Financial independence is having passive income that covers expenses without depending on a salary. Australia has world-class infrastructure (Super, salary sacrifice, MER-low ETFs) plus comparatively high incomes — combined, FIRE is more achievable than most realise.
The Rule of 25
FI number = annual expenses × 25.
Australian example: - Spend AUD 5,000/month = AUD 60,000 annual - FI number = AUD 60,000 × 25 = AUD 1,500,000
If you have AUD 1.5M in diversified portfolio, withdraw 4% annually (AUD 60K) for 30+ years high probability. Trinity Study (1998).
The 3 variables
Variable 1: Savings rate
| Rate | Years to FI |
|---|---|
| 5% | 66 |
| 10% | 51 |
| 15% | 43 |
| 25% | 32 |
| 35% | 25 |
| 50% | 17 |
Variable 2: Returns
- High-interest savings: 1-2% real
- Vanguard Diversified High Growth (VDHG): 5-7% real
- Vanguard Australian Shares (VAS): 6-7% real
- Vanguard MSCI Index International (VGS): 6-7% real
- 60/30/10 (VAS/VGS/VAF): historical 6-7% real
Variable 3: Reduce expenses
Double effect.
Australia-specific accelerators
Super salary sacrifice
Pre-tax contribution at 15% inside Super vs marginal rate (32-47%). Massive tax accelerator. Concessional cap AUD 30,000.
Government Co-contribution
Lower-income earners get up to AUD 500/year matching contribution.
First Home Super Saver Scheme (FHSSS)
Voluntary contributions can be withdrawn (concessionally taxed) for first home.
ETF tax efficiency
Australian ETFs (VAS, VGS) are franking-credit-aware and tax-efficient. Low MERs (0.07-0.18%).
Geographic arbitrage
Earning AUD wages while living in SE Asia, South America, Eastern Europe accelerates FIRE significantly.
The 4 levels
Level 1: Far (after 75) | Level 2: Close (preservation age 60-65) | Level 3: Early (50-60) | Level 4: FIRE (before 50)
Why FIRE matters even if you don't retire
- Choose right work
- Negotiating leverage
- Start business safely
- Filter toxic jobs
- Psychological peace
FIRE = recovering optionality.
Resources
- "The Barefoot Investor" by Scott Pape
- Aussie Firebug blog
- Strong Money Australia
- Aussie HIFIRE
Based on Trinity Study + Australian FIRE community adaptation.
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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