When did FIRE become synonymous with

Well, it was bound to happen. Suddenly FIRE has move from being this underground movement of wierdo who can’t possibly be telling the truth about their achievements, to being truly in the mainstream media. Everywhere you turn, there is a story about some person on the road to FIRE or enjoying FIRE. From business insider to New York Post, even Forbes and CNN are reporting on what has become a feasible way of life for more than just a small lucky minority of engineers.  Everyone has jumped on the FIRE bandwagon and it has become a burning platform (pun intended!).

Now don’t get me wrong, I am excited that this is now getting more attention. For one, it means I can read so many more inspirational stories and get handy hints for my own journey. I am excited that it is changing the discourse and creating a conversation about non traditional lifestyles and unconventional ways to live a life as opposed to the familiar “work till 65 then retire” model. HOWEVER…what is up with all these stories about achieving FIRE being this extra ultra frugal journey?

Look I am all about penny pinching, coupon using frugality but this new bunch of FIRE warriors take things to a whole new level. You have a lawyer buying brown bananas to save, another eating rice and beans and a guy working 80-100 hours for years,  All the stories appear to be about the extremist frugality and are not exactly a glowing advertisement for why this journey could be worth considering. I get that the news agencies need click bait but this one sided story seems to me to do more harm than good. How can we have a civilized conversations about the pros and cons of FIRE if everyone is equating it to eating a deficient diet, moving to far flung places in the name of geo-arbitraging and wearing clothes that are literally falling apart?

Already the conversation is being diverted by the fact that people seem to equate FIRE with people earning ridiculous amounts of money. This is not helping to break down the misconceptions and if anything just leaves people with even misconceptions than answers. Unfortunately the many blogs on FIRE that tell a more balanced story are just that – blogs and not out there in the mainstream so people can start to explore for themselves. I guess they do say any publicity is better than no publicity and so that hopefully means that people will start to dig a little further than the sensationalist headline and determine what FIRE means and how they can make it work for them.

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One bad decision away from homelessness

I am rather emotional today and so I apologise in advance for using this blog to vent. Today a very good friend of mine who is close to 40 years old contacted me about emergency accommodation. This friend is single, has a professional qualification and has also trained in a technical skill. Due to various life circumstances, they have found themselves in a situation where they have are down to their last dollar and are now resorting to the local shelter for a place to stay for the night.

To say I am raw with emotion is an understatement. I cannot in my mind fathom how a person can get to a point where there is not a single extra couch to surf, there isn’t an extra slush fund of money to pay for some cheap rental, there is only nothing and more of nothing which would force someone to seek a roof over their head in a homeless shelter. Do not get me wrong – I know there are homeless people, I see them every day, I have done fundraising walks and cake bakes to raise funds for homeless shelters, I KNOW they exist. However, somehow in my consciousness I never thought I would ever have someone I know,  a friend I have shared life with, a person who is qualified professionally and hard working and ambitious, I never thought that person would be homeless. In my reality, and I know it sounds awful, but in my reality that was just not something that could ever happen to someone like me.

And in this new reality, comes the extra challenge of what to do. Instinctively, I want to open up my house, my wallet, myself to help this person get back on their feet. I want to give them a place to stay and a meal to feed than and an ear to hear their challenges. I want to be that shoulder to cry on. That is who I am and who I have always been. However I discovered today that Mr. Moto is not that person and he automatically wants to analyse whether by helping I am enabling – how did they get to this situation? How did they not see it coming? How do you stop them from becoming dependent on you?

As I process his questions, I am blinded by my love for Moto Junior.I would never want Junior to go through this – to not have a single friend who can help, to be in a situation where help is needed in the first place. I realise how critical it is for me to equip Junior with the skills to be able to fend for oneself, to make decisions which will enable food to be put on the table and a roof to be over one’s head. It is so important that I instill the value and criticality of money in lifes endeavours and ensure it is strongly embedded. I cannot fathom a world where I am striving to save millions and someone so close cannot even put down a few dollars for a room for one night. It scares me, and it worries me and yet it is the reality of the world we live in now.

New month,new numbers…gaining momentum

Well well well, this is a big year for me not only age wise but work wise. Now, you all know not to ask a lady her age, and I am a lady so let’s just say I am getting closer to being elderly than a teenager. However I am adamant that I am “young at heart” like all people facing into the abyss of wrinkles, creaking bones and booze filled nights intolerance!!!  I also strongly believe in the power or a good dress and some make-up – Long live eternal youth!

photo of a woman wearing a turquoise gown
Photo by THE MAKEUP MAACHINES on Pexels.com

I am the first to admit that impending birthdays tend to fill me with enough anxiety and gloom that I need a shovel to dig myself out of the depression I manage to bury myself in however for the first time in a long time, could it even be the first time ever…I had am feeling different and I think this journey of FIRE has something to do with it.

I got paid my bonus this month and since we also got the windfall of Mr. Moto’s redundancy a paid out a few months ago, it has left us in a rather nice and healthy position.

Mad FI - Sep 2019

The big reveal for this month is TA-DA, how we have managed to shave off 4 months from the FIRE date and bring it even closer to my 2024 goal. The more I go on the journey, the more I feel that there is much to be said for tracking this goal  – it is such a motivation when you have a month like this one.

You will note though that we had a spike in our spending this month thanks to our dear European car which went in for its annual service and came back requiring new tires, brakes, transmission windscreen wipers etc. It is now close to 9 years old and so we will need to start monitoring those costs very closely. We are still managing on one car in the family and it has served us pretty well and since its still under 200,000km, I do think we can probably get a few more good years out of it. I will do my homework on the buy versus completely running it to ground before selling it and see how we go. It probably also doesn’t need to go to the authorised dealer (read more expensive) for every service but since it only gets serviced once a year, there is probably some analysis I need to do there as well.

Next month, will be a much higher spend month for several reasons. I will be paying for our Christmas and Easter holidays (all local and regional so tick on reduced holiday costs), I have a destination holiday in February that I need to purchase a ticket for and the big one – our usual school fees bill is coming up. So we need to be extra vigilant to keep all the extra costs down in the month so we can ensure we bring all these costs in without blowing out the really good progress made especially over the last 3 months of our budget.

As I analyse where we are on our year to date expenditure, as always food and transport seem to have run away again but I am comforted that our large ticket items like our house costs and fees which account for ~50% of our total costs, are still in line. This is encouraging. We still eat out way more than we should considering our food costs which is another expense we will need to continue to manage. But all in all, its been a promising month and I am looking forward to closing out this year.

FY19 – % of expenditure % of budget YTD spend
 Beauty 0.6% 159%
 Childcare 1.8% 45%
 Clothes 1.5% 144%
 Eat out 3.1% 122%
 Entertainment 0.7% 73%
 Fees 19.8% 69%
 Food 7.4% 116%
 Furniture 0.0% 0%
 Healthcare 2.7% 81%
 Holiday 1.7% 21%
 House 30.8% 76%
 Moto Junior 2.6% 105%
 Medicine 2.0% 79%
 memberships 5.0% 116%
 Other 0.6% 67%
 Presents 3.6% 282%
 Telephone 1.7% 82%
 Transport 9.4% 122%
 Public Transport 1.8% 53%
 Uber 0.6% 62%
 Utilities 2.5% 73%
 Grand Total 100.0% 79%

ETFs versus the underlying assets

I have finally found a kindred spirit who is also pursuing FIRE in my immediate circle of friends. It has been an exhilarating experience over the past two weeks comparing notes on all things FIRE from books to investment strategies to saving methods. It has been a true exploration and has revealed to me that there are many common themes in the FIRE world. I have discovered some new blogs and books as part of the process and it is comforting to see the similarities.

However, there is an interesting divergence that has emerged in this new meeting of the minds – the world of ETFs. So my friend, lets call him Fred, has quite an extensive portfolio with a diverse mix. Like all FIRE advocates, he had ETFs as quite a significant portion of his portfolio. He then informed me that when the interest rates started taking and money started to move into ETFs, he started getting a bit nervous about valuations and did a bit of research on ETFs. In his own words,

As I continue to learn and understand what is in ETFs, I have gravitated towards actually owning the underlying stocks rather than trusting someone ot do that for me for a fee. That way I understand what I am holding. If I want facebook then I want Facebook not tracking Facebook without always owning it.

The conversation then led to whether ETFs are now the new bubble which was further reinforced by Michael Burry, of the Big Short fame, stating the same thing. It really had me thinking about whether my decision to park money in ETFs was the best way forward or whether I have been blindly following the FIRE herd. FIRE maybe an enlightened way but the herd mentality is not and I really do need to be way of “expert” bloggers who sprout all sorts of formulas for success.

There are obviously those who disagree completely with the analysis and vehemently argue their own side and that is the pleasure of diverse thoughts but ultimately, my own selfish vested interest is to get to a point where I reach FIRE and more importantly maintain the finances to be able to have that be a sustainable long term solution.

So I am now on a full fledged fact finding mission to determine if there is any merit to creating my own portfolio of the underlying assets – my initial thoughts are:

  1. more costly – I will need to buy all these shares individually which would mean additional brokers fees
  2. more time consuming – bye bye to a single click purchase. I am now going to need to do my homework on the various stocks and also be carely about the ratio and composition of the stocks in my overall portfolio. Hello spreasheets and lots of analysis
  3. more active trading – you cant be passively investing when you need to be actively on top of your position and the market
  4. more complexity – in a nutshell, everything becomes a lot more complicated than before

So there you have it, I am now going off to do my homework on this…I have a sneeky feeling that I may have to find another asset class to invest in that isnt this complicated!

 

 

Lifestyle creep while travelling

As you read this, I am sitting on a beach somewhere while staying in a five star luxury hotel courtesy of my job. There is a side of work that rarely gets talked about that is a major contributor to spending too much in our personal lives – staff travel.

body of water view from airplane window
Photo by Igor Fedoriv on Pexels.com

I must admit that life at the pointy end of the plane is an addictive experience. From the moment you step into the luxury car when it comes to pick you up to take you the the airport lounge, it is an opulent experience – The food, the ambience, the massages, the space. It is just another experience and I am sorry for all those who say, we all get there at the same time – yes we do but I get there feeling refreshed, dare I say even energised. I haven’t dealt with the squeezing and squishing in the immigration line, or the standard food times or the small seats. The pointy end is a great place to be.

So when you are in a job which enables you to live that sort of life, the jet setting, the five start hotels, the wining and dining in fancy restaurants and locations, it takes a pretty strong willed person to not be seduced by that life. How do you go back to budget motels for holidays when you have just spent your last few trips in luxury 5 star resorts with everything available at your beck and call? How do you switch off your luxury antenna once it has been switched on and is honed in to all things succulently expensive?

I appreciate that you can have a dual personality that allows you to enjoy one thing while still going back to something as not glamorous or expensive. However in the quest to enjoy the experience it is hard to end up not upgrading. We all remember what is was like living as students on a $200 budget, in those days, it was great just crashing out in a motel as opposed to couch surfing on some random person’s couch. Now we wouldn’t dream of couch surfing, let along staying in a 2 star motel accommodation. Oh what a wonderful web we weave.

Anyway, I am off to enjoy the spa facilities now and indulge in a four course dinner after while I ponder these things some more…enjoy!