A local Perth reader reached out to me back in 2020, to say my writing resonated with him and he’d been following similar principles for a long time.
He proceeded to share part of his story and upcoming retirement. I was intrigued and wanted to hear more, so we organsied to catch up for coffee.
After meeting, I could sense how similar our thought patterns were – we’d developed the same love and excitement for learning and financial freedom.
Despite being in a different generation and having very different life paths and careers, we had more in common than our own peers. This isn’t unusual – in fact, it happens quite regularly. You find yourself drawn to those with the same values as you, not the same age as you.
Anyway, I think of this fella like a real life version of The Millionaire Next Door (which also happens to be his favourite book, and one of mine too!). Despite having considerable wealth, he blends perfectly into a middle class setting.
For decades, he’s quietly been saving, investing, and building a business – helping anyone along the way who was willing to listen. We came to the conclusion that, unfortunately, that always turns out to be a very tiny number of people.
He tells me fondly of the time spent mentoring some of his employees over the years, to improve their personal finances and start investing. Some did, most didn’t. But the desire to help others was always there. So it’s with great enthusiasm that he said yes to this interview, to share his journey and experience with you, the readers.
To maintain his privacy, we’ll be naming this reader MND, for Millionaire Next Door 😉
Firstly, can you share a bit about yourself?
I’m married to my wife for 32 years, with two teen-dult children.
I retired at age 55, a year ago. I was born and raised in Perth. My mum brought us up on a pension, as my Dad left home when I was about 8 years old.
When did you discover the concept of financial independence, or building enough wealth to retire early?
I was reading a new book following on from Rich Dad Poor Dad by Robert Kiyosaki called Cash Flow Quadrant. It was this book that led me to concept of the 4 quadrants and owning a business and benefiting from the tax benefits. And the last stage being an investor that had enough to retire on passive income from shares and property, with this leading to a life of freedom to choose what you may “like to do rather than have to do”.
Along with this authors books, I built a library of finance-related reading. I learnt from the likes of Jim Rohn who said “if you want to be wealthy study wealth”, so I did.
Was your wife on board from the start? Any challenging conversations?
My wife was always supportive of any job changes and investment goals I or we had. We both set/had goals to be able to travel the world and have enough money to do it.
The master plan was creating wealth and an early retirement goal of age 55. My wife’s only stipulation was if we are to invest in property and shares in addition to our family home, she didn’t want it to compromise my current income and reduce the life style we already had.
We always lead a wise and careful-spending lifestyle. Not tight-arse, but cautious and planned. If we didn’t have the cash, we didn’t buy it. We always asked “Is this purchase in line with our goals?”
If it was just an impulse type of buy (Harvey Norman great one day deals), we had the strength to question the deal and resist the temptation. A few weeks later, if we really felt we needed the item, we would shop around and negotiate, in many cases, a better price.
Your Road to FI:
Can you share what your journey looked like? And how long did it take overall?
My goal setting started in year 12 at school, when my Mum said my grades were below average and I would probably need to join the dole queue when I finish school.
That may have been reverse psychology. Either way, I had a job before I left school and had never been unemployed over my 37 years of work life.
My plan of FI was crystalizing around 26 years ago. I changed jobs only twice due to the salary not supporting our goals. I had management positions with nice titles on my business card, but it didn’t pay what we required to achieve our goals.
I changed roles and industries, which lead me to buying a share in a small business employing around 30 staff. The business grew over time and delivered some good franked dividends that went straight into our offset accounts and some used for great overseas family holidays.
Aside from investing, the goal was then based around building the business and selling after 15 years, as the CGT would be minimized after that term. The business sold and paid out the balance of our debts, leaving us with more cash to go into a SMSF for share purchases (LICs, index funds and good dividend paying stocks). My mum passed away and we sold her house and that also assisted in paying down some of our loan.
What kind of work did you do? Did your wife work also?
My wife had to stop working approximately 27 years ago due to health issues and then raised our two children and never returned to work. So our plan was based on my income alone.
I was always in management/sales roles. The last 16 years I was a business owner/partner in a real estate agency, managing a team of approximately 25-30 team members. We fell into the top 5% of agencies for size and profitability. Good management I guess lol.
How did you educate yourself about investing and personal finance?
At school I was a slow reader and didn’t like reading and got average grades. When I finished school I had a passion for learning topics that I enjoyed: business, selling, finance, self-motivation etc.
I enjoyed going to seminars, listening to audio books/tapes, videos and reading books around these topics and created a library of educational topics that would assist me in having a good understanding to make wise financial choices. At one stage I counted 45 books on my bookshelf that was on the main topic of interest, wealth creation. I have met many poorer people who don’t have a library.
Numbers and Strategy
Can you share your annual spending? Has this changed over the years?
We don’t spend what we don’t have, and we didn’t spend more than we earned. We always managed to save and set goals to afford what we wanted to buy (new furniture, newish car, shares, holidays etc).
Our spending increased having children and then owning a business brought extra income that allowed us as a family to travel and enjoy a few luxuries and invest more. Our spending was probably around $100k pa.
We didn’t budget as such we just knew we always had enough and we didn’t spend it if we didn’t need it. My wife however tracks all spending and we keep receipts for all purchases to track credit card statements and to be in touch with what we spend on and what things cost.
My wife knows a bargain and what’s a rip off, and hence saving or being very aware when making a purchase. Considering my wife was doing 99.5% of the weekly family shopping, when you add that up over many years, my wife played this important role. If spending is not monitored it can blow out, or save you thousands to use for investing.
What was your investment strategy? And what does it look like now?
We used the banks money (good debt to purchase property) as they called it, and from then onwards all income/spare cash/savings went into an offset account on our investment property, with the view of paying it off as fast as possible. This allowed the spare income from rent and tax breaks etc. to fund the next investment property.
We managed to pay off the family home in record time, even when interest rates had been running at 16-17%. We still live in the same house we built to grow into (not out of) 33 years later. We did the same with property 2 and so on, now 7 fully paid-off properties later.
Our investment strategy was always based on very long time horizons, usually longer than we live. So our intention is to enjoy the income from our investments, to see them grow over time and to pass the investment portfolio to our children to allow them to have some extra income in life.
That will supplement their income or allow them to be FI earlier. Whether it be shares or property, we always choose safe and secure investments (as best as one can). Some shares didn’t do so well, however we are very diversified to smooth out any minor issues like this.
We stick to top 300 Australian shares, big brand international shares, index funds, LICs like Argo, AFIC, Soul Pattinson, and some managed funds that have grown very well over the past 20 plus years.
I do not plan on changing the investment strategy as I see no need to invest less aggressively as we age, i.e. ‘Balanced’ or more cash holdings. We will stay fully invested for the long term, we buy good quality and hold, we do not use the market like a casino that some of my friends do (funny they seem to always have money troubles).
The properties we have are also diversified over the metro area, and one in popular tourist location near the beach. All are good rentable locations and designs. No fancy stuff, no CFDs or stuff we don’t understand, and no bitcoin. Just boring old top companies.
As for the breakdown, rental income provides for our living costs and dividends provide for travel. We earn a comfortable executive income from these two sources.
What was your wealth goal or FI number, and did this change over the years?
Earlier on my number was $10 million. However, as we progressed and got closer we decided that its better to retire earlier than stick it out and reach that number when we had been FI for a few years anyway.
I believe that in retirement people fall into one of 4 categories:
Option 1: Be on a full pension. This didn’t look like an option we wanted. We still have loads of travel to do, the world is a big place and we have not seen it all yet.
Option 2. Pension supplemented by dividend or rental income. That choice didn’t seem like a idea that we wanted either (and we had surpassed that option years ago).
Option 3 : Have nest egg and diminish it over a life time or earlier. That didn’t seem so smart, as a friend of mine said he will burn through the money and hope he doesn’t outlive the balance leaving his kids zip. We went with option 4.
Option 4: Build a mass of assets that will well and truly give a great income and allow for the travel goals we had set years earlier. Plus these would continue to grow over time and allow us to give our children some considerable wealth.
This option required continuous education, strategic risk, discipline, dedication, continuous goal setting, continuous goal reviewing, staying focused on the big picture and never giving up.
How long have you been retired now? And how’s it all going? Has anything surprised you about early retirement?
It’s been almost a year now. We have seen our life plan fall into place and the investment income this year is better than we expected. We set up a cash buffer just in case the markets change and as recommended by the likes of Barefoot Investor, Warren Buffett, and others.
My sleep is better. I used to wake up in the night thinking of all the things I had to do the next day, meetings, people to call, etc. I wake up without feeling like I have to remember to do things and the issues of the day/week/year. I also fall asleep much easier.
Stress and worry is almost zero now. I have noticed that many worries and stresses are now gone, and I now realise that many worries never eventuated and I wasted many hours stressing about what may happen and it almost never did. Life in FI is stress free.
The feeling of going away on holidays and not having to think about returning to work a few days after getting home would have to be one of the most pleasant feelings. This allows you to be more in the moment. Unlike being in the workforce/business owner, one always has a feeling of ‘next week I will be back to the office’, and after returning for a few days its like you never went on holidays.
Can you walk me through some of your daily experience?
Every day is Saturday!
Going out during the day is a joy, as I can take my time and enjoy my surroundings. I promise my wife I wont be one of those old blokes with the bowling hat on the back dash of the car and driving at a snails pace lol.
However, its a joy missing the peak hour traffic and just doing life at a stress-free pace. I wake up and consider what I would really like to get out of my day, rather than have to do today. Man that’s so good.
Even simple things such as buying fuel when the servo’s not flat out, like on the way back from work when every other bugger is trying to top up with cheap fuel. Mate, how good is that! I like a bargain and I can do it at mid morning when the servo is quiet.
I love to go for a walk and be in the moment. I marvel at how beautiful nature is and the shape of the clouds, the colour of the sky, etc. To be in the moment is an amazing feeling. When I would go for walks before, I would be thinking about my day and what tomorrow would bring. With a business, we had staff and customers and they both brought issues that played on my mind.
As I sit and enjoy breakfast at geez almost 11 AM, it’s only possible because I’m no longer rushed by having a week at work and only 2 days off for the weekend.
FI gives me the freedom to relax on a day like today, as others rush around. FI allows me to do what I want when I want. It’s amazing how good food taste when you can relax and eat the food and really enjoy it, without thinking “I better rush this down and get to work” or “I only have 2 days on the weekend, I better rush and get all sorts of chores done.”
Yesterday I was listening to your podcast as I went for my 3x weekly 6km walk along the river. I enjoyed the banter and I was thinking “How cool is this? I’m here walking while everyone is still at work like I use to be.” I had a beaming smile on my face as I briskly walked along listening to you on the podcast talking about the concepts that I believe so much in, that have saved me literally thousands over the years.
What’s the best part of Financial Independence so far?
The freedom to choose when to wake up, do what you want, when you want and take as long as you want to take to do a task. No boss means you cannot be sacked or made to feel guilty of the time it takes to complete something.
We are our own bosses of our life and investments. My wife and I find we are a great team, and we are productive with day to day items. I suppose being goal setters we don’t sit idle, we get on with things and make things happen, and we still like to strive for achievement and to know we gave the day our best.
We use diaries and plan our week, month and most importantly date days (once a week on Thursday). Now I can do it without the phone calls or being needed by staff demanding answers to things. (I know I should put the phone on message bank, but as a Director, you have this feeling that you should be available). Now it’s just her and I enjoying a lunch or coffee or a drive and it’s in the moment. We enjoy time together and time apart with friends as well.
Having time to contemplate and think is amazing as you get so much more clarity. The mind is free to think and its not cluttered with work issues.
The freedom of being FI is a dream that all can achieve if they set goals, work hard, and take calculated risk once armed with the education and other disciplines that is required.
I find it funny when people say, “Retired! Aren’t you bored?” I sometimes wonder how I had time for work, because busy people keep busy. The difference is we get to do what we want, not what some other person wants, i.e. a boss. I say that even though I was a boss as such… funny looking back!
Is there anything that’s not so great about FI?
I am yet to find any negatives.
What do you enjoy spending your time on these days? Future plans?
Over the many years of marriage, I have admired my wife for all the tasks she has carried out over the years. Eg: I calculate that my wife has ironed 7,992 shirts of mine so I can attend work looking sharp. Not to mention the thousands of meals that she has prepared and the shopping and planning that took place to make those meals arrive on the table.
I do like cooking a BBQ, however that falls into insignificance when I think of all the meals my wife has prepared for our family of 4. Not to mention floors vacuumed/mopped and clothes washed and hung out to dry then ironed along with my shirts etc.
I see this time in our life as a retirement from working as she has done at home for so many years. So I have taken on/share the daily house activities so the load is shared, allowing my wife to feel a sense of reward for our position of FI.
I suppose you could call it her retirement. My wife now has time to do what she wants to do, not what she has to do, to run a house and family. My wife is enjoying planning the overseas holidays for the next few years, and it’s a passion she really likes doing.
The other day she mentioned she feels like a kid in a candy store. To have the time and the funds is a wonderful feeling that we are both enjoying.
Do you have any desire to return to work? Or any idea of something you’d like to do in the future?
I have no plan to return to work and am yet to work out when I can fit in volunteering of some sort to help others. We have lots of life to live and lots of places to visit before we slow down to this option.
I am sure we will give more back to society in the future, in the way of time rather than just money.
Do your friends and family know about your situation? And if so, what’s the response like? How much info do you share with those you know?
No. My family (my brother, sister-in-law and mother-in-law) don’t know our true wealth position.
They know we have investment properties. As for how many, that’s vague. Being humble (plus it’s none of their business) we didn’t promote the fact that we just purchased another house or shares over the years.
So they probably know we are comfortable ( and now I’m not working, they probably think “Jeez, I wonder how damn rich they are”). But we don’t flaunt it. My favorite Levi’s have worn out bottom and are frayed and a few scuffs from age. I’m more comfortable in those than my new Levi’s.
Do I look rich to my family? Well, not in the way I dress. And we don’t drive flashy cars or have expensive stuff. Us blokes are lucky, we can wear shorts and a polo and sneakers and that doesn’t look rich, but bloody comfy.
So they wouldn’t have a clue exactly how much we have. I’ve got to say, I like it that way. The few people that know are just my wife and I, and the kids really don’t know our net worth either.
Lessons and Guidance:
What were the biggest factors that contributed to your success?
Having a loving and supportive wife, without us having our goals aligned we would never have achieved what we have. My mum always said she was proud of me and that also spurred me along to keep it that way.
Plus the benefits of continuous education, strategic risk, discipline, dedication, continuous goal setting/reviewing, staying focused on the big picture and never giving up. In addition, Jim Rohn’s philosophy, listening to his CDs to and from work over the years, along with others like him has also kept me keen to achieve the best life possible for myself and family.
I also had a burning desire to be the best dad and husband I could be. I feel I owe it to my family to continue to do my best and produce the best results for our lives. I never wanted to think I haven’t put in a good days work or the effort that’s required to give this life the best shot, as we only get one chance.
Where do you think most Aussies go wrong with their finances? And how can they begin moving in the right direction?
People buy shit they really don’t need. People also buy items to impress others, i.e. branded items like clothes, jewelry, watches, electrical items, furniture, cars etc.
Trying to keep up with the Jones’s is a sure “fire” way (pardon the pun) to fail in financial success. Discipline to stick to the financial life goals is key.
Oh, another thing! There’s no point being FI if you don’t have your health, so having some health discipline and goals is important, since you may as well be healthy when you get there.
Spend more time on your education than watching crap on TV. Do what will improve your overall life and financial position. Don’t be lazy. Work harder than the other person, get the promotion, get the bigger pay packet and don’t live beyond your means.
Invest wisely. Geez Dave, if I read your website when I was 20 years old I would have cut out so much of the BS out there and had a head start. I would have had low fees, good diversified index funds and no financial planners clipping the ticket for a few of the early years.
Other suggestions are: Find a loving partner who has alignment and is supportive with life goals. If both are going in different directions, i.e. one being a saver and one being a spender it will never work.
Spend less than you earn and invest the rest is my moto. Invest as early as possible with the knowledge from educating oneself with honest content like your website. Lets hope you keep getting that message out there, it can change a life.
One also needs to be able to vet through the BS in the market today and see what’s the real picture and don’t get sucked into what is a sales con.
For our FI-focused readers, any additional tips or things they should consider?
I think staying disciplined to the commitment made to one’s partner and family. And also to do the best they can in this short life we have.
I knew a young couple, and the guy had spent bucket loads on this hot car. When it came time to have the funds for a new born baby and house deposit he was reluctant to sell the car, and even had plans for spending more money on this Holden, which was OK but nothing special. It’s not as if it was a collectors item.
If you commit to your family, you sacrifice your own wants to get the goal. If each party is selfish and had to have stuff (new car, jet ski, more tattoos, latest iPhone etc.) and wouldn’t give up anything to get ahead, then one never moves forward. This couple is still struggling today.
Dave: Thanks very much MND for sharing your story and experience with us.
What you’ve achieved is a testament to self-education, commitment to long term goals, and teamwork.
A few of my favourite parts after hearing MND’s story in person and in this interview:
— He taught himself everything, starting from the bottom and kept improving his skills, knowledge, and earning power.
— He knew when to pull the pin on work and stop chasing for ‘more’.
— He regularly discussed things with his wife, and they worked as a team, each playing an important role in the process.
Our real life Millionaire Next Door and his wife are now reaping the rewards of multiple decades of hard work and consistent effort. They can now enjoy their absolute freedom and a long, fruitful retirement… even though nobody realises they’re any different from the outside!
I hope you enjoyed this interview, and thanks for reading.