It’s time I let you in on a secret. For the last five years or so, Mr Rixon and I have been followers of a growing movement across the world known as financial independence (FI) or FIRE (financial independence, retire early). Our goal is to save up enough money so that we can quit the rat-race long before traditional retirement age, and devote our time to the things in life that we truly enjoy.
It all started when Mr Rixon began reading a blog called Mr Money Mustache back in 2015. An early pioneer of FI, MMM retired from his day job at the age of just 30 through little more than being really, really sensible with money. We then went on to discover a small but vocal band of FI advocates extolling the virtues of FI and sharing advice with others on how to achieve it.
Why we chose to pursue FI
Inspired, Mr Rixon and I asked ourselves whether we would like to join this community of free spirits. The answer was a resounding ‘Yes!’ We decided that although we both enjoy our work, we would much rather live without the constant stress and worry of deadlines, commutes and meetings. We decided that we did not want to live from weekend to weekend, while our muscles slowly turned to mush behind a desk, or to wait until we grew old to pursue our dreams.
Luckily for us, our dreams are not costly ones. We aspire to quit our London life for an outdoor lifestyle in Devon, involving long country walks, cycle rides, gardening, camping, wildlife conservation and building a treehouse.
Once we had agreed that FI was for us, the next step was to plan our route there. The key to early retirement is to save more money than you spend each month. FI followers recommend saving half your income or more and investing the rest into low-cost stock market funds, being sure to make the most of tax-advantaged accounts such as ISAs and pensions. Once you have saved up the magic number of 25 times your average yearly expenditure then you should be able to live off your savings indefinitely. You will then have what is known as a passive income.
At first, saving half our income seemed like an impossible challenge. Would life be bearable with so little money left over to treat ourselves? How would it be possible to maintain our green and ethical ideals given that the eco-friendly option is usually the pricier one? And would we manage to keep saving once we became parents, knowing how expensive babies and children can be?
Does FI take the fun out of life?
Critics of FI claim that the frugality involved makes for a miserable existence. But it really depends on what gives you pleasure in life. I’ve never felt the need to keep up with the latest fashions, drive a posh car or own an expensive branded mobile phone and would much rather indulge in a spot of forest-bathing than go to a spa any day.
FI doesn’t mean that you have to forego all luxury. It’s about working out what you enjoy most in life and being more intentional with your spending. Personally, I’m happy to save money by choosing supermarket own brands of tinned vegetables and breakfast cereals but nothing is worth drinking a bad gin and tonic! Forking out for a premium bottle of gin over a cheap one is not going to wreck our FI plans. Not when we have taken the time to secure the best possible deals on broadband, home insurance and car insurance.
I’m also fortunate that my hobbies (before parenthood and lockdown at least) are all free or low-cost: reading, gardening, running and walking, and volunteering for conservation charities.
Can we do FI and live sustainably?
In my experience saving money and living sustainably can go hand in hand. Here’s a snapshot of the many ways we’ve found to be kind to both our pocket and the planet:
- Shopping second-hand wherever possible as this saves on all the finite resources used to make items in the first place
- Borrowing and lending specialist tools for DIY projects with our neighbours and family
- Buying refills for household products, making our own cleaning products or using an e-cloth
- Planning meals, cooking in batches and freezing leftovers to ensure that fresh vegetables don’t go off before we get to eat them
- Buying items that have a long expiry date in bulk to get better value for money and save on packaging
- Refilling a reusable water bottle instead of buying bottled water
- Replacing lightbulbs with energy saving ones
- Cancelling our gym memberships and exercising in the great outdoors or doing free workouts on YouTube
- Using public transport, a bike or our feet to get about and saving the car for long journeys only.
Since having children, our outgoings have naturally changed. Parenting and FI is a huge topic on its own, so I won’t go into detail now – just to say that we’ve managed to find plenty of ways to save money on our children too, such as acquiring second-hand clothes, toys and books and making use of all the free facilities and activities available in our area.
Saving alone is not enough to reach FI; it is vital to invest your savings. Otherwise, it would simply not possible to save enough to significantly reduce your retirement age. These days it has never been easier to invest responsibly and sustainably, thanks to the wide variety of Environmental, Social and Governance (ESG) funds available. By investing in these funds you can support companies that treat their employees well and do not destroy the environment – at the same time as getting a good long-term financial return.
Does FI make sense in a time of coronavirus?
The Covid-19 pandemic has had a dramatic effect on all our lives. Some critics have argued that pursuing FI adds too much uncertainty to these already uncertain times. However, saving for FI is a long-term plan and the stock market has historically always bounced back given enough time. On the other hand, being wholly reliant on one source of income, with little in the way of savings, has put many people in a vulnerable position. We are fortunate that we have been able to keep working from home over these last months, as well as saving money in many areas, such as transport and eating out.
One of the more positive things about the Covid-19 restrictions has been the chance it has created to get to know our neighbours better. The people on our street have been using a WhatsApp group to borrow, lend, recycle and reuse all kinds of stuff, from bicycles and electric sanders, to books, pottery and plants. We may even have found a potential buyer for our house (when the time comes to relocate), which would allow us to save a significant amount on hefty estate agent fees.
Does FI have to mean retirement?
When we achieve FI we will not retire in the traditional sense. For a start, I don’t care much for golf or cruise ships. Many FI followers have what is known as a ‘side hustle’ to help earn extra income to bring them closer to financial independence; or once they have reached it, to help pay for emergencies or big trips, or just to keep busy.
Side Hustles that we might explore once we move to Devon include an eco holiday let, a wildflower or tree nursery or a small carpentry business. And of course, I will keep writing this blog! If we find that we can live very well off our passive income, there is nothing to stop us from donating the extra money from our side hustles to good causes!
Now, I understand that FI isn’t for everybody. We are extremely fortunate to have a foot on the property ladder, very little debt, relatively good health and a decent income. Without these things in place it would be harder to get started. But I truly believe that many more people could lead happier, healthier and freer lives by following the FI dream, if only they knew that it were possible.
For a nature lover like me pursuing FI seems like a no-brainer. We are losing the biodiversity of our planet at an alarming rate. 68 percent of our wildlife has disappeared since 1970, according to the World Wildlife Fund. By buying our financial freedom, our family will be able to spend more time enjoying the nature we have left – and fighting for it.
I hope you will follow us on our FI journey, and maybe even be inspired to start your own.
Here are some useful sites to help get started:
And of course, for general money saving advice, you can’t beat Money Saving Expert