My Mum Retired at 42

Actually, the above title isn’t quite true, since my Mum came out of retirement a year later (due to boredom as all her friends were still working) to work another 5 years before she and my Dad (who is 9 years older) finally called it a day. So, she retired for good at 47.

Retiring at such an early age was (and is still) a massive achievement by most people’s standards.

Forgetting Valuable Lessons

Despite my parents’ achievement, it never occurred to me that early retirement was something I could even remotely consider. That realisation only dawned on me when I came across the FIRE community in 2014. Before then, I didn’t think someone like me would be able to retire early unless I won the lottery.

I don’t know why but I forgot some valuable lessons.  How my parents were really good at saving money and how they made use of TESSAs (Tax-Exempt Special Savings Accounts) and PEPs (Personal Equity Plans), the 90s and 00s versions of today’s S&S ISAs.

My parents didn’t win the lottery or benefit from any inheritance –  they ran their own business and grafted to make it successful, made ends meet whilst bringing up the family. They did have some luck during the boom years in the late ’80s/early ’90s, investing in and making money from a couple of properties.

My Dad bought the car of his dreams – a late 1980s C-Class Mercedes, which he purchased second hand and owned for nearly 25 years. It was the last car he ever bought as he no longer drives. How did I forget that?

My folks actively encouraged us kids to save from an early age and I loved putting my pocket money in my piggy bank. It was when I started working and earning my own money that I stopped being a good saver, fell off the rails and became a bad spender!

I forgot that my parents did not get into debt (aside from their mortgage).  I have no idea now what possessed me to enjoy spending squander my cash in my 20s and 30s and be embroiled in credit card debt for years but I’m just glad I came to my senses in the end.

I look back on those days now as ‘dark days‘, yet at the time, I wasn’t actually unhappy as I thought struggling with debt and a massive overdraft was just ‘normal’! I assumed that everyone was the same, not that I actually knew, since credit card debts were not something you chat about with your friends or colleagues. My family? They didn’t have a clue.

Perhaps the spending on holidays and new cars was me trying to live up to family expectations but of course it’s not their fault, it was all down to me. I enjoyed the life I led, paid for by my credit cards but it was unsustainable.

As I had followed a different path in my job and career, I mistakenly believed that early retirement wasn’t available for someone like me, when actually it was, if only I’d thought about it and remembered what my parents did.

My Definition of Retirement

I’m not going to get into a discussion of what ‘retirement’ means since within the FIRE community, the word means very different things to different people. The above definition however is the closest to what I think it means to me.

I’ll consider myself retired when I do no work for pay whatsoever. That’s not to say I’ll just be sitting at home, watching day-time tv and letting my brain go to mush (although sitting at home and playing video games all day has a certain appeal to my ‘gamer’ nature). I have a long hobby to-do/to-learn list so I’ll be filling my time doing and learning stuff.

If I end up doing any kind of activity for which someone is paying me, then I’ll consider myself semi-retired. If this activity is a full-time activity, then I’d no longer be retired.

Anyway, my point is that my parents retired over 20 years ago and have done absolutely no work whatsoever since they laid down their tools of trade. All their living expenses have been and continue to be covered by passive income from investments and property.

In the early days, there were numerous trips/cruises around the world as they made up for holidays they never had while they were working. These days, they continue to enjoy a happy retired life, living very comfortably and enjoying a great social life within their local community, have hobbies and still go on short holidays and trips, with the occasional longer trip to the UK.

That’s the sort of retirement I would love to have when I stop working and one of the reasons why I continue to be motivated to save and invest hard. My finances are likely to be tighter than my parents’ (less trips around the world for me, haha!) but I can see me having a relatively comfortable retirement if I continue to focus on my saving and investing.

It is a shame that I didn’t recognise and take heed of their (what would now be considered) FIRE lessons earlier but I have no regrets.

I lived a good life in the past, am living a good life now and will continue to save hard to ensure I live a good life in the future!

February 2018 Savings, plus other updates

Perhaps it was just as well that I had a frugal January, which was quiet and without incident, seeing as February was almost the opposite, though it was a mix of good and not-so-good.

Good Stuff

Several social outings with friends did the world of good to banish away some January blues!

Work has been manic but manageable –  the leadership team were over from the US, and my colleague and I were described as a ‘Dream Team’ – hope they remember that when they’re dishing out the pay rises, haha!

I received a surprise letter from a building society regarding a ‘failed’ PPI claim I’d made last year, which advised me that following the FCA’s updated regulations, I was actually entitled to payout so I received £74.40 – thanks very much!

Then, it was another month, another premium bond win, with £25 going into the pot with the other winnings!

Also, I kicked off my home brewing again as I had a ‘window of opportunity’ before work on my kitchen is finally completed. I’d forgotten how much effort it all takes but it was an enjoyable kind of effort and my kitchen smells like brewers hops now! A full update once I have a (hopefully) nice IPA to sample!

Chinese New Year came and went with its usual associated family expenses which were (mostly) budgeted for. May the Year of the Dog be a happy, prosperous and lucky one for all!

Not-So-Good Stuff

That first cold snap we had in the month, my boiler broke down so I was without heating and only intermittent hot water for 3 days. Fortunately, I still had the use of a gas fire, made the most of the shower facilities in my gym, plus the call out and subsequent repair was covered by my boiler plan.

Next, my PC of 8 years decided to break down. I spent 3 days trying to fix it myself (via youtube vids) but as I didn’t want to make the problem any worse, I had to call in an expert. The repair and replacement hardware took a chunk out of my emergency fund but it’s all running like new again so here’s to another 8 years.

Savings Stuff

So, how did I get on with my savings this month?

Ok, I saved 43% – not as bad as I thought it was going to be if I’m honest. My average savings rate now drops to 51.2%.  As I’ll be booking my holiday in the next month or so (which may turn into a ‘holiday within a holiday’), I’ll just need to keep a cap on some other spending over the next couple of months so my average doesn’t drop too much, though I won’t go full-out frugal again like last month (too soon!).

The above savings was topped up with my £25 Premium Bonds win, £74.40 from the PPI claim and £85.73 affiliate income from OddsMonkey (thanks to all who signed up via my links!)

Shares and Investment Trusts

I started investing in Scottish Investment Trust this month, for more diversification.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

The news in February was all about the crisis – I’m talking stock market, not KFC chicken, haha – which I pretty much ignored at the time.

What I do know is that at the end of the month, my Future Fund stands at £132,249 – yes, it’s gone down a bit from last month, but in line with my long-term plan, I’ll just continue investing as normal.

Dividends and Other Income

Dividends received this month: Continue reading

Good Riddance Dogs 2017, Hello Dogs 2018

Just my luck that as I reach the twelve month mark for my experimental Dogs of the FTSE portfolio, things go all pear-shaped in the markets!

Whilst I have largely avoided reading all about the hysteria, it was difficult to ignore the headlines describing the small downturn with words such as ‘TURMOIL’, ‘BLOODBATH’ and ‘CARNAGE’!

I didn’t worry about my Future Fund – I’ve no idea how much it’s dropped by as I’ll be running my usual numbers at the end of the month, but I did think about how it was going to affect my little Dogs portfolio.

Capita (CPI) in particular suffered in a spectacular fashion – I know it hasn’t been in the FTSE 100 for a while but they were one of the top yield stocks when I started the portfolio so I was committed to purchase and hold them for the year. Oh dear, indeed!

As a reminder, here’s the Dogs of the FTSE strategy:

  1. Choose the ten FTSE 100 shares with the highest yield (subject to my criteria*)
  2. Invest equal amounts in all ten shares
  3. Hold for a year (give or take a week)
  4. At the end of the year, sell the ones no longer in the top ten, replace with new shares with highest yield
  5. Repeat from step 3

[*criteria being that shares already in my portfolio are not included, nor any where a dividend cut has been announced]

Here’s how the 2017 portfolio finished:

Not pretty – Capita wiped out my total gains all by itself, yet back in July, it was showing a 25% gain, not including dividend paid. Gosh, I probably doomed the stock by saying that it was ‘showing its pedigree’ in that post – little did I know how the mighty would fall!

So, including dividends, only a paltry 1% gain for the entire portfolio! OUCH!

However, over this same period, the FTSE 100 Total Return was only 0.81% so despite the Dogs being a disappointing let down, they marginally did better, haha! Without dividends though, they seriously under-performed with a 4.35% loss.

What’s Next?

What’s next is the 2018 portfolio!

Oh yes, I’m going to put myself through this again in the name of err, ‘financial science’ and hope there won’t be Turmoil, Carnage or Bloodbaths this time round, nor any spectacular Capita-style demises!

So, in accordance with the strategy:

Dogs Set Free (Sold):

  • AstraZeneca plc (AZN)
  • Capita Plc (CPI)
  • HSBC plc (HSBA)
  • Intu Properties plc (INTU)
  • Royal Mail plc (RMG)
  • Standard Life Aberdeen plc (SLA)

Total received from sales = £1298.38

Total Dividends paid out = £76.96

Profit/Loss from original investment = -£92.45 or -6.3% – ouch!

It was not easy at all pushing the ‘sell’ button for some of those but I am committed to the strategy.

Dogs Rounded Up (Bought): 

  • BT Group plc (BT.A)
  • Imperial Brands Group (IMB)
  • Evraz plc (EVR)
  • National Grid (NG.)
  • United Utilities Group Plc (UU.)
  • Rio Tinto plc (RIO)

Wrong time to sell, right time to buy? Who knows!? I’m not timing the market.

So here’s how the Dogs of the FTSE Portfolio 2018 starting lineup looks as at 12th Feb 2018:

Best of breed or mangy mutts?

Hmmm…for some reason I don’t feel quite as confident as I did this time last year, but we shall see in 12 months time and as before, I’ll be doing quarterly updates.

Lessons Learned?

I’m not sure I’ve learned anything from running this experiment after just one year, though I must say that I thought the portfolio was going to do better. I guess if I hadn’t been following the strategy, I’m not sure I would have sold some of those stocks.

Let’s see how it goes after a few more experiments.

January 2018 Savings, plus other updates

Anyone do ‘Dry January’? Although some of my friends and family did, I didn’t bother. Since I don’t drink during the week, I see little point in depriving myself at weekends. Apparently, my sister failed on day THREE, haha!

Anyway, this month I tried to lead a frugal nun-like existence. That meant turning down social events, no eating out/takeaways (massive assumption here that nuns don’t have social events, eat out or have takeaways…).

My only purchases were basic groceries (including necessary toiletries), a gift voucher (for nephew’s birthday), stamps and a pair of socks. No January sales for me.  Packed lunches for work, except for perhaps on 4 occasions where I spent less than £2 on my lunch.

On the one hand, it felt great knowing that I was going to save more of my salary this month. On the other, the frugal existence didn’t make me feel too happy and in the end, to preserve my sanity, I succumbed and forked out to see the latest Star Wars film at the cinema.

I think I already have my expenses and spending down to a decent level allowing me to save/invest whilst enjoying life – there was probably no need for me to do a frugal January but I thought I’d try it anyway. I have to say it’s not something I’ll be attempting again in a hurry, not to this extreme.

So, did my being very frugal affect how I much I saved in the first month of the year?

Yes, because I saved 59.3% – it could have been more if I didn’t have some December expenses on my credit card bill.

I know, I know…imagine if I could do this every month! But no, living like this isn’t something I would choose to do long-term, even knowing that it would help me achieve my goals quicker. I guess I’m just not in that much of a rush!

The above savings include my £25 Premium Bonds win, £16.32 from TopCashback*, £63.22 from Google Adsense (my annual payout!), £71.16 affiliate income from OddsMonkey, £130 matched betting profits, and £50 rent received.

Shares and Investment Trusts

I started investing in Witan Pacific IT this month, for some diversification.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

The rise of sterling and small wobbles in the market caused my Future Fund to stay pretty much the same at £133,045, despite the capital injection this month. Whatever, I’m just going to continue investing anyway.

Dividends and Other Income

Dividends received this month: Continue reading