Welcome to the Late Starter to FI series!
I am a Late Starter – I did not discover FIRE (Financial Independence Retire Early) concept until I was 47. This was way later, I thought than others who seem to have it all together in their 20s and 30s.
Since I started to write about my own journey, I have discovered there are many more Late Starters like me, yay! It is such a relief knowing I am not alone.
I want to share our stories, our unique perspectives and show that it is absolutely not too late for us.
So in this series, I particularly highlight those of us who start our FI journeys in our 40s, 50s and 60s. And explore questions such as ‘where do we start’, ‘can we still retire early(ish)’, ‘what are the specific challenges for us late starters’. We look at our past, not to castigate ourselves but so that you can learn from us.
Please join in the conversation in the comments below. I encourage you to share your story if you fit the profile of a late starter. You absolutely don’t have to be a blogger or podcaster to share your story.
Please email me at info@latestarterfire.com or connect with me on Twitter, Facebook or Instagram.
And if you’ve missed any previous stories, you can catch up here – Late Starter to FI series
Today, I have great delight in presenting Frogdancer Jones’ story. I remember my excitement when I discovered her blog, Burning Desire For Fire not long after I started blogging. Here was another Late Starter! At last! She writes about how she achieved Financial Independence despite starting on the journey at 50. And is now moving onto the next stage – the Retire Early(er) bit.
You can also connect with her on Twitter.
Without further ado, in her own words – Frogdancer Jones
Hello!
What happens when a woman with 4 small boys under 5 and $60 cash to her name decides to leave her husband? Is it possible for her to reach financial independence before the Old Age Pension age of 67?
The answer is YES, as it turns out. Thank goodness for me and my boys!
My name is Frogdancer Jones and I blog at Burning Desire for Fire. I left my marriage when I was 33 and I discovered the world of FIRE 17 years later, after I paid off my house and was completely debt free.
My lightbulb moment
When you start out in your thirties with children dependent on you and a precarious situation, security becomes incredibly important to you. Take my word for it! As I spent the next 17 years raising the boys and going back to work full time as a teacher once they all reached school age, I kept chipping away at the mortgage. My over-arching goal was to have a secure base for the boys and me – one that couldn’t ever be taken away from us.
I had a vague feeling that ignoring investing and focusing on the mortgage wasn’t the best way to go, mathematically speaking, but I’ve never been one with a love for Maths and my emotional need to provide a secure base for the boys over rode anything else. The morning when I woke up, checked my accounts and realised that I had $10 more in savings than my mortgage balance was a moment I’ll never forget. It was more than flesh and blood could stand to leave it like that. I paid it off!
I was deliriously happy to be debt free after so many years of scrimping and scrapping, but within 3 weeks I had a cold, sinking feeling that I needed to start working on my retirement. I looked at my 100k in super (retirement account) and started googling. It didn’t take long to find out that it wasn’t going to be enough. Yikes!
I was 50 years old at the time. I didn’t have unlimited decades to enjoy the magic of compounding. Basically, I thought I was up s**t creek. So what does a teacher in this situation do? She decides to educate herself!
What strategies did you find useful on your way to FI, considering you had less time to get there?
Frugality
In other words, making sure that I was spending less than I was bringing home. It was a major factor in enabling us to keep our heads above water, particularly in the early days. I had 4 years of being at home with the boys, while living off the Sole Parent pension of 18k per year, supplemented with erratic child support from my ex husband, which was usually $20/month. (That is not a typo)
These lessons have come in handy in the years since I became debt free and started chasing the dream of Financial Independence. We’ve experienced a little bit of lifestyle inflation, but I’ve basically kept our spending low, so I could pour as much as possible into investments. For me, it’s the share market.
I’m not really a frugal person – I’m a value-ist. I’ll happily spend thousands of dollars on a pure-bred dachshund or a trip overseas, for example, but I’ll ruthlessly crush any spending on things that aren’t important to me. Make-up, clothes, coffees at cafes, the latest iPhones – these things don’t get a look in.
Having a Qualification
The thing that absolutely saved our bacon was the fact that I had my teaching degree. As soon as the boys were at school, I went back to work as a full time teacher at our local secondary school. Yes, it was hard work, juggling the needs of the job and all four boys. But if we wanted to get anywhere and be secure, that pay packet had to keep coming in. The pay was generous and it allowed me to slowly get ahead.
One of the few things I’ve insisted on for my boys is that they have a qualification of some kind, whether it be a degree or a trade. Everyone needs something to fall back on. My boys have or are working towards degrees in accountancy, music, remedial massage and acting. (Ok, the music and acting ones aren’t entirely practical …)
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Salary Sacrificing
Once my house was paid for, I directed as much as I needed from my fortnightly pay to bring my super payments up to the 25k level each year. That’s an easy way to top up investing, particularly as you don’t even see it.
Earn more
I couldn’t do much about earning more as a teacher, but for around 5 years I was a Thermomix consultant and team leader. This brought in around 30k extra per year, which was hugely influential in firstly paying off the house, and then paying for my dream holiday to Europe. (I planned it when I was 15 and finally got there when I was 51) Then I poured it into investments.
Reading, reading, reading! (And listening)
Once I discovered the FIRE world when I was 50, I dived into the rabbit hole and devoured all the blogs, books and podcasts that I could. As I’ve said, figures and spreadsheets don’t come naturally to me, so I knew that I’d have to read a LOT in order for the concepts to sink in.
Once I’d been doing this for a few years, I had a solid plan in place that would allow me to retire at 67 with around a million dollars in investments. I wouldn’t need the Old Age pension and I’d be able to travel and have the retirement I wanted.
I fully credit this strategy for what came next, as once I had a firm grasp on the basics, it had my brain unconsciously looking for ways to optimise my lifestyle and to be open for opportunities. This came along in the form of …
Geoarbitrage
THIS strategy was the thing that jet propelled my path to FI.The really cool thing was that it was firmly built on debt free status, which all of the previous strategies had led to.
I’ve written about it in detail in THIS POST but the TLDR version is that I was living in a very highly sought after school district. Melbourne is an expensive place to buy real estate and this district had a 20% mark up on houses in the zone. Basically, after doing all of the reading, it dawned on me that we didn’t have to live within walking distance of the school any more. The boys had graduated and I have a car.
I had a ridiculous amount of equity in the house, as I’d bought in 1996 just before the bubble started. By selling my little house in 2017 and relocating 16km away, I freed up all of that money and, after buying a far cheaper (and better!) home, I was able to deposit the remainder into investments. I estimate I’ve saved myself around 10 years of being in the work force.
This year, I’ve dropped back to working 3 days a week as a glide-path towards retirement. I’m cautious, as I don’t have a partner’s super or income as a cushion. All I’ll have is what I’ve managed to put together, so I want it to last!
What is your motivation to reach Financial Independence?
That’s easy! The boys, it’s always the boys. They’re all strapping young men in their 20s, either out in the work force or still at uni. My worst nightmare is to be a financial drain on them in my old age, just when they are at the life stage of raising and providing for their own families, or needing to support themselves in notoriously unsteady careers. (Two of them are heading into the entertainment industry …)
The last thing I want to do is to hold my hands out, saying, “I need help to pay the electricity bill, boys.” My parents are financially independent and I intend to make it a family tradition! I don’t believe an elder generation should be a drain on the younger ones in a country such as ours.
Are there specific challenges or advantages of starting late on the path to FI?
Absolutely!
One challenge that’s totally obvious is that we have less time to accumulate the net worth we need to have a full and satisfying retirement. Compounding doesn’t have the decades needed to give a stellar result, so we have to be far more intent on shovelling in as much money up front as we can.
This can be difficult if we’ve had decades of enjoying lifestyle inflation, believing that our bloated lifestyle full of treats and luxuries are necessities. Cutting back on things is much harder than never having had them in the first place. This is one area where I’ve been lucky – no one expects a single mother of four to be dressed in designer gear and to be driving a BMW!
A further possible disadvantage is that we’ve had decades of self-talk that we have to overcome. “I’m bad with money.” “I’m scared of Maths.” “I’m going to be working until I die, what’s the point in changing?” Younger brains can often be a little more plastic.
But we have HUGE advantages too!
Realising that retirement isn’t going to happen in some vague, misty future but will be happening SOON has a wonderful way of getting our attention. Knowing that there’s a definite end date for our working life that is galloping quickly towards us means that we can’t procrastinate anymore. We have to get our s**t together NOW. Fear is a great motivator!
We don’t have to provide for the 50 years of retirement like the young whippersnappers in their 20s, 30s and 40s. This means that we need less money to ensure that we’ll be looked after. This makes our front loading task a bit easier. We don’t have to put together thousands of dollars to live off before we can tap our super accounts. I’ll be able to access mine in less than 3 years if I want. I already have enough money put aside to bridge the gap between then and now. Imagine the difficulty of doing that in your twenties when that money has to last 30 years instead of 3?
A huge advantage we have is that by this stage in our lives, we know ourselves pretty darned well. We’re DEFINITELY not starting this race with nothing behind us. We’ve worked through issues, relationships and life stages, we know what we like and what we won’t tolerate and so we don’t have to waste time and money trying things out like the younger folk do as we head into retirement. We’ve more than accumulated some assets such as a house, investment properties and have a chunk of super behind us. Heck, even I had 100k in super and a paid off house when I was 50, and that was after raising those 4 boys on a teacher’s wage!
What's next?
I’m looking forward to seeing how this part time ‘glide to retirement’ will last. Will I enjoy the better work/life balance so much that I delay my full retirement until 60 or beyond? Or will the commute, unnecessary meetings and bureaucracy still annoy me so much that I decide to pull the pin earlier?
A couple of months ago, I pulled a large sum of money from the profits from the share market to start retirement-proofing my house, so I don’t have to do renovations once I’m living totally from my investments. 2020 is the year of watching workmen make my house one that Old Lady Frogdancer will be happy living in for the next 3 decades.
After that – Europe, here I come!!
Thanks, Late Starter Fire for allowing me to appear in this series. I enjoy reading how others have found FIRE in our twilight years as we’re all tottering towards the grave …
I hope we all fulfil our dreams of financial and retirement happiness.
Covid 19 update
I was one of the lucky ones when the Covid pandemic hit. I kept my job, my wage and, being a teacher, we were finally allowed to work from home. Australia clamped down pretty hard right from the get-go, so we haven’t had to deal with the horrifying scenes we’ve seen from Europe, the UK and the US. Touch wood that we never do!
For me, lockdown was a brilliant little window into what life in retirement would be like. When I’m not travelling, I’m a bit of a hermit, so 7 weeks in lockdown was a good chunk of time to see whether I’d get bored.
I LOVED IT. It’s given me the confidence to know that when I decide to pull the pin on teaching, I’ll be happy as a pig in mud.
Back to Latestarterfire
Four boys under 5 and $60 cash in hand at 33 to debt free at 50 to being Financially Independent now and experimenting with ‘glide to retirement’ – what an amazing journey!
Thank you for sharing your story of dogged determination, delayed gratification (that Europe trip planned at 15 and realised at 51!), being open to learning new strategies at any age and then applying that knowledge (geoarbitrage in your own city!). Your boys are so lucky to have you for their Mum!
We are very much alike, wanting financial security in a paid off house that no one can kick us out of and making sure we have enough for retirement as we can’t depend on a partner for a back up plan. I have so much more to learn from you – that delayed gratification skill, for a start 🙂
We will be following your journey to retiring early(er) avidly, knowing you will achieve it soon – your track record is proof!
