Guest Post: Accidental FIRE

There is hope for all of us

I’m thrilled to have something positive to post today. I think we all need some encouragement after the first nine months of 2020!

Stewart Dorward, a member of the RetireJapan community, very kindly wrote a post about his coming retirement. Huge congratulations are in order and hopefully there are some things to learn here as well.

I’ve stumbled into retiring next March, aged 59. I no longer need the money and have other things I’d rather do with my time though some of these are paying hobbies that make a steady small profit: Airbnb and cooking classes. I was hard wired into saving from childhood and this has been reinforced by my current spouse. My husband’s default question when in a shop is, ‘But, do we need it?’ However, my route to financial freedom has been disorganized at best and accidental at worst.

I’m from the Thatcher voting scrimp and save working class that viewed going to the pub or hairdressers or using credit cards or taxis as a sign of moral weakness. Before university, I had never been in a restaurant of any kind and that includes MacDonald’s. Not all of this rubbed off on me as I got older. However, I did note that, when my father fell through a roof at 42 and never worked again, they had enough savings to pay off the mortgage and were not short of money after that.

My first stroke of luck was to go to university in in England in 1979, when not only was it free but I got a living allowance which meant I never had a part time job and graduated with no debt. Likewise attending teacher training college after graduation. I chose to work in state education which means that, in August next year, I’ll have half a state teachers’ pension. This is from my 60th birthday and is calculated on my final salary in 1998. There is also a one off lump sum which would be tax free in the UK.

The next stumble towards my financial future involved an overt decision on my part. A friend was selling various financial services and products and asked if I’d be interested. This is when my background kicked in – ‘Saving is good.’ I took out an endowment policy with Sun Life of Canada which will pay out in 5 years time. In the mean time it has carried two mortgages in the UK. I’ll have paid in monthly since 1986, with a lump sum due in 2026.

My first disaster struck with the bursting of the housing bubble. This left me with an apartment worth one third less than I’d paid for it, so I became a landlord when I got married and moved into my wife’s home. The rental income only paid for the mortgage itself. There was no profit and it was over ten years before I could sell and not make a loss. The next disasters came together in one wave. Redundancy, divorce and with the latter the loss of my home of five years. Despite ending up in a sleeping bag in a mate’s spare room, I carried on paying my endowment premiums as a priority.

I thought a change of scenery would be a good idea and landed in Japan with a job at a Japanese university. This put me into the Private Universities and Schools Welfare and Pension Fund, which will be provide me with the other half of a teacher’s occupational pension when I reach 65. I had no choice in this and am very grateful that I wasn’t given the choice to opt out as many friends working in other schools and universities were.

Parallel with the Japanese pension, I started to pay into the British state pension again since the premiums are set extremely low and I already had 23 years of the 35 years needed to get a full pension aged 67. The government has been threatening to increase the premiums but has been distracted by Brexit, an election and now the pandemic.

Having a husband who didn’t want to kids saved a lot of money which led to more saving. My only option then was to use a financial advisor. This company shall remain nameless as it causes Mr Retire Japan to glare with disapproval. However, my first investment doubled in value. I had moved that money into cash two weeks before Covid hit and that was just plain lucky. This one has paid off my mortgage 27 years early.

Another investment failed completely but others are ticking along nicely. I’ve spread them across currencies and levels of risk over four different funds. With Brexit coming I’m so glad that I didn’t put everything in to British pounds. One is in gold, which should pay out this year. This is one of the few areas that investments have been doing well during the pandemic as gold is a safe haven in times of crisis.

So, much of this is plain dumb luck and I have many friends who were not so lucky. One died at 75 having never stopped work. She had neglected her pension, not applied for PR until it was too late and so needed to carry on working to keep her work visa. Two weeks after feeling a bit poorly she was found dead at home. That could so easily have been me if circumstances had been different. Don’t do as I did and leave everything to chance.

Congratulations again, Stewart! Some day I too will be able to write ‘I don’t need the money any more’. Some day.

In the meantime I am going to stick to the plan, spend less than I earn, and invest the difference. It really isn’t rocket science, is it?