It’s that fun time of the month again when I get to tot my figures up, see how my finances are doing and stare wistfully at a spreadsheet willing the figures to look as though I’m closer to FIRE than I actually am. I include my net worth with my house equity in the mix, even though realistically I’m always going to need a place to say, so it’s not like I can really put all of that towards my dream of a new life. Saying that, I’m now definitely at the point where if I was so inclined I could sell up and buy a perfectly nice house outright. I’m not so inclined at the moment, but never say never.
I also include my net worth excluding the house equity, but including my mortgage. This is really so that I can track how I’m doing in my quest to become mortgage neutral. In my last house I got to the point where I could theoretically have liquidated my assets and paid off my mortgage. Sadly in my new house that is no longer the case. I’m working on it though. I reckon at some point next year I’ll hit that point again. This is a real biggie for me. I’m not sure why it bothers me so much, I just know that I like to be able to clear the mortgage if I want to. Clearly selling everything I have isn’t a route I’d be wanting to go down, but from a psychological point of view getting to that stage is important to me.
I’ve put last month’s figures in brackets so that I can see my progress or not as the case may be. I did my figures a week or so later than normal this month, which meant that my mortgage payment had gone out, which isn’t normally the case. I’m going to try and stick with this slightly later date for calculating my net worth moving forward, but for this month it makes the improvement in my mortgage balance look slightly more impressive than it actually is as it includes two months’ worth of payments.
Mortgage £85,539.21 (£87,050.51)
Cash £16,174.12 (£16,728.33)
Money in sharesave £11,804 (£11,304)
AVC’s £4,138.87 (£3,987.82)
Shares £32,684.43 (£32,759.19)
House £245,000 (£245,000)
Total Assets £309,801.42 (£309,779.34)
Net Worth including house equity
£309,801.42 – £85,539.21 = £224,262.21 (£222,728.83)
Net Worth excluding house equity
£64,801.42 – £85,539.21 = -£20,737.79 (-£22,271.17)
So I’m really liking having last month’s figures there to see as it makes the whole comparison thing a whole lot easier. As I said, there’s two mortgage payments come off since I did last month’s figures, but also I made an additional overpayment of £220 from matched betting profits. I think this is going to be a bit of a balancing act of having enough cash to take advantage of matched betting offers that come along whilst not having more cash in the bank than I need to. It felt important to put my first lot of matched betting profit into an extra mortgage payment to motivate me to keep going with it. I have to say that it was a lovely feeling transferring that money and seeing my balance come down.
What’s interesting is that it feels like I’ve had a lot of expenses recently. We were away to Alton Towers with the cost of the hotel, passes and eating out to pay for. We’ve also had a few more meals out closer to home, as I was starting to feel that we weren’t doing a lot as a family. Time together definitely doesn’t need to involve spending money, but sometimes it’s nice to go and have a night out and not worry about spending a bit of extra cash. So I was a bit concerned about what the impact would be on the old finances, but actually looking at my figures it’s not looking too bad.
I’m managing to continue to overpay the mortgage, pay the maximum in to my work share save scheme, put some money into AVC’s, pay my credit card in full each month and avoid any non- mortgage debt. Mind you I do have another doosey of a credit card bill getting paid this month and a family holiday at the end of the month which will involve plenty of petrol, eating out and generally spending money on holiday stuff. I’m going to try not to worry too much about the money side of things and focus on having a lovely time as a family. With a bit of luck the books will continue to balance and the general direction will be downwards for the mortgage and upwards for the net worth.
What’s quite nice to see in a way is that practically everything has gone down in value. I know that doesn’t sound like a good thing, but stick with me on this. I have a wee bit less cash in my account and my shares are worth less. On the face of it this doesn’t sound like a great thing (it really isn’t!) and yet despite this I’m closer to being mortgage neutral and my Happy Path fund at £64,801.42 is very slightly up on last month. (Although not as high as it was in April – but we’ll not mention that!) So the positives that I’m trying to take from this are that even if the markets don’t behave for me, which let’s be honest they aren’t always going to, then as long as I keep plugging away paying off the mortgage and investing then I’m going to continue to move in the right direction.
Trying Out A Post FIRE Life
I’ve had a nice little insight this week into what my post FIRE life might look like. I had a week’s holiday from work and the kids were away staying with my folks. So I had the week in the house on my own without needing to go to work. I had a lovely time to myself, pottering around and generally feeling very relaxed. I had a little bit of social interaction with a night at running club and a trip out to the cinema with friends. Apart from that though I was flying solo.
I’ve always known that I like my own company, but this week has really reinforced for me how much I crave time on my own. The kids were home for one night before they went off for two weeks with their dad. We really made the most of that one night, getting a carry out and having lots of fun with a games night in the house. We really appreciated the time that we had together, and the night was lots of fun. The rest of the week though I spent time Matched Betting, working away at my Spanish course and starting to learn a little bit of German. I had a massive long list of things that I wanted to get done. I got some things done, but not as much as I hoped. As always time just got away from me. Saying that I don’t feel like I wasted any time, rather that I just spent a bit more time than I had planned on Duolingo working away at my Spanish and German courses. It also made me realise how long things take to get done. It’s no wonder that my To Do list never gets finished when I’m trying to fit things around working full time.
So I was busy all week with a lovely mixture of things. I thought I would get out for some walks, but that didn’t happen. I also didn’t feel the slightest need to get the decorating done that I had planned. Oh well, maybe next time. The point is though that I also didn’t feel the need to sit around mindlessly watching the telly. I was busy all the time, but not in a rushed way. I had the luxury of taking my time and allowing my day to unfold naturally. I also treat myself to one episode a day re-watching Peaky Blinders in preparation of the new series starting next month. So I think this has shown me that once I reach FIRE I’ll not be short of ways to amuse myself.
Yet Another Mid Life Crisis?
Having lots of free time to think has also allowed me to consider my life and changes that I want to make. I’m hitting the bit 5-0 next year, and it’s making me take stock of my life and consider if I’m really happy. I feel that I’ve got lots of the basics right. My family life is great, if sometimes a bit chaotic. I’ve got some great friends and a lovely extended family. I’ve not got a significant other, but I’m used to that and I’m not entirely sure I’m all that fussed about doing anything about that. My running is a huge thing in my life. I love the social aspect of it, and I’ve met some great friends through this hobby. It’s one of the things that makes me really happy, and as long as I manage to stay injury free I’m hoping to keep doing this until I’m on my last legs.
The one part of my life that I’ve never really got sorted is work. Whilst I have an alright job that pays the bills ok, I wouldn’t exactly say that I’m passionate about it. I’m going through a spell just now where I absolutely hate it. I’m not sure this is particularly about the job itself, as that hasn’t changed significantly, but more about my frame of mind. I feel as though I’m counting down until I can pack in my job, and this is not exactly the most positive way to live your life. Whilst I am committed to reaching FIRE, I think there must be a way to balance this with enjoying your job and making the most of opportunities that come your way.
I had a really strong urge the other day to hand my notice in. I was at the cinema watching Yesterday (great film by the way) and it was all about a person following their dreams. As the film finished this feeling just came over me that I should quit my job. I felt very calm about it, but also convinced that it was what I wanted to do. Luckily?? I managed to talk myself down. As I don’t have a clearly defined dream that I want to follow, I would be quitting without an alternative plan in place. It would somewhat force my hand though and mean that I would have to make some decisions about how I wanted my life to go.
Now clearly from my Net Worth figures above, leaving work would not be a smart move. I’ve got a base rate mortgage through work, I’m saving into Share Save schemes and I have a pension that I could do with some more years of service to increase the value for when I do pull the plug on work. I do have an exit plan. Kind of. Admittedly it’s not exactly imminent, but it’s more defined that it was before I discovered FIRE. Now saying that, I do have emergency money, so I am definitely in a position to be able to walk in on Monday and hand over my resignation letter. I would be able to live for quite a while off my emergency fund before I’d start running into problems. Of course if I do that then if there is an actual emergency then I would have spent my contingency money.
I’ve come up with an embryo of a plan. I figure that if something as innocuous as going to the cinema can lead to a total revaluation of my life and make me want to pack it all in and move to a hippy commune (well maybe nothing quite that extreme, but definitely have me questioning my life choices thus far and thinking seriously about shaking things up), then it’s quite likely that I need to implement some changes in my life.
So I’ve had a bit of a look at my pension forecasts and been pleasantly surprised. I already knew that if I retire at 60 I can either get £10K a year or £7K a year and a £50K lump sum. I requested a calculation for leaving at 55 and I can either get £6,900 a year or £6,100 and a £40K lump sum. I’ll turn 55 in six years’ time. So that’s leaves me six years to get my mortgage small enough to be able to be cleared by the lump sum. Six years to establish enough extra income from something that doesn’t involve being in an office seven hours a day and with all the nonsense that goes along with that. Six years to build my investments sufficiently to give me enough extra to pay my bills and allow me to have a good life.
Six years is a good period of time. It’s long enough for me to do any training that I need to avail myself of. Time for me to establish a business, buy a property, increase my investments……………….. Basically enough time for me to design the life that I want and work out how I’m going to pay for it. The challenge is going to be to actually do something about this. It’s so easy to get caught up in the day to day grind and not implement the changes that you need to make to improve your situation. I need to just get on with it. Action conquers fear as they say.