I was mindlessly browsing through instagram when I came across to a post by user @dudewithsign.
Obviously, the cardboard says, "We can stop saying 'Happy New Year' now." I smirked, a little. Not because people are still greeting one another a Happy New Year; but it dawned on me, that, it has been 3 weeks since the New Year. Yes - just like that, it is now 1/20/2020.
Then, I took a pause and started daydreaming about my goals for the year 2020 - mostly "recycled" goals from last year (lol). One of my financial goals is to max-out my Stocks and Shares ISA allowance which is £20,000 per *tax year. So I thought, let me make this a bloody challenge. It is the 20th today, year 2020, 20K.
Here it is!
Table Napkin Written Rules
Source of capital must be coming from year 2020 earnings only.
Earnings = paid job or jobs including side hustles. Other sources of income i.e. real estate, dividends, interest should not be counted.
*Tax Year in the UK resets every April. For ease of tracking, I start this January.
The capital must be invested on equities only either on a tax-wrapped account or onto a general taxable account, or a combination of the two.
How is achievement measured
A total of £20,000 invested by December 20, 2020 on either ISA, General or combo accounts. However, there is a caveat. If my ISA allowance is not fully utilised by March 2021 even if I fully invest 20K by 12/20, this challenge is a FAIL.
20K total equity investment by 12/20/2020 + maxed-out ISA allowance of £20K by 3/20/2021
Credit: bendavisual on Unsplash
On my second post, I have indicated that my savings rate is 50%. This leaves me roughly £1500 to live off for a month and the other 50% allocated to various investment instruments like stocks and shares. As someone living in Central London, is this enough? Or am I eating purely rice and beans, noodles and discounted meals all day, everyday?
I'll show you.
T1 is my actual budget for the month (January 2020) based on my Earned Income last December.
Food and Beverages - £30/week; Food in the UK is cheap af if you know where to look.
High Protein Muesli, Peanut Butter, Oats, Assorted Berries, Coffee. Quick and easy. Just add hot water. Done.
There is no way I would cook in the morning.
Dinner: Meal Prep on Sunday (1-2 hours)
Chicken (Breasts, Boneless Legs), Ground Pork or Beef, Salad, Assorted Vegetables (mostly broccoli, bok choi, carrots), Salad (baby spinach, cabbage), Fruits (Banana, Apple), and Rice
Burger + eggs, Wraps (mostly beef or chicken). There is no limit on what I could prepare with wraps. Also, pasta (unlimited recipes on this).
Tea, Scones or fruits, High Protein Bar
Beverages: Naked High Protein, Recovery Protein Shake, Organic Milk, Lager, Stout, Wine
Eat-out: I am not a patron of any particular restaurant. I eat wherever I feel like eating, Greek, Turkish, Lebanese, Italian, Ethiopian, English, American, Vietnamese, Japanese or Chinese. Once or twice monthly. My favourite coffee lounge is Caffe Nero. Starbucks is over-rated, change my mind (lol). Admittedly, I do overspend on coffee about 5-6 times monthly. This is because I am more productive in coffee shops - give credit to the caffeine high - and the ambiance as well.
Rent, Internet, Others (Fixes, Cleaning materials). A little under £700 for a rent in Central London (shared-accommodation). Criminal right? Although, this is inclusive of utilities! I know this type of living is undesirable to many people but I prefer to walk to work as opposed to wasting time traveling to and from work 4-6 times per week for 45-60 minutes each way. I may consider moving out once I get married. For now, it works well for me despite the cons. I am paying £80 for my phone and internet, which is steep. I would be eligible to change my plan at no cost to an upgraded phone for a lesser monthly bill at £40 in 3 months. Household fixes don't happen a lot, and if it does, my landlord will fix it for me.
Health is the most important investment and therefore, should be a priority.
This covers my gym membership, Protein, supplements, etc. Budget increases when it is due for my annual eye check-up and bi-yearly dental care. Healthcare is FREE in the UK.
Remittance - Mostly for my brother's school fees, extra for my parents' medical bills if needed, friends in financial difficulties, extra help to deserving students from my previous Alma Mater, and other charity giving.
Seldom used, I walk. If I ran out of travel card credit, I top it up with £20.
NMC at £120 yearly, Indemnity Body £17 monthly.
Pub, Sports Bars, Meet-ups, Professional Sports, Video-on-demand. I must admit, I over-spend on this, especially when my team has a game (£15-£20 per ticket). I am also planning to join a Rifle Club this year which is not cheap. Nonetheless, most of the things I like are free i.e. art galleries/exhibitions, museums, arts/street arts, reading books and the like.
Cashflow - leftover money.
I could do whatever I want to do with this. Go on a date, eat-out (again), shopping (not really, I hate shopping. It is stressful). Cashflow for my next out-of-town trips (mostly hiking), paid events, replace broken gadget accessories or torn/stained clothes.
Bottomline is, a £1500 monthly budget in Central London is more than enough to live a non-restrictive lifestyle. There are extreme versions of FIRE, but I don't like it. I'm a singleton, no kids or pets to look after. I don't own a house, so no repairs, insurance, service fees nor mortgage to pay for. I also do not have any debts, no overdrafts, never owned a credit card. And I follow minimalism which, in a nutshell, owning less stuff or worldly possessions and living a life based on experiences. My personal circumstance is something to consider because everyone is different. And my version of a good life could be your version of a bland, pathetic life not worth emulating, or could be that my version is still extravagant that needs modifying. It really depends.
Credit: introspectivenl on @unsplash
In England, anyone employed by the NHS will be subjected to the pay progression journey as outlined on the NHS Terms and Conditions of Service pay scale framework. This, depending on your job, is composed of different bands - from 1 to 9 where each scale has an entry pay which will gradually increase every year until you reach the full rate. Nurses belong to the Band 5 pay scale. As there has been a change on the pay scale in England as of 2018, everyone's pay progression journey is a bit different. But the point of that change is to decrease the number of years in which nurses reach the maximum pay from 7 years to just 4 years. Therefore, by 2021, everyone will have one pay progression uplifts. If you are intrigued with the current framework, check here.
Let's talk about numbers.
If you are employed by the NHS now as a qualified nurse (not pre-reg), the annual entry salary is £24,214 (1.6million Pesos). After 4 years, your full rate will be £30,112 (2million Pesos). This is only BASIC salary excluding overtime, weekend and bank holiday and agency/bank shifts. Also, depending on the location of the hospital that you work for, the salary will be topped up with a High Cost Area Allowance - Inner London (20% of the basic salary or a minimum pay of £4326 yearly), Outer London (15%/£3659) and the London Fringes (5%/£1000). There will be no allowance if you are working outside the aforementioned areas.
Inner London Entry: £24,214 + £4,326 = £28,576 Full Rate: £30,112 + £6,022 = £36,134
Beyond London Fringes Entry: £24,214 Full Rate: £30,112
Of course the taxman will take 20% and, 12% (may differ) for the National Insurance contribution. If you hustle hard and you earn more than £50000 a year, for 2019/2020, the tax will be 40%.
P1 Sample Payslip, Inner London
After deductions, my take-home pay is £1935.85 or Php128,000 for a 37.5/week work. Can I do FIRE with this income? Maybe - but by the time I will be FIRE, it is highly likely that I have already undergone or about to undergo a hip or knee replacement, and possibly could no longer walk a flight of stairs without becoming breathless. I don't want that.
P2 Bank Shift Income: £1,002.32
Whilst still young and able, my short-term remedy to boost my income is to do bank shifts. That is, adding 20* more hours per week of work. This will add me an extra £1000 monthly income as seen on P2. In total, my take-home monthly pay is £3000 (Php200000) subject to forex fluctuations. Can I do FIRE with this? YES in 11-13 years, provided that nothing changes with my spending and saving habits, and that I will increase my savings rate over-time. At time of writing, my Savings Rate is 50%. That means, I invest 50% of my monthly income and survive with what I have left which is around £1400-£1500. This FIRE calculator shows that I am on track.
One could argue that nothing is certain. Nobody knows what is going to happen in the future - marriage, kids, disease, job loss. But at least I know the numbers and that gives me a stroke of confidence to tread on this journey purposely.
Finally, band 5 nurses don't earn a lot. But I am convinced that anyone can do FI-RE. This movement is not only for the software consultants, engineers, investment bankers, you know, the top 1% earners. After all, "it is not about how much you earn, but how much you save and invest."
*20 hours is the maximum allowable extra hours you are allowed to work under Tier 2 visa in the UK.
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Savings Rate of a Nurse in Central London
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