Podcast | Smashed Avo

Todays inflight meal is Smashed Avocado!

On Board we have Emily and Simon, the powerhouse couple behind Smashed Avo! They are an Aussie millennial couple from Sydney who like investing, and brunch!

Em incredibly started investing in property at the tender age of 18! While Simon, the ying to Em’s Yang, was mostly interested in the stock market; He regularly invested in ETFs, shares and managed funds. Being together for almost a decade, they have combined finances and purchased further residential and commercial property together as well as adopting a predominantly index style stock market investing approach to diversify their investments.

Simon is an Aerospace Engineer and volunteer fire fighter, and Emily works in an executive management role, is a talented writer and is completing her Masters degree

Today we will explore;

  • Who they are and what they do
  • How they learnt to become great with money
  • The touchy subject of combining finances in a relationship
  • How they discovered FI/RE
  • Their investment strategy
  • Their specific tips to investing in Australian property and structuring finances,
  • Their financial goals
  • How they use superannuation
  • How and why they want to help others and their top three tips to reach Financial Independence

Show Notes

  • Check out Smashed Avo Australia Here or on Instagram
  • Check out my dedicated post on Superannuation to build on our super conversation… although slight addendum here, I am using the early release super scheme since my income has dropped by over 20% and I will be putting the money to good use on the path to FI.

Smashed Avo’s Top financial tips

  1. Sort your shit out, guys! – Pay off any high interest debt (personal debt) and figure out where your cash is going to come from, but make sure you’ve built an emergency fund first. That is going to be a life saver in case you lose your means of income
  2. Invest according to your strategy, which should be based on your goals – These can vary wildly between people, so focus on your goal and don’t get too caught up by what other people are doing
  3. Enjoy the journey to FIRE – It’s all great to be as frugal as you can but don’t let that stop you from doing the things you enjoy! You’ll only be this young once.

Smashed Avo Australia’s top financial Independence Books

The Barefoot Investor by Scott Pape

Check out my detailed review of the Barefoot Investor HERE

Rich Dad Poor Dad by Robert Kiyosaki

Check out my detailed review of Rich Dad Poor Dad HERE

Abbreviated Transcript

Hey guys, this is the part of the job I dislike. I have massively abbreviated the transcript for this episode, and when I can figure out a way to get the full word transcripts written quickly (or maybe pay someone to do this for me!) I will update it. Sorry its just too much of a pain in the arse to manually hand type for now… But there is loads of extra awesome content and extra questions that get posed and answered if you listen to the recording.

Intro Loop plays

CaptainFI: The forecast for today is property investing, the inflight meal: smashed Avo! 

Jet flash

CaptainFI: We are fortunate to have Em and Simon on the show today, the powerhouse couple behind Smashed Avo. They are an Aussie millennial couple from Sydney who like investing, and brunch!

Em purchased her first investment property at the incredible age of 18!  She worked full time straight out of school and slapped down a big 10% deposit, taking the leap to become a landlord whilst still in her teens!

Simon, the ying to Em’s Yang, was mostly interested in the stock market. He regularly invested in ETFs, shares and managed funds. Seeking diversification and the power of leverage, he branched into property and secured his first investment property at age 24!

Being together for almost 8 years now, they have combined finances and purchased further residential and commercial property together.

Simon is an aerospace engineer, but sounds more like a professional daredevil with his hobbies of base jumping, canyoning, skydiving and a myriad of other extreme sports. Simon is also a volunteer fire fighter and has recently been working to extinguish some of the devastating bushfires we had recently across NSW.

Em is a self professed thriving socialite; she loves entertaining, baking and brunching, as well as the occasional glass of wine! Em is also a talented writer – when she is not searching the market for great property deals, she is working tirelessly behind the scenes on their Blog. All the while balancing this with full time management work and completing her Masters degree in Business!

Ok! Smashed Avo, after listing all that I am starting to feel a little inadequate myself, and maybe that I have a little crush on you both –  Welcome to the Show

Simon and Em say hello

Em: Hello! Thanks for having us on! 

Simon: Hey mate, happy to be here.

CaptainFI: So first up can you tell us a little bit about yourself?  Simon I hear you have a bit of a green-thumb, a trait shared by many in the FI community. Em tells me your also getting good at brewing your own beer!

Simon: This is true, we’re both big fans of craft beer but its all fairly expensive to buy. Realising that you can cook up extremely decent craft beer at home has been somewhat of a recent revelation to us! And yes I’ve always been a keen gardener too. We’re a bit limited where we are living at the moment in a rental, but one day we’d certainly like to expand and grow a fair percentage of our own food. 

Em: We love the idea of living a bit more sustainably and growing food. Not only is there the cost side, but good quality fresh food can be difficult to source. It’s certainly one of the aspects that is driving our long term goals. I’m also quite passionate about natural health and we occasionally foster dogs.

CaptainFI: So How did you guys get so good with money? Was there anything in particular with your upbringing that helped your mindset or any defining moment in your life when you realized you needed to start investing to get ahead?

Em: Individually we both grew up pretty money conscious. My parents were quite frugal but also knew the value of money. They invested in property and also the education of my sister and I, sending us to a good quality school. My parents were also super supportive when I went to buy my first investment property. 

Simon: I also grew up in a pretty frugal household (classic farming background), which shaped how I think about money. In terms of investing I dabbled in shares throughout uni but realistically largely just sat on a large savings account for many years. Em is definitely responsible for educating me about the benefits of property!

CaptainFI: Joining Finances can be a big thing for couples, how did you know when it was time to join finances? Do you track your spending and how do you manage your expectations of each other?

Simon: It was actually Em who showed me the benefits. When you combined finances its not as though you’re investing capacity just doubles, if anything it triples! 

Em: It was funny I had been planning on broaching the subject with him for ages. I remember running through a little speech in my head. One night over a bottle of wine I just suggested it, spoke of the benefits to both of us. I mean, it was hard because I was in debt because I had a house, while he had quite a lot of savings so joining accounts essentially meant he was taking on debt, but also he shared in the rental returns.

CaptainFI: When I discovered FI/RE and realised it was actually a thing that you could do – that you live off the return from your investments, it blew my mind. What was that like for you guys? When did you the discover FI movement and did you have a ‘penny drop’ moment?

Em: For me I actually only discovered FI/RE was a real thing once we had started Smashed Avo! We didn’t know there was a ‘term’ for it, I suppose we had both always been working towards a goal to retire as early as we could while maintaining a certain lifestyle.

CaptainFI: You clearly are killing it with investing, can you tell us a bit about how you got started investing and your current investing strategy?

Simon: Thanks mate! We’ve always invested with the mentality that it’s for the long term. I dabbled in a bit of day trading and needless to say, it’s definitely not for me haha.

Em: Yeah and for our properties, we are very adamant that at this point of our lives cash flow is quite important to us so we maximise that by purchasing properties that are positively geared. We always intend on holding onto our properties so they grow in value too. Excitingly we are potentially looking at buying a home to live in in the next two or so years and we would love to take on a renovation so that will be totally different again!  

CaptainFI: You have a fantastic property portfolio and you are continually looking to expand it, can you talk a bit more specifically on property investing fundamentals you have used?

Simon: the absolute basics with our property portfolio is as Em mentioned above, positively geared but with low vacancy rates, a proactive council that is advocating for infrastructure, and we also make sure the town has a decent population (over 5,000 or so).

Em: I’m lucky that my dad is a pretty seasoned property investor so I often call him to get his advice and opinion on things. Something I have learnt with property investing is that emotion really is the enemy. It can become quite easy to get attached to the character of a property when you are purchasing it, but with investing all that truly matters are the numbers. 

CaptainFI: I am personally in the process of setting up discretionary trusts and company structures for my businesses and investments, and at times I have found it super confusing. Do you guys use trusts and companies at all?

Em: it is confusing and our poor accountant has really had to step us through this entire process. We have both a Trust and Company set up. We got these set up as there was a commercial and residential property we were purchasing that required it and then the purchase ended up falling through when the vendor took it off the market.

Simon: we didn’t set out to establish a Trust and Company but now we are definitely able to use it to our advantage. There are quite a few tax benefits they offer, however there is a little more work involved so I wouldn’t recommend it for a beginner investor. If you have a few investment properties under your belt it could be worth looking into.

CaptainFI: So a lot of people have a goal or FI/RE number that they are working toward, what is your goal with investing and how far away are you? What kind of a savings rate do you guys have?

Simon: We haven’t got an exact number in mind, however using the 4% rule it comes out to an investment portfolio of $2.5 million. We plucked the annual figure of $100K to live on out of nowhere really but there’s no real analysis behind that. We’ve still got a long way to go so we’ll figure out the exact number as we get closer.

Em: Also savings rate is a hard one to calculate for us as there’s so much money going in and also out. We worked out a rough savings rate a while ago and it came out to about 37%, but this doesn’t factor in growth in equity. 

CaptainFI: What about retirement accounts? We have superannuation which is equivalent to the American 401K system, do you contribute extra to that at all?

Simon: Yeah we both salary sacrifice extra money into our super and have been doing that for about 2 years now. I sat down and did a fair bit of maths – worked out that we could actually put more into super each fortnight but somehow increase our take home pay due to tax savings. 

Em: we still have quite a few years left in the workforce so I particularly didn’t pay a heap of attention to my super until I realised Simon had almost double in his super than mine! Then I started taking a little more interest in it… shows my competitive side haha. But in all seriousness I think it can be easy for young people to disregard their super because it’s not an issue right now, so I think it’s definitely an area young people should be able to talk about and they should know what is going on with their super.

CaptainFI: I’m a big fan of the blog, you clearly are passionate about personal finance and have a real knack for this stuff. You balance saving and investing with enjoying life and I think you’ve hit the perfect balance and struck a chord with your readers. What led you into wanting to share your knowledge and help others?

Em: thanks for checking out our blog, we need to get some more content up! But we had the idea of Smashed Avo because we were both individually being asked by friends for our opinion on a good property investment or shares they were looking at buying. We found the finance community on Insta and it really just developed from there! 

CaptainFI: What are your top three tips for someone wanting to reach financial independence?

Simon: First of all you need to sort your shit out. Pay off any high interest debt (personal debt) and figure out where your cash is going to come from. Build yourself a buffer too! Everyone talks about having an emergency fund but as recent events have proved, its super important in case you lose your means of income. 

Second you need to invest according to your strategy, which is based on your goal. These can vary wildly between people, so focus on your goal and don’t get too caught up by what other people are doing. 

Em: Also lastly its important to enjoy the journey to FIRE. It’s all great to be as frugal as you can but don’t let that stop you from doing the things you enjoy! You’ll only be this young once.

Get FI!

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