Welcome to The Australian Blogger Interview Series.
We noticed the Australian personal finance community growing, mostly through our interactions on Twitter and we wanted to continue to foster this great camaraderie. We’ve reached out to as many Australian personal finance bloggers as we could and asked them to participate in our interview series. If you have any favourite Australian personal finance bloggers, tell us about them in the comments below and we’ll invite them to participate.
Next up: Aussie HIFIRE
- Tell us a little bit about yourself.
I’m in my early 40s and my wife is in her mid 30s, we met when we were both living in London. Living in London we got to see a lot of Europe and had a few trips over to the US as well. We then moved to Hong Kong and got to see a fair chunk of Asia as well which was fantastic.
So we’ve done a lot of travel already which is what a lot of people want to get out of FIRE so that’s nice! We’ve got two young kids so my wife’s full time job is looking after them, and I’ve been working in various parts of finance for a bit over 20 years now.
2. How did you get into blogging about personal finance? Was there someone (another blogger perhaps) or something that inspired you to start blogging?
I’ve always been interested in personal finance so for a number of years I’d been reading articles from asset managers and started seeing a lot of great content on blogs as well. I started following some of the US FIRE ones like MMM and The Frugalwoods but couldn’t really find much Aussie content.
That started to change a few years ago with Aussie Firebug and then Pat the Shuffler. I hadn’t heard of Strong Money Australia until fairly recently but he’s been around for a while as has the FI Explorer.
And their content is great, but I felt like there needed to be more data driven stuff or lookingat historical outcomes and I figured maybe I could do something along those lines. As it turns out Dan at Ordinary Dollar is also doing some great work which is similar to mine so there is bit more of that sort of stuff out there for the Aussie FIRE community now.
3. What are your financial goals? Are you aiming for FIRE or something else?
I talked about this a while back in one of my earliest posts. The end goal is the point where I am leading a very comfortable life in retirement with lots of stuff like eating out, going to shows and sporting events, and lots of big overseas trips. Along the way there are a bunch of smaller goals as well to help keep us on track and feel like we’re getting somewhere.
4. What has been your financial journey? Did you start with a pile of debt? How have your finances progressed throughout the years?
It’s been a pretty slow journey for the most part to be honest, but it’s really taken off in the last 5 years or so. I spent a fair amount of my twenties and early thirties living in expensive cities and travelling a lot so beyond an emergency fund, I really didn’t have a huge amount saved or invested. After that I had a bit of a combination of earning more which definitely helps, and spending less on travel which also helps, and started building up my investments a lot more.
Then after we moved to Hong Kong, I was on a lot more money and paying a lot less tax (although rent was a killer) so I could save pretty decent sums of money each year to invest. Moving back to Australia was a bit of a come down financially because I was earning a lot less and yet paying more in tax both on a percentage level as well as an absolute amount, but on the plus side the cost of living is a lot less here so we’re still doing just fine.
5. Do you advocate shares or property to build financial independence? Or both? Why?
I think they both have their pros and cons. With property you have that enforced discipline of needing to make that loan repayment each month or fortnight and you will cut back on your other spending to get there because you know the bank is going to come calling otherwise. From a behavioural viewpoint you don’t see the swings in value so you’re not lying awake at night worrying about what’s happening to the price.
But it’s a huge amount of money. You almost always need to borrow to be able to buy, and it’s illiquid so if you need to come up with $50,000 for whatever then you can’t just sell off part of the house. Also with property there is all the maintenance, you have to hope you get good tenants, there’s ongoing costs like insurance etc. and it’s just a fair amount of work all round.
With shares they are nice and liquid so you can sell some off if you need to, there is pretty much zero ongoing work required, you get a nice income from them and you can start with just a thousand bucks or so. But it’s harder to leverage up (although still doable) and there are going to be big swings in value which a lot of people can’t deal with mentally.
Personally I vastly prefer shares but that is no doubt at least in part due to the fact that I’ve owned shares for probably 30 years now and have spent about 20 years or so working in that area or related ones within finance.
6. What is your personal investing strategy? Have you ever changed or reconsidered your strategy? Why?
When I started out it was mostly about investing purely in Aussie shares. Then I added some diversification through a retail fund of hedge funds and later I invested in fixed interest as well. When I was working in the markets area of finance I started doing something similar to global macro but focussing on countries and currencies rather than getting down to the individual company level.
Somewhat amazingly this actually worked out pretty well but was almost certainly mostly luck and in any case was really just tinkering around the edges of the overall portfolio which was mostly Aussie and US equities.
Nowadays excluding our house it’s about 75% in equities split roughly 50/50 between Aussie and International, mostly US. Then about 20% in fixed income, and the other 5% is in a mix of alts and property. It’s almost exclusively through index ETFs which is my preferred investment structure.
Over time the plan is to increase the equities exposure and just leave the other assets classes to tick along. I’d also like to simplify our holdings a bit as well, currently there are a few smaller ones which aren’t really adding much value and should really be folded into just one holding.
7. What do you think the biggest challenge is for Australians seeking financial independence?
I’m going to cheat and say that there are two big ones. From a behavioural viewpoint most people seem to just be unable to delay gratification or say no, and so they end up spending every dollar that comes in and then use credit to spend even more.
Then from a structural viewpoint we have really expensive housing, depending on where you live it costs something like 8 to 10 times household earnings. So you’re either going to be spending a bucketload of money on buying a house and that’s money you can’t invest elsewhere to generate an income for yourself, or you’re renting which means you have a pretty high ongoing cost for the rest of your life.
8. Who has inspired you the most in your journey toward financial independence?
Probably my Mum. She retired in her 50s. She had a high income which definitely helped, but she was frugal and managed to smash out the mortgage really quickly and then built up her investments over time. I do remember us leading a more spartan existence than a lot of the kids I went to school with, but then by the time I went to Uni times were definitely a lot better.
9. Which do you think is more powerful: frugality or higher earnings? Why?
I think for most people frugality would be more powerful. Most people don’t have an earning problem, they have a spending problem. And while there are definitely lots of fixed costs, there is also a lot of discretionary spending. If people reduced this then they’d have more money to pay down the mortgage or invest, and I really don’t think cutting back on this sort of spending would reduce their level of happiness that much. It might even increase it because they would have a lot less stress about their finances.
10. Has there been anything about becoming a blogger that you didn’t expect (good or bad)?
How much work is involved and how the words and numbers aren’t enough. If I do a data post then I’m normally building a spreadsheet, trying to come up with decent graphs or tables, formatting it and it can take 12 hours or so just for that. Then there is the writing of the actual article, proof reading, revising etc.
Early on I got a fair bit of feedback that I was just producing a wall of text and people were tuning out so I started trying to put in more charts, tidying up tables, putting in pictures etc. Nobody has complained for a while so I’m assuming people are happy with things now!
Another surprise was how supportive and friendly the rest of the FIRE blogging community are. Lots of them have mentioned my blog in their posts or on social media, commented on my posts, as well as lots of behind the scenes help as well. It’s been great to get that support and have that interaction so thanks everyone!
11. What do you plan to do in retirement (whether early or on time)?
Lots of long trips. Most of our travel when we were younger was just weekend trips becausewe left on Friday night or Saturday morning and had to get back to work for Monday. We have managed to do a few longer trips though which allow you to see more and relax a bit rather than running from one place to another. So it’d be great to be able to spend a week or two weeks or a month or whatever just exploring a region or a country.
12. What’s your biggest splurge?
Definitely travel. We haven’t done a huge amount in the last year or so but normally we do at least one trip and often several. And now that the kids are slightly older they’re going to be easier to travel with so there isn’t that deterrent of thinking oh my god how are we going to deal with them at the airport and on the plane etc.
13. How do you think the Australian financial blogger community can grow? Do you think something like Fincon is viable over here?
I’d love to see more awareness of the concept of FIRE from the general public and I think that would drive a lot more growth. It’d also be great to see a bit more diversity in terms of where everyone is, so far my impression is the bigger blogs (with a couple of exceptions) are mostly people on the journey rather than already there. So if there were more people talking about how they’ve already hit FIRE then it shows that it can be done. In terms of something like FinCon, sure I don’t see why there couldn’t be something like that in Australia. We’re probably a ways off at the moment but within a couple of years there would probably be enough people for it.
14. Do people in your real life know about your blog? If so, what do they think? If not, why not?
Nope, I keep it very quiet because I worry about a few things. Firstly I think if you talk about how much money you’ve got then here in Australia there’s the tall poppy syndrome which wouldn’t be much fun. Also there’s the security issue, if people know you’ve got money that might make you a bit of a target or get hit up with a bunch of requests for money and hard luck stories. And then just the privacy thing, I don’t really want other people who aren’t necessarily that close to us knowing our financial situation. So I try to keep things somewhat vague on my blog.
15. What’s your number one piece of advice for those interested in financial independence?
Spend less than you earn, invest the difference. That very simple advice will get you a long way along the road to FIRE.
Thanks so much for being our next interviewee Aussie HIFIRE! We look forward to sharing more interviews with you soon!
Do you like the idea of an interview series? Who are your favourite Australian personal finance bloggers?