“Semi-Retiring In My Mid 30s” | Strong Money Stories #3

Welcome to a new instalment of this new series, Strong Money Stories.

These are real members of the community, sharing how they’re implementing all the stuff we talk about here.

Because that’s what it’s all about!  While I enjoy writing, I really want to see strong financial outcomes – actions taken, wealth built, and freedom created.

Plus, the more varied examples we have of regular folks working towards financial independence, the less excuses people have for not joining us 😉

If you’d like to share your journey so far (anonymously or not), reach out via my contact page.

This Strong Money Story is from Lizzie, who’s changed her location, career, lifestyle, and investment approach and is now in a much happier position overall.

Can you share a bit about yourself?

I’m Lizzie, a 33 year old Assistant Winemaker who recently moved to the Coonawarra region of South Australia.

Previously, I’d spent 12 years in Construction as an Estimator (Quantity Surveyor).  I’m about to start a new job as the wine industry tends to be seasonal work and you’re constantly applying for contracts.  But I enjoy taking the amount of time I want to in between jobs.

I met my partner Aaron last year, and although in a different industry, he’s also been taking on contract work over the past couple of years.

When did you discover the idea of financial independence?

Like most people, my journey started by reading the Barefoot Investor.

I was recovering from major surgery when my fiancé at the time decided to end the relationship.

Even though I had only 62% LVR in my mortgage and a small amount of consumer debt, I was worried about having the cash to coast through a separation while allowing myself to recover without going back to full time work.

I was also less than a year into a career change, so was earning less than I was used to.  From there, my research snowballed and I discovered the Aussie FIRE ebook, where I saw people were planning to work the way I planned to, but in a sustainable way and it was a choice not a chore.

Dave: For those unaware, the Aussie FIRE ebook was a collab years ago between a bunch of Aussie bloggers and Pearler.  It was then turned into an audio version, and now it’s the podcast I co-host.  

Did you latch on to the idea of FI straight away, or did it take a while for you to believe it was possible?

I had often wondered if there was a way you could put money into a fund that worked like superannuation, but without your money being locked up until your 60s.

I have bought and sold 3 houses (after renovating) and one of them I kept as an investment for nearly a decade.  Just because I thought that’s how I could get ahead.

I didn’t know what that really meant or looked like.  When I read the Aussie FIRE ebook, I saw how ETFs worked and buying shares for their ability to produce income, instead of day trading and losing money in fees and CGT.

I realized ETFs were the investment option I was looking for.  My construction experience left me with a lot of business finance knowledge.  But its so common for people who understand business finance to have little clue of their personal finances.

From there I set about upping my understanding of personal finance so that I could see if buying shares and ETFs for passive income was the solution I was looking for.

So I initially thought it was possible but I wanted to educate myself first before jumping in.

What is your goal (FI, semi-retire, etc) and how far along are you?

My current plan is to semi FI within the next few years.

Technically, I could take two work contracts a year now (about 6 months worth of work) and live comfortably, but it would be a stretch and doesn’t account for emergencies or the things I want to do.

What your ideal lifestyle looks like? What does freedom mean to you?

Ideally, I’d take two contracts a year, one in the northern hemisphere and one in the southern hemisphere.

The vintage season is the busiest season where the most money is made.  Plus you meet locals and travelers alike, who are brimming with travel suggestions.

I want to complete a vintage and take that money to travel to the places I’ve added to my list during my work contract.  I should have the kind of passive income in the background that’ll allow me to pick and choose the work and take breaks as needed.

By the time I can’t physically do the work anymore, I should be able to do a more analytical job, part-time.  To me, the definition of freedom is being able to choose; I can choose the work, choose where I live, choose how much I travel and choose when to stop.

What excites you most about the path you’re on?

I grew up in a very controlling environment, and the freedom I discovered from fleeing abuse was incredible.

But I soon realized I still live in a world where consumerism and brainwashing are all-consuming, and I associate those as a softcore version of what I grew up in.

The reality is we don’t need most of the shit we’re told we need.  And the ability to use my money to produce passive income instead of feeding the consumer cycle excites me so much because I know I’m breaking another cycle of abuse that most of society is stuck in.

I hope I can influence anyone around me to do the same.

Can you share some of your income/expense numbers?

My income fluctuates, but this financial year I will have made only $38,000, mainly due to taking extended leave last year.

Generally, I’ve earned  around $58,000 per year, working maybe 10 months of the year.  I’ll be on track to earn around $20,000 in passive income next financial year, so the compounding is really about to take off.

My expenses are much lower these days, thanks to cheaper housing, transport costs and food from living in a more rural location.  My goal is to sit at around $45,000 per year in expenses while I live this lifestyle.

I’m still working out how that number will change over the years.

What’s your wealth goal/FI number, and has this changed over the years?

Like most people, I started with the $1 million number because that’s the number that keeps coming up.

It keeps changing, especially with the cost of living and I’m sure the way I want to live will keep changing too.  At the moment, I’m aiming to have around $650,000 in passive income producing assets excluding super.

This number would allow me to live the life I want, while also producing enough income to keep building the portfolio so I can gradually work less if I want to.

What does your investment strategy look like and why?

I sold my investment property a couple of years ago as it was always a money pit.

Once that weight was lifted off my shoulders, I began toying with the idea of moving to a less expensive area and possibly renting, since I had seen first hand the costs involved in owning and properly maintaining a home.

Late last year I sold my home that was sitting at 32% LVR by this stage, and moved nearly 5 hours away from a major city.

I put the cash from the sale of the home into a couple of high interest savings accounts, so that I could drip feed into the market and buy shares and ETFs for my own peace of mind.

I have also been open to buying a home again, but so far this hasn’t been desirable.  At this stage I am happy to rent and live a more nomadic lifestyle in the future.

How will you live off your portfolio?  And do you have a passive income target?

The idea is to live off of income produced through the work I choose to do and top it up with dividends.

I plan to generally have enough dividends so I can reinvest and review whether I decide to stop working.  I would like a passive income of around $30,000 per year to be able to justify taking shorter contracts if I want to.

After you reach your chosen goal, what will you do after that? Any plans?

I’ll most probably take about two months in the pacific islands to hike, read, dive and knit.

But there will probably be a job in the northern hemisphere lined up after that.

Once that job is complete, I’ll have plenty of ideas for local travel to fill in the next couple of months, then rinse and repeat.

Is there anything about your situation you think is different from others in the FI community?

I think the desire for financial education and independence is a motivator for most people on the path to FIRE.

But I think finding a life that has meaning for myself has been a big motivator, and I’ve been finding that meaning as part of my journey.

I think a lot of people feel they need to save furiously so that they have the freedom to find their meaning after FIRE.  Being open to finding that meaning along the journey is important, because it allows you to plan accordingly and that’s going to be a much better motivator.

Has anything about the journey been easier or harder than you expected? Any surprises so far?

I think the availability of good information has been easy to find.  Along with content that shows like-mindedness, not just similar investing styles.

That comes with its fair share of scamming adverts on social media though.  The ability to find like minded people in day to day life has been very difficult on the other hand.

I think so many people are content with the grind and knowing their insurances are all paid if something goes wrong that they don’t have the desire to seek independence and open up the world of possibilities.

My biggest surprise was meeting a partner who wanted to learn about FIRE once I gave him a run down of the longevity of my plan.  Considering the difficulty in meeting likeminded people I was very lucky to find one that wanted to come on my adventure.

What actions that have made the biggest difference so far in your financial life?

1- Selling my investment property.

Even if I paid it off one day, it was never going to produce the kind of passive income shares do, and it comes with so much work.

It’s also too much responsibility on my mind to be the caretaker of someone else’s housing.  It isn’t just a financial transaction to me.

2- Changing careers. 

This seems like a weird one when I explain it, as there isn’t as much money in wine as there is in construction.

However, the satisfaction and enjoyment I get from my job has made a difference to my physical and mental health to the extent that I practice more mindful spending.

I don’t feel the need to take the luxurious breaks and treat myself all the time the same way I did when I was in a job where I earned more money.  The result has actually been more disposable income for investing, even though I work a job that pays less.

2- Living a pared back lifestyle. 

I loved my previous home in the city, and got to work in the countryside 1 hour away.  But then when do you have time to enjoy the home and resources a city provides?

Now if I want the city life, I can plan a long weekend away and drive 5 minutes to work each day.  This means I enjoy more of my time as my own and waste less money and resources in day to day travel.

Which financial or life lessons have proven the most valuable to you?

Understanding how what I am doing works.  So many things are done just because it is the done thing.

I had an investment property that turned into a decade-long money pit just because I thought that’s how you got ahead.  If you understand why something is done you can decide if that actually works for you.

Believing in something is about seeing the proof.  If you decide to go down any kind of decision-making path without proving to yourself how to make it happen, it’s just blindness.

If you could go back, would you do anything differently?

I wouldn’t have kept my first home as an investment property, and I would have looked at investing in shares much earlier.

Where do you think most Aussies go wrong with their finances? And how can they begin moving in the right direction?

I think the schooling system fails us from the start, with the lack of financial education.

Most of our education comes from advertising, which infuriates me because it’s about improving someone else’s wealth and never the person its directed at.

We’re sold crap on payment plans, sold credit cards, sold the dream of a home because then the bank can make you pay for it twice.

I think most Aussies are a victim of this system.  By questioning how they want to live their life, maybe they make some decisions that buck against the tide and enjoy a less stressful lifestyle.

Any other thoughts, lessons, experiences you want to share with readers?

A lot of this comes down to the lack of confidence we all have in our ability to write our own life.

Just remember that the people who sell us all the stuff that keep us trapped in the spending cycle are making sure we feel less confident with every advertisement.

Personally, I think those people have way more confidence than they should. Always be cautious and do your own research to see what’s best for you, but be wary of people who want to make a dollar from people who lack confidence.

Dave’s Takeaways…

Big thanks to Lizzie for sharing her story with us!

A few things that stood out to me here:

1- Her change of career had an interesting impact.

Not only is it making her current life more enjoyable, but it also reduced her expenses and the desire to spend.  It sounds like she’s genuinely found a line of work she enjoys and plans to keep at it for the foreseeable future.  That’s fantastic and it’s something I hope more people are able to find.

2- Questioning home ownership and property investment. 

It’s good to see people at least questioning the standard way of doing things – that’s where the power is.  Lizzie realised that rental properties are sometimes more headache than they’re worth and she’d rather not even own a home – instead having her money invested in a low-fuss share portfolio.

3- It’s hard to ignore the impact of moving out of the city. 

Switching to a lower paying job is one thing.  But for most city-dwellers, that’s only going to make things more difficult.  Moving to a lower cost location can do wonders for your finances, and your lifestyle too.  It just depends what’s keeping you in the city.

4- I like the anti-consumer mindset. 

Lizzie points out how we’re essentially being manipulated out of our money.  Any time you see a piece of marketing or advertising, that’s exactly what you should think: “I’m being manipulated here.”  Most people start out assuming they need everything they’re told, or that life will be better with XYZ.  The truth is, we need NONE of it.  Sure, we can indulge and enjoy various things, but we truly don’t need all that much to live well.

Overall…

Lizzie’s experience shows how intentional choices make all the difference.  Whether it’s related to your spending, career, or where you live.

This case study highlights how being open to change can radically change not only your outcomes in life, but how fulfilling you find the journey.

Do you have any questions for Lizzie?  Share them in the comments and with any luck, she might pop by and reply 🙂

Thanks for reading! 

Here are some resources you may find useful on your wealth building journey:

My book: After 5 years and hundreds of articles and podcasts, I distilled everything down into an easy to follow book. A complete roadmap to achieving financial independence and retiring early in Australia. Audiobook available on Spotify and Audible.

Mortgage broker: My personal broker for more than ten years is More Than Mortgages. If you’d like help refinancing or getting the right loan for your needs, get in touch with MTM. They have fantastic reviews for a reason.

Sharesight: A great portfolio tracking tool for share investors, and free for up to 10 holdings.  It tracks all dividends, franking credits and capital gains, which is incredibly helpful at tax time.  Saves me a lot of time and headache!

Just so you know, if you choose to use these resources, this blog may receive a financial benefit at no extra cost to you.  Thanks in advance if you do.  And to be clear, I only ever recommend things I use myself and genuinely believe in.