If you want to know how to master the money game to win the wealth game (and how they're different) this is the ep you've been looking for.
Matt from the Aussie Firebug is back for another epic conversation. This time we discuss his revelations and a shift in direction and focus in his FIRE journey. We examine the good, the bad and the ugly of the FIRE movement.
Also in this episode:
This episode is packed full of transformational perspectives and powerful truths told in retrospect. It will encourage you to step back, reflect and reset.
Resources Mentioned
AFB Article: FIRE/Life update
Reddit Article: I lost the love of my life because of FI, don't be me
Join the Private Podcast Community
Click here to access free courses and trainings, build new habits, and connect with us and others on the journey to financial self reliance.
Other links 👇
Money mentorship:
Click here to start putting what you've been learning into practice.
Corporate program:
Click here to find out more about our workplace program
Follow us on Instagram:
Click here to see behind the scenes of our business and learn more about personal finance in bite-sized chunks.
If you want to know how to master the money game to win the wealth game (and how they're different) this is the ep you've been looking for.
Matt from the Aussie Firebug is back for another epic conversation. This time we discuss his revelations and a shift in direction and focus in his FIRE journey. We examine the good, the bad and the ugly of the FIRE movement.
Also in this episode:
This episode is packed full of transformational perspectives and powerful truths told in retrospect. It will encourage you to step back, reflect and reset.
Resources Mentioned
AFB Article: FIRE/Life update
Reddit Article: I lost the love of my life because of FI, don't be me
Join the Private Podcast Community
Click here to access free courses and trainings, build new habits, and connect with us and others on the journey to financial self reliance.
Other links 👇
Money mentorship:
Click here to start putting what you've been learning into practice.
Corporate program:
Click here to find out more about our workplace program
Follow us on Instagram:
Click here to see behind the scenes of our business and learn more about personal finance in bite-sized chunks.
Hello, legend, this is Terry and I am pumped for you to listen to this episode that I've just had with Matt from the Aussie Firebug. Now, you might remember Matt from very early days on the podcast. Matt was the inspiration for us to start this podcast and really just set the balls in motion for so much for us. And recently Matt put out an article where he talked about having a bit of a fire life update and such a humble title. I believe this is one of the most important articles you could ever read once you've come across the concept of financial independence, because it shows the evolution in his thinking and there's some very important revelations. There's some very important nuance in there that I really wanted to discuss with him in this episode. So we really delve deep into what he covered, what he meant by different things, why he says that travel probably was a better investment than saving and investing in his shares, what he would actually say to himself back when he realized that he hated his job and if he wouldn't do things differently.
Speaker 1:And some of the failings of the fire movement, some of the ways that we see people go completely wrong and where those failings come from and how to actually think your way through them. This is such a deep, deep but valuable conversation and he gave us so much of his time at probably the worst hour in the day his kid witching hour but he was just so generous with his time and there's so much to give you and so much wisdom as well, and I don't think there would be a better positive example of the value of really understanding fire but also evolving through it and thinking your way through it for yourself, as opposed to getting pulled into the ideology of it. So I'm super pumped for you to listen to this episode and I would love to know what you think about it and, if you do listen to it, drop us a note in the comments in the community. I would love to hear from you in terms of what you took from this, because for myself and Mitch, who is sort of sitting in the audience producing with us, we've just had just a really interesting discussion about how we were reflecting on this conversation, because there's just so much in there for you. Hope you enjoy.
Speaker 1:Welcome back to the show. I have got our much-loved guest here and our spirit animal, slash, hero, slash pioneer, slash, the OG of personal finance and fire here in Australia. Matt from the Aussie Firebug, aka the Aussie Firebug, welcome back.
Speaker 2:Matt. What an intro. Pleasure to be back, Terry.
Speaker 1:I feel like I'm bloke of the sits in the ring. I wanted to get you back in because you dropped an article recently and my hunch is you can tell me if I'm wrong here, but I reckon this might have caused a major ripple in the fire community. You titled it, very humbly, firelife Update, but it wasn't just a FireLife Update. There's so much in here. I'm really keen to dig into this with you, but just tell me, did it cause a ripple, yes or no?
Speaker 2:Depends on what your definition of a ripple is. I had a lot of responses, let's just put it that way. I think it was relatively positive but, yeah, a lot of people got around it through emailing. There was a few comments on their Facebook group, you know. It was a good response. I was happy with it.
Speaker 1:Yeah, amazing. Well, look, I think my contention is your article, this one here and one other article. There's two, I think, that are probably the most important financial independence articles ever written. Once you get beyond the actual idea of fire, the first one I lost love in my life because of fire. Don't be me. I think that's a really constructive negative model, something a cautionary tale, and I think yours is the complete opposite. Yours is a really positive tale and there's so much in there and there's a big shift in, I'd say, the way you're playing the game. I reckon your perspective is the same, but actually the moves you're making, the way that you're playing the game, has been different and, as you've just said there, right before we jumped on air, you've got this new arrival, elena, into the family. No doubt that's a big part of it, right? Yeah, absolutely.
Speaker 2:Big, huge life changing moment. I think there was a comment on the article that maybe it was an email that said there's usually two events that can completely change your life. One is a like if you fall sick or have a major health problem, and the other is children, and I can definitely vouch for the latter. Yeah, it's completely changed our lives for the better.
Speaker 1:I like it like walking through a curtain and looking back and just not seeing anything near what you saw before you walked through the curtain.
Speaker 2:You're like what was that we have a pretty like great life, me and my wife. We lived a pretty spectacular life so far, but when Elena was born I felt like there was a missing. She was a puzzle piece that went into our puzzle that I didn't even know was missing. I was like holy moly, and you hear about it. It's cliche to say, but yeah, it's different when it actually happens.
Speaker 1:It's so different and alongside this, you've gone sort of in this new direction with work and life as well. It's all kind of converged all at once. And I think this is where you know the article that you put together, like maybe it's just reread it again this morning and I'm just literally reading it, just going like yes, Because I think there's like some piercing insights in there, some really important revelations, and yeah, I'm just really keen to dig into this sum of this with you. But I just would love your high level. So if you had to summarize this article in one sentence, how would you do that?
Speaker 2:Probably say changing perspectives throughout the journey.
Speaker 1:Changing perspectives throughout the journey yeah, I reckon that's pretty good, and if you had to describe that changing perspective, how would you expand?
Speaker 2:on that. I've been thinking about this for a long time because I go through ebbs and flows with my ossified by content. At the start, when I first started the site and the podcast way back in 2015, one point I was releasing a podcast like every week, which would be crazy cadence for me because I'm lucky to release a podcast once a month these days, but I've been really diving into fire. Then I went overseas and I didn't write as much, and then I come back and I wrote a bit more, did a lot of podcasts, and I'm just transitioning to a different phase in my life, especially now that my daughter's born. I thought I owed it to the audience to, because I'd written some comments, responded to a few emails from individuals that had emailed me, but I'm like I really need to get it out there.
Speaker 2:What has changed? Because there was a consistent theme with my net worth articles that were like hey, matt, you haven't bought shares in like over a year. What's going on? Are you still trying to reach financial independence? Are you still doing this fire thing, or it just seems like you've fallen sort of off course a little bit and I wanted to have one big article to be like look, this is where I started, this is what happened and this is where I'm going, and I think this was the article and I can give a bit of a summary, if you like.
Speaker 1:We also have a link definitely to the, to your episode and the article. Yeah, cool.
Speaker 2:To sum it up very quickly, I and maybe people haven't heard my story before, but I started full-time work in 2011, at the end of 2011. And I finished uni always knew, you know, you do 38 hour weeks. That's full-time job. But it wasn't until I actually started doing it, along with the commute, everything that goes with a job getting ready, commuting, de-stressing from work it's not really 30 hours a week, it's more like 60 plus hours. When you factor in everything Plus, it was taking me an hour and a half to commute to work because I lived like 40 minutes away from my job. So you factor all that in and by the end of the week I was just stuffed and I was like, wow, this is a lot of my life that I'm spending here in a job that doesn't particularly give me a whole lot of satisfaction. I sort of like the people that I work with. They'll find the job had interesting aspects of it and I enjoyed a little bit, but I'm being honest, I was there just for the money like 95%, to earn a paycheck and I lived a lot of my life outside of work. Anyway, I did that for a year and I thought I can't see how I could do this for potentially another 40 years. I think I was like 22 at the time, just finished uni. There has to be another way that people live their life Like. I just refuse to accept that this was the fact, though. Everyone just does this. Now I am now 34.
Speaker 2:So over a decade, I can look back and say that I was a bit naive in the fact that you don't stay at an entry level job forever, like. You do get a bit more autonomy as you progress through your career, et cetera, et cetera, but you haven't experienced that. You're thinking just going to be entry level forever and that's going to be 40 years of the same job. Doesn't really work like that. But that was the mindset I was in. So I went through the journey of like and this is just on Google how to get enough money, or like is there another way to basically live your life? That's alternative to the de facto study hard, get a job, meet a girl, have kids, retire at 60.
Speaker 2:And I picked up a book Rich Dad, poor Dad, very, very popular book in the finance world, and I come across the concept of financial independence and that blew my mind. And then I come across the famous early retiree blogger, mr my name is Stash, in 2013. And that was like financial independence on steroids, and that was like the moment I had a clear roadmap on how to actually achieve financial independence in a timeframe that made sense to me. I wasn't really interested in achieving it by the time I hit 60, because I was not liking my job. At that point, I was unsatisfied with my job so I was thinking I need to get out of this cubicle. I have so many stories where it'd be a fantastic day. I'd go into the workplace and I'd see an oval where someone was kicking the footy with their dog and I just feel like slightly depressed that I'm going into the office, sitting down in my cubicle, spending eight hours there under a fluorescent light what most office workers at some point in their career most likely go through right. So, mr, my name is Stash. Fire was going to be my escape route out of the nine to five grind At that point. I was with my wife now, but we weren't married back then and we were on the trajectory. Well, we actually joined finances in 2016. So it was just me doing my own thing at that point, but I could see the light at the end of the tunnel was roughly going to be 10 or so years, give or take, maybe two or three years, depending on how well the markets did. And I was in the zone. I was so focused. This was the most important goal of my life at that point, outside of trying to win a footy premiership with my club, and I'll put in a lot of focus, time and energy, trying to optimize my expenses, save as much money as possible and really just grip my teeth and grind towards financial independence as quickly as possible. Fast forward until 2019.
Speaker 2:Me and my wife, we've been together for a while now. We had always wanted to go overseas and live abroad, and the years were getting away from us. I was about to turn 29. And I thought this is sort of now or never and we decided to quit and live in London for two years and that was sort of the catalyst, and this is I speak about it in the article. I was marching towards financial independence for a good. What's that like seven years or so and then moving to London.
Speaker 2:I had to change my mindset because I knew that I really wanted to enjoy those two years abroad. Like. This is where me and my wife have been speaking about this for years and we're finally doing it. And I thought let me put away the spreadsheet because I know I won't enjoy it as much if I'm tracking everything like I usually do at home. I'm just going to push pause on this fire goal that I've had going on for seven years. I'm going to enjoy my time overseas and when I come back we'll restart the goal.
Speaker 2:Now that, in hindsight, was an interesting catalyst or fork in the road moment, because I really never come off my mindset after I went to London and when I went to London. There's a few things that happen and we can get into it, but essentially I started living slightly differently. So I was a bit more looser with the purse strings and I really valued the experience that we were having over how much money we could save every month. I wasn't being stupid, it wasn't being wasteful with my spendings, but I just I put a greater emphasis on the experience over saving. You enjoyed your money Exactly, and then when we come back. So we did that for two years. Covid was interesting over there. It was a lot of fun, best time of my life.
Speaker 2:We come back, we got married, we bought a house and we had a baby. All those things over a two and a half year period, and when we got back, I basically spent two years, so we weren't fully financially independent when we got back in 2021. But we had enough money rolling in from dividends. I think that by that time it was close to like $40,000 a year, which is a fair chunk of change, and when you are a frugal person and you don't need to spend a lot of money to be happy, that was covering roughly 70% of our expenses. So at that point I decided I don't want to go back to the nine to five grind, even though I'm going to delay my financial independence by maybe a couple of years. I want to start marching to the beat of my own drum sooner rather than later, and I basically took a two year hiatus off.
Speaker 2:I still work, but not 38 out weeks, and I was just trying to figure out what the hell was next in my life, because all throughout my 20s and the first 10 years, let's say was dedicated to reaching this financial goal.
Speaker 2:And even though we didn't we're not there yet I feel as though we're in a comfortable enough position to start exploring different options, and that's what I did, and I thought long and hard about it.
Speaker 2:Sometimes I wouldn't work for weeks on end and I'd just be the housewife Chrissy, my partner, was still working as a teacher, and I'd just be mowing the lawns, getting the meals ready, catching up with my old family in town, really just having an awesome time. And I discovered what I wanted to do for work which we can get into in a minute, because I'm a big believer that meaningful work is a staple for humans. You need it. You can't just go through life without contributing or feeling like you're accomplishing something. So I found my meaningful work, thankfully, and at now, a later has come aboard the last couple of weeks. She's at 10 weeks old, I think, on Sunday, and I'm just blessed. I'm truly in a blessed position, with a family, with a cash flow position, and I'm living a life that Matt, in 2011, could only dream about, and that, in a nutshell, is my story.
Speaker 1:Right, there's so many things that I want to jump in on here. There's one other thing. So you said the catalyst for you was this trip and this travel. Right, yeah, so there's a quote in the article that I would love you to expand upon. The quote is travel, in some ways, was more of an investment than saving and buying shares. Can you tell us about why you wrote that I had?
Speaker 2:traveled previously before we did our London trip. But I think it is different traveling to like Bali. I went to Bali as a kid. I went to New Zealand with a few mates in my early 20s. Looking back, it's actually interesting that for some reason I did always value traveling, like I was super massive to our house on nearly everything, but traveling is where I'd be like no, this is probably going to be worth it and I think I have my parents to thank for that. They sort of instilled that into me that traveling the world, getting those worldly views, experiencing different cultures, it pays dividends differently than money does. But I didn't really truly appreciate that till I lived abroad.
Speaker 2:I think living abroad is special and if you got the opportunity to do it, I would say definitely jump at it. So when we went to London, there was a few things that happened. I'd say that traveling and the experiences and everything that we've seen definitely was still the best part of the trip. But something else happened that was not expected. For the first time in my life really, I fell in love with what work could be, because I'd never experienced a work culture and the opportunities and the teams and things that you get to build with amazing companies. I've never experienced that in my rural setting in Victoria and that's nothing against rural Victoria I love I'm back here. I've got to hit home. I love it, but it just doesn't have the same opportunities and the same energy and atmosphere that a city like London can offer someone that works in tech. So that was surprisingly the second best thing to happen. Living abroad, I felt I knew what I wanted to do work wise. After that trip, it was just about making it happen.
Speaker 1:When I returned back to my rural hometown in the valley in Victoria, Let me ask you about that, because I've had a similar experience, but more condensed, and I think it's the actually extremes of two. So you talked about coming home and then doing nothing for a bit and you've had the most engaging experience. So you've had something you hate. Then you've gone. Oh, actually, that was amazing. And now I want to come home and I'm going to do whatever I want.
Speaker 1:And I know for me, when I left sport, I had that big runway and I basically was like I don't actually have to do any work and I've said that was probably the worst my mental health has ever been. So how much of it do you think was the contrast between the experience of that engaging experience that you had overseas in London, versus when you're coming home and just kind of slowing way down? Some of those days you want to decompress, you want to think, obviously, but there's other times for me where I'm like I need to be doing so, I need to be contributing, I need to be productive. Do you feel like those two different contrasts play a big role?
Speaker 2:Yeah, definitely. There was times in the last two years I've really ramped work up, probably in the last six months, but it's been awesome, it's been the best fun. But before that there was moments where I'd be at home. Everyone would be at work All my mates, my wife she doesn't even have to work, she did like I said or my baby you can stay home. The website's probably making enough money for us to live off, to be honest, plus the dividends. But she wanted to go to work. She's like no, my friends are there. And she dropped down to four days a week. So that was her starting to shift into semi retirement. You could say I don't know if she'll ever go back. I think she will after when Elena grows up a little bit, but we'll see.
Speaker 2:But there was just days where I was a little bit like I spent so much time building this passive income stream. Now I've got it and I can take the pedal off and I don't have to work, but everyone that I want to spend time with is at work, or most of them. I still had my parents that I could visit, but I got a little bit bored and a little bit like there was an itch that I wanted to scratch. I just didn't know how to scratch it just yet, and that's why, like in the article, I'm starting this co-working space in my hometown and I've got another company that I do my data work with.
Speaker 2:But yeah, it's that two extremes. Definitely I overworked in London. That's the other thing. So I fell in love with the culture, but it was full on man, it was full on and the only way I was getting through it was like this isn't going to be my life forever, and then I go from that to doing, like some months I do hardly any work. The other thing as well is Christmas time is the worst for people that don't have a job. Like I'm an extrovert, so when everyone was going to Christmas parties, I felt left out big time. That was two years in a row where I couldn't go to Christmas parties and so like banter and talk about the politics and what's going on with you know? He yelled at him in the meeting last week. I miss that stuff. I really did miss that human connectivity. So yeah, it plays a big role.
Speaker 1:You completely underweight and undervalue the conditions or the environment around what you do. What you do can change, but actually it's like how you're doing it, that's the most important thing. You pick up on the social interaction, the band, like you said, the band. So these are the things that all kind of really matter, and that's so. I can totally see why now co-working space is front and center for you, so you can have your cake and eat it too. Work the way you want to work, get all the things you want.
Speaker 2:Yeah, and this is the beauty, I think, of the fire lifestyle to me and it's different for everyone, I think, when you get a duff of your expenses covered and it looks different for everyone. For us I felt comfortable taking that leap. At 70% covered, roughly give or take, I felt like I could have a go at something that wouldn't put our family in financial danger and I could just be free to sort of explore these different options and that is so much fun, Like anyone out there listening to think Is it even worth it getting your finances in order? Yes, for me it definitely is, because it gives you the freedom to do what you want in the end. Would I suggest grinding as hard as I did for seven years? Probably not. You can slow it down a lot. You could almost leap from it as well.
Speaker 2:If I look back at how unsatisfied I didn't hate my first job. I was unsatisfied Really. I should have been on a plane going over to London when I was 23, 24, or America or somewhere like that. I look back and think that really was the ticket. That would have been better because it would have expanded my worldviews. I would have got experience in a city and different companies, which would have resulted in a higher pay packet anyway eventually. So it's like investing in yourself pays the biggest dividend, which is why I guess I mentioned in the article Like traveling was probably a bigger investment than our share portfolio.
Speaker 1:And there's two resources that I want to just get your take on because I think they seem to be pivotal in the fire space. And obviously you've got Vicki Robin, the absolute pioneer of fire, right your money or your life. And then you've got Die With Zero. To me. I say to people you should read both those books because it's going to stretch your brain in both directions and you'll be more mindful of money but you'll think for yourself. But I think if you just read the one so I see a lot of people read your money or your life and there was a post actually in your community. I had to chuckle to myself about it because somebody actually put this post up and said finally got your money or your life, got it, bought it and then realized I could get it cheaper across town. So I went back across town, replaced it, got it on Amazon for $2 cheaper, boom. And I was like, oh God, vicki Robin would be turning in her grave.
Speaker 2:There was a funny comment on my Facebook group about the Die With Zero book in a similar vein to that story you just said. It was something like I've put a reservation in my library to order Die With Zero. It's going to take two months to get here, but like I'll read it in two months time. And someone wrote under there like the irony of that, because if you read the book it's all about don't waste your time. Way in this specific moments in your life where you want to do stuff. I'm not going to hate on that because I am a type of ass at art, but like I think it's funny. It's funny especially for that book. The irony was just fantastic for that.
Speaker 2:But like being meaningful with your money. Like when I read Die With Zero I thought, wow, it's so obvious. But until you read it it's like you can't do some things later down the track. You want to climb Mount Everest? Good luck when you're 50 and 60. Like, unless you're some sort of absolute savage that is not the majority of people we will not be able to do that. And that makes so much logical sense that you want to break up your decades to hit bucket list items and do some things that you want to do.
Speaker 2:I don't sort of see the Die With Zero is part of the fire movement in my eyes as well. It's just being more mindful and more meaningful, because we just love the extremists, don't we, like people get a part of the fire community and it's like this is the only thing that matters. We must save. You know, flexing on your savings rate, all that stuff. I was into it. That was me in my 20s, but then I just priority shifted and my life went a different direction. I'm still doing the fire movement, but just a little bit less hardcore these days.
Speaker 1:Do you reckon the fire movement can become another race? Because I see that. I see a lot of people doing that and just getting stuck on To me. I look at money, I go money is the token. It's actually not the thing. The tokens got to be cashed in for you to get the thing. But we keep actually getting stuck in the casino collecting tokens and actually not living our lives in the real world.
Speaker 2:100%, terry, and you know this is a common theme. I will see even on my articles, my Facebook group, other fireplaces. When someone writes something like this I'm not interested in the RE, I'm only interested in the FI. I know straight away that that person either doesn't know what fire is about or will be more predispositioned to one more year syndrome and I see it happen theory of you get to your financial independence number but just one more year of working and saving 4%. That's you got an 87% success rate of 4%, never earning a single dollar again. Pretty highly likely rate of success. Let's just drop it down to 3.5%. Was draw right, yes.
Speaker 2:And then when you get to, 3.5%, let's just go to 3% and you never actually enjoy the fruits of your labor. And I say this to people all the time you can be financially independent but still work at a job you don't like and I don't see it all the time, but I've seen it enough to know that one more year syndrome is a real thing, and that's why if you're not interested in the RE then I don't really see a point. Financial independence is a means to an end. To me it's one mountain that you can climb, but then you have to jump off that mountain and start climbing another. But a lot of people never get off that first mountain, which is purely a money goal, and to me they've sort of missed the whole point.
Speaker 1:So why do you reckon we do get fixated on the numbers? I've got my own take, but I think it's got something to do with the way our brains kind of made up, because I see it all the time. We get fixed out of the numbers and what we can see and measure.
Speaker 2:Probably just. We crave certainty.
Speaker 1:I can measure and I can see it's created in front of me. But if you ask me what I really want, that's scary, that's scary, yeah, yeah, that's scary.
Speaker 2:And it's that feeling of. I've been working in the spreadsheet, I'm comfortable with it and if you challenge me and Bill Perkins, the author of Diary Zero he has some great content on this when you go to fire meetups or conferences, he'll ask people so what do you want to do? Once you reach fire, I like he'll put him on the spot to be like so you've got all your four percent, you're talking about a draw rate, blah, blah, blah. And then you just be like but why? And they sort of freeze up a little bit. He's like yeah, but why are you doing this? Why Tell me? Tell me exactly why you're doing this. And they sometimes don't have a fantastic answer, or like they'll say well, I'll figure that out when I get there. I mean, you can do it like that, but you want to know, potentially sacrificing some years of your life to become financially independent. It's great to be free and it's great to figure it out on the fly, but being intentional is equally important in my eyes.
Speaker 1:Whenever someone says to me I just want freedom, I know they don't know what it's about, because you actually need to know and define what you mean by that. And what I find really ironic is why is the money game in pricing? Is because you want to change your situation. Right, you want to change your situation. That want is creative, it's productive. It actually moves you in this new direction. It creates a new identity. You learn new skills, you learn a new language, you learn a new, get part of a new community. That's a great thing. That want is a fantastic thing. And then you actually take it so literally that you start demonizing your wants. You don't even want to declare what your wants are because you got stuck on actually, just what do I need? What do I need? What do I need Another year, another year, another year, another year. And life is just walking past you every day. The sun is rising, the sun is falling and you're still there in the game, in that sort of building, playing the money games. And I would love your take on this, because, after reading your article a second time, you just put language to something. I was like this is what I've been feeling for so long about this because there's so much constructive and so much good about financial independence. It's taking responsibility, but it's also when it becomes ideology it becomes a real problem. I just want to know what's your take on this? This is just something I wrote today, just on reflection.
Speaker 1:Listen to your article. What if we've all been conned? What if money is not actually what we want? What if it is merely that token that we use to measure value and move it from person to person? And what if wealth is simply having more of what you value? In other words, what if wealth is what you want?
Speaker 1:Maybe that's why chasing money is a signal, or chasing money to signal wealth, never seems to satisfy, because we never end up with what matters to us, only what we hope matters to others. But what if we flip it around? What if, instead of chasing money, we chased wealth? Then we might see money as a way to measure how much others value our contribution, and we might see it as a certificate of appreciation and something we can enjoy, not something we need to hoard. How might that switch? How might that change our decisions, our actions, the impact we have and also our well-being? Do you feel like that's kind of what you're getting at, that kind of point of like put the right thing in the right place. You see before, like it's the means but it's not the end.
Speaker 2:Yeah, I do. That was very insightful, Terry. I'd have to listen back to that a few times to really let that sink in.
Speaker 1:But there's a few lies there, but it came from your thing. I was like that's what it is. I don't know why, but I was talking to me to my right in this out. I'm looking at what you're doing, right, and it's exactly what I believe right. What you're doing now is you've realised that you know the money game and now you're playing the wealth game. You're actually pursuing what matters to you and you're starting from that point and you're optimising for that through money, not optimising money for money. And because of that now, now money is different, right, Because now you're getting rich while you're living a wealthy life, because everything else is a bonus.
Speaker 2:Yeah, it's so much more fun. I have to agree with that, because when I first started, everything was around just seeing that line go up in that spreadsheet. I care about that by a factor of like 10 million less than what I did Now. It's about lifestyle, design and thinking outside the box, and this is what we go back to. It's like if you just want to focus on the airfire part of fire forever, then what is the point? Because you're just going to get richer. You want to be the richest man in the graveyard. Well, some people do, you know. Good luck to you.
Speaker 2:But at some point and for me, the catalysts of changing my mindset around this, and it's hard to do you've got to say, all right, we've got a fair chunk of change. Maybe I've reached financial independence. Now I need to start thinking about what I actually want to do with this enormous amount of money that I've amassed over the last decade or two. You know what's important to me, what is going to make me ultimately satisfied and happy, and start working on that. You don't have to reach financial independence. You can start doing this. At the very start I did. I didn't either. I thought financial independence in itself was going to make me happy, and of course that's silly looking back.
Speaker 2:But I liked your point as well, terry, about you mentioned something there, like we think we amass wealth because we want to project that or signal to other people. You know, look how good we're doing sort of thing and humans are. We're signaling creatures. You know, we like to fluff up the peacock feathers. That's what we do. It's actually what drives a lot of innovation. If you actually break it down, it's we just want to impress the person next to us. If we didn't have that drive, we'd be very happy, because right now we're living better than kings and queens were 400 years ago. We live in an amazing lifestyle. Our standard of living is just insane. But it is that something in our brains that wants to be slightly better than the neighbor. We just want to have a slightly better car. We just want to have a slightly bigger house than your brother-in-law. You know, we just want to be slightly better than the people around us. That is actually what drives a lot of innovation and drives people to make better goods and services. So I'm thankful for that drive.
Speaker 2:But it's a bit of a trap because if you're forever chasing, that means hard to be happy. You're just chasing the next thing and this gets talked about all the time the fire community, the hedonic treadmill, and just chasing the next shiny object, you get that or what's next? You get that, what's next? It can be a trap, but it also can be a bit of a superpower as well. So you know, start grinding or doing whatever you achieve your dreams or whatever that may be, but I do think it needs to be balanced with a bit of internal reflection of man. My life is awesome, I can actually sit back and I have the wisdom to actually just enjoy what I have now. And I think a lot of the freedom that financial independence gives you is getting that satisfaction back and marching to the bed of your own drum, working on what you want to work on, with who you want to work on it, with when you want to work on it. That's sort of the ultimate dividend that financial independence can pay, in my opinion.
Speaker 1:Have you heard of good hearts law? No, I haven't. I think it's super pertinent to what we've just been talking about here. It basically states when a measure becomes the target, it ceases to be a good measure. So for me, I look at that and I go measuring your money and tracking your net worth. That sort of stuff is a great measure of progress, a terrible measure of success. Terrible because it actually shuts you into that trap, doesn't it Like? This sort of it just gets you into just stack the token, stack the token, stack the token. You miss the point to your point, do you?
Speaker 2:know what's so funny. You mentioned that Because one of the things I had to do when we moved to London and this has been my number one tip Anyone that wants to improve their finances I have always said track your spendings. I've always said it from the start. You don't even have to set a budget. I guarantee you, if you just track your spendings for a few months, you are going to see so many holes in your boat that where water's flowing out, you're going to plug those holes. But go to gym membership. I'm not using 100 subscriptions to streaming services. I can condense them. When you see it and you aggregated over six months like wow, I'm spending so much money on Friday night beers, whatever it is Track expenses.
Speaker 2:But I had to stop doing that. I knew when we went to London I was like I can't track my expenses because I know I will suck the joy out of some of these trips because if I see how much we're spending, I just won't be able to enjoy it. I won't be physically able to enjoy some of these experiences and I remember a few times in like Italy on the beach, where I was paying bloody 15 euro for a beer and I was sitting on the worst beach I've ever sat in in my life and I'm thinking, wow, you know, this is hard to enjoy. Enjoy, for paying this much money for this beer on this bout of a beach. Hard to enjoy, but I'm trying my best to do it.
Speaker 2:And when we returned to Australia, that is something that I stopped doing completely. I know how much we roughly spend a month just with the inflows and outflows, but I don't have a tracking tool and I don't go over it with a fine tooth and comb like I used to. It's ironic because those behaviors helped get me in the position I'm in today, but it's the same behaviors that would inhibit me from being able to enjoy my fruits and my labor now. So I have to rewire my brain a little bit. Isn't that funny? You work so hard and yet you're so ingrained in a lifestyle to get you in a position, but then to enjoy that position at the end you need to sort of reinvent yourself in a way. I agree.
Speaker 1:I reckon. For me anyway, tracking spending is great to start to learn to manage your money. Tracking your choices, for me, is how you gauge your wealth. Are your choices expanding or are they going nowhere? Because you could have way more money but no more choices. It doesn't matter how much of that token you're stacking up. There's a difference between rich and wealthy, and it's that. But the thing is, you have to master the money game to win the wealth game. It's just that you've got to know when's enough's enough and what to start optimizing for, because, yes, at the start you want to amass capital, to make capital work for you. But there is a point that you've picked up on, which is you need to change what you're optimizing for at a certain point to actually start living wealthy, to actually enjoy the fruits of that labor, or else you just get stuck.
Speaker 2:There's a good quote. I can't remember who said it. It goes along the lines of something like be careful about the things you own, own in you, and I thought that was so profound Fight Club.
Speaker 1:Yeah, I think it is Brad Pitt, it is too.
Speaker 2:You've got it. I thought that was very profound and applicable to the fire community, because you don't want to let your savings rate impact your happiness level to a certain degree. I'm all for if you're going to grind in your 20s or 30s early on in life, like rashly in my head. If someone does fly in, fly out, work and they make a whole bunch of money and they save it but they don't get to see their family for six months of the year. And having just a beautiful daughter being born 10 weeks ago, I can't believe people are away from their kids at the very start, even for six months of the year, like two weeks on, two weeks off. That's a lot of time that you're not seeing yet.
Speaker 2:You could grow up, but some people make the sacrifice to get ahead in life. That makes perfect rational sense in my mind. What doesn't make rational sense is if you get to a position where you're comfortable financially but you can't ever escape the big bucks and be in an operator out on the rig or something like that and you continue to do that. You made a decision to give up part of your life to get into a better position, but you get in that better position and you just keep going along that trajectory. That's craziness and a lot of people do that, I think, because they're scared, they don't want to be uncomfortable. I think a lot of it comes down to that, like their identity is in their job. They don't want to change. If I'm not a rigour, like what am I? That's just me. Everyone knows me as that guy. It's interesting thought experiment.
Speaker 1:Have you ever heard of memetic desire? This guy, rené Girard, talks about it and it speaks to what you were discussing before around status. Charlie Munger talks about it differently. He says it's not greed that drives the world, it's envy. Basically, what is it? We are mimicking machines. We look to models and people we want to be like, because they have a certain sense of something that we want to be like. What we do is we try to do the same as them or try to get the same as them.
Speaker 1:That's why I think it's so important to track choices, because your choices are personal and they matter to you, whereas if you're tracking money, then it's easy to compare yourself to someone else, feel less than and then feel like shit. It's almost like people are competing for a social status or a social good in that community where, like you said before, like one-up being in this sort of cynical type comments. To me it's kind of a marker of that memetic desire playing out where there's that external comparison, competition driving rivalry. People aren't even aware of it, they're pissed off and then they're just spewing their bad feelings on each other. That's why I think track what is personal to you. There is no comparison. For me, it's all about. Can I walk my kids to school as a family and never rush back to work? That's the most important choice in my life. That is wealth. There's no competition with that. To me, that's the key is like what are your measures and who are you measuring against? Because it should just be like your own internal scoreboard. Otherwise you just get sucked into those memetic rivalries and you end up in these social situations that are just like actually not healthy, but starts off healthy, but it ends up in a place that it's not.
Speaker 2:Yeah, I think you can get motivation from people's journeys. I certainly did with reading Mr Money Moustache, mad Scientist. Everyone has it for yours. If some people do, that's fantastic, but I think it comes down to your personality and how you think as well and unfortunately I think there's plenty of studies on this as well Some people will.
Speaker 2:There was a good quote like the difference between envious and jealous. So jealousy is something like I see that guy with a great car and maybe he only has to work three days a week. He's semi-retired. I'm angry, why don't I have that life? I don't think that he deserves that life. I feel like I should be in that position. That's like jealousy and envious is wow, that lifestyle, that that dude's living is awesome. How do I get there? I want to be in that position but I'm not. And I'm trying to get there and I think I heard more people go down the ladder route and they come across my journey To your point earlier that is the source of human endeavor, but what starts to get interesting is when you get too close in nature.
Speaker 1:That's when that kind of the rivalry starts to develop. Now it's an externalized thing To your point. It probably is a personality thing as well, in terms of how competitive are you and how much is it, something that you're trying to win, and probably a lot of us aren't even aware of it. I'd say yeah, absolutely.
Speaker 2:I think kids change as the game as well, and you probably agree with me that so many things just don't matter Once you get born. And to your point about measuring wealth, I can't tell you everyone out there listening how freaking awesome it is to be able to sleep in with my wife and baby every morning. That is so true. Like I get up relatively early, make breakfast, go for my walk, go to the toilet, have a shower. My baby usually wakes up at like anywhere between one o'clock and four o'clock in the morning. She'll feed somewhere in between there. So, chrissy, my partner's a bit pooed, like she'll put her back to sleep, but then they won't wake up until like nine and I get to crawl back into bed. I might be on my phone, on my tablet I'll read, you know, watch a YouTube, but he's just the best. And when you just in your bed with your family, nothing else matters. I'm just chilling in here.
Speaker 1:Yeah, my little girl, she gets up 2.30 in the morning and she's like I'm scared and I'm like I'm so tired but get in, yeah, and then I got to sleep. I don't sleep for the rest of it. I ended up getting up at like 4.30 AM to go and do some training and stuff like that. But I don't care. Yeah, it's so true, and that morning period to me that's everything, because it is. Do I have to scurry off on somebody else's calendar? Or is it my calendar? And I'm like no, that's exactly why I got interested in this Cause. I was like I never want that choice to be dictated to by somebody else, ever again. And it isn't.
Speaker 1:Yeah, 100%, I don't care what my bank account looks like, as long as I've got that choice.
Speaker 2:I mean, this is what it's all about. Isn't it Like having that freedom to make the decision? I have like two companies that I'm apart. With this coworking space I'm with a friend as a co-founder, but so I have responsibilities. But like being a company owner, like you can put in the time when it suits you, and I think that is so powerful and free. Like even I don't work 40 hour weeks I probably will next year just cause I'm ramping up the business, but I just love the fact that you can be like all right, if it's a rough day I got no sleep, I do. I'm just watching a movie today and then tomorrow.
Speaker 1:I took a nap before we had this conversation. I said to Mitch I'm like, I feel like game day today. I'm talking to the Aussie fire bike, I'm going to be on my game, so I'm going to have a nap.
Speaker 2:Here's an interesting thing for you two. I actually think and then I'm gone completely off topic here, just rift in with you but I think, with the way that COVID accelerated working from home, I am not sure that fire will be a thing in like 10 or 15 years. My theory is and I hope I'm right, right Cause I'm a fire guy like fire is awesome, right, but I think a lot of people come to the movement because they either don't like their job straight up or they're unsatisfied, which is where I found it. I think jobs, generally speaking, are getting so good and so flexible and so freeing that I don't see the same level of attractiveness to this movement in the coming decades. Let's imagine the year is 2040.
Speaker 2:You finish uni. Whatever being a trade is slightly a bit harder to conceptualize that. Maybe you can do your trade through VR and a road board is doing it. The other Something like that, right, but essentially the jobs are so good and you have so many options and the lifestyle has gotten so good that people won't feel the need to reach financial independence as much as they did when I was stuck in an office cubicle in 2011. That is my sort of theory. We'll see if it plays out that it's sort of the movement will go to less and less because jobs will get better and better and more free and people won't feel the need.
Speaker 1:I reckon directly. I would agree with that with some nuance. The nuance is you're in tech and tech has had the most bargaining power.
Speaker 1:Yeah, you are out of almost any profession or almost any knowledge work, probably over the last 20 years. I hope that the other jobs become just as leveraged, but most of them aren't. So, you know, we work with guys that are in health care and all these different kind of careers, and yeah, that is true, yeah, it's different. But I do agree, though, like there are some goods and I mean like economic goods, like well-being goods that have changed since COVID. If you are now working two or three days a week from home, it is actually worth a lot of money. You don't actually know that until you realize you live that life, you have that agency and you go. This is worth heaps, like tens of thousands, if not you know, hundreds, of that. It's a lot. We don't want freedom, we want agency.
Speaker 2:We want choice, I agree. But I wonder the four day work week will ever be a thing properly. And then, even further, the three day work week. Because imagine the three day work week that becomes normal in first world countries. Hard for me to ever imagine, but you know who knows? I mean, I'd like to think that if four days off a week, working three and having four days to yourself, Sam Maltman might be the guy.
Speaker 1:You know that, henry. Forbes the reason we had two days on the weekend. So it was a one day weekend and he was like well, I want everybody to have a need for a car. But people don't. Can't drive far from one day.
Speaker 2:So he was the first.
Speaker 1:He goes if I gave my people a two day weekend, they'd actually be able to use their cars, and if I paid them more they could buy my cars, Wow. So I wonder if Sam. Maltman's going to do the same thing for our brains. Make it all so much easier and be like guys. You don't need to work so many days, they'll be sick.
Speaker 2:Yeah, it's interesting to think about and then like he got the whole. You know they've been talking about universal basic income for a while. I don't personally think that will work, but who knows, if they introduce something like that it will be interesting. I'll be a rudderless society.
Speaker 1:It would look a lot like some of those weird movies, like you know.
Speaker 2:I can't see it working, but I mean, guess we'll see, there's nothing more meaningful than solving a problem for someone that makes their life better.
Speaker 1:That just something. You know what I mean. Like that is human endeavor that is not going to leave us. But do you think? Like the incentive?
Speaker 2:structure because we're incentivized through like that's how the economy works, right For money. They've been thinking about it, theorizing about it for decades. Like how else could the system change to incentivize people just to like work for satisfaction and remove money out of the equation? I don't think it's all money because saving happened before money.
Speaker 1:Think about it like this right, you and I are cavemen. I catch one fish a day. You catch one fish a day the first time that I only eat half my fish. So I can go on, actually find and create an implement that allows me to create a fish for more fish the first day that I only eat half my fish and keep it for tomorrow so I can forage for that stick to create a fishing rod that's saving and so that human endeavor to do more with less existed well before and it'll exist well after.
Speaker 1:Whatever for money we're using right now and doesn't go away, you know they change the incentive structure. People are just going to find new ways to use that and it may as well be channelled. What I love about capitalism and I wouldn't even say that we're in capitalism right now is that you can use your selfishness what you want, but you have to look outward to give other people what they want to get it. You have to give the world something to have enough value to be able to get back. I see for you, for your business.
Speaker 1:Now you can see this I've got to solve a problem for the business in the way they actually want, and the money is a measure of how much they value it for me. And it's this really interesting thing because why do you do it? Because you do it because you want to fund more big businesses. You want to fund more bigger, better experiences. You want what you want, but you have to give the world something else to get the money thing to fund it. So it kind of uses and it channels that kind of endeavor, it channels that competitive, that drive, that spirit. It channels in a direction where you have to do it selflessly. I have to give first to get.
Speaker 2:And I guess the key with that is if you like playing that game and get yourself in a position where you like doing it, because then it's just fun. It's fun Working with the business. Now you know we're doing this co-working space and the mate right man, I can't tell you every time we meet up we've both got kids now and Sunday is like our meeting day. We meet up and we talk about all right, what's the office going to look like? You know different systems. We get so giddy talking about it. It's going to be so much fun and hopefully we open in like February next year.
Speaker 2:I am so excited to create that sort of vibe, culture and tribe, that work tribe that I've been missing since London, that I don't have in my town, and we want to create goods and service that people want to pay, transfer their money, transfer it for their life energy If you were talking Vicky Robbins here their time as form of money to come and hang out with us, and I just think it's the best of both worlds.
Speaker 2:And, yeah, if you can get into that space, then that's sort of the end goal really. But I can understand some people don't want to risk it, especially like it's a big risk, right. Quit your job, start a co-working space. It's not always going to pan out and you might put your family in financial danger. I get it. So you want to have a buffer. But if you can get a job that you like to eat that's sort of you can leapfrog a lot of the hard yards that I did. It's just skimping and saving. But sometimes it's not realistic for everyone to get a job that they like doing as well. We have to be pragmatic about this.
Speaker 1:I think a big part of that enjoyment part, like the whole dream job thing, I think is probably overplayed. It's actually the dream environment and conditions and like the way you want to live. Yes, yes.
Speaker 2:With the people you work with and how you feel. For sure that like, if you feel like a cage rat, it doesn't matter what you're doing. You could be, you know, Victoria's Secret Supermodel, Judge or something, but if you've got a micro managing boss and you're getting in teams messages on a Saturday morning that you got to respond to, it's got to be a crap job.
Speaker 1:Man. I had every 22 year old bloke's dream job working in the AFL, being a strength and conditioning coach like being there training the athletes, everything like that and I can tell you this, it's a rule. Scott Galloway talks about this. There's an inverse correlation between how sexy the job looks and actually what it's like, because I can tell you I'm standing in the middle of the Melbourne Bay at 4am in the winter, up to my neck in water. I am getting spat on by the crowd. I am spending weeks away from my family. I am getting picked up and lifted and moved from team to team and the reality is the opposite.
Speaker 1:You really should understand what environment you want to create, who you want to work around, who you love to serve and spend time with, and if you can do that, that is worth so much more than anything else. I can tell you that the fulfillment that we get now, that I get now, from the work that we do, it's far exceed anything I did in sport. I had some cool experiences in sport, don't get me wrong. But the impact, the ripple effect, all of that stuff that comes, and you can actually see this trajectory that people take in their lives, each being one of them, it doesn't even come close. Plus, you have all the choices that you want, and for me, I think the nuance that you gave before is really important.
Speaker 1:Be smart with your money to create enough capital to give yourself the chance to bet on yourself, to try something, to do something else. But you don't want to die with the most money, you want to die with the least regrets, and if you can just keep that front of mind, the thing is, you learn every time you risk. Every time you risk something, you learn and your nervous system is wired to that, and you know you're going through this in business now, right the first time, you talked about what you're doing versus how you're talking about it right now. How much more sophisticated are you now?
Speaker 2:Man, it's so scary pitching your idea because you're scared of rejection. But rejections you've got to get used to that being a business owner because you're going to get rejected 90% of the time. But you push through that and you become tougher from it.
Speaker 1:Let's talk about the strategy. So, from what I can see, it's pretty much the same Keep channeling towards the same kind of product, the same kind of approach. Is there any kind of shift in that? You're just using dividends a bit more than you were.
Speaker 2:Yeah, pretty much. We just spend our dividends now. So it's the three fund portfolio Australia world minus US and the US fund. We spend the dividends and, to be honest, like the strategy this goes back to the earlier conversation Like it's so much more fun working on the business. To be honest, I just get the money and I'm like I could either put it I could either buy $20,000 worth of shares, which removes the need, or like maybe 50 bucks a month, whatever, or for that $20,000, I could attend a conference in Melbourne for like $10,000 and have a really good chance of landing.
Speaker 2:Like another contract, pick up a new client, add tens of thousands, like hundreds of thousands sometimes, and I want to keep adding to the portfolio.
Speaker 1:It's actually ridiculous when you think about it. Like that isn't it? Yeah, for me, we're taking risk by starting a business. Yeah, and you take risk every day. You're risking it every single day. You ride the rollercoaster, right? I want everything to be boring and easy and simple and, like I agree with Warren Buffett on that Like, if you don't know, if you don't have a better idea, do that thing, just keep that there. But I just see it as a bank account that look, if I want to draw from it because it's actually going to make the human capital work harder, make the business work harder. That's exactly what we did in the beginning. I drew down for the portfolio to fund the start of the business, to get the whole thing going and all the choices that I want from wealth. I just kind of pulled them forward like decades.
Speaker 2:Well, I'm going to be drawing, selling some shares which I haven't done ever, I think to put into this co-working space as well. So I'm really excited to write about that. And some people might be like, oh, you're going backwards, you're not going to get to FI now, and I'm just like that doesn't really bother me that much. You're on the wrong measure. It's going to take care of itself.
Speaker 2:Like I guess I'm betting on myself and I do have to be careful, and with yourself as well, terry. Survivorship bias is definitely a real thing. So it's easy for us to say it with companies that cash flowing and relatively successful depend on the metric, but for every one of us there might be someone else where it didn't work out and they would be like wow, I wish I never withdrew down from my portfolio and tried that business venture and it failed. And now I'm stressed, blah, blah, blah. So I do have to be wary and just make note of that. However, in my situation I'm a pretty confident guy. The worst case scenario for me I just know like, if I look at what I have to offer businesses in terms of professionally, my experience, my qualifications, all that stuff pretty much at the very worst, let's say-.
Speaker 1:Go back and get a job right.
Speaker 2:Mate, I could get a job at Coles. I started at Coles when I was 15. That is sort of the worst it could ever get for me, because I know the manager of Coles and they'd give me a job. And if you're talking Coles, it's still like 50 grand a year and that's the worst case scenario. There's something to be said about people that are risk averse Great. But the biggest risk of all is taking no risks. And that's where I come back to.
Speaker 2:People get so hung up on the 4% rule and it is crazy to me that they get so hung up, especially with the other modeling that's been done. Because even if you just earned let's say you want to retire on like 60,000 a year and you're basically not that off the 4% rule, which is like 1.3 million or 1.4, whatever it is is close to that. Even if you earn something so small like $10,000 a year, that might be one day a week at a cafe, part time, because you're not going to be paying any taxes on that. That just blows out the modeling of the 4% rule completely. And all of a sudden you've already covered 17% of your expenses for the year with a 10,000. It's more of a social outing once a week than it is work.
Speaker 2:It just makes a mockery of this 4% rule. It's why I just can't believe some people are being like, yeah, 4% is not enough. It's not enough. You really want to be working off straight enough. You really want to be working off for 3%. It's like is this real life? Are you just living in the spreadsheet because you can just pick up the smallest amount of work and suddenly all your problems are gone? Just do a paper round.
Speaker 1:So this is the kind of person I'm betting the Bill Perkins will be like. But what for?
Speaker 2:Yes, that's exactly For 3.9%. Yeah, for 3.9%.
Speaker 1:Yeah, we say to people right, so coming into doing what we're doing, we sit down, we have a two hour conversation and we actually just ask what are the choices that define wealthy? What are they? And people are like, why are we doing it? Like just give me the number, Give me the number and I'm like, listen, you cannot optimize effectively until you know what you're optimizing for, or else what you'll do is just optimize for the very same thing everybody else on the rat race is doing, which is all is the same thing, which is always more.
Speaker 2:Yeah, absolutely. I want a big house on a Tesla and I wanted this and this. It's like great, you can do that. You're going to be working 30 years. You're going to be working 70 hours in the corporate world. Is that worth it?
Speaker 1:And, to your point, the things that you won't know you?
Speaker 2:Yeah, well, I think so. Everyone's different. Like I'm not hating on people that like materialistic things because everyone is different.
Speaker 1:Well, depends what you want it for, though. Right, is it a signal, or is it actually a symbol For me, like I've got a rivet, you've got a Tesla. Right, you got a Tesla in your future. Yeah, absolutely, you've been talking about it. Next year, man, it's colored, it's colored. So this is what I think the nuance lies For me.
Speaker 1:I want a Rivian, which is an electric truck, which is a sick electric truck. You've probably seen it. That's mine, that's mine. I don't feel less than for not having a Rivian, but I would see it as a symbol that I have given, because I would only get that if it's within my means, and if it is within my means that I have given a lot more value than I'm given right now, which means who I have to become, what I have to do. It's now a symbol, actually my contribution, and it's also a symbol of my own actualization, because I'm going to be a smarter, better version of myself as an individual, as a professional, as a business owner, all of those kind of things. The Rivian is actually just a little milestone for me along the way. Whether I do or don't get it, I don't really care, but it'll be cool, so I'm going after it.
Speaker 2:Yeah, I'm pretty much the same with the Tesla man. Like I'm really close to leading this big contract with the company and as a reward, well, actually it's sort of for my wife but secretly for me in the scheme of things. But when the second kid comes along, I think we will need a bigger car. We don't really need it, to be honest. There was, I mean, you look back in the 90s my family's getting around in, like you know, holding sedan, like you don't need these big SUVs but it would be nice to have one. And as sort of a reward, a bit of a carrot to push hard and get this contract and land it. We'll order one as soon as we land that contract. We could order one tomorrow, but once we land the contract, like I feel like that's the tipping point in my mind.
Speaker 1:So this is the thing your wants are creative. Your wants are actually the creative seed that drives your wealth, because it's actually that, that want, that makes you become a different kind of person, and everybody that wants financial independence is demonizing the wants and actually fall into that external thing. Then you get into that kind of trap. So if I'm doing that, we need to make the business this big, which means we've got new offerings with me.
Speaker 2:We've got new products, which means we're solving new problems, and that's just a reward to all it is, and I do it with, like other things, health and fitness as well. If I know we're going to some or you can eat you know Chinese I'm just going to eat everything inside I have in my head when I go to the gym that day. Like it's going to be heavy, do you know what I mean? Like I'm going to be lifted heavy because I know I'm just going to be picking out some night. I'd usually say, like you can't outwork a bad diet and all that good stuff. But sometimes it's just fun to reward yourself Like you can front load a bad diet, which is what you're doing.
Speaker 1:Yeah, I try not to do it you front load, the work to create the calorie deficit, and then you feel it Exactly.
Speaker 2:That's just such a better way, I think, to go about it A bit of pain and then get a bit of gain. Oh yeah, I love it. I try to live my life that way. Do you ever do? It would go like full Huberman here, but like do you ever do ice bar or anything, terry? Or like the cold shower in the morning and stuff.
Speaker 1:I did, and when I was in sport I used to be 20 minutes to the neck.
Speaker 2:That's a fair crack actually, because I started doing cold shower probably for the last like two months and I'm not saying this, yeah, just because I heard on a podcast. But it honestly is life changing is a strong term. Maybe we wouldn't put it right there, but it makes a difference. Like I'm telling anyone out there listening, it sucks when you first do it and I was doing it like in winter as well, I was freezing, it was like that little bit of pain. It only lasted a few minutes. In the mornings you get through it then suddenly your whole day is easier, like your whole day.
Speaker 1:Oh yeah, you have your win. That's your win, exactly.
Speaker 1:I agree, like I do the same thing. So it's 430, it's trained, it's a heavy lift, it's tracked, and every time I'm just trying to pick, just put like the smallest little bit of extra amount on, and then for the next eight weeks I go back and cycle again, and the next eight weeks I'm just shooting for another one kilogram. For the next eight weeks I'm just shooting for that extra one kilogram, right, and so it's just this little game I'm playing with myself. But I think the principle there is get comfortable with being uncomfortable so that you can do it in other areas of your life, because the psychic discomfort that you face when you face risk, your brain actually doesn't distinguish between the two. It's, I reckon you can train yourself into understanding or be comfortable there, and you do it in different arenas and it's pretty common, like it's actually quite common. I know we're coming to the end of our time here. There are a couple of questions I really need to make sure. I ask you how would you coach yourself?
Speaker 2:What advice would you give yourself six or seven years ago when you've realized in your words I'm just clocking in here- OK, so you're referring to the part of the article where I was checked out mentally from my job and it was all about the paycheck. I was just rocking up to get paid. So what would I say to myself? I would, I put an emphasis, I spoke about it before, but I would try to convince my younger self which would be hard, by the way, because I was so obsessed that if you're in unsatisfactory territory it's better to take a gamble, because you're so young, you've got no dependence, you're in a great financial position anyway, even though probably had like a hundred thousand dollars in my name, which was still a very good position as a young 20 year old.
Speaker 2:Go try something else sooner rather than later. And for me, like if I was telling myself directly, I would say pack up your bags and go live somewhere else. Now, that's very specific to my situation. What worked out for me, but that's what I tell myself. And for anyone out there who's listening, in that situation, it's not going to work out for everyone, but I'm just such a strong believer in traveling and living abroad.
Speaker 1:How much of that do you think is about you getting out, being able to flex identity? Because I know that if you go to a different environment, you're going to have a different environment. There's not people that look at you and think they know you and you don't act a certain way around them. It's a clean slate, so you can actually flex and experiment with all different versions of yourself. Is that really what you're getting out there?
Speaker 2:That's part of it and this is specific to me. So this is my situation, not everyone else's, but that's a question you ask. So I don't come from a huge town it's 23,000 people, it's not like a one street town but I just needed to be exposed to different ways of working, thinking, cultures, attitudes, world-class managers. For me, that's what ignited, or reignited, my passion for the work that I was doing, and I just wish I did it sooner rather than later. That's the simplest that.
Speaker 1:Hypothetical. You've said that to that version of you and that version of you turns up to you and says yeah, I got my spreadsheet, I've worked out the number, I'm going hard for it. He probably would say that what's the next?
Speaker 2:thing you'd say to him Fair enough, I mean, that person got me in the position where I am today, so I can't be too mad. I don't think I really wasted parts of my life really because and this I like to be said, this comes back to survivorship bias, ship bias, maybe me doing those hard yards in that boring job. I got the skill set and I did. I was. Everything happens for a reason. Did I get the experience? Okay, here's another question.
Speaker 2:Would my experience of living in a big city be way worse if I had rocked up there at 23, 24 with hardly any experience? Right, because I wouldn't have got a job that I got? When I went over there, I was very lucky. I had experience in a niche technology stack that they just happened to want for this contract and I got a contract with a big consulting firm and that sort of propelled me into the contract. It was very, very lucky. But not everyone is that lucky and as a young fella I might have been grinding in London or New York or San Francisco, wherever. I ended up 60, 70 hour weeks for pittance because I didn't have that experience.
Speaker 1:So like it's hard to say yeah yeah, what are you going to teach Elena about money and how will you do it?
Speaker 2:Oh man, this is. I obviously have like things that I want to pass on and still in her that was instilled in me that I think are very important. However, this might be not the answer that you think it's going to be, but I can already see, terry, she's going to have me wrapped around her little finger. I can tell you now that I'm going to be like I'm going to do what my dad did. He only bought the pole footy boot. You know, he had all these money, life lessons. Man, I don't have a son, but I'm just telling you, as a father of a daughter, like I just don't know how well I'm going to do with that department. I've got to teach her some things, for sure, but I see myself spoiling her a little bit, which I sort of goes against a few principles I previously held. But I just want to give her the world.
Speaker 1:I totally get that. My daughter hasn't worked it out yet, but she can ask whatever she wants and she'll probably find it.
Speaker 2:I also think as well. This might be slightly controversial, but whatever, I do think there is a difference between raising a son versus raising a daughter, and I think there are certain values and principles that are slightly different for each gender. Now, I'm probably going to get absolutely flamed by some people by saying that.
Speaker 1:Man, I've got twins, a boy and a girl, so I can tell you that's 100% correct how I am with my son, how I am with my daughter. I don't parent them the same way. And if you are a parent and you're listening to this, there is only one book I recommend reading before you become a parent, and it's called they Fuck you Up, and what it does is it teaches you. That's my reading list.
Speaker 1:It's too late, mate. I really don't think you can read books to prepare you, but it's actually more about you developing you and understanding you first. This book just absolutely pulled away all this stuff that was in front. I'm like that is who I am and that is why I am who I am. And so I can see now when I am with my daughter and I can see now when I'm with my son. I'm like I'm actually harder on my son at times, easier on her, and I'm asking myself the question all the time like why am I like that? Like what is it about? What am I seeing in him? How is that a projection of me?
Speaker 1:You can't be perfect as a parent and you've probably had this like maybe not. It's 10 weeks. Once your kid starts doing things, you find yourself at your kind of wit's end. At times you're most tired and like you react and you go what the fuck was that? That wasn't me, that was her, that was my dad. Like where did that come from? It's this slow unraveling where you start to see it. And then for me, I'm always pruning, I'm pruning, I'm like I call that's the reactive, instinctive response.
Speaker 1:Now what do I want my actual response to be that book. They Fuck you Up. That's so important, I think, to be able to show you who you are and why you are the way you are, and it helps you beyond parenting. So even if you're not a parent and you're listening to this, it's probably the best psychological profile you'll ever do to read that book. But, mate, you did actually mention that you're not consuming fire content anymore. You're only just keeping in touch with a few creators and a few different people. I would love to know who are they and what is it about them that you're kind of keeping in touch with?
Speaker 2:Of course, mr Money Moustache has always got a soft spot for him. Dave at Strong Money Australia is another blog I follow. The Fi Explorer Probably the bad scientist but he doesn't release how they create any content these days. Now these are the people that I feel are just a deeper connection with, and some of them I know I've met in person. I feel like I'm more of a friend than just an observer of their content, and other than that, though, it just doesn't interest me in the way that it used to. When I used to come across a new article about the modeling or the research behind VGS or comparing equities mixed with bonds and the ratios, whatever, couldn't get enough of that. In my 20s I'd read articles all day. I'd go through 20 finance books a year, which is a lot for me, and now I just have other interests. I don't care about that stuff. Not that I've mastered money, it's just that it doesn't get the blood flowing, and I'm more into entrepreneur and companies and raising a family and stuff like that.
Speaker 1:Do you remember when Layton Hewitt was killing it? Yeah, and then he got together with Beck Hewitt and then his game just went like pretty good, but he just wasn't the same in that sense.
Speaker 2:Well, no one.
Speaker 1:Yeah, but, like as a person, that's an evolution. Your value set changes and it changes overnight. And what you just said there just really kind of just made me think right, what is the value of 30 year modeling before you've had these big transitions? Because to me, the version you've just stepped through and become and the version you were modeling on 30 year timelines, how many assumptions do you just throw out the window as soon as that happens?
Speaker 2:Do you know? I really want to touch on the point there as well. That's important here. So there's a huge debate the fire community of the importance of SUBA and how it pertains to earlier retirement.
Speaker 2:Now I think the general rule of thumb is the closety of preservation age, the more it makes sense to start dumping co-op using some money to SUBA, just for the tax reasons.
Speaker 2:But fly is slightly different, because we're trying to do it pretty young and I can say and I don't want people to take this as you know what you should do, but this is just my story that we made a decision to not invest heavy in SUBA, even though we would have more money at 60, but we wanted to pay a little bit more tax to give us the freedom, choice and potential opportunities earlier in life and not have to wait for the government to unlock our money. Now I cannot tell you how well that has played in our favor now because our opportunities and our circumstances have changed. I can sell, if I want to, $100,000 out of our portfolio and put that into a co-working space. I potentially couldn't have done that if I dumped everything into SUBA and I only had, you know, a piece worth of dry powder as an emergency fund in cash. Like we've just got so much more choices in our lives by making that decision, I thought it was important to highlight that there 100%.
Speaker 1:Very, very pertinent. The other one that I just picked up on there too, was you sort of touched on this in the article easier to use dividends because you've got a dividend focused portfolio. Psychologically easy to use dividends, then have to sell down units in a growth focused portfolio. Do you want to just sort of talk through that as well, because I think that's actually quite an interesting distinction. It's something for people to consider when you are constructing a portfolio.
Speaker 2:Yeah, so this is just the psychological barrier that I faced of selling down units of my portfolio versus money just lands in my account four times a year as a dividend. I feel like and I've spoken to heaps of people and I'm pretty sure this is well studied as well there is something about if I have to do something it might not get done, so the dividend just gets paid automatically into our account. But if you have to sell down units, there is a psychological barrier about reducing the size of your snowball and you feel like I don't want to like make you know one more year syndrome. You know, don't want to sell it down this year, I just work a little bit more and it will be bigger than I'll feel more comfortable. And that's just me.
Speaker 2:But I think a lot of people more privy to that psychological barrier as well, and I have met a lot of people US mainly because they don't get a lot of dividends in the US, in case people don't realize.
Speaker 2:So the strategy there is to sell down, like you really have to sell down units to get that money and from an accounting or mathematical point of view, there actually is very little or no difference between the two If you actually, from a company's point of view, whether or not they give you cash as a dividend or they put it back into the company and it raises evaluation of the shares and you sell down the shares anyway, I think the mechanisms are very similar. You've got the exact same, it's just the psychological difference on I'm depleting my snowball versus oh, my snowball just gave me money. It's the same thing like from the accounting point of view and the assets on hand of the business, but, yeah, psychologically so much easier to get dividends. And again, I'm very glad that we went Australian heavy because it gives us more dividends and we just find them easier to be out. Oh, dividends got paid, we're going to spend it.
Speaker 1:That's exactly my experience. Leaving previous career, I was actually just working out run rate and income from run rate where I was like, oh, hang on, that's so many months dividends I've got. That's what's going to buy me. I've got this much cash over here. I'm good. I didn't have to sell down initially. I only sold down to fund start of the business. So I agree, and it's another really good example of how understanding how humans work with money is more important than understanding how money works, because if you were just stuck in the spreadsheet and modeling out and doing the math, that sort of thing, you'd be like well, technically we should be doing this. But it isn't about technically. It's actually about what humans do with money and humans aren't logical when it comes to money.
Speaker 2:Yeah, I haven't met anyone ever I've spoken to written to many real life, like over 10,000 people that have been on this journey towards fire. I've never met anyone that has built a snowball outside of super and drawn it down to zero when you hit your preservation age, even though that is mathematically the most efficient way to do it and I had a calculator on my website, like I know about this right.
Speaker 1:That is a great point.
Speaker 2:I've never, ever, ever come across someone that's done it. A lot of people start to do it, but then they find a job, they quit their job, they find something else that earns them a little bit of money and they never have to dip in and they just become multimillionaires at 60, which is great. But my point is that the strategy like be pragmatic about it. Even though it makes sense in the spreadsheet, what do people actually do? Because the again there's a quote that's like the best diet is the one that you're going to stick to. I find that a lot of the time that outside of super, inside of super snowball approach draw it down to zero gets talked about on Reddit. No one ever does it. Yet to meet someone that does that, yeah.
Speaker 1:This is where Peter Thornhill has done so much good for the community. But he's got something to answer for as well, because he completely ignores the emotional utility of a home, that period of time, the period that you're coming into now. Having that, if you do look at it financially, it doesn't make any sense. No, it doesn't make sense. But we're not trying to make sense just for the money. It has to make sense for your life. I would love to just have that and have that discussion with him about that and go what are you missing here, mate? I think it's just too categorical. And don't get me wrong, I love that book. This was like the thing I'm like. This gets it. No one's explained it like Peter Thornhill, but I think he really misses a trick when it comes to that.
Speaker 2:Yeah, I don't know what he's. I've had him on the podcast twice and I brought it up each time, but he just hates property. I don't know what to do.
Speaker 1:Yes, well, we could talk about that one for hours. But, mate, this has been so good and we've had a couple of real good discussions on the phone and I was like, well, you need to, we need to record some of this stuff because it's the evolution of thinking and, like I said, I think yours is such a positive example of what the fire can do, minus some of the failings, minus some of the things that we've kind of sort of discussed here today. I would just love you to finish this sentence for me to finish things off, mate, just filling the gap.
Speaker 2:For me, wealth is Don't want to be too cliche, but I would say freedom of choice.
Speaker 1:Freedom of choice to what for you.
Speaker 2:To do anything, to work on what I want to work on, to sleep in my daughter and wife, to travel, if I want to do it, just to be free. I think free is a fantastic state to be in and, fortunately, money you can master it and get to a point where you have a lot more options and freedom to do things that you want to do.
Speaker 1:Yeah, love it, mate. Well, thank you so much again. And now for the folks in the audience who are hearing from you for the first time, just give them a quick hand off. Where can they learn more about you and really hear from your story?
Speaker 2:Yeah, so if you just Google Aussie Firebug, you will find me. My website is AussieFirebugcom and I've got a whole bunch of articles in there. You can read up on my story. I run a monthly net worth update series. That sort of tracks where we started from. So I first started being 36 grand in debt with my Hex debt back in 2011 and all the way up to where we're at now, and so you can sort of follow along in the months. I also have a podcast. Wherever you get your podcasts I'll be there iTunes, spotify, wherever and they're the two main areas you can follow along. Oh, and my Facebook group as well Aussie Fire Discussion Group.
Speaker 1:Love it, mate. Well, thank you again. We really do appreciate it.
Speaker 2:No worries, Terry. Thanks for having me on. It was a very interesting and great discussion, mate.