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Early retirement costs & targets - November 2020


Sometimes I wonder how I managed to retire early given my track record with investments. For example, I just don't get why stock markets are so high in the midst of economic disruption and the huge financial cost of a pandemic.

I've read about stock markets being forward looking, the effect of Central Bank support, almost zero interest rates and a disproportionate impact on small rather than big business. But I still don't get it. I watch the news stories of businesses in turmoil, some going bust and people losing their jobs. I read about the billions or even trillions being spent by governments attempting to prop things up. But won't the books have to be balanced at some point by way of higher taxes, less money in our pockets and therefore difficult times ahead for companies and the markets? I generally follow the adage:

"if something seems to good to be true, then it probably is"

Or am I missing something obvious?

On top of that, economies move in cycles. Booms and busts follow each other as surely as night follows day. Normally, economic cycles could be five years, perhaps seven or eight. Right now, we're twelve years into the longest growth cycle there's ever been - does history not tell us that a serious contraction is heading our way?

So in June, when I switched brokerage firms, I decided not to reinvest immediately. I figured I'd hold some cash and reinvest it when the markets drop. Five months later, I still have the cash, but it would have been worth £38,000 ($51,000 or €42,000) more if I'd have invested back in June, OUCH!🤦‍♂️

That leaves me with a decision. Do I invest now or do I stick with my theory that the markets are ignoring reality, they're too high and that a contraction is coming. The recent vaccine news will probably provide another boost for the markets, but a twelve year growth cycle surely can't continue much longer. What do you think? Unfortunately, this isn't my first rodeo on the topic of investment nightmares!


Have our costs reduced by £38,000 ($51,000 or €42,000) to make up for my investing faux pas? Of course not, that would be impossible, and in fact we're spending pretty much the same amount as we did in previous years, just in different places. Unsurprisingly travel, going out and coffee shop costs are down but they've been replaced by the cost of furnishing our UK home - I'm still struggling with the concept of having two homes.

Every month I seem to be surprised by how much we've spent, and this month is no different. But much of the extra spend was on gifts and some on charity, which aren't the worse things to spend on.

I still struggle to understand why grocery costs are so high. It's more than when we lived in Dubai and more than we spend in France, despite my previous research showing that the UK would be cheaper. This sounds like a topic for further investigation on a cold, wet day when I want to stay warm inside. It's a weird thing to look forward to!

Early retirement costs - November 2020

We have a few more Christmas gifts to buy, but we've been quite organised and have >80% of our shopping done. I asked Sally how much she thought we'd spent so far, and she guessed £500 ($675 or €550). Not even close! I'd have said more than Sally, but still not enough, it's surprising how a little spent here and there quickly adds up. It shows how tracking costs can be useful - if you don't know how much you're spending, how can you decide if that spend is OK or whether you want to change things? I've tracked our costs for years and I'm convinced it was an important part of achieving financial independence. Our gift spending is OK because we can afford it, but there will be others who will be paying off the credit card debt for months to come.


My target tracker "casualty of/affected by Covid-19" tells the story of 2020. But it's also a reminder that while some of my plans might have been affected, that's nothing compared to those who have lost loved ones, been unwell or who have job or money worries because of the pandemic. We're in a fortunate position by comparison.

My early retirement target tracker - November 2020 update

My plus point for the month is that I've actually made an effort on my learning French target. In truth, not a big effort, but a step in the right direction.

Running has also been going OK despite constant niggles, aches and pains. I'm nowhere close to the standard required to run a fast marathon, but I'm getting out four times a week. I'd like to make it five, but my body objects. I don't like that but, on the other hand, it reminds me of a good reason to retire early - to do things while we're still young enough to do so.


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Hi She's Fired

Sorry for my comments going out of order (one day the blog platform will allow for replies to specific comments, I hope).

I just replied to Phillip's comment above about time in the market rather than timing the market, but knowing this and acting accordingly is not always easy. Perhaps I should just feel good that I am providing some sort of public service in demonstrating it in practice so that others can make better choices🤣

Given your background, I can imagine your WOW comment re my investing nightmares post. Other than the financial cost, I feel embarrassed not to have known better given my finance background, even though there is a world of difference between running…


Hi Phillip

It was fun to look at your chart, and yes, it does show that your career is in finance🤣. I don't have a specific budget but still have a feel for what feels right or too much. Holiday/travel are tricky because, as you suggest, it can be a bit lumpy. In my opinion, overspending on gifts isn't a bad place if there's going to be an overspend, it's nice to make others happy.

I'm also a convert to tracker funds - I have Vanguard Lifestrategy with 70% stocks and 30% bonds. I also know the adage, time in the market, not timing the market, but sometimes it's harder to put into practice than it is to say!


Hi David, always interested to see how things are going. I'm a couple of months away from being in a position to retire, and I've started to keep track of how my spend is looking compared to my budget. Here's what it looks like for November (can you tell I also work in Finance)

This chart shows where I was better off than my budget (blue) and worse off (orange).

It's help me spot a couple of things.

1. I was too optimistic in my car service/repair cost as it was covered by a dealer warranty and service plan...... but I didn't think about flat tyres! plus the bits and pieces not covered in the plan.

2. We have insurance…


I forgot to say- I read your investment mistakes post. WOW. I worked in investments and I'm horrified. We have a highly regulated investment industry and the regulations are a pain for the "good guys" who do the job ethically, but I guess I can see why they're in place here!


I have no idea which markets you're invested in and they're all different, so no comment on that. Re: not reinvesting your money, my husband received an inheritance (our least favorite way to acquire money) just before the election and he thought the market was too high as well. The Dow is now 3000 points higher. I did not calculate that in dollars for him... Somebody smart (I can't remember who- Warren Buffet maybe) once said that far more money had been lost preparing for down markets than has ever been lost in in the actual down markets. Since economists correctly predict 2 out of 10 market declines, I don't even try.

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