2 August 2016 – 

financial_freedomMy own journey towards financial independence and early retirement


Time to get personal, open up the books and have a look at what I’ve done to achieve my own financial independence and early retirement.


In my opinion, it’s all about knowing when you have ‘enough’. Thias, from It Pays Dividends, recently wrote about figuring out when enough is enough. When you have saved and invested sufficient resources to fund your retirement lifestyle. Knowing that is what will make you rich. Unfortunately, most people just want more and more to feed an ever increasingly hedonistic lifestyle. And it’s not necessary.


It was only a few months ago that I calculated I had reached the position of financial independence, and realised that I had ‘enough’ to retire. So I did. Just a few tweaks now to finalise the goal and start using my investments to create my full-time income. That’s on track to be in place by the end of 2016!!


How has this been achieved? It has been a longish process that I didn’t really begin seriously until I was 35. Definitely a late starter. And it has taken 15 years to reach this position.


What it does prove is that FI/RE can be achieved by age 30 to 35 if you really make the effort and start making the necessary changes towards a frugal lifestyle in your early 20’s, as so many of my fellow bloggers are doing. But it’s never too late to start at any age.


My own journey to financial freedom began by purchasing an apartment as an investment property to rent out. I woke up in the middle of the night with what I thought was a really clever idea to use the equity on my own home to leverage a mortgage on an investment property. At the time I had no idea you could do this and ran it past my real estate mate, Dave, as though I had just invented the best thing since……well, everything! Of course, he gave me that look and told me that this is what you do to get on the investment property ladder. Whoever knew!!


Now, after 15 years, I have three investment properties rented out. Although these are still have a small mortgage the rental income covers these payments quite nicely, and eventually, the rents will form a large part of my annual income.


harmoney_logoRecently, I added peer-to-peer lending, with Harmoney, to the investment portfolio. There are currently around four P2P companies trading in New Zealand and eight in Australia, all with different operating models and something to suit all levels of risk. Check out my previous post to find out how my P2P experience has been so far.


vanguard_logoThen, to add diversification to the portfolio, I’ve invested in managed index funds with Vanguard. Only a small investment so far but this will be increased by the end of the year when I capitalise on another investment to free up some funds. So far, I’ve spread my investment across Vanguard’s Australian Property Fund and their International Shares Fund, although they do have plenty of others to choose from. I intend to diversify a bit further when my funds become available.

(For more information on how index funds work, and Vanguard as an investment platform, check out fellow Aussie blogger When The Path Forks’ recent post)


And then there are the investments I have in my Superannuation funds, one in NZ and one in Australia. Although my NZ Kiwisaver fund is fairly dormant, I make sure that I deposit at least the minimum $1,043 a year to get the Government contribution of $522. You can’t knock free money can you, especially when the Government wants to give some of your tax back!


In Australia, we are lucky enough to have legislated minimum employer superannuation contributions of 9.5%. On top of that, you are free to make additional payments to top it up. So I’ve been paying an additional 10% of my after-tax income which means that I’ve been investing nearly 20% of what I earn without even trying.


Although I can’t touch the super funds until I’m 60 (which is not that far away, unfortunately) These will be a top-up on my regular income if required. It’s unlikely that I will need them so they’ll stay invested earning more interest, but nice to have just in case.


And, as a side benefit of voluntary super payments is that you can claim a tax rebate for each dollar contributed at the end of the financial year. Imagine how much would be invested if you’d been making additional payments first starting work!


But, I hear you say, “you must have earned a high income to afford investment properties and invest a significant portion of your take home dollars”. No, not really. I have never been a high-income earner although I worked short periods on FIFO (fly in fly out) contracts earning good money in the gas and oil industries, although these never lasted long enough to make a huge difference to the stash.


And yes, I worked in corporate sales and marketing for number of years but during most of this time I was living the typical spendy, consumer’ristic lifestyle enjoyed by so many. During this time, I also had two children to bring up, and then continued, for many years, to make Child Support payments to the ex, as well as funding my own living expenses. So as you can see, there’s been no big, fat income for this guy.


However, for a number of years now I have lived a more modest, less hedonistic lifestyle than before, although I doubt that I will ever reach the dizzy heights of frugal living like Mr Money Mustache. I can’t imagine myself using a spray bottle to wet my face to keep cool in my car instead of using the air con, (see Mr MM’s article here) although I do tend to use the AC only when the temperature is over 30 degrees C. I prefer the fresh air from an open window.


So there you have it. I’m a pretty average guy who’s earned a pretty average income throughout his life, as well as spend far too much on frivolous and money wasting things like toys and good times, in the past. Hey, I’m no saint but what I did do right was start thinking about how I was going to fund my retirement whilst I was still young enough to make a difference.


So to the lesson of the day. If you are just starting your working career, then now is the right time to start thinking about your retirement. If you are 35 and settled down with a wife/husband/partner, mortgage and possible kid(s), then now is the right time to start thinking about retirement. And if you’re 50 and haven’t planned much apart from living off your superannuation, then even though you start with a bit of a disadvantage, now is the right time to really think about how you’re going to fund your retirement.


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24 thoughts on “How this Joe Average achieved early retirement at 50”

  1. Incredible post, detailing what we need to make it in this present day and age. I’m sure there were also benefits along the 15 year path that were felt more immediate. Congrats on taking such an awesome journey.

    I love the part about waking up to realize, you’ve taken the first step in your property ladder. That is definitely a big step and I can see how the thought of added risk and all the details involved in buying a 2nd place would jolt you awake. Glad to see it has worked out well for ya!

    The superannuation sounds like something we need here in the states!

    1. Hi there Distilled Dollar and great to have you on board. My previous articles have been more focused on ways to cut costs, save money, and make smarter financial decisions. But I decided to lay out my own personal experiences to show how I got to where I am on the FIRE ladder and, I guess, show that early retirement is possible with a bit of luck and a lot of smart decisions and hard work.

      I have enjoyed the real estate investing and have found that being a landlord can be a breeze if you select great tenants. On the whole, I’ve been really fortunate with my tenants and have only had two who left owing money which has since been repaid after taking them to court.

      There have been hassles along the way with maintenance issues but these have been few and far between (thankfully) and many of them I repaired myself.

      Regarding the super, you guys do have something similar in the US don’t you? I’m not sure how it works over there but you have your employer retirement funds. I’m thinking that’s fairly similar.

      1. Great tenants sounds like a dream come true. I wish ya the best that it continues to be that way!

        In the US we have employer matches on employer sponsored retirement accounts, so it depends on the employer. Typically, these might match a few % points of your salary IF we place money into the accounts. In my short lived career I’ve seen the match amount range from 2% to 7%.

        1. Yeah, I have been lucky with my tenants. In fact, two of them I inherited when I bought the properties. They’ve been there for years and both love their homes. Can’t ask for better than that. And thanks for explaining the US retirement fund a bit better.

  2. Nice work, Martin. Funny how the premonition of investing in real estate happens in your sleep, quite amazing when you think about it. Good for you for taking action, accountability for your own retirement, and successfully reaching FIRE!

    Thanks for sharing the inside scoop.

    1. Hi there GS. It was literally like that. I woke up early in the morning and my mind clicked into gear trying to figure out ways to create investment income. I don’t know why my mind went down that path but by the time that the sun came up, I thought I had really discovered the new way of creating wealth from something I already had. Anyway, turns out I hadn’t ‘invented’ anything new but it was the epiphany, I suppose, that got me up and running.

  3. Awesome passive income stream, you took a calculated risk and it paid off huge.

    Thanks for sharing your story, to many people believe FIRE is out of their reach if they make average salaries. If you get creative you can make it happen with time

    1. Hi there AE. I have been lucky with my property investments and will admit that, without them, I would not be in this position now.

      You’re right, anyone on an average income, upwards, can do this if they’re prepared to make some changes to their lifestyle and cut back on wasteful expenditure. But I’m not telling you anything new am I. Thanks for stopping by and commenting. I do appreciate the feedback.

  4. Glad to hear you liked the post!

    Congrats on hitting your number and retiring! Very jealous over here since we are only at the beginning of our journey. It is inspiring to see people at the end of their FIRE journey to show it is possible!

    1. Hi Thias and thanks for dropping by. Thank you for the congrats but please don’t be jealous. If you are only at the beginning of your FIRE journey then you have the opportunity to learn from all of the mistakes people like me have made along the way and avoid them yourselves.

      It’s an old cliche, but if I could start again knowing what I know now, I’d a) be even better off, financially, and b) would have retired 10 years earlier.

      Like I said in my article, I’ve achieved most of what I have now in only 15 years on a fairly modest income. If I can do it, tripping and stumbling along the way, anyone with the knowledge to do it a lot smarter will be so much better off.

  5. Hey Martin,

    Thanks for laying out what you did, how close you are are complete FIRE and kudos for linking to a few different blogs in your article 🙂

    I think the key lesson for anyone & everyone from your post is that it’s NEVER too late to start trying to reach financial independence. Whether you’re 20,30,40,50 or 60 – you’ll get far closer to your retirement goals by starting. You’ll better far better off than if you didn’t.

    Your living situation is extremely encouraging to me/us, that you have made it by 50. Even if we do it slower, we can also do it by 50 🙂


    1. Hi there Tristan, and thanks for the comments. I agree. It’s never too late to start striving for financial independence but obviously, the earlier you start, the better. And even if you start making the changes in lifestyle and spending at 50-plus, it’s still going to make you better off at retirement than if you never bothered.

      I think that’s what a lot of people think. “I’m never going to earn/save enough to retire early, so what’s the point”. As we know, the point is, something is better than nothing. Cheers for stopping by mate.

  6. Great rundown of how retirement can be achieved at an age far earlier than most imagine it can be. I also enjoyed the piece by Thias … good stuff! My own plan puts me on a path to retirement at 60, based on two key facts. I started on my road to financial freedom later than I would have liked – early 30s – and a key piece of my retirement portfolio, a second defined benefit plan, isn’t available until age 60. Actually, we’ll also be waiting until then for my wife’s defined benefit plan, due about the same time. No complaints though as we’ll have way more than we need in retirement.

    1. Hi there James, and thanks, as always, for your comments. I bet you’re both looking forward to that day you can put a date on retirement. In the meantime, just keep stashing the funds away and living the financially smart lifestyle and looking at what’s on the horizon. Unfortunately, as I’m sure most of us have experienced, time seems to move so much quicker as we get older so it may get here quicker than you want it to lol.

  7. You reached FIRE in 15 years and invest 20% of your income without even trying. “Average” looks pretty good to me. Thanks for the inspiring post

    1. Thanks Mrs Groovy. It means a lot to me that you found it inspiring. Actually, it wasn’t achieved without trying. There was quite a lot of hard work and a bit of luck involved.

      The whole point is that I made the decision to do something about my retirement and it’s paid off. Some people will not do as well and plenty of others will do far better. My only regret is that I didn’t wise up at a much younger age. But better late than never.

  8. Hi there – great blog, good writing. Fellow Kiwi living in Oz here. I was of the understanding you can no longer get the Kiwisaver Member Tax credits if you aren’t residing in NZ…. http://www.kiwisaver.govt.nz/new/benefits/mtc/ . Or for you – this has been a case of if the contributions have been made, the credit gets paid?

    1. Hi there Kio and thanks for dropping by. Hmmmm, I’ve been paying into my fund and getting the credit. Although I live in Oz I’m still an NZ tax payer so I guess that’s why. Good point though. I’ll ask my accountant so that I don’t get offside with IRD. Good to hear from another Kiwi though and thanks very much for your comments.

  9. Congrats on achieving early retirement and financial freedom! That’s impressive you have three rental properties. I hope you have great tenants for the long-term!

    1. Hi Sydney and thanks for stopping by. Yes, I am fortunate to have great tenants. In fact, two of them have been in the properties since before I owned them. I kind of inherited them with the sale. They’re the sort of tenants everyone should have.

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