The Early Retirement Danger Zone | Hack The 4% Rule & Hold Onto Your Money Forever

Followers of the FIRE lifestyle will have heard of the 4% safe withdrawal rate and will be aiming to build an investment pot using this rule that’s large enough to provide them an income when they’ve retired.

The problem with the 4% rule is that it lulls us freedom fighters into the false sense of security that following a simple formula will guarantee us a set level of income in retirement.

But because your freedom fund contains a range of investments, the value of your pot will be volatile. What is worth £500,000 today could be worth £400,000 tomorrow. Or £600,000. You just don’t know.

The first 5 years of your FIRE retirement are what we call the Early Retirement Danger Zone. You have no state pension to fall back on because you’re too young, so you need your investments to perform.

But what if they don’t? What if there’s a market downturn? Using the S&P 500 Index as a measure, there have been 16 bear markets since 1926, averaging once every six years.

Today we’re going to tell you how to hack the 4% rule, force it to work for you, and make sure you can safely retire early while holding onto your money forever!

Special offer: New users to Genuine Impact will receive 1 month’s PREMIUM access for free when you sign up via this link. Genuine Impact is research and analysis app that provides insights for investors. Be sure to check them out!

Alternatively Watch The YouTube Video > > >

The 4% Rule And The Problem Of Retiring Early

As a brief recap, the 4% rule says you can withdraw 4% per year of the value of your retirement pot on retirement day, adjusted each year thereafter for inflation.

The origins of the 4% rule started with the famous Trinity study, which backtested the performance of retirement portfolios built from a range of different stock and bond mixes and withdrawal rates covering the period from 1925 to 1995.

The stock market studied was America’s S&P 500, and it was determined that portfolios built from 100% stocks or a 75/25 stocks to bonds split had around a 95% chance of surviving for 30 years.

The study was set up to provide answers for people retiring in their 60s, hence why a 30-year portfolio survival period was chosen.

Unfortunately, this implies that those retiring earlier are at risk of running out of money during their retirements.

With a 95% success rate, this means 5% of people should expect their freedom funds to run down to zero within 30 years of their FIRE date, based on the history.

Here’s a chart that shows the results of a 100% stocks portfolio with starting dates in each of the years from 1871 to 1989:

6 out of 119 tests resulted in going bust. But even if you DON’T run out of money after 30 years, you still might easily end up in the 24% of people whose portfolios’ values were down – people who wouldn’t be able to keep withdrawing enough to live on without eventually depleting their investment pot.

In almost all cases, the damage was done in the initial years, and whether a pot survived its owner or not came down to the events immediately following the retirement date.

Sequence Risk

The greatest risk to your portfolio comes in the first 5 years or so after retirement.

This is because if the stock market were to fall in those early years, it would likely reduce your pot to below the level at which you could safely continue to draw from it at the same rate. Even when the stock market recovery eventually comes, your pot may be too far gone to recover while also sustaining your withdrawals.

While for example, if your first stock market crash came a decade after retirement, you would have built up a 10-year buffer of growth that could happily be eaten up by a future bear market without your withdrawals being affected.

This risk is known as Sequence Risk, and it is the risk of the good times and the bad times happening in the wrong order, or the wrong “sequence”.

According to AJ Bell, the average time it takes for the stock market to recover based on the last 10 bear markets prior to covid was 648 days – nearly 2 years.

The shortest recovery in history was the covid crash, which lasted only 4 months.

While the longest was 1,529 days – just over 4 years – following the 2008 financial crisis.

If you can set a plan in place to protect yourself for the first 5 years of retirement without needing to eat into your pot, this would nip the sequence risk in the bud.

You’d be covered for repeats of the historic worst-case scenarios, plus a bit extra. Get past this opening phase of your retirement, and you should be into clear waters.

Your FIRE Number

First, you need to know your FIRE number. This is calculated as your required living expenses in retirement divided by 4%, if you are using the standard safe withdrawal rate.

You can calculate this easily and get more information including the years until you can retire by using our free FIRE Calculator.

Try playing with it to see the effect of tweaking the rate of return on your investments, or by cutting your expenses a little, or adopting a higher or lower withdrawal rate. The difference will likely shave years off your working life.

The FIRE number is the size that your savings and investments need to be before you can retire. The usual assumption amongst those seeking early retirement is that this number, once reached, is set in stone.

But what if the stock market falls the day after you reach your number and quit your job, and what was once a £1m pot is suddenly worth only £700,000?

You’ve stopped working to start living. Do you have to change your plans and forget about retirement? Stop living and start working?

Protecting Your Nest Egg

The 4% rule can be adapted to protect your financial freedom fund in those first years of retirement, in case the market goes south right after you’ve told your boss that they’re fired.

We just need to add on one or two extra rules into the mix.

Both of these rules are fairly common sense, but the first time we saw them named and singled out for discussion was in Kristy Shen’s book “Quit Like A Millionaire”, so due credit to her.

Rule #1 – The Cash Cushion

The very worst thing you can do in a stock market crash is sell. And yet, as a retiree living off your investments, you may have little choice but to do exactly this.

This is where the cash cushion comes in.

Say your FIRE number is £1,000,000 – the amount you’d need to retire, covering your outgoings of £40,000 a year at the 4% rule.

You need to be able to avoid selling investments for up to 5 years.

To cover your outgoings during this time, having a cash cushion of £200,000 would mean you could eat this up first without ever having to touch your investments.

£200,000 sounds like a lot of extra cash to have to build up. But hold up. A balanced portfolio might already include cash in the region of 10%, so you can splurge on opportunities, but also to cover you in scary situations exactly like this.

So, a £1,000,000 freedom fund might already contain £100,000 of cash, meaning you need to find just another £100,000 to cushion you in your early retirement years.

As a counterpoint, it’s worth noting that if you did save up an extra £100k before you retired, you could invest it instead, and it would reduce your required withdrawal rate from 4% to a safer 3.6%. But it’s not clear that this would be safe enough if you were making withdrawals during an initial market crash.

In any case, while you’re building your pot, it probably makes sense to keep that extra money invested in the stock market so it can grow, rather than being held as cash, and convert it into your cash cushion just before you retire.

Rule #2 – The Yield Shield

Still, having to increase a freedom fund by £100,000 seems like a lot of extra hardship. We can get this number down significantly if we build a yield shield.

The yield shield brings in dividend stocks to your portfolio to give you extra protection in the first 5 danger years, after which point you can switch back to your preferred allocations.

Stock market returns are a combination of capital growth plus dividends. Stocks which are likely to provide decent capital growth but little dividends are called growth stocks. Stocks which provide little capital growth but good dividends are called dividend stocks.

The theory is that dividend stocks can better hold their value during a downturn due to being stable, established companies, and in most cases should continue to provide a dividend to you regardless of what is going on with the share price.

Normally we prefer growth stocks, as their total returns tend to be better and they avoid all dividend taxes (including the nasty foreign dividend withholding tax). But during the early danger phase of your retirement, less volatile, cash flowing dividend stocks may help you to better hold onto your money.

The yield shield works by switching out your portfolio on retirement day to a portfolio that keeps a similar geographic mix to what you already have, but focusing on high-yielding dividend stocks.

After the first 5 years, you’d switch back.

In practise it could work like this. If you’re currently tracking a global stocks index with a fund like the Vanguard All-World ETF (VWRL), you could temporarily swap it out for the SPDR® S&P® Global Dividend Aristocrats ETF (GBDV).

This ETF tracks an index of top-quality dividend payers, with a weighted average yield of 4.85%, while the Vanguard All-World ETF typically yields around just 2%.

In the event of a downturn, you would in theory be ok as the 4.85% yield covers your 4% withdrawal rate, although in practise some of the companies would stop paying dividends.

This specific Dividend Aristrocrats fund though only admits companies with a 10-year track record of payouts, so you’d hope this effect would be minimal given bear markets happen more often than that, roughly every 6 years.

The yield shield means you don’t need nearly as big of a cash cushion – in theory, none at all, though we still think it’s sensible for diversification and risk reasons to hold 10% of your pot in cash regardless.

This is therefore a good alternative solution which allows you to retire on your FIRE date with your standard FIRE number and with peace of mind.

The 3% Rule

Much of the stress around retiring early could be resolved by adopting the 3% rule instead of the 4% rule.

A recent continuation study into the safe withdrawal rate extended the Trinity study period to 2017, and here’s the results:

The 4% rule for a 100% stocks portfolio still has around a 95% success rate after 30 years, now down slightly to 94%, and tails off over the decades.

But the success rate of a 3% withdrawal rate does not tail off – even after 40 years, it remains at 100%, meaning that EVERY portfolio tracking the S&P 500 since 1926 would have survived for at least 40 years.

But for us, we don’t want to be running to the safety blanket of the 3% rule.

This is because, using the MU Fire Calculator, a £1m required FIRE number becomes a £1.33m target by moving the withdrawal rate slider. And for this particular example, the years until FIRE move from 14 years at 4% to 18 years at 3%.

Could you be bothered to work an extra 4 years and build up an extra £333k if there was a smart alternative such as the cash cushion or yield shield, which meant you could retire today?

What’s your FIRE number and are you relying on the 4% rule? Check out the calculator, and join the conversation below!

Written by Ben


Featured image credit: Einstock/

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Emerging Markets: Buy, Buy, Buy!

2021 has not been kind to Emerging Markets investments. While the developed nations have powered ahead on a wave of optimism caused by the vaccine rollouts, the emerging markets first fell, then stagnated.

A low price relative to the developed world is a good thing for would-be investors in the emerging markets.

But even if the price were higher, we’d still be advocating getting your money into these growing parts of the world. Loads of investors don’t bother with the emerging markets, preferring home country and developed world bias, but we think that is a huge mistake.

We’re going to tell you what’s going on in the emerging markets, why now may be a historically opportune moment to start investing in them, and how to go about doing it. Let’s check it out!

Some great places to invest in the emerging markets include Freetrade (who’ll give you a free stock worth up to £200 for signing up using this link), and others which we’ve looked at on the Best Investment Platforms page. Check it out for platform reviews and welcome offers.

Alternatively Watch The YouTube Video > > >

What Are The Emerging Markets?

A country classified as an emerging market is a nation that has just some, but not all, of the characteristics of a developed market.

Typically, this involves a move towards greater democracy, greater regulation of the banking system, and a more professionalised stock market.

The economy and infrastructure of these countries will typically be a couple of decades or more behind those of developed nations, with people living within these countries gradually gaining more spending power, which brings with it a more industrial economy, better services and better investment in infrastructure.

But we shouldn’t just think of the Emerging Markets as one big generic blob. The MSCI Emerging Markets IMI Index is a grouping of 27 diverse countries that have little in common other than their growing economies and status as Emerging Markets, so should be considered individually.

Emerging Market Prices vs Developed

Let’s first look at some long-term market price trends. We’ve charted the MSCI IMI indexes for both the developed and emerging markets since index inception. IMI or Investable Market Index simply means that it includes Large, Mid and Small caps.

Starting in 1994, we can see 3 distinct time periods: the first covering 1994 to 2007, where the developed world took centre stage; then 2007 to 2014 when the Emerging Markets powered ahead; and finally, 2014 to the present day, when the story has been all about developed countries like America steamrollering all in their path.

Asset prices can go through long cycles of being up or down relative to each other, based on what’s hot at the time. Today’s fashion is for US stocks, benefiting Developed Markets indexes, with the US valued highly as a safe haven in turbulent times. 

We see the relative discount in the emerging markets more clearly if we zoom in on the last few years.

To right of the chart is now, with the vaccine effect, with the developed countries storming ahead and the emerging markets suffering a likely temporary price stagnation.

How We Invest In The Emerging Markets

The Emerging Markets is covered by one of the 3 equity funds in the Money Unshackled Ultimate Portfolio, discussed in more detail here.

The fund we each use is the iShares Core MSCI EM IMI ETF (EMIM), which faithfully tracks the MSCI Emerging Markets IMI Index of Large, Mid and Small Cap companies.

Index investing like this is one of the best way to invest in the Emerging Markets, partly because index investing just kicks ass in general for its low fees and access to entire markets, but also because accessing foreign stock markets directly can be tricky – especially emerging ones.

Many UK based investment platforms don’t even have the option of buying stocks on exchanges outside of Europe and North America.

So for us, it’s the MSCI index all the way.

The Big 4 Emerging Markets

If we look at the split of the MSCI Emerging Markets IMI index by country, it might surprise you to learn that 74% of this index is just 4 countries – China, Taiwan, South Korea, and India.

We could analyse the history of stock market price movements all we want, but the decision to invest in the index should essentially boil down to this question: do you think these 4 countries and their companies are going to do well over the next 10, 20 or even 30 years?

Each of these 4 countries is of such a considerable size in the index that poor performance in any one could significantly drag down overall index returns. Let’s now look at each of these developing superstars, in order of size.

#1 – China (35% Of The Index)

China is the big boy of the index and deserves the most focus – but even at its current weighting of 35% it is understated.

China has several different classes of shares, one of which – A Shares – can only be bought by Chinese citizens and certain approved institutional foreign investors.

As such, index providers like MSCI choose not to include them in full. Here’s where the index stood as of 2019, with it having grown the China holdings since 2018:

Source: KraneShares

You can see the planned future inclusion of A Shares, which means that sometime in the future MSCI’s intention is to make China be around 50% of the index. So hopefully, China continues to perform well in the future.

There are many good reasons to think that this will be the case. Since setting covid loose on the rest of the world, after those first few weeks of panic in early 2020 China’s economy was able to carry on like nothing had happened.

While the UK and Europe were huddled indoors, cases in business-as-usual China during the January 2021 peak were around just 100 a day, in a country of 1.4bn people.

China isn’t even really bothering to vaccinate at speed either, with only 14 people in 100 being offered a jab so far, despite China being one of the few countries to have developed a vaccine.

But this doesn’t seem to have hindered them, nor stopped them growing – they are instead selling their vaccine to other countries, and using it to grow their political influence in those places.

In April 2021, the IMF forecasted China’s GDP would grow by 8.4% this year. While developed Europe grinds to a halt, China’s economy is cracking on with making money, which bodes well for the stock market.

Longer term, China is widely expected to catch up to the US in terms of geo-political power and wealth by the 2030s – so much so that worries about China dominate US politics.

If you remember, it’s all Trump ever banged on about.

America sees China as their economic rival, which is as good a reason as any to assume that China will do well over the years to come. China is also home to some of the biggest companies in the world, including social app giant Tencent who own WeChat and QQ, and online retailers Alibaba and – all massively popular in China and massive by market cap.

There are strong arguments that China should be stripped from the Emerging Markets and given its own category, due to its size.

Indeed, some ETFs now exist which exclude China from the Emerging Markets, such as the Lyxor MSCI Emerging Markets Ex China ETF (EMXC).

For more information about investing in China, check out our dedicated China article next.

#2 – Taiwan (15% Of The Index)

38% of the Taiwan slice is one company, Taiwan Semiconductor, one of the most important technology companies in the world! It supplies a significant chunk of the world’s semiconductors, critical components that power most modern electronics including computers, smartphones and cars.

54% of the entire world market in fact comes from this one company. It’s no small exageration when we say that the world as we know it would not exist without Taiwan’s semiconductor industry.

If it’s not in your portfolio, it needs to be!

There has long been a political risk with investing in Taiwan that its neighbour, China, might decide it wants to flex its muscles and forcibly make Taiwan part of mainland China.

It’s an active political issue we need to be aware of as investors watching from afar, and price this risk into how much of your pot you choose to allocate to the emerging markets.

With the emerging market nations, increased risk of disruption due to political upheaval is part of the territory.

Though there would doubtlessly be some initial market panic and noise, the long-term economic impact is unknowable.

#3 – South Korea (14% Of The Index)

South Korea are a trading nation on the rise who sit between the Developing and Emerging nations, with its 2 biggest trading partners being China and the US.

As a technology exporter, when other nations do well, so will South Korea. Their most significant company is Samsung, making up 32% of the value of the South Korean part of the index.

In some developed market indexes including the FTSE Developed World Index, South Korea is even considered to be a developed country.

Along with the arguments for removing China from the Emerging Markets, this shows how the lines can be blurred when trying to shoehorn diverse countries into 1 of just 3 categories (the third being Frontier Markets).

#4 – India (10% Of The Index)

A lot of the reason behind the fall in the Emerging Markets index in 2021 is reflected in what’s going on in India right now. India is struggling to combat covid, much like Brazil, Chile, and other smaller emerging economies.

India has only vaccinated 9% of their population, but unlike China they are fast losing control of a new spike in cases that has spooked markets.

Much of these covid stats are just short-term noise though, in our opinion, that won’t impact stock prices long-term.

Even in the short-term they should bounce back, with ratings firm Care Ratings forecasting India’s GDP will grow by 10.2% over the next year, which should spill over into stock market prices.

The current fall in the price of Emerging Markets ETFs is a good thing, as you can now buy more, and we can be confident that prices will rise and even catch back up with the developed markets in due course.

India has a lot going for it demographically in the long-term, including a population of 1.4bn people who are on the long, slow march away from poverty towards middle-class affluence.

This is an enormous workforce ready to take advantage of an expected move towards offshore digital outsourcing of jobs from the UK and US.

India also has the world’s largest youth population, with a quarter of Indians aged between 10 and 24 – i.e., the wealth creators of the future.

Appropriate Portfolio Allocation

If you’ve decided to invest in the Emerging Markets, you next need to decide by how much.

To get a similar breakdown to that found in the Vanguard FTSE All-World ETF (VWRL) – an index-investor-favourite which covers the whole world – you might allocate 13% to the Emerging Markets.

But we instead like to weight our equity allocations with 18% to the Emerging Markets. This overweighting increases the China allocation from 4.9% to 6.7%, Taiwan and South Korea from 1.7% each to 2.4% each, and India from 1.3% to 1.8%.

That’s a 40% boost in allocation for the Emerging Market countries. One reason to be bullish about the Emerging Markets is the relative discount versus the Developed world, as we discussed earlier, but our main reason for overweighting is that we think these countries are better placed for growth over the long-term.

We’ll be keeping a close eye on the Emerging Markets over the years, and if they continue to grow relative to the Developed world we may have to increase our allocations in them.

Do you invest in the emerging markets, and what’s your allocation? And if you don’t invest in them, why not? Join the conversation in the comments below!

Written by Ben


Featured image credit: Ascannio/

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Getting to 200 Grand – What I’d Change About My £200k Portfolio

When you reach an investment milestone like £200k, it’s good to reflect on your achievements so far, but more important is to course-correct before your past mistakes become any more ingrained.

Normally, for investors who only invest via online investment platforms or from an app on their phone, fixing a portfolio can be as simple as clicking the sell and the buy buttons in the right order.

But if you hold illiquid assets this isn’t as easily done. You might even have the first-world problem of holding assets which have such high returns that you can’t justify selling them, even though your strategy has changed since you bought them.

In this post, I want to share with you the details of my Financial Freedom Fund, so you can get a feel of how someone might come to accumulate £200,000 in just 5 years starting from almost nothing, and also to arm you with my experience so you can replicate this milestone while avoiding my mistakes. Let’s check it out!

I first started investing in stocks and ETFs on Freetrade, and it is still one of the best places to invest and grow a wicked portfolio.

As the name suggests, Freetrade doesn’t charge any trading fees, making it perfect to experiment with different combinations of funds and stocks without feeling trapped by fees.

Also, Freetrade are giving away a free stock worth up to £200 to every new customer who opens an account with them and funds it with at least £1. The offer is only available when you use this link.

Alternatively Watch The YouTube Video > > >

My £200k Portfolio

Let’s quickly look at the detail of this portfolio. Here’s the financial freedom part of my net worth, broken down. What should be glaringly obvious is that most of it is invested in Buy-To-Let property, specifically high cash-flowing terraced houses owned with mortgages, which were my first serious investments since committing to early retirement:

It’s this section of the portfolio that has seen the most capital growth, up by over 30% in the last year alone, and over 50% in total. It currently makes up 2/3rds of the pot.

I’ve consolidated most of my stocks and ETFs into a single Stocks & Shares ISA.

My old workplace pensions are likewise consolidated into a single SIPP. I might have regretted how small this slice is relative to other people in their early 30s… if not for the fact that I was purposefully diverting every penny I could from my wage into buying properties, which I saw as being of greater value.

There is also some small allocation to Peer-To-Peer Lending investments, and some commodities. And as we say at Money Unshackled, every portfolio needs a bit of cash.

There’s a red stain on the portfolio in that I partly financed the properties with 0% interest credit card debt.

Getting to £200k – Investing In Order Of Return

The original plan with this Freedom Fund was to invest my money in order of whatever assets could provide the greatest returns. I would worry about diversification later.

The answer for me lay in leveraged rental property.

My rentals give out pre-tax rental returns in the region of 11%, which is a higher return than the stock market, especially once leveraged annual capital gains of around 12% are added on as well.

My gamble of investing early on for maximum return rather than diversification has paid off so far – it provides a high second income AND incredible capital growth, and it has pushed the portfolio up to £200k in about 5 years. But it is now time to worry about diversifying.

Course Correction – Investing To Diversify

I got to £200k by leaning heavily on property, but I now need to focus on diversification. For the last year I have been ploughing all my investable money into the stock market, rather than hoarding it in cash ready for the next property.

A well-rounded portfolio should invest across multiple asset classes, but also many positions within each asset class.

As it stood, apart from some small-change, this portfolio held 4 assets – all being rental properties, and all serving the same demographic in similar locations to one another. It was NOT diversified.

Owning multiple rental properties offers some protection in case one tenant stops paying rent, but to be truly diversified you need to own the world – and that means owning stocks.

My small but growing equity portfolio contains 9,000 stocks, achieved by owning just 3 equity funds in my ISA and 2 in my SIPP, plus a smattering of individual stocks. There are also holdings in gold and silver.

The plan is for the allocations in the Stocks & Shares ISA and SIPP to grow over the years by drip feeding income into them monthly, until they catch up to the property slice.


If we look back at the portfolio, the portion invested in equities is what we would consider to be relatively safe and secure, due to good diversification and liquidity. The part representing just 4 individual properties is at far greater risk.

If I had desperately needed cash during 2020, I may have struggled to sell a property to save my bacon. But if I’d owned more shares, I’d have been fine – though they may have dropped in value.

Likewise, in a downturn I could easily lose all 4 of my properties’ incomes if tenants could not pay rent, while the odds of all 9,000 of my stocks failing to perform would be very low indeed.

The risk in my portfolio is therefore much higher than someone who owned purely equities or a mix of equities and bonds, which is probably most investors. But are the returns on this portfolio proportionally high too?

Return On Investment

Here’s the expected future weighted average returns on this portfolio:

For property, the return is a mix of 8% after-tax rental profits that I’ve been achieving consistently, plus 12% expected capital growth on the equity.

A very brief explanation for why these 2 numbers are so high is because I’m leveraging my equity using a mortgage, so the returns get amplified because I only need to invest about a quarter of the house’s value. 

After inflation that’s a 17% real return. The equities are expected to perform at historical market averages, while P2P and cash are assumed to continue at current levels of performance.

The weighted average real return of the portfolio overall is expected to be 12.8%.

This compares very favourably to a portfolio built using unleveraged assets such as stocks, and provided I continue to be fortunate and not succumb to the risks that low diversification brings, this asset mix should power me towards my Financial Freedom target at a fast pace.

The properties I already own should multiply on their own as well over the years, as I can extract equity from the growth to buy more properties with, which will lower the risk while increasing the returns.

If you take away one thing from this review, let it be that you too should consider getting some rental property in your own portfolio early on, for the boost to returns that it brings.


That said, why would anyone want to decrease their portfolio average return by diversifying away from property towards stocks? Part of the reason of course is risk. But also, you have to consider the effort involved.

£200k is a good start but it needs to grow to around £900,000 to give me and my family the lifestyle we’d want in early retirement.

This is my household’s FIRE number – FIRE standing for Financial Independence, Retire Early.

To find out how big your pot needs to be to retire early, check out the Money Unshackled FIRE calculator. You can tweak the returns based on your own portfolio’s asset mix, and it will tell you when you can retire and what your FIRE number is.

You might be happy to put more effort into managing your investments upfront, if they give you a head start on your FIRE journey. It might just shave some years off your goal. But if you have other commitments, understandably you may not want the hassle long-term.

Right now, big percentage returns are important to me because I need all the help I can get to grow my pot fast. But once the pot is built, I could tolerate a lower percentage return in exchange for a higher return in pounds, by virtue of the pot being a lot bigger.

Owning rental property is many times more effort-intensive than investing in ETFs. Even with the use of property management agents, there’s still a fair bit of ongoing admin to do.

This all runs contrary to my desire to sit in a hammock staring into space from no later than the age of 40 onwards.

The Stocks Allocation

A portfolio based mostly around passive equity-based ETFs can be automated. If we dig into the equity section of this portfolio, this is predominantly made up of the Money Unshackled Ultimate Portfolio, covered in detail here.

The MU Ultimate Portfolio: Geographies

Above is the split of the equities in the ISA by geography, and the portfolio covers the top 99% of market capitalisation in those countries. When this £200k portfolio grows into a £900k portfolio, the intention is that this component will be the largest chunk.

Money gets drip-fed into this section of the portfolio regularly and is automatically allocated into the pre-planned allocation of global funds. When I reach my FIRE date, I will simply drip-feed money OUT of it regularly instead.

That’s as complicated as investing needs to be.

The equity investments in the SIPP follow a similar idea of owning a diversified cross-section of the world, but with a slightly different set of funds.

A good strategy is to draw an increased income from the rest of your portfolio first when you FIRE, such as your ISA and properties, and access your SIPPs and other pensions from when you’re allowed to, which currently for our generation will likely be at 58.

Be sure to check out this article which shows you how to draw up a retirement income plan using a combination of ISAs and Pensions.

The Portfolio I’m Aiming For

Seeing as I have already done the hard work of establishing a property portfolio, I’m happy to hold on to them for their high returns, and even add to them over time – I’d be happy at around 30% of the total pot:

My main task between now and my early retirement date is to plough money into the stock market, bulking up my ISAs and SIPPs to reflect the green and yellow portions of this pie. You can see the specific weightings of the top countries for the equities, with the US making up 25% of the pot, or half the equity.

Above is another way to look at the target equity split, showing off the small cap and emerging markets elements. With a full 20% invested in the emerging markets and small cap stocks, this is hardly a low-risk portfolio. But it will have a good balance of diversification, liquidity, and returns.

The expected real rate of return shifts from the current 12.8% to 7.5%, still far higher than a stocks-only portfolio which might average 5% after inflation.

Actual vs Target Splits

Portfolio Financing

If you too like the idea of starting out with a higher risk strategy of targeting the highest rates of return first, it might help you to know that the way I got started with rental property was to optimise the use of good debt.

My first 2 rentals were paid for in part with money I had borrowed on 0% interest Money Transfer Credit Cards, but even MORE so by remortgaging my own home and extracting equity from it.

Much of this goes against the grain of what you are told you aren’t supposed to do, and this definitely shouldn’t be considered advice. But to get ahead in life, it’s worked for me to ignore the mainstream guidance.

What do you need to change in your portfolio, or are you happy with it as it is? Join the conversation in the comments below!

Written by Ben


Featured image credit: Vitalii Vodolazskyi/

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

What We Discovered When We Analysed The S&P 500.

We all hear a lot of so-called facts that we just accept as gospel. Things like it takes seven years to digest chewing gum or that goldfish have three-second memories.

While these and other so-called facts don’t affect your life in any meaningful way, we also hear loads of “facts” about investing that could prove dangerous if we rely on them when building our portfolios but are then later proven to be incorrect.

There are hundreds of these so-called facts that we just accept because some faceless analyst or reporter says so. We personally like to verify as much as we can, but we’re often hamstrung by our lack of accessibility to good data. Detailed financial data seems to be only available to the billion-dollar financial institutions.

In this video we’re deep diving into the last 33 years of S&P 500 total return data to find out the real facts.

We’ll learn what the overall returns were, the impact of exchange rates, the frequency of corrections and crashes, the effect of missing the best trading days, how long it takes to recover from a crash, and more. Let’s check it out…

Keeping your investment fees down is vitally important. Make sure you have the best investment platform for your circumstances. Don’t forget to check out the curated list of the best Stocks and Shares ISAs, along with free stocks and other discounts.

Watch The Video Here > > >

Are you comfortable investing when the stock market is historically high? Join the conversation in the comments below.

Written by Andy


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Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

How To Reduce Your FIRE Number Or Bring Your FIRE Date Forward – Financial Independence

Ok so the plan is to become financially free asap. It’s what’s known as FIRE – financial independence, retire early.

You’ve already covered all the basics. You’ve cleared your bad debt – check; you’re earning more than you spend – check; you’re investing the difference – check; and now you have to rinse and repeat for what seems like an ungodly amount of time, while your investments slowly grow to your FIRE number, which is the amount of money that you need to retire early.

It’s a long and perilous journey between now and your FIRE date – the date at which you can break life’s chains and become financially independent. Your FIRE date could be many decades away, so naturally this might feel demoralising.

In this post we’ll show you how to easily calculate your own FIRE number and FIRE date, and then we’ll look at some ideas for how you can REDUCE your FIRE number, so you can retire much sooner. Maybe there’s even a way to retire earlier without reducing your FIRE number at all, so you can live a life of luxury. Let’s check it out…

Alternatively Watch The YouTube Video > > >


A major reason for wanting to FIRE for many people is that feeling of emptiness. Working a job long-term that isn’t fulfilling is no way to live, and FIRE is a genuine and achievable escape plan. You don’t even have to hate your job but knowing that you could do so much more with your life is all the motivation you should need.

Once you have achieved FIRE, what you do with your newfound freedom is completely up to you. The freedom to do as you please, rather than what you must, is liberating. Many people choose to travel. Others do volunteer work. Some start a business once there’s no pressure to succeed, and some even CHOOSE to continue working – quite often on a part-time basis or doing something more enjoyable.

What Is Your FIRE Number?

Financial independence is achieved by building up a large investment pot that produces an income which covers your living expenses from now until your death. The 4% safe withdrawal rate (SWR) tells you how big that pot needs to be although some people choose to use a slightly different percentage.

Say that your living expenses are £20,000 a year. The 4% SWR therefore says your FIRE number is £500,000. The maths behind that is £20,000 divided by 0.04. Note that the £20,000 used in our example is not your income but your living expenses. Once you have retired you can stop saving, so the goal is for your FIRE number to cover your living expenses – not your current income.

If your living expenses were £40k a year you would need an investment pot of £1m.

What Is Your FIRE Date?

Calculating your FIRE number is pretty straightforward but calculating your FIRE or retirement date is a little more complicated. We’ve put together a FIRE calculator for this, which is free to use.

Bang in some numbers and tweak your withdrawal rate and this handy tool will chuck out your coveted FIRE date, as well as your FIRE number, and some other handy stats.

Let’s work through an example. Chris is 30 years old. He currently earns £30,000 after tax and lives on £22,000 meaning the difference is invested. One way this particular calculator stands out from similar tools found elsewhere is it allows you to set different annual expenses in retirement to what you currently spend.

You might have paid off your mortgage in 5 years’ time; maybe the kids will have grown up and flown the nest; or perhaps you plan to cancel some life insurance policies that are no longer needed.

Let’s say Chris will have paid down the mortgage, and so will only need £16,000 once retired. He’s also been saving diligently in his youth and has already built up a tidy nest egg of £100,000.

We can then bang in Chris’s asset allocation (Stocks: 70%, Commodities: 10%, Cash:10%, Other: 10%) and the expected real rate of return (that’s after inflation) (average 3.8%), and finally set his withdrawal rate (4%). The calculator will instantly crunch the numbers and spit out your FIRE date. In Chris’ case it was in 18 years’ time.

Hopefully your date is not too far in the future – but most likely it might as well be a million years away.

How To Reduce Your FIRE Number Or Bring Your FIRE Date Forward?

If your FIRE date was too depressing, let’s look at some ideas of how we can bring it forward.

Don’t Be Single

If you’re living alone your living costs are going to be much higher than for those in a couple. A couple gets to split all the major living expenses such as mortgage or rental costs, gas, electric, broadband and tv subscriptions. All the major appliances that you need can be also shared – ovens, washing machines, dish washers, TVs, laptops, and so on.

Not to mention the tax advantages of having a spouse’s personal allowances to play with for investing. One study (Good Housekeeping Institute) says the cost saving for a couple, per person, is £2,000 a year but we’d say that was a conservative measure.

“Don’t be single” doesn’t have to mean settling down with a partner. An alternative to this is getting a housemate to split all the bills with. The extent you do this could really help to bring forward your FIRE date. We heard a story about a guy that literally rented out every room in his house and he himself slept on the couch.

Such extreme sacrifices are probably not for everyone but for those that want FIRE asap, it’s a possibility. You could at least settle with one housemate, right?


Geoarbitrage is a fancy word with a simple meaning. It simply means to move in order to lower your cost of living.

“Geo” means geography, and “arbitrage” involves taking advantage of a price difference between two or more markets.

Broadly speaking, you can apply geoarbitrage in two ways.

Firstly, if you are able to maintain a higher income during your working years but live in a low-cost city or country, then you will be able to save and invest more – allowing you to achieve FIRE faster or a better-quality FIRE.

If this isn’t possible or desirable, then a second option is to relocate to a cheaper city or country once you’ve ACHIEVED FIRE – meaning your required FIRE number could be smaller as a result.

In most cases relocating to cheaper cities or countries will also result in a fall in your income, which is why most people would be reluctant to do this until they’ve achieved their FIRE number and ready to retire.

If you do plan to move abroad during your working years to make the most of geoarbitrage, ideally you want to continue to earn your income in a strong currency like Dollars, Euros, or British Pounds as these currencies will go a long way when converted to weaker currencies like Thai Bhat.

We run a financial website and YouTube business that targets a UK audience and so primarily earn in British pounds. We could in theory do this work from anywhere in the world and still continue to earn the same income but unfortunately like most people we’re both creatures of habit and stuck in our ways.

If you’re a little more open minded than us, then consider geoarbitrage to reduce your FIRE number!

Reconsider Your Lifestyle Cost

We’ll keep this brief as cutting costs is such a FIRE cliché. Do you need to spend as much as you do? Do you really need that four-bedroom house when there’s just two of you? Do you need a new car every few years? Do you need to holiday in Florida, or would Spain be more than enough?

What about your hobbies? Horse riding, go-karting and scuba diving are all great fun, but would you be equally as happy with a bike ride and swimming in the sea that cost nothing, or close to nothing?

Also, the permanent cost savings from adapting your lifestyle has a double impact on your FIRE number and date. Cutting costs allows you to invest more and simultaneously lowers the size of the required retirement pot.

Boost Income

If cutting costs is the sword in your sheath, then boosting income is the bazooka in your arsenal. Cutting costs can only go so far but boosting income is limitless.

For most people already in their careers the fastest way to earn a small boost to income is to switch jobs. Earning a promotion internally is a long and risky, not to mention boring, process. Much easier and faster to go elsewhere.

We call this ‘self-promoting’ and during our employment years we did this throughout – earning a promotion and a significant pay rise every couple of years. No brown nosing required!

However, there are too many downsides to working a job, including a ceiling on the amount you can earn without selling your soul to your wage master. Instead, we always encourage people to start working on a side hustle that you control, that will bring in a small income, and that will hopefully eventually replace the job when it has had enough time to flourish.

While you’re building that side hustle you can channel all the profits into the stock market, which will get you to your FIRE number much sooner.

Increase Rate Of Return

While your investment pot is small, your contributions are the most important element driving the growth. Once the pot begins to grow the focus shifts towards your return on investment.

If you have a play with the FIRE calculator, change the rate of return to see what impact it has. Changing it from 5% to 8% for example would shave years off your retirement date.

So, what does this mean? It means you need to take some “risk” with your investments. Not doing so is the RISKIEST thing you can do financially as it puts an end to your retirement dreams.

What does ‘taking investment risk’ mean? It doesn’t necessarily mean pouring all your money into bitcoin – although it could. For us it means we invest in small cap equities and emerging markets, alongside our exposure to developed markets like the US.

For us it also means sacking off low performing assets like bonds. Bonds are good for stabilising portfolio returns but not so great for epic, long-term returns. We accept that volatility risk in order to maximise our chances of FIRE.

Should You Extend Your FIRE Date Instead?

In this post we’ve been looking at getting to FIRE faster, but maybe that’s not in your best interest.

A potentially better idea would be to go part-time immediately and push back your FIRE date. It could well be that you don’t hate work (if that was your main driver for FIRE) but instead hate the amount of time working. Man was not born to slave 5 days a week.

Interestingly, cutting down on your workdays has less impact on your take home pay than you might think. The way our tax system works is it punishes those who work more. You could cut down 1 working day and therefore increase your free time by 50% – that’s 2 free weekend days turning into 3. But the effect on your take home pay might be a loss of just 15%.

You can have an immediate boost to your happiness without waiting to FIRE completely.

Another positive of this is that it gives more time for your existing investments to grow and compound because you don’t need to drawdown on them.

Say that your pot is currently £250k and due to going part-time you can no longer contribute. Earning a 5% real return, after 10 years the pot is worth £407k. But after 15 years it’s £520k. You can now FIRE in full and getting there was not the torture it would have been.

To what lengths do YOU go to achieve FIRE? Join the conversation in the comments below.

Written By Andy


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Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Future Investment Returns Are Expected To Be Dismal

How big will your investment returns be over the years ahead? We’ve seen some huge gains recently despite wider economic concerns, but can this continue? There is a foul smell in the air and there are reasons to believe that future investment returns will not be as good as they once were.

Today’s post is jam packed – we’re looking at investor expectations, historic returns, a worrying forecast by Credit Suisse, why young people are potentially screwed, reasons to be optimistic, and what you need to do.

Keeping your investment fees down is vitally important. Make sure you have the best investment platform for your circumstances. Don’t forget to check out the curated list of the best Stocks and Shares ISAs, along with free stocks and other discounts.

Alternatively Watch The YouTube Video > > >

Investors’ Expectations: Are Investors Living In Cloud Cuckoo Land?

In April 2020 Schroders commissioned an independent online survey of over 23,000 people who invest from 32 locations around the globe. From this we learnt that investors on average expect to pocket returns of 10.9% a year over the next five years.

Oddly, this was 1.0% higher than what was expected 2 years prior. Bear in mind that this study was being carried out around the time when Covid was kicking off and we would have thought this would have sent everyone into panic mode.

Winding the clock back, we recall mass hysteria and panic-buying leading to not just some empty shelves but literally empty supermarkets. Based on this you wouldn’t have thought that there was too much optimism in regard to stock market returns. Maybe the average investor is more positive than the average member of the public.

Although the average investor expects 10.9% annual returns it does vary based on region.

Most optimistic are those from the US. Our American friends are well-known for their confidence and in this case, they expect 15.4% annual returns. Let’s hope they’re right – but something tells us this is a fantasy. Some way behind but still massively hopeful are UK investors who expect 11.1% returns annually.

To quote the study, “People have an over-optimistic outlook on their total investment returns.”

Why Are Expectations So Unrealistic?

The Schroders study only briefly touches on why they think investor’s expectations are so high. They conclude that the majority of people are basing their predictions on the returns they received in the past. With huge returns in recent years, especially in the US stock market, you can easily see why this might be the case. Most people have a tendency to show Recency bias.

Recency bias is where someone gives greater importance to more recent events. History tells us that economies and stock markets move in cycles, but it’s easy to forget that when you have 10 years of solid investment gains. Instead, people begin to believe this will continue, especially if they’re new to the game and it is all they’ve ever known.

We also think that the industry and the media like to portray the stock market as a place to get rich quick. It’s the standout performers that make all the headlines. In the UK, Scottish Mortgage has returned around 742% in just 10 years. While over in the US, Tesla has grown over 1,200% in 5 years.

We all want these standout returns but sadly, these aren’t the norm.

Historic Returns

Each year Credit Suisse publish the Global Investment Returns Yearbook – a detailed analysis on investment returns going back over a hundred years.

According to the study, over the last 40 years the World bond index has provided an annualized real return of 6.2%, only marginally below the 6.8% from world equities.

The authors go on to say that “extrapolating these bond returns would be foolish as it was the golden age for bonds, just as the 1980s and 1990s were a golden age for equities.”

Although 40 years seems like a long enough period to form a solid conclusion about returns, unfortunately it isn’t. Stocks and bonds are volatile, which leads to major variation in returns. Fortunately, the study goes back 121 years and they found that US equities returned 9.7% before inflation and 6.6% in real terms. Whereas US Treasury Bills only provided 0.8% real returns.

With the power of compounding and 121 years these differences are enormous. With stocks the purchasing power has grown by 2,291 times but only 2.6 times with treasury bills. If you were thinking about investing in short-term bonds that might make you think twice.

Other stock market studies will vary slightly, and we have long held the belief that stock markets have returned around 8% before inflation and 5% after inflation as a conservative measure. So, with the world’s biggest market delivering stellar results in excess of our expectations it gives us a reason to be optimistic.

The US has been the major success story though throughout the 20th century and the beginning of the 21st, so focussing on its performance might not be a fair representation of the overall stock market.

Over the same 121 years UK equity returned 5.4% in real terms. Not bad and on an annual basis not too far behind the US powerhouse. However, compounded over 121 years, a small difference like that makes a huge impact.

Where US equities’ purchasing power has grown by 2,291 times, UK equity has grown by just 572 times.

The study carried out this exercise for 26 countries and found that real equity returns were typically between 3% to 6% per year.

Dismal Returns Forecast

So far we’ve seen that most investors have unrealistic return expectations, while our own are more in line with historical averages, but maybe this is where things are about to get ugly.

According to the same Credit Suisse study, the authors are forecasting an enormous drop in expected returns over the coming decades, which could devastate all our plans to grow wealth and shatter our retirement dreams.

Their method takes current bond yields to indicate future bond returns. Then using this figure, they have forecasted equity returns by adding on their estimated equity risk premium. The result is that they are expecting bonds to have a negative real return of -0.5% and equities to return just +3% after inflation. Just 3%!

If that wasn’t depressing enough, when you run those returns through a 70:30 equity/bond blend as a typical portfolio might look like, the portfolio real returns are a horrifying 2%.

This same blended portfolio would have returned in real terms roughly 6% for previous generations, meaning future returns could be two thirds smaller than what our parents and grandparents’ generations could have earned.

Gen Z & Millennials Are Screwed

If the investment forecasts in the Credit Suisse report turn out to be true, this paints a very dire picture, especially for young people. But this isn’t the only way in which young people are being screwed.

Young people are already having to contend with a property market where house prices have reached what can only be described as ridiculous. Official data says the average UK house is now valued at £267,000, which is a 7.6% annual price rise. We’re betting that most of you haven’t had a 7.6% pay rise this year.

Next, Youth unemployment is already unacceptably high at 14.3%. Young people who find themselves lucky enough to have a job are being thanked for their services with meagre wages. ONS data says the average income for a 20–24-year-old is just £18,400 and only £23,900 for a 25–29-year-old.

Further, Government debt is at eyewatering levels at around £2 trillion. Although high earners are likely to bear the brunt of this in the form of increased taxes, it is the young who will suffer the most. The country will have less money sloshing around that otherwise would have been spent on boosting education, job prospects, and ultimately creating better opportunities.

Also, most people under the age of 40 probably haven’t given too much thought to state pensions but this could prove to be a big mistake.

It’s widely believed that the UK government will not be able to sustain the state pension due to the enormous running costs, which are currently estimated to be around £100 billion a year and climbing. It’s highly likely that it won’t exist in its current form for our generation and those younger.

Reasons To Be Optimistic

Going back to investing returns, there have always been reasons not to invest.

Considering the economic state we find ourselves in it is difficult to disagree with the forecasts put forward in the Credit Suisse report. However, the world moves so fast that we wouldn’t pay too much attention to forecasts that look much further than just a few years.

Would someone in 1950 have predicted the moon landing? Would someone in the 60s have foreseen the internet? Would a 1980s forecaster have predicted that everyone would carry a supercomputer in their trouser pockets within just a couple of decades?

But if these forecasts turned out to be true, a period of low investment returns COULD prove to be a blessing in disguise. When you are young and buying into the stock market it is better when prices are low. Low returns over the next decade would suggest stocks will become better value than what they are today.

Ideally you would want the stock market to go nowhere or even fall while you in the accumulation stage, and then surge right before you wish to start drawing on that retirement pot.

Everyone knows the phrase buy low, sell high, but why does everyone cheer every time the stock market goes up? Unless they’re selling and never buying again it doesn’t make any sense.

Another reason to be optimistic is the reduction in investment fees and improvement in accessibility to the stock market. Past generations may indeed have had much better returns, but they also suffered punishing fees, which would have severely dented any gains. Today we can eliminate fees almost entirely. We can invest in stocks from all over the world for less than one tenth of a percent.

What To Do If Returns Are Dismal?

In terms of our investing style, what we’re doing is accepting more risk, and by that we mean more volatility. The days of getting sweet returns with zero risk are gone. That means we will allocate more of our portfolios to “riskier” assets such as stocks instead of bonds. Bonds provide stability but not the required gains that we need.

Next, we are already allocating a big chunk of our portfolios to emerging markets and small-cap stocks. We’re hoping these themes perform better than larger caps from developed economies and might give our portfolios the boost we need.

It’s essential to keep investing – even at the point of maximum pessimism. Next time the stock market is making the front pages with tales of doom and gloom – buy, buy, buy!

Unfortunately, if returns are going to be dismal, then it’s so important to invest more. If your pot is going to be hampered by low returns, to counter this you can either invest for longer and/or increase contributions.

Our chosen route is to build multiple streams of scalable income, which is where the output reaches a growing audience. As a result, the income is effectively unlimited. We are building scalable income alongside investing, but in theory if you can build this large enough you may not even need to rely on investing to set you free, and so low returns shouldn’t matter too much.

The best thing you can do is concentrate on building that income and channelling it into the stock market.

What do you think investment returns will be? Are we about to have a decade of dismal returns? Join the conversation in the comments below.

Written by Andy


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Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Reviewing My Property Empire – Is Buy-To-Let Still Valid In 2021?

Written by Ben

I’ve been reviewing my property portfolio recently, in light of the covid pandemic.

Over the last year, landlords have endured loss of rents, illiquid markets and rising prices stopping them from expanding their portfolios.

Rishi’s stamp duty holiday has been of little use at the lower end of the market where the 3% Buy-To-Let surcharge still applies.

There was SOME help, like the mortgage payment holiday which I personally took full advantage of, as so many landlords did, and the furlough scheme to help struggling tenants pay rent.

But of the damage done by the lockdowns, how much is reversible with the reopening of society, and how much represents a true body blow to property investing?

Luckily, Paragon Bank have done some detailed analysis of the market which we’ll draw on as we go, for those of you who love a good chart.

We’ll briefly look at how my properties have fared since I started down the Buy-To-Let path, plus we’ve packed in a boat-load of statistics to show what the outlook is like going forwards for British landlords.

In doing so, we’ll find out whether Buy-To-Let is still valid as an investment in 2021. Let’s check it out!

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Watch The Video Here > > >

Do you still see Buy-To-Let rental property as a valid investment in 2021? Join the conversation in the comments below!


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How To Build The Perfect Vanguard Portfolio

Vanguard is one of the best providers of index funds and ETFs. So much so, that Vanguard seems to have built up a cult following.

Pick up any investment book, watch any YouTube video, or submerge yourself into any online investment article and more times than not, Vanguard will be touted as the go to place to build your wealth.

And to be fair, this is probably justified. We have always felt that Vanguard has the customers best interest at heart, which is extremely rare for a corporation.

Call us cynical but other corporations, no matter what industry they’re in, seem to pretend to care for the customer and then pull the rug out from under their feet.

In this article we’ll briefly look at why we think Vanguard funds and the Vanguard investment platform are great places to invest.

We’ll also consider some of the key areas where we think Vanguard are underdelivering and why you might want to go elsewhere for certain investing objectives.

And we’ll also suggest 6 portfolios built exclusively from Vanguard funds, to use as inspiration for your own portfolio.

You might find that it’s cheaper to buy Vanguard ETFs on a free trading platform like Freetrade, than on Vanguard’s own platform. Check out Freetrade’s welcome offer of a free stock worth up to £200 on the Money Unshackled Offers Page.

Alternatively Watch The YouTube Video > > >

Why Invest In Vanguard Funds?

Let’s first consider Vanguard’s funds and ETFs. Their fees are amongst the lowest in the industry and their funds some of the most popular – which means you should have no problem buying and selling, as they are what the industry call very liquid.

In the past we have referred to Vanguard as the Amazon of the index investing world.

When you shop at Amazon you know that you will get a good price. It may not always be the very best, but you can shop with confidence without having to do any price comparisons.

Vanguard is exactly the same. Across their entire range you will always get a competitively priced fund or ETF.

Not only that but in the UK, Vanguard has a very streamlined range, focussing on simplicity, which we feel are specifically targeted at the most important investment markets such as the whole-world and key geographical regions.

What Are The Problems With Vanguard Funds?

The simplicity of the range is a blessing for beginners who might otherwise drown in some of the choice offered by competing Fund and ETF providers.

However, for those a little more experienced, this smaller range really limits what you can invest in.

The most notable absences are a lack of precious metals, sector-based ETFs, currency hedged equity ETFs, synthetic ETFs, small-cap ETFs, and the absence of a dedicated global government bonds ETF.

That is quite a long list of omissions, but you don’t have to exclusively invest in Vanguard funds. You can easily invest primarily in Vanguard funds and then supplement them with investments from other fund providers.

The exception to this is if you invest via Vanguard’s own investment platform.

The Vanguard Investment Platform

When Vanguard launched its UK investor platform in 2017, at the time it was a game changer. They allowed investors to invest with platform fees of just 0.15% and no trading fees. For investors who were only interested in investing in a few Vanguard index funds and ETFs there was no better place to invest.

Since then, they have introduced Self Invested Personal Pensions, and now offer 4 account types in total: ISAs, Junior ISAs, General Accounts, and SIPPs.

Today, however, commission free trading apps are also providing some much-needed competition. Even if you are only interested in investing in Vanguard funds, in some cases it would be better to use a third-party platform.

Trading 212 and Freetrade both offer a wide range of Vanguard ETFs but with zero account fees, so might be more cost-effective ways to invest in Vanguard ETFs.

Freetrade do charge a flat ISA and SIPP account fee though so don’t forget to factor that in.

Strangely, Vanguard’s own platform doesn’t offer the full range of Vanguard funds, which is SO annoying!

For example, the FTSE All-World ETF (VWRL) is only available as a distributing ETF, but on third party platforms such as Interactive Investor you will have the option to choose the accumulation variety (VWRP) as well.

Portfolio Models

There’s lot of theory around building the perfect portfolio and the one we subscribe to is owning the entire world.

Vanguard clearly agree with this as their fund range is mostly broken down into regions, which makes building a global portfolio super easy.

Portfolio 1: Global Tracker

There’s a good argument that an investor’s biggest enemy is themselves. The vast majority of investors underperform because they can’t help but meddle.

They listen to the news, they buy into the fear mongering, they try and predict what will and won’t do well, and on and on the portfolio damage goes.

Instead of this doing all of this, it might be better to just pick one fund and leave it at that. Our favourite Vanguard funds for doing this are: the Vanguard FTSE All-World ETF (VWRL/VWRP); or Vanguard FTSE Global All Cap Index Fund.

The All-World ETF costs just 0.22% and covers over 3,500 stocks across the globe.

The US makes up the bulk of the fund with 56% of the allocation, Japan makes up 7.3%, China 5.3%, and the UK 4.1%.

Over the last 5 years the ETF has returned 94%, which is neck and neck with the benchmark. The ETF has not yet existed for 10 years, but the benchmark’s 10-year return is 133%.

This index and ETF tracks both large and mid-cap stocks and covers around 90% of the investable market capitalisation.

The Vanguard FTSE Global All Cap Index Fund is very similar but also includes small-cap stocks, which takes the stocks in the fund to over 6,800.

Although this sounds like a lot more stocks than the ETF contains, these will make up such a tiny allocation of the fund that they will only make a small difference to performance.

As it happens, over 5 years the benchmark return for the All-World ETF is 94.1% compared to 96.3% for the Global All Cap Index Fund.

Portfolio 2: Developed And Emerging Market Tracker

This is probably our favourite Vanguard portfolio. It takes all the good points from the previous portfolio and adds in a little more control and even lowers the fee. The ETFs to use are: Vanguard FTSE Developed World ETF (VEVE/ VHVG); and Vanguard FTSE Emerging Markets ETF (VFEM / VFEG).

The FTSE All-World index effectively contains both the FTSE Developed and the FTSE Emerging Indexes at about 88% and 12% respectively.

If you buy these ETFs in these allocations, you would in theory beat the FTSE All-World ETF because the combined weighted fee is cheaper.

The Developed World ETF costs just 0.12% and the Emerging Market ETF is 0.22%. Together that comes in at 0.132%.

However, we would choose to invest slightly more into the Emerging Markets – maybe taking the weighting from 12% to 20% – because we think the emerging markets will deliver stronger returns over the next few years. Doing this would change the total portfolio fee to 0.14%

Over the last 5 years both of these ETFs have performed similarly.

The Developed World ETF has returned 94.6% and the EM ETF has returned 97.1%.

The Developed World ETF is dominated by the US, followed by Japan and then the major European countries. The EM ETF is weighted heavily towards China and followed by large positions in Taiwan and India.

Portfolio 3: Regional ETFs

Another portfolio we like is one that’s built using individual regional-based ETFs. Something like:

  • S&P 500 ETF (VUSA)
  • FTSE Developed Europe ex UK ETF (VERX)
  • FTSE 100 ETF (VUKE)
  • FTSE Japan ETF (VJPN)
  • FTSE Developed Asia Pacific ex Japan ETF (VAPX)
  • FTSE Emerging Markets ETF (VFEM)

The fees for each ETF are dirt cheap. The beauty of this setup is you can put as much or as little as you like into each region. If you think Japan is cheap, buy more. If you think the US has silly valuations, buy less. You have so much control.

Portfolios 4 & 5: Ready-Made Portfolios

Vanguard has some wonderful funds of funds that are essentially one-stop-shops. They have built a range of low-cost, ready-made portfolios that will make your life a breeze.

The first set of ready-made portfolios is known as their LifeStrategy Range and each one costs just 0.22%. There are 5 different funds: LifeStrategy 20% Equity Fund, 40%, 60%, 80%, and 100%. The number indicates what percentage of the fund is in equity, with the remainder being in bonds.

Let’s look at LifeStrategy 60 as an example. Within the fund there are loads of other Vanguard funds. If you were to tally up all the bond funds in there it would add up to around 40%. The other 60% is in Vanguard equity funds.

One important thing to point out with this fund range is the UK bias. The funds are built roughly to follow global market capitalisation weightings but are distorted in favour of the UK.

We personally don’t care for this, but many UK investors do want some UK home bias.

The next set of ready-made funds are the Vanguard Target Retirement Funds, which all cost 0.24%. There’s a whole bunch of these and you choose the one with the name closest to your retirement date. For example, say you were planning to retire in 20 years’ time you would choose the Target Retirement 2040 Fund.

A traditional investing path is to de-risk your portfolio as you age. These funds achieve this by gradually moving your invested money away from equities and towards bonds – Vanguard does everything for you.

The Target Retirement 2040 Fund is still 19 years from its target date, so at this point it holds 74% equity and 26% bonds.

In exactly the same way as the LifeStrategy funds, the Target Retirement Funds are also weighted with UK bias.

Portfolio 6: ESG Fund

This is for the investors that want awesome returns but wish to do it responsibly. This portfolio consists of a single global ETF that tracks the FTSE Global All Cap Choice Index.

The Vanguard ESG Global All Cap ETF (V3AM) has literally just launched at the end of March 2021 and costs just 0.24%.

There is little info about the ETF listed on Vanguard’s own site – presumably because it’s so new.

But taking a look at the index factsheet tells us everything we need to know.  The index contains around 7,500 stocks with big allocations to all the usual countries in a global index.

The index applies rules-based criteria to screen out non-renewable energy companies, makers of weapons, and vice products such as alcohol, gambling, and tobacco, amongst other things. Companies are also excluded based on Controversial Conduct.

Its 5-year return is 110.5% – even beating the 99.5% from the FTSE Global All Cap.


Other than the ready-made portfolios you may have noticed that we have neglected to include any bonds. That’s because we don’t think young people need them in their portfolios, and also because we feel that bonds are not good investments right now.

Bond prices are linked to interest rates, which are already at or below zero globally, and we can’t imagine there being any major drop in interest rates that would cause bond prices to go up. So, it seems that investing in bonds now would be the worst time to invest in this asset class.

Having said that, there’s nothing stopping you from adding some bonds to any of these portfolios. If you’re adding bonds in order to maximise portfolio stability, then we would stick to government bonds and avoid corporate bonds.

Corporate bonds tend to move in a similar way to equities and so offer little protection in a downturn. Government bonds, however, tend to be a good hedge against equities.

Unfortunately, Vanguard doesn’t offer a dedicated global government bond ETF. But they do have these more targeted ETFs which could be used instead:

  • USD Treasury Bond UCITS ETF (VUTY)
  • K. Gilt UCITS ETF (VGOV)
  • EUR Eurozone Government Bond UCITS ETF (VETY)
  • USD Emerging Markets Government Bond UCITS ETF (VEMT)

Similarly, you might want to tack on other ETFs to increase or decrease your exposure to certain areas.

For example, you could also invest in the Vanguard FTSE 250 ETF if you wanted more exposure to UK mid-cap equities.

Do Vanguard products make up the bulk of your portfolio? If not, what does? Join the conversation in the comments below.


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Want To Retire Early? Pick Your FIRE Strategy (FAT/LEAN/COAST/BARISTA)

The Financial Independence and Retire Early movement is not very old but it has gained a lot of traction in the investing community.

If you’re a financial freedom enthusiast, you’ll have probably heard of FIRE. But have you heard of Lean FIRE, or Fat FIRE, or the other types?

We can all focus too hard on retirement and forget that the journey is supposed to be enjoyable too.

The method of FIRE you apply will require sacrifices, whether that be in time, effort or luxuries, so it’s good to know that a number of options are available for you to choose from which all arrive at some variation of the same end destination – financial freedom.

By the time you’ve read this post, you will know what kind of FIRE plan is right for you.

Commission-free trading platform Stake are giving away a free US stock worth up to $100 to everyone who signs up via the link on the Money Unshackled Offers page, so be sure to check that out!

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Many Routes – Same Dream

Freedom means different things to different people. For some it is the freedom to leave a high stress career in favour of doing something you’d enjoy, but which doesn’t necessarily pay well.

For others it means nothing less than the jet-set celebrity lifestyle starting ASAP, and never having to do a day’s work again.

Others still crave the end of employment but don’t need the fancy car or the big house and can find happiness on a campsite or on the road.

There’s a FIRE solution for each and every one of them. So, what are the main broad paths you can take to financial freedom?

#1 – Barista FIRE

Barista FIRE is FIRE at its most basic – it doesn’t even necessarily end in you leaving the rat race.

All it buys you is semi-retirement, but it is much more achievable because of that.

The idea is simple. You accumulate your freedom fund to cover some of your expenses, but not all.

This might involve setting a target retirement fund size of say £250,000 to pay you a £10,000 a year income in retirement at the 4% safe withdrawal rate. And you make up the difference between your investment income and your outgoings with part-time or enjoyable work.

For many, nothing short of full financial freedom will be good enough. But for those who don’t hate work, Barista FIRE offers a sensible half-way-house approach to freedom that’s doable for everyone.

In practise, it would work like this – any money you invested during your life up until the age of, say, 50, would be working for you and paying you out a small income thereafter.

If you need £20,000 to survive on in your early retirement, and your investments are giving you an income of £10,000, you only need to earn a further £10,000 from employment once you leave your main career behind you.

The effect this could have on your lifestyle is massive – the difference in happiness between a high powered corporate career and a £10k job can be worlds apart.

A job that brings in just £10k might involve 3 days a week doing something less pressured, or even enjoyable.

Or for those of you making the big bucks, making up a £10k shortfall might involve putting on that business suit for just a few weeks in the year as a contractor, and living the retired lifestyle for the rest of the year.

The second way to Barista FIRE is to let your spouse continue working while you put your feet up, though it would take a special kind of partner to tolerate that set-up!

But as long as SOME money is trickling in from employment to supplement your small investment income, you would technically be doing Barista FIRE.

And FYI: the name “Barista FIRE” comes from Starbucks – one of the original US companies to offer part-time workers health insurance, which makes this strategy possible in America!

#2 – Coast FIRE

Coast FIRE is best described as investing enough money at a young enough age so that you can stop contributions mid-career, live affluently for the second half of your working life, and still achieve financial independence sometime in the future just by “coasting” along.

The goal behind Coast FIRE is to massively increase your savings rate early on in your investing journey by piling money into your portfolio.

There is a mathematical tipping point where the money invested is enough to grow with compounding returns to an amount big enough for early retirement without needing any additional contributions.

If you start early enough, and are in no great rush, you don’t need that much invested because you have decades worth of time for it to grow without further effort on your part.

For instance, both of us at Money Unshackled could switch to Coast FIRE fairly soon and it would be job-done.

Our existing portfolios are almost big enough that they would grow over the next 20 or 30 years so that we would be able to retire with a basic lifestyle.

Someone aged 20 could spend 10 years squirrelling away £150k and then stop worrying about investing – 25 years later they could be retiring in their mid-50s with the equivalent of £500k at today’s value of money, factoring in inflation.

By choosing Coast FIRE, they could then massively increase their standard of living in their 30s and 40s by not needing to invest further.

So, Coast FIRE is for investors who are happy to buckle down and scrimp-and-save hard in their 20s, and then forget about their investment pot and live life to the max while remaining in work.

In a way, it’s the middle-class dream, but without the poverty in retirement that comes from spending all your wages on conservatories and BMWs and forgetting to invest. And all it costs you is a few years of initial financial responsibility.

#3 – Lean FIRE

Lean FIRE is for people who prioritize leaving the workplace over a comfortable retirement. You want to retire in full, asap, and are prepared to live a minimalist lifestyle in retirement as a consequence.

For this kind of FIRE you probably need a pot of around £300k – what is probably the baseline to survive in retirement, which provides a small income but with practically zero home comforts.

For investors on the Lean FIRE path, the baseline is also their finish line.

The principles remain the same as other FIRE types. You save enough money to cover your expenses in your retirement using the 4% safe withdrawal rate.

The main difference is that you have to save much less than people on other forms of FIRE who are going for full early retirement with a good standard of living after the magical retirement day.

The defining characteristic of the Lean FIRE approach is frugality. People that reach for Lean FIRE tend to get there by being very careful with their outgoings and by pinching pennies.

Achieving Lean FIRE is generally well within the means of people with medium incomes.

A 20-year-old Lean FIRE investor aiming to retire at 50 would only need to regularly invest 36% of their required retirement income over the 30-year time frame to reach their goals.

That would be £600 a month for a £20,000 required retirement income, using average stock market compounded returns.

But there are also people with very high incomes that seek to achieve this goal who can be happy with a basic lifestyle in retirement. For them, it might be a case of saving 50%+ of their salaries and FIREing in just a decade or less.

Other solutions involve driving your required early retirement income down by planning to move somewhere cheap, like a Northern town or even another country.

Or sack off the main cost of living – housing – entirely, and live life on the road in a campervan, Scooby-Doo style.

However, for most people, Lean FIRE probably means sacrificing too many things. Is it possible to retire early and not live on the breadline?

#4 – Fat FIRE

If Lean FIRE is the frugal path, then Fat FIRE is the polar opposite. This is the plan you should be following if you plan on being a big spender in retirement.

Fat FIRE allows you to live in the most expensive cities in the world, retire with a big house, give your kids and grandkids lavish private educations, travel when and where you want to, drive a nice car, dine out at nice restaurants, and support your parents or your kids if they ever need help. In short: proper, fulfilling retirement.

Once again, the basic FIRE principles apply – the difference being that you will need a much bigger net worth to be able to retire.

If you’re planning on spending £100,000 a year or more in retirement and living a full and activity packed life, you’d need at least £2.5m stashed away to be able to retire on the 4% safe withdrawal rate. That is a lot of money you’d need to accumulate.

If you feel you need a lavish retirement, you’re probably not the type to penny-pinch and clip coupons for 30 years in order to get there.

For this reason – coupled with the fact that spending cuts can only go so deep before hitting bone – you will need to focus on growing your income instead.

To get there fast, a normal job isn’t going to cut it – for Fat FIRE, you’d need to be a highly paid professional or business owner (or have several lucrative side hustles).

As for how much of your income you’d need to set aside to Fat FIRE: to live a lifestyle based around your current income level, investing around 30-40 percent of your current income over 30 years, or 70 percent over 20 years, should be enough as a general rule of thumb. These are big numbers – if you want to live more lavishly in retirement than your current income would allow (if you stopped saving), you’re probably being unrealistic!

You can get to Fat FIRE faster if your business or side hustles will continue to make you money after you’ve retired.

It might be that you don’t need to bother with investing at all – just focusing all efforts on building up a successful business to be your legacy might be a faster (if riskier) solution.

Alternatively, you can get to Fat FIRE the slow way by first getting to Lean FIRE, and then continuing to work and invest for another couple of decades.

Say that Lean FIRE to you is £500k, and Fat FIRE is £1.5m. The first £500k will be by far the hardest part of the journey.

Money breeds money and turning £500k into £1.5m CAN be done, for those willing to wait.

By this point, your monthly contributions will likely pale in comparison to the huge, compounded returns you’re getting from the invested funds, and you may decide to stop making contributions at this point and just let the market take care of your pot’s growth, Coast FIRE style.

£500k turns into £1.5m in just over 20 years at an 8% annual rate of return, assuming inflation of 3%.

Maybe you aim for Lean FIRE, but keep open the option to switch to Coast FIRE mode and enjoy a semi-retirement with a more laid-back part-time role for 20 years before retiring in full Fat FIRE glory.

#5 – The Middle Ground – Regular FIRE

We’re aiming for a middle ground – regular FIRE, somewhere between Lean and Fat. We aint living like paupers in retirement, but nor do we feel the need to work our butts off to get to multimillionaire status.

Though if Fat FIRE were to come within our reach, we may decide to go grab it.

For now, we’re aiming for the middle ground by first securing that Lean FIRE baseline and then building from there for a few more years to make our early retirements comfortable and fun.

FIRE to us is full retirement before 50 at the latest, so Barista and Coast FIRE are not ideal for us.

We want our freedoms ASAP, but we’re willing to work a little longer to get a freedom that involves a few home comforts!

Which FIRE route are you taking? Join the conversation in the comments below!


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What Percent Of Your Income Should You Invest For Financial Freedom? | Planning For FIRE

What percentage of your income are you saving or investing each month? If you’re like most Brits, it won’t be anywhere near enough.

We know this because the average Brit retires at age 64. If they were saving properly for retirement, we’re betting FEW would willingly choose to limp on into their mid-60s.

But how much of your income do you need to be saving each month to reach your goals?

In this article we’ll assume that your goals are a comfortable retirement, on your terms, starting sometime in your 40s or 50s.

We’ll look at what the financial gurus recommend, we’ll look at what most normal people are doing, and finally what you need to do to set yourself apart from the slow-laners who follow the mainstream media narrative.

It might even be that the whole notion of saving a percentage of your income is flawed. Maybe there’s a better way?

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What Percent Of Their Income Do Other People Set Aside?

The average UK citizen saved just £2,292 in 2020, according to Charter Savings Bank.

The average salary in 2020 was just under £26k, so from this we can calculate that the average person saves around 11% of their job income, after taxes and other pay-slip deductions.

We also know that the average person retires at 64 – the average retirement age is expected to keep climbing, and will probably be well into the 70s by the time our generation gets to retire.

If we know the average person currently retires at 64 and the average person saves 11% of their income, it seems that saving 11% is not going to be good enough for you.

For you to reach financial freedom before your 70s, you’re going to need to be putting aside more than the average Joe.

Though to be fair, the majority of these savings will not be invested in wealth building assets – instead, they will have been left to fester in a low interest bank savings account.

But as we’ll soon calculate, even when properly invested, 11% is still far too low.

We’re also very sceptical of these savings statistics – far too often, what people describe as their “savings” are really “delayed spendings”.

What they count as savings today goes on fixing the car tomorrow. Our definition of saving is putting that money aside and never touching it again until retirement.

Savings % By Age

You’d think that when you’re younger it would be harder to save or invest a high percentage of your income, because you probably don’t have much of it. Any money you bring IN goes straight OUT again on rent.

There’s some truth in that – but people in their 20s actually save above the national average, probably because they don’t have families to pay for:

Savings % By Age (Sources: ONS, & Charter Savings Bank)

People in their 30s are able to save the most, as most people are established in their careers by this point and raking in the big bucks.

For whatever reason, saving tails off once people pass the age of 50 – perhaps they are putting money into pension accounts as well that is not reported in this data. But still, these numbers are very low.

Is Anyone Investing Their Savings?

Of course, to get anywhere in this world, you need to be INVESTING your savings, not stashing them in a bank account.

Cash accounts earn less than nothing due to inflation and low interest rates. The stock market on the other hand is widely quoted as having an average return of 8% since records began.

A person who saves 10% of their after-tax income in a Cash ISA will fare FAR worse over time than a person who invests 10% each month into a Stocks & Shares ISA.

But the most recent data tells us that for the tax year ending April 2019, just 22% of ISA subscriptions were Stocks & Shares ISAs, compared to 76% for Cash ISAs.

What Do The Financial Gurus Say?

JL Collins, author of The Simple Path To Wealth, recommends you aim to save or invest a full 50% of your income.

While he admits that he hasn’t always been able to do this himself, he credits the setting of this target as having been essential with helping him to become financially independent while still young.

Andrew Craig, author of Live on Less Invest The Rest, suggests people should invest 10% of their income as a minimum, and anything over and beyond that will also be beneficial.

We find this a bit unambitious personally, though we do respect most of what this guy says. 10% is simply no good for retiring before your 60s. But it’s better than nothing.

Most commentators agree that the answer lies somewhere between 10 and 50 percent. Some in the FIRE community take it to the extremes and invest over 70 percent of their incomes.

Some are doing this by living like tramps, while others are able to set aside so much by pursuing a higher income. Let’s now look at how hard it is to increase your savings percentage.

Is Saving X% Really So Hard?

The average UK citizen who earns £26k is in the top 3%, richer than 97% of the people on Earth. So in theory, saving money really shouldn’t be that hard.

The reason you may not feel this well-off is though is because you are used to a certain lifestyle and standard of living.

You choose to live in expensive accommodation. You choose to have the big TV, ten monthly subscriptions and a new car on finance.

We’re not saying any of this is a bad thing – we’re just pointing out that in this country, saving for our futures is often a choice that comes second place behind our lifestyle priorities.

Saving a higher percentage gets far, far easier the higher your income is. This is because the range of money that most people need to live on is quite similar, while incomes can vary wildly.

You probably only need around £20,000 after tax income to live a moderate lifestyle in most cities – anything earned over this could in theory go straight into your early retirement fund.

You’d probably find that moving from saving 10% of your income to 20% is easily done if you were to get a promotion or move jobs.

Assuming these numbers are all after tax: 10% of a £25,000 income is £2,500. 20% of a £30,000 income is £6,000.

If you’d just moved up the career ladder from £25k to £30k, your salary would be up by £5,000k. But your savings per month only need to go up by £3,500 to double your percentage of income saved.

You just got an extra £5k of income, so doubling your savings rate in this scenario is EASILY achieved. So long as you don’t succumb to too much lifestyle inflation!

But if you are not able to increase your income, the only option left to you if you want to increase your savings percentage is to cut back.

But to reach anything like 50%+ and join the top ranks of the FIRE community by only cutting your outgoings, you’d have to make some radical lifestyle changes.

But let’s assume you don’t want to live on rice and beans for the rest of your working life. What’s a more realistic amount to be saving each month?

How Much We Think You Should Invest Each Month

The correct answer is, you need to work backwards from your target wealth goal, choose a timeframe that you can stomach, and aim to save and invest at least the percentage that this calculation tells you to.

For both of us, the goal is a minimum £500,000 per person in a household.

This would bring in an annual income per person of £20,000, using the famous 4% Safe Withdrawal Rate rule – what we think is enough for one person to live a basic lifestyle.

Say you start investing at age 25 and your salary is £30,000 after tax.

Let’s further assume that the absolute maximum you’re willing to tolerate slaving away for would be 15 years, gaining financial independence at age 40:

Example Scenario: Required Savings % To Retire Either 15 Or 25 Years From Now

You would have to invest 57% of your income over this timeframe to reach this goal, with compounded average stock market returns.

While the same person allowing themselves an extra decade to reach their goal, with a target freedom date at age 50, need only save 21% of their income.

Alternatively, the correct answer is as simple as; “if your goal is financial freedom, you need to save as much as you possibly can, because freedom ain’t cheap”.

As a footnote to this rule, you may believe you are already saving and investing as much as you possibly can. But are you really? Or are you in fact just investing as much as your lifestyle allows you to?

The Slow Lane Mindset

Unfortunately, the rot of “the 10% savings rule” has spread widely across the mainstream media.

Next time you see a financial expert on the BBC they’ll likely quote this number like it’s some kind of gospel truth.

This doesn’t help anyone though and is just a form of talking down to the audience.

Quite a number of other outlets including Experian are now citing the 50/30/20 rule, which is an improvement.

It suggests spending 50% of after-tax income on essentials, 30% on non-essentials, and leaving 20% aside for your savings pot.

But to us this still lacks aspiration. Especially while you are in the first half of your investment journey, how much you can save each month is far more important than your return on investment.

And yet we see investors worrying about the difference between an 8% and an 8.5% return, who are only depositing a few quid a month.

As we showed before, investing around 20% of your after-tax income is probably OK if you want to retire in 25 years’ time.

But who wants to be forced to work for 25 years?

25 years is long time. Every percentage that you can edge that savings rate higher will shave years off your career.

Switch To The Fast Lane Now

Also common in the mainstream media is a total disregard for investing.

Newspaper articles about home finances will only quote the latest Cash ISA interest rates; the BBC’s coverage of individual investors paints us all as uninformed chancers who jump onto bandwagons like GameStop and Crypto.

But most of the viewers of these shows and readers of these magazines are stuck in the slow lane of cash savings – the media are just talking to their audience.

You need to switch into the fast lane of investing, and we’re not talking about some scary Wild West where you gamble your savings on a single stock or the latest fad.

A “Do-It-For-Me” investing platform like InvestEngine invests into diversified funds FOR you. It’s as simple as answering a few questions about your risk tolerance and target time period, and hey presto – you’re delivered a portfolio of diversified funds covering stocks from around the world, both big and small, with some precious metals for protection against downturns. And the total fees are tiny at just 0.25%!

Find your way to InvestEngine via the link on the Offers Page and they’ll give you a £50 bonus upfront!

What percentage of your income do you set aside for early retirement? Join the conversation in the comments below!


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