How we retired in our 20’s (and why you can too!)

Picture this scene: Every morning, around the same time, a random friendly-looking guy walks up to your house and knocks on your door. When you open the door, just like the day before, he hands you a couple of crisp $100 bills. He then smiles, waves goodbye, and says “See you tomorrow”.

This is as close as we get to describing the feeling of being FIRE’d (Financially Independent, Retired Early) to people who’ve never heard of the concept before – basically, that guy comes to the door every day, all year, rain or sunshine.

Now, back to the beginning of the story…

The lovebirds.

In mid 2012 we were newly married, just moved to Australia after an epic backpacking honeymoon through Central America, applying for our first ‘real’ jobs. We started our working careers like everyone else – full of motivation and planning our ascent up the corporate ladder. We started like most others – from scratch.

Financial Status – August 2012
Net Worth: $2,000 (if we include the pennies under the sofa)
Monthly Passive Income: approx $0

Luckily (and after sending out a lot of resumes) we both found work pretty quickly. We really have to thank a strong Australian economy, which I believe is currently the world record holder with 26 years since the last recession, for our ability to find decent jobs quickly. Avi found a job in Finance with a great company – where he stayed until we officially left the rat-race in 2016. Miranda took on a couple of jobs, one in administration, with a great employer with whom she also stayed until we left in 2016, and she got her first side-hustle started in becoming a dog trainer.

Financial Status – August 2013
Net Worth: Mid 5-digits
Monthly Passive Income: $508

On 6th of September, 2013 (according to Google Search History) Avi was strolling around the park at lunchtime, listening to a finance-related podcast and on came a strange fellow called Jacob Lund Fisker for an interview. Jacob is the founder of the blog and forum at earlyretirementextreme.com, and the author of what many in the FIRE world consider one of the founding texts of the modern incarnation of the Early Retirement/Financial Independence movement – the book is Early Retirement Extreme, and while it’s a bit technical and blends into other fields like systems theory and permaculture, it’s a must read if you’re really intending on going down the rabbit hole.

Jacob then ‘handed off the baton’ to his more relatable successor – Peter Adeney a.k.a. Mr. Money Mustache and the rest is history. It must have been less than a week before Avi had read through every blog post on both of those sites, and had started roping Miranda into the mania as well.

Once we were able to grasp the philosophy behind the idea of FIRE, all we had to do was work hard and start putting the pieces in place. We recorded our living expenses for 12 months straight and figured we could happily live off of an annual budget around $50,000 for the forseeable future. We just had to build our passive income streams up to that point (and perhaps a bit higher for a bit of a buffer) and we would then be able to quit the rat-race.

First order of business: get promoted! Through hard work, luck and stable working environments both Avi and Miranda were able to secure promotions in their first year on the job, which helped along our FIRE dreams with bigger salaries and small but increasing annual bonuses. We also both were doing a good amount of overtime at work, but this was limited once our daughter, Noga, was born in September 2013.

Mother and daughter the day after the birth.

Second order of business: invest! Invest we did – we scrimped and saved everything we could from salaries and Miranda’s flourishing dog-training business to secure a loan from the bank and purchase our first property.

Straight from work to inspect the apartment.

Financial Status – August 2014
Net Worth: Low 6-digits
Monthly Passive Income: $1,744

During 2014 Avi secured his 2nd promotion into a senior role – giving another boost to our salary and bonus income. Miranda’s dog-training business expanded further and she was now teaching several puppy and behavioural dog training courses at a time, with private consultations sprinkled in between whenever she was free (evenings, Saturday/Sunday mornings) etc. She also got an additional gig doing specialised scent-detection work with our very own super-dog – April.

Miranda and April during a bomb-detection shift at the Melbourne Port.

We also purchased our 2nd property – we fully-furnished it and advertised for tenants. Given the quality of the apartment, the fact that we welcome pets, and the strong rental demand in our area, we have always had several applicants and strong returns from this and our future rental properties. We also ran them on AirBnB one summer and had fantastic earnings from this as demand in our area is extreme over the summer months. Unfortunately we found that the time commitment running AirBnB’s was too much once our son, Gideon, was due. We found long-term tenants from this point on.

Gideon taking his first bath – Dad’s struggling…

By now we were living a mustachian lifestyle and had excess funds to invest from savings and our increasing investment profits – we started to look elsewhere and started investing in the stock market and P2P (peer-to-peer) lending. We were also getting involved in a lot of side-hustles – everything from dog-sitting to writing and publishing eBooks.

Financial Status – August 2015
Net Worth: Low-Mid 6-digits
Monthly Passive Income: $3,260

After getting the property bug it stuck in our systems for a while – in 2015 we purchased our 3rd (and final) property and promptly followed a winning formula – fully-furnished, welcome pets and advertise and accept whichever tenants seem like genuinely nice people. With each property cash-flowing between $8,000 and $12,000 a year in profits after all expenses and a ‘repairs and maintenance fund’ set aside, and other investment income gradually building up, it was only a matter of time before we realised that this was actually possible and FIRE might become a reality for us.

Miranda’s dog-training business was still going strong, with a steady supply of past clients and referrals coming through to a point where she often had to turn down or delay even the very lucrative private home consultations during busy times. In 2015 Avi, always thinking of ways to work harder and faster, was successful in gaining his 3rd promotion to a supervisory role and a got a further boost of a few thousand dollars in his salary/bonuses. Avi also started up a side-hustle doing freelance work in the evenings in his field of Financial Consulting.

Our savings started to snowball and build up in savings accounts, share market investments and P2P lending accounts to the point where we realised that we could FIRE a lot quicker than originally planned if we kept our lifestyle lean and could live within budget. The goal date kept getting reeled in from 2020, to 2018…

Financial Status – August 2016
Net Worth: Mid 6-digits
Monthly Passive Income: $5,015

We count our official retirement date as August 5th 2016 – which was Miranda’s last day at work. Avi finished up a couple weeks earlier – a bit earlier than planned after his employer found out he was doing some freelance work in the evenings and wasn’t too happy about it ☹. With our passive income now at a level that we felt comfortable leaving our 9-5 jobs, in mid August 2016 we set off, leaving our former lives behind. We ended up going on an epic 6-month campervan trip through Northern Australia with the kids and our dog Virginia.

Setting of – the 4 of us + the dog in our Campervan which we nicknamed ‘Bear’.

The key to understanding this is that it’s not about not buying anything, it’s about saving up and making one massive, massive purchase – the purchase of your freedom. This will be most people’s biggest purchase in their lives, not their house like is commonly taught. Barring a massive economic collapse (we’ll all have bigger things to worry about at that point), you are essentially purchasing the right to have that nice guy walk up to your door every morning with cash in hand, no strings attached, forever. We’re not millionaires (not even close), but we live comfortably and we don’t want for anything.

This is just our story – everyone has a different story. You can go here and read thousands of other accounts of people from different countries, with different backgrounds, different incomes, different family sizes and all at different stages in their journey towards financial independence. Whatever stage you’re at in life, you can start taking steps today that will put your life on a course that is more aligned with your real values and vision for your life. Nothing extraordinary needs to happen – you don’t need to win the lottery, invent an app that sells for millions, or inherit a large amount of money. All it takes is old-fashioned working hard, saving and investing – there’s nothing mystical or secret about it.

Instead of following the standard advice of ‘save 10%’, start thinking about savings differently. Clean the slate, decide what’s important to you and figure out the most efficient solution – it’s not about cutting to the bone, it’s about figuring out what makes you happy and cutting out the waste in other areas. For example – do you really need those extra bedrooms? Can you give up the 2nd car? Do you actually enjoy spending time in expensive resorts when you travel, or would it actually be more fun to backpack around and get involved in the local culture? For us, travel and keeping healthy are always more important than saving money – so even during our 4 years of working towards FIRE we still travelled overseas several times, and always bought all of the healthy, fresh food that we wanted.

Once you start saving things quickly snowball – it might not seem like it in the first few months, but pretty soon each dollar you save adds up and starts returning you more and more passive income. Think of your savings and investments as little soldiers that go out every day to work for you – every time you can invest $100 it will essentially return you back $3-10 (depending on where it’s invested) every year, forever!

We will be posting more articles with our best tips and tricks and further details on how to FIRE and what we’ve been doing since.

Until next time…

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