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Mad Fientist

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Financial Independence and Early Retirement

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The Escape Artist – FIRE in the UK
Dec 15, 2021Tap to summarize
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 Nowhttps://traffic.libsyn.com/secure/madfientist/escape-artist-interview.mp3Listen on Spotify or Apple PodcastsDownload 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 ...
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Bogleheads – Life After FIRE
Nov 15, 2021Tap to summarize
Last year, I published a podcast with one of my favorite financial writers, Morgan Housel. You may remember that the episode was a recording of a Bogleheads meeting and the interview was actually conducted by my buddy, Gouri. Well, Gouri recently invited me to join the Bogleheads to talk about life after FIRE and today’s podcast episode is a recording of that discussion! Big thanks to Gouri and the Bogleheads for making this happen and hope you enjoy it! Listen Nowhttps://traffic.libsyn.com/secure/madfientist/bogleheads-interview.mp3Listen on Spotify or Apple PodcastsDownload MP3 by right-clicking here Highlights How your views on spending change after you retire Why you should treat FI as a spectrum rather than a finish line How to plan for all aspects of post-FI life The unexpected benefits and challenges of early retirement Show Links Bogleheads.org The Album Atomic Habits Ultralearning Music Habits e-Book Fifth Annual Update Ramit Sethi on the Financial Independence Podcast How I Found Freedom in an Unfree World Early Retirement Extreme My Wife’s Guest Post My Wife’s Podcast Interview Full Transcript Mad Fientist: Hey, what’s up, everybody. Welcome to the Financial Independence Podcast, the podcast that gets inside the brains of some of the best and brightest in personal finance to find out how they achieved financial independence. You may remember last year, I had an episode with Morgan Housel, and Morgan’s one of my favorite financial writers, and it was a great episode.And you may remember that I actually didn’t do the interview. It was my buddy Gouri who interviewed Morgan as part of a Bogleheads meeting. And Gouri’s big is big in the Bogleheads. And he actually invited me to join that same sort of discussion for the Bogleheads group that he was running. So that’s what today’s episode is.And if you don’t know who the Bogleheads are, they’re a group that are dedicated to Jack Bogle, the founder of Vanguard. All the index fund investing and everything that talked about on the Mad Fientist, that’s a group that really goes in depth in that philosophy of investing. So they have a fantastic and very active forum.They have these local meetups that, you know, Gouri is part of and it’s a really great organization all around. So if you’re interested, definitely head over to bogleheads.org to check it out. And obviously I’ll put links to that in the show notes. So I sat down with Gouri and a bunch of other Bogleheads on a zoom call and we had a great chat for a couple hours.What you’re going to hear today is the interview portion of that. And the interview is fantastic because as always Gouri did a ton of research beforehand and asked great questions. So without further ado, this is my chat with Gouri for the Bogleheads. Gouri: We’ll begin with something that you often end with on your podcasts, which is you ask your guests who, you know, are leaders in the FI space, or often the self-improvement space.You ask them what’s one piece of financial advice you would give towards financial independence. So I asked you that question. Mad Fientist: Yeah, that’s a question I love to ask because there’s so many different answers I’ve gotten over the years, but for me, I would say experiment, which, you know, in the Mad Fientist, I probably wouldn’t have said that when I started the Mad Fientist.So it’s not me just saying that because it fits with my science theme or anything. But it’s really the truth because if I’ve learned anything over the past 10 years of doing this and like really thinking about it hard, it’s that we’re really bad at knowing what we really, really want. And the only way to find out is to try things, hopefully them at a low cost, low commitment sort of situation so that you don’t, you know, get yourself into a situation where you can’t reverse that choice. But it’s really about experimenting because especially like for me I’m naturally frugal guy. Spending has been a big focus of mine recently.And you know, after post-FI to figure out like, what is the best use of money? And now that it’s not as tight anymore you know what, what’s actually going to make me happier and what’s not really going to move the needle and things like that. So, yeah, experimenting and just realizing that you don’t have to be right, right away, because you are probably pretty bad at actually figuring out what you really want to do or what you want to be here, what you want to spend your money on.Gouri: Excellent. Yeah, it’s so great to hear. And there’s so much there that I’d like for us to follow up on. One is when, you know, you say experiment, try it out there. There are tons of people that we hear about who, whether they’re planning for financial independence, early retirement, or just retirement in general, they dream about this next phase of life.They plan, they plan the savings part of it, but then when they get there, they’re kind of absent the social structure or interaction or meaning. How do you, how do you suggest people, you know, building on what you said about experimenting? How do you suggest people fill that void in advance? Mad Fientist: So like, I’m sure a lot of people out there are probably similar to what I was, where I blamed my job for the reason I wasn’t living the life that I thought would make me happiest and wasn’t doing the things that I thought I really wanted to do with my life. Like it was such an easy scapegoat and only after leaving the job and then trying to do all those things that I thought I wanted to do, I realized it wasn’t my job holding me back. I was very lucky. I was a software developer and the technologies I used allowed me to be very productive, very quickly so I could get my work done in, you know, a quarter of the time that some other teams that I worked amongst were able to do it. So my time scales were never tight and I had plenty of free time. So it was only once that I removed that easy scapegoat did I realize that actually I could have been doing all of these things with the job and, you know, I would have been not had to also try to figure out all these crazy post-FI things that come up that you never even expect because I would have still been working.So, yeah, I would say one just try to remove the easy scapegoat of your job and start trying to do these things that you really think you’re going to do post-FI, because one, some things aren’t big enough to really get you out of the bed in the morning. Like I remember I thought like, oh, I’ll learn a new language and then that way, when we traveled to wherever in the world, I’ll be able to know this new language…it’s going to be amazing, but you know, like when you don’t have anyone forcing you to get out of bed in the morning to conjugate verbs it’s hard, it’s hard to, to force yourself to do that. And you’re not exactly leaping out of bed to do that either.So the more you can get started on these things while you’re still in the grind, the daily grind, I think. The way better off, you’re going to be, because one, you’re going to have momentum. You’re going to sorta like come across these challenges that have nothing to do with your job earlier and start to work throu...
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