Late FI: Choose Your Own Adventure

Being late starters heading towards financial independence, we are faced with unique questions that younger people do not face. In our late forties the most defining question is whether to invest within superannuation or outside of superannuation.

Our wages are currently taxed at 32.5 cents in the dollar, however if we invest inside of superannuation that money invested is taxed at only 15 cents in the dollar. This is because voluntary superannuation payments are made from your gross wages and subject to a different tax rate.

Yet, we cannot access our superannuation until at least 60 years old. Around 60 years old is also when we project to reach financial independence.

BUT … and this is a very big hesitation, what if life circumstances change and we reach financial independence (FI) faster than expected AND have done all our investing inside of super and are unable to touch it.

How frustrating would it be to reach FI, yet have your money locked away from you!

Suddenly our finances have turned into a Choose Your Own Adventure novel. Turn to this page for this outcome, or this page, or this page, or this page …

All the following calculations are done using the MoneySmart Compound Interest Calculator from ASIC and are based on the assumption of an 8% averaged return from the stock market.

Every scenario explored in this blog is with money invested outside of superannuation.

Pay Rises

My husband and I are both average wage earners. Mr Hack works in a factory and I work part time as a school teacher. There are six children and two of them are still young at 6 and 8 years old.

From tracking our expenses, we know our outgoings are approximately $4,000 per month (including the mortgage), or $48,000 per year. We have a pretty strict budget and are able to save and invest all of my wages which are $2200 per month (take home wages, including a HECS debt repayment). Half of this amount goes on our mortgage and the other half into low cost index funds in the share market.

Our projected 12 years to FI is based on both of us working full time in our current occupations.

Now I’m going to turn the page of our Choose Your Own Adventure and select six figure incomes for both of us.

Based on keeping our expenses low, financial independence could be achieved in as little as 8 years.

Blog Produces Regular Income

Let me dream here, what if this blog starts producing a regular income, say $1,000 per month. Does it have much of an effect on our projected FI date if we invest the blog money into shares.

Based on us both working full time at our current wages, we would reach FI in 12 years. But if we add an extra $1,000 per month that date changes to 11 years.

Extreme dreaming here, at an extra $2,000 per month = 10 years to FI.

Other Side Hustles

There are so many opportunities for income producing side hustles. Past and present side hustles I’ve done have included education consultancy work; casual relief teaching; working for local, state and federal elections; making and selling beeswax wraps; paid writing jobs for magazines; Job Spotter advertisements; and, completing surveys.

Although, it’s hard to quantify our side hustles as they are usually for a ‘season’ or a ‘reason’. For example, beeswax wraps sell exceedingly well in the lead up to Christmas, casual relief teaching ramps up in winter when the teachers start to get sick, consultancy work is only sent when a review is needed, etc.

All our side hustle income gets invested as shares.

Finish Renovating and Sell

Mr Hack and I are very much homebodies. We’ve both purchased our own homes in our twenties (although we didn’t know each other back then). When we got together, we got an ‘our’ house.

But what if, we choose the ‘Sell Property’ page in our Choose Your Own Adventure. Every now and then we dream about global slow travel where we live in one country for six months, and then another, and so on.

As much as we love being homeowners sometimes it feels like a burden or a trap that keeps us stuck in a regional town with fewer job opportunities. These feelings compounded for me after discovering that home ownership can cost as much as renting, if not more.

Millenial Revolution have some fantastic articles on the benefits of renting rather than home ownership. See HOW TO RETIRE IN JUST 10 YEARS? RENT, APPARENTLY and WHY RENTING WILL MAKE YOU RICH.

So, what if we did finish renovating our 100 year old house and sell… I’m going to dream big again – what if we got $400,000 and how does it affect our FI projection.

Like before, based on both of us in full time employment at our current wages (no side hustles) and selling our house for $400K we could be FI in just 6 years. I do have to admit the concept is QUITE A BIT EXCITING, although ANXIETY PRODUCING in not owning a house.


No one should wait for an inheritance and we certainly are not. There are no guarantees of amounts or when and we don’t believe inheritance should be part of anyone’s FI plan.

Although, we do have to recognise inheritance is a possibility and could change our financial trajectory. In saying that, it’s not a page of our Choose Your Own Adventure that I care to extrapolate.

Barista FIRE

What if we got to $500,000 invested in shares and decided we needed a break from full time work?

Based on the 4% safe withdrawal rate, $500K would bring in an annual income of $20,000. This amount gives many opportunities such as both of us working part time, or changing careers.

Although, it would have a negative affect on our projected FI date.

But it is nice to know that we have options in case things happen which could send life askew. After all, not all Choose Your Own Adventures have happy middles or endings. Yet, having a nice nest egg helps to give confidence that we will be okay with whatever happens.

Take a Sabbatical

Much like Barista FIRE, and the $20K income scenario, what if we decide we want a BIG holiday sooner, rather than later.

Maybe six months on the road travelling around Australia with the kids whilst they are still young enough to like spending time with their parents. A trip like this needs funding and a dip into the savings would provide the moula.

Again, it would impact our FI date – but can you really put a monetary value on experiences with the family. This isn’t a YOLO scenario, rather a recognition that children are only young for a limited time and then they leave the nest.

Now it’s got me thinking, maybe a celebration of reaching ‘half a millionaire’ could be a trip around Australia …

In Summary

With our money locked away in superannuation we lose the freedom to make choices and be flexible in our Choose Your Own Adventure. In fact, it’s no longer a book with multiple endings. The novel becomes the standard narrative of work until 60 years (or later) and then retire. Whilst that could be how it pans out for us, why lock our lives into one possible outcome.

True freedom of financial choice comes from investing outside of super. This article recognises seven possible different pages to choose from. We could reach FI faster from increasing our income whilst keeping our spending low; earn more via the blog or other side hustles; sell our house as an extra source of funds; perhaps receive an inheritance; work part time; or, go on an extended holiday pre-retirement.

What page would you turn to in your Choose Your Own Adventure? Please scroll down to share your thoughts below in the comments box.

Have you heard of the online broker SelfWealth – it’s who we use and I can highly recommend them. Each buy or sell trade only costs $9.50 – no matter how much you are investing. Here’s a link if you’d like to try them out. The link entitles you to 5 free trades (and we get 5 free trades as well).

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