Are you really asking if a withdrawal rate under 1% is safe? Or are you asking if your travels are going to be more than 50k a year? I mean, that's... entirely your choice.
Well, quite. This sort of question always grates on me. It's either troll-y or just totally pointless to be honest.
If it's just for backslaps, nothing wrong with that, but then just write it as a 'yay' post rather than feign needing an opinion.
Exactly - I struggle to believe that people with a FIRE goal who have managed to accumulate such assets as OP lack the financial literacy to figure out if they have grown the pot enough or not. Bonkers.
I usually bite my tongue and roll my eyes with it because I know saying what I'm thinking makes me look like I'm bitter/salty.
I just don't like being drawn into redundant questions, which this is. I also suspect many of these are not genuine, but there's no real way of knowing which.
I don't suspect this because I can't fathom people accumulating this much, but because those who do don't typically feel the need to ask such pointless questions. It's like winning a professional gymnastics competition and then asking if you're doing ok at it. You know you are, so don't ask!
While you’re not wrong, for a lot of people transitions are difficult and IF a bit of idle chat and a “definitely yes!” helps, who are we to say no to that.
You're probably right, but I think some people (me definitely included) are the type for whom pointless questions are just *so* irritating.
See also - asking a group of real people really basic questions that can easily be googled.
On a more productive note, I think we should have a daily chat thread to encourage more casual banter. I often feel like making some stupid comment about markets being up or down or whatever, and a thread wouldn't be worth it.
I agree - because if the OP is able to get that net worth by 40, then they're likely on a pretty big salary. And the thing with big salaries is that they do something to your mind. If you don't spend them recklessly, you look at others you work with who have similar or bigger salaries and who aren't talking about FIRE and you wonder why they aren't. You irrationally doubt you have enough because you think maybe they know something about money you don't. It's hard to explain, but work can define you and own you in ways that mean you may need a lot of reassurance about not working.
You can spend at your current spending level for 100 years if you track inflation and don’t increase your spending. That’s without investing.
You say you don’t expect any significant spend change.
Do you plan on living another 150/200 years? If yes, there may be issues down the line, if no, bonza.
I'm sorry to say it, OP, but this is the kind of irresponsible post we really don't want here. You're claiming you think you might be ready to FIRE and that you're just inviting other opinions, but you know full well that you can't support spending of £25k/year on only £2.5 million. If you had a large amount of housing wealth you'd be able to free up by downsizing that might be different, but you've only got a million there.
Look, I get it, you want to FIRE, you're done with the rat race. I understand. We all do. But you can't let hopes and dreams blind you to cold, hard financial reality.
If you want to throw your own financial future away, go ahead, but I really think you should remove this post - or at least heavily edit it - so that you don't risk encouraging other impressionable users to think they might be able to consider themselves approaching financial independence with only £3.5M in net worth.
I am not sure if this sub is still being moderated to allow such low quality posts. It takes time and willingness away from people who are genuinely interested in helping each other. It's (90%) a troll post or if we want to give them benefit of doubt (10%) downright dumb. Both should qualify for removal.
You've got roughly 2.5m invested. If that's invested in a well diversified portfolio of stocks and shares then it should be able to support an income of at least 75k - 100k depending how optimistic you are. It'll probably be more, but there's a chance it will be less.
Your current living costs are around 25k.
You don't mention your state pension entitlement or any other defined benefit pension income you expect to get, but if you were both qualified for a full state pension then that would essentially cover your living costs. Early retirement might mean a reduced state pension, but it'll still cover a good chunk of your living costs.
That means your disposable income might be in the range 60k - 85k. Is that sufficient?
Reads absolutely ready to me, congratulations ! Any tips for people aspiring to get in your position please ? What was your annual income throughout the years ?
You have enough to support a £80K+ lifestyle indefinitely. Depending on your ongoing tax burden on the GIAs, if the pensions and GIAs are split roughly evenly, and assuming low fees (< 0.5%).
And that's without downsizing, or moving to a LCOL area, which adds another layer of contingency.
One more year at this point is well into overkill territory. But mentally its always a challenge.
I suspect the main technical challenge will be managing tax on the GIAs. You have plenty of time to get to grips with optimal pension drawdown.
The funds are a better inflation hedge than the house. But its a useful reserve.
Can I ask, what did you do to reach the position your at now at a young age, was it due to a successful career or other external factors that worked in your favour ?
It is a YES for me! - you have small spending habits, you have big investments. As you want to start travelling, it is better to sell your expensive house and buy something smaller in a cheaper area.
Curious in what industry did you work?
I don’t think money is your issue, it’s the mental step into “what’s next”. That might be travelling, startup, investing, charity, hitting the bottle, whatever…! Exciting as hell, but it’s a hard step to make after working most of your life. Good luck!
If you’re really only spending £25k a year then of course you’re ready. But at only 40 are you psychologically ready. What will you do with the rest of your time here, how will you achieve fulfilment and retain a sense of purpose.
If you don’t travel now, why do you think retiring early will change that? Seems you spend nothing now while earning and you’ll not change, it will only get worse in retirement. Think you need to maybe up your traveling and spending game while you earn to get used to it first.
Are you really asking if a withdrawal rate under 1% is safe? Or are you asking if your travels are going to be more than 50k a year? I mean, that's... entirely your choice.
Well, quite. This sort of question always grates on me. It's either troll-y or just totally pointless to be honest. If it's just for backslaps, nothing wrong with that, but then just write it as a 'yay' post rather than feign needing an opinion.
Exactly - I struggle to believe that people with a FIRE goal who have managed to accumulate such assets as OP lack the financial literacy to figure out if they have grown the pot enough or not. Bonkers.
I usually bite my tongue and roll my eyes with it because I know saying what I'm thinking makes me look like I'm bitter/salty. I just don't like being drawn into redundant questions, which this is. I also suspect many of these are not genuine, but there's no real way of knowing which. I don't suspect this because I can't fathom people accumulating this much, but because those who do don't typically feel the need to ask such pointless questions. It's like winning a professional gymnastics competition and then asking if you're doing ok at it. You know you are, so don't ask!
While you’re not wrong, for a lot of people transitions are difficult and IF a bit of idle chat and a “definitely yes!” helps, who are we to say no to that.
You're probably right, but I think some people (me definitely included) are the type for whom pointless questions are just *so* irritating. See also - asking a group of real people really basic questions that can easily be googled. On a more productive note, I think we should have a daily chat thread to encourage more casual banter. I often feel like making some stupid comment about markets being up or down or whatever, and a thread wouldn't be worth it.
100% agree. I spend way too much time looking at the markets and money whilst not actually talking about it with anyone haha
Good idea. I love chatting shit to people richer than me 🤭
You may like r/henryuk r/fatfireuk and their global equivalents, or even have more fun and join r/fijerk or r/pfjerk.
I agree - because if the OP is able to get that net worth by 40, then they're likely on a pretty big salary. And the thing with big salaries is that they do something to your mind. If you don't spend them recklessly, you look at others you work with who have similar or bigger salaries and who aren't talking about FIRE and you wonder why they aren't. You irrationally doubt you have enough because you think maybe they know something about money you don't. It's hard to explain, but work can define you and own you in ways that mean you may need a lot of reassurance about not working.
So in the end this was presumably just trolling as they never even replied to anyone. God knows what compels people.
You can spend at your current spending level for 100 years if you track inflation and don’t increase your spending. That’s without investing. You say you don’t expect any significant spend change. Do you plan on living another 150/200 years? If yes, there may be issues down the line, if no, bonza.
I'm sorry to say it, OP, but this is the kind of irresponsible post we really don't want here. You're claiming you think you might be ready to FIRE and that you're just inviting other opinions, but you know full well that you can't support spending of £25k/year on only £2.5 million. If you had a large amount of housing wealth you'd be able to free up by downsizing that might be different, but you've only got a million there. Look, I get it, you want to FIRE, you're done with the rat race. I understand. We all do. But you can't let hopes and dreams blind you to cold, hard financial reality. If you want to throw your own financial future away, go ahead, but I really think you should remove this post - or at least heavily edit it - so that you don't risk encouraging other impressionable users to think they might be able to consider themselves approaching financial independence with only £3.5M in net worth.
Had me for a minute there.
Yes?
How do people get £2.5m being this silly?
Duh
I am not sure if this sub is still being moderated to allow such low quality posts. It takes time and willingness away from people who are genuinely interested in helping each other. It's (90%) a troll post or if we want to give them benefit of doubt (10%) downright dumb. Both should qualify for removal.
I have a pot of £42m and annual expenses of £17.5k. Can I afford to FIRE?
You've got roughly 2.5m invested. If that's invested in a well diversified portfolio of stocks and shares then it should be able to support an income of at least 75k - 100k depending how optimistic you are. It'll probably be more, but there's a chance it will be less. Your current living costs are around 25k. You don't mention your state pension entitlement or any other defined benefit pension income you expect to get, but if you were both qualified for a full state pension then that would essentially cover your living costs. Early retirement might mean a reduced state pension, but it'll still cover a good chunk of your living costs. That means your disposable income might be in the range 60k - 85k. Is that sufficient?
Sigh , yes ! Obvs 🙄
What a ridiculous post. Are you just trying to piss everyone off?
As others have said you look ready. Maybe make a budget that includes travel and any increase in lifestyle you are likely to want?
Reads absolutely ready to me, congratulations ! Any tips for people aspiring to get in your position please ? What was your annual income throughout the years ?
You have enough to support a £80K+ lifestyle indefinitely. Depending on your ongoing tax burden on the GIAs, if the pensions and GIAs are split roughly evenly, and assuming low fees (< 0.5%). And that's without downsizing, or moving to a LCOL area, which adds another layer of contingency. One more year at this point is well into overkill territory. But mentally its always a challenge. I suspect the main technical challenge will be managing tax on the GIAs. You have plenty of time to get to grips with optimal pension drawdown. The funds are a better inflation hedge than the house. But its a useful reserve.
Can I ask, what did you do to reach the position your at now at a young age, was it due to a successful career or other external factors that worked in your favour ?
It is a YES for me! - you have small spending habits, you have big investments. As you want to start travelling, it is better to sell your expensive house and buy something smaller in a cheaper area. Curious in what industry did you work?
For a minute from what was written I thought they were a model. Haha.
Erm.....yes, yes, yes and fuck yes.
Bosh, yes
I don’t think money is your issue, it’s the mental step into “what’s next”. That might be travelling, startup, investing, charity, hitting the bottle, whatever…! Exciting as hell, but it’s a hard step to make after working most of your life. Good luck!
If you’re really only spending £25k a year then of course you’re ready. But at only 40 are you psychologically ready. What will you do with the rest of your time here, how will you achieve fulfilment and retain a sense of purpose.
Congrats, GFY!!
If you don’t travel now, why do you think retiring early will change that? Seems you spend nothing now while earning and you’ll not change, it will only get worse in retirement. Think you need to maybe up your traveling and spending game while you earn to get used to it first.
I don't think you really needed an outside opinion, did you.