I share these net worth updates to stay accountable, seek feedback on our strategy, and prove that achieving financial independence in Australia is feasible without relying on extraordinary luck or wealth. The table below tracks our journey from $36K in debt to reaching our goals. 🔥
For the third year running, we escaped Victoria’s chilly July by heading to Bali.
This time around, we had our little one in tow, which definitely made things a bit different, but she handled it like a champ—barely any complaints.
One of the greatest perks of FIRE and being able to run my business from a laptop is the freedom to be a digital nomad, living anywhere in the world. Mrs. Firebug and I have often dreamt about spending a few months a year in Bali or somewhere else in Southeast Asia.
This is what I love about financial freedom—it opens up possibilities that for 95% of people isn’t possible. Alternative lifestyles like this become a reality.
To be honest, though, this trip was a bit more chaotic than usual. We didn’t set ourselves up to live in Bali, it was more of a three-week holiday.
And there’s a big difference, at least for me. I thrive on routine, and after about two weeks without it, I start feeling off.
Still, it’s amazing to recharge with some warm weather and endless sunshine in the middle of winter.
Sharing this holiday with our daughter was something special. The locals couldn’t get enough of her, which was just so heartwarming 🥰.
Enjoying a sunset in Bali
In other news, our new co-working space is hosting its first live podcast, and guess who’s on the guest list? Yep, yours truly.
I’m really excited about this, and not just because it’s happening at our co-work spot. Over the last three years, since coming back from London, I’ve developed a real passion for start-ups.
And I’m not just talking about tech start-ups. Any business that sets out to solve a problem and gets rewarded financially has my attention.
This, to me, is the beauty of capitalism. When people pursue their own interests and seek rewards, they end up creating value for others too. It’s a system that not only generates wealth but also drives innovation, benefiting the entire community.
For me, businesses represent the pinnacle of human ingenuity. The magic of capitalism lies in the fact that both parties walk away better off.
I genuinely believe it can be a force for good, and I’m hoping this networking event inspires others in the community to take that leap and chase something they’ve always wanted to do.
This ties right back into FIRE as well—the flexibility of running your own business is incredible. Honestly, I wish I had started years ago.
I know some people get scared off by horror stories, but things have changed so much. Nowadays, you can start a business with minimal upfront capital, thanks largely to the internet.
That’s exactly what we’ll be discussing at the event—how each of us on the panel started our businesses, the time and effort it took, the start-up costs, the challenges, and more.
I’ll be there all night, so come by and say hello 🙂
Come say hello at our live Podcast!
Net Worth Update
It’s been an incredible month, driven largely by our assets across the board and some significant cash inflows from the business.
The business is really starting to gain momentum, and while it technically should be part of these net worth updates, valuing it is tricky. On one hand, it’s clearly valuable since it generates monthly income, but on the other, how do you put a value on something that’s neither bought nor traded publicly?
I’d really appreciate it if someone could weigh in on how tech startups are valued. Is it based on profit, revenue, or a combination of factors?
Our FIRE portfolio (shares, cash and Bitcoin) ticked over $1M this montho too. This portfolio is what we’re actually going to be living off (althought I have some thoughts about this which will be addresses in a future post).
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*Expenses include everything we spend money on to maintain our lifestyle. We do not include paying down our PPoR loan as an expense, only the interest
*Investment income is simply 4% of our FIRE portfolio divided by 12
We pre-paid for our accommodation and flights for the Bali trip, which kept our expenses for the month quite low.
Shares
The above graph was created by Sharesight
Huge month all around with the Aussie markets leading the charge.
Given our substantial investments in Australia, this led to a decent bump in our net worth for July.
Question: Why do we have A200 & VAS?
Answer: We started buying A200 in August 2018 after Vanguard didn’t lower their MER to match A200. Practically speaking, A200 and VAS are almost identical so it makes sense to go with the lower MER. As an added benefit, I like the fund diversification between Vanguard and Betashares. We decided to hold both after making the switch since it doesn’t have any impact other than some extra accounting work once a year.
Well done! Living the dream!
Happy to weigh in on how you might value your business if you are interested – please reach out. I’ve worked in investment banking and now run my own consulting business working with start-ups on various capital raising, M&A, strategy and outsource CFO projects!
Email sent!
Hey mate what happened to the LIC’s ? You mentioned at some that you had started investing in them but I don’t see them mentioned in the update.
Half way down the page:
https://www.aussiefirebug.com/election-results-and-strategy-2-5/
It would be awesome if you could flip your table around at the end of the blog post and have the most recent date first! It’s hard to scroll all the way through it on your phone and when I got to the pop up ad at the end, it kept glitching and sending me back to the start of the table to 2016. Super annoying!!
Amazing work though, and I’m glad you had a nice break in Bali. Travelling with kids is an adventure!
I have found this so frustrating as well, every time I get tot he bottom it takes me back up to the top of the table.
Yes this glitch is annoying on my phone as well. Excellent update AFB
I get this glitch too where it sends me back to the top of the timeline.
I also experience this – it’d be great if you could fix AFB!
What device are you using, Kelly?
Flipping in the table could actually be a good idea. I’ll give it a try in the next update.
Travelling with kids is definitely a challenge, haha!
I thought it was just an iPhone thing. Thanks for raising it Kelly!
I’d argue that your PPOR really shouldn’t be part of your net worth.
It doesn’t produce income and is generally a drain on cashflow (just like renting)
The value of it means nothing until you decide to downsize or you die.
My PPOR is worth $2m+ but I never include it as part of my net worth. The value will benefit my kids but for me it’s somewhere to live & a drain on my capital (have spent $250k in upgrades over the past 3 years).
Have to agree with this, your PPOR does not produce an income instead it is always an expense. Rates, repairs, electricity etc etc.
I created some Android apps and had no idea how to include them or value them.
Initially I took the annual income from them and minused it from our annual FIRE expenses number, before multiplying by 25 to get our FIRE number.
But I actually wanted to add a number to our net worth instead of treating the income as a negative expense.
Now I just times the monthly income by 300 (25 x 12). 25 to get 4%, and 12 months. The result is how much I would need to invest at 4% to achieve the same income.
This is what the apps are worth to me personally. Of course it’s not what they would actually sell for.
I agree with you on this Bradley… But people (especially Aussies) get super bent out of shape when you say this, due to property as a religion in Australia etc…
No high-networth business people put their PPOR as part of their networth (non that I follow anyway).
Not shitting on Firebug though, enjoy the monthly updates!
Funny story, I actually removed it a few years ago, but people complained and asked for it to be included for transparency, so I put it back in 🤷♂️
We make a distinction between net worth (which isn’t as crucial to FIRE) and our FIRE portfolio, since it’s the portfolio that really matters in the bigger picture.
We also don’t include our primary residence in our FIRE portfolio.
I am a part owner in an IT business. The value is generally assessed using a valuation multiple that fluctuates based on factors like the industry, revenue, and the owner’s level of involvement.
For my IT services company, the typical multiple ranges from 2 to 4. This means that the annual profit, or EBITDA, is multiplied by this range. For instance, if the business generates $50,000 in annual profit, its value would be estimated between $100,000 and $200,000. If you are a part owner you get what percentage you own of this value.
However, there are some considerations. If your involvement in the business is significant, the valuation may drop to a multiple of 1.x, with additional value factored in for assets such as equipment. If your business does not make a profit, they may use some forecasting on your expected profit and create a multiple from this. Your accountant mate that you had on your podcast would be good to speak with about what multiple might apply to your situation.
In terms of my FIRE tracking. When I set up the company, it had shares which formed the figures on my Discretionary Family Trust balance sheet. Typically, this amount is low and could only be $1 to $5 but this reflects the actual cost base (Price I paid) for setting up shares in the company.
I view this like getting an inheritance from my parents or grandparents —there’s a possibility of value in the future, but for now, I don’t track and will I treat it as a potential windfall if it happens.
Agree on this – In the purely online business world (content and/or affiliate websites), websites are typically valued at a 3x cashflow multiple, for SAAS it’s usually 4 to 5x.
But yeah, would be a little more complicated in your specific situation.
Awesome info Nat!
Thanks a lot 🙂
Not sure if you have shared previously, however what are your plans when your children reach school age which will restrict your freedom to travel etc if not homeschooling?
Also do you have a plan to avoid being exposed to a 50% drawdown in the share market and 80%+ drawdown in bitcoin during the next major long term recession like in 2000 and 2008?
Hi Mark,
We’ll simply cut back on travel—it’s just part of life.
A large cash buffer makes a big difference. We’re also flexible and can adjust if needed. During COVID, we experienced a 40%+ drawdown, but managed to stay calm and avoid panicking.
Love how transparent you are with your numbers, make it all so real and attainable 🙂
However this month I’m confused. The headline says you are up $63k but you portfolio numbers show you up approx $38k. How did you arrive at $63k increase this month?
Cheers Dermot,
The business cashed a big invoice. It’s part of the update above and also mentioned in the notes section.
Not sure about the PPOR comments. A house is an asset. It’s just not a growth asset like people think, more like a term deposit. But it’s still an asset and offers some security and advantages too. People should listen less to the Rich Dad gurus (who themselves are big on property).
I look at a PPOR the same as a car (which AFB removed from his net worth in 2015). If you liquidate it then you generally have to buy/rent another.
The best thing about your PPOR (unlike a car) is that it’s usually increasing in value. Big bonus points for being CGT free on sale.
I love my PPOR and the area I live in but it’s a drain on immediate cashflow (Around $10k/yr to live there & $250k in the past 3 years on renovations/additions) while simultaneously increasing in value which will benefit my kids when I kark-it (which is great) but doesn’t help my cash needs..
“I’d really appreciate it if someone could weigh in on how tech startups are valued. Is it based on profit, revenue, or a combination of factors?”
Startups don’t have profits. Didn’t you know?! I kid I kid. I’ve been working in tech startups most of my career and they generally lose (venture capital) money for a really long time.
And of course there’s the insanity of Uber which actually went public without profit yet a multi billion dollar valuation. Only recently finally made some profit.
Anyhow, I’m no financial technician, just an humble software engineer with an interest in startups and your other commenters have been far more helpful. In my little world of early stage startups, it’s as one mentioned, a multiple of revenue. This can be 4x or in something with wild growth maybe 10x. It’s all very finger in the wind at the early stages though. A lot of forecasting based on hyper growth. More mature startups i.e. scale-ups can be more accurate as they’ve found product market fit and are throwing cash and growing quickly.
Well done as always mate. You’re killing it!
I love that scene from Silicon Valley where they talk about never trying to make a profit. As soon as you do, everyone starts expecting crazy growth, and when it doesn’t happen, the valuation tanks—so true and hilarious!
Great comment, Declan. It’s been an absolute blast building the startup and seeing how this world really operates.
Ah Silicon Valley. My favourite documentary on the tech world. 🤣
Such a great show.
Re startup valuation, its complicated. A reasonable place to start including some methods –> https://unswfounders.com/newsletter/valuation.
Thanks for the link Simon
How did you find spending 3 weeks in Bali with a kid?
Where were you staying?
Sorry for the direct questions.
I am flying to Bali next week and am unsure if I should spend 3 weeks there or only 2 weeks and go and visit Vietnam for 1-1.5 weeks.
It was a bit of a strange trip.
We had three distinct phases and had to move accommodations three times, which was a pain. We travelled with friends, then family, and finally stayed in a villa.
I know it sounds great, and maybe I’m being a bit of a whinger, but it was all so hectic that I never really felt settled. Next time, we’ll definitely aim to stay in one spot and get comfortable for a longer stretch.
I’m such a creature of habit, and when my routine is thrown off, I start feeling off after a couple of weeks. Our favourite place to stay is still the Bali Mandira in Legian.
How did you find spending 3 weeks in Bali with a kid?
Where were you staying?
Sorry for the direct questions.
I am flying to Bali next week and am unsure if I should spend 3 weeks there or only 2 weeks and go and visit Vietnam for 1-1.5 weeks.
Hey Matt. Another great article and well done on the travel with your little one. Quick question – what exactly is your business in/providing? Is it a consultancy?really interested.
Thanks
Thanks Matt,
We build and serve data models for BI developers, analysts, and data scientists. We also offer a web app, but it’s a smaller part of our offerring.
Thanks for the update on the FIRE portfolio. I couldn’t work out why super was not part of the Fire portfolio until recently when looking at my own position where shares and cash only makes up 26% of my net worth vs 69% in your portfolio. Concentrating on moving that percentage up to 35% over next couple of year, don’t regret maxing out super over past few years but maxing out super doesn’t get you to fire, you sill need some funds to live off until you reach retirement age.
Think many traditional savers will be in same boat, would be great to understand different strategies to bridge gap till you can access super i.e. keep working, access equity in home then do lumpsum redraw @ retirement age to pay off etc.
Would love to hear community thoughts on this…
Cheers
Dave
PS with Super do most people pay for death and disability insurance or do you just leave it off. I though i had it for years until recently when i found out that i haven’t been paying since leaving local government job years ago.
Well done Aussie Firebug your journey is an inspiration. Good on you for giving back, you will surely receive much more!