Aussie Firebug: Hi guys welcome to another episode of the Aussie Firebug podcast, the financial independence podcast for Australians where the clever people who have already reached or on their way to financial independence. Today’s guest is an attractive schoolteacher who learnt the value of the dollar at her first job at Domino’s wobble boarding on the highway for five dollars an hour. Christina’s interests are cats, Netflix and anything U.S related but most importantly and the reason she’s on the show Chrissie is the better half of the Firebug couple. Welcome to the podcast Mrs. Firebug.

Mrs. Firebug: Thank you. I like the introduction.

Aussie Firebug: What? Did I get anything wrong?

Mrs. Firebug: No. It’s pretty good actually.

Aussie Firebug: The Domino’s wobble boarding is quite a funny story. Do you just want to like quickly go the background behind that?

Mrs. Firebug: Sure. So basically, I think you know it, and there was an ad in the paper for a new Pizza shop opening up. So me and my friends we went to the job and all of us got it. It didn’t say that we had to wobble board on the side of the highway and so I didn’t really know about that and then…

Aussie Firebug: So we’re talking wobble boarding is, it’s literally like we’re talking someone holding the sign, you know, like two pizzas for, ten bucks mobile boarding like.

Mrs. Firebug: Shaking.

Aussie Firebug: Shaking a board on the highway.

Mrs. Firebug: Yeah. So I had to basically do that and then one day, I think my friend was doing it and a car like got distracted might crash up the back of like another car. So they cut it. So yeah it was pretty happy when that happened.

Aussie Firebug: Because you were water boarding really and they’d get distracted, yeah? So why don’t you just tell the audience a little bit, a little bit about yourself. Just anything that you want you want to mention.

Mrs. Firebug: Netflix is correct. I love to just hang out. I’m a teacher so like by the end of the day I’m pretty much like no one talk to me anymore. Poor Matt has to go silent for a couple of hours.

Aussie Firebug: just silent mode.

Mrs. Firebug: I know. I’m just simply close to my family. I like to go to the movies and shopping, such kind of stuff.

Aussie Firebug: Just a normal country girl.

Mrs. Firebug: Country girl. Chilled life.

Aussie Firebug: So we’ll get into the proper questions now. So when did you first notice I was a bit weird about money. Well, first of all let’s just say so we’ve been together for what five and half years now?

Mrs. Firebug: Six and a half.

Aussie Firebug: Edit that out, six and a half years. Time flies when you’re having fun. So we’ve together for a while now and anyone else that’s in the fire realm, for me anyway, at the very start you sort of, you know, don’t hide it. It’s like you do things that you probably stop doing six months into it. So when did you first notice that this guy is a bit of a weirdo?

Mrs. Firebug: Probably on our first date.

Aussie Firebug: Oh no.

Mrs. Firebug: You set yourself up the big plan.

Aussie Firebug: I did set myself up, I’ve never lived this story down.

Mrs. Firebug: So after a few disco passes, Matt decided to ask me out on a date. So I get a message saying do you want to go bowling and I was thinking I hate bowling but I feel bad so alright let’s do it. So he picked me up in his… What was it called?

Aussie Firebug: 1995 ford falcon.

Mrs. Firebug: Wagon, family car and off we went to bowling. We got there and I had not been like on an actual proper date before I was only 18. So I was a bit of a newb.

Aussie Firebug: She’s 18 and she’s never been on a date thought she had leprosy or something. I was like what how’d she not have a boyfriend before.

Mrs. Firebug: I’m just quiet girl, anyway so we got to the bowling and we’re standing there and getting our shoes and what not and the lady says the price and I was it off better offer to pay you know. I get out my twenty dollars. I was like oh yeah here you go and Matt goes thank you takes it and pays for it. So I ended up paying for our bowling date.

Aussie Firebug: You didn’t pay for it, you paid half.

Mrs. Firebug: Yeah half but still it’s pretty embarrassing for you.

Aussie Firebug: Alright. Yeah.

Mrs. Firebug: So since then I remember like going home being like, ‘I had to pay’ and my sister was horrified. That was definitely the first indication but I don’t know just little things.

Aussie Firebug: I’ve never lived that down as well.

Mrs. Firebug: Yeah, I mean that’s being…

Aussie Firebug: Like that has been the story that gets told every single time our anniversary’s brought up or you know something. With me being a tight-ass, I definitely dropped the ball. So everyone’s listening like you hundred percent should pay for the first date even if she offers you one hundred percent pay, I stuffed up. I’ve been paying for a lot of things since then I can never, that’s like you can never repair that one.

Mrs. Firebug: Yeah, you can’t redo that.

Aussie Firebug: It doesn’t matter if you’re on the fire journey or not, you pay for the first date. You only pay for the first couple dates. That’s definitely my stuff up. But other than that was there like…

Mrs. Firebug: I feel like everyone wasn’t like tight ass back then so I don’t think it was so much that you were really over the top with it or anything like that. Not that I notice more probably when you got your full-time job.

Aussie Firebug: What happened when I got my full-time job?

Mrs. Firebug: Things started to… We didn’t go out as much anymore.

Aussie Firebug: I hadn’t really discovered fire for like the first year of my working full time. So I saved heaps of money that year.

Mrs. Firebug: Oh yeah maybe that first year.

Aussie Firebug: Compared to how much we spend out but…

Mrs. Firebug: Yeah but like definitely. We did go out together for a while then too we didn’t go out as much anymore and go to dinner and dates and stuff, but we had our own money. So I don’t know it didn’t really affect me per say that much.

Aussie Firebug: So when did you first hear about the whole financial independence concept? It would have been from me.

Mrs. Firebug: Oh 100%.

Aussie Firebug: Like can you remember how long?

Mrs. Firebug: How long? I don’t know, since you started reading all those books I guess which one was that probably like three years ago.

Aussie Firebug: Yeah three and a half years ago

Mrs. Firebug: Probably like you read like heaps and heaps of books. I remember being right into it. That’s when i first heard about it. Initial thoughts were great let’s do this. I don’t want to work for long.

Aussie Firebug: Did you have any doubts because I thought that you had doubts and I’m always telling you about this epic thing that people were doing, you know, all over the world I thought like she doesn’t really believe it 100% or…

Mrs. Firebug: Yeah. I think it was more than like you were so into it and I was just kind of, oh yeah sounds good.

Aussie Firebug: Yeah, you like the not working bit.

Mrs. Firebug: Yeah. That really got me good and I think that just because I hadn’t heard about like all my friends and family like worked right up until retirement age, like my parents are still working. So I just hadn’t heard of it before so I think I was like, oh surely it can’t be that good if no one else is doing it. But now that we’ve kind of dealt further into it I know a lot more and I’m all about it.

Aussie Firebug: And was there a moment where you actually felt like this is a real thing, like we could get there?

Mrs. Firebug: Probably not a specific like moment but just the further you kind of got into it and with your investing in your properties and then going into like the shares and stuff and I started to think, this surely is going to eventually work out for us.

Aussie Firebug: What’s been the hardest thing to adjust to once you we were trying to get to financial independence?

Mrs. Firebug: Probably just like having to make those sacrifices. Obviously, we wanted to travel overseas into a big Europe trip. So probably having to like wait for that because it’s been I think we originally wanted to do it like

Aussie Firebug: No.

Mrs. Firebug: Not that one?

Aussie Firebug: Last year

Mrs. Firebug: America

Aussie Firebug: Yeah? You?

Mrs. Firebug: Know that’s when we first wanted to do it.

Aussie Firebug: What?

Mrs. Firebug: Like that’s when we had the idea and like knowing back in like 2013 or something that it was going to be three or four years away with hard work and having to be like patient about it and that’s why I kind of did my own little trip to kind of tide me over.

Aussie Firebug: So we still want to do a Europe trip. So Europe trip is on the cards. Like a big Europe trip but we had it planned originally for 2016 but I sort of…

Mrs. Firebug: You pushed it back?

Aussie Firebug: I pushed it back at 2014. In 2014 I was in a really good job relatively speaking and I didn’t want to leave it in two years because I thought and I’ve just discovered this whole financial independence and I was like, oh my god, like the 20 in your 20s you have to earn like the 20s is the golden time to get ahead in life. I was still live in a home back then I was like we need to save you know as much money as we can because if we don’t save in our 20s and 30s it’s so much harder and at that’s the time of your life. So I was like look, and I remember breaking it to you like it was a big thing.

Mrs. Firebug: Yeah.

Aussie Firebug: I don’t want to quit my job in 2000 and, I think it was 2016. I think we were planning for three years.

Mrs. Firebug: Yeah.

Aussie Firebug: And you got really upset because?

Mrs. Firebug: Yeah I was. I didn’t like my job.

Aussie Firebug: Yeah. Chrisy was first year teaching and she had a rough first year.

Mrs. Firebug: Yeah. So I think that was her escape. She knew that she had to get to that.

Aussie Firebug: I only have to get two more years of teaching and then we could go on a Europe trip, but then I broke the bomb that was that we were not going to the Euro trip anymore. We’re pushing it back and you got really upset. But you kept America.

Mrs. Firebug: Yeah then I did get America for myself but yeah I guess. What was the question?

Aussie Firebug: Yeah it was the hardest thing and you said sacrifice.

Mrs. Firebug: Yeah. I did say sacrifice. Waiting on this trip like that’s been a big sacrifice.

Aussie Firebug: That’s definitely being a big sacrifice.

Mrs. Firebug: Yeah.

Aussie Firebug: Because we’ve been talking about this trip for years and when I said like, I’m going to push it back like two or three years you were devastated.

Mrs. Firebug: Yeah I was like what!

Aussie Firebug: All our friends were going on euro trips and stuff. So that was rough and plus you wouldn’t like any jobs. But we don’t sacrifice like…

Mrs. Firebug: Not really.

Aussie Firebug: Like we leave a great life.

Mrs. Firebug: I think like for me as well I’m not one of those people that just spend spend spend anyway.

Aussie Firebug: You were pretty good but not me good. But you were pretty frugal.

Mrs. Firebug: You would to and send nothing. So I have to live. A girl’s got to live.

Aussie Firebug: Oh yeah, but I think we have a fantastic lifestyle.

Mrs. Firebug: Yeah, I think its fine. I got a job straight away when I was like in year nine. So from then I like save save save, anyway, I had that.

Aussie Firebug: I think you save more money you know than what I save but you go to your parents

Mrs. Firebug: Hey. Shhhhh.

Aussie Firebug: She got a car so that was the reason she saved more than I did. I’d like to buy car but she’s a rich girl but that was a rich girl thing to get done a car.

Mrs. Firebug: I needed it. I was going to university. I had to drive.

Aussie Firebug: Yeah, keep telling yourself that. We had a look at the our finances the other day and I think we’re on track to be under 50k, well under 50k. I think was we’re going to end up around about 45 or something.

Mrs. Firebug: Yeah

Aussie Firebug: And that is you know you’ve been up…

Mrs. Firebug: Yeah

Aussie Firebug: That includes multiple times going to queens.

Mrs. Firebug: Oh yeah.

Aussie Firebug: In that 40-46 k whatever it’s going to be.

Mrs. Firebug: It’ll be three trips.

Aussie Firebug: That’s three trips to Queensland that’s you know weddings that’s you know I think we’ve, we’ve had a very expensive financial year.

Mrs. Firebug: Yeah.

Aussie Firebug: I know we haven’t like it’s not being outrageous but I could definitely live like this forever.

Mrs. Firebug: Oh, yeah.

Aussie Firebug: We go way out, would be now we go to the pub and everything like that so our lifestyles fantastic, I think you know correct me if I’m wrong so I don’t think we sacrificed too much. The euro trip was probably the biggest sacrifice that we ever made and I think that’s what will get us ahead or what has gotten us ahead more than anything

Mrs. Firebug: Yeah, it was definitely the right thing to do it was just hard to say at the time.

Aussie Firebug: Absolutely. I went so far. I was pushing it back when I said you know in 2013 and I’m like we’re not going to go to 2018 {13:00}

Mrs. Firebug: That’s like coming in. Hey, were you…

Aussie Firebug: You weren’t too impressed.

Mrs. Firebug: I wasn’t.

Aussie Firebug: What advice would you give others to try to get their partner on board with financial independence who are into it as much as they are?

Mrs. Firebug: Um.

Aussie Firebug: So you would have been in that position?

Mrs. Firebug: Yeah. I was pretty much in that position just because I didn’t know about it and you’re very passionate about it. I’m like go get that into it.

Aussie Firebug: This is probably the number one question I get. So people have emailed me before like comments about an episode like this you know interviewing you because that’s probably the, and you see it on forms all the time as well but where someone’s right into it and they might be unlucky where they have someone that likes spindle you know,

Mrs. Firebug: Yeah that’s

Aussie Firebug: Whereas we never, I never had that problem with you but I can’t totally understand you know, and they had like successful partners, you know, people that are really career orientated. So I like to work hard but then I like to play hard. I’ve spent a lot of money like how I’d be so hard what like what .

Mrs. Firebug: Yeah.

Aussie Firebug: What’s the best thing I’ve done to sort of…?

Mrs. Firebug: Steer me.

Aussie Firebug: Steer you in that direction without being like forceful?

Mrs. Firebug: Too much.

Aussie Firebug: Yeah.

Mrs. Firebug: Yeah. I think that’s a good like point try not to like ram it down your partner’s throat even though you’re like so passionate about it but like easing them into it maybe a little bit also I think like trying to like help them see the bigger picture is important as well even though, you know, it’s hard to think. I’ll you know 10 years down the track will be financially independent and might make sacrifices now trying to maybe get them to see that would be a good idea because then they’ll get on board hopefully. Other advice um, I don’t know just.

Aussie Firebug: Well here’s one for you so that’s like the positives of that idea.

Mrs. Firebug: Okay.

Aussie Firebug: Was there anything that I didn’t go over that well with you and that made you, you know, push further away from you know wanting to go down this path with me?

Mrs. Firebug: I mean the only thing I could really think of is the pushing back of the trip maybe not trying to like, like doing little things like maybe going out to dinner and stuff like that not cutting everything out like you’ve got to make some compromises. I think that’s important like we still go out with our friends. Not maybe every week but you know every couple of weeks and we might go the movies and things like that. I think it’s just maybe compromising with your partner and start small like try and cut back little bits at a time and then slowly hopefully they’ll come on board especially if they are like someone that likes to spend a lot but…

Aussie Firebug: Was reviewing the spendings weekly?

Mrs. Firebug: I was good yeah well I think it is good because I, I think you try to make me do that myself before we kind of combine our finances and I went on there once I was like okay and then i got like over it but we have like a ‘well i kind of don’t love them all the time but a weekly you like capture.

Aussie Firebug: We have weekly catch up on Sunday not when Mrs. firebug is real meet up mode because she’s got the whole week of work coming up. She is the worst time to do it but that’s just the time I do it, the laptop out and we’re sitting around said okay sweetie we’re going over the transaction for the week sit down, let’s try to remember everything we spent.

Mrs. Firebug: And I’m like terrible my memory I don’t know what that is and I eventually figure it out but yeah I think that is good because I do go oops I probably should you know be a bit more careful or what it just like it’s good to see.

Aussie Firebug: I think I always tell people that is my number one people. I feel or say like how do I save money I always tell them track your spending that is the biggest I’ve not even it was a opener for me when I first did and I thought I was like had no leaks in my budget was everything was white and then you track your spending for a couple months oh my god what is this, what is that. So track and we use pocketbook.

Mrs. Firebug: Yeah.

Aussie Firebug: And probably another thing that I get asked a lot as well is how to us that we had we set up our finances together. so we don’t have a joint bank account we don’t, we keep the our bank accounts separate because there’s no really need to have a joint bank account or not at the moment there isn’t. so I have money in my account Mrs. Firebug has money in her account and I look after some bills, she looks after others and we’ve come to just that understanding of what hers is mine and what what’s mine is hers. so I usually pay a lot of things out of my account and then who’s whom her income comes into piles up and when you’ve got pocket book if you haven’t used pocket book before I’ll put it in the show notes it’s a really good tool. You can link multiple bank accounts to the one accounting pocketbook so i can log in and I can see how much money Chrissie’s got in her account and i can tell much I’ve got in my account across the multiple accounts that i have and I can say you know well you’re you know you’re nearly at five thousand dollars savings that’s really good can you transfer me two and a half and I’ll use what’s in mine and we’ll buy 5,000 bucks of ETS or something like that so that’s how we’ve worked at the last year so I think that separation is a good thing and yeah I don’t see a real reason why you have to have joint accounts. That’s a bit of an old-school method I think having it in with this pocketbook you know you’ve got the app install in your home yet you can see you know what’s in mine and I just don’t see a reason to join accounts yet. So that’s how we do it and it’s really good come Sunday night because we can go through all the transactions that have happened across you know multiple cards; credit cards, debit cards whatever we’ve used to spend money and we can categorize it and we can put a little note to it and then we, yeah we review it you know. I usually, we usually have a budget of every month and one week got we’re going near it will be like okay we really need like tight me about the last couple of days but it’s been pretty good like I think that’s a good way to work it.

Mrs. Firebug: Yeah think it’s a good tool.

Aussie Firebug: And this we only, we only joined finances last year in which you might know you would have seen the post I’ll link it in the show notes but I’m really excited to when the end of financial year comes to do a new post and just to see you know what we spent for the whole entire financial year on you know where our money went basically. I think it will be an eye-opener again and we can address it when we go over it. Alright. What’s your dream goal once we reach financial independence? What do you picture your life being like in our mid to late 30s and beyond?

Mrs. Firebug: Well, definitely not working but so easy girl. Definitely like even going down to like two or three days a week in when we hit our thirties I guess would be great and then eventually plays that out.

Aussie Firebug: I think you’ll still work.

Mrs. Firebug: I don’t know.

Aussie Firebug: I think you’ll pick up something else.

Mrs. Firebug: Maybe I don’t know I think I cope well with like three days a week.

Aussie Firebug: I would totally, I would cope.

Mrs. Firebug: That’s a dream.

Aussie Firebug: So, well with three days a week that I could yes I like my job.

Mrs. Firebug: Yeah you like enjoy it.

Aussie Firebug: If I work three days a week right now oh my god I could do that I feel like I could do that for everyone.

Mrs. Firebug: Yeah, I think that is like sustainable whereas teaching full time as well and you’re worth ASG not as much as.

Aussie Firebug: Yeah, teaching the teaching hard shout out to.

Mrs. Firebug: I mean do you get a holiday that’s good shout out to all the teachers hard work for me financial independence. I really like the idea of picking how many days a week to work.

Aussie Firebug: And I think that’s a very freedom.

Mrs. Firebug: To you probably would enjoy work a lot more seem like I’m doing it because I want to know…

Aussie Firebug: Yeah, after. Absolutely. I think about like there’s been a few weeks this last couple months where I’ve had an audio and then there’s a public holiday and I do only work three days a week and it’s just like…

Mrs. Firebug: Oh yeah.

Aussie Firebug: You know we have four days off a week. The amount of town visits he could do it. Absolutely. I just a might. When you know I think about when kids roll onto the scene and like people at work have got kids and they’re so tired they come and work. Remember me like five hours sleep. Yeah. I’ll wait to work on what… How great would it be to only work three days a week, you know.

Mrs. Firebug: Yeah, I think.

Aussie Firebug: During that time.

Mrs. Firebug: Especially at thirties like hopefully we’ll have kids so definitely not working as much during that time being able to go and watch their sport and all that kind of stuff because they will have I’m sure commitments in life and I think actually see without.

Aussie Firebug: The most realistic thing as well dialing back the days worked you know I said before we live an awesome life style for less than 50 grand a year now I know when kids are all honesty thing expenses are going to jump up and everything but assuming we get to a point where we paid off the house and we’ve got all these investments and it’s and it’s generating you know X amount of dollars we you know the first 18 and a half thousand dollars income is tax-free and then you know you only tax so much you know up to what is it thirty six thousand dollars whatever but we could totally make way more than 50,000 by working less than five days a week both of us you know to get there. So I just think that is a really trying to work, to work towards and it’s well within our grasp as well look very realistic goal go. I don’t have any grand plans of you know making five hundred thousand dollars cash flow each year because we don’t need to like to get to that point would be so hard and we take it be so much sacrificing and everything but we are well on track to make enough money in your mid-to-late 30s to reach financial independence and at worst only work a few days away so pretty excited about when we get there.

Mrs. Firebug: Bring it on.

Aussie Firebug: Bring it on? What’s your favorite of the Firebug post of all time and why because I know your avid reader of the blog and you’ll have an epic answer to this?

Mrs. Firebug: I will admit sometimes I do get the emails and not Reba I’ve seen that I can actually go into the analytic and see who’s got a

Aussie Firebug: She’s opened it was and she hasn’t clicked on the link.

Mrs. Firebug: Something okay um one that comes to mind as I did like so sometimes proof read them as well so this one sticks out there about the renting versus the buying one.

Aussie Firebug: Yeah, rent versus buy.

Mrs. Firebug: That’s it, yeah.

Aussie Firebug: I’ll put a link in the show notes because that’s actually one of my most visited posts of all time well they get um yeah so I liked that just because for me as well.

Mrs. Firebug: I was always kind of under.

Aussie Firebug: So do you want to tell the audience just a little bit of what it’s about and why you liked it so much?

Mrs. Firebug: Well, from memory it’s about why it is better to rent than to get sucked into buying and having this huge mortgage and things like that. For me like I always just thought that’s what everyone did like my family my parents, my brother’s, my sister all just bought a house and just pay it off. I don’t know. I just thought everyone did and that was what it was everyone was supposed to do and then Matt. He kind of opened my eyes to the idea of like renting instead of buying like renting to as your main house kind of thing. So I don’t know. I just thought that article is really interesting because it kind of pointed out some of the positives over buying a house and getting locked in. The only thing I would say like would be when we come back from our trip life, I don’t know about renting forever especially when we have like kids and stuff like just because it would be annoying if you keep daddy property and things like that and having to move every few years. But I’m yeah right now it works for us perfectly like.

Aussie Firebug: And so we’ve been renting for nearly a year but I was room sharing for a while here and I, it’s good that you bring that up because that’s probably enough a like mind setting thing that um what we went against the grain big time yeah and family feels oh my god with us my mum would not stop saying to us like we have to buy house she’s almost like embarrassed there’s…

Mrs. Firebug: Yeah, I think that was insane i think like people look down upon with the rent like it’s like you’re anything like it isn’t yeah what’s wrong I think that is like the culture of our parents generation as well that they do think that renting isn’t as good as buying but then you’re like well but why…

Aussie Firebug: Yeah, well, actually we crunch them all and like even without the number-crunching wheat like we’re moving in like a week and how much harder would it have been if we bought either, like where we come from yeah to where we went to and now we’re going back to where we come from so like it just would have been so difficult. The renting, the flexibility of renting is awesome for us and we’re not going to have to worry about selling a house renting it out doing anything when we go on our trip so renting is just it’s worked what we brought a lesser and that the housing market by the way mum has actually gone down a little bit. she wanted us to buy like in 2013 and I we can get a place cheaper right now then it was gone for in 2013. Eve not the same so it’s factoring inflation there you know we’re better off we’re you know and my parents are well and truly in the you know property never goes down people like well entrenched into that metro. So yeah you can imagine the disappointment when we haven’t bought a house but I agree when we move back from our trip will probably buy like I wrote in the post as well like the biggest advantage I see for blind is the stability and if you don’t if you don’t have a reason to be stable like we don’t real reason like we could get another job or go live somewhere else or go oversees there’s no reason that we want like a hundred percent sure exactly how and I just think like kids obviously I wouldn’t be want to be renting with kids but other than that like I’m cool, I’m cool to rent you know be annoying if the landlord kicked us out by it’s not the end of the world when you’re two single people so I’m glad you enjoyed that post.

Mrs. Firebug: I read that one.

Aussie Firebug: I think you might have a word check, spell check that one.

Mrs. Firebug: I read there I did do a few of them

Aussie Firebug: Because I’m horrible with grammar and you can tell.

Mrs. Firebug: Terrible.

Aussie Firebug: Terrible life sentence I’m actually I think I’ve been told I’ve got a mild case of dyslexia like and it’s like a bit of a family joke. So if you ever see spelling mistakes or grammar mistakes on my post, you know, don’t tease me, it’s a disability.

Mrs. Firebug: Go easy on him.

Aussie Firebug: Go easy on me. I’m sensitive about it um look we’ve reached the end of what I had as the podcast sorry is there anything else that you can think of that um you want to say or mention because it’s been a pretty you know been a pretty exciting journey so far well it’s me why what…

Mrs. Firebug: I know really I mean just yeah go easy on your partner’s I guess to try and lure them into the idea of financial independence especially hearing it for the first time it does seem like oh is this legit and…

Aussie Firebug: She’s crazy it does I don’t know I first read over it is shit actually achievable now that was my I was buried yeah I just think skeptical until I met people.

Mrs. Firebug: until yeah I think that’s true to you need to like actually meet people who have done it to actually believe that it can be done because I was very skeptical to start with so yeah what about it I think.

Aussie Firebug: awesome, awesome insight from a partner of Ozzy Firebug. Thank you as well for coming on I know you’re a bit nervous to come on to the podcast so I appreciate that, you’ve been fantastic. If anyone want as a specific question for Mrs. Firebug that we miss because I’m sure I miss something just put in a comment of the post and I will ask her and I’ll put a reply so contact her through the post.

Mrs. Firebug: I hope it was helpful.

Aussie Firebug: yeah I really hope it was helpful to guys because i know a lot of you, you know wondering about it or struggling to get your partner on board i was very lucky that Mrs. Firebug was pretty frugal to begin with.

Mrs. Firebug: So lucky.

Aussie Firebug: She yes so lucky she, you know she was wobbling that board at a young age knew how hard it was to earn the money.

Mrs. Firebug: You knew how to work hard.

Aussie Firebug: So I was I was very lucky if you enjoyed these podcasts I want me to make more make sure you drop me a comment and rating on iTunes. Just search or the Firebug and on iTunes and you’ll find me. I’m also on sound cloud at www.soundcloud.com/aussie-Firebug. A transcript and show notes of this episode can be found on my website at ww.aussiefirebug.com thanks again for your time this is Firebug.

Mrs. Firebug: No worries.

Aussie Firebug: Hey guys, welcome to another episode of the Aussie firebug podcast, the financial independence podcast for Australians where I interview clever people who have already reached or are on their way to financial independence. Our guest today is Steven Ryan, a 31 year old property investor who at age 29 became the 2015 investment property magazine – investor of the year. Steven has been featured on such programs as ABC 7.30, property investor magazine, real estate talk and many more. His net worth is well into seven figures and has reached financial independence but there is no plan to stop working any time soon. Steven, welcome to the podcast –

Steven: Hey, thanks for having me –

Aussie Firebug: Ah, I guess we will just begin ah, with your story – um, and how you managed to be in the position that you are in today, starting from the beginning.

Steven: Okay, ah well – starting from the beginning – born is a pretty small town in the south Wales ah- was ah, had different views to the norm I guess um – well to figure out where that would sort of eventuate into something that was productive and useful – ah, so a lot of experiments as a teenager and as a young adult, ah trying to figure out what I wanted to do with career and stuff – ah eventually I ended up falling into graphic design job – ah, wasn’t as challenging or interesting as I had hoped, so I spent a few years trying to figure out what I actually wanted to do with my life and in the process I discovered the whole property investing and just wealth creation – and personal development ah, sides of life. Ah, a few years later after buying a few properties, I quit my job – started a mortgage [00.01.33] business to help other investors and ah, that kinda brings us today in a nut show, am sure we’ll talk in more data about some of those bits – that’s the short story.

Aussie Firebug: Okay cool Steve – so um, is it Steven or Steve – which do you prefer to be called?

Steven: ah by first name, whatever you want –

Aussie Firebug: Um, am going to call you Steve –

Steven: Okay perfect-

Aussie Firebug: Um, so when you say, um, a few, ah different opinions to the norm, what do you mean by that when you growing up?

Steven: Ah, I’ve always been inquisitive um, and always been willing to challenge conventions ah – so I ah, I think the earliest I can recall that happening is ah, when I was being brought along to Sunday schools – a very young man, ah, I had a lot of questions to ask that I, wasn’t getting sufficient answers to – um, through out of to high school I had a lot of ah, head butt moments with teachers as well – not out of ah, an interest in causing trouble, but just to – to try to understand things better and question everything, so I’ve always been curious um, am very learning driven – big passion for science as well so, um most people would describe me ah – you know me quite well as a complete [00.02.39] but then I would follow it up saying what a pretty nice guy, so um – very unconventional in just about every aspect of ah, my life I would say.

Aussie Firebug: Nothing wrong with that –

Steven: Yea well, if you keep doing what everybody else does, you get the same results and ah –

Aussie Firebug: That’s exactly right – that’s exactly right –

Steven: Yeah –

Aussie Firebug: Um, so you spoke a bit of – so you got into property investment when, even investing is not really, you know a property investing – most want to spend their money on .

Steven: Yeah –

Aussie Firebug: Do you – just walk us through a little bit of that –

Steven: Yes sure, um – I’ve always been pretty reasonable with money in terms of ah, you know saving ah, and not spending too crazily. There was a time ah, I was about 25, I believe and my parents out of nowhere ah, announced they were getting divorced and um, that was so be it – but ah, the interesting thing is that I’d remembered them working their tales of their tired old life time – ah working very, very long hours and they had barely anything to show for it when they divided assets; so ah, that kind of got me thinking – they’ve done something wrong here, they’ve really stuffed up – I mean, they did what they could with the information that they had but, for them to have worked so hard for so long and to end up with so little made me realize that something had gone wrong there and I sort of decided at that point, I didn’t want to follow in the same footsteps – that I would educate myself ah about, you know making my money and also hanging on to it and multiplying it, and that got me on the path of learning how to invest um – so it was probably early to mid 20s and ah, I’ve been saving money that entire time – managed to head on an overseas trip to Europe – I think about 22 and [00.04.32] of bags to take free breakfast for lunch and things like that – so I returned with a little bit of savings and ah, then the parents’ divorce, so I continued to save a little bit and bought the first property, I think I was 25 – yeah, it would have been 2010 October –

Aussie Firebug: And where did you buy and how much for?

Steven: I bought in city – I paid three hundred and thirteen thousand for a nice little one bedroom apartment ah, well within my budget, I could have spent quite a bit more, but I wanted to be sensible and that was the, I guess the purchase that got things rolling – but at that stage I wasn’t ah, too well read on investment. I knew that buying the property was good, I’d done my sums and realized that even if properties just [00.05.14] information, I’d need pay rises emulate that were more than realistic for me just to keep up with the higher purchase price – so it made sense and then from there I sort of put the head down and really got into learning how to invest and create wealth.

Aussie Firebug: And how did you manage um, putting the deposit down for that- um 25 years of age, you know three hundred and that’s quite a large sum of money –

Steven: yes –

Aussie Firebug: a deposit, um did you go too uni or you were working full time ?

Steven: I studied, I studied for a number of years out of high school – um, I think that probably I had been working fulltime, maybe three years before that, so I probably had saved about 10 or so grand a year since starting full time work – I was ah, certainly a pretty typical teenager in terms of ah, the drinking habits and tracing girls and what not but, I was ah little bit unconventional when we went out for drinks ah- I would bring ah, a little [00.06.00] [00.06.01] with some red wine in my jacket rather than spending ah, super amount of drinks over the bar {laughter} – and so I managed to save the deposit while still having a typical ah, teenage [00.06.08] [00.06.09], yeah –

Aussie Firebug: Do you know what, do you know what? I did the exact same thing but I–

Steven: {laughter}

Aussie Firebug: I did it with um, like ah – like or something.

Steven: Yeah, okay –

Aussie Firebug: Or like ah a little flask –

Steven: Yeah –

Aussie Firebug: I dint have wine but, such ah, such at once as well. True story –

Steven: Yeah, I ah – I never did so –

Aussie Firebug: actually you know why – because I remember this now; the girl would give me funny looks every time I went to the bar and ordered coke and I was getting drunker and drunker and she must have thought, this guy has a flask and I was really sneaky –I went to the toilets and everything and the security followed me in and he found me doing it and he kicked me out. [00.06.50 – 00.06.53]

Steven: The things you do on the way to financial {laughter} independence, I can say that I wasn’t repaid [00.06.58 – 00.07.00], tables have turned.

Aussie Firebug: Alright, you save some money, full time work – you are a pretty good saver, were you still live at home when you bought this – ?

Steven: No, I moved out of home at 19 to come and study in [00.07.08] so I would grade up in [00.07.09] ah so, I was pretty smart with the money I had [00.07.12] in the whole time and lived to a typical [00.07.15] [00.07.16] or shouldn’t say – I saved quite a bit for how much I was actually earning – I should also add at the same time as studying, I was doing some freelance design work as well as I had started music [00.07.35] online and a few other things – I had a little bit of income coming through and also YouTube channel so, I was able to add a little bit of additional savings ah, just through those –ah, so throughout my studies I was actually already accumulating a small amount of money –

Aussie Firebug: You’re hustling – you’re side hustling everywhere –

Steven: I didn’t realize I was hustling but ah yeah, I guess that was what I was doing at the time.

Aussie Firebug: Ah, very good. [00.07.58 – 00.08.00] to be honest because I saved a hip of money but I was still living with my parents – that was the number one biggest advantage all I had, but you know – to say that – you said, close to you know, $10000 a year when you’ve moved out of home and living in Sydney that’s – that’s um, very good, very good savings indeed. Um so, you bought the house um, and you continued down the property path [00.08.20 – 00.08.24]?

Steven: Um, look at the stage that I bought the first place, I just knew that the numbers might [00.08.31] ah – I dint really know the intricacies investing property or anything else, so I was looking at all sorts of options – but am very analytically minded and it’s not very hard to without a calculator and do some sums and say the advantage of property ah, the fact that you able to leverage 80 – 90% means that your dollars go quite far, ah looking historically at ah, you know house prices and also factors that affect the [00.09.00] of supply and demand. I felt pretty comfortable that property was something that I could do well with – um, so I spent probably the next 3 or so years saving like [00.09.08] at the same time researching like an obsessed crazy person um, so devoured dozens of books, went to made-up, red forums, listened to videos – all kinds of stuff to educate myself – I watched [00.09.21] and researched everywhere I could think of in a stryer and eventually settled on more property as the way for me to go to fill that foundation ah, [00.09.29] second investment property – first investment property, second property September 2013 – I paid for 60, 100 dollars for that one – um using equity from the first property. So I took 3 years effectively to [00.09.47 -00.09.51] but I was able to unlock that – ah, the same time I was saving like crazy as well but I didn’t actually need to use savings for that second purchase, that was all equity – ah for like [00.10.03] again six months later, I took equity out of the second property – I [00.10.06] very well on that one – for the third and you know the story goes on so –

Aussie Firebug: So how many properties do you currently have?

Steven: Ah, I’ve got four at the moment – total value about 2.6 – 2.7 million somewhere around that point.

Aussie Firebug: And do you keep your loan to value ratio, is everything under 80%?

Steven: At the moment yep – additionally when I was [00.10.23], ah generally I was borrowing 88% – capitalizing that is mortgage insurance up to about 90%, ah if you try to accumulate assets – it kinda makes sense to use as much of other peoples’ money as you can. It allows you to [00.10.35 – 00.10.38] in case of emergencies and also just to return on your initial capital is much ah, [00.10.43]. So that initial portfolio – I think a total of my own savings period ah, maybe [00.10.53] dollars of cash has gone into that and the rest of that [00.10.57] come equity, so that’s seventy or two thousand dollars is now controlling a portfolio many times its original value ah, and I have seen at least a 10 times return on that initial capital as well so –

Aussie Firebug: What’s the rental [00.11.10] [00.11.11] across your properties?

Steven: Um, yes a good question – ah the very first place that I bought ah to live in which now I don’t occupy, that’s in the early 7%, ah so getting a pretty good rent return on that one that I have earned is ah, six and a half [00.11.21] years. This is the benefit for not turning properties over quickly to its [00.11.27] – you get appreciation value, you also find that rents tend to track up but the amount of mortgage you own doesn’t increase – so second property ah, ran five and a half [00.11.32] I would say – ah the third property, low fives – the fourth property, very high fours. So overall ah, they are just making me a few grand a year after [00.11.39 – 00.11.41] you know facted in and the tax returns gone through – ah but my initial goal for those was always focus on capital growth, ah which I believe over time there will be an appreciation value and the rents will take along as well which is what am saying now.

Aussie Firebug: So the, the portfolio in total is cash flow positive?

Steven: Yes – first of all, [00.12.05 – 00.12.08] a few thousand dollars of you know – its neither here nor there really, it’s a bit of pocket money ah, yeah.

Aussie Firebug: And am well aware of the strategy of pulling equity to buy the next one as I have done it myself for earning three properties, um the, the biggest thing I have with that, what is your – what is the angle because obviously you are very um, you know a lot of equity – you know ah, ah they are worth so much money and um, you got loans on them and they’ve given you a little bit of you know a few thousand dollars a year in positive cash flow – are you planning to ah, wide until the rent gets to a certain ah point until it’s you know an income or are you widing for a property to reach a certain point you might sell one and pay off the debts off the other – what’s sort of your strategy there?

Steven: Yes, so – if I hadn’t gone along the path I thought I would be which is stay as a [00.12.59] employee keep [00.13.01] along, ideally I would have continued to accumulate properties – get you know a dozen or so, um under my name and at some point in the future 10 -20 years later through one or two property cycles – sell some and pay the others off completely and then have a [00.13.20 – 00.13.21] properties all producing me rental income – but since I moved into business and the income increased somewhat, so am actually now going to moving into property development ah, just starting small initially but taking some of the equity that is in existing portfolio – using that to do small projects and then keeping everything I’ve planned to sell along the way, ah those developments will be cash flow positive and then take that chunk of equity and sky up into a solely larger project then [00.13.43 – 00.13.45] – so ah, very quickly I would have turned cash flow neutral to fairly cash flow positive at the same time as being able to hang on to those properties.

Aussie Firebug: Great – do you have any shares?

Steven: Ah yeah I do – ah, I’ve got a [00.13.57] number on ah – in the US. It’s not a portfolio I would recommend for the faint hearted ah, goes against most conventionally investing wisdom – ah, that’s a little bit more of my high risk, high return money, so it’s not the typical um, you know index [00.14.17] portfolio – ah, a very, very, very heavy ah, [00.14.24] especially relating to artificial intelligence, ah machine learning- so ah, Teslar is my biggest holding and make up about over 70% of my portfolio value –

Aussie Firebug: That’s been doing pretty well in the last couple of years, hasn’t it?

Steven: Yeah, Teslar has done reasonably well, um – I still feel that they’ve got one less ah, digit in the value of the shares compared to where they ultimately get to over the next decade. But I accept that it is pretty high risk company, but I also try to invest quite um, ethically as well so, there is a reason for investing in that company outside of trying to return a profit but just to keep things moving in a good direction as far as ah, renewable transportation.

Aussie Firebug: Yeah, and is it more fun investing like with the tech companies in the US, it’s not your bread and butter you know what you’re going to live off for the rest of your life or-

Steven: No, like honestly if my entire portfolio goes to 0 or we have JFC number 2 which will happen at some point in time I’ll be fine with that. I’m pretty risk adverse and it might sound almost unexpected for me to say but I think that shares are one of the highest risk investments that you could possibly make. Even with a high level of education, unless you are looking at a really long term hold period. And so my idea is, my portfolio is to hold for some time but I won’t be too perturbed if I see large fluctuations in the value over there. Property is the bread and butter and also business is kind of making up the main chunks there and shares are just something to diversify a little bit and see what happens there.

Aussie Firebug: You know you might have triggered a few in the financial independents crowd. Do you mean picking stock, picking shares individually or you know because majority of the people here in this space are all about those index funds right like you’ve totally read behind those lines –

Steven: I think index funds are fantastic but the unique option that we have in Australia, if we can learn to understand what drives our property values which is effectively land values rather than the building sitting on them. Given the nature of our market, that the huge difference between supply and demand excluding a few particular niche areas and types of dwellings like off the plan apartments in the eastern city CBDs. We have been underbuilding housing in Australia for a very long time we’re also one of the highest net worth countries in the world. So for somebody that’s sort of starting out or at a stage where they’re trying to accumulate capital and increase their net worth. It’s very hard to make an argument for shares having even close to a hope of competing with property assuming that you are willing to leverage property at 80-90% and that you’re not able to do much lending on shares above say a 50% land to value ratio. Keeping in mind also if you do leverage on shares you do have the risk there of something like a margin call which doesn’t occur with properties. So as I said I’m very analytical on that side of things and I think it’s great to have you know the best holdings in different kinds of investments but I’m pretty confident that my property returns are going to be multiple [00:18:01] above my shares even if I went to do something like just grab the old index funds. The other thing too is that I’m pretty impatient, you’ll certainly see good long term results on shares especially index funds are really the way to go then to be pretty conservative but it’s hard to match all highly leveraged assets.

Aussie Firebug: So what you’re basically saying is you see in the future, and we’re sort of skipping ahead because I wanted to delve in into this area a bit later on but [00:18:33]. Property returns are going to blow shares out of the water in terms of returns over the next 5/10 years? Is that –?

Steven: In terms of cash on cash returns so I would suspect that shares would have just a better chance if not more of probability in terms of percentage growth to up before property in Australia but we’re not factoring in the leverage so [Voiceover]

Aussie Firebug: That’s a key point as well. I always hear that, look and you know I’m in both camps here. I’ve got 3 properties but I’m up to about 70k in index funds now so you know if either one goes up I’m really happy. But I do think that whenever someone is saying you know shares beats you know the last ten years shares have out-performed property. Yeah maybe a dollar vs. dollar percentagewise the have but they’re completely ignoring the whole. Like I think that best thing about investing in property which is the leverage, so yes I agree with you on that point.

Steven: Yes and also we do have to be very mindful to factor in the risks as well if you are levering shares you’ve got the probability of a margin call and keep extra capital in reserve. Those kind of things as well say, as I said I’m quite conservative and so I’m not somebody who would be comfortable to leveraging into shares at all. For fear of having the margin call in the worst case scenarios so I’d be putting a dollar into shares if I double that I make two dollars whereas if I put a dollar into property I get 10 from the bank and if I you know say that the same doubling there I’ve turned 1 dollar into 10 so I get a ten times return. It’s kind of hard to argue with that.

Aussie Firebug: Sure, alright one of the – I want to move into – for those listening Steve is also the director of Interstellar Finance who are actually a finalist in 2016 Australian Mortgage awards. So is it your actual company Steve?

Steven: Yes it is my company, yes I founded and I’m the director yup.

Aussie Firebug: So can you tell us a little bit about Interstellar in general, how it came to be and what you’re looking to do in that space?

Steven: Yeah absolutely, so I rather got obsessed with the investing thing and so I could talk about and think about and do was property investment related that kind of happens I think when you see the value in something that can have a big impact on your life. So it got to a point where I had a lot of people asking for help and guidance and ideas and this that and the other. It took a while for me to – I guess for the penny to drop but I realized that I was in a job I didn’t really enjoy. I had been fired from my first and nearly lost my second as well so I was clearly not a good employee. And I found a way to transition from that design career to a full-time mortgage broker thanks to an incredibly generous and selfless mentor who changed my thinking and my life ultimately. So I transitioned across a few years ago to fulltime mortgage broker and just 100% focused on helping people who want to build wealth for themselves. Whether that’s people just starting out with property or people that are a little bit further along the path and don’t really do much lending for an occupiers, it’s really a pretty strong investor focus and I get a lot of joy out of having people come to me and discussing what their long term goals are and putting a bit of a road map together on how they might be able to achieve this.

Aussie Firebug: So you do strategy as well as outsourcing and finance?

Steven: Yes, I mean the strategy it’s not rocket science to be honest it’s really just a matter of looking at what’s somebody’s goal, what’s their timeframe, what are they trying to achieve, what are their current resources, what changes might occur you know [00:22:32] when the goal is achieved. And how can we best give them the best opportunity to achieve or come as close as they can as achieving their goals. So it’s really just a matter of looking at the numbers and putting a bit of a plan together in terms of if we can do this, this and this then this is where we will get to. Because a lot of people I think one of the mistakes that people make, maybe not so many of your listeners but in general in terms of financial goals is they might think I’m going to invest in you know some shares or invest in a property or you know buy some silver. But they don’t really know why, what the end goal is. Maybe one of my main goals is really to help people clarify exactly what they are trying to achieve but more importantly why? If you don’t have a strong why you’re not going to have the drive and willingness to do what it takes. You’ll talk yourself out of things, you’ll procrastinate, and you’ll let fear prevent you from acting. So my real job is to help people clarify what they’re trying to achieve then kind of give them the resources and empower them to actually take some action.

Aussie Firebug: Excellent, I think that’s so important as well. Clear road map, what you’re trying to achieve, why you are trying to achieve it. Rather than I should just buy a property because people have been telling me that’s what smart people do and I want to be smart, which is funny enough. The reason why I started to buy property but then I read ‘Rich Dad Poor Dad’ and the rest is history. But still –

Steven: A lot of people start and it’s better than doing nothing, but it’s definitely worth going why? And it really has to be tied to something more important than just a financial goal too. Because if you don’t know what that result is going to bring you in terms of your lifestyle, how you can give to others, how you can have freedom it’s meaningless. Like nobody cares if you’re worth 2 million dollars or 10 million dollars or if your passive income is xyz, you really need to tie that into something more meaningful than just a number. What’s it going to do for you, how is it going to change your lifestyle, how can it help other people and impact other lives in a big way as a result of achieving that goal.

Aussie Firebug: Now just while we’re talking about this I guess it a good segue so you could pull up stumps right now, you sold everything that you’d owned you’d have enough money to live passively for the rest of your life, is that correct?

Steven: Yeah a fairly moderate lifestyle but one I’ve certainly lived the majority of my life, no problems yup.

Aussie Firebug: So, and it’s funny I’ll just let the audience in on a little story we had over email as I was trying to get Steve to – we were trying to book a time to do this podcast and Steve was emailing me back saying how flooded he was at work and how he just didn’t have any time to you know do the podcast and it was hard to get days and everything like that. And I just thought it was ironic that this is a guy that’s worth over a million dollars, 31 years of age could be financially independent right now, pull up stumps and basically leave as you said a moderate lifestyle but you’re working harder than ever mate. What’s the reason behind that and with the whole financial independence retire early, I want to put it to you, what’s your goal with property investing and does the ‘retire early’ bit in fire does that interest you whatsoever?

Steven: Good question there so what was the first question that we were covering off?

Aussie Firebug: I think it was just what’s your goal, what’s your ultimate goal? Why you doing property investing and I know you started business down but what –

Steven: And why I’m working so hard I guess in the meantime. Yeah I’m going to give that to kind of [00:26:12] let it sink so the reason why I’m working harder than ever now is because I absolutely love what I’m doing. I’m able to take people who are at a point where they are willing to make a potentially really important decision that can change their lives for the better. And be the catalyst for them actually making that change or taking that action or you know following up on that decision. And so I spring out of bed in the morning and I kind of get myself to stop doing what I’m doing in the evening because I know that I’m really having a big impact on people’s lives whether it’s one or two conversations we have here or there or even if they don’t end up really going down the property investment path. To plant a few ideas and seeds in their minds that can really change their thinking, their mindset, their outlook. Very rewarding and after being in business for a little while I start to hear the feedback coming from people that literally saying things like you know you have completely changed my life or the way that I think, you know I’m really grateful. So what I’m doing now is so rewarding I can’t think of anything else at this point of my life that I would rather be doing with my time. So that’s what keeps me doing what I’m doing, there’s no other reason behind it which is –it’s a great position to be in, being excited to get up and wishing you didn’t need to sleep so much so you could help more people –

Aussie Firebug: Can I just add to that as well, I’ve been to a lot of foreign seminars met a whole bunch of people that are multi-millionaires that run businesses and they do it because they love doing it. And it always annoys me, so many people just can’t accept or get over the fact that someone is worth so much money but they’re still working and it’s like you know they must be a con artiste. Why would they work if they’re worth? If their story was true why would they still be working? Yada, yada, yada. It’s like actually there’s people that exist that you know legitimately just do it for the love and yes it’s a business so you’ve got to make some sort of money I mean to keep the business functioning. They’ve got stuff they’ve got to pay, you know they’re not going to do it at a loss but essentially they are giving away their time for free. This people do exist and you can be in that position if you become financially independent. I just think a lot of people have never even considered the concept of financial independence jump to all sorts of conclusions for people that have walked the walk. And yeah they might charge a little fee you know for their wealth of information that they have, that they can’t get over that fact you know. It always comes back to that why would they still be working if they were worth so much money.

Steven: Yeah I think most commonly comes down to a few things, some people are – then they’re in a position in their own lives that they’re not happy or satisfied enough with they can’t understand why anybody given the choice to just throw it all in, you know just go sit on a beach and drink cocktails wouldn’t do so. Another part of that I think is many people aren’t willing to face the fact that they’re not where they want to be in their lives and they are the only ones to – who is responsible for that. So rather than go you know what if this person is doing this, why would they still be doing this and ask more questions and uncover that they are really passionate, they enjoy what they’re doing etc. They just make a decision without all the facts based on their own perspective rather than reality.

Aussie Firebug: So would it be fair to say, so you’re working a job you didn’t particularly like, would it be fair to say you were striving for a financial independence to escape that job?

Steven: Definitely a push to get out of there, to change my circumstances absolutely.

Aussie Firebug: And now that you’re in a business that you do like do you find that you your goals have now changed– considering you do you like your job as much as you do?

Steven: Yeah, well I guess my goal of getting out of my full time job, I walked free of that a couple of years ago. It’s probably going to go down as one of the more memorable days of my life; just having the freedom to say “see you later,” and just take control of my future. Yeah, the goals probably have changed a little bit and not so much what I’m trying to do which is just get some freedom and have a big impact on a lot of people’s lives which is really what’s pushing me, coming back to your earlier question of really my goals but I’ve come to realize that I have a lot more potential and capacity than I initially thought and every time I set what I feel as an extremely ambitious goal, at some in the future I realize it was actually a quite meager and well within my capacity so my goals don’t necessarily change, they just expand so you know, I initially had some financial goals which I exceeded well ahead of schedule so I reset those and reset those and now with the business, the same kind of thing; you know I had some goals for my first year or so in business in terms of how many people I could help and stuff like that and I shot past those so the goals really just– once I am confident and have the self-belief and the mindset and thinking to know that I could chase something more, I’ll just set a bigger goal to keep pushing and learning and growing and challenging and getting out of my comfort zone.

Aussie Firebug: Cool. Great. Now, I want to get in to some nitty and gritty stuff about the industry. So, you know, 2015 Property Investor of the year, you’re the founder and director of Interstellar Finance so you’re heavily in an industry that is such a hot topic at the moment, well it’s a hot topic nearly of every moment, but I really want to pick your brains over a few questions about the Australian housing market. So firstly, do you think Australia is in a housing bubble? Why- why not?

Steven: What’s a housing bubble?

Aussie Firebug: You tell me.

Steven: Well, we need to have a clear definition of what we’re referring to.

Aussie Firebug: Alright, let me rephrase that then. Do you think that– let’s be honest, it’s now one in Sydney because I don’t buy into the whole Australia is in a, you know unaffordable– that every place is unaffordable. It’s when people start hyping on about this, it’s 95%– they’re talking about Melbourne and Sydney, they’re not talking about anywhere else, if the price increases like Melbourne and Sydney have seen the last ten years or so, is it sustainable– do you see house and apartment prices coming down by 20-30% over the next five years?

Steven: So the sustainableness of the growth, or sustainability, if we’re talking in the last ten years, if we average that out then– I’ll say that in the last probably three or four years, definitely not sustainable. This is what we refer to as a property cycle. So you’ll have a period of little to no growth and then you’ll have a period of pretty strong growth year on year and then things will taper off, maybe correct a little bit then [00:33:27] and you’ll have again stagnation for quite a period of time and then again a process will push pretty rapidly for a few years and that seems to be a repeating cycle going back a century or more in Australia. I see at the moment, Sydney and Melbourne in particular are pretty much peek of the market, I wouldn’t be buying there as an investment unless I’ve got a view of 15-20 years or more. I stopped buying Sydney a number of years ago and moved my money to Brisbane. Apartments, I would not be touching off-the-plan apartments with a four million kilometer pole in the Gold Coast or Brisbane or Melbourne, perhaps even Sydney, there’s quite a large amount of supply, there’s quite a large number approvals still yet to commence construction and you’re asking for trouble with those types of investments but a savvy investor wouldn’t really be buying those anyway because you know, a brand new apartment, you’re paying the developers profit margin, they’re marketing fees, their advertising fees, their agent commissions. None of my clients, for example, are buying those types of things but definitely I caution to be yielded there. Outside of that, houses are a different kettle of fish: Sydney and Melbourne again I wouldn’t be buying houses there at this stage in the cycle. I think we’re pretty much done with the growth, I don’t have a crystal ball but there’s a very large market out there at the moment in many other capital cities around Australia at a much different stage of their property cycle so plenty of opportunities out there for people willing to do their research instead of get it from the news.

Aussie Firebug: So you don’t see any sort of crash happening?

Steven: Look, I don’t have a crystal ball, I can’t say for sure but I don’t see any triggers for you know, 10-20-30% reduction in prices in Australia; that would be unprecedented outside of a few anomalies like [00:35:19] towns in the history of real estate here. Even the GFC, the worst that we saw was about a 10% reduction which a year or two later, things had bounced back to where they were so I would have to say something orders of magnitude, bigger the GFC to have any reason to believe that would happen.

Aussie Firebug: Now, you’re such a great get guest for this question because you’re in the business of sourcing people loans, I personally– I’m a bit on the fence: look, I’m not too sure what’s going to happen but I think a major contributor to the spike in house prices in the last couple years, a major contributor for that has been record-low interest rates. Now, you being a mortgage broker, where do you see interest rates moving this and the next couple of years and basically I just want to know your opinion on that whole situation and also, is now a good time to fix your rate? Why or why not?

Steven: Good questions, good questions. As I say, my crystal ball isn’t perfect so take all with it a grain of salt. My gut feel is that we’re in for pretty low rates for the foreseeable future unless there’s major improvements in our economy overall, I can’t see reason for the Reserve Bank to be lifting rates; maybe we’ll get a quarter percentage or two here or there, nothing too substantial. Any much further out than a few years, I really can’t see that far but I do feel that we’re not likely to return to the rates that out parents perhaps experienced in you know, the early nineties or in a different era, a low inflation era. We’ve got the Reserve as an inflation target that we have now which has been pretty consistently maintained as well as so I’d be surprised if we see too much movement either way with rates. That being said, lenders are within their own rights to move their rates and change their margins as they please and they do have the power to do that. I won’t name names here but certainly a year or so ago, there was a very competitive price discount being offered by certain lenders to bring on new business and retain existing. I was seeing those same lenders now call back a lot of that lost profit by lifting rates here or there, some of them under the guides of [00:37:44] you know, and APRA wanting to slow investor lending. As far as fixing rates go, that’s a much more complicated decision than just fixing so you’ve got some certainty over right; there’s some implications there around what are your plans with that loan: are you building a portfolio or are you just an occupier, will you ever consider refinancing or moving, would you ever invest, will you ever want to access equity? I actually think this is my first loan on occupier property before I knew what I was doing; probably the most costly mistake I’ve ever made actually, came to about $50,000 in total from extra interest and a huge break fee when I realized that I had made a serious error of judgment because I didn’t know what I didn’t know at the time. What do I say– talk to your broker about that stuff. Make sure that they know what your plans are longer term and they can give you a bit more guidance as to whether or not it might make sense and also just think about the risks of fixing versus not. My lens is currently all variable and I plan to keep them that way unless I see very strong reason not to do, otherwise.

Aussie Firebug: Yeah, I am a fan of variable as well. I actually did write an article about fixed versus variable, just a shameless plug and for that article, I’ll put that in the show notes but yeah, I am I’m on the variable camp as well. I think there’s very rare moments in history where you actually fix your rate and you come out ahead. Like you said, it’s a different story– it depends on circumstances like if an interest rate hike is going to put you under water then you should probably fix but if you’ve got the capital and you got the buffer, I think that variable might be the better option 80-90% of the time like throughout Australian history or something, details like that and it also you know, like you said, if you’re an investor, you think you can’t withdraw equity out and like all that stuff but I’m a fan of variable. Now, on the– so you don’t foresee it going up too much, what about the federal reserve, the US Federal Reserve Act, their rate the other day, I think in the other week, and I immediately see on the internet, I think it was ANZ or maybe it was [00:40:04], but it’s one of them, upped their rate on investor loans which like you mentioned, the investor loans– the cash rate isn’t directly tied to– like the banks can set their interest rate whatever they want. Is there a correlation there and a lot of people are speculating that the Federal Reserve is going to up their rate again possibly three times by the end of the year, how do you see that playing out?

Steven: Yeah, so look there’s some correlation, not maybe as strong as many might believe. The raise for that lender who shall remain anonymous for fear of scaring people have other motivations as well to lifting those rates just do it with and proportion of investor lending growth on their loan books versus their own occupied growth so anything they can do to pull more capital in for their existing investor book and also deter people from bringing additional investor lending costs they’re doing at the moment. I think that there’ll be some influence you know, to fit those rates in the US; there’s a little bit of funding that the Australian lenders- at least many of them- get from the US as well but I can’t see it having a huge, huge impact and it’s really going to be you know, a little bit more down to local conditions but just on a plane earlier, you mentioned if a rate rise was going to put somebody under water then definitely worth fixing, I would say that if somebody has a loan and a single rate rise could put them under water, they should not have got a loan, it shouldn’t have been approved either. People need to be very mindful that their circumstances can change whether it’s change of household income, whether they can have injury or long period off work, all sorts of surprises and dramas can happen as well and it’s really important when people are taking on large amounts of debt that they have sufficient buffers and sufficient insurances or whatever they need to do to make sure that they can weather those kind of storms and not be blown around like a plastic bag in the wind when things change so that’s a really important point for your listeners to do well on whether you’re taking on an occupied mortgage or investing. It’s crazy not to retain a reasonable buffer of cash to cover living costs and expenses and surprises and rate changes so that you aren’t forced to sell at a bad time.

Aussie Firebug: Spoken like a great mortgage broker. That’s a good segue into my next question. You mentioned that everyone should have a buffer which I kind of agree with, fantastic advice. How have you seen the banks change their lending standards over the last few years that you’ve been in business? Has there been a big shift? If so, in what direction and how do you see it moving forwards because from what I read, it’s harder and harder to get a loan these days for an investment property.

Steven: Yeah, you’re reading fairly correctly. The timing of starting my business was pretty much in line with the beginning of the very intense tightening on lending policies so APRA has basically been in the ear of all the lenders in Australia telling them they need to pull their [00:43:23] up a little bit and that’s had a very, very large impact on mainly people– unfortunately not the right folks to really hurt, but people that are starting out and people on those low to middle incomes who have an existing mortgage or are looking at doing some investing to get ahead so up until those changes started to come through you know 18 or so months ago, it continued to get tighter and tighter. Somebody on a pretty reasonable sort of median income in Australia could start to put up a bit of a nest egg for themselves and get the ball rolling whereas now it’s become extremely challenging whereas previously many lenders were looking at your repayments on existing loans that you may have: basically at what you’re actually repaying and then a small buffer on top of that to factor in a couple of rate rises. Generally now loans that you have elsewhere and a proposed loan are being assessed at about 7.5% interest and are being assessed usually over a 25-year loan time. So we would have to see– I don’t even know how many a quarter percent interest rate rises for rates to get to that, probably talking 16 or 20. So now the lenders are effectively factoring in the Reserve Bank or themselves passing on you know, a dozen or more rate increases and saying can you afford to pay that? If you can’t, no loan for you. So it’s definitely become a lot tougher. It’s made things very challenging from my perspective as well but you know, it comes with the territory. We do have record-low interest rates at the moment and so it is sensible for lenders to be mindful they won’t stay here forever, yeah.

Aussie Firebug: I think it’s a good thing, do you think it’s a good thing?

Steven: I think so. There’s probably better ways to go about it but it’s a very complicated issue. The thing that’s very unfortunate is the people that it’s affecting are the people that it should be affecting least and that’s people on those lower and middle incomes who are now either unable to get a foot on the ladder or have thought that they were doing the right thing by paying their off as quickly as they could under the impression that I could you know, refinance it and increase their loan later you know, use that money for renovation or for a buffer and now many of those people are stuck. It’s not necessarily the best– yeah, many folks have got the short end of the stroll there. I think lenders certainly have to be responsible and generally they are with their lending as well. It’s a shame that sort of a third party needs to step in and decide what policies they’re able to implement in terms of how they’re assessing lender payments and things like that because it’s bringing the lenders more and more in line with each other and it’s getting closer to the point where it’s just like what flavor of vanilla would you like? You know, you can have yellow vanilla or the red vanilla or– there’s very little choice, I mean differentiation between the lender policies now which means less choice with consumers and it also means that the larger banks can use their resources to crush their small competitors which means less competition so…

Aussie Firebug: Interesting because most people won’t have even thought about that from that perspective but it is interesting to hear what you have to say. Do you think– so you mentioned that the banks are now calculating all loans on about 7.5% say you know, “if you can’t pay it back when it’s at 7.5% we’re not going to give you a loan,” which I think is a good thing. Do you think there’s going to be a point where a household simply cannot service a loan and in your professional view, do you think Melbourne and Sydney are close to reaching that point if current trends continue the way they’re going with prices rising, how far away is it because you know I, and I’ll bring up an example: my sister and her partner were looking for a house a few years ago in Melbourne and are both professionals working full time earning good money and like some of the houses that their friends were buying, it was just– the loans on them were at outrageous and you know, they crunched the numbers, they did their due diligence and you know, a few– a 1-2% interest rise here maybe if one of the– her or her husband lost their job, you know they’d be underwater very quickly like it was getting to a point where all their friends are you know, getting these enormous loans but they’re so close to– they’re so on the edge of something bad happening that it’s I think, and you’re going to know more than I will because you’re approving people’s loans all the time that at some point, you just– the household simply does not have the income to support a loan.  Are we anywhere near that point in specifically Sydney and Melbourne?

Steven: Look, Sydney and Melbourne, you need an above-average income to get a below-average house at this point in time; that’s just the nature of the property cycle. I think there’s a big gap between what people could afford to be paying, this is what a lender will give them assuming that their household expenditure is reasonable. If a lender is assessing your repayments at approximately double what they are or close to, there’s still quite a bit of room to breathe but that’s a very different issue from the fact that people who are taking out loans that they’re going to be slaves to their jobs for another 40 years just to repay them on an occupied property. They may well be able to make the repayments but the penalty they pay in terms of their lifestyle over the next two or three or four decades is a bit ridiculous at this point in time. I would be suggesting that if people are looking at getting home in somewhere like Sydney or Melbourne, to think how can they actually multiply their money now at other markets and other investment classes and bring it back into Sydney next time when they’re not going to be competing with crazy people that have been it missing out and missing out and missing out because it’s– the median price just about everywhere in Sydney now is seven figures. That’s a very long commitment; you’re going to end up paying about three times the amount back to the bank over the lifetime of the loan but a lot of people trying to keep up with the giants who don’t know any better, and we’re saying this right now: just about everybody buying homes in Sydney and Melbourne right now are making a decision that it’s going to have big– probably negative consequences for them in terms of their lifestyle for many decades to come because there are no other option.

Aussie Firebug: I know it’s crazy but surely there’s a point– you know it reaches a point where the household income just simply cannot afford to pay back a loan of a certain you know magnitude–

Steven: Well definitely beyond that point for the typical household in Sydney but given that we have extremely low levels of stock- same for Melbourne- the people that are competing for property now aren’t a typical household, they are done and dusted, they’ve been on the sidelines for a year or two. People who are competing now are people that have additional resources, higher incomes, already on the property ladder, have help from mom and dad, are downsizers so in terms of affordability for them, I think that there’s still a little bit of a room to go but in terms of affordability for a wider audience, definitely not there but given that we have such a shortage of supply and such a high demand, I won’t be surprised if the process was to continue rising throughout the rest of this year before they taper off and maybe come back a little. But from there, I think things are going to be flat for quite some time. I don’t say prices continuing to move like this for many more years to come, I think it will be very flat for quite a while.

Aussie Firebug: Yeah. Only time will tell.

Steven: That’s correct.

Aussie Firebug: Best advice to someone trying to reach financial independence in today’s time?

Steven: Educate yourself and learn from people that have done what you are trying to achieve and forget about the input from everybody else. I think one of the biggest mistakes people make is not educating themselves and not learning from people that can help them so if you want to learn how to you know, retire early from your job, is it better to talk to your colleagues who haven’t retired early or find somebody that has retired early and ask how did you do it? You’ll find that people that have had some form of success however you define that in life generally are quite generous with their time and advice and if you can find a mentor that’s also willing to spend a little bit of time to help you to recommend some resources: books, courses, seminars and to change your thinking, I think that will have the biggest impact on your life. And don’t get your investment advice from the media; their role is to sell advertisements, not give you an unbiased and accurate reflection of what’s going on. So self-education and learning from people that have walked the path, I think they’re the big tips.

Aussie Firebug: Fantastic, and was there anything else that you wanted to add or comment that we didn’t speak about in the podcast?

Steven: Actually yeah, there is one other thing to add in the mix. If you’re really, really adamant on becoming financially independent, business is definitely going to be the most effective way to get you there so I mentor of mine, my mortgage broker actually while I was investing said to me a while ago, “Steven, your biggest limiting factor is going to be your income. There’s a pretty low ceiling in your industry. Maybe you should think about business.” And at that stage, the thought had never occurred to me. Fast forward a few years and I now have started a business that’s certainly paying the bills and I think that if people are really interested in financial independence at retirement, early in particular, plugging away at a pay-cagey job you know year after year and buying your index funds stuff will certainly get you there earlier than most but if you really want to add some fuel to the fire and accelerate things, it’s well worth looking into business.

Aussie Firebug: Great. Great perspective from someone that’s done it. Anyone– if someone was to get in contact with you, where can they find you?

Steven: They can find me on a property chat forum or on my website, just Goggle Steven Ryan Investor or Mortgage Broker, I’m sure you’ll find me somehow. I’m happy to have a chat to anybody if they’d like to have a bit of a look at what their options are in terms of investing but other than that, I’d say if anyone’s curious to learn a bit more about the property stuff in particular, just head over to the www.propertychat.com.au the AU forum. There’s tons of people there with great amount of experience happy to share their thoughts and ideas and answer your questions and that could fill a lot of the blanks in for you.

Aussie Firebug: Right, I’ll put a link in the show notes guys to Steve’s profile on property chat and stuff like that and his website so you can find him quite easily. Alright, great. If you enjoy these podcasts and want me to make more make sure you drop me a comment in writing on iTunes, just search for Aussie Firebug on iTunes and you’ll find me. Also on Sound Cloud at www.soundcloud.com/aussie-firebug. A transcript and show notes of this episode can be found on my website at www.aussiefirebug.com. Thanks again for your time Steven.

Steven: My pleasure. Thanks for having me and keep doing a great work.

Aussie Firebug: Thanks, will do. Cheers mate.

Steven: Cheers

Aussie Firebug: Hi guys, welcome to another episode of the Aussie Firebug Podcast, the financial independence podcast for Australians where I interview clever people who’ve already reached or are on their way to financial independence. Our guest today is actually a podcast listener, he reached out to me via email. Chris is a 29-year old millennial from northeast Victoria who works for a major corporation in a regional town as an engineer. His current net worth is an incredible 301,000, which is mostly invested in Vanguard Managed Funds. Chris reads the blog and listens to the podcast and he thought he could contribute to the discussion so here we are. Chris, welcome to the podcast.

Chris: Yeah, thanks for having me here.

Aussie Firebug: Yeah so really interesting way we got together- you just shot me an email, I guess you listen to a few of the podcast, did you?

Chris: Yeah I think I’ve listened to them all.

Aussie Firebug: Yeah cool so yeah I thought it was really cool. You shot me an email, you know, it had a whole bunch of stuff about you and you know, basically said if you’re interested, we can set up a time and date and we can do a podcast with yourself, which took me close to 6 months to set up because of how much stuff I got on but um… yeah, so here we are and I’m excited to get into it. So I guess the first question I’ll ask you, I gave a bit of an intro about you just before, is there anything I missed or anything that you want to add to that?

Chris: No, that’s about right. I started on not the financial independence journey as it was back in about 2013 after reading Mr. Money Mustache and there’s been some evolutions along the way about how I think but it’s looking pretty good so far I reckon.

Aussie Firebug: Yeah, cool. So were you always good with money at a young age?

Chris: Yeah, I think I’ve generally been pretty good at money. I remember I always had about $10,000 aside for most of my life–

Aussie Firebug: Even as a kid?

Chris: From age probably 15 onwards.

Aussie Firebug: Whoa, that’s a lot of money for 15-year old.

Chris: Yeah, I might  be overstating that but I always had money in the bank- I’m always used to having money in the bank that I wouldn’t spend except for emergencies, whatever that is, because it’s never happened.

Aussie Firebug: Yeah sure, and was that like– did it come from your parents like that mentality with money and having stuff/having money in the bank and you know, saving up for emergencies and stuff like that?

Chris: No, I don’t think so because the more I learn about my parents’ finances- it always seemed fine growing up, you know I come from a relatively well-off background- but the more I talk to my parents as a grown up, they were terrible with money and large credit card debt and you know, borrowing against the house to pay for– you know, not for fruit, well for sort of frivolous things. You know my sister would dance six times a week racking up hundreds of dollars of lessons, I would play music three or four times a week racking up hundreds of dollars of lessons and my parents wanted to fund that all, couldn’t afford it so you, just spend it on the credit card.

Aussie Firebug: Yeah, as you do like that’s just– kids are expensive, right?

Chris: it seems that way, yes.

Aussie Firebug: [Chuckles] Yeah right, so there wasn’t like a… you know, read a book or watched a movie or anything, it just sort of comes naturally to you?

Chris: It must have done, yeah.

Aussie Firebug: Okay. And so you said you first discovered the concept of fire in 2013, like were you saving- you were just generally good with money and you were saving but it wasn’t till 2013 until you had a goal to sort of walk towards, is that accurate?

Chris: Well, it wasn’t till in 2013 that I bought my house as well so I had– ever since starting work I had been saving for something so first of all, I took a huge trip around America so the first year or so I was saving for that then–

Aussie Firebug: What year was that?

Chris: So that would have been 2011.

Aussie Firebug: That was actually a really good– I went to America 2012 when the dollar was over parity back then and I didn’t realize back then how good it was but yeah, 2011 wouldn’t have been too bad as well I think.

Chris: It was pretty nice.

Aussie Firebug: Yeah right.

Chris: So you know, I was used to saving my money for that then I bought my car so I was saving… so week to week I’ve always been pretty good at saving but prior to this I’d always been like well I’m saving so that I can spend all my money at once, basically.

Aussie Firebug: Yeah, you know I had a very similar experience growing up as well that I’d save all this money and I’d be like well, like there’s no point in being the richest person in a graveyard like I need to spend it so I’d like have a big weekend and I’d buy a whole bunch clothes or whatever then I’d feel bad for like just wasting all of the money and it wasn’t until like I found at that financial independence was a thing that it you know, gave me a goal to walk towards and it made it so much easy to save these huge amounts of next stock pile, these huge amount of wealth because it was going towards something.

Chris: Yeah, absolutely.

Aussie Firebug: Yeah, right. So what you did, you bought a house/

Chris: So I bought the house in like 2013 so I sort of discovered the blog, thought maybe this is a good idea but I’ve got something on my mind at the moment and so all that money that I was working towards saving the house, I just kept saving it basically and I’ve tried to trim out the costs here and there on frivolous stuff that doesn’t bring me joy and yeah, keep putting it into shares now.

Aussie Firebug: Yeah right. So how did you actually stumble across Mister Money Mustache?

Chris: A friend of mine. So when we moved here to Victoria, I started meeting new friends kind of thing and one of them was a bit of a follower, she’s not super into the tenants although they’re pretty good, but yeah she mentioned Mr. Money Mustache and oh, “you could be just like him Chris,” well something along those lines.

Aussie Firebug: yeah, right, and that just opened your whole eyes to all the possibilities?

Chris: Yeah, I read the blog you know, I read one article that she was like “you should start with this one,” and then I just like read every single blog post he’d ever written and yeah, I was hooked.

Aussie Firebug: It’s a common theme I think. Well, a lot of people discover Mr. Money Mustache and then they just go nuts. For me it was a book, Rich Dad, Poor Dad, but same sort of a concept like you read and you’re like oh my God! And you read a whole bunch of things and then yeah, it’s pretty cool. So you said you moved to Victoria, where were you living previously?

Chris: Prior to that I lived in Bathurst for a couple years in sort of South Wales I guess, just over the Blue Mountains from Sydney.

Aussie Firebug: Okay, I was not aware of that, that’s not– it’s not metro, is it regional as well?

Chris: Yes, it’s regional as well. So Bathurst, you know the big– the 24-hour race, the supercar?

Aussie Firebug: Yeah, yeah, right. Yeah, yeah I know the supercar race, of course yeah. Okay, cool was that for a job or?

Chris: Yes, that was for my graduate job straight out of uni, I moved out there.

Aussie Firebug: Yeah, nice. That’s quite a move.

Chris: It was quite a move. Yeah, it was three hours from home which is you know, about enough that you can get back in a weekend but definitely far enough away that you’ve got to make your life there and then same thing moving here sort of thing so I’ve moved around a little bit for a while. There was– I think there was a six-year period where I moved every year just about.

Aussie Firebug: Okay, that would have been difficult, was it?

Chris: Um… you certainly have to get good at making new friends because otherwise you’re a very lonely person.

Aussie Firebug: Yeah, actually it was going to be my next question like so obviously you left all your friends and family, did that help save money? I suspect it would.

Chris: I wonder that. My friends are pretty good. Back home, I’m friends with a lot of PhD students and otherwise very low income people so they tend to want to be frugal when we go out anyway which is just what I want to do so we get along pretty well.

Aussie Firebug: That’s a life saver. There’s nothing worse than hanging out with a whole bunch of people that all want to spend money every weekend and you’ve sort of got to be like, “uh… like no, I don’t want to do this and I don’t want to do that,”

Chris: Like this damn a little?

Aussie Firebug: Yeah, that– it makes it hard so that’s good that you have that. So have you calculated your savings rate at all?

Chris: Yes, so I calculate it once per year. I go through pocketbook which is one of these apps that will link into all your bank accounts and you can categorize all your spending.

Aussie Firebug: Yes, that’s great.

Chris: So the year I discovered fire, 2012-’13 financial year, like I was already at about 50% saving rate so that was I was saving for the house so that was mainly a normal kind of thing. For when you’re ahead, 65%, last year I hit sorry, 14-15 I had 70% and then last year I did terribly partly because I got on an international holiday every year and two of those fell on the same financial year so I do one each calendar year but it was like a back half of one year and the front half of the next year so last year the rate was only 56% which was lower than I would ideally like but it was a nice holiday so it trades offs.

Aussie Firebug: Yeah, exactly. Yeah, I guess you can’t live you know, it’s got to be tradeoffs, that’s exactly right, you can’t be overly frugal, you know, have a bad quality of life, it defeats the purpose I guess to reach financial independence but yeah, it’s still good, 56 is nothing to pull your nose about. So you bought a house and now I have to ask so you just got a touch over a $300,000 net worth, is that including the house?

Chris: That’s including the house, correct.

Aussie Firebug: Okay and how much of that equity is part of that $301,000?

Chris: $107,000 is in the house.

Aussie Firebug: $107, okay alright. So you were what- 26 if my calculations are correct, when you bought?

Chris: Right, yeah, that sounds right.

Aussie Firebug: Yeah right, and I do have to disclose because I did I ask you about it, you did have some contributions to your parents towards that house, am I right?

Chris: Yeah, so we paid a 20% deposit and I had saved 10% of that, my parents gifted me the other 10% so I’ve gotten a bit lucky there.

Aussie Firebug: Yeah, yeah, yeah and like that’s– if you’ve got those advantages, you’ve got to take them, right? Like everyone’s got different circumstances so there’s no harm–

Chris: Yeah, as much I said my parents aren’t good with money and I was joking about that earlier, my parents are both public servants and living on government pensions which are pretty generous so they’re doing just fine I think they’re too taking the gift of them.

Aussie Firebug: Yeah and I’m sure they’re doing above average. I guess when you read and like you start listening to the fire crowd, so many people’s savings rates sound so abysmal but like in reality, if you’re saving 50% of your income, you’re better than 99.9% of people. It’s all the blogs that you’re reading. Yeah, cool–

Chris: Are they absolute outliers?

Aussie Firebug: Exactly right, exactly right. Alright so that’s about close to $200,000 in Vanguard, is that right?

Chris: Correct.

Aussie Firebug: Yeah, now I guess I’ll ask so why Vanguard?

Chris: I drank the cool aid I guess, I read a few books on investing well I was saving up enough to have a share portfolio so I started by just putting the money I had on the mortgage, paid off early for 3-6 months while I worked out how I wanted to invest/what I wanted to do and I’m pretty much convinced by the idea that some very, very well paid, fairly smart people on Wall Street buying and selling the bulk of shares and the idea that I could be smarter than any of them was unlikely, I don’t have the interest, I don’t have the inclination and I definitely don’t have the time so just riding the market out seemed the way to do it and Vanguard was the first player in that space, I had a look around at the different fee structures and Vanguard generally came out favorable so that’s where I made the call.

Aussie Firebug: Yeah right. Now you originally emailed me about that you did manage funds but we were recently speaking and you said you’ve just made the switch to ETF’s, do you want to tell us just a bit about the thinking behind that decision?

Chris: Yeah, yeah, absolutely. So the managed funds are really great because once you’ve opened it for $5000, you can just be paying $100 at a time and so when I started this journey, I was on a lower income and couldn’t save as much of my post-tax income per week so you know, a couple of hundred dollars or a $100 into an Australian fund and $100 into an international fund worked out really well, kept me disciplined, made sure the money kept going but the fee structure in a managed fund is much higher and I’ve never worked out why exactly that is but you pay about 0.9% expense ratio in the managed fund compared to only about 0.15 in the ETF’s but on the tradeoffs, you pay brokerage every time you want to buy into the ETF’s so if you buy $100 shares and you’re paying $10 brokerage you’re an idiot basically.

Aussie Firebug: Yeah, I think there’s a calculator app there that I might link to in the show notes that basically you know, you punch in buy shares what frequency you want to buy and stuff like that, it works out you know, is it better off to open up a managed fund or is it better off to go through ETF’s, yeah I’ll put that in the show notes.

Chris: Yeah, link that one because I did the calculations myself when I first started which is why I ended up in the mutual fund but I always knew that about this point in net worth, it seemed worthwhile to make the switch. Also I’m able to invest about $2500 a month in my take home pay so that seems to make the brokerage less significant, it’s a $10 or $11 fee and with CMC markets, that works out to about 0.5-0.4% I guess.

Aussie Firebug: Yeah right, cool. And so I’ve always gone through the ETF’s, I’ve never gone through the managed fund and I’m curious myself, are they the same? Are they exactly the same- can you know how like the ETF’s you can have like VAS for Australian shares, can you buy the managed fund equivalent of that or is it something different?

Chris: Yeah, they’re basically– they might not all be the same but I mean VAS and VGS I think and there is an equivalent managed fund for both of those.

Aussie Firebug: Yeah, got you. Okay cool and so how long– what time frame have you been investing through Vanguard for now?

Chris: So I started it on the 21st of May 2014, according to my spreadsheet.

Aussie Firebug: So a few years now and you loving it? Is it all going as you thought it would be?

Chris: Um… it’s up and down. You know there’s periods where you know I would throw $2000 a month that it and still have the same amount of dollars at the end of every month, which was a little bit sad. I sat on $49000-$51000 dollars of shares for how long- 10 months I think, so you know, that’s me throwing money into it and just watching it go down every month. That’s a little demoralizing but you’ve got to be in on it for the long haul. I take– particularly the more I follow this fire path, I probably got different goals in mind or a different philosophy in mind than a lot of people. I read on the Reddit a lot, people who just hate their jobs because they’re ultra-high pressure and they’re ultra-high earning kind of thing and they’re just begging to get out whereas I actually, I really quite enjoy my job, I quite enjoy my life even if I could retire right now, I’m not sure I’d change anything other than maybe go down to four days a week at my job so I almost pursue fire in absence of wanting to spend my money on anything else like I spend my money– I buy everything that I want but Mr. Money Mustache and the other bloggers like yourself have helped me focus on do I really want to drive a BMW to work every day or is my $200 bike actually a much better way to start the day and I’m firmly of the opinion that riding my $200 bike to work every day makes me fitter, makes me happier, makes a healthier, just gives me a better overall lifestyle.

Aussie Firebug: Yeah awesome, really, really cool. I think it had a really good post that the less things um… I don’t know how to table this correctly, it’s like the less things that you want, the more things that you’ll have, basically something of that nature. Like him and his wife come Christmas time, there is literally nothing that he really wants in reality. He has everything that he wants so he’s happy with what he has, you know spending such an incredibly low amount of money in a year compared to other people in his salary bracket that it’s like yeah, you think if you want that new BMW, you’re never got to satisfied because the new one is going to be released the year after, the year after so yeah, it’s a cool concept to have and I’m definitely a big believer in that as well. Me and the girlfriend actually, we’re just about to head off to a hike after this podcast– yeah we live in regional Victoria as well and like I love going down the road and hiking around where we live and it costs zero money to do and it’s awesome, you know I would much rather do it than like go out for  like go clubbing or something like that.

Chris: Yeah, pay $300 to go to a club or something.

Aussie Firebug: Yeah and even if you take away the dollar value, I’d almost like– well pretty sure I’d rather go hiking than like hit the beach or something than do the other thing that costs so much more but um… yeah that’s really cool to hear. What sort of bike you have- you don’t have an electric bike, do you?

Chris: No, I don’t have an electric bike. I’ve been tempted that several times but I just keep getting fitter so the electric bike gets less and less necessary. When I say about everything, I want every now and then that’s a big purchase so you may say you’re not really on the fire path. I’ve been riding a $200 trek 7.3 FX for the past three years but for Christmas I bought myself a giant defy advance 2 to which is full carbon fiber hydraulic suspense. It is magical.

Aussie Firebug: Yeah, I don’t think that’s too– you know, you can spoil yourself every now and then. I ride an electric bike, actually and I love it like I don’t ride it to keep fit, I always get talk shit from people at work like, “you’re a young, fit boy, like why do you have an electric bike?” something I’m like, “this is my toy, like I zoom around town on it like this is– I like riding this thing. I don’t do it to– like I run and play footy and stuff and I don’t ride my bike to keep fit but I love it. Have you ever ridden one? — Because it is so much fun.

Chris: I would love to give it a try because I’ve also thought, you know, I’ve replaced 90% of my car journeys with a bike, I reckon I could replace 95-99 if I have the electric bike because there’s times when you know you know, I’m going to be riding back at 11:00 PM, I don’t really want to so I’m just going to take the car out this time but if I had the electric bike and I knew it’s going to be pretty to scoot home I’d ride even more.

Aussie Firebug: Yeah, they’re really fun. I should do a post on them that they’re really cheap to build these as well like I remember looking–

Chris: Oh, you built one?

Aussie Firebug: Yeah, I build all of mine like oh my God, you save. You know, it costs you about a third of the price if you build like if you buy the conversion kits, that’s what they’re called, and you actually buy a decent bike like you can buy a joint and then you can put an electric kit onto it and its kick-ass like it’s so good. You get like a really high quality Samsung-cell battery and like a really good engine–

Chris: I reckon that would be a great post- that would be something I’d love to read.

Aussie Firebug: Yeah, I’ve got so many posts I need to get through but I’ll add it to the list but if you were to buy a pre-made one, you know, they’re still like $2500 if you want a real kick-ass one but I built mine for like 950 bucks and I ride it everywhere like all around town so…

Chris: Ever heard what the correct number of bikes to own is?

Aussie Firebug: Um… one? [Chuckles]

Chris: Well, one more than what you’ve got now.

Aussie Firebug: Yeah, I agree. [Chuckles] I definitely agree to that.

Chris: Alternatively, if you have a spouse, the correct number of bikes S-1 where S is the number when your spouse will leave you.

Aussie Firebug: [Chuckles] I like that too. I might put that in the show notes. Alright back to what we were talking about, so Vanguard yeah, you made the switch to ATF’s so tell me about– do you sell– so you’ve got a whole bunch of managed funds still or?

Chris: No, I sold out of them.

Aussie Firebug: So you completely cashed out?

Chris: Yeah.

Aussie Firebug: And did you jack a hit to a capital gains tax?

Chris: No, luckily, luckily [chuckles], I’d lost money on my shares so I had to cover the capital loss to carry forward.

Aussie Firebug: Right, so okay. So you lost money–

Chris: During the timing of the market, you know, that period I was saying where I kept throwing two grand a month and I kept making no money, the way it’s worked out is I’ve actually lost capital on my shares in Vanguard so…

Aussie Firebug: Cool and so it’s all in ATS, and which parker are you through?

Chris: I use CMC markets.

Aussie Firebug: And it was $10 a–?

Chris: $11 and if it’s over a certain value, they charge percentage as well.

Aussie Firebug: Okay, that’s quite like, I go through it at —

Chris: But it’s brighter as you– Yeah, I bank with Commonwealth but yeah, they’re about twice as much so…

Aussie Firebug: Yeah okay I might look into that. What’s it called, CM markets, is it?

Chris: C-M-C Markets, yeah.

Aussie Firebug: CMC Markets. I think my last one, like I just did under 10 grand’s worth and it was like 19 bucks so I’ll have a look.

Chris: Yeah that’s not too bad. That’s kind of the level of trading but I think CMC would’ve been 11 bucks for that much.

Aussie Firebug: Yeah, cool, cool. So you’re going to stick with Vanguard, any other investments interest you or you’re just going to stick with Vanguard till you hit fire?

Chris: I’m probably going to stick with Vanguard till I hit fire. Other than investing in my own business, which I think about, already I’ve invested a little bit I think on and off you know, took a big ten-twenty thousand dollar investment and get a proper production running, Vanguard just seems like the zero effort option.

Aussie Firebug: Yeah, I can definitely echo that sentiment as well because I’m with Vanguard and have three missing properties and it’s definitely– like Vanguard is just effortless, you know, you throw money at this thing and it spits out money, it just keeps giving you dividends and like eventually, it should go up after like a long period of time so it couldn’t be any more easier. I’d recommend it to absolutely anyone like the properties have done well for me so far but like I definitely– they’re in active management, those at Vanguard so it’s completely passive you know, so, so low maintenance. Tells us a bit about this business, what’s this business you’re thinking about starting or you already started?

Chris: We have started it, me and a friend from university, it’s a kick-starter business so I decided to learn how to program electronics last year, it must have been even the year before now that it’s 2017 and I’ve always had an interest in clocks which is pretty common for engineers and people who want to do electronics so I’ve designed this clock which I call The Light Clock. Initially it was going to be just a Christmas present for my grandfather because he loves clocks as well, but I kept posting about it on Facebook and a lot of people were like, ‘wow! That’s so cool, Chris,’ and a couple of them were like, ‘would you make one for me, I’d be happy to pay for it,’ I’m like oh, I have an idea now.

Aussie Firebug: So you’ve got a kick-starter page at the moment, do you?

Chris: It’s not live now, I threw on the kick-starter in October/November 2015, we raised $31,000 off that which was pretty amazing for a first time kick-starter I’m like shocked that we made it so then went through a manufacturer, we bought a lot of parts you know, custom designed parts from China, shipped them over to Australia, hand assembled them in my parents garage with some friends, bought them dinner, [chuckles] low labor costs there and shipped them all over the world so they’re in something like 30 countries, we did track it at some point.

Aussie Firebug: Oh my God, so what actually is it- it’s a clock, it’s a?

Chris: It’s a clock but rather than– it runs 120 high-brightness– let me– I’ll send you a link, you could put this in the show.

Aussie Firebug: Yeah, I was going to say, send me a link, it sounds cool and have you got a website or anything?

Chris: We do, yeah. It’s just www.thelightclock.com, it should be in your text chat.

Aussie Firebug: Yeah, it is. Nice, okay, I’ll put that in the show notes and you guys can check that out. That’s exciting.

Chris: Yeah, it sort of was exciting, yeah we got a map, we’re in must be 20 countries, most of North America, a lot of Asia, Australia, a lot of Europe kind of thing but yes, as a clock, it’s sort of– it’s 120 high brightness LED’s and it connects to the internet so you can use an app with it on your phone and so rather than having a long hand and a short hand like a typical clock, you might have a blue hand and a yellow hand so it lights up your whole wall in this beautiful color which you can customize.

Aussie Firebug: You guys can’t see obviously in the podcast, but it looks pretty cool, I understand what you’re saying now that I can see it, yeah nice. How much do they run for?

Chris: They’re $229 US at the moment which is at about $300 Australian.

Aussie Firebug: Yeah very nice. So you programmed it yourself?

Chris: I programmed it myself, yeah.

Aussie Firebug: What language?

Chris: Arduino code.

Aussie Firebug: Arduino?

Chris: Which is sort of C but designed for electronics rather than just pure programming so it’s got a whole lot of libraries to run the LED’s and to run the Wi-Fi module and you know, you can attach sensors to it. It has got a lot of libraries prepackaged ready to go for that kind of stuff.

Aussie Firebug: Yeah cool, nice, very cool. And also so you’ve got that business and you work as an engineer but you’ve also got a side hustle?

Chris: Yes, I do, yeah.

Aussie Firebug: Why don’t you tell us a bit more about that?

Chris: Yeah, last year we decided to run our houses on Airbnb, we have a three-bedroom house just between the two of us which is massively excessive to our needs so it made sense to rent out a room. We’d had a lodger before, you know, someone who lived here full-time but we felt we liked our privacy some other time but didn’t need it all of the time so Airbnb, you get a much better rate per night and you have people on staying you know, one or two nights and then you can go back to having your privacy.

Aussie Firebug: So what was that conversation, like that with your fiancé, you know because that’s a site that interests me as well but you know, convincing the partner to have someone move in for a couple weeks or days at a time, how did that go down?

Chris: Pretty good, the way I sold it to her is that you know we have this wedding coming up which is going to be pretty expensive and that all of this money would get channeled straight into the wedding fund.

Aussie Firebug: Yeah right. And so what are you getting, just out of curiosity?

Chris: In some weekends, $60 a night, and we give a 20% discount if you stay for a week or more. But that’s still more than my mortgage like if people staying for a week, they’re paying my mortgage for me.

Aussie Firebug: That’s so cool and so that’s all through Airbnb?

Chris: All through Airbnb.

Aussie Firebug: And what do they charge?

Aussie Firebug: They make it very confusing to work out what they, they’re real sneaky. They charge me a couple of bucks on my end but I think they charge the guest a couple of bucks on their end as well. I actually don’t–. It’s got to be around 5-10% mark but it sort of well probably deliberately difficult to work out what Airbnb’s take is.

Aussie Firebug: And so you’re living in regional Victoria, how big is the town/city that you’re in, the population?

Chris: Um… it’s got 100,000, no probably like 80,000 somewhere maybe down.

Aussie Firebug: So it’s quite big, it’s a decent size, not like– I live in a town that’s like 2000 so the odds of me getting someone you know are severely lower.

Chris: Where you are, yeah.

Aussie Firebug: Yeah exactly but yeah now that’s a cool idea especially if you’re in like the city or something. That’s very cool. I guess the only thing is like you have a loan for your own home but if you are renting a house, I don’t know the rules behind subletting it.

Chris: Pretty sure you have to ask the permission of your landlord.

Aussie Firebug: I don’t know if you actually do because I’m a landlord myself and I read all the magazines and everything every month and I have heard, correct me if I’m wrong please someone in the comments if you know the answer to this, but I think that it’s part of like once you sign the contract, you are actually allowed to sublet but it sounds wrong, I’m not sure, I’ll find the answer to that but yeah, I thought it was some sort of weird thing that they actually can’t stop you from, you know, renting out a room via Airbnb because when you think about like if someone rented one of my houses, what’s me to stop them having someone sleeping like in another room, why can’t they just have like a friend over for a weekend? I couldn’t really– like I’d be a real prick if I said, “you know what…”

Aussie Firebug: Yeah, your landlord having that power over you, not to rent out.

Aussie Firebug: Yeah, exactly so I don’t know what the rules are anyway I’ll figure that out and put it in the show notes but yeah, so that’s another income stream?

Chris: Yeah.

Aussie Firebug: You guys would be loving– paying for the wedding, paying for your mortgage, sometimes that’s cool.

Chris: Yeah, it does help.

Aussie Firebug: Was there any– I guess if you’ve got the other business of the clock like I was kind of saying was there anything else you’re looking at as a side hustle but I’m sure–

Chris: That’s enough hustles for me.

Aussie Firebug: Yeah absolutely, like I’m having a look at this, The Light Clock website, you know, like all legit and everything so that’s very cool. Yeah, so you’ve got a few things going on then?

Chris: Yeah, I like to do things that I like to do. The Airbnb is purely for money as a side hustle, the light clock doesn’t really make me a whole lot of money, it’s just a fun thing sort of thing, learn a bit about business, learn a bit about coding, learn a bit about manufacturing as you said before, I’m an engineer so the idea of having a product that I have developed from the ground up was really, really appealing.

Aussie Firebug: It’s really cool. I really respect people that go off and create their own thing and make a little business out of it so you know, good luck to you.

Chris: Thank you.

Aussie Firebug: Do you know– have you worked out your financial independence number?

Chris: Um…it changes I was recently- I don’t know whether you read the post- there was a big analysis done on financial independence, the mine sub which this 4% rule that we’ve all been using for about I reckon is probably not that safe for a retirement. So you know, if you’re going to retire at 60, 4% is probably pretty safe, if you want to retire at 35 then you deal with a lot more risk with a 4% withdrawal rate so I’ve just shifted to a 3.5% safe withdrawal rate and that would put me at needing three quarters of $1000000 plus having paid off my house so that’s about a bit over 1000000 total.

Aussie Firebug: So assuming that your house is paid off, 370k. Sorry 350k?

Chris: 750k, 750k.

Aussie Firebug: That’s not too bad. And how are you going to incorporate super into that like I don’t know if you’ve seen, I had a financial independence calculator specifically for Australians that highlighted the you know, we could super search a tax advantage strategy, it’s hard to ignore it completely and you sort of have to break down your financial dependence number into two sort of numbers, one before you can hit your preservation age and the other one being how much after having super at your preservation age to last forever. Have you consider that at all?

Chris: I have considered that a bit and I’ve been working with you on your– I’ve been looking at your calculator with keen, keen interest so I’ve just made a whole lot of suggestions–

Aussie Firebug: Which I did read your email actually and you know what, I’m just about to release the second of it all, version 1.2 of it, because there was an error in one of the cells that was like throwing out this weird result and everyone was emailing me about the super contributions so yes, it’s coming everyone, I’ve added it in, you can change how much your employer contributes to your super yearly, yes it is coming.

Chris: That would be awesome so it’s basically something I’ve put in the back of my mind, my employer owes me, sorry doesn’t owe me, offers me a super match which I take advantage of, but I don’t sacrifice beyond what I need to get the maximum of that match. I would be really, really interested as we develop your calculator, as you develop your calculator and I’ll help where I can sort of thing, whether I should start contributing more because the tax advantages you know, are quite significant the more you move up in income and there’s that $25000 a year limit that you’re allowed to put into it so if I want to take more advantage of this super tax advantage, I need to start now rather than starting one year before retirement and just saying I’m going to put my whole income into super, something I should be thinking about. I’ve always sort of figured that retirement is ten-ish years away so I can be gradually working out the details but you know, that’s one of the details I would really, really like to work out.

Aussie Firebug: Which is what so many people do, right? Like they go through their whole life and in the last five years, they hit 60 or something, in the last five years, they dump in 90% of their salary into their super like it’s such an inefficient way to do it but like you’ve got understand not everyone can– it’s thinking about these sort of things at our age so I’ve had a play around with the calculator like the improved one that I’ve like fixed and it’s so incredible you know, you only have to add such a little amount of money into your super because we’re so young just to see it compound all the way up into your preservation age, it turns into such an incredible amount of money so easily, just like a couple years of solid contributions can just make a world of difference like it’s absolutely incredible. And the other thing is well, because your preservation age is you know, 60+ years away, who knows what they’re going to change it to by the time we get there. That gives us so many years that if we’re approaching the preservation age or a couple of years away, worst case scenario, and I think about this all the time like this, the whole financial independence you know it’s good to calculate a number and like you know, I made a calculated to help people calculate a number of years and so forth but really, worst case scenario, if you do you run low on cash, you can get a job, like you can get a job or you can do something else just to top up your money or your net worth for a few years and that just blows the projections completely out of the water like if you’re going to get another job 10 years down the track and you’re only working for a few years and suddenly your financial independence type, it’s decreased so much just because you hadn’t factored that into the equation when you first did it so I always think of worst case scenarios like that, it’s a pretty nice option to have if that’s your worst case scenario, you know, for you to survive I only have to work an extra year, didn’t think I’d have to work but it’s pretty cool.

Chris: Yeah, absolutely.

Aussie Firebug: Yeah I now I sell– I don’t know if I asked you– do you know how many years you’ve got till you reach your number?

Chris: If my very rough calculations are correct, then I’ll need another eleven years.

Aussie Firebug: Eleven years, that puts you what- up to 41?

Chris: 41 years old, yeah.

Aussie Firebug: Yeah, right, cool. That’s incredible and do you think you’ll work up till then and just like completely shut down or like do you have other aspirations that you want to move into once you hit that magical number and you know, you don’t have to work for a living?

Chris: Well, like I say, I quite enjoy my job so there’s a very strong possibility that I could get close or get there and just talk to my boss and see if I can organize you know, a three day week or a four day week, I might take a year off as a sabbatical to just go traveling. I used to live in the UK so I could go and visit friends over there. Yeah, I don’t see my life really dramatically shifting. This isn’t some sort of utopia that’s going to turn my life around but I think it’s just a hobby that’s fun to approach kind of thing so, yeah a bit more leisure time; potentially a year off or months off to go traveling.

Aussie Firebug: And I think that’s a good way to look at it as well like if you already have a happy life and then you reach financial independence, well that’s fantastic, it shouldn’t be– the goal shouldn’t be once I reach financial independence then I’m going to be happy because I don’t think like if you’re living a bad life you know, having a number tick over to a certain net worth in your bank account isn’t magically going to make you happy.

Chris: No it’s not.

Aussie Firebug: So I think it’s a good way to look at it and I am just on that, you know, winding down the days per week. I think that’s why I’ll do it as well because wouldn’t it just be magical to work three days a week, four days off? [Chuckles]

Chris: Four-day weekend but three-day week, yeah.

Aussie Firebug: Four-day weekend just sounds phenomenal to me. I could work just about any job like if I only had to be there three days a week and this is coming– you know, I like my job as well, I’m quite happy in my job but I feel though like five days is just like too much time out of my life like there’s so much else I could be doing and want to be doing even though I like my job to an extent. Three days a week, that sounds phenomenal, you know, imagine how much leisure time and creative time you could use to just do anything that you wanted without– and the other thing as well for me is you know, when kids roll along like I’ve seen a lot of people at work rocking up to work like an absolute zombie because their six-month old has been crying all night and hasn’t been sleeping or whatever, that really appeals to me you know, winding down the full-time work to you know, four days a week/ three days a week and then maybe you know, if I don’t like that job anymore, I could just quit without any repercussions financially and then pick up something else that I really like so just all the options and flexibility, really cool.

Chris: Yeah, money buys you a whole lot of options, that’s what I’ve found even more generally, you know since I’ve started down this track and have plenty of cushion underneath me, any setbacks doesn’t stress me anymore. My partner ran my car into my house, that’s got to be expensive but who cares, it’s only money.

Aussie Firebug: Yeah and that’s the beauty of having that buffer ride it’s like it doesn’t stress you out, yeah very cool. What’s the best bit of advice you can give to someone like you’re really young with such a good net worth already, and well on your way to reaching financial dependence, if you could give the best bit of advice to someone trying to reach financial independence today, what would it be?

Chris: I reckon you’ve got to start- and I see a lot of people do this which I think is good- you’ve got to start it as a hobby so you’ve got your hobby as how little can I spent this year? And it’s really fun, I found it really fun to work out you know, what can I say shave; if I ride to work, what does that shave? If I just make my own bread and have a sandwich, what is that shave? And have had a lot of fun with it but don’t feel like after a couple years that you can work out what’s important to you doing that so you know, buying a canteen lunch every day, super not important to me but owning a nice bike, turns out that is important to me and I’m okay to spend the money on that so I would say start by going as hard as possible for a couple years with the idea in mind that you’re not going to live this ultra-hard for the rest of your life, it’s going to help you figure out what’s important to you. I think the fire mindset is about working what’s important to you and only spending your money on that. There’s so many temptations in the world of people who want your money that don’t increase your happiness, don’t increase your life in any way, cut them all out and only buy back the ones that are important to you.

Aussie Firebug: Yeah wonderful. Great advice, I definitely agree with you and everything you said. I think having– and I always tell people even just friends and family that don’t even know I have this blog or anything, just that they know I’m good with money, you know, what can I do to help me save money? I always say track your expenses, that’s the number one thing- track all your expenses because it will open up your eyes to how much crap that you buy that you don’t even care about that you couldn’t even give two stuffs about but it’s coming out of your account every month. Track all your expenses and sort of make a game, like you said. We both use pocketbook to track our expenses. I love looking at the pie chart in pocketbook just about every day and like seeing how close I am to the record for this month and you know, if I don’t spend any money in the next couple days, I can break the new record and stuff like that so it is good to make a game out of it but like you said, you know, you quickly realize how important the real important stuff is to you and like it’s not the world if you just splurge once in a while on that sort of stuff.

Chris: Yep, if it’s adding value to life, buy it but if it’s not, cut it out.

Aussie Firebug: Yeah, cool. Now, you don’t have a website up or anything, a blog or anything like that? If anyone is listening to this podcast and wanted to ask you a question, what’s the best way to get in contact with you? I know you’re on Reddit?

Chris: Yeah, find me on Reddit, that’s where I do most of my financial independence kind of stuff so if you want to send a private message to Chris Melba, I’m happy to chat with you.

Aussie Firebug: Yeah and I’ll put that in the show notes, Chris’s Reddit username, so on Reddit where do you hang out mostly on?

Chris: I’m subscribed to Personal Finance, Financial Independence, F.I Australia, Australian Finance and the ESPA 266 but I browse slash 00 quite a lot so I just got a huge amount of crap sent to me through that.

Aussie Firebug: [Chuckles] Cool. So yeah, you can hit Chris up on Reddit if you have any questions for him. And that brings us to the end of the podcast. If you enjoy these podcasts and want me to make more, make sure you drop me a comment and a rating on iTunes, you can search for my name, Aussie Firebug, on iTunes and you’ll find me. I’m also in SoundCloud at www.soundcloud.com/aussie-firebug and a transcript of the show notes of this episode can be found on my website at www.aussiefirebug.com. Thanks for your time, Chris.

Chris: No worries. I’ve just got a Mr. Silver, a friend mine who is also semi- F.I path, he says hi, he’s a podcast listener as well.

Aussie Firebug: Oh, who’s that?

Chris: Mr. Silver, he is on Reddit.

Aussie Firebug: Okay, Mr. Silver, alright. Shout out to Mr. Silver on Reddit. Thanks a lot Chris.

Chris: No worries. Thanks very much.