I got to Financial Independence in 2018 and have designed an incredible life that I have to keep pinching my self to realise it is real. In this section I want to share with you what FIRE is, what it is not and everything I have learned about achieving it! Strap in for a FIRE journey!

So, what is financial independence? I have a simple definition for this one! It is not often I can say that but I find this one easy to explain​.

Simple! You have spent your time and money buying assets that bring you passive income that supports all your needs for the rest of your life!

I have written a longer article about Financial Independence

The Trinity study looked at a 30 year retirement period, different withdrawal rates and whether you will run out of money before you die!

Looking at all the different scenarios, William Bengen, a retirement advisor saw that you have a 96% chance of not running out of money with a 4% withdrawal rate. He thought that was pretty good and so decided that is what he would advice people to spend from their portfolios in retirement.

Not only did people not run out of money in most instances but they were wildly successful having more money to spend later in life. Since that point William has been on record saying that this could quite easily be a 5% withdrawal rate and with some flexibility you probably won’t run out of money.

All this is explained in how much does it take to retire.

We’ve also written a follow up article – 4% rule questions

Once you have started to invest and are seeing your money work for you, you naturally start to ask questions like “if it keeps going like this when will I have enough to retire?”, “how do I know when I have enough money?” and “how do I make sure I don’t run out of money in retirement?”

We’ve built a retirement calculator to predict your retirement age based on your inputs. It needs to know your current age, what you already have invested and a few more details to work it all out. The more accurate you are with what you put in, the more accurate the result will be.

This calculator assumes you’re ready to invest. Watch our video: Am I ready to invest?

You are only ready to invest once you have no high interest rate debt and you have an emergency fund of 3-6 months of living expenses.

There are 3 main sections in the retirement calculator. You’ll find instructions for how to fill in each section when you go and use it!

Your job is to have a play. But in your best educated guess of the numbers to start with and then start to have a play with them. If you spend 1,000 less a year, what does that do to your retirement age? What about if you earn 1,000 more or returns are 1% better than you predict? How does this all affect your retirement date?

Forecasting your financial future

No calculator is perfect (sorry Katie) so if you want to work out the details of your particular personal situation (e.g. the split of your investments between ISA and SIPP) and really chart out your own course you need your own spreadsheet / model.

So we’ve created a workshop to help you do this called Forecasting your financial future. You can watch it on YouTube.

After you have had a play with the retirement calculator and made some assumptions and predictions then the next step is to get on and build the future you want.

I have fallen in love with the phrase “The Extraordinary belongs to those that create it”.

What I have come to realise that the extraordinary is rooted in the mundane daily actions we take… setting up the direct debit to invest £100 into your SIPP each month… cancelling Netflix and investing the money instead… forcing your pension provider to give you answers(!)

None of these things are particularly sexy or exciting but they are the steps that build your future. It is the mundane daily actions like ringing your pension provider and forcing through the pain of getting them to transfer it that changes the course of your future.

Let’s make this happen!

Other articles about financial independence

Other articles we’ve written about financial independence:

• “What are you actually spending your money on?” Could you buy your freedom before the next new car?
• ​The FIRE movement in the UK. This is my guide to the bloggers, groups and people of the FIRE movement in the UK
• Your relationship with money. Getting your relationship in order with money is one of the most important things you can do before you start to invest.
• Playing with FIRE the documentary. Yes, there is a documentary on financial independence and it is rather good. Read this article for my review and a link to where you can rent it
• Katie and I have developed the ultimate guide to investing to help you get started in investing. This can be one of the hardest areas to understand after you have tackled income and expenditure.