Let’s Talk About Money
ISBN 978-1-915483-35-5 (paperback)
eISBN 978-1-915483-36-2
Published in 2024 by Right Book Press
Printed in the UK
© Harry Torrance 2024
The right of Harry Torrance to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988.
A CIP record of this book is available from the British Library.
All rights reserved. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the copyright holder.
Foreword
By Sarah Megginson, personal finance expert, media commentator and columnist
Harry says he was lucky enough to be able to ‘retire at 50’, but there’s really nothing lucky about it. His financial success didn’t happen in a vacuum – there was strategy, commitment, sacrifice and follow-through, all essential ingredients to reach his goal.
And what a goal it was! Retiring from the rat race with enough wealth and health to actually enjoy yourself – well, that’s the dream, isn’t it? What I love about Harry and his approach to financial freedom is that he’s (quite literally) an open book. It’s full of practical, real-world advice and it’s achievable, without being very heavy on the maths. He’s happy to share his secrets and strategies and show you what’s actually possible for you, too.
He lays it all out in plain English, which is powerful. The words and the language we use are so very important. Just this week, for instance, I was reading an article in a respected financial newspaper that outlined a wealth creation strategy for a healthy retirement. The article cited two example incomes – both six figures. It mentioned that by taking advantage of a clever tax technique, you could boost your retirement fund ‘while taking only a £2,975 hit to your annual take-home pay’. Only? You’re in a special band of income when almost £3,000 is considered ‘only’ a small amount!
For many people, a sum far smaller than this can be make or break. For them, the idea of giving up hundreds of pounds each month in your take-home pay – even if sacrificing £3,000 now means a significantly wealthier future – is a pure impossibility. So, the advice offered in that article was designed for the fortunate few who earn high incomes.
That’s often how it goes with wealth planning and with money conversations in general; it’s inaccessible to everyday people. Paying for financial planning advice is expensive, and people can gatekeep the secrets to their own success – sometimes because they don’t want to share, but more often because money is so taboo to talk about.
That’s the really powerful thing about Harry’s journey. He’s starting a conversation and showing you what’s possible. Importantly, he’s demonstrating that what he did (and I mean this with utmost respect) wasn’t special. In his own words, it was ordinary, and Harry believes virtually anyone can achieve a similar outcome.
You might have to challenge some of your long-held beliefs. You may have to look at things a little differently. But in reading this book, you’ll gain a good, basic understanding of personal finance, alongside the tools and strategies you need to work towards a more financially secure future.
Harry and his wife are simply a regular couple who’ve done it: they’ve lived and learned that the secret to financial success is to spend less than you earn, and invest the rest wisely. And now, you can too.
Sarah Megginson brings over two decades of experience in property and finance journalism to her role as a personal finance expert with global financial comparison site Finder. A mother of three, Sarah is deeply committed to educating the next generation on earning, investing and managing money effectively. www.sarahmegginson.com
Prologue
Alex, 28 (friend and former colleague)
On a chilly December night back in 2018, I stepped into the bustling world of Amazon as a fresh-faced graduate. There, in Stoke-on-Trent, England, I found myself as the night shift manager, a role that felt dauntingly grand for my novice shoulders. It was in those early days (well, nights) that I first met Harry, not just a colleague but soon to become a mentor and a friend, perceptive enough to see my hesitations without me uttering a word. With a mix of humour and wisdom, he urged me to embrace the challenge, saying, ‘This is your new playground – go be a cowboy.’ It was the encouragement I needed to transform trepidation into determination.
Our relationship evolved over the years, filled with countless conversations about work, life, and aspirations. Harry, with his unique blend of realism and ambition, shared his personal goal of retiring early – a dream that deeply resonated with me. When he announced his retirement at the ripe old age of 52, I was both amazed and inspired. Probing him for tips, I found no shortcuts or easy paths. Instead, he offered honest, hard-earned insights.
Guided by our conversations, I started to carve my own path. Today, as I write this from Sydney, Australia, poised to invest in my second property, I realise how Harry’s mentorship has been instrumental in shaping my journey. He didn’t just help me devise a plan for my career, finances and personal life, he instilled in me the confidence to pursue it.
Now, as Harry turns his wealth of experience and insights into the pages of this book, I feel privileged to pen this prologue as a taster of what you can achieve. For those about to embark on this read, you’re in for a treat. His pragmatic wisdom, peppered with his (often) quirky view of life, is not just enlightening but also deeply relatable. It’s a guide from someone who’s walked the path and is generous enough to share the map.
Happy reading, and may you find your own way to ‘be a cowboy’ in your life’s endeavours, just as Harry inspired me to do in mine.
Introduction
In March 2022, a few months after my wife Lou had stopped working full time, I did the same. Since then, I’ve taken on a couple of (very) short-term contracting jobs but otherwise we have effectively ‘retired’ – and we’re both in our mid-fifties. We have a financial plan that allows us to spend our time doing pretty much exactly what we want. I’m reaping the benefits of that new life: I’m sleeping better, eating more healthily, taking more exercise, have lost a stone in weight over the course of a year and rarely get stressed, least of all about money.
Sounds great, doesn’t it? Well, it is – but that’s not the point of this book. As we got closer to leaving our jobs and sharing our plans with others, the most common question was ‘How?’ And there were lots of variations, including: ‘How did you do it?’, ‘How do you know you have enough money?’ and ‘How did you start?’ As I started explaining it to friends and colleagues, it dawned on me that there were many different elements to our plan, several common themes, and it’s been a long time in the planning. This also fed into a passion of mine for mentoring and how I could share our approach with other people so that they too might have a more secure financial plan, which in turn could lead to a more comfortable life.
But let’s be clear, there’s no quick fix or shortcut and some of the choices are hard, particularly when your long-held beliefs are challenged. And I’m not going to promise that you can replicate our plan to the letter and simply ‘retire at 50’. Why? Because everyone is different and we all have different aspirations, situations, skills and hobbies. However, I can walk you through the approach to life and finance that allowed us to achieve this and would argue that you can apply many of the techniques in this book and build your own plan to a more secure financial future. I can also guarantee you that these approaches are ‘real world achievable’; in researching this book, I’ve read countless articles for background information and trawled the internet for similar content, each time sense-checking that what I’m saying holds water.
One popular blog had a little gem hidden in a post: ‘My wife and I moved state and changed jobs, doubling our salaries.’ Really? This is fantasy-land for most people and totally unrealistic. Just to set the record straight, I’ve not had a pay rise for probably half the years I’ve worked and when I have it’s generally been in the low single digits as a percentage. I’ve had some step-changes in salary when changing jobs but nowhere near double. Also, much of this internet-based content is US-centric and the fiscal examples aren’t applicable over here, so that’s another reason why I wanted to write this book – specifically to target a local audience.
As I write, here in the UK we’re in the middle of some challenging economic times. We’ve come through the Covid-19 pandemic but many businesses haven’t fully recovered; the war in Ukraine continues, contributing to higher fuel and food prices; we have experienced stubborn inflation and have had a pretty unstable government throughout. This has hit everyone hard. Research from insurance group Direct Line in January 2023 suggested that almost a third (32%) have stopped adding to their savings due to the rising cost of living, a quarter of households (25%) don’t have any savings at all, and more than a fifth (22%) of households wouldn’t last a month before getting into financial difficulties if the main breadwinner was unable to work.
Researching and writing this book has taken about two years, so it certainly isn’t a knee-jerk reaction to the cost of living crisis or about making a quick buck. As I’ve said before, there are very few quick wins and it takes time, but even in these circumstances I can explain some tools and approaches for you to build a plan to make your future more financially secure. I think it’s fair to say that many people are simply not very good at managing their finances and they’re not very good at admitting it either. If this sounds a little like you, then that’s OK – I want to help. The good news is that you don’t have to be great at maths to follow the methods in this book; you just need to understand the basic principles of finance and how to make financial decisions that are right for you.
I hated maths at school and wasn’t particularly good at it – I struggled to get a ‘D’ at A-level and only then because it was a requirement for an engineering degree. So rest assured that this isn’t going to be a textbook full of number crunching; I’ll just show you some examples to help you understand the principles. This is partly because I’m still no good at maths – if you asked me on the spot to work out the compound interest at 5% on £10,000 over 10 years I probably couldn’t but I know the effect is good and when it would be applicable to your finances.
The final aspect of this ‘knowledge gap’ is that not only are many people not very good at admitting they don’t understand their finances, they’re also slightly embarrassed and therefore don’t talk about it. You might be one of these people. I don’t care who you talk to – your mum, your partner, your friends or your kids – but not talking about it perpetuates the myth that it’s hugely difficult, meaning you might bury your head in the sand rather than try to figure it out. How many times have you been chatting to someone who’s just bought a new car on finance and somewhere in the conversation you’ll hear the line ‘Oh yeah, I got a really great deal’, without them knowing whether 3% over five years with a 20% deposit would have been better than 4% over three years with a 25% deposit? I couldn’t tell you off the top of my head which is better either, but I can explain how to approach that discussion before signing the deal and which questions to ask so that you’ll be more comfortable that you’ve got the deal that works for you.
A good tool to benchmark your approach to money, or determine your ‘financial personality’, is one developed by the Myers-Briggs Company and Goldman Sachs. It’s a free, ten-question online quiz (see the link in the Resources section at the end of the book) and is a great starting point to better understand your relationship with finance and how you make financial decisions. Irrespective of the result, it will ask the sort of probing questions that will help you start to understand your relationship with money and finances.
I’d like to say that this book is aimed at everyone as we all have to manage our money, but there’s a time in your life when money or finances begin to have a greater impact and you start to feel a little out of your depth or don’t have the confidence to share that you’re not fully in control. This might be when you start your first job, when you move away from home or when you start a family – but it’s certainly that point when you realise you have to take financial decisions seriously. You could be in your twenties, thirties or even forties but you’ll have started making bigger and more important financial decisions. If you’re under 20, even better, as the longer you have, the more effective your plan will be. Don’t worry about when you start, as long as you start – and today is as good a day as any. There’s an old Chinese proverb which demonstrates this point:
When is the best time to plant a tree? Twenty years ago.
