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Welcome To Matters Of Cash

Welcome to my blog, focused on my journey to Retiring Early, in 2017 I discovered the Financial Independence, Retire Early (FIRE) community and was hooked. I was always brought up thinking we worked until our state pension and that was it, I didn’t know there were any other options! I learned how if you saved hard from an early age, and made smart investment decisions you could accumulate a sizeable pot which you could successfully live off for the end of your days.

In early 2017 I evaluated my position by tracking my Net Worth. Turned out I was in the red,  this was mainly due to my wife and I’s sizeable student loans. Actually realising this number was a game-changer for me, and seeing it grow month on month provides great motivation as well as a strong indication that I’m doing the right things. I provide monthly Net Worth updates to check where I am against my targets as well as keeping myself on track, it acts as a great accountability!

I will talk in more detail about my long-term plan but essentially it revolves around creating a freedom fund which will be a combination of cash, tax-sheltered ISA investments and also a SIPP pension. Early retirement doesn’t happen overnight, I factored in an initial time-period of 23 years, to 2040. Whilst it is possible to get to financial freedom sooner I believe there is a balance to be struck between living well and enjoying today vs financial freedom in the future, I’m not interested in wasting my 20s and 30s just to be rich when I’m older, there is an element of uncertainty as you get older which I believe means this balance is needed.

The plan is for me and my wife to increase our Net Worth each month through SIPP and ISA contributions as well as paying down debts, I’ve assumed static growth of £40,000 per year – the bulk of this is investments in our Stocks and Shares ISAs and employer-matched SIPP contributions, the SIPP contributions are incredibly tax-efficient but less accessible than our ISAs.

I’ve also assumed an annualised return of 4.5% above inflation, the static contributions (which should increase as salaries increase) and above inflation return assumptions ensure that projections are seen in today’s terms.

all-time retirement plan

This will get me a freedom fund of just over £1.5m by age 50, which, assuming a withdrawal rate of a modest 3.5%, would provide an annual income of £52,500. The goal is to engineer this over the years so it is tax-free through ISAs and our SIPPs which will also utilise our personal allowances at the time. This would provide just over £4,000 per month at which point we also aim to be mortgage-free, which is more than enough for us to live the lives we desire.

This is our current position, the projections are based on the value of the fund at the end of the year, this has been updated as of January 2018:

latest retirement plan

I hope you find this blog somewhat useful/insightful, it’s really a place for me to keep track of things and share some of my thoughts. Check through my other articles too!

Cam

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