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.

Enjoy ✌


Heads up grammar Nazis, the following transcription is half human half machine and not 100% perfect (nowhere near it 😅) so expect a few typos and errors…


Aussie Firebug: Hey guys, welcome back to the very first episode of ask fire Fridays for 2021. This is the monthly fine Q and a, where you guys get to submit your questions and I try my best to answer them. It is so good to be back in Australia, back on my good mic and back to recording these episodes and creating content for you guys.

It’s been a little bit challenging creating content during the last two years, especially last year. Uh, but you know, I’m back now. I’ve got. My proper workflow environment set up. So I’m really excited to be able to produce these episodes on a consistent basis. And we are doing things a little bit differently at the start of this year.

And I’m very interested to know what you guys think. So, yeah. Usually the  Friday episodes would just be me responding to Redis questions, but that can be, I can get a little bit boring and lonely, and I thought it’d be good to get someone else in on these episodes to bounce ideas off and, you know, just have a bit of banter and get another person’s perspective on the question and how they would respond to it.

So with that being said, the first guest that I’ve invited on is none other than captain fire himself. You might know him from his own podcast, the captain of fly financial independence podcasts, which is very popular. And I’m really looking forward to getting other fire content creators onto these episodes and just other people in the community to join me in these episodes too.

Like I said, get another person’s perspective and have a bit of banter, have a bit of fun with it as well. Um, so that is where I’m heading with these episodes. Please let me know if you like them or if you don’t like them and yeah. Just tell me what you think. Now, we’ve got a great episode today. We’re going to be covering three questions that has been written in from readers.

The first question is all about financial advisors. Where should you go? If you want to find a good one, things of that nature. The second one is the Oso controversial topic of Bitcoin. And is it a good time to buy now? And then we’re wrapping things up with a dollar cost averaging versus lump sum investing.

And we mean. Captain Phil. I speak a bit about our experience when we’ve come into some money and then you’ve got to make that decision. Do you dump it all in the market at, at once or do you dollar cost average it over a few months now? Unfortunately, there were some technical difficulties with this podcast.

So you might. He a few bits of audio drop out, um, during the podcast and the middle and towards the end there a little bit. So, uh, please bear with me and I’m working to resolve that next time we record. And with that being said, let’s jump into the pod. Hey guys. Welcome to another episode of ox Firebug Fridays.

We are joined today by captain fire from captain Welcome to the podcast.

Captain FI: Hey,  thanks so much for inviting

Aussie Firebug: me on. No worries. Now I’m sure most of the audience already knows you from your podcast and written material, but for those out there that are listening, who don’t know who you are. Can you tell us a little bit about yourself and what captain fire is all about?

All right. No worries.

Captain FI: So, um, yeah, a little bit about me. Um, I’m Catherine fi uh, I’m 29 years old, uh, pilot living in Sydney and flying my way to financial independence. Um, I discovered fire, um, probably about four years ago. Um, actually thanks for yourself, mate. Um, I really hooked, um, and you know, you used all your guides to set up my cell phone account and, you know, my, uh, share side, everything like that.

Um, and yeah, just, you know, just slowly chipped away at it. Um, trying to build up a portfolio outside of my superannuation. Uh, and really just enjoyed, um, describing the process, uh, and keeping myself and keeping myself accountable, um, via the blog and yeah, just being really fortunate to connect with, um, older, awesome bloggers and content creators like yourself.

Aussie Firebug: I, I have no idea how this is going to go today. Cause this, you are the first guest that I’ve had on the ask Firebug Friday episodes. And you know, we were talking a bit before we started recording. Um, so plenty of banter there. So this is what I’m hoping that, you know, we can just bounce off each other with these questions from the readers.

So should we get into the first question?

Captain FI: Right? Yeah, look, I’m Kate and I’ve never done anything like this before.

Financial Advisors and where to find good ones (05:39)

Aussie Firebug: We don’t recall loss so I can clean up anything in the attitude. Or, um, I first question from a reader is coming in from Alex, Alex, rotten. Hi, thanks for the great podcast and website. Would you recommend seeking a financial advisor?

If yes. How might we find a good one? Cheers, Alex. Thank you, Alex, for such a great question. And I appreciate the kind words about the podcast and website, um, lock. Have you ever had a financial advisor in your life?

Captain FI: My, I have, I have been burned, not once. Well twice thrice like

Aussie Firebug: Roy, they were the same word or a different one

Captain FI: different different ones.

So yeah. Quite quote, unquote financial advisors. Now it’s not completely fair to tar financial advisors, um, with this brush because as actually, as I found out, I wasn’t actually talking to financial advisors, I’m talking to, um, spruikers so properties. And fund managers. Yeah. So,

Aussie Firebug: um, without illegal, like I dunno, what sort of questions you asking them?

Oh, I thought it was like, you can. Specific financial advice, like what, you know, and for the record with these episodes, of course, we are just saying what we would do in situations. Never, um, never giving personal financial advice of course, but, um, yeah, thought you needed a license to, to do that.

Captain FI: Yeah, mate, you definitely do.

I actually spoke to an awesome financial advisor, um, who I met through Instagram. So her name was Dee. She actually blogs on think it’s budget boss babies. Um, on Instagram is her handle. She actually came and I interviewed her and she was. Amazing. She kind of laid everything out. She spoke about all the regulations and actually, um, what I might do is I might actually just paraphrase a couple of the things that she’s mentioned to me.

And that way, you know, listeners can hear it from a licensed, well, I’ll be at secondhand information, but, uh, yeah, you’re right. Um, they do need to be regulated, but the actual, um, re uh, Property spruikers and, um, property investments, you don’t actually need a qualification to be a property spruiker. So if someone’s actually trying to tell you to invest in it in a property development, or, you know, a turnkey or a jewel or something, odds are, they’re actually just trying to get you to, um, to buy that because they want their 5% or their, their 10%.

And actually that’s happened to me in the past. Um, and yeah, like I said, been burned a couple of times, so. No, I don’t want to, um, tar the name, the good name of financial advisors, because there are a lot of really good independent fee for service financial advisors out there. And there are a lot of really good financial counseling services people can access.

Um, all I’d say is you need to be careful and there’s one crucial step when it comes to financial advisors and that’s actually checking their qualifications on the, um, on the, uh, ACIC

Aussie Firebug: website. Yeah, for sure. Absolutely. And I’ll, I’ll, I’ll put a link in the show notes, um, for that asset website, I think with this question, because it gets brought up a lot within the community community and a lot on the, um, the Facebook group, the Ozzy Ozzy fire discussion group.

And it’s such like it’s so circumstantial because. Yeah, I I’ll speak for our situation and it’s probably not the best situation because the wine we have structured our investments, they quite complicated. It’s through a trust. Um, all was working in London. The last two years. I had my own company in London.

Um, I was, uh, a resident of another, um, a tax resident of another country. And I had investments in Australia, so there was all this stuff going on. So I have paid for financial advice where I’ve reached my limits of what I know and what I’m comfortable with. I, I don’t think you will ever go wrong, painful financial advice from a qualified professional.

And I actually think it’s, it’s quite, um, it’s a good move to do. I guess there’s so many people though that write in and I’ve heard of a lot of stories where. That’s all they’re asking for. Like, they’re just about to pull the trigger on investing in like a really, um, simple, passive, um, Vanguard ETF or something like that.

And they go to a financial advisor and of course, you know, they, they create that, um, Uh, like the, uh, there’s a specific word that they call it, but like, uh, uh, different scenarios of, you know, you invest in this, you can give you this result, um, X, Y, Z sort of stuff, and they might pay like four or five grand, which is, you know, that is what.

That professional is worth, but what they get out of the end of it, or they feel like they didn’t discover anything new at the end of the whole process. And they feel a bit, I guess, um, let down or ripped off or something like that. And I get like, this is a hard question to answer because some people need to be, have their hand held a little bit and like, Verification that what they’re doing is correct.

And you probably shouldn’t trust, like, I would say, never trust, um, blogs or podcasts for that matter. Like always do your own research, but I never think like it’s a bad move going to a financial advisor, if that makes sense. Yeah.

Captain FI: Yeah. I’ll, I’ll, I’ll agree with you on there. My personal opinion. Um, and again, you know, Try this with a grain of salt, because I’m some random dude on the internet.

I think for most people it’s, it’s maybe not necessary, but can be quite reassuring. So ,

Aussie Firebug: yeah, this is hard like it, because I say this all the time investing is so much more psychological than it is math and numbers and everything because 20% knowledge, a hundred percent time and time again, like you always read of the stories where.

Uh, people sell in a downturn and stuff like that. And there’s always people online that have, you know, nothing invested and they say all like that, those people are dumb. And why did they do that? Everyone knows to, you know, buy more when the market’s crashing. And that is true. And I would say that like, majority of people probably know that.

Right. But I I’m telling you right now, eat is different when you’re in the hot seat. And you’ve got, you know, six figures invested in the market and then it, it loses tens of thousands of dollars. Like your mind can play tricks on you. And I actually think the most important thing when it comes to investing is understanding how your investments work.

Like never rely on just reading something, even a book, or even from your financial advisor. Like always, I’m a real advocate of, you need to understand how it’s working and to pay someone to do that work for you whilst you can do that. I could just never sleep well at night without doing the research myself and knowing what’s actually happening behind the scenes.


Captain FI: And look, even some of the most experiences those can get, um, I can get intimidated, like, Oh, I’m not gonna lie. You know, I. In the March downturn. Uh, I had my regular investment strategy and look even I it’s locked, um, you know, uh, slotted away a little bit extra into my mortgage offset rather than actually investing.

And I look back and go, ah, why did, why did I do that? Um, you know, thankfully a month or so I, you know, stuck to the plan. Um, but yeah, it, you know, it you’re right when you’re in the hot seat, it does change. And, um, look, I think. A lot of us can get away with like a good enough solution, thanks to, you know, self-education discipline and being a savvy customer.

You know, if you’re getting a good deal for the things that you’re buying, you know, and you know, often, like you speak about on your podcast, if you deal with those big four areas, what’s that like accommodation food.

Aussie Firebug: Yeah. Holidays food.

Captain FI: Yeah, and you can, you can get those under wraps. You know, you’re tracking your expenses, um, your following a fairly straightforward, simple conservative, you know, ETF, and you’ve got your splits, you know, Australian versus the international, you know, that’s a pretty, that’s pretty close to a good enough solution for most people admitted, you know, I’m coming from, you know, a single young, white male perspective.

So, um, from a, you know, Quite a financially privileged perspective. I don’t have kids that I have to worry about. You know, I have a stable job. So some people listening is probably art or I captain fire. It’s rich coming from you, mate. Um, so, you know, I think there are some places where it really is appropriate to get independent fee for service financial advice.

So I would suggest, um, for anyone who’s a young or inexperienced. In finances who doesn’t have a mentor or coach that’s someone who might benefit from a financial advice. Similarly, if you are really not coming with your finances, you have, um, poor self discipline, uh, or you’re easily spooked. Maybe that’s another great reason to go and see a financial advisor.

Certainly you are paid, you know, or physically or mentally or acting on behalf of someone who is. Um, you know, if there was a significant change in your personal circumstances, you know, marriage, birth of children, relationship, breakdowns, death in the family, um, coming into significant wealth. You know, if you’d won the lottery, you’ve got a large wound power or an inherit.

Um, if you worked in a high risk occupation, like a doctor or a lawyer, or even some might consider builders to be in a high risk occupation, you know, were an athlete. Um, or finally you are considering buying a significant investment, like a house or an investment property where here in Sydney, that can be easily.

Easily over a million dollars, you know, that is just a crazy amount of debt to come into without getting some form of professional wise.

Aussie Firebug: Yeah, mate. Um, and to the, to the second point of that question, EVs, you know, how might we find a good one? Yeah, isn’t there. I thought there was a registry registry, um, independent financial advisors, like a website or something that you can look up, um, all advisors that are, um, you know, independent and you actually have to pay them and they don’t get any commissions or anything from, um, like services and other businesses.

Captain FI: Yeah. Yeah, absolutely. Um, so when I spoke to Dee, um, she basically said that a lot of people will look to the superannuation fund first, but she explained how that might not be a great idea because of destinations in the fund. She also suggested that you can look at the services Australia or that’s basically sent the Centrelink website, um, which is where you can access, um, financial counselors and financial planners.

And they’re actually awesome. Um, Eligibility criteria. Um, my mum, when she retired, um, we were able to go and see a financial advisor through services Australia. Um, and when she had her workplace injury, um, similar, so that that’s another great place that people can look. Um, there’s actually two registered bodies for financial advisors in Australia.

Um, and that’s the FPA or the financial planning association or the a F a, which is the association of financial advisors. Um, and they’re both two, um, professional bodies that, um, financial planners or financial advisors will, you know, be a part of, I guess it’s. Kind of like lucky, I’m not sure. Um, they both have websites that you can, um, access and they do have databases and they have almost had like a bit of a name and shame.

So when some, when a financial advisor does the wrong thing, they actually get publicly spanked. So by, as you said, the best place is the ACIC financial advisor registered, um, or the money smart financial advisor at register. Uh, and you can, Chuck links to those and that’s where you can earn qualifications.

Um, you can look at their experience, um, check if there’s been any regulatory breaches or any complaints against that advisor,

Aussie Firebug: like any personal, okay. Yeah. I’ll Chuck those links in the show notes for anyone that wants to check them out. Like I said at the start, I think the most important thing is to do your own independent research and go with a professional.

If you know, I was going to say, if you think you need to, but it’s like, it there’s never gonna be any harm or I’d like to think not by going with an independent advisor. Um, so it’s probably a good thing, but does everyone need to do it? Probably not. Especially if you keep it simple and you structure your, your, your portfolio simply.

Is it a good time to buy bitcoin? (18:38)

Okay. Well, I think we’ve covered what we wanted to cover in that question. So we will move on to the next one. And this one comes in from Chad, Chad writes in. Hello. Thank you for taking time to respond to all the questions I would like to know if it is a good idea to invest in Bitcoin or any other coins regards, Chad.

Well, this is such a controversial topic, isn’t it? And I’m assuming with any other coins they’re referring to other cryptocurrencies, all we’ll start off with this one. I mean, people might not know actually, but I actually do have 2% of a Bitcoin. And the story behind that is. I bought a hundred dollars worth in 2017 because the it department in which I was a part of, we were all techies at heart.

And we like to play with new technology and, you know, um, muck around with the, the bleeding edge stuff. And someone come up to the team like one day, someone’s like, I’m buying Bitcoin who wants to buy some. And I was like, Oh, like, if you’re doing all the hard work, I don’t even know how to buy it, but yeah, sure.

I’ll throw in a hundred dollars, whatever. And, um, we all bought a hundred dollars worth in the it team. I think one person bought like a thousand bucks maybe, and we transferred some money to each other. We seen it on the blockchain. It was all very exciting and long story short at the end of that year.

Uh, cause we bought like the start of 2017 for a hundred dollars. And by the time the transactional costs like the brokerage and stuff went through, I think I only had about 93 or $94 worth of Bitcoin, which I was a bit like paved off about at the start to begin with. I was like, it costs so much money to just buy it.

Anyway, it went up to like $550 December. 2017. And then there was a massive crash and it’s only just it’s come back now to be like, I think it was like six, $700 at the moment. And I don’t include it in my net worth update specifically. Cause I don’t want to like deal with all the, you know, people talking about Bitcoin and everything.

Crypto is boss. I do actually have a little bit and I’m not like I would never invest in it per se myself, because I think part of me is like, We are close to financial independence anyway, and I can see like where at the end of the road nearly. And there’s just no need. To go down that path, even though I’m not like totally against the technology or anything like that, it’s just, I don’t, to me at the moment, it’s hard to say it would be investing.

I would say it would definitely be speculating. And I actually, this is, I guess what I’m in the minority here, but I wouldn’t. Feel too uncomfortable with like having a tiny bit of the portfolio allocated towards it. Like if someone said, you know, thinking about having, um, five or 10% in crypto, I’d be like, look, you do what you want to do, but I wouldn’t be like totally against that.

Even though, even though I don’t do it at the moment, it’s an exciting space. And like, People sometimes say that it’s only an asset. If it’s generating money, what do you think cap is golden cash or I guess cash generates interest, but you know, gold, for example, do you consider that an asset?

Captain FI: All right.

Just, uh, I just want my mind on fire, but I got just grabbed a cold one out of the fridge. Well, this was a very entertaining question

Aussie Firebug: and it is a good

Captain FI: question. I need a stiff drink to calm my nerves cause, um, I just, I write a few little notes before we started talking today. And, uh, I’ll probably write far too much about Bitcoin.

Um, but look, the only kind of coins that I personally invest in are chocolate coins and that’s because I think they have something in common with the rest of the crypto coins, especially I think they’re all going to go to zero and leave a big mess. So

Aussie Firebug: why do you think that though? Do you like, have you, have you looked into the technology behind it and like the blockchain and everything?

Uh, cause I know how, like it’s very. How it all works, but I like, like, um, I’m a tech guy at heart and I’ve read the white paper on Bitcoin. I’ve watched enough YouTube videos to like generally get an understanding of the blockchain and everything. So what makes you think it’s going to go to zero

Captain FI: that’s that’s probably a bit of an unfair, unfair claim.

Um, and like, I can’t ever know something’s going to go to zero. Um, Um, my, my background was in my technical background was in engineering. And so, you know, I’ve done a little bit of coding, a little bit of software engineering. Um, but I do not understand. I understand the basic premise of blockchain technology and the ledgers, and I’ve, I’ve watched the YouTube videos.

Um, but it’s not something I understand. Um, it’s gonna,

Aussie Firebug: I don’t understand it completely either, but like, you know, I get the whole de-centralized. No one is controlling it aspect because that’s the big thing, right. Coming out of 2008, the global financial crisis. And you’ve got a whole bunch of, um, crypto cryptography nerds and math wizards and everything.

And I come up with this, you know, they combined a whole bunch of, um, technologies to bring about this decentralized currency. So like that does that.

Captain FI: So it does sound, it does sound good in theory. Um, but. You know, many, many things sound good in theory, and looking at the practical application. And I mean, let’s be honest, um, who controls the world’s wealth currently?

You know, who are the ruling elite,

Aussie Firebug: some, some, a bunch of white dudes or something old white guys.

Captain FI: Do they want to lose their wealth? Do they want Bitcoins replacing their fear currency systems? Look, I don’t know. Um, I, I think that traditionally crypto, you know, has been the currency of the dark web funding, a lot of criminal illegal terrorist activities.

And the regulatory side of it is a bit of a nightmare. And I think that’ll lead governments to be pretty slow and hesitant to adopt them as like an official currency. Um, Again, this is going to sound very qualitative. Um, one standard Bitcoin, why invest in things? I don’t understand. No, I invest in nonproductive assets like cash or gold.

I mean, let’s say best case. Um, you know, it sticks around forever, but what is it supposed to be? It’s a currency. It’s supposed to be a store of wealth, you know, and that just makes it virtual gold. Prayed on the greater full principle. You know, you need to find a fool that is happy to pay more for it than you paid for it.

Um, it wasn’t that long ago that people did the same thing with bloody flower bolts, you know, chocolates or, you know, or

Aussie Firebug: textiles. I haven’t, I think there’s like a little bit of a difference. A new technology verse, like some flowers. Right. I don’t know. And I hope I’m not sounding like too probate here cause I’m just like coming.

I’m trying to present another side of the argument, I guess. And I actually, you know, I sent, I had a question in the, um, Ozzy five discussion group, Facebook group about Bitcoin, because it is such a hot topic at the moment. You know, the price is exploding. I asked them, I asked the audience, you know, do you guys want to hear.

A podcast purely on Bitcoin. And it got a lot of, um, Yeah. A lot of people got around that and I’m trying to look, I feel I’m going to have one with the expert that’s pro Bitcoin, and I’m really, I’m trying to find someone that’s an expert that understands it. That’s against Bitcoin. And it’s really hard to find, I don’t know too many Bitcoin bears that like are very knowledgeable on the subject matter.

So if you’re listening and you know, anyone out there, Twitter, anything, um, you know, even each national, I’d love to hit them up and try to organize a pot about that. But like, you know, back to the whole. Uh, you know, tulips and the greater fool theory, I, part of me agrees with you what you’re saying, but then the other part is like, it may have some practical applications, like even gold, right?

I know gold doesn’t produce any income and just sits there as a precious metal or whatever. It, you can use it like it does have some practical use in terms of like, having that precious metal in stuff like smartphones or whatever. I feel like Bitcoin, I don’t know. I don’t know a Bitcoin as well is going to be the, the.

Uh, cryptocurrency of the future, like no one knows. I think that’s the big thing. Um, I think the, the blockchain definitely has some really cool applications and which coin like becomes the ruling sort of which one is the winner in the next 10 years is anyone’s guess that I like, I just don’t, I don’t think it’s quite.

Fair to say, like it there’s no practical use in it, even though I will say it sounds like this is why I don’t invest in it. I don’t really consider it an investment, but if they want to use it as a currency, it’s the price fluctuates so much that, yeah, I don’t see. I don’t see it anytime in the near future, you know, overtaking a major fee at currency that I’m just like, I’m not as I’m not shutting it down.

As, as men, as much as like a lot of people do. And I’m still like, um, I’m interested, I’m watching the space with a lot of interest, but I guess to answer the question, well, it’s an impossible question to answer really. Is it a good time to be calling. I’ve got no idea, but it, but it’s a controversial topic.

So we’re talking about it. Who knows? Maybe we’ll revisit this question in 10 years and it will be like part of everyday life, these cryptocurrency, I mean,

Captain FI: some of the pilots I’ve flown with, um, have got crypto and they’ve done it right so well that I don’t work with them anymore. You know, these guys have made millions of dollars

Aussie Firebug: riding they’ve rode the train,

Captain FI: they sold it and now they have ETFs and property.

Aussie Firebug: Th they’re pretty much gambling. Right. We can both agree that to become a Bitcoin millionaire is essentially gambling. Like, you know, they’ve, they’ve hit the, that, um, one concept though. I don’t know if you’ve come across this. Have you ever heard of defy before? So apparently, cause I know like it’s a big, a lot of people bring up the point like.

Bitcoin is not investing in. You can’t make money off Bitcoin. It’s the greater, it’s the greater fool theory. Like I get all that and I tend to agree with a lot of it, but I’m not, I’m like got to do, I’ve got to get someone on the planet. And maybe it’s defy, apparently there’s ways to make money consistently.

Like I’ve seen websites. I don’t know how it works. And, um, I really want to get someone to explain it to me a little bit, a bit. Apparently you can earn, like you can get a yield. On your Bitcoin through some mechanism out there, and I’m not too sure what it is, but like I’ve seen, I’ve seen, um, a few articles and a few websites that will give you like five and 6%.

If you hold your coins in some exchange or, you know, somewhere, which could be, uh, no doubt. And I don’t think it’s, I dunno, share sponsored, but like, if you’re earning five, if you’re already earning some sort of yield to hold coins, like. That makes me feel a lot better. I don’t know about you, but that, like, that would be like a, I feel like that would open up.

I’ll feel a lot more comfortable, you know, having crypto like as a small part of my portfolio at if it’s earning know 6% yield, um, every single year. W w w what were your thoughts about that? If that was like a legit thing,

Captain FI: that’s definitely a bit of a game changer. I mean, ultimately if it’s supposed to be a currency, isn’t it just supposed to be a store of wealth that grows?


Aussie Firebug: think, I think Bitcoin is. But there’s other crypto currencies that do a lot more than just hold wealth. Like I know I’m not an expert, but you know, there’s like these smart contracts out there, it’s this there’s this like whole universe that is blockchain technology has enabled to be like, if you, if you write a contract a specific way and you lay out all the rules and the conditions.

Once it’s, you know, put on the blockchain or however you do it, like, that’s it, there is no human person that can change that now. So when certain conditions are met, there are certain things will execute on the blockchain and things will go through. And like, I guess I think it’s this  movement that didn’t, it’s kind of like a lending structure.

Yeah. You can do it like a lending structure apparently. Yeah. So like, it there’s just a lot of possibilities. Like it really does feel. The more I read about it and I’m not really too obsessed, to be honest, I might sound like I’m really obsessed, but I’m actually not. There’s a lot of like parallels to the early internet.

A lot of people have said, and I tend to agree. Like we, we’re not people don’t are not too sure what the blockchain and these crypto is where. You know what role they’re going to play and how it’s going to impact the future or anything like that. But there’s a good chance that it will play a role. And that was sort of like the internet in the nineties.

Right. But the hard bit is finding on which website will come out of the internet on top. Like if you had to choose a search engine in, you know, 1999, and you were lucky enough to get Google, then you’ve just hit the lottery. But like, there’s probably like. A thousand other search engine out there, like there is a thousand other cryptocurrencies and know all this other stuff that’s going on.

So, um, who knows, but, but I also think it’s interesting that it crashes, but then it also comes back. Like, I don’t know the history with that with the tool of mania. Like I know a little bit about it, but did it ever peak again, like Bitcoin is literally died, you know, 10 times now and it keeps coming back, you know, bigger.

The next time. I don’t know if that happened with a lot of bubbles.

Captain FI: I

Aussie Firebug: don’t know the answer to that. Yeah. Wrapping this question up now. I have absolutely no idea if it’s a good time to invest in Bitcoin. And I don’t think anyone really knows if it’s a good time to invest in Bitcoin or not. Uh, what I will say is the technology is very exciting, the blockchain, and I’m not as dismissive of it as a lot of other people are in the community.

As I mentioned earlier, for us personally, Uh, where we’re well on track to reach financial, financial independence. So I don’t feel the need to take on additional risk or to sort of go off on another path or anything like that. But what I will say is I’m not totally against dabbling in crypto and, and exploring this and potentially buying some coins in the future.

DCA vs Lump Sum Investing (33:07)

That’s not, I’m not shutting it down completely. And it may be something that we do. Moving on to the very last question for today, we have a reader called DC who writes in Haley  Firebug. I know your dollar cost averaging the proceeds of the investment property. Number one sale into your equities portfolio over the last 12 months or so wondering if you’ve run the numbers on what the difference would have been.

If you put it all in, when you first received it. I know you wrote about needing guts and courage to invest at all. Now that you can put a dollar figure on your foregone investment returns versus the actual investment returns you made, how do you feel about this? Knowing what you know now would you have acted differently?

Thanks mate. W uh, these questions referring to, and this one was actually, it’s a bit old, so I know I have done bug Ozzy Firebug stuff, you know, for. A long time now I’ve just been overseas in the last two years. So this one I think was put in like nearly a year ago, but it’s a, it’s a good question, I think.

And what is referring to is we sold our investment property, um, in 2018 and we got quite a large cash payout with it. Everything, when everything went through on the banks, you know, the mortgage was paid off and everything thing, it was like, Close to $200,000 or something of cash was just sitting in your bank.

I basic, I wrote about it in a few updates, but instead of putting it all into our portfolio in one hit, which is what the literature says to do, and it works out. That’s a more often than a dozen I dollar cost average. So I went from like, we try to do about $5,000 a month, anywhere portfolio. And we bumped that up to 15 to $20,000 and we just, we dollar cost average debt, um, over the next 12 months, because always, and this goes against everything I stand for, but I was like really worried that there was going to be a huge crash.

And if people can remember at the end of 2018 in December, so we sold in like, September, I think to 2018 in December, there was a big crash and it actually pulled back a lot in December. And I thought, you beauty, here we go rash. And I’ve got, ’em all cashed up and it actually recovered real quickly. And in hindsight now, um, I would have totally been better off putting it all in at once.

I haven’t run the numbers to figure out how much better off we would have been. Uh, but again, it’s such a psychological thing. I just was like, So are scared to be crashed, what’s going to happen. And it’s just what I felt comfortable with $2 cost average. Um, but that’s just me. So what about you cap? Have you ever had like a logic.

The money that you need to put into the markets. And how did you approach that?

Captain FI: Yeah, the con the convent, they shouldn’t be out at dollar-cost averaging versus some investing is, um, it’s a really good conversation to have. Um, personally I fancy myself as a, want some style investor, like most things in investing, you know, sometimes you can romanticize, uh, Um, but, but in general, I always try to invest as much as I can, as soon as I can.

And that’s just kind of been my personality. I won’t lie. Sometimes I just jump in with two, my two left feet and sometimes I get fit well

Aussie Firebug: that that’s what the, um, analytics say that that’s the best way to do it. And that was definitely true for my delight in the question. It says, you know, not knowing what you know now would you have acted.

Of course I would, because hindsight is 2020. So if I knew what the market was doing, I’d invest exactly at the right time, but that’s, you know, you read a lot of, um, analysis on this end, the lump sum. Historically has been the better way, more fun than not. Um, so it’s actually a good way to be. It’s interesting

Captain FI: though, when you look at, um, the concept of DCA and, and LSI for me, you know, I’m an employee.

Um, I receive a regular income and as soon as I get it, I invest it. So ironically, that’s kind of both dollar cost averaging and mom’s time investing. But I think more specifically, I guess the question is what happens when you fall and yeah, look, I’ve been in that situation. I, um, I received a, a small payout.

Do you do like a work, um, work dispute? Um, basically, you know, a back pay, um, for more of a better term. Uh, and you know, my response was to invest it. Um, I get, like I said earlier in the episode, I did get a little bit scared of the much Downton and not the sort of convenient, like shove over a bit of cash, emailed for investing into my mortgage.

It rather than investing it. And it, that was a bit of an excuse and I was a bit scared. Thankfully, I came to my senses and resumed that sort of regular

Aussie Firebug: investing. I don’t think anyone. Yeah. Like if you’ve got, I always tell people this and you know that right in, like once you have a significant amount of your wealth taught up in the markets, when it does draw, you know, five, 10, 15%, whatever it, unless you have some sort of robot, unless you’re a, some sort of spreadsheet Excel robot that just does the perfect thing at all times.

Like, The stuff is going to happen and your mind is going to play these tricks. There’s nothing worse. I know you’ve been in this situation, a cat that if you second guessing yourself and you’re like struggling to sleep at night, daddy’s the worst spot you want to be in. And that’s where knowledge is power.

And like, you will only sleep soundly at night. If you know, How it works and what you’re investing in and why you’re in that. And this is like tying back to that first question with, you know, do you need a financial advisor? Like that is so important. And I think that’s the most important thing. Something

Captain FI: that I’d bring up as well is, you know, the concept of, um, debt payoff.

Isn’t something that we really talk a lot about in the fire community, but the fire community and the debt, you know, the debt-free community, um, uh, you know, are overlapping. And, you know, you’ve got the concept of debt snowball versus the debt avalanche. And if you read the barefoot investor or, you know, Dave, Dave Ramsey, um, you know, you’ll see that they would, um, be proponents of the debt snowball, and that means paying off your smallest step first, knocking them over building momentum and using that to pay off, um, the, the highest debts

Aussie Firebug: last.

It’s like, it’s like a psychology. It’s like a psychological. Yeah, absolutely.

Captain FI: Whereas the debt avalanche would take a more analytical little analytical perspective to pay off the highest interest rate first. So people with maybe brains like ours, um, you know, typically referred to us, I guess, an analytical or an engineering brain.

You know, we, we’re probably a bit more comfortable with the debt avalanche and we’re probably a little bit more comfortable with lump sum investing, but the power, the psychological benefit of the debt snowball is similar to the psychological power of the dollar cost averaging. Yes. I mean, I think to, to weigh into my situation a little bit more, uh, personally, you know, um, having an investment property, um, building at the moment and I don’t ever envisage selling it.

So I don’t imagine that I’ll ever be in a situation like you were, and you had a bit of cash to invest. Um, my plan is to just sort of have it sitting in the background, hopefully it appreciates and capital value and, um, you know, I’m able to refinance on an interest only loan, you know, that’s the plan at the moment to say, you know, again, re romanticizing myself as an investor.

If I did sell it for whatever reason, yes. I would like to have that money reinvested into ETF’s websites or another property development or purchase as soon as possible. It’s very, very easy to sit here and say that now, but very difficult to actually do it. When it’s your,


Aussie Firebug: you were in the hot seat, I absolutely do.

You know, there’s so many parallels. To invest in personal finance and, you know, the whole realm of fun and maintaining a living the lifestyle and like going to the gym and everything. There’s so many parallels between the two, because, and I even wrote, like I had an article, um, about increasing your income and I drew upon, you know, health and fitness, a lot in that area on how it can relate to good financial habits.

And I feel like in this situation, so like to answer the question. If we are ever in the situation where we have a lot of money and we need. The markets. I like to think that I would do it in one lump sum. Like that’s what I’m thinking now. That’s what I want to do. Um, but it might change, you know, when I’m putting the hot seat, but like with health and fitness and especially like going to the gym and eating right.

And stuff like that. It, most people are like to think no, what they should be doing. Like it’s not easy to, to have the, you know, uh, an APAC and those washboard ads, ads, and everything, and like to it’s it’s it takes a level of discipline to stay fit and healthy for most of your life. But it’s not the lack of knowledge.

It’s not like there’s like a secret sauce or anything to it. Most people, I would like to think so anyway, know what they should be eating and that they should be doing some sort of, sort of exercise, you know, everyday breaking into a sweat, you know, not sitting on the couch for 10 hours a day, whatever.

It’s just like doing it and knowing what to do. Uh, two very different things and there’s that level of discipline and like, you know, enthusiasm can only take you so far. You’ve got to rely on the, um, the discipline and the routine that you’ve built to like sort of maintain that lifestyle feel as though a lot of that has to do with investing as well.

Like you can read and read and read all the things that you have to do and, you know, what’s best to do and stuff, but to start actually doing it. And developing that self-discipline, it’s going to be a lot different than just listening to what’s best and reading what’s best. If that makes sense.

Captain FI: Yeah, absolutely.

Mate, you know, Tom it’s people say, well, how do I get good investing? How do I do this? The most important thing is to just stop and find out what works for you.

Aussie Firebug: Um, I got to get it perfect. The first time I know that I had analysis very well because. All was like, okay, I can’t possibly invest without investing in the best product ever.

Like, you know, how could I possibly invest $5,000 in less? I do 12 months of research and it has to be the best investment that’s possibly available, but like the best investment doesn’t actually exist because everyone has slightly different circumstances and goals. So it’s like, Just start. It is definitely one of the most, um, it’s one of the hardest things to do.

Even for me, I was researching this stuff for a good 12 months before I went into the share market, but just starting making those mistakes and then like building on them and like figuring out what works for you is, um, It’s like, it’s all part of the journey. Isn’t it

Captain FI: getting, getting some skin in the game?

Yeah, mate, I just wanted to say, look, I, um, I’ll put it out there right lately. I kind of been struggling a little bit, you know, I’m back to work and my job, you know, confidence and, um, you know, your mindset is really, really important in aviation, uh, because it’s, you know, it’s a time critical environment and you’re constantly making decisions.

You’re constantly evaluating what you should be doing. And some of the stuff that I’ve been chatting with my therapist about, and, you know, there’s absolutely no shame in talking to a therapist. Mental health is super important. There’s a bit of stigma about that in my field, but let’s say, yeah, we can move on from that.

But. One of the things we talk about is, you know, comparison is thief of joy. And what I’ve learned in my journey to financial independence is that, you know, yes, we need to keep track of our finances and yep. We should not be afraid to make changes if you know, things clearly aren’t working. But for me personally, the level of scrutiny, scrutiny, and comparison that I’ve applied to myself and comparing myself to other people, you know, that’s been a huge source of anxiety and tension for me.

So one of the things that we’ve been working on is basically the kiss principle, keep it simple. Don’t overthink it. You know, the 80, 20 principle in a focus on the 20% of work that gives you the 80% of your results, you know? And so for me, agonizing over what could have been. If I had a, it slightly different investing choice or what someone else achieved or, you know, or what the  did.

And damn, I wish I had done what he did or, you know, should I have listened to Mr. Money mustache? You know, should I invest differently? That’s not, for me, I’m stepping away from that mindset. And I just want to focus on a simple proven strategy and not overthink it. Um, and that is what helps me sleep at night.

And so, yeah, so I try not to, I try not to overthink and get the analysis paralysis.

Aussie Firebug: Absolutely. Some wise wise words, inmate to, to end the pod actually we’ve reached the last question, dude. It was an absolute pleasure having you on. Thank you so much for making it’s been

Captain FI: wonderful. And, uh, I even got to have a beer, so how good.

Aussie Firebug: Yeah, we’ll have to grab on in real life. Eh, one, one day I’ll, uh, you know, when all this COVID stuff blows over, will I know some that they should be a fine meet up at some point might even, you know, try to organize one, but yeah, we’ll have to have it be in real life, man.

Captain FI: Uh, and, uh, the good, the good thing about my job is, you know, you can generally see sneak over the border at 30,000 feet and yeah.

Aussie Firebug: Yeah. Private plane. All right. Really appreciate it.

Shout out to the cap, making the time to come on, highly recommend his pod as well. If you just search for captain fire, you’ll find him. And that’s a wrap because that’s the first episode in the books for 2021. Uh, like I said at the start very excited for this year. And I’m looking forward to creating that consistent content and really getting back into the swing of things.

And with that, enjoy your Friday guys. And I’ll see you on the next episode. Thanks guys for listening to another episode of the Ozzy Firebag podcast, for links to all of the resources, plus an entire transcript of this episode, head over to Ozzy Make sure you never miss out on another episode by subscribing now on iTunes or SoundCloud.


Australian FIRE Calculator
Send it!
Get Calculator!
Get FREE Aussie Firebug updates, tips and tricks, and exclusive content!
No spam. Unsubscribe anytime.

Stay Connected!

Join others who get FREE Aussie Firebug updates, tips and tricks, and exclusive content!