A Family On FIRE: Aussie Millionaires

What I’m finding fascinating it that all three Aussie Millionaires featured so far, as well as my own family story, are either migrants themselves or have migrant parents. And Ms FireMum is no different.

It was a trend also seen in Chris Hogan’s book Everyday Millionaire (USA).

Interestingly, Australia is the most sort after country to migrate to for people who are already millionaires. Over 12,000 High Net Worth Individuals made Australia their new home during 2018.

Mapping the Migration of Millionaires

Personal Snapshot

Name: Ms FireMum from A Family on FIRE

Current age: 35

Marital status: Married

Children: One child under 5

Net worth: Combined net worth $1.7M excluding the family home

Your spouse and finances: Combined finances

Current estimated value of the family home: $770k

Town or suburb: Melbourne

Car/s: 2013 Mazda, bought second hand for $20k. I think it’s only worth 15k now. I’ll be keeping this car until it conks out. My last car was also bought second hand; lasted about 10 years when the engine finally gave out.

Debt: Approx. $2M in debt, including our family home

Average monthly spending:

Housing:  About $3000, this includes mortgage repayments, utilities and internet

Food: About $400 for groceries and $200 for eating out

Transport: $413 for petrol, parking, public transport

Clothing: $90

More information is available about our finances in detail by following the link.

Other details:

I don’t consider us to be frugal, but there are areas where we choose to not spend too much money. For example, I prefer to buy second hand clothing, furniture, household goods etc. We love to eat out and travel, so I’d happily splurge on that – within reason, of course.

I love gardening, so we’ve got a bit of a home orchard going in our backyard. The idea is that we reduce our food costs by growing our own food – but then I probably spend an equivalent amount on gardening related stuff – premium potting mix and so on! But at least I know what goes into my plants and therefore on my plate. And as a bonus, my toddler appreciates how much hard work goes into growing food so he avoids wasting food at mealtimes. Plus he eats his vegetables without complaining!

My hubby and I also have rather creative ways to save money. Some of our craziest include not buying gifts for each other, becoming hair models, and hacking credit card rewards programs for cheap/free fuel.

We have one 10 year old dog. We spend about $300 a month – this includes medication, food, insurance, grooming, vet visits etc.

Recently, we donated tothe Aussie bushfire relief. I used to have regular donations to a few local animal shelters before kids. But after having kids I had to start cutting down on discretionary spending, including donations. I make up for it by volunteering time instead.

I currently volunteer two hours a week at my child’s music school.

I also participate in my company’s annual volunteering program. Last year I spent a week helping the Alannah and Madeline Foundation with some of their IT work.

Growing Up

Reflecting on my past, I was probably more privileged than most. I was born into a middle-class family in Malaysia. We weren’t wealthy, but the childhood my parents gave me was memorable in that I never once felt that I was wanting for money.

My grandparents ran their own businesses. My mother’s family was quite poor until my grandfather’s business eventually took off. I think that was a defining moment in my mum’s life, as she worked very hard to make sure us kids had a good childhood without money stresses. I think being poor was also a catalyst for my mum to make sure that my dad and her worked towards becoming financially independent.

Our entire family migrated to Australia about 15 years ago.

My parents were actively working towards financial independence themselves when we were growing up. Their chosen vehicle was property investment.

I remember being taken to visit their properties occasionally. Usually during a vacancy as my parents would get the entire family to help clean up the property to make it ready for the next occupant. From those visits I learnt about property investing – what to look for in a property, tenant selection, home maintenance etc.

My parents taught me about money but within the boundaries of their knowledge. They covered the basics like saving, compounding interest and such. They also covered property investing, as that was their expertise. However I learnt about other asset classes like shares on my own.

My parents were fairly lax on the pocket money front. If I ever needed money, all I had to do was ask. Most of the time they would give it to me. Sometimes they might question what I intend to spend it on if it was a particularly large request, or if they felt I had been spending recklessly. They were quite firm in saying no if they thought I was being irresponsible with money, which kept me and my spending in check. I mentioned earlier that I never felt like I went without in my childhood – this is probably one of the reasons why.

I worked in my parents business from age 13 during school holidays. Duties were general office admin, answering the phone, stocking the office pantry, filing, printing, faxing, and so on (this was in the 90s). My parents ran a remodelling business so sometimes the entire family (me and siblings included) would go to a site to help clean up and make it ready for handover.

The work was unpaid. If my parents did pay me anything it would be covering my meals and transport to their place of work, plus maybe a bit more if I wanted to go out with my friends after work. Being involved in their business at a young age taught me a lot about work ethic – as I could see how hard my parents had to work.

I started seriously saving really late – maybe just when I started full time work. I saved up for a holiday with my boyfriend at the time. Before I started working my parents covered all my expenses. As a child I never really kept track of my pocket money, whatever was left at the end of the year went straight into a bank account or investment account managed by my parents. I didn’t have much involvement in managing my money when I was growing up.

I was educated through the public school system and went on to studying for a Bachelor degree in Computer Science.

It was interesting when I started to live on my own when at university, because I had to start learning how to budget so I don’t run out of money well before! It was a rather steep learning curve.

My first paid employment was a graduate position as an IT consultant straight out of university.

No inheritance payments have come our way, and none are expected. My parents’ investments are funding their retirement and my grandparent’s retirement. There won’t be much left, if any, for us kids, which is another reason why I’m working towards financial independence!

Having grown up with parents who were themselves working to become financially independent, it was inevitable that I would follow in their footsteps. There wasn’t really anything that sparked my interest, I was already immersed in it.

I was lucky to be brought up in a family who were quite money savvy. A lot of their habits and lessons stuck with me. The challenge for me is to make sure I pass down those lessons to my kids.

As an Adult

We budget using the envelope budgeting method. I use YNAB, which does everything for me. As a general rule I put everything on our credit cards, only rarely do I use cash. This means it’s really easy to import my transactions from my bank into YNAB and see how I’m doing. Usually I update YNAB fortnightly, though on occasion I’ll do a weekly update if it’s been a particularly big spending/income week.

I also instilled a habit where both hubby and I will check YNAB to make sure we’ve got enough in a category before we spend – for example, making sure there’s enough in the ‘Dining Out’ category before we make plans to go out to brunch. This helps us avoid overspending. It’s not fool proof, but for the most part it works.

I’ve been very lax in the goal front, only tightened it up recently. In the past we’d set and achieve goals for once-off things. Some examples we’ve achieved are saving up for a house deposit, our Japan holiday, self-funding my year of maternity leave, and for a large share purchase.

Some of my FY20 goals include:

  • achieving a savings rate of 22%
  • spend less than FY19
  • invest at least $25k in the share market

We don’t have any long term goals except the big one – which is to reach financial independence in 10 years time.

I track our net worth monthly, but recently decided on doing a quarterly update. Each quarter, I revalue our properties using the free property reports offered by my bank. I pull share values from the Sharesight portfolio tracker monthly. Everything gets recorded in a spreadsheet. These get posted regularly on my blog. I also do a half-yearly holistic review to see how I’m tracking against my goals.

Our current net worth percentages:

Due to my upbringing, I started investing through property. Our strategy was initially buying in areas with good capital growth where tenant demand is strong. Then we moved on to dual-income properties for the cash flow. Now we’re looking at balancing it out with equities – so for the next few years we’ll be investing heavily in exchange traded index funds in the share market

Looking at the net passive income – there’s not much. At my FY20 midyear review we only just netted $3700 for the half year. In FY19, our passive income was negative $6k. I’d expect the passive income to grow as we invest more and more into shares and pay off our investment loans.

I work for an employer earning about $100k. Hubby is also employed making $150k.

We don’t contribute any extra money into a superannuation fund, only because I’m intending to retire well before I can touch my superannuation (probably 15-20 years earlier). Once we’ve invested enough for us to retire outside super, we’ll start investing inside super.

Whilst financial independence can seem out of reach, it is achievable if you take it one step at a time.

“If you’re super excited about achieving FIRE, chances are you’ll want to start making massive changes right away (like the family in the Playing with FIRE film).

I personally prefer the approach:  Start small but be consistent.  That’s the best advice that I’ve received from a mentor of mine.  Funnily like all good advice, it applies to everything, including personal finance!

There’s no need to go all out and cut your spending in half to achieve a 50% savings rate right away.  Good habits take time to take root.

Perhaps start off with giving up a bought coffee every Friday.  Or take up Meatless Mondays.  Keep doing that for as long as it takes to become second nature.  Then add on the next habit.

The same approach can apply to saving or investing.  If you’re uncomfortable with pumping $1,000 a month into the share market (admittedly it’s a rather large number for someone just starting out), start small.  Maybe invest $200 a month, and increase it over time.

You’re less likely to experience burnout this way.  Maybe you’ll even have a bit of fun along the journey!”

Interested In Sharing Your Story?

The goal of sharing the Australian financial story with others is to inspire, educate and challenge other Australians seeking financial wealth.

If you are an Australian with a net worth over $1 million and are interested in being interviewed, I’d love to send you a questionnaire. It contains three sections: Personal SnapshotGrowing Up and As an Adult.

There is no obligation to answer all questions and you do not need to provide your real name for publication.

Your privacy at all times will be respected.

No identifying information in any format will be given at any time, unless permitted by yourself. 

The knowledge gained from your personal finance story will help others in their own journeys.

If you are interested in sharing your financial story, please leave a message on the Contact Page. All correspondence will be handled with confidentiality.

Thanking you very much.