In this post, we are going to look at my UK FIRE Blog, its starting point and my journey from student and credit card debt through to having paid off my mortgage and driving towards financial independence all within the 10 years.
Relationship with Money
Even before starting my UK FIRE Blog I’ve always been relatively sensible with money. I think I hit upon the realisation quite early on that debt can amount very quickly and if not managed can spiral out of control.
After leaving university I quickly found a job due to the work I had done in my year out. I was very fortunate and luckily a few years before the 2008 crash.
However, it was also a World Cup year (football or soccer for North America) so straight out of university with a job on its way I thought f*ck it I’ll pay it off later.
I put in a heavy 2 months of living life on the “never-never” (credit cards). I racked up £3,000.
At the time that was equivalent to approximately $5-6,000 on going out and enjoying myself.
When I then started working the joy of taxes and student debt repayment hit home that my leftover cash was going to mean a long slog for any repayments. It also scared the sh*t out of me…sorry I’ve probably not mentioned I tend to swear a bit. I decided the best course of action, and certainly not an easy one, was to update my parents as to the situation.
Tip #1 – Talk about it, own the situation and seek assistance
Now it is not a huge amount of debt and I certainly know people who have got into worse situations, but I think it didn’t get to that extent because I spoke up about it.
This is difficult, but I implore you do not keep it hidden. Own that situation, your loved one’s care. They may be disappointed, but they will support you. If they don’t there are plenty of organisations out there that will.
My dad and I agreed on a plan on how to tackle the debt. I was very lucky the debt was on a 12 months interest-free credit card, but even still my dad helped me plan out how I would tackle the debt month by month. I was fortunate and I vowed to waste that opportunity. During that time, I learned to cut back in areas of extravagance.
Since then I have tried to live my life within my means. After a couple of years at my first job, I decided it was going nowhere and I entered the world of project-based IT consultancy and my set about improving myself. In my coming posts for the UK FIRE Blog, we’ll delve more into this.
My career sky-rocketed, but I made a conscious effort not to allow for life creep. A situation whereby your salary increases so do your expenses. Now I am not at the extreme end of the frugality scale, but I have always made an effort to contribute to savings schemes and ISA’s.
Tip # 2 Invest in yourself
Whilst cost-cutting is a quick way to derive more cash flow, and will be another tip (oop’s a spoiler), over the long-term investment in yourself has significantly greater returns.
By getting my head down and putting in the hours for myself over the course of a 13-year career (at the time of writing)…
…I have increased my salary by a staggering 477% in 13 years
My career is not for everyone it has me on the road a fair bit, but it has laid the foundation of my financial success. Also, the more I’ve progressed the more flexibility I have managed to acquire.
My girlfriend, now wife, agreed that if I was going to do it then the time to do it was whilst we were young. In the early days, this meant I continued to live at home with my parents and paid rent even though I was actually only there 8-10 days a month. In fairness as a Tall Guy FI, I can put away a fair amount of food so I suspect it went mostly to this.
My first job had two options for saving, both offering a contribution match up to 10%. The first being a pension. I didn’t opt into that. Wow, hold on there TGFI! Are you an idiot?! What sort of UK FIRE Blog is this??
Well, that is debatable, but the reason I did it was that the other option allowed for a pre-tax saving match that could be used toward your first house purchase.
I used this wisely and also continued to save with my wife towards our first (and still) home. Both of us squirrelled away as much money as possible until eventually, we had saved up a £30,000 deposit (roughly $50,000 at the time). We got our first (and only to date) mortgage.
We waited and waited and found the right house at the right time. Our patience paid off and the vendor was looking to move quickly. We looked past the horrendous décor and some other issues and we negotiated the house down from £250,000 to £200,000 and jumped at it. We’ve been in the house for 9 years and it has, on paper, made us approximately 72%.
Paying off the Mortgage
As my salary increased, we suddenly hit a point whereby the money I was making started to hit a point whereby we could accelerate our savings.
At this point, we did something that a lot of those interested in the Financial Independence Retire Early (FIRE) movement will completely disagree with, especially in the UK. We decided to start paying down the mortgage.
I combined this with making the most of my working situation. Cashback is king and I would regularly rack-up £200 – 300 per month (approx. $400-500 – you can see the exchange rate was dwindling!) in cashback from the likes of Quidco & TopCashBack as well as accruing points in hotels and with credit cards. As an example, the hotel points have helped us travel the world whilst staying for free in a lot of places. from the US to Vietnam to Japan and lots of places in between.
Combine this with sensible living, budgeting and using bonuses effectively and within 7 years of owning the house, we had paid off the mortgage in full, paying off the remaining £170,000 + interest. One of my favourite past times during this time was playing a what-if game with the Money Saving Expert Mortgage Overpayment Calculator!
Tip #3 Do your research and understand the financial impacts, but do not underestimate the psychological and emotional factors. They can change a lot! This will likely come down to your love of your job and your approach to risk.
Now many may be thinking why is that frowned upon? Well, the general thinking is that we would have made more by investing in an index tracker vs the interest that would have accumulated in the UK. Financially speaking letting that accumulate and then paying it off when nearing retirement is the best option. They are right. Absolutely. 100%.
However, I would do exactly the same again. I make no qualms about it.
There is an emotional and psychological factor in this. The moment we paid the final instalment off it was like a massive weight was lifted. Suddenly work was not about paying off debt. The freedom I feel now is amazing and as you probably guessed, becoming more and more financially aware and prudent we just stuck the mortgage money into savings, which will help us accelerate towards a better future.
Still, people will argue I shouldn’t have done it this way. Do I care? No.
Especially now with a little TGFI on the way. This freedom will allow me to take some extended leave from work to be with my wife and child as well as potentially looking at a reducing my hours.
April 2020 Update: COVID-19 is in full swing now and the above decision has meant a huge amount of stress is simply not there because of this decision. We feel vindicated in our choice. Again it may not work for others in the same way.
Tip #4 – Optional: Choose the right mortgage. If you are paying down your mortgage make sure you are on a vehicle that will allow for over-payments without penalising you.
FIRE! I’ll take you to learn
When we made it to this stage my eyes opened to a whole new world mentioned above, FIRE, as I looked for how best to make my money work for me. I didn’t know it, but I had been living my own version of this. I had even read the go-to bible for many: Tim Hale’s Smarter. Maybe not always adhering to all the principles but trying to.
My initial foray into FIRE came from reading The Monevator website, which led me, in turn, to see if there was a Reddit sub-Reddit or two. There were. One primarily focused on the US, which led me to the Mr Money Moustache (MMM) website and then I eventually stumbled across the UK version and the UK Personal Finance subreddit and websites.
I started thinking about being able to retire early. I had always planned to retire around the 55-57 mark. That to me represented early. However, with some focus, applying the principles of FIRE and some side hustling like affiliate marketing, I believe I can bring this forward potentially by 10 years to 45-47.
As I’ve progressed my thinking, I came to the conclusion that full retirement probably isn’t for me – this may change – but the Financial Independence element was actually what I was after. I want the option to do what I want. To focus on areas of interest, to be able to spend more time with the family or to be able to give something back.
Within the community, there are a lot of people like me and the easiest answer to why is because we are all working for the man (or woman) and not ourselves. We lack control. There may well be an element of the grass is always greener to this. I want to take control back.
There are many things to talk about around the FIRE-place (see what I did there?), but I’ll keep it brief to start with:
- My Safe Withdrawal Rate (SWR): 3.8%
- My FI or more appropriately my FU number: £35,000 per year £920,000 (looks absolutely petrifying). At a riskier 4% SWR (for the UK) that is £875,000
- Expected FI age: 46-48
- My Approach:
- Sort my Emergency Fund (3 months expenses to start rising to 1 year)
- Maximise my pension
- Build a Bridge fund to drawdown – £350,000 – £400,000 for 10 years
- Side Hustles
- Budgets & Budget Reduction
All the above numbers are based on some relatively simple calculations and make some assumptions around not actually making any more money or making any further pension contributions after a certain point. The likelihood of that is slim to none and as my circumstances change, I am sure this will as well.
Why set up a UK FIRE Blog?
As I mentioned I read a lot of Reddit posts, although I’m a little introverted so I don’t post, and I read a lot of FIRE and Personal Finance blogs as well. figured it was time to give back with my own UK FIRE Blog.
I’ve always been interested in blogging and web development. I have been involved in some way shape or form for around 20 years. In my younger days, I had some quite successful gaming websites.
Unfortunately, back then ad revenue and monetisation of websites were hit and miss…predominately miss, but I still made a lovely £200/month, which for a 15/16-year-old was enough to stop me having to get a real job! For those sleuths amongst you, I am writing this at the tender age of 36 years old…hopefully, I’ll be looking back on this post in years to come and remember being 36 fondly!
Over the years I have ventured into a number of different approaches to furthering my finances and on a number of occasions hit the nail on the head with more sensible approaches. I’ve have paid my dues and learned my lessons.
I have tried my hand at everything from betting methodologies (never again), trading binaries (erm that’s just gambling again), flipping websites and domains, affiliate marketing, and other side hustles. I’ve failed a number of times, picked myself up, dusted myself off and gone again. I’ve made thousands of pounds in flipping websites and domains as well as with affiliate marketing. As you will read I’ve focused much more on my traditional career and that has paid dividends. Now is the time to focus back on the other areas to create multiple streams of income.
This is why my personal finance blog & UK FIRE Blog that focuses on a few key areas:
- Budget Setting
- Saving Money
- Making Money
- Financial Independence Retire Early
If you stick with me, I’ll show you how I’ve managed to take control of the murky waters that can be personal finance. You’ll find no judgement here. Wherever you are coming from you will have your challenges and you will have your goals.
Hopefully, I can help you out in some way and I’d love you to help others out by contributing to the comments on the site. In this world, we should all be aiming to help each other. Some of the key personal finance milestones I’ve hit so far:
- Cleared my credit card debt – Age 25
- Cleared my student loan – Age 28
- Purchased a house and paid it all off within 7 years – Age 35
My ultimate goals are:
- Replace my corporate salary with online businesses
- Become Financially Independent – To be in a position whereby my passive income streams through savings would meet by living needs.
- Be able to Retire Early – This is fully dependent on points 1 and 2. If I’m enjoying part 1 then why would I. However, if I am still in a corporate position then it is likely a different story.
We will talk more about those as time goes by in my UK FIRE Blog.
So why have I decided to start this UK FIRE Blog:
- Help others – I’ve done a lot of things in my online life and my physical life that I feel can help others out.
- Join a community – The personal finance and FIRE communities are places I’ve hung around in for quite a while, but never really contributed to. That changes now. I want to a part of these communities.
- Keep myself honest – I’ve done very well up to now, but I can do better. I am not going to pretend I am perfect, and I don’t want to present an image to people that this is all a piece of cake. It isn’t. It takes determination, patience and maybe even a smattering of luck. Things I don’t always have. This will give me a place, to be honest about that.
- Earn online – This UK FIRE blog becomes part of my online real estate. I hope to be able to earn money from the blog as well as other ventures (which I will discuss). I will not compromise the integrity of the blog to make money though. That doesn’t make sense to me for long term gain. I aim to provide value first. That will hopefully build a following.
- Have a bit of fun!! – This should probably be first, but I genuinely love this stuff. It holds a genuine interest for me, and I thoroughly enjoy it. So, it’s a hobby, it’s a bit of fun. Hopefully, it becomes more!
I hope you’ve enjoyed my ramblings about my journey and how I’ve come to set up this UK FIRE Blog – Tall Guy FI. I hope you’ve got to understand TGFI a little bit more. Continue reading as we’ll start venturing into more content that you can learn from yourself. If you have any questions drop me a message in the comments below.