We thought we better start off the blog right with a deep dive into our FIRE journey so far, which goes beyond the realm of our simple About Us. Starting right back where we began, 5 years ago in 2014.
We’ll warn you now, this is long post. So pop the kettle on and have a tea if you need.
Estimated reading time: 15 minutes.
2014 – Before we knew about FIRE but just liked to save our pennies!
We’ve been together since Dec ’13, where before we were all packed and ready to take off overseas on a world trip, we both worked in corporate 9-5 jobs on good wages. I’d been in my job for 4 years and Laura had been in hers for 8.
We lived in a large 3 bedroom rental with two bathrooms and two huge living areas for just the two of us (what were we thinking!) and had both recently finished paying off our HECS debts (university loans) of around $14k each.
We’ve always been good with saving our money but had no idea about investing at this stage, and with no debts and no mortgage, we thought we’d take some time off work and travel for a couple of months. About mid-2014, after hiking with a friend, we told her our plans and she asked why go for just a couple of months – why not longer? That stopped us in our tracks – literally. We got home that night and started planning. By the end of that night, we had a rough itinerary of where we wanted to go and a plan to save $60k by the end of the year to cover us. The plan was to spend half on the trip, and come home with the other half as our life buffer/emergency fund.
2015 – When we quit our jobs and travelled the world! (Still didn’t know about FIRE dammit!)
In the months leading up to the trip, we sold all our belongings. All we kept was our car, TV and personal items such us photos, books and few small boxed items for the kitchen and bathroom.
So fast forward to February 22nd, 2015 – and there we were at the airport having saved up $60k successfully and holding one way tickets to Singapore. We ended up planning the first 3 months, then everything else was booked as we went. The freedom was so exciting to make such spontaneous choices – like finding a $300 ticket from Seoul to Paris or a 1 euro bus trip from Rome to Venice!
We managed to visit 30 countries in 12 months (In order…Singapore, Japan, Korea, France, Spain, Italy, Slovenia, Germany, England, Scotland, Netherlands, Germany (again), Czech Republic, Austria, Hungary, Croatia, Bosnia, Montenegro, Albania, Macedonia, Bulgaria, Turkey, Greece, Thailand, Myanmar, Thailand (again), Laos, Cambodia, Vietnam, Singapore (again – for Christmas with friends), Malaysia, Japan (again), Taiwan and finally Indonesia). Best year of our life, and we spent a total of $30,000.
$30k to travel through 30 countries for a year for two people!
During our trip, we kept a daily budget and spent an average of $73AU a day in Asia and $85AU in Europe. Long term travelling taught us so much. Money-wise – the daily budget helped immensely. It kept us on track, and was great to refer to, so we could then estimate future purchases. We travelled very lightly (you can view our full packing list over on our food blog here) so it was easy to move from place to place with backpacks rather than wheeled cases. Accommodation-wise we stayed in a pretty big variety but mostly used couch surfing, AirBNB, hostels and hotels – never paying more than $150 a night on our trip. If you’re planning a big trip – feel free to ask us questions – that could be an entirely other post!
2016 – We launched our business and got more money savvy! (Still no sign of FIRE!)
We landed back in Australia on February 23, 2016. That was the day we decided to launch our business and gave ourselves 3 months to see if it would pay the bills, or if we’d have to go back to the corporate world. We were pretty tough on ourselves!
This time we found another 3 bedroom rental but shared it with our best friend (who also quit her job to start her business too!) So we each had a bedroom, and each had an extra room for our home offices. This saved us money both in rent and not needing to hire an office space or co-working area. We furnished the house with a mix of free, second-hand and on-sale items. For example, we found an old dining set for $50 and up-cycled a lounge chair we found on the street (which you can see here).
Amazingly, in those first 3 months – and the rest of the year – we did manage to cover our bills, and didn’t even have to dip into our emergency fund leftover from our trip!
In our first year of business we made just under $60k total. We saved 30% of this to bump up our cash savings to a total of $50k too. During this year, we also shared the one car – a 2003 Mitsubishi Mirage hatch with 70,000km on the clock (Laura paid for her in cash for $4k while at our jobs and my parents looked after it while we travelled). She only cost us max $60 a month in fuel – and we drove a fair bit around town for photoshoots etc. We also don’t eat out a lot as we a) run a food blog and love home-cooked meals and b) I’m a food photographer – so we do end up with a lot of free food from shoots!
Looking back now, it was after our year of travel that our lifestyle choices began to change and we began living a more balanced life doing the things we loved, and not just chained to a desk every day. We know we took huge risks quitting our jobs, travelling long-term and then starting our own business, but whenever we’d ask ourselves – what’s the worst that could happen? – we couldn’t come up with an answer bad enough to change our minds.
2017 – We find our dream car AND house in the space of a week – then Santa introduces us to the world of Barefoot. (Are those flames we see?)
2017 was a huge year. We saw huge growth in our business and doubled our income, and we took our first month long trip in June to Bali, Indonesia to get away from our Winter. With running our own business, the travel budget had turned into our business budget – forecasting future work, invoices and our savings. Being a mainly digital business, our overheads were still low, which allowed us to save, save and save some more!
Then there was the house and car hunting. For the car, we loved the Mirage but we also love travelling, camping and 4WDing, so we researched for 6 months and decided we wanted a manual Subaru Forester. This would be beasty enough to go off-road (nothing too crazy!) but still small enough to be our day-to-day driver. With the house – our only prerequisites were 2 bedrooms, a backyard for our dog and in original condition so we could renovate ourselves. We went to SO many open houses, I’ve actually lost count. We even put in a few offers that either fell through due to being out-bid or in another case – finding a huge crack down the side wall of one place just in time!
In September, Laura’s Dad calls us one day to say his friend’s neighbour wants to sell their house. The asking price was way over of our limit of $340k – they wanted $360k at the time, so we politely declined and didn’t think about it again.
3 months later, we find the perfect car. A 2010 Forester on Gumtree (like Craigslist) from a family who’d been given a company car. After taking it for a test drive, we pay for the car in cash for $10k and sell our old car to my Mum for $3k who just happened to need a car at the same time. Grinning from ear to ear, we took our car home and did the biggest happy dance. (It’s the best car we’ve ever owned and we called her BeepBeep – the number plate is BBP haha). It felt so good, after all the research and the saving to finally find the exact car we’d been looking for.
Then that weekend, we get another call from Laura’s Dad to say the neighbours had no luck selling and were willing to come down in price as they needed to sell quickly and didn’t want to go through a real estate agent. We went to inspect the property, and after the first step in the door, we knew it was home. We settled for $335k with a private sale, and the house was perfect. It was the best condition we’d seen, and the previous owners had already started renovating so everything was freshly painted and brand new floorboards throughout yet with an original kitchen and bathroom to work our magic on. So within the week we had our dream car AND house.
As a side note – it turns out Foresters are also insane at the amount of stuff they can fit in it – we didn’t need a moving truck, we already had a mini one! We fit everything from the 1.4m couch to the dining suite and all 6 chairs!
December 2017 – The Christmas that changed everything!
The present was laying inconspicuously under the tree, Dad handed it to us and said this one was from Santa (thanks Mum!). Our very own copy of The Barefoot Investor. Now we thought we had a pretty good handle on life and our savings before we read it, but this changed everything. Over the next week during our Christmas holidays, we read the book cover to cover together, noting down what we could do better with our money. The Barefoot Steps are very similar to Dave Ramsey’s Baby Steps. The trouble was, we’d done most of them – No debt – check! House Deposit – check! Emergency fund – check! No credit cards – check! Index funds … crickets … wait, what are those? We ignored that section for now and concentrated on making the smaller changes Scott recommends in the book.
It was around this time that I came across Pat’s blog Life Long Shuffle – and specifically his first, very simple post. Essentially, he had a simple statement that he wanted to retire in 10 years and become Financially Independent and Retire Early (FIRE). Looking more into the definition of FIRE, it was exactly what we wanted. For us though, retiring early doesn’t mean not working – we love what we do. For us, it means not necessary working for the money or requiring to meet an income goal for the month in our self-employed business.
After our travel and change in lifestyle over the previous few years, we were already partly living the life we wanted, but by discovering the FIRE community, we realised how we could utilise our money better to give us more freedom in the future.
2018 – We start with the kindling – Research, reading & planning!
We won’t lie, the first 6 months of 2018 was focused on our business and food blog. We made little tweaks along the way to our finances – including opening up new bank accounts with ING that have zero fees such as no ATM or foreign transaction fees (so good for travelling!) and changing over our super (like 401k/IRA) to HostPlus (currently 0.02% + $78 annual fee).
In July I re-read the shares section in the Barefoot Investor. It was time to address the elephant in our financial room. Shares. The word was scary. Shares were scary. So I decided to make them not scary and proceeded to begin reading all the books I could on shares. (I’m the numbers half of the relationship – Laura is just happy when I update her or educate her with what I’ve learnt as we go. The numbers are definitely what FIRE me up!) Before reading about shares, we’d been paying off our mortgage as quickly as possible with our extra savings, but we definitely changed things around in 2018!
In no particular order, I first read:
It was Canna’s The $1000 Project that got us over the line to buy our first parcel of shares!
We had no idea at that stage and bought into an Australian fruit and vegetable producer based on a well known share recommendation website…
The things you wish you knew earlier…
They’re currently down 60% of the purchase price 1 year later. However, we don’t regret the purchase, because we did the best thing we could – we started. We even wrote Canna an email mid-July to thank her for making it so simple for us to get started with shares.
Over the next few months that followed, we purchased between 1-3k parcels of shares in different large companies with good dividends or as growth shares. I also learnt more about checking into the company financials and ‘fancy’ terms like debt-to-equity ratios and 5 year ROIs. We even wrote down the goal of creating a share portfolio that provided $2k in dividends per year by February 2020. How we have changed since then!
By the end of 2018, I’d starting reading books beyond shares, with more of a focus on long term wealth creation. The next reading list included:
- The Automatic Millionaire
- The Millionaire Next Door
- The Next Millionaire Next Door
- Millionaire Women Next Door
- Rich Habits, Poor Habits
- Think and Grow Rich
These were all great reads, and I learnt so much from Thomas J Stanley’s research on truly wealthy people in The Millionaire Next Door. I was so fascinated at the frugal lifestyles they lead, with so many similarities to our own lifestyle. This then lead us on the path to our next greatest discovery:
I may have shoved the book into Laura’s face to read, as I stated it was not a book I could just summarise for her. It needed to be read. It was like finding a friend across the other side of the globe who loved living the way we did but was well ahead of us on her family’s journey to financial independence. Laura did read the book, and is nodding her head vigorously that it was a great idea that she did so.
It was after this book that we began to discover why we felt out of place around some people.
We love living and leading a frugal lifestyle on a low budget, and we are completely fulfilled with our life and our outlook for the future.
We don’t require material possessions to seek happiness, reward or fulfilment. Most importantly, all our current belongings add value to our everyday of enough.
And so, we finished another year with our mind ticking over and the path becoming clearer for where we want to be.
2019 – Keepin’ It Frugal is born!
This year’s focus has been all about lifestyle and working out the best path to FIRE that suits us and our goals.
Cue: Keepin’ It Frugal.
We love our business and our food blog, but we wanted a space where we could share our stories, journey and frugal tips with others in the frugal and FIRE communities. The idea was to also keep ourselves accountable and have this blog as our hobby when we do reach FIRE.
After Laura and I had our 100th conversation on what FIRE could look like for us financially, we nutted down on our current expenses to see what we’d be spending if we a) weren’t working as much and b) had no mortgage. We worked out we’d need around $30k a year. This includes our business expenses which would be around 5k and an overseas travel budget of $5k. The other $20k being our general living expenses.
So moving forward into 2020 and beyond, these are our goals to reach FIRE in 5 years:
We’ve simplified our share strategy, and now only purchase Vanguard index funds. (This is not financial advice, but simply what we feel suits us.) We have to reference the Life Long Shuffle’s blog again as Pat did a great write up on his changing journey with shares and index funds too. If you want to do some further reading on this style of investing, we recommend:
Our goal is to have our shares providing an income of $12,000 in 5 years time. To achieve this we currently still purchase between $1-3k in shares per month.
We currently earn passive income from our food blog through ad revenue and affiliate sales. We love cooking and travelling, so we see this as still being part of our life once we hit FIRE.
Our goal is to double our current passive income to $24,000 a year within 5 years.
While our mortgage was our focus before investing in shares, we’d still like to have this last debt removed before we hit FIRE.
Our goal is to keep paying off an extra $3k a month to keep us on track to have the loan finalised in 5 years.
So this has been our path so far, and we’re currently sitting at just under 50% of the way to FIRE with our current investments and passive income.
Where are you on your journey so far? Do you even want to retire early or do you just want the financial independence? Let us know your thoughts in the comments below.
PS. If you got to the end of this mammoth post, I applaud you. Didn’t know I had it in me!