Prioritising goals at the beginning of your FIRE journey

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It’s difficult at the beginning of your FIRE journey to know what to prioritise. This is only made more difficult while also being at the early stages of building a career.

Unless I was looking to live completely off-grid or risk renting my whole life and hope my investment return keep up with the rising rent costs, I see my FIRE journey as having two key goals:

1 – a paid off house

2 – a large enough investment pot to not require a full-time wage

These are two huge goals requiring a great amount of commitment and investment.

We all know the benefits of long-term, compound interest and the mantra of “the best time to invest was 20 years ago; the second best time is now”. But considering how difficult it is to save for a house on your own, I’m forever conflicted between saving as much as I can into my S&S ISA for my future self, or saving for a deposit.

I’m leagues away from affording a house, but I know owning one outright eventually will  contribute massively to being able to be completely financially self-sufficient.

Unlike many of my peers, I don’t see the deposit as the big barrier to house ownership, especially as I’ve been utilising the Lifetime ISA for a number of years now. For me it’s obtaining the average 4.5% your wage to get a mortgage, while living in the South, while being single.

Of course, I understand I’m at the beginning of my career and will hopefully see my wage rise, if I work hard, to an amount that will hopefully satisfy the mortgage lender’s criteria for lending me the dough to buy my first place, but this is a long way off just yet.

It’s a hell of a balancing act and one everyone will probably have gone through at some point or another.

For me personally, I don’t understand the desire to own a house as early as possible. Of course, I’d one day love to own one and have it all paid off, but not in my early/mid twenties; I have too much shit I want to do yet without the burdening commitment of a mortgage looming overhead.

So my priorities tend to change quite frequently depending on the current economic environment and my own personal financial situation, but a house purchase is rarely on top of the pile.

Right now, saving for a house is the last thing on my mind with markets tumbling (or not as the case may be over the last week).

I’m not buying too much at the moment, as I believe the markets have quite a bit of falling to go yet, but when they do (and I am, and will be, regularly PCAing a little bit here and there in the meantime) I’ll have the cash on hand to take advantage.

I still have that nagging voice in the back of my head telling me a house should be a higher priority (this probably stems from being British and having a natural obsession with having to own a home), but I know this investing lark will turn out for the best in later life and need to stay focused on the long term without jeopardising short term fun.

It’s forever a debate I’m having with myself. I’m also a realist so while I recognise that a house purchase is a long way off yet, I tend to prioritise investing as I can actually see the progress being made quicker than my wage rising to meet the mortgage criteria.

Despite the conflict, I’m enjoy the journey and looking towards those goals as motivation.

If I suddenly had all the money I needed, where would be the fun in that?

 

 

5 thoughts on “Prioritising goals at the beginning of your FIRE journey

  1. Well- I think you have hit the nail on the head- you either need a partner, or to move to a location where property prices aren’t quite so insane (and yet, wages are still pretty good). I hear that South Wales is pretty good 😉 On the partner front, that doesn’t even have to be somebody that you are involved with- banks are seeing more and more applications for mortgages from friends (even 3/4 etc). House v investing is hard- when interest rates were 6% (2007) when I bought, I just wanted to clear it asap. Now, 13 years later, my mortgage is fixed at 1.6%- surely even investing in bonds will be better than overpaying the mortgage.

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    1. Yeah in the crazy low interest mortgage world we’re living in it’s become quite the conundrum. I think, personally, if I actually had a house, I’d want rid of the mortgage asap despite the low interest just because I’d want that burden off my back, but that still wouldn’t be to the detriment of at least some small regular contributions to my investments. One day. One day…

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  2. It obviously varies wildly across the UK, but when I bought my first property (a 2 bed flat) in a commuter town, the average rental cost was about ~£1,000 a month. With a 15% deposit and a 5x mortgage (eep!) my monthly mortgage cost was about £750 and I could do what I liked in the flat with decorating and fixing stuff if needed. I also had an extra room to rent out so it worked out really well for me and this was back when rates were more like 3.5% not the 1.5% you can get now. I still miss that flat sometimes…

    Having lived in houses with room mates and a shit landlord who didn’t fix anything previously – I was willing to put that deposit money I’d been saving up to use. YMMW 🙂

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    1. It would definitely provide a nice sense of security owning my own place, but the commitment is the thing that holds me back at the moment as well as the opportunity to plow money into funds and indexes at a young age to take advantage of time.

      Getting a lodger would certainly be something I’d want to do to cut down on expenses. If it wasn’t someone I knew I know it can be a bit of a gamble that they could quite easily be an oddball.

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