Retire in Your 30s?

[GeoffF100]

Here is a great article:

https://www.theguardian.com/money/2018/ ... ho-say-yes

[moorfield]

Jordan Hall is 24... He earns £50,000 a year

Dave Hamilton, who is 41... He has paid off his mortgage and, after spending the final seven years of his working life saving £35,000 of his £75,000 salary

Emily, who is 44 and earns £90,000 a year

Clearly it helps if you've had a head start in life, I wonder if anyone on minimum wage has managed it yet ?

[Lootman]

Jordan Hall is 24... He earns £50,000 a year

Dave Hamilton, who is 41... He has paid off his mortgage and, after spending the final seven years of his working life saving £35,000 of his £75,000 salary

Emily, who is 44 and earns £90,000 a year

Clearly it helps if you've had a head start in life, I wonder if anyone on minimum wage has managed it yet ?

Those are hardly unusual middle class professional salaries. Not sure where you get "head start" from? Are you suggesting they did not study or work hard for that but instead were somehow lucky or undeserving?

But yes, retirement is maybe not an option for the dirt poor. Hardly news and the article addresses that, not to mention the usual snide and envious comments you get in any Guardian article when someone's success is mentioned.

The strategy described was not intended for everyone.

[Alaric]

The strategy described was not intended for everyone.

What they do however suggest for everyone that underspending to build a reserve of a few months expenditure is extremely worthwhile. At the very least that avoids the interest trap of pay-day loans or even credit cards at 20% to 30% annual interest.

[moorfield]

Jordan Hall is 24... He earns £50,000 a year

Dave Hamilton, who is 41... He has paid off his mortgage and, after spending the final seven years of his working life saving £35,000 of his £75,000 salary

Emily, who is 44 and earns £90,000 a year

Clearly it helps if you've had a head start in life, I wonder if anyone on minimum wage has managed it yet ?

Those are hardly unusual middle class professional salaries. Not sure where you get "head start" from? Are you suggesting they did not study or work hard for that but instead were somehow lucky or undeserving?

But yes, retirement is maybe not an option for the dirt poor. Hardly news and the article addresses that, not to mention the usual snide and envious comments you get in any Guardian article when someone's success is mentioned.

The strategy described was not intended for everyone.

No, class has nothing to do with it, and I'm not suggesting they are either lucky or undeserving to be in that position (although I do know a few people who are one or t'other). Median UK salary is about £28k and these examples are much more than that early in their careers which was what I was getting at. I'm a little envious of being FIRE actually, although tbh I will always want to be working the grey matter. Moving from permanent to contract would be good enough for me on balance if I can cover annual living costs with 6 months of work.

[JohnB]

A good article. Ozman's $10m pot may be laughable, but has a little more credence in the US without our safety nets. Yes you might be living your life in fear, but at least if the worst happens you can say you couldn't have earned more.

I FIREd at 48 when I really couldn't imagine a scenario when I'd run out of money or state support. Never looked back, there is no work-shaped hole in my life now.

[GeoffF100]

$10 million is crackers: One could drawdown a 100k pa for a century, ignoring investment return and sticking it under a mattress. That’s way more money than most US workers earn, and they doubtless manage to have good fulfilling lives on less. US health insurance isn’t yet that outrageous that a 100k pa budget can’t cover it for a couple.

The only reason to seek 10m is a ridiculous aristocratic status anxiety.

You have to consider inflation here. Nonetheless, 1% withdrawal rate should be very safe indeed. A withdrawal rate of 4% was reasonably safe in the US for people of retirement age, over a long period of time. At current asset prices, the outlook is not nearly as good.

[SalvorHardin]

I managed it at 39 back in 2003. Being single (no dependents) helped greatly as it meant that my costs were relatively low. As did having acquired the savings and investment habit from an early age (bought my first share shortly after turning 18). The trigger was Actuarial salaries rocketing in the late 1990s, giving me lots of cash to invest, with which I obtained superb investment returns in the early 2000s on small cap. oils (thank you Soco). Without the investment returns I'd still be working.

Controlling your spending is a major piece of the puzzle. As I discovered during my time in the City, a surprising number of people on very high salaries aren't wealthy because all of their income goes on maintaining their lifestyle. Turn off their income for a couple of months and they'd be defaulting on all of their (many) loans. It's not just the big things; those morning and lunchtime coffees, cakes and sandwiches from the likes of Pret A Manger sure add up (if you work out how much you're spending on these an annual basis you might be shocked).

What really counts is your net income (after all work-related costs, in particular commuting), not your gross salary. Getting out of the PAYE tax system (contracting, self-employment) is a huge benefit because of the flexibility you have in legally avoiding tax (employees cannot do this).

No surprise to see that the Guardian's comments section for this article is filled with bitterness, envy and general ignorance about personal finance. People won't be able to retire very early if they're on minimum wage, or even average salary, or if they spend most of their income on conspicuous consumption.

[GoSeigen]

Made redundant more than 10yrs ago at 37 with two kids, one more added soon after. Wife and I haven't worked since then: I was never paid more than £45k pa in any job, wife never more than 30k. Practically no net financial input from parents since graduating, everything came from our own work and investment.

Like SalvorHardin, we are pretty careful with expenses, one aged car for example, but don't skimp on kids' activities e.g. daughters go horse riding, all three do as many sports and other activities as they like. We on average take one holiday a year abroad but twice have taken the kids around the world for a year.

It can be done on modest salaries but maybe not everyone's cup of tea.


GS

[Quint]

Made redundant more than 10yrs ago at 37 with two kids, one more added soon after. Wife and I haven't worked since then: I was never paid more than £45k pa in any job, wife never more than 30k. Practically no net financial input from parents since graduating, everything came from our own work and investment.

Like SalvorHardin, we are pretty careful with expenses, one aged car for example, but don't skimp on kids' activities e.g. daughters go horse riding, all three do as many sports and other activities as they like. We on average take one holiday a year abroad but twice have taken the kids around the world for a year.

It can be done on modest salaries but maybe not everyone's cup of tea.


GS

Two words. Well done.

There is a lot of b*llocks written by people jumping on the fire bandwagon in the form of articles and blogs. A lot of it is by people who just want to draw attention to themselves to massage their ego.

I prefer to hear from the horse's mouth on forums such as this from people who are walking the walk, getting on with it and mostly flying under the radar

[JohnB]

My 2 two tips

1) Avoid lifestyle inflation. Once you find a way of life that is comfortable and fits your salary, don't change it when you get a pay rise, just bank the excess. Its much to easy to get into changing your car and fine dining.

2) Once you have a marketable skill, go contracting. Much more money, much more control on avoiding tax, A good 5 year run should be achievable before your skills start to date, and give you a really hefty SIPP.

[TheRIT]

I've just retired at age 46 so a little later than my 30's. My defining moment was sitting in a shared flat at age 35 having just returned from a business trip that showed me what was going to happen to my career sometime in the future. To plan against that happening (as it happens it didn't happen as fast as I thought it might) I came up with 2 choices - retrain or pursue early retirement (to my knowledge the term FIRE didn't even exist back when I started in 2007. I went with early retirement.

I chose to do it as a PAYE but in a corporate where hard work translating into strong results meant you could earn quite well. I could cry when I look back at the tax I paid but hey ho. Over an 11 year period I grew my earnings strongly and as JohnB says didn't let lifestyle inflation inflation get in the way which wasn't arduous as when started focusing on quality of life (vs consumerism or standard of living) we found costs didn't really move. On the investing front it was then buy a diversified portfolio of trackers at the lowest cost with the lowest tax situation possible.

In retirement our spending rate should be able to stay at about 2.5% of wealth at retirement with an inflation adjustment each year so it would have to get pretty bad out there for us to be in trouble.

I'm one of the bloggers out there so might be, as Quint suggests, talking b*llocks. I found my blog, particularly in the early days, really helped keep me accountable and provided lots of viewpoints to what I was doing so I found it beneficial. I wasn't fortunate enough to have friends/family with any interest in it so the blog was the vehicle I used to share and discuss.

[Shelford]

And an excellent blog it is too. Inspiring and useful (about to hand my notice in at 53!)

Shelford

[BT63]

Retiring before 40 is do-able.
Start investing early and let compounding do its thing.

[Quint]

I've just retired at age 46 so a little later than my 30's. My defining moment was sitting in a shared flat at age 35 having just returned from a business trip that showed me what was going to happen to my career sometime in the future. To plan against that happening (as it happens it didn't happen as fast as I thought it might) I came up with 2 choices - retrain or pursue early retirement (to my knowledge the term FIRE didn't even exist back when I started in 2007. I went with early retirement.

I chose to do it as a PAYE but in a corporate where hard work translating into strong results meant you could earn quite well. I could cry when I look back at the tax I paid but hey ho. Over an 11 year period I grew my earnings strongly and as JohnB says didn't let lifestyle inflation inflation get in the way which wasn't arduous as when started focusing on quality of life (vs consumerism or standard of living) we found costs didn't really move. On the investing front it was then buy a diversified portfolio of trackers at the lowest cost with the lowest tax situation possible.

In retirement our spending rate should be able to stay at about 2.5% of wealth at retirement with an inflation adjustment each year so it would have to get pretty bad out there for us to be in trouble.

I'm one of the bloggers out there so might be, as Quint suggests, talking b*llocks. I found my blog, particularly in the early days, really helped keep me accountable and provided lots of viewpoints to what I was doing so I found it beneficial. I wasn't fortunate enough to have friends/family with any interest in it so the blog was the vehicle I used to share and discuss.

I said some talk b*llocks, not all. In fact I think I have read most of your blogs. To be honest there are a few decent blogs that have been going for a while but a lot of people now just want to get on the bandwagon. What is the worst are some of the articles being published by publications that should have higher standards.

However, I could be talking b*llocks.

[runnygum]

100% achievable IMO.

With information and skills free on the internet your income is a choice.

Unemployed? No money for a phone and/or internet? No excuse GO TO THE LIBRARY!

Perseverance is the main determinant. Not intelligence.

https://further.net/perseverance/

[Dod101]

Makes me wonder why people bother to work if they are 'retiring' in their 30's. It is also no wonder that we as a country are falling behind if this sort of talent s being lost to the workplace at such an early age. I appreciate that those who are retiring at then are most likely collecting nothing from the State so at least, even if not contributing, they are not a drag. But what if everyone did that? As I have said before, I, at an advanced age, still miss the commercial drive in life, even although it is now nearly 25 years since I last worked for a salary.

I do though agree with much that has been written about the nonsense of 'keeping up with the Jones's' or simply allowing your lifestyle to rise to match your income. On the other hand, life is for living, but I imagine that that is what early retirees think as well.

Dod

[SalvorHardin]

Makes me wonder why people bother to work if they are 'retiring' in their 30's. It is also no wonder that we as a country are falling behind if this sort of talent s being lost to the workplace at such an early age. I appreciate that those who are retiring at then are most likely collecting nothing from the State so at least, even if not contributing, they are not a drag. But what if everyone did that? As I have said before, I, at an advanced age, still miss the commercial drive in life, even although it is now nearly 25 years since I last worked for a salary.

I do though agree with much that has been written about the nonsense of 'keeping up with the Jones's' or simply allowing your lifestyle to rise to match your income. On the other hand, life is for living, but I imagine that that is what early retirees think as well.

The vast majority of people cannot retire in their 30s because they don't make enough to save a sufficient amount to live on. Of those that do, most will have become so used to spending most or all of their income that they can't make the adjustment. The desire to engage in conspicuous consumption (as Thorstein Veblen called it) to impress your peers is amazingly strong in modern society (and I suspect is being made much worse by Facebook).

https://en.wikipedia.org/wiki/Conspicuous_consumption

In my case retiring in my 30s came about more by accident. After finding myself on the dole in 1997 my net income from work then rocketed after I went into the Actuarial career dead-end of pension misselling. I already had a strong savings habit so I saved most of the pay rises and then made some excellent returns in the stockmarket (mostly on small oil companies) after the dotcom crash (which I avoided, unlike many of my colleagues).

Once the pension misselling review was over our salaries would collapse (I'd have had to take a pay cut of at least 60% to continue working in 2003-04). So I decided to quit work and see how I managed. So far so good

I don't miss work in the slightest. The commute, the office politics, the unpaid overtime - no thanks

[Stonge]

Currently I am on course to punch out age 41 having met my needs for life. The nation will be just fine without me.

After Brexit you won't be able to retire at 41, maybe 61 if you're lucky. Unless you leave the UK as seems to be the favoured option now.

[baldchap]

Currently I am on course to punch out age 41 having met my needs for life. The nation will be just fine without me.

After Brexit you won't be able to retire at 41, maybe 61 if you're lucky. Unless you leave the UK as seems to be the favoured option now.

I see the Christmas drinking started early.