I was back home to Scotland for the holiday season and a friend found out that I was working on F.I.R.E and was asking a whole lot of questions when we were out for a night having a beer. Like many people in the UK, he had not heard of this new concept, but was intrigued to find out more about it so the conversation and the beer was flowing. What caught his immediate attention was the same as what first caught mine… the absurdity of working a lifetime to retire when you are told to, when you are given the permission to do so, and when you are fecked in mind, body and soul.
“It is such a simple reflection, flipping around how you think about life and brilliant to be honest, I’m good on it but not sure if it’s for me. I like to enjoy my life” he said.
“I also like to enjoy my life” I replied, “…but I just curate my purchases better than I did before”
I told him how I now think about ‘buying my life’ back when I look at many reasonable size purchases and how I calculate the true cost of the purchase by using ‘days of my life’ with the equation being that for every £50 I don’t spend, but save, then it is a day early to my retirement. I work on needing approximately £18,000 a year to live on once I have bought and paid for my house and own a car which I am very close to doing. Again he was very impressed, but stressed that he liked to live in the moment. I was cool with that.
We talked a little more about the idea of F.I.R.E but I didn’t want to disclose too much of my own financial situation although I have been proud of what I have been working on and achieving. We left it at that and moved onto talking about the good old days and how things used to be. We laughed and drank beer and shared many and much more stories and in the end as we parted he said he might text me later about getting more information on this idea of personal finance.
I got a text a week later from him asking a couple of questions;
Hey Iain, a couple of questions. Should I put the max in my company pension as my company will match it? Also, should I take out the company share scheme that gives me deals on the shares in the company and did you say rather than saving I should pay off my debt? Another thing, I sell some stuff on an online store should I keep doing that or is there a better way?
My quick reply was;
Hey mate, I am no financial expert so you should read up on some things which I can send you but to answer your questions quickly;
Yes absolutely; Pension is free money (the company match part) and so put in the max amount that they match and no more. You wont miss it and it comes out of your pay before tax so its top-line dollar.
The shares are discounted and it’s like saving money before you get paid and you also get used to your take home pay, it’s a good way to save, it’s also a great purchase if they are discounted and the shares are doing well. It’s a way of investing for the future, but mind they can go up and down pending how the business is doing but you work there so you know how that is going. Winky eye emoji.
On the personal debt question. Mate, Personal debt is super expensive and you should clear all debt if you can and live without it… apart from a mortgage as that is supporting a purchase of an asset and a mortgage debt is a ‘cheaper’ debt so to speak. Although paying it off as quick as you can will help you to then save for a retirement quicker or give you more money to enjoy life.
As for some savings, if it makes you feel safe, then have some savings for a rainy day, but work like a trojan to clear that other debt and prioritise it based on how much the interest is on each debt. Clear the costliest one first if you have more than one. Focus on one at a time you will get a good sense of achievement when you clear the first one.
As for the extra money from selling online, keep doing this, this is about developing another income source and it’s good to try and develop a few of them or as much as you can.
Cheers Iain that sounds real simple but effective.
My further reply;
Just do one thing, spend LESS than you earn as a starting point.
I heard nothing back until yesterday.
He text me this;
Hi Iain, I am working on my F.I.R.E plan and using what you sent on the last text. Loving it. Can you recommend more stuff to read.
Follow the yellow brick road…