Tag Archives: early retirement

My Moneyless (more or less) March Manifesto

My Moneyless (more or less) March Manifesto

So far this year I’ve spent far too much time putting my money where my mouth is, via shitty food, beer and way too many take-out-coffees, so my aim in March is leave my money in the bank and go moneyless, more or less.

There are three/ four reasons I’m doing this:

  1. To save money to try and keep my goal of being able to semi-retire by 48 on track.

  2. To practice the kind of money-restricted lifestyle I’ll need to transition to in later life if I am going to retire early (anything after 53 for full-on retirement I would regard as a total failure, unless I cave in and decide to go part-time at work before I turn 48).

  3. I need to get back to some serious self-discipline after a fairly slack winter.

  4. It feels right – spring is coming, it’s lighter, and this coming half term is only five weeks long – and I’ve got 3/5 Friday’s off teaching, so only 2 full weeks – NICE!

I say more or less because I’m going to make the following exceptions:

  • Any outgoings I’ve already got going out – Which in somewhat contradictory-fairness is a lot of money. So a more honest title for this post might be a ‘disposable-income-left-after-outgoings-less experiment – but it doesn’t alliterate so nicely. My justification is that my ERE strategy is presently best facilitated by my remaining locked-in to the money system for a few more years because of my reasonably high salary and ludicrous rate of equity gain on my mortgaged-flat. Hence it only makes sense to experiment with the money I’ve got left over after mortgage repayments and the utilities I need to pay by virtue of living a non-off-grid salary man lifestyle.

  • I’m going to buy simple, cheap, food – but I’m only going to allow myself to buy the following: Fruit – apples and pears, peppers, tomatoes, olives (I do so love olives!); Veg – celery, carrots, spring greens, onions; milk, cheese, butter and eggs, beans and tinned tomatoes/ paste, tea bags, grain staples – cereals, rice, pasta, couscous, spreads – honey and Mar-mite, walnuts, maybe some pumpkin seeds, and sultanas and dates and flour – to bake bread. I feel the need to bake bread. I mean I could spend two hours a week skip diving, but when I only need to spend £20 a week on food and I can earn than in an hour, it’s completely irrational to skip dive!>! I’ll do one shop, once a week on a Saturday.

  • I’ve got an INSET day in London in mid-March so I’ll need to spend £30 on train fair. Technically this isn’t coming out of my own pocket as I’ll be reimbursed, but it’s London, so I imagine I’ll do coffee on the way up and maybe a beer or two after. Call it a £10 exception to the rule. What can I say? I’m weak.

  • If I need anything for emergencies I’m damn well forking out. This is highly unlikely, but if, for example, a brake cable snaps on my bike, or a drill bit breaks when I’m building something (‘cos I’m a proper builder, me) I’ll replace them. Or if I get a little touch of man-flu I’ll buy myself some paracetamol. What can I say? I don’t like pain.

Wish me luck, and if you see me this March, please feel free (‘cos I certainly will be) to take me out and buy me a pint, or two or four, or a coffee and almond croissant.

I’m not fussy, at least if you’re buying, but I do prefer ale rather than shitty lager, and I might even return the favour, in April.

Cheers! Here’s to a money-free March 2016, more or less.

Four Options for Quitting Work in my 40s

I’m getting a bit sick of my job – It’s a lot to do with the job, but also probably to do with being 42, and with it being January (at the time of writing this).

Also, I’ve now given 15 years full time to ‘the man’. Enough is enough for Christ’s sake. That’s almost a 5th of my entire life.

My original early-retirement plans (in 2015) were to ‘hold-out’ in full-time employment for 7 years – by which time I could travel or transition easily, but the way things are going I might crack earlier, so I need a crack-up plan. NB I’m claiming this as a new concept – a back-up plan is something you have in case a new venture goes wrong (which implies risk taking). In my original early-retirement plan there is no real risk of it going wrong – I just stay in teaching for another 7 (now 6) years and save-hard. However the risk is that I go fucking nuts before the next 6 years are up, hence the need for a crack-up plan. If I feel my mental health deteriorating any more I’ll transition early. This is a post about my options.

It’s interesting to note that this is an indication of how truly awful the UK education system is – I work in a nice college, with nice kids and nice staff, and teach an interesting subject. In short, outside of the immoral private sector teaching doesn’t really get much easier than my job, but my job still makes me feel anxious and miserable and generally shit. This is the effect of the system constantly focussing on the negatives and always demanding more. This is the sub-optimal logic of performativity caused by the neoliberalisation of education. Life is not worth living as a teacher in a marketised education system. The only thing currently keeping me in it is the fact that I earn enough and am frugal enough to save down and get the hell out relatively early, which is something I advise anyone insane enough to go into teaching to do.

How much money I’ve currently got to play with

Current liquid -ish assets

£20K

Equity (-£5K sales shaft)

£110K

Total capital to play with

£130K

Other (approx)

£16K – Ring fenced for spending when I’m 58/9 (Hoping this will grow and extend into my early 50s)

The headline news is that I can already afford to buy a house outright in a cheap part of the UK, which means I could quit my job now, work part-time for the rest of my life and still probably fully retire in my mid-late 50s.

If I wait until 2018, things are a lot more comfortable, if I wait until 2021, that’s near enough sufficient for me to fully retire.

What I perceive to me my total array of practical options to escape work:

  1. Downsize to a small homestead/ croft somewhere else in the UK, or maybe Ireland, quit work and figure out another way to earn money/ live without money, more or less.*

  2. Downsize to a cheaper house in the UK, rent it out to earn a small base income and travel/ do voluntary work abroad.

  3. Downsize to a cheaper house in he UK, rent it out to earn a base income, buy some land in Portugal and ‘do Permaculture’ and figure out another way to earn money/ live without money, more or less.

  4. Downsize to a cheaper house in the UK and buy a houseboat, and figure out another way to earn money/ live without money, more or less.

  5. *I could do this, and then just stay at work and rent in the local area as a sort of ‘transition year’.

NB – It’s unlikely that any of the above will kick in for me until 2018, given the enormous housing bubble currently inflating in my local area, which I think it’s safe to ride it for a couple more years. 

NB – When I say live without money more or less, I spent a lot of time reading about freeganism this holiday – check out the previous post. 

Approximate Costings

Strategy

Initial Transition and capital costs

Additional Capital Required

Anticipated monthly expenditure

Buy a small homestead/ Croft UK

£150K House

£20K

£900.00

Downsize and travel

£160K

£150K property and £10K to kick-start travel fund

£30K

£200.00 – £1000

Downsize and buy land in Portugal

£200K

£150K House in UK

£50K Land and transition to Portugal

£70K

£700.00

Downsize and buy

House-Boat

£180K

£150K House

£30K Boat

£50k

£900.00

Option 1: Buy a small homestead (nearly) outright and earn money working part-time from home

One advantage of owning a two bedroom purpose-built flat in Surrey is that the flat’s worth a ludicrous amount of money, currently around £245K. With £130K left on the mortgage, and after the £5K cost of being shafted by the sales-system (which I could lower if I self-sold it), this would leave me with £110K in the bank. Plus the £20K I’ve currently got kicking around that leaves me with £130K.

With £130K I could actually buy outright a two-bed semi-detached house in Lincoln. I’ve never actually been to Lincoln, but it does seem to be the cheapest place in the UK that’s not a shit-hole where you can buy cheap property. Given that I grew up in a town that was a shit-hole and that I presently live in a town that’s not that dissimilar, Lincoln would probably be a step-up for me. There are probably other towns where you can buy relatively cheap, some may be better, and if you know of any candidates then do let me know!

Amazingly enough £130K would also be enough to outright-purchase a small bungalow in the highlands of Scotland on just under an acre of land. Add on £20K for updating the property and this would leave me with a mortgage of around £20K.

I figure that it doesn’t really matter where I live in the UK, but I do kind of fancy the Scottish Highlands. When all you want to do is grow vegetables, meditate, read Sociology books, and make your money online-tutoring who cares where you live? I figure the cheapest non shit-hole town/ rural location is best.

A £20K mortgage paid off over ten years would mean repayments of around £200/ month, add on my anticipated monthly costs of living @£700/ month = £900/ month income required to survive, which means I could live off a part-time income.

For every year extra I work, I’ll should have another £15K to play with, so if I do this in 2018 I can add £30K on and maybe even buy a nicer house. Also, I could buy for something a lot cheaper in Ireland, which is something I maybe need to explore more.

Option 2: Downsize and travel

This basically involves downsizing as outlined above, with all the attendant costs plus £10K to kick-start my travel fund.

The rental for a £150K ish property would be around £550/ month gross, which would come down to around £400 month net. Obviously whether I can live off this depends on what I can put up with ‘on the road’.

There are numerous people out there ‘budget travelling’ who demonstrate a range of possibilities viz how little money you can get by on. One of the most inspiring is Dan Suelo – The Moneyless Man – who has managed to survive without money for the last 16 years of his life, but I’d personally be more inclined to become the moneyless, more or less, man. Not as cool, I know, but I know myself. And I’m not cool, so that’s OK by me.

This option also opens up the possibility of buying a van (A converted VW Transporter or Mercedes Vito or something similar) and being more mobile (and obviously not money-free), which would ad about £10K to my overall transition costs.

Of course I could combine travelling with a variety of voluntary work and even paid work – time to dig out the TEFL qualification maybe?

Option 3: Buy a house in the UK outright and buy some land in Portugal; rent out the house and move to Portugal and ‘do Permaculture’.

This strategy involves buying some kind of cheap-ish property as in the other options above, but also buying land with a wreck in Central Portugal and then ‘doing Permaculture’ and self-building a small eco-house. I calculate that I’d need about £50K to very comfortably establish myself in Portugal – £30K for the land + a further £20K to transition over there. When I say ‘very comfortably’ – this includes one year’s worth of living costs while I get established + the cost of a van, and yurt.

The advantage of this would mean that I could rent out property in the UK one while I live in Portugal. The rental for a £150K ish property would be around £550/ month gross, which would come down to around £400 month net. This means that if I escaped immediately I’d have to find an additional £300/ month to pay for said property, but if I can hold out until 2018 then it should pay for itself, and after than it becomes an income-paying asset. So, somewhat unsurprisingly, the longer I can stick out my job, the easier my life is later.

I’ve looked at a fair few blogs by people who have done this, and as long as you’re careful to do everything right, it is possible to pick up some cheapish property in a couple of acres of land to renovate, actually for less than £30K. Central Portugal seems like the best bet.

The massive downside of this plan is that I’ve never been to Portugal, I’ve hardly spoken a word of Portuguese, and my earnings potential would be massively limited. I’ll take a holiday there at some point in the future, I’m sure I’ll like it.

On the ‘doing Permaculture’ front – I’m sure renting out property one is against the ethics of the movement, but I’m also sure, given the prevalence of middle class 50/60 somethings in the movement, that this is extremely common practice, just not something which people advertise freely.

As of February 2016 this is my preferred option for escaping work, hence why I’ve gone into the detail.

Total cost of buying a reasonable property outright in the UK

£150K

Total costs of buying land in Portugal and fully transitioning

£50K

Total Net Wealth Ready to Invest

£130K

Additional Capital Required to fully transition

2016 – £70K

2017 – £60K

2018 – £40K

2019 – £30K

2020 – £10K

Estimated monthly income required after property costs

£700.00

Add or Minus money I’d need to pay of outstanding mortgage/ rental income I’d receive

2016 – £300

2017 – £200

2018 – £000

2019 +£100 (need to earn £600/ month)

2020 +£300 (need to earn £400/ month)

Option 5 – Downsize and Buy a House Boat.

As above with downsizing, and then you can pick up a nice houseboat for £30K – I’ve added on £200/ month to cost of living to reflect costs such as licence fees, and mooring fees. This might actually be more. I’m not likely to do this in 2018, but living on a canal boat is just something I need to do for a period in my life at some point, thus I’m including it. Preferably I’ll be able to keep moving for much of the year to avoid the mooring fees!

In conclusion 

It is financially viable for me to quit my job this year and still retire early but it’s optimal in ERE terms to wait until 2021. A reasonable compromise in my noggin is to hold out until 2018.

Early Retirement Progress Update 2016

January 2016 And I’m now one year in to my 7-10 year plan to (semi-) retire by the time I’m 51, and ambitiously by 48. This is the second of my intended 6 monthly updates, this allows enough time to show clear progress (hopefully rather than regress) and also these things to take quite a lot of time to review.

Executive Summary

  • Total Net Wealth gain of £27000 in 2015

  • Net wealth gain excluding equity – £9000

  • Average total monthly expenditure not including mortgage – £930

  • Average monthly savings of – £536

  • Average savings to expenditure ratio – 62% (if I include mortgage payments)

  • Overall I give myself 8/10 – For once I’m actually going to focus on the fact that I’m doing most things right, rather than the few things I could improve on.

Reminder of Original Long Term Financial Goals – Updates in Italics, YEARS COUNTED FROM JAN 2015. 

  • Be mortgage free in 7-10 years (£133K 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.

I’m easily on track to do this in 10 years if I stay put in my flat in Surrey. However, the £140 I pay (in reality it’s probably more) towards service charge every month is becoming increasingly insulting, and so I’m looking at ‘downsizing’ to a house in a poorer area and commuting to work, POSSIBLY BY 2018.

  • 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.

  • Save an absolute minimum of £250/ month in additional funds (=£30K after 10 years, without accumulations). Ideally this figure will be significantly higher.

In analytical terms I now treat these the same. I’ve done quite well here – my average overall savings each month is £537 – I made the decision in November to shove £140/ month into teacher’s AVCs, I’ve now decided to reverse that – I can’t access them until I’m 55 – what was I thinking?

NB The reason I keep banging on about land is because land squatting is a key part of my ERE strategy.

  • Find additional income streams to boost the above figure. Target = £20K in five years.

I’ve finally made some progress here – early days, more on this later as it develops.

  • Continue paying into the Teacher Pension Scheme.

It’s not quite a no-brainer to keep paying into this, but it still makes sense. The amount I pay in has increased, and because of recent changes to the scheme I’m now stuck with a pension at 60 of around £7K/ year – everything I pay in from now on is not worth claiming until I’m 65 – If I claim my future contributions at 60, I lose 25% of the value of current and future contributions (what I’ve already got is protected, but then again I’m sure this could change under the nasties.)

Now onto the more detailed updates…

January 2016 Update One – Spending days compared to non-spending days

Spend Non Spend 2015

It was going so much better up until December – but still – I won by 11 days!

Jan-June 2015 Update Two – Expenditure and Savings Summary

  • Ratio of expenditure to income excluding mortgage –62% (down from 64% 6 month ave).

  • Ratio of expenditure to income including mortgage – 21% (down from 23% 6 month ave).

ave monthly savings and expenditure

  • Frivolities = beer/ coffee/ subscriptions/ transport, (because I only really use transport for entertainment rather than work).

  • Necessities = council tax, services, food, ‘stuff’.

  • Property = mortgage repayments + service charge.

NB For calculating the above savings to expenditure ratio I always count service charge (an outrageous £140/month) as ‘expenditure’ but for the first calculation I count mortgage payments as savings because in the future my flat will act as an investment which will bring in an income (while I squat in a field).

Technically I should count the interest part of this as expenditure and the repayment as investment, but honestly I can’t be bothered to work this out and recalculate it every month as the repayments change, so stuff that! Just reduce the figure by a few percentage points if you’re uncomfortable with it.

January- June 2015 Update Three – Total average monthly expenditure excluding mortgage more detailed breakdown

This is really the headline figure – and it comes out at £930/ month, or £11K/ year – This is an honest account of how much I will need in retirement to live extremely comfortably. The service charge is something which is going to disappear hopefully very soon, but I figure the future cost of running a van which I currently don’t have will come out around the same amount of £140 a month, maybe more, so I’ll stick with £900 a month to live off. I’ve factored in £700 a month for my monthly retirement budget – this covers all of my necessities and allows £50 for ‘frivolities’ – so the idea is that Ill either need to suffer or do some kind of work to pay for me beers in retirement. Then again, that probably won’t be necessary as I’ll be enlightened by that point, and just naturally high on the joy of life.

average monthly expenditure 2015

Of course if I can pull off a land-squat my services costs will fall drastically, as will my food costs, so all of this could come down to nearer £5-600 in future. Whether that’s sustainable or not remains to be seen!

NB – The obvious immediate area for improvement besides service charge (PAIN!) is beer, I intend to hammer this down from September.

January Update 4 – Total Net Wealth

Well I’ve gained £27K TNW in the last year, but most of that’s equity, only £9K gained not including equity – still, that’s enough accumulated in one year to live for approx 1 year and 1 month. 

I’ve basically got £32k to either go towards an early retirement fund or blow on some land to set up a land squat. Not bad for the end of year one!

It’s kind of comforting to know that that’s enough to buy some kind of Quinta in Portugal – I’ve even taken off £4K from the figure to factor in a contribution to selling up and moving on in case it comes to that! It also doesn’t include a small emergency fund I’ve got stashed away.

So all in all, I’m on track to achieve my ERE goals, I could do better, but I think this not so extreme route to retirement (land squatting aside) is sustainable!

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)

extreme early retirement

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

On Permaculture as a Low-Cost Lifestyle

I’ve just spent half an hour perusing the Annual Monitoring Report for Tir y Gafel Ecovillage (aka Lammas).

I don’t imagine this would float a lot of boats, but as I expected it’s striking just how low their outgoings are. Here’s the annual figures for what I’m assuming must be the two single person households on site (given that they’re a lot lower than the other households).

Plot C Plot F
Cost of need Met from land Cost of need Met from land
domestic wood use £650.00 £650.00 £300.00 £245.00
domstic gas use £108.00 £0.00 £90.00 £0.00
domestic electricity use £1,291.00 £1,291.00 £1,168.00 £1,110.00
Water £506.00 £506.00 £385.00 £385.00
Food £3,466.00 £700.00 £1,800.00 £642.00
Phone £156.00 £0.00 £350.00 £0.00
clothes £0.00 £0.00 £40.00 £0.00
maintenance £0.00 £0.00 £35.00 £0.00
council tax £0.00 £0.00 £0.00 £0.00
transport £1,000.00 £0.00 £1,000.00 £0.00
Expenditure met from land* £3,147.00 £2,382.00
£ from land based enterprises £1,700.00 £1,740.00
Totals £7,177.00 £4,847.00 £5,168.00 £4,122.00
Further monies required to break even £2,330.00 £1,406.00

*before income from land based enterprises is taken into account 

After housing costs (which are not included above) we have two annual expenditure figures of £7K and £5K, with THE single largest expenditure item being on food, which here includes alcohol and munchies (which is odd given that food growing is one of the key things Lammas seems to do.)

Expenditure is clearly kept incredibly low by virtue of electricity being generated on site through burning wood and use of other renewable sources and transport being minimal due to mainly working on site, as well as the fact that above two people must live in caravans given the zero figure for council tax.

There are items which are not included in the above table, but no matter, what this data strongly suggests is that once you’ve got your mortgage paid off you can get by on £5-7K in a year as a base income, and this comes down to £2-3 K a year if you can get your own electricity generated on site.

A final advantage shown by this example is that it is clearly possible to generate some (albeit limited) money from rural enterprise.

I’m actually staggered by the above figures. I mean, I always knew low-impact living significantly reduced dependence on money, but this has surprised me… £2-3K a year is really a startling figure, actually £5-7K a year is pretty good.

At some point I’ll add in how this compares to my own expenditure and insane (consumerism as usual expenditure).

The question in the meantime is simply one of how can I get a piece of this action and how soon, just without the community bit, in which case apparently it’s not really Permaculture, but then again I’m sure the definition’s open for debate (at least as long as you don’t want to formally use it to engage in the Permaculture Pyramid selling scheme.)

Early Retirement Extreme June Update Analysis II

Or on how getting into early-retirement makes you dislike the curiously ordinary life of the worker-consumer even more intensely, and how it makes you hate yourself for any remaining traces of normality.

When I started out nearly 12 months ago I originally planned to work for another 7-8 years before ‘moving on’. However at some point over the last year I’ve become desperate to escape work, to the extent that I was, a couple of weeks back, looking to get out in 18 months. The interesting thing is that, on reflection, this urgency doesn’t have that much to do with work, which (although subjecting me to severe psychological abuse 200 days of the year) hasn’t got that much worse in the last 6 months. Thus my increased desire to escape it has probably got more to do with getting the ERE bug. I think the effect goes something like this –

  1. You set yourself an early retirement goal – In my case originally 52.

  1. You start recording in religious detail your expenditure and savings and getting a bit obsessive over the maths of early retirement.

  1. You realise that if you can shave 10% of your expenditure here and there then it means you can retire another year earlier, or 20% another 2 years early, and retiring at 48 sounds a whole lot better than retiring at 50, and 8 years sounds much better than 10.

  1. Saving everything you can means you have much less of a life than previously – there are less vents for the frustrations of work.

  1. (When you have little extra time after work) trying to generate second income streams proves largely fruitless in the grand scheme of things, this creates more stress.

  1. A stressful life means you want to get out!

  1. You start comparing yourself to other early retirement aspirees and get competitive, wanting to bring the key date down.

  1. Very importantly you realise the extent to which you’re being shafted by the system. These points are kind of in chronological order, but this is the most important one I think. This annoys you – a lot – my particular bug bears are interest on the mortgage and service charge on my flat.

  1. You start to look around for alternatives to get the above charges down and land-squatting comes up as the favorable option to be put into effect immediately – so this means you may as well jack in work and become a postmodern peasant asap. This doesn’t sound very appealing at the moment, which creates yet more stress.

In fairness, the original drive to retire early was brought on by the fact that my job is doing me severe psychological damage, and has also turned me into an agent which inflicts harm on others, and I will need to escape from in the medium term, but the job does come with good holidays and is well below my intellectual capacity to manage, and so I do have the mental capacity to cope with this abuse for another 5 years, especially when the income’s good and my original retirement model based on a 7-8 year projection (OK I have shortened it a little!) results in such a comfortable retirement, so I’m led to conclude that my recent desire to get out and retire even earlier is simply because of getting caught up in the goal of ERE, rather than accepting that my current situation is OK, and that a medium term plan is manageable. In short, I probably don’t need to ‘move on’ in 18 months.

Here’s a modified 5 year plan to address the above:

  1. I still want out in five (academic) years. I’ve calculated this means another 925 days at work from September next year. This is realistic, then I’ll downsize, move out of the area and go part time at age 47.

  1. Realise that I have no money to do anything and get into ‘doing nothing’ in the evenings – cleaning the flat, meditating,working the allotment, the odd Sociology blog, that’s it for the next five years.

  1. Abandon for now the second income streams most of them are too much like work(do these later) and instead focus on developing resilience (ie land squatting) skills. Work out a five year plan to develop these skills – this should be fun.

  1. Give up screens – Searching for alternatives means I’ve spent way too long on YouTube looking at compost showers and so on…. It’s doing my head in.

  1. Just chilax.

Early Retirement Extreme UK Update 2 – June 2015

Fingers crossed this formats OK, I just cut and paste the job-lot straight from Open Office, pictures and all.

End of June – And I’m now sixth months in to my 7-10 year plan to (semi-) retire by the time I’m 51, and ambitiously by 48. This is the first of my intended 6 monthly updates, this allows enough time to show clear progress (hopefully rather than regress) and also these things to take quite a lot of time to review.

Executive Summary

  • Total Net Wealth gain of £13300 (since Februrary 2015)

  • Average total monthly expenditure not including mortgage – £903

  • Averge monthly savings of – £557

  • Average savings to expenditure ratio – 64% (if I include mortgage payments)

  • Overall I give myself 8/10 – For once I’m actually going to focus on the fact that I’m doing most things right, rather than the few things I could improve on.

Reminder of Original Long Term Financial Goals – Updates in Italics

  • Be mortgage free in 7-10 years (£137K 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.

I’m easily on track to do this in 10 years if I stay put in my flat in Surrey. However, the £140 I pay (in reality it’s probably more) towards service charge every month is becoming increasingly insulting, and so I’m looking at ‘downsizing’ to a house in a poorer area and commuting to work, possibly as soon as the end of 2016.

  • 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.

The ‘Land Fund’ is simply an investment account – I use Fundsmith, which I can thoroughly recommend – It’s now worth about £12K – and it gained £3K in value in the last 6 months – yes, that’s right, a 25% gain in 6 months – NB this isn’t a high risk fund, in fact, quite the opposite! Based on these figures I’m actually tempted just to leave it untouched and live off the income generated in my late 50s.

  • Save an absolute minimum of £250/ month in additional funds (=£30K after 10 years, without accumulations). Ideally this figure will be significantly higher.

I‘ve done quite well here – my average overall savings each month is £577 – I put £200 into the ‘land fund’ so that means my overall ‘other savings’ work out at £377/ month without accumulations. I’ve actually got £17K kicking about which is enough (just) to buy a small piece of raw land already, although it is extremely rare to find exactly what I want for this kind of price. If I could double this to £30K I’d have much more chance.

NB The reason I keep banging on about land is because land squatting is a key part of my ERE strategy.

  • Find additional income streams to boost the above figure. Target = £20K in five years.

I’ve realised I am not realistically going to generate any significant second income streams in my spare time, basically because I don’t have any spare time. (It’s actually quite interesting that it’s taken me sixth months to realise this, or maybe it’s about acceptance – I can’t actually do any more than I’m already doing without compromising my mental health). Thinking about it, this amazing piece of insight might just be more valuable than any financial gains I’ve made.

  • Continue paying into the Teacher Pension Scheme.

It’s not quite a no-brainer to keep paying into this, but it still makes sense. The amount I pay in has increased, and because of recent changes to the scheme I’m now stuck with a pension at 60 of around £7K/ year – everything I pay in from now on is not worth claiming until I’m 65 – If I claim my future contributions at 60, I lose 25% of the value of current and future contributions (what I’ve already got is protected, but then again I’m sure this could change under the nasties.)

Now onto the more detailed updates…

June Update One – Spending days compared to non-spending days

Early Retirement UK

I know it says nothing about how much I actually save/ spend but these are a great little invention! No spending days have prevented me from buying several superfluous coffees, munchies, and stopped silly trips to Poundland and Wilkinson’s. I can’t put an exact figure on it but I reckon a saving of somewhere in the region of £20-50 a month?.

Jan-June 2015 Update Two – Expenditure and Savings Summary

  • Ratio of expenditure to income excluding mortgage – 64%

  • Ratio of expenditure to income including mortgage – 23%

NB For calculating the above savings to expenditure ratio I always count service charge (an outrageous £140/month) as ‘expenditure’ but for the first calculation I count mortgage payments as savings because in the future my flat will act as an investment which will bring in an income (while I squat in a field).

Technically I should count the interest part of this as expenditure and the repayment as investment, but honestly I can’t be bothered to work this out and recalculate it every month as the repayments change, so stuff that! Just reduce the figure by a few percentage points if you’re uncomfortable with it.

Early Retirement UK

  • Frivolities = beer/ coffee/ subscriptions/ transport, (because I only really use transport for entertainment rather than work).

  • Necessities = council tax, services, food, ‘stuff’.

  • Property = mortgage repayments + service charge.

January- June 2015 Update Three – Total average monthly expenditure excluding mortgage more detailed breakdown

This is really the headline figure – and it comes out at just over £900/ month, or £11K/ year – This is an honest account of how much I will need in retirement to live extremely comfortably. The service charge is something which is going to disappear hopefully very soon, but I figure the future cost of running a van which I currently don’t have will come out around the same amount of £140 a month, maybe more, so I’ll stick with £900 a month to live off.

Early Retirement UK

Of course if I can pull off a land-squat my services costs will fall drastically, as will my food costs, so all of this could come down to nearer £5-600 in future. Whether that’s sustainable or not remains to be seen!

NB – The obvious immediate area for improvement besides service charge (PAIN!) is beer, I intend to hammer this down from September.

January Update 4 – Total Net Wealth

Well I’ve gained £13300 in 5 months – I’m happy with that, hence the 8/10!

This is what it’s all about! Remember, £200K is enough to semi-retire on! IMO anyone who already has more than £200K of TNW and is still in full-time work either really likes working, or if that isn’t the case suffers from a compulsive disorder (addicted to over-consumption) and/ or lacks imagination.

I don’t feel particularly comfortable posting details about my TNW, but it comes in at £101K including property – Half way to what I need. Rapidly may this increase!!!

It’s kind of comforting to know that that’s enough to buy some kind of Quinta in Portugal – I’ve even taken off £4K from the figure to factor in a contribution to selling up and moving on in case it comes to that! It also doesn’t include a small emergency fund I’ve got stashed away.

So all in all, I’m on track to achieve my ERE goals, I could do better, but I think this not so extreme route to retirement (land squatting aside) is sustainable!

If you like this sort of thing – then why not my book which is more focused on early retirement in the UK?

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)

extreme early retirement

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

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

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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)