Are influencers right? Does life magically change after the arbitrary threshold of £100,000 in investments?
My experience below for your finance-related entertainment.
When we crossed £100k as a couple
It’s hard for us to accurately track our assets at any one time, so I’m not really sure when the exact moment was that we crossed this mythical £100,000 in investments.
Which is probably a good indicator of how little things change when you pass this milestone. Lazy readers can now skip to the end.
We technically crossed it when we sold the house, but given that we used that money to buy our boat I’m not sure it counts. It was a fleeting moment. Still hard to spend it, mind you! Seeing your bank account have six figures in it and then watching as you spend it in big chunks is a little saddening.
So we crossed the next £100,000 somewhere between 2017 and 2024…
Why we’re not really sure
We invest separately and this is our main confusion.
We each have a SIPP back in the UK that we can’t add to now that we’re in the Channel Islands, and I think between us we have something like £30,000 in those. They have grown in percentage value, but haven’t been paid into for 3 years now. We check them once in a while.
We each have a public sector pension that’s defined benefit. I’m still owed an updated statement from the MOD for my military one, but its value is somewhere between £100,000-200,000 I guess. Ish. It’s hard to tell because it’s paid to me personally and only half paid to Lady SierraWhiskyMike if I snuff it first. No-one is going to inherit it and there’s little scope to play around with it. Likewise, Lady SierraWhiskyMike has a partial civil service pension. We generally ignore these for tracking.
Then I have a Channel Islands workplace pension with the world’s least usable online app that has something like 2-2.5 years of contributions in it, which I reckon is £15-20k. I can’t really check it, it’s a nightmare to use, but I set it up to pay 100% into an ESG filtered all-world equities index. Good enough to be comfortable, not great if you want to know the value at any one time.
I have two investment accounts: one with a robo-investor that I’m just leaving in there and one with Lloyds Sharedealing that I add to. Lady SierraWhiskyMike has a robo-investor account in her own name.
Then we have Bitcoin, which is actually the easiest of the lot to manage and track the price of.
Finally, we have some gold in safe storage. There’s something like £9k in there at today’s prices. It’s basically an emergency fund on top of our actual emergency fund.
We never track the emergency fund really, we just make sure there’s stuff in it. That’s the boat’s money. The boat also has an account we feed into to pay moorings, repairs and maintenance. We basically treat that as her money that we’re managing as trustee for her. Neither of these accounts is ever added to our campaign tracking, they just exist. We don’t really track our current accounts or any side spending pots either, because they’re for spending and not for investing. That said, I tend to cap mine at £2-3k and anything extra becomes more investment.
I guess I have Crowdcube shares, but that’s basically corporate-style gambling. I rarely calculate those, there’s no real point.
I briefly used Topia to track this but in the end I found that I didn’t care enough about the number of manual feeds I had to plug in.
And our timing depends on how you measure it
If we include the public sector pensions? I guess we crossed £100k way before we kicked this off and just didn’t know it.
If we exclude the public sector pensions and the house sale? I think we hit £100k a little over a year ago.
If we exclude pensions of all kinds and just look at what we could get our hands on right now, I think we cleared £100,000 around last summer.
This is the number that I’d think about, because while our pensions are all well and good if I had some need to liquidate all my assets today they would still be left untouched.
Aaand if we count me alone, excluding the military pension, I cleared £100,000 in all other assets around winter 2024. I think. I’d probably have to do some serious reverse-engineering to work out when that was. Looking at non-pension stuff only, I’m probably not far off crossing £100,000 and probably will do in the next few months assuming flat markets. A bit longer if there’s a downturn.
£100k isn’t a magic inflexion point
Famously, Charlie Munger said “The first $100,000 is a bitch, but you gotta do it”. Which, in my experience, is true.
Ignore the dollar to sterling conversion, it’s not relevant.
The people we are today and the financial habits we have now are completely different to the people and habits of five or ten years ago. We wouldn’t even look the same, talk the same of make the same decisions.
Ten years ago: SierraWhiskyMike was playing around with single company share investments, trying to piece stuff together with an Open University law degree while being deployed to the Falkland Islands, and saving money to pay for a boiler in a DIY renovation he’d started. Five years ago, he was doing a ton of side hustles to create some kind of income while finishing the Legal Practice Course during the early days of COVID. Today, he lives on a boat moored on an island and write reflection pieces on the first time he had £100k in his pocket.
Changing really is a total bitch. It was a painful process. We did stuff like go car free for a while, we hit charity shops, we discovered minimalism out of necessity, we switched our diet to include more vegeterian meals, and we accelerated our plan to live aboard a boat.
And dude, it was hard.
BUT – and it’s a big but (that I like and I cannot lie) – it was the change that got us to £100k and beyond. The magic £100k figure didn’t make life dramatically different, it hasn’t seemed to somehow propel us to a life of luxury. All that has happened is that we’ve adapted to the new normal, and now those changes have stuck.
Which, mathematically, makes sense. The difference between a 5% return on £50k and 5% return on £100k is only £2,500. That’s still a lot of money to me, but that’s not necessarily going to be the difference between financial independence or not.
My point is: it isn’t the number that has made the impact; it’s all that other stuff we did that has set us up for the later gains.
I feel like if I was some Instagram or YouTube influencer I’d be packaging this up and selling it as a FI System for Guaranteed Results or something similar, but bugger that.
The perks of an indie blog writer: there’s no need to be performative to reach an audience. Write whatever you want.
But compounding hockey stick snowball?!
Yes, if you plot compounding growth on a graph, you will plot an accelerating curve.
But the difference between that first £50k and £100k isn’t noticeable day-to-day. It’s a cool number, but nothing to live off.
At £100k, the biggest determinant of your portfolio growth is, barring the odd major event like a Brexit shock or COVID pandemic or whatever, your payments into the pot from salary.
We could sit there with £100k until retirement, and while the pot should grow impressively it might still be pretty lean in 20 years’ time if we want to live off it. Most people would probably want to keep contributing to it, rather than take a chance on letting it grow on its own.
So, really, nothing has changed with finances: keep earning, spend less, invest more. No magic £100,000 number changed that process.
So one thing did change – kind of
We got a lot more confident at work.
My job is… OK. Corporate law is famously stressful and frequently hits list of top jobs for employee burnout, so it’s not just my subjective assessment. It’s interesting, but the pace is hardcore and I don’t even work in the City anymore. Most of those guys and girls need a high-consumption lifestyle because they have no time of their own, so the big City pay is basically spent on things that make life easier, more convenient or more comfortable, rather than being fastidiously invested.
No judgement if that’s the lifestyle for you. It’s what I thought I wanted 5 years ago.
And yet, while I’m totally golden handcuffed right now, I have absolute confidence that if I was sacked… I wouldn’t need to do anything about it for up to five years.
Like, nothing.
I could sit on my arse and play video games and just eat cleanly (but cheaply) for a good few years before there were any consequences to my actions. It might even be good for my long-term health to de-stress and just do the odd walk or run to keep healthy. Wouldn’t be eating out as often, probably get used to tofu and rice dishes every day, might be quite lean.
Or, you know, I could just take up any old job that would have me. I could go back to living off my entire take-home pay, and let my assets compound in the background for thirty years.
But we’ve cleared the £100k and are essentially CoastFI… of a kind, provided we stay living aboard or geoarbitrage in retirement.
At £100k, I don’t think you’re quite there. I wouldn’t have felt ready to do that at that level, and certainly not for the pair of us. But you do have a few years’ cushion at that level. Even if your wage was £150k pre-tax and you lived in the commuter belt, that’s easily a year of covering all your bills if you were to be sacked without notice or pay today.
So that is the benefit: having that Fuck You option if things suck at work.
Which means you can be pretty outspoken and ballsy in the office.
As I told my line manager: “If you guys sack me, you’re just giving me a restful Christmas!”.
And that’s pretty powerful.
But I wouldn’t say that £100,000 is the magic changing moment for that, either. If you live well within your means, you can get that benefit at £80k, or maybe even less.
If you’re pushing kids through private school, you might be looking at more like £200,000 (I guess?).
Either way, the figure itself means nothing.
Takeaway points from this mini-essay
- Your life doesn’t change when you have a £100k portfolio. You change your life first, then you get to having a £100k portfolio.
- The real win is when you get enough of a portfolio that being sacked isn’t a threat, it’s just a change event.
- That event can be sooner or later, depending on your lifestyle costs.
- SierraWhiskyMike should have commoditised the shit out of this post and sold it as an online course. Damn. Another opportunity missed.
