Finding Enough

The journey to financial independence and a world of choices

Tomato & chilli seedlings

I can’t believe we’re a quarter of the way through 2021 already! The new growing season is upon us in the UK, and just the same as every year, I am a bit behind were I wanted to be. I have enjoyed growing my own vegetables since I was very young, ‘helping’ my Dad plant crops in the garden. I suspect my ‘help’ slowed proceedings rather than making a meaningful contribution, but it sparked an interest that has stayed with me (and I suspect improved my parents’ chances of getting me to eat said vegetables).

I have managed to get my potatoes planted and have sown tomatoes and chillis, which are currently enjoying the sunshine on the kitchen windowsill until it is warm enough for them to go into the greenhouse.

So, with plants growing well this month – what about the money tree a.k.a the Freedom Fund?

March is always a good income month with my work bonus being paid with my salary. It’s no where near being in the same league as the bonuses paid in the financial world, but never the less it’s a nice little boost to the freedom fund, and coming as it does just before the new tax year in the UK, it’s a great head start on filling my new ISA allowance. This combined with a rising market has delivered another record high for the freedom fund:

Freedom Fund value: £1,065,955

Hypothetical monthly income @4% SWR: £3,553

Actual Expenses: £1,923

Yet another month when spending came in comfortably below the income we could theoretically safely draw, despite a number of van-related purchases. March expenses also included a new shed roof, after the old felt blew away in high winds a few weeks ago. It was good to be able fix it ourselves, but my knees have only just recovered from balancing on a shed roof for hours trying to spread my weight whilst simultaneously marshalling and securing heavy lengths of roofing felt. That should now last 15 years, which I fear is probably longer than the shed underneath it will last.

As well as plants, spring has also brought life to the garden in the form of a robin’s nest in one nest box amongst the honeysuckle on the fence, and a pair of blue tits setting up home in another. Typically, no-one has yet moved into the box with a camera in it…..

The signs are good that lockdown restrictions will continue to slowly lift over the coming months, and this weekend we were able to meet friends and family outside for the first time in months. While we needed to wrap up warm (we managed to pick the days that arctic wind was sweeping the UK, rather than the warmer mediterranean air present the other 2 days), it was lovely to meet in person rather than on a screen for a change.

Roll on April – probably my last month ever working full time.

5 thoughts on “Financial Independence + 15 months, March Update

  1. Al Cam says:

    Small technical query – is your “Freedom Fund value” expressed gross or net of tax?
    I ask as I assume your expenses are net of tax.

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    1. The Freedom Fund value is just that – the actual total of all accounts. Half of it is in ISAs, so there is no tax implication, but yes there will be income tax to pay on income from SIPPs when we get that far. To keep it simple, for illustrative purposes, I show a hypothetical monthly income from investments each month, in reality it is likely we will need to deduct a some income tax from this. Once you take into account the 25% tax free element, our personal allowances and remaining ISA funds available, I don’t expect this to be a huge amount. There are an awful lot of variables which could (will inevitably?) change in the next 14 years before I can access it, so I don’t see the point in spending too much time modelling it just yet. I prefer to keep a healthy ‘buffer’ in that we have assumed no state pension income, no inheritances, no accessing equity in our home (which is larger than we need) and no income from side hustles.

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  2. Al Cam says:

    Thanks for the clarification.
    I agree – simple models are generally the best.
    I used to just multiply my SIPP by 0.85 – but in fact this turns out to have been somewhat pessimistic.

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  3. Al Cam says:

    May also be worth keeping an eye on the LTA limit(s) vs your SIPP(s) too – as 14 years is indeed a long time!
    By my fag packet calc 5%PA on 50% of your pot would be getting pretty close – assuming just one persons SIPP(s).

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    1. It’s spread across the 2 of us, with my pot being slightly larger at approx £300k. There have been some good illustration tables on one of the Facebook forums recently and I think I should be OK, but it is something I will need to keep an eye on if I continue to make contributions through my workplace pension for an extended period.

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