Financial Independence Retire Early – It’s Never too Late

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Better late than never the saying goes. It couldn’t be more apt for those of us who found out about FIRE late in our lives. The goal of FIRE (financial independence retire early) is normally taken in your 20’s or 30’s. For some of us in our 40’s or 50’s it may seem like it is too late. Well good news, it is not too late to join the FIRE movement.

There are many people all around the world who start this journey late. You will find over 20 other such stories from all over the world in the late starter fire series .  I am one of them and this post is a modified version if the original story.

My Background

I have had many interesting experiences in my life, good and bad, but always enjoyed life and luckily have a loving family. We are a family of 3, late starters there too with my son being born when I was 40.

I started my financial independence retire early journey more than 5 years ago when I was in my mid 40’s. The target is to achieve early retirement by the age of 58. This blog documents that journey and I started the journey started here

My Financial Independence Retire Early Spark

I had my financial freedom realisations at a time after years and years of working and saving. I should have been in a more comfortable place financially. Sadly I was nowhere near, and I couldn’t understand why.

Still my reasoning was that as prices kept going up I just couldn’t get ahead  to earn enough money. I always flet like I needed to be earning more in order to save and invest. It was mid 2015 when I read an article in Moneyweb titled “The most underrated financial principle” It spoke about being frugal. I thought that meant cheap, but actually the meaning is  “using only as much money or food as is necessary”.

In the article there was a link to a blog called Mr Money Mustache. He is a staunch supporter of being frugal and early retirement. The principle was that spending much less than you earn is the way to get wealthy. I devoured the posts as I came across concepts that I had wondered about but could never put my finger on. 

I had always wanted to retire early but never had a plan or knew how. Now I realised that as a family earning a reasonable income, early retirement should be possible.

My Financial Situation

Our financial situation was a mixed bag. I had my pension fund from work which was reasonable but not great. My wife did not have any pension or investments. Our credit cards had growing balances with one of them getting out of hand. I had a small amount invested from some earlier stock investments.

We had a rental property that had a bond and was paying for itself. We had just completed a complete renovation of our new house after relocating cities 2 years earlier. This meant that we had a large bond and 2 cars we were paying off. In total our debt was at about 2 million rand. Based on how we were tracking I would only pay off the house after retirement at 63 with no additional savings or investments.

Life Lessons

It had been a bumpy road for me up until this point. My first marriage didn’t work out so I had a divorce in my mid thirties. Shortly after that I met my wife. As an only child, she carried the burden of looking after her parents financially. Then there was the cost of a wedding later which also drained some of the investments. 

I left corporate life, we relocated cities and I followed my passion to setup a mountain bike touring business. During that time my business struggled to get going and we relied mostly on one salary. A few years later after building a new house my son was born.

Thats when I made an about turn and headed back into corporate partly due the opportunity and the responsibility of raising a child. We relocated cities again. All this house buying and selling and moving took its toll financially.

My first steps to financial freedom

The first steps I took were to properly understand what we were spending our money on. This then led to cutting down on the recurring unnecessary expenses like gym, satellite tv, phone contracts and optimising insurance. These savings then went into killing the car and house debt.

I sold the rental property to help settle the home loan and get to debt free sooner. We also started our TFSA accounts and a savings plan for my son’s university needs and a saving for replacement cars.

A year ago when an unexpected accident wrote off one of our cars we were able to buy a replacement with the cash saved. For now I am looking at other ways to reduce expenses and have a target to reduce every year even though inflation is around 6%.

What progress have I made to retire early?

We are now 5 years down the line and just past one third of the way to financial independence to retire early. In this time we have cut down expenses to increase disposable income and settled all the debt as of Aug 2019. I am now fully focused on investment and continually reducing expenses. 

We are currently able to save about 60% of our income without the temptation to spend it. We are on track with our financial plan to retire earlier by 58, that’s 5 years earlier than official retirement at 63.

Overall I am confident that we will achieve our goal. If we continue to earn at a similar rate then we may reach it a bit earlier. Even if there are some more speedbumps, I think we will be able to make adjustments to stay on track.

It has significantly increased our peace of mind and confidence. I don’t even want to know how anxious I would have been going into this COVID crisis with massive debt and no plan. 

Pros and Cons of starting late

I think a common challenge is that we don’t have that much time left so the options are fewer and you need to work with what you have. Changing can also be difficult as you have always believed one thing and get used to certain luxuries that you need to give up.

The biggest challenge for me was regret, the feeling that I should have known this earlier and could have been much better off. That’s a mental state that you need to accept and deal with. I use it constructively as experience to motivate me. I now have confidence in my decisions and the drive and urgency to reach financial independence.

Retirement is closer now so it is a lot more tangible and a bit easier to understand what you will need when you get there. Another benefit is that late 40’s to early 50’s are your best years for earning so income levels are good.

How my relationship with money has changed

The biggest change is realising that I can be wealthy and it is not left to a select few. It is in my control if I have an abundant wealth mindset and manage my money properly. I respect money more and see it as an enabler and not something to be earned and spent.

I have learned to appreciate the money that I earn much more than I used to. The trigger was thinking and realising how hard and how much sacrifice I had made to earn that money. To then just go and spend it willy nilly was disproportionate to the effort that it took to earn. I never appreciated that fully.

I also started thinking of money as a water, if you spill it or let it slip through your hands it is gone, never to be recovered. Looking back I spent too much money buying new cars and just wanting to have the latest and greatest because I was earning enough to afford them.

What is next?

Right now I am focused on investment and making the right decisions. I am also starting to plan what life will look like once we reach FI. How we will sustain it eg. where and how will we live, what will I be doing.

Financial independence retire early is a huge part of the life I want to lead. But it also has a lot to do with being frugal, not wasting and being sustainable. I felt like I was just part of a system , work, work, work and retire.

I never really thought about all the options, the lifehacks as I call them. So I am trying to share these lessons that I have learned and to show that there are other options to the consumerism and debt ridden life that hold us prisoner.

What is your story, have you started late or did you wake up earlier? How are you doing?