Author Topic: My current situation and my current plan.  (Read 5003 times)

Moiser

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My current situation and my current plan.
« on: January 17, 2017, 02:53:57 AM »

I currently work a 28 rotation overseas. I work for 28 days, then get 28 days off shift. I've been "homeless" for the last four years, working overseas and traveling during my leave. During the time I've been overseas I've paid of my mortgage and spent a reasonable amount of money working my way through my "bucket list".

Although my career has provided me with a great lifestyle thus far, it's not something I want to do forever... that's something I always knew, but what I didn't realise is just how strong my position is in terms of securing my financial future.

Here's the basic rundown of my financial situation:

I currently take home just over 100,000GBP a year.
I have started to save 80% of my wages, the rest is spent on traveling during my time off.
I have one property (paid for) that is also rented out, earning me around 6,000GBP a year.
I currently around 30,000GBP in savings.
I currently have no debt.

So, the plan, or the goal...

Is to be able to walk away from my job in the next 5 - 7 years... and hopefully not have to work. The current plan is to do this with rental properties and an long term index fund (around 50,000GBP).

Any advice, criticism, thoughts would be greatly appreciated.

Villanelle

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Re: My current situation and my current plan.
« Reply #1 on: January 17, 2017, 03:10:20 AM »
we are going to need a lot more info in order to be able to give much meaningful feedback.

It seems you are currently spending 26k GBP per year.  What do you anticipate your annual spend to be once you retire?  Will you continue your largely nomadic lifestyle and keep expenses roughly the same? How sure are you that you'll be able to stay at that 26k budget, since it seems like you've been spending much more than that until recently (since you only have 30k in savings but you've been doing this job for 4 years).

Moiser

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Re: My current situation and my current plan.
« Reply #2 on: January 17, 2017, 04:27:55 AM »
Hey Villanelle, thanks for the reply.

I've budgeted around 20k GBP a year to allow me to continue travelling, which should be more than enough... even with some of my more expensive hobbies.

I'll admit I've spent some of my earnings on experiences over the last four years, but I've also paid off my mortgage.  I haven't made any decisions yet on what kind of money I'll need to retire... but I'll probably travel extensively for a time. As a rough estimate I would say around 20K GBP a year.

dreams_and_discoveries

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Re: My current situation and my current plan.
« Reply #3 on: January 17, 2017, 04:37:33 AM »
Sounds like a fabulous plan, have to admit I'm envious of your lifestyle.

If you can knuckle down and save 80% consistently, you'll easily be able to leave the job in 7 years  - do you track your spending?  What would you do if you no longer had to work for income?

Moiser

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Re: My current situation and my current plan.
« Reply #4 on: January 17, 2017, 05:13:11 AM »
Hi dreams_and_discoveries.

It's a mixed bag, being locked away for half the year hasn't done much for my personal life... but for me at least, the positives outweigh the negatives.

I've promised myself that as soon as I am out I am going to complete at least one long distance trailing in the US, before heading out for some serious back packing on a shoe string. Long term, I would look to get involved in the adventure tourism industry, potentially my own little adventure travel company.

Over the last couple of years, I've kept one eye on my spending. I'm not particularly materialistic, but if there was a trip I really wanted to do, I would spend the money. Since finding this place I've started to look a little closer, I don't currently track everything I spend. I usually have a set amount for my time off shift and come up with a daily budget.

2017 is my last year for big ticket activities every trip, and all my 2017 have been paid for, so I believe I can make more cuts to my spending year on year.

soccerluvof4

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Re: My current situation and my current plan.
« Reply #5 on: January 17, 2017, 10:31:32 AM »
On paper it works BUT would like to see more of a plan and have more info

Moiser

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Re: My current situation and my current plan.
« Reply #6 on: January 17, 2017, 08:29:07 PM »

I'm more concerned about making the right moves before I get out of the industry, if needs be I can take part time work to supplement the passive income from the rental properties.

I'd love to know whether anyone would suggest another method of investing the cash.

JAYSLOL

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Re: My current situation and my current plan.
« Reply #7 on: January 17, 2017, 09:12:09 PM »
Looks like you are doing pretty well, as for the plan its hard to say without more details about the rentals and projected costs, income etc.  $50k in index funds is a start, but isnt a lot of liquidity for FIRE, at least in my opinion, though everyon is different.  Rental income is great, and i hope to get a rental or 2 for myself, but im more the type to keep at least 50% of net worth in liquid investments.

Moiser

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Re: My current situation and my current plan.
« Reply #8 on: January 17, 2017, 09:36:25 PM »
Projected costs are going to be tough to accurately predict, but the average UK salary is 28K a year.

The yield on my currently property is around 5% net.

If I cherry picked the right portfolio I should be able to pull in 18K - 20K a year with three rentals. The cost of the properties would likely be between 100K - 120K.

I estimate that I will at least save the following;

400K in five years
560K in seven years

Moiser

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Re: My current situation and my current plan.
« Reply #9 on: January 17, 2017, 10:03:05 PM »
I do need to figure out how to divvy up my savings as they come in.

Do I aim for a second rental property before starting an index fund?

I am currently planning to make additional deposits of 20k a year into my index fund. Although this would probably push my fourth rental property into year six.

JAYSLOL

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Re: My current situation and my current plan.
« Reply #10 on: January 17, 2017, 11:31:16 PM »
I do need to figure out how to divvy up my savings as they come in.


Yes, this is true.  Figuring out a plan for your asset allocation that is going to work best for you and sticking to it is key

Moiser

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Re: My current situation and my current plan.
« Reply #11 on: March 13, 2017, 11:16:47 PM »
Wanted to share my progress with you.

I still have some work to do regarding investment of my funds from now till the purchase of my second rental property. Also planning to take dreams_and_discoveries advice and start tracking the spending of my 20% play money moving forward.

I'm also going to start looking into getting some form of side hustle going.

The independent financial advisor I was talking with hasn't been in touch since the new year, still waiting on a reply from him. Going to cut him loose and find an alternative.

This trip off work came in on budget, but I can think of a couple of instances where I could have cut spending and saved some of my 20% play money.


Moiser

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Re: My current situation and my current plan.
« Reply #12 on: May 13, 2017, 01:49:54 AM »
Hey!

Here's another couple of updates...

Savings are now at 57K, and I'm 3K ahead of where I predicted I would be.

I'm managing to stick within the budget of an 80/20 split.

I've started to seek out financial advise, but it's awkward as most IFA's in the UK won't deal with me until I've met them in person. I've also started to look at property options that may have the potential to bring in a better return than a standard rental property.

I also have some serious learning to do regarding UK law on the costs associated with additional properties and whether I'd be better off financially with a mortgage or saving till I have the cash to buy outright. There are also some potential complications with mortgages as I am currently not living in the UK, apparently these problems would fall away if my parents guaranteed the mortgage, but I am not sure I want to pull my parents into this, in case things went south.

Any thoughts appreciated! x





Moiser

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Re: My current situation and my current plan.
« Reply #13 on: July 08, 2017, 05:51:16 AM »
Again wanted to post a quick update with you all...

An update that wasn't an excel file, I should have thought a little more about that.

I'm still managing to maintain the traveling lifestyle and maintain a savings rate of 80%.

I've found property number two, but the guy who currently owns it isn't looking to sell till early next year. I have to decide whether to throw all my money at the property or split my funds and look to purchase two properties at the same time.

Any thoughts or advice appreciated.

Moiser

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Re: My current situation and my current plan.
« Reply #14 on: July 08, 2017, 06:15:06 AM »
OR...


Here's my numbers, but you won't see the pretty graph I spent hours making.


   Date           Est. Deposit   Est. Balance   Actual Deposit   Actual Balance
   Dec-16   6,278.28           22,294.64   6,278.28           22,294.64
   Jan-17   7,031.67           29,326.31   7,031.67           29,326.31
   Feb-17   8,800.00           38,126.31   9,064.86           38,703.57
   Mar-17   3,960.00           42,086.31   4,231.84           42,935.68
   Apr-17   10,120.00       52,206.31   10,498.33   54,070.86
   May-17   2,640.00           54,846.31   3,008.76           57,079.62
   Jun-17   12,320.00   67,166.31   12,489.72   69,971.20

Current net worth is roughly 200,000.


Beach_Stache

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Re: My current situation and my current plan.
« Reply #15 on: July 08, 2017, 06:26:46 AM »
Moiser, it sounds like you've got a good plan of your future, and your savings rate is great!  Sounds like you are used to traveling on a shoe-string budget which is another great thing, and you have your side-hussle figured out if you want to work in an adventure travel business or own your own company.  If you have 1 rental paid off and are working on purchasing another, if you take your excess savings and put it in a low-cost index fund that can supplement your income then you'll be in great shape.  Do you think once you quit your job that working for an adventure company would pay the bills?  Or would you need to tap your rental income and investment income to get by?  If you can live cheaply and be able to work as an adventure guide and be able to live off of that, then why wouldn't you just retire now? 

I think doing some more research into what your expenses are and what you could make in your adventure job is key.  If you are talking to financial advisors I would make sure you get with someone who charges an hourly rate, and won't just try to take your money (or a % of your money).  If you are working with someone who charges by the hour and is a fiduciary then they should have your best interests in mind.  Best of luck!

Moiser

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Re: My current situation and my current plan.
« Reply #16 on: July 08, 2017, 07:00:36 AM »
Hey Beach_Stache,

Thank you for the reply.

I still need to do some more research on Index funds in the UK, Vanguard requires a min investment of 100K. I definitely want to get some cash into and an index fund as a long term investment at some point.

Do you think once you quit your job that working for an adventure company would pay the bills? 

The adventure company idea is something I am still very interested in,  a good friend of mine runs a similar company. Similar enough for me to take his advice seriously. He makes a decent living, but he works for it. His overheads are/would be a lot higher than what I have in mind. He's told me several times to proceed with caution, and has given me a lot to think about.

Would you need to tap your rental income and investment income to get by?

Ideally I'd like to be in a position where I wouldn't have to worry if my adventure company fell flat on it's face. I don't particularly want to have to rely on it as an income stream, more a hobby (three or four expeditions a year) that made a small profit. However, in order to fill three or four expeditions a year, I need customers... that's going to be the challenge.

If you can live cheaply and be able to work as an adventure guide and be able to live off of that, then why wouldn't you just retire now? 

I feel I should make the most of the money I am currently earning and the situation I'm in. When I put the "plan" together, I thought the money I'm expected to earn between 5-7 years would be enough to set me up comfortably for FI. I don't particularly enjoy my job, I have no fire for it, but I don't hate it, and having six months off a year is amazing, and what I hope is a taste of my future.


Thanks for the advice regarding the advisor, he didn't seem particularly keen when I mentioned index funds.

Moiser

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Re: My current situation and my current plan.
« Reply #17 on: August 25, 2017, 05:50:42 AM »
Hey guys,

Here's another update...

Date          Est. Deposit.    Est. Balance   Act.  Deposit   Act Balance      Diff.         Inc. Diff.
Jul-17        440.00            67,606.31      505.70           70,897.22        3290.91   486.02
Aug-17      12,760.00        80,366.31      13,099.55      83,997.30        3630.99   340.08


I'm also in the process of purchasing a second rental property before buying the property I mentioned in my last post early in 2018.