On board the podcast today is Josh, who’s been using bread to make bread!
“Sourdough bread is something special you can make at home for about 20 cents a loaf”
Josh Timms
Introduction to You knead Sourdough
Josh is a young father on the path to Financial Independence who works in the engineering construction industry. Recently, he sold all of his crypto investments and used the money to start his own small business called ‘You Knead Sourdough’, which provides customers with complete sourdough kits to enable them to make awesome home made sourdough for a fraction of the price that it costs in store. He has seen amazing success so far with high demand for his kits, and is almost at the point where he is able to leave his full time job as the business profits nearly cover his families cost of living
Podcast – Using Small Business to reach Financial Independence with Josh
Show Notes
- Check out You Knead Sourdough online here
- Use code ‘CaptainFI‘ to get $10 off a complete sourdough kit from Josh.
Josh’s Top Financial Tips
- Start as early as possible – the best time to start is now
- Start your financial journey with Budgeting – budgeting made Josh comfortable with his money and knowing how much he had left over for investing.
- Don’t obsess about saving and squeezing every dollar because otherwise it will rule your life, remember to have fun along the way and make the journey sustainable!
- If you base your early retirement on ridiculously high savings rates and frugality then the rest of your life will follow that same lifestyle – instead of focusing purely on Saving Money, remember to also think about making more income so you can live a more flexible and comfortable life.
- Josh focuses on growing his business as one of his ‘core pillars’ of wealth, alongside his other investments (index funds and superannuation).
- Josh keeps his investments simple, and automatically invests monthly into the Vanguard VDHG ‘all in one’ diversified Exchange Traded index fund.
Josh’s top influences
- The Aussie Firebug
- Josh’s favourite forums to lurk – the Personal Finance Reddit
The Captains Log
I really enjoyed talking to Josh, it put perspective on the FI journey, especially his responsibilities as a father. It was great to chat to another Adelaide boy, and I felt a genuine connection with his story about travelling interstate as a teenager to work in engineering and then feeling the call to come back home as this is something we both had done. It was also awesome to meet another pilot and totally unexpected!
I think baking your own bread at home is not only a good way to save on costs by being self sufficient, but can be part of a healthy plant based diet and certainly makes budgeting for groceries much easier (and has been a key way I keep my grocery bills so low). Should baking your own bread be added to the Rules of Thumb for FIRE? haha!
Alongside home made Pasta, I make a lot of foods at home by fermenting them or using yeasts, such as Brewing alcoholic beverages and fermenting Kombucha. These are all steps to be more self sufficient at home and save money, whilst enjoying a much better quality of food. Whether your motivation is for better food, or for saving money, it achieves both!
Transcript
Captain FI: [00:00:00] Board Today’s Josh, a regular Aussie bloke from Adelaide who loves his sour dough. We chat all about how Josh started his business, as well as how he balances his commitment with full-time work his business and investing on his journey to financial independence by trade. Josh is a construction engineer originally from Melbourne.
He moved to Adelaide for a work opportunity a few years ago. And actually, if you’re listening to this pod from Adelaide, you might recognize some of his handiwork on the Glen elk foreshore. Josh has been a member of the Australian fire community since 2017, a community that many young professionals find themselves in as they seek support and guidance in managing a work-life balance.
Josh works long hours. So a healthy work-life balance has always been important to him, but never more so than now with the recent news that his partner and he will be expecting their first child later this year. It’s a great episode. We’ve got for you today. So sit back, relax, enjoy. And you’re going to learn all about how Josh started his business and he’s leveraging [00:01:00] that so that he can reduce his commitment to work and spend more time at home with his family and be a better dad when the time comes around.
Okay. I’m to the captain fi financial independence podcast on board today is Josh for a very special episode, about side hustles, with starting your own small business.
Josh started his business. You need sourdough in Adelaide. South Australia originally was working as a construction engineer in Melbourne and moved to Adelaide for a work opportunity. Being frustrated with how tired and busy he was with his day-to-day life. He knew he needed to make a change with a baby on the way.
Starting a business was an excellent opportunity to accelerate his position towards financial independence. She has a very big family that all live into state. So pursuing fire was important to him to have the freedom, to move around and actually spend as much time as possible with his partner, child and interstate family.
It’s business is a sourdough key company. He sends off boxes of equipment it’s [00:02:00] that allows people to learn how to make awesome sourdough at home from very humble beginnings selling only a few boxes is now managed to scale the business and is now regularly sending over a hundred items every month knows that piece scales his business and doubles.
His output can actually quit his job early and reach his dream of financial independence. It’s an insulator to hear all about his tips and tricks about how he started the business. What gave him the inspiration, how he manages the accounting business, finances and his tips for reaching financial independence.
Today on the pod. We’ve got Josh joining us from Adelaide. Josh has started his own business and we got in touch recently over a shared love of sourdough. So Josh, welcome to the pod mate. How you going?
Josh: Yeah.
Good. How are you,
Captain FI: Good man? Hey before we get started, can you tell us a little bit more about yourself where you’re from and how you got into personal finance?
Josh: Yeah. Okay. My name’s Josh, I live in Adelaide. I’ve been here [00:03:00] about three and a half years and I absolutely love living here.
I moved from Melbourne for work. I’m a construction engineer I still will do that for my day job, but I had an opportunity to jump over here when work was a little bit quiet in Melbourne and that was the design company. So I paid for me to come over here. Yeah, I just took the opportunity and worked then in Glenelg, in south Australia on an apartment building.
Most of my family is in Melbourne. I get over there as much as I can to see them.
They’re obviously all in lockdown at the moment. So we’re recording this at the middle of the seven day, locked down in Melbourne. Obviously I can’t get over there at the moment, that’s the wonder of technology. Talk to them as much as he can. And I’m losing Tazzy.
So yeah, it’s nice having family all over the place. I live in south Australia with my partner, Kirsten. We are actually expecting a baby in October, so I suppose it’s never a better time to try and achieve F I, which is exciting. So I’m really trying to push it hard before that comes along, because I know life is going to completely change at that stage too
oh congratulations.
That’s [00:04:00] awesome. Yeah, I think I’ve heard everything changes once I’m once the first one comes along.
Josh: So I’m told that a lot lately
yeah. Awesome. Awesome opportunity you have now to square away all the finance stuff before bub comes along.
Josh: Yeah. Yeah. I’ve been really interested in a while I think you asked what’s my history with some finance stuff.
Like I got into it around three and a half years ago. I wasn’t really saving as much as I liked and I started looking into budgeting and all that kind of stuff. I’ve actually been using a program called one app, which I’m sure what do people there in all kinds of circles probably know that and it was yeah, massive help for really getting me on track and saving and my first step was really just start saving money and then looking into investing after that.
It’s gone really well. I bought it from the last three and a half, four years.
So awesome, man. Yeah, it’s a pretty exciting journey. And what I love is not only have you invested into your conventional investments, you’ve also invested quite a bit in yourself and your own business.
So I want to [00:05:00] touch on that in a minute, but first of all, obviously we crossed paths because of baking ed sourdough. I developed a bit of a lockdown to have it during COVID of baking sourdough. And I baked a lot of crap sodas and had a lot of fails.
Josh: You, and, half of Australia, it was like the talking point of lockdown, which is, we’ll get into it, but I guess that was another reason them, they just go for this kind of business too.
What got you started baking sourdough mate?
Josh: I actually Francis, I actually started before the whole lockdown thing, so I started it was probably going on about two years ago.
I love cooking and all that kind of stuff in the kitchen. I tried to make bread probably five years ago and I tried it once and failed. I think it was just a normal bread and it wasn’t very good. It was dense and practice on thought out.
Don’t worry about that. I’ll try that another time. So yeah. Can I actually remember the reason why I started, I think I just came across a picture on Instagram or something like that. If someone’s bread and thought, oh yeah, I’ll give it a try. [00:06:00] So I made my starter, I followed all the steps. And I made my first loaf of bread and I’m sure you’re probably having too as well.
My first life was absolutely terrible. It was flat and dense and didn’t taste very nice. But yeah, you only get better from there. Yeah. That’s pretty consistent. I can pump out a good loaf of bread.
There’s a lot of, there’s a lot of variables in there as well. Like you’d say, unless you’ve got someone in showing you step by step, it’s pretty hard to master it on your own, but it’s awesome.
Once you do. Cause like I was at this trendy cafe and they wanted yeah, they’ll sell lows for like $14 or something of these artists and Souders, or you can make it for 40 cents worth if they are thing.
Josh: Yeah. Yeah. And if you’ve got a big commercial oven, which I’m sure most people don’t, but you can bake like 40 loaves at a time.
Scrolling through my head before if I was at Tampa or opened a bakery or something like that, few hours to bake, 120 loaves of bread. And you add that up for, even 10 bucks each and you’d be doing pretty well, I think
Captain FI: aye, printing money by [00:07:00] the definition of making bread.
Huh?
Josh: Exactly. And it’s fun too. Yeah. And you get a great, I’ve always got bread in my houses. .
Josh, how did you make the leap between enjoying baking bread? Now? You said you’re an engineer, but how does an engineer start a bread baking business?
Josh: So I’ve always been interested in the kind of side hustle life.
And I’d suppose I’d never really known how to get into it and always thought about it and there’s always all these. Courses and ads that pop up that say, drop shipping and build a website easily for yourself or something like that. They’re all just crap, to be honest, I’m sure that some people probably have success, but I know a lot of people probably also don’t.
So I was taking bread Ranton gatherings and friends and family, and they’d always asked, how do you do this? God, this is so good. And it’s honestly quite easy. It just takes a bit of time to get it all set up and make sure you’ve got the right equipment and all that kind of stuff. I tried to explain how easy it was and then, what you actually need to get started.
But I’d noticed that [00:08:00] a lot of people probably never ended up taking that step. So Came up with the idea from that. It’s easy enough to find all this equipment and find a supplier and get all this equipment together, brought some status that people can basically get started straight away.
You don’t have this huge time to wait before you can stop making the spread. You can be up and running in two to three days and yeah. Took off from there.
Yeah. Okay. So you don’t actually sell the bread. You just teach people how to make it and give them the tools.
Josh: Exactly. Yeah. It’d be too hard to make that I’ve only got a small oven at home, so I can only make one or two loads at a time.
So that definitely didn’t work. So I give people the tools. To make the breads that you’ve got like a little bread proving basket a dough whisk a bench scraper. There is a called a bread line, which basically scores the top of the dome before you put it in the oven. So it can rise and not split uncontrollably.
And then the flour obviously important flour. And then the most important thing is the sourdough starter. And [00:09:00] that’s actually what makes sourdough see, yeah, once you’ve got all that equipment together, I’ve got a pretty simple guide on the website of how to utilize it all and make your first loaf of bread.
That’s epic. And so have you had much success then with the, in terms of sales?
Josh: Yeah. Yeah. So initially it was lowish as I was figuring out, marketing funnels and all that other stuff and how to use Facebook and Google ads and all that kind of stuff. And I’ve had pretty good success in it.
It is continuing as I learn more and try and focus that advertising in a good way. now I’m looking into more kind of organic growth through SEO and that’s search engine optimization, that’s basically making it easy for people to find my product through Google using certain keywords that they can type in such, for example, if someone stays a lot of the sourdough on, Instagram or someone miking it, and then they can go to Google and type how to make sourdough.
And hopefully my thing comes up first and then they can buy it through that. That’s been my kind of learning task lately there’s just so much to learn, but yeah it’s really nice to see the results,
absolutely like Josh SEO is one of [00:10:00] my little favorite hobbies at the moment.
I do it a lot for my blog and for my other websites. It works, it’s so good for businesses, but how did you learn about SEO and websites?
Josh: Honestly, just through online resources. I haven’t really had a kind of teacher through this whole process, so it’s really been as simple as jumping on Google and, topping in SEO.
There’s a bunch of free resources out there. I’ve never actually paid for a course. There’s Facebook groups. There’s subreddits all dedicated to SEO. If you just branch out there and learn as much as you can and grab information from all different sources then you’re generally going to be pretty good.
there is some things that are. Started to outsource purely just as a, I’m running out of time for having a day job and trying to do this as well. I look at that as a bit of an investment pay some money to gain back some of my time and focus things in other areas.
Yeah.
It’s all about being able to scale and effectively use your time. I was assigned Josh I learned about websites through Google YouTube videos and what I could learn on social media, but, I ended up paying for some training, which [00:11:00] was pretty cool.
It helped just, consolidate everything in one place. So it saved me a bit of time. And I found that helpful, but yeah, there’s certainly so much free content out there that you can get started. A little one that I found really useful. If you just Google Nate O’Brien of affiliate marketing He talks a lot about SEO in terms of driving affiliate sales, but it can be equally applied to anything. Josh, what challenges have you faced?
Starting and running a small business.
Josh: I suppose probably the initial funding. So obviously with a small business that carries a stock, you need a bit about funding to actually buy that stock and set up your website and then stop marketing. And if you are going to start doing some training courses then you pay for that.
But yeah, it’s definitely one of those scary things that you have to get over at the start that you need to be not really scared. To fund it. If you think you have a good idea and you think that it’s worth it and there’s all little things you can do to try and validate your idea before you go and spend thousands of dollars on stock that you might not end up selling.
There’s ways to reduce that [00:12:00] risk, but like with anything risk equals reward and, our reward is sometimes high risk. you is, have to take the chance sometimes and trust that you’ve got a good idea and that you’re going to, work hard at it and succeed.
What about in your day to day operations?
Josh: The challenges of working a punch on the job and managing a business is definitely tough. It’s long hours. I work in construction I’m onsite from anytime between say 7, 7 30 and I’m there. Five o’clock most days throwing the odd Saturday there as well.
And it’s long hours by the time I get home from work from my day job. Sometimes the last thing I feel like doing is sitting down and trying to sink some time into the business. But I know that I want it to succeed. I’ve probably had a lot less sleep lately than I’ve had for a long time.
I’m hoping that it’s worth it. As it grows in a lace, I can have more options to then, expand or keep working both jobs and hopefully, save up a lot more or even move to just one job. It’s more about just having the options there. Yeah. Okay.
So
You’re currently sort of a one man show then you’re doing customer [00:13:00] service
Josh: dispatch. Yeah. During the day at work I’ll get messages from customers and, potential shipping issues or something that is basically out of my control. Just checking up on shipping or other little questions about, how they’re doing this data.
There’s little troubleshooting things about it. Sometimes people don’t read instructions properly or whatever, and that’s fine. I’m always there to answer questions, but it’s just managing that with a job. And, I don’t like to use my day job and work on my business. So I’ll have my lunch and I sit down on my phone, respond to people if there is anything and by the time I get home, then I’m packing my orders.
I’m printing out all the labels.
Yeah, it sounds pretty busy mate. So something that obviously is pretty, natural in a business cycle is obviously eventually scaling do you have plans to scale or maybe bring on some employees to help outsource some of these tasks?
Josh: Yeah, no, I’d definitely like to, so I suppose my first step in scaling is starting to outsource some of these tasks that I just admitted to myself that
I don’t want to create more time by taking away my home [00:14:00] time and especially with a baby on the way that I don’t want to eat into that. Yeah, acknowledging that I need to maybe outsource some things and your time is money. I’ve happy to spend a little bit of money at the moment. I’ve got some content writers producing some content for me.
So I give them as much information as I think needs to be in, an article or a story or something like that. And they’ll create a piece of content, which I then sign off and it’ll make it twice my website. That’s all part of that SEO progression. So hopefully with that scaling brings in more customers, which helps me then, outsource more things and that’s my way of just scaling up that’s awesome.
How many kits do you normally sell a month?
Josh: It’s definitely picked up as I’ve started. So my first month in selling was January that’s when I got my first style. And I think that first month I probably got, maybe like a couple of dozen, which was pretty good.
I thought that was amazing. And then February, maybe 80 to a hundred and then every month, since then it’s grown. The last month has been probably, over a hundred in the month, which I’ve been really happy with averaging three a day I, or something like that. And [00:15:00] then some days I’ve noticed busy than others.
So for example, yesterday I got nine orders, which I was absolutely thrilled after getting zero on Thursday. Yeah it’s highs and lows, sometimes Facebook might market it to different people or, it could be the weather, marketing is just this absolute base that I’m sure people have written a thesis is on how it all works.
So I’m just trying the best I can. And it’s taken a long while.
that’s some fantastic growth numbers. We’re talking about financial independence and maybe you’re doing this as a full-time job. Do you have a number of kits that you have to sell to replace your income or that suit going to cover your baseline cost of living?
Josh: Yeah. So if it was just a cover, my baseline cost of living, it’s probably something four of us kids a day, which is quite achievable in my mind. Obviously I want to save and, reach F I, and, have the option to do whatever I want to do at some point in the future.
And I really enjoy running this business. I perceive that for as long as, people want to keep buying sourdough kits, I think I’d figured it out to be seven kids a day replaces my current income. And that means [00:16:00] if I can reliably sells seven a day then I’d match what I’m earning now .
Captain FI: Okay. So seven a day is 210 kids a month
Josh: yeah. So seven times 7 49 and then times 52 it’s about two and a half thousand kids a year.
Yeah. So that’s about double what you’re selling now, then
Josh: it’ll be that double.
Yeah. Okay, cool. All right. There you go, guys. Anyone who’s listening today helped Josh out by sourdough kit, save yourself some money on your groceries, and help him reach five.
Josh: Actually on that as well, even before I’d started this whole business thing I really liked good food and, being a cook and cooking at home. I try and make as healthy and good food as I can. And Red’s nice thing that you can make at home and not take you’ve mentioned on one of your Instagram posts, that it works out to something like 20 cents or something per life, flowers, dirt cheap.
And once you’ve got your starter going, it’s flour plus electricity run the oven yeah. Instead of buying a $10 life at the shop you buy a big bag of flour and you’ve got, three or four loaves of bread, so you decide to sell 40 bucks. And I love eating that bread at home, and it’s nice to not have to go to a [00:17:00] bakery and buy it.
I’ve seen you can go out for dates, and you can do like cooking classes. I’ve seen sourdough workshops where you can go in as a couple and you can learn how to make sourdough together. What I like about your kit. Is you could actually just give that to someone as a bit of a gifts.
Actually
Josh: A lot of people that have bought it. I bought two, and they always want them shipped separately because one’s for them and one’s for a gift for someone else. So yeah, it actually makes it a really good gift.
Yeah, that’s great, dude. Now I’m really loving what you’re doing, man. It’s a really refreshing take on fire. So you’ve obviously got your main job and you’ve specialized. You got on top of your budgeting. You’ve started your investing and we’ll get into that in a minute. But this is like a side hustle that’s just growing really well.
And instead of jumping onto a side hustle, that’s already there selling t-shirts or doing surveys or, that kind of stuff. You’ve actually gone out and started a new business, created a product. Yeah, it’s really impressive, man. I’m really impressed.
Josh: I’d suggest it to anyone I think a really good piece of advice to at least help you. Go [00:18:00] for a side hustle is through something that you’re actually interested in. I’d have absolutely no interest in telling t-shirts or, whatever.
But cause I was already making bread. It’s hard work, but I enjoy it and I enjoy talking about it. So when someone asks me a question, I’m actually interested in it and I don’t have to then go research. I do know all about it already. So yeah, that was a huge tip. And I’m sure you’re the same, you’re heavily involved in the world of finance and you probably absolutely love talking about it.
Tell me natural that year that you’re going to follow something like that. And same with aviation. I’m sure.
Yeah, absolutely. Mate, if you find something you’re passionate about and you can actually leverage that and turn that into a business some people say you never work a day in your life.
I think there is a balance. I don’t like that saying. Yeah that’s exactly what I was going to say, Josh is that sometimes when you take your passion and you turn into a full-time job, it can suck the fun out of it. And I’ve I experienced that with my job as a pilot, in that it used to be really fun going for weekend joints and, taking people up , on joyrides and aerobatic competitions and things.
But then like when you’re strapping [00:19:00] in for your sick turn of the day and you’ve got bags hanging out of your eyes, you’re trying to
Josh: six days and stuff.
No, I’m just meaning like the boring day-to-day auto. I red eye flights, two in the morning drinking the instant coffee. Anyway, by the way, anyone who’s listening who wants to be a pilot?
Definitely do it. It’s totally glamorous. I’m not jaded at all. That’s
Josh: it? That’s all my to do is to, by the way, I’m not sure if I told you that before, but my pilot’s license is on my to-do list.
Testing note. Look, I’m actually moving back to Adelaide soon, so we might be able to tee up a bit of a lesson.
Josh: Yeah, let’s do it. I’m actually flying a plane by myself too little interesting input of information. I was on the path and then it costs a lot of money and I wasn’t really at that stage. So I stopped, but it’s on my to do list again.
Okay. Congrats mate. First solos. A very memorable day. Isn’t
Josh: it? Ah, yeah.
It is very much etched into my brain. It was the best I loved it. Was
this back
Josh: in Melbourne. Yeah, that was, probably seven or eight years ago now, but that was in Melbourne down the monitor potential.
Oh, beautiful man. Yeah. I still [00:20:00] remember my first solo I soloed in Merimbula, which is on the the Sapphire coast or the south coast of new south Wales.
as a wonderful Cessna, one 50, couldn’t believe it couldn’t believe it.
Josh: Five, two. Yeah, it was exhilarating and terrifying. I was terrified, yet they’re very memorable.
Oh, that’s epic, dude. I look before I get smashed in the comments, I guess we gotta to get this back on track talking about business.
Look, I love aviation. I could talk about this all day, man. We can catch up over baking some sourdough and some flying. What I mean, Adelaide mate.
So my next question, Josh is how have you actually managed your accounting and business finances? So you said it was a bit tricky getting the initial capital.
So I’m assuming you literally just fronted your own cash. How did that work and how do you manage your sort of day to day expenses for the business?
Josh: . I still use white, which you need a budget and it’s an online app. Jumping ahead a bit again here. I dollar-cost average all my investments every month, I, say about the big block and then I buy shares at the start of every month.
What I did for two months in a row, [00:21:00] Didn’t invest anything. And I took that money and I went and bought stock and, thought of it as a spend money now to hopefully gain some yes, I use that kind of investing money to Boston stock. And now I just track everything through one app.
So I’m sure it’s probably not the best way to do it. And again, this is one of those learning experience things potentially. I need to look at some kind of accounting software in the future, but I track all my expenses as a business expense and you can assign certain categories and stuff like that in one app.
So I have my expenses in, and then my payments from, getting sales, and basically I get a figure that’s profit or loss. So I know, if I’ve said made it out and all those profit overall that’s things coming in and things going out, then I know I need to put aside, like 40% of that for tax cause I’ve still got to debt to pay off.
Yeah, that’s the bad, as simple as it is at the moment. I’m sure that someone out there is going to say that is really bad way of doing it, but hopefully after this tax year I’ll learn that.
Okay. So to clarify, you treat your business and personal incomes together, so it’s like a sole
Josh: trader.
[00:22:00] Exactly. Yeah. So it is mixed at the moment. However, I do categorize all the payments separately. I could create a spreadsheet and I know my business expenses. I only have one bank account, so it’s all mixed together, but I can quite easily know exactly what is for the business and what isn’t.
Okay. And
Captain FI: do you use an accountant at all?
Josh: Which is not good at this
stage?
So look I do the exact same thing. Hey, when I started my website business and I just used my personal card and look, I personally found that to be a nightmare.
But I got a good accountant who promptly rats me over the knuckles. And any time I try and do something silly with my business accounting, I sorta get a slap across the face.
Josh: you have a business, credit card or something like that. You just put all expenses through that.
so I started the company, got the ABN and the ACN. And I basically hold everything through that business transaction. I’m still learning as well, mate. I’m not an expert at all, and I’m constantly getting in trouble with my bookkeeper and accountant for apparently alcohol is not a tax deductible expense.
It sounds like [00:23:00] when this starts to scale, that might be the next step for you then. Yeah,.
Josh: Hopefully there’ll come a point where it’s, getting a little bit out of my comfort zone and, tracking abilities and there’s going to be a better way to do it.
When that day comes and I’m sure when I do my taxes this year I’ll have a chat to my tax accountant and say, What do you suggest and help me please?
Yeah, it sounds like there might be a few tears. Like I reckon I’m very close to the crying every time I do my tax return.
So just on that, I’m gonna make this a broad question by the way is there anything you wish you before you started you need sourdough and also before you started your career in construction.
Josh: Good question. Before I started, you need Saladon probably not honestly.
I’m still learning every day. I don’t think there’s anything that would have really been, beneficial for me to know that I haven’t learned along the way, and that wasn’t a good thing to learn along the way. And there’s things that I’ve. Probably done wrong and realized that, it’s probably cost a little bit more than it needs to, but I don’t really look at that as oh, I wish I knew that before I’d started, it’s all, nothing drastic, haven’t [00:24:00] lost 10 grand off of a silly mistake or anything like that.
But yeah, I really have seen it as a really good learning opportunity. I can’t really say that. I wish I’d known anything before I started
I like learning a lot. So I think before I’d started, I’d done a lot of research and if anyone’s thinking of doing the assignment, I actually think that’s probably the best tip is don’t just jump in, like really try and do your research, validate your ideas first.
And that was good that I actually already knew that before I’d started. If I didn’t, that probably could have been quite bad. And if someone’s thinking like I’m going to, I’m going to go happen to sell this little plastic toy, and I’m going to make a thousand, 10,000 bucks, if no one wants to buy it, then you’re just wasting your money.
So you really do have to know that you’re doing the right thing or at least not taking a stupid risk, taking a calculated risk.
I like that mate calculated risk. I’m probably guilty of the whole analysis paralysis thing, oncologist, I spend way too much time researching and sitting on the sidelines.
And so for me, literally just jumping in and getting some skin in the game, even though it was a shit dilution at the start, I got [00:25:00] incrementally better as I went. So how did you balance wanting to do your due diligence and research with just starting?
Where did you decide to enter the market?
Josh: I guess the first real thing. So there was little purchases along the way, registering a business name, your ABN and all that kind of stuff. That’s really not much money. Opening the Shopify store that I use, again, all little expenses that kind of purchase.
I think that really set off the, okay, I’m really doing this was when I made the first stock purchase and it wasn’t a huge purchase like I was doing now, but it was enough that I was like, okay, if these don’t sell, then I’ve got, a few boxes for the stuff that I don’t know what to do with .
That was my first big purchase that I thought. Okay. Yeah. Now and the analysis paralysis that you’re saying. I don’t know what I could say about that. I think I’ve just reached a point where I was like, you just got to do it, take the risk. And I just jumped in,
what was your total monetary risk, like in terms of your investment cap?
Josh: So over the first day, I think it was two or three months that I was basically in the red probably [00:26:00] four or five grand.
So it’s a serious chunk of money. Yeah.
Josh: Like that’s yeah that’s a lot. I thought if it didn’t work, then, it’s a good learning experience.
Then I’m still got all this stuck, I could probably sell on eBay or something slowly over the years and hopefully recoup a bit of that. But, it was enough of a rest. And I was like, okay, I’m going to try hard to make this work, but it wasn’t also enough of a, that I was like, if this doesn’t work, then I’m basically out on the street.
Sorry, it’s money. That I could afford to lose, but I also didn’t want to lose.
Again, not calculated risks you mentioned before. Exactly. And what about time commitment? You said that you are spending a lot of time on this. How many hours would you say you’ve invested over your own time?
Oh, I,
Josh: Countless, I don’t even know if I can count it. I think it was last October, November that I’d really started looking into it and, watching all the YouTube videos and setting up the store and all that kind of stuff.
And I remember I didn’t have a jest or anything set up, so I was sitting at my kitchen bench on my laptop and it was, hours every day I’d get up for work and I’d have my laptop open, just learning. It was tarring, but yeah, hundreds and hundreds.
It’s, like I said I actually [00:27:00] enjoy it. So it wasn’t like, sitting there and feeling drained about oh, I wish I didn’t have to do this. Again, going back to that thing of, you do something you love in, at work your day in your life.
It’s partly true that, I was definitely working and it’s tiring, but it didn’t think of it the same as like a draining day job where, you’re working for someone else. And, I don’t hate my day job, but it’s not mine. So I don’t feel as connected to it as I do with my business.
It’s pretty epic mate, that, you just need to double your sales and you’ve effectively reached financial independence.
Josh: Yeah. Like you said that though, so it takes a little work to get to that. And I know that it’s also continued work, but yet, like you said it’s mine. So it’s perhaps the financial independence
exactly.
In that you’ve got that passion and that motivation to work.
Josh: Exactly. And I started going back to the risk thing as well is if I ever did make that decision, that it was going really well, then, it’s always a, what if you left another job while this was going really well, what if, people started hating sourdough or, interest drove off a cliff and, stop making sales or, you’ve outgrown your target market or something like that.
And everyone [00:28:00] in that target market has bought one. I don’t know. it’s all these little things that play on your minds that you need to know.
I think that’s a perfect reason. Need diversity in your portfolio. So I know we touch. Earlier you mentioned you dollar cost average.
What is your personal investing preference? So I’m assuming you’re taking profits from the business re-investing enough for it to grow. And then I assume you’re just harvesting what you can to either repay your initial startup. And then are you just putting that into the ETFs as well?
Yeah,
Josh: once I funded that initial business I’ve had that initial pocket of money and that’s been my business expense. And as the business grows, I put money back into it. And obviously as it’s grown it’s finally starting to go into the green. I’ve taken one little pocket of money out of there and, taken that out and said, okay, this is my initial investment.
The full initial investment that I’ve taken out by them, I’m working to that. So once I’ve taken that back out of it, anything that stays in the business, I’m just going to keep it in there to keep growing it. And hopefully it comes to a point where there’s more coming in then I actually [00:29:00] need to use to let it grow more.
So for outsourcing , or scaling, and I can start then paying myself a wage out of business income.
Yeah. Awesome. So your plan is to basically scale it to therefore increase the income potential in the future. Yeah, exactly. So what about your personal wage then? How do you divvy up your investments and what do you invest
Josh: in? I get paid monthly every month. With one adult, I fund all my monthly living expenses and then whatever’s left over, I’d put into savings then I used that savings to buy shares. So I buy ETFs very broad ATS are actually have a Vanguard VD, H G.
.
Oh yeah. They’re all in one. Fine. Yeah. It’s a nice, simple solution.
Josh: It’s crazy. To, kind of one-click fly. I know that it’s very diversified and I don’t really have to think about it. I’m sure everyone who’s listening has probably had the same experience that there’s so much information out there, but it’s easy to get in the thought of, oh, I could just buy the next, after paying and, make a thousand [00:30:00] percent. But that never really interested me. I like don’t get me wrong. I have made those purchases in the past. But now that I’ve focusing on my business, I think that I’m happy with just the easy, still have a risk there, but low-risk, and not having to sync that extra time and I’d rather put those resources into my business.
it’s ironic. Isn’t it? Because most financial planners, financial advisors, and I guess just the conventional industry will tell us that stocks are the most risky category and I, you should, not have all stocks buy real estate, eh, but when you go for the total broad market index and just ignore it, As far as I can tell, like when I look at my personal portfolio and what the history has shown, it seems to just be the lowest risk sculpture.
Josh: Yeah, exactly. Compared to having it in a, hi, just so I have my normal banking with ING and, over the years, the interest rates just going home on loan. Yeah. They’ve actually entered additional days, extra steps you have to go through to, actually get that bonus interest.
And I’ve almost lost interest in trying to meet those because [00:31:00] you know what, it actually pays out versus me just putting my money into an diversified fund ETF. Yeah, I just do that and ignore them. Obviously there’s highs and lows and, did last year that there’s a , quite a big, different the market.
And, I just, I didn’t even pay attention to it cause it’s nice to know that, think about it. Long-term and you generally be okay again, it might not be by then if it’s not, then you know, everyone’s in a bit of shit, not just me.
Yeah, exactly. All it. I would say if our ETFs all went to zero, we’d have bigger problems in the world, maybe another pandemic or a zombie apocalypse.
Josh: Yeah, exactly.
But just on that as well taking that money and investing it in your business I hazard a guess based on what I’ve seen with my business, but that startup capital has probably performed so much higher than, oh, you had to just put it into ETFs, right?
Josh: absolutely.
I advertise through Facebook at the moment because I find, most of my target market is on Facebook and it actually converts quite well. Facebook gives you all this data and there’s a return on investment. And basically I think at one stage early on, it was seeing like nine times or [00:32:00] something like that said basically for every dollar I put in, I get nine times back from the Facebook advertising money.
Just in terms of how many?
Josh: Yeah, so say I spent $30 a day on Facebook. If I may. $300 worth of sales. That’s a 10 times ROI. However, obviously you’ve got to think about profits. I don’t make $300 profit. I got to take that $30 marketing budget. I’m going to take all the stock costs.
I’m going to take postage costs, all that kind of stuff, even tax,
and you got to pay yourself as well. Yeah,
Josh: exactly. You gotta
pay yourself an hourly wage or something out of that.
Josh: Sure. It’s not 10 times profit, but when you still add it up, there’s a massive gain in there for that.
So yeah. If I can get 10 times profit a year, so if my I was higher than 10 say even if it was like four or five profit of that $30, that’s. Like 300, 400% never going to get that in the stock market. So I think money invested. I don’t want to invest all my money that I was going to buy shares with into my business, because I just think that’s too [00:33:00] high risk for me.
But that when I spend money on the business, my mind always goes back to, you know what if you’re going to increase sales and then it’s actually worth it.
Yeah. It’s good, man. So other than your business and the diversified ETF do you invest in other exotic asset classes?
Like your, I don’t know. Do you have sports cars or property or it’s
Josh: the artwork? I’d done an actually I, at one stage I’d had jumped on that started trying early and the. Like 2017? I think when all the, that initial kind of bull run for all the crypto I jumped on actually before that started from a tip from someone at work.
I sold out of that recently and got a nice little profit on that. That kind of scared me away a little bit with the massive fluctuations. Yeah, so it was a good little learning experience as well. And I can say I was one of the lucky ones, and actually came out okay.
From that. But at the moment it just doesn’t interest me. Yeah, I don’t have any crypto anymore.
With your crypto. So you mentioned, you disposed of some coins. How did that work with capital gains tax, [00:34:00] and all that sort of accounting side of that?
Josh: Yeah, so I figured out my total profit from, what I basically put in it. Wasn’t a lot, like I’m not. No tens of thousands of dollars, but I think it was early, a little bit of money but it was enough to, obviously make an impact on my tax return.
So I just told Mike, and this is what I sold it for, and this is what I initially bought it for this much extra, it got added to my total income and yeah, taxed appropriately.
I just worked out that clickbait headline for this podcast episode. Local Aussie business owner sells crypto funds, small business.
Josh: Perfect. That probably works at roughly the same site. Yeah. Go.
That’s hilarious, man. Oh, that’s awesome. Yeah, I’ll look slowly in the crypto train, I would say I got burnt on the recent correction. But I don’t know a lot about it. I’ve spoken to one of the leading Bitcoin experts, which was Stefan, Lavera and he’s very bullish on Bitcoin.
It wasn’t a big fan of the other sort of altcoins. But yeah, I just have the two main ones and just learning as I go along.
Josh: Yeah, for sure. It’s interesting [00:35:00] to me and I think there’s a place for it, but again, I think a lot of people at there haven’t done that level of research and they just dumped on the main trainers, I guess you’d call it and just think oh, Bitcoin to the moon and then that’s it.
So what about Bitcoin? Can we start bread coin? Yeah,
Josh: let’s do it. We’re going to be millionaires. Oh
God. All right. . It’s been awesome chatting, dude. I want to finish up the interview with how I finished every app, which is, I want to basically extract some of your best tips that we can pass on to other people.
Yeah. In terms of your fire journey specifically if you could distill everything that you feel you’ve learned to get you where you are today, what would your top three tips be?
Josh: Okay. So I’d say the biggest tip is starting early. So if your young, obviously that’s going to be the best time to get the best compound growth on whatever investing you’re doing.
Obviously try and go for the lowest risk ones to get there. You get those longterm rewards. But even if you’re not young, the best time to start is now. If you’re thinking about it [00:36:00] start, think of it as a long-term game. I think that was the biggest thing for me.
Don’t think you’re going to make, a hundred percent in the next year and if you don’t make a hundred percent then you know, it’s game over. It is a long-term thing. Yeah, I think just starting now, starting early, or if not starting now as the best tip I could give.
If you are also in those early stages, You’re working out you’re learning about money and you’re like learning about budgeting. That was the catalyst for me to start, looking about all this stuff. And that’s what led me on the path I think I started learning with Ozzie Firebug was a big influence.
And I think even one that was suggested by him in one of his early parts and this was yeah, probably four or five years ago now. Budgeting really made me comfortable with money that I could then use what I had left over to invest if I didn’t know where my money was going and how much that I had, wouldn’t have been comfortable to invest what I had.
I would have always thought I know what if I need it for know car service or this or this or whatever. I’d say budgeting is probably another huge [00:37:00] tip that don’t overlook it and really start early as well. Try and save as much as you can also obviously try and live your life at the same time.
Don’t be too frugal. And yeah that’s my last tip actually, is that you really want to have fun at the same time as budgeting. So don’t let it rule your life. I think it’s easy to fall in that trap. I’ll admit that I did the same thing when I started doing the whole budgeting thing.
I probably got a little bit too frugal. I was trying to save too much money. I was trying to pinch the dollar at every turn and, there’s probably some things that I missed out on that. You can’t go back and do so it’s not too drastic, but yeah, don’t let it rule your loss, make sure you’re still spending money reasonably where you can and go ahead and have a beer garden and take a joy flight with captain fin and just have fun.
It’s awesome, mate, and I’ve seen this recurring theme in a lot of the bloggers that, and the fi personalities that I follow Ozzy FIBA talks about his experience doing it the mad scientist to expand it as well. I’ve found it in my own journey.
It’s exactly the [00:38:00] same as what you’ve experienced made. It’s, you’re going really hard on this whole budgeting thing and you do start to cut into your actual enjoyment. So it
Josh: becomes an an obsession, and then you, yeah, it almost takes the fun out of budget.
Yeah.
Yeah. Now I really appreciate you sharing your experience, man. It’s pretty raw and I’ll hope that anyone who’s listening to this does take that to heart and I’ve probably been guilty in the past, oh, I’ve got a really high savings rate this month and I enjoy people egging me on, but sometimes I wonder if I’m sitting the best example for everyone.
Yeah, it’s a really good point. So I really appreciate you bringing that up.
Josh: And I suppose the same thing with that is if you do have a high savings rate you can stretch it as far as he can, but when you really think about it, if your savings rate is, 70%, are you happy living that way forever.
Because if you reach your fin number based on your current savings then I guess you have to live that way forever. Some people don’t want to live the frugal life forever, too. Stopped working in and BFI. That’s not really my goal. I think I was more happy to live the way you want [00:39:00] first and then save for it obviously you don’t want to go out and buy jet skis and fall into the trap of, buying $2 million houses and all that kind of stuff.
That’s silly in my mind, but in the same sense live the way you want first and then Saved for that life. And I’ve found that it’s been a huge kind of piece of advice for me. I think I’ve read that protocol. neo-Nazi five. I’ve been too.
Yeah. So reaching five by increasing your income more than being frugal and cutting.
Yeah. Yeah. That’s good mate. Obviously fiber, it’s been a really positive influence on you, man. Who else have been really good influences or, other experiences or books that you’ve read on your financial independence journey that you’d be able to pass on and share with the rest?
Josh: So honestly I’m not a huge book person. I know that in the whole entrepreneurial life, everyone says, you’ve got to read a million books every day, but with the internet now there’s so much resources out there. There’s plenty of great stuff on YouTube.
Like subreddits, I think when I started budgeting, I was on the I was finance subreddit, and there’s just so much great information about, flow chart on how to do [00:40:00] things. Good little tips about, going out and researching all your bills and making sure that you’re reducing money that way.
And then same thing of career choices to try and increase that income as well. I’d suggest using the internet and, people do like books and that’s fine, but my experience was just jump on the internet and do creature research and just learn as much as he can just keep reading.
And then through that as well, all the Facebook groups. Obviously that’s how I got to know your stuff, you’re obviously pretty active on social media. I follow all the captain fr stuff and yeah, that’s been a huge help as well. That was through Aussie fire.
And just the group conversations that happen in those blogs as well.
They’re really good community and an awesome resource I’ll link all of the the various communities and stuff that I’ve found useful
Josh: if there’s anyone else out there that is, interested in starting that kind of business and doesn’t know where to start then, jump online and, there are also really good resources that are found through that
you have to reach out and I can give some tips if I can. Yeah.
Awesome. So wrapping up may, where can we actually find you? [00:41:00] So you’ve got the blog and you’re on social media. Where else do you find, are you in the yellow pages, mate?
Josh: Yeah, I’ve got a few online listings out there.
That, helps with SEO as well, but I think social media and the website is definitely the wider field.
Awesome. So that’s a, you need sourdough.com.edu. Yep. And
Josh: that’s just need with a K N E a D as
in
I
Josh: had to throw upon in this outlet,
I, that definitely pauses. Toby will be a dad, so definitely that’s future growth of the business. I’m
Josh: just getting in early, you know exactly. That’s a sit down units out though.com that are you same units out on Facebook and Instagram.
And like, as I said, I’m pretty active on social media. So I tend to answer pretty much straight away. I’ve always got my phone on me. Yeah. Jump on, ask me a question and I’ll help us as well as I can.
Awesome. How about a cheeky discount for the audience? Yeah. So if we reduce your arm, you
Josh: can, if you use captain FYI, you’ll get $10 off. The complaints out. Okay.
Eddie. That’s an absolutely bargain. Yeah. Make sure to get one for you. One for you ma one second.
Josh: Yeah. And it’s a low ongoing cost. So that’s the biggest selling point. I think I’ve got,
there’s a lot of people in my family and friendship circle that we’ll be getting a sourdough kit for Christmas.
Let’s put it that way. Awesome. Joshua, look, thanks so much for making the time to come and record today. I know today’s like your day off when you know, they’re working pretty hard on site and, or running your business. So yeah.
Josh: I love it. I love it.
Yeah. It’s great, man. Look forward to chatting with you in the future, mate.
I’m sure I’ll be bothering you with questions about how I can perfect. My sourdough. So wishy many years of happy baking, man.
Josh: Thanks very much. Yeah. We’ll we’ll catch up when you’re not allied for beer and go for this joy fly. Yeah.
Sounds good, dude. All
Josh: right. Catch you later. Nice.
Captain FI is a Retired Pilot who lives in Adelaide, South Australia. He is passionate about Financial Independence and writes about Personal Finance and his journey to reach FI at 29, allowing him to retire at 30.
