Where have the last three months gone? How is it July already? I feel like we are stuck in this Covid infinity loop with no end in sight. Anyway, it’s time for another Semi-Retirement update.
I’ve broken the update up into three parts – a life update, a financial update and a quick blog update.
Let’s get started!
Info for new readers: Our quarterly updates chronicle our adventures in semi-retirement and our financial progress from Flamingo FI towards complete Financial Independence (and probably Fat FIRE as well). Since we reached Flamingo FI, we have not been adding funds to our investments and are instead coasting to Financial Independence. You can read all about our overall plan here: Coasting to FIRE (Without Saving Another Cent!) – Our Semi-Retirement Plan.
Not much has changed since our last update in April. We are still here (in Sydney). As I mentioned last time we started making plans for the next few years. Relocating overseas is still an option we are seriously considering, but with borders still closed and things pretty uncertain at this stage, it is hard to make definite decisions. It feels like everything is on hold at the moment, so we are just enjoying life while we wait for the country to open up.
To Move or Not to Move – That is the Question
I have to say that it is getting harder not being able to see my family in Europe. None of them has even met Baby Flamingo #2. There are lots of expats in our local area and many of the families we know are in the same situation and wondering when they will be able to see their loved ones again. Many are thinking about leaving Australia permanently (and they are all highly skilled professionals). It will be interesting to see how Australia is going to manage this issue over the medium term with no end to the closed border policy in sight.
I am currently still on maternity leave. At this stage it looks like I will probably go back to my old job part-time in a few months’ time until we know if, when and where we’ll move. Basically, our options are:
- Stay here.
- Benefits: It’s an amazing place to live(we live 30 seconds from the beach and love our area) and we’d have a great work-life balance.
- Cons: High cost of living and we would have to keep renting. If we want to work part-time it would have to be in high-paying roles (i.e. our current jobs or similar).
- Move to a different area of Australia with a lower cost of living.
- Benefits: Lower living expenses, so we could work even less (or in lower-paying jobs) and we could buy a house. Plus, we’d potentially be closer to Mr. Flamingo’s family.
- Cons: We’d have to build a new network of friends and acquaintances and we don’t know if we would enjoy the new area as much.
- Relocate to Europe.
- Benefits: We’d be close to my family and have more options to travel (I really miss just being able to jump on a plane or train and be in a different country in an hour or two). Plus our kids could get to know a new culture.
- Cons: We would have to give up our great lifestyle here not knowing if things will be as easy/enjoyable for us over there.
I keep reminding myself how lucky we actually are to have several great options to choose from. It feels good to know that our accumulation phase is behind us and we don’t have to make earning a high income a priority.
I started a Personal Finance (and FIRE) Book Club!
One thing I really want to get back into and focus on while we are in this Covid limbo / drifting state is reading books on personal finance and money in general. I have had a bit of a reading break ever since our kids were born (unless you count books on baby sleep and toddler tantrums…).
I started what I thought would be a small reading group with like-minded people. It turns out that so many of us in the FIRE community would like to read more books on our favourite topic and discuss them with others. Our brand new Personal Finance and FIRE Book Club has grown like crazy since we started it about two weeks ago. In July we are reading our first book – The Psychology of Money by Morgan Housel. I’ve just started it and am really enjoying it so far.
Feel free to join the club if you are interested!
I have a confession to make: Our spending on things like groceries and eating out have gone through the roof since the birth of Baby Flamingo #2. We cooked a lot less and spent more on take-out and partly prepped foods right after the birth to make things easier. That was completely fine, but unfortunately, it seems that we never went back to our old cooking and eating habits.
I was shocked when I looked at our expenses in YNAB and noticed that we spent $1,300 on groceries and almost $500 on take-out in June. We’ve decided to do “Frugal July” instead of Dry July this year. We are cooking meals from scratch focusing on what we have in the freezer and pantry already. And we’ve limited our take-out budget to only once per week.
I guess this shows that is it important to monitor spending habits regularly. Temporary changes can easily become permanent without anyone noticing. Being super frugal has never been a priority for us, but this kind of spending is definitely excessive. Increases in spending should ideally result in an increase in happiness or at least offer value. This has not been the case for us in this instance, so it’s time to make a change!
It’s been another amazing three months for our nest egg. When you look at the chart below you’d be forgiven to think that we have been adding funds to our investments, but we haven’t. The nest egg has been doing all the heavy lifting. I am aware the markets are crazy at the moment and that this kind of growth won’t go on forever, but it really is nice to see that we’ve built a snowball that keeps growing.
Over the last quarter, we went from 13.97x our living expenses to 15.4x. We really can’t complain about that!
The chart also shows our projected FIRE date. If we achieve average returns of 7% (inflation-adjusted), we will hit FIRE sometime in 2028. The slightly unnerving thing about CoastFIRE is that we are completely at the mercy of the markets because we are not contributing to our investments anymore. So our projected date will change often while we are coasting to Financial Independence. We have confidence in our investments and diversification, but I know the path will be bumpy.
Over the last quarter, we have continued investing the cash part of our nest egg into ETFs (IOO and IOZ to be exact) and will continue to do so until the cash allocation hits 10%.
This is what our current asset allocation looks like:
We celebrated the blog’s 3rd birthday in May! Thanks to everyone who has followed and supported us over the last three years!
Lately, I have been thinking a lot about the direction I want the Money Flamingo blog to go moving forward.
After being told over and over for years that I need an Instagram page for the blog I’ve recently created one. I actually signed up a while back but never even logged in once. I don’t have a personal Instagram profile, so the platform is really new to me. What struck me when I had a look around is that there seems to be a whole universe of FIRE followers and content creators on Instagram who don’t have blogs. I had no idea. Some of their content is fantastic. There are also lots and lots of “finfluencers” (often in their early 20s) who publish content on investing, FIRE and personal finance in general. Some of it is great, some of it not so great. The overall vibe is a lot different from and a lot more salesy than the blog-based community that I’m familiar with (I’m probably showing my age here…).
I have also noticed a bit of a shift even in the blogger world. There are a lot of new blogs popping up that seem to have a different goal compared to most FIRE blogs just a few years ago (making money vs. sharing knowledge). I have to add that since having kids I have not really followed many other blogs, so I probably missed some of these developments. I recently read an article by Tanja Hester in which she suggests that the FIRE movement has been co-opted by the “get rich quick” crowd. I don’t agree with everything Tanja writes in this article but she is spot on with this observation. There is still a lot of great FIRE content out there but I find that there is now also a lot more content by people who want to use the FIRE movement to make a quick buck, which is obviously not great.
I am not sure what all of this means for the movement in general and for the Money Flamingo blog in particular, but it is something that I have been thinking about a lot. If this the direction the community will continue to move into I am not sure I want to be part of it. More on this to come…!
Thanks for reading!