Adamski wrote:Which means retirement investing going to get more difficult to retire in your 30s or 40s, is it even plausible if you don't work in the City or some mega job or an inheritance?
I'm not sure it was ever easier.
I've been saving as much as I can with the intention of financial freedom since I started working, pretty much straight out of uni give or take a few months.
I'm now mid 40's and only
just about at the point I feel
tentatively financially independent - albeit not a huge amount over the minimum wage coming in from investments, but enough to cover all my current living costs, but with little margin for luxuries, and little margin for unexpected hiccups - inflation, etc.
Admittedly I chose to keep renting instead of buying, and clearly, with hindsight, was wrong footed on that decision! Though had I bought a property right at the beginning, I doubt I would have been as committed to building investment savings to the extent I have - I would probably have spent much instead on home improvements and just paying off the mortgage, so I probably would never have taken the investment plunge.
I also chose to invest (my non-pension investments) primarily in the UK stock market - and similarly I was wrong footed on that decision as well.. my proper pension, can't remember exactly when started, but probably between 15 to 20 years ago, but told the pensions advisor that I was intending to retire early on non-pension savings, so since my pension would just be a fall back, so just split 50:50 UK vs international, nothing exotic.
Upshot is, I've been putting 50:50 a month, every month, unchanged since then into UK equities vs international equities in my pension.
And the international component is now 30%+ ahead of the UK equities ... and that's not a sudden change of fortunes - it's pretty much grown like that over time.
If I'd done that with my investments outside my pension...
![Crying or Very Sad :cry:](./images/smilies/icon_cry.gif)
... well 30% extra on where that's at now would be making a HUGE difference. There'd be nothing tentative about feeling financially independent - though only just.
While I don't work in the city, I do earn a reasonable amount - not doctors salary or anything like that, but above average.
I actually think the low interest rate environment, has actually made saving for FIRE very difficult over the previous 20 yrs. I remember briefly when I just started out into the real world as an adult moving out into my own place, interest rates were around 6%. Compound interest on that makes a difference! Sadly no sooner had I started on my financial savings path, interest rates dropped and have never recovered.
I can't help feel that in periods of higher interest rates - which usually result in higher equity yields as well - has meant earlier generations building to FIRE pre-2000 were able to benefit far greater from compound interest while they were saving for retirement.
But My Biggest Realisation...
The young me, setting out on this path, really hoped to achieve FIRE in my 30's, and put just about everything in life on hold in anticipation of achieving this goal. Sadly the rest of my 20's and 30's flew past in a blur of almost just living to work, and I still hadn't achieved my goal by the time I hit 40.
(Which is why it makes me very angry when Kier Starmer suggests those earning dividends should become a cash cow to pay for everyone else... get stuffed Kier, I worked damn hard and sacrificed a lot of living to build up those investment savings)
Was FIRE in my 30's ever even a realistic goal?
When I think back and wonder what could I have done differently to arrive at FIRE earlier, as I'd originally hoped ... with hindsight, obviously investing outside the UK, but I wasn't to know that. Similarly with house prices, I wasn't to know just how silly they would get (relative to income). But who knows where these will go in future. Maybe renting now is the better option. Maybe UK equities are now the better option. Who knows.
But I think the one and only thing that almost certainly would have made the biggest difference, and would make the difference to any youngsters looking to do this in futures...
... if I could have found a partner (wife / girlfriend) who had exactly the same goals and drive to earn, save and invest, rather than spend, and with whom I could have lived with all these years and shared the share-able bills.
Two people (albeit only if they share the same goals) living together are clearly going to be in a far better position to FIRE, than the same two people each living separately on their own, each having their own accommodation and heating bills to pay.
But this risks of that route are obviously at least twofold ... (1) that the person you end up with isn't as committed to the goal, with all the potential squabbles, disagreements, etc that would likely then ensue, and (2) if it came to separation, any divorce would be a financial catastrophe, at least for the me, as the bloke.
But other than potentially having a partner equally committed to the goal, I don't think there's anything definite that I could otherwise have done to arrive at FIRE earlier. And that's on a moderately-above-average salary, and with the exceptionally good fortune of avoiding any interruption to income for savings, or worse still any need to consume savings before reaching FIRE, due to redundancy, etc.
Upshot... I'm not convinced that FIRE in your 30's is at all possible for an average person in an average job.
Perhaps possible by very late 30's to early 40's for a couple who are both committed to the goal, and sharing accommodation, etc.
And perhaps it is asking a lot... if you only start working in your 20's which is probably average for most people, and then expecting to retire after spending only roughly 15% - 25% of your (average expected) life working, is perhaps expecting a lot, when most people expect to work for something like 60% of their life.