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Australian FIRE case study with All About Balance

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This case study is part of our Australian Financial Independence, Retire Early (FIRE) course available for free on Rask Education.

Hello there, I write under the alias Miss Balance at a blog called All About Balance. I write about my journey towards reaching financial independence while still enjoying the good life along the way.

I focus on a values based approach where I share tips and tricks on saving in areas that aren’t aligned with my values, so I can enjoy the things most important to me. I also focus on growing my income, so I can invest for long term wealth. 

When did you first discover the concept of FIRE?

I first heard about the concept of FIRE around late 2016 when I stumbled upon a range of blogs online talking about how you could save hard for a few years and then enjoy a longer retirement.

I was hooked right from the start.

I found mostly by US bloggers at that time and it was confusing to read about 401ks, Roth IRAs and other tax structures that weren’t relevant to us Aussie’s. I started my blog to track my personal progress, keep me accountable, connect with others on the same path.  

What is your motivation towards achieving FI/RE?

Whilst inspired by the RE concept, my main motivation to reach FI is so that I can take time out of the workforce to raise a family without any added financial stress. It is hard enough for new families to juggle the uncertainty that comes with a whole new life phase and trying to raise a human on little sleep.

I want to be able to enjoy that phase of life without needing to worry about how to pay bills and if we can afford the groceries and bills this week. I also enjoy working in my local community and want to have more free time to volunteer.

How close are you towards achieving your FI goals?

Breaking down a large goal like FIRE is important to ensure you stay motivated along the way. There are many different versions of FI, however the 3 steps I’m aiming for are;

  1. Coast FI (sometimes called Barista FI) is when you have enough assets invested for your future retirement that you do not need to add any more to your nest egg and it will continue to compound over time until you reach retirement age. For example, if you plan to retire at age 65 with $1million, and you had $93,622 invested at the age of 30 with an expected return of 7% per annum, you would not need to add any more money for retirement and can instead reduce work to only cover your day to day expenses until you reach retirement age. I have hit the First FI milestone already – hurrah! 

It is important to keep in mind that these figures are approximate and past returns are not predictive of future returns, so I always like to build in an extra buffer to my calculations. 

  1. Semi FI (also called Flamingo FI by a fellow blogger) is to have 12.5 times your annual expenses invested, which is half of the traditional amount needed for FI. This will allow you to take a few years out of the workforce, choose to work part time, or a combination of both. I’m currently at 60% of that goal and am on track to hit my first semi FI goal by the end of 2022. 
  1. Financial Independence (FI) is reached when you have 25 times your annual income invested. Based on my current plans to take a couple of years off and only return to work part time, it is likely I will achieve FI by the end of 2034 at the age of 45. It is likely that I will continue working part time after this, however I will have even more flexibility to choose what projects I want to focus on. 

What investment journey have you taken and why did you choose to do it that way?

When I was first looking to invest, I did not know a whole lot about what the options were, except having heard the basics about property and shares. When I looked into those two options more, I chose to start investing in shares at first as I felt the property prices in Sydney were too high and I wanted to get started right away, not wait until I had a large deposit saved. 

I began by choosing individual shares, though over time moved towards investing in Listed Investment Companies (LICs) and Exchange Traded Funds (ETFs).  The reason for the change in strategy is that I have learnt over time, the chances of beating the index by choosing my own shares is very small. There are very large companies who employ thousands of very smart advisers and they still don’t beat the index over the long term.

I also prefer a very low maintenance portfolio rather than actively managing my assets regularly. 

I’m also comfortable investing only in the share market at the moment rather than looking at an investment property as the returns have historically been quite similar and shares are very low maintenance compared to property; no leaky taps to fix, or chance of someone not looking after my investments or not paying rent. 

Everyone needs to consider their own preferences and risk appetite to find the right balance for their portfolios.

What’s the hardest part of working towards FIRE?

For me, the hardest part is having these big goals and then waiting to hit them. I don’t like to stereotype too much, but as a millennial I find I’ve always been told I can have anything I want, which I do believe to be mostly true. What isn’t discussed enough is how long it takes to get there. FI is a long game. Of course, I need to acknowledge the incredible privilege I have to even be contemplating FI/RE and take a step back to be grateful for everything I have that allows me to be on this path. 

The other part I struggle with is seeing people who have little to no financial literacy make decisions that could greatly impact their future. That is one reason why I think sharing my knowledge and journey, as well as other education programs (like this one from Rask) are so important. I want everyone to learn what I’ve learnt, and continue to learn. 

You best advice for others just getting started!

Read, listen, ask questions and learn as much as you can. There are so many fabulous resources both online and at your local library. 

Then once you have a good base make sure you take action. It can be so easy to feel overwhelmed by all the wonderful information and take no action at all. You may make mistakes, you might tweak your plan over time as you learn more, that’s all part of the fun of learning and growing.  

To learn more, check out our Financial Independence, Retire Early (FIRE) course available for free on Rask Education.

Kate Campbell

Kate Campbell

Kate Campbell is the founder of How To Money (HTM), a personal finance platform for young Australians. Kate created HTM from a passion to help young Australians start talking about money, and share the resources she finds along her financial education journey. This led Kate to start her own journey to financial independence a few years back and she now works in the Australian financial services industry.

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