Starting the journey to FI at 40?

Welcome to my very first post, and what better way to start than my financial back-story.

“I spent a lot of money on booze, women and fast cars. The rest I just squandered.”

~ George Best

If I analyse my life up to this point, I can’t really complain about the fortunate position I find myself in despite also squandering a lot of money. Yes, in my youth, a lot of it went on booze (and related activities), (not so fast) cars, women, holidays and eating out. I enjoyed this all thoroughly at the time and I don’t have any regrets about.

If I were to apply the regret label to anything, it would be to my absolute head-in-the-sand approach to personal finances.

Humble beginnings

Life was far simpler growing up in ’80s and ’90s Britain. My father worked very hard to provide for us, and we generally did OK as a working-class family. We could never afford a foreign holiday, but our regular camping trips more than made up for that. My parents instilled in me that it’s not OK to go into debt to buy things we didn’t need. My sister and I were the first in our family to go to university and due to our financial position, we both got full grants. Yes, that’s right, the government used to not only pay for your tuition, but also your living expenses. I didn’t realise how lucky I was.

A shock to the system

Halfway through university, we lost my father to cancer at far too early an age. I kind of fell off the rails when my old man died. For some unknown reason, his early death embedded in me the false belief that my chances of living to retirement age were also slim. Thoughts of retirement went out of the window, with the consequence of living hard and spending everything I earned. Like me, my father had lost his father very young. Unlike me, my father had put his limited means towards private pensions and life insurance to ensure that my mum would not have to worry about work after he was gone.

Drift

I took some time out of uni when my dad died and finally graduated a year later than I would have without ever really having my heart in it. Over the next 17 or so years, I organically grew a career in IT without ever truly being passionate about any niche, and I earned decent money. Crucially, I always allowed lifestyle inflation to creep in and generally got to the end of each month having spent it all. There was very little to show for it and worse still, little or no money saved.

Nonchalance

At the age of 38, I became a father. As an IT contractor, I had accrued enough money in my company to take a six month break from working when my son was born, which I’m incredibly grateful for to this day. However, I mis-managed my finances during that time and basically burnt through all my reserves. I have no regrets about that period though as I have formed an incredible bond with my son.

The kick I needed

It wasn’t until I was made redundant at the age of FORTY, and realised I was no longer a young, carefree singleton. I had a family to provide for and I needed to look into other ways of making a living than exchanging time for money.

I’ve long been a podcast fan, and discovered the Side Hustle Show. One particular episode with Alan Donegan talking about his PopUp Business School triggered my curiosity. Lo and behold, there was a PopUp Business school happening in my vicinity the very next month, so I signed up. I’ll be writing a full review of PopUp Business School soon—needless to say, it was life-changing. Alan was a true inspiration to me and I started reading his brilliantly insightful personal blog over at AlanDonegan.com In fact, I read his whole blog, including some great articles on Financial Independence and beginning investing in the UK

I had discovered the possibility of Financial Independence.

It reminded me that I’d half listened to the Tim Ferris show episode with Mister Money Mustache, so I looked up his blog, and dived into the rabbit hole that is the world of FI and started consuming content and understanding the movement.

Wow, have I been doing a lot of things WRONG

  • Most of the money I’ve earned over the years has been spent on things I didn’t really need or things I didn’t really need to do.
  • I have no real savings to speak of – just a few thousand in cash ISA and a Stocks & Shares ISA
  • I have just one source of income
  • I’m still in the prison camp of exchanging time for money.

If only I could speak to my 22-year-old self and tell him to max out his tax advantaged accounts (pensions and ISAs), and allow the magic of compounding to do its wonderful work. But I can’t, so I’ll start now, at 40.

It’s not all bad though

Some vaguely positive points in my favour:

  • I graduated with relatively small student loans and paid them all off within a few years of employment.
  • I got on the property ladder at the age of 27 which seems young by today’s standards, and I’ve seen my property increase in value by around £100k
  • Interest rates have been historically low ever since I’ve had my mortgage which gave me more disposable income to well, dispose of, and have a thoroughly enjoyable 20s and 30s.
  • I’ve had a standing order to my mortgage provider to pay off an extra £100 over and above my payment each month for the last ten years. Because I’ve been an ostrich about most matters financial, setting and forgetting that was one of the better decisions I made.
  • Apart from my mortgage, I have no other debt (thanks to the instilment of that value by my parents) – I’ve never lived beyond my means, only up to them.
  • I use credit cards to my advantange and always pay them off in full each month.
  • Most importantly: I’ve decided to take action.

My journey to FI begins at 40

My Aim:

Get to FI by 50.

A 15 year timeframe seems reasonable given my current situation, but where’s the challenge in that, let’s do it within 10 years!

My Money Manifesto

  1. Spend Less
  2. Earn More
  3. Save
  4. Invest
  5. Retire by 50

So, come with me on this journey if you fancy learning with me how to move from financial mediocrity towards early retirement.

I’d love it if you signed up to my mailing list below so you can get updates whenever I post new content.

Please tell me in the comments below:

  • How old are you?
  • Have you started your journey to FI?
  • How far along are you?
  • Do you think forty is too late to start?
  • What topics would you like me to cover?

2 thoughts on “Starting the journey to FI at 40?

  1. Hey,
    Just thought I would give you some encouragement from another late starter. I am 34 and just in my final year of university. I have also made some financial mistakes, but will fortunately be graduating with no debt other than my student loan. I found out about FI a couple of years ago, but I am concentrating on building a deposit to buy a house before I think about investing. The only time that is too late to start is tomorrow. 🙂
    How on board are the rest of your family with working for FI? Good luck!

    • Hi H!

      Thank you so much for reading and being my first commenter! Your words are very encouraging.

      I wish you the best of luck with finishing your studies and saving for that house deposit. Hopefully your new qualifications will allow you to find a well-paid job. Remember, pay yourself first and you can’t go far wrong. I know there is some debate in the FI community about whether to rent or buy. Personally, I’ve always been on the side of buying rather than paying somebody else’s mortgage.

      I’ve got a fair bit of work to do to convince my family that FI is a good idea – more on that in a later blog post I’m sure.

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