Hello world! The Ginger Investor here…
We have a lot of time to get to know each other, but initially here is my first post! 🙂
The site will chronicle my experiences and journey towards becoming more financially literate and hopefully reaching the end goal of Financial Independence, Retire Early (F.I.R.E).
I will explain what F.I.R.E means to me, a little later.
Along the way, I aim to share tips and resources I have found useful. And my progress, which will no doubt a few stumbles and achievements along the way.
Most of all, I hope this gives back a little something, in the hopes it might help someone else.
A history of my relationship with money…
As good of a place to start as any, is to go into a little bit of the ‘about me’ and my journey so far. So as I write this, I am 35. And I have only very recently started to set my Financial Independence, Retire Early (F.I.R.E.) goals.
But my journey through the personal finance and learning how to be more self-sufficient financially has naturally gone through a number of peaks and troughs. So let’s take a walk through memory lane.
In the beginning
I started work casually as a teenager, while still attending school, but working on Saturday mornings in my dad’s retail store. It was mostly basic retail work, assisting customers, cleaning shelves and the store. But it gave me money each week, which I saved to go towards my six-month student exchange to New Zealand.
Even though I was fortunate enough to be able to consider this, it was a tough slog to save up the ‘pocket money’ side of the trip.
My parents graciously invested the flight costs for me, but it was still a stretch. Hence the short exchange and “only” to New Zealand – not somewhere like South America/Europe.
As a family didn’t have much in the way of assets or cash flow. Everything the family had was tied up in the shop. So much so, that to save money, my parents had actually moved us into the space above the shop.
Lucky for us it was a hardware store, so part of the deal was we got to paint / decorate our new bedrooms as we saw fit. Which as a 15 year old helped with the adjustment/move.
And so, every Saturday morning I would go downstairs and prepping the store for open.
I would never have consider myself a ‘saver’. And this was almost the one and only time in my teens/twenties that I actually saved…
Around this time, I also remember having chats with my dad on our back balcony/deck about share markets and positions. Not that a lot of it sunk in/stuck around in my head, but I do remember some basics from our talks about EPS (Earnings per Share), Dividend Yields, etc.
Never being in a position to really buy shares myself. I do remember reading through the newspaper on the weekend, reading about the Air New Zealand, Qantas, Ansett shares were performing. I was fascinated with flying and I think this extrapolated itself into my psyche.
(P.S. Thank goodness I didn’t know how to actually buy shares though, looking at the carnage of the Ansett collapse in 2001, I would have lost everything!).
Money & my late teens
After my little trip to New Zealand, returning for the last few years of high school, my part time work and relationship with money evolved. And I would say I became very consumer-focussed, as most teens are.
I started working part-time in a local food court, and later in an electronics store. I was into building computers and always looking for the latest video card or extra bits and pieces to put into my PC.
Internet was still dial-up back then, but during holidays, I used to take my PC with me to friends’ houses and we would network them together and play games.
I remember a family trip to Thailand, and I borrowed money from my parents to top-up my cash balance and essentially buy all the components needed for a new PC.
And I guess you can see where this is heading. This pattern of spending also continued into my early twenties…
Moving out of home
By the time I was 18, I had decided that I was going to leave the town I went through high school and move down the the ‘big city’. I had a cousin who was moving down to Melbourne.
My cousin had offered me a couch, and I made the decision to take the plunge and move down too.
This obviously didn’t help my bank balance… But I figured that was a problem for another day.
After 4/5 weeks job hunting, I was starting to run desperately low on any sort of cash reserves. Relying on my cousin to help with groceries.
But then all of a sudden I found a job in a call centre advertised in the paper. Had the initial screening call on Saturday. Face to face interview on Sunday. And the job started on Monday!
I was in the right place at the right time. As the call centre had just won a new contract from a national carrier and simply needed as many able-minded/bodied people as they could get. Hence the ‘fast tracked’ application…
With money starting to trickle back in, I found a house-share to live and set about establishing myself in Melbourne.
In my early 20s, with money coming in week to week, I was able to get by. Most of the $$$ went into rent obviously, the rest was drinking/eating out. There was no saving mindset here anymore…
Around this time, I also started applying for credit cards. I convinced myself it was just to ‘build my credit rating’. But that became a slippery slop, especially when you living pay-check to pay-check.
Isn’t Credit wonderful?!
Looking back I was so naive…. But I guess most people in their 20s are. Having a credit card soon became a way to even out expenses between pay-checks.
Working for a mobile carrier, and being inclined to like new shiny gadgets… I also started an unhealthy relationship with upgrading to the latest phone whenever I wanted. Which was around every 6-9mths.
Sure I got a little bit of a discount, but that is how I justified it to myself. Obviously it wasn’t really anything significant to allow for this. The contract and exit fees for upgrading, all went onto my credit cards.
And so the debt cycle continued its spiral out of control.
The Ginger Investor, without any of the investing 😀 🙁
Finding level footing…
It has taken a while, to learn some basics around money management.
When my credit card debt was spiralling, I began seeking out ways to cut the debt habit. It was a hard and long process. But perseverance helps.
From time to time I would dabble and buy shares, but I kept leaving myself short for other things, including paying off my debt. So I made a mental pivot…
I read a personal finance magazine about getting out of debt, and two main lessons sunk in to me. Debt consolidation and/or paying off the higher interest rate debt first.
Slow but steady progress
I was in such a financial state (roughly $15-20k credit card debt). Debt consolidation in its own right was not feasible. No bank would lend me the money needed to roll everything into one (and probably rightly so!). Which lead me to instead I used a slower approach. I would apply for a balance transfer offer from credit card providers from time to time, trying to minimise the impacts on my credit file, to roll the highest debt interest rates into one lower rate.
All the while paying the highest rate of debt off first, and scrounging together payments each month which would be higher than the monthly minimum of the card.
When I managed a balance transfer, I maintained the payments, so with the benefit of a lower interest rte my payments made more of a ‘dent’.
This was a bit of a stepping-stone approach, but I slowly made progress.
There were a couple of silly mis-steps, where I would re-use the old credit card rather than closing it. But I did learn from my very obvious mistakes and instead started to immediately close the credit card after any balance was closed.
During this period, I was also very fortunate to get a number of promotions/new roles. And took to using any pay increase towards paying off the debt automatically via my bank account. This way I didn’t notice the pay increase (or felt like I was missing out).
And gradually I watched as the debt pile gradually decreased over the years. And now, I have no credit cards at all!
What ‘Retire Early’ means to me
As I have mentioned I have am only really starting out. But I have been reading a lot about this mythical ‘Retire Early’ concept. And recently I read this great post by Aussie FireBug, about what ‘Retire Early’ is. And most importantly, what it is NOT.
I thought I would share with you, what it means for me at this point in time. I personally aim to move towards ‘Financial Independence’ but maintain some semblance of work, be it part-time or casual type work (ie freelancing). An analogy in my mind is really the ability to take the foot off the accelerator, but still be in the driving seat. So ‘Retire Early’ doesn’t mean going off fishing for years or playing golf ad-nasuem on end. But having the ability to do what I want to, and more than likely start new business ventures.
I am fully aware that my goals may change and evolve as I gain more experience and build up some steam heading into the ‘Financial Independence’ end-goal. And I will share more about these goals in a post shortly.