Thursday, 12 December 2019

Our Approach

Hello fellow Fire Fans!

Welcome to the first blog post. I’m sure you’ve read the introduction post regarding the topic of this blog and its objectives. If not read that first here.

The very first thing I want to write about is, our current approach to FIRE:

This will be Slow FI L. Trust me I’m more disappointed about this then you are! If you’ve been reading about FIRE online, you would be aware that there seem to be various different versions of FIRE and one of them is the slow version.

Slow FI


When I first came across FIRE, I read the countless stories and articles online about people retiring in their thirties with large amounts of savings banked and then living off the interest/dividends. This made me think, you know what? I wanna do this too! I’m going to start this straightaway and I’ll be retired in 5 years too! Yay! However, my excitement soon hit reality, when I realised that these people started very young… pretty much in their early twenties and also had very high paying jobs!

I, on the other hand, came across FIRE in my late twenties and unfortunately my income is not where I would want it to be. Since 2012, I have been consulting on a self-employed basis and my average yearly Gross income has been between £40K - £45K – some years it has dramatically increased from these figures, but then some years has been much lower. Additionally, due to the self-employed nature, I have also been through weeks and months of no income coming in as well not getting paid for any personal time off work or holidays. Woe is me! L.

My wife on the other hand is full time employed, however her professional career is at its early stages and so her salary is again not where we would want it to be.

She started working September 2016 on £21.5K,
pay increase to £24K a year later and then
changed jobs August 2018 starting at £31K

When she changed jobs she had asked her new employer for £31K and they accepted it gleefully with no negotiation (I told her to ask for £35K, but she wasn’t confident enough and thought they will expect a lot more work from her – so it’s very important to have the confidence to ask for your worth, I’ll talk more about this in a later post).

Luckily for her, she is a software developer and with the IT industry booming, we know this will continue to keep increasing especially with job hopping every few years! This should help with our Slow FI approach to hopefully become Fast FI!

So those are the 2 main reasons why we will have to be following Slow FI for at least the time being

1.       Started late so need more time for investments to grow &
2.   Our incomes aren’t high enough (yet) to be able to stash away large amounts in savings and investments

Other factors:

1.    Recently had our first baby! October 2019 we were blessed with a baby boy and we are absolutely thrilled. Naturally, though, we need to be realistic that we will experience higher costs going forward – This was a huge shock to me when we went browsing at Mothercare (shame they have closed down, but we did manage a few good deals just in time!) a few months into the pregnancy and looked at all the products that we need or the whole baby goods industry makes you think you need! Seriously it’s a money making industry. Buying pushchairs and cribs was only the start. I’m now seeing the initial ongoing costs such as baby formula milk, bottles and clothes that only fit for a few weeks! Never mind, the fact that when he gets older there will be toys that he’ll want, day care costs and who knows what else.

But I digress! Point being its obviously going to add extra expenses, but we wouldn’t have it any other way, we love him and want to be able to provide him a wonderful life.

2.     Another reason for the Slow FI is that, we also don’t want to completely miss out on life!

We would like to go out to eat now and again, go cinemas and on holidays etc. In reality, no one knows what tomorrow will bring and I don’t want to get grim here (promise you this is the only time!), but we are only on earth for a limited time, what if halfway through our FIRE goal, god forbid, there is a tragedy? Then what would have been the point of doing all this? That’s why we will not be going down the absolute extreme route of frugality – what you will see, though, is how much we are able to save and invest as well as how it’s still possible to follow FIRE and yet still enjoy and spend for the fun things in life!

We want a good quality of life but want to achieve FIRE quickly too, so something has to give hence Slow FI. The only way we can achieve it quicker would be when our incomes increase – this way we can still enjoy ourselves and save and invest more.

Phew!

Sorry for the long post!

So, now that I’ve explained how we will be approaching FIRE (Slow), and the reasons for why it will be slow, we can get into our goals!

See you in the next post!

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