Principles to achieving FIRE
My name is the squirreler and I love squirreling (I googled squirreling (urban dictionary) and came up with a definition I was not aware of and definitely not what I had in mind – just so you know!). I like putting my money in virtual and physical pots, labelling them, giving them meaning and a job to do.
I love socialising, going out, having new experiences so my approach is not a hair shirt approach denying myself holidays, festivals, going out and enjoying myself. So I have a monthly ‘my spends’ pot, a holiday pot, a birthday and xmas pot. And when the money in the pot is gone, its gone – enforced scarcity (TEA).
This helps me manage my expenditure.
I have a household budget and a loose personal budget.
I keep my daily spending to a minimum during the week, pre-covid I cycled to work and took my own lunches, and now I stay at home and still cook my own lunch. This means I don’t open my purse for days sometimes.
I hate shopping!
I genuinely enjoy free or cheap things, I love walking and cycling, going to the cinema, fringe theatre and having friends round for food, as and when restrictions allow.
I feel guilty about how much crap and plastic modern life generates. I always try to remember if its not recyclable it will end up somewhere sometime in landfill. I try to spend intentionally, buy to last and not see my self worth in the car I drive or the clothes I wear.
Approach to investing
It is very simple (as of Dec 2020), I
- Contribute 19.9% of my gross salary in a Defined Benefit pension (employee contributions + AVCs) – I also get a very generous 19.5% employer contribution
- Invest 7.1% of my gross salary in a Define Contribution pension
- Invest at least 22.6% in Stocks and Shares ISA 100% in Vanguard Lifestrategy Fund 80% Equity
During 2020 an odd year to say the least I have had a I have a healthy 58% savings rate based on my net income? But could I do better?
2 thoughts on “My approach”
With a defined benefits pension scheme it is irrelevant how much you pay. It’s better to think of it as a membership fee. It does not contribute to a ‘pot’ as there is no pot. Your employer contribution also does not affect the ‘pot’ as the ‘pot does not exist. Your employer is not being generous, it is just the cost of the scheme.
Hey there John thanks for taking the time to read and comment.
I see what you are saying that the amount I pay in is irrelevant – it has gone up in the past but will not have a positive impact on what I get in return. The amount matters to me as its a real financial commitment and one I include in my savings rate – which is a good behavioural measure for me, something I can build on. I still maintain that the employer contribution is generous, as they could choose not to be a member of the scheme i.e close the DB part of the scheme going forward. Which may well happen!