Can I Retire Early? I've Had Enough of Work

Discussion in 'Investing and Retirement Saving' started by IHateDebt, Aug 30, 2013.

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  1. IHateDebt

    IHateDebt Newbie

    From a very age I hated the idea of going to school waking up early and then looking forward for the weekend, I hated school. Fortunately I did well at school and thought work would be better. Now after 10 years of working and changing jobs seven times I've come to the conclusion that I want to retire as soon as possible. I guess I was not cut out to work for a living. I am not lazy and I certainly don't want handouts, I just want to work and make enough so I don't have to work again, I could choose to work if I want to.

    If there's anyone out there who can give me some advice I would really appreciate it!

    Thanks in advance :)
  2. Alistair

    Alistair Newbie

    I feel you brother, I also hate working for a living and only see it as a means to an end. If you really want to retire early you need to make some really tough choices. It all boils down to your income, expenses and how much you have in reserve. If you really want to retire early then I would suggest that you minimize your expenses and increase your income.

    You can't retire straight away so try to save as much as you can, normally people only save about 10% so that they can retire in 40 years. Instead why not try saving 80% so you could retire in 5 years? it all depends on how much you want to retire.
  3. Miles

    Miles Newbie

    How much savings do you have and what do you need to live on every month? you need to take into consideration inflation and how the cost of everything will rise in the future. You really need to work everything out in advance and workout how much your retirement will cost and then work towards that figure.
  4. hamza

    hamza Newbie

    Cool idea about saving 80% of what you earn, I wonder whether it could be done? I suppose the best way to retire is to minimize your liabilities and increase your income to reach your target amount. If I was really hell bent on retiring early I could always rent out my house and then move to some smaller apartment, I could lower my expenses by spending less on food and energy, clothing and then use and savings that I had to generate income. I wish interest rates were higher then the money would work harder for me.
  5. IHateDebt

    IHateDebt Newbie

    Thanks for the responses, I really appreciate it. Looks like there's more people like me. Here is my financial position at the moment. I live in London and my monthly expense is around £1000, I live in a 3 bedroom house which has equity of £130k. We have much more room that we need so I could move to another smaller house if possible. At the moment I have £50,000 in savings earning a pitiful rate of 2-3% in savings account. Please Please Give me some ideas.
    Shobir likes this.
  6. Shobir

    Shobir Administrator Staff Member

    Admin Post
    Thanks for providing some numbers, this is a really interesting thread you started. I've done some research and found that a 3 bedroom house in London can be rented out for £1300 on average, if you renting this property out and moved to a smaller house in the suburb with the £50,000 you have in savings then I suppose technically you could retire right now! This is just a general idea but if I was in your position then this is the move I would make. I'm guessing that the £1000 expense includes your mortgage outstanding so when you go to another property you need to ensure that there is no mortgage on that one. The rent you receive should cover the cost of the mortgage payments and your monthly expense.

    Once you're out of the rat race you could concentrate on generating income doing other things like blogging, investing, inventing, or even selling things on eBay, this would definitely supplement your income.
    IHateDebt likes this.
  7. IHateDebt

    IHateDebt Newbie

    Thanks for the advice, you're right about the rents in London, they are high! You've really given me a lot to think about. I am thinking along the following lines, I thought I would make a list of what I need to do to make this a reality.

    1. Work for another 2 years and take savings account to £100k
    2. Buy a 1 bedroom flat for £50,000 - this means £50k left over.
    3. Rent out property for £1200 (£100 less for estate agent fee), after mortgage I will have remaining £700
    4. Keep £50,000 in Santander 123 account which pays 3%, I will get £125 - Hopefully rates will rise in the future.
    5. Total income now of £825 of which we will only spend £500 so we can save the rest
    6. Look for other ways to generate passive income

    Having the freedom to escape the 9 to 5 job would be a dream come true!

    Is there any way I can refine the plan? I need to make my assets work as hard as possible for me.

    Thanks for all the advice and guidance..look forward to some response.
  8. Shobir

    Shobir Administrator Staff Member

    Admin Post
    Nice plan, I guess if you wanted to refine this even further you could either think of more ways to cut costs, or think of more ways to get higher returns from your assets. I guess you could optimize further as follows


    - Practice frugality intensively
    - Make food from scratch
    - Repair clothes/Make clothes
    - Reduce energy bills to the extreme!

    Your Property

    - Move to the cheapest place in the UK (You can actually get a property for about £30k
    - Take on lodgers to generate income if you have more than one bedroom.
    - Extend your property or add more rooms to increase rent, a 5 bedroom could be rented out for £1500 per month.
    - You could sublet, if you have 5 bedrooms and 2 receptions that you convert to bedrooms you could charge £400 per room, if you have 7 rooms then you could potentially make £2800 per month

    Your Savings

    - Invest in dividend stocks that pay 6% to 10%
    - Make sure you hedge by buying puts to offset any losses

    I suppose if all of this could happen you could retire right now! Very comfortably.
  9. IHateDebt

    IHateDebt Newbie

    Wow, thanks for all the information, seriously dude this is gold dust. It seems pretty obvious now but it would probably taken me ages to figure everything out. Time to make a plan.
  10. Shobir

    Shobir Administrator Staff Member

    Admin Post
    No probs, I found this video that might be helpful to other people who are looking to retire early, the cheapskate way!

  11. FavellaMan

    FavellaMan Newbie

    Have you thought about moving abroad to a country where everything is cheaper like Thailand, I hear that the cost of living is one tenth of what it is here and the properties are cheaper. If you're prepared to relocate then you could retire sooner than you thought, the concept is called Geo Arbitrage, you earn interest or passive income in dollars and spend in Thai Bahts.
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