16 year old getting started on FIRE journey – HOW?

This post lists the practical steps to take for a 16/17 year old aiming for FIRE in the UK.

Our 2nd child of 6 kids, FU#2, has just left school and has started working on an apprenticeship. She is 16 years old and will soon be turning 17.

Over the last couple of years she has watched and listened in the background as we have travelled our own FIRE journey.

So, now she is earning a wage, we had a talk about setting her up on her own FIRE path, and she said that she wanted to do it.

Although apprentice wages are quite low (£3.90/hr, £156/wk), she has agreed that she will pay herself first and save 50% (£78/wk, £338/month) from the start.

This way she will not miss what she never had, and will learn from the beginning to live on less money.

The Practicals

What have we done, and what we plan to do.

1. Opened bank account – Santander 123 mini current account for 13 to 18 year olds, 3% interest on balances from £300-£2000 – DONE

2. Opened Help to Buy ISA – Santander Help to Buy ISA, 2.25% interest if have Santander 123 account as above. (note: Help to Buy ISA only available to open until 30th Nov 2019 so hurry if you need to open one). You can save upto £1200 in the first month then £200/month after that. – DONE

3. Deposited £1200 savings from Saturday job and unspent Birthday/Christmas money into Help to Buy ISA (HTB ISA). – DONE

4. Set up standing order for £200 per month into HTB ISA. – DONE

5. Save remainder of monthly savings £138 in current account to build up emergency savings fund.

6. In 12 months time when she turns 18 she will have £3400 in HTB ISA, and £1656 in the emergency fund.

7. When 18 open a Lifetime ISA (LISA) – Transfer HTB ISA to the LISA and change the standing order to contribute £333/month (£4000/yr- the max allowed). Invest the money in the LISA (stocks & shares LISA) in a low cost index fund (Vanguard US Equity Index Fund). FU#1’s LISA provider is Hargreaves Lansdown.

8. As wages increase continue to pay yourself first by saving 50% of net pay. Carry on putting the maximum contribution into the LISA. Open a Stocks and Share ISA (S&S ISA) and put the remaining savings (up to £16k) into that each month, again in low cost index fund.

9. If buying a house at some stage, assess when funds will be required and reallocate savings to LISA/S&S ISA as appropriate.

10. Consider joining workplace pension scheme for the free employer contributions. If on a low wage ensure it is a ‘Tax relief at source’ Scheme, not a ‘Net Pay Arrangement’ Scheme, to get tax relief on the contributions.

11. After 10 years (age 27), based upon your wage going up by £2k/year, and assuming 7% investment return, you will have a pot of £145k.

12. After 20 years (age 37) you will have £500k. Using the 4% rule, this will give you an income of £20k per year.


The above plan will no doubt need adjustments and tweaks along the way, but it will provide a solid foundation for FU#2’s future whatever she decides.

I hope she will be able to stick to it, whilst also enjoying herself and life at the same time. I have no doubt she will as she likes a good party, especially when we are away weekends at the caravan!


Any comments or questions welcomed.

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4 Responses to 16 year old getting started on FIRE journey – HOW?

  1. Saving 50% at the start is ambitious. I averaged 31% over 30 years, but only started saving more than 15% in my eighth year after some career progress. Good luck on this plan.

    • FU MON CHU says:

      Hi GM

      Yes we are aiming high for the savings rate, but there is a bit of buffer in the emergency fund in the first year whilst she is on such a low wage.

      31% over 30 years is a great savings rate and much better than anything I achieved myself.


  2. Adam says:

    Great post. It’s tough for young folks. Will increasingly need bank of mum and dad to help out when get on the property market. All good stuff but so difficult long term planning as life changes like marriage kids divorce can turn planning upside down. Although good to have a plan, and of course earlier to start the better.

  3. weenie says:

    Hi Mr FU

    This answered my question from your last post! 🙂

    A very detailed plan, which will be tough going but even if she were to deviate slightly, she would still be in a far better position had there been no plan.

    Starting so young, compounding will really do the heavy lifting so even if there was a gap in the plan due to life in general, the investments made early on will continue to grow.

    Good luck to her!

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