The Sensitive Issue of Talking About Money
Updated: Oct 24, 2020
So if you've read this far, you'll know there's an amount of risk in my current plan and the risk is that despite throwing around the word retire a lot lately, doing nothing for the next 50+ years is probably not a viable strategy.
I've already grown to dislike the word retire, it immediately flashes up a visions of an old people's home (Are you still allowed to call it that? is that ageist or some kind of other "ist"? Does it have to be called something softer like a community for people of advancing years or some other PC nonsense?..... I'll Google it.) I wouldn't classify myself as going to be Self-employed either as that says to me that I have my own business with employees and go into an office very day. Semi-retired just sounds like you just can't make your mind up and Home Investor just sounds like someone I'd like to slap continuously. There isn't really a word to describe "Not working but planning to generate an income", I should come up with something. I'll put it on one of my ever burgeoning lists. For now, I consider myself a "Willing Opportunist"
At this point, we should address the thorny issue of sharing ones personal finances (look at me using the word one not as a number, lardy dah). Whenever I'm reading or listening to someone talking about personal finance, I kinda expect them to share most if not all of their circumstances so I can get a feel of how and if it relates to me. I've never been one to understand why someone is afraid to divulge what they earn, it's like it calibrates their capability or intelligence for some people. I can't really buy into that, I have zero tertiary education (I barely scraped through High School) so I started at the absolute bottom of the pile and have worked hard for what I've got but I wasn't embarrassed of what I earned then, and I'm certainly not embarrassed about what I earn or have now.
I'm going to be pretty easily identifiable by anyone who even remotely knows me when I hit publish on this blog (Probably the day I leave my full-time employment) and a lot if not most of my friends work at the company I'm leaving, as does my wife, who is continuing to work there, so at the moment it feels wrong to divulge any salary information but for the sake of relevance, I'm going to be as open as I can with our savings amounts and where the money is invested along with our spending amounts and our cost of living. Seems like a fair compromise and later down the line, if it's relevant for a post, I'll share info from my current job as much as necessary.
All of that said, going back to being a bit of an educational failure, I should point out that I was the head boy of the "Could do better" and "Needs to try harder" report card club. It wasn't that I couldn't do the work or found it even difficult, the exact opposite actually, I was put into accelerated learning whilst I was in infant school (Do they call that primary now? between 8 & 12 years old anyway). No, my problem was that A. I was lazy, B. I wanted to earn money and C. I preferred hanging around with the older kids which included drinking, smoking, girls, truant and clubbing for the last few years of High School.
It wasn't that I couldn't get an education, I just didn't really want one or see the value in having one. I also had no clue what I wanted to do other than get out of school as fast as possible and start making money. Whilst I actually quite enjoy maths (or should that be math) now, I have not, and probably will never, use my teaching in Loci or Pythagoras' theorem, I've never really needed to use the information I gained studying the history of the battle of Little Bighorn (good porn-star name) and general Custer's last stand, the difference between a perpendicular church and a decorated church never got me out of a tight spot with the rent and knowing that water is one part hydrogen and two parts oxygen has yet to provide me with an income of any kind, although I live in hope. Physics, Basic Arithmetic & English have helped me a lot, but everything else would have been much better replaced by economics, leadership skills, business studies and project management. None of which were even subjects at any of my schools. I learnt much more about working in business from delivering milk and collecting the payments for it.
I can honestly say, I have never regretted any of it, I worked a bunch of side jobs as a child including getting up 5 days a week at 4am to deliver milk and then working 2 nights a week collecting the payment for it. I did that for 5 years from 10 to 15 years old. My first job at 16 was as a "Chain Man" which basically translates as "Dogsbody" to a highly paid engineer and meant spending most of my day fetching and carrying with the highlight being allowed to knock a wooden stake in with a sledge hammer. I got paid 1.50 great British pounds per hour on that job so having put in a back breaking 50 hour week, I would get a massive 325 Great British Pounds per month ($433 / R6,000). That was however in 1992 so if I adjust for UK inflation which is an average of 2.25% per year from 1992 to 2019, that would have been the equivalent today of 790GBP ($1050 / R14,700), not exactly a King's ransom but I have hard working young people who work for significantly less than that today and just as hard.
I could start a long rant here, I won't, but I'll never understand people who would choose not to work (Not ones who can't, the ones that can but wont). Using the UK and the numbers above as an example, the minimum wage in the UK is today, just shy of 1800 pounds per month. That's more than double my first wage in today's money, and that's for literally any job at all, not just as a broken backed skivvy. I would have happily dug graves for that kind of money when I was starting out (No disrespect to the grave diggers, much love, although I think you use machines these days). OK rant over and back to the Personal Finance stuff.
So my next posts are going to be laying out the "Before" picture in advance of hitting the big day of becoming gainfully unemployed. Obviously I haven't been sitting on my arse for the last 43 years when it comes to planning for my future and since I discovered the FIRE thing I've been putting a lot of time and effort into putting my money where it will work hard for me and trying to cut back on the frivolous and wasteful spending to make sure we need less money to live on.
Which kind of takes me to my last major point of this post, just how much more aware I'm becoming on what a completely massive steaming pile of turd I've been spending my money on for the last 27 years of my working life. Like most people I've lived right to my means and often beyond, especially in the early days. I've amassed no less than a graveyard (A lot of talk of death today, I should analyse that) of gadgetry, enough clothes to make a rope to the moon (maybe!) and more stuff with screens than an average Apple Store, I've only got two frickin eyes and they're on the same channel! And do you know what? I barely use any of it. Today, in order of importance, the things I use that actually provide value to me (that are not people or animals):
The House (more specifically, Sofa, Cooker, Bed)
The BBQ / Braai (for the South Africans)
10 Things, and the first two are not even things! I own hundreds of "Things" and I did debate ditching something to make room for my current obsession, my 3D Printer, but that mostly prints things I really don't need. There's definitely another post coming on what I actually need and I can see a serious de-cluttering of my life in the not so distant future. I really do wonder if you took everything away apart form those 10 things (and the basics like a cup, plate and fork), what I'd miss the most. I kinda hate the smart phone being on there but it is, and I hate myself for that.
So, to get to the point of the sensitive subject of money and the obvious question of how much do we have saved that has allowed me to entertain the idea of quitting a perfectly good job with no plan of getting another one and also planning never to run out of money? The answer is around about 700,000 British pounds, 900,000 dollars or 13,000,000 South African Rand. If I use the FIRE principal of 300 times my planned monthly outgoings, I need that to be more like 1,000,000 British Pounds, 1,300,000 dollars or 18,500,000 South African Rand. That may sound like a lot (I never thought I'd be a millionaire by British Standards, let alone actually need to be), but remember, I'm 43, I'm living until I'm 100 and there's also Mrs H and Winston the wonder dog to provide for from that. Yes, Mrs H is still working for now, but I have to assume she might join me at any time (even though she probably won't as she loves her job and hates me "creating" in the house) I have to treat her salary as not guaranteed more than a year or two in my calculations at all times.
I'm going to try and show everything in all 3 currencies as I'm British, I live in South Africa and most of the world understands dollars. I just need to get a keyboard with a British pound sign on it or this is going to be painful!
Next time, I'm going to break down our "before and after" living expenses, it's been an interesting exercise.