It’s been a while. To all those lovely people who have contacted me and asked for an update – thank you – you know who you are.
Where do I start?
Perhaps the most interesting thing to readers would be the financial update. Well, despite everything that’s happened in the global economy since my last update, my finances are doing just fine.
I can hardly believe that despite the pandemic, my finances are remarkably on track. I still have the three rental properties I had on my FIRE date. They give me an income which is very welcome. There is something very different about living off rental income compared with drawing down from investments. I view the properties as assets that will rise and fall with the UK property market but nevertheless throw out a reliable income, month in month out. It makes no difference to their value if I withdraw the rent in a way that would not feel comparable to withdrawing dividends from investments.
They are not without problems. Bad tenants, maintenance issues…. I have experienced them all, but they have provided me with a living nonetheless, and over the long term will continue to appreciate in value. Property is very much for the long term. Entry and exit costs are so high – it makes no sense to me to do anything other than hold for the long term, despite the fact income may rise and fall in the short term.
Over the years since I last wrote, my other investments increased more or less as I had modelled. It seems that chaos and uncertainty can rule in real life and yet the stock markets – over the long term – withstand it all.
The trick for me somewhat unadvisedly has been to bury my head in the sand. It doesn’t sound like the soundest advice. And if I were at any other stage in my FIRE plan I might not have done so. But throughout the pandemic, I was helpless really. There was no point in torturing myself. I buried my head until the worst had past and emerged to find that solid investments are just that. Companies will always look to make profits; on a holistic scale – almost regardless – on the whole, profits will be chased.
And so…. my solid investments in global trackers held their ground over the longer term and today I feel as financially secure as I have ever felt.
The UK had been living in a ridiculously low interest rate environment for many many years. And so, I was using the equity on my house to take out extra cash if I needed it – using a base rate plus 0.25% tracker mortgage. It was practically free money, while my investments continued to compound in the background.
Roll forward a couple of years and that free money has escalated through multitudes of interest rises to repayments in excess of £700 a month. I took the drastic decision to withdraw capital from my ISA investments to significantly reduce my mortgage. In the multitude of models I had played with post FIRE, I had assumed I would need to withdraw these sums anyway. In reality, I was able to live well by other means and so it made sense to belatedly take these withdrawals and reduce my monthly interest payments on my mortgage.
I think I may be an outlier in not believing a person needs to be mortgage free in order to FIRE. To me it is the overall picture that counts. At this precise moment in time my total mortgaged property compared to equity stands at 20%. If I needed to, I could liquidate other property in order to secure my home. It’s not something that causes me any loss of sleep.
So how do I live?
It’s a reasonable question. In the immediate 2 years or so post FIRE, I worked one day a week for a friend’s company and this provided enough income to mop up my tax free allowance and combined with the rental income, was more than enough to live on without any investment drawdown.
Two years down the line and I wondered why I was still doing something I hated. I still got Sunday night feeling, even though I only “needed” to work one day. The reality is, I didn’t need to work at all, I just struggled with turning down money – something that was pre-programmed in me. It took the full two years to accept I could let this income stream go and still be financially secure, but I did get there.
In the meantime, the other 6 days a week were mine.
My eldest was scuppered in his plans to attend Sydney Uni by the blasted pandemic. He deferred for a year and then for another as Australia was slow to reopen its borders. In the meantime he met his partner, who has since moved into our house. What can I say? I’m delighted my son is not living on the other side of the world and has met someone that makes him happy, even if that means he forfeits his dream – for now – of becoming a composer.
My youngest has faced untold difficulties. His anxieties meant in the end he was never able to return to school. Thankfully natural intelligence means he has emerged from those years with a handful of GCSEs and an A’level – it’s a fraction of what we all know he is academically capable of but absolutely fine for a child with no education in the school system.
At this point, his life is an open page. I think perhaps what comes next is his story to tell not mine.
Income comes from the rentals. When needed I use the drawdown mortgage previously mentioned to supplement our needs. And rarely, I withdraw from my ISA investments, which are there for precisely this purpose.
In the free time early retirement gave me I found a love for the natural world and gardening that I never knew existed within me.
I began by working on my own back garden and that soon expanded to an allotment. Still not enough, I converted my front garden to a food growing space and between them all I produce most of our fresh food needs.
I gave some of my free time to a local hospice and made them a kitchen garden that produces a range of fresh food. I have given two years there – I think now maybe time for a break, but I don’t rule out helping again when I can.
I spend my time now either sowing seeds, nurturing seedlings, maintaining my garden or most recently – working at a local plant nursery – it’s a casual relationship that suits us all and perhaps averages to one day in every two weeks
It really is true when those early retired folk say that you will find other income sources. Since I have discovered my passion for gardening I have found a casual role as and when at this local plant business and I’ve been offered numerous gardening jobs (all of which I declined but it’s comforting to know they are there if I need them).
So that’s things pretty much up to date. As we speak I am sitting at the beach bar in my favourite Turkish hotel. My youngest is back in the room. My eldest is at home, working and living his own life.
I don’t have any wise words to give you other than our reality. This is how it worked out for us. There is not a single day that I say I wish I hadn’t retired. I don’t know how we would have survived as a family if I hadn’t. I love my life and I love my everyday. I think that’s enough.