FIRE Starters (Financial Independence, Retire Early)

Damn. So I just found out I’m a fraud, and I’m doing life all wrong apparently.

@Piston_Broke I’m Dave from SMA, the one you seem to have a fascination about disproving. Is there something in particular you want clarified?

Basically every comment you’ve made has been addressed on the blog in various places, sometimes even in the same posts you’ve quoted from. So you’re either hearing what you want to hear or you’ve just missed it.

I understand that my situation and story are not the norm, but it isn’t totally outlandish either.

If a couple with no dependants saves a lot for a number of years and earns a return on their money, then if their needs are low it doesn’t take that long to reach enough wealth to live on.

There are numerous stories from ppl all over the world doing this because they want more time, freedom and independence than the traditional full time work arrangement gives them.

Thanks to the ppl who get it and chipped in on my behalf, much appreciated!

 

Awesome Dave. Best thing is time. In a few years, any criticism about your approach - and you - will fade to be a complete non-event.

Cheers, bro.

 

Haha cheers SatayKing

It’s already a non event since we can go on with our lives regardless of what outsiders say.

But I doubt the criticism would go away. The critics stay the same, only the complaints change.

 

LoL not my words which were more along the lines of misleading by omission.

Really? Your FI story has no such details how you bought the properties.
What you do mention is that you're selling assets to make up for the 20 to 25k shortfall in your expenses. Basically known around here as "living on equity".

That your biz and your problem.
My opinion in this thread is clear: On 25k your are dependent on every dollar that passes through your hands.
In a case of 45k to pay the expenses for 2+kid is the same.
And with those assets you won't qualify for the dole either.

My point is quite simple.
Neither you and many of them post details and numbers involved.
Many on the lists haven't posted in years. And many post long after the fact with hindsight "optimisation".

My opinion is that barely covering expenses you must count every penny and save and spend like it's your last.
You are financially dependent on every one of those dollars. Hang on to them tightly.
Maybe that's why you're promoting that site, and I have no problem with that. It's free enterprise.

 

@Piston_Broke

Apologies, I don't know how to use the quotes feature, and too lazy to learn haha.

No details? This has been mentioned multiple times. First 2 properties were bought with cash deposits, my partners was bought with cash savings and equity in her home. The others were bought with combo of cash savings and equity from property growth as per the usual method. Mentioned in this post very early in the blog's existence - My Journey to Financial Freedom - Strong Money Australia (mods remove links if inappropriate)

Remember, this is pre 2015 when lending was way looser. We used as small deposits as we could get away with, interest only loans and our Perth rents were also quite high back then which helped servicing.

The properties didn't actually help us all that much to be honest since half of them were in Perth, and as I've said multiple times I wouldn't do it that way again. The real progress came from a high savings rate, not high returns. Which is also why the property details don't really matter. It wasn’t critical to the outcome.

If you look at any compound interest calculator, and plug in a strong level of savings, you can see that decent wealth is built within 10 years without leverage. ($70k per year for 10 yrs at 8% return is $1m or so, with 70% of wealth coming from saving).

We have 1 dog, no kids, and I'm not sure I understand how qualifying for the dole is relevant. We don't need or want a cent in handouts.

You seem to understand living off equity yet still get hung up on the $25k dividend income. This grows as we continue investing and slowly offloading property. We also using some of the equity from the properties to live on as you say, while covering any other property expenses. Explained how our cash works here in case this doesn't make sense - How We Manage Our Money Each Month, Explained! - Strong Money Australia

We're reliant on every dollar? Well, yes and no. That wealth was built for a reason... to live on. Interestingly enough, my partner is working 2 days per week at her old work because she likes the social interaction (extrovert) but doesn't want to work full time. So this is extra money we could spend if we wanted to. And yes, the site does make some income too, which is nice, but again this is a bonus. There's a lot more flexibility/cushion in our situation than you might think.

Hope this helps.

 

The banks restricted lending after the GFC of 2009. By 2015 plenty were posting here about the difficulty of getting finance.
Personally I always had difficulty getting standard loans and always used more than 20% deposit. Over 30% on occasion. A dev site was LVR50% lo doc.
I did mention this in my posts saying it could be done, just difficult.

That I gathered hence the possibility of refinacing didn't seem to be there.

4 IPs in to 2 years at 20% deposit at an avg price of 300k is 240k of deposits.
Maybe finance was easier in Perth than on the east coast. Over here without servicability you won't get a loan under that amount. with your income I could never get a 90 or 95% LVR loan.

My engineering background makes me a bit nerdy and that timeframe of 10 years just isn't there.
The numbers do matter cause there is a about a couple hundred thousand missing in the equation where x=the property sold or other income, or both.

At this point you ain't old enough to know, and I hope we both never will be.

The 25k income as all that's needed came from many fire blogs and other posters in this thread.

I know what it's like, i was doing this 30 yrs ago and I did'nt invent it.
I like wealth building and think everyone should.
The generics may be inspiring, tactics and execution is what makes it really happen. In the beginning every single dollars does count, after 20 yrs not so much.
Anyways, that's enough from me on this topic.
Good luck

 

@Piston_Broke

Yes, 2015 is when it really changed. Lending was still pretty loose up until then, tho tighter than before GFC. Lending is the same across Oz far as I know.

We used less than 20% deposits on most of our properties, which makes a big difference to how much input is required. A few loans were 90%-95% loans, and few at 85%, a few at 80%. Again combo of savings and equity.

Your engineering background is impressive though irrelevant to a simple math example to show that it's possible with/without leverage. Look at a basic compound interest calc, plug in the example I gave and it's right there. It takes 10 seconds to do if you'd bother, rather than dismissing it.

Thanks for listening anyway. Hope this clarified a few things for those genuinely curious.

 

Hi @Snowball

Having corresponded with you personally and having read most of your blogposts, to me, your primary attribute is your decency and honesty in which you have gone about things.

Through your blog posts and your podcasts you have always tried to look at things from different angles and you have always made it abundantly clear that your approach is not the only approach that works and that there are many ways to live a fulfilling life. Where you have disagreed, you have always done so in good humour and without ever resorting to denigration.

Even if you stop today (writing and podcasting), you would have positively impacted a great many (including me) and given people hope and a pathway to lead a more enriching life. That is an outstanding legacy to leave.

 

This is great

 

That is a beautiful comment to leave, thank you, I really appreciate it. Hope you're doing well by the way!

 

Just in case.

JobSeeker Payment - Who can get it - Services Australia

 

“Comparison is the thief of joy” - Theodore Roosevelt

 

Love this

 

It’s Time to Retire FIRE (and to Split It Up)

as a couple, my friend’s seem well off, with the recent divorce and both losing job due to covid, the wealth shrunk significantly.

 

thats a good read

 

Yep, that'll do it every time.
Probably why it's best to become a billionaire, then if above happens you'll hopefully still be a millionaire .

 

It’s simpler than that: make sure my needs <= my haves

 

Or become a monk

 

Haha, good one, this is great!!!!!!