Financial wisdom from 1987

By | 31st July 2017

Financial wisdom from 1987

This week’s post is somewhat different, as many people will be away on holiday/vacation.

You may think that the principles of frugality, minimalism and FIRE are fairly new, but a surprising amount of wisdom in these areas can be found in the lyrics of the 1987 song Dignity by Deacon Blue:

Lower earnings aren’t a barrier
“He’s a worker for the council, Has been twenty years”

You don’t need to be an engineer or a doctor to retire early. As long as you live below your means and save the difference then you could find that compounded returns mean you achieve your FI number while still fairly young.

Frugality will save you a fortune
“And he packs his lunch in a “sunblest” bag”

I talked about how just buying one coffee a day could cost you more than £250,000 over 40 years. By taking your own lunch to work, and not even paying for sandwich bags, you will be saving a fortune over your working life.

Have a plan for your retirement
“He let me know a secret about the money in his kitty, He’s gonna buy a dinghy”

You need to have a goal for what you want to achieve – retirement will be different for everyone. Perhaps you just want to sail a boat all day, or become an artist, photographer, etc. Having a goal will mean that you can plan for it.

Early Retirement
“I’ll be on my holidays, They’ll be doing their rounds”

Once you have reached your target for retirement savings, then you can indeed go on a permanent holiday if you wish. Even if you take up a new profession, you will still have plenty of spare time.

The secret to success
“They’ll ask me how I got her I’ll say “I saved my money”

That really is the secret – saving money regularly and living below your means combined with compounded returns will get you the results you seek.

As this sketch from SNL shows, rather than buying boats(and other things) on credit and making payments, you can save your money and achieve both early retirement and a paid for boat – while others will be forced to remain working for many many years longer than you by their own choices:

James McBrearty started his own business from scratch in 2006, to help the self-employed.

He helps people to escape from the corporate world and shares his thoughts here on the changing world of work, technology and personal finances; as well as the occasional travel post.

Over the next 10 years things are going to change significantly. James is a follower of frugality and minimalism; and an advocate of F.I.R.E. to minimise the coming disruption.

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