Finding Enough

The journey to financial independence and a world of choices

The Great British summer – sunshine, but threatening skies are never far away….

Two months into semi-retirement and I have only worked one week in June! The weather has been decidedly changeable, so it has been great to have the flexibility to get out and enjoy the sunshine between showers.

We met up with some friends this month while they were in the area on the way home from a holiday. I was asked if my new working arrangement felt like ‘that coming back from holiday Sunday night dread’ a couple of times a month. I can honestly say, that is a long way from the truth (for now at least). I was actually looking forward to catching up with colleagues and getting involved with ongoing projects. The extra time away from work has made me feel more energised and I believe that during the week I spent working, I was more focussed and productive than I would otherwise have been. Part of that could have been the focus brought from knowing I needed to get things complete within the week, but I am certainly benefitting from a modified mindset and perspective that a very different work life balance allows.

The only negative feeling that I can describe, so far, associated with working less is a sense of guilt that I can’t support colleagues with everything. Then I remind myself that it is not my responsibility to deliver everything, and whilst I might naturally want to help others where I can see that I can, I am the only one truly looking out for my own interests. It would be so easy to slip back into working more, just because it is what everyone else does.

So, while I spent most of the month doing what I wanted to do, what did the freedom fund get up to in June? Turns out that with only an automatic £800 investment from me (from my reduced workplace pension contribution), it increased in value by over £20k! I know how the maths works, but the magic of passive income and compound returns still amazes me when I see it in real life. At the end of June, the numbers looked like this:

Freedom Fund Value: £1,123,347

Hypothetical monthly income @4% SWR: £3,744

Actual monthly expenses: £2,201*

There was quite a lot of spending on the van project, which is a good sign, as it means we’re finally making some real progress. There was £216 on new anti-roll bar drop links for the car after it developed an un-nerving clunking sound when going over bumps and there were also a couple of meals out. One with the friends I mentioned earlier, and the other with some old work colleagues from a previous company.

Those ex-colleagues are mostly quite a bit older than me, and the topic of conversation quickly turned to retirement. One had retired since we last met up (which we worked out was more than 2 years ago) and two others were starting to think about when they might be able to do the same. What shocked me about the discussion was that there was very little understanding about what investments they actually had and what they could realistically afford to do. The talk was all about when different pots were accessible. When you consider how much money builds up in pensions over your working life, by retirement age it is probably most people’s biggest asset apart from the property you live in. I find it astounding how little interest people take in how it works and what it is invested in. I suppose a life time of being persuaded by financial institutions how complicated it all is, causes people to switch off. Perhaps it’s just a symptom of how little effort many want to put in themselves in favour of paying someone else to do it for them?

I found myself playing down my ‘move to part time’, as what I am doing is completely alien to them. I think it’s a mix of not understanding what would possess me to voluntarily halve my income, and not having enough imagination to fathom what I might find to fill so many free days.

However unorthodox my path, it is working for me and at the point it doesn’t – I’ll change course and do something else! July will be 50/50 working and non-working, lets see how a more even balance feels….

*Includes £600 per month personal allowances (£300 each), which may not be spent in the month, but which is not tracked. Some of it may show up in the freedom fund in the future, if savings build up and are invested.

3 thoughts on “Financial Independence + 18 Months, June Update

  1. Al Cam says:

    Nice update:
    RE: “I am the only one truly looking out for my own interests” I agree, but I suspect in practice this is easier to do once FI.
    Have you given any further thought to possibility of tweaking your workplace pension contributions?

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    1. I don’t think I would go as far as effectively sacrificing my entire salary, but may well increase it beyond current levels. There is an electric vehicle salary sacrifice scheme being launched soon, so am waiting for the details if that before I make changes.

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      1. Al Cam says:

        Thanks for the reply.
        As usual, lots to consider, but good to explore the various possibilities.
        Also, IIRC, a salary-sacrifice arrangement must not reduce an employee’s wages to below the level of the national minimum wage.

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