Reader Case Study: “Not too fussed about FI”

It is time for another FIRE case study! Today’s case is from a reader from rural Victoria. Spoiler: This case study is a little different! If you are a hardcore FIRE fan, you might find this case study hard to read without wanting to shake our subject! 😉 Enjoy!

Note to readers: If you would like your own case study, please get in touch with me! * 

Now let’s get straight into today’s case!

“Not too fussed about FI”

Meet Dillon, a 32-year-old husband and dad from rural Victoria. Dillon and his wife, Susan**, have a young daughter and would like to have another child soon. They both work full-time and Susan works an extra job as well. They hope that Susan will be able to cut back on her number of days at work once their second child is born.

The family built a house in 2010. Four years ago, they moved to a new area and took out a mortgage of $650,000. They plan to stay in their current house until they are too old to manage the property.

They kept their old house as an investment property and sold it last year with a profit of about $300,000. They put $200,000 onto the mortgage straight away and kept $100,000 in the offset account. Last FY, Dillon and his wife salary sacrificed the maximum amount into super in order to lower the amount of capital gains tax they expect to pay***.

Dillon owns a small number of shares. However, the family’s main investment goals are salary sacrificing into Super and to put extra money into the mortgage.

They like to go on a week-long holiday once a year and every second year Dillon takes the family on a trip for a number of weeks.

When I asked Dillon about FI, he told me that he is “not too fussed” about it. FI is not a priority for Dillon and his wife. They are both happy to work part-time or on a casual basis until traditional retirement age. Their main goal is to be able to spend more time with their children and to travel and work around their property more (sounds like they want to semi-retire!). They want to pay off their house as soon as possible and be able to afford overseas holidays every 1 or 2 years. Once the mortgage is paid off, they want to build a portfolio of ETFs, LICs and individual shares.

Dillon’s question: “Do you think we are on the right track?”

The numbers

Let’s have a look at Dillon and Susan’s numbers:

Annual Salary Dillon: $85,000 (gross) = $64,128 (net)
Annual Salary Susan: Job 1 – $83,000 (gross); Job 2 – $7,500 (gross)****; Total: $90,500 (gross) = $67,573 (net)
Total after-tax income per year: $131,701

Annual employer Super contributions Dillon: $7,885 (gross) = $6,702 (after Super tax – 15%)
Annual employer Super contributions Susan: $8,597 (gross) = $7,307 (after Super tax – 15%)
Total after-tax income (incl. Super) per year: $145,710

Assets (investments):
Shares: $5,000
Super (combined): $240,000
Total: $245,000

Acreage property worth between $1,050,000 to $1,200,000

Mortgage: $390,000, interest rate 3.78%


What I really want to say to Dillon and Susan

What an interesting case! Fellow FI folks: I think what we are looking at here is an Aussie family living the Australian dream!

Here is what the FI person in me really want to say to Dillon:

If you want to work less and spend more time with your family, you can do it now! Sell the big house, downsize and stop working so much. Your wife certainly doesn’t need to work two jobs! Have a good look at your expenses and cut back a little.

The elephant in the room is your house. You live in rural Victoria, not in Sydney. Do you really need a house worth over $1,000,000? If you downsize and manage to reduce your expenses a little bit, you are very close to reaching Flamingo FI and could semi-retire very soon!

The thing standing between you and spending more time with your family, traveling more and working less is the McMansion you are currently paying off!

But I am not going to say that to him. After all, everyone is different and Dillon has made it clear that FI is not his focus. Dillon and Susan want to pay off their big (sorry, I can’t help myself) house and then downshift a little once they have accomplished that. So let’s have a look at his situation with his goal in mind.

Side note: Dillon, if you ever change your mind about FI, please get in touch with me again, I would much prefer to do a FIRE case study for you (since you are almost there already…)! 


Well, first of all, I would like to say that Dillon and Susan have done really well for themselves. They are only in their early thirties and they have a net worth of almost $1,000,000!

Let’s have a look at the family’s expenses. Their monthly spending does seem pretty high to me and I think there are several areas where they could make improvements:

  • Groceries: While $750 per month for two adults and one small child is not outrageous, it does seem to be on the high side. I think that with some smart planning, they could easily get their spending down to $600 budget for this category. It also sounds like they have a big property so they should definitely grow some of their own food too.
  • Personal care: Dillon and Susan’s spending in this category seems crazy high to me. $200 on shampoo, makeup, and toothpaste? I am not sure what they are buying, but they should definitely revisit this category! I think a budget amount of $50 per month is realistic and still generous.
  • Utilities: $575 for utilities? Wow. I am not sure how they spend so much, but I am sure they are aware that they should have a good look at their power consumption!
  • Internet / Home Phone / Mobile: It might be worth exploring some cheaper options here.

Obviously, they could also tackle their takeout budget and make some other changes in categories that are not that important to them. If they reduce their monthly spending by just $500 (even though I think $1,500 is perfectly doable), Susan can quit her second job straight away!

Reducing their household spending is key for Dillon and Susan. The more they can cut their expenses, the less they will have to work once their mortgage is paid off.

Now, let’s talk about their mortgage. They currently pay off an additional $1,800 per month and will pay their house off in 8 years and 4 months if they keep it up:



So what should Dillon and Susan do? My advice: Sit down together and talk about their true priorities.

Here are a few options:

Option 1: Priority – To spend more time with the family now while their daughter is young and to maximise their time away from work
If this is their priority, they should reduce their expenses. Susan could quit her second job straight away (I think this is something they should consider no matter which option they go with). They could stop salary-sacrificing and making extra mortgage repayments. This would allow them to work part-time – either both could work 4 days per week or Susan could work 3 days while Dillon continues working full-time. They would pay the mortgage off in 15 years. At that point, they could afford to work even less if they want to.



Option 2: Priority – To pay the mortgage off as soon as possible
In this scenario, they could stop salary-sacrificing and put the extra money into the mortgage. The house would be paid off in just over 6 years and they could both semi-retire. Obviously, Susan would not be able to cut back on her days at work any time soon, so I don’t think this is a reasonable option for them.



Options 3: A balanced approach
I see one big reason this case study is so challenging: It seems that Dillon and Susan have two competing priorities: a) time for the family and travel and b) to pay off their mortgage asap. So a compromise somewhere between options 1 and 2 might work well for them. What that compromise should look like is something only they can decide.

I do think that Susan could and should quit her second job right now, especially if they focus on reducing their expenses.

One thing that makes me uneasy about their situation is their asset structure. Once their house is paid off, they will have a high net worth, but no liquid assets. I suggest they stop salary-sacrificing into Super so that they can start building an investment portfolio outside of Super. This will also allow them a bit more flexibility if their plans change and they want to semi-retire earlier.


This was a tricky case study for me! It is easy for me to help people figure out the quickest path to FI, but this one was definitely a challenge!

I’d like to come back to Dillon’s question – “Do you think we are on the right track?”. My answer is yes, they are on the right track if that is really the track they want to be on.

To summarise: I believe Dillon and Susan have to sit down together and figure out what they really want the next few years to look like and then choose a plan based on their priorities. They should definitely work on cutting their expenses and re-think their investment strategy. I highly recommend that they start building a portfolio outside of Super so that they don’t end up asset rich but cash flow poor.

And they should at least consider reconsidering their decision to choose the big house over FI! (Sorry, this is the last time I mention this, promise!)


In the comments: What would you do if you were Dillon and Susan? Do you have any tips or advice you want to share with them? Anything I’ve missed? 



* Please keep in mind that we are not financial advisors and do not offer financial advice. Anything we write about or recommend on this site should be seen as a suggestion, not advice. If you decide to implement any suggestions we make, you are responsible for this decision and the results. 

** Obviously not their real names.

*** A quick note on the CGT on the sales of their previous home: I am not sure what Dillon and Susan’s exact circumstances are, but if you own a property which is your main residence you can move out of the property for up to six years and still get the CGT exemption.

**** Dillon told me this second job pays $5,000-10,000 per year, so we’ll go with the average, $7,500


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14 thoughts on “Reader Case Study: “Not too fussed about FI””

  1. OMG! These guys really don’t know what they want. A mio for a house in country VIC?? Lol!! Must have been a pain writing about this case! I agree with your advice. They have to figure out what they want.

  2. They are in a great position!

    The house might not even be that big or that new. If you buy a decent amount of good acreage with just a basic house in a decent high rainfall area you can expect to pay $1million or more easy. So that’s not really a huge surprise. Also, what are their incomes derived from? His might be farming and therefore selling the farm would make him unemployed.

    Need a lot more information to make a decent plan moving forward but with that much money in equity I would get a flexible interest-only line of credit against the mortgage to the maximum amount, redraw it down and use all the money to buy LICs straight away (the line of credit is then tax-deductible and as your mortgage diminishes you can redraw more down). Direct all dividends from your LICs into your mortgage, As this money reduces your mortgage you can then immediately redraw the money back out through your Line of credit to buy more LICs. Rinse, Wash, Repeat!

    Reduces your mortgage faster, builds a large high paying LICs portfolio which increases as your mortgage decreases and increases your tax savings which you wouldn’t be able to do if you just had the mortgage by itself.

    Or the other option would be to as you say sell everything, reduce your annual living costs, buy the LICs now and retire within the year and spend all the time you want with family and travelling which can be done quite comfortably on 40-50k per year. By not having to work, frees up all the time you need and costs of living come down quite a lot when you don’t have to work. Also while you are travelling you can choose to stay in countries that are cheap for half the year to bring costs down again and explore more expensive countries for shorter periods say a month.

    They are luckier than they realise.

    Either option is good depending on what you want. I would be choosing one of these anyway personally.

    • Great points, Ben!

      Regarding their house – I am not sure where they are in rural Victoria. But I did do a bit of research and the value of their property seems to be pretty high compared to the average.

      Dillon works in government and Susan in HR, so their income does not depend on the house or the land.

      I think the interest-only loan / LIC approach you mentioned is the one described in Peter Thornhill’s book. Definitely an option for them! I did get the feeling that they really want to be mortgage-free though and then close that chapter.

      I agree with you – they are really lucky and I hope that they will examine their own situation from that perspective. They have a lot of options (and could semi-retire really soon if they wanted to)!

  3. Without knowing the facts, I wouldn’t assume they are living in a McMansion. One million is expected for decent land within a 1.5-2 hours of Melbourne. However, you’ve indicated from your research this is significantly higher than the average in that area, so they could consider downsizing but will have to factor in the costs of buying/selling/stamp/conveyancing again. It’s really disappointing but property in rural Victoria is not cheap unless you buy a tiny plot or more than 2.5 hours away from Melbourne.

    I’m sure there will be people who disagree, but I’d love to move to rural Victoria and look at property every single day so am in touch with pricing.

      • House in the article shared above was $835k. Definitely can get close to that $377k mark for a much smaller property or significantly further out from Melbourne. Many people who move want to be around 1.5hrs out of Melbourne and have at least an acre, so this makes properties with those characteristics much more expensive.

        • If the median price is 377k that means that half the houses are actually cheaper than that.
          “Many people who move want to be around 1.5hrs out of Melbourne and have at least an acre, so this makes properties with those characteristics much more expensive.” Yes, I don’t argue that. But it is a choice. They choose the bigger house closer to Melbourne and eith an acre over time with the family amd semi retirement. Everyone can do what they want but it is a choice and it is clear that there are cheaper options for those who want to choose family and free time. I think this is also what the case study shows. It’s their choice.

          • Yes perhaps just trying to explain why I was not shocked when I saw the million mark for a Victorian rural
            property, after my recent research it seems to be quite common. I certainly don’t want one costing that much… the search continues…

          • IT IS A CHOICE! Choose the house over family time if you want but don’t whinge because you don’t see your kids. First world problems.

  4. Interesting case study. I agree with you that first, they need to decide what is most important and then work out a way to achieve that. If it were me personally I’d go with Option 1 – cut expenses, quit the second job and spend more time with family, especially while their daughter is young. If they choose option 2 instead and spend 6 years working harder to pay down the mortgage then they miss those early family years.

    At $7,501 per month there is a lot of fat to trim from those expenses. Groceries is a big one. You’ve suggested $600, I’d be inclined to go 1 step further and suggest they could slash their food expenses in half!
    Next up would be getting better deals where possible on all the insurances and monthly bills such as phone and utilities.
    While not a high number, I don’t know why anyone is paying any bank fees at all with the options available these days. I’d look around and pick a bank with no fees.

    I think it would be easy to save $550-700 per month by doing the above and still living comfortably and working the 4 days per week. If they really wanted to, there is scope to reduce expenses even further and only work 3 days, but they need to find the right balance that works for them.

    Good luck Dillon and Susan!

    I’d love to see a follow up post in 6 months to see what path they chose and how they made it happen.

  5. I had to have a chuckle at the near 8 grand figure of expenses per month. My mothers ANNUAL compulsory expenses (water, electricity etc) equal 8 grand (no mortgage payments included she owns her house). Its eye opening to see the way some people live!


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