A Journey Travelled Already

The other night, whilst reading before I went to sleep, my bookmark slid off my bed and as I bent to retrieve it, I noticed a post-it note peeking from behind my bedside table.
Fishing it out, I saw it was a list of new year resolutions that I’d made in 2008 – I must have stuck them next to my bed as a reminder!
The list was as follows:
 
– No buying books or CDs
– No buying new clothes before April
– No shopping on Ebay
– Budget!
– Halve my debt by August
 
Unsurprisingly, they’re all money or spending-related because in 2008, I was still carrying a lot of credit card debit.  Unfortunately, I hadn’t at that point discovered the whole FI/PF blogging community, but it seems like I had the gist of some things in knowing that I had to try to control my spending.
Funny how I just wrote ‘Budget’ with no info as to how or why, so it’s highly likely that I didn’t ‘budget’, not properly anyway.
By 2009, I know my debt was around £3,000 when it was finally paid off, following the sale of my house, although I can’t remember if I did ‘halve my debt by August’ or not. I reckon my debt was around the £5,000 mark, and believe me, it had taken me many years to get it to this level.
Mind Boggling
It’s quite mind-boggling now when I think of how I was just carrying that debt and that it took me a long time to realise I had to do something about it, to make paying it off a priority. Chances are that if my friends and family had known about it, then it would have been a priority.
During that time, there is absolutely no way that I could even remotely imagine that I’d be saving around 50% of my wages today and still be able to have a good life! I’ve just cut back on things that aren’t so important in my life, while still enjoying the stuff that is important to me.

It’s not as if I’ve had huge pay rises over the years – in fact, there were several years where I had no pay rises and was just lucky that I kept my job when many others in the industry were being laid off.

Progress

When I started this blog in April 2014, my Future Fund was around the £30,000 mark. Not bad, you might say, compared to people who have no savings whatsoever.

However, this had taken me over  FIVE years to save up!

Yes, I actually thought I was doing great, saving money and not getting into debt but it was only when I came across PF/FI and ERE blogs that I realised that I wasn’t doing that great, that there was so much more I could do!

Still, I have no regrets about not saving more during that time – I think I just really enjoyed life being debt free for the first time in 15 years!

Getting Graphical

Anyway,  I was playing around with some graphs the other day against my original FI plan:

My path to reaching FI

The blue bars chart how my savings/investments need to steadily grow into my Future Fund of £250,000 by 2029, ie when I turn 60. This was the original goal that I’d set myself when I started this blog.

However, check out that little red bar, which is what my Future Fund was totalling at the end of 2014 (I’ve used the correct figure, not the incorrect one!).

And if I hit my 2015 Future Fund goal of £50,000, well that’s pretty much where I thought I’d be in 2016!

Anyway, after one month, things look quite good:

Future Fund progress so far in 2015

Ahead of the Game

Ok, I can’t get too excited as it’s only Year 1 out of 15 years, the markets could all get messed up between now and then (in fact, they will at some point, such is their nature) but if I were able to keep this going, then there’s a real possibility that I could get to FI earlier than I thought I would (and could).

However, with my Cerridwen-hat on, I would have to consider the implications of stopping work earlier as it would mean stopping paying into my company pension scheme, ergo the pension will be less.

Stopping work earlier would also mean I would probably need a bigger pot that my planned £250,000 to make up for the extra years of not working, the extra difference depending on how early before 60 I stop working.

It’s perhaps not surprising that I seem to be ahead of the game as when I set my original goal, I had no idea how much I would be able to save/invest, or how I could change my own spending habits. The thing now is to remain focused and to maintain this long term.

However after a ‘no-social life’ January, February is proving to be pretty action-packed so I need to not go overboard with the spending! 
 
Also for me, there’s the added expense of Chinese New Year coming up very soon so I need to squeeze that into the equation!

14 thoughts on “A Journey Travelled Already

  1. The important thing is that you now have a plan and you're building up your freedom fund. In the mean time, keep learning and expanding your knowledge and skills. 😀

  2. Hi Weenie,

    It looks like you've made a great start to 2015, and towards FI in general.

    It's amazing when you look back at goals or your mindset 5-10 years ago. For some people it can change significantly in 1-2 years. What I find so fascinating is your shift of psychology from thinking you were doing really well with saving £22k in 5 years to seeing what others could do in 5 years with ERE and saving over 50% of your salary. I think it's healthy for our perspectives to be challenged every now and then. I gain a lot of encouragement when I can see how others have succeeded, as I think "If they can do it, why can't I?". I used to procrastinate or not do something at all because I didn't understand it. Now, I'll take my time to understand it, and seek out how others have made it work and repeat the process. Why can't I retire early, or by the the time I'm 40 or by the time I'm 35? If we're able to continually challenge our perceptions of what's possible, the compounding effect can be huge.

    You could be a year ahead of your goal in under a year of trying. What could you do in 3 years or 5 years. I don't know about you but I find it so exciting!

    Keep up the good work Weenie and have a great weekend!
    Huw

  3. Hi weenie

    Eyeballing that chart and it looks linear. Over a 15 year period I'd expect some compound interest effect, which would turn the shape into more of a hockey stick, which will in turn also knock some time off. Providing Mr Market of course doesn't throw a curve ball…

    Cheers
    RIT

  4. Hi weenie, "ahead of the game" is definitely the best place to be and, to be honest I would predict that if you keep going as you are, you will reach your target several years before you plan to. The thing about plans is that they can, and should, change and this would be a good "problem" to have despite the fact that you would need to think about the effect on your BD pension. This could be quite significant (I lose £500pa for every year I don't work so will be ending up with a pension of around £8,500 rather than the £12,500 I would have if I worked to 66 – but then I will be getting it for 8 years longer.) It can be a tricky one to bottom out but it all revolves around how much you need to give you the lifesryle you want and making sure you fund that one way or another.

    I just wish I'd started thinking about this at your age, and then done something about it. Keep up the good work 🙂

    btw thanks for the link

  5. whoa, you need to clean your room more often! LOL, joke, I found a train ticket in my coat pocket from 2010… guess I don't wash my coat very often!

    Really like what Huw said above, as I have been thinking a lot about psychology and though processes to do with money and life goals lately. So much so, I'm posting on a different topic tonight in a break from the Understanding Money series.

    Cheers

  6. Hi Huw, I guess saving £22k in 5 years was good compared to the debt I was in but I was just spending the rest of my money needlessly, with little to show for it! Seeing what others could do really opened my eyes and gave me that lightbulb moment to change my own life and implement my own saving/investing strategy. It was very much "if they can do it, why can't I?"

    I am really excited about what I have achieved so far and look to the future with optimism.

    Thanks for the words of encouragement.

  7. Hi Cerridwen, yes, playing catch up with a plan wouldn't be a nice place to be in, although if the markets tank, it's possible that could still happen in the future, but I'll take this win while I can! As regards the DB pension, as you say, it's really down to how much I will need. In my calculations, I've made a guess at what I think it will be based on the current figure, but who's to say that in between now and then, they don't change how it's calculated?

    Hehe, you say you wish you'd started thinking about it at my age and I wish I'd started thinking about it at Huw's age, or even the No More Waffles guy at the tender young age of 25!

    Thanks for the kind words and wishes.

  8. Hi RIT
    Yes, correct, I was keeping things really simple and not including compounding or market ups and downsl So yes, a couple of years could be knocked of, or as you say, Mr Market could have some bad hair days!

    Thanks for stopping by!

  9. Hi M
    Yeah I didn't want to look too closely behind the table, in case there were dead bodies and such like lurking that I hadn't noticed… 😉

    It's funny that when I hear my friends and colleagues talking about buying things that I don't think they need, I feel almost detached from it all. In the past, hearing them talk like that would make me think that I too had to go out and buy whatever.

    It is all to do with mindset and psychology – interesting stuff!

  10. It's funny how you said that when you first found FI blogs you thought you were far behind others. I actually thought I was closer to the middle. (Though, initially I thought I was kicking everyone's butt!) Yes there are the extreme cases of people being FI in their last 20's or early 30's but I also found a lot of blogs that existed because they had mountains of debt! Some people were in their early 30's and had school loans and credit card debt that totaled over $80k, I couldn't imagine having to pay off that much just to start out at $0!

    While you may think you're not stacking up as well, I think you are doing a tremendous job being ahead of the "average" which is basically someone that ends up retiring at 65 or maybe even 70 with the rate that society is changing.

    As for your outlook on actual versus your plan, I think it will be interesting for you to see where you end up. For me, my original outlook was smashed so badly that I don't really look back at it since I'm years ahead of it while I'm only 3-4 years into trying to track it. Partially it's because I've changed jobs and made more money, part of it is that during that time my fixed expenses have actually lowered since I have tenants whose rent increases while my overall mortgage stays the same so my portion shrinks. And another part of that is that I made very conservative guesses at where I would be because I would much rather under promise and over deliver than over promise and under deliver.

    I'm guessing with time yours will start to skew badly too. It already sounds like you're saving more than you initially expected, and perhaps you can push that further. Also with compound interest your savings should balloon faster if you are ahead earlier on.

    -Zee

  11. Hi Zee

    I think I thought I was far behind because the first couple of blogs I came across were MMM and ERE – pretty much off the scale! Next, it was blogs like Financially Free by 40 and TheFIREstarter, young guys just in their 30s already planning to be financially independent. I just felt that starting out at 45, I was way behind, but like you say, there are a lot of bloggers out there who need to get out of debt first before even starting to save, so I guess I'm ahead of them!

    I actually don't mind 'not stacking up well' as it's a good motivator for me to do well. Just as in sport, when there's someone better than me, I know where the bar has been set and can strive for it and improve.

    I'm not planning on changing jobs so there's unlikely to be any huge changes in my wage, although there's the possibility of bonuses, which I haven't accounted for at all as they are not guaranteed. These, if I get them could push me even further ahead, assuming I save most/all of them!

    Yes, it will be interesting to see compound interest working…need to give it some more years!

    Thanks for the kind words and for stopping by.

  12. Weenie,

    It's great when you find a list of goals you write years ago, and realise you've met most of them, as daunting as they all seemed at the time. Also congrats on being ahead of your goals so far! You'll probably get there quicker than you think, considering compounding and potentially increasing your income streams with time 🙂

    DL

  13. Hi DL
    Thanks and yes, it's good that I am ahead of my goals so far. It's still only my first year doing this and I hope I have the focus to continue in this fashion!

    Thanks for stopping by!

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