I saw an interesting Reddit post the other day on the Financial Independence Retire Early thread that I read from time to time. I do quite like Reddit for obtaining that kind of ‘insider’ knowledge about things. However, you do have to take things with a pinch of salt as opinions tend to sometimes lean greatly towards each end of the extreme and with the internet, being the internet, you of course have to grow a slightly thicker skin upon engaging with someone in a debate!
One post I did see though which did spark a thought is, has anyone ever failed at FIRE?
Sure, I could imagine people ‘giving’ up in the early stages, or even the late stages. Or perhaps one of those thought experiments comes true such as the one where a ‘hacker’ has obtained your financial details and depleted all of your hard earn’t savings. But I don’t hear about many who have given up on the process. Perhaps the goal of having a financially secure future for the rest of your life without the need to work is just such a pull / draw to people which makes everyone that bit more motivated? (It sure does me! 😛 )
Have I had a set back towards FIRE?
Fortunately I’m grateful not to have suffered a set back most likely down to that fact that I’m just over a year into my FIRE journey so nothing has yet come and bit me in the ass (just yet). As my income is predominantly made of salary and dividends, I do have a welcoming tax return to make come January 2020 meaning that my savings rate will drop towards the later end of this year in saving for this. Alternatively I do have the option of depositing into my pension to work on reducing some of my tax liability, however I do have to be mindful that this money won’t be withdraw-able until the grand old age of 55 and pension contributions don’t effect tax on dividend income (just my salary).
I did work out though, if I save ?100,000 into my pension in the next 6 years (my current pension sit’s at just under ?10,000 currently), by the time I’m 55 (20 years from when I’m 35, anticipating 8% annual returns) and without depositing anymore than ?100,000, this pot would grow to just over ?570,000 come the year 2045. To me, this sounds like a no brainer!
Anyway, I digress! Have you had a set back towards FIRE?
Hi Jase
I’m sure there are failed FIREs – we don’t know about the non-bloggers who are trying for FIRE and failing and we don’t know what happens to all those FIRE bloggers who stop blogging – did they fail/give up or just get bored of blogging?
My set back was being made redundant at the end of 2016 from what I thought was my ‘forever job’.
After over 20 years with the same company, I was in my late 40s, institutionalised perhaps, hadn’t had an external interview in all that time, had no idea how to apply for jobs online or make use of online agencies! It was telephones and letters back in the day, the jobs market had moved so much in that time!
Fortunately, the break from work allowed me to experience what early retirement would feel like and it’s something I know I will enjoy. My break lasted for nearly 5 months before I was back at work and although things don’t look 100% certain (potential company restructure), at least I’ll be financially ok to deal with temporary set backs!
Hey Weenie!
Oh jeez! Did you have a sense of panic when you were told of the news of redundancy or were alright knowing that you had some savings to cover? Those 5 months must’ve been great!
With Brexit looming I do have some concerns over the business as marketing is normally the area that gets cut by many companies in the initial run and depending on what the outcome is made, we’ll just have to dig our heels in and ride it out!
I haven’t really had a set back yet in my pursuit of FI, but it’s still early days for me! I’m sure that will change when we have the inevitable stock market dip in the next year or three. Thankfully I feel like I could ride it out; I think my current role working at a University is less likely to be affected by a recession (although I could be wrong!) and I have enough of an emergency fund to ride out any short term bumps in the road.
I’ve had a number of financial set backs over the years – x1 divorce, x2 redundancies, a company I worked at closed its final salary scheme, and one job I handed my notice in without another job to go to. So there has been some ups and downs. Life’s tough stuff is difficult to deal with at the time. But looking back you soon move on. Time is the best healer with both life situations and financial setbacks. Having plenty on emergency funds is good to have for that reason.
Crikey Adam! Sorry to hear what you’ve been through – definitely some life experience there! I think that is one of the many benefits of FIRE is that if these things do crop out of no-where, there’s a savings pot which can help cushion the fall / to give you time to get back up again!