What's your UK fire amount?

[MarcherLady]

@billy2shots ,  I know nothing about valuing and selling businesses, but I know that things are only worth what people will pay for them, and sellers sometimes value their goods higher than buyers do. How solid is your business valuation and do you have a buyer lined up? Other than that, congratulations, things look good.

[billy2shots]

@billy2shots ,  I know nothing about valuing and selling businesses, but I know that things are only worth what people will pay for them, and sellers sometimes value their goods higher than buyers do. How solid is your business valuation and do you have a buyer lined up? Other than that, congratulations, things look good.

I have given a value under what a professional has valued it at.

I have only accounted for the property value not the £80k net annual profit the business produces.

I always value things cautiously.

Last year the business was split down the middle (to pay other directors off). That half of the business (second site) sold stc with 5 bids above asking within a week.

Hopefully the climate is still like that when I'm ready to sell.

[MarcherLady]

In which case: Come on in, the water's lovely!  Do you have a date in mind?

[billy2shots]

In which case: Come on in, the water's lovely!  Do you have a date in mind?

Yesterday :-).


Actually I have a couple of dates that I could work with to simplify things.

August would see a complete year of the business in its current guide so accounts for a potential owner would be cleaner or After December 31st so a full trading year in its current set up (22 years total).

Those dates are not set in stone and it may be expedited if the economy points to a downturn. Hoses price is also key so a property crash could see me extending a year or two.

My heart is out but mentally I need to make the leap.

[MarcherLady]

Yeah, it's a tough one. We live in Interesting Times, so there is always going to be something to hold you back from taking the plunge. Is yours the sort of industry where the buyer of your company might want you to stay on as a consultant for a period? That might be a more gradual off-ramp, if that would help you ease into the FIRE'd life. 

[billy2shots]

Yeah, it's a tough one. We live in Interesting Times, so there is always going to be something to hold you back from taking the plunge. Is yours the sort of industry where the buyer of your company might want you to stay on as a consultant for a period? That might be a more gradual off-ramp, if that would help you ease into the FIRE'd life.

Yes you are spot on a 3/6 month consultancy period would definitely be needed.

[Manchester]

Yeah, it's a tough one. We live in Interesting Times, so there is always going to be something to hold you back from taking the plunge. Is yours the sort of industry where the buyer of your company might want you to stay on as a consultant for a period? That might be a more gradual off-ramp, if that would help you ease into the FIRE'd life.

Yes you are spot on a 3/6 month consultancy period would definitely be needed.

Obviously, feel free not to answer if you'd prefer.  But do you mind me asking what type of business it is (or what industry). 

I have a software company, and with recurring clients and limited expenses, we should make tens of thousands of £s profit every year (not quite £80k, but I think I'll get there and maybe exceed that figure within the next 5 or so years (ambitious).  I worry that when I become financially independent, the golden handcuffs will keep me strapped in.  But I can employ more staff to run the company for me and become a silent director.  Is that something you've considered?

[js0554719]

I also think of my number in terms of £Xk per year plus a paid off house (or a mortgage and assets to keep the mortgage paid). I'm in a pretty LCOL area now, but made a move from a MCOL and I used to count the difference as an asset that would be available for FIRE.

Sent from my TECNO KC8 using Tapatalk

[js0554719]

I also think of my number in terms of £Xk per year plus a paid off house (or a mortgage and assets to keep the mortgage paid). I'm in a pretty LCOL area now, but made a move from a MCOL and I used to count the difference as an asset that would be available for FIRE.

Sent from my TECNO KC8 using Tapatalk

[vand]

So I'm pretty sure that I could get by happily on £20k/pa after tax (not including OH, we keep finances separate). With a paid off home and a simple low cost lifestyle, that sort of figure just below the median wage would represent financial freedom to me. That said, it's difficult to know for sure. Just a few things to consider are:

I've been tracking my expenditure much more closely in the last year or so.. my 20k/pa was always a high-side estimate. My actualy spending is probably 25-35% below that figure.

Given that, I would draw my lean-FIRE line at the personal tax threshold, currently £12.5k. This of course works beautifully; pocketing the full tax savings gains on the pension. x25 pot is £312.5k.

Normal FIRE would probably be £15k/year. x28 pot for £420k.

FatFIRE for me would be 20k/year with a x33 pot, so £660k.


313k - 660k.. that's quite a wide spread. I definitely wouldn't feel ready to pull the plug on work at 313k, but would probably do before 660k. First, I need to get to 313k and then see how I feel. Hopefully I can hit that in the next year or so.

Interesting to revisit this as of Jan/2022.

Sailed past this original LeanFI number quite some time ago, and barely stopped for a breath.. and looking back I don't think I'd be happy if I had taken my foot off the gas at that point. Now currently about 90% of the way to the original NormalFI number adjusting for inflation etc.

Revised targets in inflated 2022 currency:

LeanFI: x25pot * £20kpa = £500k
NormalFI: x27pot * £26kpa = 702k
FatFI: x29pot * £33kpa = £957k

LeanFI is hopefully 1-2 years out
Normal FI is probably 3 years out at best maybe 4
FatFI is more of a blue sky target at this stage, but could happen in maybe 5 or 6 years if I really wanted to commit to it

Apr 2024 revised figures

Lean 25k * 25 = 625k
Normal 30k * 27 = £810k
Fat 38k * 30 = 1.14m

FI Target inflation continues apace, especially at the lower end.. greatly aided by actual inflation :-/
On the other hand I've trimmed my fatFIRE multiple as Bond yields are higher now

[never give up]

It's hard to see how anyone could comfortably FIRE now on less than £500k unless there was also a DB pension in the mix or they were near State Pension age. Even though my expenses are low, I wouldn't want to FIRE in my 40's with less than £500k and no other sources of income. I've eased into a higher category since I first posted in this thread and this is purely due to inflation of the money, not lifestyle kind.

After years of low inflation the last couple of years will have been a shock to anyone that hasn't experienced it before. It's weird thinking there are a bunch of young people who have only ever been used to low interest rates and low inflation.

It's interesting you reduce the withdrawal rate as you move from lean to fat FIRE vand. I only have one number, but I would want the lower withdrawal rate on a lean number, and the higher withdrawal rate on the fat number, so I had more leeway when market times were tougher. No right or wrong here, it's just interesting how different people see things.

[PhilB]

It's hard to see how anyone could comfortably FIRE now on less than £500k unless there was also a DB pension in the mix or they were near State Pension age. Even though my expenses are low, I wouldn't want to FIRE in my 40's with less than £500k and no other sources of income. I've eased into a higher category since I first posted in this thread and this is purely due to inflation of the money, not lifestyle kind.

After years of low inflation the last couple of years will have been a shock to anyone that hasn't experienced it before. It's weird thinking there are a bunch of young people who have only ever been used to low interest rates and low inflation.

It's interesting you reduce the withdrawal rate as you move from lean to fat FIRE vand. I only have one number, but I would want the lower withdrawal rate on a lean number, and the higher withdrawal rate on the fat number, so I had more leeway when market times were tougher. No right or wrong here, it's just interesting how different people see things.

I think you're spot on with that last paragraph NGU.  The fatter the FIRE, the more flexibility to cut back and hence the higher the SWR you can afford to go with.  I suspect it all comes down to how you are defining 'Fat' vs 'Lean'.  Looked at purely as a spending amount suggests increasing SWR as you get fatter, but if you think of it instead as Lean = white-knuckle FIRE, whilst Fat = not a care in the world, then the lower SWR might make a kind of sense.

[Affable Bear]

Apr 2024 revised figures

Lean 25k * 25 = 625k
Normal 30k * 27 = £810k
Fat 38k * 30 = 1.14m

FI Target inflation continues apace, especially at the lower end.. greatly aided by actual inflation :-/
On the other hand I've trimmed my fatFIRE multiple as Bond yields are higher now

FI target inflation is crazy at the moment, when I voted 4 years ago we were on the lower end of £750k - £1m including value of house, but a house move in 2023 (we sold high bought high) and crazy inflation we probably need 1.15m including the house (approx 35% of total).

Our FI goals are very similar to yours, aiming for around £30k mark but we spend £26,500 at the moment (excluding mortgage & investments) so there is margin there for us to increase lifestyle a little bit when we hit that goal.

Based on my current budget/spending energy & food increases have hit hard, I now need approx £170k (25x) to cover just these monthly costs alone compared to about £100k 4 years ago.

[vand]

^ Some sensible comments been posted (which happily seems like a thing on this UK board).

Yes, the trouble with having moderately simple budget and skinny FI number is that inevitably groceries, energy and transport are going to make up more of your budget... the things where inflation is felt most keenly. 

For the higher multiple at higher levels of FI thing, its just how I like to rationalize it - the idea that I could happily spend more is probably more attractive that actually doing so, although one thing to bear in mind is that higher spending will incur proportionally more tax if pensions have been the main saving vehicle.