Retire at the age of 35

  • 145

    Days to Go

  • 2076

    Days in total

About a year ago a friend of mine asked what is my objective in life. I answered promptly that my goal is to be around my children (after I have some;-)) as they grow up, rather than having to leave every morning and spend time in the office instead. Heck it’s already hard enough to do that today with a dog! Of course he joked that I should be more considerate as my children may not want to spend time with me… I knew what to answer straight away! Despite that I haven’t done anything to actually achieve that.

 

I have always been really driven person but after spending most time at a 9-5 office job that wore off rather quickly. Not having any sense direction makes the years just pass by and I had enough of that. While I may not be exactly sure about what would I like to do in the future, I am pretty sure financial independence will help me with whatever I decide to pursue. I also think I need a challenge in my life. When I don’t have one I just seem to create unnecessary problems for myself:-)

 

The challenge is to achieve financial independence in about five years from now. I don’t have an exact plan at this moment and would like to include the planning in the future updates. At the start I’ll try to change my approach to things and finance. Will consider everything more temporary – as rented out for whatever the difference is between purchase price and potential selling price. Hopefully seeing future value of the items bought and savings made will eventually become natural to my mindset.

 

First baby steps:

1. Rent out the apartment I own – the rent normally covers the mortgage but it’s currently empty

2. Sell the car – used to have a great MX5 which I sold, now I have a shitty car which I should have never bought in the first place. Gotta go.

3. Sell things I don’t necessarily need – this is mostly guitar and musical equipment. I should really spend more time practicing rather than acquiring gear. I haven’t bought anything for ages but still have plenty to sell.

4. Tax rebate

5. Pay off debts I have

6. Review all my expenses and cut everything unnecessary

7. Aim to save at least 60% of my income

 

That’s it for the first post. I’ll update again soon, especially about the planning, and the actual amount which is required for retirement.

 

Updates

02-Jan-2015 10:21:11

November is over. There are some goods and bads. Bad is the savings rate which seems to be below 50%. This is again because some of the savings were realised in the beginning of December so they don't appear in the chart. I will really need to revisit the way I report this to avoid these problems. The entertainment expenses were high due to theatre tickets purchase and retails shopping was high compared to other months (where it's normally close to zero) as I had to make some purchases I've been postponing for a while. Food & dining at 7%?? OMG, bunch of small expenses added up together and the result is I spent almost three times more on food than last month. Definitely need to cut this down again!

The goods are the work in my apartment has been finalised and it's on market for rent. The car is finally gone, all debts are paid off. Life's good.

01-Jan-2015 21:45:10

October is over. The 70% savings rate look good but it's just compensation for last month so nothing to be too excited about:-)

11-Nov-2014 16:56:22

September is now over. Most of the bads from previous month are applicable but there's some progress in getting it sorted. The graph only shows 45% savings which is because I didn't transfer the money to the savings account until early October so hopefully the savings in October will be proportionally higher. Maybe I should work out a better way how to report on this however I don't feel the need for a great level of details when I still have some big things to sort out first.

14-Sep-2014 22:35:47

August month is over so it's time for some retrospective. It is a first full month since I started saving. Let's start with bads...

Bads: 1. Apartment is still not rented out. 2. Haven't sold the car yet. 3. Haven't sold many of the things which I'd like to. 4. Got fined for not having a public transport ticket:-/ 5. Phone is expensive, I recharged twice this month, each recharge for $70. Definitely something to look at! 6. Due to holidays my monthly income was a bit lower than usual. 7. People owe me money and don't pay.

Goods: 1. Managed to live on less than 34% of my income! 2. Saved 43% and used another 23% to repay loans. 3. My expenses on food dropped dramatically while the quality of food improved by home cooking:-) 4. Didn't spend much for drinks or entertainment.

This month I didn't have any of my usual big expenses (pre-paid music and exercise classes) but managed to pay health insurance a month in advance. What I need to focus on now is renting out my apartment and selling things I don't need.

17-Aug-2014 17:13:48

So the first few weeks are now over. This is what I learned so far.

1. I spend a lot of money on coffee - over $100 a month! I wish it was tax deductible. Well well, now I started drinking coffee early at home, which is fine, but I miss the little coffee breaks outside the office. I guess I'll just get a mug and walk around the office with my own coffee.

2. Big spendings on food, but that was expected. I hope for big savings here from cooking at home instead of eating out most of the time.

3. Gymnastics - this sounds crazy but this is more than 30% of all expenses! I guess I'm really into it:-) This is mostly payments for workshops and related travels. I think it's time to start monetising what I learned. More about this later.

4. It's really difficult to get rid off things. And the bigger and more valuable, the worse it is. Selling the stuff I don't need is pretty frustrating experience, I think this is what I will struggle with the most. It's not because of any emotional attachment but because of all the work involved. Taking pictures, doing research to find a fair price, posting ads, bargaining, dealing with people who don't show up...not a good experience. I'd like to learn to consider all my things temporary and think about the way of disposal at the time of purchase.

5. I spent a lot of time thinking about the 'real' cost of 9-5 job. The expenses related to the daily job are extremely high. The need of daily job requires you to pay for living in a reasonable distance from the office. The dependence on the job income requires you to pay for insurance. The general lack of free time promotes outsourcing of services which you could otherwise do yourself (cooking, car cleaning, house maintenance and similar would be on top of the list). A ton of money is spent on leisure activities and entertainment due to need to recover quickly... Vacancies tend to be expensive because you don't want to hold yourself back during holiday you've been waiting for the whole year, do you?

Anyway, will be back in about two weeks. I want to start aligning these posts with calendar months to make the tracking easier.

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