Aussie Firebug

Financial Independence Retire Early

In the middle of 2017, a colleague of mine asked the entire IT team if they wanted to buy some Bitcoin. He was pretty into it and had been explaining to us how it all worked. The conversation went something like this:

“Hey guys, my friend is buying some Bitcoin and if you want him to purchase some for you then now is a good time. I can set you guys up with your wallets and everything and then we can transfer some Crypto to each other and I’ll show you the transaction on the blockchain. You guys in?”

Now you might think I’m a sporty outgoing personality type (which is true) but at my core, I’m a massive nerd 🤓. And although I had been reading about Bitcoin for a few years I was still very much intrigued by the blockchain technology that powered it and I wanted to see for myself what all the hype was about.

So nearly everyone in the IT team bought $100 worth of Bitcoin in September 2017 when the going price was $4,763 AUD. I was rather unimpressed that there was a $5.50 transaction fee (5.5% of the investment!) just to buy the bloody thing so I only ended up with ~$94 bucks worth which at the time was 2% of a Bitcoin.

This was just a bit of fun to see how it all worked. We bought enough to muck around, but not enough to move the needle… or so I thought.

The 2017 Boom and Bust

The next few months were crazy!

We would come into the office each week and the first point of call was talking about the price of Bitcoin. It was skyrocketing!

Our $94 turned into $150 in a mere matter of weeks. And then $250, and then $450. We all had a laugh that this was our ticket to early retirement (they didn’t know about my blog 🙈) and we were only a few weeks away from buying a Ferrari.

Bitcoin peaked on the 16th of December 2017 at $25,506 AUD and our initial investment of $94 dollars had turned into $510 in less than three months.

Now I understand that it wasn’t a lot of money because our initial investment was so low but the return on investment was out of this world. Everything is hard to quantify if you don’t have a point of reference. I understood that even though we only made ~$400 bucks, the rate of return over that short period of time with zero effort was likely never to be repeated again in my lifetime.

And then came the crash…

Source: Yahoo Finance

Our tiny slither of Bitcoin which was valued at $510 in December 2017 plummeted back down to earth and bottomed out at $96 dollars a year later in December 2018.

This was my first taste of the Bitcoin rollercoaster everyone talks about.


Post Crash and General Feelings

A few of the guys in the team had actually sold their Bitcoin at around $450-$500 which was pretty much the peak in 2017 so they were very happy.

But I never had any intention of selling mine.

First and foremost, I was curious about the tech. However, I had a lot of reservations about the practicality of Bitcoin as a currency and if I’m being honest, I didn’t really think it was going to take off. I kept racking my brains on what problem Bitcoin was actually solving for me as an Australian. I understood the utility of this Cryptocurrency for other countries where the government was freezing accounts. And there was definitely a utility for criminals to send and receive value anonymously. But I could do everything I wanted to do with Australian dollars almost just as quickly as Bitcoin and with fewer fees.

I just couldn’t see this thing taking off.

I didn’t really understand what Bitcoin was back then. What it could be and what it represented.

But I had this hunch that it might be worth holding onto moving forward and the worst-case scenario meant that I’d lose my initial $100 bucks… not a big deal.

If I’m being honest, I was actually hoping Bitcoin and the other cryptocurrencies would eventually disappear. I was receiving a fair few emails from readers asking me about it and I originally just thought it was a Ponzi scheme. No intrinsic value, hardly any utility for Australians, high transactional fees etc. It also seemed complex and I couldn’t be bothered learning about something that I thought was going to be a relic of the past within a few years. I never included my tiny amount of Bitcoin in my net worth updates because I didn’t want any more emails.

But crash after crash Bitcoin continued to rise from the ashes to reach new heights.

This new ‘thing’ just wouldn’t stay dead…

Down The Rabbit Hole

The biggest turning point for me to do a deeper dive into the world of Bitcoin was when it surged again in late 2020. I was personally getting a lot of requests to do a Crypto podcast as well as a bunch of threads popping up in the FIRE Facebook group.

It was around this time that I read Why I’ve Changed My Mind on Bitcoin by Nick from the ‘Of Dollars and Data’ blog. I really value Nick’s commentary and that article really cemented the idea that there might be more to this Bitcoin thing than meets the eye. If Nick was writing about it, it was worth another look.

I decided to commit to educating myself on Bitcoin so when I eventually booked an expert on the podcast, I didn’t sound like too much of a n00b.

A quick side story….

I actually was in communication with Alex Saunders from Nugget news about coming on the podcast. He was one of the most recommended Australian authorities within the Crypto space and had built up a huge following online. Everything looked legit so I sent him a few emails. I nearly fell off my chair a few weeks later when my mate sent me an article that said Alex was being taken to court for potentially millions of dollars owing to his community 🤯.

Holy cow. This Crypto space was like the wild west.

Another name that kept coming up was an Australian who was living in the US, Vijay Boyapati. Vijay wrote the very popular book ‘The Bullish Case for Bitcoin’ and was very good at articulating his ideas during interviews. I reached out to him and he agreed to come on the podcast last year.

His book really changed what I thought I knew about money.

The mistake I made when I first came across Bitcoin was that I didn’t know the history of money. You need to really understand how money came about in the first place to give you the context of why the invention of Bitcoin was a game-changer. Explaining this could be an entire blog post on its own (or maybe a few posts honestly) but if you’re interested, Vijay’s book is a great starting point.

The history of money is more of a psychological deep dive into how humans interact and trade with each other. It’s super fascinating stuff and it challenged some core beliefs I had previously.

I started watching Michael Saylor’s videos on YouTube and I really enjoyed the ‘Decoding Bitcoin’ series from the Australian podcast The Passive Income Project.

The more I read, the more I realised how little I understood about money. I know a decent amount about how to become financially independent, but the mechanics of where money came from, how it’s created and why it works is an entire discipline.

Risk vs Reward

For me personally, the risk-reward proposition for a small amount of Bitcoin is quite attractive.

And it’s for this reason that we have now allocated 1% of the portfolio to this new asset class (we currently have around $12K of Bitcoin). And I’m seriously thinking about upping that to 2% in the future but let’s start with 1%.

This is the way I look at it – the worst-case scenario is that Bitcoin becomes worthless and we lose 100% of our investment. It’s only 1% of our portfolio so while I don’t like wasting money, it’s not going to ruin us financially. The upside for this investment however is unlimited.

I don’t know what’s going to happen in the future but I’m fairly confident that Cryptocurrencies are going to play some sort of role in our financial lives moving forward. I don’t know if Bitcoin will be the dominant player in 15 years but it’s the horse I’m backing for now.

I was very close to spreading that 1% across the other top 10 Crypto (by market cap) but I’m just not as educated on them and lacked conviction.

I think Bitcoin has a major ‘first mover’ advantage with its network but its crowning jewel is the decentralised nature of the protocol. I’ve read that other Cryptocurrencies are not decentralised and there are actually a few people at the top running the show. From my understanding, the whole point of using blockchain technology is to be decentralised. If you want to create an app, community, new system or whatever and it’s not going to be decentralised, you’re much better off using traditional technology with a normal database. That would be a lot more efficient as the processing power required to run the blockchain can be quite high.

I’m not an expert though so please if I’ve got this part wrong, let me know about it in the comments. Why would you use blockchain tech if whatever it was you were building didn’t need to be decentralised?

End Goal

I’ve used the word ‘investing’ a few times in this article but I’m hesitant to call anything to do with Bitcoin an ‘investment’.

I’m not even sure I know what to call it.

It’s not really investing but I think it has graduated past gambling at this point. There’s definitely a heavy amount of speculation but every investment in history has had some degree of speculation by definition.

It’s now possible to generate an income from your Cryptocurrencies but this isn’t something I have experience with so I can’t comment on the practicality and risks associated with staking.

The way I see it, we have two potential scenarios that can play out:

  1. Bitcoin succeeds and is adopted worldwide
  2. Bitcoin fails and becomes worthless

The goal is scenario 1.

We don’t have any intention of converting our Bitcoin back to fiat currency. This technology either works or it doesn’t. And if it does work, we should be able to use our Bitcoin for future purchases.

It’s more of a store of wealth than anything. Of course, I want the value of Bitcoin to go to the moon now that we own some. But the main strategy behind this purchase is for us to be able to actually pay for future expenses using this Bitcoin.

Think of it like money that buys more the longer you hold it. An interesting concept given the current rate of inflation.

This is different from our shares portfolio which is being built to generate passive income for us.

But Why?

If I’m already living a great semi-retired life and am on track to reach full financial independence within the next few years – why bother with Bitcoin at all?

That’s a great question!

There are a few reasons

  1. I’m interested in the technology and personally get satisfaction from participating
  2. I’ve concluded that the upside of Bitcoin succeeding far outweighs the downside of it failing given a small allocation within our portfolio
  3. It’s a vote for a better system

Points 1 and 2 are pretty self-explanatory but I want to expand on point 3.

When I was trying to think of the utility of Bitcoin back in 2017 I didn’t really understand how inflation worked and how it is used by the government.

I’m not an expert so I’m not going to try and pretend to know all the complexities of our current financial system but it doesn’t take a rocket scientist to know that inflation is rising in Australia. Your dollars are buying less each year even factoring in wage growth.

One of the main problems with the way our democracy works is that politicians are incentivised to be shortsighted. They are constantly slapping on band-aids rather than actually fixing the problem.

An obvious example of this is how much money has been created over the last few years. But this quick sugar hit doesn’t come for free. Someone always has to pay the bill. And all this printing has started to come back to bite us in the ass.


Inflation is a hidden tax.

People hardly even know it’s happening.

But make no mistake about it, high inflation without wage growth means you’re losing purchasing power. Your hard-earned dollars are becoming less useful and the rate at which they depreciate is out of your control.

I don’t like the fact that short-sighted politicians are happy to fire up the money printer at the expense of fiscally responsible savers that have built up a safety net. Is it too hard for them to maybe tighten their belts a bit in bad times? Why does it seem like every solution these days is to start making it rain at the first sign of the economy slowing?

I’m not saying I have all the answers, I’m just pointing out that the relentless drive for continuous growth is punishing responsible savers through the debasement of our currency and rewarding speculators loading up on cheap debt.

The more money that is created, the less purchasing power we all have.

Bitcoin flips this narrative.

The amount of Bitcoin that can be created is set in stone. It can’t be changed.

Part of me wants this experiment with Cryptocurrencies to succeed because I think it presents a superior financial system that can’t be screwed with by corruption and greed. Both of which are unfortunately innate traits of human beings.

Converting my fiat currency to Bitcoin is a vote for a better system.


We’re officially in the Crypto game (technically have been since 2017 😜).

I’ve really enjoyed learning about Bitcoin over the past few years but it was the history of money that really caught my attention. I find it absolutely fascinating how humans created and used money in past generations and I think the history of money is a prerequisite to fully understanding the utility of this new technology.

Over the last two years, the risk/reward proposition has shifted for me personally and I now consider a small amount of Bitcoin in a portfolio to be perfectly appropriate for any Australian looking to reach financial independence.

You’ll be fine without it of course but I think we’ve reached the point where most people can rationalise someone having a small amount. This is a lot different from years gone by when a lot of well-regarded reasonable voices would have publically shamed anyone who even thought about ‘investing’ in Cryptocurrencies. I must admit that I was secretly judging people who were buying it back in the day too 🙈.

We live and learn and I can admit when I was wrong.

I’d love to know what you guys think about Bitcoin in the comments.

Are you starting to believe? Or is it still a huge Ponzi scheme?

As always,

Spark that 🔥

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