Welcome to our latest quarterly update where we share the ups and downs of our coasting journey from Flamingo FI to full Financial Independence.
If you are new to the blog and not familiar with our plan you can find an overview here.
Life Update
It’s certainly been an interesting three months since our last update.
In August we flew to Europe for six weeks. It was our first international trip post-Covid and long overdue. It was really nice to reconnect with my extended family and watch the kids spend quality time with their grandparents.
If you’ve followed the blog for a while you probably know that we have been in two minds about whether we want to stay in Australia long-term or relocate back to Europe at some point. During this recent trip it has become very clear to me how much I feel at home in Australia now and what a fantastic lifestyle we have created for our family. Living so far away from family is hard (as many of you would know), but I think this is home now. Things change all the time, but it feels like Australia is the best place for our family – for now anyway. It is good to get a little closure around this topic because it has been playing on my mind for a long time.
Our plan is to take the kids to Europe for an extended holiday once a year. It is really important to me that they know that they have a second home and a family on the other side of the world. I am also doing everything I can to ensure they become truly bilingual. This is totally relevant for their own FI journeys, by the way, as it opens up opportunities like free university when they are older.
In other news, we finally settled on our house in SE Queensland last month. It was a lengthy and frustrating process and I am really glad it’s finally done. We won’t move up there immediately as we are just happy with how things are going for us here in Sydney at the moment. So for now we are renting the house out, but it’s nice to know that we now have a home for our family that we can move into when we are ready.
Work-wise nothing much has changed. I’m really enjoying the mix of my part-time job, my flourishing little coaching business and the consulting business I’ve recently started with a former colleague. After many experiments and lots of trial and error, I think I’ve found my ideal work-life blend. It meets all of my work values and offers plenty of flexibility for my most important job – my role as Mummy Flamingo.
I often think back to the early days of our journey to FI when all I could think about is getting out of the rat race and not having to work again. Now that money is no longer a major obstacle and I get to freely choose when and how I want to work I am more motivated than ever. I had always thought that semi-retirement is the FIRE sweet spot. So far this has definitely proven to be true for me. I actually wish I had more time to tackle all the ideas and projects floating around in my head. It’s funny how things change when you shift your perspective.
FIRE and Net Worth Update
Another bumpy quarter for the global markets and our little nest egg.
The reality of coasting to FI is that whether your portfolio grows or shrinks depends entirely on market performance. It’s a bit like being on a tiny boat in the middle of the sea. You feel the waves and bumps a lot more than someone who is still in the accumulation phase and can add fresh funds to their portfolio when the markets are down.
However, I am glad to report that I am not concerned by the recent downturn and all the headlines about shocking inflation figures and a looming recession. I guess this is where 10+ years of reading books on investing and developing a good money mindset really pay off. We have a broadly diversified portfolio and I have 100% confidence in our plan. It’s all about staying the course and taking a bird’s eye view in my opinion.
I know that we’ll get to our destination sooner or later. There is no rush at all because we are already living our ideal post-FI lives and to be perfectly honest, FIRE feels less and less relevant to our lives and happiness.
Overall, our portfolio didn’t do too badly over the last quarter. I was surprised to see that we are pretty much back to the same spot we were three months ago. Our portfolio went from 19.8x our annual living expenses to 19.9x. Not a bad result at all considering what is going on in the world economy!
Reminder: Instead of using dollar amounts, we like to display our net worth and portfolio value in years of living expenses. Real wealth is about time, not money, so I find this way to look at things much more useful. I increase these annual amounts with inflation on a quarterly basis by the way.
Our total net worth number sits at around 25.4x our annual expenses. In addition to our FIRE portfolio, this total net worth number includes things like cash savings, kids’ investments and home equity. It’s not really relevant when it comes to early retirement, but I like tracking it anyway as a measure of our overall wealth position.
And that’s it for our Q3 update, thanks for reading! 🙂
Mummy Flamingo ❤
That’s my main gig!
Great update. Congrats on the house purchase. I have one question: You wrote you have over 25x expenses in total, doesn’t that make you FIRE?
We do track ours the same…
We have over 25x in our ‘Net Worth’ number but we only consider assets that we can actually use in our actual number FIRE number… Although equity in a property for instance is part of your overall net worth, you can’t sell a bedroom only to use as that years 4%.
Just makes the FIRE number more real for us.
Mark (Ice Cream FI)
Please tell – what is ice cream FI? (Sounds delicious)
My part time hobby business is that I own a soft serve ice cream van.
https://www.facebook.com/SoftServeIceCreamGeraldtonBigSofty
Well I guess if I put every dollar we have into the FIRE portfolio then yes, we would be at FI. But that’s obviously not something we would do in practice. Mark explained it well in his comment. The FIRE portfolio is what we’ll retire on, so that’s where we’ll eventually need 25x living expenses.
Same here. I’m not sure if I should count for property, so it still take work to get to 25x. It’s good to be a bit conservative in calculation.
Well if it’s an investment property you should count it in for sure. But the house you live in is not a FIRE asset if you ask me.
Another great update. I find these so motivating. Thanks for sharing how your life is changing as well, it’s been a big inspiration following your journey over the past few years. Glad you are staying here in OZ!!
🙂
Fantastic update – really enjoy your blog.
Could you please clarify for me, when calculating your Flamingo FIRE number, should you be considering the equity in your Principal Place of Residence (PPOR) , even though there is no intention to use the equity to live off? Same applies for Superannuation, could you please confirm if this should be considered in the Flamingo FIRE number.
Apologies as I’m sure this is already covered somewhere however I couldn’t find it.
Thanks!
Hi Claire,
No, you should not include the equity in your home. The equity is part of your net worth, but not part of your FIRE portfolio (because it can’t be sold or used to generate an income in retirement). Super is different, we include our super because eventually we’ll use it to fund our retirement lifestyle. Hope that makes sense!
Why SE Qld?
Lots of reasons. We were pretty open but the affordability and lifestyle combination made it the winner for us. Plus we have family in QLD, so it’s also nice to have them a bit closer.