October Progress Review Of My 2018 FIRE Goals

Hi folks,

Happy November!

The first thing I began to notice as we race into the final 2 months of the year was the clock change. On the last Sunday of October, the clock moved back by 1 hour. This marked the official end of the British Summer Time and the start of Greenwich Mean Time.

What made the transition so noticeable was that the sky darkened by 4 pm and didn’t light up until 7 am the following morning. These long hours of darkness marks the coming of winter, which is always a depressing season in the UK.

As usual, I’m going to perform a review of how it went versus the various personal goals that I had set myself at the start of the year.

Here’s the progress summary chart:

I decided to change the format of these posts slightly. Rather than going through each goal individually and sometimes repeat myself month after month, I’m going to highlight the key progress/setbacks happened during the month. This will cut down the length of these posts significantly and convey the relevant information across quickly.

Without further ado, here are the highlights in September.

Second salary bonus of the year

If you haven’t been following my site, I’ve written extensively about my salary arrangement with my current employer.

My bonus is paid out on a quarterly basis. I received my first payment in July and October marked the second one. This means I have now officially exceeded the salary goal I had set for myself at the start of the year.

I am an ardent believer that you should never be 100% reliant on your employer. I think making promotions and pay rises your sole mission is extremely dangerous. This is why I side hustle and invest extensively on the side to generate non-employment-based (and often passive) income streams.

On the hand, it is super important to know your worth and negotiate the best salary package for yourself. This will definitely contribute to your job satisfaction.

Saving optimisation

At the start of the year, I had some cash left over from liquidating an investment project in 2017. Meanwhile, they had been sitting on my instant-access saving account of over 10 months. With an EAR of 0.01% EAR offered by my bank at the time, let’s just say that the interest income didn’t even cover my home insurance every month!

Ever since the start of the, I’ve been trying to optimise this.

As I intend to deploy the capital at an unspecified date in the next 12 months, I needed to keep it liquid and easily accessible. At the same time, I wanted to achieve a higher rate of return and diversify holdings to reduce deposit capital risk.

MoneySavingExpert has a very helpful guide that outlines the best current deals in the instant access saving sphere. This saved me tons of search time. As a result, I simply picked the top 4, opened accounts with them and started gradually transferring my savings to them.

This exercise was officially completed in October and now I can relax in the knowledge that my capital is earning market-leading returns at a reduced capital risk exposure.

Stopped making SIPP contributions

One of my goals for 2018 was to increase my personal pension contribution (SIPP, the 401k equivalent in the UK) to £800 per month.

I had been absolutely nailing that target this year, averaging close to £1,000 per month. Until October.

We have identified a potential project (currently in stealth mode) that we might want to pour our capital into. The exact capital requirement is a bit unclear at the moment. As a result, we want to save as much cash as possible in case the price tag comes at the higher-end of our expectation.

SIPP is a great pension saving instrument. If I put in £1, the government will top up another £0.40 on my behalf. One way of viewing it is an immediate 40% uplift in the contribution value.

There’s only 1 downside to SIPP: any contribution made is not accessible until the age of 55.

This is quite different to 401k in the US, where the portfolio can be accessed at a penalty.

I’m very supportive of the SIPP approach of prohibiting access before a certain age. Pensions are long-term investments and they should be left untouched to compound for as long as possible.

However, it doesn’t help my current situation where I need liquid capital. So I have decided to temporarily to forgo the tax relief and save into the general taxable brokerage account instead and hold it as cash. This gives me the option to take should I need to deploy it elsewhere.

Wrap up

October has been a good month. Having a pre-defined list of goals and achieving them one by one brings me enormous light and energy during these very dark hours.

How are your 2018 goals progressing? I’d love to hear your stories. Please comment away.