Sorry to hi-jack this thread topic but I have a serious question on it,
How does one live on 25% of their income especially in the UK? I get it if you happen to be a CEO or an investment banker making a killing but i am struggling to see how even decently paid couples get anywhere near it - it is hard enough to do 50% which is a struggle with any kind of decent enough lifestyle?
I love the idea of gaining financial independence in 5 years but saving rate of 75% ? Seems a pipe dream without basically living on the street or living with 6 or so people who share the mortgage / rent payments - either way unless you severely sacrifice a basic standard of living or earning significant money this is a pipe dream it seems ?
If you look round the UK FI blogs there are very few that hit 75%+ savings rate. The ones that do tend to be either very highly-paid professionals, or no-mortgage houseowners with few dependents living a spartan lifestyle.
I live in a country at least as expensive as the UK and we saved 75% of our take home pay last year. That was due to:
- No mortgage on the house that we live in.
- No children.
- One good income (1,5 x average) and one very good income (2 x average). We are in our 40s.
- Having cheap hobbies that don't require money to do them.
- Going on cheap vacations (sleeping in tent most of the time).
- Buying some big things second hand, like new dining table and chairs and new sewing machine.
- Last year we were lucky not to have any cars repairs for our 2 cars.
- I had discovered MMM and stopped buying the usual shit that people buy all the time. I also found cheaper insurances and electricity, cancelled subscriptions for magazines etc.
- We don't pay for TV channels other than the standard state channels that we pay for anyway.
- We sold some bicycles and other bigger things.
- I watch out what I shop for food, pricewise. And we always watch the price when filling petrol, as that varies per day.
- We did not have any big repairs/renovations on the house.
- Cooking all meals at home.
- Not hiring people to wash the house or doing small repairs or painting. We do everything ourselves.
- Brewing beer at home.
In 2016, before I discovered MMM, we saved about 60%, which was our normal savings rate for most years. So a good amount of active mustachism, combined with luck that year in not having expensive repairs, brought in that savings rate once. But it is not easy to have that every year, without having to cut back on even more lifestyle stuff. We could of course ditch the second car, sell our cabin, skip the week's autumn holiday to the south, not buy fancy cheese, not buy wine and whisky. Without these things, we could probably reach that savings rate every year.
I should add that we will not be retiring after 7 years of work, but rather after 25 years or so. In the second half of our 40's. Still a lot better than 67, which is standard here. Our countries are not comparable to the US in matters of COL, taxes and health care. But we still can get a high savings rate and retire (relatively) early if we want to.