March 2021 Savings, plus other updates

Another month has flown by, our humdrum lives just go on.

I’ve had a more positive outlook this month, with the better weather, brighter days and the prospect of lockdown restrictions being lifted.

Work eased off a little, allowing me to tackle my mountain of boring admin and although I’m still trying to catch up on my blog reading, it’s better than it was before.

A few ‘highlights’ this month:

  • Had my COVID jab (AstraZeneca) – felt crap for a few days (shivers and aches) but not so bad that I couldn’t work. Thanks go to the volunteers and the nurses at the local medical centre for making the whole process so smooth and easy.
  • Attended the latest Zoom ‘Manchester’ FIRE meet up.  This one had a good presentation by an independent financial adviser on ISAs vs SIPPs, so there were some good discussions.
  • Started a daily stretching routine – the creaking, popping and cracking sounds emanating from my joints show me that this is long overdue and that I seriously need to keep this up.
  • Followed this guy on Twitter and got some lighthearted updates on the (now resolved) ‘traffic jam’ on the Suez Canal :

Some Bad News

My boss revealed that she has handed in her notice at work because she has ‘had enough‘ (her words).

No, she hasn’t reached FIRE in her 30s but she has saved enough during the pandemic (built up her FU fund!) to allow her to take a long break from work.

I can’t say that I’m really surprised as there’s been an unreasonable amount of pressure put on her this past year (her boss left and wasn’t replaced) but I’m pretty devastated all the same at the news, as I have a great relationship (work and non-work) with her and we work well together as a team.

My job will become very tough without her having my back and there’s potential here for it to go from something I like doing, to something I don’t like, way before I’m ready to pull the FIRE plug…

Some Good News

The day after my boss announced her impending departure, I was notified that I was to receive a 6% pay rise.

This came as a surprise because 1) I didn’t ask for it and 2) we’d all been told that there was a cap on salary increases this year. Unlike many in the public sector, I don’t get an automatic annual increase in pay (not even 1%), any increase is subject to the whims of the powers that be and partially based on performance (as discussed in my annual work appraisal). Since the former carries more weight, it’s usually a zero increase.

I guess my performance has been good (I did win Employee of the month in August)  but perhaps this is just the company not wanting me upping and leaving too. The extra will come in handy with the bills, with my sister moving out next week.

Anyway, how did I get on money-wise in March?

I saved 50.5% of my net salary – continuing with my decent start to the year.

The above savings includes a top up of £55.05 from affiliate income from OddsMonkey* (thank you to all who signed up via my links!).

Shares and Investment Trusts

No new investments, I just topped up existing holdings.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

Who knows what’s going on with the markets, down one week, up the next.

At the end of the month, my Future Fund jumped up to £227,628, so the rocket is back!

What a difference a year makes

Dividends and Other Income

Another bumper month of dividends:

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Changes and The Psychology of Money

Back in August 2019, my blissful bachelorette living situation was turned upside down when my sister and nephew moved in with me following their relocation back to the UK.

I’d been happily living on my own for around 12 years so it was a big change to my life and lifestyle.

Actually, it was a big change for everyone, since the last time us siblings had lived under the same roof, we had been squabbling teenagers.

Anyway, all will be quiet again for me as by the beginning of next month, they will have moved out as my sis has bought a house and I will be all on my own again.

I have mixed feelings about this.

All Change Again

It’s all very well me thinking that I would have been alright during lockdown had I been on my own but the reality is that I’ve been extremely grateful that I had some family around me during the worst of the pandemic, particularly as I’ve been unable to travel to see other members of the family (I last saw my parents and my Gran in summer 2018…).

I believe the COVID situation was made a lot more bearable having others in the house – a couple of my friends who are on their own have really struggled with coping with isolation and are a lot more desperate for things to return to normal.

Anyway, in the same way that I had to prepare myself mentally to live with other people again back in 2019, I will need to prepare myself for living on my own again.

Yes, of course I will miss them and their company, but in a way, I’m also looking forward to being back on my own again, with my own quiet space, doing my own thing.

My sister’s new home is less than 15 mins away in the car so not so far that I can’t just pop round to see them (or vice versa).

I’m really glad that I had the opportunity to spend some quality time with, to get to know and to see my nephew mutate from a little boy into a gruff-voiced (though still very chatty) teenager.

I’ll miss my sister’s cooking (I’ll be going round to theirs for the odd Sunday roast!) but also relish going back to cooking for myself again – I have a few more recipes in my personal cookbook now compared to before!

I think the first few nights after they have moved out will feel rather weird.

The Psychology of Money

On an unrelated topic to the above (I’m squashing two draft posts into one), one of my goals this year is to read four non-fiction books – easy for some but not for me as I far prefer to spend my spare time getting lost in fiction.

Anyway, 1 book down, 3 more to go, as I recently read ‘The Psychology of Money‘ by Morgan Hounsel (it was on my Christmas wishlist and a member of my family kindly obliged!).

I thought this book was easy to read and digest, full of interesting stories, anecdotes, wisdom and great advice.

It’s not often that I enjoy reading educational/informative books but I did enjoy this one.

Not all of the stuff was new to me but it was nice to be reminded of it and to re-learn.

I won’t give any spoilers as I’d recommend that people pick it up to read but the chapters intriguingly include:

  • Luck & Risk: nothing is as good or as bad as it seems
  • Never Enough: when rich people do crazy things
  • Confounding Compounding: $81.5 billion of Warren Buffett’s $84.5 billion net worth came after his 65th birthday

The book reminded me that all this FIRE stuff goes far beyond just numbers on my spreadsheets, because us humans are such complex creatures with complicated relationships with money.

Despite these lessons however, I’ll probably continue to make some mistakes with my money – the key is just to not so many mistakes!

A book to keep and re-read.

My Decumulation ‘Hypothesis’

I thought I’d take up Indeedably’s Sovereign Quest challenge to write about ‘Planning for Decumulation.

You can read about the challenge and other people’s decumulation stories in the above link.

♦♦♦♦♦

My plan to FIRE seems quite straight forward (to me).

(A) – save and invest to get to my FIRE number (although this number frequently changes)

(B) – Call time on full-time work when FIRE number reached.

That’s it in a nutshell – simples.

However, (A) is reliant on my maintaining my moderate lifestyle, avoiding changes to my earnings or to my living situation, keeping my expenses low, maintaining a decent savings rate and a good dash of luck in the stock market to get over the finish line. Most things I’m in control of, but others I am not.

(B) depends on how I will feel once I get to my goal: will I end up with OMY (one more year) syndrome or will I say ‘Bye!’ to my colleagues, give a younger person the opportunity to do my job and waltz off into the sunset?

The FIRE Sunset

Let’s assume that I pull the trigger and skip gleefully towards the FIRE sunset – sounds fabulous but so much uncertainty and conflict will be unleashed as I change my life from being a saver to a spender.

Psychologically, I know I’m going to find this change to my life very challenging (particularly with selling my investments…) but until I’m in the situation, I don’t really know exactly how I will feel.

To say that I have a decumulation ‘plan’ would be incorrect – it’s all just a big guess right now, estimates cobbled together from various spreadsheets, speculating on how much I might need, how much I might spend, what might happen in my life, how I might react in certain circumstances.

Aiming for FIRE itself is a huge leap of faith – I’ve got faith in myself to stick to my plan but who really knows if my plan is any good, that it will work!?

The ‘unknown unknowns‘ of my future – there’s no way to plan for those!

So my decumulation plan is really a WIP hypothesis and I’ll only be able to tell you anything meaningful (ie does it work?) once I’ve FIRE’d, much in the way that Michelle of FIRE and Wide has been able to report on the success of her own plan, 3 years since she FIRE’d.

Anyway, in a very broad visualisation, here’s how my decumulation will look like to me:

Simply visualised in my mind

So in simple terms:

  • My Future Fund will provide my income from when I FIRE up to age 65
  • From age 65, my income will be from my Future Fund and my DB pension
  • From age 67, my income will be from my state pension, DB pension and my Future Fund

The State Pension

Yes, unlike many other FIRE wannabes, the state pension is part of my plan. Perhaps it’s because I’m a little older than most but my plan would not be viable if I didn’t include it. One fear of mine is that it could be means tested in the future, but chances are that by the time I come to draw on it, I’ll have spent most of my Future Fund/wealth, since I do not intend to preserve my capital, so I reckon I would likely skirt under any kind of means tested threshold.

Note that this simple diagram does not account for any income I may derive from side hustles, or even <gasp> any work I may choose to undertake if I decide to pivot and become ‘semi-retired’.

The state pension and my DB pension should provide me with a minimum income floor, which is the minimum amount I think I can live on and be reasonably comfortable. Assumptions are made here that I don’t suddenly develop expensive or extravagant tastes (or costs) in my old age.

So if I were to blow my entire Future Fund by the time I come to draw the state pension, I should still have enough to cover my basic living costs, without too many frills. Caribbean cruises will be out of the window but I might be able to enjoy a nice UK weekend away or two.

Eagle-eyed readers might have noticed that I have entered the age of 100 in the illustration – that’s just the number I’ve used in my spreadsheets, not a prediction of how long I will live!

The Back Up Plan

If it all goes t*ts up pear-shaped, perhaps I should have a decent back up plan, much like TA of Monevator, who has a plan B, C and D in the event of things going wrong.

My back up Plan B is to return to work. I know, it’s a rubbish plan but it’s an option which would have to be considered. I’m likely to have a side hustle or two to churn out a bit of income so maybe it won’t come to this drastic outcome.

Back up Plan C is to find myself a rich toyboy. I jest of course…. 😉

The Nitty Gritty

I haven’t really thought about the actual details of how I will get my income. I have ISAs and two SIPPS, will I draw down on the SIPPs one at a time or at the same time? Will I take my 25% tax relief? Will I sell my investments on an annual/quarterly basis? At what point/age should I consider buying an annuity!?

I mentioned the psychology of all this already and part of the reason why I will have part of my portfolio paying dividend income is that I feel like I need to see income dropping into my account, as if I were ‘getting paid’. That might sound strange to some, but it will be a source of comfort to me (assuming here that dividends won’t get cancelled or cut too drastically….).

I think a year from actual FIRE, I will drill down to the nitty-gritty but for now, I don’t want to stress myself about it.

The Spare Time

Whilst I haven’t planned exactly what I will be doing to fill all the spare time I will suddenly have, I’m someone who already has a lot of hobbies and interests and I know I will be able to keep myself busy and entertained. Volunteering also springs to mind.

The Family

I reckon that by the time I have FIRE’d, at least one of my siblings will have done the same, or in their case, just retired early as they’re not aware of the term FIRE.

Theirs will most certainly be considered Fat FIRE – they live very different lives to me.

I won’t have to worry about having to financially support any members of my family during my decumulation – my folks retired over 25 years ago and are financially comfortable. My siblings have all done extremely well for themselves in their careers so supporting the family is not something I need to consider but it might be something others aiming for FIRE might have build into their plans.

I have no dependants so as mentioned earlier, I don’t have to consider wealth preservation, I’m planning to spend my money, although if there’s anything left of my Future Fund when I pop my clogs, it would be nice to leave a little something to nephews and nieces.

And Finally

I’d like to say that when I re-read this post in a few years’ time, since I’d be closer to my goal, I should have more clarity and certainty about my decumulation plan, but the chances are that things will still look about as clear as mud and will just result in more lines or tabs on my spreadsheet!

How go your decumulation plans?

February 2021 Savings, plus other updates

Monthly update time again – how time flies, even when you’re not really having fun.

No, I’m not sad, depressed or feeling fed up –  I think I’m just suffering from a bit of mental fatigue.

Long busy days at work have left me pretty brain-dead and brain-tired, I’ve gotten behind on my blog reading/commenting and for the first time in a long while, I didn’t get round to sorting out a post in between my monthly numbers updates.

I’m still exercising regularly, eating well, not drinking too much, getting enough sleep and avoiding too much social media or news.

The brighter days and better weather might help drag me out of this listless phase, back to my normal self.

Not many ‘highlights’ this month:

    • Attended (and also did a presentation in) the latest ‘Manchester’ FIRE meet up.  Always good to see familar faces, some new faces and to be able to chat about FIRE, pensions and such-like without people thinking you are a bore or a weirdo. Also attended a ‘Leeds’ Invest Meet up.
    • My nephew finally returned home from staying at his dad’s since before Christmas. Bless him, he’s grown an inch, his voice has changed but sadly, he’s picked up some very bad teenaged boy habits (less said about those, the better!).
    • Losing myself completely reading The Way of Kings, a 1000+ page fantasy tome recommended by SavingNinja. It’s been a while since I stayed up reading past 2am because I got caught up in the ‘just one more chapter’ cycle! Just started book 2, so I can lose myself again!

So, how did I get on money-wise in February?

I saved 47.7% of my net salary – continuing with my decent start to the year.

The above savings includes a top up of a £25 premium bond win, £27.96 from TopCashback* and £20 from Matched Betting profits (from last month).

Shares and Investment Trusts

No new investments, I just topped up existing holdings.

Current share/IT portfolio can be found here.

(Entire portfolio here)

Future Fund 

Another wobble in the stock markets apparently, something to do with bond yields going up but whatever, I carried on investing.

At the end of the month, my Future Fund stood slightly up at £221,108, but the increase was from the addition of capital.

Steady and calm…

Dividends and Other Income

A bumper month of dividends:

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