Mid Year 2022 Goals Update and Review

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Oops, it’s nearly the end of July as I write this “mid year” review of 2022 goals. But as I didn’t set my goals for 2022 until February … I think it’s just the right time to do a review!

I’m writing in my attic room as the sun is setting – I can just glimpse the orange glow from the corner of my eye. I’m in London on a 4.5 week holiday. My first overseas holiday in 3 years.

After an epic 17 hours 15 minutes non stop flight from Perth to London (in addition to a 4 hour flight from Melbourne to Perth earlier with an one hour transit in Perth airport), I arrived as dawn was breaking on Thursday. Phew, tested negative upon arrival. But 24 hours later, I was coughing and spluttering and yes, tested positive to Covid.

This is really ironic. I’d splurged on premium economy seats using my Qantas Frequent Flyer points (amassed from not travelling for 3 years) so there are less people in my vicinity. I chose the long direct flights because I didn’t want to transit outside Australia.

But the rules had changed just before my flight. Passengers need not be vaccinated nor do we need a negative test to board. Masks were mandatory from Melbourne to Perth but not on the international flight from Perth to London. The vast majority of passengers, including the guy next to me did not wear a mask.

I’m blaming the 17 hour flight. Even though I wore a mask throughout the flights (and changed the masks a few times), it wasn’t enough. I always knew the possibility that I’d catch Covid on this trip and brought medicines with me for symptomatic relief. But I thought I’d catch it from gallivanting about in London, not from the flight over.

Anyway, this enforced rest with lots of sleeping and reading will prepare me for lots of adventure ahead.Thank goodness for the Libby app – I have access to thousands of books from the two libraries I’m a member of in Melbourne. I’ve already read 5 books.

But I am frustrated at missing out on a family outing to see The Jungle Book at Kew Gardens and having to cancel a lunch with Sam (Late Starter to FI Series #2) in Bath. I was so looking forward to meeting up in person.

The silver lining I suppose, is that it’s now out of the way and I can enjoy the rest of the holiday without worrying about when I’d be getting it.

I’ll be posting my shenanigans in the UK on my Instagram and Facebook ‘stories’ if you’re interested in following along 🙂

All right, now that you’re up to date with my Covid status, how have I been travelling in 2022? Am I any closer to achieving my goals?

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Goal 1 - Invest $30k into my Shares Portfolio

So far, up until today, I’ve invested $18492 so I should be on target here. Even though this is on auto pilot, I’ve had to review my weekly amounts as I transition to working 4 days a week. It is still my absolute priority though to invest $30k this year.

And yes, the share market has been rather volatile in the last seven months but I can’t control that. I can only control how much I invest in it.

Goal 2 - Rebuild my Emergency Fund

I raided my Emergency Fund last year to replace major appliances when they broke down plus some home maintenance expenses. It’s slowly being rebuilt.

I feel secure with holding 6 months’ of expenses in it and I’m up to 5 months now.

I stopped contributing to it for a month or so in order to build up one month of expenses in my Bills account so that I would always have enough to pay next month’s bills. The anticipation of reduced pay from working 4 days a week brought up some feelings of insecurity.

Goal 3 - Make a Will

I won’t lie. This was very challenging. And confronting. I wrote about it – What Happens if You Die Tomorrow? How to Make a Valid Will.

But after my lawyer sent me all the paperwork for review, the thick pile of papers just sat on my dining table. For MONTHS.

Then everything kind of happened to make it all come together.

There were two close family members’ deaths within my circle of friends. It suddenly brought home to me again how crucial (and kind) it is to leave clear instructions for the people left behind.

And it became clearer who my people should be – the executors of my will, attorneys for Enduring Power of Attorney and Medical Treatment Decision Makers.

I had dragged my feet for months, not wanting to initiate a conversation with them and asking their consent to take on the specific role.

With my overseas holiday looming, suddenly everything needed to be in place. And it was easier than I had imagined. All said yes, thankfully! And it was then just meeting with my lawyer one more time to get final documents plus obtaining everyone’s signatures.

I’ve also sent off my binding death benefit nomination to my superannuation.

So I can say that this goal has been achieved! Woohoo!

It really does feel good (and a weight off my shoulders!) to have all these estate planning documents in place. There are now instructions for what to do when I’m dead AND what to do if I’m alive but incapacitated (which is the scarier option, to be honest).

illustration of women's legs standing in front of a scale

Goal 4 - Make Health & Wellbeing a Priority

I have lost 1kg out of the 5kg I wanted to lose.

I started off quite well early in the year, walking for at least 20 minutes every morning before work. Then I had a terrible cough that everyone thought sounded like a Covid cough. But several RATs and a PCR test confirmed it wasn’t due to Covid, influenza or RSV. So no one knew what it was from but all concluded I needed to rest. The weather became colder and I stopped going out in the mornings.

I plan to walk every day when I’m on holidays so I’m hoping to kickstart the habit again. (It hasn’t happened yet, holing up in my attic room!)

Besides March when my savings challenge involved me paying myself $5 a day if I didn’t eat chips or chocolate but penalising myself $10 if I did, I wasn’t very controlled in my snacking habits.

I’m trying to learn not to be an “All or Nothing” person. My word for 2022 is Consistency and it is this area that I need to apply it most. I have been consistently inconsistent in my prioritising of health and wellbeing.

I prioritise it when I’m in pain and then forget when I’m not. For example, I have consistently seen a massage therapist and osteopath to keep my shoulder pain under control. And now I also have jaw pain due to all the jaw clenching in my sleep.

But what I really need to do is to prevent the pain in the first place. That will be the goal for the next 5 months.

Goal 5 - Prepare for the Non Financial Aspects of Retirement

I read 2 books to help me with this goal – How to Retire Happy, Wild and Free by Ernie J Zelinski and Keys to a Successful Retirement by Fritz Gilbert – I reviewed them both plus Retirement Made Simple by Noel Whittaker which I read last year.

All emphasised preparing for the non financial aspects – in particular, finding purpose in retirement. I’ve started lists based on the Get-a-Life Tree illustration in Zelinski’s book.

My travel list is by far the longest among the lists of activities I can pursue. And while I’m on holidays, I’ll indulge in what I know has brought me joy in the past – exploring new places, eating good food, seeing live theatre, visiting museums and galleries plus spending time with my family. Just to confirm that they still bring me joy, haha!

FIRE Progress Update

There are 5 metrics that I track on the way to FIRE and here is their progress in the first 6 months of the year.

Net Worth

Chart of net worth progress from 2018 to 2022

The above chart shows that my net worth fell by 6% compared to the end of Dec 2021. This is totally expected due to the volatility of the share market. I am not too concerned about it. This net worth figure does not include my paid off house which I have no intention of selling in the near future.

Bridge the Gap Fund

My goal is to retire at 55. This means I need a Bridge the Gap fund to support me for 5 years before I can access my superannuation (retirement fund) at 60.

My Bridge the Gap fund is comprised of my shares portfolio and cash. Right now I’m focusing on investing as much as I can into the shares portfolio and have not started accumulating cash.

It has only fallen 0.6% compared to the end of 2021 so I’ll just be consistent here and stay the course.

Superannuation

How is my retirement fund going since it is what I will rely on once I turn 60?

The balance as at the end of June 2022 was 8.7% less than the balance at the end of December 2021. Once again, this was expected due to market volatility. Since I haven’t sold anything, this is only ‘paper’ loss. Hopefully, the next nine years will see a return to growth.

And the balance is still higher than the balance when I declared I was at Coast FI in April last year.

Dividends

Chart of dividends from 2018 to 2022

Dividends is hands down my favourite metric to track!

So far, the first 6 months of 2022 has been stellar – dividends received are equivalent to 72% of total received in 2021.

My aim is for dividends to support half my expenses by the end of 2026. It’s at 30% of achieving this goal so a fair way off yet.

Expenses

2022 has been kinder than 2021, mainly in the absence of failing appliances and home maintenance.

So far, I’m on track to spend less than $40k this year but of course, not all my holiday expenses are part of this progress report. I can already tell you that July and August will be much more expensive than the previous two Covid years!

Final Thoughts

I do love this time of year as a second chance to refocus where I need to and to celebrate if I’ve achieved a goal.

After this review, I need to stay the course financially and I should be on target to achieve my goals for 2022.

Where health and wellbeing is concerned, I need to refocus my energy on preventative measures. Otherwise I’d be spending heaps on osteopath treatments and remedial massage. Plus not able to keep my weight down. Wealth without health is useless.

And I’m totally celebrating achieving and exceeding one goal ie estate planning done instead of just making my will. Yay!

How has the first half of 2022 treated you?

Am I a FinFluencer? ASIC thinks so

Am I a finfluencer? graphic of woman with black hair with open mouth

When I think of finfluencers, I think of Gen Z on youtube or TikTok (ok, I had to google how to spell TikTok 🤣)

A finfluencer is a financial influencer – someone who shares or comments on social media, mainly on TikTok and Instagram about finances and investing.

The ones who have been featured on mainstream media are generally young and apparently earning a decent income from their efforts.

Australia’s regulator, ASIC is cracking down on finfluencers.

ASIC stands for Australian Securities and Investments Commission. It is “Australia’s integrated corporate, markets, financial services and consumer credit regulator.”

Some of their roles are to “maintain, facilitate and improve the performance of the financial system and entities in it; promote confident and informed participation by investors and consumers in the financial system.”

And they license financial advisers in Australia.

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Back story

A record number of 18-24 year olds started investing in the stock market over the past two years – 25% of all new investors, in fact. Plus 27% of all intending investors (defined as those wanting to invest in the next 12 months) are in this age group. This is according to a study done by the Australian Securities Exchange (ASX) in 2020.

Interestingly, these young investors are willing to seek advice from a financial adviser.

According to this same study, 37% would seek help with investment decisions and 36% would seek help for access to a wider range of investments.

But 37% don’t know how to find an adviser while 25% think they are too expensive.

And 30% wouldn’t use an adviser because they think their portfolio is too small.

So where are they getting their advice?

According to ASIC’s surveys in July 2020 and again in February – March 2021, when asked who they have received the best piece of financial advice from, 67% cite their parent.

But 28% indicate they follow at least one finfluencer on social media. And of those that follow a finfluencer, 64% reported having changed at least one of their financial behaviours as a result.

Crucially, they were not asked if their finances improved as a result of changing those financial behaviours. I could not find this in the report.

ASIC cited this report in their media release on March 21, 2022. (Although they cited 33% of young people follow a finfluencer whereas the survey report on page 9 cites 28% – not sure why there is a discrepancy).

It is clear that ASIC is worried about the influence finfluencers have over young investors.

ASIC Chair Joseph Longo gave a speech to financial advisers at a conference in September 2021. He gave an example of a young family wanting to know about their life insurance needs and wondering where to get advice.

“Here comes the plot twist.

They may have gone online and sought to educate themselves via a financial influencer or ‘finfluencer’.

ASIC is aware of the fact that the pandemic has created the perfect conditions for finfluencers to flourish. The result is the conflation of general and personal advice, which is now in a state of flux.

We are watching this evolution closely.”

He acknowledges that there is an unmet advice need of Australians seeking quality financial advice and goes on to outline how ASIC is helping financial advisers to help Australians like the young couple.

 

Group of Friends sitting on steps with Tablet PC

What is their solution?

ASIC issued an information sheet (INFO 269) titled “Discussing financial products and services online” on March 21, 2022. It outlines how the financial service laws apply to social media influencers.

But they didn’t define who an influencer is.

I most definitely do not consider myself an influencer. And anyone in their right mind wouldn’t either. Don’t you need thousands or hundreds of thousands of followers to be considered an influencer?

But it seems ASIC may disagree because I do discuss financial products and services online.

They threatened 5 years jail for anyone who breaches these financial service laws.

According to the information sheet,

“Financial product advice is a recommendation or statement of opinion which is intended to influence, or which could reasonably be regarded as being intended to influence, a person making a decision in relation to financial products.” (Italics are mine)

It goes on – “You can share factual information that describes the features or terms and conditions of a financial product (or a class of financial products) without giving financial product advice. However, if you present factual information in a way that conveys a recommendation that someone should (or should not) invest in that product or class of products, you could breach the law by providing unlicensed financial product advice.”

Therefore my interpretation is that I cannot recommend any financial product or service eg bank account, credit card, shares, superannuation company, insurance companies, share platform that I personally use and love. I also can’t express my opinion. Because it could be considered as “being intended to influence”.

And I most certainly can’t give you affiliate links to said financial products or services where both of us may benefit even though I’ve disclosed this fact. It would be “dealing by arranging”.

My experience of unmet advice needs

When I first paid off my mortgage, I was so excited. I understood that I had to use the money that I saved from not paying a mortgage in some sort of investment. But I didn’t know what sort of investment.

Colleagues suggested an buying investment property. I met with a mortgage loan officer at a “Big Four” bank. He wasn’t interested in my situation – late 40s single woman – and maybe I gave off vibes that I wasn’t too keen on entering into another mortgage.

I then rang an investment firm that I’d heard being spruiked on radio. The guy who rang me back quickly showed his disinterest when he found out that I had $10k to invest – an amount that was obviously not worth their while.

Next, I made an appointment with a financial adviser within a “Big Four” bank. He told me there was no point in him providing personal advice to me because it would cost $3k to $4k for the advice and I only had $10k. I wholeheartedly agreed.

So it’s not just the young ones who can’t access mainstream financial advice. I was a middle aged woman with $10k cash.

In hindsight, all of this probably contributed to me waking up one morning in a cold sweat, petrified about not being able to retire. Subconsciously I was obviously worried about not knowing how to invest for my retirement.

You know my story of googling “how much I need to retire” and somehow stumbling onto FIRE (Financial Independence Retire Early) blogs. They were all American sites. I was reading about how to contribute to 401k, IRA, Roth IRA, backdoor IRA, HSA etc etc, none of which is available in Australia.

Then I found Aussie Firebug and Strong Money Australia who wrote about FIRE in the Australian context. And boom! I now have examples of what they invest in, their strategies and tips. And I could see their progress. I didn’t follow anyone’s advice blindly. They were so much younger than me. And so I had to adapt their advice (and anyone else’s for that matter) to my own circumstances.

Mauritius sunset

Why I started Latestarterfire

The reason I started my blog (& related social media channels) was that I wanted to share what I’ve learned on the path to achieving Financial Independence and Retire Early(ish) as a Late Starter. That is someone starting in their 40s/50s vs someone starting in their 20s.

Because I couldn’t find anyone who started their FIRE journey like me. There were plenty of people in their 40s but they were at the end of their FIRE journeys, about to retire or already retired.

It was only after I started Latestarterfire that I found Frogdancer Jones on Burning Desire for FIRE. I remember my joy at finding another late starter who has gone on the same path ahead of me.

Representation matters.

Just like seeing Aussie Firebug and Strong Money Australia achieve or pursue FIRE as Australians and Frogdancer Jones’ success as a late starter motivates and inspires me, I too want to contribute my story and journey.

And in doing so, I may help fellow late starters get started on a path where they can take control of their money, achieve financial independence and retire earlier.

What ASIC's crackdown means

While I understand the need for ASIC to crack down on dodgy advice and quite simply, criminals who prey on vulnerable people, I think it’s very heavy handed in trying to solve the problem.

All of us online financial content creators have been lumped in the one basket – the good, the bad and the indifferent. I don’t know what the solution is. But I fear that the very people ASIC wants to protect and help are the ones who will lose out by this action.

Who will they turn to for real life examples, for lived experiences?

Will financial advisers lower their fees? How can Australians, young, old and in between who are just starting their investment journeys afford to pay thousands of dollars for financial advice? Will financial advisers advise on products that don’t earn them a fee eg recommending ETFs?

Why not educate the public on how to discern good financial advice? Why not go after the influencers that give misleading advice or behave deceptively?

 

Final thoughts

I apologise now.

If what I’m allowed to share is so restrictive that it doesn’t help you, I’m very sorry.

But I will find ways to comply with ASIC and still serve you.

Because my desire to share my story and what I’ve learned is still strong. The potential that doing this may help someone is what keeps me going.

Thank you to everyone who has read and interacted with me over the years, both here and on social media. Your support is very appreciated.

And a huge thank you to those who have written and shared their stories both here and overseas – I have learnt so much from all of you. I value your content and the work you do to deliver that content. 🔥

For another perspective on this topic, Dave at Strong Money Australia has written an excellent article – ASIC’s Crackdown on Financial Content and ‘Finfluencers’

What do you think of ASIC's crackdown?

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