Egg's journal

Where are you and where are you going?
Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Egg's journal

Post by Egg »

About me

-Mid 20s
-United Kingdom
-Arts degree
-Started working a couple of years ago
-Single, no children
-ISTP

Motivation

Whilst I still enjoy my job, and am very grateful to my employer for the working environment and great experiences on offer, I look to those a little further up the ladder, and they are largely jaded and cynical. Much as emotionally I like my job now, therefore, rationally I think there is a good chance this enthusiasm will wane in the none-too-distant future. There is also the question of job security, which I would like not to have to worry about.

Financial

No very specific spending data yet, but based on my savings now vs. when I started working, I've been averaging around 65% savings on take home pay. This is not particularly impressive, considering food and accommodation are deducted from my paycheck before this figure, and I have never owned a car. My monthly take home is almost exactly £2000, so that's around £700 on miscellaneous frivolous expenditure per month. Mostly, I suspect, due to eating out, drinking, a mobile contract, and fairly expensive holidays. My current net worth is £40000.

ERE strengths and weaknesses

+Independent minded - don't feel peer pressure very strongly
+Decent salary - yes, very small compared to you programmer and engineer types, but following a degree with little employability benefit, it's not bad.
+Chimes ideologically with my esteem for environmental sustainability and self-sufficiency

-Risk averse - less likely to invest profitably
-Unfocussed - I've never "stuck at something" and am always more interested in the next thing
-Current absence of "big three" costs makes it hard to estimate required retirement expenses
-Work is not scalable or transferable, so little prospect of increasing income
-Still probably want the whole marriage and kids thing down the line

Goals

-Invest (currently 100% cash)
-FI by 33 (not currently on track, but need to start winning from compounding, rather than losing net worth to inflation)
Last edited by Egg on Sat Oct 18, 2014 10:33 am, edited 1 time in total.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

Time to share some specific information. So as not to spam this journal, I'll keep to the last six months for now. If some stuff you'd expect to be there isn't, don't be surprised - I spend a fair bit of my life at sea, so my particular pattern of expenditure fluctuates wildly. For that reason, I'm not really that interested in savings rate as such, because it doesn't mean anything within the context of almost any change of working circumstances, retirement or otherwise. I should also note that I have also just cracked down what comes into my bank account as "salary income". This includes any deductions I incur via work for food and accommodation and, as of six months ago, around £120 student loan repayment.

Past six months overall

Income - £13530 (inc. around £300 of pay for work done in the couple of months before, but only paid in Sept)
Expenditure - £4325
Savings rate - 68%

April

Income £2070

Salary - £2070

Expenditure £215

Bank account subscription fee - £10
Mobile contract - £30
Eating out/drinking - £150
Tourist activities - £25

May

Income £1990

Salary - £1990

Expenditure - £290

Bank account subscription fee - £10
Mobile contract - £30
Eating out/drinking - £200
Tourist activities - £50

June

Income £1990

Salary - £1990

Expenditure - £1655

Bank account subscription fee - £10
Mobile contract - £30
Tablet - £110
Sports videocamera - £50
Car hire - £120
Eating/drinking - £305
Tourism activities - £1500
Hotel - £150
Flights for summer holiday - £730

July

Income £1990

Salary - £1990

Expenditure - £585

Bank account subscription fee - £10
Mobile contract - £30
School alumni club annual subscription - £10
Eating out/drinking - £215
Transport - £205
Food - £30
Entertainment - £15
Self-storage unit - £70


August

Income £1990

Salary - £1990

Expenditure - £1285

Bank account subscription fee - £10
Mobile contract - £30
Transport (inc car hire) - £495
Travel visa - £10
Clothes - £30
Knife - £10
Eating/drinking out - £230
Hotels - £200
Entertainment - £200
Self-storage unit - £70

September

Income £3500

Salary - £2000
Backpay for six months' sea time - £1500

Expenditure - £295

Bank account subscription fee - £10
Mobile contract - £30
Eating/drinking out - £115
Food - £20
Self-storage unit - £70
Entertainment - £50

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

Looking back at my expenses, I have to wonder how much of it is necessary. Here are my rationalisations. Feel free, anybody, to pick holes.

Bank account - comes with higher interest than a normal current account, partially offsetting cost plus travel insurance and worldwide free atm usage. Spending a lot of time abroad with work, this latter is v. useful. On the other hand, all of these benefits are probably worth less than the monthly £10, so this is an arrangement to review

Mobile contract - I regret this one, as I don't even use my phone that much. In a few months, when the contract ends, I will either go to much lower, sim only, 30 day contracts or PAYG.

Self-storage - Here to stay for now. Due to my professional circumstances, I don't have a home as such, and there are certain work items which I can't keep with me at all times, but aren't mine to get rid of. Whilst I need some form of storage, I may be able to downsize.

Eating/drinking - I enjoy eating out and drinking incautiously. I've managed to tone down the drinking, but my propensity for eating out is costing heavily. On the other hand, it is somewhat a result of having no home, and therefore social activities are necessarily largely "out". I may try to reign it in somewhat, but I think that one might be a gradual weaning.

Holidays - I went on a big, expensive holiday this summer (there is more to this story, which I may share at some point). I had an amazing time, but I would think twice about such a big outlay in the near future when I live in Europe in cheap and easy reach of a lot of exciting places.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

October

Income - £2000

Salary - £2000

Expenditure - £310

Bank account subscription fee - £10
Mobile contract - £30
Eating/drinking out - £90
Food - £20
Self-storage unit - £70
Entertainment - £90

Savings rate: 84.5%

On the surface of it a decent month for savings, but then I only spent a few days ashore, so if I were to multiply my expenditure up to a mensualised figure I would have a savings rate of zero. Also started November with a big drinking weekend, which I wish I had enjoyed a bit less so I would be less likely to repeat it.

locheachles
Posts: 13
Joined: Wed Oct 22, 2014 11:00 am

Re: Egg's journal

Post by locheachles »

Looks to me, from the outside perspective, that you are doing a solid job saving. There is of course a lot of things you can cut out but it seems you are aware of this. Besides, for entertainment/"not having a home" (sounds like you work on a cruise or something) you must also maintain sanity... If you are living ERE and just miserable for that extra 5% saved IMHO it is simply not worth it. As long as you are hitting big benchmarks (IMO over 65% or so is good, 75% and up is great) then you are gravy. And it seems you are doing just that.

Keep us updated... Looking forward to hear how things evolve!

(EDIT) Oh, and I wanted to mention... You have got to start investing (well, never have to do anything I suppose, but I highly recommend it!) Look into index investing with dollar cost averaging (DCA). It's simple, inexpensive, conservative, and as safe as investments can be. It fits in great with an "auto-pilot" ERE savings plan as well!

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

locheachles wrote:Oh, and I wanted to mention... You have got to start investing (well, never have to do anything I suppose, but I highly recommend it!) Look into index investing with dollar cost averaging (DCA). It's simple, inexpensive, conservative, and as safe as investments can be. It fits in great with an "auto-pilot" ERE savings plan as well!
Thanks for stopping by. I do realise that I'm missing a trick by not investing. Being U.K. based, I find a lot of the specific talk on here doesn't apply to me. Some sort of basic index tracker would be good, though, as my working conditions wouldn't allow very active management, and though I accept it as important, investment is not something I find interesting. I know we have vanguard funds here which looked potentially promising.

locheachles
Posts: 13
Joined: Wed Oct 22, 2014 11:00 am

Re: Egg's journal

Post by locheachles »

Egg wrote:
locheachles wrote:Oh, and I wanted to mention... You have got to start investing (well, never have to do anything I suppose, but I highly recommend it!) Look into index investing with dollar cost averaging (DCA). It's simple, inexpensive, conservative, and as safe as investments can be. It fits in great with an "auto-pilot" ERE savings plan as well!
Thanks for stopping by. I do realise that I'm missing a trick by not investing. Being U.K. based, I find a lot of the specific talk on here doesn't apply to me. Some sort of basic index tracker would be good, though, as my working conditions wouldn't allow very active management, and though I accept it as important, investment is not something I find interesting. I know we have vanguard funds here which looked potentially promising.
Would the FTSE be an option for DCA? Just putting say, 1000 pounds in it a month on the same date every month (via an FTSE index mut. fund with low fees)? As someone use illustrated for me why you "have" to invest:

"There are three people

1. One who uses himself to make money (labor)
2. One who uses something to make money (capital)
3. One who uses money to make money (investment)"

Each option down the list is better than the last and reflects how wealthy individuals think... I thought it was an interesting way to think about growing wealth. 8-)

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

locheachles wrote:Would the FTSE be an option for DCA? Just putting say, 1000 pounds in it a month on the same date every month (via an FTSE index mut. fund with low fees)?
I think it would be. I guess coming back to the risk aversion I mentioned at the beginning, though, I feel pretty pessimistic about ftse growth at best and like a major slump is quite possible at worst. I'm not sure if you have a view on this. That's why I'm drawn towards real estate. At least it has some real, tangible value, and rented out could provide a reasonable yield.

Nomini
Posts: 29
Joined: Fri Nov 22, 2013 10:45 am
Location: South UK/abroad

Re: Egg's journal

Post by Nomini »

Oops. Mispost.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

I'm going to spin way off into more personal territory now. Bear with me, dear reader. As a young man, one of my major preoccupations is women. I had a conservative upbringing and very little exposure until the age of 18. There are certainly psychological issues I'm still dealing with arising as I see it from that. But that's not what I'm about to discuss.

Suffice it to say that I have been ploughing through a fair few women in recent times on a casual basis. My particular brand of sleeping around is not the "usual" clubbing type, but almost like having a girlfriend just for one weekend. I feel therefore that I've got to know quite a few women. Each time, I put gentle ERE feelers out, and nobody has really seemed to have the right mindset that I would even start to try to convince them.

My concern is this: would I really go ahead with ERE if it were incompatible with my romantic ambitions? I sense not. Ideally I'd meet an ERE receptive girl, but as it's not the be all and end all for me, I don't know that I'd be willing to compromise significantly in other areas to find one. For instance, I just met a fantastic girl who I'd be happy to go exclusive for and hope to make my girlfriend. Even if it doesn't work out with her, in principle I would rather be with someone I really like than retire. And that basic admission probably highlights an ERE obstacle I strangely hadn't even given that much thought to yet.

IlliniDave
Posts: 2763
Joined: Wed Apr 02, 2014 7:46 pm

Re: Egg's journal

Post by IlliniDave »

Possibly the worst thing you can do is to try to be someone you are not in order to make a relationship work. Be yourself and find a girl that values you for who you are. If ERE is not the primary characteristic of you/your life, then sure, it is optional. You just need to work at understanding where your own contentedness lies.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

IlliniDave wrote:Possibly the worst thing you can do is to try to be someone you are not in order to make a relationship work.
That's an interesting take. I'd say ERE itself is a middling ambition of mine at the moment. Certain money saving ways are more ingrained than others, such as not owning a car and taking little interest in most consumer electronics. On the other hand, I guess I kinda buy into what one might call "experience consumerism", hoarding expensive memories rather than material objects. I'd say short of marrying my psychological clone (which would be a nightmare) it's unlikely I'll ever find someone very similar to me.

Which brings me onto what you said, scriptbunny:
scriptbunny wrote: (2) Money disputes are the #1 cause of divorce

I'd say if you think your girlfriend's financial outlook is *compatible enough* with yours not to end in constant bickering and resentment, then go for it! Of course, that line is dependent on what you see for yourself financially
I do think it's fair enough that money is at the heart of probably most relationship issues. That said, we're early days yet, and I can't judge whether or not she'd be fine with a FIRE life. She is unusually practical though for a girl of my age, which encourages me. That said, and maybe this is where I go wrong, but I don't like to put pressure on by viewing all nascent relationships as an interview for happily ever after.

Adrian
Posts: 10
Joined: Sun Nov 09, 2014 2:39 pm

Re: Egg's journal

Post by Adrian »

If she agrees with ERE, it's a bonus. You are going to attain and maintain financial independence much faster.

If she doesn't agree, you can still be frugal when it comes to your own expenses. You can say that this monthly amount it's the maximum you are willing to contribute on a monthly basis. And you are going to invest the rest.

If she wants to buy luxury items, ask her to pay for them. You will not contribute to them. Of course, she will pay for them only after she pays her half of basic necessities like food, utilities etc.

Adrian
Posts: 10
Joined: Sun Nov 09, 2014 2:39 pm

Re: Egg's journal

Post by Adrian »

Let's say she wants to go in vacation with you. You can ask her to save $1, in advance, for every dollar she spends on holiday. In this way, you know that some of the money will not be wasted.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

Wow. Seems people are far more interested in personal stuff than financials!

@Adrian I suppose I do agree to a point that keeping finances separate can help, but I guess to my mind there is a limit to the amount of acceptable divergence. Hypothetically speaking, I imagine there would be a lot of resentment in a relationship between a frugal retiree and a working spendthrift even if on paper the finances were separated.

@cimorene12 Thanks for the link and for your PM (which I can't reply to for some reason). I'd like to think that I'm sensible enough to choose someone not too financially wild. I guess it's just a question of compromises on the continuum of frugality. I could no more go for a horrendous spendthrift than someone I find physically or mentally repulsive, but nobody's perfect (and if they were they wouldn't settle for me!) so I guess I just look for people who cross the threshold in all of my non-negotiable areas. That sounds a bit utilitarian when I see it written like that, and God knows I've ignored my better judgement for girls in the past, but I hope I have enough sense to keep myself out of trouble if ever I find a long term partner.

A little update on this specific situation. I have continued to date this girl, along with a couple of others less seriously, but have so far resisted any commitment. I'm probably going to be moving very soon, so I just don't see it working out longer term, which is a shame as I like her probably more than any other girl I've met so far in my life. What's meant to be will be.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

It's been a little while. Things have been turbulent on the work front. For very specific medical reasons, I have put in for an internal transfer (not an issue which would affect 99.999% of jobs). Raising these medical concerns may ultimately result in losing my job entirely, which I'm pleased to say is not overly stressing me at the moment. On the other hand, I could hypothetically be out of work in the next couple of months which would certainly set ERE back as it's unlikely I could quickly land a job of similar salary. Then again, I like a change, and even find uncertainty quite exciting and, dare I say, fun, so watch this space...

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

Back to some numbers. Here they are for last month:

November

Income - £2100

Salary - £2100

Expenditure - £965

Bank account subscription fee - £10
Mobile contract - £30
Eating/drinking out - £400
Food - £55
Self-storage unit - £70
Entertainment - £200
Transport - £200

Savings rate: 54%

Not a brilliant month for saving. I had a few silly ones, including a horrendously expensive taxi ride the cost of which I can't even bring myself to repeat. December is shaping up to be even more spendthrifty, and I frankly don't feel all that motivated towards ERE right now. I find that I haven't really cut back, and nothing about my underlying spending inclinations has shifted; I still like eating out and big, hard-drinking nights. It's not to say that I couldn't go without them if I couldn't afford them, but I need to find some alternative, cheaper leisure activity if I really want to make ERE headway. There's also the very real possibility of losing my job in the next few months, with the accompanying free (at the moment - otherwise fairly heavily subsidised) accommodation and food, which makes me concerned that I naturally spend so much money on non-essentials so easily in so little time.

It won't affect December's expenses, but it looks like I will be moving to the other end of the country in January for work. If that happens, it will at least mean I can consolidate my stuff and get rid of the self-storage unit I have down there. My mobile contract is up then, too, and as a light user I plan to use PAYG which should save another £20. In prospect, then, £90 savings on current standing expenses from January. On the other hand, I will have to start paying my accommodation again, which will more than offset the difference. The exact extent of that expense is yet to be seen.

On the romantic side of my financial affairs, I plan to stop dating as much as I have in recent months to concentrate on my favourite girl (more on this in a moment). I have been doing a mixture of stuff for dating, but do often end up eating out at some point, sometimes several times, between cheaper/free activities (somehow my "dates" seem to go on a lot longer than most people's - I don't know anyone else who's done a three day first date...). This has proven to be a rather an expensive form of entertainment. Things have also become more serious with the girl I've talked about earlier in this journal. I don't know if our relationship will survive my moving to the other end of the country, but I hope it does. Ideally I'd want her to move down with me. Realistically, though, we've not known each other long, and she'd have to leave her job which is quite a gamble to take on a near-stranger (though admittedly devilishly handsome and excellent in the bedroom), so I doubt that will happen.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

December was a good month. I spent a couple of weeks with my parents and brother which was the first time I'd seen them in a few months. Financially, my last paycheck was the first after a promotion resulting in some increase in pay so hopefully I will sidestep lifestyle inflation and just save more. More concrete figures and analysis to follow at a later date.

January is looking to be a time of change. The move has gone ahead as expected. I haven't started my new job (in the same organisation) yet, but I'm really looking forward to it. I have a few important lose ends still outstanding with respect to medical suitability for continued employment by that organisation, but in the meanwhile I'll be doing the job I've actually wanted to do for a while. As far as I'm concerned that's great news, and with a bit of luck will increase the longevity of my enthusiasm for employment.

Romantically, I successfully convinced my girlfriend (for more attentive readers, yeah I'm not the only one who's had a promotion...) that she wanted to leave her job and move accross the country for me. I am delighted but I hope I have not been too selfish in asking it of her. Either way, she has a notice period at work etc. so should join me in a month or so (assuming she doesn't change her mind in the intervening time).

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

cimorene12 wrote:Wow, Egg! This is a time of extraordinary change, and I'm looking forward to your new updates. I'm glad that she's decided to join you. :)
Thanks, Cimorene. You know as well as anyone on this forum that it's a bit of a surprise. It doesn't seem real apart from the few bags of her stuff I already brought down with me when I drove here, but I'm excited nonetheless.

Egg
Posts: 148
Joined: Sat Oct 04, 2014 10:59 am

Re: Egg's journal

Post by Egg »

December

Income - £2078

Salary - £2078

Expenditure - £1068

Bank account subscription fee - £10
Mobile contract - £30
Eating/drinking out - £210
Food - £150
Self-storage unit - £70
Entertainment - £90
Hotel - £118
Car hire and petrol for round trip to my grandad - £240
Train travel - £100
Christmas presents - £50

Savings rate: 49%

As always, these figures involve some fudging with cash payments etc. but a certain amount of this month's expenses have been ones not featured in past months. I hired a car for a week to visit my grandad, for instance, which accounted for a little over 20% of the months expenses. However, unusual expenses are in themselves not unusual, so no excuses to be made there. It's a bit worrying to cross the 50/50 threshold in the wrong direction, but in truth I haven't been living more extravagantly. Rather, I've had more days of the month which haven't been 24hr/day work-absorbed. Whilst this made for a pleasant month in some respects, I realise that I really haven't made any progress in optimising living expenses. Travel accounted for around a third of my expenses, however, which should not be so for January as I am living in a far more convenient location. And with a payrise in the region of 10%, I intend to reinvigorate my saving rate.

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