November is done and we are well and truly into the end of the year. The Christmas decorations are on sale at Aldi and they are in full swing trying to sell you festive meat based products (Yuck!). My Christmas shopping was done months ago, with small but thoughtful gifts for the people I care about selected over the course of the year.
I have been enjoying gardening during the few days off and the odd evening I have had home this month now have conventional soil pot plants growing over 20 different types of herbs (mint, lemongrass, peppermint, thai basil, spicy basil, oregano, french tarromin, lemon myrtle, dill, fennel to start), as well as beans, snow peas, eggplant, tomatoes, strawberries, blueberries, pineapple, spring onions and a bunch of other stuff. Between that and the hydroponics (Kratky pots) it cost me about $300 all up but well worth the expense and I have already seen a reduction in grocery bill spending. The best part is it is all on timers or attached to reservoirs so it can survive on its own for weeks at a time when I am away and get stuck due to broken aircraft, roster changes or bad weather.
I have begun to understand the skill of propagation where you can clone a plant. It is very easy for herbs where you simply cut a portion of stem (leaving behind a growing node for the original donor plant to regrow) and then use it to create a new plant. The portion can simply be dipped in honey (antibacterial plus source of sugar for the new plant) and then potted in moist soil or left in a cup of water. After a week or two the new plant shoots out roots and is thriving ready to be potted or transplanted – I have now grown over 10 new basil plants this way and am planning to gift these to friends and family over Christmas and New Year.
Finally I have made another decision – I WILL be making a return to homebrewing! With the warmer weather down under at this time of the year, I have been enjoying a nice cold Pale Ale on the balcony (and the odd handful of crisps) as I ‘potter’ in my garden. Whilst the shop bought beers are nice – they have absolutely nothing on the flavour of my homebrew IPA. Another factor is price – especially when you consider a slab of homebrew costs about $10 to brew and $80 to buy – this really makes homebrewing a smart investment on the path to FI!
I have kept my eye out for a small bar fridge which will be converted into an outdoor cold brew chamber using a temperature controller (so I can brew around 10 degrees C) without making my apartment smell like beer and fermentation…
I am also Still waiting to be paid for a lot of work I did this and last month, but that will trickle in eventually.
Get FI Portfolio
The Get FI Portfolio is now sitting at approximately $191,761 after making a sizeable withdrawal from the Milton stock holdings. I broke my cardinal rule and sold some MLT stock to fund a property deal, but it is for the greater good. Settlement has occurred on the land and construction starts shortly!
Still reeling from the pain of selling some of my Milton stock last month which kinda sucked, It felt even worse not to make a stock purchase this month. I am drastically fire-hosing my torrent of cash into IP1, which is a dual duplex joint venture.
I was very tempted by the drop in the Aussie market this month to dive into a $3000 purchase of VAS, however I refrained and directed all available resources into the property fund. This money will create a breathing space or buffer in an offset account and is there in case of emergencies such as flooding, hail damage etc. It also reduces the interest payable on the loan, giving me an approximate 6.5% ‘Grossed Up’ return on investment (Yes – I would get probably closer to 10% in stock I know…)
Settlement is completed on the land purchase, and negotiations with the builders are well and truly underway. The construction loan is just about sorted and we hope to turn soil very shortly. More to come on this next year!
Nothing juicy to add here. Approximately $700 in contributions to my superannuation as well as growth within the fund. End of the financial year will be the best time to review this and see how it performs against my forecast expected performance.
Income for October was a combination of my regular flying salary, international and domestic trip allowances, as well as some solid sales on eBay and online classifieds. Definitely a step down from October, but still a healthy amount of income coming into the accounts.
We have seen the online businesses start to flourish and hit that exponential traffic curve meaning there is significant affiliate and ad-sense revenue building up – all of it is being re-invested into the web portfolio at the moment to help build better sites and user experiences, but I imagine next year this will start to form part of my regular income. We have started hiring and contracting out more and more of the web portfolio work which is exciting and scored a number of new clients to grow the business.
Finally again – I can’t disclose my actual flying salary or position due to non-disclosure agreements with the company however you can get a good idea based on my saving rates, super contributions etc.
This month I participated in ‘Movember‘. I didn’t ‘fund raise’ anything or even create a fundraising account because I absolutely hate ‘Chuggers’ (Charity muggers) and don’t want to tell people how to spend or use their money. I firmly believe charity starts in the home, and that you should sort out your own financial emergencies (such as any debt!) before helping others.
However I acknowledge that I am not in a financial emergency and now am in a position where I can afford to help others. So I donated $100 towards Movember which raises funds for research on Mens health issues such as Suicide prevention and mental health treatment. There is some alarming statistics about young men in crisis killing themselves, and so I think Movember is something we can be proud to get behind (even if it is just growing a moustache to raise awareness).
I also donated approximately $50 worth of items towards goodwill, including kitchenware, clothing and bedding. This was more because I wanted to de-clutter my apartment than any sense of charity, but at least its going to potentially raise money in a thrift shop or go to a shelter.
Budget and expense tracking
Expenses this month were a little higher than usual due to a larger number of domestic sectors – it doesn’t sound like it would make a difference however a (AUD) $10 meal (and drink) in Asia gets you a three course meal and tall beer, whereas in some of Australia’s expensive cities like Perth, Canberra and Darwin that equivalent meal is over ten times the price.
I also extended my hydroponics and balcony garden. Its probably a bit over the top now, but stuff it – I like it! I enjoy growing stuff, and now have a virtually unlimited supply of greens such as lettuce, spinach, basil and kale from my hydroponic Kratky tubs.
Grocery bill spending came under budget as I was away a lot, as well as Petrol usage was lower – however this was offset by the spike in prices recently meant that expenditure was as forecast. I have been using my bicycle a lot more recently for local errands (local hardware store or grocery store) and am contemplating upgrading from my $50 second hand bke as I try and reduce my reliance on my station wagon for transportation.
Passive Income streams
The following income stream calculations are an approximate of how much passive income I am expecting to receive as a base retirement income if I retired right now. Obviously I am still going to work on some projects and on my businesses in my retirement (such as web development, property development, property management and online arbitrage) so its unrealistic that this will be all I have to live on.
The passive retirement stream is based upon a combination of dividends from the Get FIRE’d! Portfolio, and rental returns from cash flow positive property with an interest only loan. It does not currently include yield from the business or any other active investments, and is purely a passive income stream.
For those more astute FIRE aficionados – you will note that Australian property is not the most optimal way to retire when compared to index funds – the holding costs, tied up capital value and typically lower yield means that you would need more to retire as compared to purely index funds. However this is part of a diversification strategy and wealth creation method through ‘sweat’ and developed equity. When the properties go up in value, the plan is to revalue for a cash out refinance to buy more ETFs / index funds.
Stage one – before preservation age
- 4% sustainable draw for ever = $7,670 per year ($639/month), or;
- 7% draw down over 25 years = $13,423 ($1,118/month), and;
- Rental positive cash flow: $1,440 ($120/month).
Stage two – Superannuation
- Employer super pension benefit = $8,231 ($686/month), and;
- Social Security Aged pension = $18,122 ($1510/month)
To date, I have paid off fully $302,000 in training costs. The majority of those are my commercial and airline theory and practical flight training costs, which add to just over $297,000. The remaining balance of approximately $7,000 has been my contribution towards my Bachelor and Masters Degrees (of which the majority was funded by employer education grants).
I would not advocate anyone interested in financial independence going out and studying at university to get a degree as I don’t think its worth the cost and there are many high paying non degree qualified fields out there. You should only go to University for higher education if you are genuinely interested and passionate about it – for example I love aviation and engineering, hence why I have spent over a decade at university (split between full and part time) studying aeronautical and space engineering.
On a similar note, I would caution anyone who isn’t fully committed to becoming a pilot from getting into aviation. It can be a ruthless and cut throat industry, and extremely tiring and stressful, bordering on dangerous at times. There are fantastic safety controls in place, but you need to be willing to put the time and ongoing effort in – for example you often hear ‘the day you stop learning is the day you die, so you should hand in your licence’
Net worth table
I hope you got something out of this update and it helps you towards FI and developing your very own Get FI portfolio! Let me know in the comments below if there is anything you need clarifying or want me to include for Decembers update!
Get FI !