My 3 Year £250,000 Target – Operation 2235

Intro

Hope everyone’s doing well. I have had a few busy months lately and have been focusing quite heavily on side hustles and then back to some career development by pursuing some new certifications in my field. I will do a general update discussing some of this as my next post during a Christmas review most likely :).

Operation 2235 – Intro

Back to Operation 2235… I had to give it a name like that to make it sound cool. It should be considered pretty cool on its own though I know but still there it is…

So there I was reviewing my finances a week or so ago and entering some costs as it were – I still track to the penny and record it against categories such as Going out, Gifts, Food etc. I updated my current portfolio total which I do once a month and it got me going yet again to an online compound interest calculator – oh boy have I visited that site a lot over the years. I put in 5 years in months and 5% as the interest (not 8% accounting for 5% real growth with inflation taken away) and I noticed that my current total was £161,000 and with my recently new monthly investment of £1500 (increase from £1160) I would be on track to hit £250,000 in 3 years time when counting the money I have in my Cash is King fund. This would coincide with me still being 35 years old at this point. 2022 – 35 years old (Operation 2235 :D)

Many years ago when I first started getting into FI, I dreamed of getting to £250,000 (saying Quarter of a million sounds so much better…) which I considered Base bare bones FI giving me the £833 monthly figure at 4% SWR, this would pay for all my current bills and basic outgoings as fortunately I am mortgage free. I dreamed of getting to this figure before I was 40 but originally it was going to take me until 50.. this has since fell due to a good dose of luck and increasing my monthly investments with a couple of promotions along the way.

The Plan

In order to hit my target of the quarter of a million. I need a nice sail wind that I won’t be able to control such as the 2% real growth for 3 years with no bears showing their face. Who knows if this will happen what with what’s going on politically and with the long bull run we have had. Life itself will have to go as I plan also when it comes to my job, health and such and I only mention these things as I am very aware that I can only control so much and even if the wind turns against me, I will still consider this plan a success if I manage to pull off the below;

• Invest £54000 over the next 3 years (£1500 a month)
  
  
• Do the above without depriving myself whilst still being able to weather some expected unexpected outgoings

Is it Achievable?

Is this target I have set myself achievable? I would certainly say it is yes. The key thing for me that will determine this is that the £1500 monthly figure itself is realistic given the realities of life and my increasing expenditures lately.

With that in mind when I look at this target I have looked at 3 areas financially that I need to ensure are strong. There are of course many other factors such as ensuring I keep my job, working hard etc but financially my main instruments used in this success are as follows:

Expected Unexpected Outgoings Fund

I have always had a £1000 cash expected unexpected fund that I use to make sure my monthly investment amounts are safer from being meddled with due to any number of issues propping up. I currently fund this in terms of replacing it every year so that should I spend the lot, by the next April I will have a fresh £1000 ready. This is done from normal cash monthly interest, the 2 months of council tax I don’t pay and 2 yearly payments I receive for doing a task for family members. Every year for the last 5 years, something has come up using some or most of this money. Whether it’s a large vets bill or to replace a boiler, fridge etc or fix my car. This has always helped me out so this fund for me is a big first defence of not touching that £1500 monthly investment

Big expenses Fund

The next major pillar to the success of this plan is that when it comes to big expenses such as buying that new iPad, new 4K TV, PS5 or yearly trips to Amsterdam and Liverpool etc. I can pay for these things without it impacting the investing. This fund which has been sourced from side hustles (mostly MB) stands at around £7k and will be there to use for these next 3 years. This is a huge relief for me as it means I can still do the things I want to do without yet again impacting this plan.

Non depriving Discretionary spend 

Now for me, this is probably one of the most critical parts of this plan. One of the most important parts of all this for me is that this is a financial plan and goal which of course impacts so many areas of my life. Despite this however, I don’t want to spend 3 years not doing the things I want to do such as having drinks on a Friday, going out for a meal once a week, buying that game or book when I want them or going out on day trips etc. I am still very very careful with my money and I always look for deals and buying food in bulk as an example but I will not compromise on quality of life when there are things that for me really bring great joy. 

For these reasons, I have set a weekly discretionary spend that for me should be enough. It’s slightly higher than I am used to but not much more. This is in part because I have been spending more money on buying gifts for people and going out in the last few months and I don’t want that to stop.

In Closing

I will provide updates on how I am getting along with this £250,000 challenge from now on every quarter at least. I would love to know your thoughts on this and if you could share any of your financial plans however large or small.

Chris @ TheFIJourney