This is my master plan for financial independence, the blueprint to freedom. In March 2019, I started my journey to financial independence and early retirement (FIRE) from zero. As a single person on an average wage, this means I have a long way ahead of me.
My aim is to be financially independent by age 40. Financially independent means I can live from the returns of my investments and do not need to work unless I want to.
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My master plan for financial independence
My FIRE Number
There are different ways to calculate your FIRE number. You can learn how to calculate your own FIRE number by reading this post.
As for me, my estimated post-FIRE annual expenses are £13,200. This would give me a FIRE number of £325,000 (4% rule), meaning I would have £1,100 to spend after retirement. Having £1,100 per month does not sound like much but
- It is an amount I can easily live on
- I won’t have any work-related expenses
- I still plan to make some money while retired
Since this is my life I am planning, I will use a withdrawal rate of 3.8% rather than 4%. This rate gives me a FIRE number of £347,368.
Hence, I will aim to save £350,000 by December 2028.
Progress to FIRE
In the sidebar, you can see my current status. The percentage is the amount I have saved in relation to my FIRE number, £350,000.
Hopefully, at the time you are reading this, the percentage will have increased.
Aiming for £350,000, I can calculate the amount I need to save each year. Note that I have defined a year as the period from January to December, even though I started in March of Year 1 and will finish in November of Year 10.
The table below is my theoretical savings plan. It is only meant to be a guide as
- My circumstances will likely change e.g. redundancy, move, having children, etc.
- There may be periods of economic recess/higher growth
- I may want to change my goal.
|Year 1 (2019)||£20,375||£22,769|
|Year 2 (2020)||£23,662||£46,431|
|Year 3 (2021)||£26,594||£73,025|
|Year 4 (2022)||£29,762||£102,787|
|Year 5 (2023)||£32,143||£134,930|
|Year 6 (2024)||£35,754||£170,684|
|Year 7 (2025)||£38,615||£209,299|
|Year 8 (2026)||£42,744||£252,043|
|Year 9 (2027)||£47,203||£299,246|
|Year 10 (2028)||£50,772||£350,018|
Values for years 2-10 are projections.
You can follow my journey by reading my savings reports which I publish at the end of every month.
Why does the amount of savings increase?
You may have noticed that I am planning to save more and more every year. This is possible due to
- Earning interest and compound interest (interest on interest)
- My salary hopefully increasing
- Being able to earn more from passive income sources
- Establishing new side hustles.
The main ingredient of these is compound interest. This means my savings will grow exponentially rather than linear. In basic terms, the more money I have, the more interest I will receive.
How can I track my progress?
If you are interested in tracking your own progress, you can download my net worth tracker from Monethalia’s Resources section. To gain access, simply pop your email address into the form below. You also subscribe to my newsletter from which you can unsubscribe any time.
My plan for financial independence – goals
Despite elaborating on my financial plans in great detail, staying healthy will always be my number one priority. Number two is being happy and living a satisfying life. In the sad case that I should pass away before I can reach financial independence, I will die happily and without regret.
Monthly FIRE goals
- Achieve a savings rate of over 60%
- Stick to the budget
yearly FIRE goals
- Increase income by 15% every year
- Add one new income stream every year
- Max out ISA allowance
These are more a loose list of ideas at the moment and will get finalised once I am closer to FIRE.
- Go to ASDA and clean the car park
- Write a novel
- Continue blogging
- Adopt a child
- Try different jobs e.g. be a cleaner or a waitress
- Pick up litter regularly
Every month, I complete a savings report detailing my income, expenses, and savings. Below is a list of all past reports:
2019 savings reports
|Month||Savings rate||Savings amount|
2020 Savings Reports
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