2019 year end

Last 2019 post


December was incredibly busy for me and I hope you will excuse the lack of a post until now.


My girlfriend’s sister has been visiting and we have been busy entertaining her. That involved a trip to Dublin for a weekend and then Scotland for Christmas and New Year.


Along with a very busy December at work, I have finally tied up some financial loose ends.


I have consolidated two pensions from former employers into a SIPP. This tidies up my finances and I hope will save money on fees. Previously I was paying 0.5% on the pension from my first employer. It had been sitting doing nothing (except growing to be fair) but it was time to sort it out. I also had another pension combined that was on 0.3%.


I am paying £120/year for this pension flat fee and have gained £250 cash back for making the transfer so basically it will be free for 2 years. It is with Interactive Investor whom I also have my S&S ISA.


Disappointingly, after I started the transfer process, which was tiresome, Vanguard announced their SIPP. Never mind, I can always transfer later but thanks to the cashback offer there is no need.


I now have my current workplace pension which needs to remain to get their contribution and one from my last employer which I have not been able to sort out as yet. I need to contact the provider of my former employer to find out about the tax rebate they should do before I move it.


It turned out it was a bit of an admin nightmare to get the transfers done. I suppose in some ways that is a good thing as it means it’s harder for fraudsters.


The exciting thing is I now have to decide how to invest this money…

On the downside, my lodger has let me know he is leaving. I’ve been renting out my spare room to a lodger for £500/month (mid-week only) which can be claimed tax free under the rent a room scheme. He commutes from Holland for work in London and has been there for 2 years so it’s quite sad he will be going as we all got on great. He was working in a bank in London and they fired him on his last day before Christmas. Absolutely shocking.

It drives home the underlying goal of FIRE to gain independence from a job (and someone else’s cruel decision).  I don’t know what he will do – he has two children and a wife to support in Holland. Hopefully, he put away some money. I also had a chat to him about FIRE every now and again but I don’t think he was sold on it so not sure if he was putting money away. However, he is a smart guy and well qualified so I think he will get another job.

From a selfish point of view, it also means I have less spare money to invest. I don’t think I’ll be getting another lodger for now so I expect my savings rate will drop.

My girlfriend has also taken a pay cut to do another job she will hopefully enjoy more. The pay cut should only be for a while (12 months) until she finishes a Masters degree the new company are paying for at which time her pay should be more than she was on in her last job. If anything this temporary reduction in income will make us more frugal so is a good thing!


2019 brief review


I will do a better review when I have some time in January but for now I will do a brief overview.

At the start of the year, I made some goals, one of which was to pay off my debts. I did this by September. Unfortunately, I have misplaced the notepad I wrote them down in so cannot recall the other goals! So I think they were:

  1. Pay off debts;
  2. Obtain a legal training pupillage;
  3. Renovate my bathroom.

My net worth is up from £265k to £324k (up 23%).

This is due to paying off debt and saving more. I paid off £37000 of debt and saved more into pensions and ISAs. It also includes mortgage debt reduction. I have not included any increase in my home equity (as I believe it has not increased in value!).

My FIRE fund has grown from £102k to £125k . A solid 23% increase mainly due to the bull run in the markets.

I am very pleased with this progress and will continue to save as much as I can…

In January 2019 I had £37000 of debt. This was causing me some concern. My savings rate was 13% which I thought was ok at the time!

I have ended this year with a savings rate of 57% with a peak of 85% last month.  Over the whole year it has averaged 41%. I am beyond pleased.

The other goals I have failed to achieve but I have removed the tiles from the floor in the bathroom. After receiving quotations for £12k to redo my bathroom I decided not to…

Pupillage is a long-running dream of mine and I will not give up.

Watch this space for 2020 goals!

We are all going to enjoy ourselves in Edinburgh at the street party this evening so I will wish you all a very happy new year in advance.

RE: The problem with FIRE

My FIRE journey is approaching 1 year old. I first came across FIRE around this time last year by reading a New York Times article about it and was completely inspired. I set about doing it right away. I chucked some money into a Stocks and Shares ISA before realising I was making a false start. I had to pay off my vast debt before anything else and now I’m actively investing.


Over the past few months, I have had a niggling pain in my side about the whole process. Although I am completely enamoured with the FI part, the RE end is what is bothering me.


I think I have come to understand what it is that is causing me an issue.


Firstly, I should say I am highly enthusiastic about obtaining financial independence. The benefits are clear in that you are beholden to no one and you are free from the shackles of work.


Retiring early is, in theory, a great thing. When you rock up to work on Monday morning wishing you could continue the weekend, it never seems more appealing.


I may be speaking from a position of privilege as I have a professional job, but work is good for you in many ways. Beyond making money, you have a daily challenge, meet interesting people, and can have a sense of achievement once you have done something.


In my line of work, managing the design and construction buildings, it is rewarding to finish a job. Yes, the journey there is often a war of attrition, but overall it can be a very interesting and rewarding job.


Is giving that up in my mid-forties, at a time when real success is likely to come knocking, really going to make me happy? Giving up decades of hard work at the peak of my career is likely to be something that would be quite depressing.


I feel like if I was 10 years younger retirement would allow me to undertake some sporting challenges, but I’m getting older. In 10 years I will likely have kids and be in my mid-40s. I won’t be able to do the physical challenges I once thought I could do. I’ll also have mouths to feed!


However, with success comes time commitment. It may be that spending more time with my family (yet to have one…but fingers crossed!) will be the reward. FIRE will give me the choice.


I know lots of wealthy people who work by choice. My old boss was married into the Pilkington glass fortune. They were so rich that they sold some vases they had in the family home for around £20m. I oversaw him on his iPad once looking at his current account. It had £140k in it. He came in every day, worked and had a jovial attitude to work. He perhaps could see it for what it was rather than a financial need and I think that led to him enjoying the challenge. I think this is where I would like to be once Financially independent.


Going forward, I am going to strive for FI but maybe take it easy on the RE part. If I retire at 50 that would probably be great. After all, they say the Devil makes work for idle hands…


Savings update Nov 2019     

It’s that time again – my savings update. This month I put a lot of effort into developing a spending tracker so I can accurately calculate my savings rate. I had previously been using a theoretical savings rate based on my budget. However, as we all know, sometimes we go a bit off course and I need the data to reel that back in. I now have that data but first the figures in a spreadsheet.


The Figures


My Saving rate for Nov 2019 was 84%.


Yes, I was as astonished as you perhaps are. I actually thought I had made an error, but no, I have achieved this.


My investments increased by £6199 in one month. Again, I am astonished. It is more than my salary already. (Sorry for the small size!)

november assets

How did I calculate this?


Very simply, it is as so:


((Total Income – Expenses) / Total Income) * 100 = Savings rate.


If expenses are (Total Income – Investments) then the formula becomes.


(Investments / Income)*100 = Savings rate.


I back-calculated my savings rate to give the following:

nov 2019 SR

As you can see, a general increase throughout the year (with a few hiccups along the way!).


Key points of the month


Several significant things happened this month; firstly, it was the first month with increased pension contribution. I am putting away 14% of my salary. This has the benefit of increasing the amount of tax I claim back (which counts towards the savings rate). My employer puts in a higher amount than my previous employer too which increases the savings rate even further.


I also invested £1600 into my S&S ISA.


All these things made my savings rate higher.


On a down side, was hit by a bigger tax bill in my salary than expected (thanks to my old employer totalling the annual taxes rather than paying out the average PAYE). This left me with £600 less than I was expecting. Combined with the increased pension contribution, this is putting a squeeze on the budget as my new employer whacked it out my pay. Payroll say it will be back to normal next month.


Finally, I had a massive expenditure on a skiing holiday I’m taking in February which became due now. This was expected and budgeted for,but was a lot of money to handover. It counts as expenditure, but It was from my savings.


Otherwise, this month has been fairly quiet for me and I was very happy with my spending until the end of the month when I got the double whammy of holiday and less take home.


Spending tracker


To make my spending tracker I have used the Emma personal finance app. The app links up to my bank accounts and automatically categorises my expenses real-time. It then provides a monthly total for each category against a budget. I have simply used this as the basis for my spreadsheet.

spending nov 2019


In the spreadsheet I have also tracked my investments which for this month are as follows:



So that explains the extremely high savings rate this month. It does seem to be counter-intuitive that with such high expenditure, but it is what it is. It can be explained somewhat as I now include my investment in my budget.


I have massively increased my rate thanks to increased pension contributions which gives increased tax breaks to give a savings boost. My ISA contribution was the first I have done this year.
Well done me. Now I just need to keep this up!!

In other news…

I nearly forgot to mention that I was very pleased to have been featured in on the EU’s FIREhub. It’s a great place to get FIRE resources from a wide range of bloggers from across the EU. Thank you very much FIREhub!