100k Milestone

 

I’ve just returned from an impromptu short trip to Hong Kong (a close member of the family was seriously ill but is now recovering) to find that as of today, my Future Fund has reached the £100,000 mark!  The actual figure is £100,436.

My Future Fund is made up of the combined savings/investments I have in ISAs, SIPPS, P2P, Premium Bonds and cash. It does not include my company pension.

How long did it take?

“The First 100k is a Bitch!”, as supposedly famously quoted by Charlie Munger.

In total, it has taken me 8 years to get to this milestone.

Wow, sounds like a very long time?

Well, the first £30,000 took me FIVE years to accumulate – I only started saving in 2009/2010 after I had finally paid off all of my credit card debts. I thought I was doing pretty well, saving and not getting into further debt, but the thing was, I had no plan and didn’t really know what I was saving for, except that it was a ‘good idea to save’ something.

In 2014, I discovered the FIRE movement, worked out a plan to aim for early retirement, read up on DIY investing, automated much of my savings, cut back on unnecessary/unimportant expenses and have managed to boost my savings/portfolio by £70,000 over 3 years.

A combination of saving hard and luck with favourable markets has helped me achieve this goal. All dividend income/interest has been reinvested to add to the growth of the portfolio.

Note that no money from my recent severance package has been added to my Future Fund – until I secure a permanent job, I’ll be using up those funds gradually so they form no part in my future plans.

No Regrets

I don’t have any regrets that I didn’t start saving harder earlier – what I did (or didn’t do) in the past (spending or otherwise) shaped the person I am today.

No sense in dwelling on ‘what if’, ‘if only’, ‘should have, would have, could have’ – I can’t change the past. All that matters is what I’m doing now and what I do in the future as I continue to chase after my goals.

Of course, when the stock market crashes (and it will), my portfolio could well drop back below £100k as I have most of my money in equities but hopefully, it’s diversified enough to withstand the brunt of such a crash and will be able to recover sufficiently.

Liquidity

How much of this £100k could I get my hands on now (or within the next few days) if I really needed to?

£41,975, so just under 42%.  I’m not sure if the liquidity ratio should be higher or lower? I’ve no need for this money right now but I guess it’s good to know what I could get at immediately that’s not tied up in pensions or long term investments/savings.

Righto – onto the next £100k! 🙂

20 thoughts on “100k Milestone

  1. Well done weenie, a huge milestone.

    Your liquidity ratio question largely depends on how close to pension eligibility age you are, and what you would like to do with the money in the meantime.

    Another factor is how big the gap between your target “early retirement” date and pension eligibility age, as you would need to fund this from outside of your pension(s).

    Good luck with the next £100,000 and I hope your relative gets well soon.
    Slow Dad recently posted…The pension fallacy (Part 3)My Profile

    • Thanks Slow Dad.

      I don’t plan on touching the money before I’m 55, since my stretch target is to retire early at that age, so perhaps in that sense, the liquidity issue isn’t such a big deal. What’s a bigger deal is to minimise my tax bill between age 55 and 65. So I was hoping to juggle between SIPP and ISA to keep the tax bill down to a minimum/zero for as long as I can, so maybe I need more in my ISA (there’s more in my SIPP right now). Not worked out the actual number split yet, I’ll give it a couple more years.

  2. Woohoo. Well Done Weenie!!! I like to think of liquidity in terms of how many years’ expenses I have. If the available fund would get me to the pension (or to the next pot of long term funds) then it’s a winner. Alas I have some way to go yet.

    Here’s to the next £100k [raises bottle of home brew]!

    • Cheers PwF! As per my comment to Slow Dad, as my intended ER and the age at which I can get at my SIPP coincide, perhaps liquidity in that sense won’t be such an issue. ISAs will be a lot more flexible though, assuming the government/future governments don’t meddle too much.

  3. Yay. Congrats on reaching the first six digits milestone. Only nine more before reaching the first seven digits milestone! One can always hope. 😉

    Having said that, it must be a great buffer to have to reduce stress over the money as well.

  4. I forgot to say – congratulations on the lovely round number, and the time period you’ve achieved it in is inspiring!

    I admit to harbouring faint regrets about our wasted 8 years, but like you, I try to focus on the now and the future. At least Mr. ETT and I got there eventually, the only way is up from here on in.
    Mrs. ETT recently posted…A Weekend To Mudgee Without Visiting Wineries?!My Profile

    • Thanks Mrs ETT

      In terms of sleeping easy at night, I’d say I’m happy with that amount; in fact, I think I’d be ok with a bit less to be honest!

      Yes, the main thing is taking the step to work on your personal finances, even if it’s taken a while to get there, it’s far better than not starting at all! Good luck to you and Mr ETT!

  5. Hi Weenie,

    Congratulations on the huge milestone! Here’s to the next 100k! The other thing to look at is when the next account hits 100k as well 🙂

    In terms of liquidity, for me it is what amount of £ can I get my hands on, fast. My Emergency Funds are the fastest (some of these are instant), then ISAs (as I would have to sell shares). That is the extent of my “liquid” funds. I don’t include my pension as I can’t access this for a long time yet, but as Slow Dad and others say, it depends on when you are able to access the pension.
    One thing to consider as well in that however is taxes. If I were able to draw out my pension completely to, say buy a fast car, and then get hit with 45% tax rate I wouldn’t class the high rates of tax as that liquid!

    Cheers,
    FiL

    • Thanks FiL

      Yes, hopefully with the ‘snowball’ effect that TFS mentions, the next £100k won’t take as long!

      I think tax is the bigger issue for me, as my ER coincides with my aim to retire at 55, so I would be able to get at my SIPP at that point but I would want to try to minimise my tax bill and hope to do that with my ISA. As mentioned to Slow Dad, I’ve not done the actual figures yet.

      Re your definition of liquidity, I don’t hold a lot of cash (still slowly building up my emergency funds), most of that £42k is tied up in shares in my ISA so I would have to sell to get at them.

      Not planning on getting a Lamborghini then, with your pension? 🙂

      • Hi Weenie,

        Don’t tell TFS this, but he is right 🙂 The second 100k does seem a lot quicker so it will help! I can understand the tax challenge on it as well – take the maximum out of the pension you can with the minimum tax implication, and then as much else into the ISA!

        Ah, so if it is in shares that is slightly less liquid for me but the dividends they throw off are very much liquid, so get £100 per month average in dividends and you will have a great extra liquid bounce 🙂

        A Lamborghini with my pension? No, Id have to sell the Ferrari…. 😉

  6. Congrats Weenie!
    It’s good to put a smile on your face. That significant number reached, the next big number shouldn’t take so long now the ball is rolling.

    Well done.

    • Based on the URL for this article, I’m guessing you chickened out of running with the Munger quote as your title 😉

      • Hi FS

        Thanks and haha – the url title was what I used for my draft post (I started drafting it ages ago in anticipation of reaching the 100k!) but I wanted to emphasise the milestone aspect. I did use the Munger quote when I tweeted about the post!

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