Today is a monumental day, I’m 1% of the way through my target of retiring in ten years! I thought this would be the perfect time to show you how I’m going about tracking my progress to retiring early.
Now everyone will be different, and I’m probably more analytical than most people I admit. But at the same time, I only have 99 more 1% check-ins before I retire. That’s just 99 times I can change something in my life to make sure I’m still on track. This is the whole point of keeping a regular check-in on your progress, it will increase the chance of you reaching your goal.
So here is a summary of how I’m tracking my progress.
Step 1 – I update my monthly spreadsheet tracker
I have a big spreadsheet. That’s just me, that’s the kind of thing I do. I have a spreadsheet that helps me with the timing of Christmas dinner and what I need to buy for that year’s menu. When the football results come in I have a spreadsheet that tracks the result of my favourite football team, Watford, so I can create a graph and show how close we are to not being relegated. I create spreadsheets at almost every opportunity, yes I’m a proper geek. So of course how could I not create a spreadsheet for this! It was just to good an opportunity to pass up.
I’m working on creating simpler and more user friendly excel version that I will share on this website free when it is ready. But here is a little extract from my spreadsheet. Specifically this page is the tracking page. This little page firstly takes all the predictions I’ve made elsewhere on the growth I need to retire early. Then I tap in what my savings actually are, and hey presto I know if I’m on track or not.
As you might be able to see I have three targets. I’m an advocate of keeping things flexible as who knows what I will be thinking in ten years when I retire? Therefore I have three main scenarios I’m tracking my progress against. This means I won’t get too despondent if my main dream is some way off, whilst also making sure I know what I need to do to get back on track.
- The simple retirement. This would allow me to retire at 51, with a lifestyle very similar to now. We could go holiday – but nothing too fancy.
- Luxury. This would allow me to retire at 51, with a lifestyle described as luxurious. Cruises and golf club here we come! Or we could ditch the luxury but have a holiday home.
- Luxury & holiday home. This is the main aspiration. Live a life of luxury, but also have the holiday home my family dream of having.
So how am I doing after 1 month?
It’s a mixed bag! My simple retirement is looking rosy, I’m on target and £0.7k ahead. The luxury retirement is okay, £0.1k ahead – pretty much dead on. My dream scenario is a bit tougher though, £1k off achieving it after a 2 month period.
This is flag for me that to retire in a life of luxury with a family home I probably need to make some changes somewhere. If that £500 a month carries on for a few years I’ll be on the back foot for sure. Taking action is a key reason for this step.
A small caveat is that being off target isn’t necessarily a sign you need to change something. My whole investment strategy is based on the prudent faith that over a ten year period my investments will grow by at least 4% per annum (before fees). So if I’m missing my target just because the market is a bit stagnant or in decline, that’s actually okay up to a point, it should come back.
Step 2 – I update my 100% progress chart to keep me motivated
The image to the right is my motivator (click on it to expand). I have this on a wall near my desk in my bedroom and when I reach each 1% time period towards my ten year goal, I will mark off if I’m on target or not. Now this is in many ways not the best metric to use. My whole spreadsheet is based around the calendar year and months! In my head though there is a key milestone in saying “I’m 1% of the way there!”, rather than “I’m 1 month of 120 months there”.
So this is is something I do to keep me mentally on track. Something I will tick off every month and a bit. Visually I see it every morning so it reminds me of my focus – and it satisfies my when I check it off. I used to work with someone at work who tick off the days until they were about to go on holiday. This is the same idea.
I created a simple template that plots the 100 dates of each 1% milestone. Then I just highlight the box either green for on target, or red for off target by more than £1k. If you sign up to my newsletter you can access this for free and create your own geeky retirement wall chart.
I’ve kept this second step deliberately simple. It’s aim is not to give me a blow by blow account of how my investments are performing. But rather to remind me of the progress I’m making, and give me a little kick if I need to take action to get back on track.
That’s how I’m tracking my target of retiring in ten years, and I’ll be looking into other options for those of us that are perhaps a bit less analytical. You can find more ideas and advice at the How to keep track of plans to retire early page.