Interview #2: Paddy Downey – De-Risking now FIRE

Introduction

Paddy interviewed with me back in November 2020 and proved to everyone that early retirement in Ireland is possible despite the odds being stacked against us! One of the things that I distinctly remember from the first interview was where Paddy mentioned:

“I Fire’ed quite young and there are no other people around in the same situation that I’m aware of, so you definitely need to be able to spend time in your own company, for sure. Hiding in plain sight!”

People have mentioned Paddy’s interview to me so many times and given the choice to FIRE mainly via property which is covering all his expenses, I got so excited as this has always been my own strategy!

Note to readers: (Remember, Financial Independence is when your passive income covers your expenses. The RE bit is optional!).

So, I decided to check in with Paddy and see how he is getting on since. I took one question from the FIRE Dave community, that’s all of you, and I asked a personal question. I also requested an up to date photo so you can connect.

Remember it is a journey not a destination, enjoy…

 

Paddy, how are you getting on with your Fire journey now and has anything changed since?

 

All things considered, things are going very well.

On the positive side, obviously we’re spending a lot of time together as a family at home. My fiancé is now working from home indefinitely, 4 days/week. She has a great office set-up in a large room we renovated and I’ve been enjoying looking after the 3 children, while also being a company director (see below), landlord and DIY investor.

Two of the kids are young teenagers and fend for themselves, so it’s not very difficult!

There is a lot of exercise going on too, to keep us sane – my fiancé gets hers down during lunch, and I head out running in the afternoons.

A FinTech business I co-founded in early 2017, post FI, has just successfully been through a second round of investment funding, and trading reasonably well, so that has been taking a few hours/week, which is a good source of income as a company director. I stay out of the daily running of the business – otherwise I’m not longer FI.

I also had a financial set-back when another software business I invested in way back in 2014 was liquidated by the worldwide Travel lockdown. I never factored it into my base FI case due to the nature of the shares (it wasn’t a listed company), and indeed I now have a substantial CGT loss to carry forward against gains elsewhere in equities and rental property. A silver lining of sorts.

Obviously we can’t travel at the moment, something we love to do, but that also means we are saving a lot more, as it was the largest pot of money in our annual budget.

 

Have you picked up any new ideas or tips?

There is definitely been a couple of things. For example, my investments in rental property account for about 50% of my net worth (excl family home), but generates all of the income which covers my costs. Yes, this is greatly helped by a buoyant rental market, but also means I over-saved for my FI, something I’ve heard throughout the FI community over the years – ‘people who are good savers tend to over-save’.

On the investment side of things, after 4 years I’ve finally stopped being solely in an accumulation phase, so I’ve de-risked a little and stopped reaching for higher returns from riskier investments. I’ve redirected that money to things like dividend stocks and broad ETF’s. I’ve always enjoyed analysing companies; their cash flows, balance sheets and income statements.

I’ve no more than 3-5% of net assets invested into speculative assets.

 

Final Note

On the personal side, we’re just allowed to start meeting people again this week, so I’ve a couple of meet-ups already organised, usually in parks with a coffee dock.

I could use a haircut. In the classic Irish sense, I’ve little to complain about!

 

Read Interview #1 again  Interview: Paddy Downey – Early Retiree FIRE’D | FIRE Dave

 

Or, check out my other unique Interviews | FIRE Dave

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