Numbers

Day 21

	Current	Target
Pensions	£110,415	£1,500,000
Residual Income	£0,000	£5,000

	Current Balance
Liquid Assets	£107,548

	Outstanding Balance
Mortgage	£329,303
Debt	£0

Latest Update:Pensions ticking upwards.

Pensions continue to tick upwards, driven by technology funds (BlackRock and Frnaklin Technology).

Liquid assets continue to look good, but are swelled by the drawdown from the mortgage to cover the house extension once we get things started. Nevertheless, they're proving a nice little earner in the meantime, with fund investments growing here too.

Net debt now factoes in the mortgage increase, so isn't going to come down dramatically any time soon. We did however shorten the length of the mortgage when we took out the additional equity, while keeping very similar payment levels, so that helps a lot on our quest to be mortgage free.

What do these numbers mean?

AKA, how much do I really need in order to switch from the corporate daily grind to a much more family friendly daily grind.

If you take a look here you'll see a rough breakdown of our monthly expenditure (spoiler alert: it's not insignficiant), and with the knowledge that I'm a generator not a saver, we need to pretty much replace that in it's entirety. Under the assumption we clear the debts and pay off the mortgage in the process, that's about 5k / month.

Be careful!

I'm no financial adviser; and not one to overcomplicate things. In most of the 'napkin calculations' you'll see on this site, I gloss over simple (!) things like tax; pension drawdown limits; etc. They're important, and could make a big difference to you (and me for that matter) depending on your circumstances. For the purposes of getting this thing done, and with the size of numbers we're talking about, I can just about get away with not giving them their due diligence (at least for now)

tl;dr - all the numbers are close, but we've simplified a few bits, so be warned.

If that was purely from pensions, using the accepted wisdom (I may challenge this later) of being able to drawdown 4% of your total pension pot per annum without affecting the overall sum, that would imply that a total pension accumulation of about £1.5m is required. For now, we'll gloss over the fact that we'll run into the lifetime allowance limit if we get to that level of penion saving, but we'll definitely revisit that once we're underway to make sure we take that into account in terms of how we spread pur investments.

Looking at it from another angle, if we were to ignore the pension pots, and focus purely on the alternative income streams, we'd need to get that 5k figure from there in order to make this grand plan work. Again, that's assuming clearing the mortgage as part of the process, without which it would be closer to 7k.

So, we'll track both targets - 1.5m pension pot, 5k per month alternative income - and probably end up somewhere in the middle in order to step off the hamster wheel.

“we'll track both targets - 1.5m pension pot, 5k per month alternative income”

Me in dreamland (probably)

The remaining numbers we'll keep account of are fairly self explanatory.

Liquid assets means anything we have in shares or exercisable options; cash; or other readily available finance.
Mortgage is (tada) the currently outstanding amnount on the lily pad
Debt is what we have in card debt; loans; etc.

That's it at a high level - get the income, assets and pensions up; get the mortgage and debt down; and we're done. Simples, as certain cinema going rodents would have us believe.