Want to retire in 10-years? Here’s the plan

There’s a big thing going on at the moment called F.I.R.E.

Financial Independence Retire Early. For a lot of people that translates as wanting to retire in 10 years. 

But it has different connotations for different people, so I thought I’d explain what it means to me and why most people are doing it wrong, but also how you can make it work for you if you really want to. 

What is FIRE?

The basic premise of the FIRE movement is to minimise your expenses, so you can save up enough money to invest and get a return on that money that covers your minimal expenses. 

It’s a pretty solid plan I’ve got to say.  

The main part of the plan is minimising your expenses now, and being happy to keep them at that level for the rest of your days. 

I guess it really depends how much you hate your working life as to how much you’re willing to scrimp and save to get here. But it’s at least your choice I guess. 

How Do I FIRE?

So how do you actually go about doing it? Well, the goal is to save between 50 and 70% of your monthly take-home income. 

If you earn £35k a year then your net salary is going to be between £2286 and £2788 depending on if you’re PAYE or dividends (accurate as at 2020/21 tax schemes). 

So that means you only have a monthly budget of £685 – £1394 per month. I can’t be arsed doing double calculations, so let’s just call it £1k per month.

You’ve now got to live on £1k per month – that’s to include your housing, transport, food, hobbies, blah blah blah. 

As a very rough guide – maybe I’ll do a blog about how cheaply I reckon I could live… someone remind me to do that sometime!

But anyway, as a very rough guideline you’d want to spend around 35% of your budget on housing, 15% on transport, 15% on food and groceries, 20% on boring random shit you don’t have a choice about (TV licence, insurances, utilities, mobile phone, etc.), 15% on fun stuff. 

Rent £350Car £150Food & shopping £150Essentials £200Entertaining stuff £150

That’s very ballpark, but it gives you a bit of a starting point. 

Can you do that? Ace. If not, ummmm… tough?

Minimising Expenses

Whatever you can do to minimise expenses, that’s what you do. If you have a home, then you take on a lodger. If you rent somewhere, then you rent a room instead of a whole house to yourself. Apparently, you forage for food cos I’ve no idea how you live off £150 a month food budget, but you get the point. 

If you don’t need a car for your day to day work, then maybe you don’t bother with one and you cycle everywhere. 

You get the idea. Any opportunities to minimise expenses you take them. There’s a perverse pleasure to be taken from getting a ridiculously good deal, so maybe this becomes a new hobby. 

Oh, and FYI, doing this as a couple is much MUCH easier. Either you just don’t tell your partner and make them keep working while you save 70% of your take-home pay, or you join forces (probably better for your relationship), and you double up on all your budgets.  

Increasing Income

Option 2 is to increase the money coming into the household. Can be anything from a second job bar tending to setting up a new business that you do on the side. If you can completely ignore this money from a regular expenditure perspective, then it just goes into your saving pot to let you retire earlier. 

Alternatively you can use it to minimise the amount of income you’re looking to replace if you’re happy to keep doing this. 

Some random thoughts that anyone can do;

Uber driverFood delivery driverMow lawnsPart-time carerDog walkerChildminder (probably need some qualifications and to not be a murderer for this one).

Invest the Surplus

Once you’re busy cutting coupons and walking strangers dogs for extra cash, you then set up an investment pot. This is where you put all of that saved money each month, and you invest it in as passive a way as possible. 

Nothing fancy, and I’m not going to go into it much here anyway, but you can reasonably expect to make say 7% per year growth on the money you invest. 

If you want to know how, then you need to sign up to my next Money Masterclass and learn all about your options – including how to get yourself set up with a guaranteed side hustle that can bring you in £500 – £1000 per month. 

How long will it take?

You’re now investing £1325 each month (I took an average again, cos can’t be arsed doing it twice), and you’re achieving a 7% return on your money each year. Your goal is to create an income of £1k per month to live off. 

If we assume you’re getting 7% pretty comfortably, then you can also assume you could get a 5% return on the money when you’re ready to rely on it. 

A lot of times you’ll see different numbers used for these two calculations. In the US they tend to use 8-10% for the growth element, and you’ll often see 4% used as the income element. 

There is no right or wrong answer, and there’s no guarantee, so it’s all just made up to be honest. But you could pretty reliably expect to make 7%, and I don’t think it’s a major stretch to achieve 5% income in a pretty low-risk way. 

If you want to use my numbers though, it’s going to take you 10 years and 4 months to build up enough of a pot to earn £1k per month off your investments. 

Cool, now what?

That’s it. You’re done. You now don’t have to work anymore. But you also don’t get to spend much money on stuff anymore either. 

And you’ve got a lot of spare time on your hands. 

The fun part is at this stage you can choose to do work you actually enjoy and want to do, and any money you earn from that becomes your play money. So you can still have a slightly less than miserably depressing life doing it that way. 

But I don’t want to live on £1k per month

OK, don’t then. The numbers change slightly the higher up you go because of income tax brackets, but as a very broad-brush approach, you want to be saving around 60% of your net pay in order to be able to create a passive income of 40% of your current net pay in around 10 years. 

Plus or minus a few months. 

Sounds like rubbish, what about… 

To be honest, it could well be. The 7% (or 8-10% if you’ve read anywhere else) is an average over several decades and you might be out of luck with the decade you invested over. You could also do much better than that though. It’s kind of out of your hands. 

The 4 – 5% income you can produce is a bit more realistic, but if inflation happens to go crazy, that £1k you’ve got to live off is going to buy you a lot less than it did 10 years ago when you first started. 

Inflation and tax are the big killers when it comes to this stuff being realistic. Inflation makes your money go less far each year, so £1k today will buy more than £1k in 10 years time. Also tax if you’re over the tax-free threshold can bugger up your plans immensely. 

If your goal is for £10k a month income, then you’re going to have to achieve a much higher rate of return in order to end up with a net figure of £10k per month. 

But the whole FIRE movement is primarily aimed at lower-income bracket demographics. Not in a mean way or anything, but it works much better if you’re looking for up to say £2.5k per month as you can mitigate a lot of tax on that kind of level of income. 


It’s good if you can handle living life on a very strict and tight budget for the rest of your life. But if that’s not your character, this isn’t going to work for you. 

I’ve not tried it, although I did a much more relaxed version to enable me to retire after about 12 years of investing. I just got a better rate of return while I was investing and then got a better return on my investments when I retired. But the principle is still the same. 

There are elements of the FIRE movement that I share with people and encourage them to follow, but I think a 10-year retirement plan is a bit too extreme or strict for most people to follow. So maybe a 15-year plan would be my preferred option – with a side business you can continue into retirement to top up that disposable cash. 

But that’s just my preference. You do you, honey boo-boo. 

Further Reading

How Much Money Do You Need To Save In Order To Retire
How To Start A Pension And Save For Your Future As A Freelancer
How Much Should People Have Saved In Their Pensions At Different Ages