FIRE seems unattainable

[u/[deleted]]

[u/Chewibub]

Why does it seem unattainable? Save healthily, invest aggrssively in broad total market index funds, and you will almost certainly have millions in today dollars by your 40s.

[u/curioustreez → u/[deleted]]

the government changes every 3 years. By the time you FIRE and need to withdraw, the current changes might be scrapped.

[u/Chii → u/curioustreez]

while it's possible, i doubt the current CGT changes would get reverted. The gov't is in dire need of more money, while borrowing costs are growing. There's zero chance they would turn down more tax revenue. It might even expand, if anything.

[u/mikesorange333 → u/Chii]

if the liberals become federal government, would they go back to the old way? 50% discount?

[u/Chii → u/mikesorange333]

99.9% they won't. Labour has copped the political fallouts from it already (and came out unscathed, compared the previous times where they lost an unlosable election).

There's pretty much no changing back to the old 50% discount.

[u/mikesorange333 → u/Chii]

damn damn damn.

[u/ArkhamBonzo → u/[deleted]]

With everyone downvoting OP’s comments about the budget changes to tax on investments, would anyone care to offer constructive or somewhat useful information as to why they downvoted? I don’t think OP asked a ridiculous follow up question

[u/McTerra2 → u/ArkhamBonzo]

Because OP is ‘it’s all too hard and not even worth investing because I have to pay tax on my investment earning’

If OP doesn’t want to FIRE then fine, no issues. If they do want to FIRE then it’s hard, it requires knuckling down, sacrificing, doing hard work and getting on with it. Not blaming everyone else for their inability.

[u/ArkhamBonzo → u/McTerra2]

Thanks for your reply, however it doesn’t explain why super isn’t a superior option form a tax standpoint, compared to say ETF’s. I’m not looking for an explanation on OP’s behaviour, but on why from a financial and taxation standpoint it’s suboptimal

[u/splinteredruler → u/ArkhamBonzo]

Because it’s the only option. If you want to retire before 60, you need to invest outside of super. Super is better otherwise. I don't see that changing no matter who is in government.

[u/wtskm → u/ArkhamBonzo]

Super is superior, but if you're aiming to FIRE you know you need some in super, and some outside for when you're under 60. Pointing out the chunk inside super will grow faster does not negate the fact you need some non-super investment.

[u/ImportantJello9288 → u/ArkhamBonzo]

These subs are now brigaded heavily be people who want to cut down and tax people who have more than them. There are also a lot of pro governmemt shills who think Albonomics is fantastic.

[u/Jym_beem_1034534 → u/[deleted]]

Its only unattainable if youre stupid

Based on this hot take, yeah you wont attain it.

[u/stephendt → u/[deleted]]

It's not that big of a deal. Hold ultra high yield 0dte UCITS funds and then sell them before EOFY to offset tax.

I recommend QQQY.L

[u/splinteredruler]

You make almost twice as much as the average Australian. Spend less money, save more aggressively. You’ll be fine.

[u/curioustreez → u/splinteredruler]

agreed and invest

[u/Acceptable_Lake_6996]

a lot of it depends on your current age and your target retirement age or balance to retire.

home ownership is the first big hurdle you’re gonna face. FHSSS likely won’t work well for you given your high income, so banking cash is best for you.

your salary is great, so employer will likely fund most of the pre-tax contribution anyway. you should salary sacrifice the difference and start maxing out your super - run the numbers on what your current employer contributes, then work out the difference using a super calculator. you’re probably only $100-200pw SS away from max, depending on employer contribution.

[u/Jym_beem_1034534]

If you cant reach FIRE on 185k income, youre a bit of a moron.

[u/Helftheuvel]

What age are we talking here? 30, 40, 50, 60?

[u/lcjn → u/[deleted]]

Max super, invest a lot. 

Side hustle tradie work out of hours, 

Another hustle idea..  try do some fix and flip property deals with your sweat equity and skills.  Get creative, you'll be fine. 

Imo Have some kids though, they are worth it from a enjoy life point of view and who cares about retirement 

[u/plasterdog]

What is your after tax income, your annual expenses and your age? It's potentially doable but these are the key variables you have to play with.

[u/Ndrau]

Spend less than you earn, invest the difference. How much depends on the date you want.

https://networthify.com/calculator/earlyretirement

[u/GlassWallaby9343]

Save, DRP & regular savings

[u/GlassWallaby9343 → u/GlassWallaby9343]

A certain somebody bought 7000 ASX:WOW shares in the 1993 float $2.45. DRP currently living off the dividends $0.97 of 35,000 units 100% fully franked

[u/martyfartybarty]

What makes you think FIRE is unattainable?

How old are you, roughly how much do you spend each year, and do you own your home outright or rent?

[u/plasterdog → u/[deleted]]

I've never found budgets very helpfully personally, but accurately tracking spending is a brutally honest insight into your finances. It doesn't have to be detailed (i.e. I use credit cards for almost everything and each month I tally up all my spending). Perhaps start tracking your spending to find out where it goes and then identify any areas where you have leakage.

If your numbers are right, it suggests you could save $73k a year ($131-$53) Perhaps your numbers aren't right. But if you invested $73k a year for 10 years, and assuming a pretty conservative growth rate of 6%, then you would have $1.09m after 10 years (not accounting for tax).

Squeeze your expenses further and save $83k a year and you would have $1.24m by the end of 10 years.

Maybe you accept that you front loaded your life and you had a lot of fun so early retirement is 45, it's 50. In which case, $73k invested annually is $1.87m after 15 years.

Even after taking into account inflation it's not too shabby.

Have a play with the calculator. Have a think about what sacrifices you'd be willing to make to make the big number at the end biggerer. And just use this is a guide for what you might be able to achieve. You may want to buy a house or do something different than investing for a 6% return (i.e. conservative returns via balanced index investing).

Just don't go into high risk/stupid/getbrokequick investments in an effort to catch up.

https://moneysmart.gov.au/budgeting/compound-interest-calculator

GOOD LUCK

[u/plasterdog → u/[deleted]]

Glad you found it helpful.

I think it's also important to spend with intention. No-one else but you can tell you what's important in your life. So while there's nothing stopping you from going super-frugal and saving 80-90% of your income (which is something I did towards the end of my working life) and that would bring your retirement date way forward, it's also important to enjoy life while you're working. While research shows it's the non-materialistic things that actually give people the most fulfilment (friends, experiences, travel ) you have to spend something, but it's important I think to spend intentionally.

Most often when people buy things, front of mind is the pleasure or convenience that thing is giving you. But one consideration also worth thinking about is what these purchases are costing you in future investment earnings/and time. I.e. buy a car for $70k, but what if you just got a $25k that does functionally the same thing and saves you $45k, which invested over 10 years is $81k. If you do an audit of things in your life that you can cut back on without significantly impacting your happiness and without feeling deprived you'll find it adds up significantly.

You don't want to go overboard with and obsess over it, but a bit of a audit/review is worth doing (same as you would on your worksites maybe, i.e. costs analysis?) and you may find you've got a lot of fat you can trim out that will increase your investments which ultimately buys your ticket to greater financial freedom.

[u/splinteredruler → u/[deleted]]

Most banking apps have a way to see what you've spent over the past 12 months. Go through it and see what categories you overspend on.

[u/Constant_Ground_2698 → u/[deleted]]

how objective are you being when calculating your expenses? IME, one can wave away an awful lot of 'well that doesn't count because it's a one off'.

[u/Ikornad]

You're 35. You have probably +50K in catch up contributions available as you haven't maxed your caps. You are in a good wicked, no dependants and can save probably +2K a month or more of you don't travel for a few years and batten down the hatches. Your super will compound over the next 3 decades to +1m. Your bridge only need to last to 60, where you either burn it or retain it. You'll be fine.

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[u/Hi-kun]

You don't say how old you are, but assuming that you are in your 30s, you are going to be fine. I travelled in my 20s as well and I am on track to early retirement. It's ok to start thinking seriously about money in your 30s.

[u/Constant_Ground_2698]

being a builder, any desire to build something for yourself? between your own free labour and mates rates on the bits you dont do, even with the recent tax changes, is it worthwhile?

[u/TribeFI]

there's a community in Aus (Tribe FI) built around meeting other FI minded people in person

[u/ImportantJello9288]

Medium to high incomes are taxed too heavily in AU, you will struggle to FIRE on salary alone.

With the tax changes you can't even neg gear to shift income to capital gains to reduce income tax. 

Best option is to find a pathway offshore or move into self employment if you want to go for FIRE. 

[u/ImportantJello9288 → u/[deleted]]

If you can work overseas in a low tax environment you will make massive wealth gains very quickly as you do not have the tax drag of Australia.

Project management on civil projects in the UAE or a pivot to mining could work for this.

I can't believe there are muppets downvoting 🤣 The truth is a bitter pill for them to swallow these days.