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Creating Freedom Through Financial Independence

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What If I Woke Up Broke?

August 8, 2023


Many questions I get from readers angle around central themes.

One of those themes is a general curiosity of whether I’d be able to repeat what I’ve done today.

So, let’s do a little experiment.  We’ll assume I’m starting my journey all over again right now.

Same level of schooling (year 11), same level of qualifications (none), and no savings.  We’ll also assume that Mrs SMA is in the same boat, no fancy qualifications, just some office admin work experience.

How would I deal with housing?  What job would I get?  How would I invest?  Would I work harder or take a cruisier path?  And how frugal would I be?

In this scenario, I’ll walk through exactly how I’d approach all of these things.  And so it’s more complete, I’ll also share how I’d approach it as a single person.

Alright, financial independence from scratch – let’s go!

 

Income

First of all, I need to make some money!  So what am I going to do?

I’d probably go for similar work – warehouse stuff – at least in the beginning.  The work itself was perfectly fine, and the pay can be quite decent for relatively unskilled work.  It’s workplace politics and petty managers that sucked the enjoyment out of it 😉

In the beginning, I’d start doing picking/packing work, preferably afternoon/evening shifts and weekends for higher pay.  I’d then get a forklift ticket and reach truck training (a more capable forklift common in warehousing).  This would cost maybe $500 in total, is pretty simple to complete, and makes me more valuable as a warehouse worker.

These simple things turn a $60,000 day job into one paying $80,000+.  Add some overtime (say 4-8 hours per week) and the current pay for my old job and hours would be about $100,000.

I probably wouldn’t bother studying to try and achieve a higher income.  If my goal is freedom, I can achieve that faster through well-paid work that doesn’t require further schooling.  If I have no wealth, then it’s an emergency – I need money now, not in 3 years!

Mrs SMA would be able to get her current job again in government admin, after some basic admin work history, or starting on a slightly lower level first.  There’s no specialised training required, but the full-time pay is around $85,000.

Expected income: $140,000 after tax ($75k for me, $65k for Mrs SMA)

These are healthy incomes as individuals, and very solid for a household.  The funny thing is, these incomes are relatively normal.   The ABS dataset shows the median hourly rate for full-time employees is $41.50, which translates to annual income of $82,000, roughly what we’d make (excluding overtime etc).  ABS has plenty of ‘average’ figures, but I prefer the more conservative median figures because it avoids the common complaint of “but high earners make all the money so the average is misleading!”

 

What about side hustles?

Honestly, if I’m working overtime, I probably just want to chill and live a healthy life outside of work.  Especially if I’m doing night shifts, which takes its toll on your body and sleep habits.  Besides, a side hustle isn’t going to pay me more per hour than overtime.

The only thing I might do is start a blog.  Now that I know how enjoyable writing is and how well it fits with my personality, that’s definitely a hobby I’d take up.  Of course, if I wanted to desperately grow a personal brand or build a huge following, then video (or at least podcasting) is a smarter path.

I could document the journey from start to finish, which would be pretty cool, and share everything I was learning along the way.  We’ll go ahead and assume this would make zero money for this case study.

The thing with writing or making content is, it has huge upside with no downside except for time spent.  It costs nothing to try.  If you have something to say and you think can add value to other people’s lives, then it’s worth having a go.

 

Housing

This is always pointed out as perhaps the biggest hurdle for financial independence.

What would the strategy be?  Well, fortunately housing costs in Perth are still very affordable for most people, with prices and rents being only slightly higher than 10-15 years ago.

We’d choose an affordable suburb (say 10 minute drive of both jobs), with shops nearby to minimise the need to drive.  A modest home or villa would cost around $500,000 in a decent suburb (we own some like this).  Not the ghetto, but certainly nothing flash either.

Rent or buy?  Given where interest rates are as I write this, I’d probably rent to maximise savings.  Either that, or buy a place and rent out a room to reduce costs.   But that’s probably better suited to later on, in a low/zero tax bracket.

Now yes, doing this affects the capital gains treatment of the home – I get it.  Most people wouldn’t do it for that reason alone.  But at this point, the most important goal is freedom.  I’ll figure out everything else out later.  If there’s some crazy tax burden because the house goes up massively in value, but we wanted to move, I’d consider just keeping it and renting elsewhere in the unlikely event we couldn’t buy a second place.  None of this would be a problem (being flexible is a beautiful thing).

Either way, I think we could keep the cost to around $500 per week.  There are cheaper ways to do it (renting an apartment vs 3 bed home), but let’s go with that.

Already, I can hear the eastern staters losing their minds.  I understand it’s more expensive where you are.  As always, try and look at the decisions and principles rather than the specifics.

Expected cost:  $25,000

 

Living expenses

Our personal spending would be somewhat similar to now, just a bit more strict.

Notice I say “personal spending” as opposed to “cost of living.”  The first implies it’s a choice (accurate), the second implies it’s fixed (wrong).  You could also think of it as “lifestyle spending”, since that would be a more accurate description.  After all, the “cost of living” sounds like that’s what it costs to stay alive, which is hilariously misguided.  The “lifestyle” we choose is the main driver of our annual expenses.

For many years now, our non-housing expenses have been about $20,000 to $25,000 per year on average.  But we’d definitely tighten things up in a broke scenario, so $20,000 is more reasonable.

This, again, might seem insane to people who are accustomed to spending much more.  But that’s the key difference.  You’re just accustomed to it.  Just as we’re accustomed to spending less, all while living a perfectly enjoyable life.

Here’s the driving factor: if I’m in a rat race scenario, saving and investing money looks infinitely more attractive than spending it.

So what does this lifestyle look like?

Eating out on special occasions.  A treat would be coffee at the beach on a day off.  We’d spend plenty of time outside work in the fresh air, walking or bike riding, being among nature and restoring our sanity 😉  In short, lots of low cost enjoyable activities.

Our workouts would be done at home using equipment we’ve bought, or potentially a low cost local gym if we opted to live in an apartment.  Travel would be minimal, probably road trips to nice country areas or the odd special adventure overseas.  We’d own one older car between us.  The other could take public transport, a scooter or a bike to work, given it would be close.

The way I see it, we can ramp up spending and let go a bit later after we’re in a strong position and have some freedom.  Because we’d both likely end up earning some income later on anyway.  And that would essentially be ‘bonus money’ to use as we please.   So this low level of spending wouldn’t be a permanent situation.

Expected cost:  $20,000.

So you know I’m not just making this shit up, see examples of our previous annual spending: 2022, 2021, 2020, 2019

 

Investing strategy

If you’ve followed me for a while, you know I’d do things a little differently next time.  I wouldn’t bother with property, and instead would build a simple share portfolio from the start.  It’s just simpler, easier and I love receiving income from investments rather than paying bills 😂

Just a couple of low cost diversified funds would do the trick.  I’m not supposed to speak about this on this blog but if you’ve read my book, follow my stuff over at Pearler, or you read my recent Livewire interview, you’ll have a rough idea what that might look like.

Would I utilise super?  No, definitely not.  Again, the goal would be freedom ASAP, and that’s not going to happen by stuffing money away in an account I can’t access for decades – tax efficient or not.

As stated, if we’ve bought a house, we’d probably also rent out a room upon retirement when in a low/no tax situation.  This would bring in an additional $1,000 per month, or $12k per year in retirement.  In terms of cashflow, that’s like $300k of shares – an extremely valuable income stream.  We aren’t doing that now because life is pretty damn easy already, but it’s a handy tap that could be turned on in a less cushy scenario.

 

Full FI or semi-retire, and how long would it take?

As enticing as semi-retirement is, I still find complete FI the most appealing option.

But… if I started a side hobby (like writing) which ended up generating income, I would consider semi-retirement more seriously.  That’s because I’d be doing it regardless of hitting FI or not.

Work feels different when you know you don’t have to do it.  And if you actually enjoy it and are happy to spend your time on it after FI, then it makes sense to consider building that into your numbers.

Alright, so working towards full financial independence on the current numbers, we end up with the following.

Wealth needed:  $1.1m.  Example here.

How long to hit FI:  9.5 years.

And just for fun, here’s how long it would take to semi-retire, which I define as reaching 50% of FI.

Wealth needed:  $550k.

How long to semi retire:  5 years.

These numbers are inflation adjusted and assume 5% real returns annually along the way.  This example is also more conservative than it seems.

I’ve assumed the standard 4% rule of thumb here.  But if you’ve read my findings from this post, you’ll remember that due to our high level of flexibility, this is an extremely safe and overcautious approach.  In reality, we would likely use a figure of 5% or more, creating a timeframe to FI of 8 years or less.

Plus, if we then also rented out a room in our house, that’d bring it forward by another couple of years (given the equivalent $300k value).   So, there’s wiggle room in here if it turned out we needed a bit more money than this per year.  Super has also not been included, which is another safety net and backup plan accessible later on.

There’d be genuinely zero fear around this set of numbers.  What looks reckless and ‘on the edge’ to some is ultra cushy and comfortable to others.  It largely depends on your mindset, what you’re accustomed to, and how adaptable you are.

For more thoughts on how to finally overcome the ridiculous fear of running out of money: Your Flex Rate – The Crucial Factor Behind A Successful Early Retirement.  This has actually turned into one of my most popular posts.

 

What makes the difference

Would we be more or less frugal than before?  Probably the same.

Would it be easier today or harder?  In our situation, probably quite similar.

As it turns out, one of the biggest and mind-numbingly obvious secrets to retiring early… is starting early.  If I started at 30, it would’ve taken me until almost 40.

If I had kids, it would’ve taken longer.

If I lived in Sydney, it would’ve taken longer.

If I had to own a house, it would’ve taken longer.

If I started with consumer credit, vehicle or education debt to pay off, it would’ve taken longer.

If I wanted to travel overseas every year, it would’ve taken longer.

If I wanted to eat out every week, it would’ve taken longer.

If I wanted to own a new car, it would’ve taken longer.

If I needed to own the latest gadgets, it would’ve taken longer.

If I had expensive hobbies, it would’ve taken longer.

If I didn’t want to work more hours, it would’ve taken longer.

If I wanted to save tax by utilising super, it would’ve taken longer.

If I wanted more ‘cushion’ in retirement, it would’ve taken longer.

If I… you get the idea.

The important thing to note here is that these are all decisions we can make.  Not advantages some are born with and others aren’t. 

The more of these layers you add, the longer it takes.  Until you turn into the typical self-imposed 40 year career due to all these seemingly small and innocent choices.  I’m not saying any of this is good or bad.  Just pointing out that it’s reality and a set of tradeoffs to accept.

 

On the flipside…

if you work backwards from the standard 40 year career, each decision to prioritise your freedom and time, takes you from 40 years, to 35, to 30, to 20, and so on.  By the way, you can still spend more money as you get richer if you actually want to.  But if you spend all your money now, you’ll never get anywhere.  Simple as that.

And if you’re arguing, “Yeah, but what about quality of life,” you probably need to go back through the content library of this blog and do some serious reading.  I’ve discussed this topic at length through countless posts.

It’s possible you’re stuck in a religious worldview that money spent = quality of life.  But if that were true, everybody around us would be exceedingly, deliriously happy, because we all spend a shitload more than we used to.  No, not on necessities – on a bunch of little lifestyle upgrades, one by one, over the last 100 years.

And again, we’ve gone on another unintended philosophical rant 😅  I could delete it, but let’s just leave it there, because why not?

The truth is, it doesn’t take much to turn my seemingly crazy story into a still-impressive 25 year path to early retirement, starting at 30 and finishing at 55.

So when people can’t fathom how it’s been done at such a young age, it’s a bunch of seemingly small decisions and ‘advantages’ stacked on top of one another.  To be clear, I didn’t make these choices in a state of painful sacrifice.  I either genuinely didn’t care about those things, or nowhere near as much as I cared about FI.

 

How I’d approach FI as a single

Housing: 

I’d rent a room in a house for a while.  Ideally, I’d team up with a friend or two who were on the same path and move in together.  I think that’d be extremely motivating, living together with the same goal, pushing and helping each other along the way.

This would probably cost about $250 per week, or $13k per year.  Maybe less in a larger share house.  After a few years, I’d consider buying my own place and would rent out a room (or two) to subsidise costs.  But only if it didn’t slow down my progress, so it’d depend on interest rates, income, and other stuff at the time.

Income:

This would be the same, or possibly higher.  Without a spouse, it’s much easier to spend more of your free time on side hobbies or working more hours if you like.  We’ll assume the same income, but it’s likely I’d devote more effort here.  I may even consider a low-skilled mining job, learning some online income-generating skills in my spare time, or even consider something in sales (like real estate) where there’s good upside without having to be ‘salesy’.

Personal spending:

As the frugal one in the relationship, I’m confident I could live perfectly well on $15k outside of housing.  Probably less to be honest, but we’ll leave a bit of fat in there for the sake of this example.

Timeframe to FI:

With income of $75k and expenses at $28k, this is a savings rate of 63%.  Using a 5% withdrawal rate, it would take me almost 10 years to reach FI.  Possibly sooner, depending on income upside and housing strategy.

I’d consider semi retiring sooner (say 5-7 years), and maybe doing little part time gigs like nightfill at Coles, labouring, pet sitting, or of course, writing.  I actually like simple physical jobs, and find them quite meditative.  It would be easy to generate income of $20k-$30k with miminal work and essentially cover my entire expenses.  This would mean plenty of spare cash to keep investing and hit full FI in the following 5 years or so.

Other thoughts:

As a single, and with no pets, I would actually consider the whole Geo FIRE thing, moving (or at least travelling) to another country with a lower cost of living (at least for a while out of curiosity).  Well, if I had a job that let me work remotely that is (maybe writing?).

I know absolutely nothing about this area, so if any of you have experience or knowledge here, please share in the comments!  It seems like a promising idea, at least on the surface.

 

A couple of side notes

On naysayers: 

Often the most dismissive people are those who simply embrace the opposite decisions that I have.  So they pass it off as impossible and come up with all sorts of stories why my path is a silly one, or that it’ll somehow all turn to shit.

The naysayer’s comments have nothing to do with me, specifically.  It’s simply their mind’s way of comforting them and giving a sense of reassurance that their path is the ‘right’ one.

On starting again: 

Every now and then I fantasize about starting it all over again and wondering how quickly I could do it.  Then I remember all the work hours involved and how annoyed I was about not being where I wanted to be… and the feeling subsides 😅

But I did actually find the process of learning, saving, investing, optimising and strategising incredibly enjoyable.

 

Final thoughts

In my view, what I’ve laid out here is a fairly tame approach.  But a few people might assume I’ve massaged the numbers and would claim “I bet you wouldn’t do that in real life.”

That’s partly true.  Because in practice I would massage the real-life numbers… in such a way that I was happy with the timeframe to FI.  If my situation suggested it was going to take 15 years, that’s simply not good enough.  Let’s pull this lever, tweak that thing, improve this area, cut the fat here, and let’s get it down to under 10 years.

Rightly or wrongly, I value financial independence higher than ‘enjoyment’.  I probably even value this freedom higher than my own happiness, if I’m being perfectly honest.  Perhaps a more accurate statement is that I don’t feel happy unless I feel free – the two feelings are inseparable in my mind.

That’s not to say others should be like this.  It’s just understanding myself and what my priorities are.  The thought process is simply this: I’ll enjoy myself more when I’m no longer broke and on the hamster wheel.

Please remember, whether it’s personal finances, investing, whatever, the principles and mindset is more important than the specifics.  The details and motivations here won’t match your own life, and that’s fine.

Of course, the muppets will say “but it’s more expensive here…I can’t do it… but this… but that… waaah waah.”  The real reason you can’t do it is because you take this defeatist attitude which dooms you from the start.  Being so wrapped in comfort that you can’t make hard tradeoffs is a precisely why you fail.

Why not become someone who’ll do what it takes to reach their goals?  Instead of just hoping it’ll be easy peasy.

Even though the details and environment may change over time, the idea that my general story is not repeatable is silly.  Just because something is rare, doesn’t mean you need all the stars to perfectly align to pull it off.   Indeed, many of you are writing in and telling me how much progress you’ve made in just 3-5 years!

So, keep winning and keep sharing your experience with others.  Because the more examples we have of people with different circumstances reaching FI or semi retiring, the more people who realise it’s possible for them too! 🔥


Thanks for reading! 

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

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!

Mortgage broker: My personal broker of 10 years is More Than Mortgages.  Highly rated and award winning, Deanna and her team been super helpful over the years and can assist you with anything home loan related, including refinancing and debt recycling.

My book: After 5 years and hundreds of articles and podcasts, I decided to distill everything down into an easy to follow book.  Designed as a complete roadmap to achieving financial independence and retiring early in Australia.  Available in paperback, ebook, and audio.

Just so you know, if you do use these resources, this blog may receive a financial benefit at no extra cost to you (thanks in advance).  I only ever recommend things I genuinely believe in.

20 Comments

20 Replies to “What If I Woke Up Broke?”

  1. Great article SMA! I totally agree its doable for most people.

    My wife & I have made tremendous progress since starting to clean up the balance sheet & invest in 2018. Only 6 years later & we are at $950k (this jumps up & down but highest NW was $968k). We have 3 children (all girls 14, 10, 2) who are a major drain on our finances but we are still able to make progress & still travel overseas every year.

    One thing my wife & I are trying to decide on is to buy a house or not & where. If it was just us it wouldn’t be a problem we would just do as you said above but with kids it throws in extra complications around schooling, friends, affordability (bigger house), not wanting strangers living among our kids etc. if we bought we would want to put down a good deposit or just pay cash for it but then we would no longer have the portfolio & would have to start it again which would have been fine if we were younger but now that my wife & I are approaching our 40’s we are getting sick of our employer & dealing with the silly politics etc.

    Decisions have become more complicated as I am very much like you & prefer freedom over things but my wife is a little more materialistic & loves traveling which adds to the expenses. Hopefully we can make a decision soon & we don’t make the wrong move else it will only set us back again after all our hard work lol. Decisions, decisions…

    1. Cheers mate, and I appreciate you sharing your experience and thought process. It’s really quite hard to believe how quickly things can change once you really nail down and focus.

      Yeah it’s a tricky tradeoff. I might have to revisit the rent vs buy topic again as I’ve had a few questions around it recently. I don’t really think there’s a wrong move to be honest, because there are pros and cons on both sides. So whichever one you end up choosing will be the one that ends up with the better balance of tradeoffs (at least it should be lol).

      Is your reason for wanting to pay cash based on current rates? You could always instead pay as little as possible and treat your mortgage like you’re paying rent? Granted it might not be optimal cashflow wise given current rates, but they might come down in the next couple of years and it could help you have (some of) the best of both worlds.

  2. This is a fantastic article Dave. I’ve sent it to all the young adults in my life.

    Geo-arbitrage is awesome. My family member is travelling the world on less than $20Kpa. If I had a do-over I reckon my plan would be to save and invest to $500K, then live the rest of your life travelling the world. Beats buying a house I reckon.

    1. Wow that’s awesome. Where are they heading? And will they be working at all while away?

      And thanks for sharing the post 🙂

  3. We met young blokes in Bali who work in the mines in WA who spend their 2 weeks off in Bali then back to work for 2 weeks. Cheap as chips in Bali and so beautiful. They love the lifestyle and are saving most of their incomes. I was impressed.

    1. Very interesting. So they rent a home there together? That’s an awesome idea, and good to hear they’re making the most of it!

    2. Same Phil, met a couple of guys who work on a back to back roster. Have a house in Bali with thier own rooms, lock the room when at work and the other person is there. Share the cost for a daily housekeeper who also does basics food shopping etc. The housekeepers husband comes once a week to do the gardens
      During covid thier company paid for their accommodation in Australia (hotels on R&R)

  4. Hi Dave,
    Thanks so much for your book and articles like this one. Refreshing and inspiring.

    I was interested in your comment about public speaking. With your wealth of insights I suspect there may be a lucrative path for you in speaking. I have found that the Rostrum club is great for building confidence and self assurance in a supportive atmosphere. There are clubs in WA and even online clubs available (like mine based in Launceston)

    I would love to see you spread your message even more widely.
    Regards
    Rod

    1. Hey Rod, thanks for the comment, and glad you enjoy the content 🙂

      You’re probably right there, I hear speakers can make quite a bit of coin. But I guess the thing is, doing speaking gigs is not something I’m interested in, even if I became good at it. Though becoming a better speaker is just generally a good skill to have, so I will check out that suggestion, thanks!

      In terms of spreading the message, I think the internet wins that award, being able to reach 10k people with a newsletter/article 😉 In person stuff is always good to meet people on the other side of it, so I will continue to do both in person meetups + events like that. As an introvert I think I will always find speaking/social activities tiring, whereas writing is something that energises me, so there’s that aspect of it too.

  5. Hi Dave, great article once again! I’ve nearly finished your book and I have to say it’s reignited my investing spark (I lost it for a while when interest rates went up). Anyway, I was wondering if you could tell me what you’d do in the following hypothetical situation:

    Say you’re in the highest tax bracket and have about quite a lot otshares in your name, 40k of which are in VGAD shares. If you wanted to change that into VGS shares, would you wait for a time when you weren’t earning as much to sell the VGAD to then purchase the VGS? Our hypothetical human is concerned about the tax implications of cashing the VGAD now while they’re still earning a lot.

    1. Hey Francine, thanks for reading!

      Interesting scenario. In that case, I would encourage the person to actually figure out how much tax was going to be payable if the holding was sold. It might not be as much as first assumed. That might help decide whether it’s a big deal or not and whether it seems worth it. Otherwise, there’s I’d probably just keepg it until a more tax efficient time to sell + reinvest came along (either a market fall, or lower tax bracket).

  6. Notice I say “personal spending” as opposed to “cost of living.”  The first implies it’s a choice (accurate), the second implies it’s fixed (wrong).  You could also think of it as “lifestyle spending”, since that would be a more accurate description.  After all, the “cost of living” sounds like that’s what it costs to stay alive, which is hilariously misguided.  The “lifestyle” we choose is the main driver of our annual expenses.

    Channeling your inner MMM. 😋

    Thanks for the required face punch. 🤣

    1. Haha I suppose that does sound like something Mustache would say doesn’t it!

      Anytime mate, you’re welcome 😉

  7. Australia is such an incredible place – to be able to choose to work hard as a forklift driver and retire so quickly while still having a very comfortable lifestyle. Bloody amazing!

    Dave, I’m curious if you’d consider jobs using your increasingly impressive writing skills if you had to start over? Say if you could start in an office role earning $80k and progress to $150-200k in around five years by taking on more management responsibility (and stress). Would it be worth it to you or is driving a forklift better because you can switch off after work more easily, etc?

    1. Exactly Paul, it’s really incredible.

      Good question! I would definitely consider writing now that I know how enjoyable it is. But I didn’t want to use that as an example here and ‘cheat’ in a way. I’d be interested in testing writing in my spare time, but as for a management role, that’s not interesting at all. It would have to be some sort of well paid columnist to make it worthwhile on a per-hour basis, which is probably hard to get without having experience/proof you can do it. Being an independent writer would be more doable, so maybe something like a newsletter with a paid option would work.

      Having said that, I think a full-time office role would bore me and I like doing my own thing. So I couldn’t stomach writing about things I wasn’t genuinely interested it just because that’s what topic the boss said needed to be covered.

      Short answer: I’d consider it, but I’m not sure how feasible it would be other than as a scalable side hustle.

  8. Hey Dave, really enjoyed this article as a 26 year old on their journey to FIRE. The circumstances you’ve describe are actually pretty similar to mine, I’m working a warehouse job too, doing the Arvos and weekends for the extra money.

    I Have been living a frugal lifestyle and investing majority of my cash in an index fund strategy but I’m considering getting into real estate investing as a way to turbocharge my journey.

    Interested to know why you’d opt against the real estate game if you had your time again. Have you written an article on this?

    I agree completely that shares are so easy and simple but I also feel like I’m missing out on the leverage aspect that property offers which could potentially help me reach my goal sooner…

    Would also be keen to know what country/area you’d be interested in if you went down the geo fire path? I think it’s a fascinating concept and wonder if it’s something I’d consider down the road.

    Cheers!

    1. Hey Joel, nice to hear from a fellow warehouser 🙂

      Property can definitely work very well, but depending on the timeframe and expenses, it may or may not work out better overall. I wrote a bit about it here: https://strongmoneyaustralia.com/our-adventures-with-leveraged-property/

      Short answer: upfront costs are huge, takes couple years to breakeven, then ongoing cashflow losses add to that, then selling at the end (CGT + agent’s fees) to put back into shares for decent income. All dilute the gains created from leveraged property. Not at all saying it wouldn’t work, but depends on future growth of a specific property, that asset’s expenses and timeframe. Not the huge payoff it’s made out to be in many cases.

  9. Dave, I recently found your site. Lots of useful information. Have been a long time saver but only recently came across FIRE. Just want to say that the numbers you gave here ring true in our case too. As DINKs living in an expensive east cost capital, our living costs are 20K – excluding housing (rent). Again choices matter. We keep a one small car but one of us WFH and the other walks to work so this saves a bit on transport. We have one interstate trip per year to visit family. We eat well at home (no skimping on home cooked food!). We buy what we need in terms of cloths and update phones/technology only when it becomes unserviceable. Having said that I don’t think we go without. Life is certainly comfortable. Granted the lifestyle choices we make are probably not for everyone. We do pay 30K rent for a small unit in an expensive location due to work. But if we moved back to a small IP in a cheaper city then based on the running costs it would work out at about 10k to 12k for housing so say 35K in round figures per year all included. But as you say if one had expensive habits, multiple cars, long commutes, went to restaurants each week and travelled OS each year that would go up somewhat. Thanks for the articles, keep the coming.

    1. Hey Oz FI, welcome and thanks for sharing your perspective.

      Great to hear the content is resonating. Sounds like you’ve got a great setup going there and living a nice optimised lifestyle. I especially like to hear that you’re doing it on the east coast, since the pushback is often pretty big about housing costs being a dealbreaker. As you know, it can be, but it doesn’t have to be. Keep up the good work and hope to see you round here again 🙂

      1. Dave, thanks, I do think the housing cost is the big challenge in the eastern capitals. We pay 30K PA rent for a very small but functional unit. We were paying 36K but moved to save some money at the tail end of the pandemic when an opportunity presented. But for folks with a kiddo or two, they would likely need to be further from work if they tried get housing for that same price given the extra needed bedrooms. Then they would probably need to add transport costs too. We also don’t commute on weekdays so we save there as well. I dare say your dollar goes further in Perth and the other non-east coast capitals. But it is still doable in the east if the circumstances align and you make choices. We plan to move to a cheaper city once work is done.

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