full blown intro
Do you know your financial health – Really? Are you in a good place, comfortable, ‘just about managing’ or living from one pay-day to another? Or – more truthfully – you just don’t have any idea? I may be able to help you, if you’re willing to question and challenge what you think you know about money, and I can share with you the approach we’ve taken to be able to take early retirement in our 50’s. There’s a lot of psycho-babble written about ‘early retirement’ – but it’s not about that, it’s about ‘Financial Freedom’ – knowing where you are financially, and having a plan to enable you not to have to work and have a lot more fun enjoying life. It might involve a bit of work here and there, but it’s about choice – not having to work. Essentially it’s tipping the balance from ‘working to live’ over to ‘living to work’. In truth, we’re actually still working, it’s just that it’s voluntary, to benefit our community and give a little back – but we just don’t get paid. That doesn’t matter as our social life is great and we have no money worries.
Typically people talk about FIRE – Financial Independence & Retire Early: but this is also a little mis-leading. You’d find multiple blogs about extreme saving and deprivation and then jumping in a camper van and touring the world. In reality, it’s simpler than that – you just need to understanding your financial position, having a plan and tracking it. Sorry if this sounds boring, but it really is that straightforward, yet so many of us fail in the basics. How do I know? Well, we’ve done it. We are in our mid-fifties, and have stopped full time employment. We have a plan than that will comfortably see us through to the end of our lives – what’s not to like? You too can share that lifestyle if you follow this approach, caveat that it’s more a mindset change to allow you the financial freedom to live the life you want to. I’m not going to tell you what you can and can’t do, or what you should invest in, but I will challenge you to question your beliefs about your lifestyle and spending and make you commit to a couple of changes that will put you in a better financial position.
Whilst we’ve shared these plans with our family and friends, the feedback is a mixture of horror (mother-in-law), envy (some friends) and inquisitiveness (colleagues). There’s also a fair number of comments ‘lucky bastards’ – but in reality, it’s not that we’ve won the lottery, or inherited millions, its more that we’ve made informed, structured decisions about our finances, we know our level of spending we need to enjoy life and we’ve achieved our goal. It’s as simple as that. The key point is that there is no ‘single plan’ that works – everyone is different, but the approach is the same. As a friend who is also retired in his 50’s said recently (whilst we were on a spur-of-the-moment trip to Iceland to see the Northern Lights) – it’s really not that difficult; “Spend less than you earn, and invest the rest wisely”.
Along the way, I’ll probably go off on a tangent a little as whilst thinking about this book for the past 3-4 years, and also mentoring others along our career there are parallels with life in general. Weight loss is a simple concept of ‘eat less and exercise more’ but many people struggle with this idea, so we explore and probe what motivates you. If you understand that, you will succeed.
What I’ll be doing in my book is explaining how to get on top of your finances, know your financial health, and how to build a plan that works for you. It won’t be easy, as you will need to ask yourself some very searching questions and deal with some strongly held beliefs about quality and value, but I promise you that you will be all the better for it. If nothing else, you’ll know where you stand! Coming back to my mother-in-law, she frustrated the hell out of me with her understanding of finances “I don’t care, I can afford it” – and that’s fine; everyone is different, but I hope that by working through my book you come out the other end as a more informed member of society, and can build your own plan, that makes your life more financially secure. A final comment on commitment – yes, you’ll be challenged to change the way you think, but you don’t need to be a mathematical genius. I got a ‘D’ in A-level maths, and I could not work out what compound interest is, but I can explain why it’s important, and how it needs to be part of your plan.