How to Fail Spectacularly and Still Retire Early

I have made mistakes in life – we all have. Some minor, some frankly catastrophic. But I’m still here, living a great life having retired at age 46. There were times I thought I would be working even beyond standard retirement age (67) so to be in this position now is something to be celebrated and never ever taken for granted.

But things haven’t always been plain sailing and with hindsight, I’m not sure I would want them to have been. Although I didn’t see it at the time, many of the qualities I needed to possess to end up in this position, I gained as a result of my failures or because of life experiences I went through.

I’m not going to talk about every bad haircut (although there were many) or every failed interview (likewise). I’ll hardly mention the distinctly average GCSEs and 2 very poor A’Levels I left school with after years of staring out of the window and daydreaming of freedom.

But I will share the 3 experiences with the biggest financial impact. The ones that seemed at the time to be the major setbacks – the make or break times. If things are hard for you now – maybe it will help.

• Redundancy
• Divorce
• Buying property overseas

Redundancy

For my parents’ generation, redundancy was a shameful thing. In those days, jobs were for life. My father spent upwards of 40 years toiling away in a car factory – noisy and dirty and monotonous. If he ever thought about leaving, he never mentioned it. I doubt the thought ever entered his head.

So when I left my first real job (of my own accord) after 4 years, they were terrified on my behalf. And when after only a year in the new role, I was made redundant, I was ashamed to tell them. There was still a stigma attached; an unspoken belief that if you were good at your job, this would not happen to you.

I did not react well. We were called into the MD’s office – the entire finance team of  3 – where he delivered the news that our jobs were no more. In a spectacular show of how not to behave, I didn’t even stay for the whole meeting. I walked out, collected my bag and drove away. I then took the following week off work sick, nursing my wounds. I am not proud of this behaviour. All I can say in my defence is that I was young and brought up to believe that this must be my failure.

After a week I returned to the office, ego bruised but otherwise unharmed, to work out my notice in return for a retention bonus. The bonus wasn’t huge (from memory about £5k) but I was in my early twenties and still living within an overdraft. The payment was enough to clear both mine and my partner’s debts. That was the last time I was ever overdrawn.

My salary at the time was £25k and not knowing any better, month to month we spent it all. Perhaps not too frivolously, but on setting up home and buying everything we “thought” we needed.

Within a few weeks I had a new job lined up and with the prospect of the biggest payday I could ever imagine in the form of redundancy and bonus – this shameful event became one of the best things that could have happened. Spending all my income the way I did, it would have taken years to clear that overdraft. But as it turned out, in one fell swoop I was out of debt – never to return.

I think it’s fair to say that in our employment climate, there is no shame around redundancy anymore. And if you have the skills to move on quickly (pandemic not withstanding) it can be a massive financial boost, particularly in a large corporate where I’ve seen packages equalling a year’s salary being commonplace.

Divorce

Perhaps not the easiest subject to talk about – the failure of a marriage and indeed I won’t. But the financial impact of divorce can be the biggest set-back to anyone’s finances.

After the first couple of years of setting up house it became apparent that I was a natural saver, my husband a spender. I honestly don’t know how he managed it but money would simply disappear in his hands and as the years passed it became more and more of an issue.

Just some of the ways our money was frittered away:

• £18k initial purchase of a timeshare that then cost an on-going £1,500 a year in maintenance fees – most years we didn’t even use it because of additional flight costs.
• £400 to “a man that approached him on the street” for 2 fake leather jackets that ended up in the charity bag.
• Increasing our mortgage by £50k to fund a car purchase (colleague comparisonitis)
• A taste for expensive cuts of meat, cheese and fine wine – making the weekly shopping bill extortionate.

I tell you this not from any other perspective other than to say that divorce is not all doom and gloom – there can be financial upsides. It is enormously liberating to be 100% in control of my money now and to know that nobody can spend it but me. To know that I will never again be derailed by someone else’s spending habits is a freedom I cherish.

In the divorce agreement we split everything 50/50 with the exception of his pension which he wouldn’t share. I know I missed out on a substantial sum here but keeping the peace was worth more to me. By this time my legal fees were around £10k; his would have been similar and dragging it out further would only serve the solicitors well.

I remember my solicitor sitting me down and saying this was a stupid move. She pointed to my small part time salary and my husband’s sizeable one.

”You will never earn as much as him,” she said.

I could only think, yes I bloody will.

So yes, I ended up with less than half of the accumulated assets from our marriage which on the face of it, set me back many years financially. In my mid-thirties I faced an uncertain future with just one part-time salary coming in (the children were still young).

I have no regrets, either about the marriage or the divorce. Both were right at the time. And I learned so much about what is important to me.

My student days stood me in good stead for knowing how to manage on a shoestring and I resolved to turn my finances around. Slowly and surely, the reserves were rebuilt; this time on a much more solid foundation. And I think long term my finances are far better off. Amassing the savings and investments needed to achieve FIRE would never have happened if I had stayed married. Instead,  a bigger house, fancier cars and masses of “stuff” would have been my life along with the life sentence of work to pay for it.

Freedom comes in many forms and I cherish them all 🙂

I’m going to pause here because this post is already much longer than I intended. I will publish separately the final instalment of my spectacular failures – Buying Property Overseas 😄