What I learned about the FIRE community

It was very overwhelming as I started to dive into the world of FIRE – people were so hard core!

They rejoiced in being frugal and had insane savings rate. They sold their cars and bought bicycles. They sold their homes & downsized. They moved to different cities with a lower cost of living. They pursued side hustles to increase their income. They exchanged ideas on how to save on tertiary education. They reduced their living expenses. They sold things they no longer needed. Their meals cost $2 per meal – wow!

But the one thing that stood out for me was that they were happy while pursuing this path. They were happy eschewing consumerism, the need to keep up with the Joneses next door. They were happy with a lot less material stuff. They spent time doing what they enjoyed – activities that were free such as hiking. They were happy doing things for themselves instead of outsourcing.

My first thought was there was no way I could be that hard core. I’ve always had a fear of cycling in traffic. The last time I cycled was on a holiday in the Hunter Valley where we hired bikes to cycle between vineyards. What a fun thing to do, except I fell off my bike at least a dozen times between the first and second vineyard (which was a short distance from each other). I was ecstatic when the heavens opened up and the bike hire company offered to pick us up and refunded our money – I was spared the ordeal of cycling to another 4 vineyards.

I am very fortunate as I have the use of a company car so my car costs are nil, yes zero. That means I save on car registration, insurance, fuel and maintenance costs. I have not calculated the exact dollar savings over the last twenty years or so but my best guess would be thousands of dollars. Plus I live 15 minutes from my workplace which means I don’t have a long commute. So I think I can safely leave bicycling out of the picture … for now.  Note to self – may need to explore biking as a recreation … or to prepare for my retirement when I no longer have use of a company car. Hmmm …. it may be easier to save money to buy a second hand car.

I have paid off my mortgage so at least my housing costs are neutral from now on except for ongoing maintenance. Another note to self – must set aside some money to budget for this expense. House maintenance can be costly as evidenced by my recent expense of new fences. I have no wish right now to downsize to a smaller abode even though I acknowledge that my house is larger than I need it to be. The goal of FIRE will take longer to reach, as a consequence.

The two biggest expenses incurred by most of us are housing and transportation. I am very grateful that in my case, expenses in these two major categories are under control. I just need to work on the other areas of my life …





Time was not on my side …

Superannuation is the unsexiest topic in personal finance as far as I’m concerned. It is hidden away, something my employer does on my behalf that truly does not interest, let alone excite me.

It represents retirement down the ages, something remote and far, far away in the future. Therefore it is absolutely shocking to me that the time has arrived for me to sort out my superannuation!

At the moment, we cannot withdraw from our superannuation account until we are 60 years of age. Who knows if the government would change this rule in the future?

This is another layer of uncertainty with superannuation over the years – rules change on when you can withdraw, how much you can invest in it etc etc. That said, I am assuming that the government would have to give sufficient notice if they were to change the age rule … surely they would face a voter backlash …

All of a sudden, 60 years of age is not very far away anymore. I only have thirteen years left for my nest egg to grow.

Time is no longer on my side!!!! That is the reality of a late starter to FIRE, sigh!

I need every cent to compound & grow so that my nest egg will be ready by age 60.

The Barefoot Investor suggests that we ought to salary sacrifice 5.5% of our gross salary into superannuation once we’d purchased our house. This was in addition to the 9.5% compulsory employer contribution. I had not been salary sacrificing at all whilst I had a mortgage as I had wanted every cent in my loan account.

Using the superannuation calculator on ASIC’s moneysmart website, I found out I would need to salary sacrifice substantially more than 5.5% if I wanted a decent nest egg at 60.

In the end, I decided on 15% ie I would ‘sacrifice’ 15% of my gross salary & have my employer pay that amount into my superannuation account instead of my bank account. This was in addition to the usual 9.5% employer contribution.

However, even at this increased rate of contribution, my nest egg would fall short of the one million dollars target. This is where I want to tell all young people – time is on YOUR side – salary sacrifice now and you will be pleasantly surprised by the substantial nest egg waiting for you at 60.

I had two superannuation accounts, one with an industry fund that my employer makes contributions to and a second retail fund set up when I first started work many years ago.

I had stopped contributing anything to the retail fund when I bought my house.

My next action was to consolidate these two accounts into one. I chose the industry fund as it had lower management fees. It made sense not to pay a higher management fee to the retail fund.

I was shocked however that by simply rolling from one fund to another, I lost $3000 in exit fees. That nest egg just got smaller …

Then I had to decide on which investment option to invest in within the fund.

Do I stay in the default Balanced option or look at another option? I did the fund’s online survey to assess my risk appetite / tolerance and promptly ignored its recommendation to stay in the Balanced fund.

I found out I could split my portfolio and invest in different options. Once again, bearing in mind that time was not on my side, I decided that I was still in the accumulation phase ie I was still accumulating my wealth which meant I needed higher returns (read higher risk) but at the same time, I was also terrified of losing it all.

After much internal debate, I settled on 40% invested in the Balanced option & 60% in the Shares option.

Phew! That was a marathon! Big pat on the back – can’t believe superannuation is sorted … for now








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