UK FIRE

FIRE stands for Financial Independence and Retire Early.

Although most people in the UK would probably want a bit of FIRE in their life, it isn’t really a thing for us BRITS.

Many of the self-development books, blogs and podcasts I have read or watched relating to FIRE are based in the US.

Maybe it will grow in popularity after things start to return to some sort of normality? With many people currently struggling to pay bills and put food on the table, it emphasizes the importance of looking after your money.

Many of us up and down the country may have to start to look at our consumption habits and focus on what is important to us.

If you spend what you earn, or worse, more than you earn, it really is time for change. It might be a case of cancelling the SKY subscription or having friends round instead of a night up town. Or ignoring the Starbucks on the way to graft, and drinking the shitty Nescafe that you get for free in the staff canteen.

The very basics of FIRE, is spend less than you earn and invest the rest. This is a habit that could be a game changer for you and your family.

FIRE will mean different things for different people. Like all things money related, it is very much an individual thing. Personally, FIRE for me means enough passive income to cover all of my expenses so that I can choose where I work and what I do for work.

It is not about retiring for me, it is the freedom of choice and security for my family. It means no more Offshore on a shitty Oil Rig sharing a room with some scruff who doesn’t know how to use a toilet brush. No more shitty B&B’s up and down the country tucked up inside my sleeping bag incase I catch something off the rotten bed sheets.

Now that I am working on foreign soil, it means no more deserts in Africa or the Middle East. My tolerance for my means to an end jobs has gone and I am going to push hard for a bit of FIRE.

We have a few choices on how to start heading in the right direction. The first option is to keep the same expenses and look to earn more money pcm. Then you would invest the extra money.

The second option is to reduce your budget and ensure you spend less than you earn that way. Again, you would then invest the difference.

The third option is to do a combination of the two. Look to slice a bit off the budget and get out there and earn more money. I know this bit isn’t easy but it is possible.

An example is to have a normal Monday to Friday job and supplement it with an additional job at the weekend. This may be a bar job or a courier job or even doing some overtime in your current job.

If you do get the opportunity of earning extra money, don’t fall into the common trap of upping your consumption.

Our collective perspectives will no doubt change for the better when things get back to some sort of normality. The normal ball ache of going to the supermarket will become a joy and privilege. As will many other things in this life we take for granted.

It will be difficult to not get over-excited and spend for fun when normal service resumes. Our inner consumer will be busting to spend some money.  What we have to do is stick to a budget.

Over the last 12 months I have trimmed my budget and am now investing the difference. Although it took me 36 years to get my act together, we all have to start somewhere.

Providing we can stick to the plan and work within our budgets, it is time to start heading towards a bit of FIRE.

My preference when it comes to investing is a mix of low-cost index funds and property. My Vanguard Index fund uses algorithms to buy stocks across the market. Depending on what you read the market tends to increase at around 8% per year. The theory is that index funds will follow this pattern.

I have had an up and down journey when it comes to property thus far. Now I know exactly what I want, my intent is to rent houses out for many years to come. A long-term strategy with no intention of selling.

The plan will be for tenants to move in and pay my mortgage off. This way any ups and downs in the market won’t affect me as someone else is paying the mortgage off. As time goes by, I would also expect to benefit from capital appreciation.

If I can buy a property a year for the next 10 years and continue to invest in my low-cost index fund, I can get my FIRE in my late 40s. This may or may not happen but now I have a target to aim for, I feel the likelihood is far greater than before I had any plan whatsoever.

To get some UK FIRE you need to make a start.

Here are some basics to get you going:

Decide what you want.

Get your budget into an easy to use spreadsheet.

Ensure you spend less than you earn – no matter how painful.

Do your research.

Determine what you are going to invest in.

Take it easy.

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