4th Quarter Update 2018

End of December means the end of the 4th quarter of 2018, which is a good chance to look over our spending.

We had a bit of a bump in income due to Mrs FMT’s small business.

 

Total Income $28,344 Oct to Dec

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Photo by Pixabay on Pexels.com

We continue spending extra on the planned necessary house repairs this quarter. Now with the repairs out of the way we can continue increasing savings as of 2019

 

Total Spend on Home Repairs $7,690.83 Oct to Decimg_7988 (1)

Even with the home repairs we managed to pay down some extra money on the home loan.

Total Extra Payments on Home Loan $6,074 Oct to Dec

Current Home Loan balance at $-279,357

Just beating our target we set last quarter for end of 2018, to pay down the home loan to under $280,000

Travel for 2018 $2,406

We had two family holidays in 2018 a interstate holiday to South Australia and a trip to the South Coast in Albany. img_7733 (1)

Goals Update

  • Hit 50% savings rate – We have not hit a 50% savings rate yet, December was close at 40% but on average with home repairs was around 25%
  • Under $299,000 Home loan – Done $279,357
  • Essential house repairs that had been put off – repairs are now done

New Goals for 2019

Under $260,000 Home loan

Home repairs to only come from Home repair fund. ($208/fortnight transferred to a offset account for use on future home repairs)

Earn 100,000 frequent flyer points. (in 2018 120,000 qantas points and 65,000 virgin points were earned) Virgin points were used for South Australia Holiday.

Overview

At start of 2018 we had sold one investment property but still had one investment property loosing money monthly and no idea on what our monthly expenses were.

Fast forward to today and we have

  • 9 months of expenses tracked
  • a separate 6 months emergency fund
  • budgeting for future months
  • sold investment property
  • carried out outstanding home repairs
  • have a clear view of where we will be in the coming months and years.

This has not only helps us sleep well at night but to make plans ahead into the future.

Which is handy as the FMT family is growing from 3 to 5 in 2019 with twins expected in May 2019.

How was your 2018? and what goals are you planning for in 2019?

 

 

Change of Plans for the Blog

person writing on white book

Even though I have a number of unpublished posts ready to go, I haven’t posted in the last few months because I have been thinking about what type of site I want this to be.

I didn’t want to end up with another page of copy/paste FIRE related content. There is already a wealth of great content out there, written and presented a lot better then I could of done.

The blog will only focus on my own progress towards goals and FIRE as well as travel updates.

In the coming days I will have my 4th Quarter update published and go over our goals for 2019.

Photo by rawpixel.com on Pexels.com

Home Loan Interest Rate Creeping Up

For the last two years my home loan interest rate has been slowly creeping up. It started off around 3.89% and is now at 4.07% with one of the Big 4 banks. This has prompted me to look into other lenders to see what is on offer.

House Value: $450,000

Current Mortgage Balance: $284,000

4.07% Variable Principle and Interest 

$395 annual package fee

2 years into a 30 year loan. (planning on paying off loan over next 5/6 years with extra payments)

After contacting my current lender they have agreed to drop interest rate down from 4.07% to 3.92%

1 Email = Savings of $426 per year! not bad for 2 minutes of work.

I also search for best deal online.homeloaninterst

Best rate: 3.59% Variable P/I no offset but redraw. $0 annual fees

If I switch to this online lender, I would be saving $937 per year in interest + $395 annual fee = $1,332 per year!

There are a few fees in switching lenders to consider, discharge fee for my current loan $300, property title fee $179 and potential settlement fee $150.

I would also need to switch my everyday bank account over to avoid monthly fees to a fee-free online account. This would also involve contacting all direct debits to switch over.

If I switched over I wouldn’t have a offset account, this shouldn’t be a issue as I plan to pay the loan off early and never want to create a Investment Property out of it.

Should I do the paper work and make the switch?

What your current interest rate?

 

 

 

 

 

 

3rd Quarter Update $-288,200

End of September means the end of the 3rd quarter of 2018, which is a good chance to look over our spending.

We had a big bump in income due to a tax return and a small first pay from Mrs FMT’s small business.

Total Income $26,564 July to Sept

After a great second quarter of saving, we ended up spending alot of money on planned house repairs which we had put off for the last 2 years. Mostly necessary repairs, which comes with owning a 1960’s house on the beach.

Total Spend on Home Repairs $14,364 July to Sept

As much as I wish this was money put onto the homeloan, the work is now mostly done with last part of the repairs coming into the 4th quarter spending.

Even with the home repairs we managed to pay down some extra money on the home loan.

Total Extra Payments on Home Loan $5,000 July to Sept

Current Home Loan balance at $-288,000

With the major home repairs costs out of the way for the immediate future, I hope to get back to paying down extra on the loan.

Target for end of 2018 is to pay down the home loan to under $280,000

What are your thoughts? How do you deal with Home Maintenance costs and trying to reach FI?

Paying a 30 year mortgage in 5 years!

Since discovering FI we have sold our money-hungry Investment Properties. So we can focus on paying off our own mortgage then we can invest into low cost index funds.

We started aggressively paying off our mortgage May 2018 – Planning on paying off our 30 Year mortgage in 5-6 Years.

By putting every spare dollar into the loan, we will need less income in retirement because we won’t have monthly mortgage payments.

Purchase Price: $470,000 September 2016

Minimum payment $1806/month

Aggressive Payments 5 Years: May 2018 $303,500

$5,575.73 Monthly

Aggressive Payments 6 Years: May 2018 $303,500

$4,734.50 Monthly

Average Payments as of August 2018

$5002.75

(This is a bit distorted due to our tax return)

We are currently on one income as Mrs FMT is staying at home with our daughter.

So far it looks like we are on track to reach our target of paying our 30 year mortgage in 5-6 years!

What you planning to do with your mortgage? Are you paying the minimum off your loan so you can invest?

 

Introduction to FI

FI or FIRE stands for Financial Independence/Financial Independence Retire Early.

The concept is spending less and saving more, investing the savings to create income to live on in the future.

One of the original bloggers in this space is Mr Money Mustache, in his post Shockingly Simple Math Behind Early Retirement he explains how easy it can be by spending less and investing to retire in under 10 years.

50% savings rate is the target for most FI people.

This seems huge compared to the 10% most average people save. Though it can be done by cutting a lot of the waste and unnecessary crap out of our first world lives.

Cost cutting ideas:

  • Cooking at home
  • Packing lunches for work
  • Buying cheap used cars opposed to loan or leasing new
  • Buying or renting affordable houses instead of million dollar mansions
  • Biking occasionally instead of driving car
  • Swapping Netflix for Foxtel
  • Optimizing mobile phone plans
  • Travel hacking holidays with points

More reading on FI can be found at links below –

Bogleheads Australia

Barefoot Investor

Aussie Firebug

Strong Money Australia

Vanguard Australia

USA based content

ChooseFI

Jim Collins Stock Series

Mr Money Mustache

Millennial Revolution

Share your favourite FI content in the comments below.