“I’ve met high flying partners in law / accounting firms who earn in excess of £750,000 pa who told me they couldn’t afford to quit their job. They had allowed their lifestyle to ramp up and it had become their prison camp.”
“I grew up with an unusually vivid fear of poverty.”
Overview of earlier career
After doing a degree in Economics, I qualified as a chartered accountant and then moved into the world of corporate finance - where I worked for 20 years.
The trigger for change?
Well, it’s a story that I can trace back to my childhood. I don’t claim to be normal…I grew up with an unusually vivid fear of poverty and of being homeless which was “hard-wired” into me via childhood experience.
When I was 11 (1981) my parents bought the biggest house they could afford and then interest rates rose to 17%. Imagine the devastation that would cause now!
My parents cut back sharply. Our holiday that year got cancelled. The newspaper was cancelled. Dad started brewing his own beer rather than buying it.
There weren’t many positives but, on some level, I gained an appreciation of how it’s possible to tighten your belt when you really put your mind to it.
I think that period had an impact on almost every decision I made in the future. Deciding what to study at university. Where I lived. What career to pursue. These choices all revolved around trying to make sure that I would not end up poor and homeless. And yes, I realise how strange that may sound!
I got my first mortgage aged 26. It was a normal 25-year term mortgage, but I wanted to clear it as soon as humanly possible. By age 32/33 I’d developed the habit of saving and had paid off that mortgage.
Around that time, I’d taken a new job that wasn’t working out. The culture felt entirely wrong for me. Even though I had paid off the mortgage, I felt trapped as I still needed to earn a salary. My wife wasn’t working as our second child had just arrived.
I hated my job and felt like I was hanging on by my fingertips.
First steps to freedom?
To build up a “safety fund” in case I found myself unemployed, we slashed our outgoings from ~£3,000 per month to ~£1,000 per month…remember this was for a family of four.
Eventually I found another job that felt less soul-destroying. But rather than getting comfortable and allowing our spending to inflate back up, I decided to continue to save hard.
After a number of discussions (and some arguments!) with my wife, I vowed to save and investing at least 50% of my income to give me the freedom and the choice that I craved.
Fast forward 10 years to 2013 (when I was 43) and I stumbled what I then thought was an obscure website about financial freedom in the US called Mr Money Moustache. This is a blog written by a software engineer who, by frugal living and sensible investing had “retired” at 31 and now did pretty much whatever he wanted.
What Barney learned?
I learned that there was a whole Financial Independence movement which had started in the USA and was spreading internationally. This movement combines frugality, environmentalism, hard work and investing to get to financial freedom.
I learned about the 25x rule whereby you probably have enough to never need to work again if you can amass a portfolio worth >25x your annual spending. I realised that I probably had enough so I handed my notice in at work.
How can financial independence help with career change?
When it comes to career choice, I see two logical career strategies:
a) Do something hard that is well paid to allow you to save hard towards your financial freedom OR
b) Do something you love
I did a) for long enough to fund a move to b).
It’s possible to work a job you love that doesn’t pay much…but only if you have a freedom fund and / or a reasonably low-cost lifestyle.
If you want to change career you have to address lifestyle inflation.
I’ve met high flying partners in law / accounting firms who earn in excess of £750,000 pa who told me they couldn’t afford to quit their job. They had allowed their lifestyle to ramp up and it had become their prison camp.
Financial independence is back-end loaded
It’s hard to save meaningful amounts in the beginning so many people never get started. But if you can get into good saving habits early on your money starts to work for you and amazing things become possible. £15,000 saved between 18-25 can turn into a pension pot of £1,000,000 over 40 years, thanks to the magic of compound interest.
You need to discuss your escape plan with your partner
To crush your spending, you need to have some very open discussions with your partner to get them on board.
They need to be on-side with your long-term life vision to be committed to the changes required. It might not be what they originally signed up for. They might have signed up to marry a stock-broker and all the trappings that sort of life brings with it. Change is always possible but it can be hard.
You can have anything, but you can’t have everything.
It’s a bit silly to think you can have it all. Life is about choices.
Lots of people fantasise about having financial freedom, doing work that they love or just dream of the day that they can stop doing a job they hate.
The press often highlight the part of the story that involves retiring early but the live frugally with reduced consumerism for years part of the equation gets less prominence!
Even when the cell door is open, some prisoners choose not to escape
The work that is required to attain financial freedom requires sacrifices and lifestyle compromises. Not everyone is prepared to dig deep over a decent period of time to get the results they dream about.
Just because individuals could learn how to create financial freedom for themselves, doesn’t mean that they’re up for it. Remember how the movie Shawshank Redemption? One of the escapees couldn’t handle the freedom offered by the outside world, having become institutionalised.
Who the hell wants to retire at 40 and do nothing all day long?
Not me. I enjoyed having time off to “decompress” after my escape but eventually we all need to find something to do that provides meaning, purpose and challenge. I get this through writing, teaching and providing financial coaching for other people.
Financial freedom allows you to step away from the metaphorical “Prison Camp” that many of us have created for ourselves and decide what your future could look like.
How does it feel?
I feel grateful to wake up without an alarm and that I don’t have to get on a soulless, grey-suited commuter train.
I laugh a lot more than I used to. The fun and humour had been slowly squeezed out of my life in the corporate world. Laughing is one of the most under-rated pleasures in life and I’m grateful that I can choose to do things that allow me to do it more often than in the past.
I have a lot of fun writing The Escape Artist blog and have enjoyed seeing the readership grow over the last 5 years from 1 view per day to 10,000 page views in a day. I hope it will continue to grow, but even if it doesn’t I’ll still have fun.
Find out more about Barney: