quit your job and retire early

A review of my progress towards extreme early retirement - six years on...

By RealSociology | Retire by 50 | 9 Jul 2020

Back in 2014, I was working full-time as a teacher in a sixth form college in Surrey. I'd had enough by that point, and I spent that summer holiday writing a book outlining my strategy towards early retirement, taking as a model the early retirement extreme model by Jacob Lund-Fisker. 

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I was 41 at the time and was pretty obsessed with the idea of being able to retire at age 52 at the latest, maybe not that extreme by true ERE standards, but manageable given my relatively late start.

I remember vividly the first day of that summer holiday because that was the only end of term drinks I didn't go to, so I didn't have a minging hangover the following day like every other year. Instead I was up on day one of the holiday strategising how to earn more and save more over the next decade.

I'd opted for writing a book on the topic as part of that strategy because not only was it useful to get me focused, I also intended to sell it as a means towards the goal it outlined.

I put the book up for sale back in 2014, and I was (honestly) just about to write that it has sold precisely zero copies, but I just logged onto my Smashwords account and discovered it has in fact sold around 90 copies, at the princely sum of $1.00 a piece, which I guess is something!

Anyway, far more important than the rather dismal sales of this book (although I guess $90 is better than nothing!) was the fact that it kick-started my whole early retirement process.....

Writing that book, my first 'digital product' got me interested in the idea of selling digital products more generally, and I now live off my digital resource sales (sociology revision resources, hence my name here!).

Writing that book also encouraged me to stick with some very frugal living and intense savings during the mid 2010s, some of which turned into old-Hive three years later.

Most significantly, I've been able to quit full-time work as a teacher on the back of the changes in lifestyle outlined in my book.

NB - The term 'retirement' might not be the best I could have used, what I really mean is 'financial independence' - having enough money in the bank to not have to do paid work!

Here's a summary of what I wrote about my Early Retirement Extreme plan back in 2014:

(NB this really is a summary, having just re-read my chapter on this, man I like to go on!)

  • I was one year in to paying off a £146K mortgage at 3.1% interest. This was on a 15 year term at the rate of just > £1000 a month.
  • My Teacher's Pension, which I can claim from the age of 60, was already worth about £6.5k a year (plus a lump sum of £19K), approximately half of my projected desired retirement income.
  • I took home £2400 after tax and pensions contributions (the later being about £400/ month).
  • My expenditure at that time was £1830 a month, including the mortgage
  • I was aiming for a savings rate of 51% of my post-mortgage payment income. I'd opted to include my mortgage payments as savings given that my flat was part of my wealth. I always new this was slightly false, but it was motivational!
  • My plan was to retire in 12 years, at age of 52 at the latest.
My main goals aged 40-52 years was as follows

Full Time work, voluntary poverty, paying down the mortgage, saving and working towards the following 6 goals:

  1. Reducing my expenditure to a minimum and living a voluntary-poverty lifestyle.
  2. Paying off the damn mortgage over a 15 year term, at the rate of +£1000 a month.
  3. Saving a minimum of a further £400 a month.
  4. Continue paying into my current Teacher Pension Scheme (TPS).
  5. Generating second income streams. I've set myself the goal of earning about an extra £30K over the next 10 years.
  6. Developing 'resilience skills' – constructive skills, cheap hobbies and meditation, the kind of things that are free, and hence work with a frugal retirement plan.

2020 Six years on Review

I'm now 47, so six years on from those original plans, how am I doing?

Expenditure reduction and voluntary Poverty?

I did great for all of 2015 - I remember I had more days where I spent no day-to-day money than I had where I spent money, and I was very good with restricting my daily take out coffees!

Unfortortunately every year since 2015 has seen a gradual creeping up of my habitual expenditure, although one of the upsides of Covid-19 was a forced change of habit, and so that cut my gym membership and my coffee and beer consumption right down.

The most signficant reduction has come from getting rid of the service charge on my flat - by 2018 that was heading towards £4000 a year, yes that's not a typo, with my house, the maintenance costs are no where near that.

Paying off the damn mortgage

Here I've been hugely successful - since I've sold my old flat and bought a house my mortgage is now down to around £55K, with the house valued at more than 3 times that, so it's happy days, that's £90K off the mortgage in 6 years, more than half my target already.

What I hadn't factored in is that I'd lose £11K in the process of moving house! But even with that, things are looking good!

Interestingly, I said this at the time

My flat is currently 'worth' about £210K, and I could pick up a dilapidated two-bed flat, possibly even a two-bed house for about £140K in a less desirable part of the South East. This alone would shave £60K off the mortgage, although once I factor in buying/selling costs and renovation this would probably be more like £40K saved. If I just left it there, this could take me into early retirement another three years earlier, albeit in a dwelling of lesser value.

This is precisely what I ended up doing - albeit selling and buying for higher prices four years on!

Generating second income streams. I've set myself the goal of earning about an extra £30K over the next 10 years.

I managed to do this and then some - I've been so successful in selling digital resources related to A-level sociology that these have now become my primary income stream, especially during Covid-19 and I've managed to quit my full-time teaching job as a result.

Saving a minimum of a further £400 a month.

I was very successful here thanks to my second income streams from digital revision products. I diversified these savings into shares, peer-to-peer and crypto - the only mistake I made was buying too many alts in 2017. I'd probably have at least another BTC if I hadn't have done that! Maybe more, I honestly would rather not think about it!

Continue paying into my current Teacher Pension Scheme (TPS)

I did carry on paying into it, I think it's now worth about £8000K a year, but I'm fully expecting to not be able to claim it by 60, I think there's about 98% probability that government will fuck middle-aged public sector workers and force a delay to the pensions until possibly as late as 68-70 years.

Developing 'resilience skills' – constructive skills,

Hmmm - well I've done OK meditating, bit slack of late, but as to the constructive stills that's a big fact no. This is something I need to work on for sure!

Final thoughts - how well have I done on my journey to financial independence?

I think I've done better than I thought I'd do back in 2014.

There are still two key aspects still left to reach FI:

  1. I've got another £50K on the mortgage to pay off.
  2. I need to maintain my wealth levels

I'm still on the same 15 year mortgage, which is due to be paid off by the time I'm 52 (I think, it might be 53, but near enough).

At time of writing, thanks in no small part to crypto my wealth is looking pretty good for full retirement from age 52.

Most importantly, now that I've quit full-time teaching I don't actually mind working that much, I honestly don't do much of it - around 4-5 hours a day, 4-5 days a week (it varies), and the work's at a pretty relaxed pace.

Financial Independence next phase...

I'm about to launch into a whole nother phase of my ERE/ FI plan - hopefully I'll have my current house up for rent soon and by October I'll be renting a place in Portugal and scouting out land to buy.

Yes, the next phase is to find some cheap land, stick up a yurt and some solar panels and go proper frugal.

Should be a lot less fun than the fantasy romantic visions I've got in my head about the adventure!

Originally posted Using LeoFinance

All quotes above are taken from my original book, 'How to Quit Your Job and Retire Early'. 

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Blogging about Sociology and Extreme Early Retirement

Retire by 50
Retire by 50

In the summer of 2014, when I turned 41, I set myself the goal of retiring from paid-work by the age of 52. This blog charts my own strategy and progress, and explores different theories of financial independence and 'extreme early retirement'. It also provides the odd tip on how you might also retire early!

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