Living a miserable existence to fund an early retirement is a terrible idea

For me, the costs firmly don’t outweigh the benefits.

Let’s assume that you’re able to invest an extra £10,000 per year by living miserably now in hopes of a brighter future (bear in mind the average full-time salary in the UK is around £35,000 and that’s before tax).

The S&P 500 has historically averaged around 10pc per year, so if we assume a compound annual growth rate of 8pc across 20 years, you’d have £46,609.57. Not bad, and it’s easy to see why people focus solely on the numbers.

And if you ramp up your savings then there’s a clear path to being a hefty six-figures better off in retirement. However, the goal of Fire is to retire early, so you’re missing out on what are expected to be your golden years of earning power as your career and skills progress. This is all so you can retire early (and continue to live on little). 

We also need to remember that young professionals (especially those in London) find rent and living costs a struggle, and so it’s unlikely they’ll have a spare £10,000 lying around to invest for retirement given the average 22-year-old graduate can expect to earn £25,000 a year.