FIRE Community Guest Interview #13 – Making An Impact On The Way To FI

Today we have our 13th interview as part of the FIRE Community Guest Interview Series! 

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to the Modern Fimily! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having Leah from FI for Impact on to tackle our interview questions.  Leah and her husband are from Brisbane, Australia and they are very much aware of how FI, sustainability, and gratitude are intertwined.  I love their focus on giving, being so in tune with how their decisions impact the planet, and using FI to make positive impacts on the world.  Leah is showing how a pair of teachers are able to reach FI while making mindful decisions to help save our planet.

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with Leah, please check out her Instagram account @fi.for.impact or leave a comment on this post. Without further ado, take it away Leah!

---

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

 

We are a couple in our 30’s, both teachers and we live in Brisbane, Australia. I first discovered the concept of FI through minimalism. Minimalism taught me that if your wants are few you don’t need a large income. I got excited by the prospect of enjoying a happy, low-cost lifestyle and not needing to work that much in order topay for it! I remember watching an Exploring Alternatives video on YouTube about a guy who quit his stressful corporate job and started working part-time at a grocery store. Lights went off! You could work a few days, just enough to cover your basic needs and regain some freedom. This led me down the rabbit hole and I soon discovered Mr Money Mustache, the FI community and learnt about the importance of investing for long term wealth creation. 

 

2. When in your journey did you realize financial independence was actually possible? Was that the original goal at the beginning?

 

Our original financial goal was to pay our mortgage off early. We intentionally bought an older, more affordable house, further away from the city, with spare rooms for housemates. We knew being mortgage-free would give us a great amount of freedom, we could take lower paying jobs or work part-time, so for the first 6-7 years that was our laser-focus. Get rid of that mortgage… and we did! We were on such a high and the momentum kept rolling. We paid off $15,000 of HECS debt(University loan program) and then started saving up a cash cushion – we wanted a year’s worth of living expenses saved up. With no mortgage repayments and no HECS being deducted from our pay, it was incredible how quickly our savings stacked up. Each month we were saving between 60-75% of our income. It was around this time we started thinking about investing and got lost in podcasts and books relating to Financial Independence.

 

Last year we sold our home and downsized to a townhouse which meant we were able to redistribute some of that equity into shares so we are back to having a mortgage but the plan is to pay it off within the next 2 years. 

 

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc.?  How long have you been working towards financial independence and where are you today? 

 

Combined salary is 185k per year and our current net worth is 880k which includes our home, superannuation, shares and cash. A $1 million dollar share portfolio would see us financially independent. If we both kept working full-time we could hit this number within the next 5 years, however, the plan is to take the Slow FI approach and leverage some of this freedom earlier by switching to part-time work, then as our passive income continues to grow we can shift gears again to only working a few casual, relief teaching days. Basically we plan to ease into the early retirement life and let our shares do the heavy lifting in the background! Might take us a few extra years to get to the finish line but having that flexibility and extra time freedom will make the journey more enjoyable.

 

4.  Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

 

We don’t feel deprived. Early in our journey we did take it to the extreme, working 3 different jobs, long days and busy weekends, living and working in boarding schools in exchange for free rent, food, bills. Might seem a bit full on but we had this huge “mortgage-free” goal to achieve and gamifying everything made it an exciting challenge, not deprivation. Bringing a few discretionary spending categories back in has helped us realize that some things do add value and improve our quality of life. The road to FI is a long one, you don’t want to get burnt out. We have figured out exactly what we are happy spending money on and what we can live without.

 

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost?

 

We try to vote with our dollar by spending money on things that align with our values. We recently saved up to cash flow solar panels for our home and an EV is next on our wish list. Most of my happy money is spent on things like houseplants, treats from the vegan bakery or something to make my home feel like a sanctuary. I also get joy from spending money on loved ones and trying to be generous with our family and friends as often as we can. Generally, I think we live a pretty simple life, we are happy when we are spending time outdoors, walking our dog, gardening, reading library books, learning new skills and getting plenty of down time. We like to eat too, cooking healthy meals at home brings us joy. It’s something we have learnt to prioritize instead of trying to eat for as cheap as possible. A kitchen full of fresh fruits and veggies is luxury spending to me! Your health is important so we choose to spend freely in this category, that includes things like vitamins, sport, high quality kitchen appliances and naturopath visits. Experiences are also prioritized over spending money on things as that typically means getting quality time and creating memories with people we love. 

 

We don’t spend much money on alcohol, clothes, gadgets, magazines, expensive phone plans, tv subscriptions, make-up, fancy restaurants, jewellery, or anything like that. We rarely buy anything brand new and try to find second-hand options first. This has the added environmental benefit as we’re keeping things out of the waste stream. We happily spend money on reusable items that we will get a lot of use out of (things like reusable kitchen cloths, reusable menstrual products, safety razors etc.), basically we don’t want to throw our money in the bin or create unnecessary waste by purchasing disposables and over a lifetime it really adds up.

 

6. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

 

We don’t set a budget we just track our spending which typically adds up to 40k a year. We track our net worth, savings rate, dividend income, active income and expenses on a quarterly basis too.

 

7. As a FIRE member living in Australia, are there any pros to living in Australia specifically that have helped you along your journey? Conversely, any cons?  What would you say are some differences that you’ve encountered compared to many of the American based FIRE bloggers out there? 

 

Australian dividends are some of the highest in the world. We are lucky to receive an average dividend of 4% while the rest of the world averages 2%. We have franking credits which is a tax credit on dividends to reduce or eliminate double taxation. This stops income from being taxed at a company level and taxed again at the individual share-holder level. These franking credits vary depending on what shares you buy. Some Australian companies offer a 100% fully franked dividend, some might only be 30% franked. We also have Superannuation which is a retirement account that is funded by your employer as soon as you start working. You choose which fund, how its invested and you can make additional contributions. The only downside is that you cannot access this money until you’re 65. For this reason, we have chosen to focus on investing outside of Super, that way we can access the capital and passive income it generates whenever we want. So I guess that preservation age is really the only con I can think of, plus the cost of living in Australia is pretty high.

 

8. As an Australian couple pursuing FIRE, what are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs? What do you estimate your post-FIRE health costs to be per year?

 

In Australia we have Medicare – a universal health care scheme. It’s funded by the tax payer, its roughly 2% of our taxable income. We also have the PBS (Pharmaceutical Benefits Scheme) which makes some prescription medicines cheaper. Some Australian’s choose to pay for Private Health Insurance, it can be a tax advantage for higher income households, it can cover the cost of health services not covered by Medicare like dental, physio and optical, and can give you more choice over which doctor or specialist you see. We currently pay for private health insurance, its costs us around $170 per month, this will most likely be an ongoing expense for us so we’ve calculated it into our FIRE number.

​

9. What is your investment strategy? Do you invest in mutual funds, index funds, dividend growth stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years?

 

Our strategy evolved quickly as we learnt more and more about investing. We started off with individual stocks, then moved on to low-cost, index-tracking ETFs (Exchange Traded Funds), and then LICs (Listed Investment Companies) for a more steady dividend-focused approach. Our investment strategy has shifted slightly again as we now choose to focus on funnelling our future investments into ethical ETF’s.

 

10. Has discovering financial independence changed how you view your job and life overall? 

 

Yes! It has had a positive impact on my attitude towards my job. I no longer feel chained to my employer which takes a lot of pressure off. I take pride in my work but I don’t feel like I have to compete with my co-workers. I’m not interested in putting in any more hours or taking on any more responsibility than I currently have. I also seem to appreciate my time at work more because I know it’s just a season. I’m not going to be a teacher for 30-40 years, so I’ll enjoy this little ride while it lasts. This attitude shift makes all those bored-out-of-your-brain staff meetings, naughty students and crazy end-of-term marking and reporting a little more bearable. 

 

Bigger picture, FI has made me think about how our systems are set up. Not everyone in the world has the opportunity to pursue FI due to circumstances out of their control. It is pretty unfair that we get to be on this journey just because of where we live and the families we were born into. We recognize this privilege and feel a strong responsibility to make wise decisions with our money and use our wealth to contribute in meaningful ways, to have an impact, give generously, and as cliché as is sounds, try to make the world a better place. 

 

11. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money such a taboo topic?  

 

We have come out of the closet to most people. When you discover a life hack as good as FI/RE, you want to share it with everyone but we were met with varying degrees of interest and skepticism. Now I just sit back, lead by example and wait for them to come to me. Recently, my younger brother asked if I could help him start investing. I was so excited to share what I had learnt with him, someone who was actually open to information, no eyes rolling or glazing over. It made me so happy! When it comes to our co-workers, we’re all about that stealth wealth. Having FU money is great (being able to call it quits whenever you want) but I don’t want my boss to know I have that one up my sleeve. 

 

12.  What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

 

If you are just starting out the best thing you can do is track your spending. You have to know where your money is going then you can evaluate whether or not you think its being spent well. Really take the time to understand what you value, what is important to you and then spend accordingly. Try and get the 3 big expenses down (housing, food and transport) as those areas will have the most impact, then you don’t have to sweat the small stuff. For the investing side of things, there is so much information out there, go do your research, read books, listen to podcasts, and then just start! It is scary making that first share purchase but you can always course correct as you go. 

 

13. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

 

For Australian investors I really enjoy Strong Money Australia and Aussie Fire Bug. I highly recommend checking out the blog Impactivated. I’ve found Sebastien’s writings on FI and Effective Altruism incredibly inspiring. Giving back is not talked about enough in the FI community and we are in such a unique position to do so with our time and resources.

 

14. How can people get in contact with you? 

 

You can follow our journey over on Instagram at @fi.for.impact. Its my favourite pocket of the internet, everyone in the community is so supportive and full of knowledge.

---

Man I just love Leah’s take on things!  Here are some of our key take-aways from this interview:

• When you reduce your wants, you really are able to add so many options to your path to FI.
• For many people starting out, they have a massive amount of debt to pay each month (student loans, car loans, mortgage, consumer debt, etc.).  Once you get rid of all the debt, it really is crazy how high your savings rate can get when you apply all those debt payments towards investing instead.
• Anyone else notice how a pair of teachers in Australia are making $185,000 per year?  Teachers are paid WAY more in Australia than in North America.  Perhaps this is a light-bulb moment for any teachers in North America to use some geo-arbitrage to their advantage.
• Another FI couple looking to slow things down as they approach their FI number.  You know we are all for that thought process!
• Surprise surprise, they don’t feel deprived.  Leah did bring up a good point that it’s easy to go too hard too fast at the beginning which is something to be mindful of.
• I love the list if things Leah spends her money on, as well as what she doesn’t spend on!
• From what I understand, the franking credits in Australia are similar to the Canadian Dividend Tax Credit in Canada.  A Super is like a 401k/RRSP except there is no way of accessing this money prior to 65! And their health care system/coverage/costs sounds very similar to Canada’s.
• I absolutely love how Leah view’s the world around her thanks to FI.  Recognizing your privilege is so important and being able to put a smile on someone’s face or giving back are little things we can do to leave the world in better shape.
• Leah’s advice is practically the same exact advice we’ve been giving for years too.  If you don’t track your expenses yet, get on it!  It’s crazy how powerful this simple act is.
• Even though I’m not Australian, I too enjoy Dave at Strong Money Australia and am subscribed to his blog.  Impactivated is a great resource too!  There hasn’t been new content recently, but if you haven’t read through Sebastien’s blog I too highly recommend it.

Thanks again Leah for being a part of our FIRE Community Guest Interview Series.  Her focus on mindfulness and designing a happy life along the way is amazing to see.  In next month’s interview, we head back over to Canada to an amazing mamma who turned into a high paying consultant and is able to design the life she wants to live because of it.

Did you enjoy this interview? Any additional questions for Leah? Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area

Sharing is caring!