My Journey to Financial Freedom

I grew up in Country Victoria. A nice quiet place, not too far from the coast.

Growing up I always thought I would get some sort of trade and stay at home as long as possible because hey it’s damn near free, so I get to spend my money on whatever I want!

I’d stay in the town and eventually save up and buy a house at some point, or so I thought…

 

School & Work

I worked a part time job for a few years while I was at school. It was incredible, raking in $10 an hour! It was as if money was falling from the sky!

I was saving nearly all of this money to buy my dream car. I stopped going out to parties and just worked and saved, dreaming of having that car in the future. This paid off, managing to pay for the car when I was 17.

Looking back, these were signs I would become obsessed in meeting certain goals if they meant a lot to me.

Around this time I was starting to lose interest in school. Working just seemed more enjoyable and rewarding, so I dropped out after Year 11.

Soon after my 18th birthday, I decided to head to Perth for better job prospects.

Perth

Within two weeks of arriving, I secured a decent paying factory job.

It wasn’t too far from where I was staying.

After a few months I moved into a rental house with my mate who was living in Perth already and a couple of buddies he’d made since living here.

Life was good, and my bank account started to grow with no real effort and even plenty of nights out and wasteful spending.

After a couple of years, I was bored and unsatisfied with that lifestyle, my job, and everything really. Looking around at how everyone lived and worked their whole lives for nothing but a house and some possessions. They didn’t seem happy or satisfied either.

Wasting my whole life working some crappy job just to exist and pay bills was not an option. This is when I decided I wanted to be rich, I had to be.

Financial freedom became my obsession.

Not long after, I met my partner and moved in with her. We both worked full time. Me as a storeman/forklift driver, and my partner in admin.

 

Investing

We were both interested in property investing, so we started saving and learning more about it.

I bought an investment property with some of the savings I had built at the time, and a year later I bought another one, using only 5% deposits.

My partner also bought a property with some of the equity she had in her house. Being quite a bit older than me, she had been a long-time homeowner.

Over the next few years, we figured out how to save more and how to buy more properties using those savings and equity from our properties that had grown in value.

 

Change of direction

Having maxed out our borrowing capacity, we looked for other places to stash our cash.

The sharemarket always seemed scary, but investing for dividends seemed like a good idea.

More safe and reliable rather than watching the prices zig zagging all over the place!

In the next 18 months or so we built our share portfolio and used the dividends plus our savings to buy more shares.

It started to become obvious that shares pay excellent income with no bills or the headaches associated with property.

We also learned a lot more about what really makes us happy, we thought about what’s most important to us and how we want to live our lives. 

When we realised how much money we needed to make this happen, a light bulb went off in our heads! It was much less than expected.

The properties we had in Melbourne and Sydney had increased in value quite a bit, but they still generated negative cashflow. So, we ran some numbers to see how much dividend income we could generate if our property equity was put into shares and it turned out to be more than we needed for our lifestyle.

Learning that was like winning the lottery!

We didn’t need to work for another 10-20 years to generate millions in equity to live on, or wait for our properties to become positive cashflow.

Financial Freedom

Having realised that our investments would be more than enough for us to retire on, if the equity was put into good dividend paying shares, we decided to start selling down our property portfolio.

This process is underway with 1 sold so far, using some of the money to live on, while we pour the rest into shares.

During the journey, although we were focused on building our savings, we still had fun along the way. There were multiple overseas holidays, nice dinners out, and an addition to our family with a far-too-expensive dog.

We just prioritised what was most important to us so there was never a feeling of missing out. The mentality was “We can do anything, but we can’t do everything”.

We left work in the first part of 2017, around my 28th birthday.

Hello Freedom!!!

9 comments

  1. Are you going to post monthly income/expense reports? will be very interesting to see how the day-to-day money works for you seeing as you’re so new to the retired status, very curious to see how the nitty gritty works in the reality of early retirement!

    Mrs DDU

    1. Thanks for the comment Mrs DDU. I will definitely be writing about our spending and investing in more detail soon! But I don’t think I’ll be posting specific monthly income/expense reports because I’m not sure they’d be very interesting lol. Currently we just have increasing dividend payments and p2p lending payments coming in (we also put a lump into p2p lending). After bills are paid we combine with cash in bank and allocate monthly to lic’s/shares. Might be a bit messy and confusing to share with folks 🙂

      Edited: On second thoughts, maybe that’s a good article idea. Living off and investing from a lump sum of cash at the same time. Will work on that one, thanks again!

  2. Sorry I am a bit late to the party with this comment. I just discovered your blog today. I can really relate to this. We are in the changing directions stage.

    We have built a decent net wealth with 4 properties and we are about to start selling some of them down.

    We want to own a place mortgage free so the money we have left over won’t be enough to retire yet, but by 2025 is the plan.

    1. All good, thanks for stopping by! Just checked out your blog, you’re in a great position so far, but it’s definitely not much fun being equity rich and income poor.

      In Australia this type of situation is super widespread and it’s a bit sad.
      Our net worth is actually similar to yours, with more debt though.

      I wouldn’t go the leveraged property route if I started again. It can work out well for some but it’s not necessary for financial independence.

      All the best in creating income from your equity 🙂

  3. Great Blog SM
    Have read a number of artciles within
    Are there many Financial Freedom Fighters in the FIRE space with kids also?

    1. Thanks Bazza!
      In Australia, I know that the couple at DividendsDownUnder just had a little one. Of course over in the US, the man himself Mr Money Mustache has a son. I’m not too sure of many others though. Sorry mate, I tend to lose track of which bloggers have kids and which don’t.

  4. Hi, great blog! Question for you. You mentioned in one of the above comments that if you could start over, that you would not go down the property investing route and just start off with investing in shares. From your above article, you mentioned that your properties have grown and provided you with the equity to allow you to move those funds into shares now to provide you with the dividends giving you the financial independence. I’m curious as to if we did rewind the clock, and you had started off investing your savings straight into shares instead of buying your investment properties, would you still be in the same financial position you are as of right or do you think the growth in your properties provided you with the boost to get you to where you are today?

    Reason I’m asking is that I’m at a crossroads. I’ve got 3 investment properties valued at $1.6mil and currently have $600k debt. I am in a position where I can go and buy another investment property but after stumbling upon your blog as well as Peter Thornhill’s Motivated Money book, I’ve started shifting my interest towards shares now. However, I’m not sure of the best way to proceed. I still not feel 100% confident that I could sell down my property portfolio and divert all the funds into shares. I still feel like I’d like invest in both property and shares at the same time. Do you think this is possible? Or do you think this would be counter productive? I am interested to see whether investing in shares could provide the same level equity growth compared to property (especially since I can leverage the banks money for property so I assumed that the growth/my dollar would be higher in property when compared the growth/my dollar in shares). If my assumption is correct, wouldn’t it make sense for me to continue investing in property to keep accelerating my equity growth so that when the time comes for me to consider retiring, I can sell down then and divert all the funds into shares for the dividends? Trouble with continuing to buy investment properties though, is that it would limit the amount I’d be able to DCA into my share portfolio each month.. Sorry for such a long post. Looking forward to hearing your thoughts.

    1. Unfortunately, I didn’t make squillions in a recent property boom. Half our properties are in Perth, which haven’t done much in terms of growth.
      After the cash we saved, the negative cashflow we paid for, and the deposits/stamp duty etc. we put cash towards, our savings done most of the heavy lifting in getting us to where we are. I covered this in the article about our savings rate/journey here… https://www.strongmoneyaustralia.com/savings-rate-revisited/

      Re your situation – It depends a lot on what your goals are. If all your equity was in shares, would you have enough income to retire? Or was your plan for a much larger amount of income?

      Rather than having a massive discussion in the comments section, I’ll shoot an email out to you 🙂

      Correction – I tried to email you, it says email doesn’t exist? Perhaps connect through my contact page so I can send the full email reply through to you. Cheers

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