The sky isn't falling, and you should be investing

I generally avoid mainstream media. I realised very young that most news shows are interested in showing you all the horrible things happening in the world. They devote 90% of an hour news block to tell you about all the bad things that will never affect you (Do we really care that a flock of chickens escaped and are running amok in a caravan park?) and the other 10% to sports.

Unfortunately this obsession with the worst news has burrowed into the minds of most people, and turned us all into hopeless pessimists. Investors are convinced the next market crash is right around the corner, and sitting on their piles of gold, waiting for the best time to invest.

That time is now.

This post isn't going to be a pearl of economic wisdom proving that the economy is going to continue on it's amazing upwards trajectory without a blip. In my lifetime there have been two great market crashes (the dot com bubble and the GFC) and pessimists are convinced that Australian housing is overpriced and the bubble will burst any day and drag the share market down with it. I've been hearing that for ten years, so I don't trust those experts.

Market returns over the years

That's not to say it won't happen, but I'm not stressing out about it. Markets will yo-yo up and down, but in the long term they'll keep travelling upwards.

Take for example, this chart from Vanguard.

This chart show what would happen if my parents invested $10,000 in Australian Shares from the day I was born until now. Despite two major crashes it returns over 10% per annum, and is now worth $123,000. Over such a big timeline, the dot com bubble is barely visible.

If my parents had been a little more conservative and waited until just before my 15th birthday, they would have invested right before the Global Financial Crisis. Let's say they invested in April 2007. Ten years later, the chart looks more like this.

This chart is much flatter, but it is still worth 4% per annum. While not as amazing as the last one, this chart shows what would happen if my parents had bought in at the worst possible time in my life. A year after buying in, they would have been down 16%, or over $3,000. However, as long as they didn't panic and sell, just a few years later they would have made that money back, and be $4,000 ahead.

Of course, they could have been really super smart, and bought in at the bottom of the market. That's the dream, because then their returns would look more like this:

From February 2009 to now, the share market has returned 10.9% per annum. A $10,000 investment becomes $24,000 in just a few short years without you adding a cent to it. Investors often quote 7% as a historical average, so anyone who could get 10% would be absolutely thrilled.

Invest at the bottom of the market... right?

So, Hands up everyone who wants a 10% return on their investments? Yepp, me too. Keep your hand up if you're willing to sacrifice $85,000 to get the right market timing. Not me.

Once again, hypothetically, let's say my parents had $20,000 to invest in me when I was born (if only!). To hedge their bets, they put $10,000 in a Vanguard Australian Shares Fund, and they hold $10,000 in cash, waiting for the best time. But watching the market crash in 2009 they were too scared to deploy that $10,000 in cash.

The $10,000 in cash is now $30,000 because it's been sitting a high interest bank account. The shares had grown to $95,000, but when the market crashed they dropped to $50,000 in a few short months. So my parents decided it was too risky to put the money into the markets, and they left it in cash.

Today, at the ripe old age of 26, my returns would look something like this:

That rapidly growing blue line is now $123,000 of Vanguard shares, paying dividends every year. That purple line, crawling upwards at a snails pace, is the cash that was held aside for when it was the 'right time'. It's only worth $39,000.

So when is the best time to invest?

The best time to invest is yesterday. Or last year. Or even last decade if you could. However I assume that none of you have a time machine handy, so the best time to invest is today, and everyday moving forward regardless of the doom and gloom you keep hearing.

Over almost any ten year period* you will make more money from investing than from stuffing your mattress and waiting for the apocalypse to come. The market might crash tomorrow, it might crash next week, it might crash the day before you retire early with your million dollar nest egg.

Most highly paid hedge fund managers can't consistently beat the market. Even if they could, they can't stop a crash from happening. If (like me) you're many years out from retirement, the best place for your money is in the markets, earning a return.

And if the market does crash tomorrow, I'll be the first one at the sale buying up even more shares to fund my future.


* While I was playing with the Vanguard Index Charts I managed to find a couple of scenarios where cash was a better bet over ten years. Over 15 years, cash never won, even when you set the 'end date' at the very bottom of the GFC.

The Holy Trinity of Financial Success

For most people three primary expenses dominate their expenses - housing, transport and food. 

In my case they take up 37.5%, 0% and 6% of my expenses - in that order. Lower expenses are a key path to Financial Independence, which is why finance bloggers spend so much time talking about food.

By keeping my expenses lower, I'm fast-tracking my path to Financial Independence, and I'm doing it on a pretty cushy lifestyle.

According to MoneySMART our the three biggest expenses at any life stage are Housing, Food and Transport. With the exception of single folks under 35 who are spending a little more on recreation - maybe it all the dating they're doing! Maybe they need some more frugal date ideas like these.

While frugality can be used to target any part of your life, slashing the big expenses will have the best outcomes - and you can do it without compromising your happiness.

Cheap house 

While my housing expenses make up 37.5% of my budget at a whopping $15,000 a year, I also bring in $7,800 a year in 'rent'. I started house shopping before Mr. FIRE and I decided we wanted to live together. I planned to have a room-mate to help offset the costs. 

During the house hunt Mr. FIRE pointed at the maybe he could be my housemate. Since the house (and the mortgage!) are entirely in my name, Mr. FIRE pays me rent. As a result the net expense of my house is only $7,200 a year, or a measly $600 a month.

My house isn't quite this small,
but tiny houses are gorgeous!

This cost includes all the bills, repairs, maintenance and upgrades. 

After crunching the numbers I could have bought a much pricier property (even without Mr. FIRE or another room mate!) but by choosing a smaller (but still super comfortable!) home I slashed my housing costs.

Initially, the plan was to put Mr. FIRE's rent payments directly into my mortgage. With an extra $300 a fortnight, I would have cut my mortgage repayment time in half, and saved $88,000 in interest payments.

Instead, I'm choosing to leverage my mortgage and invest instead. Assuming a 7% return, Mr. FIRE's rent will be worth over $200,000 in fifteen years. I'll still owe $150,000 on my mortgage, but I'll be $50,000 better off. 

While some people might prefer to have no debt, my $200,000 in investments will generate more than my mortgage will be costing - winning! All through choosing a smaller house and getting a 'room mate'.

Cheap food

According to MoneySMART the average young couple are spending $200 a week on food. In contrast, I budget $200 a month and I assume Mr. FIRE spends the same. Hopefully one day I'll convince him to track his spending so I can report this accurately!

While I have a love of frugal foods, baking my own sweets, making homemade snacks, and I have learned some great meat-free dishes to keep the cost down, these fancy tricks aren't the core of why I spend so little.

The main reason my food costs are so low is simple - I cook for myself, and we very rarely go out to eat. In my Epic Food Week post I outlined how I stay on top of my food budget, and keep food waste down.

You can make these are home ridiculously easily!
You just need sauce and cheese. Pineapple is also
a brilliant addition, or sun dried tomatoes.

One of our favourite lazy meals is chicken schnitzels and chips. This is a basic pub meal that normally costs around $18 each. In contrast, we make it at home ourselves for less than $3.50 each. We could do it for even cheaper, but we like to top our schnitzels with sweet chilli sauce and melted cheese, delicious!

Plus we don't have to shout over bad pub music to talk to each other, deal with obnoxious Friday night crowds or find parking. Instead we have cheap delicious food in the comfort of our own home.

If we were to go out once a week for schnitzels (rather than eating at home) we would be spending an extra $15 a week each. This small change is worth $800 a year, or over $11,000 in 10 years. 

Of course, not many people could go out for dinner and only spend $18 each. While $18 meals exist,  it's more common to find meals ranging from $20-$30. Add a beer or wine on top of that and you're looking at another $5-$8. It's not unrealistic to spend $30+ on one meal.

On average Australian's go out to eat 2-3 times a week. By learning to cook delicious food at home and dropping your restaurant trips to once or twice a month you can save almost $300 a month and still enjoy fancy date nights.

With such big savings, it's easy to see why Finance Bloggers talk about food so much!

Cheap transport

The final category in the Holy Trinity of Finances is transport. For most people this means cars. A friend of mine working as a second year teacher has just taken out an $8,000 loan for a new car. In a public school teachers salary this is more than 10% of her pre-tax annual income.

On a 5 year loan, the repayments are $42 a week, which means 4% of her take home pay is taken up by her car loan payments, before she even starts driving.

Add in another $600 a year in insurance, $600 for registration, and $50 a week on petrol, her car is costing almost $6,000 a year. 11% of her take home pay is spent on maintaining a car.

This cost isn't including maintenance, regular services, road trips, and any other little expenses that crop up along the way. I don't say this to shame her, this is the normal way that most people manage their transport.

When couples move in together, they tend to both bring a car to the relationship - as Mr. FIRE and I did. However, after living together for four months, my car looked like this:

I haven't owned a car in two and a half years, I just ride a bike everywhere instead. When Mr FIRE and I moved in together I bought a property that was half an hour ride from work, and fifteen minutes from roller derby training. On occasion I need to go further afield, and either I borrow Mr. FIRE's car or get a lift with a friend.

Over two and a half years, my transport costs look something like this:

• First Bike : $600
• Bike accessories : $300 (lights, panniers and a rack)
• Second bike : $550 (Some jerk stole my bike!)
• Replacement bike accessories : $150
• Replacement bike lights ($100 - seriously, my lights were stolen a month after I bought them)
• Bike service : $80
• Various at home maintenance parts : $100
• Total : $1880 in two and a half years - $14 a week

Biking everywhere costs me $14 a week. If my bike hadn't been stolen, it would be a measly $10 a week. In contrast my teacher-friend with her $8,000 car loan is spending ten times as much, at $115 a week!

Let's consider this cost over ten years. Assuming that I have to replace my bike every 3 years for whatever reasons (thieves are the worst!) I'll continue spending $14 a week. In ten years, I'll spend $7,280.

In the same time frame, assuming that my friend replaces her car in five years, and therefore her payments remain constant, she will spend $59,800!!

Considered another way - I save $100 a week compared to her, if I invest this savings, I'll have $75,000 in ten years.

Spend less, cycle more, retire early to cheese and wine!

Or considered yet another way, I like to look at how much I need invested to cover the cost with passive income. To cover the $14 a week cost of owning a bike, I need to invest $18,200. However to cover the $115 a week of car ownership, I would need to invest almost $150,000!

The Holy Trinity of Financial Success

Put together, food, housing and transport form the three biggest expense of our lives. Following the normal path you can easily spend $40,000 a year on these three main expenses. With a few lifestyle changes like a smaller home with a roommate, cooking great food at home (maybe even eating some meatless meals)  and swapping out car trips for walking, or riding, you can save thousands of dollars a year.

Plus, with a smaller house, there is less to clean.

Budget Reboot Challenge: Eating Meat

Hello Budget Reboot, have you tried turning it off and on again?

Money saving posts are always the same - stop doing this, stop buying that, stop having any fun and live a sad deprived life while watching the numbers in your bank account tick up and up. Of course, they don't frame it that way, but when someone asks you to give up something you love in the name of money, we get pretty defensive.

Instead of 'giving up' let's try something new. Hit the refresh button on your spending habits with this Budget Reboot Challenge.

This month's challenge: Eating Meat.

Let's start with a simple assertion: Steak is delicious. Bacon is delicious. I think people are designed to eat meat and it tastes amazing - this post isn't going to try and convert you to a meat free lifestyle.

But what about a meat free meal. Just a couple of times a week.

Meat versus alternative proteins - in dollars

At my local supermarket I can buy chicken breasts for $9 a kilo. I can buy cheap casserole steak for $12 a kilo, or delicious marinated Kangaroo steak for $32.70 a kilo.

Or I can pick up a tin of mixed beans for $1.88 a kilo. I can buy a dozen eggs for $3, or collect them from my back yard for next to nothing. There are also an amazing variety of cheeses to choose from, as well as tofu, nuts, milk, yoghurt, mushrooms and other protein heavy vegetables. If you plan it well, you can get just as much protein from a meat free meal, for a fraction of the cost.

I'm not eating salad!

Okay, cool, that's fair - salads aren't for everyone, although a Lentil, Roast Carrot and Feta salad is divine. There are plenty of meat free meals you can take out for a spin that aren't salads.

Soup

A FIRE household favourite is a simple pumpkin soup. Made with butternut pumpkin, sweet potato, carrots, coconut milk and a little Thai curry paste, it's the only vegetarian meal Mr. FIRE actively begs me to make. You need a kilo of pumpkin, a kilo of sweet potato, and 500g of carrots. Peel and cube the whole lot and toss it in a giant soup pot with 2 tablespoons of Thai curry paste and a litre of chicken stock. Simmer for an hour, then blend and add 2 cans of coconut milk. It's one of the easiest vegetarian dishes I know, and costs less than $1 a serve.

Eggs

Another option is to have breakfast for dinner. Inspired by Adventures With Poopsie I've been having eggs on hash browns for dinner while Mr. FIRE is away for work. You can buy the hash browns frozen, or make your own.

To make your own hash browns you need:

• Two medium potatoes
• A small handful of grated cheese
• A pinch of chives
• A dash of salt and pepper

Peel the potatoes and grate them onto a plate. Zap the grated potato in the microwave for 2 minutes, then dump it into a mixing bowl. Stir in chives, cheese, salt and pepper. Dump the whole lot in a hot frying pan and press flat - the flatter it is, the better it cooks. 

Hash browns take 5-10 minutes to cook through, so keep an eye on them and start cooking the eggs when you think they're done. The extra couple of minutes on the hashbrowns is important to make them extra crispy. Then enjoy delicious, easy dinner for about $1.50.

Beans and rice

Finally, I need to mention the Frugalwoods Rice and Beans recipe. At first I thought this would be sad and dull, but worth it as an occasional ultra frugal meal. I was wrong, this is one of the most delicious meals in my lunch rotation for less than a dollar a serve.

Give it a whirl, you won't regret it!

Cheap, delicious options

There are hundreds of ways to eat a meatless meal. The ones I've listed above are just the super easy options. Each meal listed above costs around $1 a serve. In contrast, a single pork loin chop would cost me $3.50, plus the costs of sides.

A single meatless meal is $4 cheaper than a meat based one. Having a single meatless meal each week will save you $208 a year, invested that $4 is worth $3,000 over ten years. For another way to look at cost, you would need to invest $5,200 to have a passive income of $4 a week to pay for that steak.

Turn it off and on again: Expensive meat based meals

The point of the Budget Reboot Challenge isn't to force you to change your ways, but to commit to something for a set period and see what it's really like. Turn off eating meat for every meal, and at the end of your commitment, ask yourself if you really need to add it back in again?

You can urn off eating meat in a variety of ways: commit to meatless Mondays for a month. or perhaps not eating meat for a full week. Maybe you're only going to commit to learning one meat free recipe. Pick something you can handle and make a commitment to yourself.

I, LadyFIRE, commit to finding a meatless meal that Mr. FIRE will enjoy.

I know that doesn't sound like much, but you haven't met Mr. FIRE. It's going to be a challenge!

At the end of the month, turn it on again: This is the fun part. After the end of your commitment, you're free! You can eat as much meat as you want, but first I need you to do a status check for me.

Did you enjoy your meatless meals? Maybe you could cook them more often?
Did you save money? How much?
Did you really feel like you were missing out? Did those meatless meals leave you hangry or were they actually pretty satisfying. Maybe you could keep going with it?

Can you retire yet?

Financial independence is a wonderful dream. At the start it's overwhelmingly exciting to realise that you don't have to work until you're old and grey. You start cutting costs left right and centre and see your bank balance sky rocket. You dabble in investing and start to understand annual returns, dividend reinvestments and rental statements. You automate your finances and confirm you're on track to freedom! 

And then the waiting begins...

I discovered this concept of early retirement in 2014. In that year I opened a RateSetter account and started investing in peer-to-peer lending, as well as buying my first home. In 2015 I opened a Vanguard account. In 2016 I opened an Acorns account. In 2017 I'm trying to buy another investment property.

In the last 3 years my net worth has more than tripled. My RatesSetter account alone pays almost $100 a month. My Vanguard account is returning the expected 7% per annum. Last year I pulled in more than $10,000 in passive income (not counting the rent Mr. FIRE pays to live here). 

Despite all this, the road to financial independence feels like watching paint dry.

Thankfully, I'm not the only one on this journey. Turns out a lot of people have gotten bored on the path to financial independence, and built a variety of tools to answer the question - Are we there yet?

Networthify

Let's start with the classics. One of the most widely shared calculators is Networthify's "When can I retire?" calculator. It super simple and super friendly to use. Simply plug in how much you earn, how much you spend and how much you save. You can actually get away with only plugging in two values and it will work the other one out for you - neat.

Then add in your portfolio value. This is your net worth, but don't include the equity in your own home. You can't eat the equity in your home (which is why I recommend investing instead of paying down your mortgage) so don't include it in these calculations.

If you earn $40,000 a year and spend $20,000 your chart will look like this:

This tool focuses on the power of increasing your savings rate. If you earn $100,000 and still only save 50% of your income, your time to retirement will be exactly the same. But if you can earn $100,000 a year, while maintaining a frugal $20,000 a year lifestyle, you can retire so much sooner.

Check it out. Start by plugging in your own numbers to see how far away your retirement is. Then tweak your spending and saving to see how much a little change can have a big impact. 

Mad Fientist Laboratory

A much fancier one to play with is the MadFientist Laboratory. You can plug in you spending, saving and net worth each month and the FiLab will spit out a wonderful chart, plus some key dates.

Unfortunately the Lab doesn't play well with investment properties. For example, my property makes a bit over $15,000 a year in rent, but has almost the same amount of expenses. I have equity in the property which contributes to my networth, but that doesn't directly lead to income. 

I could update the lab with my only my stocks and peer to peer lending, but that wouldn't be the full picture either, so I take the 12 years to FI with a grain of salt.

If you didn't have investment properties, I think the FI Lab would be super accurate. Either way it's great fun to play around with - I've been keeping mine updated for almost three years! You do need to sign up, but that's just so your information can be saved so you can come back to it. I've never paid a cent, or received any dodgy marketing emails - this one is safe.

Bayalis calendar

Bayalis Is The Answer supplies us with a calendar on the countdown to financial independence. When the fireworks start exploding on new years eve you're free! You can tell your boss where to stick it, spend lazy Mondays at the beach and hang out with your pets.

The FIRE Calendar isn't complicated, but it does give you the opportunity to triumphantly shout "Winter is Coming!". Simply plug in your current portfolio value, and your target number and bask in the results.

Simple! You can also plug in some rewards for yourself. Once you pass a certain day on the FIRE calendar, pat yourself on the back.

The Earth Awaits

This isn't technically a retirement calculator, but it's great fun on a Friday when you're just praying for the weekend to start. Take your current portfolio and divide it by 25. This is how much you get per annum if you quit working right now. Imagine you had a terrible day at work, so you sell everything, take your 4% returns on your investments and vow to never work again. According to the Trinity Study that 4% withdrawal rate will last almost indefinitely in most cases (but not all!).

Head over to The Earth Awaits with your new passive income and see where you could live. Plug in your monthly budget, family size and lifestyle, and see what you can afford.

If you're willing to live a 'lean' lifestyle in a one bedroom apartment there are 93 places you could live for under $1,000AUD a month. If you're interested in living in Madurai, you could do it for only $406.09. That's only $122,000 invested.

What can you afford if you quit right now

How long could you live if you retired right now? I built a nice basic calculator to tell you just that. Assuming a consistent return, and a consistent spend with just a couple of numbers you can see how long your portfolio would last. Check it out here - LadyFIRE's Quit Tomorrow Calculator. You'll need to hit the 'File' button and save a copy before you can start playing with the numbers.

Of course, you might not use this number to quit tomorrow and retire early. Maybe this is what you need to start that business you've always dreamed of. While I'm chasing Early Retirement, knowing that I could easily go ten years without working is overwhelmingly comforting.

This calculator maxes out after 125 years of calculations - medical science is great but I doubt I'm going to make it past 150!

Have a poke around at the calculators above and see how you're doing. Is Winter Coming? Will your portfolio get you through the next decade? Are you moving to Brazil? 

Five things you wont find in a finance bloggers budget

There are a lot of things in the world worth paying for. Good food, warm blankets, a roof over your head and comfy bed to snooze in every night. There are also a lot of things that you should never waste money on. Some are ridiculously overpriced, some are unfair, and some have free alternatives lying around.

It's important to keep in mind that just because we don't pay for these things, doesn't mean we're missing out. There are so many free alternatives in the world that it's foolish not to take advantage of them. In this world of entrepreneurs every single transaction has been monetized. From grocery shopping, to house chores, to paying for a puppy party, if you want to spend money on an experience, someone has devised a way to handle it.

Instead of paying, here's a list of five things you'll never see on a finance bloggers budget.

#1 Finance bloggers don't pay for music

I am listening to Spotify as I write this post. I listen to Spotify as I ride to work. When my friends and I wanted a dance party but couldn't afford a DJ we just spun up a great Spotify playlist.

You don't have to pay for Spotify. With the free version you have to listed to an advert every six or seven songs. It won't kill you, but you will reach a point where you can quote each advert word for word.

The only problem with free Spotify is that the bands don't make any money from you. If you want to give a band some money, find a way to do it directly. Buying albums or paying for subscriptions services gets a little bit of money to the band eventually, but most of it is eaten up by paying record labels and the platform.

#2 Finance bloggers don't pay for bottled water

The most ridiculous expensive first world luxury - bottled water. Seriously, it's just water! It comes out the tap! A litre of petrol is around $1.50 right now and everyone is constantly outraged at the expense of this processed, imported liquid that runs our cars, and yet we don't bat an eye at paying $3 a litre for water.

The water that comes out my kitchen tap costs $2.27 for a kilolitres. That's 1,000 litres, or 0.2 cents per litre.

While I'm complaining about water, be careful ordering water in a restaurant. I once asked for water for the table. The waitress asked if I wanted still or sparkling and (not being used to high class dining) I said still. When we checked the bill at the end of the night we were charged eight dollars for water.

#3 Finance bloggers don't pay bank fees

How much do you hate seeing this screen? "You will be charged $3.00 for this transaction". I love seeing that screen because I don't pay those fees. ING Direct pays those fees for me. The fee is charged by whichever banks ATM I am using, but ING simply covers the cost for me.

I guess it works out for ING as a cost of business. They could be paying to install and maintain ATMs, or they could just cover the cost of their customers using everyone else's ATM network. It's a great deal for me, and a great deal for them.

I also don't pay any ridiculous month to month 'maintenance' fees. In fact ING pays me one of the greatest interest rates on the market right now. Oh, and their customer service is pretty amazing.

Want to join the best bank out there? Sign up with my referral code EBB062. Deposit $1,000 in the first month, and ING will shout us both $75.

#4 Finance bloggers don't pay for garbage bags

This one baffles me. When you buy garbage bags you are buying something just so you can throw it in the bin. I wrote a post about throwing your money in the bin, but this is next level ridiculous!

A roll of garbage bags typically costs about $5 - just to wrap up your garbage. For some reason you can even get scented garbage bags.

Skip the absolutely ridiculous cost of garbage bags. You don't need it. Instead buy more fruit and vegetables, and hoard the small plastic bags that you bought them in. Congratulations - you now have an endless supply of garbage bags.

And no, your trash won't smell. With small bags you'll be taking it out from under the sink to the wheelie bin before it starts to smell bad.

Bonus - start a compost bin or get some chickens! Instead of an overflowing garbage bin, you'll have an abundance of compost and rich soil so you can grow veggies and slash your food bill.

#5 Finance bloggers don't pay for exercise

Look at all these fit gorgeous people running on treadmills. You want to be like them to, so you should pay for a gym membership right? Wrong! It's a trap and you should run (literally) the other way. Go outside. Find a park and run under some trees. Run at dawn if you're a morning person because it is gorgeous outside. Or if you're a night person download the free Zombies. Run! training app and run after dark - it's creepy and amazing.

Not into jogging? Prefer weight lifting? Keep on eye on Gumtree or Craigslist for weights, and let your friends know you're looking. Mr FIRE and I picked up a full weight lifting kit for a measly $50. Including a weight bench and close to 100kgs of weights. We're just looking for a squat rack if anyone has one going ;)

Prefer cardio - use youtube. Looking for some yoga? Try the Down Dog app. I've had three different yoga instructors and I can honestly say the Down Dog is better than all of them.

Bonus: Finance bloggers don't pay for ... date night accessories

As a bonus, many finance bloggers report every item of their spending. They meticulously list the cost of toilet paper, a dozen eggs, happy hour beers and their new-to-them shoes. But I have never ever seen a finance blogger report the costs of, ahem, 'date night accessories'.

Are we really boring? Or perhaps we're hiding our costs under and overblown grocery spend. Either way, you'll definitely never see these in a a finance bloggers budget report.

Save money, the environment and your vagina

As a female, I statistically spend 25% of my time walking around with my knees clenched together because it's That Time of the Month. I always resented that not only is it uncomfortable and inconvenient to have a period, but it was expensive as well. I used to spend $10 a month on tampons.

A couple of years ago I made the switch to using a cup, and I have never looked back.

Comfort and practicality

Firstly, a menstrual cup (specifically a Mooncup) is easily the most comfortable thing I have ever used. Back when I used tampons I always struggled to get them in exactly the right place, and I remember not being able to sleep some nights because I couldn't get settled. 

While the first month or two using a cup requires a lot of practice to get things just right, once you learn the tricks it's easy to forget that you are even wearing a cup. In fact I did the other day! 

Even better than the comfort though is the practicality. I think we've all had a moment when we've flipped open our tampon box to find that we've run out. In high school and university I remember awkwardly approaching near strangers to ask if they had any spares. 

I have been using the same cup for four years now. I have bought a second one, but that was only because I accidentally packed it in the wrong bag. I decided I'd rather have two Mooncups (one in each bag) than constantly remember to swap it between bags and end up awkwardly missing it.

Apart from some discolouration, my cup looks exactly the same as the day I bought it. You can wear it when you swim, when your hiking or playing high contact sports. I've worn it overnight without any spillage. I've also (accidentally) worn it for two days without a leak - I don't recommend this. For proper hygiene you should be emptying the cup twice a day, but it's so comfortable you can easily forget.

Day to day usage is super easy. You need to take out your cup and empty it twice a day. If you're in a public bathroom you can quickly wipe it out with some toilet paper before replacing it. If you're at home give it a quick rinse under a tap.

Long term, you should sterilise your cup every few months. You can either soak it in boiling water or wash it with gentle soap - just make sure you let it air dry after. It's as simple as that.

Finances

Okay, here we go, this is a finance blog, so how much money does a menstrual cup save me? Over $100 a year. 

I have a reasonably unreliable period, which I believe is a side effect of the Implanon implant I use for a contraceptive. As such when I used tampons I was generally going through 40 a month for a period that would last more than ten days. The cheapest tampons you can by these days are 11cents each, or in my case, $4.40 a month. However I found the cheap options never worked consistently and led to leakage and buying new underwear. 

Between the slightly higher shelf tampons and buying replacements, I was easily burning through $100 a year on something I had no choice about. Invested over 10 years this costs over $1,450. For something I have no control over! Put another way if I wanted to invest enough to cover that cost I would need $2,500 in the bank. Just to pay for my period.

Buying two cups back in 2013 cost me a measly $100 after paying for shipping and currency exchanges (the Australia Dollar wasn't particularly strong then). In four years I've saved over $400 by using a cup, that's 100% return each year. You can buy one today and join the cheap, comfortable revolution!

Environmentally Friendly

I've saved a lot more than money though. Plastic takes centuries to break down, and every tampon comes individually wrapped. While the tampons themselves might be biodegradable, the process to make them requires a large amount of chemicals, processing and shipping. 

Cups are made from medical grade silicon, which also won't degrade. However after four years of usage my cup (produced once, and shipped to me once) has used significantly less resources than a four year supply of tampons, and created a significantly smaller amount of waste than hundreds of plastic wrappers.

While this blog is about personal finance and retiring early, there's no point in escaping the rat race to a planet buried under mounds of rubbish.

But it's gross!

This is the number one complaint from women who are reluctant to try a menstrual cup. This is something that we need to get over. As an adult woman you will bleed from your vagina once a month for thirty to forty years. Do you really intend to spend all that time grossed out by a basic bodily function? No, of course not.

Most times when I change my cup there is no mess. Occasionally you will get a small amount of blood on your hands. Wipe it off with some toilet paper, then wash your hands like you were going to anyway. In the worst case scenario you might want to invest in a nail brush, but I very very rarely need one.

What are you waiting for?

For a measly £25.99 plus shipping you can have the convenience, comfort and cash-saving powers of a menstrual cup from MoonCup UK.

And if you think dealing with your period sucks, try living in East Africa. Without access to proper supplies, and the cost of a packet of pads equal to 60% of the daily wage, women in East Africa resort to using things like twigs, leaves, mud and mattress stuffing. These substitutes are ineffective, and lead to infections and long-term damage. Young girls in East Africa miss up to 20% of their school year because they cannot afford sanitary products. If this blog was preaching to the converted, or you want to change someones life, you can donate reusable pads or a menstrual cup via Femme International.

Let's talk about finances and taboos

Despite our lives being ruled by the things we do to get money and the places we spend that money, getting people to talk about their income and outgoings seems impossible. Discussing investment strategies is either considered really boring, or some hush-hush back room conversation that can only be had with your closest confidants. I was in a 5 year relationship where bringing up money was met with avoidance, hostility, and a pretty derisive attitude that made me feel worse than Scrooge McDuck because I was thinking past next weeks pay.

This isn't to say that when you meet someone you should shake their hand and say "Hi, My name is Jane Doe, I make $32.37 p/hour working 35 hours a week and ascribe to the '50% on Needs 30% on wants and 20% savings' strategy. Personally I like the low risk nature of index funds but I'm keen to branch out into flipping houses when I have enough capital." That's a little bit overshare, but I think this conversation needs to be opened up.

There's no reliable statistics that say talking about money solves the worlds money problems but financial literacy can't be underestimated. My first 'job' was as a paper-girl. Once a fortnight the newsagent would drop the bills, a stack of envelopes and $40 on my parents doorstep. It was my job to fold up the bills, put them in the envelopes and deliver them to the right houses. It probably took me 2-3 hours of sorting and 3 hours to deliver. So I was on roughly $7.20 p/hour ($20 p/week) and I had no concept of financial literacy or saving that money. I remember blowing $20 on lollies at the local deli. I remember buying Red Bull at the supermarket most days. I remember my phone bill being $30 a month, which was a terrifying 37% of my income!

When the newsagency switched to digital delivery of bills (I guess, one day they just stopped delivering the money) I picked up a job at a supermarket. For 3 hours a week, at about $8.70 p/hour.  So after tax, it was still taking me more than a week to earn enough to pay my phone bill. It sucked, the job was terrible and I hated it. Twelve months later I picked up a job at Hungry Jacks, for $7something an hour, but closer to 12 hours a week. Suddenly I had spare money! And like every teenager in their first job, I had no self-control. And suddenly a lot more stuff.

Thankfully, somewhere in my early years I had an exciting 'investment' moment. My parents had set up Dollarmites accounts for my brother and me when we were young. They were pretty terrible, with some horrible fees and low interest rates that meant money in those accounts was pretty much stagnant. But I had a savings account, and I knew those numbers slowly going up were kinda cool. Then a couple of things happened.

• My parents moved my money to an account with a better interest rate. I seem to remember getting 6+% p/a
• My grandad needed to unload some money and gave all the grand-kids a rather excitingly large gift. Seeing that jump in 'my' savings was amazing.
• I got a bank statement and saw my interest payments for January, February and March. I was outraged! Why was February's payment less than the others! So I got my first lesson on how banks calculate interest.

I don't remember any other serious Financial Literacy lessons. But I knew money was pretty cool to have. And I knew there were ways to get it other than work. And I really hated seeing money go into my account one week, and be completely gone by the next. It felt like a huge waste, I was doing all this work and all my money was dribbling away into pointless snacks and soft drinks.

Getting it together

I started a budget. It was a crappy paper budget that I've redrafted a few times, but stayed with me for about eight years. At first I just tracked what I spent. Then I started tracking what I earned against what I spent. And added what I saved. Nowadays I use a big elaborate spreadsheet stored in Google Sheets so I can access it anywhere. I track my spend month to month, and my income and savings / investments year to year. I even have separate spreadsheets at home for more in depth savings and spendings tracking. It has become an ingrained habit to know how much I spend, and how much I saved. I've just opened a new credit card for travel hacking and they delay reporting expenses for almost a week, which is driving me absolutely batty!

When I was 17 my father started buying investment properties. For as long as I can remember I was keen on buying a house and having someone pay me so they could live there! Wow! It was a solid, visible investment that paid back hundreds per week. When I was 18 I put in an application for a home loan and was unsurprisingly laughed at by the banks. So I dumped all my money into a high interest term deposit and came back next year. Thanks to a huge pile of luck, a great property mentor and my parents confidence in me, I bought a house. At 19.

For the next few months I read everything that came my way about real estate and squirreled as much money away as I could. I don't want to do things in halves so I tried to buy another. And was again solidly laughed away. This time I had no out, I had a borrowing capacity of $1 including my personal income and my rental income. So I switched tactics, dabbled in the share market, mostly sticking to low risk bonds.

What's the point of this story?

The point of telling you this isn't to brag. I stumbled drunkenly through my personal finance journey. At 26 I own a rental property and have a comfortable cushion of investments. But, honestly, despite the amount of time and research I poured into all these things, I was lucky. I was lucky to have a cashed up benevolent granddad. I was lucky to have a savvy father. I was lucky that the day I first saw a bank statement I was in the right mood and the sun was shining, and it was exactly 11:23am or whatever it was that caused some tiny something to tick in my brain.  I was ridiculously lucky that I met my property mentor who jumped through rings of fire over a shark tank to get my first property. And I've been crazy lucky ever since that my tenants have accepted all the rent rises, taken care of the property, that the house hasn't flooded, that the stock market hasn't crashed, that I've fallen from job to job and ended up somewhere that pays me quite well.

Having my successes with my finances so heavily based on luck scares me. Since buying my first property I have done a lot more research on my investments, but the basis of my success is the luck of having the right random childhood experiences that shifted my mindset. Which leads me to my point, no one ever spoke explicitly to me about finances unless I asked first. And watching those big responsible adults umm and ahhh and shuffle their feet was pretty nerve wracking. I am immensely grateful that my father and property mentor were willing to talk to me about money and answer my questions, even if the answer was occasionally "I don't know".

When was your last money conversation?

Here's the thing though. Money is integral to our lives. Even if you ascribe to a minimalist lifestyle, that minimal still costs you money. The freedom to go home, turn on the lights and have a nice hot shower is driven by money. So refusing to talk about it baffles me. It is a taboo subject, and that needs to change.

I asked on Twitter who you could talk to about money and a scary 38% of people are only able to talk to their family. Almost 10% of people can't talk to anyone. While @DiligentDividend is happy talking to anyone about how much he earns @FatherWithCents thinks it might be shame that keeps people quiet. @indie_finance doesn't like talking about making more than others - although having those conversations might lead to pay rises for everyone if you lean on your boss hard enough.

Talk to your kids

I'm not a parent so I can't say much about parenting. But if you don't talk to your kids about money, where do you expect them to learn it? Primary school taught me how to count money, and the difference between dollars and cents. High school, the time when children enter the labour market and start earning, had work experience but no conversations about spending, saving and budgeting. School isn't designed to teach us how to cope with cash.

I can't talk about general parenting, but if I wanted to go back and teach young me about personal finance, I'd do it with games. Monopoly was initially designed to show you all the problems with capitalism. The Game of Life gives you a job, an income and expenses. Cashflow 101 is about collecting enough assets that you have a passive income, can quit your day job, escape the rat race and achieve 'life goals' like traveling the world and starting a successful charity. It also comes in a kids version.

The games all have varying levels of realism but they all make a good starting point for getting your brain switched on. At worst they're a bit of fun, at best they can open up that conversation.

While you're playing Cashflow 101, you should read "Rich Dad, Poor Dad". Robert Kiyosaki recounts the difference lessons his Rich Dad (his friend Mike's father) and his Poor Dad (his real father) taught him about money. The book is accessible and easy to read, I found it on Dad's bookshelf in primary school and I loved it. If you asked me about it I would probably ramble for ten minutes about how great it is.

Talk to your friends

You probably already do this. If you ever chat about that super cheap recipe that you made, or complain about the crazy big electricity bill you just got, then you're discussing finances. I find that most people tune out when I start talking about intangible things, interest rates, stock markets, diversified funds. They're scary unfriendly words. But personal finance is just as much about your day-to-day choices. About cheap nutritious meals. About looking for a cheaper electricity company.

The first and, I would argue, best step towards financial literacy is knowing how much money you get in and where it goes. Talking to my friend and co-workers has turned up a wealth of information about rebates on gas, where to find a cheap conveyancer and house hunting tips.

Diving headfirst into a conversation about  insurance, or investments is pretty daunting, but chatting about a new house is exciting. If you push past the taboos, those exciting conversations can turn up a wealth of knowledge. And knowing that the guy you sit next to at work owns eleven properties is pretty interesting too.

Money is considered a measure of 'success' in society. It's hard to get people to open up about their income because we're all afraid of being judged. At the same time it can be considered uncouth to talk about your financial success. After all, if financial success is 'life success', it comes across as bragging. I'm not suggesting that you start comparing dollar figure incomes with your friends, but knowledge shared is knowledge gained. You help yourself by solidifying what you know. You help your friends by sharing. And when you talk about the big scary topics, they start to feel smaller and easier to manage.

Talk to your partner

For so many reasons, talk to your partner! Communication is key in every part of your relationship, from cooking dinner to travel to sex. If you can't talk to your partner about your long-term and short-term finance goals, you've got a problem. They are going to be the ones comforting you when shares dive, high-fiving you when an investment matures and standing next to you scratching their head when the bills come in. Eventually most couples combine their finances, so when you start investing or making money saving choices, it's not your income and livelihood that is at risk, it's theirs too.

Your financial literacy

Financial literacy isn't just the big 'boring' investment questions. It's the basics, it's starting small and building up. The important part is identifying your goals and working towards them. If your goal is to travel as much as possible, you might be willing to eat rice and beans every night to save the cash for your next around the world extravaganza. If you hate travel and love food, do the opposite. At it's core, financial literacy is understanding where your money comes from, where it goes and making conscious choices about your spending and saving.

Financial literacy leads to financial freedom - which is a vague, loose term that depends on what you want. It can be something as small as the freedom to buy a coffee every day without every worrying if it fits in the budget. For me it means eventually not relying on my employer as my primary source of income. So all that 'boring' investment mumbo jumbo is fascinating to me.

The Year of Investing - July 2017

One month down on the year of investing! I'm pleased to say I'm ever so slightly ahead of my investing goal, but it was an uphill slog with the markets fighting against me!
I haven't quite hit my savings goal, but I think we're off to a good start for the year.

Triple Income, No Kids: Is Polyamory the Trick to Getting Rich?

We've all seen the acronym 'DINK' (Double Income, No Kids) but the other day I saw someone post 'TINK"s - now they meant Two Incomes, No Kids, but it got me thinking - how great would it be to have Triple Incomes pushing towards your financial independence goal!

This thought lasted about five minutes before something else caught my attention, but then a couple of weeks later I was watching "You Can't Ask That" on ABC iView and they had a segment devoted to Polyamorous people and their partners.

Which got me thinking again, and the idea has been bubbling in the back of my brain: Is Polyamory the trick to retiring early?
In 'You Can't Ask That' one of the Thruples was asked "Do you ever worry about losing your spot on the team" and one of them replied (with a laugh) "Of course not, you couldn't pay the bills without me". While they don't delve deeply into their financials I am infinitely curious. However a (very brief) googling hasn't turned up any gold in the polyamorous-finance blog space, probably because of the time committment in having multiple partners.

Thus, with absolutely no solid information (save a brief unsuccessful open relationship as a youngster that ended when I met Mr. FIRE) I need to point out that this post is entirely speculative. As thought experiments go I've found it rather interesting, although I anticipate this being my first post with an angry comment, probably using the phrase 'morally bankrupt'.

Anywho, here we go.

Dating

Firstly, dating is expensive. And being Poly means a lot more dating. When Mr. FIRE and I were dating we went out for dinner (once, that was boring... still, it's the thing you do) we went to the movies to see the Hunger Games, which ended in sitting on my car boot talking for an hour, and oddly - we took up an 8 week parkour course together.

By the end of this we knew each other well enough that dates were largely visiting each others house (okay, his house. I lived with my parents, how embarrassing!) and a lot of, ahem, Netflix and 'chill'.. or whatever it was called before Netflix. We went hiking a lot, frequented chocolate cafes like San Churros and played board games. I once threw a Monopoly board at him.

In the first couple of months of our dating I'd say we spent a couple of hundred dollars each, and most of that was on the parkour classes. However, this is definitely not typical dating. For an accurate pricing, let's look at a couple of cliche' date ideas and their costs, plus one not so cliche' excellent idea.

For the sake of argument, and because I'm a child of the modern age, let's assume that you and your date are going to split the cost evenly.

Dinner and a movie

Firstly, this is a terrible idea for a date. Dinner will be spent making awkward conversation, and then you have to sit silently next to each other in a dark room for two hours. Creepy, and uncomfortable. If you have to do the cliche' dinner and movie date, flip it around and see the movie first. You can get in for an earlier (hopefully cheaper) session, and then talk about the movie over dinner.

Cost: $15 each for a movie, $10 at the snack bar, and $30 each for dinner. Plus $5 each for some kind of dessert either at the restaurant, or after. Total: $60 each

Coffee by the beach to watch the sun set

I'm writing this post in winter, but I think we can all agree this is a summer date. While the beach can be gorgeous and empty during winter, nothing cuts a date short faster than icy winds and unexpected downpours. The beach is always a win for dates because you get to see your new heart-throb out in the sunlight, have a swim, have a walk, eat some ice-cream and either lounge around or play beach sports as suits you. Plus it's reasonably cheap.

Costs: $5 for a coffee, $5 each for the fish and chips your will inevitably get a craving for, and another $2 for an ice-cream on a hot day. Total: $12

Archery and lunch

Finally, the kind of date Mr. FIRE and I would actually go on! If we were bringing a third into our house this is the kind of date they would have to love. There is a self-paced archery course in the hills where a nice lady will give you a ten minute crash course, then sends you out to follow a trail through the woods shooting three arrows at each target. The whole course takes about two hours (including lost arrow time... oops) and prevents any awkwardness because you're focused on learning a new skill and spotting the next target. Lunch is picked up from a country bakery on the way home because by that time, you're a wee bit peckish.

Cost: $15 each for archery (plus $3 per lost arrow, ask me how I know that...) and $10 for bakery goods and coffee. Total: $25

Dating costs

Let's be honest here, Poly dating is likely to be just as expensive as regular dating. The only difference will be that you're going on more dates since you'll be scheduling in more than one partner. Depending on your flavour of Polyamory you might be going on group dates, or seeing one partner one night, and the other the next. Either way, dating starts out pretty pricey - two dates a week averages almost $50, and I picked some cheap dating ideas.

Moving in to one house

Fast forward a few months and you and your Poly partner(s) are ready to move in together! Just like when a couple moves in together you probably have too much furniture and more TVs than you could ever possibly need. You'll probably pull in a quick bit off cash selling off the extra TV's and the smallest couch - or maybe you're garage will be full for months of things you don't want or need.

Of course, there is a third option where you pay for a storage space, but this is a finance blog so I'm not recommending that. I'm frowning sternly at the concept.

Moving three people in together has advantages over moving two in together - you only need one fridge, one TV, one washing machine, so you can sell off all the extras. 

However, you need space for three people. Mr. FIRE and I live in a snug 'two-bedroom' house, which is really one-bedroom and a study. The study couldn't comfortably fit a bed and a wardrobe, but it does nicely fit our computer desks. If we had a third person we would need to strongly contemplate moving into a bigger place, and paying more rent. On average an extra bedroom in our suburb would cost an extra $80 a week. Mr. FIRE and I currently pay $150 a week each towards the mortgage, so moving somewhere bigger but adding a third person would actually save us $25 a week each.

Savings: $25 a week less in rent, plus a short term boost of approximately $2,500 as we sold off excess appliances and furniture.

Living together - the long term

The happy time of all living together! We've already covered that three people are paying one rental bill / mortgage, but we are also only paying one set of utility bills! The water bill would be the happiest change - currently we pay over $150 for usage and a measly $40 for usage. Assuming having a third person in the house means 50% more usage, then our quarterly bills would go from $190 to $210. Rather than $95each, we would be paying $70.

Let's dig further. Our utilities also include gas and electricity. I doubt these would go up by 50% by having another person in the house because a lot of the usage is communal - having lights on, cooking dinner, running the fridge. Let's be generous and say it goes up by 30% to account for an extra load of washing each week and maybe a bigger fridge.

Based on our last set of quarterly bills, our gas would go from $144 to $168, and electricity from $276 to $370. Our individual split was previous $72 and $138, now it's $56 and $123.

Lastly, the internet. We pay $60 a month for unlimited data. We wouldn't need to upgrade our plan, so what was $30each a month is now $20 each.

On utilities we're saving almost $100 a quarter. Not a massive amount, but also nothing to sneeze at

Food shopping is the third biggest expense for most Australia, and now we can shop in bulk, and bulk buying is always cheaper. We also wouldn't have to worry so much about wasted food, so let's say we can knock $20 each off our monthly food budget (10% off).

Total savings: $160 a quarter.

Money in!

While I've been focusing on expenses and savings, there is one more very important thing to consider - this is a triple income household. If we assume our mythical third person is making an average wage of $60,000 with expenses similar to mine they would be bringing an extra $24,000 into our household savings - after tax.

Adding their $24,000 savings to my goal of $28,000 in a year means as a household we've almost doubled our savings (I would include Mr. FIRE here, but he still can't tell me his savings rate...). This is assuming that they have the same expenses as I currently do.

As I've worked through above those, we can expect a 10% reduction in groceries ($20), and roughly 30% off of our utilities ($28). Plus another 15% off rental expenses ($25). This would drop my monthly expenses from $1833 (excluding my rental property) to something closer to $1750.

So not only do we bring an extra $60,000 income into the household, we reduce our expenses, which reduces our FIRE number, and increase our savings.

Assuming two people in my house, earning $70,000 each and spending $25,000, we could save $90,000 a year. With a combined expenditure of $50,000 we would be ready to retire in ten years.

Assuming three people in my house, spending and earning the same way, we could save $135,000 a year - with our 'bulk discount' lifestyle let's round that up to $140,000. With a combined expenditure of $70,000 we would be ready to retire in eight and a half years.

While eighteen months isn't a massive reduction in costs, there's also all the incidental benefits to consider. Three people sharing the cooking, cleaning and yard work. Three people around means there are always enough people for board games. Plus with different work and hobby schedules, hopefully there would always be someone around for a cuddle on a cold winter night.

What about bad things?

Well, firstly, bad things like broken dishwashers, car crashes and random medical emergencies would be less terrible with all the costs split three ways instead of two.

But what about when you stop wanting to split things three ways? What about a divorce, or a break-up? If they're messy with two people involved, imagine the mess with a third. With one in three marriage ending in divorce.

Divorces are financially devastating as couple split assets, sell off houses, fight over fridges and pets. With a third person do the assets get split three ways? Do more things disappear in the night as scorned lovers try and take what they treasure before you can hide it from them? Do you statistically increase the likelihood of coming home to find all your clothes in garbage bags on the front lawn?

Probably yes.

What do you think? Would a third person in your FIRE journey speed up the process? Should you just get a housemate instead?