My Journey to Financial Independence

Everyone has a unique journey towards FIRE. I suppose I could say mine started in high school, when I was trying to work out how I could achieve my dream job of being a pilot. I had been gifted a flying lesson by a family member and I was instantly hooked. I was always good at academics, so I knuckled down to try and get the best grades, so that I could get a well paying pilot job, and then I would have all the money in the world and be successful and live happily ever after… right?

The first setback – starting a career and training costs

The problem is, pilot training is expensive. Really expensive. I couldn’t get into any scholarship or funded pilot training program, and because I didn’t want to ‘waste’ any time I took a scholarship as an engineer. I didn’t earn a lot on the scholarship, but I didn’t want to wait to start flying, so when I wasn’t studying I took on as many extra jobs as I could. The study was pretty intense at times, but I realised that by being creative and flexible with my time I could easily pull in some extra cash; I took jobs..

• Tutoring: Math, physics and chemistry at high school and university level, which brought me close to $100 an hour. Plus the occasional free meal from the students parents, too!
  
• Gardening and labour services: I used to pick up cigarette butts in shopping centre car-parks earning about $20 an hour some weekends.
  
• Buying and selling cars and motorbikes: I had a lot of fun doing this, I was first introduced to this by a friend who bought a Honda CBR250R motorcycle on my behalf for $1000 (and then promptly took me to an ATM to reimburse him). Three months later I sold that bike for $3800! This was a lucky find and not all the deals were as lucrative, but in general I made at least $1000 per flip, after paying for minor repairs / maintenance and stamp duties / taxes. I lost count of how many flips I did, but I had a lot of fun riding the bikes and using the cars. I also learned a heap of valuable skills such as how to maintain all of my vehicles, and how to advertise and negotiate deals.
  
• Buying and selling the most RANDOM things on eBay and other online classifieds. At one stage I was buying memorabilia or other antiques in op-shops and selling them on eBay. Whilst it wasn’t a huge amount of money, bargain hunting became a fun Sunday morning activity, and one of my best sales was an old and tattered first edition poetry book which I paid $2 for and sold for over $300 online. The best thing was, I lived up the street from a post office and the buyers would always pay for the postage.

This stuff sort of came naturally to me, because as a kid I was pretty enterprising and I would always find a way to build an empire of Pokémon cards or whatever was popular at the time (despite usually being banned from school or by my parents). I was reminded recently at a school reunion how I would take a heap of candy to school that I had bought at Costco or other bulk wholesaler and then try to sell, undercutting the school canteen.

The need for frugality

I spent close to $300,000 learning how to fly. Most of it came from my scholarship income over the four year degree, but a decent chunk came from my trainee wages after I graduated college, and of course I filled the gap with my various part time income sources.

This sort of led to a natural frugality because I just didn’t have the money. A flying lesson such as a commercial Navigation training exercise often cost me over $1400, and the syllabus called for at least 15! Some larger, more advanced trainers cost me up to $770 per hour. But eventually I made it work, and got my commercial pilots licence and a Multi Engine Command Instrument Rating.

Aside from my car flips, my daily drive was an old beat up coupe, which I had a strange affinity for and really loved for no good reason. I was very lucky actually as my mother gave me that car when I moved out at 16 years old to go to college interstate. It was the old family car and I kept it going as long as I could. I got a service manual and taught myself how to service it, as I couldn’t stomach paying someone $250+ for a basic service when I could do this for $50 worth of supplies in under an hour. I became very crafty at saving money by being self sufficient.

Minimalism and saving

Because of the nature of my work, after graduation I moved around. A lot. Actually in the past 12 years, I’ve moved on average once every year. Interstate, to a new capital city or regional centre. Usually I have had work provided or subsidised accommodation, which was a massive help. I became very good at travelling light and being able to get rid of my things and start over. I actually have this little box trailer which I would connect up to the back of my little coupe and I would put my motorbike and all my worldly possessions on it to haul across the country. I’ve been almost everywhere, man!

This kind of naturally drew me into the minimalist movement; tread lightly, leave only footprints, take only memories that kind of thing. I could really only take a few things, I just didn’t have the space and I refused to pay for removalists to freight it around. I liked the idea I could concentrate my possessions to what I really valued. For example, I had a small wardrobe of quality clothing, a good laptop, strong luggage and of course an excellent espresso coffee machine. I still had far too much stuff mind you, so each move was a really great opportunity to evaluate whether something really held value to me, or whether it was something I had just collected and was too cheap to throw away. This was something I’d naturally done but I had come to realise this was one of the core principles of minimalism.

Around this time I started realising that gee, I was actually starting to save a decent amount of money. My expenditure was still really low and I was able to find extra part time work in most places. Since I was no longer throwing it into what seemed like the endless black hole of pilot training costs, it was nicely accumulating. I realised I had to do something with it rather than just leaving it in a savings account where it earned bugger all interest. This started a really agonising but pretty important period of my life of self education and growth where I tried to learn and evaluate types of investing.

The need to invest

I started to read articles on finance and investing, and learned about the fiat banking system and how our economy worked. Shares versus property was a HUGE debacle I found myself in. I kept weighing each other up and trying to optimise each class, often working myself up in the process. Analysis paralysis! Death by alternatives.

In the end I decided to try both. The minimalist and frugality in me really loved the share market with its low (or no!) holding costs and cyclical high growth. The entrepreneur in me loved the idea of using someone else’s (the banks!) money to buy a cash flow positive asset which would grow steadily in capital worth, and let economic inflation erode the value of the loan.

I tried to buy a house which I planned to rent out, and got messed around a bit by a real estate agent which I took really personally, which was probably a sign of my immaturity at the time. I ended up backing out of the deal because I couldn’t keep my ego in check, and poured all of my money into an actively managed fund. Because it was easy and quick… (and portable!), and I was pretty busy at work.

I didn’t realise the HUGE detrimental effect the fees of an actively managed portfolio would have on my total returns. I would get investor newsletters telling me how smart I was and how well the fund was performing, but one day I made an excel spreadsheet comparing what I had paid into the fund versus what I had now, and a bit of reverse engineering showed I had made a net growth of about 4.5%. Hardly the 10%+ they were crowing to me.

Because I was annoyed, I withdrew my entire balance and stuck it back into my high interest savings accounts, with the idea of revisiting a property deal and buying some individual stocks myself through an online broker.

More self education, and my dream job

Whilst I was researching brokerage accounts, I found a review of CommSec by Scott Pape, the Barefoot Investor. It instantly struck a chord with me as his no BS approach, minimalist attitude and financial policy was so similar to mine. I bought a discount copy of his book at the post office for $5 (an old version) and set to work following his steps to reduce my cost of living even further, boost my savings and get into stocks. I paid for a subscription to his blueprint service and started buying stocks through CommSec. I guess I liked that he discouraged property investing, because I still didn’t know much about it so it was ‘different and scary’ and I still had a bad taste in my mouth from my failed property deal.

Work was going great, I got my first flying job taking joy flights in antique aeroplanes, and had then managed to progress through a number of graduate level jobs. I had finally landed a professional gig as a copilot flying a cargo jet doing primarily domestic and international freight, but also some basic passenger services. The company paid for the required training workups I needed on other aircraft and then the extensive conversion package, which was an amazing challenge. I had never worked so hard in my life but it was awesome fun and I got paid a trainee wage the whole time to pursue my dream job.

Again, I was moving around a lot, didn’t spend a lot of time at home and was being paid allowances to eat out and live in hotels. A lot of my peers in the company and industry generally were getting into life style inflation as their wage grew. They were consumer spending like crazy, renting massive places to live, even entering into debt for luxury cars and the like. I was still content living my minimalism inspired frugal lifestyle and madly stuffing the money into high quality shares through my brokerage account.

Trying to beat the market turned into an obsession

I found I was getting obsessed with investing, and was spending too much time checking my portfolio and researching new buys. It was addictive, especially when the dividends hit my account or a stock skyrocketed, but time consuming. The inner engineer in me always wanted to try to optimise and find better ways to invest and make profit. I even wondered if this was starting to affect my job – my dream job which I had worked so hard to get.

After 12 months, I was evaluating my performance for my personal tax return. My shares had done alright, and I was smug since the property market had generally stagnated and in many places corrected downward. But I couldn’t escape one fact – for all my stock picking success, I had an equal amount of flops… and the net effect was I had under performed the market!

I had got these great dividends which I had to pay income tax on, but some of the stocks that paid these dividends had gone down in capital value. Although my net position for these stocks hadn’t moved, I’d ended up paying all this tax, for what felt like nothing. This clearly wasn’t a very tax efficient strategy.

I was due for my yearly medical, which is pretty strict in aviation. Much to my surprise, the doctor noted my blood pressure was high. Unusually high. Too high. I was a fit, young pilot in my mid twenties, I exercised every day with rigorous weight training and cardio. I thought I ate pretty healthy and yet my blood pressure was probably higher than my CEO’s.

The importance of Health, and a new revelation

As it turns out, my diet wasn’t as good as I thought, my sodium levels were through the roof, I was eating so much junk food (copious quantities of salted beef jerky) and I was suffering from huge latent stress from overloading my schedule. I was working a full time job as a domestic and international line pilot, moonlighting taking up shifts as a casual flying instructor on weekends to make extra cash, double loading on post graduate study through my employers education scheme (I mean come on it was free!), trying to do multiple business startups and to top it off, trying to pick stocks and obsessing over the results like crazy.

Sometimes it’s really hard to evaluate your own workload and level of latent stress… I had just thought I was motivated with a good work ethic and was ‘hustle and grinding’ my way through my twenties. As it turns out it this was starting to impact my physical and mental health, and my performance in my flying on the line was also suffering.

I was having dinner with my best mate from college and his wife one night, who were both staunch vegetarians, and they introduced me to how awesome some vegetarian cooking can be. They were pretty hard workers, some of the smartest people I knew and were very good at managing their money. I really admired and looked up to them, so I was willing to listen to their advice and reasoning behind their vegetarian choices and the beneficial effects it had had on their health.

Now some of my family have been through some serious health issues. I come from a pretty large family, and both of my parents have had battles with cancer. This required some pretty devastating chemotherapy and intrusive operations. One of my sisters lives with a chronic disease, which seriously restricts her lifestyle. I had always thought I’d been exceptionally healthy and maintained an aviation grade medical since I was 16 and had nothing to worry about. But I was wrong, and I was working (and eating) myself sick.

Diet and destressing

So with the combination of a kick up the arse from the doctor and the advice of some dear friends (who had never steered me wrong before) promoting the benefits of a vegetarian diet to me, I knew this was something I had to learn more about. After locking myself in my study for a weekend and reading papers such as the China Study, I realised that a Whole Food Plant Based (WFPB) diet had some pretty amazing health benefits and was super compatible with my lifestyle. I’m not militant, and love the flexibility associated with WFPB dieting – “Eat food, mostly plants, and not too much”, which fit right in with my other favourite food saying “If it fits your macros, bro!”

Pulling back from some of my commitments and improving my diet paid dividends to my health. I was feeling better, sleeping better, eating loads of clean healthy produce and even seeing improvements in the gym. And to boot, my grocery shopping bill had halved, so I had even more savings to throw into my investments.

I knew I wanted more investments to build more income, maybe to buy a house and to provide for my future family. But I didn’t really have a goal or end state. My results actively stock picking were average at best, taking up so much time and causing me a lot of stress. Trying to find a better way, I stumbled across the topic of Index fund investing online, and started to learn more.

FI RE blogs; the online community

The source of information on index fund investing came almost exclusively from these things called FI blogs. I had no idea what these were at first and there were so many to choose from. Reading them every night, the concept still didn’t really make sense; Financial Independence seemed like something that was just such a massive obstacle and I didn’t really believe it was possible or could apply to me.

Who even wants to retire early, anyway? and What would I do with my time? are amongst the questions I asked myself. I loved my job! I had spent a decade of my life and hundreds of thousands of dollars to achieve this – why on earth would I kill the golden goose and quit my job?! Sure I thought, FI is easy enough when you’re some ‘single-white-male’ computer programmer or CPA accountant earning $200,000+. I mean, what computer programmer or accountant would even like their job anyway, of course they would want to quit. And they get paid so much so it’s easy for them to save.

I realised this was probably just a defence mechanism and me rationalising a fear of the unknown, and gradually I came to realise the FI community was something I could really learn and benefit from. I would say I have probably now read every piece of information out there on FI, and this has been a really positive influence on my life.

The FI RE concept actually really aligns closely with my core values, and it has been refreshing to find support within a community of like minded individuals. The FIRE concepts of minimalism and living below your means, and investing for growth really compliment a Whole Food Plant Based diet and fitness lifestyle, and together these have all been a huge help towards reaching my FI goal.

Probably my favourite revelation though, is validation in only directing my energy towards things I really value, like quality time and experiences with close friends and family. Personally I love my job and at the moment, as of mid 2019 I’m not anywhere near ready to hand in my wings, so for me FI RE means financial independence… retire eventually! We will see what the future holds, and I look forward to reaching my goal of financial independence and potentially looking at planning an early retirement in my mid 30’s sometime around 2025

Thanks for reading, I hope you can take some inspiration from this and look forward to when you reach FI.

*Note from Future me – I actually pulled the pin in 2022 and retired earlier than I had initially planned! – I have since written about my experience in One year of Early Retirement

Get FI !