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.

From August 2022, the freedom fund will provide the majority of our income (I am not ruling out the odd side hustle along the way).

Before we took the plunge and gave up our jobs, I was comparing the theoretical passive income available at a 4% safe withdrawal rate vs. our actual monthly spending. As we move into the decumulation phase, I will monitor our actual spending (and associated withdrawals) as a % of the fund and also any income we generate in addition to this.

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. 44:43:12 between pension, non-pension and cash 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 01/07/22

Our plan was to have approx 2 years worth of expenses in cash (actually, mostly premium bonds) before we pull the trigger on ‘retirement’, but we are currently well above this. We planned 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.

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 proceeds from our recent house sale, current value of vehicles and a small number of other valuables. This figure is less important, as we plan to use the money from the house sale on another property and have no plans to sell any other assets to generate an income. We update this figure less often, and 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 £1,788,527


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