How my wife and I are retiring this year in our early 30s

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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.

early retirement leo

NAME: Leo, Alisha, Dom, 4, and baby Ellie*
AIM: Retire this year
INCOME NEEDED: $90,000 a year
INVESTMENT STRATEGY: Vanguard index funds, shares, managed funds that align with their principles, maximum contributions to superannuation.

In 2018, Leo, Alisha and baby Dom were travelling with three suitcases, a backpack and a pram, so they could be together as a family. They decluttered their furniture and possessions.

They had no house, no car, no debt and could live wherever Leo, who works in the resources industry, was sent. The alternative was flying in and flying out, sporadically getting together as a family.

They now have four pieces of luggage, as their daughter Ellie was born over two years ago.

Their nomadic lifestyle was welcomed by employers and it made Leo more valuable than FIFO workers. He didn't have to be flown back to his family, as they went with him. They travelled to 10 cities and four countries over 2½ years for Leo's well-paid work before COVID-19 hit last year.

His unique family position saw Leo's salary dramatically rise, and they are well on the way to saving $2.8 million outside superannuation and retiring this year at 34 and 32.

They have also researched how much they will need for retirement, stress-testing it with a range of scenarios such as a major sharemarket crash. They have lifted their desired retirement income from $80,000 to $90,000 because they underestimated some of the education costs such as after-school activities.

Financial independence is an evolving process for them as they consider their changing needs as a family.

Their original plan of renting for life has changed with the prospect of their son Dom starting school. They decided to buy a home but one with an income stream, so it would give them a lifestyle plus a business. Alisha's parents did the legwork, live streaming house inspections as  Leo was overseas. He was happy to buy a low-cost house that needs renovating.

"Ninety per cent of the houses didn't fit the criteria," he says. But eventually they found a dual-living home with two three-bedroom residences. It is near Alisha's parents and can allow them to provide some care to them as they get older.

Other financial decisions have been about family health insurance and setting up a car fund, even though they don't own a car. They put aside money every month for both, which they dipped into when Ellie was born.

Taking advantage of Leo's rising salary and travelling means Alisha is the full-time carer and says it is a luxury to be a stay-at-home mum.

Leo works long, stressful hours but he is able to see his kids for 40 minutes each evening and, if he isn't working, on the weekends.

"The number one reason for being nomadic is keeping my family together. There are also some financial benefits with paid accommodation, food and relocating costs," he says.

After such a hectic work life and living from suitcases, which they say they have adjusted to, they are looking forward to retirement. They aim to spend more time together as a family and pursue whatever interests them without having to consider whether it works financially.

Leo wants a life that is about doing simple things, like what you do on a Saturday or Sunday: a leisurely breakfast with the family and reading the newspaper and getting fresh produce that day to cook.

Alisha is relishing the time to exercise and lead a healthy life as well as explore interests such as craft.

Helping people through charities is also a priority. One way is volunteering as financial literacy counsellors. They would certainly have some valuable advice to pass onto people with financial issues.
*Not their real names

Leo's tips 
Saving is the key to financial independence. For many years they saved all of Leo's salary and lived off Alisha's before she stopped working.

They save at least 70% of Leo's current salary. When they go shopping everything they buy has to pass the "happiness test". Even after saving so hard, they still ask the question: what gives us the most happiness for our dollar?"

Favourite reading 
- You Need A Budget (YNAB): an envelope approach to budgeting app
- National Centre for Social and Economic Modelling (NATSEM)
- Crowdsourced FIRE Simulator (cFireSim): an online tool that calculates how early retirement plans would have fared throughout history
- Go Curry Cracker: another nomadic family's blog
- Mr Money Mustache blog and Mr Money Mustache forum.

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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.
Comments
Bron Barker
May 22, 2021 9.47am

And this folks, is how it's done!

Work hard, save hard, go without for a little while.

Long term benefits are, well, long term!

We did similar for 6 years, however, the FIRE movement wasn't a thing, and we certainly aren't retired just yet, but it allowed me to stay home with my boys for 12 years, pay off our mortgage, buy our cars outright, purchase three investment properties, send all three boys to private school and gave us the freedom to work in jobs now that we really like. We are both set to retire at 55, which is only 3 years away.

Looking back, and with the FIRE movement information aplenty, I would make a few different financial decisions. Still, at the end of the day, I know that those 6 years of sacrifice, saving and working ridiculous hours in our late 20's and early 30's, got us to the comfortable position that we are in now.

Foot note - we started off skint, no 'bank of mum and dad' assistance and my husband had a considerable hex debt.

Stella S
May 22, 2021 10.07am

Great point, Bron!

I have huge respect for anyone who has done the same thing before the FIRE movement existed, without the support of the community and even the shared understanding that it's possible. You've done amazing!

V Marsh
May 22, 2021 12.27pm

Wow that is inspiring! What would you have done differently? Would love to learn from you. Thank you for sharing

Bron Barker
May 29, 2021 12.06pm

Hi V Marsh

Looking back I would have invested in ETF's earlier, set up my bank accounts with offset and purchased a house closer to the primary school that my children were at. Actually, if doing it all again, I would have found a very basic house - read old - on a large block in an, at the time, still affordable coastal town (Port Fairy for example) walking distance to kinder and school and the beach. That way we could have just walked everywhere and spent every afternoon at the beach or in the garden. My husband worked away, so it really didn't matter where we lived. It would also have meant that we would have had a big, valuable block for future build for retirement in a gorgeous town. We lived very simply then, but being country, we spent a lot of the time in the car.

I was a daily trawler of the website Simple Savings, and implemented many cost saving measures, cooked all of our meals from scratch and used the 'money envelopes' system for years. Also, I realise now that we could have started to buy investment properties a lot earlier - I just didn't understand it all enough then, and I certainly had not come from a background that ever invested, let alone talked about money.

We did well, and we are very proud of what we have achieved financially.

Where are you at in your journey?

V Marsh
May 30, 2021 10.17pm

Thank you for replying.

Early 30's with baby and toddler. Started investing in property in 20's. It has done well and equity is good but now with 2 dependents I feel like property can't give us the cash flow we need ( don't like the idea of refinancing equity to spend it). So continuing to focus on paying down loans and started ETF's as a more liquid investment to draw down when we need it for kids' education. But yeah like you I wish I started ETF earlier. Also juggling time with kids and being at the prime of our careers is a bit confusing at times.

Paul L
May 22, 2021 11.44am

" saving $2.8 million outside superannuation " Early 30s, can't see how it can be achieved ?!

Stella S
May 22, 2021 2.11pm

It says in the story - originally they saved one whole income. Now that she is a SAHM, they save 70% of his income.

Sam H
May 22, 2021 2.23pm

Must be easy when you're on a very good wage as saving that amount of money by your early 30s is out of reach for the ordinary person. And even saving 70% is extraordinary, and still having enough money to live is amazing. The common person can't do that when they might only earn $60k

Stella S
May 22, 2021 3.03pm

Yeah, you're right. It's obviously so impossible that other people shouldn't even try.

I think this couple is admirable for overcoming their own challenges to achieve this incredible goal.

Krunel K
May 22, 2021 4.11pm

He works a highly paid job in the resources industry, apparently many days spends 40 mins max with the kids via zoom. That's niche. What if you're a teacher, nurse, cleaner, work in a supermarket, etc ...literally millions of essential jobs? These articles rarely point out that to retire early requires that a whole lot of other people keep working (at a lower salary) to provide you with services, products and investment returns

Richard Jordan
May 23, 2021 2.05pm

Yes it is easier when you get paid a high salary, however it can be done at any income level, it is about the thought process not the income, my son works in grocery (not a high paid job) and is accumulating at a rapid rate with the intention to retire before mid 30's.

Paul D
May 23, 2021 7.53pm

Really Richard. Find that hard to believe, I think your son might be waiting for his inheritance. But gotta love the general statement "it's about the thought process, not the income"

That's something someone says when they have more than enough money.

I've thought about retiring too, but have a mortgage and bills to pay, school fees, the list goes on... Thinking about it doesn't mean it will happen

Richard Jordan
May 24, 2021 10.15am

Hi Paul

Thanks for your input, sorry you missed the point.

the thought process is not about dreaming of retirement, it is about changing your focus on your spending. there are plenty of people who earn 6 or 7 figure salaries that are basically broke, spending more than they earn and there are those on lower incomes making concious decisions about where they put their money. It is all too easy to get caught up in the consumer society and can be very hard to match your outgoings to your income level but even a small shift in your thinking will reep huge benefits. I hope your life improves and you see the light at the end of the tunnel, everything you mention is an investment in your future happyness, morgage, school fees they all reap rewards in the future.

Paul D
May 24, 2021 12.11pm

Thanks Richard. Makes perfect sense now, and couldn't agree more. One of my favourite sayings is 'don't spend more than you earn' and generally it's working for us, although sometimes it's easier said than done. So we're still looking forward to retiring early (just not as early as some) and being financially independant.

Claudia O
June 8, 2021 4.21pm

it is nor related to revenue but how little % from your revenue you spend, how much you save AND how well you invest. For a beginner that save 50% of his revenue and invest in a Vanguard fund, he can retire in 20 years. For a beginner that save 75% of his revenue and invest better than Vanguard fund, he can retire in less than 10 years.

It is definitely this family did better.

He over worked (like 70-80 hours per week if not more as he said didn't see the kids just in morning), less spend - he said they don't own a car, and I suppose he don't have the latest phone, or tv, or cable - as my most of financial educated people around me. 80hour week working is like having 2 jobs. I save from my job 25%-50% , having double job I might save 80% of the revenue (but I don't have).

Rams Gounder
May 22, 2021 12.00pm

Hello Susan, it is a good caught up after 3 years. Continue your great work.

Sam S
May 22, 2021 2.26pm

Happiness test... what a load of sh!t. Does paying my rates, gas, electricity or insurance make me happy. NO!! But I need to pay those bills.

Stella S
May 22, 2021 3.04pm

They're obviously talking about about shopping in that sentence - discretionary spending, not paying utility bills.

Also, I like having hot water and somewhere to live, those things make me happy!

Dave S
May 22, 2021 4.21pm

Given they are making maximum contributions to their super, I'm not sure how they save another 2.8 million outside of super. They started with nothing so must have huge annual salaries, unrealistic for the average Australian. It's not like their savings have yet had all those years to compound if they're retiring this year at 32 and 34. I didn't even finish my full-time education until 22!

Stella S
May 22, 2021 5.27pm

If they were out there living it up, buying supercars and beachfront properties, someone would take offence at that too.

Seems like they can't win.

Dave P
May 23, 2021 1.00pm

You seem quite vocal Stella on this story... why?

Richard Jordan
May 24, 2021 10.27am

seems to me because she gets it! you reap what you sow, if you live within your means, only buy what truly makes you happy which can include a house to live in (and its associated bills) then you can save for a better independant future (what some call retirement but is really just having choice in what you spend your time doing).

Dave S
May 23, 2021 3.36pm

Not taking offense at them at all. Just questioning the numbers in the story. They only add up if they have huge six or seven figure salaries to begin with. They haven't been working that long. Vanguard index funds have only returned 10% or so over last ten years. I'm assuming they pay income tax and with kids have at least some living expenses. Story says they are maxxing super contributions which is at least $125 000 each per annum. If they're doing that well salary wise they're not the most realistic example of FIRE. They're an outlier because most people don't earn a million dollars a year. Either that or the numbers in the story are bull.

Paul D
May 23, 2021 7.45pm

Hi Dave S, you're not the only one thinking the numbers are bull. I've read all the FIRE stories in that recent issue of Money Mag, and I can't help but think that sometimes the numbers don't add up. What aren't they sharing? What aren't they telling us? Do they not want others to know their secrets? Hey, let's just throw out some arbitrary numbers to make us sound great, like save 70% of your income and in 10 years you can retire. Or, maybe they have had help from the bank of mum and dad, or got a nice inheritance, so really haven't worked hard at all for "their" money

Philip Smitj
May 22, 2021 8.03pm

Again another story of what you should do.most Australians don,t have the income these people have so it's a good read and good on them,let's face facts the average Aussie on a average yearly has no hope of retiring early no matter how hard they work or save.

Rose Wood
May 23, 2021 12.57pm

Hi Susan, would you consider a similar study on a middle income family? Or perhaps the outcome of a middle income family undertaking a similar journey - that may have some more relevance to some of the readers leaving comments regarding your story.

Money magazine
May 23, 2021 4.33pm

Hi Rose,

Thanks for your comment.

Susan interviewed seven different case studies for this series.

They include Serina Bird, who started on her FIRE journey as a single mum. You can read Serina's story here: https://www.moneymag.com.au/se...

We also recently shared this column from Frogdancer Jones, who retired early as a single mum with four children: https://www.moneymag.com.au/ho...

We hope these stories are more relevant to you.

- Money team

Stu P
May 23, 2021 2.06pm

Good luck to them. Not something the ordinary Aussie can do, but nice to see it is achievable by some. Also nice to see that the F in fire doesn't stand for frugality like most in the fire movement by wanting a $90k annual income

Andrew B
May 26, 2021 1.18pm

I have read other Money fire stories of couples on more moderate salaries and they still have a plan to retire early. I guess the message is have a plan. I wish the fire was around when I was in my 20s.