[00:00:00] Aussie Firebug: Welcome to the Aussie Firebug podcast, the financial independence podcast for Australia.

Hey guys, welcome back to another episode of the Aussie Firebug podcast. The financial independence podcast for is where I interview clever people who’ve already reached her on their way to financial independence.

Today on chatting to Sam, a financial planner from around the B Bay area, who had a really interesting path before he landed in finance. Sam reached out to me after my super podcast with James from early on in the year and explained that there was so much more to cover when it come to super and fire for Aussies, which was shocking to me because that first podcast at the start of the year about super was a massive one.

It was close to an hour and a half long. One of the most interesting topics from a financial point of view that has come about from this global pandemic we’re all in, is the early access to super this become available for a lot of people who meet the criteria. We’re going to be chatting about the circumstances where it makes financial sense to withdraw the money and use it in your journey towards fire.

We also go into a deeper dive into the first home super saver scheme. That’s a, that’s a tongue twister. That one and I really cool conversation about why everyone, whether or not you’re aiming for fire or not, should really aim to have 1.6 million in their super account when they hit their preservation age.

It’s a really cool [00:01:30] strategy. Sam talks about, I’ve never had someone explain it exactly how he explains it, so I’m sure you guys are gonna love that one.

So let’s jump into it.

 

Hi, Sam, welcome to the podcast. Thank you so much for coming on.

Sam Thanks, Matt. It’s good to be here.

Aussie Firebug: Now let’s start with you, mate. How did you get involved with the financial industry?

Sam: so I got into financial advice four years ago. came out of a farming background and before that, a, sort of community service, actually working for my church for about seven years in the U S.

And before that, just backpacking around the, the, European, North Africa for 18 months. So I’m sort of on my [00:03:00] fourth career now. loving this one, loves working with people and yeah, that’s, that’s where I’m at now.

Aussie Firebug: That’s an interesting story there, Sam, and, and an interesting path to get to the financial industry.

I’m curious what, what sort of farming, what background in farming is, did you

Sam: have.  well, I grew up on an American quarter horse stud. We always had about 50 horses around. We had cattle as well. And then when I came back from the U S was really interested in sustainable agriculture, did some permaculture courses, holistic management, which is sort of broad acre grazing management stuff.

and yeah, ended up setting up some properties here in the Northern rivers of new South Wales, sort of Byron Bay area. sustainable type self-sufficiency farms for people. And, anyway, there was just sort of a limited scope for growth in that always working for, for others.  got given an opportunity to move across into financial advice by a friend who had been in it for about 30 years.

And I knew a little bit about the depth of relationship that he had with his clients and sort of the trust that they had in him. And I thought that was probably a good, good industry to be in, you know, being part of people’s lives, helping them out, and yeah, going deep with people. So that really drew me to it.

And I’m, I’m enjoying it.

Aussie Firebug: I, you an American citizen as well. You sound like your accent sounds Australian to me.

Sam: Yeah. And not yet born and grew up in Australia. Left when I was 18, met and ended up marrying, Austrian American girl.

we met at the Bible college that I went to the U S [00:04:30] for. And then, Yeah. We moved back here, in the second year of being married.

Aussie Firebug: So what an interesting story. Now, I don’t know if you’ve had, this is sort of going off on a tangent already where we’re only two minutes in, but, I wonder if you’ve ever had a look at the us system, like the financial system and the tax laws there?

Because from what I’ve heard, and I’ve had actually a few. American citizens, you know, message me about if they’ve come to Australia and, you know, the whole bunch of really complicated tax questions that I have. No, absolutely no idea how to answer. But, have you ever looked at the American system and just thank your lucky stars that you’re working in the financial industry in Australia?

Sam: Well. Yeah, the pros and cons. I mean, when I was living in the U S I wasn’t making any money, so I didn’t really pay attention to the money system. I was sorta over there for, it was about seven years on a volunteer basis. So didn’t really have reason to pay much attention to it, especially as a, immigrant.

the rules were different for me, but I do have a brother living in Canada. And, so to talk to him and compare notes about what their opportunities are for, you know, fast tracking, their wealth creation. And yeah. Now I’ve got us friends that I’m sort of talking to about it. There’s pros and cons both ways.

you know, to, to both systems. Hmm.

Aussie Firebug: I’ve just shared it. It’s a bit of a nightmare of you move out of the U S you’ve gotta like keep paying taxes even though you’re leaving and stuff

Sam: like that. That side of it is a disaster if you’re a us citizen and you [00:06:00] leave. Yeah, absolutely. Yeah.

Aussie Firebug: No, it’s all good.

It’s a weird, it’s a weird cyst. I don’t know it like. I thought, I don’t really want to know it, but, yeah, it seems a bizarre way to do things. Anyway. Yeah, we’ll jump back on topic. So there is a very hot topic amongst the fire community at the moment and probably the larger just the Australian finance community, and that is the covert 19 early release of super that the government proposed the other month.

So I did a super podcast with James at the start of this year, which was an absolute monster, and I thought it would be good to discuss a few other things in regards to super and fire that maybe wasn’t covered as in depth as we would have liked to in that first podcast. So. With another super expert, coming on being yourself, I thought it’d be good to touch on the hot topic of the `early release two or the early access to super.

And also just a few other things about super that we may have missed in that first one. So let’s begin. Early access to super, what is it? How does it work.

Sam: . So, early access to super is a short term opportunity in response to the Covid 19. And the financial pressure that people are feeling is to be able to withdraw up to $10,000.

In the current financial year. So prior to June 30 and then a further $10,000, or up to $10,000 in the next financial year. So post July one of this year. and [00:07:30] the, obviously the spirit of the, The thing is to help people that are under financial hardship, unable to pay bills, unable to put food on the table.

I’m guessing that. Does not cover a lot of the people that listen to your podcasts and follow, you know, fire blogs and are on the fire journey. Because if, you know, if you’ve been on it for any period of time, you’ve got an emergency account, hopefully with a bit of cash there to get you through, at least until you get onto some of the other government.

the subsidies at the moment, whether it’s job keeper or job seeker, but we won’t go into those for now. We’ll just stick to this. so if, you’re in financial hardship, you can get that money. I think one of the best things about the early access to super is that it’s getting a lot of people to sit up and actually take a look at their super account.

because a lot of non-fire people just ignore it completely. They don’t know what insurances they’re paying there. They don’t know what it’s invested in. They don’t know what their balance is. That didn’t even have their log in set up to be able to check it. So I think that is a secondary benefit. But in my line of work, it’s a good thing.

A lot of people are starting to pay attention. unfortunately a lot of people that are under financial hardship and pull that $10,000 out. we’ll spend it and probably don’t have the intention of repaying, or topping this super [00:09:00] backer, which, , anyone that knows anything about compounding, it’s going to hurt at retirement.

Some of the figures that have been thrown around are obviously on the high side by the superfunds. Because they like to keep as much money under their management as possible because they charge a management fee and there are more realistic numbers as to how much someone’s retirement savings actually going to be affected.

But either way, you know, you’re robbing your future self if you pull that 10 or $20,000 out and don’t top it back up.

Aussie Firebug: , so first of all, I guess I want to make clear that.

This, , early release to super there, there are stipulations and rules, to get access to super. So there is , eligibility testing. I believe that it’s happening. So if you are not eligible to have to do early access to super, you shouldn’t be doing it. That is breaking the law. and you shouldn’t do it.

But for the people that are able to access this early access to super, like you said. $10,000 for this financial year, which we’re recording in, on the 2nd of May 20, 20. So the 19 to 20 financial year and the 20 to 21 financial year, so potentially up to $20,000 out of your super. So just, I don’t want to make it clear the  algebra eligibility rules, having trouble saying that.

so they, I did have it up here, so it’s

Sam: easier. I would just stick to the Australian New Zealand citizen one. Otherwise, you podcast is going to be quite long. There’s different rules for temporary visa holders, [00:10:30] et cetera, but your Australian ones are pretty simple. if you’re unemployed, and that’s whether you were unemployed before the 1st of January, 2020 or after just flat blanket rule.

If you’re unemployed, if you’re eligible to receive job seeker. Youth allowance, parenting payment, or other special benefits like farm household allowances, like drought related type things. and then if you have been made redundant after the 1st of January this year, or your working hours were reduced by 20% or more.

After the 1st of January this year, or you’re a sole trader and your business was suspended, or there was a reduction in your turnover of 20% or more since the 1st of January. So the eligibility rules are pretty, pretty straightforward, pretty simple. And the easiest way for people, I think, to pull it up and look at their own situation, see if they are eligible, is just Google early release of super fact sheet treasury.

And that’ll take you straight to the horse’s mouth and you can see the rules there.

Aussie Firebug: Yeah, I’ll, I’ll put a link in the show notes for everyone listening out `there, if they want to go to the website to see the, the rules of , who and who can not get access. Access to this early release. Now these rules, you know, reading through the last couple, if you’re made redundant, if you’re unemployed or the big one, to me, if your working hours were reduced by 20% or [00:12:00] more, like that is a lot of people, especially, it’s a lot of people and that’s, it’s almost a bit hard to.

To quantify, like there’s going to be a few gray areas. I would assume that the government are going to be auditing, but, but regardless, it’s going to be a lot of potential people that have access to to the super. So, or this early release. So a few questions that I have, it’s tax-free. Correct. So when you, if you apply for it and you can get the $10,000 yeah.

You don’t pay any tax on

Sam: that. Correct. Now, usually if you pull super out before you reach preservation age, and especially before you reach age 60 it just, it’s silly to do it. You’re shooting yourself in the foot in a major way, but because this is for, you know, financial hardship release, it’ll come out to you.

You withdraw 10,000. And 10,000 will come into your account and it will not show up as part of your taxable income for the financial year.

Aussie Firebug: Yes. Now, this is the big, I guess this is the big question amongst the community. Now let’s say, and this is, it’s personal for me as well, because mrs FIBark has lost her job, so I believe reading the rules that she would be eligible to have early release of the 10,000 offer.

Super. If she was to take out that $10,000 tax free. And put it into the ETFs that we, that we invested in, that she invests in. Although I understand that it’s now that that money has moved from a [00:13:30] low tax environment to a higher tax environment. But other than that, is there anything else I’m missing here for the downside of,  doing that?

Eve, you’re eligible to do that to top up your money outside super. That was previously inside super.

Sam: Yeah. Look, if you’re moving it from being invested inside of SU to being invested outside of super as long, you know, this is making the assumption that it’s an intelligent investment. It’s not highly speculative and likely to disappear, but sticking to the script of what, what you cover with your community.

yeah, the only downside on it, as long as it’s legal and you qualify, obviously. Is that you’re moving from a tax concessional environment that exists inside of super to a regular tax environment. That obviously depends on what your, your work situation has been prior to losing your job or having your hours reduced this financial year, and then obviously into the future.

there’s tax implications, but the other thing that I don’t know if you planning to go there, Matt, You could do both in that. and we’re going to talk about this a bit more later.  , the pros or cons of growing your, your super as part of your fire number or just trying to do that exclusively or primarily outside of super.

But if you, if you did have a double strategy where you’re trying to grow both you, you’re falling number in ordinary money [00:15:00] and you’re your fire. number for 60, age 60 and beyond. Inside of super, you could technically, and this is a loop hole that isn’t in the spirit of  the,  early access to super, I’ll be honest, but it, it’s, it’s, it’s playing by the rules of,  superannuation.

You could pull $10,000 out. You could re contribute that $10,000 and if you’re, let’s say you’re earning under $90,000 a year, you could save yourself 19 and a half cents in tax on the way in. and then just reinvest it back inside of super so you could actually end up in front by pulling it out, putting it back in, reducing your taxable income for this financial year, and then keep plodding along with your, you know, your fire strategy.

Aussie Firebug: yeah. That is very interesting.

Sam: Does that make sense?

Aussie Firebug: Yeah, it does make sense. I did hear that strategy. It’s very interesting. I wonder,

cause like you said, it isn’t

in the spirit of the law, but it is playing by the rule book, that it can be done and saving tax. And to be honest, if, if you’re playing while the rule book, this is, I guess this is my personal opinion and, a lot of people, like you got, I’m young, there’s gotta be a lot of different opinions about this, but.

If you  reducing your tax, legally, I don’t have any issues with that. obviously tax evasion [00:16:30] is illegal and you shouldn’t do that, but tax minimalization is perfectly legal. I do wonder this, this taking it out and putting it back in. I wonder if they like, that seems too obvious to me. Like a lot of people are gonna abuse that, and I wonder if they’re going to somehow, audit that or, or do something with that.

But I guess we’ll wait and see, if anything changes by the time this is recorded, and any, any laws or updated or anything, I will, I’ll make an edit. but that is super interesting. So you pull it out. Tax-free, and then you make a contribution to your super, so you reduce your taxable income and you save the difference in tax.

That’s sort of how it works.

Sam: Yeah. Now, obviously this is not personal advice, I’m sure you say, of course. and you’ve gotta be spot on with the timing of how you do that. And if it is you, generally, if you make a contribution to super, a concessional contribution to super through your employer, so salary sacrifice, then you don’t need to do any extra paperwork.

But if you make a, A personal concessional lump sum contribution. Then there’s extra hoops that you’ve got to jump through, which is shorter. And so you have to submit a notice of intent to claim form, and you don’t want to miss that. Otherwise, the whole point of doing it is, is lost. and you’ve essentially pulled 10 grand out, put it back into super and paid 15.

[00:18:00] No, sorry. If you put it back in, you won’t without doing the notice of intent. It will have just pulled money out, put it back in with no advantage to it. Right. You’ve got to submit the notice of intent to claim form to, to secure the advantage.

Aussie Firebug: Okay. And is there any cutoff date, and, and speaking of this early access to super, I guess this is a good question as well, when, what’s the latest someone can do this?

We’re recording this on the 2nd of May and hopefully I’m going to have this published relatively soon. is there any deadlines or something that people should be keeping an eye on?

Sam: Yeah. Look on the, on the fact sheet, there’s some explanation of timing, but it’s very brief. All it says is that you need to pull it.

You need, you’re able to make the request, sorry, from the 20th of April onwards. Now. Like super funds are, are taking their say about five days to get the money out to you. So I’m guessing though, the timing on this would be, as long as the request is made before the 30th of June, this financial year, then that would tick the box for your, your first part.

And then obviously at the timing for the next financial year, one is you’ve got a lot more room to breathe, cause you’ve got a full 12 months to do it. But if I was doing it, I wouldn’t be leaving it until the last week of June. I’d be doing it sort of first week of June, so that this time for the request to go in the money to come out.

[00:19:30] and then if you, that’s if you needed it for financial hardship. If you were putting it back in, yeah, I’d give yourself a bit more breathing room because you’ve, you’ve only got to get that notice of intent to claim form in before your tax return is done for this financial year or before you roll that superannuation to a different account.

So you wouldn’t want to go changing super funds in the middle of this. Re contribution strategy.

Aussie Firebug: Right? And that’s actually just reminded me of something else that’s happening, as a indirect result of this early access to super, and this isn’t, isn’t a question that, I’ll show you before the podcast.

So if you don’t know the answer to that, like don’t feel free to just pass on it. I didn’t give you any time to prepare for it, but there is a lot of news in the media  about super funds. Having issues or having trouble with people wanting access to $10,000 cash because of unlisted investments in the super funds.

And the big one that’s getting a lot of press at the moment is the, the  host plus industry super fund, which, Scott pap, the barefoot investor, he promotes heavily the heat. Now he doesn’t promote. The, the option of the unlisted investments, he’s always said that the, the index fund one, like the, the low fee option within that super fund is the one he would go for.

So it’s not like he’s, he’s promoting , the, the product that’s. I’m not going to say failing or that’s [00:21:00] causing a lot of issues at the moment. do you have any opinions or any, anything that you can tell us about why that’s happening? what you think might happen in that space and just general, I’m just generally just interested to hear what you would say in regards to that topic.

Sam: Yeah, so obviously if people have made an investment choice to be invested in an unlisted asset class. or an unlisted asset, if, you know, I’ve just looked at it here, that news news is saying that 360,000 Australians have applied for an early release of super. So we’re not talking lunch money here.

It’s a lot of money that some of the superfunds are having to, to release cough up. And yeah, a lot of the, especially industry super funds have invested in infrastructure, projects. You know, roads, tunnels, you know, big, big office buildings in the city. They sorts of things that you can’t sell one of the offices down the bottom overnight in order to free up some cash to give to members who want to pull it out for one reason or another.

So, yeah, it’s just, it’s a rush on, those assets that would certainly have a cash allocation. Yeah, but not enough cash sitting there to be able to honor. All of the redemption requests that are being made.

Aussie Firebug: Yeah. It’s low

Sam: liquidity, right? That’s like

Aussie Firebug: the crux of the issue, that they’ve invested in a lot of assets of, of low liquidity and [00:22:30] it’s not really their fault to be honest.

Like if the government makes a flips a switch, like , who knew that a pandemic would grip the world in 2020 like, no one knew this was happening. So like, it’s easy to criticize these super funds, but in reality, It’s not like they knew that this was coming and when the government just click their fingers and it’s like, Oh, we’re just going to pass this law really quickly.

Like we can’t think too hard about what’s going to happen and the repercussions like it is, they’re put in a tight situation. But it is, it’s interesting too. You know that this has come out. And I do wonder if there’s going to be some sort of, Royal commission or something, about this. And, you know, some rules are going to be put in place after this all goes down to say that they can’t invest in unlisted funds or something like

Sam: that.

Yeah. I’d be surprised if that happened because, I mean, if you went and checked their product disclosure statements, it would, it would address liquidity issues. And you know, it’s a two edged sword. Unlisted assets at the moment haven’t dropped 30%. because they’re not listed on the stock exchange.

They can’t be valued every minute of the day between 10:00 AM and 4:00 PM. They’re valued generally every quarter by certified property valuers or assesses. and that’s why they’re, they’re an investment option that has a lot lower volatility. But part of that is because they’ve got lower liquidity.

And, you know, it’s not, no one plans for a [00:24:00] mass Exodus like this. So I think there’s a lot of, lot of grace is going to be given across, you know, lots of different areas.

Aussie Firebug: , if someone is in. Host plus, I’m pretty sure it’s host. Plus someone is in host plus super and they’re looking to get out.

Like are you seeing in your experience, many people moving super funds or transitioning from one fund to another because of this reason or other media overblowing the issue here.

Sam: Are, look, I mean, bad news sells. so I’m sure they’re overblowing it. I haven’t followed it super close.

We don’t have a lot of people in industry funds. and. Yeah. I just haven’t had my finger on the pulse with that one.

Aussie Firebug: Okay. Fair enough. all right. We’ll move on to the next topic then. And that is the first home super scheme. I think it’s, that’s, the name of it. The FH S. S

Sam: yeah. We spoke. First time Supersaver scheme.

Aussie Firebug: FH SSS. It is a tongue twister. Yeah. Now, I spoke a little bit with James about that in the first podcast, but we really didn’t do a deep dive into it. So I’m keen to chat to you, Sam, about what is it, how it works in, can people chasing fire uses to their advantage on their journey?

Sam: Yeah. So obviously, depends on what people’s circumstances are.

For instance, if you’ve owned property. In your own name before then. It’s a no go zone [00:25:30] because the eligibility criteria is that you cannot have held property in your personal name before. What happens

Aussie Firebug: if your video partner has just, sorry to interrupt that. A real quick question. If you’re

Sam: no good question, they can go.

They can do it themselves. Even if they’re going to buy a property. With someone else who has held property before interest. So you are treated as an individual, not as a couple on it. So I’ll walk you through it as a hypothetical. Let’s say you have owned a property before. mrs Firebug has not, mrs Firebug can put up to $30,000 into super.

an EMR market as being related to the first home super saver scheme. That’s $30,000 is broken down into a maximum of $15,000 per financial year. And so over two years, they could add, mrs Firebug could put $30,000 total in. The advantages of doing that is that. That $15,000 each year would reduce her taxable income.

So let’s say she’s owning that below $90,000 for the $15,000 that she puts in, she’s going to save 19 and a half cents for every dollar. [00:27:00] And her tax return will be larger in both of those financial years. And if you keep track of the difference, you can put that extra texture stone aside towards your home deposit or paying off that mortgage or putting it into whatever investments you’ve got going.

When the time comes to purchase the property, that money is pulled out, and needs to be spent on your first home. You need to live in the property. For six months of the first 12 months of owning it. So if you’re someone that’s looking to rent best, buy an investment property in a good growth area, but you’re living somewhere else because of work or lifestyle, whatever it is, it’s probably not for you because you do have to satisfy the requirement of living in it.

As your first home for six of the first 12 months. but one of the other advantages to it, and I think this is a big one at the moment, when you’ve got term deposits, you know, under 2%. which is generally a sensible place for people to start stockpiling a a house deposit. You certainly don’t want to go putting it into the markets in case something like what we’re in the middle of now happens and it pushes your home purchase plans back, you know, a couple of years, depending on what happens going forward.

Instead of putting your home deposit savings into a term, deposit it to less than 2%. [00:28:30] If, if mrs Firebug puts $15,000 into super tomorrow and pulls it out in two years time, the deemed right of return that will be given to mrs Firebug when she tries to pull that $15,000 out, is around 4%. So even if the Superfund value goes down, when that money is pulled out.

It will be the amount that was put in minus the 15% tax plus a deemed right of return of about 4%. So guaranteed rate of return tax concession. It’s a pretty sensible strategy. I was helped to, you know, a good number of couples through it. But you gotta, you know, by the time you look at has anyone owned property before?

Do you have the money, to do it? All those sorts of things. It doesn’t fit everyone, but it’s certainly worth exploring if people have known property and and want to pick up a bit more tax

Aussie Firebug: short. Now there’s a bit to unpack there so that the 4% guaranteed return, w what is that based on? Is that based on the tax that you save by doing this strategy?

Sam: No. So that’s totally separate. So the tax that you save is based on your taxable income. So, you know, let’s say someone’s in the 45 cent tax bracket, there’s strategies and [00:30:00] absolute goldmine for them because, you know, they’re saving 30%. in tax by putting the money in, and then that obviously comes back to them in their tax returns.

So that’s one part of it. Yeah. The 4%, and I’m using 4% as around figure it’s roughly 4%. That, this is a same sort of equation that the government uses for, retirees, and people on. Yeah. Pensions with a look at their assets and it would be a compliance nightmare to try and keep track of. Okay. Sam’s retirement account returned 7% but Matt’s returns 6.3% and so the income from that for the income test for is.

His government benefit is 6.3 of what he’s got invested, but Sam’s rate of return was seven instead of getting into that level of complexity, they just say, if Sam has a hundred thousand in investible assets and Matt has 200,000 in investible assets, we are going to assume that the right of return on those investments is.

It’s about 4% that deeming is the process. That is the name that’s given to that process.

Aussie Firebug: Interesting.

Sam: And so the money that, [00:31:30] the money that goes into super for the first home super saver scheme, once you apply for the release through the ATO website, you go on there, you say, okay, I’m ready to buy a house.

How much am I allowed to pull out? They look backwards and see the date that the money was added to super. Then they do a calculation of, an annual rate of return of about 4% while that money was in there. They add that to the money that you put in, and then that’s what you can pull out.

Aussie Firebug: That is very interesting.

I’m not too sure many people know that that’s how that works. That’s, that’s, that’s super interesting. So even if, and I think you spoke on it a little a little bit before, but I just want to clarify. Even if the market drops, you’re guaranteed a 4% rate of return.

Sam: Yeah, and just on that point, that’s one of the risks with it is it’s a safe option for buying your first home.

It can be a bad option for growing your time and savings within super, because. Let’s say someone put in $15,000 on the 30th of June before the 30th of June last year, they put $15,000 in in the first week of July this year, they put $30,000 into the markets. They’ve got a deemed rate of return of 4% for the six months that it’s been in there, but if they want to buy a house next week, they’re [00:33:00] pulling $30,000.

Out of their super account after it’s dropped 20% so it’s stunting the growth of their retirement savings inside of super, but it’s helping them get towards their house deposit.

Aussie Firebug: Interesting. Okay.  so , when, when the money goes into, I don’t know, is it separated or that they just, they just.

Bookmark it to say

Sam: you could put it in and just earmark it in a cash account. so that.

It’s not effected that way. Yeah. and then you would just get the tax risk. You’d get the tax saving, you’d get the deemed rate of return, and then you’d pull it out. It can be done, but you’d have to get into your super fund , and nominate that that portion of your investment pool stays in cash.

Aussie Firebug: Right. Okay. Okay. Very interesting. So, so it’s a, and this is sort of super basics that I’m hoping for getting, but it’s not, sorry, it is tax when it goes in, but then it’s not tax when it comes out.

Is that right? Or is it tax both ways.

Sam: Yes, no, no, no. It’s not text when it comes out.

Aussie Firebug: Yeah. I guess what I thought. So 15% going in and then you get that you lower your taxable income and then it’s not taxed when you want to bring it out. And the, the really important bit there, which I never knew is a guaranteed rate of 4% when it’s in there.

which is very cool. It can vary. It can definitely help out. So, yeah. Awesome. That’s [00:34:30] definitely, that’s a big one. that I’ve learned and mrs Firebug actually hasn’t bought a house for herself. Now. She’s not eligible for the first home buyers grant because we’re a de facto relationship. We’re getting married soon, so that makes her ineligible for that part.

But this one, what you’re saying is she actually is eligible for this one, even though I’ve used the first home buyers grant and I’ve already bought a home. Which is very interesting.

Sam: Yeah. Yeah. And then if you wanted to double back on our first part of our conversation, if you wanted to sort of start, start to layer your strategies.

If, if you fit into the unique sort of demographic that ticked all the boxes on both the early release of super as well as the first home super saver scheme, you can potentially pull 10 out, put it in. Get the tax deduction and then pull it out in the future for your first home super saver scheme after getting a deemed rate of return of 4% but that’s for people that want to be real tricky.

Aussie Firebug: Yeah, that’s definitely something cause I believe. she will be eligible for both of those things, but yeah, I’ll have to do my research, but it’s very good to know. So, yeah, very, very interesting.

Sam: But again, on, on that one, just a real encouragement to people there. There are more, so to tick boxes that you’ve got to go through with the first time super savers games.

So go straight to the horse’s mouth, Google, you know, first home, super saver scheme, ATO [00:36:00] and read it all there. And that, the most frustrating thing about that is the timeframes on release. Generally when people go to buy a house, it’s like, you know, they find a dream property. They want it tomorrow. There is a bit of a lead time on getting that money released from super, it ends up being about a month if everything goes smooth.

So if you’re going to go house shopping in, say October, start the process 1st of July. Take care. Give yourself plenty of time of requesting the determination from the ATO, and then they do the calculations until your super fund to release that money to you. And there’s some lag times that sort of build up there that you want to be cautious of.

Aussie Firebug: Yeah, right. Oh, that’s very interesting. Anyway, I’ll, we’ll put a link in the show notes too. go to the FHS, link on the ATO website for people to check that out. I will definitely be checking it out. So, yeah, very good to know. let’s shift gears for a second here and chat about the pension balance cap of 1.6 million and why that should be a target for people in the fly community.

Sam: . So superannuation is, divided into two phases. The first phase that anyone under preservation age. and for most of your audience, I’m assuming, you know, we’re sort of younger, our preservation age at the moment is, is going to be 60, so let’s just talk about [00:37:30] 60. Sure. up, up to 60, you’re going to be in accumulation phase.

post 60, you have the option of moving that money. It stays inside the superannuation environment, but it moves across the half way line from accumulation phase to pension phase. The difference of those two is, A regular withdrawal amount can be set up from a pension account and account based pension inside of super, and the money that is paid out from there is tax free because you’re over 60 and the investment earnings on money’s invested inside of the pension phase are tax free.

Whereas in accumulation phase, the rate of tax on investment earnings is still 15%. So let’s imagine that you’ve got, 1.6, in super, well, let’s call it two mil. If you’ve got 400,000, Over that 1.6 cap, then it’s going to be sitting in an environment where it’s taxed at 15%. and the advantage of having it there versus outside of super is maybe questionable [00:39:00] depending on your taxable income that you’re drawing.

Keeping in mind that if you’ve got 1.6 in pension, when you pull it out, it’s tax free. So. You’re not really probably gonna have a tax problem and having it inside in an environment where it’s going to be taxed at 15% you might be worse off.

Aussie Firebug: So, so that 1.6 is really the, the gravy boat. Like everyone should be taking advantage of the tax free environment of that 1.6 it’s, it should be the target.

Regardless of where you’re at in your journey. You should be a preservation age. You want to have at least 1.6 mil in super.

Sam: No, I wouldn’t say, at least I would just say. The benefit of having more than 1.6 diminishes significantly. Sure.

Aussie Firebug: Yeah. Yeah, yeah.

Sam: I wouldn’t say it’s a minimum target. It’s a maximum target.

Aussie Firebug: Yeah. Okay. That’s a good point. Yes. Because especially in the fly crowd, if you’re going to be leaving off such a low amount of income from your investments, that you have the potential to be paying more. If you have all your investments in super, right. Then if you have it outside.

Sam: Yeah. And the reason, I think the 1.6 balance cap as it’s called, is helpful to the fire community is, you know, the debate of do we grow our fire savings outside of super or inside of super?

my personal [00:40:30] sort of approach to it is it doesn’t have to be either or. It should be both.  If you start early and make, let’s say the first year or two of your employment while you’re still living at home, or you know, you’re able to really keep your, your expenses down. If you could put.

The, the maximum concessional amount into super each year, which is $25,000 at the moment per year, which includes the nine and a half percent that your employer has to put in. If you max that out and ended up with $50,000 in super in your first two or three years of your career. You pretty much wouldn’t have to do any other contributions between then and age 60.

obviously this depends on your, your, wage and, or whether or not you’re getting a wage. Like if you’re a contractor, you’re responsible for paying your own super. Yeah. But let’s assume that someone’s just making 50 grand a year, the average Australian wage, and they’re getting nine and a half percent of that put into super.

Well, if, if, if a young fire bug gets themselves off to a great start by putting, say 50 grand into super in the first couple of years, you can sort of set and forget that. And because of the power of compounding in a tax concessional environment, you’re not going to be far off that 1.6 [00:42:00] cap. If you choose your investments correctly and make sure your fees are kept low and all of those basics, and then, then you would turn your attention to focusing on your savings outside of super,

Aussie Firebug: the power of compound interest,

Sam: right?

Yeah. But if, if I’ve got 50 grand in super and I’m 25 then. I don’t really need to be having the debate. Should I put more into super or should I save money outside of super? Well, if your projections show that you’re going to hit the 1.6 cap, by the time you reach age 60, then there’s not really, there’s not as much advantage to putting more into super versus putting it into your, You’ll ordinary money investments.

Aussie Firebug: That’s, that’s a really interesting point Sam. Cause we spoke a bit  before this podcast started recording about the fly calculator that I’ve got on my website and. I speak about that as well, and a lot of people, a lot of people ask me the same question over and over again.

You know, what is the most optimal way to reach a fire? Should I be investing in inside or outside? Super. And I don’t think I’ve ever heard that phrase like you just phrase it there, Sam. It’s, it was very, very interesting to hear, like, we all know, if you invest in super at an early age, the power of compound interest, you know, you’re almost.

Like you [00:43:30] said, that the math shows that you only have to invest so much at the very start of your career and then that will grow over time, but I actually never thought about it like that. If you get to that maximum amount, by the time you hit your preservation age of 1.6 then anything on top of that isn’t necessarily going to help you out that much and you can really focus on building the snowball outside super.

so that’s a, that’s a great, great way to look at it. Just do maybe do the hard yards at the very start and get a decent snowball rolling down that Hill, and then let the power of. Four decades of compound interest do its thing, and the snowball’s going to get to the magical 1.6. Hopefully, fingers crossed.

It doesn’t change by the time we get there. 1.6 mil, by the time you hit your preservation age and then you can focus on building your snowball outside super and you don’t have to worry, you don’t have to have that conversation with yourself. I like it.

Sam: Yeah. Interesting.

Everyone’s situation is different. So there might be different factors. You know, you’re saving, you know, maybe property is your, your gig, and you really believe in the power of leverage and you’re happy with a lot of debt. And you say, look, you know, that 50 grand that I could put into super. I can leverage that into $300,000 in an investment unit, and that’s going to have me better off, go for it.

But for those that are, that are always having that debate, or should I, shouldn’t I, and this is probably something that comes out of the financial advice sort of [00:45:00] track record so far, is when someone walks into the office and they say, Oh, what should I do? It’s up. There’s a thousand things you could do.

Tell me what you want to achieve and we’ll reverse engineer it. I think if you, if you solve that eternal debate of inside or outside of super by reverse engineering your super account balance to that 1.6 mil cap, you realize how easy it is to hit that target. If you know the markets do what the markets have always done, and you get an early start on your contributions.

And the fact that the, the snowball rolls down the Hill so much faster when you’re only paying 15% tax on those investment earnings.

Aussie Firebug: Good. Yeah, it’s a very good point. And it’s something that my calculator,

Sam: it’s on compounding on, it’s on compounding, on steroids because of the tax environment. And if you get an early enough start.

You can have your cake and eat it too. You can have enough money outside of super that you finish it. Say, you know, 33 you’ve hit your fire number that will help you coast until you hit 60 and then that, that money is going to come. And I’d probably just make a comment. I mean, everyone will have their opinion on this too, but I think especially when we’re young, it’s.

It’s a antiestablishment. It’s cool [00:46:30] to be skeptical, and sort of down on the government. But I think if we just think of what motivates governments votes, what’s the fastest way to lose votes? Tell people they can’t access their money. Like. That I think the financial situation would have to be the least of our concern.

If it gets to a point where the government isn’t going to give, , a whole generation of retiring people access to their money at 60

Aussie Firebug: I see what you’re saying. Stuff.

Sam: I’m just not as skeptical on that.

Aussie Firebug: Fair. Fair enough as well. But wouldn’t you agree that. The government hasn’t done themselves any , favors, how they’ve, how they’ve already tinkered with the rules of super in the last decade or two.

Sam: I think a lot of that tinkering falls into the category of, it affects very few people. The tinkering, I think that has been done. And look, full disclosure, I’m new to this. You know, I’ve been paying attention to this, you know, at an increase level over the last four years. Before that, I didn’t have any super because I had volunteered overseas and I just wasn’t paying attention to money.

but a lot of the tinkering that has gone [00:48:00] on has to. To reduce the lucrative nature of the superannuation environment for wealthy people who don’t need tax concessions. That’s what a lot of it has been. And the other part of it, like you think of the increasing preservation age, the people that were allowed to access their money at 55 did not have 40 years.

Of nine and a half percent of their paycheck going into super. So there, there was a strategy and there is a strategy called a transition to retirement strategy where people, once they reach preservation age, they can pull money out of super to allow them to put more money into super to save tax and therefore boost their retirement savings.

Well, someone that’s 30 years of age now does not need. That extra help to get their retirement savings on track by the time they’re 60 but someone who was 55 and had only had, you know, what would it be 1520 years in the superannuation environment. They needed that little bit of extra help to get there and the preservation age has been increased as people don’t need that extra help.

Fed sort of tinkering to cater for the, it’s [00:49:30] tinkering to cater for the, the generational changes of, you know, the different waves of people that are coming through and the opportunities that they’ve had to save for their retirement.

Aussie Firebug: Fair enough, Sam. And that’s a, it’s a good way to look at. And you know what?

I hope, I hope you are right. And maybe I have been, I guess more skeptical of the government than most, but I do hope that, it doesn’t change too much and they keep the, they keep the rules relatively consistent over the next couple of decades when. you and me can finally get access to it. So, yeah, I’m definitely hoping, but either way, you look at it, what you’ve, what you’ve discussed is super interesting.

And you know, I’ve got my calculator on my website that does the whole, how much should you need inside? Super. How much should you need outside for like, optimal, tax optimization, but it still doesn’t factor in the, Maximum you can contribute to super the 25 K a year, because that depends on your tax rate.

And it was just too confusing. And I think I’ve got a disclaimer in the calculator that says, I just can’t be bothered putting it in. Like it’s, it’s too hard to, to, To factoring everyone circumstances, like this is the blanket general rule that I’ve got, but it’s very hard to factor it in. But yeah, I really liked the way you look at it, that 1.6 as a target, as a max that you want to reach in just doing the hard yards at the start and having this snowball, as you said, on steroids rolling down that Hill to get to that point.

So

Sam: interesting. Either way. I think it could moderate not to hop on the [00:51:00] skepticism thing because I like to have views about the future, but, The skepticism can be moderated a little bit when you look at, okay, so I put 20 grand a year in, in my first two years of employment, and that gets me on the road to the 1.6 cap.

Well, if they move the goalposts a little bit, it’s not like I was putting 20 grand every year. Yeah, too. Like I wasn’t robbing my ordinary money investments or I wasn’t depriving myself of that second investment property because I was focusing on super, and now they’ve moved the goalposts on me. So that was two years of surplus income.

And then you forget about it and if they move the goalposts, it’s like, well, that sucks, but

Aussie Firebug: you know, we’ll live,

Sam: I’m going to hit the 1.6 cap.

Aussie Firebug: Yeah, yeah, it is. It is. You know, even I, I wrote a big article about like, when they label, we’re thinking about changing the Frank and credit refunds, and at the end of the day, it’s, you know, we will leave.

We will, we’ll get through it. there’s plenty of ways to get around it anyway, but, it just is. I guess it’s a, it is frustrating for some people that plan their retirement on certain rules and then the government want to change it and it can affect some people in certain circumstances greatly. And the majority of the population probably not as much.

Like you said, it goes back to votes, right? They, they make these changes. They try to get the best bang for their buck. Whilst also being empowered. They don’t want to lose the [00:52:30] vote. That’s like the number one focus, but they try to do everything in their power to shift, to shift the money around, to like do, more projects to get them more votes and keep them in power longer.

Anyway, we could go, that could be a whole

Sam: nother podcast where the first home super saver scheme came from. It was to get some votes. Of, you know, younger people that were struggling to get into the house market. That’s why we’ve got this opportunity with the first home super saver.

 

 

Aussie Firebug: I’m sure some people will be interested for sure.

Sam: Yeah. No worries.

Aussie Firebug: that is it. That is it. Sam, we’ve come to the end of the podcast. thank you so much for coming on and spending, spending time with us and offering us your expertise.

It’s been an absolute pleasure.

Sam: Hi, thanks for having Matt. I hope I’ve been helpful and yeah, love what you do and just keep people learning and it’s, that’s good. That’s

Aussie Firebug: good. Cheers mate. Appreciate it.

See ya.

Sam: Catch up.

 

Aussie Firebug: I hope you guys enjoyed that one. I love Sam’s thinking behind, maxing out your super for the first few years of your employment and then lending the power of compound interest, do its thing in a low tax environment. I’ve never really thought about it like that before, but I think it’s brilliant. Now check this out.

I did some quick mass and let’s say you’re able to max out your super contributions for just over two years. When you first start working and say you have a roundabout 50 K in super by the time you’re 22 let’s say you’re. A tradie. You might’ve been earning a little bit more money earlier on in the piece, and people that went to uni or something like that, you would have over 1.7 million in super by the [00:54:00] time you hit 60 without ever having to add anything extra yourself, assuming that your employer is contributing at least 5k year during that time.

Now, obviously there’s a few factors at play there. But let’s say that you get to that number in that situation, you could focus solely on your snowball outside of super, completely after the first initial two years that you’ve done the salary sacrificing, and you would still end up with a super balance around that really important 1.6 mil Mark.

Really cool to think about. There’s been a lot of coverage out there about the early access to super from very credible people basically saying, don’t do it. But the thing about all that general advice is it’s targeted towards every everyday normal people who won’t have the financial discipline to stick to a strategy.

Ask fire bugs are different. Accessing your super early can have financial benefits, especially if your goal is to retire early. We’re still getting confirmation on mrs firebox eligibility, but if she is eligible, she will be taking out the 10 K this financial year and the 10 K next financial year because our strategy is to build up our financial independence number outside of super.

And the only downside of doing this. Is the potential that that money will be sitting in a higher tax environment. However, there is also the possibility that we can save money on tax because retiring young puts you in a very unique position of an even [00:55:30] lower tax environment. Then super in some circumstances.

So for our situation, it actually makes financial sense. Make sure you read the show notes and fully understand the eligibility testing before considering this strategy though, and I want to make one last point about this topic because there’s been a lot of chatter on Facebook groups, online forums, and comment sections of news articles.

I’m not sure if everyone realizes, but super is actually your own money. It’s not a handout from the government, and people that qualify for the early release can spend their own money however they see fit. I’m constantly seeing comments from people judging others on how they spend their own money and somehow justifying this judgmental behavior with the fact that they’re going to have to pay for these people’s welfare checks.

Well, I hate to break it to anyone out there that thinks like this, but. That’s how welfare works. You don’t get to dictate how people spend their own money just because you don’t want to support them when they run out of money in retirement. Also, there’s nothing stopping them from taking a lump sum when they hit their preservation age anyway.

I’ve already spoken enough about how the government wastes billions of taxpayers dollars, and that’s billions with a B. But at the end of the day, I’m more than happy to pay my fair share of taxes because the overall positives far outweigh the negatives. But I’m not campaigning anytime soon to pay more tax, but [00:57:00] that’s enough ranting for me.

I hope you guys enjoy that one and I’ll catch you on the next episode. Peace. Thanks guys for listening to another episode of the Aussie Firebug podcast for links to all of the resources plus an entire transcript of this episode. Head over to  dot com make sure you never miss out on another episode by subscribing now on iTunes or SoundCloud.

 

Aussie FIREbug: Hey, guys, welcome back to another episode of the Aussie FIREbug podcast. Today, I am chatting to some O.G’s of the Aussie fire scene, two of my absolute favorite Australian bloggers who have both individually been on the podcast before. But this will be the first time that I’ve had them one at the same time. So first up, and making a record breaking third appearance. We have Pat, the shuffler from lifelongshuffle.com and joining Part is the man who starts my Saturday routine with his ever so insightful weekly posts. It’s Dave from Strong Money Australia.com. Welcome, lads.

 

Lifelongshuffle (Pat): Hey, how are you?

 

Aussie FIREbug: It is so good to speak to you. I can’t remember the last time I’ve had. David, last word to you ages ago for that podcast that we did. But I think did we speak previous to that or did we speak after that?And then Pat. I think Lossiemouth had you on the podcast was like, yeah, a year or so ago as well. I feel like we’ve we’ve spoken previously, though. Or am I just making things up?

 

I think we had a couple of email chats.

 

Aussie FIREbug: Yeah, it may have been. I thought like something to do with the FIRE documentary. What would you guys think of that documentary, by the way?

 

Lifelongshuffle (Pat): Yeah, I thought it was really good. Dave and I went to the Sydney premiere, so dave actually flew over from Perth and that’s the first time I actually met Dave.I thought was pretty good. Don’t think.

 

Strong Money (Dave): I think I think it laid out the I guess you laid out the basics pretty well of what’s required.But also I think maybe it went a little bit too far in in maybe leaning towards making it a bit dramatic, I guess, in terms of their level of sacrifice. It doesn’t have to be like a huge level of sacrifice. They put a good occupational spin on it because there is obviously emotions involved, but it didn’t have to be that, that level of sacrifice. But they’re making a movie, so you kind of almost have to be like that

 

Aussie FIREbug: I was spewing that I couldn’t be there with you guys, like I went to the London premiere of it. Yeah but I missed out on meeting Serena (aka Miss Balance). But it sounds like you had a ball.I have to, I tend to agree Dave. It was pretty good. I thought like as as a overall movie.I enjoyed it, but I definitely felt like if I’d just shown my parents or if I just showed someone, hey, on chasing this fire dream, this is what it’s about and I showed him this movie, they might watch it and be like, OK, you guys are crazy.You know, the way they portray that they live in this, what it seems to be a really great life by the beach with all their friends and then they get ripped out and they move back in with their parents. Like Mr. Money Moustache had on his blog, that “I moved out of this community to live back in my parents to save money”, I might have just stopped reading the blog right then and there.

 

Strong Money (Dave): Yeah, I mean, if they I mean, if you look at their lifestyle before it was pretty lavish I guess even if they just stayed in the same location and switch to like a smaller place or an apartment and then got rid of the expensive SUV’s that would have gone a huge way into building some sort of savings.

 

Aussie FIREbug: Yeah and then they move into like some Snowtown that the wife hates. It’s all a bit. yeah. I would have liked them focus more on the people who had already reached fire and like the benefits of reaching fire. But again, they do have to make a story. I have to make an ark and like everyone asks Travis in the questions after it’s like so is there going to be a chasing fire 2 in like 15 minutes time to see how it worked have to say so on. So I have to ask and this is made everyone’s feel and this is the moment. So how are you guys going in your respective states with all these Covid going on?

 

Lifelongshuffle (Pat): I’m in the construction sector and, you know, I’m considered an essential service, so it hasn’t affected my work whatsoever. I still go into work every day. I still,  travel by car there and all that sort of business. My missus is working from home. Traffic has died down a lot. I think there’s a general level of a little bit of fear.I think that might be dying down a bit now as people get sick of staying at home.But, yeah, as you know, that Australia is doing remarkably well. So maybe some complacency setting in a bit. I mean, what’s it like over there as you think people are getting complacent or if people are still sort of really knuckling down and iolating

 

Aussie FIREbug: We are still heavily lockdown in the UK. Nothing has really opened up. But in saying that BoJo is going to hit the TV, I think Sunday night, and I am expecting him to start opening up the country. You know, the first phase of opening up the country because, one, people are breaking the restrictions anyway, like we had we had a chat before we started recording and, you know, you’re not meant to be in the park and have picnics, to play bowl and all that good stuff. People starting to do it. Now, at the very start it was super strict and you could see a level of judgment on everyone’s eyes in the park if you have seen someone doing something wrong. I would be like, oh, your not meant to be doing that. But now I feel like so many people are getting over it and it’s getting to a point where I could not see it in the UK going on any longer than two or three weeks without them starting to open up a few things over here.

 

Strong Money (Dave): I think we’ve been one of the luckiest states in that we’ve had, I think, a week or a little bit more now of no new cases each day. So I think we’re gonna have some loosened restrictions coming pretty soon for us. I mean, it hasn’t really changed our lifestyle very much. My partner works from home now, but she’s doing two days a week. So it’s not not that big of a change.We still can go out and exercise take the dog for a walk and garden and go to shops. But I can definitely see that people are getting out more now than they were a few weeks ago. So there’s definitely people are becoming a bit maybe a bit less scared because it feels like we’ve gotten on top of it now.

 

Aussie FIREbug: I listened to a few news podcasts, and I think they’re talking about having like a little Tasman bubble or whatever they call it, ring with New Zealand, Australia and New Zealand opening up the borders between the two countries.

 

Strong Money (Dave): Yeah, I heard that as wel

 

Aussie FIREbug: I guess it give people an excuse to, to actually explore your own backyard Like if you, if you do have the urge to travel like Australia’s pretty bloody big , it’s the UK, Germany and Italy and Greece all of those countries put together. So if I was back home in Australia, I think you’d be the perfect time if they start opening things up to do a big trip around Australia if you keen for a holiday.Local tourism could boom.

 

Lifelongshuffle (Pat): Well, New Zealand could really benefit from this, couldn’t they? All these Australians just like, let’s get the hell out of here. The only place you can go is New Zealand.

 

Aussie FIREbug: So that is that that is true. Definitely. Now there are two two main reasons to have this podcast today. Firstly it’s always nice to chat to you.And we have great conversations. But secondly, you guys have some exciting news about a new podcast called Fire and Chill. I’d love to know the backstory about had that podcast was founded and then we could get into what it’s all about.

 

Lifelongshuffle (Pat): Yeah. So that Playing with Fire, a documentary premiere in Sydney. What was it like a year ago now or half a year ago? Dave and I were both there, we were both on a Q&A panel at the end of the show and it was the first time we met each other and I don’t know, we just sort of looked at each other and had a bit of a quick chat, maybe half an hour or something. And we just like on the spot like. Let’s start a podcast.

 

Aussie FIREbug: Sounds very romantic.

 

Lifelongshuffle (Pat): We just looked at it and gazed into each other’s eyes and we just knew

 

Strong Money (Dave): It was like, have you considered it? I think I asked Pat, have you considered doing any other type of content, you know, like YouTube videos or podcasts or something like that. And I think your answer was like or maybe a podcast. I thought maybe a podcast. But to do it with someone else, maybe like it with yourself or something like that and I thought, oh, maybe he’s just joking. I went to the back of my brain and then I think a couple of months later I said, oh, you know, that’s not such a crazy idea and then we started talking from there and it kind of grew. We researched it a little bit more and we thought, oh, actually, let’s do this. This is a good idea.

 

Aussie FIREbug: Excellent. Yes because i love yoir content. Pat, you need to start writing some more night. Like I haven’t seen any articles from you in the last 12 months. But even if theres just a podcast it is much appreciated. What should the audience expect when they download the first episode of Fire and Chill?

 

Lifelongshuffle (Pat): Dave, I’ll let you go.

 

Strong Money (Dave):  They should expect a damn good time.

 

Aussie FIREbug: Is there a specific genre or is it just you guys having having chats? And it’s a it’s a fortnightly podcast. Is that right?

 

Strong Money (Dave): Yeah, it’s going to be once, once a fortnight. We’re going to, I guess, launch the show on May 19 and it’s going to be three episodes like one intro one and then two topic related shows. And then after that, it’s gonna be one a fortnight. And it’s basically gonna be may impact diving into all sorts of fire related topics and having discussions around that, that basically we can go a bit deeper than we can in a blog post because we can talk for, you know, a good half an hour and get really into it, whereas no one wants to read a blog post that’s like ten thousand words long.

 

Aussie FIREbug: Yeah, Okay. Excellent. Yeah. And it is launching on the 19th of May. Is that right. Yeah. Ten days away. We are recording this on the 9th of pain now. And where is it going to be available? Where can people get these podcasts?

 

Strong Money (Dave): Basically everywhere.So it’ll be on iTunes, on Spotify, Stich Google, Google podcast

 

Aussie FIREbug: So you’re gonna be speaking about different topics. If people want to get involved or want to submit a topic question like is there any any channels that you guys are going to have set up to get people involved in the podcast?

 

Lifelongshuffle (Pat): Yeah, absolutely.

 

Strong Money (Dave): We set up an email address for topic suggestions, feedback, maybe questions, because we’re going to answer a couple of reader questions at the end of the shows. So we set up an email address and that’s [email protected]. Oh, can you put that in the little chat? Because all all include that in the show notes for sure so when this is published so people can I’m sure you get bombarded with topics and questions and stuff like that. Excellent. I’m really looking forward to it’s going to be straight on my podcast list.So just to be clear, I think I know the answer to this, but you’re still going to have a weekly post that you do, Dave. You’re not going to take away any production from your blog. This is just going to be on top of the work that you already do on the blog.

 

Strong Money (Dave): Yeah, that’s right. So I’m going to be working a bit harder

 

Aussie FIREbug: And what about you, Pat? How are you? Because like I did mentioned that you’ve you’ve been a bit light on on the blogging side of things. Where is that? Is there a reason that you have me blogging so much or you want to focus more on the podcast side of things? Or can we expect more articles from you coming up in the future? Is on on. I’m hoping that you’re going to.

 

Lifelongshuffle (Pat): Yes.Now, you can definitely expect more articles from me.I don’t. I have no excuses, Matt. I’m just slowed down a bit. I’ve gotten a bit lazy. I suppose I should probably spend more time on it, but I’ve always got like a backlog of three or four posts that I’m sort of working on in the background and eventually I sort of get get to finishing them and posting them. But I’m definitely not nearly as consistent as Dave is there.

 

Aussie FIREbug: I know on that issue all too well, Pat. I know that all too well. But you are working. That is our excuse. You know, we haven’t retired yet. So I think we can use that excuse compared to Dave.

 

Strong Money (Dave): I was just gonna say so that’s the thing I can’t believe you guys. I mean, especially yout Pat, back in the day when you running red hot on the blower. I cant believe you guys have time and energy to do that? I mean, I don’t think I would have a blog at all if I was still working. I just couldn’t be bothered like after work hours I just don’t want to do it anyway. It sounds I’m impressed that you guys even gave out the content they did well.

 

Aussie FIREbug: Well, I have there’s a good reason for for mine. I’ll go first. But when I first started the blog, I was working for the government. Now I know that there’s a bit of a meme that if you work for the government, you do no work. That’s 100 percent true. And let me tell you, when I was working for the government, I had so much free time at work, like I could knock over all my life admin on the job. So I would literally be, you know, all my emails, any accointing work, investing in properties. I was doing a lot of, like, you know, work for them at work and it allowed me to just get so much stuff done. And I often I do think back and I wonder, especially now working in London where it’s such a go, go, go work style and I’ve worked hard here in the private industry than I ever did in the public sector back home, that if I’d going into the public sector straight out of uni, would I have would I have had time to start a blog and a podcast? And I’m pretty confident that the answer would be no, I wouldn’t have. It goes to show how how much free time is important to create stuff like you. If you’re just working, you gotta earn notice by your mentally and physically drained after a job. You’re probably not going to have time to sort of do your best work and do stuff that is really important because you just spending all your energy at your job and any other while being in London, because I’ve already had those processes and habits already in place, I can turning enough blog content.  I haven’t I haven’t posted like a proper blog article in ages. I’ve just been doing podcasts which as you guys have known or will get to know, it’s a lot easier to get out podcasts than it is to like research a well a well researched article and put it all together nicely and to do it all to the standard that you want. It’s easier just to get on taught him sheit with a couple guys and outsource the transcription and then post the podcast. So that that’s sort of the reason that all was able to provide as much content as I did early on and still keep it flowing over in London. But yeah, I’m not too sure. I’m not too sure about you, Pat. Did you have like some spare time back in the day?

 

Lifelongshuffle (Pat): I don’t even know how I did it. Like, I think at the very start of my blog, I was almost pumping out two a week, like for at least a couple of months and doing that with full time work. I think it was just all of that energy and invigoration I had from discovering fire and wanting to really get into it and just wanting to learn as much as I could and get get my voice out there.

 

Aussie FIREbug: You had that initial excitement. Like you have so much stuff you want to say. And we thought that once. Yet you do hit sort of well for me anyway. Yeah. To a point where it’s mostly like the stuff I had sort of burned inside me up.And now, like, there’s so many topics to cover because there’s new topics like everyone, you know. I guess some people like you just told me the same thing, but that hasn’t been my experience. Like there is there’s new stuff to it to cover with all the changes, with the laws and everything. And then there’s just different stages in life that you eventually get to that you don’t run out of topics to talk about, especially with such an interesting topic like fire and finance and investing in Australia.

 

Lifelongshuffle (Pat): And life always throws a pandemic your way and that that screws everything up again. You know, I have some more to talk about. Absolutely.

 

Strong Money (Dave): And even content that’s been written about like 50 times, everyone still thinks about it and approaches are a little bit diffeent. Our message will be different to how Pat will write it and how you will write it. I say I think other people will learn from the way that each of us, I guess, expresses that that thing that we’ve learnt that we’re passing on just because of the way that we’ll explain it.

 

Aussie FIREbug: Absolutely. Now, I did throw it and this was this is a pretty quick podcast. And, yeah, I usually have a lot of questions lined up for my guests that I email like a week before that. This these podcasts, like I say, we’re just basically was like, hey, you guys are starting a podcast. This is awesome. Do you want to jump on back? We’ll just talk to shit. I didn’t have like a whole bunch of questions, but I thought it would be good to have the community ask a few questions if they wanted to, especially having you guys on, some of the OGs of the FIRE game in Australia. I put the questions out there on the Facebook group. And a lot of people have written in. I’m just going read out some of those questions and talk about it, because a few of them are quite interesting and a few of them are repeating the same sort of stuff, which we spoke about it before we recorded. So  if you submitted a question like what is the best investment to do? And you should combine your investments to make the perfect portfolio. It’s sort of impossible to do. And we spoke about it a lot and I’d almost say if you did a quick Google, you could find you could read articles from both of these guys that explains exactly how they invest. And I might put a link in the shadows, but we won’t be speaking too much about that. But I do have a few good questions I thought were good to ask. So, first of all, do either of you use the NAB equity builder a product? And for those who don’t know, it’s like a a loan. It’s it’s leveraging into equities is the product that NAB offer. It’s quite popular in the forums. Do either of you use it?

 

Lifelongshuffle (Pat): No,

 

Strong Money (Dave): I don’t use the data.

 

Aussie FIREbug: Would you consider using it or as a reason that you don’t use it.

 

Strong Money (Dave): I say it depends.I mean, if you’re a renter and you really want to grow your portfolio as fast as physically possible, you could consider using something like Nab equity builder because I do kind of work like I guess it kind of it’s designed to be like a home line. But for shares. So you borrow money, you pay, you pay a principal and interest loan and you can, you know, ideally earn a return that’s higher than your interest rate.But given we have enough debt and too many properties I don’t think we’d be able to take out more debt. And I couldn’t be bothered with that in any way, to be honest. If I mean, later down the track, when we have very low debt or whatever, I might consider using some of our equity in our house or something like that to invest into shares, which would be like a cheaper interest rate than using the NAB product. So I don’t use it and I probably wouldn’t be using it anytime soon.

 

Aussie FIREbug: Yeah. Pretty much the same. Like. I’ve got investment properties debt as well. And I’ve used that in the past, like pull debt, equity to invest in shares. And I feel like that works a little bit better. But I understand people don’t want to invest in property, like just to do that. And most people are not suited to be property investors anyway. I really haven’t looked into with that much as well, like it’s really like firstly not necessary to reach fire. That’s that’s the first point. And secondly, it’s there is a bit more risk you take on if you want to do such a thing.

 

Strong Money (Dave): It’s not a lock.If you look at the numbers and work it out it’s not going to be a huge extra return you’re going to make anyway by getting out of there.The difference between the interest rate over the next four or five percent and a sharemarket return about seven percent, it’s not gonna be very much unless you’re going to borrow by many hundreds of thousands of dollars. And I don’t know if it’s worth the risk.

 

Lifelongshuffle (Pat): Yeah, well, I don’t know if I’ve ever mentioned this before on my blog or not, but a few years back, I actually had a margin loan with CommSec. And it was an interesting experience because I found that even though it all sounds great on paper, having the loan changes your behavior in terms of investing a lot. So whereas, you know, right now during Corona virus and the market downturn, I’m just continually pumping in and trying to find more money to pump into investments. Whereas when I had the margin loan, I was more concerned with maintaining my LVR So instead of being able to buy when the market’s down, I had to, like, just lower my LVR. by any means possible, miss out on the market downturn. And then when the market’s going up, all of a sudden you have more and more equity to invest. So it kind of distorts your market timing almost If I if I can call it that.

 

Aussie FIREbug: Yeah, that’s interesting. That’s a very good point. I usually didn’t know that. So you don’t have the margin line anymore.

 

Lifelongshuffle (Pat): It’s sitting in the background. I can draw on it whenever I want, but I just find these days my I don’t know, my risk tolerance isn’t high enough to take on debt, to invest in anything, really I just I don’t want debt. I don’t want how it affects my behavior. And if you think about like with sharemarket, I think once you posted it on your blog. Dave, the number of positive sharemarket years in Australia was like 70 something percent. And so if you look at that in a different way. So seventy two percent of the time, the Australian share market produced more than zero percent across that year. Then when you’ve got interest on top of that, you’ve got like four percent. You raise the bar before you make a profit. And I just I didn’t like that. So I’d like to see the statistics, like the number of the percentage of years where the share market has returned more than four percent, which is probably the NAB equity builder rate at the moment.I haven’t looked it up and I know. Could I really let’s say it’s 50 percent. Could I really tolerate 50 percent of year’s of me not making more than I’m paying in interest on those shares. I don’t know.

 

Strong Money (Dave): That’s funny, because some people some people live in a spreadsheet. And I say, well, according to this I make an extra, you know, X percent per year. And its like one percent or two percent. Yeah. It’s like markets don’t work like that. No, I don’t run on a spreadsheet.

 

Aussie FIREbug: And it’s that classic thing as well of so many people. Majority people especially and I was like that at the start. I guess as well, they concentrate on the investing side so much and they do everything that’s so much analysis and time and everything on how to get that few extra basis points or an extra percent or whatever and so much more bang for your buck is made on the saving side. And if you actually just  shopped around for a competitive home loan or did stuff on the savings side it would be so much more beneficial to your journey. And I’d even go as far to say, especially the last couple of years, like I’ve discovered, probably in order of importance to reach FIRE obviously, the savings rate is the number one thing that ought even say that once you get like the index investing,LICs some something of that nature is pretty suitable for reaching fire in Australi, in my personal opinion. But if you want to if you’ve got your savings fully optimized, I’d even say that trying to make some extra money is probably going to get you further than spending an extra few hours a week crunching the numbers in a spreadsheet, but trying to figure out is VAS better than A200 or is this margin loan going to help me out more like that. The the side hustle is something that has opened up a lot in the last couple of years of what’s possible in the side hustle space and how much that can supercharge your journey towards financial independence as opposed to, you know, Optum. Absolutely optimizing your investment is important. But I feel like it’s the last step. It should always be, save more than you earn, optimize your expenses, earn a bit more money, and then invest the rest like the very last step as long as you’re doing it like, okay, it should be should be pretty suitable.

 

Strong Money (Dave): And I guess like if people stopped looking into side hustlres and that sort of thing, it’s hopefully going to be in a in a space or in an industry or something like that, that dead that they’re really interested in. And I might not might not come with a huge financial rewards, but it can help them out, give them ideas and I guess motivation and inspiration for when they start reaching FIRE or towards the end of their journey.And I can transition into that new that new job as a part time gig or whatever, because it’s something that they’re gonna be really actually enjoying.

 

Aussie FIREbug: Yeah, it goes back to that building life at the very start of the journey, how you want to live it at the end of the journey and then sort of optimize around that. And if you do have a side hustle that you absolutely love doing. Yeah, definitely. Like more often than not, actually, it turns out to be something that most people that retire early pursue. And that’s the, you know, the career or that’s the creer that they do in their spare time once that they reach financial independence. So probably, yeah, it’s it’s very important because you don’t want to be in a situation where you reach financial independence just for the hell of it, just to say that you’ve got it. You sort of want to use that to live a better life. I have have all those options and freedoms.All right. Next question. And this is a good one, I thought, and relevant to today’s climate. So, first of all, how much do you guys keep as an emergency fund? You can either give a dollar amount or percentage and. Are you increasing it or decreasing it during the course of it?

 

Lifelongshuffle (Pat): I keep a basically a zero dollar emergency fun. The only money thats like liquid is just like the amount I need. So the next the next shop or the next bill that comes in doesn’t send me bankrupt. So it’s only ever a couple of thousand at a time in my bank account and everything else just gets shuffled straight into my investments.

 

Strong Money (Dave): Mr. Efficiency over here.

 

Lifelongshuffle (Pat): Do you have what do you have some sort of plan that I like if. So obviously you can sell your investments, though that’s the last thing you want to do in a downturn. Do you have can you withdraw from like a redraw account or something or is there something in the reserves?

 

Lifelongshuffle (Pat): Yes, I feel like the everyday sort of emergencies people think of. It’s like, oh, your water heater or your car or whatever, and you just throw that on the credit card and that’ll be paid off in the next two paychecks. So that’s not a problem. Let’s take it to the next level up. And that’s like all you’ve lost your job or you’ve lost your income. That’s sort of an emergency. And I’ve also got like my CommSec margin loan just sitting in the sitting in the wind to draw upon if I really need to, until I get my next job or bout of dividend’s anyway, which is just coming out of the portfolio automatically. So being a renter with no children and minimal lifestyle expenses it doesnt cost much to be pat the Shuffler, I just see it’s like why, why do I need twenty thousand sitting on the sidelines.How long do I really expect to be out of work and why can’t I just cover that with a margin.Mind if it ever comes along instead of having all that money not earning. You know, if I kept thirty thousand not invested since I started this journey over three four years ago, I would have lost maybe that much again. It’s already paid off for me. That gamble. Even if I do lose my job right now and have to draw on the margin.

 

Aussie FIREbug: What about you, Dave?

 

Strong Money (Dave): So our situation’s a little bit different in I don’t know if your guys might be aware of how we’re transitioning off from property to shares over time. And so what happens is we sell a property and we’ve got a big chunk of cash that sits in the offset account. Now we live on some and we invest the rest into shares each month. And so we have quite a lot of cash. But it’s not really I mean, it’s not really what we want to have long term. So I wouldn’t use my situation as like a guide. I would just I guess in normal time/ term, I would expect us to not keep very much in an emergency fund at all. I mean, we’re retired and we’re both adding some income. So, I mean, the portfolio plus that that bit of income is more than enough to cover our expenses and if something popped up, we might keep maybe a maximum of five percent in cash. But that would be it would be at a maximum.

 

Aussie FIREbug: Yeah, right. I don’t know if you guys have read like some of the articles. It’s funny to to read online to their credit but It’s like the US articles, but there’s a few like gotcha articles, It’s like, oh, they had this grand plan and they retired and then COVID comes along and thier screwed. Isn’t it funny to to read those and be like, well, actually, the people that have retired probably have about 100 times the wealth of anyone not fired. So they put me in that position. Well, they can pretty much guarantee they’re in a better position than 99 percent of the people out there. So I fail to see how this is a sort of give up.

 

Strong Money (Dave):.Oh, very. We had this exact conversation the other day when we were recording a podcast on one of our podcasts. Like when I first read something ridiculous,

 

Aussie FIREbug: What was your what was your summary

 

Lifelongshuffle (Pat): You know, crazy 35 year old retired with a million dollars and now the thirty five year olds only got half a million dollars for thirty five year old.It’s like this what you’re saying that it’s ridiculous.It’s like the thirty five year old who now ONLY has half a million dollars isn’t in a spot of trouble. It’s outrageous.

 

Aussie FIREbug: I don’t know how they like publishing these articles, but, you know,  they’re going to sell some clicks. The next question actually. Sort of is in a similar space to the previous one. But has the current downturn made either of you change strategies at all? And I guess with me and pat still in the accumulation phase is a bit different from your diet. But I am interested to hear from you, Dave, especially considering you are retired and like we always do hear about that the worst case scenario for someone that wants to retire and a hundred percent not earn any income, which, by the way, pretty much never happens. But the worst case scenario is that you retire and the market crashes.So I am interested to hear what you say. But we’ll start with you, Pat. Like I’m assuming nobody has has this downturn to change your strategy at all. The people want to know, though.

 

Lifelongshuffle (Pat): Not whatsoever. I’m still accumulating. My plan has always been to throw everything into equities for as long as possible while I’m still working. And then when I decide to retire. I’ll have another look at  my bond allocation or my safe allocation. But to be honest, I’m still doing more research around bonds. And there’s a lot of really conflicting information, I feel, from even the fire community around how useful bonds are and whether they really handy in a day accumulations phase. So I’m the jury is out for me still, but it certainly won’t be like, you know, 20 or 30 percent safe assets. If anything, it might be zero to 10 percent in safe assets once I retire. It’s not going to be anything crazy.

 

Aussie FIREbug: And what are you buying, if you don’t mind me asking? In terms my all my equities.

 

Lifelongshuffle (Pat): The latest. Yeah. Sorry. The latest purchase has been VGAD a day, which is the hedged version of VGS. If you don’t know and I know you’ve been paying attention to the Australian dollar. So I think maybe about a month ago, the Australian dollar dipped to like fifty five cents, which is below its long term average. So I’ve always sort of thought, you know, not really being a lot of firm information around the whole currency hedging space. Again, it’s sort of a bit of a grey area which needs a lot more research. But being below its long term average, I thought it made sense to go hedged instead the unhedged virgin.

 

Aussie FIREbug: Yeah, nice. You do look at like some of the unhedge stuff like VTS and VGS. So if you look back at like, VTS, which is the US market and like you look at the returns from like 2010 are just crazy. And half of those returns are because the Australian dollar is so bloody high. Was it was over parity at one point and all was actually in America. And also, like I was holidaying there, if I can, 2013.And I remember I’m like, hindsight’s 20/20. But man, if that ever happens again, I know I know what I’ll be shifting allocations to.

 

Lifelongshuffle (Pat): Yeah. I’ve always thought the same thing. Yeah. Back in 2012, it was like a dollar 12.

 

Aussie FIREbug: Yeah. American one Aussie dollar was born over a dollar ten U.S., which is just insanity. Think about it, I got Very lucky with that holiday. Yeah. And even like I said, I’ll be keeping an eye on the Aussie dollar to the sterling. I sent back a fair chunk of money when it was over two dollars. But now it’s like I think it took a dollar. Ninety, one sterling gets you only. So it’s men. The fluctuations in the stock market, the currency market, the oil market, like it’s just crazy, crazy times at the moment. And so what about you, Dave? Strategy changed at all. And any thoughts on, like, someone that, you know, you are retired and the market has gone down a lot. So can you just speak a little bit about that, how you guys are handling not.

 

Strong Money (Dave): Yes. We’ve only got about a third or so of our total wealth in our personal share portfolio. Just because we are in this kind of transition stage, I suppose. So I guess when you look at it in terms of networth, it hasn’t been such a big drop as it would obviously if we were all shares right now. So it hasn’t been hasn’t been all that scary. I’ve been excited to actually put more money into the market, to be honest. Yeah. So maybe if we were all shares that we’d feel a little bit different. But in terms of strategy change, Not really. I mean, we’re still putting putting money to work, still buying shares. Only anything that I’m thinking more about lately is like international diversification, because I know you guys will know that I started like hundred percent Aussie equities for our shares and so over the last like year or so, I’ve been thinking more about that. And we’ll probably add. Our Super is currently set up as a 100 percent international shares. I’ll probably add some international shares to our personal portfolio as well, just because, like, the more I read and experience and learn, the more I come to appreciate diversification. So we’ll probably startYeah, that’s it, that’s it. That’s about the only change. I mean, everything’s pretty much the same.

 

Aussie FIREbug: I’m in a similar boat to you, Dave. Like off we’ve got the two properties that we want to transition out of Eventually and be 100 percent equity. I was Literally going to list one. I was talking to a few agents. I had the one I wanted to I was like as if we had to list a boom covered. It’s like we can’t even see the property anymore. It’s just, oh my God. So that’s sort of on the backburner as well at the moment, which is super annoying.

 

Lifelongshuffle (Pat): And you know that it’s back open. You know, it’s back open this weekend.

 

Aussie FIREbug: I don’t. Is that I’ve got the two in Queensland, so it’s hot.

 

Lifelongshuffle (Pat): I don’t know about Queensland and New South Wales. Open homes and auctions were allowed. Today was the first day.

 

Aussie FIREbug: I think that’s good to hear. But I still it’s hard for me to think that it wouldn’t take a hit just with the current climate. Even in Queensland. So I guess I’m going to have to wait and see. It actually could play out in our favour a little bit because we are wanting to buy a family home back home where we’re from next year. But I am watching the property market like a hawk at the moment over all the alerts turned on and everything. And even if a property comes out that way that we like and it looks good at like a discount or a nice price, I think we’re just gonna pull the trigger and buy it because it’s so hard. I have being burnt before with property. My first one that I sold, I actually had a higher offer that I waited on and then like waited a few weeks and then the market started to go down. I ended up selling for like it was like 20 grand less than that first offer that come in. And like I say, hindsight is 20/20. What I’ve decided on with property moving forward, if it’s a price and I’m happy with and it’s a good, good house, we’re just gonna have to pull the trigger. Like, you cannot wait white and you cannot be I could go lower. It’s like not happy. Just do it. And the same goes with property, even if it’s a price you both agree upon.Just pull the trigger because you it can work out better, but you can get a lot of the time waiting for something to happen.

 

Strong Money (Dave): How many people do that in the share market? So, I mean, it’s gonna go lower. Just wait. Oh, just wait. Yes, exactly.

 

Aussie FIREbug: Right. Yes, that’s. Yep. It’s the same. It’s really it really is the same, the same mindset and psychology behind both of those. Which is why the strategy of simply buying every month is so powerful. Right. Like you don’t have to think about have to get worked up, you know, like this psychology’s taken out of. It’s just like Matt. That’s just what I do. I bought the end of the month. I buy this. I buy this. The waiting is, you know, I buy the the lowest weighted split in our strategy. And that the thinking, my dumb thinking is taken out of the equation. And it’s Semi automated in the process. Next question. So I’ve only got I’ve only got two more. Don’t like this one. This one’s interesting. So do either of you invest in Bitcoin?

 

Lifelongshuffle (Pat): I think that’s an invalid question. You can’t invest in Bitcoin. You can buy Bitcoin. NO

 

Strong Money (Dave):  No

 

Aussie FIREbug: Oh, now, this is an interesting one. And I’d love to know your thoughts on this, Pat, as you’ve had a pretty strong view on Super.So assuming that your eligible are either of you withdrawing from your super. Hypothetically,  would you consider withdrawing from your super and that’s obviously the new the new laws that the government come out with the new COVID laws that you could withdraw 10000 in this financial year and another 10000 next financial year.

 

Lifelongshuffle (Pat): Now, you’ve got me in a pickle because I don’t know honestly what I would I pull it out if I were eligible because I’m as I said before, I’m still in full time work. So I’m not at all eligible for it.So it hasn’t really come to the forefront of my mind.Yeah. I honestly, it may surprise people, but I probably wouldn’t take it out. I probably just leave well enough be. It’s money that I haven’t accounted for. It’s money that I don’t really I almost don’t believe it’s there.It’s like it’s just kind of there.

 

Strong Money (Dave): You have so little faith in the system and I’ve already written it off!

 

Lifelongshuffle (Pat): So I just I don’t even think about it too much. But it’s also. It is nice to just have something that I am not considering as part of my Main numbers as sort of a backup plan, and I just. I’ve got my main plan. And if that ever goes to health, whatever reason, then, you know, when I hit 60 or whatever it may be, I’ve got, you know, however many hundreds to thousands just waiting for me in another account that I’ve long ago written off.

 

Aussie FIREbug: Fair enough. Dave?

 

Strong Money (Dave): I’m a little bit like pat in the sense that I think of super mostly as a backup plan. And that’s really just because we didn’t think about it earlier, just because it’s so far away where we’re all roughly the same age right now. All three of us I think early 30s. So it’s just so far away. But.I actually think I mean, I don’t know the exact rules around this.I think if you have to be affected by COVID or just not working. I don’t know if I would qualify as not working. So maybe I don’t I might be eligible. I’m not really sure.

 

Aussie FIREbug: I think it’s a view. If you’ve been if you’ve lost your job, you’re definitely eligible. Have you had your hours reduced by 80 percent? You’re eligible. And there’s a few other criteria. But I think the bulk of people that are going to apply for it have been hit by those two things, like basically lost a job or had their hours reduced by 80 percent. But there’s a lot of gray areas in the law because it was rushed through. It’s like it’s self-assessed as well. So you can just apply for it, get the money out and if the ATO come knockin, which, you know, like how many millions of people have already done it.So the odds of you even getting audited would be pretty low anyway. Then you’ve got to sort of prove that you lost hours or you lost your job or something like that. But it’s it’s very gray, but it’s gonna be interesting.Mrs. FIREbug actually is eligible for she lost her job and because she’s eligible for it I did a bit more research than I otherwise would have. We’re at this point in time things could change, but we’re leaning towards taking it out just purely because of the whole you have to wait to your preservation age to get it so you can take it on tax free. And there’s actually is a whole bunch of little.Like, this is a trick you can do, which is sort of against the spirit of the law. But it’s perfectly legal. We can put it back into super.But I don’t know of the idea is going to plug that. I actually have a podcast specifically about this coming up. Yeah, it’s an interesting one. And I feel in that situation, I would rather have I’d rather have all our money. Like, if I could deplete super completely and put it into our personal accounts, I would purely just because we can get to it before the preservation age. But ten thousand dollars this financial year and 10000 dollars next from Mrs. Firebugs account. We’re leaning towards taking it out even though it’s going to be taxed in a higher tax environment for the time being. I still think it’s valid for our situation, but I’ll go heavy into those details in another pod.

 

Lifelongshuffle (Pat): I was just going to say maybe it won’t be taxed in a high tax environment for the time being because you’re not aware to get it.

 

Aussie FIREbug: Yeah, I know exactly what you’re getting at. Yeah. That that’s the that’s really the only the only argument against it. And like from a fire point of view, it makes sense. Like everyone that’s written these articles, like Scott Pape, the Barefoot Investor, everyone’s like, no, no, no, don’t touch it. Don’t touch it. They’re all assuming that one you’re not going to invest that money back into. You’re not going to put that money back into investments, which, to be fair, the spirit of the law is really it’s not intended for rich people to take money out of this super to reinvest it. It’s what people that are financially distressed to live off it. So I understand that like the barefoot investor is saying do everything you can to not touch your investments. Don’t take it out and buying a car or something. But for the fire crowd, it could be it can actually be beneficial depending.And as as we always talk about, it depends so much on where you are, the journey, what how old you are, how close you are to preservation age, what your goals are. Do you want to retire early? Are you happy to workto Fifty, fifty five.It all plays a part in the decision, but for our situation, yeah. It’s looking like we’re gonna do it now.

 

Strong Money (Dave): I mean you say star is like yeah if you take out ten thousand dollars you’re gonna miss out on one hundred and sixty thousand dollar.So you’re insane. But like to fire a crowd. Oh you’re really doing is moving money from an inaccessible account to an accessible account. It’s just that it may be taxed at a higher rate or a lower rate.

 

Strong Money (Dave): And obviously the benefit You get that money right now, which can help you in terms of, you know, ridging bridging financial independence. But it’s not a massive amount of money, so.

 

Yeah. Interesting topic. Oh, and speaking of interesting topics, this next question. So very you know, a lot of people have different opinions about these, but how are kids if you are going to have kids in the future going to affect your phone number? And is that factored into your goal? Dave, I’ll start with you. And I believe that you’re not planning to have kids in the immediate future. So this might not be valid for you. But I’ll let you answer.

 

Strong Money (Dave): Yes, I yeah. We’re not having kids, so it wasn’t part of the plan. I mean, if we were to I don’t see it as being insanely expensive as people think it is. I mean, I did a little bit of research because people have asked me, you know, about kind of a question like this and talking to parents and reading in forums and different places.And it’s like, wow, it depends. You know, you can spend this much, but you can also spend just this much. So it really seems to be down to personal choices on how much you spend.And so I don’t think it’s as expensive as people claim that is. I mean, it can be but Doesn’t have to be the case. So I don’t think it would blow out the number to fire All that much.

 

Aussie FIREbug: What about you pat?

 

Lifelongshuffle (Pat):  So we are planning to have kids and it is worked into our FIRE number.No, I sort of advertise on my Web site is just my number.So it doesn’t include Stephs Networth. And, you know, the goal that we both want to reach as a as a combined unit.But as a combined number, which is sort of opaque to all of our readers and my readers, even we have considered it. I think there’s a lot of hysteria around kids costing a lot of money. And it’s it’s almost like the hysteria around retirement costing a lot of money. It’s like you see all these numbers just thrown out there. It’s like all you need 10 million to retire. You need five million to retire. We know that’s nonsense. I feel like it’s a bit the same with kids. Like it will think it will cost a million dollars to raise a kid from zero to 18.And that’s that is actually nonsense. Like I’ve done looked at research done. I forget which government agency in Australia did the research, but it it shows like kids can cost anywhere from zero dollars, literally zero dollars, because the government gives you more money than you actually spend on your kids up to two hundred thousand or four hundred thousand or whatever it may be. And. It depends on the decisions you make and what you value out of life, whether it’s violin lessons or taking your kid bike riding.

 

I think it’s a little bit sad because I think there’s almost like a judgment that’s put on people. If you think if it’s said that while you only have to spend this much on your kids, it’s. Oh, yeah.But I want to like I want you to ask for my kid. I want to give my kids this.It’s almost like a judgement thing.Like I’m a better parent because I spend more on my child. Yeah. I don’t really believe that.

 

Aussie FIREbug: Yeah. My partner’s sister has gone pram shopping, it’s absolutely ludicrous. How much do they cost is what the first thing it’s like. Holy hell, is this a car or my buying a new car or buying a pram? Secondly is the the absolute like the guilt trip that some of these sales they will do. It’s like, well, you know, we got this we got the deluxe two and a half thousand version. Like, you want the best for your baby, right? Like you want the best. This is so, such a like tactic to make people spend more money. And it works.

 

Lifelongshuffle (Pat): My friends bought a pram maybe a year ago, and they had Pay like an extra one hundred and twenty dollars for the coffee cup holder that attached to pram. The whole pram should cost one hundred and twenty dollars. Not the coffee cup. Hold up. This is crazy.

 

Aussie FIREbug: I like the safety features as well. Like Ali safety features. I will that that model isn’t as safe as this one. And like that, that gets a lot of people to like. We need to be 100 percent safe. We need to be so safe. Like, would we be bad parents everywhere, the safest possible parents we could possibly be.And yeah, I don’t want to put my baby at risk. Yeah. Yeah. Three thousand dollars on a pram. It’s like, oh, my other flatmate works in marketing and like you and I are so smart. So these of the strategies I honest to God. They really tugged at all the emotional heartstrings of people. And yeah, you spend a shitload of money on something that’s like Yeah pretty sure people made do back in the day without, you know, taking out a mortgage to buy a pram.

 

Strong Money (Dave): That’s a big deal.You have to remember what people used today or what people do in other countries don’t have as much disposable income generated and people manage just fine.

 

Aussie FIREbug: Yeah. Yeah, it’s definitely yeah. That they’re very clever of how they  suck. you in. But I agree that’s it’s a status thing. Yeah. Yeah. Oh yeah. my sister’s a wedding photographer but she also does like kids’ birthdays if their parents are crazy enough to hire a professional photographer. But she does all these other like events. And yes, some of these melburne moms that, you know, drop fifteen hundred dollars on a professional photographer to be at a two year old’s party. And then she goes there and there’s like a jumping castle. It’s full on.  they spend more money than some people spend on their weddings for it.It’s crazy. It’s disposable income. And it’s just crazy. But yeah, we personally like we want to have kids. I don’t really like I’ve said ballpark, you know, a million dollars, but that’s not factoring in kids. And I don’t sort of like to plan too far into the future, like too much into the unknown. Like we are planning to have have kids, but we don’t have kids. So this is the FIRE number as of right now based on our saving rate and their estimation right now. So when we do have kids, it will obviously change. And I feel like that’s almost another like Gotcha.Some people like, ah, you know, kids like that.I am very interested as well to see how much it actually costs to have kids with someone being from the fire community. Because we all know that, you know, people in this space usually Hunt around to and get the best deals. We’re not afraid to use secondhand prams and secondhand and everything like that. So there are a few blogs out there. But are we completely honest because we haven’t had kids yet? I haven’t taken like a great deal of interest consuming all that content yet. And I guarantee that will probably change the day I became a father. How do you like absorbing all that information? But I really just haven’t gone down that rabbit hole just yet.

 

Strong Money (Dave): I think from memory, I think Mr. Money Mustache has a post about how much it actually or how much I spent raising their kid. And I think it was something like it was under five grand. And I think it might have been like about four grand a year or something on average, which was like, what’s that gonna cost…. An extra hundred grand to your fire number?Yeah, I mean, that’s that’s not a massive amount really. No, I think I think some people also use it as an excuse. Oh, that’s why you can retire. Yeah. Good luck trying that if you have kids, you know.

 

Aussie FIREbug: Yeah. That that’s that’s a bit. Yes. One hundred percent like oh this this fire thing is only for people that don’t have kids. It’s like I how true that is, it’s so new as well. Like it’s gonna be very interesting in the next couple of years. How many people actually reached the financial independence and then, you know, how many of us can sustain it. I think it’s going to change the concept or change a lot of people’s views. Yes. Only you only need to be in a certain demographic. You can’t have kids. You need to be earning, you know, a million dollars a year for for it to be plausible. But we know that’s not sure. And I think that’s gonna be proved in the next five or so years when we’re we’re all still kicking around, you know, hopefully. if COBID has wiped out the planet.

 

Strong Money (Dave): I guess as time goes on, there’ll be more and more examples of people from different backgrounds, different life circumstances back, and will now have achieved their own version of financial independence.On different incomes and everything, so it’ll give the people who are new to the, I guess, new to the scene and each beach person will have an example to look up to like, oh, that person’s like many of these persons like me.

 

Aussie FIREbug: For sure. All right. Well, I’ve exhausted all the Facebook questions, so I think it’s nearly an hour that we’ve been recording. So, guys, it’s been an absolute pleasure having you both on fire and show podcast.I’m going to have a link in the show notes. Put it in your calendar. It’s gonna be fantastic. I can’t wait for the first episode. And thank you so much for coming on, both of you.

 

Lifelongshuffle (Pat): No worries. Thanks. Thanks. Thanks for having us. Matt.

 

 

Aussie FireBug: Hey, Sam, welcome to the podcast. Thank you so much for coming on.

 

Sam: Pleasure to be here. Thanks for having me.

 

Aussie FireBug: Now we’re going to be chatting about how you turned a passion into an online side hustle that is helping you on your journey towards financial independence for those out there who don’t know who you are. Can you just give a brief overview of who you are and where you’re from?

 

Sam: Sure. So I’m based down in South Australia. I’m 28 years old, obviously on the path to financial independence. Always been a passionate gamer. Little stint in a competitive gaming as well. When I was younger, which I quite enjoyed forcing, was born a little too early to turn that into a career. But I’ve turned it into sort of a side, hustle through the games, find a website that I that I run know us.

 

Aussie FireBug: Now I have to ask because I wasn’t a I wasn’t a competitive game. But, you know, I’ve played my fair share of guys back in the day. What games were you a competitive gamer in, Sam?

 

Sam: Yep, definitely. So started call of duty, you know, offensive, which was the very first call of duty and the expansion pack for that. So I played for a few clans there on it was actually a competitive ladder run by Telstra. Believe it or not, it was called Game Arena. Not around anymore, but that was probably my main competitive stint. Also, I had brief stints in League of Legends and Fortnight, but definitely was not as successful there, given I was in full time work by that point, so I didn’t quite have the time to keep up with the young kids that are around these days.

 

Aussie FireBug: Yeah, definitely. Yeah, I get I keep keep flashing back to my 16 year old self. I think that a lot of people at their listening that has played Call of Duty because it’s such a big franchise. So I’m sure that a lot of people have it has played. I’m sure everyone’s got that guy or girl in their group. That’s pretty good at call of duty. How does one actually go? I’m just genuinely, genuinely curious. How did how do you get into competitive gaming or similar competitive gaming back in the day? And how does it all work? You get paid for it. You go to an arena. Had you go to get a certain score to get into the clan, it just. Can you give us a bit of an insight into that world?

 

Sam: Yeah, sure. God takes me back is nearly 10 years ago now. I guess at that time there was very few competitions around it. Like I mentioned, though, Telstra was running a a game ladder. I think it had about 20 teams. So it was the top Australian league, if you will, for college, Judy, at the time. And it was simply a matter of, you know, I was playing regularly every day, constantly coming the top of service team. Team Deathmatch was the popular mode. And, you know, you just start connecting with a few of the better players. You know, you get invited to try out for a few clans. Some of them were local as well. So I’d made up with them, maybe do a few LAN events and stuff. But as far as payment, there was not really much was very much a you can call yourself a competitive gamer and hey, maybe you know, if if we win, will shout some pizza or something. But it was definitely by no means a career at that point. I was just born too early.

 

Aussie FireBug: Yeah. ‘Cause we’re talking ten years ago. So yeah. I used to play on a bit of a nerd myself, although I haven’t played as much as I’d like to just in the recent years, but I used to play Starcraft.Starcraft was my jam and when Starcraft 2 come out I’d always I play that ridiculous amount whilst uni. I got up and went all the way up to the masters level, which is for anyone out there and I don’t know how many people will know because this is such a nerd tool, but it was the top 2 percent of the server. I believe there was only one other league above that which was Grandmaster, which was the top two people people of the server. And I my biggest achievement in my games life is I beat a grandmaster once upon a time and I beat him by doing a zerg rush, believe it or not. And it was a bit more sophisticated than a 6 pool, but it was like still a rush. The competitive game scene back then 10 or so years ago, it was nothing like it is today.Sometimes it comes across my YouTube of the Starcraft tournaments and these, you know, the WOW tournament and stuff. And they just it’s like 40000 people or something in an arena. And the prize money is like millions of dollars. It’s just insanity.

 

Sam: Yeah, it just did not exist back then, you know? Yeah, I said million dollar prize pools in tournament’s huge stadium, huge fans. You can be a twitch streamer on the side making thousands of dollars a day. Just people watching your skills. And that just didn’t exist back then. It was solely just doing it for the fun of it. And if you made some money on the side through, you know, some small tournaments, that was that was great. But there was no path for. Take that as a career as there is now, definitely a little jealous here.

 

Aussie FireBug: But now this is a nice Segway into my next question, because what I love about the Internet is it opens doors that previously didn’t exist. Now, what I love about your story, the reason that you’re on this podcast is because you took a passion and you turn that into a side hustle. So you started an impressive online company that has helped over 10 million gamers and now has grown to include its own staff. Can you give a brief overview of to what Games Finder is?

 

Sam: Definitely can. So at its heart, I guess games find as a video game recommendation website where basically I take a popular game. So maybe fortnight because that’s probably one the most people listening might have heard of before. And I’ll go out and I’ll curate a list of similar games to 8:56. I’ll say, hey, you know what? If you want something a bit more realistic, try this one. If you want something for mobile. Try this one if you want something with swords or magic or something. Try this one. But it’s similar to fortnight. I’ll pull them together. List what platforms it’s available on. Is it phrase not free where you can buy it? Some general information, some screenshots, some videos. Put it all in that one place and basically serve that to visitors, primarily through Google traffic. People are searching for these things and I’m simply delivering what they’re after.

 

Aussie FireBug: Awesome. Awesome. So it’s a Web site. So it’s a curated list. Games on it on its own website. So how did you what was the idea behind Games Finder and how how is it born? Was this something that you personally wanted that didn’t exist? The marketplace didn’t have a product like this. And you said, I really want it. A lot of my friends wanted it. So you just when it created it, can you just walk us through the steps or outcome?

 

Sam: you’ve hit the nail on the head. It was exactly 10 years ago. Like 8 or 7 when I started, it was looking around for similar games. I can’t remember the game, but I just I just couldn’t find the information I wanted. It was frustrating to me. And I just decided, you know what? There’s got to be that famous line. There’s gotta to be a better way, you know? And so I created that better way. Industries moved a lot in those years. There’s now things like, you know, I even read it has blown up. So it’s easy to find these things. Steam, which is a PC game store now makes it very easy to do this stuff as well. But it just didn’t exist when I started. And I just love the concept of because how often you know, when I’m talking to friends who play games like are I really love X game? What else will I like? And that’s just why the concept started.

 

Aussie FireBug: How many times and people are out there listening. I’m sure this happens all the time with a group of friends. And you come up with an idea and you say this is like, why doesn’t this exist? And it could be absolutely anything. It can be, you know, in the gaming industry. A Web site, if you’re into snowboarding, could be, you know, one of the best places to drink beer at The Snowy Mountains, specifically in Australia. It could be about fishing. It could be whatever you want it to be. But what I’ve found is a lot of people talk about it, but they don’t actually take the steps to make it the product. So can you talk a little bit about your friends talking about this product that they wanted and yourself? You know, Salik didn’t exist and you wanted it to exist. How did you go from inception into actually something online? Can you walk us through the steps there and how you actually grew the business to where it’s at today?

 

Sam: So probably go. It’s probably a bit of a long story, but important to take people on this journey.

 

Aussie FireBug: We’ve got to on that wave. Excellent.

 

Sam: So even though I started Games Finder in 2013, I actually had the seeds of making money online. Back when I was in high school, probably 16, 17, 2007, 2008, I was in high school, part time job, playing video games, playing soccer on the weekend, pretty regular kid. And I started searching for ways to make money online. I came across a Web site where you could write articles and get paid. I no longer exist anymore. It was cold squid, squid to squid and then two O’s. It’s a strange name.

 

Aussie FireBug: I would put in the show notes. But you said it’s non existent

 

Sam: No, it’s not. Does not exist anymore. Unfortunately, risk you take when you use someone else’s platform, I guess. But basically was the user generated content website. So they gave you all the tools where you could publish a web page and they would share revenue that that page generated from ads. I think it was it was fifty fifty your or close to that. You know me being a 16, 17 year old thinking yeah, I’m as good a writer as anyone else, I can give this a crack and put up three or four gaming articles. And I remember making my first eight cents in. I was probably the first six months, I think I made eight cents. So I didn’t didn’t really pan out. But what an eight cents. Oh well it was eight US cents. So by the time I voted, it was like fifteen cents.

 

Aussie FireBug: So that’s a decent amount at the tuck shop as a six. Yeah. Yeah. Yeah.

 

Sam: Oh absolutely. I don’t actually I don’t actually think you can even buy a lolly.This is in a back in my day story unfortunately.But you know I basically left it. I did nothing with it. But then six months later I got a ten dollar amount because one of my articles that got popular and Google got a few visits, whatever. And that’s sort of when that light bulb moment hit that, you know, I wrote four articles, didn’t really know what I was doing. Imagine if I wrote 40 articles and I knew what I was doing and how that sort of snowball can start.So I actually did that for about five years, doing random gaming articles, a few other bits and pieces hit and miss. I was I was learning, but I was I would make that a thousand dollars a month at the peak of that, which I was in. You need at that point. So obviously a nice little uni go out, have a drink or something like a fund.

 

Aussie FireBug: That’s big, big being on $8000 a month. Yes. Is pretty epic. You.

 

Sam: It was. It was. Yeah. Yeah. I even I even quit my part time job in my last year of uni. Cause I was I figured I could grow this. But then just after I finished uni I had the idea for games funding which we just talked about before. So I decided I want to go ahead and create that. Obviously, I had a bit of a background to work from which helped. So I created a WordPress site. I’m not sure what you host your blog on.

 

Aussie FireBug: Yeah, WordPress as well.

 

Sam: Yep. Had you had you find that pretty pretty simple to set up?

 

Aussie FireBug: It’s it’s very simple. I tell people all the time. You know, if you want to get something online, you can literally set it up without any technical knowledge whatsoever. You can watch if you eat your videos, follow me, go out and you can be online in about an hour. I think fully domain name registered hosting everything. It’s the Internet’s crazy. Yeah. The doors that it opens is just more people need to know about stuff like this, which is, you know, your story is a great example of it.

 

Sam Yeah, absolutely. They say, yeah, I set up a WordPress site seven years ago. It was a bit more technical, but it’s extremely easy these days. There’s hundreds like had hundreds of videos, hundreds of articles. So I reckon for about one hundred dollars, I had a year’s worth of Web site hosting a domain. I even got a premium WordPress theme, which is just those changes, how things look. And I just started doing some basic modifications. I don’t have a coding background by any means, but I learned to be in school about h._t._m._l C SS, so I was able to change some basics. Even if I didn’t have that knowledge, I would have been fine to go. It was more, you know, I’m a bit pedantic about things, so I want them to look a certain way. And then I just started writing. I was writing so much I just finished uni so I didn’t have a wasn’t working full time or anything yet. So I was just writing and writing and writing probably took three or six months before I had enough content up there to where I was getting some trafficking. And then, you know, I was just getting one visit a day and five visits a day, then ten, hundreds, thousands. I started reinvesting in people to write content for me. I hired a developer to create some features that I thought would be good that well beyond my expertise. And I just that snowball just kept on going.

 

Aussie FireBug: Love. Love that story. So, you know, there’s a famous saying, I can’t remember which movie it’s from, but build it and they will come. Is it Field of Dreams or something? I can’t remember. I have found and I’ve got my own blog, but I’ve also there’s a few other Web sites that I’ve done in the past and build it and they will come is actually a terrible analogy I’ve found. For if you want your website to get traffic, that is not how it works. If you’re trying to build an online business, I don’t know if you if you’ve had the same experience that I’ve had that you really need to get your content is king. I’m curious to get your opinion on this, but you said, you know, a lot of your traffic was driven by Google. What strategies did you implement to ensure that this this new product that you created was going to get that traffic and people were going to actually read the content that you’d spent hours and hours writing?

 

Sam: Yep, it’s a definitely a good question. So when I was writing for the scritti website, I picked up a lot of tips and tricks. I’d recommend people search up. That’s basically called keyword research. So there’s a number of tools. Google even has their own where you can type in a key word or phrase and it’ll say, hey, this this phrase gets searched 40 times a month or 50 times a month or 100 times a month or, you know, hundreds of thousands of times a month. The most popular. So what I started doing was I’d go in there and I’d say, all right, well, I’m writing about games like let’s games like fortnight. All right. That get searched 500 times a month. I’m going to write an article on that. I might check out the Google search results and go, you know, 500 people a month of searching for this, but all these results are actually terrible. So if I’m building something good, Google is actually pretty good at figuring out what’s good and what’s not good these days. So as long as you’re writing for something that has demand, you usually can get rewarded for that.

 

Aussie FireBug: Absolutely. And is it was it any other. Was Google your main traffic generator or is there any other sources that you pull from that bringing significant traffic?

 

Sam: I definitely get a bit from being as well. Bing presently brings in a bit.

 

Aussie FireBug: Really?

 

I don’t get a lot of social traffic. And part of the reason for that is choice. I didn’t want the building a social following building.You know all this work that comes with social. I decided that’s not for me. That’s not something I’m good at or interested in. So I completely honestly ignored that side completely. I want to start off the website. I did get some traffic from YouTube. I actually had a semi-successful YouTube channel at the time I started this as well. So I was using that to funnel a bit of traffic like I was doing a lot of legal legends, game, common commentary and stuff. So I made a few league legends, guides and stuff, put them on the website, built-up bit of traffic like that But otherwise, yeah, it’s completely Google.

 

Aussie FireBug: So you build this product, built this website to serve a need that you and your friends wanted. But the power of the internet, you can now host this web site and unlimited or the whole world can benefit from what you’ve built.Now, obviously, you mentioned that, you know, it was only $100 to have the hosting and the domain name and everything like that. Yeah, that is only suited for, you know, low traffic in a smallish website. Imagine that Games Finder has now grown to be a lot, cost a lot more than the initial hundred dollars. So obviously and this is another. This is the power of an online company. Is it you can you can start small and if your product isn’t good and it fails, that’s fine because you’ve only lost the time that you’ve put into it. You haven’t actually lost, you know, tens of thousands of dollars like you would with a traditional business if you had to buy a shop or buy inventory and store that in a warehouse and so on and so on.

 

Sam: So, yeah, absolutely.

 

Aussie FireBug: So obviously, you’ve scaled up to a point now where you’ve you know, we’ve mentioned you’ve helped 10 million gamers. How does games find to actually make its money to keep that show running?

 

Sam: Yep, definitely. I might just touch on. Yeah. As you said, the expenses have grown as well. So it’s darn common for me to spend thousands of dollars a year now on games, find out between hosting and premium WordPress benefits and develop a time and you know it. I was able to stop essentially risk free for 100 dollars. If I hadn’t worked out, I could have just walked away. So I definitely agree with your point there. As far as how games find to makes money. Pretty standard. So like most websites, anyone that goes on without an adblock activated will say some typical banner advertising there probably makes up about a quarter of total revenue. Just because gaming doesn’t pay a lot for advertisers don’t pay a lot for gaming. Gaming websites and I find that a lot of my users run adblock software probably because their game is there on the computer a lot or they’re a bit more tech savvy. So they run an ad blocking and that’s fine. I also run one, so I’m not going to be a hypocrite here.That’s that’s fine. I try to implement them tastefully, but if you don’t want to see them, that’s fine. So the other 75 percent is actually made up of affiliate revenue. So it’s from a few sources, but from, I guess, largest to smallest. I work with directly with a few game publishers, mostly for free to play games where I receive a revenue share, usually between 20 and 50 percent of any in-game purchase plays. Mike. So if you have a saying the in-app purchases on these free to play games, spend $10 and get a nice looking hat or something, I’ll get a cut from that.

 

Aussie FireBug: That that that’s very interesting to me. So because Aussie fly about also makes money from affiliate relationships and I actually have ads, but it’s ads on this podcast because I don’t know how many people out there know about the podcast is actually more popular than the blog. Believe it or not, and I actually don’t run ads on my website. Aussie firebug because like you, I thought I just didn’t know how much. I didn’t think it it’s gonna be worth it. Like how many people run or ran adblock compared to the absolutely minuscule amount of money that you get for putting ads onto your site. And I think I’ve read a few statistics to say it actually it hinders more than it helps depending on obviously how many page views you get. But that’s interesting for me to hear that still 25 percent of revenue, that’s still a lot of money. So yeah, there must be a decent amount of game is not running adblock, which is good for you. But my question was, so someone comes to games finder a dot com and they click on a game so they know like there’s a special link, is it, and then the gaming company know that it’s been that traffic has been sent by you. And then if that person, which they somehow still know is playing that game makes an in-game purchase, you get a cut of that revenue that roughly if I got it right there.

 

Sam: Yep. Exactly. That’s so unique. Your URL that I send them to somehow and the background I’m I’m not that tech savvy, but yeah. They attach that person to my account for the for the rest of their life. Some of them, some of them for the rest of like some of them it’s only purchases in 12 months or something. The ones I work with were rest of their life is actually obviously very attractive. But I also like the model because in my mind you’re not paying for a game unless you’re actually enjoying it. So it actually means I’m actually making more money by recommending good games, which which is what I really like about that revenue model and that’s no cost to them. It’s probably my preferred revenue model and the one that’s the most successful for me.

 

Aussie FireBug: Yeah, for sure. I agree with you as well. If you’re recommending a company that you’ve used or that you’re currently using is a lot easier to get someone to discard through an affiliate link or something and everyone wins in that situation, I feel.But also advertising a lot of. So let’s make money that way as well. Can we talk now about how much? So when you first started and Games Fund has been running now for, what, seven years? So how much was how much did games find to make at the start? And how has that growth. What’s that growth been like over the seven years that has been running? And how much are you guys making today?

 

Aussie FireBug: Yep. Sure.

 

Sam: So I’ll probably tackle how much I’m making today. First, we might as well put that out there first. Sure. So at the moment I’m making about three thousand to four thousand dollars a month in Australian dollars.I get paid in both US euro and Australian. So I have a lot of fun watching the currencies, but it’s about that on average. The first year I was probably making after about a year, probably making three hundred, four hundred, maybe five hundred a month and sort of every year since then I’ve been adding $500 a month. That’s sort of the growth. So every twelve months at $500 a month and that gets me to basically where I am now. So it’s been pretty steady and consistent throughout.

 

Aussie FireBug: Awesome. And is the say you currently work a full time job and this is your side hustle at the moment. Is that right?

 

Sam: Yes. Yep, that’s correct.

 

Aussie FireBug: Is the dream to eventually have gains? Want to grow into enough income that you’ll be able to quit your job?

 

Sam: I’m honestly not sure about that. It’s got the potential I think it has the potential would ever want to do that. Maybe as a later on, I you know, I’ve reached my FBI number or something and I decide to step away and do the website but I’m not sure I would want to make it my full time job. I just think it’s I mean, I enjoy the career I’m in now. I don’t hate it. The fire community, I’m definitely more FI than RE. I really enjoy my career. I just like to do this as a side hustle. And then sometimes I wonder if I did at full time what I enjoyed as much. So I’m honestly on the fence. I’m not sure which direction I’ll go.

 

Aussie FireBug: I really like that answer because I think that. It’s different having a side hustle and site that you passionate about. It’s different to if you turn that into a full time job. And I guess this is why I like fire so important that you can do. You can pursue your hobbies and dreams and your passions without being forced to rely on them for a living. And it’s so much more enjoyable when you don’t have to earn money from whatever you’re doing. As a passion or a hobby. So, yeah, I think that if you’re doing it as a side hustle and it’s you know, it’s earning pretty unbelievable amounts of money and you’re enjoying it. You know why would you change anything? We discussed a little bit before this podcast. We’re just chatting about the potential tax benefits of owning a company. Can you tell the audience how being the founder of Games Finder has been tax efficient in your circumstances?

 

Sam: Sure. So, yeah, one of the best parts about having the side hustle for me because it’s also my hobby is the way I’ve been out to maximize some benefits around Taxes.I’ll slip in the general advice disclaimer here, not tax advice. Seek your own advice.I myself use a qualified accountant would recommend it.

 

Aussie FireBug: Well, my tax returns are a bit complicated because of the trust. Once I once I clean up, once I get sell the properties and everything’s through the ETF and just shares the plan, eventually long term for us, I’ll do it myself. But at the moment, just because it’s a bit more complicated and I just couldn’t. On the other side of the world traveling around it was it’s easier to hire a professional, but eventually I’d like to think I’d get down to control myself.

 

Sam: Yeah. I’m sure you like get the hang of it once you simplify things a bit.So for me, though, because of, say, my hobby is gaming, so new video games come out. I would love to buy them. And the benefit of having a website that reviews games is if I did buy that video game and decide to review it. That’s tax deductible. That was that’s a business expense. So I have that benefit of things I may have bought anyway can become a tax deduction. There’s also little things such as electricity, internet, computer upgrades. There’s some portioning between private and business use for those, but there’s still some benefit to be realized. And at the end of the day, it’s just I’ve turned a hobby into profit and then just getting even a little bit extra out of it by shifting some expenses to a tax deductible state. So I’m saving, you know, 30 percent or thirty seven, whatever the tax rate is, I’m saving that from.

 

Aussie FireBug: How many does any 16 year olds listening to this that are just online right now starting up their own company so they can get tax guidance? So do you have an ABN or is it the actual company?

 

Sam: I do have a ABN. So it’s a it gets a bit complex.I used to run it as a sole trader and these days I run it. I run I actually run it through a trust. So my taxes are getting complex. That’s what the accounting is for. So, yeah, it’s evolved over time.

 

Aussie FireBug: Say, I wonder, the reason I ask is because an ABN doesn’t really cost much to stop. I think it’s what, like 100 bucks or something. You can register a business name for like 100 bucks or close to that.

 

Sam: Yeah. So I think the ABN actually might even be free. So I don’t think it’s any cost for the ABN. I think the business name part has a cost, though. But don’t quote me on that.

 

Aussie FireBug: Yeah, maybe I’ll look that up by putting the show to it. But the reason I bring it up is because like I wonder how the ATO look.Imagine if 10000 kids just created an ABN and just created a website for like 90 bucks and said that they were doing this gaming website and they just put an absolute shit load of games and laptops and everything and just started claiming everything on tax like is that. I’m sure there’s an account and yet they’re listening like shaking his head or her head and say, no, that’s not how it works. Not imagine that’s not how it works. But I wondered if, you know, there’s some something that I could do there. But yeah, I’m sure there’s there’s checks and balances that the ATO do to stop that from happening.

 

Sam: Yeah, I’m sure there is. I think probably when it comes down to is I mean, I’m not an expert in the tax side of things, but you would need revenue to offset that. I don’t think you can start a business by ten twenty thousand dollars in losses, made no money and bought all this stuff and tax deduct that. I’m pretty sure that that’s why you’d probably get caught up.

 

Aussie FireBug: Yeah, that’s interesting. I’ve been not speaking about this anymore. This is definitely going into specific tax, but it’s interesting. But your circumstances it’s 100 percent legit and I really think that such a thing it’s such a cool little benefit of this business that you’ve created. Like it’s in a niche that you absolutely love and you have the passion. You know, you with a semi, say, my professional gamer, everything like that. And you’ve you’ve taken that passion and you’ve turned it into a profit. I think it’s a really cool story. Now, switching gears a little bit. You’re into the FIRE movement. When did you discover fire? And why is it so important to you?

 

Sam: Sure. So I discovered fire. Probably. Probably just after I launched games finder. So I didn’t stop getting signed up because I wanted it to contribute to my fire journey. I would say worked out quite well that that is doing that. But that’s not why I started it. I think like most well, maybe not most people, but at least a subset of people listening to this. I was a saver my entire life. Never really understood what I was saving for or why I was saving. I was just really good at it. Discovered Mr. Money Mustache. It was either through a friend or through read. It just absolutely devoured that that blog in a short span of time realized that savings could give me just greater freedom in life and choice, which is something I’ve always valued because I have always viewed money as this limiting thing in life where it definitely doesn’t buy happiness, but it removes so much stress from your life having finances sorted.And I think and I think that just comes from, you know, you grow up. What do you see adults worrying about? They’re always worrying about money. Maybe they’re fighting about money. You hear on the news people struggling. And to just remove that stress from life is so empowering. I think that’s what attracted me to fire.

 

Aussie FireBug: Absolutely, man. I think. I think there’s a statistic out there. It’s like the second highest reason for divorce. I think in America, the study was full. It was money issues or financial problems. So it’s definitely like you said, it’s not.It’s real funny one, because when you explain it to people, especially being a notorious, tight ass my whole life, it’s like explaining to people that it’s not actually. I don’t actually love money. I just I like what it can do for my life. Like, it’s not like I want to be the richest man in the graveyard. But what I want to be able to do is do what I want when I want and not have to rock up to a job that I originally locked in.Now that I don’t like or I work for a boss, it’s it’s a bit of a prick. Something like that, sir. Money doesn’t buy happiness. It’s technically true. I think this is 50 Shades of Grey in between that statement anyway.

 

Sam: Yeah, I absolutely agree. I was actually in a job that I didn’t like very much and that was definitely a motivator as well. My first job at a unit was, you know, it was stressful and I always thought, well, what’s a better way? And that that definitely encouraged me to really buckle down into it for sure.

 

Aussie FireBug: Very similar. Like a lot of stuff that you’ve mentioned, especially just being a good say that and not knowing why. Like, I definitely went through that and I can relate 100 percent to that. I said, yes, save up all this money and then sort of blow it.Not when I say all this money, you know, it’s laughable how much it was now, But back then it’s like. Yes, I saved all this money and I was like, well, what’s the point of having all this money? I don’t like I better spend it on something and I’ll just buy new clothes or something. And then I thought, well, I’m not even, you know, that was good. But now I got no money. It was just such a odd thing.So, yeah, it’s such a classic light bulb going off when you discover financial independence and there’s people like Mr. Money Mustache. He’s just such a such a oracle, you know, in the fly space that he’s actually living proof that it works. And you can actually pull back from a full time job and go in to pursue your passions, your hobbies and stuff that you like doing at such a young age. So I really think that’s a cool. A cool door to open in your brain. And it really. Yeah. Light bulb definitely went off for me. Which it sounds like it went off for you as well.

 

Sam: Yes, it absolutely did. And I mean five, six years ago when I discovered it, he was probably only one of the few that were out there. And it’s been really enjoyable to see the Australian community build up. You know, we’ve got subreddits. The community. Yeah. Exactly. You know, I see it in the news every now and then. So you’ve you’ve got the podcast. I see. You’ve got your Facebook group, which I which I joined today. It’s you know, it’s. Yeah. It’s just been really nice to to see that growth and hopefully it continues.

 

Aussie FireBug:  Yes. Shout to Aussie fire bug facebook. It’s think we’re at like three, three, three and a half like three thousand seven hundred members. It’s got more members than people like on my own Facebook page. It hasn’t like guys in my Facebook group like the page at least. Come on.

 

Sam:  I’m guilty

 

Aussie FireBug: I’d be expecting a like within the next hour. So does how does having a side house a lot games, fun games find a play into your FIRE planes or does it not really play into it at all?

 

Sam: I mean, like I said, I didn’t start it with that intention, which is which is probably a big bonus. I didn’t start it for the monetary reasons. But now that I’m into fire and it’s come along, it’s obviously become a huge part of my plan. There’s probably this probably three ways that it’s helped. The first one is reducing expenses. So we talked about the tax benefits already. That’s obviously a nice little boost. But another part of that is I’ve I’ve probably received thousands maybe maybe even tens of thousands of dollars worth of free video games either sent directly to me or just asking the publishers, hey, I really like this game, can I play it? And that alone has saved me that much, because if I didn’t have games finder, I’d definitely been paying for those games and playing them. I have not had to do that. That is a huge cost reduction.

 

Aussie FireBug: Yeah, that’s that’s such a such a bonus, isn’t it?  I don’t know. You know, the YouTuber marquis brown or something on YouTube that the guy aren’t tech, the tech reviews. I’m probably saying his name wrong.Oh, my God. Like when he first started, he was buying everything himself. I’m pretty sure because his channels and sponsored. And I used to think, how much money is this kid dropping on all these new gadgets? But now, like, yeah, he gets laptops, cameras, smart phones just thrown at him because he’s videos get 10 million views, you know so like all the manufacturers want their product to be reviewed by him just to get it get that exposure out there, which is such a cool thing. I don’t get too many free things, like there’s a couple of services that I have partnerships with, but it’s not as lucrative. Definitely in that regard is something like Games Finder. Jealous!

 

Sam: You’ll get that. I’m not sure what financial product you’d get for free, but I’m sure we can find one for you.

 

Aussie FireBug: I need I need some. Any financial companies are listening. Feel free to throw some products my way.

 

Sam: Hey, all you have to do is ask. That’s that’s what I do. I just ask and I say, hey, I’ve got this Web site. If you’re interested, send me some keys. I usually ask for a few for my friends as well. You know, you got to test it out properly. Yeah, it’s it’s definitely saved a lot of money.

 

Aussie FireBug: Yeah, definitely. And that is such a important thing to just ask the question. Because what’s the worst they can say is no. And then you’re back to the same situation you were at before. So could not agree any more. Definitely need to ask.

 

Sam: And then the second part, I think I said three ways. So we’ll go to number two is obviously the income side we can’t ignore. You know, I said three to four grand per month that the website is making. That can make a tremendous difference over the long term. You know, am seven years in. So I wasn’t always making this much, but that’s where I am now. Might be higher in the future, even if it stays at this level. That’s all going straight to investments. I just treat it as money that it’s it’s not my money. I just I just invest it. All the money the website makes. I’ll say there’s expenses, but anything left over is just a striaght into Vanguard.

 

Aussie FireBug: Such a bonus. The fact that you can do it for whatever reason that you can do it, if something happened at your job job or something like that, you’ve got another source of income coming in and like you’ve already got investment. So that’s another. You’ve got just off the top. I had three sources of income coming in and you might have more. Which is such a powerful concept of, you know, growing this snowball from from attacking it from multiple places. Obviously, most people listening will have the primary source of income, which is the job each or you trade your time for money. That’s obviously gonna be a big one. But building these little streams of income, I think is a such a a way to supercharge your way to fire that doesn’t get as much attention as the other things, like arguing between what’s better, A200 or VAS, which is such a miniscule as such a miniscule difference between those products anyway that this side hustle and making money online. That’s definitely my preference. A can really, really speed things up. And yet I keep harping on about a bit if more people knew the possibilities. I think you could shave years off your retirement date for sure

 

Sam: It easily and I mean, I would say I’ve been quite successful now at the level I’m at. But even when I was at the $500 a month phase, you. That’s amazing. That’s an extra. Sure. And I’m investing a year one grand , 12 grand a year and that’s just straight to investments. You you you lived without it. So there’s no reason to spend it. Just get it into investments, you know? And that adds up.

 

Aussie FireBug:  And it’s it’s something that you can grow as well as like a little baby. You can nurture, you know, and it’s there. It’s, you know, making money online once as soon as you start. It seems like you get your first $10 or $100. Like you said, the light bulb go goes off and this is just a whole another world where you can potentially make money and this I feel, can play into the retirement part of a lot of people’s flight plans that if they have something, a little side hustle to fall back on each drastically, drastically reduces their reliance on the portfolio come post retirement, even if you have enough in your portfolio. Let’s say that the market crashes and burns like it is at the moment It’s going down at an alarming rate. If you’ve got that that side hustle and that income that’s been made online, you are going to sleep a lot easier than if you’re you’re relying solely on the portfolio.

 

Sam: And you’ve you’ve stolen my third point because my third point is absolutely the flexibility that the side also brings in your fire plans. You know, I’ve got a Web site. It can be easily packaged up and sold. So if I decide to retire and I want to sell it, there’s a boost to my assets for investment income. Maybe I could quit my job and just run the Web site that we talked about. Or maybe I quit my job and keep the website for the income stream. Maybe I retire with less assets because of the website or maybe I use it to protect against bad returns in the first few years. You’ve just got so many options with that extra income that it’s absolutely the flexibility is is incredible.

 

Aussie FireBug: Could not agree any more, Sam. Now, before I let you go, I have to ask any advice or what would be the number one piece of advice that you would give to someone that’s out there may be listening. That is thinking about turning their passion into a side hustle.

 

Sam: I would definitely start out like I did, I would find a no risk way to get into it, so be it. Maybe you want to create a YouTube channel that’s that’s free to start up. There is a few Web sites out there where you can with riots and sort of test the waters. So one of them is called HUBB pages. I just don’t show it. I have a little experience with it. I don’t do it much anymore because I have my my own website. But you could go on that. You could write a few articles, see if you like the idea of it. It might make you $10 a month. Learn more about the process. Risk free. All you’ve got to lose some of your time. And that being said, I would say start with an area of interest. Pick something that you’re interested in that you think might be under undeserved, that you can that you want to research and you might be OK. Q Right. An ultimate resource on it or something. So for me that I also did a few gaming guides because I was really deep into some games where I had some value to give. Think about what sort of value? Where’s your value? Basically.

 

Aussie FireBug: Awesome. I think that’s that’s a common theme. You know, I’ve had Brandon and your self on now in the sort of theme of side hustles. I would recommend you need to start in something that you’re passionate about. Like don’t go into something. Just because you’re Googling is that it’s the latest trend or what’s gonna blow up or something like that. It’s always better. Some people might have success in that. But I personally think it’s always better to do something that you’re you’re obsessed in and you have so much passion for. And I know a lot of people out there listening will be like, I don’t have any passions. Well, I think that’s rubbish. Everyone has passions.You just gotta think hard enough and really, really put the time and effort into what putting a list together on what the things that you’re good at, the things that you’re interested in and the things that you when you go down to the pub on a Friday night, you just know a lot more about than majority people there. And even if it’s super niche the Internet opens up the door for the whole world to look at your product or your content. So it odds are if you interested in something, there’s gonna be people out there that are also interested in it as well.

 

Sam: Absolutely. You don’t need to be some award winning writer. You don’t need to have insane website skills. It’s it’s very easy to do. I mean, I started this fifteen, sixteen and I’ve done all right. Games Finder’s is not an amazing website, but it’s it’s filling a niche that I’m passionate about and that’s that’s enough If you pick the right the right niche.

 

Aussie FireBug: Yeah, great. Now I couldn’t let you go before asking you a few questions that 16 year old me was dying to ask, especially about the competitive gaming career. And maybe there’s some people out there that might find this interesting as well. Smart console or computer gamer?

 

Sam: It’s absolutely computer gaming for me.Sorry. Console players out there. What’s that?

 

Aussie FireBug: Read it mean like master race. You’re part of the master race, are you?

 

Sam: Yes. I guess I am. I wouldn’t use that term because I think 0 0 gamers are equal.And whatever you want to play on, it’s fine. Yeah, I’m definitely on.

 

Aussie FireBug: Politically correct answer.Love it. What version of cod? Call of duty for those out there that didn’t know what that is. Did you play the most?

 

Sam: Definitely the first one, definitely United offensive. I remember tracking my time played in an old program that you actually mentioned before the podcast xfire that isn’t around anymore. I had one thousand five hundred something hours in that game, which is almost embarrassing to say, but a young kid in high school with nothing better to do with his time. So that’s where it goes.

 

Aussie FireBug: Yeah, I guess we we did speak and I was on xfire as well, but I can’t remember if.Yeah, I think maybe you did have. I wonder if that information is still out there somewhere on a database or something.  I’d love to know how many hours I spent on call of duty as well.Weapon of choice.

 

Sam: There was a rifle that I was actually quite good with. And there was a survey that tracked weapons stats. And I was actually the best player on the server with this weapon. It was the Mosen as a bolt action rifle that the thing was a Russian a Russian rifle even then. Yeah. Many fun times without that weapon. It was is good. Good times.

 

Aussie FireBug: Hardcore or normal.

 

Sam: I like a bit of both. Actually, I’m actually playing quite a hardcore game at the moment. But then that being said, I think there’s a place for non hardcore games because sometimes you just want to relax and you don’t want that pressure and say both something I’m going to have to say.

 

Aussie FireBug: You know, I encourage you to specifically, you know, how there was the hardcore mode in like the I think was hardcore. I always played the hardcore mode because it was more realistic to me. Like if you shot someone once in a major area, they died instantly, whereas like some COD games. I don’t know what the latest ones like, but you could sort of power your way through like you could, you know, shoot someone a few times and I could just keep running and you’re like, Oh, I just miss them that hardcore with so much better, I felt, because you just nick them and they would die and you get the kill. And I always thought that was a lot better, although it did suck when you come across a really good play because you just you had no hope.

 

Aussie FireBug:  Did you have a favorite perk in the latest COD.

 

Sam: No, actually, I didn’t. I didn’t play the latest COD, I haven’t played in a few releases. I have to say I’ve looked elsewhere for gaming in recent years.

 

Aussie FireBug: You’ve moved on. Oh, I have. Some of the other questions are not going to make sense then, but they want I’ll still ask them. So when you when you played a lot of match, what was your normal score for you in, say, like Team Deathmatch? How many kills? How many deaths? Roughly.

 

Sam: Offensive worked on a point system. So those points for kill, but there’s also points for objectives and Multikils I would regularly get over 100 score on these servers. I’m not sure how that translates to current games, but yeah, usually very high score very low debts.

 

Aussie FireBug:  Your KD was good. It would have been like it would have been like 4 to 1, 5 to 1.

 

Sam: Yeah, it was pretty solid.

 

Aussie FireBug: Now, you might not have played this one, but I’m really hoping you did because this was my favorite.Highest level you ever got to call of duty World War zombies.

 

Sam: I’m sorry to say I never played the zombie

 

Aussie FireBug: Like what? That was like a religion in amongst our group of friends. Like seriously that the world of the world. zombies was our jam back in the day like we used to. Seriously gather round, my friend and have beers before the pub. The zombies mode has a special place in my heart for gaming. I feel like you need to get back on that!

 

Sam: I should. There was a few zombie mods COD 4, COD I played however that was probably the lat i played. I think I was playing league legends by by that stage.

 

Aussie FireBug: Yeah. COD was such a leap in engine or something. I was like buttery smooth. It looked really nice. But you haven’t played a few in the last couple of releases but yeah. Very special place in my heart in the call of Duty series. If there’s anyone out there listening, Sam, that wants to get in contact with you, what’s the best place to reach out to you?

 

Sam: So once this podcast goes live, I’ll definitely be watching the comments for a week or two after. So if anyone has a question, I’m happy to answer it there. And you know, it’s always good to be public with these sort of things because if you’ve got a question, someone else probably does. Otherwise, like I said, I joined your Facebook group So if anything pops up there, I’ll try to answer it. But if you have something more private that you don’t want to share with other people, there’s a contact page on Games Finder that I’ll respond to.

 

Aussie FireBug: Great.I’ll put a link to the website games find in the show notes for those listening that want to check it out. Mate, we’ve reached the end of the podcast. It was an absolute pleasure having you on. Thank you so much for sharing your story with us.

 

Sam: No worries. Absolute pleasure.