I can still vividly remember hitting the “5 years to go until I can quit my job” point whilst on my journey to financial independence.
It was a big deal for us – the first time we had solid yearly targets making financial freedom seem actually achievable. It still seemed miles off at times though, especially on those tougher working days.
So it seems slightly surreal that I have now been officially ‘retired early’ for five years.
Eh? How did that happen? It’s amazing how much time seems to speed up when you’re no longer counting it down.
That five-year gap on my C.V. obviously came at a financial cost – so do I think it was worth it?
How Much Is Financial Freedom Worth?
I may have started out on a less-than-impressive £8k/year salary in my first job – but by the end of my career I’d been lucky enough to work my way into being a high-earner.
Using the traditional back-of-an-envelope approach, I reckon not working these last five years easily ‘cost’ me a few hundred thousand after the tax man (or lady) would have taken their slice.
There’s the actual salary not earned, the annual bonuses, plus the various share match and share save schemes I always maxed out. And then there’s all the extra employee contributions to my pension fund I’ve ‘missed out’ on.
Even if I assume no more major pay increases, it doesn’t take long before it adds up to some serious money I’ve chosen to not earn.
Actually, when you come from a very average background like me, it seems like a crazy amount of money to give up. It’s the kind of money that I know would change pretty much all of my friends and family’s lives.
So was it a bad decision to quit? I know I’ll never be able to go back in at the same level – should I have stayed working whilst I was in that golden earning period?
For me, I think it comes down to what would I have done with the extra money?
How Much Is Enough?
One of the things I will always harp on about is how the decision as to ‘how much is enough’ is so personal for everyone. What’s right for me is unlikely to be right for you.
That said, I found it useful to learn from other blogs when figuring out my own journey. And so my take on this is that it’s as much of an emotional debate as it is a financial one.
From a financial perspective, our budget each year so far has been well below what we thought it would be. On average over these last five years, we’ve spent on average around £33k each year. This year looks to be coming in around the same, despite all the price inflation.
For those curious, I’ve written before about how that’s broken down here. Our original budget, and the basis for our FIRE target, was for £50k a year. So we’re running well under our budget expectations so far.
You might think the pandemic artificially flattened these actual numbers but the years pre and post are very similar. Given one of our major expenses is travel, I think that largely comes down to the fact that our slow travels abroad work out costing about the same as us staying in the UK.
I honestly can’t think of a time when either of us has said ‘if only we had more money to do x,y or z’. Having the additional money in the bank would have made zero difference to what we’ve done over the last five years.
From that perspective, I can see no reason why I would be happier now with the extra money in the bank instead of everything else I’ve gained and done in those five years.
So what did five years of FIRE give me that was worth that bundle of cash?
What Has FIRE 'Bought' For Me?
One of our major reasons for working towards Financial Independence was having enough time to do what we wanted. Hence this blog’s tagline – Buying Time For Living Life!!
But I was still a little wary of writing this piece, since I’m not a big fan of the influencer-type blogs. You know, the kind that reel off glowing stories of how amazing everything is.
However, the truth is, that we’ve done and seen so much in these five years that just wouldn’t have been possible if I’d stayed at work. Instead of trying to max out my 5-6 week holiday allowance each year, we’ve fallen in love with slow travel.
We’ve had some epic three-month adventure trips, exploring SE Asia, Africa and South America. We completed our first multi-day hiking trek in Europe, an experiment that turned out to be another instant hit.
We’ve also spent many happy months in old favourites across Europe, getting to know them in depth. Learning more of the language, delving into the food, the people, just the ‘real’ way of living.
So I consider the travel box well and truly ticked – but the freedom has also brought us more unexpected benefits.
Being so flexible means it is much easier to get time to see friends and family – when we are in the country at least! No longer tied to just the weekend hours.
It’s something we considered invaluable when we lost S’s Dad last year. Flexibility to support S’s Mum and no regrets on wishing we’d spent more time with him.
And then having given up the horrendous commute means I’m not so tired all the time. Not always playing catch-up at the weekend with tasks – and sleep!
My health is much better – not least because I now have time and the energy for daily exercise. My stress levels are so much lower. I’m not half-thinking about solving issues at work when I’m out and about.
I could go on – but it already sounds irritatingly happy so I’ll stop there. Suffice to say, I’m more than happy the financial cost of those five years has been well worth it.
But out of curiosity, what do I think I would have done with the extra cash?
What Would I Have Done With The Extra Cash?
Ok, so given how far under our expected budget we seem to be, it’s safe to say our day-to-day life would not have been much different if I’d had the extra cash from working those five years.
Would it have helped me feel like I could spend more? I don’t think so. My natural tendency – and S’s – is to look for and spend money on things we consider good value.
Much in this world is regularly hyped up and marketed to death. Targeted at the cash-rich, time-poor. Be it travel or shopping for groceries, the advertisement barrage can seem endless.
We can honestly say we’ve never not done or bought something because we were worried we didn’t have enough money. But there are definitely a few things we haven’t bought or done because we didn’t think they were worth it.
Having more money in the bank wouldn’t have changed my mind on those. But there are a couple of longer-term ideas we have that will take a little more planning than they would have if we’d saved for longer.
Such as buying a £150k RV from the States. First up, it’s a ridiculous amount of money for an RV anyway. The one we occasionally drool over clearly falls into the heavily marketed camp.
So I know we’ll eventually find one that suits us better for when we actually want to get one. For now, we’ve still got many places to explore where it would be too difficult to take the thing anyway.
This is also why the delay to our second long-term idea of leaving the UK and settling down in a country that suits our day-to-day living better. Without the extra money, we have to accept selling up our UK house to make the move. We could probably have afforded a second home if I’d stayed working longer.
But tbh, I don’t want to own two houses. It’s hard enough looking after one! So it’s kind of a good thing to be forced to commit, once we’re ready.
So from a personal perspective, there’s not much I can think of that the extra money would have done for us. But sometimes I do think about whether it would have been worth it to be able to do more for others.
With no children, we have no intention of leaving an inheritance. But I can see that with the extra earnings we could have donated more money. We could have tried to make a sizeable difference to the kind of people in real poverty we see when we travel. That’s still something we’re thinking about how best to help.
But in all, I really don’t see that the money I’ve ‘given up’ would have made any real difference to us over the last five years. Whereas having had these last five years of freedom – it already feels priceless.
I think there’s always more you can think of having, of doing – but for me, not everything is worth giving up your freedom to do so. The hard part is knowing which is which for you. And having a partner with a similar view helps enormously!
But FIRE isn’t for everyone, there are more than a few people who’ve tried it and preferred to return to work. That’s why I think getting FIRE ‘right’ is about so much more than just the financial side.
What Have I Learned - So Far?
It’s funny, I used to hate the expression ‘lessons learned’ back when working. It used to mean a torturous workshop following any kind of project, documenting what people thought went well and what not-so-much.
A painful exercise that was supposed to inform future projects – but the lessons were always faithfully ignored and duly repeated. Such fun times.
But now five years into my early retirement, it does seem a useful point to reflect on what I have learned so far.
The previous point about there is always more you can spend on – but it’s not always worth it has been a good lesson. I’m glad I quit when I did, zero regrets on that front. I don’t feel I am missing out because of a lack of money.
It takes a lot of honesty to know what that level is for you. It can be tempting when work is tough to think you will cope on a lower budget. For me, there’s a big difference between being frugal because you have to be versus because you genuinely enjoy living that lifestyle.
We would never have enjoyed the last five years as much if we’d been restricted in our spending. The better you know yourself, the easier it is to get ‘the number’ in the right ball-park at least.
Which has been a good second lesson – you won’t get everything right and you can’t plan everything. There will always be unknowns and some level of risk involved.
This one was an interesting mix for me. I spent a lot of time in risk management as part of my job and I’m used to balancing the pros/cons and deciding a good tolerance level. It’s still much harder when it comes to your own personal life!
At some point it becomes more about knowing you will be able to adapt as necessary, rather than trying to remove every single possible risk. Take a giant curve ball called Covid, for example. Couldn’t have seen that one coming.
Keeping some flexibility in our budget and focusing on cashflow above net worth were both big reasons why we didn’t have to stress out too much about money at least during those oh-so-fun rollercoaster times.
And it was in those days when the mind-set lesson really hit home. A ‘good’ FIRE or early retirement doesn’t just happen. It takes effort to make it the life you want, just as much as saving up the cash in the first place.
When travel became difficult during the pandemic, we still managed to make the most of what opportunities were available. Instead of rigidly sticking to a planned wish list of countries to visit, we went wherever it was safe and legal to do so.
It would have been very easy to stay home but instead we had some great experiences to add to our collection.
In the same vein, it takes effort to try out volunteering, to start a blog, work on improving our beer brewing, getting fitter etc and so on. That all meant actually getting off our proverbial asses and getting on with it.
And that’s probably my biggest lesson learned – that the finances and investment decisions matter less than your mindset and actually doing something.
Funnily enough, we check our investments far less after reaching our target than we did beforehand. We’ve set as much up to run on auto-pilot as possible. It’s just not something either of us enjoys spending time on.
Instead of fretting over allocations and what shares to hold or sell, we just do a quarterly review to make sure everything is still on track. Make adjustments if needed.
We spend far more time talking about plans for the year, what to do, where to go. Are we still happy with where life is heading and how we’re spending our time?
After all, that precious time will continue to drip on by – and it’s on us to make the most of it.
As ever – welcome all thoughts below – any expectations of FIRE or hard-earned lessons learned to share??