Aussie Firebug

Financial Independence Retire Early

Nothing written below is financial advice. The below questions and answers are for general information only and should not be taken as constituting professional advice. You should always do your own research when making any financial decisions.



Question (3:58)


Have you had any success explaining investing to friends? I am 28 and have a number of friends who don’t really invest at all, preferring to keep their money in the bank. I don’t want them to miss out on all this good compounding but I can’t sell investing to them.


Firebug’s Answer

Hi Luke,

I have never really tried to ‘sell’ investing to anyone. The only person I’ve actively tried to teach the value of investing to is Mrs. FB because we’re a team and doesn’t work if one party is not on board. Other than that I never really talk about investing in the real world unless someone asks me about it.

What I’ve found extremely interesting is when the topic of investing actually does come up amongst friends or family, most people seem to be engaged and genuinely interested. Imagine that, a topic that most people like talking about and want to know more is view as a taboo and is cloaked with secrecy.

I mean, the number one selling book in the country is about money.

When someone is brave enough to actually bring up the forbidden topic of money and investing, suddenly everyone’s an expert. This is doubly so when it comes to property investing.

EVERYONE has a hot tip and opinion as to what the next suburb to boom will be. People that have 0 skin in the game can rant on for hours after a few beers why BitCoin is the next internet and everyone needs to get on board.

Yeah, yeah, yeah mate. I’ve heard it all before. Talk to me when you have actually dropped over $10k into this golden goose and you’ll get a bit more of my attention.

If I was to give a practical answer for trying to get people to understand the power of compound interest, it would probably be through books. ‘Rich Dad Poor Dad’ did it for me, but there are plenty of other modern ones out there. If someone can honestly read through a good general investing book and still not get it, they probably never will.



Question (10:33)


Considering the market turbulence this week and the concerns around the possibility of a Labor Government win and removing Franking Credits refunds… Will your investing strategy remain the same for the next 12 months? Or are you planning on adapting to suit market conditions?

Do you Dollar Cost Average or save up to buy in the market dips?



Firebug’s Answer

Hi Daniel,

This is a very good question and something that’s been on my mind more and more. There are a few pieces at play here and I don’t usually like to speculate on future policies.

The current laws in place right now (including the franking refund) mean that an income stream from Aussie franked dividends is the best strategy for us to reach financial independence and retire early.

We as investors, can and should make decisions based on facts and not on speculation.

Having said that, I do tend to think that the abolishment of the franking refund is very likely to get through the Senate which has a big impact on the majority of the FIRE community if you’re planning to live on franked dividends (which we are).

You can read about how big of an impact in this fantastic article from Aussie HIFIRE.

If this change goes through, the biggest reason why we invest in Aussie shares, to begin with, goes out the window. The plan is to generate around $40K which is split between Mrs. FB and I, meaning we would have $0 tax to offset against. Not being able to get the franking credit refund once we hit FIRE is essentially the same as not benefiting from franking credits altogether (for our circumstances).

And if I take out the franking credits, suddenly Aussie shares look way less attractive. We are giving up global diversification to take advantage of the uniqueness of Aussie shares.

If they take this ‘X-factor’ away. We will be re-evaluating the strategy and most likely will go back to something similar to strategy 2.

We’ll cross this bridge if we come to it I guess.

We DCG around $5K a month but with the cash we have from selling IP1, we have been drip feeding $15K a month into the market. We will continue this over the next 18 months.




Question (20:22)

G’day AussieFire Bug,

Been smashing your podcasts over the weekend and got through about 3/4 of them. They have been amazing.

What are your thoughts on private health insurance? Do you find it worth it? I know it does reduce the Medicare levy by a little, but is it worth it?

Thanks AussieFire Bug,


Firebug’s Answer

Hi Michael,

We personally don’t have private health. I did once upon a time when I wasn’t a defacto with Mrs. FB for tax purposes. I use to have it to reduce the levy but combining our salaries puts us under for a couple.

I’m happy to use the public system during our 20’s and without kids. Once we hit 30 and have kids we will most likely buy private health.

I’ve chatted to many at work who have always gone through the public health care system and it worked fine.

Just remember to buy ambulance cover. That is a non-negotiable and only cost around $65 for a couple. A mate at footy once had to go to the hospital in an ambo and it cost him something like $3K.




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