I met The Fireman at a recent FI London meet up. He’s a really good guy with a fascinating back story which he agreed to share.
The Escape Artist is always on the lookout for interesting reader case studies where people achieve what looks at first glance to be impossible. How about creating a multi-million pound property and share portfolio from a fireman’s salary plus leverage, risk-taking, good luck and hard work?
Not bad huh? So enjoy this case study from The Fireman…
The early days
My parents encouraged independence and early on I felt a need to be self-reliant.
Most of what I’ve done from age 20 has been directed towards that. My parents were from the post war rationing era, and we had to ‘make do and mend’ so I had frugality drilled into me from a young age.
We lived in a house in the Kent countryside on an acre of land. We were a mile away from the nearest bus stop, and I biked everywhere until I was 17 and bought a motorbike.
Relationships with other people
Conflict was hardly ever seen in my childhood, and was never discussed further than my dad explaining that everyone should do as he says because he is clever and always right.
I wasn’t well prepared for dealing with people, and never seemed to have friends in the same way as everyone else. I still don’t. I struggled with maintaining relationships and felt like an alien sent to study humans.
I’ve worked hard at getting better with people: taking an interest, putting people at ease, asking open questions etc. It’s just that I’m not interested in TV soap operas, football or any of that crap. Maybe its something to do with my values (building invisible wealth rather than splashing the cash) that doesn’t resonate with the rest of the herd.
I know that support networks are a major factor in life’s good stuff, but I still feel that other people are chalk and I’m cheese. One difficulty of my shift system as a fireman is that it works on an 8-day cycle. This means that regular weekly social events are impossible. I know these are self-limiting beliefs, but they are based on real difficulties.
The lightbulb moment
Maybe a lonely childhood working out figures ended up for the best?
My financial epiphany came when I was about 20, unemployed and living in a shared flat watching the fleas on my carpet (yes really). I’d always been good with numbers, and worked out that with four people sharing a 2-bed flat (there was a couple in the living room) the combined rent was over £10k per year.
At the time the flat was worth about £24k. I did the maths (£10k income on £24k investment = ~42% per year) and realised my future lay in property investment.
I needed money to get started so I looked for the highest paid job I could get, which was accountant. I knew the skills would help, so I did a degree and started training.
The 80:20 rule
I’m a great believer that in most fields of human endeavour, 20% of the work gets you 80% of the results. So if I concentrate very hard on the important 20%, I can sit back for 80% of the time taking it easy, and still be ahead. The property investment decision is an example of this. A short time working very hard setting it up, and then sit back and let it tick over day and night.
My working life supports this view. While on my three year holiday doing my degree I worked weekends for a prolific landlord in north London helping out his full-time maintenance guys. He had hundreds of houses, and with hindsight I should have beaten his door down begging for a full-time ‘apprentice’ job. I also worked for accountancy firms each summer back in Kent.
Getting a job
After graduating, I sent out 168 CV’s and got 2 interviews, 2 job offers, and went to work in the big city. I wanted to work in London where my intended property investments were.
In 1989 with £1,200 to my name I used my new-found cashflow skills and agreed with a like-minded friend to buy a house 50:50 for £81k. My take-home pay was £525/month, and my half of the mortgage was £495. We divided up the rooms and squeezed five students in with us, paying a term up front, and saved like mad. House prices crashed, and a year later the house was worth about £50k.
I tell people there’s never a wrong time to buy property, only a wrong time to sell (e.g. when you are a forced seller). Me and my business partner bought three more houses over the next few years, still working 7 days a week (and nights), and saving like mad. Our investment focus was based on two criteria, (1) lowest house prices and (2) highest unemployment rate (due to my epiphany moment).
I was failing my accountancy exams (they’re hard!), so I applied to join the London Fire Brigade. This occupation had never occurred to me, but my business partner was mad keen and was already in. The work was fun, pay was good, prospects were good, we had lots of time off and the pension was brilliant. I applied to join, and very next day I was let go from my floundering accountancy career.
It took a year to get into the Brigade, so I had a year of relative leisure, concentrating on the houses and got married during that time. After starting with the Fire Brigade, we bought three more houses in quick succession. We ended up buying 20 houses/flats some of which we sold, the others we kept. The original £81k house sold for £150k, which helped pay off my own mortgage before I was 40.
One highlight I’m proud of is buying a house at auction for £45k, spending £5k on refurb, then getting it valued at £80k and raising a 75% (£60k) mortgage on it. The house had effectively cost us nothing, left cash in our pockets and we still had the property tenanted, making a profit every month. We still own it, and it’s worth about £350k.
During all this, we had children. If you’re going to have children, you should know how hard it can be.
Our first child had a medical issue which seemed to disappear during pregnancy, but was taken into acute care immediately after birth. He was and remains a difficult child. The second child was stillborn at 25 weeks. This was devastating, and remains so still. We had a third child who was lifeless and resuscitated immediately he was born, and suffered from epilepsy into his teens, and continues to have language issues. Despite this, he is taking a degree and seems to be doing well. Due to all three pregnancies being bumpy rides, I had the snip shortly afterwards.
The Fire Brigade
I have a frontline role in the Fire Brigade and still ride the firetruck every day I’m on shift.
Most of our calls are rubbish fires, people stuck in lifts, false alarms and road traffic accidents but we still get real house fires and face real danger in temperatures up to 900 degrees centigrade.
I’m in charge of my watch (me + 6 others), and get to be in charge of up to 4-pump incidents (up to 26 people). I know my guys very well, but have to work closely with strangers in life threatening situations from time to time.
A fireman has the awesome legal power in an emergency to do “anything they consider necessary”. We have to think ‘outside the box’, e.g. speeding, driving on the wrong side of the road, forcing entry into peoples private property without their permission. I think the same lateral thinking also helps you get to FI. You have to do whatever it takes. Anything is possible when you’re not restricted in any way, unlike people stuck on the hamster wheel.
I’m not sure if the Brigade attracts mad people or if it makes them that way.
I’ve known enough people in the brigade to know they have a much higher than average ‘screw loose’ factor, and that makes them an interesting bunch.
Ex-paras talking about bayonetting ‘Argies’ in the trenches, sex addicts, armed robbers, drug dealers, professional poker player, stalkers, ex-corrupt police officers, and lots of people with businesses on the side. Lots of marriage breakups, and more suicides than you would expect. We see mortality up close and it strikes unexpectedly.
When our children were aged 3 and 6, I was unhappy at home. I left my wife. I became suicidal and was diagnosed with depression. It was the worst time of our lives.
I rented for a while, then bought a flat and filed for divorce. After intervention from the NHS, I slowly came to my senses and we rekindled our relationship. I am extremely grateful for finding my perfect woman not once, but twice. I consider myself extremely lucky in that regard.
What do I do to maintain my mental health now? I enjoy walking our dogs on the local heath, watching the seasons change, appreciating nature. Every now and then you read a news article about the amazing fitness effects of walking. I’m like Duuuhh, get a German Shepherd!
I’ve read about mindfulness, but it seems to be something that I’ve always leaned towards before even knowing it existed. Mental health is becoming much more mainstream, and I try to talk openly about it whenever I have the opportunity. Having had depression and not seen the signs at the time, I feel much better now recognising when dark clouds are gathering and being able to deal with it.
‘Dealing with it’ means thoughts taking control of my emotions, rather than the other way around. I also consciously try not to care too much about the bureaucratic aspects of the Brigade which would otherwise be very frustrating.
I started to focus on what was meaningful in our lives and fulfil a lifelong ambition to get my Private Pilot’s Licence, but when he was 17, our eldest son needed a month in drug rehab for £10k, that put an end to my flying. He’s been arrested twice for violence towards me in our home.
We had family therapy sessions at a Harley Street clinic in relation to my son’s drug rehab, but didn’t find it much use. We stopped when they wanted me to pay while they discussed my relationship with my mother (it’s very good).
My son now holds down a full-time job, and has moved into a rental with his girlfriend. He still smokes weed and suffers from depression. We are very worried about him and wish there was more we could do to help.
The property investments were hard work, and around 2005 my business partner and I took a conscious decision not to continue expanding indefinitely. We wanted to spend more quality time with our families.
I also wanted to balance my property investments with some stock market exposure, so was maxing out my ISA from income and property sales. Further promotion would mean much more time spent at work, so I was happy to remain where I was and enjoy the ride.
I enjoy the process of managing our investments, and spend a little time each weekend updating a spreadsheet and planning. I invest in the stockmarket (a mix of stockpicking and index funds) because I realised that being 100% in property was a risk (mostly from the Government).
I don’t try to time either the stock market or the property market. I don’t think Brexit will have a significant effect on the property market. All our European friends won’t disappear overnight. My only prediction is that something has to change eventually.
I’m aware that by fluke I seem to have ‘timed the property market’ just right. With so much property porn on TV and the Government whipping landlords, maybe the best days are over? This is a major reason why I’m siphoning money into the stock market, despite the properties remaining extremely profitable.
I’m naturally frugal. Here’s just a couple of quick examples:
Example 1 : I drive a VW Golf Bluemotion which is very economical. I bought it used for £7k. Its now done 225,000 miles and is still going strong.
Example 2. I cut my own hair.
Any man who says they can’t save should buy some clippers (for less than the price of a single haircut). Every time you cut your hair afterwards, put £12 into savings. In terms of % return, clippers may be my best investment ever.
My wife gets her hair done at Toni & Guy for a small fortune every now and then (I’m OK with because she values it so much).
For ladies: bear in mind that women with curly hair get straighteners, women with straight hair get curlers, women with dark get bleached blonde, and women with blonde hair buy dye, so my advice to them is be happy with what you have, because someone out there is paying good money to have hair just like yours. You’re already perfect just as you are.
These days my earnings from the fire brigade are outweighed by the earnings from property. I earn £35k basic per year from the fire brigade plus overtime. The partnership properties produce about £120k net profit, of which my share is half (£60k). The partnership properties are worth about £6m with under £2m mortgages. Plus our family house which has no mortgage. My wife and I also have ISA’s, SIPP’s and other shares worth about £650k.
What does the future hold?
The photo opposite is me being awarded a medal for 20 years of good conduct in the Brigade.
I can retire from the Brigade now, but to get the max pension I have to do another 5 years. I put in about £500/month, and the Brigade puts in about £850/month. I still enjoy it, but not the commute.
I’ve essentially been doing 2 jobs for the last 30 years with a view to building passive income, so I’m quite looking forward to cutting down to just one job. Having said that, the houses don’t take up anything like so much time as they used to, and I joke about the Brigade being semi-retirement.
I’ve squeezed 55 years of career into the last 30 years, so I feel justified in sitting back, enjoying the sunshine and a cool beer. Past dreams included building a kit car, kit plane, sail around the Med, build my own house. Who knows… I can do anything I want, but I can’t do everything. Most likely a bit of gardening, a bit of golf, carrying on investing, trying to teach life lessons to my kids who don’t want to be taught…
What would I do differently if I had my time again? Not much. The Fire Brigade has been a laugh, and the property business has been a rollercoaster ride at times. I’ve made lots of stupid mistakes in all aspects of my life, but they’ve all helped make me the person I am.