Ten years or less to reach FI

[TenYearsOrLess]

Hi potential readers,

I am new to joining but I've read the ERE book and been lurking for a while on this and the MMM forums. Now feels like a good time to start a journal.

Currently I am a fully funded PhD student in the UK, approximately halfway through my allocated funding. Prior to this I took out a £10k bank loan to do my Master's degree. The loan is at 9.8% interest! Although I think doing the Master's was worthwhile because it allowed me to get onto my current PhD course, I now realise that I could have got research experience by working as a research assistant and achieved the same goal.

I have been overpaying the loan since repayments started, and currently around 30% of my income goes to debt repayment. I don't have any excess to save, it all gets thrown at the loan. I get paid my funding quarterly and in advance, with my next payment due at the end of March, and my current plan is to pay off the remaining balance of my Master's loan (£3200) as a lump sum. This won't leave me enough to last the remaining 3 months of expenses but I have a 0% credit card which I plan to float my expenses on until I get paid again in June. I also have access to an overdraft for emergencies. So the plan is, get rid of the Master's loan in March (18 months earlier than the loan repayment schedule originally planned), get rid of all other debt in June and then start saving!

In terms of my living situation, I live in a very expensive city but my current rent is good value for the area. I moved here with a small number of possessions however moving into an unfurnished flat has resulted in me filling it up with useless junk. I've bought a range of second hand furniture and brought my entire library with me from home (I estimate around 200 books). My lease expires in 7 months, and I want to move out of this shared flat and into a studio flat on my own. Studio flats in my city are tiny single rooms in which you can reach the kitchen from your bed and the shower is a hole in the wall. So basically I need to rid myself of all the useless stuff I have accumulated before I move, and hopefully make some cash in the process to allow me to accelerate my debt payoff.

My expenses are pretty good except for a few problem areas. Food is a big one. I normally buy lunch every day but since I've realised how close I am to getting debt free I have started bringing a packed lunch with me. Also, I have banned all take-aways and am making myself cook in the evenings. It doesn't come naturally to me but I'm working on it.

Summary of goals for next 6-7 months:
(1) Pay off remaining debt
(2) Sell useless possessions
(3) Find a nice cheap studio flat to move to.
(4) Increase savings rate from 30% to 40%.

Long term, my goal is to achieve financial independence, within ten years or less

[Egg]

Good choice imo on paying off the debt first. What's your subject area?

[TenYearsOrLess]

Biomedical research. It's not been hit as hard with funding as other biology based subjects but it's still difficult for labs to gets to get money. Job security seems an issue with the post-docs. I'm undecided what I want to do after graduation but currently leaning more towards a non-academic job.

[TenYearsOrLess]

To start with the decluttering I've listed two old games consoles on ebay and around 10 fiction books on amazon (for some reason I'm more attached to my non-fiction book collection). I'd forgot how much more effort it takes to get rid of things than it is to buy them.

[TenYearsOrLess]

I've made a lot of progress with my decluttering efforts. I've digitised my entire CD and DVD collection, and the physical discs are listed on amazon. I've also listed at least 30 books that I've already read and know that I will never read again, which has cleared an entire shelf. I'm pricing everything as cheap as possible so I'm selling 3 to 4 items a day. It means I'm spending half of my lunch hour at the post office each day but my room is looking much better and I'm feeling less overwhelmed with the sheer amount of stuff I own. I'm also donating a black bag full of clothes to charity, and my games consoles and games have sold or are due to sell this week on ebay.

In total I'm looking at around £70 net profit from my decluttering efforts so far, which is a bonus because the reason I'm doing this to reduce my possessions rather than to try to make any great amount of money from it.

[fiby41]

Second hand textbook shops are useful to me when decluttering. Textbooks generally have a low depreciation cost. Are such shops available near you?

[TenYearsOrLess]

Second hand textbook shops are useful to me when decluttering. Textbooks generally have a low depreciation cost. Are such shops available near you?

This is a good idea. I have a few textbooks I can sell but I avoid doing so online because postage is so expensive for heavy books. I'm not sure if there are second hand textbook shops here but I'm sure there must be somewhere in the university I can advertise them to undergraduates.

[TenYearsOrLess]

I've now cleared out enough useless junk that my chest of drawers is empty, so its been listed on ebay. I've also decided to list my bedframe and just sleep on my mattress on the floor. Getting rid of furniture will make it easier to move into a furnished studio after my lease expires. Books and DVDs are also selling at a steady rate. I'm definitely on a roll with decluttering now; each day I spot new items that I don't need.

[TenYearsOrLess]

It's payday, so I sent an overpayment of £850 to my loan. I was hoping I could drain the majority of my funds to pay it off but having looked over my YNAB budget for the next three months it's not going to be feasible. Unfortunately, I'll have to wait until June.

I've also started writing a (non-fiction) e-book. I've been looking for a cheap hobby for a while and this seems like a good one since it will hopefully improve my writing and possibly generate some passive income in the future. I tend to get interested in projects for while and then forget about them or lose interest so I'm hoping by admitting it here I will force myself to complete this before I get distracted by other things.

[TenYearsOrLess]

I think I've reached my limit with ebay and amazon sales. Buyers want the items for absolutely nothing and then complain about the item or change their minds about wanting it. It's not worth the hassle for the small amount of money I get after fees and postage are taken out. I'm going to donate the rest my books (and also furniture when I move out of this flat) to charity instead.

[TenYearsOrLess]

Time for an update! I've now paid of the loan for my master's degree (£9k at 9.8%). I chose a 36 month term and finished paying off the balance after 18 months so very pleased. I do still have some debt remaining on a 0% credit card which I used to float some expenses, allowing myself more cash to pay off the loan. I get paid next in June and I should be able to get rid of the majority of the credit card debt.

Next financial goal is to get a £1000 emergency fund together and then start investing. I've been putting a small amount each month into a Vanguard LifeStrategy 100% equity (in a stocks and shares ISA) for the past 6 months, and once the EF is sorted I want to increase my contributions to this fund. I've put a small amount into P2P lending site zopa, just for fun mainly.

[Gilberto de Piento]

Good job getting rid of the student loan!

[steveo73]

It'll be interesting if you can reach FI in 10 years. I also have that goal however I've been working for years. I also have 3 kids so the situation is a little different.

I think 10 years is achievable however if your circumstances change you might find it harder.

Still - keep going along that path. The worst case will still be heaps better if you hadn't taken these steps.

[TenYearsOrLess]

Update time. Things have slowed down since I paid off my private student loan. Not because I have become lax with spending, but because I really overstretched myself by paying off the final £2000 of the loan in a lump sum and all the expenses that I had been putting off finally caught up with me. I still have my credit card debt remaining, but luckily this is on 0%. I'm trying to remind myself that I should be debt free in by December if I just stick to the plan.

My rental lease is coming to an end this month and while the flat that I currently live in is affordable, if I make some sacrifices in terms of space I think I can reduce my rent further. I'm going to see somewhere cheaper today and I'm hoping this could be the place I've been looking for. It will cost money to move initially but I could potentially reduce my outgoings by £200 per month, which is £2400 extra to pay off debt and then save, in the final funded year of my PhD. I need to get some savings ASAP after my credit card debt is repaid since most PhDs here normally take 4 years, but funding is only provided for 3 years.

[TenYearsOrLess]

I can't quite believe it's been so long since my last update. Despite not logging onto this forum, I've still been sticking to the plan of working towards debt freedom and eventual financial independence. I no longer have private student loan debt, credit card debt or an overdraft. I still have my government student loans but as I am in the UK, these are effectively interest free and there are no repayments when earning below a specific salary so there is little benefit to overpaying them. I also have some savings - ~ £1k I have built up in a stocks and shares ISA (tax free wrapper, for those not from the UK) from small monthly contributions, and another £2,400 which is in specific ISA product to be used to purchase a home. It's not much, but it's a start!

I am now in the fourth year of my PhD. I naively thought I would finish the PhD within the 3 year period, or a short time after it, but I am now in the 7th month of my fourth year! I will hopefully submit in the next few weeks, so there is a light at the end of the tunnel. I was also lucky enough for my funding to continue until the end of May so my finances haven't taken too much of hit. I think the period of transition between PhD and job will affect my finances a bit, but I should be able to smooth it over after being paid for a few months. I should be able to save at between 40-50% of my salary initially, and I am aiming to increase this as my salary increases.

My thoughts on financial independence have changed slightly since my last update. I've decided to go into a non-academic career that allows flexible working and working from home, as well as the option to work set up my own business and go freelance. I still want to be free in ten years or less, but I have different ideas now about what I will be free from. I think the freedom to work when and where I want, and the ability to work on what projects I want, is what is going to be important for me in the future.

[wolf]

Thanks for sharing your progress. The last chapter is inspiring. It is always good to know why you want to achieve FI.

How old are you when you plan to start working in a non-academic career?

[TenYearsOrLess]

Thanks for sharing your progress. The last chapter is inspiring. It is always good to know why you want to achieve FI.

How old are you when you plan to start working in a non-academic career?

I'll be 26 when I finish my PhD. Still relatively young but internally I feel like I've aged about ten years in the past 3 and a half years from the stress.

[TenYearsOrLess]

Well I'm back again for another update. I'm going to try to update this journal more regularly in future. There have been a lot of big changes in my life since my last update. Most importantly - I've finished my PhD!!! It was a long, painful and expensive process that took a lot out of me emotionally and financially. Even though I'm not pursuing an academic career, a PhD is required for my chosen profession so I don't regret doing it. So I managed to get a full time job a few days after passing my viva, with a decent starting salary the potential to make a lot of money (or at least a lot from my perspective) in future. The only catch is that I can't live in my chosen low-cost-of-living area immediately - I have to work at the head office for a while which has two negatives - firstly, the office is located in a remote (car-access only) location and secondly, it is in a high-cost-of-living area for rent. So, not only did I have to pay for moving expenses, estate agent expenses and pay a (large) deposit for a flat, I had to also buy a car and live for about three months without any income - and it's still another week until my first payday!

Let's just say my finances are painful to look at right now. I had to use all of my (already meagre) savings and also use my 0% student overdraft to cover the shortfall. I know this is a blip and my finances will only improve from here but it still hurts to look at my net worth and account balances in YNAB. I haven't had a full month of expenses yet but from my initial calculations it looks like I will be able to save around £400-500 per month, although for about 5 months this will go towards debt repayment. When I am able to move to my chosen location I estimate I will be able to save £1000-1200 a month.

I need to make sure I get back on track and don't get into bad habits now that I actually have an income. I will probably post my expenses after my first full month for advice on where I can cut back but if anyone has any tips to get me back into good habits and avoid lifestyle creep, they would be appreciated!

[Jason]

Much respect for PHD perseverance. Congrats.

Hopefully you won't be one of those douchebags that makes everyone call you Dr. Ten years or less to reach FI because if you are, I personally won't be coming back here.

[cat9]

Jason, it could be worse if you were in Germany. You might find Mrs Doctor Engineer Zehn-Jahren, and even when you were having sex with her she'd still not let you use the familar verb form.