Aussie Firebug

Financial Independence Retire Early

September 2017 Net Worth $382,136 (+$4,898)

September 2017 Net Worth $382,136 (+$4,898)

 

I can’t believe that September has finished already. Weren’t we just starting 2017 a few months ago?

 

We hit a big milestone in September. We reached $100K in ETFs!

 

We were so close last month and it felt like the market was just toying with us. It got to $99K a few times before dropping.

 

I knew we would eventually break through $100K because we were going to buy another lot of ETFs anyway but I really wanted it to get there on its own.

 

This was a big milestone for Mrs. Firebug and I and it’s important to celebrate the little wins along the way to financial independence.

 

We bought our very first bunch of ETFs on the 29th of September last year which means we managed to get to $100K within 12 months which was definitely unexpected and I’m actually shocked we did it in such little time. My payout this year when I switched jobs definitely helped, but other than that, it was mostly savings.

 

We made the decision to diversify our assets since we were too heavily weighted in property in Australia.

 

The plan was to get to $100K in ETFs and then decide from there as to what we were going to do.

 

We sat down and discussed our options. We could either:

a) Buy another property investment

b) Continue to buy more ETFs

c) Invest in something else

 

Option a) might have been more appealing if the market had suddenly tanked or the rental yields improved. But as it currently stands, option a) was not very appealing to me for the following reason:

  • I can’t be bothered putting in the effort required to purchase a good IP. This includes the proper research, potentially value-adding exercises on weekends, dealing with agents and banks (errrr banks. No thanks) and having another IP to manage all the book work for
  • The risk associated with Australia right now. A recession (whilst I don’t think it’s likely) is well within the realms of possibility. And if it did happen… Who the hell knows what the fall out would be.
  • Cash flow just isn’t there for me.

Don’t get me wrong. You can still make a killing in real estate right now but you have to put in the effort. Which I can’t be bothered doing. There was a time when I could. But now that ETFs have proven such a great alternative. Why would I work hard when I can get great returns from hardly doing anything at all?

 

No other investment really caught my attention for option c). I did look into P2P and maybe someday I will dabble in that. But we are looking to build our base foundation for a prosperous wealth machine. P2P feels like a fun exercise and not something you could comfortably retire on.

 

So the only option that was left and the clear winner was option b)

 

More ETFs 🙂

 

The returns played a big part to our decision too.

Here’s what our last 12 months looked like

 

Sharesight.Sept.Networth

 

A total return of just over $9K (8.77%) after investing roughly $100K which isn’t too bad. To put that into perspective, Australian based robo investing company Stockspot has 5 funds they offer. And only 1 fund managed to beat my return for the last 12 months.

 

You can see their returns here

 

This is a company I have had on the podcast before. They also invest in ETFs but offer rebalancing and a few other things.

 

My point is that with a very simple three fund portfolio, I got a great return with 0% research into what are the ‘hot’ stocks this year or time spent managing my investment and still came out similar to a professional investment company.

 

And when the dividends started to roll in it was like Christmas!

HomerChristmas

I also looked into our interest rate for the IP loans to see if there were any better deals out there.

 

I already have a mortgage broker, but didn’t have any luck with him being able to lower my interest rate.

 

I ended up signing up with a company called HashChing* who is basically a marketplace for mortgage brokers and loan deals.

 

Their website boasts some insanely good rates and it doesn’t cost anything to sign up so not much to lose I thought.

 

I ended up being contacted by a mortgage broker who has been great and is currently giving me options on all three of my loans.

 

The lowest option being 3.88% which is a whole 1% lower than what my current rate is at now.

 

This works out to be a savings of $6,791 bucks per year just from making a few phone calls!

 

I’m still in the process of choosing a deal but the bottom line is if you have a loan (home or investor) you need to have a mortgage broker working for you to get the best deals. They don’t cost you a single dollar as they get their commissions from the bank and 9/10 times they will get you a better deal than you could get by walking into the bank.

 

*The Hashching link above is an affiliate link to which I may receive a commission from if you sign up to their service. This is a service I have personally used and would recommend anyone to use if they have a loan to get a better rate. I would never recommend something I didn’t believe in (and there have been plenty of offers trust me)

Net Worth Update

 

Pretty quiet month with our smallest gain this year. There was a bit of Super bump and ETFs but mainly just savings.

 

Properties

 

No changed in the properties this month.

 

 

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs more or less stayed the same, slight bump I believe.

Networth

 

August 2017 Net Worth $377,237 (+$6,965)

August 2017 Net Worth $377,237 (+$6,965)

 

A lot to cover for August.

 

We finally had price movement in our properties with one going up $16K?, one dropping by $22K ? and one not changing at all.

 

It feels like it’s been forever since there was a price change. But in reality, the last price fluctuation was 7 months ago in January which isn’t that long really.

 

Property is like a big cruise ship. When the price goes up or down it takes a while for the ship to change direction. You’re not going to see prices zip up and down quickly. It usually takes a few months for a significant wave to build up and change the course of the ship.

 

The sharemarket, on the other hand, is a ballet dancer. Jumping, bounding and leaping up, down and sideways with no warning.

BalletBull

 

We had another influx of cash into our account from an event which I have hinted to in past posts. I still can’t give away details yet but there is a post coming in the future which will go into detail about ?.

 

We are so close to hitting the $100K in our ETFs. We’re currently at $99,705 and it feels like the sharemarket is just toying with us.

 

We set a goal last year around July that we wanted to get to $100K worth of ETF’s and then reassess what we wanted to invest in next. Pretty stoked to have achieved this goal ($300 off but c’mon) within 13 months.

 

We’ve already had the chat about what we’re going to do next and we both agreed that pouring more $$$ into ETF’s made sense.

 

I love real estate, but when I look at the current climate in Australia there are very few places where I think we could make money without a lot of risk and hard work.  I’m a buy and hold investor. I don’t have the skillset, experience or desire needed to flip, renovate or subdivide in this market and come out ahead majority of the time. There’s too much at play right now for us to put so much capital into property especially when there is such a great alternative for us which requires no skill or experience to make money.

 

I’m talking ETF’s of course.

 

Don’t get me wrong, you can still make money in the current climate but you better know exactly what you’re doing. Because the yields just aren’t there for me in the capital cities and I don’t want to put in the work required for sweat equity.

 

If Australia does have a property crash and the yields get back up towards 6-7% in the capitals (especially Syd and Melb) I hope that we have enough spare cash to grab a bargain. If the banks are lending money that is…

 

Net Worth Update

 

$16k from an IP and -$22k from another. About $1.7k added to Super accounts. $5k into ETFs as per usual with ETFs adding an extra $500 through capital gains. We also had an additional $7k from another source which I’ll write about in due time. We saved well this month too but the majority went into ETFs.

 

On a side note. We broke our $10k streak which lasted 7 months!

 

That’s 7 months in a row where we managed to add at least $10k or more (sometimes a lot more) to our networth.

 

Sad the streaks over but I knew we couldn’t keep it up forever…for now at least ?

 

Properties

 

Finally some change in our properties!

 

One IP went up by $16k, one went down by $22k and one stayed the same.

 

 

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs moved about $500 upwards. Pretty good months.

Networth

 

July 2017 Net Worth $370,272 (+$24,361)

July 2017 Net Worth $370,272 (+$24,361)

 

Tax Christmas arrived at the Firebug household in July.

 

Saint Nick delivered 3 parcels of joy and one lump of coal.

 

Mrs. Firebug got a sweet tax return and paid off around $3K worth of HECS debt (bringing her loan to ~$22K)

 

I paid off my last installment of HECS ever!

 

Officially HECS free and getting around $250 extra per fortnight.

Woohoo

 

I had around $11K for my HECS debt so with that cleared, it has essentially added $11K to my net worth this month.

 

And the one lump of coal was me actually owing the ATO some money.  Can you believe that!

 

ato_Aussiefirebug

 

Even after all my management fees, maintenance costs, rates, water bill, insurance, depreciation reports and the banks upping investor loan interest rates. I still managed to earn too much from my IP to negative gear.

 

I guess I should be happy. Paying tax is a sign that your investment is profitable. I just wanted a refund god dam it! ?

 

The end of July marks 1 year that I have joined finances with Mrs. Firebug.

 

We spent around $50K last FY.

 

But the cool thing about tracking every single dollar we spend is now we have a baseline. Where as last year we were sort of flying blind because I had no idea how much she spent and vice versa.

 

Every month I’m comparing how we did the previous year. It also makes big ticket items like rego, insurance ect. easier to plan for because I can look back at the same month last year and see where our money went.

 

Really looking forward to the next 12 months to see how much we can improve.

 

 

 

Net Worth Update

 

 

Cleared about $15K worth of HECS debt between both of us which was the major bump in this month’s net worth. Super, savings, and a little ETF increase also helped.

 

 

Properties

 

No change in any of the properties for this month.

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs had a little bump.

Networth

 

June 2017 Net Worth $345,911 (+$10,004)

June 2017 Net Worth $345,911 (+$10,004)

 

How in Gods name is it the end of June already?

 

Each year seems to be going quicker and quicker I swear.

 

There is only one thing of concern as we approach the accountants Christmas…

 

 

TaxRefund

 

Ah yes! The fantastic, delicious BruceMcavaney and awesome tax return.

 

Get your franking credits and negative gearing hats out to take a little back from the ATO.

 

This will be my first year doing a return with ETFs so I’m looking forward to seeing what is involved. Franking credits are a great way to reduce your taxable income to claim more come tax time. I hold one ETF that has franking credits and that is ASX: VAS.

 

VAS is made up of Australian companies which makes sense since franking credits are designed to stop double taxation.

 

I don’t get why people put off doing their tax return. Or some that don’t even do it at all (which is illegal).

 

You’re getting money from this people (sometimes you owe money but most don’t)!

I always to try to complete my tax return asap so I can get the $$$.

 

We had a pretty good month to finish the financial year with the only real big ticket expense car rego and insurance.

 

It also worked out the June was a triple paycheck month which meant we received 50% more income which pushed us over the $10k mark.

 

Speaking of the $10k mark. This month is the 7th month in a row we have added at least $10k or more to our net worth!

DuffMan

 

We should be able to add around $6k each month from pure savings given our income and savings rate. So the last 7 months have been well and truly above our norm.

 

But we ain’t complaining!

 

 

Net Worth Update

 

 

Extra pay week, good savings, a little Super boost and I think ETFs stay the same if not went slightly down a little. We did buy another $5k chunk of ETFs this month as per usual.

 

 

Properties

 

No change in any of the properties for this month yet again. No movement for a while in this space. Could property be starting to cool in Australia???

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs went down around $1k this month 🙁 VAS was the only holding that actually made money with VTS and VEU losing value.

Networth

 

May 2017 Net Worth $335,907 (+$19,805)

May 2017 Net Worth $335,907 (+$19,805)

 

I’ve been tracking every single dollar I have spent for a good 4 years now. And May is always a good month with no major big ticket expenses.
 
This May was no exception. We managed to save very well and added about $6K to our net worth from cash.
 
Mrs. Firebug had another $5K installment of lost Super which just keeps on keeping on apparently. And I had an influx of cash that has something to do with another post that is currently in the making but one that I can’t share right now. It’s a long story, so for the sake of this net worth update, my cash reserves went up around $5k and that’s all I can say for now.

 

I was MC at a wedding for the first time which was pretty cool.
 

wEDDING CRASHERS

Oh, and I turned 28 in May ???

 

I always had this grand plan to reach FI before I turned 30 so I could be one of those 1 % of the 1% kinda people. You know the type. They are on talk shows sometimes and in magazines and everyone else is looking/reading about them like WTF that’s impossible!

 

This dream quickly vanished when I realized that to become FI before you’re 30 requires an incredible amount of luck, timing, skill, and risk… but I’d say out of all those attributes, luck plays the most important part. I sometimes trip out thinking about how lucky and fortunate I have been with my situation.

  • Born in Australia (best country in the world!)
    • Side note on this point. Sometimes I feel like millennials shit on Australia constantly (high cost of living, no jobs, slow internet speeds, fuck the boomers and so on). But like, just the fact that you happened to live in Australia is a MASSIVE advantage. Feel glad that you live in a country where FI is actually a possibility. /rant
  • Could not have asked for better parents. Showed me the value of the dollar at an early age and gave me a great upbringing
  • Was lucky enough to fall into a high paying job straight out of Uni (comparatively speaking)
  • Live in a rural area where housing is only 2-3 times our combined annual salary
  • Discovered FIRE in my early to mid 20’s

 

But I’m cool with reaching FI during my 30’s.

 

TBH, both my partner and I have already talked about how epic it would be even just working 3 days a week at some stage in the next 5-7 years. Sometimes when I take leave or when the public holidays line up well, I managed to get a 3-day working week and it’s great. SO much extra time back in my life and working 3 days is easy and enjoyable.

 

Anyway. We reached 1/3 of a Mil this month!

 

And that’s definitely something worth celebrating.
 

Net Worth Update

 

 

Around $5K Super, good savings ($6K, little ETF bump and cash ($5k) from another source which is to be revealed.

Properties

 

No change in any of the properties for this month.

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs had a slight gain this month (hover over to see $$$ figures)

Networth

 

April 2017 Net Worth $316,102 (+$10,778)

April 2017 Net Worth $316,102 (+$10,778)

Really solid month of saving along with ETF’s increasing plus a little over $300 in dividends … oh and a Super bump!

 

It’s amazing how much Mrs. Firebug and I are able to save in a ‘normal’ month.

 

What do I mean by normal? Well…mostly a month that doesn’t involve some big expense. And we have been having heaps of those lately.

 

I’m talking about weddings, holidays, Christmas, unexpected medical expenses, new cars (example only, we didn’t get new cars ?) and so on and so on.

 

We’re both at the age where all our friends are getting married so I’d expect wedding season to last another couple of years for us ?.

 

But that’s just life and as much as I like the ‘normal’ months from a savings point of view, life would be pretty boring if we didn’t do any of those things mention above.

 

It’s all about balance!

 

 

Balance

Side not: How cool were those bird things right!

 

 

 

Net Worth Update

 

 

Main increase was a result of good savings and no real big expenses this month. A little bump from Super, ETFs and dividends too.

Properties

 

No change in any of the properties for this month.

*DISCLAIMER*
Various data sources (RP data, Domain.com etc.) are used in combination of what similar surrounding properties were sold for to calculate an estimate. This is an official Commonwealth bank estimate and one which they use to approve loans.

ETFs

ETFs has a slight gain and dividends came this month :). Around $300 worth!  (hover over to see $$$ figures)

Networth

 

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