Well… the content of my last post was all about life returning to some form of a new normal. How quickly things change. Since writing that last post we have been put into a national lockdown and as I am writing this, the area I live in has been announced as being a Tier 3 area until at least the 16th December when the current lockdown ends. Let’s be honest, I knew this was probably going to happen but still, it’s certainly a big change. I must say up front though that I think it’s all been necessary. As I work for the NHS I have seen the impact directly with the increasing numbers and how it threatens all normal functions we take for granted from still being operational, it’s not just about COVID deaths in isolation. No one wants the NHS to have a closed sign up on the front door.
I really hope everyone is keeping safe and is doing as best as they can. Now follows a quick update on a couple of things FI Journey related.
£200,000 Portfolio Milestone Reached!!!!!
I think five exclamation marks should be enough… I have reached a milestone I never thought possible prior to getting into the FIRE lark 6 years ago. It really does feel amazing to have hit that amount and even more amazing at this particular moment given that 6 months ago with the COVID crash, I was close to £150k. I am not sure if I will be dipping back well below £200k with any soon to come decline but whilst it lasts, I can and will enjoy the feeling of being above £200k :D.
I think it feels so good because it helps me feel so much closer to my base £250,000 Project 2235 goal which is now 1 year in with 2 years to go this month. I really can taste that quarter of a million portfolio target and it tastes dam fine the closer I get…You might wonder if I celebrated hitting this target and well yes I did do. I certainly didn’t splurge and buy a new car, book a trip to New York (not that you can right now) or buy a Rolex watch. No, I simply had a lovely Indian meal at home and got completely drunk on Hop House 13 beer with my partner. We even threw in a tub of magnum white chocolate ice cream no less… go us!
Don’t get me wrong though, life goes on and you get a bit used to where you are quite quickly but despite that, it really has left a feeling of being all so close to base FI, closer than I have ever felt before. Let’s see how long that feeling lasts. Onward to £250,000 I now March!
Financial Update – Nov 2020
The below figures are taken from 27th November.
- Monthly investment (Sep – Nov) – £1500 each month
- Savings rate (April – Aug)– 55% each month
- Investment portfolio – £192,525.21
- Cash is king fund – £10,000
- Emergency fund – £1046.41
- Big expenses / holiday fund – £2971.93
Total Liquid Funds = £206,543.55
Post Project 2235 thoughts
Because of my £200,000 milestone achievement and my reaching the end of year 1 of 3 of Project 2235. I have been reflecting on what comes next after I achieve that base FI of £250,000. I have known for a long time now that there’s no chance I would retire and live on £833 a month (no mortgage) at 35 years old. This is a wonderful position to be in and would likely cover my most essential basic needs perhaps indefinitely however I just couldn’t do it for the following reasons;
- It’s far too risky for me to rely solely on the 4% rule working out for hopefully 50+ years with no wiggle room to lower expenses if needed
- Even if the 4% rule held solidly, this simply doesn’t give me enough money to get the most out of life for me personally. I want more money to spend on big purchases, holidays and other such expenses
- I need extra layers of protection when I will be in the drawdown phase to sleep at night soundly. I want a large buffer so I can take less money when things aren’t going so well. I want a back up plan where state and private pensions will still cover my basic needs in old age at the traditional retirement age. This would give me at minimum a base FI in itself although I will be aiming for higher than this.
- I just feel strange and a bit weird about stopping working at 35, now that it’s getting closer to being possible. I really don’t think I could do this.
So what exactly am I thinking? Well if you take a look at the below. This is what would happen depending on what I invest each month. I currently invest £1500 as of now.
| Post Operation 2235 | £250,000 at Dec 2022 (35 going into 36) | ||
| Investment per month (5% growth) | £0.00 | £250.00 | £500.00 |
| 40 Years Old (4y) | £305,223.84 | £318,532.78 | £331,841.73 |
| 45 Years Old (9y) | £391,711.66 | £425,864.17 | £460,016.68 |
| 50 Years Old (14y) | £502,706.56 | £563,608.84 | £624,511.12 |
| Investment per month (5% growth) | £750.00 | £1000.00 | £1250.00 |
| 40 Years Old (4y) | £345,150.67 | £358,459.62 | £371,768.56 |
| 45 Years Old (9y) | £494,169.19 | £528,321.70 | £562,474.22 |
| 50 Years Old (14y) | £685,413.41 | £746,315.69 | £807,217.97 |
| Investment per month (5% growth) | £1500.00 | £1750.00 | £2000.00 |
| 40 Years Old (4y) | £385,077.51 | £398,386.45 | £411,695.40 |
| 45 Years Old (9y) | £596,626.73 | £630,779.24 | £664,931.75 |
| 50 Years Old (14y) | £868,120.25 | £929,022.53 | £989,924.81 |
My provisional thinking right now as I really enjoy my job is that if I were to work until I was 50 and that from during 36 until 50 I would invest say £500 a month on average, I would achieve the following:
- Secure higher than Base FI in State and NHS Pension which is a safety net and pretty safe in itself, I would get this at traditional retirement age. This would be achieved as I would get enough years of national insurance contributions to qualify for the full state pension and my NHS pension would be decent by that time in itself.
- I would still be investing £500 a month on average which would hopefully allow me to achieve £600,000+ which would give me £24,000 a year (£2,000 a month ISA Tax Free income) at 50
- I would have an extra £12,000 a year from no longer investing £1500 a month to spend on doing my house up, going on holidays, enjoying life to the full on my own terms from 36 to 50
- I would however not just spend the £12k for the sake of it but it would be available and if I ended up spending only 5k or 8k then I would invest the difference no doubt
This is just some of what I have been thinking about and of course I am not holding strong to any of these plans but it’s certainly nice to think a few strategies through. I’d love to know what you all think and also how you have all been getting on lately. How are you coping?
TFJ -TheFIJourney