Our Family On Fire Recipe for Success

So, you might be wondering, how did Cam and Trish get here, so close to achieving F.I.R.E (Financially Independent Retire Early) in their early 40’s?  They must have both earned a huge income over the years right?  

Nope.

The truth is, we are an ordinary Australian couple, we have three kids, Cam has always been our main income earner and I was able to stay home with our babies when they were tiny and have continued to work from home in my own small business now they are all school-aged.  I have not returned to the traditional workforce at all since our firstborn arrived almost 15 years ago.

We truly believe that ANYONE can aim for and reach F.I.R.E. 

Before I begin, you may be asking:

How Do I Calculate FIRE?

The ultimate aim of FIRE is to be able to earn enough passive income from your investments that you can retire and live off that income. Your passive income ideally should pay you an average of $4 for every $100 you have invested (4%).

For example, say your living expenses are $60k per year, here’s how to calculate your FIRE number:

$60,000 x 25 = $1,500,000 (The 25 magic number comes from 1 how many 4% or 1/0.04). Your FIRE number is $1,500,000.

Use our calculator below to find your own FIRE number.

Read on to learn our own recipe for success:

1. Be on the Same Page

One of the most important aspects of our F.I.R.E journey is to have the same values and long term financial goals.  Cam and I have both always had a desire to become financially independent as soon as possible which has made it super-easy to move forward and map out our journey as we go along.  

As a couple, you may not always agree on the methods that you believe will get you there, but it is important to listen to each other and not try to “railroad” your partner into thinking your way.  Bounce ideas off each other, share your own ideas and dreams and be open to compromise. Aiming for F.I.R.E should not feel like a chore for either one of you. It should feel like a shared partnership where you can celebrate the milestones together along the way.

2. Goal Setting

“Where focus goes, energy flows.” – Tony Robbins

There is no doubt that when you set goals, you are already on the road to achieving them.  That first step of writing your goals down or speaking them out loud sets things in motion and you will automatically work towards making them happen.

Cam and I married quite young, at ages 25 and 24 (I’m the young one in our relationship!).  Right from the beginning our aim was to save up for a deposit on our first home. As we were young and our wedding was self-funded, we planned a relatively small-scale, budget wedding.  We borrowed a family member’s beautiful oceanfront property for a garden wedding and they allowed us to hold our reception in their large, stunning home, saving us the huge expense of a venue.  A family friend made our wedding cake as a gift and Cam’s Mum supplied the flowers (she is an ex-florist) as our wedding gift. It was the most beautiful wedding I’ve ever been to, so intimate and full of love.We moved into a tiny shoe box-sized apartment in our first year of marriage and both worked full time.  We committed to saving Cam’s wage while using my wage to pay for our living expenses (rent, power, food, clothing, etc.).  It was actually quite easy not to buy “stuff” as there was no room to store it in our tiny apartment anyway!

After 10 months of marriage and careful saving, we were able to put a deposit down our first home – a very happy day!

Of course, that meant we had to set a new goal: Pay our mortgage off as quickly as possible.  We managed to achieve this goal by the age of 32, despite going down to one wage once we started our family.  Our baby #3 was a newborn and we’d smashed our goal – such an amazing feeling!

We have gone on to set many other goals along the way and have achieved them all.  We have bought investment properties, shares and our favourite goal – we bought our dream beach house too!  We’ll chat more about that in another blog.

3. Budgeting / Mindful Spending

In this consumerism-driven world, it is so easy to spend money without even thinking.  There are cafes at every corner, fast fashion in every store, “must have” phones and gadgets being spruiked to us on social media, etc.  Aiming for financial independence requires us to stop and think before we spend.

Setting a budget for your family is an absolute must.  Look at your ins and outs and make sure that your “outs” are less than your “ins” by setting a budget.  We recently started using the Pocketbook app to track our expenses and set our own personal budget and can highly recommend it.

Setting a budget holds you accountable and puts you in a mindful spending mindset.  You WILL be able to resist all of the things!

To achieve our goal of paying the mortgage off on one wage, we made simple choices such as:

• Purchasing second-hand furniture, kids clothing, baby equipment, etc.  
• Not owning the latest and greatest TV and sound system (so glad we didn’t, how things have dated since those days!).  
• Saving our own clothes shopping for birthday and Christmas presents for each other rather than just mindlessly spending on clothes throughout the year.
• Sticking to a grocery budget.
• Shopping around for the best deals on electricity, gas, internet, phones, etc.
• Ensuring we were getting the best home loan deal with the lowest interest rate.
• Minimise renovation costs until you have paid off the mortgage and have cash for the renovations. Yes we lived with a 1972 kitchen for many years!

4. Wise Investments

To really set yourself up for F.I.R.E, it is important to make the right investments.  Once our mortgage was almost paid off in our early thirties, we leveraged against our house to purchase some small investment properties with no additional cash. They are now positively geared (some were positive from the start). 

During this period we have also built a healthy share portfolio. We have now moved to a managed diversified strategy by only buying five high quality LIC (Listed Investments Companies). Our portfolio is based on the ones Peter Thornhill likes. We only buy these ones as they have been around for a long time (some +50 years), low MER (Management Expense Ratio of 0.14 – 0.4%) and have a strong history of returns (TSR 8-10%pa over 20 years). They offer Fully Franked dividends of ~4% that grow over time. 

Re-assessing Our Position

Every so often we grab a coffee and look over our goal spreadsheet together to reassess where we are currently at with our goals and where we are heading next.  This is a great way to keep track of what you have achieved so far, set new goals and allow you to celebrate your wins. We find it so motivating and we get a thrill when we see how much closer we are to reaching F.I.R.E!

6. Some Fun Along the Way!

Hold up, where does fun fit into this?  Fun as a family is very important to us and we factor it into our goals.  Want a holiday? That’s totally OK, just make room for it in your budget. Enjoy sport?  Kids like dancing? You can make that happen too! Budgeting doesn’t have to be boring. We absolutely recommend that you make sure to include fun and enjoyment in your budget and it will be much easier to stick to.

Right back in our early days, we worked out that travelling interstate with three kids was very expensive!  So we bought ourselves a late ‘80’s triple bunk Jayco caravan and were able to go away almost every weekend at a very low cost.  We LOVE the beach and had a ball camping in beautiful places like Wilson’s Prom, Phillip Island and Lorne. We even took an amazing 6 week caravanning trip from Melbourne over the Nullarbor to Western Australia.  We have so many happy memories thanks to our old van!

Our kids love to surf, ski, mountain bike ride and generally be outdoors.  Many of our favourite activities are absolutely free and we enjoy them often.

Within our current budget, we are saving for an overseas holiday over the Winter holidays next year, somewhere warm – we can’t wait!

Just the Tip of the Iceberg

We have so much to share with you about our own journey and our biggest dream is to inspire you and allow you to realise that you can do this too!  

Please feel free to comment your thoughts and questions below, we’d love to hear from you.