• thinkrichmum

My Journey Started Here

Journey to financial independence may be long and challenging, but you have to start somewhere and keep progressing to reach your destination.

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In my previous post, I briefly touched on how I started my journey.

Real estate was a popular investment vehicle in Australia. My husband and I educated ourselves on different strategies in creating a property portfolio. After buying our first home in 2010... between years 2013 to 2016, we bought 2 investment properties and a land to build our new home. The plan was to buy a certain number of investment properties during accumulation phase. The property portfolio is then expected to double its value in 8-10 years. Once in consolidation phase, we can sell half of the portfolio and use the realised gains to pay for the remaining half. Hereafter, the portfolio will have unencumbered properties which can generate passive income (rent) that we can live off. It was an awesome concept and we chose that path to travel (spoiler alert!! this will shift to index fund investing).

Then came bank lending restrictions. Banks have tightened the rules on investment home loans. We can no longer pull home equity from our portfolio, meaning we can't buy another investment property and we can't grow our portfolio. Bank lending conditions hasn't changed for 2 years - it was a stale mate.

At that time, we just turned 40 and started to worry about our retirement - yeah, I know, my husband is a worrywart (Lol). We had a look at our superannuation, and it looked like it will not be enough for us to retire comfortably. Also, the thought of working until 65+ years old did not really appeal to us. It was the time to find another investment vehicle... fast!!

Turning point

We started researching again for alternative investment strategies and stumbled upon articles about early retirement and how they achieve financial independence through index funds investing.

My commute to work is approximately 1 hour, so that's a total of 2 hours a day, 10 hours a week - easy math aye!! I came into a realisation that I was just wasting my commute time in social media, news and other meaningless stuff on my phone.

So I started using Audible on my commute to work and back home. This app provides a wide selection of audiobooks - with a 30 days free trial. If you decide to be a member, there is a monthly fee. One of the benefits of Audible membership is you get 1 credit per month and you can use the credit on an audiobook (or any audio entertainment available, i.e. podcast etc.) you want. If you happen to dislike a purchase, you can return it and get the credit back. If you find this interesting, sign up for free 30-day trial. Remember to use this link.

The first book we got is The Barefoot Investor. What is the fuzz about this guy?? Some people refer to him as the Dave Ramsey of Australia. We found lots of gems in his book and it was quite entertaining too! The book gave us specific steps to follow and had a massive effect in the financial evolution of our family.

Key Takeaways

Before our turning point, I would say that our knowledge in investing, saving and share market was very high-level only. I guess the primary actionable item for the readers of this blog post is to educate one's self by reading/listening to books. Blogs and podcasts are great sources of information as well.

It was essential for us to have the knowledge and right mindset in creating our path to financial independence. I'm sharing my first audiobooks and my key takeaways that helped us build the foundation of our journey:

  1. The Barefoot Investor (by Scott Pape) - learned to effectively control family finances by setting up buckets, couples need to work together and talk about finances, power of compounding

  2. Simple Path to Wealth (by JL Collins) - learned the basics of index funds, ETFs, stock and bonds portfolio

  3. Unshakeable (by Tony Robbins) - learned the principles of investing long term, understanding the unpredictable share market behavior, minimisation of fees and the concept of diversification.

  4. Rich Dad Poor Dad (by Robert Kiyosaki) - how to build wealth, clarity on assets vs liabilities and learned the concept of how money should work for you.

  5. Think And Grow Rich (by Napoleon Hill) – how to turn the desire for wealth into its monetary equivalent

These key takeaways deserve to be discussed on separate blog posts.

One can say that our journey started when we bought our first investment property. But this strategy will be dependent on the conditions in bank lending and property market price movements. Though financial independence might be achievable in this manner, we had decided to shift our investing strategy in making index funds as the core building blocks of our portfolio.



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