Dan and Charlotte were a few years into their careers, with good jobs and incomes. They had been researching the FIRE approach to financial planning and it really appealed to them. They were happy to work hard at building their wealth for the next few years, but they wanted to feel like they were working towards something - more options in the future, to take time off, to take a more flexible approach to work, to travel. But they were struggling to give form to their plans, to join it all up. They were also wary of some aspects of the FIRE approach. They didn’t want to make too many assumptions too far ahead, and they worried that if they were going to get serious about this approach, it meant being miserable while they were young, horribly aware of every penny they spent.
They wanted to provide well for their future selves, but without making themselves miserable on the way there...
Using lifetime cashflow modelling strategies, we worked with them to design a multi-phase plan focusing on accumulating wealth, building sources of passive income and smart budgeting, including settling expensive debt before investing. Key to their plans was a realisation that each phase of their financial life was closely connected. They wanted to provide well for their future selves, but without making themselves miserable on the way there. In our modelling, we ran various scenarios with different degrees of financial sacrifice in the early accumulation phase, to explore the effects on future plans and find the right balance for them.
Once the plan was in place, we were then able to build an optimised and fully personalised accumulation strategy, making use of their long investment timeframe to build up the benefits of tax efficient allowances and compounded investment growth over many years.
Dan and Charlotte now have a FIRE strategy that has been designed for their own needs and tolerances, not someone else’s idea of what financial success looks like. We review it regularly and work as team to plan each phase, adapting the strategy as their lives and finances evolve.
It’s never too late to get serious about your financial plans, but when you start early, you’re doing yourself a big favour. The effects of good planning early on in your journey can have a huge impact on your future choices.
