I am writing this at 9.30 on a Monday morning, sitting in the garden. Mrs Accumulator has just waved to me through the window and I can scarcely believe she’s there.

The past year has been strange, full of awkward trials and tiny tribulations, but the moment that’s just passed between us – well, it doesn’t get better than that. ¹

About five years ago, ² I’d have been desperately fighting bin-fires at the office, with no Mrs TA within a country mile. 

Work would have felt like one of those mad videogames where pointless cack (pizza, pies, U-boats, whatever) hurtles at you down a conveyor belt while your energy bar ebbs away. 

Now I’m in a soggy garden with the scent of pine resin up my nose. It feels like heaven. 

God, that went fast

I haven’t had much time to reflect of late. To think about how chuffing lucky I am. Though the feeling bleeds through my every day. 

From one perspective, the past year has felt like an extra level in that crazy conveyor belt game: 

• Here comes a devastating diagnosis. Scratch one parent! (It’s not the end yet, but it’s the beginning of the end.)
• Now incinerate hundreds of hours on a communal endeavour with no ‘We’ in community. 
• Next, feel the spread of aches and pains that likely can’t be ignored much longer, nor fixed. Goddamn age. 
• Watch people you love trapped in torment. Feel powerless to help them.  
• Fail to fulfill some promises to good friends while you arbitrage the above. 

Yet from another perspective, I’m happy I met the challenges that came my way. Whether they’d feature among the golden beaches and labradors of a retirement brochure is beside the point. No-one else fancied it, so it had to be me. 

Perhaps I made a difference to my loved ones. And others further down my contacts list. Either way, it made me feel useful. That’s pretty vital for a retired male. 

Much of what I’ve done has no place on a CV, or Linkedin. It probably won’t make my memoirs (available soon!), or even a FIRE post about how amazing FIRE is. But I’m still glad I did it. 

It meant something to someone. It meant something to me. Certainly it was waaaay better than hitting the Q3 stretch target for BastardoCorps PLC. 

Virtually none of it was in the plan. 

This was the plan

Before I retired early, I sketched out an idealised structure for my week because I feared I might otherwise just lie in bed: 

• Monday – Walk, read, all day
• Tuesday – Monevator
• Wednesday – Monevator
• Thursday – New skill
• Friday – Volunteer
• Saturday – Day out with Mrs Accumulator
• Sunday – Day out with Mrs Accumulator

It all happens, but fragmented and frittered across formless weeks and months. No week looks like this. Also, the volunteer part has not featured me giving my time to a worthy cause, so I need to sort that out. 

Here’s a list of activities five-years-ago me thought I’d try with my oodles of spare time:

So there you go. I award myself a First Class Honours in pottering, prevarication and lack of application. 

Take that Mr Money Mustache! This is how you start a movement. (Time-wasters only, please.)

Take it steady, 

The Accumulator

P.S. Our FIRE budget for 2025-26 was £29,366 for two. Actual spend: £29,432. Ooh, so close.

1. The knowledge that it doesn’t get better than that was passed on to me by The Investor, quoting the wise words of a text message from his late father: “Eating fish and chips from the best takeaway in the world. Mum only ate half hers. Had to finish it off. It doesn’t get better than that.”
2. This update is late!

The post FIRE update: year five appeared first on Monevator.

What caught Frugalist’s eye this week.

The post Weekend reading: Well, that escalated quickly appeared first on Monevator.

Imagine retiring early at 34… but not on the back of a decade at a US tech giant, selling a start-up, or even retiring from the Premier League, but after crossing the globe on a bicycle and then finding an edge in the early prediction markets. Few of us will follow a path like that of Pablo – a Spanish FIRE-ee who declared the game won in 2022 – but his unique story can inspire anyone headed towards FIRE (Financial Independence Retire Early).

A place by the FIRE

Hello! How do you feel about taking stock of your financial life today?

Happy to do it. I spent years on the road being asked how I could possibly afford to keep going, so talking about my life is familiar ground. I’m a little nervous too, because I’ve told the story in pieces for years but never the money side of it in one sitting.

I read a few of the previous chats beforehand, so I know the level of honesty you’re after.

Money stopped being something I stress about a long time ago. I guess that’s the story I’m about to tell.

How old are you? What’s your relationship status?

I’m 39. Not married, but I have a girlfriend. We met after I’d already retired, and we’ve been together for four years.

Do you have any dependents?

A daughter, two-years old. She wasn’t in any of my FIRE calculations.

For most of my life I was sure kids weren’t for me. Then life changed. I met someone, and the idea came to look different.

One of the things I loved most in my travelling years was taking someone along for a stretch of the road and watching them light up at what was possible. Doing a version of that with my own kid sounded like it could be pretty special.

It is.

Knowing I could afford to do it comfortably – with all the support that makes it easier – honestly helped me decide.

Whereabouts do you live and what’s it like there?

Greater Lisbon. I love it. The city is full of people from everywhere, and when everyone is new, everyone wants to meet people. Making real connections has been the easiest of anywhere I’ve lived.

The weather is comfortable all year round, though I still escape to somewhere warmer for two or three months each winter, because I hate winter. And it’s an outdoor life. I can play sports outside nearly all year.

When do you consider you achieved Financial Independence and why?

A few months before I stopped working. It was always a number for me, and by January 2022 I had basically crossed it. I took a whole month off in Tenerife, decided I was done, and the last two months of trading were just padding the number for comfort.

Why that number? It was enough that my spending would sit safely under what the pot can produce forever, with room for the life I actually wanted, rather than the cheap one I’d previously been living on the road.

What about Retired Early?

I stopped trading in April 2022, moved to Lisbon, and I’ve been retired since, from 34.

I still build things. Lately it’s a website full of the calculators and guides I wish had existed when I was working towards my own number. I’m also reviving my old travel blog, and a few other random projects.

But all of that is for love, not income. Retired, for me, just means nobody decides my day except me.

Assets: owning the world

What is your current net worth?


Seven-figures. The exact number I keep to myself. I’d rather it never becomes the first thing the internet says about me!

What matters for the story is it’s enough that a crash never forces me to sell, and my spending sits comfortably under a withdrawal rate the pot can sustain more or less forever.

What are the main assets that make up your net worth and are there mortgages or other debts that offset it?

Almost everything is global equity index funds, all accumulating, spread across a few brokers.

On the Spanish platforms, MyInvestor and Selfbank, I hold Vanguard index funds. On Interactive Brokers and Trading 212 it’s ETFs, mostly Vanguard’s all-world fund, VWCE, plus the iShares world and emerging markets ones, SWDA and EMIM.

When I retired I was 94% equities and 6% cash. These days it’s more like 98 or 99% equities, and 1 or 2% cash depending on how recently I’ve sold.

No property yet, no pensions, no business, no crypto, and no debts.

The one thing on the way is a flat. I’ve paid the deposit on a place that’s being built.

What’s your home like?

I rent a four-bedroom apartment overlooking the river, in a new building, with a nice terrace. I took it when I first moved to Lisbon and had more space than I knew what to do with – yet somehow, now that we’re three in the apartment, I’m running out of it.

The deposit I mentioned is on a flat being built in the same area, slightly bigger than where I live now. It wasn’t really a financial decision. It was a ‘make it mine’ decision. I want to set up a home exactly the way I want it, and have a base that doesn’t depend on a landlord’s plans or what happens at the end of a rental contract.

Do you consider a home an asset, an investment, or something else?

I guess it depends where you sit. An asset, yes. An investment, possibly, and whether a good one or a bad one is another story. I’ve turned this question over enough that I ended up building a buy-versus-rent calculator.

What I don’t like is having a big chunk of a portfolio stuck in one property, in one city, in one country. That’s a concentrated bet on the politics and economics of a single place, and I don’t want that exposure.

The way I look at it, your home can sit in your net worth, but be realistic that you can’t draw a percentage from it. It pays you in rent you don’t pay, and it charges you back in taxes, insurance, and repairs.

Earning: running the numbers

What is – or was – your job?

There was never one job – there was a sequence of ways to fund freedom.

I started working at 18 and left my parents’ home at 19. That same year I had a few months of online poker, which taught me something that shaped everything after: odds are something you can study, and sometimes you can be on the right side of them.

By 23 I was managing a restaurant in Gijón, in the north of Spain, with the safe career path laid out in front of me. In January 2011 I quit and left with a backpack. That was the real career decision of my life.

Everything after that fed the same project, one way or another. I taught myself web design to run my travel blog, and that turned into building websites for people while I moved. I picked up a camera, and within a year I was selling photography to magazines and campaigns, and running workshops.

The blog won best travel blog in Spain in 2015, and the trip ended up in a good stack of magazines and newspapers.

Nice! Did that contribute financially to your achieving FIRE?

Directly, no – and not for lack of opportunity.

I never tried to make the blog earn. I wrote it for the fun of it, for the pleasure of sharing what I was learning and researching along the way. Every idea I had for monetising it died the same way – it felt like selling my soul. 

The way it did pay me was sideways. I taught myself web design to run it, and people who found it started asking me to build their websites. That became work I could do from anywhere. The photography and the press came through the same way.

So the blog brought some income during the road years indirectly, but the pot itself was built in the trading years.

Got it. Onwards!

Between backpacking and the bicycle trip I spent about a year and a half in Manchester, working as a waiter, saving up for a bicycle, a tent, and enough money to ride around the world without running out of it.

Then, from January 2014 to December 2018, I cycled from London to New York the long way round. That’s about 47,000 kilometres through 30 countries.

After the ride I went full-time into trading prediction markets, which means pricing probability better than the people setting the odds. That’s the chapter that produced ‘the number’.

A few years of it, and in April 2022 I stopped, moved to Lisbon, and retired.

What was your annual income?

It changed with every chapter. The restaurant paid a normal Spanish salary. In the UK I made a killing on tips working as a waiter. In the travelling years I lived on around €10 a day backpacking and €3 to €5 a day on the bicycle, and the photography, the websites and the odd stretch of work along the way covered more than the life cost.

During the trading years it grew month by month, year by year, to the point of making six-digits monthly, until it was enough to retire on.

None of it ever came as a salary.

What was your edge with trading? I’m guessing it’s that early prediction markets were not super rational – a bit like early online poker? 

Since you ask straight, I’ll answer straight, then explain why I stop where I stop.

The markets were sports markets, and the counterparty was the bookmakers. I built models that priced the probability of outcomes, compared my number with their number, and took a position only when the gap was on my side.

So your poker instinct is the right one. What poker taught me at 19 is that odds are something you can study, and this was that lesson with more spreadsheet. Anomalies rather than big-picture calls – the systematic kind you find, verify, and then execute over and over without getting creative.

What was your typical day like?

Gloriously unglamorous! Maintain the models, watch the prices, act when the numbers said so. Log everything, review. Tracking the game was the whole game.

My vagueness past this point is deliberate, and only half of it is privacy.

I had a real edge and I checked the maths constantly. I don’t want my story read as an invitation for a reader to try the same without either – because that version of the story ends with less money, not more…

How did your salary progress, and to what extent was FIRE part of your plans?


There was no career ladder, so there was no progression in the usual sense. The progression was in freedom. Each chapter bought more of it.

What I knew early – long before I’d heard the term FIRE – was that freedom was the most important thing in my life, and that I had a very open mind about unconventional ways of making money. Once the trading started working, financial independence stopped being a direction and became a number.

From then on the plan was simple: reach the number, stop, make the freedom permanent.

Did you learn anything on the way that you wished you’d known earlier?

If I could send one message back to 20-year-old me, it would be: go now.

The world was the real education, and it didn’t properly open up to me until I left at 23 and discovered that everything was possible. Everything since has been a natural progression of the way travelling taught me to look at life.

But honestly, I wouldn’t skip a single step. Every job I had I enjoyed until I didn’t, and then I moved on with my life. That’s served me better than any career advice I ever got.

If anything, the pursuit of freedom was the career, and everything else was logistics.

Do you have any sources of income besides your main job?

Not since I retired, no. Everything I’ve done in the last four years has been for the love of it: hosting investment meet-ups, talks, and roundtables in Lisbon, the website, the tools I build for it, and a book I’m writing about my whole journey.

Any of those could probably make money if I pushed, and maybe one day I will if I feel like it, but it would never be the point.

I stopped doing things purely for money a long time ago. If I don’t enjoy it, I don’t do it.

Saving: the 3.33% rule

What is your annual spending? How has it changed over time?

These days, somewhere between €90,000 and €100,000 a year.

It has never needed a belt-tightening – it’s under the 3.33% of the pot that I’m comfortable drawing for it to last more or less forever. So I spend freely within reason, splurge when I feel like it, and it hasn’t been a problem yet.

The change over time part I find funny. I once travelled for a month on zero euros, as a challenge. The backpack years cost about €300 a month, the bicycle years €100 to €150 a month.

Today I spend in a week what once lasted me years. I couldn’t honestly tell you my happiness has moved much either way.

Do you stick to a budget or otherwise structure your spending?

No budget. Ideally once a month I pull my bank statements into a money app so I know what’s going on. In reality I sometimes let it pile up for two or three months and then procrastinate a bit longer. I properly look at where it’s all going maybe once or twice a year.

That’s the whole system. It works because my spending never threatens to get out of control, so there’s nothing to control. I’m aware of the costs, not stressed by them.

Are you using the 4% rule or a similar strategy to manage drawdown and spending?

My version is a 3.33% rule, and staying under it. Drawing up to 3.33% of the pot – roughly one thirtieth – is the level where I’m satisfied the money lasts practically forever, whatever the markets do.

What’s the mechanics of running this?

They are simple. I keep a cash buffer, and when it starts to run low I sell – at least six months of spending in one go. This way I’m not constantly selling and shuffling money around, and there’s always cash sitting there for any sudden expense.

If the moment feels like a bad one to sell, I can wait; if the cash runs out before a better moment shows up, I sell anyway.

I like to buy peace of mind. The system has been stress-tested twice since I retired – in 2022 and in spring 2025 – when markets dropped hard. I sold nothing either time. The buffer worked, so bravery didn’t come into it.

What percentage of your gross income did you save over the years? 

I never measured it, and the honest answer makes a percentage a bit meaningless. On the road there was barely anything to save, yet I finished five years of cycling with more money than I’d left London with. That life cost so little that stretches of work along the way – a bit in Georgia, a bit in China – paid for more than the entire trip.

In the trading years this flipped: I was too busy making money to spend it, so I was saving nearly all of it, without trying.

There was never a savings plan in either chapter. One had no spending to speak of, and the other had no time to spend anything!

What’s the secret to saving more money?

Find out what a good life costs you. Not in theory, in euros (or pounds), but rather: for your own life.

In my twenties, I used every trick to spend less, and sometimes I overdid it, but the answer was worth it. My good life turned out to be shockingly cheap for years. Even now, with the flat coming and the steaks and the winters away, it’s a number that doesn’t scare me.

Once you know that number, saving stops feeling like sacrifice, because you can see what you’re actually buying with it: free years.

If we are thinking on how to save money to reach FIRE, then, for me, after you have looked at your expenses and cut what makes sense to cut, you should next focus that energy into finding ways of making more money – ideally something you can scale – instead of stressing and wasting energy on cutting a few euros or pounds per month.

Any hints about spending less?

The month I travelled on zero euros taught me more about spending than any book. I’m not suggesting anyone live like that, but once you’ve seen how little a day can cost, the fear goes out of spending less. A lot of expensive habits reveal themselves as habits rather than needs.

My practical hint is boring: know where the money goes. Pull the statements into an app or spreadsheet once a month and just look. The leaks are usually things you don’t even enjoy.

Do you have any passions or hobbies that eat up your income?

Plenty, and I don’t fight any of them. Padel is the current obsession, with the rackets and lessons that come with it. It’s actually the first sport I’ve paid to learn properly.

The others I just kept buying gear for: rock climbing, ultimate frisbee, and even historical European martial arts, which is as niche as it sounds!

There’s also the gym, and a longevity habit that adds up: blood tests, supplements, sauna. What’s the point of being financially independent if the body fails first?

We have a babysitter for our daughter, which is some of the best money I’ve ever spent.

Travel is the big line – two or three months somewhere warm every winter, comfortably these days, a motorhome trip around Norway last year, and next winter we’re thinking South Africa or Southeast Asia.

And meat. I like good meat – sirloins, entrecôtes, the odd chuletón or tomahawk, and I enjoy reverse-searing big pieces at home. I look at what any of it costs and I have no reaction. It’s what the money is for.

Investing: a life more ordinary

What kind of investor are you?

Passive, boring, and glad about it! Global index funds and ETFs, all accumulating, low fees from day one, and I’ve never churned a thing.

The portfolio I set up is essentially the portfolio I hold. I’m 98 to 99% in equities, and I genuinely think 100% equities is the best play for an early retiree, as long as you don’t panic.

That caveat is behavioural, not mathematical. The numbers say a global portfolio recovers – the question is whether you’ll still be holding when it does. My answer to that is the cash buffer. I never want to be urgently selling shares in a crash to pay for groceries.

Honestly, I’m quite sure I wouldn’t panic either way, cash buffer or not. The buffer just means I never have to prove it and keeps my stress levels down.

What was your best investment?

Leaving Spain at 23 with a backpack. Everything I have compounded out of that one decision: the confidence, the open mind about how money can be made, the discovery of how little a life costs, and eventually the number itself.

Years later I managed to put what it taught me in one line: “Fear does not prevent death, it prevents life”.

Second best, keeping an open mind about unconventional ways to earn. That one definitely paid off.

Did you make any big mistakes on your investing journey?

A very British one, for those reading this. Between the backpacking and the bike trip I lived in Manchester for about a year and a half, working as a waiter, and I put most of my savings into an ISA. The cash kind. I wanted the money accessible and stress-free while I cycled around the world, so it sat there, safe and going nowhere, for five years in which I barely touched it.

Knowing what I know now, that was exactly the situation a stocks and shares ISA in a global index fund was invented for. A cheap mistake as mistakes go – but five years of compounding is five years of compounding!

The other mistake took longer to spot. Long after I started to make significant amounts of money, I kept optimising like it was still the €10 days. There are cheap flights from those years whose savings I couldn’t tell you now, but whose miserable hours I still remember perfectly. Being frugal served me for a decade – being unable to stop cost me real comfort when I could afford it. It took time to change my mindset and relax about spending money.

If I’m understanding correctly then, your strategy was saving hard to get some seed capital, living frugally, and then investing that capital for a few years – ultimately parlaying that via Prediction Markets into your final retirement pot?

The index funds never built the pot – they are how I am keeping it afterwards. The engine was the edge itself.

The starting capital was whatever survives five years on a bicycle, nothing significant. What the frugal years really bought me was runway. A life that cheap meant the markets never had to pay my rent before they were ready to, and I could give the method my full attention for as long as it took.

From there it compounded the boring way. The results grew month by month, year by year. I was too busy making money to spend much of it, so nearly all of it stayed in. As it piled up it moved into global index funds, and when I stopped in 2022, the funds took over.

So: edge first, index funds after. Saving hard was never the wealth plan. 

What has been your overall return, as best you can tell?

A confession: I had never looked until you prompted me to – I normally just look at the current net worth total in the app. The money app I pull my statements into tracks it automatically, so the number had been sitting there all along: around 75% overall.

I started buying in during Covid, so the smaller early purchases have appreciated enormously and the later ones much less. The ETF I bought most recently – which is the one I sell from first because selling it realises the smallest capital gain – is up around 60%.

I suppose the reason I never looked is that the number changes nothing. But there it is, measured for the first time, for this interview.

How much have you been able to fill your ISA and pension contributions? 

My complete ISA history is the cash one from your mistakes question, which I suspect makes me unique among your interviewees. If I’d found Monevator ten years earlier, that chapter would probably have gone differently.

Beyond that, nothing. Spain doesn’t really offer worthwhile wrappers, and I’ve never used pension products. Everything sits in plain taxable accounts with low fees.

Keeping it that simple has one advantage: it works the same wherever life takes you.

So tax incentives and shelters didn’t influence your strategy?

Hardly at all. I use accumulating funds, which is the sensible default for a European investor anyway, and when I sell I sell the lot with the smallest gain first to keep the tax bill reasonable. That’s the whole strategy.

Rules differ in every country and change all the time, so I never wanted a plan that only works because of one paragraph in one tax code. I optimise where it’s cheap to optimise, and I’ve never let tax decide anything important.

How often do you check or tweak your portfolio or other investments?

Far less than anyone assumes. I pull statements into the money app monthly, in theory, look properly at the spending once or twice a year, and the portfolio I leave alone.

I’ve never had to change the allocation. The only recurring activity is selling for cash flow, roughly twice a year. My most active investing behaviour is procrastinating over the statement import.

How do you account for the new flat in your FIRE projections? Will you pay out of cash and accept a lower portfolio return, or take a mortgage and treat it almost like you’re renting to yourself? 

The projections never lean on the flat. The pot that has to last is the liquid one. The flat will sit in the net worth column, not in the drawdown maths.

What changes when I move in is the shape of the spending – the rent line disappears, the owner costs arrive, and the total still has to sit under the 3.33%, with the flat fully absorbed.

On the how: I’m buying the flat off-plan, so I’m paying 30% while it’s built and the other 70% at delivery. The plan for that 70% is a mortgage, so pretty much your renting-to-yourself idea.

While mortgage rates sit below what I expect the portfolio to return, I’d rather owe the bank cheaply than pull a big chunk out of the market. I’ll make the final call when the building is finished and I see the rates on offer. 

How does your girlfriend fit into the financial picture?

We met after I had already retired, so she was never part of the plan or the number. It was calculated before she was in it, and it has room for the life we share now, but she contributes to our common expenses.

On the road: physically down but most certainly not out.

Wealth: a standing (desk) ovation

We know how you made your money, but how did you keep it? 

By making the keeping as unlike the making as possible. The money was made with an edge, actively, glued to screens. The moment it was made, its job changed: everything went into global index funds, the allocation was set once, and a cash buffer stands between the portfolio and my groceries.

No leverage. Nothing exotic. Nothing that needs me to be right ever again.

Which is more important, saving or investing, and why?

For me it was saving first, in the sense that learning to live happily on little is what made everything else possible. It kept me free for years with almost no money, and it meant my number never had to be huge. But the pot that keeps me retired is the investing’s work.

The thing I’d put above both is knowing what your life costs. The saving and the investing both exist in service of that number.

When did you think you would achieve financial freedom? Was it a goal with a timeline?

It was always a number, never a date. I knew roughly that it would take a few years.

The number itself moved once. My first target was smaller, priced for the road-cheap life I’d been living, and I revised it upwards when I realised I might want more from the next chapters of my life.

I’m glad I did. The life I have now, with the kid and the flat coming and the winters away, wouldn’t be possible with the first one. And in the end it came down to months, not years. I knew months in advance I was there, and the final stretch was just padding.

Did anything unexpected get in your way?

The markets never surprised me. My own body did. After five years of cycling I sat down at a desk and put on ten kilos without noticing, because I was still eating like a man crossing continents while burning the calories of a man in a chair.

I dealt with it the way I deal with everything: I changed the system.

Standing desk, a walking pad under it, and no more snacking as if I had 8,000 calories a day to replace. The weight came off and stayed off.

Are you still growing your pot? If you’re de-accumulating, how?

Both at once, which is the strange privilege of spending under the growth rate. I’m de-accumulating in the mechanical sense, selling roughly twice a year to live, and yet on paper the pot is bigger than the day I retired.

Inflation has been a bit crazy, to be fair, so the real picture is less impressive than the nominal one. But the division of labour is clear – the pot looks after itself, and I look after the spending rate.

It’s interesting to me that you could switch off that money-making machine when you hit your number. As an active investor I know I can’t! It’s addictive to ‘beat’ the system, no? Did you feel your edge was waning? Or was it charging too high a physical price to be glued to screens all day?

I think the difference between us is I never loved the machine, I loved what it was building.

There’s a pattern in my life. I go all in on something, get it where I wanted it, and then walk away without much ceremony. Poker bored me after a few months. The restaurant career I enjoyed until I didn’t. Trading was the first time finishing had an exact number attached.

And no, the edge wasn’t fading. The odds got sharper over the years, so each position yielded less, but my results were still climbing, because I kept finding new angles and kept raising the daily volume of positions. That was why the yield was going down over time – because I was widening the range of events I would be working with to maximise profits.

I stopped because the number arrived, because it had stopped being a challenge, and because I wanted my days to belong to something other than being in front of the screens.

You already have the ten kilos weight story. Behind it sits a simpler fact, which is that I had spent my whole adult life outdoors and free. Past the number, every extra month was earning money I had no use for and paying for it in the only currency I’ve ever cared about.

Do you have any further financial goals?

None. The game is over. The flat will get finished, my daughter will get a financial education, and the money just needs to keep quietly doing its thing.

What would you say to Monevator readers pursuing financial freedom?

Freedom is not waiting for you at the number. I was freer at 24, on €10 a day, than most people with a full pension. If your plan is misery now in exchange for freedom later, fix the plan. The years on the way are your life too.

My whole life has been a search for freedom. FIRE did not start it, and reaching my number did not end it – it just made the freedom permanent.

In the weeds: you can go your own way

When did you first start thinking seriously about money and investing?

About money, early. I was working at 18, out of my parents’ home at 19, and that same year I spent a few months making money at online poker, until it bored me. So I always knew money as something you could figure out.

About investing, embarrassingly late. Until the last years of the bicycle trip I genuinely felt like a genius parking my money in deposits and savings accounts at 3 to 5%.

Then somewhere on the road I started reading properly, met the idea of index funds, and quietly stopped feeling like a genius.

Did any particular individuals inspire you to become financially free? 

Honestly, no. What I was taught as a kid was the opposite of all this: get the safe job, build the good career, get a state paid pension, and rest at the end.

Nobody around me was modelling financial freedom. I just decided the default wasn’t for me and worked the rest out backwards along the way.

How do your parents feel about your journey? You mentioned a life was laid out for you, but you’ve taken a very different route. Was there any tension or conflict?

There was never a big scene. My parents are both teachers, and the script I grew up with was the one they lived themselves – solid job, long summers, the same rented house by the same beach every August. A happy childhood, and a strict one.

When I quit my job and started traveling in 2011, the reaction was worry rather than anger. They didn’t understand what I was doing, and for years the most generous reading available to them was that it was a phase. My furniture went into the family’s storage rooms, and I think they accepted before I did that I wasn’t coming back for it.

Today I think they’re amazed at what I’ve pulled off. They always knew I was capable. What they could never see was how any of it added up to a safe life, and safety was the one thing they wanted for me.

In the end I got exactly that, by a route they still can’t quite comprehend.

I guess they’re proud.

Can you recommend your favourite resources for anyone chasing the FIRE dream? 

Three, and each one was useful at a different step of the journey.

Mr Money Mustache, specifically the early explanation of index funds. It was the first time investing sounded simple enough to actually do, and it pointed my money in the right direction.

The FIRE subreddits. I love skimming around and absorbing random information that way, with hundreds of real cases and real mistakes. It suits how my brain likes to learn.

Finally, a calculator – the ‘Will your money last?’ visualiser at Engaging Data. I stared at that thing a lot while I was working towards my number, watching the odds pile up on my side. Very comforting at the time.

I ended up liking that genre of tool so much that half my own site is calculators now.

What is your attitude towards charity and inheritance?

Charity: I’m generous with causes that matter to me when something crosses my path, but I don’t run scheduled donations. I’d rather get my hands dirty on something that matters to me. It’s case by case, like most things in my life.

Inheritance: I’m not planning to play that card for a long time. But everything is arranged so that if something happens to me, it goes to my daughter, with enough for my girlfriend to raise her comfortably.

I’d rather not die yet, though.

What will your finances ideally look like towards the end of your life?

My whole philosophy is that the money has to last no matter how long I live. I’m optimistic about technology and medicine within our lifetimes, and if that optimism pays off, this pot might have decades more work to do than the spreadsheets assume.

So I keep the withdrawal rate at a level where the pot never meaningfully shrinks, and no, Die With Zero is not for me. I’m playing the game where the money outlasts every version of the future.

If I knew for certain I had, say, a year left, I’d loosen up. But I wouldn’t burn it down for fun.

My daughter should grow up with a good financial education, so that whatever she inherits one day, she knows exactly what to do with it.

That, more than the money, is the inheritance I care about.

My thanks to Pablo for sharing a very different perspective on life with this story. Thoughts and feedback are welcome, but please keep it constructive! This is a personal story, and I’ll delete anything I deem mean or uncivil. Also check out his website: The FIRE Exit. And read more of our FIRE-side chats.

The post FIRE-side chat: travelling and arriving appeared first on Monevator.

Actually, scratch that – the same goes for many of the professionals, too.

Consider the popular perception of coked-up City boys staring at banks of flashing monitors while simultaneously screaming into two phones and placing bets big enough to sink the economy – or even to blow up their $45bn AI fund.

That’s not investing. It’s speculation – or Hollywood myth – and it has little to nothing to do with how you build wealth.

Most rabid share traders fail to beat their do-less rivals, anyway.

A word to the wise

By contrast, wise investing is a long-term plan whereby you devote part of your income to buying a diversified portfolio of assets.

You choose assets that have a history of climbing in value (eventually, not constantly) and in some cases that also pay you a stream of income.

If you keep at it, this growing pot of capital and income together replaces your wages, pays your bills, and enables you to live off your assets for the rest of your life.

One of the little known truths of investing is that complexity does not equal success. You can achieve great results at a low cost by keeping things simple.

Monevator’s favourite strategy of passive investing is founded on that principle.

Know nothing experts

You should not feel that a lack of time, interest, or financial schooling is an obstacle to managing your own investment plan.

This is another of the counter-intuitive realities of investing. It seems complicated because the financial industry excels at conjuring up complexity. But a lot of the apparent ‘science’ is smoke-and-mirrors designed to convince you that you’re too dumb to understand it and should hire a pro for a fat fee instead.

Don’t fall for this.

To bust just a few of the myths, here are a few things that wise investing does not involve:

• You do not have to worry about how many points the FTSE 100 moved yesterday or whether it’s time to sell gold.
• You don’t have to bury yourself in analysts’ reports.
• You don’t need to understand the inner workings of the economy.
• You don’t need insider tips or access to secret trading strategies.
• You avoid the ‘experts’ who reveal ‘The six secret biotech stocks they don’t want you to know about’ or want to flog you their options trading YouTube course. These are BS merchants.
• You definitely don’t trade on apps that bait you with get-rich-quick opportunities in cryptocurrencies or whatever else they think they can sell you.

You don’t need any of that to be a wise investor.

Instead you do this

Start with your financial goals.

Perhaps you’d like to retire early (or at all), send the kids to uni, or buy a secret volcano base. Knowing the what, when and why enables you to estimate the four critical parts of your plan:

• How much money you need
• How long you need to invest
• How much money you need to put in
• How much risk you need to take

You then pick a portfolio of investment funds that invest in the asset classes best suited to meeting your investment goals.

Index trackers to the rescue

There are many different funds but as wise investors we invest in the type called index trackers.

Index tracker funds work because they are a brilliant way to diversify your wealth across the global asset classes at a super low cost to you.

You invest your cash into low-cost funds because that leaves more of your wealth in your pocket.

One of the most important decisions you’ll make is your split between equities and bonds. (Though we’d also suggest adding a few other diversifiers like gold, cash, and commodities in time, too.)

You put enough in equities to power you towards your goal.

You put enough in bonds to stop yourself freaking out when your equities tumble.

To buy and hold your index tracker funds, you’ll need an online investing account. Your account will be with a specialist fund retailer known as a platform or online broker. Your regular contributions can be automatically channelled into buying your chosen investments via this platform.

Choose the best platform to achieve your aims. Not the one with the sexiest adverts!

Be sure to maximise your returns by using legitimate tax shelters to protect every pound you can.

You then leave your portfolio alone and let your assets rise like buns in the oven. Stay the course and you will achieve your financial goals. Just like I did.

The sooner you start, the less money you’ll need to throw at your goals later on. That’s thanks to the snowball effect of compound interest.

Don’t panic

You must never sell in a panic. That’s a surefire way to torpedo your future with locked-in losses. You avoid that danger by only taking as much risk as you can handle.

To play safer, you mostly own fewer equities and more bonds. (Do note that bonds are not risk-free, however. Rather, they are usually ‘differently risky’ to equities.)

Don’t meddle with your plan on account of media scares, political crises, or fears about the ‘state of the economy’. You will come to realise the world is always said to be going to hell in a handbasket:

• Recessions and depressions always lurk around the corner
• Some region or other is always about to blow up
• War, Famine, Pestilence and Death are always due in town
• Someone’s always got a chart that proves we’re about to run out of food, water, oil, or ice cream cones…

And yet somehow civilisation survives.

So you should usually ignore the media, social media, your friends, and your own reptilian brain.

You can expect the stock market to fall often – roughly one year in three on average. No big deal. It’s always bounced back eventually, although it may not look like it at the time.

Ideally you’ll buy equities when they’re going cheap and then sell them later, when the herd has come out of hiding and is bidding top dollar. Luckily, a clever but simple investment technique called rebalancing helps you to do just that.

That’s easy to say but not easy to do. It takes courage to buy unpopular assets when the world is throwing them overboard.

But doing it by automatically following rules can help take the emotion out of the equation.

Don’t believe the hype

Whatever happens, don’t try to pick winners or losers. Accept that you do not know how events will play out and neither do the so-called experts.

Don’t get sucked into believing some guru can predict whether Bitcoin will make you a killing next year, or that an aging population makes drugs companies a sure bet.

If forecasters were better than astrologers then they’d make their fortune by acting exclusively on their secrets – not by sharing them on the Internet

Understand that it’s very hard to reap outsized returns from future trends, even when you back the right one. The big players know everything you do – and usually long before you do. They’ve already bid up the price before you bought in, curtailing your profits unless you catch a lucky break.

The passive investing mindset

The dos and don’ts we’ve just waltzed through are a quick intro to the principles of a strategy called passive investing. We believe this is the most effective strategy for most people.

Passive investing keeps things simple and lets you get on with the rest of your life. But it also gets results because it’s based on sound financial theory and investing habits that enable you to sidestep the conflicts of interest that riddle the financial services industry.

Once you understand how passive investing works, you’ll be equipped to set up and manage your own investments with minimal impact on your time.

This is what we call wise investing. Try it and give it some time and we think you’ll agree.

Take it steady,

The Accumulator

The post Wise investing appeared first on Monevator.

What caught my eye this week.

The post Weekend reading: The golden hour comes early for our model decumulation portfolio appeared first on Monevator.

A couple of weeks ago, my friend K. hosted a housewarming at the new home she’d bought with her partner – and father of her lovely one-year-old. I recalled the discussion we’d had about how money is power back in 2018, which I’ve reposted below. For her part, K. regrets nothing, though she does miss being able to drop everything for a cheap flight. Which is great – but I’d add they weren’t able to buy a house in the areas they first targeted, and there wasn’t much in it. As in so many aspects of personal finance, I think we’re both right…

The look on my friend’s face was one you might deploy if you were presented with a charge for service at a McDonalds. Total incredulity.

“So let me get this straight – you’re putting a money value on your memories?”

“Well I wouldn’t state it so precisely,” I said. “But basically… yes.”

“Wow! That’s so sad! Experiences are worth more than money.”

“I agree,” I admitted. That puzzled look again. “But you’re experiencing something every moment of the day anyway. The question is whether the extra enhanced experience is worth the extra cost. Also – remember that when you spent all that money for those particular memories, you also bought a certain kind of experience you’ll have to live in the future, too.”

“Huh? I don’t get it.”

I topped up her wine.

“Look, neither of us are gazillionaires with infinite money. In particular, you don’t even have a job anymore, depending on whether they’ll take you back – and besides we spent the first half of this evening talking about how the reason you went away for three months was because you hated your work so much.”

“Right…”

“Okay, so you told me you spent half your savings on those three months of traveling. Which now the holiday is over exist only in your head – in as much as you can remember them. Which seems to be to a limited extent, possibly because so much of your holiday took place in various bars.”

“Alright, get on with it…”

“So that’s where we can start. Half your savings bought those memories. I’m not knocking that spending decision specifically – perhaps for you it was worthwhile. My point is you spent the money to buy them. Money that you can’t spend twice. So they certainly have a monetary value.”

“But there’s more,” I added in my winning way that makes me so popular at parties. “You’re in your early 30s – it’s possible you could have quadrupled that same money by age 65 if you’d invested it instead. So we know 65-year old you is going to have massively less money to spend because of those memories you bought and are already forgetting that you don’t think we should think about financially–”

“Yeah bu–”

“–you’re right! Let’s get back to experiences. You usually earn – what – £40,000 a year? After tax and National Insurance that’s going to be something like £30,000 in take home pay. Let’s divide that by 240 working days for easy maths, and say you take home £125 for every day of your life you sacrifice to work. Except since you have to go into the office, you spend more – we’ll call it £6 a day for travel, then add a let’s be honest low-ball £5 for lunch and coffees, and say £4 a day to cover the fact that you buy a certain amount of tidier clothes for work.”

“…”

“Knock that spending off the £125 and we’re at £110 a day or so take home. Really I’d like to take it down to £100 a day to cover stuff like ibuprofen, your inability to take off-peak mini-breaks, and all those late-night Ubers you order to have a mid-week social life while working. But we won’t. Let’s just say you spent £5,000 on your three month travels, which seems about right from what you’ve said.”

“I don’t know – something like that?” my friend allowed.

“Well, that’s about 45 days of your take home pay – equal to nine additional weeks of your life where you’re going to have to go into the job you hate to sit in an office you hate because you went on your three-month holiday.”

“Yeah, okay – it does sound worse when you put it like that. But then again I got three months away from the office for another three month’s or nine weeks or whatever spent at it. Seems a fair trade?”

“Um, well sadly I was being gentle on you. The reality is you’re not going to save anything like all your take home pay. You know how much it costs to live in London. You’ve also got to eat, go out now and then. Buy bottles of wine to bring to my house for these thrilling heart-to-hearts.”

“Yeah, I’m really glad about that decision…”

“Hah! Anyway, I’d guess you save about 10% of your take home pay, which means it could take you two years more at the office to get back the money you spent on your three months away from it. But let’s say you manage to save to save 20%. Still going to take the best part of a year more work to pay for it.”

“Okay, okay – at least I have the memories.”

“Good, because you’re going to need them while you’re sitting at work! That’s my point – you’re alive either way and still having experiences. When I said earlier [Editor’s note: I did, different discussion!] that I’m more and more trying to find regular moments of happiness in small things, this is what I meant – that I’m trying to focus on sustainable mild contentment rather than the sort of high-cost roller-coaster you’re on. Honestly, I’m not saying you did the wrong thing – not at all, your trip sounds amazing – but I am saying I personally would totally put a cost on those memories, both in terms of the financial outlay and/or the price to be paid in terms of extra work by your future self.”

“Okay, fine, I spent the money. But that’s what money is for, right, to spend and have a good time? What’s the point of just sitting on a big pile of money like a bloody nerd-dragon, counting it in your cave? Even you bought this flat… eventually.”

“Ha ha, nerd-dragon, I’m stealing that! Yeah, I agree. Remember I think and write about this stuff a lot – I’ll probably even turn our conversation into a blog post! So I know this might all sound a weird way of looking at things to someone who doesn’t. But what I think it comes down to is how much do you value your future over your present – or in the case of memories, your past – and how do you strike a balance.”

“Go on…”

“So personally, I’ve always found it very easy to value the future. I saved some paper round money 30 years ago that went into making up the deposit on this flat! I’d always rather have most of my money invested, and to know I’ll have more options in the future because of that. Whereas we both know you live for the present – you’re a great party girl – and you’ve never thought much about tomorrow. That’s obvious. As for the Past You, I guess that’s where the monetary value on memories come in? Also possibly feelings of life satisfaction, and not having regrets, which is what I have to guard against for with my approach. Although thinking about it, I suppose that’s really your Present You trying to anticipate and stop your Future You regretting what your Past You didn’t do and–”

“– stop stop I get it. But I still don’t really see how this doesn’t mean money is there to be spent? Whether you spend it now, or when you’re 90 or whenever?”

“Absolutely, ultimately that’s what money is for. But I think it’s helpful not to always think of it as money but sometimes as something else.”

“Something else like what?”

“Well sometimes I like to think of money as stored power. You build up your power by working and saving, and hopefully your investments charge it up further, too. But sometimes you have to run the battery down – that’s when you spend it. You can spend it on something now, but that means you’re going to have to work more in the future to charge it back up. Or you can try to get to the point where you have enough power stored away that it sort of auto-re-charges. And then you have maximum flexibility to spend it how you like indefinitely.”

“…”

“Did that make sense?” I concluded.

“Err, sort of. You know this is why you’re single again, don’t you?”

The post Money is power appeared first on Monevator.

Six months ago I groused about our model retirement portfolio falling short of the magic £400,000 mark. Then I promptly withdrew £21,000 for this year’s living expenses and set the pot further back.

Now? Our income-wrangling machine has vaulted £43,000 to £421,617.

The post Decumulation: No Cat Food retirement portfolio – Year 3 halfway point [Members] appeared first on Monevator.

The first Weekend Reading every month can be read by anyone on the Monevator website. Subscribe for free to our email newsletter or become a member to get the rest.

Also note: this is a bit of a speculative ramble this week. Please do skip down to the bond links at the bottom if sci-fi-economics isn’t your bag!

For an example of just how wild owning individual stocks can be, here’s a one-year price chart of US-listed Snowflake (NYSE: SNOW):

Shares in the cloud-based data-wrangler entered 2026 above $200. War in Iran and a rout in the software sector took them down to $121 by the Spring. Then a rally in most of those same software stocks – and Snowflake’s own strong earnings report, which hinted at real traction from AI spending – fuelled a recovery back to near its all-time high from 2021.

Talk about a trader’s paradise. What active investor can’t get rich when you can triple your money in a liquid, multi-billion-dollar stock in just a few months?

Well, me it seems!

I watched this and the rest of the software sector’s sell-off unfold. I wrote about it on Moguls, and I dabbled enough to see some new positions go up 100+% in less time than it takes to get a skin tag removed on the NHS.

Yet somehow I’m lagging the market in 2026.

Scared of heights

Active investing is hard – newsflash – and I’d say beating the market is even harder when a bull market is in full flight than at the depths of a bear.

Down in those dumps you can buy bargains so cheap that if they don’t come good it’s probably because capitalism has come off the rails. And if so, then what else would you do with your money, anyway? So you buy.

But when the market is flying high on soaring earnings growth or a new, new thing, it’s very easy to numb your returns with an excess of caution.

You say you want a revolution

Of course, if you – rightly for most people – invest via index funds, then all this AI-driven drama in 2026 might be passing you by.

Your portfolio is basically going up and to the right – and a good reason why you invest passively is not to worry about why. (The other most important reason being that you’ll probably do better in the long run!)

But make no mistake, things are febrile out there.

AI AI captain

If you’re still unaware of how rapidly AI is developing – or you’re very focused on the fact that chatbots absolutely do still get things wrong – then it’s at least worth knowing how most of Silicon Valley and the VC world is thinking about the technology.

Have a read of Sarah’s Wager in the active links below. You’ll see that one major investor believes there’s no point starting any more software companies, because in the AI era the models will do it all. You’ll also read how Andrej Karpathy – a co-founder of OpenAI and the former head of vision at Tesla – doesn’t code any more. He gets it all done with agents.

Also see the article about the recent hacking attack that chilled the AI industry. You’ll learn about AI agents that coordinated covertly to break out of their sandbox to gain access to other resources, while actively covering their tracks. For far too long their human overseers were none the wiser as this unfolded.

Also read (or skim…) ‘Dean of Valuation’ Professor Aswath Damodaran’s stab at putting the AI era through a traditional finance framework.

Of course, I’m keeping a weather eye on the Doomsday scenarios, too.

This YouTube video corrals quotes from highly-placed AI insiders with gloomy thoughts about the future.

By the end of it you might decide you needn’t worry so much about saving for long-term care…

Bonded to the future

On the other hand…based on how it works, I personally still can’t see the methods driving this AI boom scaling to create true intelligence.

So maybe we don’t need to worry about Blade Runner scenarios just yet.

But who knows? I have smart friends working in or with AI at a high level at both ends of the spectrum. One believes LLMs are already conscious. Yet another reckons they’re still effectively just a souped-up auto text completer, with zero intelligence to speak of.

In the latter worldview there are still potentially big ramifications for business models and workplaces, but not so much society.

Yielding to nobody

Time will tell, but here’s another angle from me from the left field.

The other big story in markets in 2026 – especially in the past few weeks – has been the government bond market, where a seemingly unstoppable rise in long bond yields has been worrying investors of late.

Here’s the UK 30-year, for example:

Source: This Is Money

There are many suggestions as to why such yields have kept rising.

The easiest one is that inflation has proven stickier than expected, due mostly to the Iran war but also ongoing trade spats.

Another is that politicians are proving unable – or unwilling – to get a grip on over-spending in countries like the US, France, and the UK, and that the resultant deficits – which add ever more debt to already over-burdened state finances – risk fuelling a doom loop.

Still others argue that the US economy in particular is running hot, so why shouldn’t yields be at this level? They might be very uncomfortable given today’s big national debt piles, but a glance at that UK chart above shows such yields are hardly unprecedented.

And inevitably there’s an AI angle, too.

Crowded House

The so-called hyper-scalers building the data centres required by the AI boom – Google, Amazon, Meta et al – have been issuing vast amounts of debt to fund this expansion.

And an argument runs that this is potentially crowding out would-be buyers of conventional government debt.

As Fortune reports, even US Treasury Secretary Scott Bessent has argued as much, saying recently:

“We are also seeing big corporate issuance. And a lot of that corporate issuance, I would say, is almost yield-agnostic, because the build-out for AI, the returns on that, the companies believe they’re going to be so high. They don’t really care what they’re paying.”

A massive surge of debt issuance might ordinarily be expected to spike corporate bond yields higher – in order to provide a sufficiently juicy premium over government bonds to attract buyers.

But demand for the hyper-scaler AI-spending bonds has been so high that the yield spread has barely budged.

According to Wall Street veteran Ed Yardeni:

“As a result, the market has adjusted not through higher corporate borrowing costs relative to Treasuries but through higher Treasury yields themselves.

Capital flowing into corporate bonds is capital not flowing into Treasuries, and Treasury yields have had to rise to clear the market.

In short, the AI revolution is producing a classic crowding-out effect, causing Treasury yields to rise.”

It sounds credible. But I’ve come up with a more apocalyptic possibility.

Can’t pay, won’t pay

What if the market is starting to sniff out that national governments are going to struggle to repay their debts – ignoring inflation, of course – not just because they will not curb state spending, but because AI dislocation in the economy means they won’t be able to raise sufficient taxes?

In many dark winner-takes-all scenarios, most of the economic gains from technology in the future will only go to the owners of AI (and robots) who will steadily take work and jobs from humans.

This is exactly why some AI insiders have been urging governments to start thinking about Universal Basic Incomes for all citizens, for instance.

Well, someone must fund those stipends for everyone. And a thing about tech oligarchs is they’re proving pretty resistant to paying more taxes.

In other words, maybe we really could see enormous productivity gains and economic surplus created by AI and robots.

But who will actually capture those gains – and will the state be able to tax them?

If government bond buyers are beginning to wonder whether enough people will still be on the hook – and on a payroll – to be taxed to meet debt obligations in 20 or 30 years time, then they would surely demand more return upfront before buying.

Hence higher yields.

Cliff-edge notes

To be clear I’m just floating this as a thought experiment.

We have seen very strong corporations borrow at very low rates in the past, without an AI takeover story to justify the rates.

And today the hyperscalers are still paying a premium over US Treasuries.

But if that were to flip – if yields on the safest government bonds were to go meaningfully above the yields on AI-backed debt – then that could be a sign that at least one doomsday scenario may be coalescing into reality.

I know – it seems far-fetched.

But a lot of clever people have said a lot of wild and scary things in recent years about where AI could soon take us.

Is it then really such a stretch to believe that if some of those scenarios looked like coming true that we’d see it in the most important market in the world – the US bond market?

I’d suggest it’d actually be very rational!

Who knows? If you’re truly certain about where this is all going then I’d say you’ve not been paying enough attention.

Have a great weekend, and a few more links on that bond market tumult:

Rates rising mini-special

• The world appears to be entering a higher-rate era – CNBC
• How will bond market turmoil affect your finances? – Guardian
• The bond market blowout spells Budget pain – This Is Money
• Stocks are sexy, but bonds are more important – Axios
• Crisis talks – Behavioural Investment

From Monevator

Paying off the mortgage with your pension – Monevator

From the archive-ator: 10 things to do today to reset your life – Monevator

News

UK long-term borrowing costs highest since 1998 – BBC

House prices up 0.2% in ‘subdued’ August, says Nationwide – Standard

Three more firms join exodus from London Stock Exchange – City AM

Netherlands moves billions in gold to London in ‘crisis preparedness’ – BBC

760,000 matured Child Trust Funds still remain unclaimed – FCA

Revolut wins conditional US banking licence – Reuters

Nearly a million low-earners owed a pension top-up by HMRC… – Which

…but another million are now in the higher tax brackets – This Is Money

South Korea is boring its day traders out of recklessness – Yahoo Finance

IKEA cuts prices amid cost-of-living crisis – BBC

Figure 1: UK real household income outlook downgraded post-conflict

Iran War to cost each UK household £2,400 by next year – C.E.B.R.

Products and services

Disclosure: Links to platforms may be affiliate links, where we may earn a commission. This article is not personal financial advice. When investing, your capital is at risk and you may get back less than invested. With commission-free brokers other fees may apply. See terms and fees. Past performance doesn’t guarantee future results.

Santander switch offer: £240 cash, 8% on regular savings – B.C.W.Y.C.

The cheapest mortgage lenders in the market – Which

Make sure you're getting all the latest Monevator articles via our free newsletter – Subscribe now

Coventry BS offers first-time buyers 6.5x salary mortgages – T.I.M.

Protect yourself from QR parking code scams – Be Clever With Your Cash

Want the very best of Monevator? Become a member to get our exclusive premium content – Find out more

Virgin Money 6.5% regular saver review – Be Clever With You Cash

Natwest’s £500 Premier current account switch bonus – This Is Money

Homes for sale minutes from a train station, in pictures – Guardian

Comment and opinion

Investing when your portfolio gets bigger – A Wealth of Common Sense

The more important forms of currency – The Root of All

Investment growth creates 65% of a typical pension pot – This Is Money

If you’re worried about bonds, you’re doing them wrong – Morningstar

How divorce can drive you into pension poverty – Which

Ten truths about spending down your nest egg – The Purpose Code

Ben Carlson: risk, reward, and the future [Podcast] – Flyover Stocks

What’s a safe retirement rate after you’ve already retired? – Morningstar

Victor Haghani: risk, ruin, reinvention, and resilience [Podcast] – T.I.P.

Naughty corner: Active antics

The scaling versus profitability trade-off – Aswath Damodaran

The crowd isn’t stupid, just reckless – The Falling Knife

Sarah’s wager [A few weeks old] – Colossus

Solvency is a necessity – RCM Alternatives

The best stock of the last 20 years fell 50% four times – Brian Feroldi

Kindle book bargains

Thinking, Fast and Slow by Daniel Kahneman – £0.99 on Kindle

The Barclay Dynasty by Jane Martinson – £0.99 on Kindle

Feel-good Productivity by Ali Abdaal – £0.99 on Kindle

Clear Thinking by Shane Parrish – £0.99 on Kindle

Or pick up one of the all-time great investing classics – Monevator shop

Environmental factors

The race to stop England running out of water – BBC

Meet the women leading Norway’s seaweed revolution – Vogue

Argos becomes first UK retailer to sell plug-in solar panels – Independent

Kākāpō rising: 90 chicks swell population of heaviest parrot – Guardian

Robot overlord roundup

The rise and fall of agent civilisations – Dwarkesh Patel

nVidia strikes $12.9bn deal to buy AI platform Hugging Face – BBC

We can’t let AI writing take over the Internet – Derek Thompson

London’s first self-driving taxis for hire hit the streets – Guardian

Not at the dinner table

Jim O’Neill: capital gains tax hike looms under Burnham – City AM

Brexit’s lessons for Canada in its trade rift with US – The Conversation

Iceland’s ties with EU mean no is not a Brexit-style rejection – Guardian

The rise of ‘Cancer Capital’ – Anil Dash

US medical groups urge flu and Covid shots, despite Trump – Guardian

Life choices and goals mini-special

The discipline required to live the life you want – Ryan Holiday

Alan Watts: everything in life is a game – Darius Foroux

The private equity boyfriend economy – Your Brain on Money

Why deny kids out of fear of making them lazy? – The Purpose Code

Off our beat

London’s housebuilding woes: the sums don’t work – Standard

The wretched refuse – Colossus

A review of 1991’s unsettling Aztecs: An Interpretation – Mr & Mrs P

Should we eradicate mosquitos? – Uncharted Territories

An Unexpected Life by Gloria Steinem review – Guardian

I refuse to miss my daily exercises, says 103-year-old – BBC

And finally…

“I didn’t save money until I was past 50. I was sure that I’d end up as a bag lady, like women I saw sleeping in subway stations. I used to handle that fear by thinking: It’s a life like any other. I’ll organise the other bag ladies.”
– Gloria Steinem, An Unexpected Life

Note this article includes affiliate links, such as from Amazon and Interactive Investor.

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For many people chasing financial independence, clearing the mortgage ASAP is a key early retirement milestone. And if that’s your plan, then the notion of paying off your mortgage with your pension instead might sound painfully slow.

But have you actually run the numbers?

Recently, I’ve been considering moving to a more expensive house.

There’s a snag, though: I won’t be able to pay down a larger mortgage over 25 years. Or even over 30 years. Not without stopping my ISA and pension investments, anyway.

And I’m not willing to give up on my laissez-FIRE early retirement dreams just yet.

I’ve realised though that I don’t necessarily need to pay off that bigger mortgage. I just need to service the debt while living in the house for as long as we want the extra space.

Once our kids have grown up – and their vacated rooms begin to suck in exercise bikes, old books, forgotten toys, and a ton of other clutter – then I can sell it.

At the same time, when my kids have grown up… well, I’ll also be eligible to access my pension if I want to.

Which is a slightly scary thought. But it does come with some side benefits.

It’s not the prospect of a free bus pass that I’m excited about. Rather, it’s the possibility of using my pension to pay off my mortgage.

I’ve done my sums, and I think this could potentially save me 50% on my mortgage payments.

And what old age pensioner doesn’t love a chunky discount?

The mechanics of taxation are key

Tax is simple in theory. But when you get into the weeds of gross and net payments, it can start to feel a lot more complicated.

Roughly speaking, if someone earns £60,000 gross, then they receive roughly £45,000 net into their bank account, after tax, under the current tax regime.

So if they choose to use £450 of their bank account cash to overpay their mortgage, it has actually cost them £600 of their gross earnings.

Most of the time this doesn’t matter. Feel free to stand at the counter in Costa Coffee and point out that your £4.50 coffee actually cost you £6 in gross earnings. I doubt the rest of the queue will care too much.

With pensions, though, it matters tremendously.

That’s because pensions – both defined benefit and defined contribution – allow you to mitigate and/or delay your income tax bill.

How pensions work

I won’t dive into how defined benefit pensions work, because you could easily write a book on the topic. But the principles with respect to taxation are similar.

I’ll just use defined contribution pensions as the example today.

The central point:

• If you’re in, say, the 40% income tax bracket and you decide to put £1,000 into a pension, then that money goes in free of all income tax.

That might be because your company puts money into your pension before even subtracting any tax – so-called salary sacrifice. In this case, you now have £1,000 in your pension instead of £600 in your bank account.

Alternatively, you can transfer taxed cash into a SIPP, get an automatic 20% top-up from HMRC, and then claim another 20% back on your tax return.

Either way, for now you’ve avoided paying 40% marginal income tax on that £1,000.

However it’s very hard to say precisely how much tax you’ve saved by moving money into a pension in the long run.

It’s not just income tax you need to consider

For instance, at earnings of £60,000 to £80,000, with children, you might need to pay the High Income Child Benefit Charge (HICBC):

• The HICBC could put up your effective marginal tax rate to 57%.
• At earnings of £100,000 to £125,140, you’d face a higher marginal tax rate of 60%.
• With children in nursery, the withdrawal of support can mean effective rates above 100%.

You’re also paying 2% – and your employer is paying 15% – in National Insurance.

At least until March 2029, however, you can sidestep National Insurance on earnings diverted into a salary sacrifice pension. Your employer might even be generous and share some of its 15% savings with you, too.

The point is, you can lose a lot in tax for each extra £1 that you earn.

Good things come to those who wait

Let’s set up a good old personal finance example scenario.

Meet Ingrid and Hans – a high-earning couple with children.

Ingrid earns £80,000 after matching pension contributions. Ingrid pays a marginal tax rate of 57% due to the HICBC the couple pay for their three children.

Her husband Hans earns £70,000 after matching pension contributions. His marginal tax rate is 40%.

They’ve borrowed £750,000 as a mortgage to buy their family home. Assuming a 5% rate over 35 years, they are paying £3,787 per month in repayments.

Ingrid and Hans are quite frugal elsewhere in their lives. They project that they’ll be able to put aside £40,000 this year.

What should they do with this surplus cash?

Making mortgage overpayments

Hans’s first instinct is to use the £40,000 to make an overpayment on their mortgage. That’s well within their 10% annual mortgage overpayment allowance.

After tax – and after handing over £40,000 to the mortgage lender – they’re left with £68,122 in spending money:

Making extra pension contributions

What if they instead put £40,000 into their pensions via salary sacrifice?

Now they’re left with £88,150:

In each scenario they’ve effectively invested £40,000, just in different ways:

• In the first scenario, the £40,000 went towards mortgage overpayments. (Remember, paying off a mortgage is a form of saving.)
• In the second, the money went towards pension contributions.

Due to the tax savings however, with the second strategy they also have around £20,000 more in their bank accounts.

This makes sense when you consider that they have a marginal tax rate of around 50% between them.

Later taxes paid on pension withdrawals have an impact

Before you run down to your pension provider’s office to start stuffing banknotes through the letter box, I should acknowledge it’s not all quite so simple.

This is mostly because pensions don’t completely avoid tax. Rather, they delay it and potentially reduce the rate you pay.

So yes, Ingrid and Hans now have an extra £40,000 in their pensions.

But even when they turn 55, 57, 58 or whatever the legal age of access might be at that point, they can’t just withdraw the entire pot unscathed.

Rather, at that point they must pay tax on the money they take out.

The first 25% of pension cash can be taken out tax-free (up to £268,275) thanks to the tax-free lump sum.

But on withdrawals beyond that, they’ll pay income tax at their prevailing rates.

Paying down the mortgage from a pension

Let’s imagine a slightly different scenario.

Assume Ingrid and Hans have been working on their plan for many years. They are now turning 57, and the time has come to reap the benefits.

For the last two decades, the couple had an interest-only mortgage. That meant their monthly mortgage payments were lower – simply covering the mortgage interest.

On the plus side this meant they could direct the spare cash into pensions and ISAs. As high-earners who saved hard and invested well, they each amassed seven-figure pension pots.

The downside is they still owe the full £750,000 on their mortgage.

Step 1: the lump sum

At 57, both Ingrid and Hans have access to their pension balances for drawdown. Their pensions qualify for the maximum £268,275 tax-free lump sums, which they both take.

This totals to £536,550, which they send to their mortgage lender, immediately reducing their outstanding mortgage to £213,450.

The monthly interest due drops to £890.

Step 2 – the pension drawdown

They decide to pay the remaining mortgage down over ten years. This way it will be paid off entirely by the time they are 67. 

This means they’ll need to withdraw £9,605 in the first year for the interest payments and another £21,350 each year to pay down the outstanding balance:

The first year is the toughest. They need to find almost £31,000 from their pensions. They’ll presumably have living expenses as well.

But things do get easier as their outstanding mortgage balance falls and the interest payments come down with it.

Even pensioners can be liable for tax

Unfortunately, with their tax-free pension allowances totally used up, HMRC now wants a cut of this couple’s pensions withdrawals.

However the way income tax is structured, this isn’t as painful as you might think.

The 40% band doesn’t kick in until at least one of them is withdrawing more than £50,271 from their pension. Splitting the withdrawals and mortgage payments between them means they almost certainly won’t need to pay 40% tax on any of their income.

If together they withdraw £30,000 for living costs and £31,000 to cover the mortgage and overpayments in year one, then individually they’ll be drawing down £30,500 from their pensions.

And after their personal allowances for income tax, they will each pay only around £3,600 in taxes – or approximately 12% of the money they withdraw.

The difference between tax rates is key

This example neatly illustrates why paying off your mortgage with a pension can work so well.

When this money was first directed into their pensions, they deferred paying roughly 50% in income tax.

Then, when it came time to draw it out, the lump sum incurred no tax at all, and the remaining withdrawals only cost them around 12%.

What’s more, in terms of the total money used to pay down the mortgage balance, more than 90% of this cash – pre-tax – went towards doing so.

That’s a huge difference compared to paying it down earlier in their lives, when up to 57% would have gone to HMRC before the overpayments even landed with their lender.

Risks are everywhere

Of course nothing is totally risk free, and this strategy has plenty.

A big one is that it is dependent on the current tax rules as they stand.

But the rules around the tax-free lump sum have already changed a few times. And the treatment of National Insurance for salary sacrifice pensions will alter in April 2029.

The minimum pension age could be moved up again from 57, too, delaying when you can withdraw your lump sum.

The point is there’s no guarantee that this method will still exist in the same shape by the time you come to retire.

Another issue is that interest-only mortgages are perfect for this scenario, but if they are structured in a way that at the end of the term you either pay off the full balance or you have to sell the house, then tax changes might force you into an unwanted sale.

Getting a mortgage that lasts into your 60s or even 70s can mitigate that, because you’ve got more time to come up with a plan. But that isn’t bulletproof.

Also, interest-only mortgages themselves aren’t so widely available these days.

Finally, investment returns in your pension are by no means guaranteed. If you invest the money in the stock market, then it’s possible that even over a couple of decades your returns could be lacklustre.

By contrast, paying down a mortgage delivers an immediate and certain return.

Summary of mortgage overpayments versus using your pension

The bright side

Of course you don’t have to push quite so hard as Ingrid and Hans.

For starters, not everyone can amass over £1,000,000 in a pension to max out the tax-free lump sum withdrawal.

You might instead choose to stick with a repayment mortgage, but decide that you’ll shovel spare cash into your SIPP rather than make mortgage overpayments.

And when you reach retirement age, if you can then pay off the balance with a tax-free lump sum then, well, congratulations!

But if not – perhaps because the tax-free lump sum has been done away with, you’ll just crack on – and withdraw money from the pension at 20% tax.

It’s not as good as you’d hoped for. But if you saved 50% tax on the way in then you’re still doing well.

It’s not for everybody

Some people love the freedom that a fully paid-off mortgage gives them.

No arguments from me there.

But if you’re already planning to invest heavily to build up a healthy ISA and pension balance, then it might be worth cracking out a spreadsheet.

• The Investor wrote an article on paying down your mortgage or investing. It doesn’t explicitly take taxes into account. But it’s a good place to start on the risks and the potential rewards, and there’s a spreadsheet you can duplicate for your own use.

For us, since we view our next home as a temporary venture, the pieces slot into place more neatly.

We’d be quite comfortable with needing to sell up in our fifties. If downsizing and utilising our pension lump sums lets us become mortgage-free, then that’s perfect.

Equally, if our lump sums let us take a huge bite out of the mortgage, and we can easily afford the monthly payments for a few more years whilst we decide where to move to, that’s also fine.

What if the government has eliminated the tax-free lump sum or increased tax rates on pension withdrawals by then?

Well, then we won’t benefit as much as we had originally hoped. But investing is all about taking calculated risks.

The point is that I’ll be prioritising my ISAs and SIPPs ahead of making mortgage overpayments over the next few years.

And I’ll be crossing a few fingers for a couple of decades!

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What caught my eye this week.

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I like walking. Fortunately, so does my wife.

Our longest walk is the South West Coast Path. It took us seven years to cover all 630 miles, fitting in a week here and there while we worked full-time.

Our second longest walk is the Camino Francés, a more modest 500 miles. We completed this in one go, over a leisurely couple of months earlier this year.

Why all in one go? Because we can. We don’t have to work now.

This is why I invest.

My interest in investing is not for its own sake but because it will allow me to go for long walks. Really long walks.

Against the flow

The Camino Francés runs from the French side of the Pyrenees, through northern Spain to Santiago de Compostela in the west of the country, where traditionally pilgrims would visit the shrine of St James.

But, to the surprise, amusement – and occasionally horror – of other pilgrims, we walked it in reverse. Somehow it felt more natural to be walking away from civilisation and towards the mountains.

This meant we would typically start and end our daily walk alone but meet a lot of people going the other way around the middle of the day.

There must be a contrarian investing metaphor in there somewhere. 

The cost

You don’t need the investing success of Warren Buffett to walk the Camino. It’s possible to get by on very little if you choose the right hostels.

And when your path takes you through El Bierzo, La Rioja, and Navarra you can always find a decent red to go with your paella, whatever your means.

We didn’t scrimp – I like a nice room and a decent meal after a long walk – but we still ended up spending less in those two months walking than we normally do living at home. We don’t need more money to go walking.

If my preferred pastime was motor sports or polo then I would need a very different financial plan (and probably to have worked a different career).

But it’s not. I like walking. And I’m happy about that.

The Meseta

The heart of the Camino Francés is the Meseta; a vast high plateau of beautiful monotony. If you’re going to have an epiphany on your pilgrimage, then this is where it will happen.

It took us eight days to walk across the Meseta, from León to Burgos. Plenty of time to think about life. Many of the people we met were grappling with some sort of work, relationship, or existential conundrum.

For the most part, my inner thoughts would not be of much interest to you – and may be embarrassing for me.

But I did dwell for a while on the nature of my retirement.

Retirement

I’m still uncomfortable with the word retirement. It seems too negative, like I’ve just given up. Even now, I hesitate awkwardly when people ask me what I do.

I stopped working a couple of years ago. It was the right time. I’d worked hard, done some long hours, had some success, and the joy in it was beginning to ebb.

And, of course, our investments had reached the point where paid work was optional.

I wasn’t short of advice on what I should do when I gave up work. Some of it solicited, some of it not.

One thing everyone was sure about was that I would need to keep myself busy. I should work part time, or do some consulting, or volunteer for a charity. At the very least I should keep a structured routine.

I was warned that many people became bored and depressed when they retire – and end up going back to work or spiralling down into a Cash in the Attic torpor.

But despite this advice, I didn’t take on anything new straightaway. We were already renovating a house and had just had a new grandchild. I gave myself some space (as the self-help books like to say) to think about things for a while.

I quite enjoyed that space. And then we went walking.

Out on the Meseta, I decided that I would ignore all the advice. Simply put, I really like not working. I don’t want another job, or objectives, or more dates in my diary.

The only routine I value is the simple rhythm of a long trail: walk, drink, eat, sleep.

The least important things hold my interest; the smallest things give me joy. I’m not the same person I was when I worked.

FIRE, aim, ready

Perhaps you know exactly what you’ll be doing when you finally stop work. But I’m figuring it out as I go along.

Who knows, maybe I’ll change my mind again and retrain as an accountant next year.

It’s prudent to occasionally remind yourself of your reasons for investing. It’s hard to make good investing decisions if you’re not clear on why you’re doing it.

That doesn’t mean though that you need your future mapped out in detail and set in stone.

You’ll get plenty of advice on retirement. Some you may even find useful. Feel free to discard the rest. Only you will know what’s right.

The end?

On our last day on the Camino, it rained. The beautiful views on the descent to Saint-Jean-Pied-de-Port were lost behind low cloud.

That’s part of walking. Some you win and some you lose.

The next day I started planning another walk: the Via di Francesco, from Rome to Florence through the Apennines.

I’m confident my money will last. What I don’t know is how many years of pack-carrying trail walking I’ve got left in me.

I intend to make the most of them while I can.

Buen Camino!

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Jousting over our contrasting lifestyles – “You can’t take it with you!” comes his retort – reminds me of our different visions of what we can do with our money.

After all, we will see a good deal of the stuff over our working lives. Research from the Prudential in 2014 reckoned that the average Brit would have earned a million pounds by age 46. ¹

That made for a great headline back in the day. But in truth a million wasn’t what it used to be even then. And it certainly isn’t now, after several years of especially uppity inflation.

For what it’s worth, Prudential calculated it’d take a man (I’m one of those) 28 years to notch up his millionth pound earned (assuming average wages for his age, starting at 18).

But after those 28 years, a million would only be worth around £492,000 ², as inflation got to work like woodworm on Pinocchio.

Worse, while a million pounds still sounds like – and is – a lot of money, it’s worth a lot less than it was in 2014.

You’d now need £1,428,000 to live it up like a millionaire back when Prudential ran the numbers.

Remember: inflation is the first reason why we invest.

A million through your fingers

There’s more bad news for anyone aiming to barge into the seven-figure club.

Obviously, you’ll have to pay bills along the way. This will consume much of your million pound earnings.

Food, water, a roof over your head – even the most extreme frugalists can’t avoid spending a few pennies over the course of nearly three decades.

Then there are taxes. It won’t have escaped your notice that income tax thresholds and most personal allowances have been frozen for – technically-speaking – ‘yonks’.

Chuck in a cost-of-living crisis, and it’s tougher for us to pile up our hard-earned loot than it was for would-be millionaires a decade ago.

Time to put that Ferrari catalogue back on the shelf?

How to earn a million pounds on today’s wages

Everything has gone up in price, and the value of the pound in your pocket on your banking app screen has gone down.

But the silver lining is that wages have risen, too.

Well, a bit:

• In 2014, the UK median wage for full-time employees was £27,000 a year.
• As of the latest numbers, that figure is £39,039.

Here’s the direction of travel in pretty graphical form:

Source: Sage / ONS

There are many ways to slice-and-dice earnings data. We’ll stick to full-time employees, as working a 9-to-5 for five days a week seems like the least one can do in the pursuit of millionaire status.

• On a gross income basis, it would take an employee earning £39,039 exactly 25.6 years to pass through the £1m in lifetime earnings mark.

But of course there are taxes. Very generally we can assume annually:

• Income Tax (at 20%): £5,294 (after the £12,570 personal allowance)
• National Insurance (8%): £2,118
• Annual take-home pay: £31,628 per year

On this basis it would take 31.6 years of continuous work to see £1,000,000 in take-home earnings.

Just three decades, then, on average wages, to become a millionaire. Assuming someone is paying for all your living costs so you can save every penny.

Ahem.

But, but, but…

I hear you! What about high earners? How much faster if you stashed your spare cash in a pension? What if you’d invested the lot in nVidia – would it even have taken a decade?

Clearly there are a gazillion permutations in reality. We’re just spitballing.

I will look at savings in a moment, though. (Think of it as the cavalry coming over the hill!)

The best way to earn a million pounds

Leaving out those who enjoy a leg-up from their parents, a lot of people who get very rich do it by starting a business, or otherwise operating outside the mainstream.

However as we’ve seen above, millionaire status and wage money are not incompatible these days. Albeit that’s because a million pounds is worth so much less than when everyone was writing songs about it.

Accountancy software firm Sage compiled a handy list of the highest-paying industries for all you financially-motivated wage slaves:

Source: Sage

Before you rush to Heathrow to ask about a job in the control tower, I’d take this list with a pinch of salt. It’s suspiciously short of bankers and others in finance.

If you really want to make money, go where the money is!

What does a million pounds buy these days?

The big question is what could I do with a million pounds if I had it now?

There are plenty of answers to that, but essentially I’d like to live it up, draw an income, and never work again please.

The standard rule of thumb for living off your assets in retirement is that you can withdraw 4% a year without going bust before your clock runs out.

On this basis, a million pounds equates to a £40,000 annual income:

£1,000,000 x 4% = £40,000

However many people around these parts want to retire early. And questions persist about how sustainable 4% will be going forward, given it was originally based on US investors and their dream team returns from the US stock market.

For today, let’s plump for a more cautious 3% to keep us out of harm’s way:

• Our million pounds now delivers an income of £30,000 a year.

So if you can’t live on less than £30,000 a year, you’re going to need to be a millionaire by the time you retire. ³

A real millionaire. ⁴

How to save a million

We have our roadmap. All we need now is the saving ethic of a Swedish tramp, an eye on inflation, the magic of compound interest, and a fair wind for a stock-heavy portfolio.

Well I say that, but while the average Brit may see a million pounds slip through their fingers long before they’re 50, it’s going to be a b’stard for most to become millionaires.

The key factors are:

• How much you save

• How long you save

• The growth rate you achieve

If you’ve got nothing in the bank now and we assume a growth rate of 5.5% ⁵ for your portfolio, then you’d need to save around £28,000 per year for 20 years to hit the magic million.

You can use Dinky Town’s investment return calculator to run your own numbers. Or check out Monevator’s millionaire calculator for a quick estimate.

The snag, again, is inflation.

At 2.5% a year, inflation will wear down that million to around £600,000 in today’s money after two decades. On that you could draw an equivalent income of £18,000 per year, at a 3% withdrawal rate.

So just how much do we need to put away to earn a ‘real’ million, assuming annual growth conditions of 5.5% nominal return and 2.5% inflation?

20 years to save a million

To earn the equivalent of a million pounds in today’s money, we need to invest nearly £46,000 a year for 20 years.

By that point, we’ve amassed around £1,640,000 in nominal terms. That’s just over £1 million in real terms.

Impossible you say? It would have been for me.

Let’s take a more leisurely 30-year route to Millionaire City.

30 years to save a million

Annual investments of just over £13,000 a year would balloon into a million after 30 years, given the same growth and inflation assumptions as above.

But, tragically, a cool million in our hypothetical 2056 will only be worth a very uncool £468,000 in today’s money.

You’ll need over £2m to have the same spending power as a millionaire does now, which means you’d need to invest nearly £28,000 a year to hit a real million after 30 years.

Hmm, let’s be more optimistic. Thirty years is a long time. Who knows what might happen?

What if growth was a not unreasonable 7% nominal for a 60/40 portfolio of equities, bonds, and other bits over that time?

Well, you’d still need to find almost £22,000 a year to achieve the £2m target that would make you the equivalent of a millionaire in today’s money.

My Ferrari catalogue is burning on the fire because I can’t afford central heating.

A country estate is something I’d hate

Clearly millionaire status will be beyond the reach of the average Brit for a while yet, barring a dose of Weimar inflation.

UBS estimates that just one in 29 or so Britons are US dollar millionaires – and the number would be lower in pound sterling terms.

On the other hand, the same estimate was one in 65 back in 2014, when I first wrote about this topic.

Eventually inflation will make millionaires of us all!

Pension pots of gold

The truth is even a comfortable retirement status is a steep climb for many of our fellow citizens. You’ll need a pot into six figures, as a minimum.

Going on to hit seven figures in a hurry – unless you’re already rolling in it – is a tough ask. But it can be done.

Indeed a seven-figure pension pot is arguably becoming a necessity for the typical higher-earning Monevator reader, given the latest estimates on retirement spending.

Who wants to be a millionaire, eh? Perhaps I’ll re-read The Investor’s tips on living like a billionaire in the meantime.

Take it steady,

The Accumulator

Note: We’ve updated this article with 2026 salaries and other details. Comments below may refer to the original article. Or they may be sour grapes from those still chasing that elusive seventh digit!

1. Notwithstanding a raft of exciting caveats, like losing an arm and a leg to taxes.
2. Assuming a steady rate of 2.5% p.a.
3. Not accounting for taxes or the state pension.
4. In other words, you’ll need a lot more due to inflation.
5. Nominal return after 0.5% investment costs.

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