'We didn't need luxury - we needed freedom' says early retiree Dave


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Three years ago we first profiled seven Aussies who are working towards early retirement.

Money caught up with them again to find out how their plans and investments have fared during COVID-19.

Read more about the early retirees who know there's more to life than work, and how to be inspired by the FIRE movement.

dave strong money australia fire early retirement
Dave and Alison with Boss.

NAME: Dave
INCOME NEEDED: $45,000 a year for Dave and his partner, Alison, and dog, Boss
INVESTMENT STRATEGY: Selling down investment properties and buying more index funds. Currently buying real estate investment trusts. Owns some peer-to-peer investments.

Dave's remarkable achievement of retiring at 28 began when he was 19 and working with people much older who unhappily lived pay day to pay day. It dawned on him that he didn't want to work every week to pay the bills in a job he loathed.

dave strong money australia annual spend

"The only way to escape this treadmill was to become wealthy. And the best way to achieve that was investing," he says.

He saved hard and by 23 he had bought two properties. His partner, Alison, also bought a property with her savings.

"Luckily she also bought into the idea of financial independence," says Dave.

They both earned around $75,000 on average and diligently kept their living expenses to $45,000 a year on average - which is where it sits today. Of this, around $20,000 covers rent.

Their combined income of around $115,000 after tax meant they were saving $70,000 a year.

"If you plug that into a compound interest calculator, with a return of 7% per annum, in 10 years you'll have just under $1 million.

"We simply don't buy stuff we don't need and in a wealthy and beautiful country like Australia, that turns out to be a lot of stuff."

They cook at home instead of eating at restaurants. They exercise at home and live opposite a park where they walk their British bulldog, Boss, every day. They travel locally and make lattes at home rather than visit cafes.

"We also live in moderately priced housing, and avoid upgrading our car and phones."

Dave was surprised how quickly financial independence happened.

"When we reached it, we didn't need as much to have a good life. We didn't need luxury at all. We needed our freedom. We reached financial independence because our savings rate was high. It was saving that drove all the progress."

In 2014, Dave came across the idea of investing in shares and funds for dividends.

"After doing some more research, making a few investments and receiving a few dividend payments, I was hooked. Simply buy a parcel of shares in a good company or an index fund, and it spits out increasing sums of money at you over time," he says on his blog, strongmoneyaustralia.com.

Dave is wary of investing in property, He says it is dogged by costs such as council rates, management fees, agent fees, conveyancing, stamp duty, insurance, vacancies, maintenance and repairs.

"These costs are glossed over massively. Even people into property don't realise their real costs. There's always an email that someone is moving out."

Not surprisingly, Dave has sold a few of his investment properties and invested in easy-to-monitor index funds and ETFs. He has also bought into older-style listed investment companies when they trade at a discount. Four years ago he put money into peer-to-peer lending, which has worked well.

Dave enjoys the freedom of not working and describes his life as "active and healthy". He writes regularly on his blog, connecting with FIREs around Australia and overseas.

Dave's tips

Saving is the key to an early retirement.

"We found a way to optimise each category of spending to get the most benefit for the lowest cost."

FIREs also need to be flexible and adjust their plans if necessary. For example, he considered buying a home but decided instead to keep the assets that provide his income.

Favourite FIRE resources

  • lifelongshuffle.com
  • thefiexplorer.com
  • joyfulfrugalista.com
  • thisabundantlife.podbean.com
  • aussiehifire.com
  • fireforone.com
  • latestarterfire.com
  • moneyflamingo.com
  • aussiefirebug.com
  • burningdesireforfire.com
  • Ben Carlson: A Wealth of Common Sense (US)

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Susan has been a finance journalist for more than 30 years, beginning at the Australian Financial Review before moving to the Sydney Morning Herald. She edited a superannuation magazine, Superfunds, for the Association of Superannuation Funds of Australia, and writes regularly on superannuation and managed funds. She's also author of the best-selling book Women and Money.
Robert Gooley
May 29, 2021 9.00pm

I just put $50..in a superfund for my partner after 2 weeks th $50 has turned into $44..was that becorse of fees or just th superfund investment strategy

marc jones
June 19, 2021 11.09am

money going into super gets taxed at 15%

Josh P
May 29, 2021 9.58pm

Looking forward to the Money articles in 10 and 20 years to see how these people are going. Personally I think they are in for a world of hurt, but happy to be proven wrong. Also just don't get why too many people in the FIRE movement think the F stands for Frugality, but as long as they are happy with that.

Dividend Lover
June 28, 2021 8.57am

For sure it is risky to quit working at 28 and rely on investments. He should keep going for 5 more years at least and to build in more safety and better quality of life.

How are you going to raise kids on a 45k budget ? What if you have some emergency where you need to spend more than you planned.

Paul Low
May 30, 2021 3.46am

Young couple $22k a year not including the rent ? Me & my wife in our 60s, we spend $50k-$60k, and we don't pay rent, all basic expenses, no luxury stuff ?! Just the rate, utilities, insurances, car expenses almost $20k.

david smith
June 3, 2021 2.38pm

20 k .

Holding costs.

Wheres that .Cape Cod.

Alex Menstal
June 3, 2021 11.09pm

4700 for food a year lol

300 for clothes a year lol lol

Nick Barton
June 4, 2021 9.23pm

Responses of people who don't understand fire. My partner and I own our house and live easy on $25000 a year.

Nat P
June 5, 2021 1.10pm

Responses of people who understand FIRE and know the F doesn't stand for Frugality like most of the people these FIRE stories are written about. I get Financial Independence... but for some people that's $60k or $90k or more a year. Why do some many people in FIRE associate it with Frugality? With such a low annual budget how do they cater for the big one off expense that arise from time to time?

Nick Barton
June 5, 2021 8.46pm

It's not because some like to live a simple live that they don't have money saved up for the big one off expense as you call it. And RE doesn't mean that you actually stop working completely. It means that you have choices, that you can do what makes you happy. Also I don't understand why some think that it must be hard to live a "frugal" life. We don't need a new car every couple of years and go overseas 3 times/year or dine out every second day. These things may be important for some people's happiness but we can easily do without.

Nat P
June 6, 2021 10.52pm

Cheers Nick. That goes a little way to explaining it, but I still don't get why Frugality and FIRE seem to go hand in hand. Maybe it's just me, or maybe there needs to be more articles about people in FIRE who are getting $80k+ a year. We actually live a semi-Frugal existence. We purchased our car new in 2003 and still got it now, hardly ever eat out (we're not foodies!), in fact I can't recall the last time we ate in a restaurant, and have take-away a handful of times a year. But we do like to take a nice trip overseas once a year (not 3 times!) and a couple of domestic trips too. I just don't want retirement to be about watching every dollar when it should be about enjoying life. In other words, Frugality Free FIRE. That is what I was hoping to learn from these articles, and they haven't quite delivered what I was hoping for.

Claudia O
June 8, 2021 1.30am

is more related to people that don't understand where their money are going.

Since I made my first year the budget I found I am working for supporting the work: car and transport to-back, cloths and make up for, eat out and take away as don't have enough time to cook from scratch, insurance, house close to job where all the houses are expensive, babysitting and daycare and afterschool as no having time to take care of child, cleaning lady as I have too much stuff and too les time for, overspending to compensates emotionally, overspend on supplements and massage and osteopath to fix my back issued etc - almost a half of the salary was saved since the covid and I sold car, no more gas, no more babysitting, no more new cloths (I use what I have - a good quality cloth bought on sales I use for several years), etc.

It is about choice: I rather not work that to have tv and cable and latest phone and choose to spend more time as family. Since I made the choices our health improved so much that no cold in the family for many years, no money spend on doctors.

Claudia O
June 7, 2021 9.02pm

another nice article about saving and investing wise.

I am more and more convinced the key is to spend little. Housing and food I have in similar budget, no car and using public transport is a great saving solution working for us, but the child expenses is a big one.

I am curious if there are nice stories for families with children.

marc jones
June 19, 2021 11.40am

With the currant low rates of return on most investments it almost seems unjust that you would need to save well over a $1M to live the lifestyle of the family next door who have never done a days work and live on centrelink.

You really do need at least $2-$3M to retire on a reasonable income, and saving that amount is imposable for most families on the average $80K wage, even if you did live in a cardboard box in the park and ate grass.