FI Without the Pain

With my first job at 16, I had great ideas of what I planned to spend my first paycheque on. I had worked over 100 hours in a local hotel and restaurant, often until the early hours of the morning: cleaning bathrooms, mopping, collecting glasses, carting people into taxis - I was the errand boy who did what was told of him, often working 8 to 10 hours straight with barely anything that resembled a break. I was disgusted then to receive slightly over €300 for all that hard work. What were all these deductions? tax, prsi? In hindsight, I'm certain emergency tax was being applied, coupled with minimum wage for someone under 18.

I have always had a very strong work ethic - I know I couldn't possibly have done more for that money and felt frustrated. So I vowed to myself that I would always make my money work for me, rather than the other way around.

Making Time work for you

So with my first real job out of college, a graduate role with a company in Co. Down, I decided to contribute a significant portion of my salary to a pension. The first month, I started out paying £125 (I think somewhere around 10%). I logged into my online account with Scottish Life and beamed to see it there alongside a small contribution from my employer. When I paid off college loans (roughly €8k) in my second year, I contributed the same amount I had been paying into the pension. With various increases in my salary over the years, the first thing I would increase where I could was the pension contribution.

Don't get me wrong, it hasn't always been easy. There have been times when money was incredibly tight. I've managed it by putting up a mental block on that money. In some ways, I don't view it as mine. That belongs to an old geezer, pottering about his garden or driving around in a campervan, brewing beer or treating his grandchildren to ice-cream on a sunny day.

That first real job, brought me from Northern Ireland to London and on to New York city where I met my, now, wife. After 5 years there, we came back to Ireland. When we moved, I had approaching £50k in that same pension fund - nothing to shout from the rooftops about, but for a 27 year old with nearly 40 years of compounding ahead of me, that small amount could be worth over €750k adjusting for inflation.

FI Without the Pain

When I came home, it was for a big promotion and I was adamant I would continue with the lessons I'd learned - so the pension stayed maxed out. The odd bonus I was lucky enough to receive went either into savings or a small investment account. Today, I have over €450k tucked away in the pension pots. Assuming they can continue to compound at 7% after inflation, that would leave me with north of €3m at retirement. I didn't have to sell a kidney or live on tinned beans. I just paid the old guy first and got on with my life.

So now I'm about to do something I had never expected. I'm easing off the pension and putting that money into this platform instead - Cisti - the site you're reading this on. I'd love to turn it into something that lasts and help people coming up behind me get there with less guesswork than I had.

The 16 year old pissed off at that first payslip thought the whole thing was a farce. To an extent, there might be a point there. But the answer wasn't necessarily to earn more. It was to quietly set aside a portion of the pie, year after year, and let it do the hard work instead.