WCI #324: Pilots Can Reach Financial Independence Too

This is the White Coat Investor Podcast where we help those who wear the white coat get a fair shake on Wall Street. We've been helping doctors and other high income professionals stop doing dumb things with their money since 2011.

This is White Coat Investor podcast. 324 pilots can reach financial independence too. The White Coat Investor is proud to introduce our no Hype Real Estate Investing course which will provide the framework for developing further knowledge and experience as you progress in your real estate investing care. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. Welcome back to the podcast. Hope it's been a great Sunday summer so far for you. As you are listening to this, I am back in Idaho floating on a river in the boondocks. So if you send me an email about this today, it runs. Don't expect a response for a little bit. All right, let's do our quote of the day before we get to our interview. This is from Jack Bogle, the late Jack Bogle. He says, I favor the All Market Index Fund as the best choice for most investors. Don't look for the needle, buy the haystack. And that is a great tip from Jack. All right, don't forget about our paid surveys. If you want some extra income this summer, maybe while you're traveling and your spouse is driving, not while you're driving. You can hop onto whitecoatinvestor.com mdsurveys and sign up for a few. They really do want your opinion. They really do pay for your opinion. So the record I've heard so far is about $30,000 a year on surveys. But I'm sure somebody out there can beat it. And we'll write in and let me know. All right, we've got something unique. It's summertime. Let's do something a little different. Let's get off the continent, let's go to Australia, let's talk to a pilot. We've actually got a surprising number of white coat investors who are pilots. According to our most recent annual survey, pilots are a different kind of high income professional, have their own challenges. It's reaching their financial goals. Some advantages over doctors, some disadvantages but lots and lots of similarities. So we've got Captain Phi that we're going to bring on a pilot who now blogs and podcasts out in Australia about financial independence and retiring early and financial literacy. So let's get him on the line. Our guest today on the White Coat Investor Podcast is Captain Fi. Captain Fi. Pete, welcome to the podcast.

G', day, Jim. Thanks for having me, mate. It's awesome to be chatting.

Yeah. So how do you pronounce it? Do you pronounce it Captain Fi or Captain Fi?

Yeah, Captain Phi. I got it in one. So, look, it's a bit of a funny one. It basically just came apart because obviously I'm a pilot. That's what I do for my day job, although not anymore. I now spend a lot of my time writing and podcasting and Fi. Just financial independence, which was, I guess, the whole theme of my blog.

Yeah, I think people have probably caught onto your accent at this point as well. You want to tell people where you are and what time of morning it is while we're recording this.

Yeah, I'm tuning in from Adelaide, South Australia, and, yeah, it's pretty early in the morning, but that's okay because my lovely partner made me a cappuccino, and I'll be sipping on that whilst we chat this morning.

All right, good times. It's the end of our workday, the beginning of yours, so. All right, let's start at the beginning. Tell us a little bit about your upbringing and what it taught you about money.

Yeah, so, look, I'll preface with this idea is sometimes I'll start talking and you just need to give me a hint when it's time to stop talking. Look, I grew up in rural Australia, and unfortunately, my parents did split up. I didn't exactly have the greatest dad. It wasn't very nice to my mum, and my mum was just the most incredible person. So she got. And my siblings and we. We left the farm property and she basically started a new life in the city. And, yeah, we just, you know, I guess I would say it's a fairly normal suburban upbringing. I did have some issues at school. I think I bounced around to, you know, about 17 different schools just with some behavioral issues. But my mum always stood up, stood up for me. Yeah, she was absolutely lovely. Unfortunately, because of the issues between her and my dad, my dad was pretty much completely out of the picture. So I didn't really get to see him much. I sometimes see him once a year or every couple of years, which was, you know, made me sad and he didn't contribute financially to my mum's or to our household. So mum did it pretty tough. You know, she was a teacher, she worked part time to I guess optimize between the cost of childcare and how much income she was able to bring in. But as a result, you know, it was below the poverty line here in Australia. But, you know, not to be, you know, having a sob story. I had an awesome childhood and I'm so grateful for everything that my mum did for us. She always told us that, you know, you just need a little bit more income coming in than you have coming out. And you know, unfortunately my dear mum did pass away recently after a very long battle with cancer and you know, before she passed away she had paid off her house, she built up a nice retirement savings in her superannuation, I can see equivalent American 401K. And she had built a wonderful family who was surrounded by everyone she loved. So yeah, I guess in summary, I had a wonderful childhood and really that's just a testament to how wonderful my mom was.

Okay, so after childhood, you know, obviously a little bit of issues at school for a while but tell us about your education after that and your career so far and what it has taught you about money.

Yeah, of course. So I guess, sorry I didn't really answer your question when it comes to like money and childhood never really had a lot of money. So I, I think I did develop a bit of a scarcity mindset around money in that money is something to be saved and to be sort of scared of and it was a bit complicated. Fortunately I was pretty good academically. Kids that are quite clever often get in trouble at school and I think I was no different. I was really lucky that mum always stood up for me and as a result I was able to finish my education. So I finished year 12 here in Australia which is like I guess when you finish high school and I finished with a really good score and I was able to get a scholarship at university. So I had a degree in aeronautical engineering paid for without any student loans and actually received an income whilst I was studying which was really cool. I then I went on to complete a master's in space engineering but all the time wanting to fly and be a pilot. So I used would save all my pennies and put it towards flight training. I had all a whole bunch of different side hustles, some more successful than others. Flip cars, clean graffiti, pick up rubbish, tutor, basically anything that I could think of to make money I did spend. Now this is Australian dollars, about 300,000 Australian dollars on my flight training over a period of about seven years. And yeah, so I guess I was very fortunate in that, in that I did. I didn't have student loans and I had these professional qualifications that I could use to bring in income. But basically once I'd finished my pilot training, I had still got my income coming in, but I no longer had this massive deficit. So that was kind of the inception of my learning about personal finances out of a necessity because I basically couldn't spend all of my income.

So let's not talk necessarily just about you. You're a pilot, you know, other pilots you worked with lots of pilots. How is the typical pilot with money? And why do you think that is?

Look, you know, I'll start first by saying, you know, not all pilots, but I would say the majority of air crew that I know probably aren't too switched on when it comes to money. And it seems to be something related to most professional careers and high income earners that, you know, money in dims, equal money out. I worked with a lot of colleagues who finance their cars, finance their holidays, finance their home. I mean, some debt is obviously sensible. My personal opinion is I don't like consumer debt. So I personally have never had a credit card, I never had a car loan. Yeah, I don't. The only loan I would take was for, is for a productive asset. But again, not about me. This is about, I guess the industry, the wider industry. It can be difficult for young pilots and junior pilots. So I know some do resort to debt to get ahead. But one of the things that I didn't really like about working as a pilot maybe was the, there is an element of the keeping up with the Joneses, you know, the popularity contest. To be seen as, you know, successful. You need a, you know, a C suite executive car. And you know, perhaps for certain areas, say if you're working in Outback Australia, the car that everyone wants here is a Land Cruiser. And I'm not sure what the equivalent is in the US but a Land.

Cruiser can be a Land Cruiser.

Yeah, they can spend $200,000 on one. So I imagine it might be a similar culture in medicine. And I was actually recently chatting to a gp Dev Raga who interviewed me and we were actually talking about this exact thing. There's a lot of crossovers between the medical aviation worlds, including professionally things like the Checklist Manifesto. But yes, I would say not all pilots are particularly good with their money. And I don't know, Jim, do you think Maybe that's just a trap with high income earners that always see this money coming in, that it's never an issue for them. What have you seen in the medical industry?

I think the truth is that pilots, doctors, they're all people. And most people spend all their money, you know, and then some, you know, and so I don't know, that's part of it, part of its status. You know, you're expected to spend, you're expected to live a certain lifestyle. But I think most of it is we're just regular people that do what regular people do and without financial discipline, without financial knowledge. That's what people do. And so it's not that unusual. Now you go by Captain Fi and I'm curious, what got you interested in fire in financial independence? Retire early. What got you interested in that movement?

Yeah. Okay. So I guess I reached this sort of crux in my, my adult career where I think it's around, you know, 20, 2014, where I had achieved my professional qualifications. I, you know, had a frozen air transport pilots license, which is when you have a commercial pilot's license and you've done all of your airline theory subjects and you're basically ready to slot into the airlines. And I was working as a flying instructor. In fact, I was working multiple jobs still. And I sort of had this surplus income that I know I needed to do something with. So that was the first, I guess the first aspect is, okay, there's some income trouble, something needs to be done with it. Now my previous role as an engineer, I would typically want to optimize everything. And I think I've fallen into the trap of over optimizing things. So I knew I wanted to do something, I want to do it right. And probably starting to build up a little bit of money anxiety around that because I wasn't used to having money. So I felt like I was responsible to do something proper with it. And actually before I started doing something useful with it, I started buying lots of gifts for people, bought my sister a car, you know, laptops, like paying for international trips for family. Like, I started to realize, no, actually I can't keep putting this off. I need to do something clever with the money. I need to do something responsible with the money. And it sent me down a rabbit hole of like learning about different, I guess, assets. I had money in a management which performed very, very poorly, underperformed the market. Like the market was, if I look back, was doing like 10%, I was getting 4% with horrendous brokerage fees. Like a couple of percent each way, which was just shocking. So I think I made a lot of silly mistakes when it came to investing. I tried to buy an investment property, tried to haggle with the real estate agent, had no idea about property and I think really just embarrass myself. I ended up picking up a book, it's really popular in Australia here. It's called the Barefoot Investor, written by Scott Tape. He used to write a financial column in a newspaper. Very, very popular, probably very similar to Dave Ramsey over in the US and his book was great. And it's sort of a no nonsense book that sort of helps the majority of Australians get to a baseline level of financial literacy. And that was great. And that kind of started me off, I think I read Robert Kiyosaki, Rich Dad, Poor dad and you know, and I found out about J.L. collins, the Simple Path to Wealth and Mr. Money Moustache, the Mad Scientist. And I kind of went crazy and I was like binging all of the podcasts, I was reading all of the blogs and I got really, really excited and it sort of helped me because I had this culture at my workplace, my old workplace, I kind of refer to it as the smoke em, if you've got them mentality. And I think that was where most people were in that paycheck to paycheck cycle. And it was kind of self destructive. So reading about the fire movement, it was so refreshing and I felt like, oh, these are my people. These are like other engineers, other professionals that are really interested in efficiency and setting up streams and the idea that I could invest 25 times my annual income, sorry, my annual expenses, and that I could be looked after financially for the rest of my life. It was almost too good to be true. It was like a safety boat had been thrown to me about my, you know, in my sea of money, money anxiety. And it was like security, something that I could latch onto. And I did. And I saw that many people on their fire journeys were documenting it online and I thought, I can do that, that can keep me accountable to my goal. And so I started blogging about it. You know, it wasn't very successful. In fact, I had a couple of failed, a couple of failed starts with websites. But yeah, loved it and have met some wonderful people, some incredibly smart, successful, lovely people that have helped me so much in my journey. And yeah, I don't think I would be where I am like today if I hadn't started blogging about my experience.

All right, well, when I look at your website, it says you retired at 30, is that really true? I mean, I hadn't even started my career at 30. And so I'm curious how you define retirement and why you say you retired at 30.

Yeah, look, I think it's a bit of a sound bite really. Jim. I definitely don't really consider myself retired in the conventional sense. I think of it maybe semi retirement or part time. Look, I certainly spent a lot of time, I guess retired in a conventional sense when I did left leave work. So I kind of switched one job for another which was I became a full time carer for my mum as she, you know, in the final stages of her life. And, and that was hard. That was really hard. So when she passed away around Christmas, that was where I felt that cliff of like, oh no, what do I do? What do I do with my time? Who am I? What's my purpose? Like I was so motivated for, you know, seven years or so about saving, investing towards Fire that when it sort of happened I felt really destabilized. I had this like existential crisis and I think a friend of mine told me to read Nausea by Sa and that definitely didn't help. That's a difficult book to read. And yeah, so I think I, I came to this conclusion and by, by speaking to quite clever people like yourself. We need something to do. And of course I had been, I've been blogging and podcasting along my journey to fire and you know, I realized this is something that I want to continue. So I think, yeah, I guess I would call myself semi retired or I work part time, actually run a portfolio of websites and they just sort of tick away in the background. I guess it was an additional pillar. People talk about different pillars of wealth, you know, investments, property, superannuation or 401ks and then business. And under the business pillar that's where these websites would fit. I guess I'm fortunate. Now I have a brilliant team of outsourcers that work as contractors and they do an amazing job. I really enjoy the SEO and the keyword research aspect. So it's very interesting. When you look at content websites, they actually don't really take a lot of time. So these days I spent a lot of time with my dog, focusing a lot on fitness myself. Friends. Yeah, I think recent events, the passing of my mom and the passing of a close friend of mine only just recently has definitely put this into perspective that you know, you really, you only get one shot at this life and you know, you can make a few sensible and strategic decisions early and Focus on, I guess, that delayed gratification. You really can free up your life to do what matters to you most. But I don't think you need to wait until you've got a fire number, like until you've had 25 times your savings to actually do the things you want. And so I'm really looking forward to buying a hobby farm soon. In fact, I'm looking all the time before the bed when I wake up at properties. And you know, my goal is to start planting as many fruit trees and big veggie garden and you know, have a lovely house and start raising a family. So I think there's a lot of work ahead for me. So I think, you know, it's a lot of words. But to summarize, no, I don't. It's not your conventional retirement. I'm not sitting on a couch, I'm not going to go to Barley and sit on a, on the beach sipping things. My life, I think as a human we need hard work. Your body needs hard work, your brain needs to be stimulated. So it's just about reframing why you're doing those activities.

Now, as I read through your blog, you throw a figure out there that your family spends something like 30 or $35,000 a year. Now I assume these are Australian dollars, which for those who aren't familiar with the exchange rate, the Exchange rate's about 0.67, meaning an Australian dollar is worth about two thirds of a US dollar. So 30 to $35,000. I mean some families spend that on a two week trip to Europe. And so I'm a little bit curious how that's going. I mean, do you think you'd enjoy being able to spend five times that much if you didn't have to go back to work to do that or tell us about why you're chosen to essentially have that lifestyle?

Yeah, look, it's an interesting one, Jim. And money is something I'm still working on. So I talk to a therapist and one of the things that comes up is spending more freely. In fact, he's always gently encouraging me to spend more on experiences. And look, we do sometimes spend more. So that's kind of my base spend and that's based on we live in a very modest place. In fact, we've got a two bedroom house which is awesome. Previously always had a one bedroom apartment. I was living in Sydney. And so I'm speaking to you now from our, you know, our second room which we've set up as an office, which is pretty, pretty Lux, in my, in my books, you know, we have a dog. Wonderful. You know, obviously quite a lot of expenses relating to having a pet. And, you know, I think that's awesome. And you know, I don't think anyone should be shamed for spending or for not spending. I just think it's important to spend on what's important to you. And for me, a lot of that stuff, a lot of the spending is just sort of not important. And whether that was part of just growing up and not having that, you know, we, we never went to see shows. So I'm not really interested in, you know, as much as she's an idol, Taylor Swift, coming to Australia, everyone's like going nuts for it. Some people are spending like a thousand dollars on tickets. But I just, that's not something that I want to do. Like, maybe I'm a boring, boring old man who's older than his years, but standing in a concert with loud people screaming and getting sore feet doesn't sound like a great time for me. Like, I, I would love to be curled up next to a fire reading a book, you know, maybe sipping a coffee or a glass of wine or something. Or, you know, out on, in the future on my farm, you know, building up my permaculture, food forest and, and growing, growing food for people, I think. I guess I enjoy activities that are low cost in nature or activities that produce an income. It's kind of just how I tick, you know. But having said that, we do have some expenses. Did you want me to go through the expenses or.

Well, I don't know necessarily. You have to go through the expenses. I think a lot of our listeners would just kind of hear that sort of a dollar figure, adjust it for US Dollars and just go, wow, you know, that's such low spending. You know, I mean, I talk to lots of people that would love to retire at 35 or 45 or 55, but not if it meant living on $35,000 a year. They would rather work longer than retire on that because it isn't really, you know, the question. I think it was George Foreman who said this. He said it's not what age you want to retire at, it's at what income. And there's a lot of truth to that. Obviously in the fire movement, people understand the math behind that. But what would you say to someone that says, you know what, 35 or 45 sounds great, but no way. I would rather work longer and be able to spend $80,000 or $100,000 a year?

Oh yeah, look, that's totally fine, you know, and that thing about personal finance is it's so personal, you know, I'll just put out there, you know, the share portfolio that I have, you know, that spits off about $42,000 a year in income. The investment property, you know, there's another 25k of income. The websites, you know, I had a couple of dozen websites and at the moment I choose to reinvest all into building the sites, paying my contractors, but you know, wouldn't be too hard for me to take another like 10,000amonth, 120k from that. So actually my investments, if I wanted to take the income now, could be actually my income, my flying income. But I don't want to spend that money. I like that it's there, the potential is there. If I, if I want to spend it, I can, it gives me the choice, the option. But for now, like I said, we're still living in my mind an amazing lifestyle. We're definitely not baked bean millionaires by any stretch of the imagination. Like food is probably one of our biggest expenses. We love good food, we eat out several times a week. And we're really fortunate where we live in Australia, we, we're really in like a food and wine capital here in Adelaide, South Australia. It's a really wonderful place to live and we have everything at our fingertips. We can walk a cycle, surrounded by beautiful national parks, beautiful beaches, the climate is lovely. We just don't feel that we need to spend more to improve our lives because it doesn't. Whilst my car might be 17 years old, it drives like a brand new car. Luxury Japanese built wagon, wonderful, you know, cruise control, power windows, power roof, giant moonroof. It's just wonderful. You know, like I thought, what will make me happy? Should I buy a new Land Cruiser? Will that make me happy? Should I get a caravan? And ultimately no, they don't. So what I'm doing is I'm choosing to take all of that surplus income from the portfolio, so taking the dividends, taking the franking credit refunds, getting that rental income and reinvest it. And similar with websites, taking revenue from advertising partners, reinvesting that into content to hopefully build the capital value. And we'll try to use that to buy this hobby farm which will be a very big expense and we will have larger expenses once we have the land. Because as anyone might know, you get a patch of land, you have fences, fences break, trees fall down, you know, we probably won't have like livestock to start off with. If we did maybe just a couple of sheep and chickens, but there's always issues with animals, you know, property taxes. And then, of course, starting a family will be a huge expense. That's the big one that would probably hit on us. We don't have kids yet. And hopefully in the next couple of years, we'll be starting a family and those expenses will. Will rise. But, you know, we're not total misers. Like, we did spend 15 grand. We spent a few months in the Philippines at the start of the year, and that was awesome. You know, learned how to scuba dive, learn a whole bunch of new skills, spent money that made us really happy on really cool experiences. So, you know, I think if someone wants to retire on higher income, that's totally cool. But, you know, just think carefully about what actually makes you happy, and you might be surprised by how little you actually need.

You know, it's interesting, while you were sleeping this morning, CNN put out an article, and I'm sure you haven't seen this because you just got up and got on the phone with me, but they asked 2,500 US adults how much money they would need to earn on average a year in order to feel financially secure. And the figure. And then they asked him another question. How much would you need to feel rich or to attain financial freedom? So I want everyone listening out there in podcast land to think about these two questions. How much would you need a year to feel financially secure? And how much would you need to feel rich? And they're talking about annual income. They're not talking about, you know, net worth or assets or anything here. And the average was $233,000 a year. This is US dollars to feel financially secure and $483,000 annually to feel rich. What is your reaction to that survey?

Yeah, look, that just blows my mind. Okay, so that's like over 300,000 Australian bucks.

350,000 just to feel financially secure. That's not even to feel rich. Right.

I don't want to swear because I know we're pretty crass Aussies, but I know Americans have much better matters, but holy, no, that's just ridiculous, mate. And again, are we talking before tax or after tax?

Yeah, I don't think they specified, but the sheer number, however you want to look at it, is obviously pretty impressive, because, remember, that's an average. Half the people picked a number bigger than that. Right?

Yeah.

So it's. It's pretty wild what people think they need.

Yeah, I think as humans, like, we're not very good at predicting what will make us happy. Whereas what I like that passive income does is passive income helps you to subtract it helps you to get rid of things you don't like. So for me, I don't like ship work, I don't like doing red eye flights. I don't like taking off into a sunset and landing after a sunrise. Like, man, that's so bad for your body. And you mentioned that like a lot of doctors, professionals might be, you know.

You'Re, you know, you're talking to an emergency doc. Right. You're preaching to the choir here. So I dropped my night shifts. It was the first thing I did when I got close to being fi is dropped my night shifts.

Awesome. Yeah, because you know, you can take away some of these things that you don't like and you know, it builds this wonderful life. And so I think maybe the people that are in this survey, maybe they just, they're looking at it from the wrong approach that, you know, like, it's like a head in the clouds. La la la. Yeah, give me a half a million income and I'll be happy. Like, right. Like I don't know a lot of super wealthy people, but I've met a lot of financially independent people through Captain Fire and through the Fire movement. You know, I've interviewed a lot of people networks around like 5, 5 million to $10 million. And they just seem like normal people. Like it doesn't seem to change them, doesn't seem to prove their happiness. I think, you know, to some extent it can create further issues. Wealth can create unforeseen issues. Certainly giving unearned masses of wealth to people can be a huge burden, can be really unfair. But I think if people are sensible with their money and they're earning six figures, I always thought that that was a pretty good sweet spot. I'm not okay with some of the studies, but I sort of vaguely remember that there are a lot of articles written saying that around the six figure salary is the sweet spot in terms of happiness. And it's sort of worth noting as well. I spent a lot of my career working in developing countries. I spent a lot of time in Asia and the Middle east. And the poverty in some parts of the world is just crippling. And you know, even in Australia you're living in like on like the poverty line in Australia, you know, I don't have the stats in front of me, but that still puts you here something like the top 1% of wealthy people in the world. And so I think I don't know, I'm just going to say people saying that they need a half a million dollar income to be happy, that's just delusional, Jim. That is just delusional.

All right, well, I don't get to talk to Aussies very often and I'm curious what you see as the most significant differences between personal finance in the US and personal finance in Australia.

Okay. The context, I guess I would say that property, real estate is kind of more of a religion than an investment here in Australia. So the gospel is that thou shalt shall only go up. Sorry, I hope I haven't offended any religious people. But yeah, everyone wants a property here in Australia and it's pretty unaffordable in the two big cities, Sydney, Melbourne and to some extent Canberra as well. You know, I live in Adelaide, which is, you know, seen as a less desirable place. It's a much smaller city. So real estate is obviously much more affordable. Possibilities is much more affordable. So that's probably the big one is a lot of Australian, Australian dream is of owning your own home, you know, a quarter acre block and you know, getting your Land Cruiser or your Hilux. We have I guess probably similar financial setups. The taxation is probably similar. We have one level of tax, like a federal tax, so we don't pay state taxes. You do tend to pay on a more of a user pays basis here in Australia. So we do have like, you know, our council rates, which is kind of like property taxes and you know, we pay gst. So I think depending on your level of consumption, you can end up paying more taxes here in Australia if you consume more goods and services, which is kind of fair. But you know, we're so fortunate here, Jim. You know, Medicare, we have world class healthcare and it's totally free. I mean we pay like a 2% levy, like a Medicare levy. And the Medicare levy surcharge if you're a high income earner. But for the standard of living that you, you get in Australia is so worth it. I say as someone who's traveled through a lot of developing nations and seen a lot of horrible things and man, I am just so grateful to live in Australia. I feel so blessed and privileged. I know that the medical thing in America can be really tricky and it comes up a lot in the fire movement. People talk about, oh well, if you retire early, where are you getting your health care from? You know, in Australia you don't really need that. You can have private health if you want. I know a lot of doctors recommend having it, but we like to. We've got a world class Medicare system and if you don't consume, if you don't spend a lot, if you have very modest lifestyle here in Australia, it's very achievable, it's very affordable, very safe. I must say I don't know a lot about the U.S. in fact, a lot of my knowledge of U.S. culture comes from the media, comes from places like the Simpsons. I have been to some parts of the States, but I haven't spent time in like, I guess it's the mainland or continental us So I don't know really how to answer the rest of that question other than just to talk a little bit about some Australian centric stuff. We don't have a Roth ira. You put money into super. It's locked until preservation age, you know, 665. Yeah. So there's probably more of an emphasis in Australia of investing in property and conventional taxable brokerage accounts which gives that freedom to access that money early. Whereas I know that, you know, it's a beating in the States to, you know, max out your IRA and you know, the Roth IRA conversions and backdoor letters and there's a lot of awesome documents on that. Mad scientist has got some great guides on his site, but thankfully it's probably a little bit more straightforward here in Australia.

Yeah, ours is a mess of Alphabet soup for sure. Now you've got some interesting investments and investment history. For example, I think I read somewhere that you had kind of a bad experience in short term rentals. Tell us what happened.

Oh God, yeah. I haven't thought about this for ages. You've done your research, Jim.

Sorry to bring back a bad memory.

Yeah, so look, I think it was a really close friend of mine, an engineering colleague, we actually ended up successfully finishing a small development recently. And of course that's not a short term rental thing, but when this would have been around 2018, 2019, we were getting really excited about money and I think this is when I just recently started blogging and so I was, you know, I thought I needed to do everything and have things in every pie and maximize the chances of reaching fire. And so yeah, we set up a company for short term rentals so we would try to lease properties. We take a 6 to 12 month lease and then release them or sublet them on the short term market. And we also had another avenue where we would basically manage for owners. So we would go directly to landlords and say, hey look, you know, we can, we can manage your apartment for you and get a Better rate on the short term market and then charge them for the privilege and then, you know, so we were, we were really gearing up for that. Then the pandemic happened and yeah, thankfully it wasn't too much. I think we probably, you know, 20, 20 grand loss or something.

Australia was pretty locked down during the pandemic as I recall. So I'm guessing there weren't a lot of people traveling and using short term rentals.

No, no, it went from really thriving demand to basically zero overnight. And yeah, so did feel a bit foolish but I think I learned a good lesson about business capital risk and my personal risk tolerance. It took a lot of time, it took money risk and it turned out I wasn't suited to do something like that. We might look at it, my partner and I might look at it in the future, something like a farm stay, bed and breakfast kind of thing on our property in the future. But certainly I'm not going to be subletting or trying to run a property management company. Incidentally we still have the website, it still generates a lot of traffic and my business partner, I think he sells the leads to other real estate agents. So you know, it's still, there's something good's come out of it and it certainly taught us a bit more about the value of online business and lead gen so wasn't a total waste.

Now speaking of websites, this sounds like something you invest a significant amount in and I'm curious what you think about website investing for most people. Do you think most people can be successful investing in websites or do you think that's kind of takes a special person?

Yeah, look, I would say it's definitely within reach for everyone but it's not a panacea, it's not easy, it's not something you can just, you know, hop in, make all this money. A lot of people spruce it as something that's too good to be true and often something's too good to be true. Yes, it took a long time for me to see income from my website portfolio and I think it's really about like front end load. So if you're able to put in a lot of the time and a lot of the effort or alternatively invest capital in buying a quality website that someone else has put in time and capital into. Meaning content and backlinks. Yeah, you can get a wonderful cash flowing asset but unfortunately a lot of people don't seem to be able to stick with it. I'm not sure what the stats are. Do you mean the US but in Australia I think it's something like 9 out of 10 businesses fail in the first year and it kind of just gets harder from there. And I've personally seen this in some of the, one of the training courses that I've done here in Australia. There is, you know, quite a lot of people do the course and yes, there are a lot of people that are successful, but a lot of people do tend to just give up or fade away. And ironically that's actually the best time for the successful people to kind of swoop in and buy those websites. It's one of those things where I think you just need to stick with it, you know, and if you are able to produce good quality content that people are interested in reading and you provide value to your audience, you don't try and, you know, over saturate them with advertising and offers and you're genuinely providing value, then yeah, I think your, your site can be successful. It isn't rocket science. It's really just finding sensible keywords that demonstrate what people are searching for. Then writing good long form, sensible content that answers people's questions and then links, providing appropriate links for them to then go and have further reading and then also getting people to link to your article. And if you're able to do that, and you're able to do that for a couple of years, I think you can build up a really awesome asset. But if you're not able to do that, if you're not willing to put the time, effort or money into it, then yeah, it's probably a waste of time for some people.

Yeah. Now you, like some bloggers, publish your net worth starting at about $579,000 in 2019. Just over $1.8 million recently obviously in Australian dollars. Anything bad happen to you as a result of being so open? And I'm curious, over time as your net worth has climbed, you know, over a million dollars, how the reaction to that revelation has changed?

Yeah, absolutely. Now the first thing in that, you know, and maybe you appreciate this as a medical professional, as a doctor, is I can say it was a double edged sword for my mental health. So on one aspect, tracking the number is useful because you know, you've got a trend. So my engineering brain loved it, my pilot brain loved it. But my human brain, my ADHD brain, it was probably a little bit risky because I started to like complicate the idea of my net worth being my value as a person. So I try now I try to refer to it as like a net wealth. That's my little Subtle thing that I'm trying to shift. And that's something my therapist had mentioned because, you know, first of all, your net worth, it's not your self worth. And yeah, one of the reasons that I was blogging is because I wanted to reach financial independence and I saw a lot of successful people before me did that and it worked for them and I thought, you know what, if they can do it, I can do it too. And I just stayed anonymous online. So I didn't, I didn't have pictures of myself, I didn't have videos, I didn't talk about my job. I still don't. And that made me feel like safe enough to put these very intimate figures about, you know, saving and income and expenditure and investments. But yeah, unfortunately you never truly anonymous online. So yeah, people did find out, work did find out and it became, it did become an issue because obviously the theme of the website is about becoming financially independent and not having to work. And when my boss found out about that, obviously weren't very impressed with me at all. And yeah, it ended up being a less than pleasant retirement process.

I noticed that it seems like there's a lot of cheerleaders for people building their net worth across the blogosphere up until the time they get to about a million dollars. And then it feels like a lot of jealousy crops up and people aren't cheerleading nearly as loud as your net worth moves into the seven figures. Did you ever notice that?

Yeah, look on my platforms, like I guess on my blog and on my social media, I could count on one hand, probably on just with a couple of fingers the number of I've run into. Most people have been incredibly supportive. Maybe people are treating me a bit gently because I've been through some really difficult things in my personal life recently and I've been pretty open about, I guess, my experience with the death of my mum, my dad and palliative care, loss of my friends and I guess just working on my mental health. So people have, I found people have been really, really supportive and really loving and gentle and kind towards me. Having said that, if you dive into some dark places, Internet like Reddit, yeah there's a lot of tall poppies in Australia we have this thing called tall poppy syndrome. And I guess the crux of it is the flowers grow and if one grows above, then you'll come along and chop it off so that everyone's the same. I certainly experienced this in my work working in small teams and sometimes with larger teams that the needs of the team often outweigh. The needs of the individual. And so sharing is important and people do sometimes get their nose at a joint when there's a perceived inequality. Having said that, I think in general in the FHIR community everyone's really quite supportive. I think maybe it's probably when you start opening up and being viewed by like the wider society. Yeah. There are people that do, you know, have different political beliefs, you know, about wealth creation and wealth accumulation that, you know, some people don't think it's ethical and I think everyone's entitled to their attitudes and opinions. But you know, Australian society is probably very similar to American society. You know, going back to your question about like the personal finance differences in that, you know, it's a, it's a democratic capitalist society. We can own property and the choices we make to specialize and build wealth through making decisions to spend less than you earn and save, you can really build huge, huge amounts of wealth. And whilst there are inequalities, not everyone starts at the same level and not everyone's playing on the same field. I guess more generally speaking there is this opportunity to save and build wealth that most people have an ability to do it. So I don't feel bad. And the people that do have a go, maybe they've got other things going on in their life. So you never know.

Yeah. All right, well, time's getting short here, but we have a fair number of pilots who are white coat investors who listen to this podcast, who read our blog and I'm curious what your best tip is for pilots who want to become financially independent.

Yeah. Cool. So first up, get a high paying job and fly as much as you can if you can, you can like get on longer flights if you can get, you know, you can go from domestic to international, get on more trips so I'll see more income. Advance your careers, do your ATPL subjects, do them as soon as possible, get them out of the way. Because if you're going to like you're junior pilot and you're just sort of starting out, you don't really want to have that bit, that sort of big break from active flying when you're taking time out to go and do all of your theory subjects where you're not earning and you're potentially losing currency and potentially even left a job, left a role to do that. So that's the first thing. So I would say if you're going to study as pilot, DCPL D atpl, get the Mecca done, mcc, you know, multi career coordination course, get all of the academic stuff sorted early I don't think you need necessarily a degree. It's becoming less and less prevalent that you need a degree to work in the industry. Some employers are removing the requirement, but most, you know, bachelor of aviation is useless. Don't waste your money on it, literally. Get your kids, get your cpl, get your ATPL subjects done, get your meta, try and get a few insurance renewals on your belt and then look at operators that have complex fleets. So everything from scenic flights in your 4C assessors all the way up to, you know, complex twins and pressurized turbine engine aircraft. Like, look for a large fleet operator that you can progress within the company because it's probably easier to progress within a company than to continually be job hopping. But allies keep networking, going to events. If you can get involved with any aviation blogs or organizations, get involved them. Start volunteering junior pilots. Get out there, produce content, write articles for magazines, become an expert at your job and you can basically increase your income faster than a traditional pilot pathway. But having said that, that's only one side of the equation. So you need to be saving and investing that money. So whilst it might be important to spend some money on professional memberships, networking events and that kind of stuff, don't fall into the trap of I need to buy this, I need to have this really expensive watch. Not everyone needs a Breitling watch. That money could be much better off investing. Yeah. You know, not that I'm trying to shame you, if you really want a brewing watch, you know, get one. But I'm pretty sure iPhones are more accurate than Bre link watch now. So I don't know if that sounded like gobbledygook tgm, but yeah, sounds like.

Your tip is work on the offense but also work on the defense. Both sides of the equation.

Yeah, you got to play both sides, you know, a lot of parts as well. And I'm probably just as guilty as the sneddings. You know, once, once everything's settled, you know, once, you know, top line, everything's, everything's calm, you're just basically up there in the autopilot. There's a lot of people like you chat, right? You chat business. So you know, don't get sucked into to, you know, stupid things financially. Like a lot of pilots will have these business ventures, a lot of them don't work out. Just think carefully about how you're going to invest your money, you know, with the defense, you know, boring. Low cost index funds have worked for me, property has worked for me and websites have worked for me. In fact, I spent a lot of my time in the cruise blogging on an iPad. So, you know, make use of your time, make use of your travels. Sometimes it can be quite weary and you won't actually enjoy all these quick stays and quick turnarounds. But, you know, try and enjoy the travel, enjoy the lifestyle, because when you stop flying, you will miss it. Because I do.

Awesome. Well, we've been talking with Pete. He's Captain Fi. You can find out more about him@CaptainFi.com and we appreciate your time coming on the White Coat Investor podcast today and sharing your story.

Oh, absolutely. My pleasure, Jim. Thank you so much for inviting me. Awesome. To connect and now look forward to chatting in the future.

All right, bye. Bye.

Cheers, mate. Bye.

All right. Hope you liked the interview. The accent, despite it being complete and perfect, English can be a little bit tough. I know my ear sometimes has a little bit of trouble understanding that, but we hope we got good quality audio for you so you're able to follow most of that conversation. You know, lots of interesting differences between countries. Even among countries that were at one point, you know, part of the British Empire, there are significant differences. You know, I thought it was interesting to hear his perspective about, you know, medical care in Australia and how little he worries about paying for that. Whereas it's a big concern here in the US Even among white coat investors, it's a big concern. Also interesting to hear that they can't break into their retirement accounts until 65. Not the case here, where you can get into your 401 at 55. You can get into your IRAs at 59 and a half. I mean, you can get into them at any time, but that's the without penalty or exception, ages. So lots of interesting things there. You know, the thing that always makes me want to share, you know, the fire community, the fire experience with White coat investors, is to help people realize that there are all kinds of folks out there living on dramatically less money than you're spending who are perfectly happy. You know, whether that's $30,000 a year or $60,000 a year, $100,000 a year or whatever. I think it's important to recognize that most of us have an income that puts us in a pretty privileged place. And if you're not enjoying working as hard as you're working, you don't have to. You can survive on less income. There is a whole community of blogs and podcasts out here that will teach you how to spend less money so you can reach financial independence faster, so you can work less so you can do whatever your financial goals are. And I'm always impressed when I talk to them and think about how terrible my spending habits are compared to what they're doing. I mean, just today I think I spent three or four thousand dollars trying to get secondary water connected to my lawn. And I got to buy a new lawnmower for 650 bucks because my son kind of tried to mow something that shouldn't have been mowed and I just had to put shocks and struts on my car. That stuff all adds up several thousand dollars and there are people living on less than I spent on just maintaining the stuff I've already got. And it's really pretty amazing how little you can live on and be happy. So you only get one trip around this world. Let's make sure we're spending our money and our time on what we care about the most. The White Coat Investor is proud to introduce our no Hype Real Estate Investing course, which will provide the framework for developing further knowledge and experience as you progress in your real estate investing career. We call it an introductory course because there's always more to learn. But this is no short, superficial course. There are over 200 lectures and videos adding up to more than 27 hours of content by over 15 different instructors. We think it just might be the best real estate course on the planet. Continue your wealth building journey today with the no Hype Real Estate Investing course@whitecoatinvestor.com courses. You can do this and the White Coat Investor can help. By the way, if you haven't heard, federal student loans are back on come September 1st. You will have to make payments. Interest will start accumulating again. So if you've been waiting to refinance, well, now's the time. August, September. You can even get started right now. And by the time it comes through you're going to be right up to that deadline. So if you've been waiting to refinance your loans, now's the time. Don't forget about the paid surveys I mentioned. Whitecodeinvestor.com mdsurveys don't forget to leave us a five star review. You only have to do it once in all the years you listen to this podcast. But do go on, you know, wherever you get your podcasts, Apple podcasts or whatever. And leave us a great five star review to help us share this with others. Here's one from Gail came in just this year said my Go to Financial podcast. I've been listening to this podcast since its inception. The more I listen, the more I learn and I am inspired. I appreciate the diversity of invited guests and the positive messages and celebrations of those who are interviewed on milestones to millionaire. Dr. Daly and his staff are providing an invaluable service. Thank you for all you do. Five stars and I echo those words. Thank you for what you do. Keep your head up, shoulders back. You've got this and we can help. We'll see you next time on the White Coat Investor Podcast.

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