Episode 4 of the Captain FI podcast takes an international connection, stopping in London to feature none other than our very own, Aussie Firebug! The Aussie Firebug is an Aussie FIRE Blogger with over 12,000 subscribers, and over 100,000 listeners on his Podcasts.
The Aussie Firebug was one of the first Australian Financial Independence bloggers, coming onto the scene in 2015. He is a millennial trying to escape the 9-5 grind by reaching financial independence through investing in real estate, index funds and superannuation. He is from Melbourne, Australia and is currently on a working holiday in London as he and Miss Firebug near the end of their FIRE journey.
Starting from zero net worth, through his blog and podcast, The Aussie Firebug has tracked his investing strategies, tools, decisions and net worth as it has grown from zero right through to an incredible $770,000. He has also shared many personal stories and lessons learned along the way, including his current experience of working abroad, and deep reflections on his path to FIRE and the impact it has had on his relationships and his own mental health. It’s a whopper of a show we have for you today at 80 minutes, so sit back, relax and enjoy the flight!
On the show we discuss everything from his humble beginnings, right through to his financial education and investing strategy as well as his journey to FIRE, the psychology of investing and different kinds of investors. We discuss the use of trusts, companies and investing the tax advantaged environment of superannuation. We wrap up with the AFB giving his favourite book recommendations and top tips for someone on the path to FIRE.
The Aussie Firebug Blog and Podcast
Check out all of the fantastic content from the Aussie Firebug – head over to his website at https://www.aussiefirebug.com and subscribe to join over 12,000 people on his mailing list and never miss an update! He also releases podcasts regularly through Soundcloud, which can be accessed on all major podcasting and streaming services such as Spotify and iTunes Apple Podcasts.
The Aussie Firebugs top three tips to FIRE!
- Track your spending; if you want to reach FI you have to track your spending! You probably won’t even have to do a budget if you track your spending every week.
- Pay yourself first! Make sure the first thing that comes out of your paycheck is your investments, and then you can spend whatever is left over on your cost of living and entertainment.
- Learn to cook. You will save a heap of money cooking delicious and healthy food at home instead of loading up on Uber Eats and take-aways.
The Aussie Firebugs top FIRE Blogs
Check out MMM’s blog that started it all with Financial Independence here at https://www.mrmoneymustache.com/
Check out the Mad Fientist blog, the one that started it all for the Aussie Firebug! https://www.madfientist.com
The Aussie Firebugs top FIRE book recommendations
Rich Dad Poor Dad | Robert Kiyosaki
The main reason that over 90 percent of the American public struggles financially is because they play to not lose. They don’t play to win.Robert Kiyosaki
Rich Dad Poor Dad helps you develop the correct mindset and burning desire for success in building wealth and financial freedom through the story of a young boy who grows up with two Dads; A rich Dad, and a poor Dad. While he loved both of his Dads and they both had a huge impact on his life, both were incredibly different in handling finances.
One of Kiyosaki’s Dads is a highly successful academic, who drives an expensive car with a large beautiful house in an expensive suburb. He is conservative and doesn’t take risks with his finances. He is also the Poor Dad.
Kiyosaki’s Rich Dad instead focuses on building wealth through businesses (where he doesn’t trade his time for money), living below his means and acquiring assets that produce income, instead of liabilities like flashy cars and houses. Kiyosakis Rich Dad is actually the father of one of his childhood friends, who takes him under his guidance and mentors him as he grows up.
Although a fairly controversial and often heavily criticized book, Rich Dad Poor Dad is a modern classic of personal finance and is a best seller, having sold over 30 million copies. Its most important lesson is to start getting rid of your liabilities and start buying productive assets today!
From 0 to 130 properties in 3.5 years | Steven McKnight
You will only ever do your first deal once. From then, as your experience broadens, you’ll become more and more confident in dealing with agents, inspecting property and making offers. Its no where near as scary the second time around. If you don’t know the area like a local – don’t invest there. If you want to be treated like a local – look like a local!Steven McKnight
McKnight has a series of property investing books, and is himself a highly successful property investor and popular author. His common sense books are filled with practical step by step tips and guides and this is probably one of his best reads. Although it should be treated as educational material and not a financial guide
From 0 to 130 properties in 3.5 years stresses the importance of stripping away the emotion from property investing. The only decision worth considering is how much this investment should make, weighed up against how much it costs, and what the risk of losing your capital is. His key take home point is not to get emotional about any property you invest in.
His strategy is that you should only ever buy houses for people to live in. So long as people continue to need to live in houses, investing in property means you’ll ‘buy problems and then sell or rent out solutions‘. McKnight discusses the two main choices in real estate investing: Investing for cash flow, or investing for capital appreciation.
McKnight echoes the important messages of self education especially when it comes to the areas your investing in – you need to invest like a local! A part of this is the critical skill of networking and negotiation. Networking with other real estate investors is one of the simplest and most cost effective ways to educate yourself.
He also talks about some hard facts of real estate investing. It is active. It takes a lot of time. There are Risks. But his common sense and practical approach to investing helps minimise these risks; avoid properties that are cashflow negative or ‘suck away your cashflow’, and look for properties that make money from the instant you get them (by negotiating and paying the right price, you lock in your profit upfront). He describes how the only real way to expanding your property portfolio is by being able to access the equity that you earn from capital gains.
Finally, one of the best take-homes from his book is this: Money can be replaced, but time can’t!
The Bogleheads guide to investing | Taylor Larimore
Wise investors won’t try to outsmart the market.They’ll buy index funds for the long term, and they’ll diversify.John C. Bogle
The Bogleheads’ Guide to Investing is a no nonsense, straight up guide to investing for everyone from teenager, to families and single parents and even those approaching retirement! The Forward is by John (jack) Bogle who created Vanguard, the worlds largest mutual fund and provider of exchange traded index funds. John Bogle is the original O.G. FIRE blogger and investor!
The Bogleheads is a name given to the giant fan base he has amassed (and you can visit them at https://www.bogleheads.org and take part in their forums with over 50,000 active participants). Rather than worry about the vagrancies of Mr Market and volatility, Bogleheads are investors who have adopted John Bogle’s investing philosophy of being “lazy”.
The guide covers an array of topics with interesting discussions on insurance, behavioural economics, ways to save money and of course, how to invest and structure a modern investment portfolio. The book is written for new investors, and shows through countless examples how dumb actively trading the market is, and how active fund managers bleed their customers dry with fees whilst consistently under performing the market.
The Guide features an entire chapter devoted to “Tuning out the noise” (ch 18) which implores investors to “ignore the barrage of investment sales pitches because their promises are fictitious at best and financially disastrous at worst”. Focusing on a passive index strategy, by structuring your portfolio with index funds like the S&P 500 stock index. Having not bought individual stocks in over 30 years, John Bogle is a leading proponent of index investing.
John Bogle’s top tips are;
- Stay the course – “you must weather any storm, because even though the market is risky, over time it still produces better returns than any alternatives”.
- Beware the experts – Money managers more likely have their best interests at heart, not yours. When discussing the GFC Mr Bogle questioned “How could so many highly skilled, highly paid securities analysts and researchers have failed to question the toxic-filled, leveraged balance sheets of Citigroup and other leading banks and investment banks?”
- Keep costs down – “In investing, you get what you don’t pay for. Costs matter. So intelligent investors will use low-cost index funds to build a diversified portfolio of stocks and bonds, and they will stay the course. And they won’t be foolish enough to think that they can consistently outsmart the market.”
- Don’t get emotional – “Eliminate emotion from your investment program. Have rational expectations for future returns and avoid changing those expectations in response to the ephemeral noise coming from Wall Street.”
- Own the entire stock market – Invest in index funds!
Captain FI: This is your Captain Speaking – Welcome to Captain FI, the Financial Independence Podcast. G’day, welcome to another episode of the Captain FI, the Financial independence podcast where I open the cockpit to some of the best and brightest in personal finance, as well as those who have reached or on their way to financial independence
The Aussie firebug is a millennial trying to escape the 9-5 grind through financial independence, by investing in real estate, index funds and superannuation. He is from Melbourne, Australia and is currently on a working holiday in London as he reaches near the end of his FIRE journey.
The Aussie Firebug has been an incredibly positive influence on me, through his blogs and podcasts I first learned to navigate through the thick fog of personal finance and the investing world. I would even go so far as to say he has been one of my most influential financial mentors, and he has been incredibly supportive in helping me develop Captain FI from the very beginning.
The Aussie firebug had a keen interest in finance and wealth creation from a young age, he made the connection very early that most of his rich friend’s parents didn’t have normal jobs – they owned assets such as businesses and real estate and didn’t ‘work’ for a living. Armed with this, he started his investing journey and set about acquiring assets like most Australian’s do, in the world of property investing. He had a clear plan and strategy, demonstrated by the three investment properties he was able to gain fairly quickly.
Whilst researching more about investing, he discovered the term financial independence. Curious, this led him to read Robert Kiyosakis ‘Rich Dad – Poor Dad’ where he learned that to reach FI all you have to do is keep buying assets that make you money, and eventually you can just live off the cash flow; he had discovered the concept of FIRE. After devouring 20 finance books in rapid succession, he was hooked. Ramping up his savings rate, he began attending seminars and FI meet ups in Melbourne, as well as following a number of highly influential online bloggers. He learned about the power of Index fund investing, and began to diversify his property portfolio with index fund ETFs.
He became obsessed with a burning desire for FI, and the Aussie Firebug was born. Through the Aussie Firebug blog and podcast, he has tracked his investing strategies, tools, decisions and net worth as it has grown from zero right through to an incredible $770,000 that it sits at today. Along the way He has also shared many personal stories and lessons learned along the way, including his current experience of working abroad, and deep reflections on his path to FI/RE and the impact it has had on his relationships and his own mental health at one stage. Aussie Firebug, welcome to the show
Aussie Firebug: Wow what what an intro it’s a pleasure to be here mate!
Captain FI: When I go back through my personal investing journey, your blog was one of the very first I discovered and I am pretty sure you were the first Aussie Fire Blogger on the scene, around 2015 is that right?
Aussie Firebug: Yeah, umm I don’t 100% know if that’s right but I’m pretty sure I haven’t seen an earlier one so I’m claiming it that I was the first one. There was a lot of blogs that did financial independence and a lot of pages, but retiring in your 30s the actual Early Retirement financial independence Early Retirement was not in Australia I believe. Unless someone corrects me or I’m claiming that I was the first one!
Captain FI: He’s the OG of FIRE!
Aussie Firebug: In Australia!
Captain FI: Look I became obsessed with your site at one stage, consuming all of your articles and listening to all of your podcasts repeatedly, it really drove the family and the missus nuts. I remember one Christmas, I think I had just started investing in VTS ETF – I had your YouTube channel Up streaming in the living room so I was getting tips on filling out the annoying W8BEN tax form and literally I got banned from the remote and they’re like “no no , no more fire bug just relax”
Aussie Firebug: Somehow I don’t think a video about the W-8BEN-E form would have gone down that well I think it’s a boring enough top again for myself I community so it’s not really going to do well in the living room haha
Captain FI: One of your first podcasts was with the Mad FIentist. After I listened to that I read all of his stuff and blog articles and podcasts. I actually discovered through his podcast one of the first interview is did was actually with Mr Money moustache himself and those two are really highly influential, almost celebrities in the FIRE community. I learnt so much from them. I feel like having you on the captain fi show is a bit of a right of passage!
Aussie Firebug: Haha I’m glad to be here mate and yeah hopefully I can continue the theme of a prominent blogger a podcast on your first one!
Captain FI: So first up mate, can you tell us a little bit more about yourself? Clearly you have a bit of a travel bug, but what are the hobbies or things you do for fun?
Aussie Firebug: Yeah so I’m yeah definitely could almost rename the website the travel bug after after the last 12 months! Look just a fairly normal guy from country Victoria. I play football I’m into the footy, into keep and fit. Yeah like you I’m a bit overly obsessed with finances, but other than that I had a pretty normal upbringing through a middle-class family. I went to the local Catholic School in the town that I’m from, and recently or more recently me and the missus have have been on this worldwide trip the last 12 months. It was a big bucket list item that we wanted to check off.
Before that we did the normal things that normal people – do we went to school, we both went to uni, I started full time work when I was 22 worked all the way up to 29 I had two jobs between those time periods but it was the same in the same sort of a career. And then yeah when I was 29 last year we decided to uproot and moved to London to see a bit of Europe and to see you a bit of the UK. That’s where we are now
Captain FI: I think its really clever the way you have done this
Aussie Firebug: Yea I think it’s work out pretty well like you know we spoke a bit before you started recording, but like it it’s it just worked out that the our journey to FIRE wasn’t put completely on hold, even though I’ve sort of fact that in. We we definitely took a risk doing this last year or quitting our jobs last year – because we were on the road to fire and I could see the finish line last year. I’m like if I stay in this job and Mrs firebug stays in her job we can get it done in the next couple of years. Like it’s not a matter of if, it s matter of when for us.
But you know life is about living, and that’s always the philosophy that I’ve had. Maybe not always at the start I was a bit too extreme; I think the journey towards fire should be just as enjoyable as your retirement life after you reach financial independence. It should be about building the life style that you want in retirement. Even the word retirement is sort of a funny word you know because it means different things to different people.
It doesn’t really describe it how most people see in the fire world anyway So who ever created the term fire that’s that’s neither here nor there – but yeah the journey towards fire is more important, or the life of your living I think is very important you shouldn’t have to sacrifice a whole bunch of things you – shouldn’t have to be living a life that you don’t want to leave just to get to this magical number. In saying that I’m trying to practice what I preach, we had the bucket list item of travelling the world and even though it might it could have delayed our fire – well actually I think it definitely delayed our fire date, but it just it worked out it I managed to get it pretty good job over here in London and the markets are doing pretty well so we’re still on the journey towards fire that has it just been a little Road bump financially speaking but it’s one of the best things I’ve ever done. I sort of wish I did earlier
Captain FI: It is so important isnt it, you need to have a sustainable approach to FIRE. I think most people on the path of FIRE have definitely gone a bit extreme at The Start, really wanted to get that savings rate up and be a bit frugal
Aussie Firebug: I think it’s natural I think it’s natural. It happened to me it happened to Brandon the Mad Fientist. I don’t know about Mr Money moustache but I’m sure… actually do you know what maybe it didn’t happen to him because, it’s funny. From my experience anyway once you know or once you discover the term fire – for me it a light bulb went went off in my brain and I was trying to do everything in my power to get there as soon as possible. That can be unhealthy at times and that definitely was for me in the first couple of years, and it’s so… I can’t even begin to describe there’s someone listening out there there’s listen to this podcast that maybe is in the first couple of years of Fire…and they’re not maybe seeing the gains at that hope to see, you know it’s not happening quick enough for them. Just give it time and let it compound after a few years because it’s absolutely insane, the power of compound interest is is really insane and the snowball start rolling down that hill. Before you know it it will start generating that passive income that little bit, that little trickle passive income will turn into a stream and then before you know it turns into a raging torrent.
This is almost the point where we are at now like we are on the home stretch and we can see the finish line. We just got a whole bunch of dividends the other month and I remember opening the email – the notification that dividends were rolling in and I thought – you know this is it’s almost too easy at this point! I know the markets have been doing well last couple of years but you really do reach a critical mass. It gets to a point where all your assets are so this you have so many assets that they are generating enough money that you almost don’t even have to add to the snowball. You could just be chilling and like live your life – switch on the investment dividend plan and you would eventually Coast to fire which is the you know some people talk about Coast fire but it’s really powerful and Time and delayed gratification, it’s it’s really really powerful s*** hope I’m allowed to say that! Haha
Captain FI: Yeah, I think your nailing the concept of FIRE, and its pretty inspirational. A lot of the stuff that you are talking about comes down to really – mindset and focus. I think the whole FIRE movement can be summarised by saying ‘you’re putting the needs of tomorrow ahead of the wants of today’
Aussie Firebug: For sure. 100%. One last thing I sorry I keep cutting in but you know, but you’ve got me, just talking this stuff gets me psyched up. Someone said, I think it was Ted Richards that I had a podcast with, and it’s so true, investing is so much more about the mental side then it is about the the numbers or the the you know the strategy. Look Strategies important and the numbers are important, but it really is more to do with psychology. Investing, or good invest is being able to stick to the plan through thick and thin and understand it what you’re actually doing. As opposed to you know spending 4 hours online and a forum debating 3 basis points or something like that it’s it’s it’s really a lot more to do with your mindset and the psychology of you approach the investments and what you are going to do when there is a downturn in the market.
Captain FI: Its such a mature way to think of this problem. So Aussie Firebug mate, how did you get so good with money? Was there anything with your upbringing that helped your mindset, or any defining moment for you when you realised you needed to start investing to get ahead?
Aussie Firebug: I would probably attribute a lot of my frugality if you will to my old man. So he’s a he’s a wog, he’s a tight ass Italian and yeah. Growing up he took me the value of the dollar he was always always hard on me about buying anything like absolutely anything. I had a part-time job when I was 14 and 10 months old, which was only 2 months after the age limit to to get a job in Australia so I was like in a job straight away earning money as nearly as soon as I could.
Whenever I spent my money on anything, doesn’t matte what it was or how good it was, h would sort of like you know judge me on it like ‘what are you doing spending your money on that crap’ and ‘ripped off’ and stuff like that. So I always was annoyed – I was always like what’s his deal you know, I can’t spend money on bloody anything!’. Its not that he wasn’t happy, but it was a bit of a joke because it I guess – it was a bit of a lesson secretly as well – you know just watch what you spend your money on. He did tell me like you know a full in his money are easily parted and that sort of that quote stuck with with me as well.
So my parents are definitely the biggest influence on me, but particularly my Dad. Just general money habits – like learning how to cook, cooking your own meals, saving money and stuff like that. Not that I had to do that when I was living at home, but those values and those lessons in life – to be able to know how to cook even when it home, has served me well throughout my life.
To the second point about was there a catalyst or was there that was one big moment for financial independence I think you mentioned? That definitely, definitely was when I start a full time work. Basically I started full time work and like I finish uni and I got a job. I’m going down the normal path it everyone aspires to go down, and you know 21st century middle class Australia. That’s the the the plan or the the the set of things that you’re really meant to do if you go to uni you’re a study hard get a degree go get a job work full-time for forty years and retire happily or whatever. The standard yeah exactly standard plan for most Aussies.
I started my my full-time job and I remember it to this day I remember. I will never forget how much… how I just looked at it full time work differently after that week. That first two weeks… because I thought , ‘MAN, I’m spending so much of my life at this place!’… the work wasn’t bad like I quite enjoyed it but never I’ll never forget remembering how it felt almost being forced to go there. I mean strictly I wasn’t forced cos I could have quit, but I was just like I’m in the job now like this is my life this is my new life.
I started going to work and like yeah this, this is a lot of my life out of the week, 5 days with the commute and everything, that I’m never going to go going to get back. But I just pushed through and like I guess most people you just get used to it and it just becomes Norm after while. Fast-forwarding a few years or something I bought an investment property – because again, my parents were they done well with real estate they wanted to be they wanted me to be a smart person which you know there’s his two major religions in Australia like everyone knows: Christianity and real estate investing.
So they wanted me to buy a property and I did, because that was the common consensus amongst all my friends and family that smart people that want to do well in life buy property and they get a head through property. That’s what you always hear
Captain FI: Haha yep, there is almost this philosophy in Australia that property can never go down.
Aussie Firebug: Exactly exactly, so yeah I wanted to be one of those smart people and get a head. I bought a bought my first property investment… investment property rather in 2013. I think 2012 I signed it on to build so I got the first home buyers grant. Anyway I think it was around about 2012 when I got started. The whole thing took about a year, and it took me a while to actually start researching about how to invest in property. My parents sort of walked me through – like a I got a lot of help of them, mentoring off them because they have been there and done it
They told me what to look for – you know, where the job’s coming from? is it close to public transport? Is their school’s? They’ve been through it all before, so I could invest in confidence by drawing from their experience. That gave me confidence. I picked up a book about a year later because I was like I’ve just spent all this money and I’ve got all this debt to my name -like what am I actually doing, what’s the plan? I don’t have a plan! I just did this because a whole bunch of people told me was good thing to do… I don’t actually know it it was really good thing to do so I’m hoping it was…
I picked up a book Rich Dad Poor Dad because apparently that was a kick-ass financial book and you know, you have to read this book. I read that book and that’s through I come across financial independence. That you know, just reading that simple sentence of: Assets generate money – if you have enough assets that generate enough money, you never have to work a day in your life again.
That really struck a chord with me and I was like ‘WHOA!’ I was like Neo waking up from The Matrix! I was like oh my god this is it! This is something! I’ve always been a saver, but what I was saving for was never there – like the end goal of saving was never really there for me. So that right there was what I want to do. I wanted to build up enough assets so I have the flexibility to only do work that I enjoy, and yeah that’s where financial independence came from for me.
I burnt through Kiyosaki’s book and then I went through the property route. I read Stephen McKnight 0-130 properties and 3.5 years.. it’s very clickbait the title of that book, but its actually a really really solid property investment property book highly recommend. Then I come across Mr Money moustache like I don’t know like some time in 2013 I stumble across his site and that is just where like that is just like financial independence on steroids!
Anyone who has read that blog knows what I’m talking about. Mr Money moustache writes very well for starters, and he’s actually achieved what he is writing about his not just saying that this can work in theory. Which is like give him a lot of credibility, everything he writes about make sense – he doesn’t just write in a way that could be interpreted to make sense. The hard numbers are there, like the strategies are there. So when I read all those, it was I was just completely hooked, I was just consuming everything Early Retirement related in the fire sphere that I could get my hands on.
That was basically when I formulated her a goal in my brain that I was going to reach his goal and I was going to get there as quickly as possible which probably wasn’t the best thing to do, but yeah that’s the story!
Captain FI: I can relate to so many things that you’ve just said I remember when I discovered went down the reading route read all of your stuff, and you put me on to Mr Money moustache and the Mad Fientist. I got obsessed, I was reading all of your stuff, all of the Mad Fientist’s stuff, and all of Mr Money mustache’s stuff. Be honest here – did you become obsessed with Mr Money moustache as well ?
Aussie Firebug: Oh yeah absolutely! I was burning, I burnt through that blog you know in a few weeks maybe a month or something! It was an unhealthy obsession like I was reading 7 or 8 articles every day at work, then when I got home I was listening to all Mad Fientist podcasts… I was just on a bender. That first maybe year of discovering fire I couldn’t get enough of it. I was just consuming financial-related stuff at an unhealthy rate actually
Captain FI: Thats so good to hear… well, no, its good to hear because it makes me feel better. I was doing the same. I was at work and doing really really long sectors, up to 16 hour flights. Actually we have the ability to get internet on the aircraft – I could actually turn the satellite wifi on and be reading on my phone or on my iPad. Reading the Mr Money Mustache blogs and such. Even recently I bought these little Bose headphones – they actually can sit under or inside my headset in the aircraft. So now I can actually listen to the Aussie firebug podcast whilst crusing along at 30,000ft.
Captain FI: Do you have a FIRE number you are working torwards?
Aussie Firebug: Oh yeah this… I actually haven’t posted a lot about this and I was thinking about this the other month that I probably should have like a countdown to a goal that I’m setting or else it will just sort of go on forever. I think based on our expenses in Australia, I think I’ll be aiming for the cool 1 million in investments.
Captain FI: The Cool Mil
Aussie Firebug: Yeah I think like that will be major stone, but I don’t like know… we plan to have kids and I’m actually, I’m quite ready to have kids now and to be honest with you I’m well aware that there’s part of your life that you can’t do anymore what you have kids. Part of your life is over when you have kids and I understand that, so I’m getting all the travelling and everything I want to do out of the way this year. A few of my friends started having kids, and I’m not getting any younger. So I’m well and truly Rready to to have kids but we need to do a few things actually first, like weneed to get married first
Captain FI: Haha minor detail, semantics, semantics…
Aussie Firebug: Yeah haha exactly do all that stuff, but that’s going to change our spending. I don’t know by how much, but there is a few things to consider. I don’t know -it’s hard to say there’s a goal, but I think even now, I spoke a little bit about it before, but you eventually reach a critical mass the portfolio reaches critical mass it’s at some point, where it literally just takes care of itself. Again I’ll say like I know people listening – the markets doing well, there’s not a bear market I get it, but it really you get to a point where as long as you’re sticking to the the basic strategy that you’re implementing your fine. You know a lot of people in the FIRE communities do the ETF index portfolio funds. It’s a really simple strategy, keep your expenses relatively low.
So Yeah I reckon the cool 1 mil will be a great starting point and we’ll go from there. I’ve got no doubt that at that point – even at this point the $770K odd that we are at right now, the options of flexibility are already presenting themselves now. I feel like I have the option to retire early even now, even though now it’s like maybe mathematically is not going to work exactly. It is such a relieving feeling. Like you I quite enjoy my job, but for me personally (and you know everyone in the fight community has a different opinion about the retire early part of the financial independence retire early thing). The financial independence part is pretty defined, everyone knows what that means – its about having enough assets that are generating a passive income to cover your living expenses.
The retire early bit is so subjective to so many people. For me personally, it’s about retiring from the rat race and retiring from doing something you don’t necessarily love doing and you do just to make money. To go into the next phase of your life and to start your career in doing exactly what you want to do. More often than not, that will actually be in an industry that flips a buck – you know that makes money. More often then not, from what I’ve, people that have actually become financially independent end up making more money in their passion field than they ever did in their the feel that they didn’t really enjoy.
I almost feel like I’m already there I’m already reaping some of the benefits of the retire early part of FIRE, so that was a bit of a waffley answer to your your question, but I think the cool mill. 1 million is what will be aiming for for and then I’ll reassess after that
Captain FI: One of my first articles was talking about what is the ‘RE’ part of FIRE, is it retire early…
Aussie Firebug: It’s a difference! I think there is a difference between financial independence and FIRE, or the retire early part. For me – my interpretation of the difference is that people that reach financial independence… There are plenty of people in the world that reach financial independence but what they don’t do and what a lot of people traditionally have done is they don’t take that next step and do the retire early.
Whatever that means to you – it’s different for everyone, but they don’t transition from a career that was about trading their time for money into a passion project or into a career about doing work that they love doing. They just stay the course and just get richer for… for I don’t know what reason. Does make sense? I feel like that’s it I’m real key difference between it. I always read online people that say ‘I’m not interested in retire early I just want to be financially independent’ like what does that even mean?! There has to be a goal? For me financial independence was never about the money for me it’s about what that money could do for my life
The retire early part for me is the whole purpose of amassing that many assets. Amassing assets just for the hell of accumulating wealth doesn’t really do anything for me. What do I actually want to do with my life once I’ve got that wealth behind me? Because you can you can have that wealth and do nothing with it, which is still financially independent but I feel like the more important part is what you do with that walth. If that makes sense
Captain FI: Absolutely – 100% agree with you there. I’m not interested in amassing wealth for no reason, so that instead of driving a Subaru I can now drive a Mercedes and pay more tax… for me it’s always been about I guess buying back my time. I know so many people that get caught in the wage trap. A lot of pilots can go and get jobs based out of, flying for airlines in Asia with the Middle East. They can come with really high paychecks but they get trapped in this lifestyle inflation cycle. They will be away from home so often, so that the kids can go to the private school and the partner can go to the yacht club and they’ve got luxury cars in the driveway.
Slowly it builds up and suddenly they realise they are trapped in this cycle. Although that attractive high income comes in, it gets spent in this cycle where they have to keep doing it, and working away from home so much just to keep that going. Yeah for me I guess there was something I was never really interested in.
Aussie Firebug: I’m hearing you loud and clear there, absolutely!
Captain FI: So your wedding… I have an interesting opinion on weddings. Now, they’re pretty expensive right
Aussie Firebug: They can be, they can be!
Captain FI: Yes they CAN be, they can. Its a fact though that a lot of people around our age are getting married. Right? I’ve seen on your spending history you talk about all the travel that you have done to attend weddings.
Aussie Firebug: Buying suits! Haha
Captain FI: Haha yep I feel your pain, I just recently dropped a grand on a suit for a wedding but I absolutely love my mate and its going to be worth it to bet here supporting him.On average, Aussies spend $60,000 on a wedding.
Aussie Firebug: Thats… that is diabolical. That is ludacris!
Captain FI: So $60,000… if you invest that…. I sat down with my missus and she was not impressed as we did the maths on a napkin. We worked out if you didn’t blow that 60 grand, and if you actually invested that in ultra Low Cost diversified index fund ETFs, you know like, your split that you invest in your VTS and VAS and VEU. Well if you do that then every year you could have you could take a 2-week fully paid vacation.. so my question was ‘hey do you want this $60,000 wedding or every year to celebrate the anniversary do you want to go away for a two week fully paid vacation?’. When you start comparing in terms of what you could have it’s a really interesting way of thinking about money.
Aussie Firebug: Absolutely and the thing is there’s going to be some people out there that are listening that do value that $60,000 wedding. That’s perfectly fine, if that’s something that means a hell of a lot to you then do it! There’s no rules as there’s no right answer for everyone when it comes to fire. Like you said, I think that if people looked at it a different way and if you actually really broke down what does a wedding mean to you. Do you actually want to do a big wedding, or does your mum want to do the big wedding? or are you just doing a big wedding because your sister did the big wedding?
If you start asking those basic simple questions you might find out it actually – I’m not doing this, we’re not doing this for US, we’re doing this because we thought that’s the thing that we had to do to get married. Instead we could you know tone it down a lot and like you said, maybe go on a paid vacation two-week vacation every year instead
Captain FI: Yeah. Well I tell you what – if you need a lift back from London – jump on board. Im pretty sure once we are over international waters that the Captain can pronounce like you man and wife. That could be a low cost option!
Aussie Firebug: Haha! Mate… I was ready to go to the the local chapel in Spain where I popped the question, but you know I think we will be having a wedding when we go back to Australia I think it’s going to be just small like family only but we’ll see ill see how it goes.. it will be on the blog.
Captain FI: Fantastic, Look forward to reading about it
Captain FI: You and Miss FB you are killing it with investing. Can you tell us a little bit about your investing strategy?
Aussie Firebug: Yeah sure so my investing strategy at the very beginning it wasn’t even a strategy it was just the savings account.I guess that’s common most people earn interest on a savings account and your like ‘well that’s cool I didn’t do anything and my bank account paid me a little bit of money that’s really awesome’. After that I started like I started full time work and I wanted to be clever I wanted to set myself up for the future so I bought an investment property and I discovered financial independence.
I was like ok, now I’ve now I’ve actually got a goal, so now this is real and like I am taking this s*** really seriously and I’m going to write down the plan of attack that is going to to enable me to reach financial independence.
The original plan went something like this – if I could get 10 investment properties and then hold them for 7 to 10 years because everyone knows that old saying that ‘properties doubling price every sense 7 to 10 years’ which we of course know is not true but that’s the old saying.
If I had 10 properties I wait 7 to 10 years, they double in price – I could sell half of them and then I would have 5 properties that are fully paid off and I could live off the rent. That was the original plan, and it was actually I was well on my way I had three properties like within I think 3 years of working full-time because the lending conditions were completely different back then and the banks were just throwing money at everyone. It was crazy that I was even to able to get three different loans – I definitely wouldn’t have been able to do that this in this lending environment. Eventually I hit a wall because the banks said I was borrowing too much money. There was the commission in the banking sector and like APRA pulled back all the lending regulatory legislation. It’s technical, but basically the government was like hot hold the phone and all these loans is a potential bubble we need to really like reign this stuff in.
I went to apply – I asked you out getting my fourth loan, and they were like’ HELL NO! you’re not getting it’ at that stage it was just me like I was just me on a single income having three loans. So I was like Damn, ok, so this puts a spanner in the works. But everything was working at that stage with the properties. A common strategy is you buy property – do research you buy you hope that it goes up you pull out equity with a refinance and use that equity to fund your next purchase and you keep popping along. That is actually a really risky strategy when I think about it like looking back in hindsight now but it can work in a lot of people it has worked out for a lot of people but on the flipside people have been burnt that way as well.
Anyway I got denied for my fourth loan application and it was at this point after reading Mr Money moustache, for a solid… I reckon… I was reading his for like over a year before I started investing in ETFs, or even thinking about invested in the share market. That’s how long I was research before maybe even like 2 years or something because I come across him in… yeah it was over 2 years. I came across him in like 2013 and we started investing in shares in 2016 so like two and a bit years maybe even three. That’s how long I was pondering about the stock market at and at that stage I was still very much real estate but when I hit the wall I started looking at the stock market a lot more seriously.
I went back to a few articles that he’d written about the stock market and I read a lot of books about the stock market and basically I came to the conclusion and everyone in the FIRE space was doing it – all the international FIRE bloggers use in this strategy called passive style index investing through this vehicle called an ETF.
This is an exchange traded fund and I won’t go into how they work and everything but a nutshell just summarising briefly – You by this one product that is traded on the ASX the Australian stock exchange or Security Exchange and you get exposure to a whole bunch of different companies, different sectors, by just purchasing this one product.
With the ETFs I was able to build a portfolio through three ETFs that gave me access and instant diversification across the entire Australian stock market or the top 300 biggest companies were traded on the stock market (VAS) in Australia, and the top I think 1500 companies traded in America (VTS) and then the top I think it’s like over 4000 companies are in the rest of the world (VEU) so you talking you know Exxon, Apple, Commonwealth Bank, all the biggest companies in the world. You can get a tiny slice, a tiny slice of their ownership through a product like an ETF
It’s a bit hard to explain the whole investment strategy but we decided to go with a stock market strategy than a passive income diversified ETF strategy since 2016, and we basically said we will run with it for like a year and see how we go and we can always go back to real estate. It was around about that point that we joined financial forces – so Mrs firebug myself we join bank accounts and we started invest in together. Ever since we invested in ETS we haven’t looked back and basically the strategy has chopped and changed a lot throughout the years but we’re to Point now where the end goal for our portfolio is we want to be 100% in shares and we want to cover our living expenses from the dividends that those shares generate.
That’s it in a nutshell! We want and her the dividends to come in 4 times or 2 times year whatever the the fund pays, and we use those dividends to pay our expenses for our life and that’s it. Then there’s a whole theory behind how this stuff works and like I said I wont go into it in detail in this answer, but the portfolio is theoretically going to outgrow or grow with inflation so the dividends every single year will be a little bit more and a little bit more but I’ll keep up with inflation hopefully. In reality or historically speaking they’ll probably outpace inflation. That’s it we will live off dividends in the end. We’re slowly transitioning got two properties left our to sell and put that money into a share portfolio and yeah that’s that’s the plan
Captain FI: It’s a remarkedly simple strategy The Snowball Effect of ETFs, and when I was reading your blog in was learning more about it online and I’ll have your investing strategy in the show notes for everyone
Aussie Firebug: Yeah that would probably be good save me from waffling on trying to explain the whole strategy, but yet go – go read the post!
Captain FI: I’m interested to hear though – knowing what you know now. Would you have still gone into property at the start or would you have gone straight to a passive etf style?
Aussie Firebug: MMMMMM… that’s a good question. Hindsight is 20/20. So knowing what I know now…. the first house that we sold. So we have sold one of the three investment properties that I originally bought we got to sell still. Hopefully the other one will be sold very soon, but knowing what I know we made I think the return on the first investment property the annualised return was like 33% or something ridiculous like that and a major reason like I can’t sit here and say that I’m some master property investor… a major reason that happened was because Melbourne boomed like the whole time that I had that property it just went up and up and up all the way till I sold. Well it started to dip a little bit what I sold like 9 months before I sold it starts go down, but like that sort of that’s just luck
There was nothing I had foreseen happening… and the other thing was the interest rates were going down the whole time. When I looked back it’s sort of like just such a fortunate time. It’s nothing to do with my skill that I got into property during the early you know 2010’s when interest rates was dropping and property was going up. Its just how I played out – but I I still like property as an investment class.
One thing that’s funny in the FIRE crowd especially, is that people are so tribal with their investment classes. It’s like yeah you have to be property or you have to be shares or you have to be you know pro Bonds or you have to be pro gold or whatever. At the end of the day if the asset is going to be generating some sort of income – because that’s really to me it must generating income (that’s why I’m like I’m not personally a big fan of gold because it doesn’t do that). I’m sure there’s people out there listening the could write a whole thesis on why gold is a good investment and that’s cool but like I said at the start investing to me is a lot more psychological and I just I understand at this point how the stock market works and why the strategy that I’m implementing with this passive etf index fund style strategy is going to get us to financial independence
I think that’s a major a major part that some people are willing to put in the air to research it themselves. I couldn’t even begin to describe some of the emails that I get better like ‘hey like I’m 40 years old 2 kids what what ETF should I buy’ something like that! First of all I can’t give out financial advice so don’t ask me those kind of questions, and secondly that is an impossible question for anyone to answer because this there’s just not enough information in there.
You need to be comfortable with your strategy that such an important part of financial independence or using the stock market to reach financial independence. If you just read a blog, and you could read my blog, you could read Mr Money moustache or you read anyone. Or you could be watching a video on YouTube and you get what they’re saying and it sounds good but you don’t really 100% know exactly how it works and you’re not fully around the whole strategy fully then that’s a recipe for disaster
When the S*** hits the fan and it will! There will be a crash – it hasn’t happened for a long time but there will be a crash. It’s going to be those sort of people that read one or two articles and then started putting thousands of dollars into a strategy just because they have old mate – they’re the ones that are going to be affected negatively or they’re the ones that are going to start believing all the s****y articles that is going to get published when the next stock market crashes. The articles that you know talk about the end of capitalism as we know it the end of the stock market yada yada yada that stuff this s*** the gets posted every single time. You mentioned off air that Pat the shuffler released a great post the other day about like the how the world was ending in 2012 then in 2013 it was going to crash, 14 15 16 and so on and so on so my point is that whichever it doesn’t matter if you invest in property if you invest in shares in invest in gold whatever just make sure that you know what you’re doing and your strategy is something that you know inside and out
Then just stick with it. You can change strategies and I’ve change strategies, but there needs to be as very good reason and a thinking process behind that strategy. Like I said I literally research the stock market and ETFs for over a year before I even get my toes in. Even then I was nervous, even then when I want to put $5,000 in dollars my heart rate when I feel a little bit was like ‘oh my god I’m making mistake am I ****ing this up’ I need I need assistance! You learn to deal with that those nerves and like you understand the longer you do it. I just think it’s an important thing to not just read one article or read one boo, you need to really crystallize your own strategies to suit your own needs because they’re different for everyone
Captain FI: You need to immerse yurself I think. And really going back to what we said earlier, that burning desire to learn and know more. Thats the first step to reaching FI is that burning desire. You can look at some of the worlds best investors – Warren Buffet the oracle of omaha, he says never invest in anything that you dont understand.
Aussie Firebug: Exactly
Captain FI: Although the first stop I bought was AFIC. It actually was like a bit of a comedy, the process of me buying this stock. I didn’t actually know what AFIC was, I just read in the barefoot investor that there was this stock called AFIC its on the ASX its called AFI and its good to buy, and everyone should buy it. I actually thought that it was a concreting company, because I thought that what foundation investment company meant, like they were obviously like a building conglomerate or something. I know I feel so stupid looking back. A lot of research led me to index fund ETF investing path, but I think youve hit the nail on the head its super important that you do your own research and that your investing strategy is appropriate to your personal circumstance
Aussie Firebug: Absolutely and just one last point, it’s not about total returns. This is you know touches on the whole invests in the whole mental aspect of investing. Some people are just more comfortable investing in property! Some people out there you know I read a whole bunch of forums and I read Facebook groups and everything – some people need to understand this – there are people out there that just going to be more comfortable investing in different asset classes. ETF passive investing is really really great choice for a heap of people and I wish more people would take the time and get educated learn about the share market but the the fact of the matter is is going to be a large percentage that don’t do that but going to trust bricks and mortar. And you know what – that’s fine! It’s not an issue! It isn’t a pissing contest between the asset classes. They’re all got their merits in some some way shape or form but for me personally I mean Mrs firebug and I have gone down the passive ETF route and that works for us – but what works for us might not work for you!
Captain FI: I don’t think I could have said that any better. I Remember The Intelligent Investor and he talks about an enterprising investor versus a defensive investor. I thought yes I am definitely an enterprising investor, I am an extrovert and I am going to put all this effort and time into my investments and we’re going to beat the market! But really I actually discovered I’m actually more of a defensive or passive investor and you know what that’s fine everyone’s different
Aussie Firebug: Agreed!
Captain FI: Do you invest in your and and Miss FBs own name or do you use any company or trust structures to hold those etfs and properties?
Aussie Firebug: Yeah so we we invest through a trust and it’s funny that you mentioned before that you thought you had to put in a whole bunch of effort and do something do it a little bit differently to get ahead because when I set up a trust that was how I was thinking. I actually set up a trust – a major reason for me doing it too in our investments through the trust was reading Steve McKnight book he’s property investing book and he was really big on trusts. There was a whole chapter to do with investing through a trust and he even recommended a book called ‘trust magi’c and I read that book and I had the exact same thinking as yourself but I was in the property investment stage in my investing career and I thought like if I do everything like everyone else, or if I follow everyone else I’m going to end up like everyone else I need to do something different I need to like put in the extra effort to get the better result I definitely had that mindset and it has taken me a while to you understand the passive investing is different.
Usually a lot of things in life if you put the effort in your going to get the results out, but the stock market is slightly different in that regards and more effort here you actually put in – odds are the worst result you gonna get funny enough!
In hindsight, if I could go back to the start I would have never bothered with it because it just complicates things a lot. It’s not necessary to fire. Having said that having said that, it has it has actually turned out to be super beneficial for us and our travels and the reason being I am a resident for tax purposes in the UK right now. Now if there’s any accountants account it’s listening you’ll know straight away where I’m going with this. If you’re a resident of another country you pay extra on all the dividends that your assets are generating in your name back in that country.
All my property like the rent and the dividends and everything would it be like getting smashed – I would be paying a lot more tax put it that way. Because I hold them in a trust my parents actually control all our assets at the moment – so if Mum and Dad are listening you know don’t please don’t go any crazy holidays using the out our shares please!
I handed the keys to Mum and Dad when we left and like I changed my residency status and a few people have actually written into me and I need to do – I got a massive post about Australia to London and like all the tips and tricks if you going to make the move and I really need to get it out. Basically the trust has been a lifesaver for us this last year and it will continue being this next year, and then when we get back to Australia, because our trust is set up with a corporate trustee, I’m going to become the director of that corporate trustee when we get back and it will continue business is as usual. Also the extra advantages you can divert the income of the assets generated or the income generated from the assets within the trust and has been super beneficial for us being overseas at the moment.
That’s a whole another story and like not everyone is going to move to London for 2 years so yeah I wouldn’t have done it, like if I could go back in time I just would have done it in my own name. It’s just a lot easier to do and there was a whole bunch of headaches with especially getting loans getting home loans having a trust it was just a pain in the ass, it’s not necessary. I just say that it’s not necessary
Captain FI: For anyone who wants to go into a little bit more detail the book that Aussie Firebug was talking about was Trust Magic by Dale Gatherum Goss. Its a great book I admittedly have not read it cover-to-cover I have flicked through it. There are some things that might have changed as it wasoriginally published Gee almost 20 years ago now, but you know it’s full of Awesome gouge and I’ll put it in the show notes.
Aussie Firebug: Yeah that is a good book that’s the best and you read it and you think oh my god trust of the bomb! I need to do a trust, but in reality going through it and everything like it’s just not necessary. This isn’t financial advice but I don’t think… I think they are more of a headache than their worth to be honest. Even though yes you can save money and it is flexible you have asset protection ID personally wouldn’t have bothered doing it at the start
Captain FI: Yeah again, sometimes the simple solution is all it takes
Aussie Firebug: Yea absolutely that’s it keep it simple!
Captain FI: Speaking of structuring and accounts, I know you have just released a monster podcast superannuation which is very similar to an American 401K or Roth IRA. I have been doing concessional contributions or adding extra right to my cap for some time, so my super actually makes up a huge portion of my net worth. What are yout top tips regarding super and do you do you max out your contributions at all, or how do you use superannuation?
Aussie Firebug: No I don’t max out my contributions that the moment I’m not contributing anything because I’m not working in Australia. That that podcast was a beast an hour and a half it was huge and to be honest we couldn’t probably spoke for another hour and a half just because super is it’s a bit complex. There’s a lot of areas around it and a lot of legislation written about it so that was probably just scratching the surface to be honest. My… my thoughts on Super I guess like this is such as a bit of a controversial topic amongst the FI community because it is such a good vehicle to use it’s the it’s the most tax efficient vehicle for majority of Australians. But people that are looking to fire, and again it depends if it’s so circumstantial so this is really like you’re not going to get a perfect answer here, but if you’re going to retire early like in your thirties like I’m planning to me and Miss firebug, and you know that you’re not going to be living off a lot of money – you are going to keep your expenses low that’s the true fire way (unless you doing like fatfire).
It’s actually possible and we talked about it in the show, to pay more in tax by having your investments in super then it would have otherwise been having your portfolio outside of super. The reason for that is the the flat 15% tax rate within Super vs if you are outside super and if your.. lets say you got your house paid off and you can live I don’t know like $38,000 a year or 37 whatever it is basically if there’s two people in the relationship and you both earn through dividends, then you need to consider the minimum tax free threshold amount which is like 18 1/2 thousand Australian dollars or something like that. If you’re getting those dividends under the tax-free threshold then you’re paying less tax outside super then you would be if you had that money inside super!
That’s really strange and odd circumstances, but in the FIRE community it might not be that uncommon. It’s really hard to know what’s the best answer – I would say for majority of 99.9% of Australians you should probably max out their super every single year. But if you’re looking to fire you got a crunch the numbers.
My other my other sort of qualm with super is just the chopping and changing of the rules. I just I feel more I personally – again all circumstantial, I personally just feel more comfortable building up the snowball outside super and reaching financial independence so we can retire early outside super. Then once I reach… if I make it… that’s it as a bit morbit… but if I make it to the preservation age then it’s just going to be cherry on top and it’s going to be a bonus!
If I’m earning money up close to the preservation age then yes I’m going to be salary salary sacrificing for sure but at the moment we didn’t super is not heavily in our fire plans
Captain FI: Interesting man. Good response. I did read one of your articles where you talked about you ok so worst case without some of those tax savings even if it took you an extra 6 months or years to fire then that security of investing outside was worth it for your peace of mind
Aussie Firebug: Yeah that’s… that’s my take on it, But there is people on and plenty of Fire bloggers that will say you know that they’re maxing out the cap every year and they’re building up this snowball inside super and that’s awesome. I think that’s great that it’s definitely good. But like we’re splitting hairs at this point – whenever fire people you know how the have a debate amongst investment products.. and you know a few basis points or whatever – this is so far at the end of the journey sort of stuff.
The big ticket items – anyone that’s listening that wants to reach financial independence so you can retire early, the big ticket items are really your lifestyle like cutting out expenses and whether or not you reach it’s inside super outside super is really it’s such a minute detail in my opinion. Your gonna get there either way you’re going to get there as long as you keep plugging away at it – but crunch the numbers yourself figure out what’s the best option for you and stay the course.
Captain FI: I almost liken this to Pareto’s law or the law of diminishing returns. Really just focus on the big ticket items that are going to give you the most benefit – you can almost just cut away those those minute details which you can spend a disproportionate amount of time debating… like whether a LIC is better than an ETF – like they both are pretty bloody good
Aussie Firebug: Yeah try not to lose sleep, like anyone out there listening try not to lose sleep over it if. Whichever way you going to go, you can always correct the course of the ship later. It is not going to be disastrous. I think sticking to the the big ticket items like not overextending on a house that you buy, not paying 1.2 million dollars on a house, not buying expensive cars all that stuff that’s really important Decisions are made. Then all this other stuff we talking about is really a lot smaller in impact
Captain FI: For anyone who wants to delve a little bit deeper into Super, I will link to Aussie Firebugs monster Super podcast – its definitely worth a listen.
Captain FI: Clearly you are passionate about finance and have a real knack for this kind of stuff. What led to the creation of the blog and specifically why are you so interested in helping other people now?
Aussie Firebug: Yeah so a major reason for me starting the blog – there’s a few major reasons, but I was obsessed with the mad fientist. He was always my guy in the fire scene – like Mr Money moustache was awesome but I feel like mad fientist was a bit younger and I just I’m not related to his stuff a little bit more.
I loved, he wrote something when he started the podcast or maybe it was when he started the blog, about how he knew he should research some topics but without some pressure or some yeah some sort of pressure for him to to force him to actually research the topics and crunch the numbers and really do the work to fully understand it himself, he might not have done it. I was like you know there’s no FIRE specific website in Australia that I could find at that time in 2015, and I’m going to create one because there’s no community or there’s no real yeah FIRE scene in Australia. But mostly to keep me accountable – like I thought that was a really great tip that I had read from the mad fientist. If you actually make a website or you make YouTube channel you make an Instagram page doesn’t matter what medium that you’re doing it on, or a podcast if you actually you making it and putting it out there you’re sort of forced to become all learn about various topics that the makeup the subject matter that you’re speaking about.
I knew that if I created a website I could have to be forced to learn about the super system and franking credits, and the Australian stock market. Stuff like stuff that I was already passionate about, but if I actually written like created a tailored good piece of Australian content, financial content, it would force me to go down and to the research and put in hours to actually understand it fully.
That was one and, the other one was that there was no one out there doing I can podcast about fire and I really wanted to be a voice in Australia I so basically just wanted to copy the mad fientist to be honest because he was you know such a such an impact on my life and you know they say you know what’s that quote… the best form of.. something about imitation
Captain FI: oh yeah, imitation is The highest form of flattery
Aussie Firebug: Yea exact that’s the one. Imitation is the highest form of flattery, so you know mad fientist was just the guy for me and basically I just yeah wanted to be a strategy the Australian version of him.
The other reason, and this probably turned out to be the best reason is when I put my stuff out there my – strategy, everything, like that a lot of people critique them. I had a lot of people at the start be like why you doing this – this sucks and that sucks. I actually had my had my car in my net worth at the very start and they were like ‘that’s not right’ so yeah I got that out of the net worth and in hindsight what was I thinking!
I’ve learnt so much through the comments of the website – I probably learnt more through the comments and like the discussions that have happened then I have through some books that I’ve read like by some experts. Crazy and because it’s Australian specific – when I was reading and consuming all these blogs from overseas it didn’t mean anything to me. A lot of these 401Ks and Roth IRAs and everything they weren’t relevant to me. I love that there’s a thriving fire community now and I’m not the only one- there’s heaps of really good content creators out there and I just I learnt so much and I’m glad to be part of the movement the fire movement in Australia.
Captain FI: I totally understand the motivations to to be blogging. Yeah you have a really great stuff but sometimes people can be pretty brutal in the comments… I’ve been Smacked Down a number of times in the comments but yeah it’s great you know you learn from it and you just got to take it all on stride I guess.
Aussie Firebug: Yeah it’s a bit it’s a bit scary when you when you put your s*** out there for the first time – like it is scary and like you know what I’m talking about because you’ve published stuff. Some people will never know, even though I am anonymous there’s a still vulnerability of publishing your thoughts and opinions and your content the you spend hours creating. You put it out there it’s a bit bit scary. But once you get over it and you get the the odd negative comment… but then as soon as you got your first one it’s just water off a ducks back after that and it’s been one of the best things I’ve ever done
Captain FI: We do have a bit of a cultural tool Poppy syndrome in Australia, and for anyone who is listening and doesn’t understand that – just imagine you’ve got a bunch of flowers or poppies growing, and one sort of grows bigger than the other to keep them all even of course someone comes along with the big pair of scissors and lops the the head off of the tall one.
Captain FI: So has there been any fantastic books that you’ve read on investing personal finance or Self Development in general?
Aussie Firebug: I have read a heap of great ones actually, but my top 3… off the top of my head – Rich Dad Poor Dad that was that changed my life that book. It was instrumental, its such a cliche answer but it really is. Its popular for a reason for sure.
If your into real estate then any book that Steven McKnight has written is fantastic. He is the real deal trust me, I have been to his seminars, I have been to many seminars of a lot of different property investors, back early days when i was a lot younger, and there is a shit load of property spruikers out there. Steven McKnight is not one of those. He has walked the walk and any property boo is great. I don’t really read his stuff anymore because I’m not that invested in property or as interested as i used to be. I don’t want to put in the hours to be an active property investor. If your some young, budding builder or sparky that’s got all the time in the world and wants to put in all the hours and wants to flip property or something then I’d recommend his book.
The last one is the Bogleheads guide to investing. That is a great book. For a passive income and learning about why passive investing makes sense from a strategic point of view and explaining a billion times better than I ever could, especially just speaking to you now we couldn’t cover all the points in that book. Go read that book its written by the guy that founded vanguard – that is the holy grail basically, the whole world of passive investing. And its a great book, it covers so many things all the way from the start and how important an emergency fund, and then all the way to the end about how to generate your passive income using ETFs and using that passive style of investing
Captain FI: Those are three fantastic books. I’ve lost track of how many copies of rich dad poor dad I’ve bought to give to family and friends. Your right its so important in developing that mindset and developing that burning desire.
Captain FI: Alright, so last question. What are your top three tips for someone wanting to reach financial independence?
Aussie Firebug: Number one without a shadow of a doubt, and I’ve said this many times throughout interviews. Track your spending. You will never know, its imperative – if you want to reach FIRE then you have to track your spending. Without tracking your spending, you don’t know how much you need to generate in passive income to cover your expenses. Secondly, I guarantee you that you don’t even have to budget at all. I promise you don’t have to budget – if you simply track your spending, just do it once a week – track every dollar that leaves your account. Write it down or check out software that does it for you. I promise you’ll save money. You will look at stuff and go ‘why are we paying for that, I thought we cancelled that gym membership’ or you know ‘why are we spending so much money on drinks’ … whatever it is, I promise if you track your spending and egt the complete financial picture about where your dollars are going, you will start to plug the holes in your boat where its leaking water. Guaranteed. Just do that. Thats the number one most important one
The second one I would say, and this is off rich dad poor dad, this is a line out of his book – but pay yourself first! Its a bit of a cliche answer but its soo true. What does it actually mean, pay yourself first? Pay yourself first refers to setting a goal, and I will use myself as an example. When I first started, before Miss FB and I joined forces, my goal back when I was around 24 or25 it was to save $2000 per month. No matter what I did, I HAD to save $2000 out of my pay. I got paid twice in the month, but I had to pay myself first, so every single paycheck I got- $1000 went into the savings account no questions asked. I just had to make it work, it didn’t matter if I had a really big expense or like If i needed new tyres on the car that week, If I didn’t plan properly and it meant I was eating baked beans on toast for the whole week then I had to do it. I always paid myself first, I put my savings and investing at the forefront. And then everything else came after that – so that’s what I mean by pay yourself first
And the last one, its a really easy one. I touched on it a little earlier, and its just learn how to cook. Learn how to cook your own meals. Its one of the easiest expenses to cut down, and its one of the easiest one to blow out if you don’t know how to cook. If your always ordering Uber Eats and your doing takeaway more often than not, your going to blow through your budget and its not as good for you. I promise, if you learn how to make your own meals its so much better for you, it costs less, you learn a new skill its like a triple win. So learn how to cook. Go on you tube – you got no excuse with the internet these days, find a recipe – put the time and effort in, and I promise once you learn how to cook there is no going back!
Captain FI: Fantastic advice from the Aussie firebug there. Thanks so much for coming on the show
Aussie Firebug: its been an absolute pleasure to come on the show mate and looking forward to when its published
Captain FI: If the listeners want to find you and read more about your blog, how can they find you or get in touch with you?
Aussie Firebug: Just head over to my site website www.aussiefirebug.com, I blog about our journey to financial independence so we can retire early. I post our net worth updates every month, and occasionally I will write an article about anything that tickles my fancy. I also run a podcast as well you can search me on all major podcast apps like Spotify, just search for Aussie firebug and you’ll find me!
Captain FI: Thanks for listening to another episode of the Captain FI Financial Independence podcast. To read the transcript or check out the show notes, head over to www.captainFI.com for all the details
If you have a question for the captain, make sure to get in touch. You might even make it on the airwaves. You can reach me online through the Captain FI contact form or get in touch through the socials. I’m active on both Facebook and Instagram as well as a number of online finance and investing forums
Finally, remember the information presented on the show and the links provided are for general information purposes only. They should not be taken as constituting professional advice,. You should always do your own research when making any financial decisions, and make sure its appropriate for your personal circumstance.