So it has been almost 4 years now since I left my company and left a full time job. I looked back and compared what I was planning to do vs what I actually ended up doing.
March 2015 Plan
1) Build a business
2) Pick up a martial art
3) Learn to program again (finance took a lot of this skill out my head)
4) Live in several countries, initially this will be Scotland again until I get myself going
5) Expand my industrial scale cooking recipes
6) Learn Spanish (my fiance would kill me otherwise)
1) Technically I did build a business, although it was as a consultant doing what I did as a worker. Over 4 years I have worked around 40% of the time. My savings have increased at about the same rate as my 4 years working in Switzerland. A combination of high hourly pay, very low cost of living. So a success from that side, relative to what I initially had in mind its a failure. I just extended out what my job was as opposed to starting something new.
2) Didn't even look at martial arts, so massive fail all round.
3) I learned a decent chunk of Python, C# and JavaScript for various reasons. Not to the level I would have liked. When I do work through my company now I am a lot more skilled than my direct peers in the world of finance. Not that hard though as most have very little skill in this area. So a partial success, could have done more.
4) I have lived in UK for a while, France for a couple of years, 4 months in Spain. So I have done a reasonable job here. What I would say about this is that living in another country is not that hard relative to anywhere else The main issue is dealing with the system or state rather than day to day life.
5) As for cooking we now have a system of buying staples in bulk and then rotating through them for our meals. We buy 1 meat a week for them and then 3-5 vegetables. Depending on how we feel we will make a sauce or (usually) buy one. Still have too many takeaways but in general I have mastered the efficient coking process.
6) As for Spanish, not great. I have managed to learn some and have a general understanding now and can follow along. Not been killed yet, but should really stop the procrastinating on this.
The last 4 years has obviously not gone the way we expected but overall managed to achieve and do a number of things that would not have been possible had I still been working.
Would not have been able to live in France the way we have
Would have been separated from wife for months due to VISA issue had I not had the flexibility I have
Would not have made the jumped to a consultant where the per hour pay is much higher
Would not have managed to spend as much time with family or visit friends
I am glad I pulled the plug on work, but I think the margins needed were higher than the reality of life. I could have taken the leap much earlier. £100,000 in savings instead of £300,000 would have been enough FU money for me. That means I could have avoided the move Switzerland and "quit" at 26 instead of 30. Moving to Switzerland for a few years was enough of a life experience, had I stayed where I was until 30 I would have regretted that more.
JollyScot's Journey Starts
-
EdithKeeler
- Posts: 1099
- Joined: Sun Sep 01, 2013 7:55 pm
Re: JollyScot's Journey Starts
This is interesting, and an observation I see a lot among people who’ve quit , that they could have quit sooner, that their spending dropped even more than anticipated. Probably a little more often by people who live in countries without the health insurance concerns we have in the US, but then again, I suspect some of the concerns we have about that in the US are a bit overblown.I am glad I pulled the plug on work, but I think the margins needed were higher than the reality of life. I could have taken the leap much earlier. £100,000 in savings instead of £300,000 would have been enough FU money for me.
Re: JollyScot's Journey Starts
Yeah the lower/zero health care costs are a benefit. It takes a core US worry out of the decision making process. There are drawbacks to what we have here however.
The US seems to have its own special kind of crazy with respect to the health system. Even relative to other private forms.
As for not needing as much, it is a tough to recommend being less prepared. I do not think I would. If something unexpected did happen and costs spiraled or no work appeared or no back up arrived it would have been a more foolish choice.
The journey to the retirement number does make it a lot less likely you will run into some unexpected trouble. Just the reality of what has happened in last 4 years, where even through relative chaos it has been fine.
I think my initial years post leaving will be more chaotic than some others who maybe have themselves set up somewhere. They will know exactly what their costs will be post leaving as well. Mines jumped around and I had to modify my plans.
The US seems to have its own special kind of crazy with respect to the health system. Even relative to other private forms.
As for not needing as much, it is a tough to recommend being less prepared. I do not think I would. If something unexpected did happen and costs spiraled or no work appeared or no back up arrived it would have been a more foolish choice.
The journey to the retirement number does make it a lot less likely you will run into some unexpected trouble. Just the reality of what has happened in last 4 years, where even through relative chaos it has been fine.
I think my initial years post leaving will be more chaotic than some others who maybe have themselves set up somewhere. They will know exactly what their costs will be post leaving as well. Mines jumped around and I had to modify my plans.
Re: JollyScot's Journey Starts
My experience in travel is that third world and or socialists countries - Cash only pay in advance. In the USA many of my friends are working not only to pay their bills but to have medical and dental insurance while working. Currently I have Cobra insurance for 18 months after I FIREd then I will pay monthly private health insurance until age 65 when the government covers me.
Re: JollyScot's Journey Starts
Travel in a lot of countries just results in you paying for the care upfront and then claiming back on travel insurance (assuming you have it). At least that is what I have done, an emergency would probably be a bit different.
I've now lived in 3 systems with varying degrees of a social bend and there are pros and cons to them all.
1. The UK System. Everything is free at the point of use and it is all covered via taxes from citizens. It works very well if you are poor or otherwise short on cash as there is not upfront costs associated with going to the doctor. It also works very well if you are in general very unhealthy as the cost of care is not linked to your health choices. Since no one pays for anything there are a lot of people who make multiple trips to a GP for any hint of anything wrong. Or worse there are those who go to Accident and Emergency when not an emergency. Ther worst story of this was an individual going 250+ times in a year.
2. The French system. You pay for your costs here directly and then the government will refund 70% of this to your bank account. The remaining 30% is sometimes covered via an additional insurance so you still get money back. Makes health care significantly cheaper but ensures everyone knows exactly what the costs of their care is. I am not sure the weighting of private hospitals vs public hospitals however. I think in some cases you are required to have a GP referral before going to specialists (not sure yet). An illness here could still technically wipe you out if you don't get the additional insurance but I think it would be unlikely.
3 The Swiss system. The health care seems to be entirely private and you pay for your care directly. Every resident is legally required to get insurance and they choose between many providers. Then if you get ill you choose whatever doctor you like in whatever area you like. Some of the insurance policies might have restrictions on this for a lower price but you don't need to get that. The type of insurance is one with the varying deductible level depending on the risk you have. Again everyone knows directly what their healthcare costs and it structure limits the case where an illness could wipe you out.
So we have 3 systems of varying degrees of 'socialism' they are all pretty good and the standards of them are pretty high. The UK has high waiting time which is not great but we pay less as a % of GDP for the service so I guess you get what you pay for. The French system still has high tax amounts to cover it and it is not clear to me exactly how their taxes correspond to what you get. The Swiss system is pretty clear and allows a lot of freedom, but if you don't pay attention you can end up paying more than needed (low taxes probably compensate for this).
In terms of most progressive I guess it would go like this
UK -> French -> Swiss
In terms of sick paying less of a share of cost probably like this
UK -> Swiss -> French
Overall I think I preferred the Swiss system, they pay quite a lot for their health. That said in their system they are actively choosing to do that more than the others, so I guess that is fair.
As for the US system there seems to be some combination of all of these above at varying stages of life. The main issue I saw with it was that it is mainly people being insured by their employers via large insurance companies. So it is everyone spending everyone elses money, resulting in those who end up paying directly seeing a huge sticker price that most of the country never see or think about. I could be wrong though.
I've now lived in 3 systems with varying degrees of a social bend and there are pros and cons to them all.
1. The UK System. Everything is free at the point of use and it is all covered via taxes from citizens. It works very well if you are poor or otherwise short on cash as there is not upfront costs associated with going to the doctor. It also works very well if you are in general very unhealthy as the cost of care is not linked to your health choices. Since no one pays for anything there are a lot of people who make multiple trips to a GP for any hint of anything wrong. Or worse there are those who go to Accident and Emergency when not an emergency. Ther worst story of this was an individual going 250+ times in a year.
2. The French system. You pay for your costs here directly and then the government will refund 70% of this to your bank account. The remaining 30% is sometimes covered via an additional insurance so you still get money back. Makes health care significantly cheaper but ensures everyone knows exactly what the costs of their care is. I am not sure the weighting of private hospitals vs public hospitals however. I think in some cases you are required to have a GP referral before going to specialists (not sure yet). An illness here could still technically wipe you out if you don't get the additional insurance but I think it would be unlikely.
3 The Swiss system. The health care seems to be entirely private and you pay for your care directly. Every resident is legally required to get insurance and they choose between many providers. Then if you get ill you choose whatever doctor you like in whatever area you like. Some of the insurance policies might have restrictions on this for a lower price but you don't need to get that. The type of insurance is one with the varying deductible level depending on the risk you have. Again everyone knows directly what their healthcare costs and it structure limits the case where an illness could wipe you out.
So we have 3 systems of varying degrees of 'socialism' they are all pretty good and the standards of them are pretty high. The UK has high waiting time which is not great but we pay less as a % of GDP for the service so I guess you get what you pay for. The French system still has high tax amounts to cover it and it is not clear to me exactly how their taxes correspond to what you get. The Swiss system is pretty clear and allows a lot of freedom, but if you don't pay attention you can end up paying more than needed (low taxes probably compensate for this).
In terms of most progressive I guess it would go like this
UK -> French -> Swiss
In terms of sick paying less of a share of cost probably like this
UK -> Swiss -> French
Overall I think I preferred the Swiss system, they pay quite a lot for their health. That said in their system they are actively choosing to do that more than the others, so I guess that is fair.
As for the US system there seems to be some combination of all of these above at varying stages of life. The main issue I saw with it was that it is mainly people being insured by their employers via large insurance companies. So it is everyone spending everyone elses money, resulting in those who end up paying directly seeing a huge sticker price that most of the country never see or think about. I could be wrong though.
Re: JollyScot's Journey Starts
UK system could use some tinkering like a token payment for each visit (never gonna happen due to 'it hits the poor the most' argument but it could help with people going to emergency with broken fingernails.
https://www.google.com/amp/s/www.bbc.co ... d-38516876
Also, people with self imposed illnesses could be placed at the end of the queue for things like transplants etc. (believe this might actually already be happening in many cases?).
The GP system works quite fine from my experience. What doesn't is specialists - good look seeing for example a neurologist quickly.
However, it's still clearly the best system for anyone not working for whatever reason since no contributions are required, so ERE folks will like it.
https://www.google.com/amp/s/www.bbc.co ... d-38516876
Also, people with self imposed illnesses could be placed at the end of the queue for things like transplants etc. (believe this might actually already be happening in many cases?).
The GP system works quite fine from my experience. What doesn't is specialists - good look seeing for example a neurologist quickly.
However, it's still clearly the best system for anyone not working for whatever reason since no contributions are required, so ERE folks will like it.
Re: JollyScot's Journey Starts
Yeah the NHS has become the closest thing to a religion for the UK now. I like the fact that everyone can get cover and everyone is treated equally. The general life improvement to a society of really not having to worry about it is worth the draw backs I think.
As you say, mentioning any kind of improvement or change just leads to a fury of "but the poor", "privatisation has started" or whatever else.
Now the we are trying to privatise it by stealth. What they are actually doing is even worse though. We have stumbled into the situation where we are taxed so that the government can give the money to a private company to provide the service. I want drivel like that even less than just full privatisation of everything.
If you account for the fact that health costs are really not a worry in the UK then setting yourself up well is actually quite easy even for the lowest paid. Say we were to take one of UKs main cities, Glasgow.
Income
£14,400 - Minimum wage after taxes and working full time
Expenses
£3,600 - Single bedroom in the city center (cheaper outside center (£2,400) but we will go with best area)
£1,200 - Food budget of £100 per month (I lived on less than this in UK)
£1,200 - Phone costs (£60), transport (£500 bus pass, should say zero and get a cheap bike but I'll be generous) and other entertainment (£640)
£6,000 - Total expense
£8,400 - Annual Savings
Within 2 years you'll have the deposit for a simple 2 bed flat in the center (£100,000). Then rent out the spare bedroom and the additional home owner costs get covered. This is for someone working at the minimum wage. If you are a couple you can basically double the numbers and buy a flat within a year. When you actually see those kind of numbers it makes the whole going to university decision look a bit daft too. Within 10 years you could have a fully paid off city center flat at a minimum wage job. 5 years for a couple.
It is only when you start adding in kids and broken up families that we start to see the larger struggles with managing life. I am not sure what to do about that. However for a young person starting out, the UK is a very good place to become wealthy even with no skills or desire to advance beyond the lowest paid jobs. It is just the knowledge of how to do it is somewhat lacking.
Basically just avoid London and the South East of England and the UK is almost easy mode for ERE.
As you say, mentioning any kind of improvement or change just leads to a fury of "but the poor", "privatisation has started" or whatever else.
Now the we are trying to privatise it by stealth. What they are actually doing is even worse though. We have stumbled into the situation where we are taxed so that the government can give the money to a private company to provide the service. I want drivel like that even less than just full privatisation of everything.
If you account for the fact that health costs are really not a worry in the UK then setting yourself up well is actually quite easy even for the lowest paid. Say we were to take one of UKs main cities, Glasgow.
Income
£14,400 - Minimum wage after taxes and working full time
Expenses
£3,600 - Single bedroom in the city center (cheaper outside center (£2,400) but we will go with best area)
£1,200 - Food budget of £100 per month (I lived on less than this in UK)
£1,200 - Phone costs (£60), transport (£500 bus pass, should say zero and get a cheap bike but I'll be generous) and other entertainment (£640)
£6,000 - Total expense
£8,400 - Annual Savings
Within 2 years you'll have the deposit for a simple 2 bed flat in the center (£100,000). Then rent out the spare bedroom and the additional home owner costs get covered. This is for someone working at the minimum wage. If you are a couple you can basically double the numbers and buy a flat within a year. When you actually see those kind of numbers it makes the whole going to university decision look a bit daft too. Within 10 years you could have a fully paid off city center flat at a minimum wage job. 5 years for a couple.
It is only when you start adding in kids and broken up families that we start to see the larger struggles with managing life. I am not sure what to do about that. However for a young person starting out, the UK is a very good place to become wealthy even with no skills or desire to advance beyond the lowest paid jobs. It is just the knowledge of how to do it is somewhat lacking.
Basically just avoid London and the South East of England and the UK is almost easy mode for ERE.
Re: JollyScot's Journey Starts
Yeah Glasgow is so cheap, especially compared with Edinburgh where real estate is twice as expensive but average wage is only higher by less that 10%. Our mortgage, bills and food are £890/m which could be covered with 25h of minimum wage job. And yet, everyone seems broke. Go figure.
Re: JollyScot's Journey Starts
Yeah Edinburgh is a bit more difficult and is closer to the nonsense that happens in London, although no where near as bad.
That said just had a quick check and you can still rent a £300 pm room, bus pass is a bit more expensive, Edinburgh is very walkable though so even less needed than in Glasgow.
Housing purchase is the main issue. Need an extra 50-75k relative to glasgow to do the same thing. Still possible but takes a bit longer. Maybe once the Airbnb bubble pops it will come back down again.
That said just had a quick check and you can still rent a £300 pm room, bus pass is a bit more expensive, Edinburgh is very walkable though so even less needed than in Glasgow.
Housing purchase is the main issue. Need an extra 50-75k relative to glasgow to do the same thing. Still possible but takes a bit longer. Maybe once the Airbnb bubble pops it will come back down again.
Re: JollyScot's Journey Starts
Been continuing to try and secure some additional work for myself. Had two interviews so far and have another five roles that I am looking over.
The interviews were ok, useful even if I don't get the work. With each one I narrow down the things to focus on for any future work. Most people think they ask different questions, they are all pretty similar in reality. I have a couple of topics to spend time brushing up on after the first two interviews.
Within the next month I can hopefully secure something that will take me to the beginning of January. Since most people want longer term work the 3-6 month jobs have less people to choose from for the company. So much so that some of them will offer longer term contracts even though they only need someone for a few months. This works well for me as I actually want short term over long term items.
Still struggling to get myself back into a productive way of using my days. It is getting there but I still have too many distractions. Will try and set up a daily routine in the next couple of weeks. I have found that if I can make it through 2 weeks I am more included to stick with it.
As for living situation, the immigration deadline government needs to stick when deciding to defend itself has now passed. No response...not entirely sure what happens now. Either we automatically win and get a Visa or the appeal Judge has force their hand (probably the second, not built for the individuals favor here). Has been 8 months since we submitted our application to the UK. Again big thanks to civil servants for that. Summer in France has been nice though. As a comparison our French Visa application took 3 weeks.
Still not sure if we will return. A couple of the roles are not based in the UK or with a UK based company. If I win one of those it requires the set up a company in that region. If that happens we will stop the UK plan as the benefits of moving back beyond family ends. Part of me wants to just completely commit to not going back now because of everything, I guess there is still the sunk cost fallacy hanging over me.
As for finances, annoyingly I missed some of the upswing in gold that happened over the last couple weeks. I had a chunk of mining stock in my portfolio but I recently switched for something else. Looking likely to be anywhere from a £30k-£60k swing in the wrong direction. Disappointing but I will need to not play captain hindsight here, what is done is done. Expenses have still been trending down however so that is good.
The interviews were ok, useful even if I don't get the work. With each one I narrow down the things to focus on for any future work. Most people think they ask different questions, they are all pretty similar in reality. I have a couple of topics to spend time brushing up on after the first two interviews.
Within the next month I can hopefully secure something that will take me to the beginning of January. Since most people want longer term work the 3-6 month jobs have less people to choose from for the company. So much so that some of them will offer longer term contracts even though they only need someone for a few months. This works well for me as I actually want short term over long term items.
Still struggling to get myself back into a productive way of using my days. It is getting there but I still have too many distractions. Will try and set up a daily routine in the next couple of weeks. I have found that if I can make it through 2 weeks I am more included to stick with it.
As for living situation, the immigration deadline government needs to stick when deciding to defend itself has now passed. No response...not entirely sure what happens now. Either we automatically win and get a Visa or the appeal Judge has force their hand (probably the second, not built for the individuals favor here). Has been 8 months since we submitted our application to the UK. Again big thanks to civil servants for that. Summer in France has been nice though. As a comparison our French Visa application took 3 weeks.
Still not sure if we will return. A couple of the roles are not based in the UK or with a UK based company. If I win one of those it requires the set up a company in that region. If that happens we will stop the UK plan as the benefits of moving back beyond family ends. Part of me wants to just completely commit to not going back now because of everything, I guess there is still the sunk cost fallacy hanging over me.
As for finances, annoyingly I missed some of the upswing in gold that happened over the last couple weeks. I had a chunk of mining stock in my portfolio but I recently switched for something else. Looking likely to be anywhere from a £30k-£60k swing in the wrong direction. Disappointing but I will need to not play captain hindsight here, what is done is done. Expenses have still been trending down however so that is good.
Re: JollyScot's Journey Starts
Just been confirmed that I have secured some consulting work for the next 4-5 months. The process has taken a full 2 months to complete. This is a short term role for urgent additional help..I guess urgent includes 2 months for bureaucracy. A nice reminder of why I left large company working. The company were really not happy that I had breaks in my CV. The argument of well I am technically retired and can make time to do other things was not really understood.
My wife has also found herself a job also. it is close to where we currently live (3 min walk) and is for about 20 hours a week. She didn't need to get a job but wanted to integrate into France a little better. So will hopefully work out well for her. One bonus of the place is that she gets some free food as part of the deal.
A combination of the two changes means that we will boost our savings by enough to cover costs of the last couple years in France. In addition the pay my wife receives vs her usual monthly share of costs means she will get close to a 50% savings rate. Will be nice for her to see her pot of money start to increase. She is kinda on board with the retirement life, but doesn't quite follow all of the details yet. Hopefully this will be useful for her seeing "how" it works a little more.
She liked the fact that each months work would be able to buy her €40 of income per year for life.
Other than this we are making a start at looking at a longer term accommodation solution here. We have a few options.
1. Stay in the shared accommodation a little longer and combine this with slows travelling around more.
2. Rent a place by ourselves again, should be easier now that we have done one tax return. Increases costs by about
3. Buy a small property in the area and reduce our cost base down. Rent out if we are travelling or use as a home swap
4. Been speaking to parents about whether they would want to contribute to buy a larger property for them to visit and stay at through the year. They were talking about getting a holiday home for themselves at some point. If they like the area then could be a more efficient way for everyone to be better off. We can rent the spare space out when they are not visiting. Most tourists visit in summer they would want it for winter
Other than that it is looking as though the VISA decision is going to be a blessing in disguise as the UK is having and increasingly large and public breakdown.
My wife has also found herself a job also. it is close to where we currently live (3 min walk) and is for about 20 hours a week. She didn't need to get a job but wanted to integrate into France a little better. So will hopefully work out well for her. One bonus of the place is that she gets some free food as part of the deal.
A combination of the two changes means that we will boost our savings by enough to cover costs of the last couple years in France. In addition the pay my wife receives vs her usual monthly share of costs means she will get close to a 50% savings rate. Will be nice for her to see her pot of money start to increase. She is kinda on board with the retirement life, but doesn't quite follow all of the details yet. Hopefully this will be useful for her seeing "how" it works a little more.
She liked the fact that each months work would be able to buy her €40 of income per year for life.
Other than this we are making a start at looking at a longer term accommodation solution here. We have a few options.
1. Stay in the shared accommodation a little longer and combine this with slows travelling around more.
2. Rent a place by ourselves again, should be easier now that we have done one tax return. Increases costs by about
3. Buy a small property in the area and reduce our cost base down. Rent out if we are travelling or use as a home swap
4. Been speaking to parents about whether they would want to contribute to buy a larger property for them to visit and stay at through the year. They were talking about getting a holiday home for themselves at some point. If they like the area then could be a more efficient way for everyone to be better off. We can rent the spare space out when they are not visiting. Most tourists visit in summer they would want it for winter
Other than that it is looking as though the VISA decision is going to be a blessing in disguise as the UK is having and increasingly large and public breakdown.
Re: JollyScot's Journey Starts
First week of work went ok. Picked up what was going on quickly. The proper bulk of work I am here to do will get going next week.
The office is in a rubbish spot, hopefully I can sort out a room rental next week. I am in a hotel just now. I don't like the costs of doing this though.
Quite a few of the staff asked what it is like being a consultant. How they could be a consultant. It is so good being a consultant, you get paid so much. I am contractually bound not to talk any staff into leaving the company so my answers had to be somewhat diplomatic.
For most people consulting is not the slam dunk they would assume. For an Early Retirement type it works a lot better. I'll run over the numbers to show broadly how it works out well. Dive in if you are a numbers person.
Other than that not much new to report.
So the contractor calculation. If we take a standard person who spends most of what they earn and have average company expenses over the year. I'll start with £150,000 and show what you may keep. This is for someone who pays themselves a salary broadly equal to what a permanent equivalent would get. This is not to far off the numbers for my career.
£150,000 pay
£135,000 Vat 20% of earned pay
£112,500 25% of the year where you would not be in work (average)
£84,375 25% overhead for costs (travel, accommodation, insurances. accounting, training)
£90,000 VAT rebate, 20% of overhead costs (will be less but easier to do this way)
£34,291 Salary payment £50,000
£27,776 Corporation Tax @ 19%
£10,000 dividend payment £17,776 and leave £10,000 in company
Taxes paid
VAT = £16,875.00
Income tax = £7,500.00
National Insurance = £10,672.94 (includes employer)
Corporate Tax = £6,515.33
Dividend Tax = £5,777.16
Total = £47,340.44
Net Income = £49,534.56
Compared to the full time equivalent £50,000
Taxes Paid
Income Tax = £7,500
National Insurance = £4,964.16
Total = £12,464.16
Net income = £37,535.84
Contractor premium 32%
You could argue the full time employee tax total should include the employer national insurance too since in reality they pay it. However since normal people don't see it that way I have excluded it
Now let's do the same from an Early Retiree perspective, from someone who understands the tax codes and how to manage what they are doing.
£135,000 Vat 20% of earned pay
£112,500 25% of the year where you would not be in work (average)
£101,250 10% overhead for costs (travel, accommodation, insurances. accounting, training)
£103,500 VAT rebate, 20% of overhead costs (will be less but easier to do this way)
£94,868 Salary payment £8,632 (No NI on this amount)
£76,843 Corporation Tax @ 19%
£35,475 dividend payment £41,368
£26,843 Salary payment £8,632 in the following year
£10,000 Dividend payment £16,843 in the following year
Taxes Paid
VAT = £20,250
Corporate Tax = £18,024.92
Dividend Tax = £4,365.83
Total = £42,640.75
Total Pay = £71,109.25
Contractor premium 89%
Now obviously these are huge differences. So being a consultant is all dependent on how you actually manage your business. I know a lot of people who are consultants and are not that far ahead of normal employees. They need to pay themselves a lot to cover their living costs. Also they stay in expensive hotels and travel everywhere to work.
The second method although you only pay a little less in taxes the management of payments means you end up keeping what you save on costs.
A lot of people will complain that I am not paying my "fair share", in general those are the ones who don't understand how taxes work or how much everyone actually pays. That is why we have national insurance and so many other taxes to hide the real amount I guess. Most people in UK pay about 50% on every new £1 they earn. The higher tax band this moves up towards 60%. If you include VAT, Fuel taxes, Council taxes. Probably closer to 70% (for the high earning professional at least)...Yay socialism. Those who earn from capital however do pretty well in the UK.
The office is in a rubbish spot, hopefully I can sort out a room rental next week. I am in a hotel just now. I don't like the costs of doing this though.
Quite a few of the staff asked what it is like being a consultant. How they could be a consultant. It is so good being a consultant, you get paid so much. I am contractually bound not to talk any staff into leaving the company so my answers had to be somewhat diplomatic.
For most people consulting is not the slam dunk they would assume. For an Early Retirement type it works a lot better. I'll run over the numbers to show broadly how it works out well. Dive in if you are a numbers person.
Other than that not much new to report.
So the contractor calculation. If we take a standard person who spends most of what they earn and have average company expenses over the year. I'll start with £150,000 and show what you may keep. This is for someone who pays themselves a salary broadly equal to what a permanent equivalent would get. This is not to far off the numbers for my career.
£150,000 pay
£135,000 Vat 20% of earned pay
£112,500 25% of the year where you would not be in work (average)
£84,375 25% overhead for costs (travel, accommodation, insurances. accounting, training)
£90,000 VAT rebate, 20% of overhead costs (will be less but easier to do this way)
£34,291 Salary payment £50,000
£27,776 Corporation Tax @ 19%
£10,000 dividend payment £17,776 and leave £10,000 in company
Taxes paid
VAT = £16,875.00
Income tax = £7,500.00
National Insurance = £10,672.94 (includes employer)
Corporate Tax = £6,515.33
Dividend Tax = £5,777.16
Total = £47,340.44
Net Income = £49,534.56
Compared to the full time equivalent £50,000
Taxes Paid
Income Tax = £7,500
National Insurance = £4,964.16
Total = £12,464.16
Net income = £37,535.84
Contractor premium 32%
You could argue the full time employee tax total should include the employer national insurance too since in reality they pay it. However since normal people don't see it that way I have excluded it
Now let's do the same from an Early Retiree perspective, from someone who understands the tax codes and how to manage what they are doing.
£135,000 Vat 20% of earned pay
£112,500 25% of the year where you would not be in work (average)
£101,250 10% overhead for costs (travel, accommodation, insurances. accounting, training)
£103,500 VAT rebate, 20% of overhead costs (will be less but easier to do this way)
£94,868 Salary payment £8,632 (No NI on this amount)
£76,843 Corporation Tax @ 19%
£35,475 dividend payment £41,368
£26,843 Salary payment £8,632 in the following year
£10,000 Dividend payment £16,843 in the following year
Taxes Paid
VAT = £20,250
Corporate Tax = £18,024.92
Dividend Tax = £4,365.83
Total = £42,640.75
Total Pay = £71,109.25
Contractor premium 89%
Now obviously these are huge differences. So being a consultant is all dependent on how you actually manage your business. I know a lot of people who are consultants and are not that far ahead of normal employees. They need to pay themselves a lot to cover their living costs. Also they stay in expensive hotels and travel everywhere to work.
The second method although you only pay a little less in taxes the management of payments means you end up keeping what you save on costs.
A lot of people will complain that I am not paying my "fair share", in general those are the ones who don't understand how taxes work or how much everyone actually pays. That is why we have national insurance and so many other taxes to hide the real amount I guess. Most people in UK pay about 50% on every new £1 they earn. The higher tax band this moves up towards 60%. If you include VAT, Fuel taxes, Council taxes. Probably closer to 70% (for the high earning professional at least)...Yay socialism. Those who earn from capital however do pretty well in the UK.
-
ItsALongStory
- Posts: 40
- Joined: Sun Jan 13, 2019 9:50 am
Re: JollyScot's Journey Starts
Just read through basically all of your journal, very fascinating to see the evolution throughout the past 4 years. I am based in the US currently with plans to move to Western Europe in the next 3 years. France seems like a decent option despite what I had read about taxes. We are currently leaning more towards Portugal/Spain/Italy but don't speak any of the local languages (we do speak French) which would make integration a bit of a challenge.
Re: JollyScot's Journey Starts
Yeah it has been a 4 years that I didn't quite see coming and the plans move around all over the place. The underlying chaotic path is still working its way forward though. We are still a bit in limbo, but the next round of potential plans are getting made.
Although the uncertainly gets frustrating and it is stopping some things we may consider without it. That said I am not the same person I was when I pulled the retirement trigger. Or I am a more extreme version of what I was then...Not sure.
As for your choices I can't say much for Italy.
Portugal lets you buy a property as a path to permanent residency and a passport. So if you are asset rich and retired and want a way over you could look there.
Spain I know some of the details but not enough to explain anything. I know that the Canary Islands have a special tax zone that is lower. The aim is to attract businesses to the islands I think. So if you wanted to open a small business in Spain the Canaries might work.
Now France, you are right taxes are a nightmare. There are still some things we don't understand. I am a special case relatively speaking so it is hard to get a "right" answer from people. I think if you have a normal job they are less awkward.
The tax offices here do have staff who really try and help people fill in all the forms so you can get through it. Depending on where you choose to locate yourself there are some very cheap areas of France to live.
The French would argue they get sufficiently good services for what they pay. Maybe, the health service is very good. Although I liked the Swiss system more, I don't think it was necessarily better. Just different. That is only one part of public services though. Not much of an idea about the others and their value.
One thing I would say is that French bureaucracy is mental. They have so much paperwork for everything. They all collect massive binders of their paperwork that they carry about with themselves their whole life. If you turn up with the right things though, works fine.
With respect to integration, there are pockets of Brits dotted around most countries. If you can find one of those bubbles it make make settling in a little easier (assuming we are not all booted out because of Brexit of course). Otherwise yeah I agree the language is a tough one.
Although the uncertainly gets frustrating and it is stopping some things we may consider without it. That said I am not the same person I was when I pulled the retirement trigger. Or I am a more extreme version of what I was then...Not sure.
As for your choices I can't say much for Italy.
Portugal lets you buy a property as a path to permanent residency and a passport. So if you are asset rich and retired and want a way over you could look there.
Spain I know some of the details but not enough to explain anything. I know that the Canary Islands have a special tax zone that is lower. The aim is to attract businesses to the islands I think. So if you wanted to open a small business in Spain the Canaries might work.
Now France, you are right taxes are a nightmare. There are still some things we don't understand. I am a special case relatively speaking so it is hard to get a "right" answer from people. I think if you have a normal job they are less awkward.
The tax offices here do have staff who really try and help people fill in all the forms so you can get through it. Depending on where you choose to locate yourself there are some very cheap areas of France to live.
The French would argue they get sufficiently good services for what they pay. Maybe, the health service is very good. Although I liked the Swiss system more, I don't think it was necessarily better. Just different. That is only one part of public services though. Not much of an idea about the others and their value.
One thing I would say is that French bureaucracy is mental. They have so much paperwork for everything. They all collect massive binders of their paperwork that they carry about with themselves their whole life. If you turn up with the right things though, works fine.
With respect to integration, there are pockets of Brits dotted around most countries. If you can find one of those bubbles it make make settling in a little easier (assuming we are not all booted out because of Brexit of course). Otherwise yeah I agree the language is a tough one.
-
ItsALongStory
- Posts: 40
- Joined: Sun Jan 13, 2019 9:50 am
Re: JollyScot's Journey Starts
Thanks for the elaborate response. Seems like I forgot to mention that I am an EU citizen so it should be very easy to get into any of the 3-4 countries we are considering. Portugal also has the option for the 10 year tax free visa, which we are considering once I pull the plug and we live off of my wife's pension.
Re: JollyScot's Journey Starts
Ah happy days then, both Spain or France are nice and I have enjoy visit and being in them both. Took a scan of the Portugal net income VISA. It is pretty interesting I may need to add this to my bucket of world wide systems I can work with.
Re: JollyScot's Journey Starts
So after a big day in the markets (for me) and taking of profits here and there my net worth went up to £550k. If we add on the value of this contract I may by April next year manage to push my way over the £600k mark. Considering my assets are not entirely in £ this target could swing about all over the place come the Brexit answer. Still a nice milestone, even with a lot of the cash stuck in my company.
On worse news it looks like as a sufficient resource (financial independent) EU free movement case. I may be booted out if France post Brexit, not 100% clear yet. So yay for another potential kick in the teeth from UK. I really can't imagine how bad it is for poor people who end up on the wrong side of them.
With that said plans are afoot for me to get a permanent job again. Not really for the money, but I will use it to just to reset my wife and I's position in a new region away from the trap we have seemingly stumbled into. So it looks as though Europe may not be my final retirement destination...Or at least not yet anyway. (Come on Scottish independence).
Still onwards and upwards. I've had my rants just need to make the most of the hand I've been dealt. My wfie is taking everything very well considering the way she has been treated over the last year. I guess my laid back nature is finally rubbing off on her.
I've realised that with respect to brexit, I don't really care if UK leaves or not. My issues are not really as a result of Brexit, its as a result of current government policies. Since it looks like the country are still doubling down on said government then its best to move on I think. If after everything it is what you really want then knock yourselves out and good luck.
On worse news it looks like as a sufficient resource (financial independent) EU free movement case. I may be booted out if France post Brexit, not 100% clear yet. So yay for another potential kick in the teeth from UK. I really can't imagine how bad it is for poor people who end up on the wrong side of them.
With that said plans are afoot for me to get a permanent job again. Not really for the money, but I will use it to just to reset my wife and I's position in a new region away from the trap we have seemingly stumbled into. So it looks as though Europe may not be my final retirement destination...Or at least not yet anyway. (Come on Scottish independence).
Still onwards and upwards. I've had my rants just need to make the most of the hand I've been dealt. My wfie is taking everything very well considering the way she has been treated over the last year. I guess my laid back nature is finally rubbing off on her.
I've realised that with respect to brexit, I don't really care if UK leaves or not. My issues are not really as a result of Brexit, its as a result of current government policies. Since it looks like the country are still doubling down on said government then its best to move on I think. If after everything it is what you really want then knock yourselves out and good luck.
Re: JollyScot's Journey Starts
That's my 6th week in the office complete. Arguably they probably don't need me anymore as the core underlying developments are complete and a plan for finishing the project in place. They will probably continue on with the work however as their whole department seems to be behind on everything.
I do now have a hard finish date of end February though. Recently the UK government has introduced a new law to try and force independent consultants into being defined as "employees". As a result the company I am at just now have announced they are just not hiring any independent contractors now and any existing ones need to be out by February. They have decided it is easier for them to not worry about dealing with the tax authorities over it. It has in effect stopped the independent consulting market from being viable. The law change has been pushed for the last 15 years or so by the big consultancy companies, so they have now finally got their way and their main expert based competition has been removed from the market.
Had initial chats around relocating, spoke to a recruiter in Singapore and one in Canada. Early days still, but we will see what they come back with. I am leaning more towards Canada as that is a bit more like being in Scotland but on a larger scale. Singapore I'm still not sure about. I think I would have a lot of fun there but a permanent move would be less likely I think. There is a third option of returning to Switzerland, but I am less keen on heading back there. Hopefully my CV is refreshed sufficiently well that obtaining a move is possible. Due to the large savings pot I am pretty willing to accept a lower than usual pay to secure a route out of UK.
I would have preferred to be in my UK flat with my wife above everything else by now. I unfortunately can't choose the government myself and civil servants I have the misfortune of encountering. Thinking through all of the problems or pains points in my life since retirement every single one of them is as a result of the state or a state. Difficult to stomach, but hopefully I can navigate the moving to a less problematic country for my wife and I. Had I known of the potential troubles, I'm not sure I would have left Switzerland, considering it was to retire however at the time it was the correct choice.
In the 4 years since returning I have had:-
20% pay cut because of Brexit (£ fall)
20-25%% pay cut as a result of law change OR my companies business being snuffed out (I want to be retired so I can just opt out, still)
20-30%% pay cut potential of Brexit going bad (£ fall again, looking more likely)
My country refusing entry to my Wife and treating us like criminals every time we come back
The Brexit agreement potentially stripping away my right to stay in France
Been a fairly brutal welcome home. That said I am still significantly luckier than almost all of the rest of the world. So as much as I may like to continue moaning about it, instead have to just get on with working my way through the options and paths to get back to something more normal. Finger crossed that this time next year all of this mess is firmly put behind us.
I do now have a hard finish date of end February though. Recently the UK government has introduced a new law to try and force independent consultants into being defined as "employees". As a result the company I am at just now have announced they are just not hiring any independent contractors now and any existing ones need to be out by February. They have decided it is easier for them to not worry about dealing with the tax authorities over it. It has in effect stopped the independent consulting market from being viable. The law change has been pushed for the last 15 years or so by the big consultancy companies, so they have now finally got their way and their main expert based competition has been removed from the market.
Had initial chats around relocating, spoke to a recruiter in Singapore and one in Canada. Early days still, but we will see what they come back with. I am leaning more towards Canada as that is a bit more like being in Scotland but on a larger scale. Singapore I'm still not sure about. I think I would have a lot of fun there but a permanent move would be less likely I think. There is a third option of returning to Switzerland, but I am less keen on heading back there. Hopefully my CV is refreshed sufficiently well that obtaining a move is possible. Due to the large savings pot I am pretty willing to accept a lower than usual pay to secure a route out of UK.
I would have preferred to be in my UK flat with my wife above everything else by now. I unfortunately can't choose the government myself and civil servants I have the misfortune of encountering. Thinking through all of the problems or pains points in my life since retirement every single one of them is as a result of the state or a state. Difficult to stomach, but hopefully I can navigate the moving to a less problematic country for my wife and I. Had I known of the potential troubles, I'm not sure I would have left Switzerland, considering it was to retire however at the time it was the correct choice.
In the 4 years since returning I have had:-
20% pay cut because of Brexit (£ fall)
20-25%% pay cut as a result of law change OR my companies business being snuffed out (I want to be retired so I can just opt out, still)
20-30%% pay cut potential of Brexit going bad (£ fall again, looking more likely)
My country refusing entry to my Wife and treating us like criminals every time we come back
The Brexit agreement potentially stripping away my right to stay in France
Been a fairly brutal welcome home. That said I am still significantly luckier than almost all of the rest of the world. So as much as I may like to continue moaning about it, instead have to just get on with working my way through the options and paths to get back to something more normal. Finger crossed that this time next year all of this mess is firmly put behind us.
Re: JollyScot's Journey Starts
So this week we were supposed to have our court case against the government. The night before the hearing we received a call saying the government were not going to bother turning up.
Its a weird feeling as on the one hand we now have permission to come back to my farce of a country, which is good news.
On the other hand the government willfully declined our application, made us wait almost a year and then bailed out at the end when they knew they would lose. Now this could have been because of a couple of reasons.
1. Someone made a wrong decision. They just automatically processed all the paperwork to go to court. No one in the last 11 months actually checked if they made a mistake. Day before the lawyer defending read the case and realised it would be a waste of time.
2. Someone purposely refused on an invented technicality. They proceeded through all the steps taking as long as possible. Hoping we would just give up and not bother (we almost did that). When they realised we wouldn't they withdrew the decision. So no court and no extra cases against what they are doing. So they can continue to use this method against others.
First is incompetence that gets defended, second is a sort of vile banana republic process. Considering they were willfully deporting citizens recently I would lean towards the second process unfortunately. Regardless both are a fairly stark showing on how UK is not going to "make a success" of Brexit.
The fact the process is now finished means we can move onto next steps. The plans to relocate elsewhere will probably continue. The interim, well not sure yet.
I will probably never trust a governmental official/civil servant again in my life however. My political outlook is now very much on the line of severely limiting state power and having clear and extremely harsh penalties on those who abuse that power the do obtain. Whether this is via incompetence or otherwise. I have fallen on the wrong side and now read enough cases to know that the state in the UK will happily destroy lives and will do so under the cover of "I'm just doing my job" and generic bureaucracy.
We found a way out, but we were lucky and had an expensive lawyer (not refunded). There will be zero repercussions on anyone in government as a result. As you can see I am still furious. I will probably not post an update for a while until the red mist I have clears and I can maybe see myself being more objective regarding the last year and the muddled stream of potential plans begins to settle down.
I think my FI level of funding will need increased beyond the current number assumed. I will now target a cash value that will allow me to buy my way out of a state going bad. Based on research this is up at the £1,000,000 stage....So half way there.
Its a weird feeling as on the one hand we now have permission to come back to my farce of a country, which is good news.
On the other hand the government willfully declined our application, made us wait almost a year and then bailed out at the end when they knew they would lose. Now this could have been because of a couple of reasons.
1. Someone made a wrong decision. They just automatically processed all the paperwork to go to court. No one in the last 11 months actually checked if they made a mistake. Day before the lawyer defending read the case and realised it would be a waste of time.
2. Someone purposely refused on an invented technicality. They proceeded through all the steps taking as long as possible. Hoping we would just give up and not bother (we almost did that). When they realised we wouldn't they withdrew the decision. So no court and no extra cases against what they are doing. So they can continue to use this method against others.
First is incompetence that gets defended, second is a sort of vile banana republic process. Considering they were willfully deporting citizens recently I would lean towards the second process unfortunately. Regardless both are a fairly stark showing on how UK is not going to "make a success" of Brexit.
The fact the process is now finished means we can move onto next steps. The plans to relocate elsewhere will probably continue. The interim, well not sure yet.
I will probably never trust a governmental official/civil servant again in my life however. My political outlook is now very much on the line of severely limiting state power and having clear and extremely harsh penalties on those who abuse that power the do obtain. Whether this is via incompetence or otherwise. I have fallen on the wrong side and now read enough cases to know that the state in the UK will happily destroy lives and will do so under the cover of "I'm just doing my job" and generic bureaucracy.
We found a way out, but we were lucky and had an expensive lawyer (not refunded). There will be zero repercussions on anyone in government as a result. As you can see I am still furious. I will probably not post an update for a while until the red mist I have clears and I can maybe see myself being more objective regarding the last year and the muddled stream of potential plans begins to settle down.
I think my FI level of funding will need increased beyond the current number assumed. I will now target a cash value that will allow me to buy my way out of a state going bad. Based on research this is up at the £1,000,000 stage....So half way there.
Re: JollyScot's Journey Starts
I am very sorry to hear of your and your spouse's bad experience. I am very pleased for you both that the law (and, incidentally, justice, which is not the same thing) has eventually won.
My experience, both as a former civil servant and as someone who now fights with the civil service, suggests that this is almost certainly cock-up rather than conspiracy. The decision to decline your application was, I suggest, not 'wilful' in the sense of 'personally vicious'. Conspicuously unfair decisions are made every day by low paid, and thus intellectually ill-equipped, civil servants who follow the letter of their instructions; rather than acting with an informed understanding the meaning and purpose of the law they are trying to enforce. This is 'just' what happens when you have someone ill-equipped for the job attempting and failing to overlay a rigid lattice on the chaos and complexity of human existence. Once the decision is made, you are then in a process that goes along on rails to the Tribunal. It is only when you get to an actual lawyer (which, as I understand it with immigration appeals decisions, is, at the very most, a few days before the hearing) that there will be any kind of independent assessment of whether the initial decision is correct.
Please do not think I am acting as an apologist for the systemic inhumanity of an inefficient bureaucracy. What I am doing is saying that I meet very many people whose lives have been made very difficult because of a bureaucratic error or misinterpretation. Many find it hard to accept on an emotional level that it is not personal. But, it is almost never personal.
My experience, both as a former civil servant and as someone who now fights with the civil service, suggests that this is almost certainly cock-up rather than conspiracy. The decision to decline your application was, I suggest, not 'wilful' in the sense of 'personally vicious'. Conspicuously unfair decisions are made every day by low paid, and thus intellectually ill-equipped, civil servants who follow the letter of their instructions; rather than acting with an informed understanding the meaning and purpose of the law they are trying to enforce. This is 'just' what happens when you have someone ill-equipped for the job attempting and failing to overlay a rigid lattice on the chaos and complexity of human existence. Once the decision is made, you are then in a process that goes along on rails to the Tribunal. It is only when you get to an actual lawyer (which, as I understand it with immigration appeals decisions, is, at the very most, a few days before the hearing) that there will be any kind of independent assessment of whether the initial decision is correct.
Please do not think I am acting as an apologist for the systemic inhumanity of an inefficient bureaucracy. What I am doing is saying that I meet very many people whose lives have been made very difficult because of a bureaucratic error or misinterpretation. Many find it hard to accept on an emotional level that it is not personal. But, it is almost never personal.