Aussie Firebug

Financial Independence Retire Early

Nothing written below is financial advice. The questions and answers below 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 (05:53)

Hey! Love these updates.

While I’ve been following you for a year it seems like you are always winning at this FIRE game. (which is great!)

Do you have any stories of how you royally screwed up, and how that made you learn something with which you used to do something awesome?

Those stories are a bit more relatable as I’ve personally screwed up a few things financially (taking investment risks that went the wrong way, etc.) and I’m learning as I go.


Firebug’s Answer

Hi Daren,

I’m glad you’re enjoying the updates mate!

I’ve had a few people send me similar messages over the years and I must admit that I’ve been extremely fortunate when it comes to my FIRE journey.

I haven’t really had any huge ‘stuff ups’ when it comes to money and investing (I’ve actually been quite lucky in some instances), but I have screwed up in general for sure.

One of my biggest royal screw-ups is nearly getting kicked out of Uni when I was 19. I’d just finished year 12 and got accepted to study at Monash University. I really thought I could just roll in and breeze through the units without putting in the work. I did more study in year 12 than I had done my entire life and I was a bit burnt out (school was never my thing and I loathed studying).
Well, long story short. I ended up failing 3 out of 4 subjects in my first semester and I received a letter from Monash warning me that I was about to be booted!

I cleaned up my act and graduated from Monash but I ended up having to do an extra 12 months in order to finish and those units that I failed cost me around $5K extra!

The worst part is that I was on the cusp of passing all three units. I really only needed to put in a tiny bit of extra effort and I would have passed. I felt really disappointed in myself for a long time after that.

The lesson I learnt was failing is much easy to live with if you have given yourself the best chance at success. Not everyone can be the best, but if you try your best and still come up short, so be it.


Question (28:34)


What will you change in your portfolio as you move from the accumulation phase to the pension phase?

Will you transition your growth shares to dividend shares? And if you don’t how will you make up any shortfall in dividends (or to get to 4%)?



Firebug’s Answer

Hi Edmond,

There’s no current plan to change the portfolio once we move to the pension phase atm. However, I may feel a bit differently about this when the time comes and as I get older.

I think there really comes a time when the mind shifts to wealth preservation mode. There’s something really comforting about a regular paycheck rolling in and I believe that may have a psychological effect on a lot of young peoples risk tolerance. When that regular paycheck isn’t there, I could see us shifting the portfolio to be more defensive but as of right now, no, we don’t plan to change the portfolio at all.

Our dividends most likely won’t cover our lifestyle completely once we have hit FIRE but they don’t too. Selling units in order to fill the gap is perfectly fine and is actually what the bulk of US FIRE chasers do. There’s a great article on Passive Investing Australia’s website that covers this. It’s called Dividends are not safer than selling stocks.

In a nutshell, a dividend from a company is actually a withdrawal and if you look closely at the stock market on the Ex-dividend date, you’ll see that the price of the company will drop by usually the same amount of however much the dividend payout was.

The biggest advantage I see of using a pure dividends strategy is the psychological benefits of not having to think about it. You just get 4 magical payments each year without thinking. But the big risk with this approach is concentrating too much on only investing in companies that pay good dividends. You definitely want to have some diversification in your portfolio.



Question (43:37)

G’Day mate,

Love the podcast and absolutely respect what you have created for so many Aussies.

I have recently joined interest in FIRE and in the process of setting this up; sorting out our investments/wealth.

My question for you and apologies if it has already been discussed (as I am still getting through all previous podcasts):

  • Do you rate the share apps Raiz (Acorn) or Spaceship?
  • Have you ever used these?
  • Do you reckon they are good or a waste of time?



Firebug’s Answer

Hi Stuart,

I’m glad you’re enjoying the content mate 🙂

I’ve never used any micro-investing apps before but I think they could be useful for people who want to dip their toes in the market.

Of course, you’re going to be charged extra for the features they are offering and the smooth barrier to entry software they are providing but paying a bit extra and getting started is way better than shoving it to the ‘too hard basket.

I like to think of these sorts of companies and services as training wheels on a bike. I wouldn’t be using them forever and paying the unnecessary fees. But They can serve a purpose IMO and the rates aren’t really that bad if we compared them to what some managed funds have been charging clients over the years.

I crunched the numbers on one of the most popular micro-investing apps in Australia atm called Raiz (formerly Acorns which was such a better name lol).

If you have under $15K invested with them you will be paying $42 a year or 0.28% to use their platform. It’s important to remember that any underlying management fee that an ETF provider may charge is added on top of Raiz’s fee. So if you choose a portfolio that has Vanguard ETFs within it, Raiz will charge you their fee on top of the underlying fund providers’ fees.

So the question becomes, is 0.28% too much? IMO, for people looking to get started… no it’s not.
BUT! They become unnecessary once you get the hang of it and eventually you’ll want to take the training wheels off and go direct.



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