I share these net worth updates to stay accountable, seek feedback on our strategy, and prove that achieving financial independence in Australia is feasible without relying on extraordinary luck or wealth. The table below tracks our journey from $36K in debt to reaching our goals. 🔥
Quick update for September.
The biggest highlight? My daughter turning one 🎂🥳.
People always said, “Enjoy it while they’re young, it goes by fast,” but seriously, it feels like we were just bringing her home from the hospital yesterday.
Time flies!
Net Worth Update
A bit of a strange month for the net worth.
Our assets had a fantastic bump across the board, but the company had a big tax bill, which pretty much wiped out all the September gains.
In other news…
Our PPoR split loan just came off its fixed rate and jumped from 2.99% to 6.4%—ouch!
Now that it’s variable, I’m planning to debt recycle this split loan. I’ll be using some of our cash and selling our VAS shares to buy A200. I ran this by my accountant, and it’s all good on the ‘wash sale’ front.
The trust will need to distribute some capital gains, but that’s not a big deal since most of it came from dividends anyway.
After this is done, we will have a slightly more consolidated portfolio and a 100% debt-recycled PPoR loan 🥳.
.
*Expenses include everything we spend money on to maintain our lifestyle. We do not include paying down our PPoR loan as an expense, only the interest
*Investment income is simply 4% of our FIRE portfolio divided by 12
.
Shares
The above graph was created by Sharesight
Epic month across the board!
Question: Why do we have A200 & VAS?
Answer: We started buying A200 in August 2018 after Vanguard didn’t lower their MER to match A200. Practically speaking, A200 and VAS are almost identical so it makes sense to go with the lower MER. As an added benefit, I like the fund diversification between Vanguard and Betashares. We decided to hold both after making the switch since it doesn’t have any impact other than some extra accounting work once a year.
Networth
Impressive as always 🙂 good to see you on track
As someone close-ish to FIRE these updates are really valuable
“Great update! I’d love to hear more about what you do with your loan and debt recycling.
Yes, it would be great to know if you’re planning to debt recycle the whole amount at once or split the loans into smaller amounts to dollar cost average over an extended period of time given that the share market is at all time highs.
Whole amount at once.
I’m also interested to hear what happened to the LIC plan ?
Me too I’m also interested in this. I’m in a similar situation but would feel more comfortable debt recycling when interest rates drop.
+1 on finding out more about debt recycling. I assume you’re going to split your PPoR loan and maybe use some equity to invest in shares. Keen to read about more about such experience.
Debt Recyling, seems like the current trendy thing to do. I have trouble understanding the process. People say it’s a simple concept, however, when any person tries to explain the concept, it leaves me more confused.
Thanks, Nat.
We’re essentially applying the same approach to this half of the loan as we did with the first half, as explained in this article (https://www.aussiefirebug.com/debt-recycling/).
I was just waiting for the fixed loan to convert to a variable rate, so we could pay it down to zero and then redraw it for investment purposes.
Your journey continues to motivate many of us like myself! Thank you for sharing and keep progressing!
Hey Aussie fire bug at one point you were talking about buying LIC’s, is this still something you plan to do at some point ? My wife has just gone back to full time work and over the next 5 years we will have the income to make a meaningful amount of progress on our investing journey.
Still struggling with the age old question of what to invest in. What ever we do will focus largely on the income generated by Australian shares.
Hi Corey,
In my opinion, both LICs and ETFs are great options for reaching FIRE in Australia.
I’ve shared why I personally prefer ETFs in this article: https://www.aussiefirebug.com/etfs-vs-lics-and-strategy-3-revisited/
Hope that helps! 🙂
Cheers
Hi AussieFirebug, did you post the correct article? Because in that article you wrote that you have chosen to invest both in ETF and LICs however I can see in all your more recent Sharesight screenshots that you are only invested in A200 VAS VEU VTS and BTC. ??
So why are you selling VAS to buy A200?
he has this above in small print: Basically it has a lower management fee.
Question: Why do we have A200 & VAS?
Answer: We started buying A200 in August 2018 after Vanguard didn’t lower their MER to match A200. Practically speaking, A200 and VAS are almost identical so it makes sense to go with the lower MER. As an added benefit, I like the fund diversification between Vanguard and Betashares. We decided to hold both after making the switch since it doesn’t have any impact other than some extra accounting work once a year.
Ditto, I’d love to know your thoughts here as well. You have always said that you “like the fund diversification between Vanguard and Betashares”. Love following your story, thanks!
Sounds like a good idea to switch from VAS (0.07%) to A200 (0.04%) which is a $30 saving for every $100k. But doesn’t this create a CGT event which you will have to pay tax on?
Yes, it does. Most of our gains from VAS come from dividends, so it’s not too bad. Plus, the trust can distribute to four self-funded retiree grandparents, which helps immensely.
Two main reasons…
1. We have two products (VAS and A200) that are essentially serving the same purpose, so I want to consolidate them into one.
2. I need the extra cash to pay down my split loan to $0 before redrawing it for debt recycling.
Cheers
Hey,
Congratulations on your daughter turning one! 😄
My husband and I are on this journey as well and we have been struggling to find a good accountant. We as a couple are managing on our own and now that we have bought our second property which is our PPoR, I really want to look into debt recycling. We have tried 3 accountants in the past 3 years and all of them were okayish with no inputs on how can we improve our portfolio, except negative gearing and they charged us pretty good as well. We really want to now invest into finding good financial advisor and tax accountant. Could you please give us some inputs on how to find one or recommend some in Sydney area?
Thanks Sehej!
Try posting in my Facebook group https://www.facebook.com/groups/2349400101853544/
Plently of people from Sydney in that group.
Good luck 🙂
Hi! I love these updates but I’m always so confused how you can keep expenses so low. I think I’m frugal and then see this and think maybe not! Would you mind doing an overview of your annual expenses by category?
Hey Alison! You may be interested to know that AFB last did a annual spendings review for the FY year 2019-20. You can read it here:
https://www.aussiefirebug.com/savings-review-19-20/
Probably a bit dated now because of inflation and also AFB’s lifestyle has changed quite a bit since then (eg. he now lives in his PPoR).
Hi Alison,
It’s all relative—I’ve seen other FIRE blogs that make our numbers look quite extravagant!
I’m definitely due for another annual update, leave it with me 🙂
Cheers
Hi mate
How does the dept recycling into you trust from your PPOR work is it exactly the same as if you were buying the shares in your own name or is there some added complexity?
Thanks
Explained here mate (half way down the article)
https://www.aussiefirebug.com/debt-recycling/
Cheers
Hi mate
How does the dept recycling into you trust from your PPOR work is it exactly the same as if you were buying the shares in your own name or is there some added complexity?
Thanks
I think I might be suffering from one more year syndrome. We have same amount in share investments as you, no mortgage and over $1M in super but I still can’t pull the pin. Our monthly expenses would be twice yours however. 3 kids, two in high school, one finished. Am I mad to still be driving 50 mins each way to a job I hate? We’re mid 40’s and both over it.
Hi Leanne,
It’s such a personal decision, and even if I knew every detail, I still wouldn’t know how you and your partner feel about it.
Can you start easing back from work and try something different? Maybe semi-retirement or something like that?
One day you will die.
Hey AFB, just a heads up; I noticed your Aug-24 net worth report link is broken.
June and July-24 both working fine, as is this one.
Cheers.
Seems to be working for me lad… Got a screenshot?
Doesn’t work for me either – just a message saying “No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.”.
Only for your Aug post, all others are fine.
Congratulations on the first birthday!
I have to say, these last couple years — it’s been tough not to look at the S&P500 returns and think “what if”.
The advice I always heard ten years ago was to just put it all in IVV while still working. I went with a slightly more balanced approach similar to an aggressive Stockspot portfolio. Looking back, I wonder if it was really worth it for the extra “safety”. I guess there’s another timeline where I’m grateful for it.
Happy first birthday to baby Firebug! Time does fly indeed. Good on you for going for debt recycling I gave up on it as the extra risk would not make me sleep well at night hehe! Agonised over it. It became more about freedom to work part time, take some mini-retirements.
Congrats on the $1.5m AFB.
I assume you’ll need to invest in own name to be able to offset income tax with debt recycling? (Eg will not be able to hold the debt recycling shares under the trust?)
Love the updates every month.