I have had a niggling feeling for a few months now that I may be targetting the wrong networth number to reach FI (financial independence and retire by 60). In my early 40’s my dream was to retire by 55. I even had the number 55 written on my wall at work. People use to come in and think it was “55 days to my next holiday” or something similar. I would proudly state that it was when I was retiring. I would get blank stares from people younger and from the older folk, “really?!?!?!”. I even had a TTR (transition to retirement) countdown on my phone. I wanted so badly to retire or have the choice, at 55. I was exhausted from trying to be ‘everything’ to everyone and it beat me down. I just didn’t really know what vehicle or strategy would get us there when our income was not high and we had daycare & primary school kids and the dreaded mortgage!.
Retirement / Super
GETTING READY TO INVEST
Knowing how much you have available and what your debts are is the first step. You can work through my Finance 4 U Series which goes into the foundational steps to KNOW your numbers in detail.
The series goes through some key elements to help you feel more confident with your finances and consciously be aware of where your money comes from, where it goes, and how to manage that process.
Investing is different to saving. Invested money is not as easily available as money held in saving accounts, however, some investments are accessible within a few days if needed. My intention with this post is for investing for the long term, so there are some steps you need to consider BEFORE you start moving money to investments.
MY TAKE ON ‘THE LATTE FALLACY’
I first heard Vince Scully speak on a My Millenial Money podcast and was nodding all the way through. I had to know more about him and so hopped onto Google and went down the rabbit hole for a few hours.
His current creation, LifeSherpa, is an online financial literacy & adviser site, which is excellent and for all ages. So much information to assist at every stage of life and learning. On the Life Sherpa website you can request a ‘discovery session’ and I was lucky to get Vince for the meeting.
OUR 1ST ANNUAL FINANCIAL PLANNER REVIEW
I AM excited about this process because normally I’d look at a lot of this on my own.
Having someone else review our financials, who has an unbiased viewpoint AND has so much more knowledge than I do about government and super regulations, made me excited to do this session.
FINANCE 4 U – STEP 10
Hooray, we are at the pointy end now. Well done.
My wish for you is that you have discovered some things along this journey that will help give you the confidence to keep going. Now that you KNOW YOUR NUMBERS you can definitely CONTROL the majority of them and when (and there will be a ‘when’) things go haywire, you will be able to refocus on what you need to do, to get out of the situation. You will be able to move forward and rebound fast as you are BUILDING your numbers to Wealth for you and your family … for FUTURE U!
I am proud of you and me for getting this all down on paper 😀 … a pat on the back all-round!
FINANCE 4 U – STEP 9
This post has been the hardest to write as there are so many different ways to building wealth. I have been thinking that there are many similarities to working towards having a healthy lifestyle at this step. The foundations of both these goals are pretty generic. Know what you put into your mouth, or in our case what you spend (Step 2-4). Understand where we are at with our inner health and current weight, or with finances, knowing what we have to work with, ie, our Networth, debts, and our possible surplus each month.
FINANCE 4 U – STEP 6
Let’s talk retirement fund.
Future You will thank you for this.
1. Have a copy of your superannuation statement or if you have a login, go to your account.
2. You need to source the Product Disclosure Statement (PDS) for the fund. The document is usually 15+ pages and in that wonderful document, you will find 2 main fees.
OUR NEW ROADMAP TO RETIREMENT
As we are moving towards the last decade of planning for our retirement we have taken up the services of a Financial Planner. They will assist and guide us, with options to aggressively build our retirement fund, gain as many tax benefits as possible whilst we are working AND then the transition to retirement, with the tax benefits post-retirement.
SOLD – AND WHAT IT MEANS TO MY RETIREMENT FUND
We sold our SMSF Investment Property AND here are the numbers – the good, the BAD and the ugly.
As I write this post I am also working through all the numbers from when we purchased the property in 2015, to now selling it and changing strategy.
I have battled with myself as to WHY I am changing direction when only 5 years have passed. I will walk through it here to work through the potential demons/concerns I have and see if I can come to some key points that will make this choice solidify in my mind. I don’t want to be thinking about this in years to come and wondering if I did the right thing or not.
Writing the reasons now will cast them in stone for me to look back on later if I do start down the rabbit hole of WHY did I SELL … Blah blah blah
THE JOURNEY SO FAR
The year was 2010 and our net worth was $750,000 (this was after the sale of our house, and includes superannuation and shares).
We sold our home that was spacious and a great family home with a big backyard AND we were STRESSED (well I was) with the financial burden of ‘house debt’.
In hindsight, we didn’t have a HUGE debt compared to these days ($450,000 home loan). But with a young family, working part-time, minimal understanding of finances and no other income stream I found it very distressing that we couldn’t get ahead. I was brought up to believe wealth only came from buying 2-4 properties and I couldn’t see how we could do that.
- We were 40 years old
- Super ($170k)
- Shares ($50k)
- And a beautiful home (profit after the sale of our home $550k)