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Retires at 20: “We didn’t need as much as we thought”

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For many disgruntled Australian workers COVID-19 has become a wake-up call.

People have changed jobs en masse in search of more meaningful endeavors or lifestyle changes, and some completely give up daily work.

We cover six Australians who are on their way to financial independence and early retirement.

Dave
PENSION: At 28 years old.
REQUIRED INCOME: $ 45,000 a year for Dave and Allison.
INVESTMENT STRATEGY: Sell investment property and buy more index funds and REIT.

When you ask people about their savings and investments, they will often tell you that they are not earning enough to do both.

Dave Gove turns this excuse upside down. Dave and his partner Alison earned an average of about $ 75,000 a year. Notably, Dave retired early at just 28 years old.

It took him 10 years to accumulate enough funds and invest to earn an income to do the simple things in life that he loves. He never spends capital, lives on income. “We just buy what we need and what we think is worth,” he says.

How did Dave retire at 28?

After he started working at age 18 and saved 20% of his salary, he quickly became disillusioned with his work and saw that his colleagues were unhappy and unhappy living from day to salary. He realized he didn’t want to be “the cog in the car for the next 40 years”.

At age 19, Dave increased his savings rate to 35%. By the age of 20, he raised it to 50% and began to master investments, in particular the purchase of real estate. At age 21, he met Allison, who also liked the idea of ​​financial independence.

By age 22, Dave, working as a forklift driver, bought investment property and they raised the rate of their savings to 60%. When Dave was 23, he bought another investment property, and Alison also one. Dave worked overtime to raise his savings rate to 65%.

At age 24, Dave and Allison officially pooled their finances and together acquired investment real estate. Their savings grew to 70%. At 25 they bought two more properties and rented a room in their house. Their savings reached 75%.

At 26, buying another property, he started learn about investing in stocks and the income stream that generates dividends. “We also realized that we didn’t need as much to retire as we thought,” Dave says. They sold their first property to start investing in stocks.

At 28, they achieved financial independence, left full-time jobs and, as Dave says, “brought our lives back”. They continued to build their portfolio of stocks, using dividends and money from real estate sales to make a living. They earn some income from part-time work that they really enjoy.

No wonder people want to know how Dave managed to retire at age 28, so he started a blog, Strong money Australiato explain his thinking and strategies that helped him achieve financial independence. He found that he really enjoys writing and answering readers ’questions.

Two years ago, Dave teamed up with Pat Seirac, a lifelong celebrity in the FIRE community. shuffle.com blog. Pat is 60% on track to reach his $ 1.2 million goal. Their two-week FIRE / Chill podcasts about money and investment range from “Is insurance worth it?” and “Youth Fucked Up?” to “Buying Real Estate” and “50 Inexpensive Pleasant Things”.

Dave’s experience with real estate investment versus index funds highlights. He reviewed a recent management statement about one of his investment properties, and the $ 5,000 he earned after spending led to $ 500 for him – not including mortgages.

For comparison, a dividend payment of $ 4,000 from it exchange-traded funds and stocks carried no bills and even some tax credits. It was all income.

Both Dave and Pat surprised the FIRE movement by buying a house to live in. They have been tenants for years. Living in a small apartment, Pat says he is looking forward to extra space and a garden, as well as opportunities to make adjustments to the house.

The hotel is located outside the city, close to bike paths and the beach. He went with Tic: Toc, an online bank with low rates, to get a mortgage.

Dave bought on the same street, on the same side where he rented for four and a half years. Long-lived turtles lay eggs near his property. Every year he helps the turtles climb into a nearby lake.

Dave and Allison moved to the area with the regional park and lake on the doorstep when, after retirement, they no longer needed to be around work. They love the area, ride bikes and walk Boss, their dog, and have always said they will buy a house when it hits the market.

They are selling investment property to help finance a home that is in disrepair. Dave says they spend their budget on homework and are in no hurry to fix everything at once. “People are so excited and fascinated by the way they want to have a home. It never ends.”

Dave’s next book comes out later this year. It aims to teach people to think about financial independence so that they can adapt its philosophy and do it themselves.

Dave’s Chief Investment Council

“I use Pearler, a cheap brokerage platform for long-term investors. People like us in the FIRE community have not been served before, because brokers just want people to trade, trade, trade. “

Dave says the features of traditional online brokers tend to distract and hinder long-term investors.

Pearler’s the auto-investing feature allows investors to set up direct debit every week, month or whenever you want to automatically buy shares, such as exchange-traded funds and exchange-traded investment companies. Over time, the effect of compounding creates a portfolio that can lead to financial independence, a home deposit, or other financial purpose.

The three most popular investments made by 29,000 Pearler investors are the three Vanguard ETFs: the Vanguard Australian Shares Index (ASX: VAS), the Vanguard Diversified High Growth Index (VDHG) and the Vanguard MSCI International Shares Index (VGS).

Pearler charges $ 9.50 for trading on the ASX. He made a deal with some ETFs to keep them free if you keep them for a year.

Perler was so impressed with Dave that he invested in the group.

Follow the news to get more information from Australians on the road to financial independence. Or, order April issue Money read their stories and more.

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https://www.moneymag.com.au/early-retirement-in-your-20s

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