Welcome to our financial review for 2023! Below, we’ll detail how we each got on this year, including progress towards our FIRE goals.
We’ll also be posting a more personal review from Mr Way, as well as our annual spending summary for 2023, so keep an eye out for those!
Mr Way
What a year it has been! We started the year settling into Caribbean life, and within a few months everything was flipped on its head once again, with our premature return to the UK.
Fortunately, we left the Caribbean in a reasonable financial position, with a small amount of savings despite the huge cost of living there!
The whole experience was incredibly worthwhile, but we would probably have saved more if we stayed in the UK!
The Numbers
Here’s an overview of how my personal numbers look, in comparison to previous updates.
| Account | Balance (Mar 20) | Balance (Dec 20) | Balance (Dec 21) | Balance (Dec 22) | Balance (Dec 23) |
|---|---|---|---|---|---|
| Stocks & Shares ISA | £70,400 | £108,069 | £141,578 | £133,721 | £94,904 |
| Workplace Pension | £17,200 | £25,630 | £34,357 | £32,425 | £37,029 |
| SIPP | £3,800 | £5,802 | £7,269 | £6,914 | £7,638 |
| Total | £91,400 | £139,501 | £183,204 | £173,060 | £139,571 |
This means I am now 37.2% FI!
Clearly this is disappointing, because I’ve now gone backwards 2 years running. However, there are very good reasons for both!
The drop from 21 to 22 was simply market movements, as the world tried to work out what was happening post-Covid.
The drop this year has come about because we bought a house!
We dipped into our FIRE funds somewhat in order to buy the house outright, with no mortgage.
While it hurt to dip into my FIRE fund, I think it will be a really positive move longer term. Our living costs will obviously be significantly lower, with no mortgage or rent to pay. We’ll therefore be able to ramp up the savings into our FIRE funds and replenish the balances.
The idea is that this will become our permanent base, which we will keep regardless of any possible future moves abroad. This will make the whole process much easier, meaning we don’t have to get rid of all of our ‘stuff’ like last time, and can visit home much easier.
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 property value.
My emergency fund is currently quite high at around £16k. We recently bought our home so we kept a bit of extra cash for furniture etc, as well as any unforeseen costs. I currently keep most of my emergency fund in premium bonds. I’ll probably look to invest some of this money into my FIRE fund as we settle back into UK life, probably leaving around £10k in the emergency fund pot.
As for the property, as we already mentioned we now own our home outright.
We paid £285,000 cash which came from the proceeds of our previous house sale (before moving abroad) as well as money accumulated in the Caribbean, and some dipping into FIRE funds.
It’s great to own our home like this at such a young age, but it won’t be added to our ‘FIRE fund’ total, because it doesn’t provide an income to live off.
Bring on 2024!
That’s it for my 2023 financial review!
It has been a rollercoaster of a year. We started out chilling in the Caribbean, not knowing how long our adventure would last. That chapter very quickly unravelled, but we’re now writing a new story back in the UK!
I’ve started a great new job and we’re expecting a second Baby Way in July.
It’ll be interesting to see how we get on with spending in 2024. While we expect to keep our spending really low, it is really noticeable how much costs have increased while we were out of the UK. I’m still fairly comfortable with my personal FIRE spending allowance of £15,000, but we’ll see how it goes.
Mrs Way
The 2023 financial review for Mrs Way looks slightly better than mine, because we didn’t raid her FIRE fund for the house purchase!
The table below gives a summary of Mrs Way’s current ‘FI Fund’ balance. Again, this is compared to previous financial reviews.
| Account | Balance (Mar 20) | Balance (Dec 20) | Balance (Dec 21) | Balance (Dec 22) | Balance (Dec 23) |
|---|---|---|---|---|---|
| Stocks & Shares ISA | £47,400 | £68,309 | £80,748 | £77,325 | £82,437 |
| Total | £47,400 | £68,309 | £80,748 | £77,325 | £82,437 |
This means Mrs Way is now 22.0% FI!
We haven’t added anything to Mrs Way’s accounts this year, but it’s nice to see a small amount of growth.
As in my financial review above, this ignores Mrs Way’s emergency fund and property. Our property was purchased 50/50.
The above FIRE fund figure also ignores Mrs 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 Mrs Way is eligible for so far, because their system is useless!
Mrs 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 backwards year for our FIRE funds! It feels really strange to dip into our savings like this, with out mindset having been to maximise investments for the last number of years.
However, we’re comfortable that this decision will set us up very well for the future. It should mean we can very quickly replenish the FIRE funds, as well as adding significant sums in the future as we seek to reach FIRE asap!
We can’t wait to see what 2024 brings! All the best to you all!
Keep in touch, and have a fantastic 2024!