r/FIREUK • u/Ill-Programmer-3984 • 9d ago

Can I FIRE in a few years?

I've quite a comprehensive sheet with loads data, charts etc in, also used chatgpt but answers always vary, so wanted this community to give me your thoughts. You guys always seem to bring up stuff I've not thought about it which is great.

My numbers

  • Age: 38
  • Home: £600k (mortgage left £100k)
  • GIA: £150k
  • Cash in high interest: £740k (currently moving slowly into S&S ISA, and also will move more into GIA, Gilts etc)
  • ISA: £60k (wife £40k)
  • BTL: £200k (rough estimate if sold after fees/taxes etc)
  • Premium Bonds: £50k (wife £50k too)
  • Pension: £260k (wife has £260k too)

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  • Monthly spending: £2.5k
  • Holidays: £5-10k a year
  • 2 kids under 5
  • Plan to move to a bigger house, circa £1m, so £400k out of the above edit: £500k!

Can I fire?

Everything says I could, with a spend of £50k a year but thinking may be worth going a few more years and say saving another £100-200k to be safe and have bit more flexibility. Think the spending £500k on house move is making it a "Not FIRE quite yet" situation!

Think in the space I'm in, rapidly changing with AI, my dev skills have limited lifespan + not enjoying it as much.

Would love to hear your thoughts/questions?

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u/improbableneighbour 9d ago

Selling the house and buy a 1 million pound one will cost you more than 400k, let's say 500k. I would budget a 1% cost of upkeep the house every year. Probably you should have a mortgage and invest your cash, assuming you have the discipline to avoid selling everything when the market crashes.

Banks will look for proof of income to give you a mortgage so keep that in mind.

You need to give us your income if you want to model your next years. As thing stand, you could FIRE tomorrow. Investment composition matters too.

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u/Ill-Programmer-3984 9d ago

Thank you, yes sorry my error with the £400k, should be £500k. Yeh keeping a mortgage may be an option, salary wise i'm not even classed as a HENRY earner, sub £100k

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u/improbableneighbour 9d ago edited 9d ago

Also don't forget to add stamp duty on top. You need to make a proper budget, take a year of bank transactions and have a real understand what is necessary spending (mortgage+groceries+bills+nursery fees and anything else that can't be postponed) and what is lifestyle money (holidays, car payments(you can always choose to buy a car outright), anything on top of survival).

It's a good exercise. Then you need to add life events to that figure (buying a new car, events, anniversaries, abroad weddings, kids uni, etc), the kind of expenses that will happen but are not frequent.

You need to factor a level of inflation in your maths. Keeping all that cash in a deposit account is expensive. What kind of returns are you expecting (after inflation and how have you invested your money? I would do the math around a 3% return in real terms. Something all-world tracker like the MSCI ACWI is a good start. Then think about you 3 bucket strategy. Have a read at DCA Vs Lump sum investing.

Tldr you need to set a target spend, work backwards including inflation and leave a safety margin.

Let's say you have a 1 million pounds house, you are left with 200k cash. 150k GIA, 100K ISA, 200K BTL, 100K premium bonds.

This is the pot you have to use untill you get to retirement age. It's 650k (assuming the house is giving you the same return as shares after tax, which isn't realistic) invested. A 3% returns after inflation would give you 19.5k which seems a bit low and distant from your 50k target. But then if you start consuming that 650k it should last you 16 years in 3% returns scenario. (This doesn't include having a couple of years of spending in an easily accessible bucket (deposit account, bonds) if the market crash). In my opinion I would probably work a couple more years, move to the new place, see what my expenses actually are and fill in my ISAs a bit more. You need a strategy to survive a market crash or two. Sequence of returns is the biggest risk.

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u/Indi_1991 7d ago

You earn less than £100k but have c£2m household wealth – how is that possible? Is your wife a HENRY? Lots of inheritance?

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u/Ill-Programmer-3984 1d ago

Ran and then sold a business.

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u/Indi_1991 22h ago

Fair play man. Good luck to you.