Disclaimer: This website (the “The Money Pal”) is published and provided for informational and entertainment purposes only.  The information in this article constitutes the interviewee’s own opinions and it should not constitute as personal advice nor any formal recommendations.

The Inside Word #8 – FIRE With A Family

Blake is a 33-year old father of 2 with a keen passion for all things finance and investing related. He works full time in the mining industry as a Business Improvement Professional and when not at work he uses his time off to create content to help others better their financial situation. Blake and his family have a goal to be “work optional” before the age of 50 by achieving financial freedom through investing.

G’day Blake, it’s a pleasure to have you on the Inside Word. As I usually do, let’s kick off with a speed round ⬇️

If you could live a week at any point throughout history, when, and where would you? 

I’d probably go back to when Bitcoin first saw it’s jump from zero, the week of July 16, 2010. I’d invest $10k.

First thing you do when you wake up?

Turn the espresso machine on. Love that dirty bean water!

3 People you’d invite to dinner? (Dead or Alive)

Warren Buffett (because he’s the goat of investing), Gary Vaynerchuk (because he’s an inspirational dude) and Jack Bogle (because, index funds!)

How often do you invest?

I aim to invest twice a month when I get paid. I automate what I can so I don’t have to think about it.

What’s your Targeted FIRE Age?

Before 50.

One piece of advice you’d pass onto your 20-year-old self?

Always have an emergency stash of cash & prioritize investing at least 20% of your post-tax income into broad market index funds. The earlier you start doing this, the more wealth you’ll build due to the magic of compound interest.

1. Can you tell me more about what motivated you to start sharing your journey to FIRE through Fire With A Family? 

After a family emergency in 2019, I realized I couldn’t cover the cost of travel to return home to be with my family. This was the moment when I said to myself “I’m sick of living like this”, always in debt and living paycheck to paycheck. Once I made the commitment to change, I educated myself through every avenue I could (podcasts, books, YouTube, etc).

After 6 months or so I realized we COULD budget and we COULD save and we COULD invest, as long as we had a good plan and discipline. It was then that I realized that we are just your average family, and if we could do it, so could others! This is what inspired me to start sharing our journey – all the ups and downs – and share what we learn along the way. A lot about personal finance is simple, but we overcomplicate it and put it in the “too hard” basket. I try to simplify financial concepts and encourage others to take charge of their finances to build wealth over time.

2. You’re an inspiring example that it is possible to work towards FIRE while raising a family. What advice would you give to anyone planning to start a family, who doesn’t want to compromise their FIRE Goals in a major way?

Raising children will be expensive. There’s no two ways about it. Your financial situation, goals, priorities and FIRE timeline will have to change if you add children to the mix. One parent may wish to stay home and take care of the kid(s) and this means you’ll have to live on one income. So before you have kids, make sure you can live on one income, while still saving and investing a desired amount each month.

Then, while both of you are still working while planning a family, the “extra” income from the other spouse can be used to top up a savings account that will be used for child-related expenses when the baby comes. In doing so, you’ll have plenty of cash to cover the costs of raising a child, while still comfortably working towards your FIRE goals with the earned income from the other spouse.

3. Reaching FIRE can establish the foundations for the creation of true generational wealth.  What’s been the best thing you’ve done to create economic security for your family? 

The best thing I’ve done is build a 6 month emergency fund and began investing in index funds outside of retirement accounts. I believe everyone needs a well-stocked emergency fund, regardless of how wealthy you are. Investing outside of retirement accounts means I’ll be able to access my wealth – penalty-free – when I retire early.

The investments within my retirement accounts will be a “bonus” when I reach the age in which I can access them. Aside from that, the day to day practice of expense tracking and budgeting is a foundational skill that my kids will be introduced to at a young age, to ensure they have the skills and tools to be good with money very early on in life.

4. How would you describe your investment strategy from an asset allocation perspective and how does it align with your financial goals?

My investment strategy is simple. It’s almost completely passive. It’s been proven that passively managed funds (that track market indexes) outperform actively managed funds over the long term. This is why 95% of what I’m invested in is invested in a few index funds/ETFs. You don’t have to get fancy and try to pick “the next Google or Amazon” to build wealth. Simple is often better. I hold an ETF that tracks the S&P 500 in America, an ETF that tracks the ASX200 in Australia and an ETF that tracks the developed world excluding the US. I also have a small percentage of my net worth in crypto and hold no individual stocks.

5. Arguably, protecting wealth is as important as growing it. Do you have any strategies in place to protect your wealth from downside risk?

There is a rule of thumb that suggests you should have a percentage of bonds/fixed income ‘stable’ assets in your portfolio equal to your age. E.g. If you’re 30, then 30% of your portfolio should be in bonds. I don’t subscribe to this thinking. I hold 100% equities because I’m young (33) and have time to recover from market cycles, and the total return is likely to be higher over a long enough time period, which for me is decades.

When I begin to approach FI status, I’ll look to add more conservative asset classes like bonds to my portfolio so I can have more of a predictable income stream, but I still plan to hold a large percentage of my portfolio in equities. Any money I invest I don’t plan on touching for decades, so I can handle the ups and downs of the market.

6. Have you thought about how you’d like to spend your time once you’ve reached financial independence and the amount you’ll need to earn passively to sustain your desired ‘retirement’ lifestyle?

I don’t think I’ll actually retire once I hit my FI number. It will be a nice milestone, but I enjoy what I do for a living so I don’t think I’d just up and quit. I may scale back to a few days per week or take extended periods of leave though. I’d imagine we’ll have grandchildren by then so I would like to spend more time with my family without the burden of “needing” to work if I choose not to.

7. What would you say is the most fundamental investing concept that most people aren’t aware of or don’t adopt?

Investing doesn’t need to be complicated. You can build wealth reliably through passive investing strategies which don’t require you to be an expert on financial markets. Investing isn’t picking stocks or trading in and out of positions trying to earn a quick buck. Investing is playing the long game, buying quality assets consistently, holding them for a long time, and letting compound interest do its thing until you’re ready to retire. 

8. What’s one share market myth that you’d like to bust for readers without any experience in the market?

Paying someone to manage your investments – like with an actively managed fund – won’t guarantee you better results. Most often, the net result after fees will be lower than the average market returns over the long run. Investing doesn’t have to be complicated. With things like index funds and ETFs these days, you can build wealth without knowing too much about how the stock market works. 

9. Do you have any must-read books you can recommend to readers? (These don’t need to be associated with finance and/or investing)

Definitely have a few favourites!

1. Rich Dad Poor Dad
2. The Millionaire Next Door
3. The Seven Habits of Highly Effective People
4. The Little Book of Common Sense Investing
5. The Intelligent Investor
6. The Bogleheads Guide to Investing
7. Entrepreneurial Leadership
8. A Random Walk Down Wall Street
9. How to Win Friends & Influence People
10. Atomic Habits
11. Start With Why

Want To Read More From Blake @Fire With A Family? Check out his Blog!

For more of Fire With A Family, Follow Blake on Insta, and while you’re at it, why not throw me a follow @themoneypal.

Disclaimer: This website (the “The Money Pal”) is published and provided for informational and entertainment purposes only.  The information in this article constitutes the interviewee’s own opinions and it should not constitute personal advice or any formal recommendations. The author is NOT a financial advisor and does not hold an AFSL. This is not financial advice!