

  • Two new pairs of Asics – £100
  • 6 new shirts for work – £40
  • Pair of Jeans – £20
  • Trip to the dentists – £20
  • Trousers for Summer – £20
  • Fleece-top for spring/ autumn – £50
  • Fleece Jacket – £80
  • Propagator (ideally home-made) – £30?
  • Paint to redecorate bedroom/ hall and living room – £40
  • Fruit trees and bushes (*2) NB – Bought in Feb – £100
  • Bike servicing – £50
  • Flask – £10

Total = £460

Of course I will eventually buy a lot of this stuff, but an early retirement strategy works on the basis of saving NOW – this means more capital accumulation in the long term. What was it Warren Buffet said.. A dollar spent now is several dollars forgone in the future, or something along those lines.

Strategy Three  – Only Food Shopping Once a week

This one was unexpected – but limiting myself to shopping in Sainsburys only once a week (instead of doing an online shop once every two-three months and then nipping in twice a week) seems to be saving me a small fortune – £50 month?!

I’ve also started cooking more cheaply, although not uber-frugally. I might even allow myself the luxury of doing a recipe post at some point. For now I’ll just give a big thumbs up to Dhal and Chapatis (how easy are they!); home made pizza; and vegetable stew (swede is compulsory) with pearl barley – three wonderfully cheap and delicious meals, which are bit of hassle to make but are just FAB!

Strategy four – Aiming for more non-spending days than spending days.

This is another strategy I just sort of stumbled on – It prevents me from that kind of idle spending which I used to do compulsively – Nipping out for coffees, or nipping to the shop for munchies – A few quid here and there a few times a week can (and has in the past) easily mount up to £40-50 a month, or £500/ year. Looked at another way, this could mount up to £20K over 40 years – Or nearly a year’s worth of earnings on the median salary, just because of ill-discipline.

This strategy also has the added bonus of making shopping days quite unique experiences. Something to actually look forward and be in conscious control of, rather than something you just passively do without really thinking about it. In fact, I’m not even sure that I’d categorise most shopping as ‘intentional action’. I think I’ll stop there, I’m starting to think hateful thoughts about shoppers, not very Buddhist!

NB – I am slightly behind – so March is going to be an uber-frugal month. I’d always planned it that way anwyays.

feb jan

Strategy Five – Keeping track of everything I spend on a day to day basis:

I’m just at the end of month two – I published the first month here. February has actually been quite similar, despite spending £100 on fruit trees and bushes. This is good discipline, But I won’t be publishing anymore until June, just because it gives a more representative and hence valid indicator of overall spending patterns.

 

Early Retirement Extreme Update 1 – January/ February 2015.

 

It’s now been six months since I realised I could realistically (semi-) retire by the time I’m 51, and ambitiously by 48. I’ve saved a bit of cash in that time, but TBH I’ve only just got into the swing of the early-retirement drive since the start of this year, 2015, so this isn’t so much of an update, rather a starting-point statement of where I’m at, a base from which to compare in the future.

I’ve now started (since January 3rd) to keep a record of everything I buy in various categories, with the intention that this will inspire me to spend less and save more. It worked a treat in January, but that’s probably because (a) it’s still a complete novelty and (b) I haven’t actually needed to buy anything of significant value.

At the moment my data’s only in Open Office, I might move it online laters.

January 2015 Early-Retirement Extreme Update

Reminder of Long Term Financial Goals –

  • Be mortgage free in 7-10 years (£138k outstanding)
  • Pay over £1000 a month towards the mortgage (15 year term) with a mind to either using savings or ‘trading down’ to pay off early.
  • Save an absolute minimum of £250/ month in additional funds (=£30K after 10 years, without accumulations). Ideally this figure will be significantly higher.
  • Find additional income streams to boost the above figure. Target = £20K in five years.
  • Save £200 a month towards a ‘land fund’ – eventually to be used to purchase a van and land on which to establish a forest garden.
  • Continue paying into the Teacher Pension Scheme.

January Update 1 – ‘Spending days compared to non-spending days’

I figure that I need to internalise not consuming – to this end I’ve started keeping a record of everything I buy and (roughly) how much it costs me. One of the interesting things that’s emerged is that there are several days during which I spend nothing and my non-spending days just over the 50% mark! This is now a new goal for 2015 – simply to clock up more non-spending than spending days.

Untitled
January Update 2 – Total expenditure excluding mortgage = £725 pounds

NB – Transport was £000.

Untitled
January Update 3 – Expenditure including mortgage

  • Frivolities = beer/ coffee/ subscriptions/ transport, (because I only really use transport for ents).
  • Necessities = council tax, services, food, ‘stuff’ (because I’m not a frivolous materialist consumer).
  • Property = mortgage repayments + service charge.

Untitled2

Ratio of expenditure to income including mortgage – 30%
Ratio of expenditure to income excluding mortgage – 71%

Summary 

If I can keep this up for another 11 years, then I can basically move to full retirement – but this is premised on the following:

  1. Having a Teacher’s pension which kicks in at 60 (most of it anyway), meaning by the time I’m 51 (or thereabouts) I’ll have enough saved to simply see me through for 9 years.
  2. Continuing my very low consumption – After property my expenses come to around £600. I really don’t see why anyone needs to spend much more than this.

So – that’s me formerly started and outed on the ERE mission, bring it on!

Related Links

Early Retirement Strategies for the Average Income Earner (itunes)

New Year, New Bathroom, New Lock-In?

 

So I spent most of the ‘Christmas’ holiday redoing the bathroom – stemming from a leaky waste on the bath and mould growth mainly because of a broken extractor fan – It took me several days to rip out the old (partly rotted) frame under the bath, build a new one and put it back in, sort out the leak, degrout and regrout, de-seal and reseal, sand and paint (quite badly, thankfully white paint is quite forgiving), and it cost about £100 for the tools and various industrial chemical products.

Now I could celebrate the fact that I now have the whitest bathroom in the known universe, the fact that I did this extremely cheaply compared to ‘getting a man in’, and I could even celebrate my capital gains – lots more tools, some more knowledge, and a tiny bit of extra-skills. However, I don’t see it like this – I’ve come to realise that my efforts have really only been ncessary because I’m locked into what I think I’ll call a sub-optimal bathroom context:

For starters had the original housebuilders left the side panel off the bath (which is only on there for aesthetic reasons) I would have noticed the leaky waste a lot earlier, saving myself hours of ripping out the rotten frame. The waste was only loose, not cracked – so firstly I’ve been a victim of uncessary normative bathroom aesthetics.

Secondly, the mould-growth due to the fan being broken only occurs because I live in a block of flats and there are no windows I can open to allow the bathroom to air naturally. If I could afford a house, which I can’t around here, I could simply open a window and the broken extractor fan wouldn’t be as much of a problem. Thus I’m also a victim of relative poverty, albeit on a salary of £45K a year.

Thirdly, I’ve also got to thinking that the need to grout and seal stems from the fact that the bathroom is inside – A bathroom is a wet area within a dry area – This might sound like I’m stating the obvious but it’s actually quite an unnatural place for a bathroom to be – outside would make a lot more sense. It isn’t necessary to have inside bathrooms, or even private bathrooms, but I don’t really have a choice to buy a property without one, or to use collective bathrooms outside (nothing in convenient reach for me). Thus efficiency dictates that I need to use my own private bathroom – So here I am a victim of a conflation of urbanisation/ individualisation/ privatisation.

Now.. I think most people would look at the job of redoing their bathroom and feel a sense of satisfaction (a kind of meaningful agency if you like). I do sort of feel satisfied, my bathroom is now VERY white – but I’m also painfully aware that this sense of satisfaction is as thin as the layer of paint on my bathroom walls, beneath the surface of which is a bizareely sub-optimal nexus which has led me into having no choice but to spend time and money on doing up my bathroom.

What annoys me most about the above point is that I do actually want a private bathroom – even though this is not necessary – I’ve been socialised into this, the result is extremely sub-optimal, and this is a tough one to break out of.

So what’s the ultimate solution to all of this? Well long-term, once I’m done with my job, which does require me to wash every morning, I’m going do without the normative bathroom aesthetics – the bath panels, tiles, extractor fans, anti-mould paint, grout, sealant and so on, and live in a field and wash outdoors with a bucket.

After all, water falls from the sky and goes back to the earth, may as well cut out the middle men.

Update –

Having wrote this (TBH I never intended to write this, but it’s been cathartic) I find myself interested in the Sociology of bathrooms and bathing – if anyone knows of any further sources on this please do get in touch! Questions/ issues I’m interested in are…

How many times would the average homeowner redo their bathroom, how much money would they spend>? I’m more interested in spread rather than ranges.

Based on the above – what is the lock-in effect of the average bathroom? – How many months of a working life is spent paying for bathroom upgrades?

How have bathroom aesthetics evolved? Who are the main agencies at work in the social construction of bathroom aesthetics. What has status got to do with this?

How many people do their own bathrooms renovations compared to other parts of the house? I’m quite interested in this – It is more of a technical challenge in some ways than a living room or a bedroom, but then again if you cock it up you have to spend less time looking at it, so its less of a risk (plumbing aside).

Anyway, enough of bathrooms for now…

 

 

Increasing Life Expectancy – It’s far from certain!

According to this eye-catching infographic from the Office for National Statistics  1/3rd of babies born in 2013 are expected to reach 100 years of age, meaning that there will be well over 100,000 centanarians alive in the UK in 2113, which is more than 6 times the estimated 14000 alive today.

According to this scenario, the expected averarage national life-expectancy is projected to be 90.7 for men and 94.0 for women, a ten year increase compared to current (2010-12) life exptencies which are 81.7 and 82.7 years respectively.

The government has used these data (unsurprising giving that this is the ONS) to justify the rising of the state pension age, given that according to these projections people will, on average spend a third of their life in receipt of a state pension, as evidenced below (full document here)

survivingtoage100infograhic_tcm77-345385

However, this future is far from certain, and such an increase depends on a number of underlying social developments taking place – such as a reduction in the number of people smoking, an increase in medical interventions to prevent deaths from heart disease, stroke and cancer, and healthier diets and lifestyles. It is also the case that a number of other factors may serve to reduce future life-expectancy – such as the increasing cost of living in real terms driving up the number of people in poverty and the increase in inequality causing more status anxiety.

In fact if you read down the infographic, this lack of certainty is recognised as the initial figures are only the ‘principal projections’ but the low and high estimates for the number of babies born today likely to reach 100 varies from as low as 16K to as high as 259K for men and as low as 31K and as high as 271K for women.

To my mind, the real story in this data is actually the very high level of uncertainty surrounding projections in the ageing population, and the difficulties society faces planning for the future in the light of such uncertainties.

It’s unfortunate that the infographic or the government fail to highlight this, but instead focuses on the principal data in order to tell a story that might (but only might) happen.

Then again, I guess this particular manifestation of uncertainty doesn’t suit the present government’s ideological war against the public sector, whereas the message that we are all living longer serves as a plausible justification for raising the pension age and reducing the overall public sector commitment to ‘caring’ for people in their old age. It is also, of course, another effective means of punishing the poor, because the poorer you are then the earlier you die.

Related posts

http://www.economicshelp.org/blog/9556/labour-markets/increase-state-pension-age/

http://www.beyondcurrenthorizons.org.uk/review-of-longevity-trends-to-2025-and-beyond/

http://www.longevitypanel.co.uk/docs/life-expectancy-by-gender.pdf

This is a nice series of infographics from the ONS focussing on current (2010-12 figures Life Expectancy among people aged 65+, looking at such things as the very signficant gender divide that persists into the 80 and 90 years age brackets.

Five ways to spend less than £263K on housing over the next 32 years

The average twenty something in the UK will spend £263K on housing over the next 32 years of their life, and many will spend considerably more.

What I find deeply offensive about this astronomical figure is the simple fact that the house below cost £3K and took only 10 days to build.

ST_roundhouse_1307_2982916b

 

Given this, I think normal housing strategies are in need of serious reconsideration.

The Housing Norm in the UK (which is just NUTS!)

According to this is money, a typical first-time buyer who buys a £151,000 home with a £121,000 repayment mortgage over 25 years will pay back £191,600,  calculated at 4% interest. This works out at £638 a month or £7664 a year, which is equivalent to 9 years worth of earnings on the median-salary. Of these repayments, interest accounts for £191, 600 – £121, 000 = £70, 000.

Previous to buying their first property,  A recent report by Santander found that the average person spends 7.4 years renting paying an average monthly rent of £474, totalling £42, 000,

Combined with the £191.6k loan repayment and the £30K assumed deposit in the scenario above this gives a total 32 year average spend on basic housing costs of £263 600. Obviously, if you are twenty-something, you have the choice to follow a similar path-to-property ownership and just settle for paying out an overall average of £600/ month for 32 years.

Obviously you have the choice to follow a similar path-to-property ownership and just settle for paying out an overall average of £600/ month for 32 years. Or, like me, you might think this is totally nuts and consider doing all, or any of the following in order to reduce this figure…

  1. Live with your parents for the rest of your life
  2. Squat someone else’s second (or third/ fourth/ fifth etc….) property
  3. Live in a van
  4. Buy some land and live on it without planning permission
  5. Set up a low impact eco-village

This post is really just an overview of some of these alternatives, to demonstrate that they are viable, even if challenging….

One –  Live with your parents – until they die.

According to the Office for National Statistics, A total of 3.3 million 20- to 34-year-olds lived with their parents in 2013, the highest number since it started keeping records in 1996.

While the prospect of a 34 year old still living with their parents may sound sad, it is good for your finances. Taking the average rent of £5688/ year, if someone were to live with their parents from the age of 20-34, they could potentially save £80 000, and that’s before accumulations on savings are factored in, and for the ultimate savings on housing costs, you could just live with your parents until they die, which is what 42% of current renters are waiting for in order to be able to get their foot on that first rung of the property ladder.

Two – Squat

Squatting means to unlawfully occupy an uninhabited building or settle on a piece of land.

Until recently squatting in England and Wales was generally a civil matter, not a criminal matter, However, in 2012  Squatting was technically criminalised by the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) 2012, section 144 of the LASPO made it a criminal offence to trespass in residential properties with the intention of living there.

However, a few test cases have revealed that if the police find you squatting a building, charge you with squatting and you plead not-guilty, it is actually nearly impossible for the prosecuters to prove that you were actually living in the building permanently.  Also, the law does not cover non-residential properties.

There are a few things you need to get right in order squat a property for any length of time –The squatter’s advisory service recommend the following –

  • You need to make sure you do not commit criminal damage to get into the property, and repair any such damage that someone else has done immediately after you take up occupation.
  • Always make sure somone is in the property, because if the property is vacant you can be evicted.
  • You should contact the utilities providors asap to prove that you intend to pay.
  • When the police turn up, do not give them entry, talk to them through the door, and finally research who the owner is so you know who you are up against when you go to court, and don’t expect them to be too happy about it the fact that you’re squatting their property.

It’s difficult to say exactly how many people squat in the UK exactly given that squatters don’t generally want to draw attention to themselves, but there are some high profile, political examples –  One of the most interesting being Grow Heathrow which was established in an abandoned market garden site in Sipson, one of the villages due to be completely tarmaced to make way for a third runway at Heathrow. Over the past four years the site has played host to a wide range of political gatherings for groups such as: UK Uncut, Climate Camp, Reclaim the Fields, and The Transition Network, so you would need a certain amount of subcultural capital to fit in to this network, but if you can embed yourself comfortably into that sort of thing, then the payback is free accomodation, and probably food too.

Also of interest is this site – Made Possible by Squatting which is an exhibition from  September 2013 documenting stories of how squatting has benefitted the lives of individuals and communities in London- against the backdrop of the government’s attempts to criminalise squatting.

Three – Live in a Van

Admitedly this doesn’t seem to be a very popular option here in the UK, so firstly to America for some inspiration….  To Simplify is a blog by someone called Glen, whose been living a mobile life for over 5 years in a heavily converted 1988 Volkswagen Vanagon, which he describes as the closest thing to a home he’s ever owned. The blog simply documents Glen’s life on the open road, and he also details his total van conversion, from totally gutting the original van and then installing a whole range of new features – not least of all the engine and a solar electricity system. I particularly like this picture in which Glen’s parked up with other, more typical American mobile home dwellers – it sort of sums up his philosophy.

van 1

Bringing it back across the Atlantic, El Pocito is a nice little blog which, among many other things of an alternative nature, outlines the experience of two art teachers, originally from the UK who spent 9 years travelling through Spain and Portugal in their converted van. The site offers some excellent advice on the realities of van-living on the continent.

Campervan Life is a web site devoted to providing advice on buying, converting and living in a camper van, set up by a guy called Darren who bought a cheap Mercedes Sprinter (£1000 in 2006), learnt how to convert it on-the-job with no prior experience or any significant background in DIY and then travelled around Europe in it for 9 months. He lists the ‘van-travel’ related costs of his trip at under £3K, and although he doesn’t appear to include costs of the conversion can’t imagine it would have cost more than £1000, which means that in total Darren had almost a year of comfortable living and travel for under £5K, which is cheaper than the average rent in the UK.

While there are no doubt hundreds of people who live in vans long-term in the UK, but hardly any of them document their experience, hardly surprising given the degree of prejudice against ‘travellers’. The only example I could find was of a guy (who, incidentally has a job!) who’s put a few videos up on youtube outlining aspects of his life in a converted ambulance. In this clip he’s talking about his ‘split charge relay’ while smoking a king size roll up (contents undisclosed)

Incidentally, living in a van may sound like it’s an extreme strategy for saving money, and possibly only for hippies, and you’d be forgiven for making this mistake given that one of the first search returns for ‘living in a van uk’ takes you to a forum called ‘UK HIPPY’, but there are even members of the relatively conservative caravan club who have lived in their caravans long-term, combining this with either owning a small no-frills apartment, or house-sitting.

Four – Buy some land and just build without planning permission

In eco-circles, the best known example of someone who has actually done this is Tony Wrench and his partner, who built their own low-impact roundhouse for about £3K in 10 days (picture above). Actually, this may be the only example of a couple who have managed to do this and get away with gaining retrospective planning permission, others, such as the couple who built the beautiful hobbit-house below don’t seem to have been so lucky.

Shortly to be torn down because local planners judged it to be 'out of touch with the countryside'
Shortly to be torn down because local planners judged it to be ‘out of touch with the countryside’

 

For this reason, although this particular strategy is the one I intend to adopt at some point in the future, you might be better off going for option five…..

Five  Set up a low-impact community

There aren’t very many low impact communities in the UK, this is a very emergent phenomeonon, but one example of a group who have managed to get temporary planning for their dwellings is Tinker’s Bubble, a community of 11 adults and 2 children based in Somerset who live on 28 acres of land in self-built houses, grow most of their own food and are fossil-fuel free. I don’t have too many about the economics of the place, but the dwellings most of them live in seem to be of Tony Wrench’s low impact design and the weekly contribution for food is only £20, so compared to the average mortgage-monkey, this represents a significant saving.

One of the most inspiring recent examples is that of Llammas. Based in Pembrokeshire, on about 75 acres of land, this is one of the few fully legitimate (in planning terms) eco-projects in the U.K. It combines the traditional smallholding model with the latest innovations in environmental design, green technology and permaculture. The ecovillage was granted planning permission in 2009 by the Welsh Government and is currently part-way through the construction phase. The dwellings being built here are more robust than those in Tinker’s Bubble, and thus more expensive, but over the course of a lifetime these individuals will save themselves well over a £100K per person compared to the average, and have a significantly higher quality of life into the bargain.

In conclusion

Although all of the above involve more hassle than the standard massive-mortgage route to home ownership, personally I think a little discomfort and risk is worth it given the injustice involved with said mortgage route – via which you pay tens of thousands of pounds to people who simply haven’t done anything to earn it.

Related Posts 

Live Without a Car and Retire Five Years Earlier 

If you like this sort of thing – then why not my book?

Early Retirement Strategies for the Average Income Earner, or A Critique of Curiously Ordinary Life of the Everyday Worker-Consumer

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Stop buying crap you don’t need now and retire 4 years earlier!

In this post I continue my statistical critique of the ordinary life of the everyday worker-consumer. This is done through comparing a hypothetical 35 year old who earns the median salary and has average expenditure to a hypothetical construction I call the frugal-consumer who spends as little as possible without completely cutting themselves off from society. The expenditure levels of the former effectively tie them into working for a further 33 years until the current projected standard retirement age of 67-8, while the later, assuming they maintain their frugal levels of consumption, will be able to retire when they are 52-3, or 14 years earlier, or in half as much time as the average-consumer on the average wage.

Here I consider spending on Consumer Frivolities (see previous posts for other categories of expenditure).

The average-consumer spends £216.71 a month on what I call consumer frivolities, which includes unnecessary expenditure on restaurants and hotels (£73.15), furniture and furnishings (£51.48), ‘miscellaneous goods’ (£69.33), which in the ONS family spending survey mainly consists of beauty products and jewellery, and finally recreation and culture (£111.06), which for most people means the cost of purchasing audio-visual equipment and subscriptions to various services, and also includes the cost of entrance to things such as cinemas, concerts and festivals.

Over the course of one year this amounts to £3,933 and maintaining this for another 33 years will cost £129, 798,  which represents 6.0 years working earning the median salary.

So what does the average person get for this £129, 798, or 6 years of toil? Most people would say it’s hard to generalise, because the consumer gets what ever they want for the money they’ve got, assuming the market can provide it. Some people will choose a house full of antiques, others a house full of gadgets, and stilll others closets full of clothes and  boxes full of jewellery. Increasingly likely, though is that money will be spent not on stuff, but on experiences, such as playing the dating game, or weekends away and longer holidays, supplemented by such products as fake tan and sun cream to prevent an actual sun tan.

To many people, such consumerist experiences are the very purpose of life: the products we buy define us, mark us out, and the events we purchase play a crucial part in our weekly, monthly and yearly life-course – they are things we look forward to, and back on, the events which help to maintain and define our relationships with our friends and family and give us something to talk about at work, other than work.

I’ve managed to resist the urge to be utterly cynical about the role which consumption plays in most people’s lives, because just recently I’ve come to perceive most ordinary consumption as tragic, and in this context cynicism seems innapropriate. Those people  who define themselves through their stuff become tied to it (and possibly require a bigger house in which to stuff their stuff), and for those who define themselves through their experiences, it seems to me that the way in which many people consume such events involves them not really being present because they’re too concerned with acting for the sake of sharing the experience via social media, and for me if you’re not actually present, then you’re not really even alive.

Ultimately such unnecessary consumption costs the average-consumer on the median salary 6 years of their working life. In contrast to this the frugal-consumer rejects the trivial, shallow and short-lived fake-joys of consumerism and instead engages in meaningful, productive and either free or very cheap activities when not working.

The frugal-consumer is not, however, an anti-consumer, and maintains an expenditure level on ‘consumer frivoloties’ which allow them to avoid being completely cut off from ordinary society. This is mainly because I could not, hand on heart, say that I am ever likely to cut out consuming frivoloties all together myself, cut down radically yes, cutting out altogether, highly unlikely.

The frugal-consumer spends just £60 a month on such frivolities, allowing for £20 a month on restaurants and hotels (so basically no hotel stays and one trip to a restaurant a month), £20 a month on furniture and furnishings, given that this category includes spending on basic household items such as hoovers, a further £20 for ‘miscellaneous goods’ because everyone needs a little something extra, and a whopping £30 a month for recreation and culture. This amounts to an annual expenditure of £1080 a year, a total of £35 640 over 33 years, representing a saving of £94 158 or 4.33 working years of working at the median salary compared to the average-consumer.

NB If this looks unrealistic, or even unbearable, something like the bottom fifth of the U.K.  in terms of income live such a life out of necessity rather than as part of an early-retirement strategy, so it is possible.

References

http://www.ons.gov.uk/ons/rel/family-spending/family-spending/2013-edition/index.htmlhttp://www.ons.gov.uk/ons/dcp171776_335332.pdf

Live without a car and retire five years earlier

This is a redraft of a previous post (with additions towards the end)

Giving up the car is the single most significant thing the average person could do to save themselves money and achieve early retirement. I personally refer to cars as money sinks, at least when I fancy a change from my preferred label for them which is ‘pollution and death machines’.

This was one of the unexpected findings from my statistical analysis of average consumption patterns (E R E for infographsBLOGv3) is that an irrational addiction to the motorcar is the single most significant  factor which locks the individual into having to work until they are 68. Giving up the car and moving to within cycling (preferably walking) distance of work and most other places you want to go is the single most significant thing you can do to save money and make early retirement possible.

The average-consumer’s crazy car habit.

According to the National Travel Survey 2012, the average distance travelled per person  in 2012 was 6,691 miles, with 78% of these miles being travelled by car, which means roughly 5000 of these miles were travelled by car. If we assume that someone makes an economically rational choice and purchases a relatively cheap car, then using the AA’s Motoring Costs Survey 2014, the overall average standing costs of the cheapest category of car (up to £13K in this survey) stood at £1913, with a running cost per mile of £18.56. If we factor all of this together, the average cost of running a cheapish, and thus probably small car in 2014 was £2841. (See endnotes 13-14)

This works out at £277.77 a month or £3333.20 a year, which rounds up to a staggering £110 000 over 33 years, equivalent to 5.2 years worth of earnings on the median salary.

worst-ever-jams3-01122012-jpg_130019
I was first alerted to the incredible economic inefficiency of the motor car by Andre Gorz’s excellent 1973 essay ‘The Social Ideology of the Motorcar’. Following Ivan Illich, Gorz made the point that the average American spent four hours a day devoted to their car, either sitting in it (moving or not-moving), or working to pay for the various services associated with driving. He calculated that if you added up all of these hours and divide by the average distance travelled by car, the average American travelled at an average speed of 3.5 miles an hour, or the same as walking pace, but thousands of dollars worse off and probably a lot more stressed as a result.

In Britain today, the statistics aren’t quite as bad as this. If we take the approximate average distance travelled of 5000 miles a year, and divide by the average speed of 24.6 mph, this makes a total of 203. 25 hours spent driving. If we then add to this the 212 hours it would take you to pay for one year’s worth of motoring costs, the total amount of hours we get is 415.25, which when divided by 5000 miles gives us an average speed of 12 mph.

Given that this is comparable with the speed of a bicycle, and that I am being quite generous in my calculations (the bigger your car, which won’t go any faster in all that traffic, the more local your journeys, the more of them are in peak hours, and the lower your wage, then the more time inefficient the car becomes), all in all I’d say the car is, for your typical person, a total waste of money and of 5.2 years of a precious human life.

It is possible to give up the car!

Although such experiments are not widely publicised, if you type in ‘how to live without a car’ into Google, the search returns a number of case studies of people who report positively on their experience of going car free.
The first search return (all accessed Summer 2014) outlines the case of an individual who went for an entire year in 2013 without even sitting in a car, while traveling around much of the country, moving house and even attending a wedding by a combination of bike and public transport. At the end of the experience she reports a £2270 saving compared to doing the same activities with a car, which is broadly in line with my own savings projections.

The second return, written by a motoring journalist, is somewhat less optimistic, but the author did note a saving over two just two weeks of £106, and her arguments for having a car included socialising, and needing to get to a job interview, all while living in a rural area.

After a third return in which an individual reports managing to hold down a decorating job while being on a bike, the fourth return outlines the story of a family in Edinburgh who have gone car free, albeit with the use of a car pool on occasion, saving about £1200 a year.

All in all I was quite surprised by the positive tones of all of these responses, but it does seem that in order to give up the car then you need to make sure of the following – (a) live in a region with decent public transport links, (b) be prepared to cut down on your social life, (c) break the norm, be rational and save yourself £100k over 33 years – Yes, that’s £100 000!

What is also important is changing your attitude towards transport – Instead of thinking you and your life are so important that you need a car because you must be able to get to so many places as quickly as possible, take a step back and slow down, realise that you don’t need to do so much at such a pace and enjoy the journeys you take – walking and cycling are wonderful ways to travel if you approach them in the right way, and if you limit your bus or train use to a few times a month and are well-organised with your timings, even this can be pleasurable.

You’ve probably heard it before, and it might be something of a pseudo-spiritual cliché – but the journey is as important as the destination. Why on earth anyone would want to pay £100K to avoid being reminded of this everyday is beyond me.

Related Posts 

Five ways to spend less than £263K on housing over the next 25 years

If you like this sort of thing – then why not my book?

Early Retirement Strategies for the Average Income Earner, or A Critique of Curiously Ordinary Life of the Everyday Worker-Consumer

Available on iTunes, Kobo, and Barnes and Noble – Only £0.63 ($0.99)

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Also available on Amazon, but for £1.99 because I’d get a much lower cut if I charged less!

 

References

The National Travel Survey

AA’s car costs

http://www.bikereader.com/contributors/misc/gorz.html

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/310251/congestion-local-a-stats-release-mar-14.pdf

http://www.thebikestation.org.uk/storage/BS_Travel_Cost_Comparison_2011.pdf

Your mortgage or your life?

Following on from my realisation that the average income earner could retire at 52, I’ve started to analyse the relative importance of various categories of expenditure in preventing early retirement. Here, I look at housing.

Given that housing represents the single largest life time expenditure item for most people in the U.K., getting your housing strategy correct is vitally important for early retirement. As far as I’m concerned, it is simply irrational to rent in the long term, so, if you can afford it, buying really is the only option. However, the average-consumer goes about this in the wrong way – i.e. by spreading their mortgage repayments over a relatively long, 25 year term and dragging the mortgage out even longer because of trading up to a larger property.

According to this is money, a typical first-time buyer who buys a £151,000 home with a £121,000 repayment mortgage over 25 years will pay back £212, 000, calculated at 5% interest. In my calculations I’ve been a little more optimistic, to reflect some of the better interest rates out there at the moment, and assumed an average life-time interest rate of 4%, so borrowing the same amount  (£121 000) at 4% over 25 years means paying back a total of £191,600, at £638 a month or £7664 a year, which is equivalent to 9 years worth of earnings on the median-salary. Of these repayments, interest accounts for £191, 600 – £121, 000 = £70, 000, which in itself is equivalent to almost 3 years of work earning the median salary. (See endnotes 8-12)

In my frugal-consumer model (Spread sheet ) the same figure is paid back over 11 years, which means paying back a total of £149, 764, at £1135 a month or £13, 620 a year,  equivalent to 7 years worth of earnings on the median salary. Compared to the average individual, the frugal-consumer saves themselves over £40, 000 or the equivalent of nearly 2 years worth of work earning the median salary.

The above scenario is actually extremely generous in its comparison – In the sense that while my 11 year pay-back model is, I think, reasonably achievable for the average income earner, my ‘average’ consumer model is in fact not realistic – If a couple chooses to ‘trade up’ to a house then their costs of housing almost double.

The Average house price is currently £264K – And if we apply the same payback-ratios as above, then a  4% mortgage over 25 years gives a total payback amount of £385K (5% gives  £424K).

(NB – Many people will pay back more than this – 30 years is rapidly becoming the norm for mortgage repayment periods – In 2012, the number of mortgages with more than 30 years on the term had risen to 27.8%, up from less than 3% ten years earlier, and the longer the mortgage term, the greater the interest!

So let’s just pause…. assuming that you stay in a one or two bed flat for the rest of your life and stick to the standard mortgage term, then that will cost you £250K over the course of your lifetime, but if you want a family-home, you are looking at something in the region of £400K. Looked at in starker terms, if we take the median salary, these figures represent approximately 12 and 20 years of work respectively. If you compare the later of these to my frugal-consumer model, you lose 9 additional years working to pay for property.

To make an even starker comparison, there are several people in the UK who have built their own houses for 10 times less than these figures both in terms of money and time, it becomes clear that most of the above years are basically years spent making someone else rich – A combination of the land owner, property developer, previous owner and/ or mortgage-lender – And I think anyone who is either considering getting on the property ladder or who is currently on it needs to urgently consider some of the available, cheaper, alternatives to housing.

Or look at it this way – If you walked in to work tomorrow and your boss offered you a year, or two, or ten off on full pay, that’d be pretty nice, wouldn’t it? Or if you won £100K on the lottery, that’d be at least Facebookable. These are the types of figures radical housing alternatives can save you…..And these are the figures you throw away by being a mortgage slave.

NB – The point of this post isn’t necessarily to criticise the injustice of a system based on debt, the aim is simply to raise awareness of the extreme savings that can be made in terms of your money and your life if you just pay that damn mortgage down as quickly as possible.

References

http://www.thisismoney.co.uk/money/mortgageshome/article-1633400/Mortgage-calculator-Compare-true-cost-rates-fees.html

Related Posts

1. How the Average Income Earner could retire at 52