Hi, I’m Kev, also known as The thrifty fellow!
I have always been good at saving. I’m sure I inherited that from my Dad, who had always been very careful with his money. He was born during the second world war and came from a working class background. His father suffered from ill health when he was younger, and this put pressure on the family, so I think times were tough during those years. He started as an apprentice engineer, and similar to many people of that generation, went on to work for the same company for forty years before retiring early at the age of 56.
He achieved this by contributing to the company pension during his working life, saving regularly every month and also having a side income that allowed him to save more. He managed all this while still having three children, larger homes, foreign holidays and all the usual expenses that regular people have – quite an achievement I think!
He has gone on to enjoy a long, enjoyable and very comfortable retirement. He often says that he got a lot more out of his company pension than he ever paid in over the years – something that I will cover more in due course. I think over his working years he also benefitted greatly from the rise of the stock market and the growth in house prices.
As for me, my path has been quite different. I was never the corporate type and enjoyed my freedom too much. I got the travelling bug quite early after going on a group trip to Kenya and Tanzania in my late teens. I then spent most of my 20’s and 30’s travelling and living in South-East Asia. I used to work for six months or a year and then go off travelling for extended periods. Rinse and repeat. (Isn’t this perilously close to the definition of madness!)
The first book I read that really made me start to think differently about money and how I spent it was Rich Dad, Poor Dad by Robert Kiyosaki. Now into my 40’s, I have made changes to get my financial life back in order and onto the path for early retirement.
Although I have done a great deal of traveling, I would still like to continue to do so in my early retirement. I realise however, that I must make some sacrifices now to enable me to enjoy the benefits later. I don’t have an issue with this as I have enjoyed myself plenty already! As with all things, the sooner you start the easier it is – I left it a little bit late!
I would describe my way as being one of ‘balanced frugalism’. I’ve often been called stingy, tight etc!, but I’m not that way unnecessarily. My years spent travelling taught me that it is important to spend money when it’s necessary, as we often regret not doing something previously, later on in our lives.
So what is FIRE?
‘Financial Independence Retire Early‘ (Fire) is a movement that advocates striving for financial independence and earlier retirement than the default retirement age. Achieving financial independence means that you have enough income to support yourself without needing to work. It does not mean that you cannot continue to work, but instead means that it will be your choice if you continue to do so. You achieve this by accumulating assets that will provide you with enough passive income to support you for the rest of your life. By starting early many people have achieved financial independence in their 30’s and 40’s or earlier.
There are two simple steps to the process:
- Saving more money. This is achieved by reducing your expenditure and any debts and also increasing your income.
- Learning to invest the money you save into assets that will provide you with capital growth and passive income once you reach retirement.
I currently save on average 50% of my post tax income each month and I work in a regular job, but the ideal goal is to save up to 75% of income. This allows you to reach FIRE much sooner in under 10 years based upon the 4% rule. This rule states that once your accumulated assets amount to 25 times your average annual living expenses, you will be able to safely withdraw income at a rate of 4% annually for the duration of your retirement.
Although I am slightly older than some in this movement, I feel that age should not be a barrier to what you can achieve. Also, that there are many paths to reach the same goal. The important thing is that you start. I have learned that taking action is the most important thing and that procrastination leads nowhere. Take the road that works for you. Be inspired by others but don’t idolise them.
So, follow my journey and hopefully take your first steps towards FIRE! I am U.K based, so this blog will be focused accordingly, but the principles and content will apply equally to anyone – just adapt them to your location.
The thrifty fellow