I have been on the journey for quite a while, but I have only started blogging about Financial Independence in some form or another for about the last year. And what a year it has been! I feel I have learned so much and grown as not only an investor but as a person through the blog, and made so many memorable friendships and connections. Parts have also been tough and a lot of work, but overall it has been a very rewarding experience.
This post is all about my journey to reaching a $1M net worth, and goes back to explore my time at School, University and my experience entering the workforce.
Seven figures; why it means nothing!
I recently surpassed the ‘six figures’ and became a millionaire thanks to a property development I have been involved with for the past year as well as a growth in my online businesses. Does it change anything? No, not really. I will continue to invest in accordance with my investing strategy to pursue the goal of passive income to reach Financial Independence.
See, the reality is that whilst the Net Worth might sound pretty cool, and it might look good on a spreadsheet or graph on this website, ultimately capital doesn’t really mean much unless you do something with it. For me, I want that capital to work for me creating passive income.
The irony of course, is that the major investment asset class in Australia for most people is property – and property does generally have a pretty low yield. This can be thought of as a capital trap, or sometimes is described as a ‘rat race trap’ – someone can be exceptionally asset rich – such as a landlord – but be very cash flow poor, and as a result might still have to work a conventional job to fund their lifestyle, especially so if they are negatively gearing their property portfolio.
Whilst I am a property investor, the equity in my property makes up under $200K, of less than a fifth of my net worth. So where does the majority of my wealth lie? Easy, it’s in my Superannuation – my Australian retirement investment account. And there is nothing I can do with that until I am old enough to ‘conventionally’ retire.
Circling back to passive income, this means whilst it sounds cool on paper, the millionaire status doesn’t really mean much except a catchy blog article headline or Instagram post. Even talking about this now has me wondering if I am bordering on the line of attention seeking, rather then providing educational FIRE content.
Anyway, the purpose of this post was really to try and ‘fill in the blanks’ about my journey to seven figures, So I am going to try and provide you all with a bit of a backdated summary of my net worth and investments to date.
Captain FI’s Financial Independence Journey
Prior to 2009, I was at school. I was generally pretty savvy with money, and my entrepreneurial spirit tended to keep me well financed. Our family grew up below the poverty line and my amazing beautiful Mum raised our large family on her own, and did an exceptional job! While lunch orders and fashionable new sneakers might have been off the cards initially, she always kept a roof over our heads, clothes on our back and kept us well nourished.
To get extra pocket money, I may have resorted to brokering deals with Pokemon cards, Toys, Game-boys and even occasionally trying my hand at undercutting the school canteen by selling junk food and soft drink that I had bought wholesale or as expired stock. I also tried working – mowing lawns and washing cars, but I much preferred ‘wheeling and dealing’ over actually doing actual jobs. I did eventually pick up a few conventional part time jobs like stacking supermarket shelves, cleaning graffiti and picking up rubbish from shopping centers (which all sucked), as well as receiving some sweet sweet ‘teenager dole’ youth study allowance from Centrelink – a government payment to encourage you to stay in school.
So I always had a good little cash flow strategy on the side somehow, but unfortunately the culture of my family growing up was to spend it. Save it up, and spend it on stuff we need. I felt guilty hoarding money when I knew how beneficial spending it could be, and my impulse control was never very good either (Yes, I do have ADHD and Yes, somehow I still managed to become a Pilot) so I tended to spend pretty much all I had, giving me a net worth of pretty much zero at all times.
I have been gifted with academic ability, as well as with exceptional privilege and a great upbringing, and I was able to use this to my advantage to get scholarships at University to complete my engineering degrees. So, As best as I can recall – this is what my Journey to a seven figure net worth looked like (based on starting Net Worth for that year as a combination of cash, super, assets and physical property) with associated commentary and major changes.
- 2009: $5,000 – Started ‘Full ride’ scholarship
- 2010: $24,000
- 2011: $40,000 – Graduated Bachelors degree
- 2012: $92,000 – Graduated Honors degree, Gained Commercial Pilots Licence
- 2013: $130,000 – Started ‘office life’, Gained Air Line Transport Pilots Licence
- 2014: $161,000
- 2015: $200,000
- 2016: $281,000 – Secured full time professional flying employment (Transport)
- 2017: $340,000
- 2018: $482,000
- 2019: $542,000
- 2020: $858,000
2009 – $5,000
Was INCREDIBLY lucky to have been gifted the old family car (worth about $5,000 as it was an amazing car) to take with me to University on a full ride engineering scholarship. Couldn’t believe how lucky I got and how generous my Mum was, but I had also worked my arse off for two years in order to graduate high school (which I thought was the hardest thing I had ever done – oh how wrong I was!) so this was a bit of a graduation present from the family.
My scholarship included accommodation, tuition, meals and even a fortnightly stipend for beer money. What a time to be alive. In exchange, I worked very hard to maintain my HD average WAM (grade-point), as well as worked on research projects for the university – to be honest I was just a ‘lacky’ for the actual researchers, and was probably more of an embuggerance than actually useful in the beginning – I did fetch lots of coffee.
2010 – $24,000
Nothing of significance, I ‘invested’ in a lot of consumer goods like a fridge, big screen TV and sound system for my dorm room, a kick ass snowboard and a heap of other toys. Bought lavish gifts for family like laptops etc (I guess flexing my new money muscles). Managed to save up about $10,000 in cash, picked up part time work tutoring local high school and first year uni students in math and science, and started flying lessons for my private pilot licence
2011 – $40,000
Got my Private pilot licence and managed to save up $30,000 in cash in term deposits. Graduated my Bachelor degree.
2012 – $92,000
Graduated my Honors degree and got my Commercial Pilots Licence in my spare time. Begun investing in ‘Managed funds’ through a ‘bank’ and seriously had no idea what was going on (not naming names for defamation reasons, but they basically scammed the crap out of me). Continued to spend lavishly on myself, friends and family – including overseas holiday trips for my family and I.
2013 – $130,000
Started ‘office work’ and I did not care for it at all. Money was good but soul destroying, contributing extra to super. I knew I wanted to be a pilot so applied for unpaid leave and spent a lot of money and time doing an Airline Transport Pilot Licence course. Passed with ‘flying colors’. Applied to every airline I could find but not accepted for any because I had pretty much zero experience. Needed a new strategy – bought a $20,000 second hand station-wagon and camper trailer to ‘go North’ and live in in search of General Aviation jobs. A serious family emergency occurred which meant I had to put off plans and head home to help care for my Mum, so initially worked remotely from the office. Continued investing in managed funds and term deposits. Bought myself a motorcycle to try and escape the monotony of office commuting.
2014 – $161,000
Ended up transferring to a different ‘Office work’ office in my home town and it was still just as soul destroying. Threw lots of money into my flight training and achieved an assortment of really cool flying qualifications like Aerobatics, Low flying endorsement, formation flying and a Multi Engine Command Instrument Rating (a significant professional pilot milestone). I also became a flying instructor, and got my first couple of flying jobs – scenic flights, charter, and basic flying instructing. Because I was spending almost all of my pay on flying, I paid very little attention to my managed funds which performed poorly.
2015 – $200,000
‘Office work’ becoming soul crushing at this point, but progressing as a flying instructor and managed to rack up over 1000 hours so begun applying for full time flying jobs. Got very mad at the managed fund ‘bank’ as they left me with about 3-4% returns after their fees and charges – when I realised what I could have got with other managed funds angrily I withdrew the whole amount and closed my account. Had $100,000 or so in cash in term deposits. Put in several offers on houses for investment properties but literally had ZERO idea what I was doing – thank gosh none of them got accepted. I became very jaded about money. Bought a car for a family member.
2016 – $281,000
Finally got the dream job – accepted into full time flying job, full ride training package – the works! I actually got a pay rise from what I was previously earning, and the company paid for my relocation and training / aircraft conversion. I was incredibly happy to leave my desk job behind. Great salary package and benefits, including above average super. Also had a light bulb moment – I read the barefoot investor and whilst it doesn’t specifically give advice on how to, it set me on a path of learning how to begin investing in shares.
2017 – $340,000
Moved literally across the country to take on a 12 month ‘remote’ (I considered it remote!) work location. Sucked because I didn’t know anyone, but made friends quickly.
2018 – $482,000
I got serious about investing in 2018 and began pouring almost everything I had into trying to pick shares. Turns out that was a Dumb idea in the end (underperformed the index)
2019 – $542,000
Discovered FI/RE and learned how powerful index funds are. Got serious about Financial Independence and slowly converted my holdings into index funds after 12 months to take advantage of the 50% CGT reduction. Entered into a property development contract. Begun blogging about Financial Independence in late 2019, took the whole frugal and FIRE thing way too far.
2020 – $858,000
Awarded a favorable settlement to do with workplace pay and conditions, which included a boost to my superannuation. Bank valuation on property development came through, and also started a portfolio of online websites as an ‘eBuisness’ which all grew really quick. Started to scale back my frugality and savings rate as it was affecting my mental health (and was potentially a factor in a relationship breakdown) and started prioritising family, relationships and experience more.
It has been a bit of a bumpy ride, but here we are. I wish I could go back and have a word with myself when I was a bit younger – I would tell myself to prioritise what I loved more, and maybe not to waste as much money on random crap! Ultimately though, I think I did pretty well, Graphically, this journey looks like this below – and I think you can even see the exponential effect that compound interest has had (as well as the two spikes from my settlement and when equity from the investment property development was recognized by the bank).
Finally, I have been incredibly privileged and lucky to be able to do this. I had the unwavering and incredible support of my family and dedicated mum who supported and helped me to win a full ride scholarship meant that I did not have to take on HECS / HELP / VET FEE / Student loans. Student loans would have meant taking a massive hit to the net worth.
Weirdly enough, because I did switch career streams I did end up spending around $340,000 on flight training and out of pocket costs at University. I guess this kind of ‘offsets’ the benefit of the scholarship, but it has also landed me an exceptional job and postgraduate level qualifications – which have allowed me to continue to earn a good salary and continue to invest aggressively.
Next stop… Financial Independence!