Hopefully you read my last post about the mistakes that I had made so far on my F.I.R.E journey (if not- head over to it here). This post is the tips that I think can help you on your journey- especially if you are at the start of the process.
Table of Contents
1. Get a partner
Now, this doesn’t have to be a wife/husband, or even a life partner. It could be somebody that just shares the same ideals/thoughts/processes that you do. It doesn’t have to be for life either- it could just be for a defined period (though, I’d suggest longer is better). What’s the point of this partner then? It’s to share- usually the living costs, which in the UK are pretty high, but immediately you can half them. That water bill, council tax, electricity, heating, rent/mortgage- can all pretty much be halved (ok, council tax isn’t since you get a 25% discount being single, and rent/mortgage is probably higher as you went for a bigger place, but still!). There are ways around this if you don’t want to partner- you can “lifehack” and rent a room out, or house share entirely.
2. Buy a house
So, this isn’t possible for everybody, and if you move around a lot, it might not fit with your lifestyle. But, buying a house is a seriously good way to achieve the following:
Enforced saving- every month you have to pay that mortgage
Fixing your housing costs- no more can your rent go up
Allowing you to do things like rent a room out, or even rent the entire place out if you go travelling for a year (mortgage rules permitting)
Decreases your costs month on month- on a capital repayment mortgage, each month you pay less and less interest and more capital- saving you money.
Pegs you onto the property market- so if prices go up, it doesn’t directly affect you (least, till you move)
3. Live in a Low Cost Of Living area (LCOL)
Housing is one of the main costs of living in the UK. If you can reduce this, then you can seriously increase the amount (or percentage) that you can save towards F.I.R.E. One of the easiest ways to do this is living in a low cost of living area. This usually means, living further from a city (especially in London), but it doesn’t even need to be that far. 2/5/10 miles can make huge differences in cost- and if you can work remotely, even better. I’ve written about living in South Wales before.
4. Avoid ‘lifestyle inflation’
This is one of those tips, that can be very easy to say, but much harder to actually follow. What even is lifestyle inflation?- it’s when living the way that you do, slowly gets more and more expensive just to maintain. This is very normal for most people- since they earn more as they get more experienced in their jobs etc. They would then treat themselves more- more takeaways, nicer cars, a nicer house/extension, etc etc. The problem comes when you realise that you savings rate hasn’t changed (and the income you require has increased). If you can avoid this, and keep this under control, then your F.I.R.E date won’t slip (or by very much), and you’ll be there sooner than you think (who, when you look back, thinks that sky full package at £100+ a month was really worth it).
No no, not the kind of balance you do when you balance on 1 leg. The balance that applies as you move through life and you make decisions weighing up the advantages/disadvantages. As you work towards your F.I.R.E journey (and it will be work, and lots of it), you need to apply a balance to your life. Sometimes you will want to spend money- and that’s ok. Sometimes you will want to say no to an earning opportunity- and that’s ok too. If you get this balance wrong, then you will look back on the things that you missed with regret- not attending a friends wedding etc. Don’t do this, somethings only happen once, and you want to be there/or do that. On the other hand, you can’t just say yes to everything as it’s a “once in a lifetime” experience, that’s just really good marketing.
I could have added another 5 tips to this list easily (or probably, another 95), but I really think that these are probably the top 5 that got me to where I am now & they are the 5 that I would give to somebody that wants to F.I.R.E but isn’t really sure where to start.
What do you think? Did I miss something obvious? Is there something that you have done that’s worked really well for you?