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Chapter 1: What is the FIRE movement and why is it important?
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Please remember that all of the information in this podcast episode is limited to general information only. That means the information is not specific to you, your needs, goals, or objectives. So you should seek the advice of a licensed and trusted financial professional before acting on the information.
And before you acquire or apply for a financial product, please read the PDS or product disclosure statement, which should be available on the issuer's website. Lastly, please keep in mind that past performance is not indicative of future performance. Welcome to this episode of the Australian Finance Podcast and we are talking fire. Kate Campbell, thanks for joining me.
Good to be back, Owen. And one of our favorite topics to talk about, we've talked about it a couple of times over the last few years on the podcast, but because we actually just released our brand new Financial Independence Retire Early mega course on RASC education just late December, so most people probably don't know about it yet. And it's free, so that's great.
And it will be in the show notes, so we'd love for you to take it. But we wanted to talk a little bit today about how our perspectives on the financial independence movement and that concept have changed over the last few years.
I mean, just Owen and I, just the two of us have gone through a lot of changes and I can't imagine the amount of changes all of our listeners have gone through, especially with COVID last year. So I think that's a really interesting thing to talk about how our ideas and what we think of been financially independent looks like now.
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Chapter 2: How have perspectives on financial independence changed over time?
Yeah, true. So there's alignment.
Yeah, and I think it's just like working out. If you don't really care where you live and like you couldn't care less, you just need a roof over your head and that doesn't really bring you much joy. Are there other areas of your life where you could spend more on, like reduce your cost of living but spend more on travel or entertainment? Well, not travel right now, but yeah. Yeah.
And I think it's just sort of trying to align your spending with your life and what you want your life to look like. And that's also, I do talk about Ramit Sethi's money dials in the course, like turning up the money dial in your life and spending guilt-free on the things that
you love and that really bring you happiness and then turning down the dials on other things because you can't have everything all the time. You have to pick something. So, yeah, I think that was a really interesting thing that I sort of learned more about and tried to incorporate in the course so you can work through that exercise as well.
Yeah, I'm just looking at, again, I'm just looking at the downloadable workbook. I'm actually going to do this because it actually is a good chance to reflect on Morgan Housel talks about in his book and he talked about with us on the podcast, which is brilliant. It's just investing time, money, effort in the things that are important to you.
It's so important to have that kind of North Star to focus on. And even, you know, I just said family and friends are really important to me. how much time and effort do I invest in that on an ongoing basis? Like the last thing that I said to someone, is that something that adds value to that relationship or is it something that detracts from it?
And without actually writing things down and thinking about it, you probably don't put in enough effort to actually just be mindful of those types of things.
Yeah, and even you could probably do the same exercise with your time. What are the 10 things you spend the most time doing and what are the things that you would much prefer to be doing with your time and is there ways you can sort of align that a little bit closer too? Because often the things that bring us the most happiness don't actually cost that much.
It doesn't cost that much to have a cup of tea with a friend and spend time together, but often we get so busy with everything else we don't leave time for those sort of things.
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Chapter 3: What are the benefits of taking the free FIRE course?
But, I mean, it's just a good way you can sort of slow the pace instead of trying to get to financial independence as quickly as possible. And I guess one, I'll put it in the show notes, but there's a great website called
two financial independence writers in the US called the Pioneers and they've created a coast fire calculator so you can plug in your numbers and sort of see what age and what would you need to sort of coast your way towards financial independence.
Okay, cool. So what about then, Kate, people always say, and this is your point number three, people always say, you know, it's about eating lettuce leaves and rice. That's all the fire movement is. What would you say?
I think the more I've looked into it, and I'm definitely not a frugal person at all, there's so many ways. At the end of the day, finances are so personal and everyone's got a different method to reach their financial goals. And in the most case, they're all right. As long as you get to your goal by the point you want, go for it, whatever way you want to get there.
But I think there's a lot of people working towards financial independence that are actually living a really I don't know, everyone's living standards are different. But like what would you think a pretty normal lifestyle? Like you're not trying to keep up with the Joneses but you're not eating baked beans for every meal.
So I think that's the media kind of gives you that misconception maybe based on one or two stories that it's really about frugality, buying everything secondhand and like not ever going out. But I think you've really got to find that middle ground that works for you. Are there areas of your life you can save more money on and maybe –
If you love going out, then spend the money on going out, but also find an area in your life you can cut back that spending. So, yeah, and it also comes back to that question, what are you prepared to change about your life? For most people, if you're not on a crazy high salary, you're going to have to change something because most people are not financially independent when they retire.
They might have to live on a government pension or something like that. So you're going to have to change something in your life to get there, but it doesn't need to be change everything. You've just got to work out what's what's the most sensible way to change things in your life to reach your financial goals?
Yep.
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Chapter 4: What strategies can help increase savings for financial independence?
So it's hard to cut all those small things out of your lives, like cut down your grocery bills and cut out the coffees. I'd much more want to focus on self-educating yourself and working out ways to increase your income, whether that's a side hustle, a second job, negotiating a pay rise, something like this. Because there's a lot of jobs where you just, maybe you can't because you're in sort of a
union like salary or whatever you can't increase your salary by that much and if you're on a job where you just you've got x salary you can't increase it and there's just no more things you can cut out or reduce without making your life completely miserable. And I don't want you to be miserable. I think that's the biggest takeaway from the course.
If your goals are making you, your financial independence goals are making you miserable, then it's time to make a change. Like I don't want you working towards financial independence and making yourself completely miserable for 10 years because what's the point? But yeah, in some cases you just cannot cut anything out of your budget. or you've just trimmed everything you can.
And then really it's about thinking of other ways to increase your income. Like just listening to people say, cut out that coffee. That's not very helpful when you've already cut everything else out. So I think it's focusing on those things like, yes, side hustles, second jobs, other sources of income. And there's so many ways nowadays.
And I've got a list in the course of about 50 different side hustle ideas that you could even have a look at. So yeah, that's probably like my fifth takeaway.
Yep. Cool. There's so much to get in to this one episode, but basically what we're trying to do It's trying to give you a taste of what's available in the course. So Kate's got these fantastic downloads. I'm just looking at some of them now. The podcast dotted throughout the course as well. 50 Aussie side hustle ideas. Here we go. Physical services is something.
Drive for Uber or food delivery service. Physical products. This is a different category. Have a garage sale. Yeah, that's something that you can do if you want to save up your emergency fund. Really good one. Online services. Become a freelance article writer. We have a lot of those that participate at Rask. They write some of our articles. Write resumes.
The amount of people that need help with resumes is incredible.
Yeah, I see people selling on $50, $100. Pop seems to be quite a successful business side hustle idea online.
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Chapter 5: How can lifestyle changes impact your financial journey?
You've got me thinking. So you asked me before the podcast, before we started recording, what my takeaways would be from the last few years and just financial independence in general. Has it changed? And I would say no, it hasn't really changed. But then hearing you talk just now about You know, I think that's a really good example that you give of having $250,000 at 30.
That's a big stretch for a lot of people. I get that. But it is achievable for some people. $250,000.
Yeah, it could be at 40.
It could be whatever.
I just couldn't do the math.
And if you do double your money every 10 years, then you have a million by the time you're at 50 because that's 20 years. Yeah. So it doubles and doubles again. And... I know a lot of people who really, really, really, seeing that we've used a few slang words on this, they bust their ass when they're in their 20s and in their early 30s.
And you sometimes look at them and you're like, why are you doing that? But if you think about the timeline of your life, the more you save now and you think about that math, the easier it is in time. And this is compound interest 101, right? So, you know, $250,000, 30 might seem hard. But when you're 45 and you're saying, I need a million dollars by 50,
That's a lot harder than, you know, that first $250,000. So not to mention the peace of mind it gives you for the next 20 years.
And you can take a lot more risk, I think, in your 20s, especially like with working second jobs. That sort of stuff you might not be able to do in your 40s with a family and things like that. So I think if you... listening to this right now and you're in your 20s like me, this is like a real opportunity to lay a solid foundation.
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