RE: Early Retirement Extreme Update: On track to quit work this August, and fully retire by 2022....
This was a very thoughtful breakdown! I'm interested in ERE, only I haven't found a way to convince my husband of the merits yet.
Are you suspecting an increase in blogging income once you retire this August?
I'd also like to ask you about the savings rate. When I read about ER or FI I get confused because of what people claim they are saving. Do most people with 50+ savings rates include their mortgage?
We had an income decrease last year, before that we were saving 43-45% of our income every month. We don't have a mortgage yet as we rent currently. It's a lot less now as we are in a season of low income (but a big savings account so no worries), which will hopefully end soon.
I liked that you split your savings rate up to show both percentages. When people include their mortgage, do they generally include the full amount or only what they paid extra? From my (granted fairly uneducated in this regard) perspective it makes perfect sense to include any extra payment, but the original payment not so much as it is (almost) the same as paying rent. Does that make sense?
I'm glad I found you and will look forward to following your journey and learn from you.
Hi and thanks for the comment: I think you just have to be honest with yourself when you're counting the 'savings ratio': the reason I discount my mortgage payments is that I won't be making them by the time I retire.
I think most people count mortgage repayments as expenditure rather than savings, but to my mind it's a bit misleading as they'll disappear by retirement, hence why I include both.
As to blogging income, I do expect it to increase a little, but I'm not relying on it - private tuition can easily make up the difference and bring me up to about £2K net per annum, there's a lot of desperate teenagers out there.
NB My own situation is also a bit unique, as I've got about £8K a year waiting for me when I hit 60, from my teacher's pension, which is 'only' 15 years away, something of a buffer which makes the whole quitting work thing easier. With my savings, that's only 9 years max in the gutter as a worst case scenario.
Let's hope it never gets to the gutter.
Thank you for your explanation. We have forced retirement savings here, which is good for a lot of people, but not necessarily for the ones who are interested in stewarding their resources well.
We're in our late 20s so we don't have much for retirement yet, but hopefully, we'll get there sooner rather than later.
Have you heard of people retiring early while still having a mortgage?