Today was a good day. I knew that a podcast that I recorded just before Christmas was being released, so I got up, downloaded it onto my iPad and then took the dogs for a walk to the dog beach. Tuesdays and Thursdays are my school-free days, so I had all day to listen to the conversation we’d had.
‘What’s Up Next?’ is a podcast that assembles a panel of people to talk about various topics about financial independence and financial literacy. Our topic was “Are All Teachers Poor?” (this link lets you hear it), and I was lucky enough to share the conversation with Gerry, the Millionaire Educator, and Ed from Educator FI – two guys who really know what they’re talking about.
I never listen to podcasts when I walk the dogs. I like to be in the moment with them instead. So, we walked down to the beach, I took their leads off and we set off walking beside the water’s edge.
The sea was like glass. The colours were muted and beautiful. I was surprised to see quite a few people there with their dogs. When you work full-time you have no idea of how many people are freely walking around the place during working hours as if they have a perfect right to be there. We stopped and talked with quite a few people as we made our way onwards.
It’s a lovely way to start the day. The soft lapping of the waves, the squeak of sand under your feet, the incessant barking Poppy does until she’s convinced you haven’t brought a ball down with you… it’s a darned sight better than driving down a packed Nepean Highway to work.
Once we got home I grabbed my iPod and listened to the podcast as I watered the veggie garden. I’d completely forgotten what we talked about – there’s been a lot happening in the Frogdancer household after all! – so it was as if I was hearing it all for the first time.
I really enjoyed it – and not just because the female panellist was so clever and insightful. (LOL – jokes. That was ME!!!) Ed and Gerry are thoughtful, caring people who are well-worth listening to and they know their stuff. I wish that Ed was on the admin team at my school!!
It’s now 5:40 PM and I’ve pretty much wasted the rest of the day. I’ve clocked up less than 6,000 steps, but you know what? Tuesdays are for ME. I’ll get the hang of this part-time malarkey. After all, it’s only been a month. These things need easing into, right?
I’d like to thank Doc G for inviting me onto his podcast. I enjoyed it very much and I hope other people, particularly teachers, enjoy it too.
Something really exciting happened at work yesterday.
I walked into the Danger Zone, (our little area in our staff room), and came slap bang in the middle of a conversation that Beth, Emily and Laura were having. Beth is well along the path to FI. We’ve had many a conversation about investing and she’s going great guns.
Laura is much younger than us. She’s already looking towards the future, having bought a couple of apartments as investments. I guess it helps to be a Maths teacher when it comes to understanding the whole ‘numeral’ thing.
Apparently they’d started talking about passive investments and Beth shared how much she earned over the last 12 months from the interest on her investments and her super. This blew Laura’s mind and got her attention. Then I walked in.
“Talk to Frogdancer,” said Beth. “I’d still be spinning my wheels if it wasn’t for her. She got me started with this whole thing.”
“Beth said that she made ($Xnumber)* last year, all from doing nothing!” said Laura. “How is that possible? It’s blowing my mind.”
I grabbed my laptop. “I have a net worth chart,” I said. “I check it at the end of every month.” I pulled it up and showed her.”See? Once your investments hit a certain mass, they take on a life of their own.”
Laura’s eyes popped. “OMG, why isn’t my net worth going up like that?”
Beth and I both said, “You’re young! You haven’t had time to build it up yet.”
Laura and Emily both jumped onto their banks’ websites and pulled up their own net worths. Both have mortgages and Melbourne is a really expensive place to buy real estate. Both of them are over half a million in the hole.
“That’s totally age-appropriate,” said Beth. I nodded. “You’re just starting out.”
Laura looked at me. “Beth and my parents say that I should be salary sacrificing into my super,” she said. “I don’t know – shouldn’t I be paying down my mortgages first, though?”
“It depends what you want,” I said, pulling up a chair. “Mathematically, it probably makes more sense to start making some outside investments while interest rates are so low. But if you have a paid-off mortgage then you have security. No one can kick you out or make you sell it if you can’t make the payments.”
“I made the deliberate decision to pay off the house first because I had the kids,” I continued, “and security was the most important thing for me. I was always terrified that if I messed up, I’d lose the house and the kids would have nowhere to go. Three weeks after I paid off that house, I was starting to learn about investments.”
“How old were you then?” Emily asked. She’s another young Maths teacher. “What was your net worth?”
I laughed. “I paid off the house when I logged onto my banking and saw that I had $10 more in my savings account than I had on the mortgage. I was 50. So I guess my net worth was $10 just after I turned 50!”
“How old are you now?” she asked.
“56,” I said.
Her eyes widened. “In six years you’re worth **($myFInumber)???? You should write a book!”
“She already writes a blog!” said Beth.
“When I was your age, I pulled my super out, all 30K of it, to put a deposit on a block of land,” I said. “When we sold the block a couple of years later, we sold it for 30K less than we paid for it, so effectively my super was lost to the wind. A couple of years ago I calculated what that 30K would have been worth today if I’d left it alone. It would have been 200K.”
Laura and Emily’s eyes widened. They gasped.
“Learn from my mistakes!” I said. “Money put in for retirement when you’re young is worth a hellava lot more than money put in when you’re my age. It’s the second-biggest mistake I’ve made.”
“So how much do you need to retire?” said Laura.
“Don’t you need a million?” asked Emily.
“Close enough,” I said. I wasn’t going to dive into the 4% Rule just then!
“Right!” said Laura, turning back to her laptop. “I’m going to salary sacrifice into Super. How much should I be putting in?”
“You can put in 25K a year,” I said. “That includes all of the super that the Education Department pays. But you’re paying those mortgages and you probably don’t want to tie up every dollar into an investment that you can’t touch till you’re 60. If I were you, I’d start off with $100/pay. You won’t miss it and you’ll get used to putting extra aside. You can always increase it if you want.”
While Laura was out of the Danger Zone, talking to HR I pulled up a compound interest calculator and put in her basic figures, starting with the $100 depososit and then kicking in $100 fortnightly.
When she came back into the room she said, “I’ve done it! I’m now salary sacrificing!!” We all cheered and then I gave her a hug.
When I showed her the calculator she loved it, changing it to plug in her current superannuation amount, then taking a screenshot to send to her Mum, saying, “She’s going to be rapt I’ve finally started this.”
Conversations like this are so rewarding.
It might sound a bit corny, but it makes me think that all my struggles have been worthwhile if someone else can benefit from my experience and avoid making similar mistakes. Laura and Emily are young women who are full of plans and are going places, but as I said to them, this one little tweak to their finances will give them so many more options later in life.
“When you’re as old as I am”, I said, “you’re going to be really glad that you started doing this. You’ll have a lot more choices available to you than if you didn’t have this money stashed away.”
Yep, yesterday was definitely a good day at work!
*and ** I’m not sharing anyone’s numbers on the blog. But we definitely shared them in the conversation we had.
Anyone who’s been here on the blog before would probably know that I’m dropping down to part-time work next year, as a glide-path towards retirement. It wasn’t an easy decision to make, because as a rule I’ve been trying to earn MORE money ever since I left my husband with 4 kids under 5. To voluntarily drop from a full-time wage of over 100K down to working 3 days (but getting paid for 4 days) was stepping outside my comfort zone in a big way.
You’d think that now I’ve made the decision and set the wheels in motion I’d be all set and raring to go. I’ve got permission from my principal and I’ve let the timetabler know, as well as notifying the heads of departments that I work in, English and Theatre Studies being in different areas. I’m colouring squares on a calendar and I should be happy to see the number of days until the end of the year shrinking daily. As days tend to do…
But something’s happening at work. Something that’s messing with my head. People my age are leaving, either for new jobs or for retirement. They’re looking happy, saying things like “A weight has been lifted” and this is all making me feel restless and starting to question my life choices.
Two, in particular, have got me feeling envious. The main one is a woman who is retiring at the end of the year. She’s married to a teacher, they have no kids and for years she’s been one of the year 7 student managers, which is a very demanding position. She’s decided that it’s time to pull the pin and her husband is fully behind her decision, even though he has no plans to retire for a while. The thing is – we were in the same year of teachers’ college together!!!!
It’s hard not to compare. She’s happy. She has a gleam in her eye that I haven’t seen since we were at Rusden together…
The other person has taken a direction that, while I don’t want to do the same thing myself, is nevertheless very clever. She’s also the same age as me and our kids have been through both primary and secondary schools together. She heard about a part-time position going at a local selective secondary school which is all about running the admin for VCE classes, (years 11 and 12.)
In other words: No teaching. No marking. No meetings. No parent/teacher days. No yard duty.
And get THIS – if she stays behind for any reason, she can bill the admin and get paid for her time!!!!!
This is unheard-of in teaching. She’ll be able to leave work and not take any of it home with her. Ever.
I mean, I’m really good at separating work and home life and the only time I take marking home with me is when I correct the year 12 practice exams that they do over the September holidays, so I’ll have them ready for the kids when they get back. I learned how to smash out marking at school when the kids were young and I’d take marking home, then it would inevitably all go back with me to work the next day, untouched. But most teachers aren’t like me, and the thought of having their evenings and weekends being designated a ‘Correction-Free Zone” is intoxicating.
What I find enticing about what she’s done is that it beautifully solves the problem of burn-out. It’s a total change, but it’s an easier job in so many ways. It’ll be a total refresh of her professional life and will make a perfect glide-path to retirement.
When she was in the job interview, she was asked by the principal why she was applying for the job.
She said to me, “I could’ve replied with some high falutin’ thing about personal growth or something. But I just looked him in the eye and said, “I’ve spent the last 35 years telling year 7’s where to stick their apostrophes. I’m getting a bit over it!” “
Me? Well, I’m hoping that only working 3 days will be enough to refresh how I feel about my working life so that I’ll get back to where I used to be. Coming into work with a song in my heart and a spring in my step and feeling glad to be doing a job I enjoy. I hope that only coming in for 3 days a week will minimise the things that are sucking all the fun out of teaching, but still contain the things that I still love doing… the actual TEACHING part of the job.
Having 4 days a week to do the things I choose to do will hopefully be enough freedom for me to feel that the job is adding more to my life than it’s taking away. After all, every year I’m able to delay retirement is another year for my investments to keep compounding without hindrance. Old Lady Frogdancer will be better off in the long run if Present Frogdancer doesn’t start eating away at that money.
Next year will hopefully be like a breath of fresh air. The freedom to do things at home and the freedom of enjoying my job again. As I said to someone in the staffroom who asked why I was feeling so restless:
“I’m in my mid-50’s. In previous centuries I’d probably be DEAD by now. No wonder I feel like I’m ready for a new life!!”
I’m sitting here in front of my year 8 class as they are writing their “Persuasive Letters.” They spent their last lesson before this one filling in a chart with dot points that they were allowed to take in with them – a roadmap, if you will, of what they want to achieve and where they want to end up.
Writing well is definitely not something that happens overnight. It’s the result of years of learning about different techniques; reading and gaining new words and phrases to add to your repertoire; talking through new (to you) ideas to broaden your horizons and finally, writing writing and more writing.
All the theory in the world won’t help you if you don’t actually put pen to paper and do it.
The task is pretty simple. They had to pick a topic, like “Smoking in all public places should be banned”, or “The school system is fundamentally flawed” and then write two letters on it. Each letter has to differ in tone and audience, so in effect, they’re learning how to pitch their arguments in two different ways to appeal to differing demographics.
As you can imagine, this is easier for some kids than others.
Some kids are more fluent than others, or have chosen a topic they feel passionately about, so the words and ideas flow easily. Others have struggled. But look at them now… everyone is silently writing and all of them will produce their finished letter by the end of the period in 12 minutes time.
Step by step, they will all make it, even the kid who has just migrated from China, who is sitting there looking through his Chinese/English dictionary to find the right word.
It’s just the same with personal finance.
Some people are naturally drawn to the world of spreadsheets, portfolios and numbers. They come across the lessons of how to succeed financially and they’re off and running. They draw out a plan in about 5 minutes flat and set off, dragging their hapless spouse behind them.
Other people may need to have the lessons presented to them a few more times before they start to take any real action. They ‘get it’ intellectually, but they’re not motivated to actually put the lessons in action until something in their life changes.
My writing students have the external motivation of Ms Jones marking their work to get them to produce a finished product, and this may be true in the financial realm too. A job loss, a baby, a divorce… all these can cause someone to re-evaluate how they handle their money. But sometimes it’s a more internal, personal motivation.
For me, when I decided to strike out on my own and leave my husband – if you can call being a single mother of 4 boys under 5 as ever being “on my own!” – with only $60 to our names, it was with sheer gritted teeth determination not to fail and drag the boys down with me. I was in pure survival mode. I’d look at those little faces that were totally dependent on me and I’d vow to myself that we’d succeed.
And we did.
I knew where I wanted us to be and over time, we reached and then surpassed it. But it wasn’t done overnight. It took twenty years of small choices, both personal and financial, to get us there. Did each little decision have a huge impact on where we ended up?
No. But the cumulative effect of all the little decisions and choices, along with a couple of really big ones, set the scene for our “overnight” success.
The thing that kept me going, even when things in the early years seemed darkest, is that if I made more “good” money choices than bad, I couldn’t help but move closer to where I wanted us to be. Achieving financial independence is definitely not a sprint, so I knew I had time to correct our course and recover from any mistakes I might make. I had time to learn frugality and to pay off the house so we’d be safe.
Once that was done, I had the mental bandwidth available to go onto the next big step – investing. This led to FIRE. I was just starting my 50’s when I started working on my retirement. The goal seemed insurmountable. But step by step, I’m turning it into a reality.
Step by step. No need to get stressed about how long it’s going to take. Just set things in motion and keep going. You’ll get there.
Of course, there’s no generic answer to this question. We all travel through life in our different ways and we learn whatever it is that we choose to learn along the way. But I believe that there’s one quality that people who reach Financial Independence share and that is resilience.
Resilience is the ability to get back up after we’ve been knocked down. It’s the ability to set a goal and go for it, even though the way grows tedious and dull. People show resilience when, if the original plan doesn’t work or if they fall off the wagon, they tweak the plan and keep on going, rather than throw their hands up in surrender.
As a teacher and parent, I want both sets of my kids, (biological and my students), to enter the grown-up world as kind and resilient people. But how do we do this? Unfortunately, despite what many parents appear to believe, simply telling kids, “You can do it!” isn’t enough – in fact, it often has the opposite effect.
I believe that people need opportunities to “grow” their resilience, preferably way before they actually need to face real-life situations where possessing this quality is crucial.
One of the classes I teach is a year 9 English class. This year, my year 9’s are almost robotically good – who would believe that a group of 16-year-olds, awash with hormones, would be this dedicated to their lessons?? However, as the year went along the admin introduced a couple of school refusers into the class. Let’s call them Betty and Chaz.
These kids both have home lives that are problematic. Both are sometimes reluctant to come to class and the school is doing its best to get them to feel comfortable about school again and to get into the groove of following a normal routine. It’s a delicate balancing act – too draconian and you’ll scare the kids off for life; too lax and they’ll walk in and out as if they own the place, which isn’t good either way.
In effect, this basically means that you never know when they’re going to be in front of you on any given day.
In the last 3 weeks of term we do Poetry. I start it off by selecting some poems and songs that I absolutely love, such as Dulce et Decorum Est, Introduction to Poetry, Ozymandias, My Last Duchess, Starry Night, and Eleanor Rigby. I begin by telling the kids about the poet and any background abut the poem they need to know, (they love hearing about things like Robert Browning’s elopement, the background about World War One and about Vincent Van Gogh’s life), then we dive in and look at how the poets use language to get their points across.
The end result is that the kids have to write a poem, then read it out to the class and give a short talk about which poetic techniques they’ve used in their poems and what emotional response they were trying to elicit from their audience by using them.
It’s a bit daunting for most kids, but every year we end up with some fabulous work, sometimes from the most surprising kids. But what do you do with kids like Betty and Chaz who shy away from anything confronting?
Do you force them to do it? Do you let them skate away from it? Neither one gives them the chance to develop resilience…
About two weeks in, someone in the welfare staff sent me an email telling me that Betty was suffering great anxiety over the public speaking aspect and she asked me if I’d let Betty off doing it.
This is a tough one. Over the years, I’ve seen how debilitating anxiety and depression can be and I certainly don’t want a little poetry speech to make the problem worse. I know that she has a lot on her plate in her day to day life.
But then again… it’s only a little poetry speech. How will she learn to push through difficult tasks if we keep taking them away from her? I replied that I’ll have a chat with her after class.
Betty’s a lovely kid. She sits up the back with a couple of friends, hiding under a long fringe that hangs over her eyes, taking every chance to dive into the current novel she’s reading. She seems to enjoy English. After the next class I asked her to stay behind. I told her I received the email, but I wanted her to at least write a poem. I said up front that my goal was to see her do the task in front of the whole class like everyone else, but we’d take it a step at a time.
“Do you think you can write a poem with enough poetic techniques in it to be able to write a speech about it?” I asked.
“Yes Miss, I think I can,” she said.
At 10 PM that night she sent me an email.
“Hi Ms Jones, I’ve finished the poem, however I haven’t started on the explanation and I’m not sure how to explain the writing techniques I used In the poem. I’m actually really scared to present in front of everyone. Oral presentations are seriously my nightmares, so im extremely nervous. I genuinely don’t think im ready, yet I still want to give you at least something. Thank you for understanding. Yours sincerely, Betty. “
“Coolio. We’ll have a chat after lunch. I’m glad you wrote the poem… nice work!”
Ok, first step done. She wrote something. I honestly wasn’t sure she’d even do that. Most kids like this *cough cough Chaz* just disappear until the task is finished and they’ll get an N/A mark.
As anyone who’s ever tried to teach somebody a skill knows, you seriously can’t teach anyone anything unless they actively want to learn and make at least some kind of effort. I could talk to Betty and Chaz until I was blue in the face about the importance of learning how to speak in front of others. I could tell them about how in practically any job I can think of there’ll be a meeting to speak at, a task to report on, a lecture to give, etc etc.
But if they don’t produce even the bare bones of what the task requires, I can’t help them. It’s impossible to steer a stationary vehicle.
But Betty isn’t standing still. She’s started to move. I wanted to keep her momentum going.
As luck would have it, we were heading into a double period. We’d be knocking over the rest of the speeches that day. Betty’s friend Zelda had already done her speech and earned an ‘Outstanding’. Maybe, while the rest of the class were performing and watching the speeches, Zelda could help Betty build her confidence and get her speech down? After all, Betty likes and trusts Zelda and they’re both very good writers…
So I grabbed the girls and set them to the side at the back. Betty was hesitant at first, but Zelda was all over it. As the class went on and kid after kid stepped up to the front to perform their poem and the analysis, Betty and Zelda were whispering to each other and typing. Zelda’s a little… shall we say… exuberant at times and when she got excited about something I’d have to ask her to pipe down, but apart from that it all went well.
By the end of the lesson they came up to me, Zelda beaming and Betty shyly smiling.
“How did you go?” I asked. “Do you have the speech written?”
“Most of it,” said Betty. “I just have to finish it off at home tonight.”
“Do you think you’ll be able to knock it off in tomorrow’s lesson?” I asked. “Then we can start watching a movie.”
Betty nodded. Zelda turned to go, then looked back and said, “Wait till you see her poem, Miss. It’s really good!”
As I drove into work the next morning I wondered if Betty would be there. We had two classes left before the school holidays and it would be very easy for her to simply ghost the class for two days and turn up again next term, knowing that we’d be moving on to new work.
Period 2, I walked down the corridor and scanned the class waiting outside the room. I saw Zelda… and Betty. She was standing right beside the door. As I turned the key, I smiled at her and airily said, as if it was all totally routine and there was no drama involved at all, “Are you ready to go?”
She smiled. “Yes Miss. It’s all done.”
“Coolio. I’ll call the roll and put the Dad joke on the board. While I’m doing that, send me your poem so I can throw it up on the interactive whiteboard.”
After calling the roll, I said to the class, ‘Before we start the movie we have one more poem to hear. Betty, you’re up!”
As she walked to the front of the room, I found her poem in my emails and threw it up on the board so we could all see what she wrote. Betty walked past me, outwardly composed but very pale. Her hands were slightly shaking.
She stood and faced the room and read her poem. You could have heard a pin drop. Even my two talkative boys at the back were silent.
Then she stood straight up, glanced at her cue cards and began her analysis.
She spoke about how she was paralysed with fear about this task and that the only thing she could think to write about was how she was feeling, as it was so overwhelming.
She spoke about how the poem explores anxiety, and how she wrote the poem both to explore it in herself and to let anyone reading it who also suffers from anxiety know that they’re not alone… that everyone feels anxious at times and that it’s perfectly normal.
She spoke about how she used repetition to show how waves of anxiety can roll over and over, and how she used a simile of a bird with no wings to explore the feeling of the anxiety denying her the freedom to soar and express herself – how a bird with no wings is no longer able to do what a bird is meant to do. How she used rhyme to hold the poem together and give it a structure, just as someone with anxiety tries to do every day.
She spoke in a clear, confident voice, looking out at the class and rarely referring to her cue cards. I glanced back at Zelda and caught her eye. Her face was glowing with excitement and pride. I’m sure mine was too.
When Betty finished, the class spontaneously broke into applause. I jumped off my table and ran up to her and gave her a hug. “I’m so damned proud of you!” I whispered.
You should have seen her face. She was glowing. She did it!
Yeah, I gave her an “Outstanding.” Not just because she had the backbone to actually do the thing that she was so scared to do. I gave her the ‘Outstanding’ because she stood up there and earned it.
Now, this is only a little poetry speech. It’s not going to change the world. But Betty showed that she has resilience. She was petrified of doing this thing, but with some gentle prodding from me, a willingness FROM HERSELF to at least produce something to work from, some encouragement and support from Zelda to help her see how she had to structure her speech to get her message across, she was able to do it. And do it well.
Resilience doesn’t mean that you feel no fear. It doesn’t mean that when you start you know what to do and have all the answers. Showing resilience means that you have an idea about what you want to achieve and you’re open to finding ways to help you get there. Resilience means doing things step by step, even if they’re difficult or tedious, but sticking to it until the job is done. Exactly the kind of things that people who reach Financial Independence do.
Want to see Betty’s poem? Here it is:
I am Scared.
“But of what?” they declare.
As I stood there, I had to accept that I was unaware.
On Monday the school had people from VicSuper come out to talk with people about their retirement plans. VicSuper is the default retirement company for teachers, so the vast majority of staff are with them. I don’t have my superannuation with them anymore, but I booked a half-hour slot during my lunch hour to have a chat with someone anyway. I thought that they wouldn’t be able to talk in detail, but I could at least have someone more mathematically gifted than myself to have a look at what I’ve set up and tell me if I’m on the right track or not.
Let’s call her ‘Ms VS’. It has a certain ring to it.
For the non-Aussies: Superannuation is the name for our retirement funds. Every employer is required to pay in 9.5% of every employee’s wage into a super fund of the employee’s choice. It guarantees that by the time people reach retirement, they’ll have at least some money behind them, instead of solely relying on the Age Pension.
When we first starting talking, I said to her that although I’ve been working full-time, I’m dropping back to part-time next year as a sort of glide-path towards retirement. I said that retirement might be 3 years off (when I can access my super) or it could be as soon as 1 year off, if I find that I’m still hankering towards total freedom over my days even with the reduced hours.
Apparently, from what Ms VS said later, this is pretty standard. She said that she normally doesn’t have people book a time with her unless they’re very close to retirement, when they suddenly become aware that they’ll have to rely on what they’ve put away in their super. She clicked her pen, leaned forward and asked me if I knew what I have in my investments.
Did I know what I have in my investments?!? Little did she know that she was talking to Frogdancer Jones. I’ve been reading blogs about net worth, share portfolios, savings accounts, superannuation and the like for YEARS. Hell, with all the US blogs I’ve read, I know more about American retirement accounts than you could shake a stick at!
I was primed, ready and prepared.
I had period 1 off that day so I had time to make a full list for her. Well, to be honest, I just took all my numbers from the ‘Net Worth Table’ I have in the cloud, which I update at the end of every month. Took me less than 5 minutes. I flipped open my notebook at the correct page and passed it across.
I don’t think Ms VS meets a lot of FIRE-y people in her line of work.
She was pretty surprised, not so much at my figures, though she said they were unusual, but by how I’d thought about the share market ups and downs and where I’d pull money from when the market tanks. She didn’t need to explain how the share market ebbs and flows; how risk can affect people in different ways depending on how close they are to retirement; how, if I retired earlier than 59, how I’d have to find the money to fund my lifestyle and what a safe withdrawal rate was, etc, etc.
Thank you, blogs and books in the FIRE movement! I looked like I had a financial brain!!
The talk about my actual figures only took up about half the time, so we moved on to talk about other things, which is why I wanted to write this. Some of what she said was scary, particularly for women.
I guess when we’re interested in FI and we read all the blogs and books and start to absorb the knowledge, we assume that most people are more financially literate than they really are. According to Ms Vs, this is far from the truth.
She said that when I mentioned that I was looking to pull the pin in the next year or two, she thought I’d be like most of the people who come to see her. They give no thought to their retirement, assuming that the compulsory 9.5% of our wages that our employers are legally required to put into Super is enough. Then, a year or two out from retirement, they decide to look at their figures, they have a heart attack at what they see and they come running to see what they can do about it.
I guess that’s not so much of a surprise – we hear this a lot about huge swathes of the population not getting ready for retirement in time. At the risk of sounding like a Nelly Know-it-all though: I just don’t understand that mentality. When I was in my 30’s and 40’s I deliberately ignored putting extra money into my retirement account because I made a conscious choice to pay off my house first. Security for the boys and I was my paramount objective. But 3 weeks after I’d made that last mortgage repayment, I was stressing over what I had to do to get my Superannuation account looking more lively. Maybe that’s the blessing/curse of being a long-term thinker??
“I see a lot of women in their 50’s and 60’s who come in after a divorce,” Ms VS said. “They’ve only got around 70K in their Super and they still have a mortgage. They’ve never dealt with finances in their lives before and it’s a scary time for them.”
I smiled. “I went through the divorce thing twenty-two years ago,” I said.
“You’ve had time to recover,” Ms VS said. “It’s really good to see a woman as well-prepared as you. Though I suppose you’ve had to be organised, being on your own.”
“I wasn’t on my own!” I said. “I also had 4 kids under 5 with me.”
We talked a bit about where the boys and I started from, veered off into talking about dachshunds, (because why wouldn’t we?) then back onto finances.
“Have you ever taken what you’d consider being a financial risk to get into the position you’re now in?” she asked.
“OMG, yes,” I said. “Years ago, back when the boys were still in school, I decided to take a 15K pay cut from teaching by dropping a day and using that time to run a group of Thermomix consultants as a team leader. 15K was a lot of money to me back then… well, it still is!… but I was assured that if I worked hard I could pull in 30K. Turned out to be true, so I kept doing that for 3 or 4 years.
“Then, when I decided to go into partnership with a developer and draw up plans to put a couple of massive townhouses on my property, I took on a 750K bridging loan when I bought The Best House In Melbourne and still owned the original place. The interest payments took up over 70% of my take-home pay. I thought it’d be for 6 months or so but the council took so long to approve things that it was 18 months before I was able to sell the property with approved plans and pay off my new place. I was terrified the property bubble would burst, but it turned out that I sold at the peak of the market so, in the end, it worked out. It was a calculated risk – but it paid off.”
We talked about whether I’d seen a financial planner. I said I hadn’t and she said, “You’ve managed very well so far, so why would you hand it all over to someone else and pay them a fee to look after it for you? “
I said that before I leave work, I want to see someone to stress-test my plans in case there was something I’ve missed, and she thought that was a good idea.
As the bell for the end of lunchtime rang and I got up to go, she said, “It’s rare that I see someone who’s all over it like you are – and if I do, they’re usually Maths teachers.”
I’m glad that I was able to fly the flag for the Drama and English teachers for a change!
This morning, a few minutes ago, a little thing happened that made me think about the effect we have on the people around us. We don’t realise it but in all sorts of weird and wonderful ways, the things we do and say often rubs off on those around us.
I’ve mentioned on this blog before that I always put at least one ‘Dad joke’ up on the board at the start of each lesson. I started doing this a year ago and the kids love it. If I start the lesson and forget to put them up, they always remind me. Admittedly, my year 9 class have asked me to stop doing this before the corniness kills them… but they never fail to ask for the Dad joke when I ‘forget’ to do it. They’ve already asked me to email them next year with a Dad joke a day when I’m not their teacher anymore.
After a few months of this, some kids have started emailing me with Dad jokes that they’ve found. A typical email might read, “Hi Ms Jones. I was away today and I was wondering what work I missed. To make up for it, here’s a Dad joke: ‘I saw a magician yesterday that turned audience members into wind turbines. I immediately became a big fan.’ See you tomorrow!”
I love it, especially when it happens in my own house.
Ryan24 called me into his room to read a Dad joke he stumbled across on a website. He said it was two Dad jokes in one. Seeing as it’s a joke on finance, I thought I’d share it with you. Are you ready for the glory of the Dad joke…?
‘I’ve started buying heaps of stocks. Chicken, beef and vegetarian stock cubes. One day, I’m hoping to be a bouillonaire…’
I hope no one strained a muscle from laughing too hard.
It got me thinking though. People pick up on what you do. If they think it has value, they’ll copy it for themselves. Because Ryan24’s joke was a financial one, it got me thinking about how the boys are running their financial lives.
When they were growing up, we were living on a financial knife’s edge. You might not think it, but it takes a long time to claw your way out from the pit of starting a new life with 4 kids under 5, $60 in cash and a mortgage just under 100K. I wrote about it here.
Those boys grew up watching me living within the financial rules I set out for myself:
1.NEVER borrow anything. Always spend less than you earn. Actually, the only exception was when I landed the first teaching contract at my current school. It was for 9 months of full-time work and I knew we could afford to get a new(er) car. The Tarago we were driving was as aerodynamic as a loaf of bread and the skylight leaked every time it rained. Whenever I made a right-hand turn, a trickle of water would run down the back of my neck. When I traded it in for a 5-year-old Ford station wagon and took out a 20K loan, I said to them, “I don’t know if I’ll have a job next year, so I’ll be paying this off before my contract finishes, just to be safe.” The kids were Tom13 (now Tom27) down to Evan9 (now Evan22). They watched me do it.
2. You should have everything you NEED, but only some of what you WANT. This translates to their after school interests. I knew that with 4 kids and only my income, we’d never get ahead if I spent lavishly on everything that the boys might have wanted to do. So I got them to prioritise. They were allowed ONE after school class a week each. It could be anything they wanted – sports, music, art, dance, whatever. But only one thing at a time. David25 was David2 when he first asked for piano lessons. He stuck with those and is now putting the finishing touches on a Music degree in piano. Other kids tried a few different things before settling on what they liked. It was ok. They had to decide what they really wanted to explore and then focus on that. I think that’s a good thing.
3. Your money is a finite amount. Don’t spend on things you don’t value, but spend on the things you do. An example of this is overseas travel. I didn’t want my boys to miss out as I had. (I planned a big trip to Europe with my best friend when we were 15… but I didn’t get to go until I was 51; after the boys were old enough to be left alone.) When the boys were younger, I took them on holidays to Bali, Thailand and Singapore and also sent the 2 middle boys to the US with the school’s band. I had to forego a lot of coffees, new clothes and other fripperies to afford to do this, but to me, it was worth it. They watched me saving and planning for all of this.
4.ALWAYS have an emergency fund in place. This one’s pretty self-explanatory. When the boys were very small I had a few years when I literally had no money at our backs if a real emergency happened. I’ve touched on it a bit in my ‘About’ page. I don’t think they have any strong memories of those hand-to-mouth times, (I should ask them!) but what they DO know is that Mum always has some money put away for when we need it.
5. Christmas is important. Always make it a special day for everyone. I insisted that the boys always had Christmas Day with me. As Mum said to me, “You have all of the hard days – you deserve to have the fun one.” A. always used to pick them up at around 6PM that day, after we’d had Christmas lunch with my family. One day soon I’ll write about my strategies for Christmas Day when we were so poor. The boys didn’t miss out on a thing.
So given all this, what are the boys doing with their finances now they’re in their twenties?
NEVER borrow anything. Always spend less than you earn. Interestingly, none of them uses credit cards, only debit cards, even though I’ve always used a credit card. I run all my expenses through a credit card, but I run it like a debit card so I rarely dip into the ‘credit’ part of it. They’ve seen how being free of debt has helped our family to become financially independent and I think they realise the importance of it. When we sold the old house to the developer and I was finally able to pay off the bridging loan of 750K that I was carrying on The Best House in Melbourne, I took them all out to dinner to celebrate.
Whenever they’ve needed to buy things like cars, they’ve either paid for them themselves out of savings or they’ve come to me for an interest-free loan. This month, Tom27 decided that he needed a new car. We talked about what he could afford, given his wage, so instead of buying a tinny but shiny new car, he bought himself a 5-year-old Prius. He was spending 18K, which is bigger than the Bank of Mum is prepared to lend. Initially, he applied for a loan from the car yard’s financing, but after getting home and doing some research and some Maths, he realised that getting a loan from someone else will save him over 2K in interest, so that’s what he did. Interestingly, the car yard tried to entice him by saying, “If you get the loan through us you can have the car tomorrow!!!” Tom27’s response? “I’d rather wait a week and have the two extra grand, thanks!”
You should have everything you NEED, but only some of what you WANT. I guess this follows on from not having access to credit, but they seem to be quite good at prioritising what they spend their money on. If they need cash for something, they’ll either sell something to free up some money (which is David25’s go-to), or they’ll tighten the belt and wait until they have the means to get what they want.
Your money is a finite amount. Don’t spend on things you don’t value, but spend on the things you do. Poverty and student life has forced Evan22, in particular, to take this on as a survival mechanism. If he spends all of his Austudy allowance on wine, women and song, then he doesn’t eat for the rest of the fortnight. He lives in Ballarat, so he can’t pop home very often for a free feed, so he’s had to learn to be very self-reliant and to balance his money.
Tom27 is an accountant, (yeah… I don’t know how that happened either…) and he plans out his expenses months ahead to ensure he has enough to do what he has to do, such as rent, petrol car payments etc, before he does what he wants to do, such as recording a new album, travelling overseas and going out.
David25 has a girlfriend and at first, a lot of his money went on eating out, flashy dates etc. Now, nearly 2 years on, he and Izzy spend a lot of time at each other’s houses, watching videos, composing songs and popping up to Coles to get a litre of gourmet icecream as a treat. Ryan24 is the king of slashing expenses to make his money go further.
Christmas is important. Always make it a special day for everyone. Well, everyone’s onboard for this one! David25 doesn’t spend as much on dates anymore, but when it’s their anniversary he pulls out all the stops to make the date a memorable one. He’s learned the art of prioritising in this regard.
We all put thought and effort into Christmas, probably even more so than birthdays. No one’s allowed to buy anything for themselves in December in case they muck up someone’s gift for them and we all sneak around buying and making things that we hope will really hit the spot. I love seeing the boys plotting and planning gifts for their brothers and grandparents – I feel like I’ve passed the baton onto the next generation.
So, given that they’re following all but one of the financial things I modelled for them as they were growing up, I guess you could say that the “Monkey See; Monkey Do” saying is pretty apt. Also, I’m putting it out there that when they get a bit older and start pulling in some real money, the Emergency Funds will come.
This wasn’t what I started off intending to write about – it began with Dad jokes – but I guess it’s a useful exercise to step back and observe the people around you and see what’s rubbing off on them. It seems my legacy will be a love of the Dad joke and a leaning towards the thrifty!
These past two weeks have proven the words of John Lennon. Two weeks ago I was blissfully planning for two weeks of school holidays – granted, it’s in the middle of winter, but I was still dreaming of two weeks of unencumbered bliss… and then the phone rang.
I’ve blogged before about how my Mum’s health is not the best, particularly since she fell and broke her arm a couple of months ago. Two days before the holidays began, I got a call from my sister.
“Dad’s been taken to hospital with suspected internal bleeding. Mum can’t be left on her own, so I’m staying with her tonight. I can’t stay with her on Friday night, can you?”
I told her I’d pack a bag for the weekend and I’d be over there after work on Friday. Not the way I was visualising spending the start of my holidays, but how lucky that it happened when I had the time free to look after her for a couple of weeks, if needed!
I leapt into the shower at 6 AM the next morning and found, to my horror, that our hot water system had broken. Nooooooooooooo!!!!!
I’d always thought that when this happened I’d upgrade to a continuous gas system, which is far more expensive because you need to install a bigger gas line to the house, but on the plus side you never run out of hot water and you can program it to the exact temperature you want. We had this at the old house and I loved it. So I decided to go through with this, but it wasn’t exactly a convenient time.
But then again, when is your hot water suddenly cutting out ever going to happen at a convenient time?
I was lucky. I’d be at my parents’ place for at least over the weekend while Dad was in hospital, but the boys would have to bear the brunt of it. I knew I wouldn’t be able to deal with getting plumbers out until the next week. So I trotted off to the last day of term and then went over to look after Mum.
It’s funny how you might intellectually know something, but when you actually live with it you realise the reality. I knew that Mum needed 24/7 care, but it’s not until I was walking her to the toilet and helping her with all of that, getting up in the middle of the night to take her to the commode, washing her in the mornings and walking beside her, supporting her with every single step she took that I realised just how much Dad was doing.
It was constant. She’s totally dependent. And if Dad was seriously ill or popped his clogs, we’d be in a seriously bad place with Mum’s care.
Long story short, Dad DID have internal bleeding from a small tear in his upper bowel, a condition that had obviously been going on for months and months without anyone picking it up. The doctors thought his breathlessness and dizziness was asthma. He just thought that he was eating too much liquorice!! 4 bags of blood to replenish all the blood he’d lost, a cauterisation and he was back home in a couple of days.
The Jones family dodged a bullet. If it hadn’t have been noticed by a different GP to the one he usually went to, we could quite easily have been planning a funeral and racing around trying to find a nursing home for Mum.
It brings home the fact that when people get elderly, their situation can meander along for years and then change in an instant. We have to set things in place now in case we’re not so lucky next time. This is turning out to be a huge learning curve.
So how did the holidays end up going for me?
The hot water system was an inconvenience, not a full-blown drama thanks to my Emergency Account. I got around $700 taken off the cost of the system because I work with someone whose husband works in a plumbing clearance centre. It still ended up costing just under 9K all up, but I had the cash. By Wednesday we were able to shower again. (Before that, I simply made sure I was standing up-wind from the boys…heh heh)
I haven’t had to tap the Emergency Fund for YEARS. But instead of getting complacent and spending it, I let it ride. Sooner or later, I knew I’d need it.
My situation with Mum and Dad is a little more tricky. Power of attorney, being put on their medical and “My Aged Care” accounts, attending medical appointments and dealing with people from their council who are supplying food, cleaning and showering services – this is a whole new ball game. Yes – see how out-of-the-ordinary it is? I, Frogdancer Jones, just used a sporting metaphor…!
I have a younger brother and sister. My sister is very practical and good with things like seeing a need and supplying the solution for it. Things like organising a walker and commode, going to medical appointments and keeping track of what’s going on… that sort of thing. Her schedule is a little more flexible than mine, so she’s going to carry on with these sorts of things. I, on the other hand, have put my hand up to be the ‘Admin person’, helping Dad with all the paperwork that’s piling up with all the new organisational things that need doing.
As you know, next year I’m dropping down from full-time teaching to working 3 days a week to be able to build in time to care for my parents a little more. I’ve pretty much reached FI and this has given me the flexibility to be able to make this choice. A small part of me is wishing that I brought that change forward to this term, but realistically, with teaching year 12s, suddenly changing to part-time just wouldn’t be fair to them.
The woman who came to assess my parents’ eligibility for Respite and Residential Care said to me, “So this is your part-time job on top of your full-time one!” I laughed and nodded, but that remark resonated with me. It’s taken a fair few days for me to think about and accept.
Here in the FI/RE movement we’re told to think about what we’ll do in retirement. We’re cautioned against racing full-tilt towards the goal of early retirement without working out what we’re going to do with ourselves when we get there. Plenty of people pull the pin on their jobs and then wander around aimlessly, unsure of how to fill the suddenly empty hours that head out in front of them.
I had it all planned out. I wasn’t going to make that mistake! Travel is big on my list – at least one overseas holiday a year, going to different places all over the globe (but especially the UK and Europe.) I have the food garden that I’ve set up, my knitting, quilting and writing. My dogs – how I’m looking forward to spending more time with them! In the fullness of time, perhaps my ugly boys will find some kind-hearted/short-sighted partners and reproduce, so I might be wrangling grandchildren.
I didn’t give any serious consideration that I would become a carer to my parents. It’s a stupid thing to admit, but again… intellectually I knew that they’d one day become frail, but emotionally?? That’s just crazy talk. They’ve always been around, looking after themselves and everyone else. Why would anything change?
I guess my over-arching goal in retirement was to engineer a life for myself where I have the freedom to do whatever I want, whenever I want. That’s the foundation of it and all of the other things I had in mind to do are just the detail. Things can be added and taken away without changing the basic idea of my retirement – the freedom to spend my days as I please.
The thing I’ve realised over these holidays is that I’ve now chosen to spend a good proportion of my time looking after my folks. Time moves on and changes things and that’s what’s happened with us. I’ll still do all of the other things on my retirement list, but I’ve added another activity, that of Carer, to it.
It’s a big thing to wrap my head around. It’s a bit painful to have to adjust my view of my parents from them being the bullet-proof backstops between me and a cold, harsh world to a view where they’re the ones needing protecting. I know it comes to us all if we’re lucky, but I guess you always think that you’re going to have more time.
Still, things could be a lot worse. My advice to anyone reading this is to get your financial life sorted before any of this starts to happen. I’ll no doubt have stressors and strains that I have no idea about yet, but worrying about how I’ll be paying the bills while putting other things aside to care for my parents won’t be one of them.
Yet another reason why aiming for FI is a great idea!
I walked into HR today with a very particular question to ask. Basically, the crux of it was, “I wish to work 3 days a week next year and be paid for 4. Can you grant this wish?”
Turns out she can. She’s like a fairy godmother, granting wishes all over the place.
Long Service Leave is a perfectly brilliant thing!
In Australia we have LSL, which is earned after you work with the same employer for more than 7 years. You get extra days’ holidays that you MUST take as an actual holiday – you can’t cash them out or transfer them to someone else. You can store them up or years if you want to and then take a holiday when it suits. This is what I did when I took a whole term off in 2015 and went to Europe and used up 50 days on full pay, and I did it again last year when I took an extra week’s holiday in April (5 days on full pay) and went to North Korea.
There’s nothing so sweet as standing at the top of the Eiffel Tower/Juche Tower and knowing that you’re getting paid while you’re looking out over Paris/Pyongyang.
People who job-hop obviously forego gaining LSL, but for people like me, who work as teachers in the government system, LSL works brilliantly. Even if we hop from school to school, the State Government is still our employer, so our LSL gently piles up until we’re ready to use it. I don’t know how many days we get/year. I tried googling it but the website had a mathematical formula to explain it so I got out of there quick smart. I’ll just call it magic.
I always assumed that you have to take LSL in biggish blocks of time until I talked with a retiring work colleague late last year. She said that she was going to spend the last 6 months of her career working part-time but getting paid full-time, by using a couple of LSL days every week.
This has rocked my world.
Think about it. In two or three years I’m going to be retired, so I’ll be able to take holidays whenever I want. I won’t be restricted to school holiday times with their exorbitant prices. I won’t need to have access to some holiday days – the whole year will be my holiday smorgasbord table.
I have around 45 LSL days available. Roughly speaking, school terms are 10 weeks long. There’s 4 of them a year.
Imagine being able to work 3 days a week, while having another day’s pay coming in over the first year to Get Things Done and smooth the ride down to retirement?
Now THAT seems like a good use of Long Service Leave!
I sat down 5 minutes later with my principal and ran the idea past her. She’s officially approved it. In writing. It’s really going to happen, folks!
Of course, there’s the other option, which is what most people do. Work and get paid for your normal days, “retire”, then stay on the books and use up the LSL in one fell swoop at the end. This also has its charms.