Ten years or less to reach FI

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Jason
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Re: Ten years or less to reach FI

Post by Jason » Sat Sep 16, 2017 8:52 am

For purposes of discretion and overall subject matter of this forum, I will restrain from further discussion on this issue. But if you could PM her contact info, I would greatly appreciate it.

JollyScot
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Re: Ten years or less to reach FI

Post by JollyScot » Sun Sep 17, 2017 6:09 pm

Good job on the PhD and the new role, from those I know who did a PhD none of them made it in the 3 year "plan" that they had.

Hopefully the new role will be able to kick start you off to being financially independent in no time. Although you took a bit longer to do a PhD relative to someone that didn't the fact you are out of it more or less debt free and ready to save I'm sure you'll smash it.

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Wed Jul 10, 2019 4:57 pm

It really is scary how much time speeds up the older you get. I can't believe I started this diary in 2015. When I chose my username, ten years felt like an incredibly long period of time. Right now, FI in ten years or less seems incredibly ambitious and optimistic.

So, I guess I should give an update on my current situation. I'm almost 2 years into my post-PhD career, living in a low cost of a living area (relative to the rest of the country) but in the middle of a small city so the most expensive place in that area. The bonus is that I only use my car for long journeys on an infrequent basis. The rest of the time I walk everywhere, including work, which I really like and saves a lot of money on petrol. There's also lots of free entertainment around me, although lots of tempting food places everywhere to spend money on. I own a one bed flat. It would probably be small to some but after years of renting in tiny bedrooms, it feels like a huge amount of space to me.

I enjoy my job, generally. I feel like, if I have to have a job (which I do, obviously) then I have the most tolerable job I can find. But I still dislike the concept of a job. It just makes me feel trapped and like I have no autonomy about a massive aspect of my life. I've been struggling with this a lot more since I got a mortgage. I love my flat and I don't see why I would want to move, but something inside of me just wants the freedom to do so if I wanted. My brain just keeps telling me I should quit my job, sell my flat and move to Asia and teach English or something, while I'm still young (ish). I don't know if this would actually make me happy or not, I just know it would be different.

Money wise, all my savings went into the deposit for a flat and the furniture, so I have an emergency fund which I'm building up to a higher amount and I plan to start investing regularly as soon as I have enough cash saved. I do have a pension now too, which is nice.

I'm just really confused right now. Any life advice would be massively appreciated.

Cheepnis
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Re: Ten years or less to reach FI

Post by Cheepnis » Wed Jul 10, 2019 7:56 pm

It sounds like you've got your life financial situation pretty fine-tuned and are at the beginning of "The Grind". After everything is set-up and on auto-pilot the accumulation phase is rather dull. I'm at the beginning of it myself and there's no major lifestyle changes I need or want to make that would benefit my numbers. So life rolls along, work rolls along, numbers simply roll upwards. All the while I feel like I don't have enough time (or I'm just not motivated enough after work) to actually seriously pursue anything I'd want to spend my time doing upon reaching FI.

"The Grind" that we, as ERE minded people, will experience isn't really any different than it would be if we weren't, except it isn't set to last for 30 years. I often question whether or not to make a drastic change only to have the very same thought as you. "I don't know if this would actually make me happy or not, I just know it would be different." Many times I err on the side of "it would be different". Scenery and circumstances can change an awful lot without addressing underlying feelings of dissatisfaction or restlessness and I think addressing those feelings first will only make things better when scenery or circumstances do change.

Quit your job to teach English abroad only to have to start another job once you quit teaching English abroad seems circular. Since you're primary goal is freedom wouldn't it make more sense to work toward FI for a few years with the goal of teaching English abroad afterword? Depending on the COL of where you'd like to teach you could become financially independent extremely fast and then experience the freedom and the change of scenery/circumstances at the same time!

Take this take with a grain of salt because I am currently in a similar situation to what I described. There are changes I definitely want (and during ER will need) to make, but making them now would enslave me longer to a job, which isn't ideal. Whether or not this is the best course of action I don't know.

steveo73
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Re: Ten years or less to reach FI

Post by steveo73 » Wed Jul 10, 2019 11:31 pm

I started my journal in 2013 with a 10 year time frame as well. I think we will make it at about that point but I will be 50. As Cheepris stated above it is a grind. I feel the same way as you do about your job. It's okay but I don't like working.

I think you have to just try and live as good a life as possible within the parameters of remaining on the target to FI and RE I assume if you want too.

jacob
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Re: Ten years or less to reach FI

Post by jacob » Thu Jul 11, 2019 9:58 am

From the perspective of extremely high savings rate (75%+), I don't think "the grind" exists. First, the accumulation period is short (~5 years), so it feels more like a sprint than a marathon. This also creates more flexibility in terms of stopping and restarting. If you take time off, the savings drain will be low and if you restart, the NW quickly moves up again. Going fast, I've never felt a need to do countdowns, that is, whether it took 5 years or 6 years because I took a 1 year break (I didn't) or whether I would reach NW goals slower because I killed my income potential (I did) was not an issue because I knew that slightly slower than really fast is still fast.

Think of it as crossing a marathon distance. If you walk the whole way, it will take 7-9 hours + breaks. However, if you can run sections fast, you can take much longer breaks. Or just finish early. In terms of blisters, there's a big difference between being on your feet for 8 hours straight ... and pounding your joints for 3-4 hours. Running and walking is not the same challenge. Financially, the analogy breaks down a bit because of compound interest. The advantage of sprinting early is HUGE. See, http://earlyretirementextreme.com/updat ... ation.html

The other thing about achieving high savings rates is that it's not just something one can set up lest one is satisfied with doing without and sacrificing. There's a continuous learning curve of skills to learn in order to increase economic efficiency---how far each dollar goes---the value one gets for the price one pays. Learning how to stretch dollars provides a lot of "distraction" ... and meanwhile, the monies are just rolling in.

Perchance the frustration felt by the OP is due to picking a 50-66% savings rate (time horizon 10-17 years) and thinking of FIRE as a dreary accumulation phase followed by a fun and free consumption phase ... instead of seeing it as a lifestyle change? Those are very different paradigms. Happiness should be part of one's web-of-goals(*). Sacrificing a few years to get a head start (See link above) seems smart just because of the power gained. Sacrificing for 10+ years ... I've never done that so I can't speak of that other than it doesn't seem very attractive.

(*) In terms of telic goals, it's a problem if there are too many conflicts between activities creating happiness and unhappiness. Much of the traditional economic earn-spend lifestyle is predicated on this kind of retail-therapy. This conflict should be reduced as much as possible. Learning self-reliance is one way which happens to reduce expenses as well.

Add: It's best to pick a speed of execution that fits the speed of one's dreams and plans. The characteristic timescales should match. It's no good wanting a life of adventure and then choosing a 50% savings rate when that requires 17 years of grind before adventure starts. No good acquiring boat anchors (mortgages) if a life of mobility is desired. It's likely not coincidental that ERE/75%+ savings rates matches my temperamental planning horizon of 3-5 years at a time. If you see living in terms of lifetimes I basically spent my first lifetime acquiring my stash. Because it was the first, I derive enormous benefits from compound interest. (Cf. those who YOLO in their twenties and thirties never saving a dime. The difference is a quarter million dollars in interest payments alone by the time they hit 40.)

CS
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Re: Ten years or less to reach FI

Post by CS » Thu Jul 11, 2019 10:07 am

Edit: I posted minutes after Jacob. After reading his post, I like his better! :lol: Do that - go fast.

--
As someone who has bought houses (twice), and felt trapped (twice), I don't know what to tell you. You have to live somewhere. At least a flat doesn't demand a lot of yard work and overhead for unused space. I think the best thing to do is to get your stash saved by not spending too much on consumables (furniture, clothes, etc) so you can trade that full time job as soon as possible. You could do that and keep your flat as a home base, or rent it out, or if you find some other place preferable, just sell it.

I think you'll feel better as soon as the savings account starts growing. Calculate what it would take to semi-retire, i.e. save enough for full retirement at retirement age if the sum just grew while you worked just enough to pay the bills year to year. I found that point to relieve a lot of stress, even if it isn't the 'I'll never have to work again point.' Besides, things happen - economies collapse, etc. It is better to have the skills to rebuild than only count on money (which ties into below).

This is a good time for planning time adventures after the job, as well as working on other skills such as getting your ESL certificate now and trying out other alternative income ideas.

And keep reminding yourself the job is a tool you are using right now - not a lifetime commitment. :)

steveo73
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Re: Ten years or less to reach FI

Post by steveo73 » Thu Jul 11, 2019 10:57 pm

jacob wrote:
Thu Jul 11, 2019 9:58 am
From the perspective of extremely high savings rate (75%+), I don't think "the grind" exists.
I agree if you can do this. I'm married with 3 kids and we are already fairly different compared to all of our peers. We don't earn enough to save 75%+ of our income with kids.
jacob wrote:
Thu Jul 11, 2019 9:58 am
The other thing about achieving high savings rates is that it's not just something one can set up lest one is satisfied with doing without and sacrificing. There's a continuous learning curve of skills to learn in order to increase economic efficiency---how far each dollar goes---the value one gets for the price one pays. Learning how to stretch dollars provides a lot of "distraction" ... and meanwhile, the monies are just rolling in.
I agree with this again if you can be bothered. I think that this is the ERE way as well but it might be easier for some people to simply pay for stuff.
jacob wrote:
Thu Jul 11, 2019 9:58 am
Perchance the frustration felt by the OP is due to picking a 50-66% savings rate (time horizon 10-17 years) and thinking of FIRE as a dreary accumulation phase followed by a fun and free consumption phase ... instead of seeing it as a lifestyle change? Those are very different paradigms. Happiness should be part of one's web-of-goals(*). Sacrificing a few years to get a head start (See link above) seems smart just because of the power gained. Sacrificing for 10+ years ... I've never done that so I can't speak of that other than it doesn't seem very attractive.
Another perspective is that you view life that way but you need to work to fund that life. So the savings rate is 50% because that is all you can do and live the life that you are happy with.

There are some stuff that you do that is hard to decrease costs on. For instance I do jiu-jitsu and my gym fees are say $1000 per year. I have to pay this fee + uniform costs every year if I want to keep doing this sport.

I also like surfing but driving to the beach would cost a lot of money. They are building a wavepool in my area and I'm hopeful it will be unreal. I think though this will cost me $1000+ (I reckon $2000) per year.

These activities have basically no way to ERE the activity. I should state that there are ways but they aren't easy. For instance I could teach jiu-jitsu and get lesser fees or possibly work at the wavepool and pay a smaller rate of receive free surfing. I though don't think I want to take those options up or rely on them.
jacob wrote:
Thu Jul 11, 2019 9:58 am
I basically spent my first lifetime acquiring my stash. Because it was the first, I derive enormous benefits from compound interest.
I'm 46 and I didn't do it this way but we were still pretty good. The issue is we didn't think about retiring early (or knew about the concept at all - most people don't). So although we didn't go into too much debt and we paid down debt quickly we had 3 kids and bought a house.

I think it really comes down to saving what makes sense and then waiting for your portfolio to fund your lifestyle. I also think managing your expenses realistically is critical. I think it's much more likely especially on here to have a significant chance that expenses increase over time. This is disastrous because a 3% WR which appears safe may end up a 7% WR.

I don't know for sure but I think the OP probably doesn't have a great grasp on his spending even if it is low relative to how much he needs to retire on. I know for me personally my expenses have increased significantly even though my portfolio has grown significantly.

I suppose the principles are valid. Save a certain percentage of your income and retire in x number of years. ERE really minimises expenses and looks for opportunities to obtain the same utility in different ways. There will only be certain lifestyles though that fit this pattern. Not all activities can be bootstrapped easily. I get that a lot can.

steveo73
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Re: Ten years or less to reach FI

Post by steveo73 » Thu Jul 11, 2019 11:09 pm

CS wrote:
Thu Jul 11, 2019 10:07 am
I think the best thing to do is to get your stash saved by not spending too much on consumables (furniture, clothes, etc) so you can trade that full time job as soon as possible.
I agree. Spend on stuff when it makes sense.
CS wrote:
Thu Jul 11, 2019 10:07 am
I think you'll feel better as soon as the savings account starts growing.
Seeing the progress is great but for me personally it's just a figure that is meaningless. What really matters is being able to not go to work.

You make a good point though in that you can amend your lifestyle earlier and work less. Personally I like this idea but my wife for instance is risk-averse and would rather save up enough to quit completely even if she chooses to work part time doing something different at some point. She wants the option not to ever work again.

Gilberto de Piento
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Re: Ten years or less to reach FI

Post by Gilberto de Piento » Fri Jul 12, 2019 9:58 am

jacob wrote:
Thu Jul 11, 2019 9:58 am
Perchance the frustration felt by the OP is due to picking a 50-66% savings rate (time horizon 10-17 years) and thinking of FIRE as a dreary accumulation phase followed by a fun and free consumption phase ... instead of seeing it as a lifestyle change? Those are very different paradigms. Happiness should be part of one's web-of-goals(*). Sacrificing a few years to get a head start (See link above) seems smart just because of the power gained. Sacrificing for 10+ years ... I've never done that so I can't speak of that other than it doesn't seem very attractive.
I'm doing the 50-66% savings rate thing and I can confirm it is a drag. It feels like a bad middle ground, where I have to work hard to save money, I'm not having much fun, and I'm not getting anywhere very fast either. There is a light at the end of the tunnel but it is very, very far away.

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Lemur
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Re: Ten years or less to reach FI

Post by Lemur » Fri Jul 12, 2019 12:53 pm

Gilberto de Piento wrote:
Fri Jul 12, 2019 9:58 am
I'm doing the 50-66% savings rate thing and I can confirm it is a drag. It feels like a bad middle ground, where I have to work hard to save money, I'm not having much fun, and I'm not getting anywhere very fast either. There is a light at the end of the tunnel but it is very, very far away.
Sure is...and the lower your savings rate is, the greater one has to depend on market returns (hence the spread between the amount of years it might take to FI). A flat or falling market works against you if your savings rate is too low. Makes the accumulation that much longer.

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Mon Jul 15, 2019 3:58 pm

First of all, I just want to say thank you to everyone who posted in response to my cry for help. I was in a bad place and my post was basically me screaming into the void; I never expected so many people to actually reply. This community is amazing and I'm definitely going to spend more time here from now on because you guys are awesome and somehow manage to understand me better than people who have known me my entire life.

Life definitely feels like a grind right now. Although I'm used to grinding through each of my degrees, I've always had an end date to look forward to. This is the first period in my life is that is completely open-ended. It's actually plausible that I could stay in this job for the next 30 years. That both scares me to death and saps all my motivation. I'm starting to understand why people gain weight and spend money on useless items to numb the boredom and depression of everyday life, something that I've never really been able to relate to before.

I also agree that my savings rate is definitely an issue that needs to be tackled. It's been about 9 months since I bought the flat and a lot of the money that would have gone into savings has been going towards furniture and such. I am a natural minimalist to the extent that owning what I consider too much actually triggers my anxiety, but has still felt like a huge expense even buying a few large items of furniture. I've also been lax with spending money on food and entertainment recently. Despite reading about FIRE for many years and being interested in the movement, I've never fully committed to the lifestyle, usually telling myself I will when I get a 'real job'. Only now, after 2 years of working, I think I'm fully realizing that living "normally" will not make me happy. I think I have been kidding myself that I could do what everyone else did - get a job, a 30-year mortgage and spend almost everything I earn - and be content with life.

In the next few months, I am going to really focus on my expenses and work on optimizing my savings rate as much as possible. I can't make any grand decisions about my future right now and I can't run away, but my expenses are the one thing I actually can control. I don't know whether buying this flat was a good idea anymore, but I don't have to decide that right now. I don't have to decide when this period of my life will transition to the next, but I need to trust that this is not how my life will be forever. I don't know what the next stage is, but the more money I have stashed, the more options I'll have when I choose to move on.

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Mon Jul 15, 2019 4:01 pm

Oh, and one more thing - I'm going to re-read the book. It's been around 4 or 5 years since I first read it so I need to reacquaint myself with the basic principles of ERE and remind myself how stupid my current level of spending is. :)

bigato
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Re: Ten years or less to reach FI

Post by bigato » Mon Jul 15, 2019 4:47 pm

Since you are a natural minimalist, what do you think led you to still be spending on furniture after 9 months? What do you think are the root causes?

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Mon Jul 15, 2019 5:10 pm

bigato wrote:
Mon Jul 15, 2019 4:47 pm
Since you are a natural minimalist, what do you think led you to still be spending on furniture after 9 months? What do you think are the root causes?
Well I should clarify, I've been saving each month and then buying the items when I have enough cash in place, which is why it has been spread over the 9 months. I stretched myself to buy this flat so I had zero cash when I moved in. So far, I've bought a sofa, a rug, tv unit, desk and three bookcases, all from Ikea. All in all, I've probably spent around £1500 on furniture, plus around £500 on other general stuff. I didn't have any furniture when I moved in so it was necessary, although I could have bought it secondhand or shopped around for cheaper options.

I think the root cause was spending to try to make myself happy. I spent a lot of time on pinterest looking at 'perfect' apartments and I was convinced that once I owned a flat and had everything I wanted, that I would be enough. It was just a distraction I guess; that and I was trying to impress people. :lol:

bigato
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Re: Ten years or less to reach FI

Post by bigato » Mon Jul 15, 2019 5:25 pm

You sounded like the guy from Fight Club now :)

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Mon Jul 15, 2019 5:40 pm

Haha oh no, this does sort of feel like a slow descent into madness. ;)

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Wed Jul 17, 2019 5:14 pm

I've spent the last few hours working on an excel sheet to track all aspects of my finances. Looking at my expenses this month as an example, I'm on a savings rate of about 30% without being particularly mindful about spending. Going forward, I think I can get that up to 50% without too much difficulty. Going higher than 50% is going to be difficult until I get a raise (which in theory, I should get every September) and until I can remortgage to a lower interest rate (or sell the flat) in October 2020 when my fixed rate deal is up. I also have an annual bonus in December which can be completely allocated to savings, which should help a bit.

I get paid in a week so in the next pay cycle I'll start reporting my monthly expenses and savings rate here to keep myself accountable.

wolf
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Re: Ten years or less to reach FI

Post by wolf » Thu Jul 18, 2019 12:09 am

TenYearsOrLess wrote:
Wed Jul 17, 2019 5:14 pm
I'm on a savings rate of about 30% without being particularly mindful about spending. Going forward, I think I can get that up to 50% without too much difficulty. Going higher than 50% is going to be difficult...
30% is good, 50% is better! That's great. It is a process. It is happening step by step. Don't underestimate that you evolve mentally. First I thought too, that going even further than xx% is almost impossible without y happening. But that was not the case. During the last 3 years I underestimated the potential to reduce expenses. Maybe this is happening to you, too?

TenYearsOrLess
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Re: Ten years or less to reach FI

Post by TenYearsOrLess » Thu Jul 18, 2019 3:37 pm

wolf wrote:
Thu Jul 18, 2019 12:09 am
30% is good, 50% is better! That's great. It is a process. It is happening step by step. Don't underestimate that you evolve mentally. First I thought too, that going even further than xx% is almost impossible without y happening. But that was not the case. During the last 3 years I underestimated the potential to reduce expenses. Maybe this is happening to you, too?
Hopefully that will be the case for me too! I think I'll get even more motivated when I see the money growing month on month. At the moment it just feels so sloooow.

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