Early Retirement Extreme Forums

In terms of housing, I found this report by CEPAR (Centre of Excellence in Population Ageing Research, UNSW) very informative:

http://cepar.edu.au/sites/default/files ... tralia.pdf

My own opinion on whether it is rational to strive for buying and paying off a house by retirement age is very much aligned to findings in this paper. Short extracts to summarise:

"Homeownership serves multiple purposes over the lifecycle: It acts as a home as well as a store of wealth to guarantee financial security in retirement. Its lack in old age compromises security of both tenure and finances"

"Homeownership appears to be in decline [...], much of the decline may be due to declining affordability: Over the past 20 years, house prices grew faster than household incomes"

"In the meantime, the retirement income system is failing renters: The continued exclusion of the home from the means test, undifferentiated Age Pension payments, and rent assistance levels that are pegged to the wrong index, results in a wide financial gap between renters and owners. [...] Older renters continue to experience significant vulnerability: Often-quoted figures that old-age poverty in Australia is high, are inaccurate. But new estimates, that take account of housing, suggest that older Australian renters have among the highest relative poverty rates in the OECD"

FIRE mindset may influence what type of house, where and how I may aim for. It may be tempting to aim for something where we live now - so convenient and close to everything, but prices are out of reach. So maybe for us it will be a tiny house on a reasonable size plot, away from major cities, somewhere to keep chickens and grow own food.

It looks like you've made great progress in a short amount of time, perhaps once the debt is gone big strides will come faster than you think. I've been really surprised at how much easier it is to save without our student loans hamstringing us. The practice at paying down the loans translates nicely to savings once the debt is gone. Haven't you halved your debt in a pretty short time?

And remember to read other journals, there are a lot of renters in this early retirement crowd. Ego in particular has solved the rent problem in a very tidy fashion. Jacob rented until a few years ago and he's been retired ten or so years. So, don't discount renting as a viable option. Once you have the debt gone and the good savings habits, you might not want to dump a boat-load of your money into a house. Or maybe you will?

@Alice_Au - I agree with you completely on focusing on old age first and then going backwards. I forgot/didn't realise that you emigrated and missed out on Super. I agree with salary sacrificing especially if you earn a decent income.

A house in retirement in Australia is I think really important. If you own your house plus get the pension (which I'm really confident will still be available) I think you should be good to go.

I love your avatar. Luther is a great show.

Thank you @steveo73

@mooretrees, maybe I will... it's definitely something I'd rather regret doing, than regret not doing

On a side note, just noticed that GT's journal has been deleted... hope she's ok, and wishing her all the best no matter what she's doing now.

If I were in Australia the recent fires would really give me pause about putting all my assets in one house-shaped basket. I'm not even a doomer by nature, but I'd be looking into the long-term ramifications of climate change in depth before buying real estate there. I agree a paid-off house tends to be a sine qua non for a financially feasible retirement, but there are workarounds and there are other factors to weigh against it too. For instance, it's possible you may want to be near your adult children in the future. Are they certain or keen to stay in Australia? Preserving a high degree of flexibility can be an important goal in and of itself.

Hi Peanut, get where you're coming from.
Well obviously will be getting house insurance. Fires, floods, storm, etc.

And even my end-target allocation doesn't have all eggs in one basket:
I'm aiming for $750K house (41.5%), $750K normal retirement (41.5%) and $300K early retirement (17%).

By the time I plan to buy first IP this will be approximately:
$50K deposit (19%), $200K normal retirement (77%) and $10K early retirement (4%).

Nothing too extreme...

COVID-19 situation makes me rather depressed.

Fear, uncertainty, worry for family overseas, economic turmoil, worry about job security, worry about property market (yes I did put down that 5% deposit just before all hell broke loose), fluctuating between "oh it's just a flu" one day to watching 30-year olds with no prior conditions in ICU on TV next day and moving to fear of getting sick and dying, thinking how will my family cope without me, then worrying that kids not showing any enthusiasm in following their online study and will get behind, then something else...

Well I expect everyone's on the same boat. Most of the people must feel the same right now.

So even though money worries are high on the list, money in general isn't. But I' still did the monthly spreadsheet update even though I don't seem to have much interest in it right now:

Mid Feb-2020 for comparison
1. Unsecured Debt: $11700 - 53% of target
2. Housing: $37700 saved for deposit - 5% of target
3. Pensions: $194K combined balance - 25.8% of target, own contributions 6% of gross pay
4. Early Retirement: $10700 - 3.6% of target, saving only $100 per fortnight

Progress - Mar-2020
1. Unsecured Debt: $10750 - 57% of target
2. Housing: $23K deposit paid, further $17K saved - $40K total, or 5.3% of target
3. Pensions: $162K combined balance - 21.6% of target, increased own contributions to 10% of gross pay
4. Early Retirement: $9700 - 3.2% of target, saving only $100 per fortnight

Wishing to everyone to stay safe and calm, and survive this with minimal losses...

I've been feeling reluctant about posting April update, because with everything that's going in the world my little troubles and achievements are just dust in the wind... but... after all it's my dust in the wind, and I'll probably enjoy coming back in 10 years time and re-reading my old journal)

April has been quiet, working from home, kids and husband at home, and pretty much Groundhog Day every day. I've been feeling nostalgic and watched a lot of old TV shows from UK. Latest being "The Spendaholics" BBC program that is now available on youtube. If you never heard of it, I highly recommend - it's so entertaining! For me however, brings a lot of regret - I used to be one of those people. They might have as well made an episode about me, buying my first ipad and twentieth pair of shoes with a credit card.

Very regretful about early-life stupid choices and lost opportunities now. Especially now. During global pandemic, I'd rather be somewhere rural, in a fully paid own house with a large vegetable plot, and with a healthy bank balance. But can't change the past. On the positive side, I don't think of myself as a recovering alcoholic who (as they say) is now forever in remission but never fully cured. I rather see it as "been there, done that, didn't like it - will never do it again".

Progress - April-2020
1. Unsecured Debt: $9723 - 61% of target
2. Housing: $23K deposit paid, further $20K saved - $43K total, or 5.7% of target
3. Pensions: $167K combined balance - 22.3% of target, own contributions 10% of gross salary
4. Early Retirement: $10900 - 3.6% of target, still saving only $100 per fortnight

Another good thing - whilst feeling a bit down, I once again picked up an old hobby that I didn't touch for 4-5 years at least (scandinavian embroidery). I have completely forgotten how much I liked it! This is an unfinished piece I'm doing now:



It's not a cheap hobby - for a piece like this, $20 for fabric and $40 for thread ($60 AUD or $40 USD alltogether). But I had all of the supplies in my huge hobby-supply-stash already, so free fun for 20-40 hours at least.

wow that's beautiful! What kind of fabric is this?

Thank you @horsewoman)
This is Bellana 20ct by Zweigart.

I'm asking because it occurred to me that maybe there are ways to source this fabric (and maybe even the thread) more cheaply.
I've sometimes come across embroidery materials in thrift stores and at flea markets in what we call "dead grandma sewing boxes" in the fix it - thread.
Also, sometimes whole pillows are made out of this kind of fabric, giving you lots of space to work after cutting away the original embroidery.

I have to admit that a lot of my existing supplies came from "dead grandma sales")
Sometimes I even think what will happen to my own craft stash if I'm no longer here - my husband has no idea of all these american patchwork cottons, german embroidery fabrics, DMC and Anchor threads, quality knitting and crocheting wool, Mill Hill beads, Kreinik, Mirabilia, tools, patterns, etc. real value and will possibly sell everything on ebay for peanuts or even take straight to a charity shop for free!

Oh dear, that is quite the alarming thought! But very true. My stash might end up as a dead grandma stash as well...
My daughter is very into crafts, but no one needs as much stuff as I have accumulated. I'm in the process of swapping rooms (sewing room - kids room), so that is a good opportunity to get rid of some things.

Beautiful embroidery work! I have never seen this style before. I'm amused by the term 'dead grandma sale' - I have also had success organising swaps among my crafty friends for supplies too. My partner refers to it as 'the sisterhood of the travelling stash.'

Thank you kiwiz)

I have finished my little 'quarantine' project



One one hand, I'm happy that a bit of self-isolation prompted me to go back to an old hobby. On the other hand, it may be pretty and fun to do - but I have to admit it is also completely useless. No practical value at all. Any other crafts I do occasionally - knitting, crocheting, patchwork and quilting, etc. at least can be somewhat useful. And for some reason I always kept to 'female' crafts. Possibly because my mother taught me what she knew, whilst my father was not good with his hands at all. But I think at the age of almost 40 I can maybe teach myself... I'm fantasizing about learning how to do simple woodwork... Zero skills and zero tools - but hey, we have Youtube now!

Well done! It looks great.

It's beautiful, especially with the dark wood peaking through! How are the eyelets made? Stitched around and cut out?
I don't think that each and every craft project needs to have a use. Making it was entertaining and looking at it gives pleasure, that is not nothing. I spend hours over hours creating music only a few people will ever hear (and hopefully enjoy). One might argue it is useless as well, but it makes me happy.

Thank you guys)
@horsewoman - yes, little holes are cut out with scissors. There are many pictures and videos of hardanger embroidery online if you're interested, from very simple to very fancy.

What a lovely piece!

July update

On the anniversary of my journey to FIRE, I fell off the wagon and spent a ton of money on 'toys'. I hope it is not my last post here... unless Jacob reads this and kicks me out!

It started innocently - I thought that a more tangible, useful hobby would be good. Got a saw, a hammer, a couple of chisels and screwdrivers, and tried to make a wooden box. I soon realised that sawing by hand, and hammering nails by hand is a bit hard... got nail gun and electric jigsaw. Orbital sander. Drill and driver. Router...

Then I watched Youtube. Don't take me wrong, woodworking videos on Youtube are great. Steve Ramsey with his WWMM 'Woodworking for mere mortals' no-nonsense channel for example - love it! But of course I had to get a mitre saw... Table saw... Thicknesser... Clamps, glue, varnish, pockethole jig, drill and router bits, sandpaper, screws, ruler and level, more clamps, and whatnot.

But... this is more fun that I had in ages. Totally saved me from COVID-stuck-at-home depression. Projects are too clumsy to show off yet, but as a new hobby this is worth every penny)

Figures are meh but I'm quite happy regardless..
Jul-2020
1. Unsecured Debt: $9385- 62% of target
2. Housing: $23K deposit paid, further $23K saved - $46K total, or 6.1% of target
3. Pensions: $183K combined balance - 24.4% of target
4. Early Retirement: $12900 - 4.3% of target
5. Emergency Fund: whopping $200, or 2% of target