I wanted to get some advice here, because we’ve been making things up as we go along and I’m sure we could do better ☺.
I live with my husband and energetic 3 year old, and we’re about to have a baby. The thing is, we’re sort-of working towards FIRE but we also want to live a fun, purposeful life in an awesome location, and we don’t want to wait years to do it! About 18 months ago we realized we wanted to exit Canberra, and worked to move both our jobs online and reduce our working hours. Then 6 months ago we packed up, rented out our house and travelled up and down the east coast in a caravan with our 3 year old (while still holding down our jobs – I don’t fully recommend this, it’s a recipe for crazy).
We’ve found our version of paradise on the far south coast of NSW, and we’d like to slow down even more (while still playing smart financially).
A summary of where we’re at in dollars:
Income: Partner income: $70-90k per year (own consulting business, covers some of our spending, approx. 3 days per week work)
My income: was $35k (2.5 days per week), now mostly zero for 12 months on maternity leave (ok, there is 18 weeks government paid maternity leave)
Expenses: Approx $50k per year. These have varied significantly while moving/travelling (hence not detailing them here), but hoping to see them move to $35-40 as we settle down.
Assets: 1 x investment property. Value $550k (bought for $394k in 2011). Mortgage $256k @ 3.8% (monthly repayments are $1700). Rented for $500 per week (privately rented, approx. $3k in bills/maintenance a year – so currently ).
Looking-to-purchase-shortly 1 x PPOR. Approx value $500k. I realize that renting could be a better option, but unfortunately most small coastal towns are split into owner-occupiers or holiday rentals, and there are zero long-term rentals where we’re trying to live.
Cash in offset account $200k. (I realize that holding cash isn’t great, but we’ve as yet been too cautious to invest and are now looking to buy).
Debt: We have a HECs debt of about $30k EACH. Yes, that’s a lot of study time.
Next steps/ideas: - Set-up a discretionary trust so that my partner’s company can distribute tax to me as lower income earner
- Max out the pre-tax contributions to super for partner ($25k)
- Should we sell investment property (it used to be our PPOR) and get into ETF/stock investing? Better return? OR should we refinance the investment property and use the extra cash to pay down any new mortgage on our PPOR. Currently we’re thinking to make PPOR debt-free as soon as possible.
- We’re hoping to do some airbnb through our new place, I’m wondering if anyone has any experience of that and if it might be better to run it through the company rather than in our personal names?
- Also, HECs - what to do?
- Any other tips for young-ish players?
Thanks so much team :)