This sounds ridiculously obvious but The Escape Artist has observed that most people don’t do this. For some reason, people find it really hard to ask for help. They ignore advice and the experience of others who have already achieved stuff.
The Escape Artist tries to practice what he preaches, so when I got an email from a reader who’s been out of the Prison Camp for 10 years now, I thought I’d shut the fuck up for a week and instead listen to what this more experienced reader has to say about financial independence.
On 1 September 2014 I celebrated my tenth anniversary of financial independence. Besides confirming that TEA’s advice works, I can confirm how liberating it is to seize control of life and ensure every day is my own. So how did I get here and what have been the highs and lows of life on the outside?
I am a 50 year old married man (no kids) living in the UK. I come from down-to-earth, working-class stock, was raised in a council house by my mother (my dad died when I was young) and had a bog standard education. Nothing exceptional.
My life got interesting via an opportunity when I was twenty on a year’s work experience at the head office of a large retailer. It was 1983, I was sat in front of a PC and was asked to see what I could do with these ‘new fangled’ spreadsheets. Little did I realise that I was boarding a roller coaster ride that lasted the next twenty years and led to FI.
Hang on…. isn’t this supposed to be a story about an escape from drudgery and grinding out a financial position that would allow the two fingered salute to The Man? In my case, the road to FI was not so tortuous. There were exciting highs like developing software, starting a company, gaining clients and floating the company. But there were also gut churning lows; cash flow shortages, a business partner quitting and no life outside of the business. There were many reasons to want to escape even though I was “successful”.
Please don’t think this story is about a dot com billionaire and therefore not relevant to others. Reaching financial independence was not dependent on creating and selling the business. We always saved, paid down our mortgage and built up an investment portfolio from our early twenties. The sale merely accelerated the process.
The business was a minnow in an Information Technology niche so small even I couldn’t see it some days. But the business was profitable and attracted the attention of acquisitive competitors. The shareholders and I graciously accepted such flattery and overnight I went from a company founder to employee number 2938.
The following twelve months were rough. Corporate idiots made crass decisions and slowly smashed all the innovation and creativity out of my business. It took twelve months for me to realise that I was unemployable. They offered me the opportunity to leave. They hadn’t finished the sentence before I said yes. I have said a prayer of thanks to their CEO every day ever since. Not only had he given me a good return on my investment for my business, but his disdain for me made him kick me out of the nest to enjoy life.
The bedside alarm clock went off on 1st September 2004, the first day I have ever been unemployed and I have never felt more alive. The word I use is ‘liberated’. Ten years later and I still do not take this position for granted. The exhilaration of those first days may have subsided, but the joy of being in control of my own destiny has never gone.
Have I ever regretted my decision to step out of the business world? Never. Did I ever consider going back? Yes, I very nearly did so after only six weeks of freedom. Luckily, my wife helped me see that this was “herd instinct” and I gave it more time before making a decision. It took me twelve months to understand that I could find challenges without being tied down with another full-time job.
I still believe it would be fun to build another business. But I then remind myself of customers who wanted the earth but to pay nothing for it and I weigh that against the pleasure I get from a much simpler life.
So what does a much simpler life look like. Long lie-ins, daytime TV, golf, afternoon naps? No! Like so many people in my position, I find myself overusing the phrase, “I don’t know where the time goes”. I have done more with the last ten years than the previous twenty.
There has been a vast improvement to my health and fitness, and greater time for my wife, family and friends. In addition, a large chunk of the ten years has been spent travelling and on a self build property. Other projects have included non-exec directorships, developing a property portfolio, Solar PV installation projects as well as managing my own investments.
Whilst running the business, I was unfit and overweight. I would run up a flight of stairs and get out of breathe. Now, I run five or six miles regularly, play tennis and Racketball and most importantly I walk great distances everywhere I can.
I took up photography as a creative outlet in my new life. I booked training courses to learn the technical stuff but made the best progress when I found a mentor who I met with every month. He stretched my creative powers and helped me develop skills I never knew existed. This also opened my previously closed mind to ‘The Arts’: theatre, galleries and literary festivals.
I have developed a vegetable garden as part of living The Good Life. This lead to a new found passion for food and wine. I bought a season ticket for my local football team (something I last did when I was teenager) and followed the team home and away and across Europe.
The travelling is my wife’s passion. However, I would not trade the experiences that I have gained from our adventures and the great people we met along the way. For example, my wife and I lived like locals in New York for a month. We have also travelled widely in India, China, Brazil, the rest of the States and Europe.
The house build was an ambition that both my wife and I had on our wish list for twenty years. We wanted to design and build from scratch and I insisted on being hands-on (despite no prior construction experience). The build was completed two years ago and has been one of the most rewarding things I have ever done. I now have an efficient, bespoke home that costs next to nothing to run.
If I were to reflect on the highs and lows of the last ten years the former has outperformed the latter. FI cannot shield anyone from life’s inevitable sadness such as watching my mother suffer and die from dementia, but at least I could make myself available at her time of need. Some of the highs of FI are subtle – the bandwidth to support friends and family, the opportunity to build a unique relationship with my wife or the ability to just ‘think’.
I felt a little like a pioneer when we first embarked on this journey and there were times when the experience was a little lonely in the absence of FI buddies. It is not so much that they were trapped in the prison camp and unable to ‘come out to play’, it was more to do with being sensitive to their situation and not wanting to appear to gloat about ours. Gradually, a number of our friends have been encouraged to join the growing community of escapees in the independent state of FI.
I have a simple investment strategy. The majority of my equity portfolio is held via a diverse range of index trackers or investment trusts. I haven’t got sufficient interest in carrying out the necessary research in individual companies. The worst investments I made were recommended ‘buys’ suggested by wealth managers – an expensive lesson never to be repeated. For this reason I have concentrated on a passive investment strategy and put my effort into making sure the asset mix is well balanced and diversified. My asset allocation is currently 40% Residential Property, 35% Equities and 25% Fixed Income.
The cornerstone of my personal financial strategy is that I have always despised debt. My living expenses are low and our net income is over three times our living expenses. The annual surplus is used to fund travel, the projects we choose to do, or philanthropy. My future plans include setting up a charitable foundation, to publish some of my photographic work and to start an aquaponic growing project.
In summary, in the words of Dicky Fox from the film Jerry McGuire; “I love my wife, I love my life…. I wish you my kind of success“.
I sincerely hope this is not viewed as smug or self righteous. Yes, I took the great opportunities presented to me and overshot the level of investment portfolio needed for FI as a result. However, regardless of the size of investment portfolio, the principles that TEA writes about are a sound basis for achieving this goal. I merely want to share my experience to help show it worked for me. I believe ten years of sustaining a FI lifestyle is a pretty good proof of concept
I think this story illustrates several interesting aspects of FI. It would be easy for a reader to dismiss this story as not applicable to their job situation. I think that would be a mistake. Yes, Billybow ended up a rich entrepreneur, but he worked and saved hard, invested, took risks and embraced opportunities to achieve success…and this was far from guaranteed.
What I found most useful personally was the reminder of the temptation to go back into the Prison Camp to find routine, rather than take the scarier but more rewarding path of true freedom outside the Camp.
Its not easy to hear the story of successful FIers (they are often modest introverts and so hard to find) so thanks to Billybow for sharing. If you have a question for him, you can ask this via the comments section below.