eBook is coming !

Happy New Year to all !!

It's a nice time of year, I hope you've all had an enjoyable Christmas and new year with your friends and families.

It was great for us to be home, after missing so many Christmases away in the past decades.

I guess like many I've done my share of reflecting on 2015 and resolving for 2016... On the whole it was a pleasing year, we took the plunge and made the transition back to Oz. It's been quite an adjustment as I described in the previous post, but after recalibrating my expectations I'm finding a lot of happiness and satisfaction in this new life, we definitely made the right decision and no regrets !

Re: finances, it's been quite a big focus for me the past 18 months. it's now quite well on track. Asset allocation is largely on target. I would like to tone down finances and focus on different areas going forwards. There's a few more things to tidy up :

1. Write a 5 year plan : keen to sell two properties (leaving just one IP and our PPOR). Re-invest the funds in shares / FI / cash as per existing AA. These are the first properties we bought, have held them a long while. And they are located in perth which is a pretty tough market right now. No rush to sell, but definitely will move at least one of them (ideally both) in the next 5 years. And certainly to sell both in the next 10 years. In the 5 year plan, I'm going to estimate the proceeds (after CGT) from these sales, plus other income we expect in the next 5 years, less living costs, to work out the net savings/investment rate per quarter. And set a regular invest plan based on this. My idea is to spread it over 5 years instead of doing nothing until the property sells and then having a huge lump to deal with. I think this is not much work maybe 30mins or an hour max. And once I have this plan, the goal is to switch finances to autopilot mode, with regular monthly investments and minimal market watching in between (let's see how long this will last :) )

2. Write an eBook : I've been mulling the idea for sometime, and a recent exchange in the MMM forums put this back on my radar. There's been a lot of great exchange in the Australian investing Thread. I'm keen to summarise FFA's views on how to invest simply, based on my experience and what I've read and learned. I'm also keen to fundraise for a charity, so will be requesting voluntary (completely optional) donations to a yet to be determined worthwhile cause, for those who read the eBook and find it useful and decide they want to make a donation. The drafting is well under way and I'm tapping up some kind and knowledgeable souls from the MMM forum to give me feedback. Regarding the subject, it's going to be focused on simple investing. May aim is to write something helpful to a wide audience, and I believe simple index investing is an 80/20 rule approach. Actually even better really, since the final 20% usually detracts from performance rather than adding ! There's diminishing returns and then there's shooting yourself in the foot..... Aim is to have it out in Feb, so watch this space !!

Re: other goals/changes. We've decided to put the kids in childcare for a few days per week from Feb. We feel we need a bit more time to get our lives back. I've also started part-time work which might increase from 1 day to maximum 2 days per week. But in the long term (e.g. after 6 months or so) i'm thinking to go back to 1 day. I'm keen to spend more time in our garden which is a work in progress, to get back into some exercise, and socially to re-connect with old friends and make some new ones. Less time checking emails and online is also a goal (MMM forum only once or twice per week, let's see how long that lasts too :)  )

Well, that's about it for now. I'm excited about the year ahead and hope you all have some plans and goals to look forward to!

A final thought that I read recently " Find happiness in the simple things. Life is short ! " - by kane cornes, reflecting on the sad and unexpected death of football coach and mentor, Phil Walsh

Day to day life after FIRE

I got this question in response to the last post " If possible, can you talk a bit about what you do in your day to day life after FIRE? "

Of course it's possible, so here goes....

Well, it's been a little over 9 months since we moved back to Oz and I quit my job. I guess there are many different versions of FIRE, depending on your life situation, age, etc. In my case, FIRE involved moving countries and returning to the place I grew up, but hadn't lived here for 17 years. The bigger transition by far has been giving up a cushy Mon-Fri office job to be a Stay At Home Dad. I guess that would be the four letter answer to this question - SAHD.

I severely underestimated how time consuming and exhausting it is to look after kids. I took a lot of things for granted before when I used to walk out the door to head to work. But just to catch myself in case I start whinging, it is completely a labour of love ! I wouldn't change anything. And I know it will only be the blink of an eye before my eldest is in kindy (well, a little over a year actually but the time flies), so I want to make the most of this time while I have it.

I think it would've been helpful though to have a more realistic expectation of Stay at Home Parenting before I started. It would've saved me some frustration in the first months, as I gradually re-calibrated ... Maybe something for you to consider Rob_S (?)

So coming back to the question, usually 5-6 days of each week I'm looking after two toddlers together with my wife. We have 1-2 days where grandparents help out with childcare, and those are usually bursts of productivity to do shopping, gardening, maintenance, errands, etc. I visit my great grandmother who's in an aged care facility.

And now to share a recent development for me, I've started some part time contracting work in the past months. I'll put this forward as my excuse for the infrequent blogging of late ! It's only one day per week, but has been a nice change for me. I guess I wasn't that successful at the "RE" part of FIRE !!

What else can I share ? We see plenty of family and the kids are developing bonds with their grandparents, uncles/aunties and cousins, which is the main reason we wanted to be back, so that is fantastic. Asides from family our social life has been limited, which I guess is not uncommon for parents with toddlers, but it's something we're keen to change in 2016 to reconnect with old friends (and make new ones too hopefully !)

Well, that's all I can think of for now. Maybe quite different to expectations, sorry no fairytale holidays or golfing to report as yet, but hopefully more of those to come also :)

Wishing you all every happiness in 2016 ahead !!!

Where did our wealth come from ? Part three

The aim of this third post is to draw deeper insights into how we achieved FIRE. So far we have established that the majority (approx two thirds) was derived from retained earnings, and one third from investment returns. This seems to tell you what we did but not really how we did it, i.e. what did we do differently than the average person/family to enable us to retire so much earlier. When I first conceived this post I intended to perform some kind of benchmarking analysis. For example, the average person earning X, spending Y, .... and compare this against our earning A, spending B, .... ; to try and build a bridge spanning the 27 year gap between our early retirement versus conventional (let’s say 65 years). Maybe I will still do this one day, but I can’t be bothered right now – sorry! Instead I am just going to try and list out the key things we did differently from most other people, and then try to judge which of these differences really made a difference. I hope this will be more useful and insightful than just stopping at the usual message: save more / spend less (although that actually is the crux of it!)

What did we do differently ?

Flying start (new car, no debt, no HECS)

Double Income No Kids until 30’s

Property Investment and accelerated loan repayment

Overseas “Expat” for 12 years

Carless decade

Frugal spending

High salary / career progression

Which differences really made a difference ?

To varying extents, all of the above strategies helped us reach FF in fast time. Some of them probably saved a year or two of work, others maybe cut a decade or even more. Some of them are also inter-related. Let’s go through them one by one...

·        Flying start (new car, no debt, no HECS) : This certainly was a boost, partly down to part-time work and saving while studying at Uni, and partly generous parents who wanted to pay off my Uni fees. I guess it’s not a silver bullet, but probably a year or two of head start versus the average person with a car loan / HECS debt.

·        Double Income No Kids until 30’s : I used to think this was a huge factor, but so far after 3 years of parenthood, I’m starting to wonder if the kid factor is not such a massive financial drain as what I had feared (perhaps its still too early to say). Also, I personally wouldn’t advocate making this life decision based on economics. For us, it took quite some years before we felt ready and excited to have kids, and there were periods when we questioned whether we would have them at all. The biological clock certainly played a role as a forcing mechanism and we are both extremely glad to have two wonderful children. Having said all of that, I think financially it is far more optimal to be DINKs and save/invest the surplus in your 20’s. I guesstimate this can be worth 5-10 years versus a couple who have kids in their early 20’s, and resultant impact on earnings (career break / slowdown) and expenses (childcare, kids costs, etc). Again, to reiterate I wouldn’t advocate deferring kids for financial reasons. If you know you want kids and are ready and eager to have them, then go ahead and do it !

·        Property Investment and accelerated loan repayment : I think the key factor is the last part. Our serial property investment was an effective forced saving mechanism. We didn’t overleverage. I feel our investment performance was neutral. We didn’t pick great properties but we didn’t pick lemons either. We had a good run overall with tenants over the years. It probably helped us get there a bit faster but I honestly don’t feel it made a huge difference versus if we had stuck it in index ETF’s and not used any leverage over all the years.

·        Overseas “Expat” for 12 years : The first seven of those years were on a traditional multinational company expatriate package, with lots of generous allowances and equalisations. This was a big income boost and enabled us to increase savings substantially. Not all expats capture the benefit, many spend or travel it away. In our case, I think we enjoyed ourselves but also tried to make the most of the financial opportunity. Aside from the salary aspects, there are factors like being a tax non resident of Australia. I think we didn’t capture this opportunity nearly as much as we might have in hindsight. In particular, with investment more in shares than property to capture greater benefit. As per the kids factor, I think key life decisions such as this, i.e. where do I choose to live, should be made holistically and not just based on economics. The opportunity to live abroad for us brought many positives to travel and experience different cultures, and the fact we could get ahead financially was the icing on the cake. I guess this helped us quite a bit, perhaps a 3 years short cut, off the top of my head.

·        Carless decade : We were lucky to live in big cities with excellent public transport systems (i.e. not places like Oz, US, where it’s hard to live without a car). Car’s are a financial drain and living without one for 10 years must’ve saved us a fair amount. Again it’s not a silver bullet, but would’ve contributed perhaps a year or two of avoided work.

Just a process check, adding up the above I get roughly 12 years worth of avoided work. We reached FF approx 27 years earlier than conventional retirement age, so that leaves another 15 years to account for. And that brings us to the two generic early retirement “must dos” – earn more / spend less.

·        Frugal spending : I’m unsure whether we are really frugal people, but let’s go with the description nonetheless. As I’ve mentioned, we have never been in the habit of budgeting or tracking expenses. But definitely I would consider myself tight with money and someone who likes to bargain hunt, I’m sure I inherited that from my folks. Some of this has inevitably rubbed off on Mrs FFA too after hanging around with me for so long! We are not materialistic people and spend little on clothes or brands. The purse strings have certainly loosened a lot over the years, and definitely we have accumulated our fair share of useless “stuff” and made some stupid impulse purchases just like nearly everyone else does. That was a bit of a ramble but to cut to the chase I would estimate from a NW accumulation perspective, these “frugal” tendencies carved at least some 2-5 years of work versus the average. But don’t forget a lower spending level has the double whammy effect of faster NW growth AND lower NW required for FF. The latter is a much more substantial effect in our case. Our typical annual spend of $30-40k (including two kids) is far below the numbers I see for “comfortable retirement” which are of the order of $55k (and that’s for a couple without kids). If one’s spending is 40% lower than the average, then one can also accumulate 40% less in retirement funds. That is a huge shortcut; decade(s).

·        High salary / career progression : Without going into details, my salary has been above average and career progression relatively good/fast. I had a good run for 18 years. Benchmarking against an average income, I expect this is a big factor driving our early FF. It’s also the reason we managed to achieve such a high savings rate of approx 80%, which was more about high earning than extreme saving. I guess this was worth at least 10 years, probably more.

Summary

This post identified seven things we did differently from the average person and attempted to guesstimate how many years each of these factors contributed towards earlier FF. In our case, a successful career, an extended period as DINKs, and frugal spending are the key factors. As I have stated in earlier posts, increased earning and reduced spending are both very important but if I had to pick one I would target sustainable spending reduction as the most critical driver of FF (due to the double whammy and controllability). I hope this gives you some insight and ideas on how to plan your own path to FF.

Where did our wealth come from ? Part two

I sat down recently and tried as best as possible to figure out where we accumulated our wealth over the years. I won’t be posting any absolute numbers here but will talk in percentages, which still tell the basic story. This post will aim to estimate where the wealth was made based on the various buckets of Earning (net of Spending), Saving, Investing. This will be a good start, but I’m also interested to try and draw deeper insights on what really enabled us to achieve FF in accelerated time. That will be the focus of the next post, i.e. to identify what strategies we used to accumulate wealth faster than the average person, and which of these were the most effective.

Now for the hard work of backcasting the past 17 years and analysing where the money came from.

Let’s start at the beginning : As a 20 year old bright-eyed, Uni graduate. I must admit, I was lucky to be able to start from scratch (and not negative). Two things helped me get off to a flying start: 1) I had saved money from part-time work while in Uni to buy my first car with cash and 2) my parents had paid my Uni fees so I had no HECS debt.

So, from this starting point, the task is to make a bridge from – age 20 / 0% to age 38 / 100% net worth.

Despite being a relatively detailed person, I haven’t kept budgets and financial statements that will enable me to forensically calculate this, so we will have to make some simplifying assumptions. Fortunately, I have tended to buy and hold investments, and the majority of investment has been in a handful of residential properties, so I will start by back calculating the capital gain and approx. income derived from these over the years as a percentage of current net worth:

·        Property Capital Gains (after provision for CGT) : +20%

·        Property Net Income (after interest on mortgages) : +6%

I have also been a long-term regular investor in shares, but it has always been a small allocation versus property. Regrettably I don’t have good records of all the capital gains and income from these over the years, but my best estimate of the contribution is :

·        Share/Cash Investment returns (including Superannuation returns)  : +9%

Please note, the above are contributions to net worth from these investments, they are not asset allocations. My actual asset allocations are currently something like 55% Property (too much, I know!), 15% Shares, 10% Super, 20% Cash. The point of this exercise is to identify where the money came from, not where it has been invested.

To recap so far, we have accounted for a third of my net worth being generated from Investing, with 26% from returns on residential property and 9% from returns on shares/cash. Referring back to the FF waterfall (and ignoring the Savings bucket which is included in cash), so the balance two thirds must have come from the surplus of Earnings over Spending. It’s going to be difficult for me to break it down in any more detail except to say :

·        Earning (Salary/wages) less Spending : +65%                ( = 100 – 20 – 6 – 9 %)

I guess this reinforces my position regarding the preferred pathway to FF being to focus on the “Earning less Spending” part of the equation, moreso than the Investing.

The final piece of backcasting is to reconcile our historical after tax Earnings (based on employment contracts, bonuses, tax returns etc) versus the “Earning less Spending” contribution calculated above. Again I don’t have the full records of the past 18 years at my fingertips, so this involves some degree of estimation, but here is the figure I came up with…

·        Earning (Salary/wages) : +80%

·        Implied Spending : -15%                  ( = 65 – 80 %)

I must say that before doing the sums, I was expecting the Earnings to be a much larger multiple of net worth, leaving behind a huge amount of Spending that I would have no idea where all the money went. But this result is a pleasant surprise. So much so in fact that I am questioning the accuracy of my calculations and wondering if I’ve missed a chunk of income somewhere. The inferred “savings rate” is 80% ( = 65 / 80 * 100), which is at the high end based on this poll in the MMM forums:

 

source: http://forum.mrmoneymustache.com/welcome-to-the-forum/what-is-your-savings-rate/?viewresults

In conclusion, having gone through the analysis, it seems the vast majority of net worth came from our Earning (80%), i.e. active income from salary and wages accumulated over the years. Out of this, a relatively small portion was required for Spending (15%) on our basic needs and wants, leaving behind roughly two thirds of the net worth being contributed by “Earning less Spending”. The residual third has been generated from Investing, i.e. passive income and capital gains from property (26%) and shares/cash (9%).

This has been a useful exercise and only deepens my opinion that the key to achieving FF is at the top of the waterfall. Efforts to minimize Spending and maximise Earning will have the biggest impact for most people. Of course it is always beneficial to invest wisely and put your money to work effectively, but the impact is second order in comparison. If you are serious about FF, you need to focus your mind and effort where it will make the most impact. In part three (whenever I eventually get around to writing it !), I will dig deeper into this and try to benchmark the various strategies we used to reach FF.

Where did our wealth come from ? Part one

I was reading this recent MMM blog http://www.mrmoneymustache.com/2015/01/26/calculating-net-worth/ and it got me thinking... Where did our stash actually come from?

Of course, I have a fair idea that a large chunk came from salaries, out of which some was spent. And then we have had lots of investment primarily in property, which has made money over the years. While I have a good handle on our balance sheet, net worth and asset allocation today, I couldn’t definitively tell you where it came from, or answer questions raised in this post e.g. what was our savings rate?

In some ways it’s an academic question, but I’m kind of curious and I guess some readers will be too. Also I’m wondering to what extent I have practiced what I preach, about controlling spending and maximizing earning as being the two most important pillars to focus on. So this is the background to the following series, which will be in three parts.

1.      Our financial story

2.      Backcasting Net Worth into FF buckets

3.      Accelerated wealth strategies

Financial chronology

Here’s a brief summary of our main financial milestones over the past 17-18 years. Sorry I’m not including all the gory details of salaries, property prices, etc – they are private and I don’t think they’re required details for the basic questions I’m trying to answer here.

Year(s)	Milestone / Activity
0	Graduated Uni debt free. Used savings to buy new car. Moved cities to start work.
1	First year of work. Mrs FFA still studying. Company pays rent. Saving for house deposit
2	Bought property 1 (20% deposit) and moved in. Mrs FFA now working
4 to 10	Bought investment properties 2, 3 and 4. Roughly paid off each mortgage before buying next
4 to 6	Started some small share trading/investment, without huge success (or failure)
6	Expatriated overseas. Rent out property 1.
6-16	Regular monthly investment in retail actively managed funds (CFS, MLC, Perpetual etc)
10	Relocated to different country, still overseas
12	Paid off all mortgages properties 1-4. Switched from expat to local terms, paying rent again!
14	Bought property 5(overseas) and moved in
15	Parenthood ! Demolished property 4 and built new house (our intended post FIRE home). Mrs FFA becomes a SAHM.
17	Belatedly discovered ETF’s. Switched all mgd funds (2% fees) into low cost ETF’s and direct ASX blue chips
18	Quit job to return “home” to Australia!

 

Hopefully the above time-line gives you a good enough impression of our trajectory towards FF. A few key points to highlight :

·        We invested heavily in properties, but with moderate gearing and aggressive loan repayments. We did not cascade mortgages on top of each other. (Note : Just to make sure you have the right idea, these properties are villas or small houses, not McMansions !)

·        We enjoyed a lengthy period of expatriate living with company allowances for housing, etc

·        We invested consistently in shares over the long-term but at small scale and using high cost actively managed funds. At the end, our share portfolio was roughly equivalent in size to having another Australian property.

Data keeping

It has been an eye opener for me since reading FIRE blogs to see the extent to which people track living expenses. We have never really budgeted, let alone track how much we spend. Fortunately we are not big consumers or materialists, so I doubt the lack of these habits has dented our wealth too badly, but it is hard to say how much more effective we might have been over the years. One thing is for sure, the lack of such data makes it difficult to approach a task like this and figure out where the money came from. I will have to do my best to estimate and fill in the gaps.

Back in the early days, I did use to track Net Worth in a book. Initially I did it every month, but then after some years I regret I also fell out of this habit. I am trying to track down that book now, but it will take some more searching through boxes. Certainly it would be very handy for this exercise to have a timeline of our NW progress.

Coming up next

So that set’s the scene. In the next post I will analyse from our current NW all the way back to the beginning. While I don’t have records of how much we’ve spent over the past 17 years, I can estimate how much we’ve earned in salaries and the returns on our investments. From this data, I will infer spending and savings rate, as well as shed some light on what proportion of the NW was generated from active versus passive income.

Landing in Oz

We've been back for 6 or 7 weeks now and the time has flown!

This won't be a long reflection on having transitioned to FIRE, I'll save that for later. To be honest it has still barely sunk in yet.

Our FIRE is a jumble of several things - 1) quiting my "career", 2) relocating home after 17 years, 3) being a Stay At Home Dad.

[ Note : Points 1) and 3) only apply to me; Mrs FFA has already been for some years and I now empathise much better with all the things she has been telling me! ]

So far, I've felt the impact most of point 3). Being a SAHM or SAHD is a tough gig and must be one of the most under-appreciated and undervalued roles you could imagine. I guess you have to do it yourself to realise, that's how my eyes were opened.

From a practical perspective, the move has gone relatively smoothly, all things considered. We have had a lot of help and generosity from family which has made a huge difference. There's still many relocation issues to attend to, but I am hopeful some spare time will emerge to write some new posts here. The next plan is to put up a high-level analysis of how we generated our wealth, so stay tuned!

Taking a break, FIRE in progress.....

Please bear with me, there will be infrequent posts in the next month or two as we relocate back to Australia. Many thanks to all of you who have been reading and commenting - I promise to write more once the dust settles !

The final month

It’s hard not to be quietly happy as I embark on my final month of a 17 year career. Adding to this inner glow is the fact it’s a short month being February, and even further multiplying the joy is the presence of two holidays. Since today is nearly done as I write this, that makes it only 17 working days left…. Sweet !

So how did it come to this, 17 years boiled down to the next 17 days ? I don’t really know myself and will take further time post FIRE to digest and understand it all. Anyway the point of this post is not to gloat, but to reflect a little on where my head is at right now… There are plenty of things to do since in our case, FIRE also involves an international relocation with two young kids. We are lucky to have family helping on the destination side and we already bought some bits and pieces (fridge, washing machine, car) so we can hit the ground running there. We are fortunate to have an empty house ready and waiting for us too! On the departure side it will be somewhat more chaotic, the main thing yet to be booked is the moving company, which is the key job for this week. There’s a long list of other admin tasks (closing bank accounts, credit cards, change of address, etc), but still plenty of time for these.

From a career perspective, I’m keen to end it well. It’s been a happy and successful path over the years so why not end on a good note too... How to do this ? I’m trying to close out loose ends, let go for all other issues to be handed over (doesn’t come naturally for me) and giving a good exit story so that people can understand my decision. This last part is one of the more difficult things. I’ve been reading the MMM forums about how to explain FIRE, whether to tell or not, etc. In our case, I really don’t see the need to go into FIRE voluntarily, but if someone asks me directly I also wouldn’t lie about it. Making things a little easier is the merging of FIRE with geographical relocation, so it’s easier to steer the conversation to the latter. The crux of our decision to move home is down to personal reasons - the desire to live near our extended family, and raise our kids as Australians. This is an easy story for most people to grasp, and it’s also the honest truth. Therefore I tend to leave it at that and not bother about the FIRE part. Sometimes people probe into it, e.g. what will you do there ? can you continue to work in the same field ? etc. I usually answer these honestly and move the conversation into other areas. Am I being evasive or trying to hide my wealth ? Maybe, I don’t know really. But in my experience talking about money matters / relative wealth with the majority of family and friends usually ends badly. I do worry it might leave the other person feeling jealous, that we are “different “ or somehow out of touch with real people. I don’t want to drive a wedge between us and others who might not have much prospect of FIRE, or even any concept that such a thing can be achieved without a winning lottery ticket.

Anyway, in the interest of keeping this briefer than recent posts, it’s a very exciting time and I’m really looking forward to the coming months. I thought I’d be quite stressed by now about the move but it’s not the case and seems to be offset by the eager anticipation of FIRE and finally heading “home”. The end of “work” is not such a big issue. As explained in the Evolving Perspectives of FF post, for some years now I have been coming to the idea that I will continue to work after RE and phase my exit from the conventional career. It’s nice to be able to think about all the different possibilities, projects, hobbies etc on the horizon. And often I have to catch myself and remember to take it slow for the first 6 to 12 months. I got some good advice in the MMM forum along these lines, and to be open to things that come my way rather than trying to initiate/plan everything. I will try my best to follow this.

Evolving perspectives of FF

So far I’ve written about my general framework and preferred pathway to FF. One of the objectives for this blog is also to reflect on my personal life transition. This post will make a start on this by considering how my personal/internal perspective of FF has changed over the years, which has been quite substantial. Apologies if it’s rambling but that can be the nature of self-reflection.

As mentioned in the very first post, when I started out my career it was all about accumulating wealth as soon as possible. Work was a means to end. And the “end” clearly in my mind was being permanently parked on a picturesque beach, golf course, or other similar pleasurable location. I guess it’s a common aspiration for many young, ambitious graduates (and even the older, less ambitious variety too!). I used to track my net worth each month in a book, and drew satisfaction in the slow but gradual accumulation of this wealth pile. I was inching towards my goal and it was an excellent way to keep focused and driven in my career, budgeting, saving and investing habits.

My mindset stayed like this for around 8-10 years. I can’t recall the exact point, but somewhere in this timeframe and approaching the 30 milestone, I noticed my perspective starting to change. In retrospect, I reckon there were a few factors involved in this. When you are starting out, the FF goal is a long way off and rather abstract. It is easy to keep your head down and focused, safe in the knowledge that you are heading in the right direction and will one day reach the hallowed land. However, once you start making tangible progress towards FF and it is no longer a dim flicker of light at the end of the tunnel, but really coming into sight, then it starts to take away from everyday focus and becomes a substantial distraction in its own right.

This can manifest in different ways, a few of the key issues I encountered were : 1) lower tolerance for work / boss ”issues” that in the past would be easily accommodated as a necessary evil, 2) questioning the end game and if I would really be able to while away 40+ years on the beach and golf course. In some ways these are good problems to have. It’s like an enlightment to finally take more conscious control of one’s life and re-discover your intent and purpose. That is of course, provided that you really know what you want to do with your life ! This can also be a disorientating and destabilizing phase. After spending the better part of a decade on autopilot and happily tolerating the daily grind for the pursuit of later rewards, it can require a huge adjustment in mind set to revisit these basic questions, especially without any strong financial motivational force. I guess it could even be like the Shawshank Redemption movie, where the freed prisoner has been in jail so long that he/she no longer knows what to do when finally being granted freedom, and might even prefer to stay in prison, as crazy as it might sound.

I struggled for a long while on this, some years in fact. Mainly it was a challenge career-wise as I lost motivation and direction. Previously my career goals were always clearly aimed to progress and grow my salary and bonuses in order to accumulate enough wealth for early retirement. I knew what to do and didn’t question it, so things just chugged along. However when I began to deliberate these issues - the need to continue, more “meaningful” pursuits, etc – the answers didn’t come so easily. There was a sense of limbo or “no man’s land”. In some ways I wish I had been braver and declared FF at an earlier point, like Mr Money Moustache and others. But I was always a bit conservative and wanting a bigger buffer or margin of safety. Also I became quite attached to my job and resident country and it was quite easy to keep postponing the decision another year. Finally as already explained, I didn’t really know what to do with myself next and wasn’t quite mentally ready for FF, even though the balance sheet had probably passed that threshold some years earlier.

I’m pleased to say that as the time of FF now approaches, the uncertainty and instability is melting away and replaced by excitement and newfound enthusiasm. Perhaps the hard part for me was deciding, as one can agonise especially over timing. It’s always tempting to defer and accumulate a bigger reserve in case of the unexpected. However, after booking the one way flight home and giving notice to the boss, the decision is now made and we are past  the point of no return. I’m looking forward to the final weeks of “salaried life”, finishing off this chapter well, and eagerly await the opening of a new life chapter in the coming months!

So in reflection, there has been a massive change in what FF means to me. The initial dream of hedonistic life was useful to put me on the path and stay motivated. But as I started to make serious progress, the reality also came to me that it would not be satisfying to park on the beach for decades. This was disorientating because 1) it meant I had to find a new end goal, and 2) substantially brought forward the timeframe for FF. The second point is due to the huge difference between assuming no further employment income and an opulent lifestyle, versus some continuing employment income and a moderate lifestyle. Gradually I have recalibrated my idea of FF and the key point is being Free to choose if, what and how one might work. Not necessarily that you will never work again. I am really excited about the possibilities of working in areas where I have a deep passion, genuine interest and the chance to directly help people in need. Of course these possibilities always existed but before now my priority was Earning, which led me to other pursuits instead…….

This has been a longwinded post but if I were to draw one key conclusion it would be that there is a lot of psychology that supports (or can derail) ones progress to FF. It’s important to be aware of your own internal dialogue, assumptions and motivation, as well as how these will change over time and as you get closer to FF.

What’s this blog about ?

I consider myself very fortunate.

I have a lovely wife and two beautiful kids. We are healthy and have basically everything we need. For the past 18 years I’ve enjoyed a great career working both in my home country and abroad. Before that, during my first 20 years I had a happy childhood and a good education. Now I find myself at the crossroads again, closing one life chapter and soon to open the next….

When I started my career all those years ago, I had a clear goal in mind which was to retire by the age of 35. In those days and with all my youthful confidence, I was adamant that work is merely a means to an end. No matter what you might say in the interview to get the job, the honest truth is that you are only there for the pay check. Come the future day when I have enough money to no longer need that pay check, I would just as soon be on the beach, golf course, etc.

Some 18 years later, it’s with a measure of pride that I am now reaching this goal. Despite being 3 years late versus the target, I won’t beat myself up too much since it’s also 27 years earlier than the standard retirement age.

There are some big changes and exciting times ahead for us. I recently gave notice to finish up my job, and we are planning to relocate to our hometown in the coming months to settle down near our families and spend more time with my wife and kids.

With this brief introduction out the way, let me now come to the question : What’s this blog about ?

My first idea is to reflect on the transition in life phases from “working” to “financial freedom” (FF). I see quite a few blogs about the journey to FF, and also by those who have achieved FF, but not so many at the point of transition. Logically it should be a happy time, but as with all major life changes I guess there will be some bumps in the path too. I look forward to reflecting on the experience here.

Secondly, I am starting to consider future projects/hobbies/pursuits for the next phase, and one area I have in mind is financial planning/advice. I’ve always had a keen interest in the world of money and lately I’m eager to pursue activities that directly help others and give something back. This blog is a way for me to explore further on this and test the water.

Thirdly, I have benefitted a lot over the years from the experience and kind advice of friends and colleagues. As I said at the outset, I feel very fortunate and hope through this blog I can in some small way return the favour. Please understand that I’m not an expert and in fact do not have any formal qualification in this field. I will be the first to admit that I have made many mistakes along the way too. But in the end I am reaching my goal and so at least in a practical sense, I hope this blog might benefit like-minded people who are working towards their own FF.

Further to the above three points, here are some additional intentions :

This blog is ….	This blog is not ….
Honest	Financial advice (please read the disclaimer)
Practical	Revealing the secrets to get rich quick
Anonymous (or Private from my perspective)	Explaining the basics of finance / investment

Thank you for reading this blog. I hope you find it useful and appreciate any comments. As today is 30^th December I’m sure many of you are pondering resolutions for 2015 and the years ahead. I wish you every success in pursuing your goals and most importantly to enjoy the journey along the way – FFA.