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Bruce Brammall, The Australian, 6 January, 2025
Sometimes, an email pops up into your inbox that signals “success”. You’ve been working towards this. And it’s finally happened.
If it was a cocktail – appropriate for this time of year – it’s made up of two parts happy, one part pride, one part a nice type of envy and then fill to the top with champagne.
It was a simple email, typed out quickly on his phone. It was a client putting a date on his retirement.
“What the?” I hear you say. “No big deal. People do that every day.”
Indeed they do. But this one isn’t a regular retirement. It’s arrived about 12 years earlier than he expected. And his retirement is going to be a far more pleasant one than a life on Centrelink age pension, as he had expected.
And no, there was no Lotto win, no inheritance, no great fortune made quickly by getting a crypto-currency gamble right.
Just a lot of sacrifice, mixed with determination and advice.
Dramatic realisation
Let’s call him Michael, or Mick, for short.
Back in 2010, Mick contacted me after reading one of my books, Debt Man Walking, and said he wanted a chat.
“Bruce, I’ve just read your book and I’m freaking out. You’ve made me realise that I’m not going to be able to afford to retire until I’m 75. Can you help?”
Mick said that he had fallen into a rut on spending. At age 47, he had about $30,000 in super, a motorbike, some home contents and about $12,000 in savings.
“Bruce, I’m not long back from Bali. What happens is … everytime I get my savings up to $25,000, I book in a couple of weeks in Bali and come back with $10,000 in the bank.”
Rinse and repeat. A couple of times a year.
He’d partied hard through his 20s, 30s and 40s. And he knew it. But something had to give.
Fear as motivation
Now Mick’s fear was that if he continued on as he had, he would have to work through until 75 and would retire with some super, but otherwise almost penniless and probably on the full government age pension.
“I don’t want to live on the age pension. What do I have to do?”
We started talking about insurance, before moving on to super and investments. I explained that the basis of lifting him out of the current situation and to a better position would require some sacrifice.
He said he was up for it. And you could just tell he was. Fear, even if it’s fear of something happening in 25 years, is as good a motivator as any.
I don’t care what motivates people to make financial change, but fear and greed tend to be the ones that will tip the most people into wanting to develop the right habits.
In his case, he already had good insurance. We tweaked it, but he understood and got that element of it and that was quickly done and dusted.
Next was super. He hadn’t paid any attention to it. His employer put money in each month, but it was sitting in a balanced investment option with an industry fund.
Ramp up risk
We went through a discussion about risk profiles and the various asset classes (cash, fixed interest, property and shares).
I explained how his super was invested now and the difference that increasing the amount of risk he is taking in his super – by putting more into shares and property – could have on his super, by the time he turned 65 (the age pension age back then), or if he continued to keep working past that.
He agreed to invest his super more aggressively (and after a little while of getting to understand what we’re doing, his natural risk profile increased anyway).
We maxed out his super contributions, with salary sacrifice up to the annual limit. We talked through that he wouldn’t be able to touch this money until he hit 65 or turned 60 and resigned from a job.
Sacrifice some more
And then we talked about non-super investing and how we try to make it as close to what happens with super, with regular amounts being contributed.
He wanted to start with $2000 a month, matched with a margin loan, to invest in low-cost index fund style investments. The amount would fluctuate up and down over the years.
To this point, we had “taken” about $3000-4000 a month, after tax, to put towards his future, for his super, investments and margin loan interest.
Given his lifestyle, this was likely to hurt. But such was his drive to change, that he didn’t really let it.
“Bruce, I’ve made a bunch of changes. I’m still going to Bali about as often as I used to. But I just spend less when I do. I’m still having a good time, but I just don’t feel like I’m blowing money anymore.”
The really great thing about Mick? Every year when we caught up, he would acknowledge that he could see the difference from last year (even in years when markets weren’t great) and he would say …
“Bruce, this is great. What’s next?”
A few years in, he wanted to start a second geared investment. This one had a specific purpose – to either buy an investment property, or to buy him a home (he’d been a lifelong renter to this point).
Long property conversations
Therein started an annual conversation, at his request, about the benefits and pitfalls of direct property investment.
At the end of the discussion, for about 3-4 years, he would say: “Thanks, but I’m not ready for that yet”.
Until 2016, following the same discussion we’d had for about four years, when he said: “Yep, I’m ready, let’s do it.”
Steady progression
Because of his convictions to make sacrifices and adjust his lifestyle, while still having one, we could see the results pretty quickly.
When we started in 2010, his net assets (super, cash, bike and contents) added up to about $70,000.
In 2012, his super had grown to $75,000, his net investments about $70,000. With other assets, he was now worth about $195,000. That is, it had more than doubled in just two years, largely through his sacrificing, as markets hadn’t really had time to do their thing yet.
In 2013, net assets were now about $230,000 and in 2015, about $290,000.
He cashed in some shares to buy the property in 2016, but by this time, net assets were sitting at about $540,000.
By 2019, his super was sitting at $299,000, his shares had been built back up to $160k and, despite paying stamp duty, he now had about $80k equity in the property.
In 2021, he hit net assets of $690,000. When we caught up in 2022, we realised his net assets were now about $1,025,000.
In 12 years, he’d gone from $70,000 to being an on-paper millionaire.
Today, his net worth is north $1.3 million with super north of $500,000, investments back up to nearly $300,000 and equity in his property of about $500,000.
Work knock off
Mick’s email to me said that he had made an actual date for his retirement, which is now going to happen in 2026, soon after he turns 63.
His sacrifices and willingness to take on advice and some risk, means that he is retiring about 12 years earlier than he had expected to.
Mick is going to move states and turn the investment property into his home. (We’ll chat about that later this month.)
He’ll then have to make decisions about whether he wants to retain the debt on the property, or pay it out, from his super and other investments.
More important than being able to retire a dozen years earlier than he’d anticipated, is the quality of life, financially, that he’ll be able to enjoy.
Find your motivation
It doesn’t matter how you find your motivation. In whatever form it comes, I just hope it bites you really hard.
It certainly bit Mick hard. He was prepared to sacrifice a lot to get to where he wanted. Though it wasn’t until later years that he realised that his pipe dream was now likely to succeed even more than he’d hoped.
He made it work. He still got to travel as often as he used to. But he made very conscious decisions to change how he spent money, prioritising the financial plan over short-term pleasures.
Sacrifice. Make a plan. Give yourself some time. Taken on reasonable risk. And it’s doable.
Bruce Brammall is both a financial adviser and mortgage broker and author of books including Debt Man Walking. E: bruce@brucebrammallfinancial.com.au.