I have some big news…

I am now a British citizen!

In honor of finally getting my UK passport, and therefore completing this long journey to citizenship, I am releasing my UK FIRE episode.

Barney, from The Escape Artist, joined me in my Edinburgh apartment (before the pandemic) to discuss all things related to financial independence and early retirement in the UK.

Hope you enjoy it!

Listen Now

Listen on Spotify or Apple Podcasts
Download MP3 by right-clicking here

Highlights

The cultural differences between US/UK that affect pursuing FI
How to escape from the prison we create for ourselves
Translating US investing terminology to the UK (e.g. 401k→pension, IRA→ISA, etc.)
Is it easier to reach FI in the US or UK
Class structure in UK and how pursuing FI forces you to traverse all classes
Why FIRE isn’t bigger in the UK
Difference between the different types of ISAs
Is tax hacking possible in the UK
Real-estate investing in the United Kingdom and the fantastic Rent-a-Room scheme
How to use geographic arbitrage to reach FI sooner

Show Links

The Escape Artist

Full Transcript

Mad Fientist: Hey, what’s up, everybody. Welcome to the Financial Independence Podcast, the podcast where I get inside the brains of some of the best and brightest in personal finance to find out how they achieved financial independence. Today’s episode is a long time coming. I actually interviewed my guest two years ago, which because of the coronavirus pandemic seems like a lifetime ago.

But the reason I haven’t published the episode yet is because I’ve been waiting for something really special to happen…and that just happened last month. I’m excited to tell you that I am now British, which is something I never expected to be in my life, but I’m so happy that I am at this stage because over the last six plus years, I’ve been sending in lots of money and applications and spending lots of time trying to get my British citizenship so that I can just come and go as I please.

And thankfully that finally was successful and now I’m a dual US/UK citizen, and I couldn’t be happier. So to celebrate, I’m finally releasing the UK episode and I’m excited to introduce my guest, who is Barney from The Escape Artist. And those of you in the UK will know Barney cause he’s probably one of the biggest FIRE blogs in the country.

So when Barney was up in Edinburgh for the Edinburgh festival in 2019, he stopped by my flat and we sat down for an hour and just chatted about FIRE in the UK. And we dove into a lot of, you know, UK-specific stuff, but we also compared it to how people in the US pursue FI and the differences between the two countries that make some things easier and some things more difficult.

So without further delay… Barney, thank you so much for being here. I really appreciate it.

Escape Artist: Hey man, it’s great to be here at last.

Mad Fientist: So this is actually a real weird one for me. You are actually sitting in my living room, which I don’t think I’ve ever done one at home before. But you came up from London.

We were going to do it in a pub or somewhere cool, since this is the UK episode, but I realized I don’t have my traveling mic. So you had to come to my apartment and use the one that’s attached to my desk. So welcome to my flat.

Escape Artist: Edinburgh is just beautiful. It’s just such a cool city. And it’s great to be here while the Fringe is on.

Mad Fientist: Yeah, the Fringe is the world’s largest arts festival. Well, it’s part of the world’s largest arts festival and it’s the whole month and it’s just one big party in the city. So you’ve definitely come on the right day. So, so yeah, this is the long awaited UK episode. I’ve gotten so many emails from UK readers asking, you know, what’s the differences between the US and the UK and you know, how do you pursue FI in the UK and all these things, and you’re going to be the man to help with that.

But before we get into all that, can you maybe just give my audience a little bit of details about yourself and give a little background story about how you achieve financial independence?

Escape Artist: Sure. I think that for a lot of people that are financially successful, if you kind of scratch the surface, there’s often a trauma kind of in their earlier life that got them started on that path.

And for me when my parents, when my parents moved house when I was 11 years old back in 1981, they did the classic British thing. They bought the biggest house they could, they took out as much debt as they possibly could. And their timing was awful because this was 1981. And interest rates went to 17% and my parents kind of had this realization that they’d overstretched themselves.

And so they had then to do a kind of period of belt tightening and the newspaper got canceled. My dad stopped buying beers, started brewing his own beer. The holiday got canceled that that year. And I think I took away from that was that debt was a kind of very scary thing. And ultimately the bank could kind of take the house away from you.

And so kind of from that point on, you know, I made choices in my, in my education and in my career that would put me on that path to kind of having money. And so, you know, when I went to college, I studied economics. When I graduated, I chose like a, really a profession where I could earn safe money. So I trained as a chartered accountant and qualified, and then worked in corporate finance for 20 years.

And really for the last 10 of those years, I was very focused on just putting away as much money as I could, because I’d had an experience at one of my jobs where I realized that kind of I was trapped. I had I had a mortgage at that point. We had children on the way. My wife had given up her job and so the whole kind of burden of providing for the family was on my shoulders. And I, I took a job that I hated. And from that point onwards, I saved at least half of my income every month. Fast forward to 2013 and I realized that I had enough.

Mad Fientist: Yeah, you said you were trapped, which maybe leads into the whole theme behind your blog so maybe you do want to tell the story about the escaping from the prison camp.

Escape Artist: Yeah, so the prison camp is my kind of analogy or my metaphor for the situation that a lot of us kind of put ourselves into where we kind of create our own prison. We trap ourselves through our spending choices by taking on debt, by kind of societal expectations.

And that can lead you to a point where you’re no longer happy doing that, you know, doing a job, but you feel you have no choice, but to carry on doing that. And, and I, I certainly felt trapped at that time in my life. And I just couldn’t see a way out of the prison camp other than to kind of slowly dig my way out stone by stone, rock by rock, but by saving money.

And that the prison camp analogy is based on a kind of World War Two story of, you know, The Great Escape, the film, The Great Escape, where the prisoners literally kind of dug their way out to the prison camp in this amazingly kind of painstaking, slow, laborious process. And that, that kind of amused me that analogy.

Mad Fientist: That’s great. And I want to go back to something you said, you mentioned, what was it? 17% interest.

Escape Artist: Yeah, yeah, absolutely. One day there’ll be 17% again. And you kind of wonder what the world will look like at that point.

Mad Fientist: It will look very different. No doubt. Yeah. That’s I just released a post not too long ago about whether you should pay off your mortgage early or something.

And I’m definitely in the camp where I’m just looking to buy a house just so I can lock in some of these low, low interest rates. Cause they may potentially be, you know, once in a lifetime interest rates and yeah, it would feel pretty good to have a 30 year mortgage at 3% or something. If, if interest rates do go up to what they were before.

Escape Artist: Well, everything in finances is cyclical.

The problem is, you know, history n...