Finding Enough

The journey to financial independence and a world of choices

Our Freedom Fund is a pot of money we have been building steadily for years. The intention was to reach a level where the passive income produced, comfortably covers our outgoings, making paid work optional. The freedom fund does not include the equity in our home, and our post-retirement budget does not include any mortgage payments or rent. We paid off our mortgage at the start of 2018.

We are no longer contributing to this fund at anything like the rate we were when we were both working full time, but my part time income covers our expenses, so we have not yet started to draw income from it.

Each month I compare the theoretical passive income available at a 4% safe withdrawal rate vs. our actual monthly spending.

Although I have been tracking the value of my investments since 2014, Mr. Wombat only really came on board in 2017, so I have only been tracking the value of our combined portfolio since then. We hold mainly ETFs in ISAs and SIPPs, with total wealth currently being split approx. 45:55 between pension and non-pension assets. I have a small LISA balance, which I include in the pension category, as it is not accessible until 60. We do own a few individual shares, but this is a very small proportion of the overall portfolio. It just adds a bit of interest to the general ‘set and forget’ approach.

Freedom Fund value as at 1st May 2022

We now have approx 2 years worth of expenses in cash (actually, mostly premium bonds). Our plan was always to reach this target before we start using the fund as our main source of income, to prevent being forced to sell when the markets are down. Essentially, we are in a position to hit the go button on early retirement whenever we want to.

Total Net Worth: As well as the value of our freedom fund we also keep tabs on our total net worth. This figure includes the equity in our home, current value of vehicles and a small number of other valuables. This figure is less important, as we have no plans to sell any of these assets to generate an income, and we therefore update this less frequently. It is also less accurate as it is necessarily based on estimated valuations, but we always keep estimates conservative.

Our current net worth is approx £1,826,104 (including a boost from a recent house valuation!)


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