Could you save enough to get financial independence?

This is Money Podcast

This is Money

Business News, Business, Investing, News

4.1 • 650 Ratings

🗓️ 24 July 2022

⏱️ 62 minutes

🔗️ Recording | iTunes | RSS

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Summary

Financial independence and retiring early sounds great, but could you sacrifice enough of your spending to get there?

The so-called Fire movement involves living a frugal live, saving as much of your income as possible – 50 per cent or more – and investing to build a pot to retire early on.

Ideally, this needs to be 25 times your annual spending requirements, so that you can follow the 4 per cent rule on how much of your pot you spend each year.

Advocates of financial independence will tell you that this requires giving up much of our modern-day consumer lifestyle but that it’s worth it in the end, as they can then live their lives on their own terms.

Could you do this and would the This is Money podcast’s Georgie Frost, Lee Boyce and Simon Lambert be able to stomach the hardcore budgeting and saving it requires?

On this podcast, the team discuss financial independence, its attractions and the drawbacks of getting there.

And don't miss our second special bonus podcast this week, where Simon speaks Barney Whiter, of The Escape Artist blog, who helps others to try to achieve the same financial independence he has.

Also, on this week’s podcast, inheritance tax is catching more people in its net, what can you do about that and is it time for the tax to change?

Plus, why inflation is causing problems for the national debt and should a reader use a £60,000 sum sitting in a low rate cash Isa to pay off some of their mortgage?

Transcript

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0:00.0	Welcome to This Is Money podcast. I'm Georgie Frost and joining me and editor Simon Lambert. Today is Deputy Editor Lee Boyce.
0:09.0	And coming up, the risks and rewards of the fire movement. Is early retirement a dream worth chasing or will scrumping only make you end up poor and lonely?
0:18.0	Also today, the tax man sees an incredible spike in inheritance tax
0:22.4	receipts, that's what's behind it. UK debt reaches 2.4 trillion, why record levels of debt
0:29.0	interest matter, how it influences government decisions, and what next for borrowing levels?
0:33.9	And a nice problem to have, but what do you do with £60,000 in a cashiser paying just 0.4%.
0:40.2	Don't forget to up to date with all the latest breaking money news, just go to thisismoney.com.com
0:44.3	or download the app.
0:46.5	Market updates and conversations around the financial world don't have to be boring.
0:50.9	The Digest and Invest Podcast by Eatoro is a great way to tune into what's happening in a fun
0:55.6	and easily digestible format. Discover the Digest and Invest podcast at E-Toro.com forward slash
1:01.4	academy forward-slash podcasts. But first, it's the dream, isn't it? To retire early, to leave behind
1:08.4	the daily grind and sail off into the sunset, or don't
1:12.6	some fancy gardening shoes and tend to your hydrangeas, whatever you want to do. How much are you
1:17.1	willing to sacrifice to get there? Now, an extreme saving movement known as fire has gained
1:22.7	momentum in recent years. The mix of frugal tactics, aggressive investing and maximising your income are
1:29.0	unrealistic for most. And as critics say, one way to work yourself into loneliness. So is it possible?
1:36.5	Is it worth it? Now, Lee Boyce, you've been interested in the fire movement. Where did it come from?
1:46.9	Hi, Georgia. Yeah, the financial independence,
1:52.7	retire early movement is something that I've, I've read a lot about in recent years. I find myself sometimes for fun, just reading people's blogs or websites that have done this and social media.
1:58.6	And it was born out from an early 90s book called Your Money
2:02.4	or Your Life. And it was the kind of the theme of fire in there. It's kind of where this was
	...

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