Aussie Firebug

Financial Independence Retire Early

My Story

G’Day!

I’m an Australian in my mid, late twenty’s, early thirties and a major goal in my life is to become Financially Independent and Retire Early (FIRE). But what exactly does FIRE mean? Well, I’m sure you can figure out the retire early bit (my favourite part). As for financial independence, one definition defines it as:

‘Having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses.’ 

FI basically means that you have income-producing assets that generate enough money for you to live off…forever. This, in turn, gives you the option to retire early (RE) and do whatever the hell you want! Pretty sweet right?

I definitely think so. In fact, my whole mindset has changed to achieving this goal. But before we venture any further I’d like to rewind to the start of my journey many years ago

Early life

I have always been responsible with my money even from an early age. I accredit this attribute to my parents but particularly to my father. Being a typical WOG he was a tight arse. And I hated it. When I was young and needed new footy boots, off to the store with Dad I would go. Back from the store, I would come with the no brand, pov, ugly football boots that I would be embarrassed to wear to training the following week.

I can now appreciate how utterly ridiculous children’s football boots and clothes, in general, are priced. Especially when you consider that I would be growing out of them in less than a year. Nevertheless, this does not cross your mind when you’re a child and all you care about is having the coolest shit possible to show off to all your friends.

Dad taught me that smart people saved their money and only suckers parted ways with theirs. Whenever I would buy ANYTHING he would ask me how much I paid for it. No matter how much of a bargain I got on the item the response was always the same.

“Ripped off”

It was sort of like when Darryl Kerrigan would ask he son “How much does he want for it?” and the response would always be the same “Tell him he’s dreaming”. It was almost like spending money on anything other than a necessity was being ripped off. I would later realise how true this was.

Observations

I have always had an interest in money and wealth. I’m not sure where it comes from but I took notice of it from an early age. When visiting friends who lived it really nice houses I would always be interested in what their parents do for a living.

When I would watch a reality TV show some of these people would be living in multimillion-dollar mansions. I would be less interested in the main ‘stars’ and wanted to know more about their parents and how they obtained these enormous fortunes, often resulting in me reading their wiki page for hours.

The connection I made early on was that most of my ‘rich’ friends parents didn’t have normal jobs. They either owned businesses, land, real estate, shares or did something that wasn’t your average 9-5 day job. There were the few that held high positions in companies but even then it seemed that the wealthiest people owned things that made them money.

Lightbulb Moment

If you live in Australia you might be aware that we have a love affair with real-estate. God forbid you move to Melbourne and start renting because that is wasting your money. What you need to do is buy a house and ‘set yourself up’.

I was too engraved in this mantra. I knew that smart people bought investment properties and I wanted to be smart! So when I had saved up enough money for a deposit I bought my first Investment Property in 2013.

Towards the end of that year, I started to think to myself  ‘Shit. You actually have this massive debt to your name and 90% of the reason you bought it was because you were told it was a clever move. You need to actually figure out yourself if that was true.’

So I set out to discover as much as I could about investing in real estate and not too far into the journey I discovered the term financial independence. I believe it was from Robert Kiyosaki’s famous book ‘Rich Dad, Poor Dad’ which is not specifically about real-estate investing. I remember reading a section of the book that roughly said all you have to do to reach FI is to keep buying assets that make you money. It will be slow at the start but thanks to the powers of compounding interest the more you buy the more you make and the easier it is to buy again. You eventually have so much money flowing in from the assets that you can live off the stream of income.

MIND. BLOWN.

It seemed so simple. Just buy things that make money, that’s all there is to it. Buy enough of those things (assets) and voila you’re finically independent!

I had my doubts, I didn’t think what they were describing in these books was really possible. I mean really? You’re telling me that if I save my money each paycheck, invest said money, eventually, I would not have to go to work 5 times and week?  I must have read somewhere between 15-20 books in 6 months (which is a lot for me). I started to subscribe to online blogs of people who had already reached FIRE. I went to seminars in Melbourne on the weekends to meet people who had achieved financial independence. Anything I could get ahold of to do with FIRE I would absorb it.

I BECAME OBSESSED.

The light bulb went off in my head and I was now desperate to achieving this goal. Now I have to admit, I don’t actually mind my job. I actually quite enjoy it. But I HATE having to be there for 38 hours each week. It’s not the work, it’s the time I feel I am forced to give up. My precious time that I can never get back. And as I eventually move up the ladder of adulthood that precious time is continuingly taken away from me. It seems like I don’t have enough at the moment, what happens when I take on more responsibility at work and move up in my career? Move out with my partner? What about KIDS? Yikes!

This blog is going to track my journey from $0 net worth to FIRE with detailed information and analysis on saving $$$, investing, mindset, struggles and anything else that is relevant to reaching FIRE.

 

47 Comments

  1. Alicia

    Finally a FI blogger who speaks my language 🙂 I’m 19 years old trying to set up for the path of FI, would be cool to meet more like minded Melbournians

    Reply
    • Aussie Firebug

      Cool that you’re starting at such a young age.

      Yeah it would be great if there was a meet up or something like that.

      Reply
      • Maggie

        Yes is there a meetup for firebugs? I would totally love to join – I’m also in my late twenties and my partner and I have pretty much been adopting this philosophy but only heard of FIRE recently.
        I live in Sydney 🙂

        Reply
        • Aussie Firebug

          Interesting. I was just talking about this with some other friends who read the blog and said I should do a meetup! I’m away this year, but I’d like to start doing them when I get back to Australia for sure!

          Reply
    • Nicholas G. Muscat

      Bit late to the party but I just turned 19 and I am doing exactly the same thing. However, I am from Sydney!

      Reply
      • Lara Teal

        It’s great to see other young people focusing on setting themselves up for the future! I was the same and was super fortunate to be connected with some successful entrepreneurs who are mentoring me on my FIRE journey. Would love to hear what you guys are reading or recommend checking out in terms of events?

        Reply
  2. tom

    hey mate
    great blog!

    any tips or advice getting started with Investment properties? ive read RDPD but want to know how to really get cashflow +ve properties here in Oz

    cheers
    tom

    Reply
    • Aussie Firebug

      Hi Tom,

      Thanks for the kind comment.

      Yeah RDPD doesn’t really explain how to do anything lol, more mindset. Still a great book.

      There are plenty of cash flow properties here in Aus, you just need to know where to look. You can almost certainly rule out Sydney or Melbourne unless you got a cracking deal. Most are in countries towns or bigger regional hubs.

      Do you read any real estate mags? They have some good stats at the back of them that gives the median rent yield for the suburb. If you’re purely looking at cash flow properties, this is not a bad place to start although I would be wary of mining towns.

      Email me if you want to know more.

      Cheers

      Reply
  3. Fred

    Hey!
    Love the podcasts! Even though the quality sucks.
    Keep up the good work 🙂

    Reply
    • Aussie Firebug

      Thanks Fred.

      LOL love the honesty. I working on the quality 😉

      Reply
  4. Jon

    Good to find a fellow Aussie on the path, started a few years ago have been following a few US guys, looking forward to reading about your journey and Aussie strategies!

    Reply
    • Aussie Firebug

      Thanks Jon

      Reply
    • Daniel

      Dude, just opened a commsec account and was YouTubing tips on it stumbled across your page then website…. been on here for 3 hrs.
      So glad I found someone who speaks my language. I’m mid 30s and am just starting. (30k net worth.) tell me you e written a blog how it’s not to late for me to start. ? Keep up the good work mate!

      Reply
      • Aussie Firebug

        Hi Daniel,

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

        It’s NEVER too late to start. Contrary to popular belief, starting to invest in your 30’s will put you way ahead of 90% of Australians. The FIRE crowd are extreme outliers and most people don’t start to think about this stuff until their 50’s and 60’s.

        You’ve got decades of compounding ahead of you my friend 🙂

        Reply
  5. Sush

    Great to read your blog. Quite refreshing and detailed. May I ask how did u start with the ETFs and which product/company you use? I am looking at any financial vehicles which allows me to put a few $$$ (less than $500) every month to begin with and get on the compounding interest bandwagon.

    Reply
    • Aussie Firebug

      Hi Sush,

      Thanks for your kind words about my blog.

      I use Commsec when buying ETFs. There is a difference between buying ETFs through an online broker like commsec and directly through the managed fund like Vanguard. There are pros and cons for both sides. I’m actually doing a wrtie up now about how to purchase ETFs so stay tuned 🙂

      Reply
  6. Elliot

    Hey do you mind sharing your age, would like to know how I am travelling on the journey to FIRE, cheers!

    Reply
    • Aussie Firebug

      I turned 28 two months ago Elliot.

      Reply
  7. Nikki

    So glad I came across your site! You’re a year younger than me but if I could get to where you are in ten years time that would still be awesome. I can’t find a search button on your site so could you tell me, what are your thoughts on cryptocurrencies? Is it a good idea to invest a small percentage of your portfolio in it? Thanks

    Reply
    • Aussie Firebug

      Hi Nikki,

      A search bar is coming! Currently doing a site make over.

      Ahh crypto’s. Certainly a hot topic at the moment. Me and a few friends bought some bitcoins earlier this year for a bit of fun ($100 worth) to actually see what it’s like to buy, transfer and sell. I can definitely see the attraction with bitcoin and the blockchain technology.

      But it’s way too early to tell if it’s going to pan out. Even if crypto currencies do become mainstream. It might not be bitcoin that is the gold standard by then. Look at what bitcoin cash is doing right now, it may overtake bitcoin but who knows.

      Bit of a gamble if you ask me.

      Reply
  8. Mark

    Love the idea but thinking it’s a bit late for me – 45. Any tips or advice for those further down the track. Not all is lost though. I do own a portfolio with ETFs and paying down the home loan is a priority. Work, to be blunt, is stressful and unfulfilling. I don’t mind work per se, it’s just that I’d prefer my work to be something I actually enjoy and look forward to.

    Reply
    • Aussie Firebug

      45 is still young Mark!

      Just keep plugging away and stick to the basics.

      1. Spend less than you earn.
      2. Invest the surplus or pay down debt
      3. Wait

      That’s it!

      The fact that you’re even aware of these things at 45 puts you miles in front of others who don’t even know who their Super is with until they hit 60.

      Good luck mate

      Reply
    • Barry

      You merely need pure 10 years of sacrifice. I started late in my career, first decent job at age 30 and little money. Rented a small room paying little and close to work. Worked hard, overtime etc. Scrooge for first 5 years, I took every dollar as gold because I understood the power of compounding. Post 5 years, start to go easier on finances.

      Invested from day one. Fortunately it was 2008/2009 on wards. Bought a mixture of shares and Aussie properties. Had a like minded partner, so it was a breeze. Retired age 38. Partner works 1 to 2 times a week. 2 kids. Net worth 2 million including Super.

      It all starts from the ability to save.

      Strategy:
      1. Will only buy property as a Permanent place of residence (PPOR). (Can’t recommend NSW/MEL at the moment. Though might consider Perth especially if you are living in it. Concentration RISK is the number one problem with property. Perth is not NSW/MEL as Perth does not have well diversified industries.
      2. Shares diversified ETF: VAS/VGS/VGE or VDHG (once liquidity improves in a year or two)
      3. I do not recommend VEU/VTS combo due to (a) decease estate taxes if assets becomes huge in future but also that if (b) I’m not mistaken (you only get a 15% tax offset, with USA domiciled funds, i.e. if you do not pay tax to the ATO (e.g. below 20k tax free threshold), that 15% tax offset is a waste, hence effectively you are paying 30% tax on dividends. This becomes a huge issue with a million dollar portfolio and FIRE.

      BUT might consider a mix of IHVV and VTS when cape ratio is reasonable again. There isn’t a low cost S&p500 aus domiciled fund that is also low cost and high liquidity.

      Also it is easier to rebalance with VGS with your defensive assets including gold (<10%).

      3. Make use of Shillers CAPE ratio for risk mitigation. There is an article somewhere I've read by Wade D Pfau.
      Title: Long Term Investors and Valuation-based asset allocation.

      I'm adopting the 20%-100% equity allocation. Gives you best sharp, sortino ratios.
      In other words, in year 2018, an overvalued environment i.e. USA shares, Ex USA shares are still highly correlated to USA shares hence we can't ignore it.

      Hence I have gradually cut down on equity exposure without incurring too much CGT. The aim is between 20-50% equity exposure when values are expensive. and up to 100% when cheap.

      Risk to me is maximum draw down. I can't tolerate a 50% draw down yet I want a similar return if not better than a 100% fixed equity exposure. Shiller's cape helps to slash that max draw down by half yet with similar returns if not better.

      Read a few financial planning articles supporting the use of cape ratio especially in the risk zones prior and post retirement. Once you attain FIRE, shillers cape and dollar cost avg, and rebalancing are all risk mitigating strategies that can not be ignored.

      If you have not faced a 2008 GFC like crisis, you will never know your risk profile till you've faced one. Cape ratio will help in this case until you have determine your risk profile.

      After all, a 100% equity exposure for at least 20 years or more will likely give you the best outcome. NEVER less than 20% RISKY exposure in any circumstances in your investment portfolio. Most bull runs happens in a frothy environment (overvaluation). However, value investors generally lose out in bull runs, but their aim is to be greedy during undervaluation.

      Disclaimer: Sold PPOR recently, now living in my investment property (may sell it and rent). 163k equity exposure. (Zero USA exposure, rest mix between AUS, Europe and Asia).

      Lots of cash (not a good idea). But as Warren B. says" its a call option without an expiry date". If Warren Buffett and Seth Klarman can hold lots of cash, why can't I ?…..

      Minimal exposure to bonds, but will gradually buy some in a year or two.

      I'm just glad I still can get a 2.8 to 3% return on my online savings account.

      Reply
      • Mahesh

        Nice work!! Barry. I should gain some knowledge on the cape you are talking about..

        Reply
      • Daniel

        Calm down Barry

        Reply
  9. Jim

    Nice work mate, love the site. Im on a similar journey to you, similar net worth and looking for Fi. Good luck!

    Reply
    • Aussie Firebug

      Thanks Jim 👍

      Reply
  10. peter smith

    hi Aussie firebug.

    been looking for ages to find the right investment but never can find, then I discovered your blog, and I was thinking you could help me, I have 4 investment props all on interest only and 500k sitting in a 2.8 % account, I want the money to work harder but have little knowledge of doing this, would love to stop work but need help to live off what I’ve got.
    my name is peter, 50 years old and 100k in super, own my home.

    was looking at vanguard investments, don’t fully understand them though
    if you can help it would be much appreciated, thank you

    Reply
  11. Kishore

    Just curious about when did you start and how long it’s takes you to get to your present net worth. I have a 18 y.o son and want to help him on this journey too. Cheers

    Reply
  12. Ross

    I have only just started to listen to your podcast AFB! I work 12.5hrs a day as a Laboratory Technician in a Pilbara mining town, and one thing is for sure, I have lots of time on my hands and PLENTY of money coming in. I am so excited to start my journey at the young age of 23 and I cannot thank you enough for being the person to convince me to do so.

    AFB is such an amazing thing that all young Australians should get into. I applaud your efforts.

    #AustralianOfTheYear

    Reply
    • Aussie Firebug

      😂😂😂 You’re too kind!

      Great position to be in mate. Start that snowball and get that passive income rolling in brother!

      Good luck

      Reply
  13. Imz

    Was following US based bloggers for quite a while but got pretty frustrated about all the 401ks, RothIRAs and stuff I couldnt relate to.. Glad to see an Aussie on the Journey,

    i’m thinking of moving from Sydney to Adelaide at some point so i’ll have a much lower PPOR mortgage (something like 250k max) cos owning my home is a must, yet i’m not particularly interested in taking on a 600k+ mortgage for that purpose.

    My main headache up till now has been the issue of jobs, so I was just wondering.. You said you live in the country, could you be a little more specific? And how were you able to get a job that pays the current amount you earn – outside a capital city?

    Thanks, and keep up the good work.

    Reply
    • Aussie Firebug

      Hi Imz,

      I got lucky I guess. IT generally pays well… and I was lucky to get into government straight out of Uni. That’s all there was to it honestly. Mostly luck.

      Reply
  14. Mike

    Hi there, I stumbled across your blog whilst trawling for info on ETF’s. I am in my 50’s and would like to retire in the next 5 or so years. We own our home and have a rental each which are mortgaged to the hilt (300 and 500K repectively) @3.99% fixed for 3 years but with guaranteed tenancy. I have 100K in savings and my wife and I both have well paying jobs. My question is, with the 100K savings am I better off paying off some of the mortgage (getting a redraw facility) or investing in ETF’s. I was thinking VAS, VTS and VEU in a 40/30/30 split. Any advice would be appreciated. I wish I had have stumbled across your blog years ago. Thanks in advance, Mike

    Reply
  15. Lee

    Glad I found your site. I love that you’re into real estate and since reading this your already living that FIRE life. bless you, man!

    Reply
    • Aussie Firebug

      Thanks Lee 🙂

      Reply
  16. Financial Gladiator

    Great story! Love it. I used to live in Australia for almost a decade. Left to explore and optimise my income. I have never been a fan of the Superannuation system. FIRE’d at 34. Now 37. Roaming the world. Networth 1.4m. With 85% in overseas Realestate which generates a health and stable passive income. I have a European background besides my Aussie citizenship. You mentioned somewhere you live out of the country? Where did you go and did you go to optimise you path to FI?

    Reply
    • Aussie Firebug

      Hi FG,

      I’m glad you liked my story 🙂

      We have moved to London mate. And it definitely has not optimised our path to FIRE haha. Quite expensive here. We’re doing the whole, ‘see the world’ thing and am loving every moment of it (currently in Belgium!).

      We’ll move back home one day. Family is really important to us. But we are young, with no commitments and already have a healthy amount of passive income behind us. Time to explore a little I say!

      Reply
    • Brad

      Hi, It seems from reading your story! you have lived an interesting Life, with up’s and downs along the way.
      Similar bumps in the road myself . But i think the journey also add to resilience and other strengths too.
      I live in Australia, my travels have not been anywhere near as much as yours.
      Brad

      Reply
    • Noel

      Hi FinGlad, do you mind if I ask for more detail on how your passive income is generated? My net worth is 1.5M excluding preserved super and equity in my principal place of residence. I haven’t FIRE’d yet but intend to within the next few years. Main reasons are having a pretty cruisey, low stress job with the real possibility of a decent redundancy payout coming up.

      I’m working my allocations toward having 1M targeted towards equities and REITs with stable income generation that should give me 40K to 50K of passive income reasonably protected against market down turns. I’ll then throw the rest (hopefully another 1M when I FIRE) at stuff with more growth potential that I can draw on in the good times to supplement the 40-50K. Over time I would be looking to transfer from the growth portfolio to the income portfolio and access to super once I hit my preservation age in 10 years will give everything a kick along.

      Reply
  17. IN

    I’m so glad to have found you! I’m a 26 year old student, worked since 14 with nothing to ‘show’ for it. I only recently heard about FIRE (specifically) however over the past year or so I’ve been OBSESSED with financial independence, being intentional with my money, instead of super impulsive and wasteful. I’m so excited about the future, to save, to learn, to grow, to invest! It motivates me to work hard at uni to make sure I get through so I can earn (far) more than austudy and set myself (and my family) up to be financially secure. I’m looking forward to going through every single post and podcast you have! 🙂

    Reply
    • Aussie Firebug

      I’m glad you’re here 🙂

      Enjoy the content!

      Reply
  18. Jordan

    Love the content mate, can really relate to your story as I also really enjoy my job but just hate the amount of time it takes from my life !
    I am a bit older and starting to think seriously about FIRE right before my 30th Bday.

    I have spent my working life in the rat race always looking for more money and inflating my living expenses when I get it and now have a large personal loan for our cars.

    It stops now for me and I am working on clawing it all back and getting my networth moving the other way as fast as possible.

    The one thing I keep feeling now is that my friends and family judge me when I talk about it purely because they have all done the normal thing of working, saving and buying a house and expect me to do the same thing.
    I even get it from my partner at this stage too but I think that’s just her fighting the same critics and emotions engrained in her from an early age.

    Did you face critics or people who didn’t understand why you were deviating from the norm of house and 9-5 until retirement ?

    Thanks for the content !

    Reply
    • Aussie Firebug

      Hi Jordan,

      I don’t really tell people in the real world… unless they probe. I’m happy to chat about it all but I don’t go out of my way to inform people of my plans.

      The one person that has to be informed though is, of course, your significant other. I can’t really help you too much in this department I’m sorry. I have been blessed to have found someone that I not only love but also came from a similar understanding when it comes to money, frugality and where we’re heading in the future.

      FIRE is a pretty radical idea so I’d expect some judgment from any sane person. You need to explain to your S/O why FIRE is important to you and the freedom it will grant. If she’s still not into it then maybe she never will be… and that’s ok. FIRE isn’t for the majority that’s for sure!

      Good luck with it all mate and hopefully she comes around to the idea.

      Cheers

      Reply
  19. Mr Why925

    Hi Aussie Firebug,
    it is great to read your blog and to see your openness in disclosing your personal wealth. Well done. You are easy on your way to your FIRE goal. I really like your podcast and actually it is the only one together with ChooseFI which I am listenning. It hard to come by to some Aussie specific fire info and you seem to have well educated yourself especially on Australian investment details, which I was missing from US centered posts. It was great to hear that you are enjoying yourself currently in Europe. When if not now? Though I am originally from Europe and after visiting 30+ countries I have not found better place for living than Australia. Especially now when after 17 years in Sydney I have moved to Sunshine Coast.
    I managed to free myself from the job after discovering MMM and ERE many years back. Retired at 43 which you would not probably consider particularly young but considering I held full time jobs only for 14 years without any major financial breakthrough I am quite proud on my achievements in FIRE area. I wish I have done as well in my career but then I might not FIRE! What it proves is that if you follow FIRE rules you can get there in no time even on average Aussie salary at least 4 times faster than you are told by standard financial planners. All you need is be consistent and don’t blow it. Oh yes and your other half should be on board which Mrs Why925 is.
    We are currently full time parents to your twin toddlers enjoying our lives in sunny Queensland. To say that I am busy even without job is an understatement. But at least what we are doing makes some sense, instead chasing mouse on the screen and entering some scribbles in little squares (I was an accountant).
    It is ridiculous to spend the life in the job which you don’t like away from the family and hobbies which you love. I wish I was one of about 20% of people loving their job, but it did not happen though I tried .
    I used to blog little bit since 2013 but now with bit of spare time I am trying to promote FIRE ideas myself based on my own experience, thoughts and interests on my own blog whyninetofive.com with Australian touch as opposed to majority of US posts.
    Good luck and thanks for writing and recording FIRE ideas so the financial freedom can be promoted in Aussie community.

    Mr Why925

    Reply
    • Aussie Firebug

      Loved the story mate 🙂

      Twins run in my family… I kinda like the idea of two for one but have heard it can get quite busy haha

      Checking out the blog now 👍

      Reply

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