Hi from the UK

[ThriftyRob]

I came across ERE a few weeks ago and have to say I have been blown away by Jacob's thinking and clarity on spending, saving and investment. I'm 63, self-employed and working about 20 hours/week, with a plan to downsize our home, move to a lower-housing cost area and live off our savings/investment income. I have been financially independent (ie haven't needed to work) for the last 20 years.

My financial mentor was my father, who believed in the power of cash - he always said never use credit and always save for major purchases. His influence has helped me be frugal, supported by my DW, whose family was financially challenged, who is also thrifty.

Our immediate priority is to give our home kerb-appeal before we sell, so decluttering and selling off years of accumulated junk is our top priority. Second, is redecorating and renovating an outdated bathroom. We have hired an architect who will ensure that the renovations are tasteful and built to a high standard. That said, as a graduate engineer, I'm fairly practical and I am reviving my dormant woodworking and painting skills to keep the renovation costs low. I have also followed Jacob's steer by investing in good quality tools and materials.

Being self-employed, my income has fluctuated over the years, but with no mortgage or debt, we can live comfortably on a joint income of around £25k per year (before tax), which includes two long haul holidays each year. We have just covered our son's bachelor's degree at university, paying his tuition and accommodation from our income. I've never calculated my savings percentage rate – we're fortunate that we have never had to draw on our savings and they have increased each year.

I had two shocks which have influenced my attitude to investing in equities - first in 1997 when the markets crashed, then again in 2008, in both crashes my portfolio took a hammering. We have maxed out our investment in ISAs (savings and investments outside the UK tax regime, maybe like Roth?) and invested in property.

As we plan our downsize, I'm open-minded about renting, buying a house/apartment or even living in a motorhome. I was entertained by Libby Rome's book about living in hotels (promoted by JL Collins) but it takes around £30k per annum to fund, which is not efficient use of resources.

[horsewoman]

Welcome to the forums!
I'd love to read along with your downsizing adventures, perhaps you'd like to start a journal?

[UK-with-kids]

Great to hear your story. Hope you don't mind me asking a couple (of) questions?
With those shocks influencing your attitude to equities, did you settle for a relatively low percentage invested that way? As you said maxed out ISAs, that would mean a lot of cash? (And the property investment presumably being outside of that shelter). I'm personally holding a lot more cash than is ever advised, but it just seems to provide so many options, and inflation hasn't been a big deal for such a long time now.
Also in my retirement calculations I'm looking ahead to pensions at age 67 and thinking - well that's £9,000 income per person that's already taken care of. I guess that depends on national insurance years accumulated though.
Looking forward to hearing about how your plans pan out.

[ThriftyRob]

Welcome to the forums!
I'd love to read along with your downsizing adventures, perhaps you'd like to start a journal?

Thank you for your welcome. I may well start a journal when I have spent more time reading posts here and have a better idea of how I could contribute something useful

[ThriftyRob]

Great to hear your story. Hope you don't mind me asking a couple (of) questions?
With those shocks influencing your attitude to equities, did you settle for a relatively low percentage invested that way? As you said maxed out ISAs, that would mean a lot of cash? (And the property investment presumably being outside of that shelter). I'm personally holding a lot more cash than is ever advised, but it just seems to provide so many options, and inflation hasn't been a big deal for such a long time now.
Also in my retirement calculations I'm looking ahead to pensions at age 67 and thinking - well that's £9,000 income per person that's already taken care of. I guess that depends on national insurance years accumulated though.
Looking forward to hearing about how your plans pan out.

Thanks for your comments. I'm happy to answer questions (we're all here to learn).
Basically, I kept my positions in equities and didn't invest further in that asset class. I knew I needed to spread the risk by putting money into funds/units and spoke to a couple of investment advisers but wasn't impressed with their suggestions so held (and added to) cash. At the moment, returns on cash are very poor, however, as you say inflation hasn't been an issue for the past 10 years. I think there will be a time to allocate into equities.

Like many UK investors post-2008, I saw residential property as the right place to be so ran with that and put surplus cash into ISAs. Having taken more interest in the last year and learning about FIRE/ERE, I would now shift a significant chunk into Vanguard funds. But not yet, I think the markets are due a correction when the job losses hit and there's an emergency UK budget sometime after the summer.

As an aside, I sit on the management committee of a pension fund and collectively it is fairly bullish on equities, especially small caps. I wouldn't go heavily into UK equities because the FTSE is overweight in oil and gas and light in tech (which is where the growth has been and will probably continue).