Reaching Milestones on the Journey to Early Retirement

If you’ve been reading here for a while, you know that Poopsie and I don’t budget in the traditional sense of the word.

Instead, we try and keep our spending as low as possible and everything left over is either put into our offset account or our Vanguard Index Fund.

However, I do keep a Retirement Budget. This is the only way we will know, in six years time, if we are ready to retire. Do we have enough money, through passive income and the selling of a small parcel of shares, to fund this budget? Do we have enough to live?

This budget is based on our current spending, so is evolving all the time. It used to have $400 a month budgeted for groceries, but now that we are spending closer to $500 a month for the last six months or so, I have adjusted this amount. We want to ensure we’re not selling ourselves short in what we intend to spend during retirement.

One of the lines on this Retirement Budget is “Bills”. These are those non-negotiable things that we have to pay, usually on a monthly or quarterly basis. I keep these amounts updated and divide the total by 26, so we know how much we will need each fortnight to cover our bills.

Currently, our “Bills” category is made up of: internet, mobile phones, car service, electricity, gas, car insurance, car registration, water, council rates, home insurance, charitable giving, blog hosting, accountant fees (for tax time) and university textbooks for Poopsie’s Masters. This is an ongoing list that we add to each time we acquire a new bill and that we alter each time we’re able to reduce a bill.

Recently, we received our end of financial year dividends from our Vanguard fund. And this dividend payout allowed us to meet an enormous milestone.

Our July dividend payout from our Vanguard fund was enough to fund out yearly “Bills” category.


Just one of our quarterly dividend payments is enough to pay for our “Bills”. The other three dividend payments we receive throughout the year are not needed for us to be able to pay our bills. We could just collect our July dividends every year and never have to worry about paying those bills again.

To us, this is amazing!

If you’d asked us just six months ago if we thought we’d achieve this milestone this year, we would have said no. It’s amazing how, investing a little bit of money every month can so significantly impact our returns. Little efforts really do add up.

There is no magic formula for this. All we do is spend less than we earn and save the rest- sometimes in our offset account and sometimes in our Vanguard account. I can’t even imagine what our dividends would be like if we put every cent into Vanguard, rather than working to pay off our mortgage.

I encourage everyone on this path to keep going. It’s amazing the progress you will make and I can assert that you will reach your goals quicker than you expect (once you’ve set your goal that is) and the momentum will carry you onward to early retirement.

Have you reached any milsetones, big or small, lately? Share in the comments below!


This entry was posted in Uncategorized. Bookmark the permalink.

17 Responses to Reaching Milestones on the Journey to Early Retirement

  1. Mrs. ETT says:

    Wow. Wow. That is definitely worth celebrating, congratulations! I just did some quick calculations, and our half-yearly dividend payment is enough to pay just over 1 month worth of bills. Clearly we have quite a ways to go yet! It’s heartening to hear that we just need to keep going, and one day we will get there. Hopefully even faster as we continue to slowly reduce our spending.

    This is just going to snowball faster and faster from here on in. Go, AwP, go!

  2. LadyFIRE says:

    Oooooh, I like this game!!

    My July Dividends would cover:
    7 weeks of Mortgage repayments, OR
    A full year of my Phone Bill and Health Insurance, OR
    5 years of spending on my pets, OR
    Almost 3 full years of Roller Derby Dues πŸ˜€

    This is pretty amazing, I like this game! If only ever quarters dividends were as good as July

  3. Miss Balance says:

    This is fantastic!! Definitely a call for celebration πŸ™‚

    It looks like everyone has invested in Vanguard except me…

    I should probably be more proactive and find out when dividends are paid for my stocks. I usually just enjoy a nice surprise when they hit my account and the reinvest them. Perhaps more of a plan is needed here. Thanks for the motivation to care a little bit more!

  4. Wow! I enjoyed this post so much – it was filled with the confidence of a concrete outcome. I was obviously not the only one to reach for a calculator and some bills. Since the July Vanguard payout, I’m having to recalculate what is possible. It’s also motivated me to re-approach Vanguard about wholesale fund access.

    • I’m so pleased everyone was inspired to crunch their own numbers after reading this post. How did you go?

      Definitely approach them. We had a lot less than the advertised $500k and we were able to get in. I have heard anecdotally they’ll let you in with $100k, but I’m not sure if that is their minimum. We have been really happy with the returns thus far. We are in a high growth fund, but we were still blown away by the returns. Much better than we ever got on the retail fund (for about the same amount of money).

  5. What an awesome way to look at it. I love this idea!

    All our money right now is tied up in property so sadly rental income goes all to cover the mortgage and other holding costs.

  6. You guys are rocking it! To have your bills accounted for through investing must be such a good feeling! Seems like your FIRE goals could be closer than they first appeared (just like objects in car side mirrors πŸ˜‰ ).

    Mrs DDU

  7. Pia says:

    Oh wow!! Huge congrats are in order. That is a huge milestone indeed and much be such a relief. Investing is such a rewarding game, and I love reading about your progress.

Leave a Reply

Your email address will not be published. Required fields are marked *