Category: FIRE

Posted on

Goodbye 2018, Hello 2019!

I can breathe now.

Christmas is over.

After two solid days of baking and 288 Christmas mince tarts / pies plus 100 gingerbread cookies later … After an epic lunch of seafood, turkey and a ham that was in the oven for 14 hours (!) …

Baking is therapeutic for me (cooking, not so much). I pound the pastry and roll out little rounds again and again then methodically fill in the fragrant fruit mince heavy with brandy. While my hands are busy, my mind is free to roam and reflect …

… to reflect on how baking and finance is very similar. Once you have the right ingredients, and you follow a recipe that is right for you, a good result will naturally follow!

… to reflect on the year that will end soon.

… to reflect on the year ahead.

What I am most proud of in 2018 is ….

I took action.

Just that, I took action.

The year began with retirement anxiety and the fear of growing old.

I was scared of retirement and its implications. I was worried I would not have enough money in retirement. Or indeed, what I would do in retirement. I was fearful of growing old.

Yet, this fear and anxiety propelled me to DO SOMETHING  about my finances. 

Which led me to discover FIRE and the awesome FIRE community.

So, what actions did I take in 2018?

1) Pay off my mortgage

  • the satisfaction and mental relief experienced is priceless when I finally closed my loan account
  • the whole house belongs to me now

2) Retirement account

  • consolidated my superannuation accounts to one only
  • moved my account to a superannuation fund with lower management fees
  • invested it in the low cost index fund option
  • set up salary sacrifice with employer – I choose to contribute pre tax dollars together with my employer’s compulsory contribution to superannuation
  • should be on track to max this out ($25000) by end of financial year 2019

3) Savings accounts

  • opened 3 online high interest savings accounts
  • account one – emergency fund
  • account two – travel fund
  • account three – investment fund
  • set up automated direct debit from wages every week into these 3 savings accounts

4) Track my spending

  • using TrackMySpend, a free app from ASIC
  • identified my top spending categories
  • looking at ways to actively reduce spending as a result

5) Assess my net worth

  • looked at my assets versus my liabilities
  • understood what my financial position was at any given time

6) Invest in the share market

  • started learning about investments
  • reactivated my brokerage account
  • invested in low cost index funds
  • invested in several quality top ASX 200 companies
  • slowly building a diversified portfolio

7) Install solar panels

  • took advantage of the Victorian state government’s solar rebate scheme
  • back of the envelope calculation indicates system should pay for itself after 3 years
  • looking forward to receiving electricity bills from now on

8) Start a blog

  • as a result of researching side hustles, I decide to start a blog partly to be accountable on my FIRE journey and partly to share my struggles and wins along the way with the wider community

But who knew that looking into my finances would trigger so much self analysis and reflection?

Or I should say, more accurately, that going down the rabbit hole of financial independence (FI) has triggered a lot of self analysis & reflection. This, of all the things I achieved in 2018, has been the most surprising and unexpected consequence.

It has forced me to re evaluate my dreams and re define my values, my goals, my purpose.

Money, after all is  a tool.

A tool that enables you to pursue your dreams.

A tool to enable your dreams to come true.

It is not an end in itself.

For me, the pursuit of money has never been appealing.  Subconsciously, I always thought it vulgar to pursue money and riches. Upon reflection, I think it is the obvious display of wealth that repulses me.

However, the pursuit of financial independence is incredibly appealing. And exciting. 

Most of all, I want to reclaim my TIME, a finite resource. I can always earn more money by working harder, longer or pursuing side hustles, working a part time job. But time? I will never get back time once it’s gone.

Being financially independent will enable me to spend less time at work and instead, pursue my dreams of slow travelling; spending time with my niece who lives in another country; taking care of my elderly parents. I will be able to live a life with a lot less stress.

What did I learn in 2018?

In 2018, I learned about FIRE concepts and principles; and that the FIRE community is a big robust supportive community.

I learned about what type of investor I am – what my risk tolerance is; essentially, it boils down to this – I want my money to grow faster than inflation but that  I can still sleep at night.

My habits can change – with the right motivation & focus, I can develop new habits that serve the bigger picture. I never imagined I could give up takeaway coffee. Now my daily routine includes making myself a cup of coffee from my moka coffee pot. Not only do I save money, I am less stressed in the morning driving around looking for a carpark to get my coffee.

I learned that I can pick up new skills – starting a blog has been one steep learning curve. Now, growing it and maintaining it will be 2019’s challenge – bring it on!!! Navigating social media and Pinterest, SEO?? will be … a lot of fun?! I am looking forward to connecting with a lot more people – for an introvert, that brings heart palpitations.

I found that writing was therapeutic for me, that putting my thoughts into words was soothing. Besides crystallising my vague thought bubbles and the endless neurotic meanderings of my mind.

So what will I look forward to in 2019?

I want to embrace a simpler life, a life with less stress.

A life where I will have more time to spend intentionally with people and activities I value.

I am conflicted right now with the best way of setting goals or even if setting goals is a good idea. My history in keeping goals alive has been abysmal so I am exploring new ideas.

I am riding out 2018 on a high, just starting with a broad and quite frankly, vague goal of sorting out my finances. Who knows what 2019 will bring if I knuckle down and set concrete goals? Like my baking, I want to make sure I have the right ingredients to live my best life.

Guess you will have to stay tuned …

Incidentally, I will be most grateful if you could take 2 minutes to subscribe to my emails – I will not spam you, I promise! I don’t have any freebies to give away at the moment but you will be the first to get it when I do! Thank you very much for your support.

 

 

 

Posted on

Smell the roses on the way to FI

Smell the roses
Smell the roses

Since discovering FIRE, my moods swing from being overwhelmed to really busy putting things in place to now feeling slightly bored …

There is the initial stage of OMG I’m so behind everyone else pursuing FIRE. Hint – already in my late 40s – others retired at 30!!! So very behind …

Then comes the optimistic stage – of course I can do this, I just have to catch up. Must read & listen to everything FIRE related.

Oh, there’s so much to do! Track my expenses, tick! Set up emergency fund, tick! Contribute to retirement fund (superannuation), tick! Invest in low cost index funds, tick! Eliminate takeaways and restaurant meals, tick! 

There is of course still lots of room for improvement. I am too embarrassed to tell you what my grocery bill is each month. And I must find ways to reduce my utility bills without freezing my butt off or sweltering in 40 degrees Celsius heat.

Oh, and there’s my outsourcing of gardening and cleaning jobs … oops, yes I feel guilty about those expenses. There was also the big fail on travel hacking … (you can read about that here – still trying not to beat myself up about it)

And new skills to learn, side hustles to pursue perhaps …

But seriously, there is only so much agonising one can do over where to invest, what to cook this week, how to save on blah blah blah … the list goes on. Once things are set in motion, what do you do?

As a result, I’ve been in a reflective mood lately. I reflected on my money story, looking at how my parents’ relationship with money influenced my own money management habits (read that post here, only if you want to, of course).

Now I want to look to the future.

The FIRE journey is not for the faint hearted. It is a long haul process, an on going project that will take years to complete.

So I looked at my goals again. And basically ask this question  –

What am I willing to suffer for?

For there is some suffering here if we are to reach financial independence in a relatively short amount of years.

If my goals or dreams do not excite me, then this FIRE journey will be difficult to sustain. or at worst case scenario, not sustainable. I may as well go back to getting a takeaway cappuccino or two every day & having brunches every week. I may as well just spend my money on what makes me happy now with no regard to tomorrow.

So … what do I want to do when I reach FI?

Do I want to stop working? Right now the answer is a resounding yes. Yes, it will be a relief to stop working full time, in a never ending cycle of stress. I am tired of managing people, of putting out fires, of constantly not having enough time to do what I have to get done. This is the first time in my whole working career that I feel this way, that doing my job no longer gives me any sense of achievement & accomplishment. At the end of each day, I am just grateful I made it through the day.

Reaching FI will give me the option of working part time or not at all.

But then what would I DO if I weren’t working? Sitting around all day drinking coffee and reading? Or watching Netflix (which subscription I cancelled during my frugal month challenge)? So much of our identity is tied to our work, to the job we do. It is often the first question a stranger asks you in a social situation – ‘So what do you do for a living?’

The answer is I don’t know. Beyond not wanting to work full time, I don’t really know what I want to do once I reach FI.

That is so sad! I now realise that I have never liked looking too far into the future – anything can happen so what’s the point of worrying about it? It amazes me that  I find it so difficult to articulate what my dreams of the future are, what I would like my future life to look like. 

Time to pause and appreciate the present

So in the meantime, I decide to (literally) stop and smell the roses … while I figure out what it is I really want for my future.

Grevillea and roses from my garden

Spring brings me such beauty in my garden. I am appreciating all that my outsourcing has created – the beautiful grevillea recently planted; the abundant roses in bloom; the cheerful geraniums that grow without any effort on my part.

Tracking my expenses shows just how much I spend outsourcing my gardening. This has accelerated my wanting to learn how to garden. I was reserving this for when I retire but hey, why wait?

I want to pursue this vein of hey, let’s not wait till I reach FI to do things. Why not start exploring activities now and figure out what I’d like to do once I reach FI?

So I planted pumpkins from seeds I dried from a pumpkin I cooked! I must amend that to … there are some green shoots sprouting through the earth … hopefully they will turn out to be pumpkins eventually.

And I start visiting my local library again, not only to borrow books on investing and personal finance but also novels that I enjoy reading.

I am listening to podcasts that have nothing to do with personal finance or FIRE or side hustles … though I am still committed to listening to those podcasts, of course. Just need some variety to spice up my life!

I am exercising once again – though to be fair, my personal trainer is back from maternity leave so I have no excuses. But I now share my session with another friend – this reduces my cost and increases the fun.

Final thoughts

My conclusion is that while on the journey to FI, there will be many ups and downs. I must seek balance in my life as I grapple with the bigger question of what I want my future to look like beyond reaching FI. So I must remind myself to stop and smell the roses from time to time on my way to FI.

Do you stop and smell the roses on your way to FI? How do you find balance in your life?

Where can I send your
Monthly FIRE Goals Plan?

By signing up, you’ll also be added to my newsletter

You can unsubscribe any time, I promise.