Here it is! Our financial review for 2021. Below, we’ll detail how we each got on this year, including progress towards our FIRE goals.
If you want to see a more personal review of 2021, see this post by Mr Way.
Mr Way
As far as my FIRE journey is concerned, it has been another steady year in 2021. Spending has been strange with our wedding and Baby Way, but the savings have just ticked over without too much thought.
I have a monthly payment of £1,000 into my ISA which leaves me more than enough for other spending. Another £250 goes into a regular saver each month with a reasonable interest rate. I usually let the rest stack up in my current account until I get round to putting an extra lump sum into my ISA! Probably not the most efficient way of working, but it works for me.
Having stepped down to 3 days a week from September, my finances have taken a bit of a hit in recent months. I’ve yet to really notice this yet though because I had a decent cash buffer which has been slowly depleting.
The Numbers
Here’s an overview of how my numbers look, in comparison to previous updates.
| Account | Balance (Mar 20) | Balance (Dec 20) | Balance (Dec 21) |
|---|---|---|---|
| Stocks & Shares ISA | £70,400 | £108,069 | £141,578 |
| Workplace Pension | £17,200 | £25,630 | £34,357 |
| SIPP | £3,800 | £5,802 | £7,269 |
| Total | £91,400 | £139,501 | £183,204 |
This means I am now 48.9% FI!
Very close to 50%, which feels like quite a significant mental milestone!
It’s quite incredible to have made so much progress, considering I’ve been working 3 days a week for the last part of the year.
My FIRE goal is based on the 4% rule and annual spending of £15,000. If you keep up to date with our Monthly Spending posts, you’ll know this is quite a comfortable level of spending for me. This combination gives me a rough goal of £375,000.
Exclusions
As mentioned before, the above doesn’t take into account my emergency fund or our house equity.
My emergency fund is around 12 months’ spending. I currently keep it in premium bonds while there are no decent savings accounts to be had!
We’re about to release all of our house equity as we make the move across continents. Our expenses will look drastically different in the coming months because we’re moving to a very high cost of living country, but hopefully we’ll still be able to contribute significant sums to our FIRE funds!
Bring on 2022!
That’s it for my 2021 financial review!
It has been another steady year of contributing to my Stock & Shares ISA accounts and everything has ticked along nicely. We’re about to turn that upside down though!
As we’re leaving the country, we won’t be able to contribute to SIPPs or ISAs for next tax year onwards. We’ll hold the accounts and let them grow, but any new money will be invested elsewhere.
Where to put this money (which includes the ~£150k from our house sale) is a total headache. Not many companies let you invest as an expat and I want to make sure it’s held in a secure location with plenty of protections. I’ll probably create a post on this shortly as I think I’ve just about worked out the best method.
I’m excited to see how these numbers look by the end of 2022 as it’s quite a big unknown at the moment!
Miss Way
2021 has been a different one for Miss Way. Her income hasn’t been as high as usual, due to her maternity leave and only partial return to work. She has continued to contribute to her accounts, but not as significantly as she would like.
The table below gives a summary of Miss Way’s current ‘FI Fund’ balance. Again, this is compared to previous financial reviews.
| Account | Balance (Mar 20) | Balance (Dec 20) | Balance (Dec 21) |
|---|---|---|---|
| Stocks & Shares ISA | £47,400 | £68,309 | £80,748 |
| Total | £47,400 | £68,309 | £80,748 |
This means Miss Way is now 21.5% FI!
Going over 20% makes things start to feel much more achievable!
As in my financial review above, this ignores Miss Way’s emergency fund and house equity.
Miss Way holds a larger emergency fund (>1 year spending). This is because she’s self employed currently. She is also uncertain how much she will be working once we move abroad, as it depends on childcare etc.
The above figure also ignores Miss Way’s pension. The Teacher’s Pension is a defined benefit system. It is available from age 60. Unfortunately we don’t currently know how much Miss Way is eligible for so far, because their system is useless!
Miss Way is always likely to maintain some form of work, even post-FI. She finds the structure this provides benefits her mental health and general productivity levels. As such, she doesn’t technically need a full FI Fund in the same way. Considering this, she’s in a very strong position already!
Overview
All in all, it has been a pretty good year for our FIRE goals. Markets have done surprisingly well considering all of the uncertainty, so we’ll see what the coming years bring. Hopefully our 2021 financial review won’t be the last positive one!
All of that is out of our control, so we’ll just continue sticking our monthly contributions in and see where we end up by the next financial review!
We’re really unsure how our finances will pan out once we move abroad. Living costs will be very high so we’re unsure how much we’ll be able to save – probably not as much as we have been in the UK. But while it will probably be a slightly negative move financially, we’re really excited for the potential lifestyle benefits from living in paradise.
We can’t wait to see what 2022 brings! All the best to you all!
In the next few days we’ll be posting our usual monthly spending post as well as a summary of all of our spending throughout 2022.
Keep in touch, and have a fantastic 2022!