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Speaker 1: Welcome to Sugar Mama's Fireplay, the podcast where we ignite

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Speaker 1: your financial independence, plan an early retirement for you, and

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Speaker 1: help you build long term sustainable financial freedom. I am

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Speaker 1: your host financial planner, Canna Campbell, and today we're diving

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Speaker 1: into one of my most requested topics. That is my

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Speaker 1: personal fire strategy that I'm going to share with you

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Speaker 1: right now. If you've been following me for a while,

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Speaker 1: you'll know that my goal isn't about building a big, fat,

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Speaker 1: gross or net figure worth. Far from it. It's actually

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Speaker 1: about creating a sustainable, growing passive income that gives me

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Speaker 1: and my family the freedom that we desire, we're worthy of,

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Speaker 1: and we're worth fighting for. And if you aren't familiar

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Speaker 1: with what passive income is, passive income is essentially money

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Speaker 1: that you earn whilst you sleep at night. Examples of

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Speaker 1: this are owning interests of a bank account, dividends from

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Speaker 1: shares which is my favorite form of passive income, or

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Speaker 1: even rent from an investment property. So the more passive

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Speaker 1: income we have in our lives, the more financial freedom.

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Speaker 1: And the ultimate goal is to earn enough passive income

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Speaker 1: that more than covers your living expenses. And of course

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Speaker 1: accounts for all those other things such as tax, superannuation,

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Speaker 1: and of course are changing evolving lifestyle needs. Now, when

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Speaker 1: I say growing passive income, this component is really important,

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Speaker 1: and I really want to make sure that we invest

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Speaker 1: time making sure that you understand it so that you

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Speaker 1: don't get caught out like other people have with their

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Speaker 1: fire strategies. So when I say growing that passive income

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Speaker 1: must be able to keep up with inflation, if not

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Speaker 1: exceed it, because at the end of the day, financial

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Speaker 1: freedom isn't about hitting a number. It's about maintaining and

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Speaker 1: improving your lifestyle over time by living off your passive income.

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Speaker 1: So today, what I'm going to do is take you

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Speaker 1: behind the scenes of exacs how I've built my passive

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Speaker 1: income with my ultimate goal of being two hundred thousand

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Speaker 1: dollars per annum. I'm going to share with you exactly

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Speaker 1: what I've invested in, the risks that I've taken, the

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Speaker 1: challenges and setbacks and blocks even that I've faced. And

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Speaker 1: I'm also going to share with you what's next on

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Speaker 1: my fire journey. And of course, most importantly, I want

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Speaker 1: you to walk away from this episode feeling inspired and

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Speaker 1: ready to review your own fire strategy, looking at what

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Speaker 1: you're doing, looking at what's working, what you can build

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Speaker 1: upon for greater, more efficient success, because at the end

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Speaker 1: of the day, financial independence is never a one size

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Speaker 1: fits all approach. Now, on that note, I need to,

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Speaker 1: of course remind you that all of my content, in

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Speaker 1: particular this episode, because I'm going to share with you

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Speaker 1: what I'm doing, is never personal investment or strategic advice.

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Speaker 1: This is purely for educational purposes only. Whenever you're wondering

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Speaker 1: what you should be doing, can I strongly suggest you

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Speaker 1: make an appointment to go and see a financial planner

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Speaker 1: and ask them to design you a financial strategy through

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Speaker 1: a statement of advice. All right, now that we've got

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Speaker 1: that out of the way nice and clear, let's get

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Speaker 1: cooking with my fire strategy. Okay, first of all, I'd

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Speaker 1: like to actually go straight to the strategy. So I've

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Speaker 1: actually been on my fire strategy for the last twenty years,

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Speaker 1: and my approach has never been set in stone. There

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Speaker 1: have been bursts and spurts where I've smashed my goals,

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Speaker 1: and then there have been times where I've just plaaued,

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Speaker 1: and there've even been times where I have had to

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Speaker 1: press pause or even take a step back. My life

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Speaker 1: has changed. My life has a bolt, as everyone does,

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Speaker 1: and I've had to adjust my strategy when life has

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Speaker 1: needed it. I've had children. I've also had to spend

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Speaker 1: large amounts of money doing IVF. I've moved homes, I've

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Speaker 1: upgraded properties and built properties. I've also had setbacks in

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Speaker 1: my life and financial challenges and had to take time

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Speaker 1: out away from work for reasons that were out of

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Speaker 1: my hands. So, in saying this, my strategies had to

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Speaker 1: evolve with what's going on in my life, what I'm

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Speaker 1: trying to juggle, and also what I have physically, mentally,

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Speaker 1: spare ritually needed in my life. So I think it's

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Speaker 1: really important for me to highlight this with you right now,

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Speaker 1: because your financial strategy, your fire strategy, should always be

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Speaker 1: reviewed improved regularly. What may have worked for you five

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Speaker 1: years ago may no longer serve your goals today. And

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Speaker 1: there may also be times in your life where you

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Speaker 1: have to put the foot on the gas and work

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Speaker 1: really hard and maybe make a few sacrifices. But there

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Speaker 1: are also times where you are forced to slow down

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Speaker 1: because of something has happened in your life, intentional or unintentional.

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Speaker 1: Or you just feel like you need a slower pace.

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Speaker 1: Your strategy has got to be able to evolve with you,

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Speaker 1: pretty much like the waves of the ocean and learning

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Speaker 1: how to serve. But at the end of the day,

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Speaker 1: regardless of what's been going on in my life, I've

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Speaker 1: always upheld the core principle, and that is about building

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Speaker 1: long term, sustainable and growing passive income. Now, for me,

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Speaker 1: that means that every investment that I personally make has

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Speaker 1: got to pay me back a consistent income. It is

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Speaker 1: also got to be able to provide me with a

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Speaker 1: growing passive income for example, knowing that that passive income

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Speaker 1: is going to increase from say twenty thousand dollars a

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Speaker 1: year to twenty one thousand dollars a year or twenty

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Speaker 1: two thousand dollars a year. It's also got to have

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Speaker 1: the potential for long term capital growth. For example, buying

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Speaker 1: a property for say five hundred thousand dollars knowing that

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Speaker 1: in a couple of years time it's worth say five

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Speaker 1: hundred and thirty thousand dollars. That's capital growth. And then

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Speaker 1: of course it's got to be structured in a way

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Speaker 1: that keeps me financially secure even with the market's natural

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Speaker 1: ups and downs that are a part of the game.

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Speaker 1: So one thing that helps make my approach a little different,

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Speaker 1: and some might say even riskier, is that I've always

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Speaker 1: borrowed to invest. However, I have done this in a

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Speaker 1: way that is measured, controlled and always sustainable. And I

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Speaker 1: say that in a very strict, stern voice, because this

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Speaker 1: is really important, because often when things backfire is because

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Speaker 1: they haven't done it in a sensible way. When it

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Speaker 1: comes to borrowing to invest, Now, well, how have I

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Speaker 1: built my passive income? As I mentioned a second ago,

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Speaker 1: I have borrowed to invest, but I've done it the

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Speaker 1: right way. Borrowing to invest is most definitely a powerful strategy.

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Speaker 1: It's one of the most powerful strategies. But it is

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Speaker 1: only powerful when it is done the right way the

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Speaker 1: first time, and it is done in a responsible, respectful way.

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Speaker 1: So when I started borrowing to invest, I started with

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Speaker 1: very small, modest amounts of money, and I always triple

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Speaker 1: checked my cashlow in the event of a three percent

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Speaker 1: interest rate rise. And of course I kept my loans

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Speaker 1: on a principal and interest repayment plan, so my debts

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Speaker 1: were always coming down. On top of that, I did

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Speaker 1: things like a reinvestment plan so that I was creating

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Speaker 1: more and more equity between what my portfolio was worth

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Speaker 1: and of of course the debt the loan, the initial

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Speaker 1: loan was gradually coming down. So this really helped make

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Speaker 1: sure that this investment strategy and my over exposure was

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Speaker 1: always safe and appropriate. And so my key rule for

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Speaker 1: you right now is to understand that almost all of

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Speaker 1: my loans are actually set at principle and interest and

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Speaker 1: the reason why I have done this, which isn't necessarily

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Speaker 1: the smartest savviest thing, because normally you prioritize paying off

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Speaker 1: your deductible non deductible debt and then you delay paying

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Speaker 1: off the investment debt because of the tax deductions. But

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Speaker 1: for me, this is what made me feel safe and secure.

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Speaker 1: Now this meant my overall debt is actually reducing over

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Speaker 1: time slowly and steadily, instead of just covering the interest

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Speaker 1: or even worse, not covering the interest. And obviously having

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Speaker 1: those loans capitalized. I never wanted something that could very

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Speaker 1: usually spin out of control. I will admit there is

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Speaker 1: one investment loan I have which has actually been structured

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Speaker 1: as an interest only loan, but that has been structured

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Speaker 1: in that way purely for strategic reasons only, and I

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Speaker 1: will look at shifting that back to P and I

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Speaker 1: when appropriate and smart. Now my investment mix. When it

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Speaker 1: comes to boring to invest, you want to make sure

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Speaker 1: that the potential returns exceed the cost of boring, that

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Speaker 1: is the interest. So what is exactly inside my investment

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Speaker 1: portfolio and it comes to my own fire strategy, and

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Speaker 1: what is exactly paying me this growing passive income stream?

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Speaker 1: What are my sources? All right, I'm going to be

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Speaker 1: really open and transparent with you. So I own a

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Speaker 1: commercial property. Now this provides me a solid rental income

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Speaker 1: with long term lease. And I love commercial property because

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Speaker 1: these tend to come with leases that tend to stay,

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Speaker 1: you know, three to five years, so you don't have

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Speaker 1: that high turna a risk that you could often have

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Speaker 1: with residential investment property. I also have a residential investment

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Speaker 1: property that I now have with Tom and that obviously

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Speaker 1: contributes to my passive income through the rent. Now on

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Speaker 1: top of this, I have a share portfolio, a diversified

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Speaker 1: Australian share portfolio that is predominantly made up of industrial shares,

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Speaker 1: particularly using listed investment companies and some just a few ETFs.

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Speaker 1: Now that share portfolio is probably my favorite investment portfolio

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Speaker 1: of the three key different asset classes because the passive

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Speaker 1: income that I receive from this investment portfolio comes with

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Speaker 1: tax credits which are called franking credits, so they really

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Speaker 1: do help boost my passive income stream through the dividends.

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Speaker 1: And I've shared in many other episodes my share portfolio

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Speaker 1: doesn't create headaches, nightmares, and expensive holding costs like property does.

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Speaker 1: And I say that about residential and commercial property as well. Now,

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Speaker 1: each of these investments pays a key role in building

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Speaker 1: my long term growing financial independence. But as you will

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Speaker 1: hear in this moment, I'm still making decisions about what

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Speaker 1: is best for my long term goals. Nothing is set

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Speaker 1: in stone. I may make twigs and changes depending on

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Speaker 1: what is going on in my life, in Tom's life,

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Speaker 1: and of course what is best for overall family, So

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Speaker 1: this mix could change at any time. However, going forward,

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Speaker 1: my ultimate goal or my priority, is to try and

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Speaker 1: build up the share portfolio above and beyond any of

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Speaker 1: the property investment, both commercial and residential. So the challenges

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Speaker 1: and what's next in store for me, so I have

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Speaker 1: come really cl to building that two hundred thousand dollars

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Speaker 1: per year passive income stream. And I feel a little

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Speaker 1: bit embarrassed sharings with you because I don't say it

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Speaker 1: to boast, but I'm saying this to inspire you and

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Speaker 1: also to be really transparent so that you can see

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Speaker 1: that this is actually doable and achievable yourself. And I

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Speaker 1: really hope that you take this to go all right.

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Speaker 1: If can I can do it, I definitely can do

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Speaker 1: it anyway. I must also explain that there is still

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Speaker 1: debt attached to these assets, including my home loan. However,

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Speaker 1: because I've structured all of these loans on principle and interest,

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Speaker 1: at the very least, they are calming down naturally on

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Speaker 1: their own accord. But for me, the challenges is making

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Speaker 1: sure that this happens sooner rather than later, because the

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Speaker 1: repayment plan they are on is not fast enough. However,

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Speaker 1: that then brings me back to my cash flow strategy

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Speaker 1: and how I'm using my cash flow to tweak and

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Speaker 1: change my strategy, which involves a combination of paying off

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Speaker 1: our home loan as soon as possible, but also keeping

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Speaker 1: a very close eye on making sure that our investment

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Speaker 1: are coming down as in the loans are attached to

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Speaker 1: those investments are coming down, but it is cash flow positive.

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Speaker 1: I do not want to be going into an early

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Speaker 1: retirement with large amounts of investment debt. I won't go

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Speaker 1: into retirement with any personal debt. I intend to have

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Speaker 1: my home paid off before I officially retire or even

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Speaker 1: semi retire. But I do not want large amounts of

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Speaker 1: investment debt for retirement because that won't give me the

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Speaker 1: passive income that I need. There is no point building

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Speaker 1: a two hundred thousand dollars passive income stream. If two

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Speaker 1: hundred thousand dollars needs to go directly towards loan repayments,

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Speaker 1: that does not serve me in any way whatsoever. So

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Speaker 1: for me, regularly reviewing that in strategy, keeping a very

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Speaker 1: close eye on the overall debts, my home loan, the

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Speaker 1: investment loans, and making sure that I am channeling any

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Speaker 1: surplus cash to make sure that they come down as

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Speaker 1: fast as possible is a really important strategy for me now,

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Speaker 1: particularly as I am so close dhating that two hundred

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Speaker 1: thousand dollars a year passive income figure. Now, the other

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Speaker 1: challenge is life, My life naturally evolving. So as I mentioned,

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Speaker 1: I have a mortgage, but I also have goals to

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Speaker 1: renovate our home, so I've also got to try and

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Speaker 1: fix that new I guess dynamic into the whole equation,

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Speaker 1: the whole big picture. I've also got three children, and

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Speaker 1: whilst my children are in public schools, eventually I would

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Speaker 1: like to be able to afford for them to go

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Speaker 1: to private schools if the budget allows. So again, these

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Speaker 1: are the sorts of things that dynamics, or the curveballs

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Speaker 1: or the options that I need to factor back into

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Speaker 1: my fire strategy and see how it's going to impact

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Speaker 1: my cash flow and of course my goals and the

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Speaker 1: time frame in achieving those goals that is the deadline.

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Speaker 1: So I've got a lot of things in the air

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Speaker 1: that I need to keep a close eye on, and

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Speaker 1: I will admit it is a balancing act. But by

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Speaker 1: keeping my eye on everything on a regular basis, by

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Speaker 1: reviewing it, I'm far more likely to achieve this goal

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Speaker 1: and on time. Now, I will also share with you

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Speaker 1: one potential change I'm considering, not now, but maybe further

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Speaker 1: down the track, which will also throw a curveball into

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Speaker 1: This is definitely fixable, but there is an element of

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Speaker 1: efficiency behind this is and a lot of people will

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Speaker 1: understand what I'm about to explain, and that is the

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Speaker 1: consideration of maybe one day selling that investment property, that is,

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Speaker 1: the residential investment property, to accelerate paying off our home

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Speaker 1: loan faster should we need to. However, to factor into

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Speaker 1: this is my fire strategy, I also need to take

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Speaker 1: into consideration the capital gains tax that I'm going to

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Speaker 1: have to pay, well, Tom and I will have to

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Speaker 1: pay in selling, and of course the selling costs involved

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Speaker 1: paying the agent's commissions and all the legal fees and

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Speaker 1: so forth. And most importantly, by selling an asset such

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Speaker 1: as an investment property, that means we're going to be

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Speaker 1: losing a chunk of that passive income that contributes towards

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Speaker 1: that two hundred thousand dollars a year. However, this is

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Speaker 1: the upside of it. This would potentially save us hundreds

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Speaker 1: of thousands of dollars in interest off our home loan

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Speaker 1: because we'd be wiping off a serious chunk off our

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Speaker 1: home loan accelerating the time. And obviously there's huge amounts

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Speaker 1: of interest that we pay over the life loan. But

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Speaker 1: what it would mean is we can then shift more

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Speaker 1: towards a debt recycling strategy, which means what I would

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Speaker 1: be doing is essentially back to basics, back to square

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Speaker 1: one again to a certain degree, in trying to replace

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Speaker 1: that passive income with a new investment loan again, I

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Speaker 1: would have to do the same thing, keeping its principal

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Speaker 1: and interest, making extra repayments to bring that loan down.

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Speaker 1: But what that would potentially mean is we can replace

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Speaker 1: our investments, that is the residential investment with potentially a

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Speaker 1: more efficient, more diversified investment portfolio through Australian shares, which

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Speaker 1: for us align better with our long term financial goals,

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Speaker 1: particularly around tax effective income streams. The next important part

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Speaker 1: of my fire strategy is superannuation. So I actually haven't

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Speaker 1: included superannuation into this two hundred thousand dollars per annum

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Speaker 1: passive income goal. For me, superannuation is a bonus. I

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Speaker 1: won't be able to access it by the time I

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Speaker 1: plan to retire, but it's not too far away when

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Speaker 1: I do plan to retire, And of course I'm always

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Speaker 1: aware of the real that the government may change the

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Speaker 1: rules around when you can actually access super They may

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Speaker 1: put stricter restrictions in place as to how much you

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Speaker 1: can access or maybe make a sliding scales to where

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Speaker 1: you can actually access it. But that doesn't bother me

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Speaker 1: because I've created my own passive income stream that's completely

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Speaker 1: out of SUPER and away from anyone's control rules or regulations.

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Speaker 1: But then I still have the bonus the value the

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Speaker 1: efficiency of superannuation as well. Now, if you have been

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Speaker 1: following me for a while, you know that I've always

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Speaker 1: contributed to my superanneration as part of a bigger, wider

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Speaker 1: fire strategy, and I plan on doing that continuously. I

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Speaker 1: really respect SUPER. I think it's extremely important, and for

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Speaker 1: most of us, including myself, we'll end up being one

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Speaker 1: of my biggest asset classes that I will own above

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Speaker 1: my family home. So it is actually really reassuring for

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Speaker 1: me and also for Tom to know that we have

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Speaker 1: an additional layer of financial security in the future through

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Speaker 1: our superannuation accounts. So if you're listening to this in

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Speaker 1: your buyer member and you're really passionate about your financial

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Speaker 1: strategy and building independence, can I strongly recommend, if you

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Speaker 1: haven't done so already, is to go and look at

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Speaker 1: your super and make sure you've set it up correctly

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Speaker 1: to support your fire retirement goals. Now, what are the

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Speaker 1: big lessons that I have learned along the way. This

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Speaker 1: is what I really want to impart and this is

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Speaker 1: the gold of the nuggets that I want to impart

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Speaker 1: with you right now. Your fire strategy has got to

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Speaker 1: evolve with you. What works for you today isn't necessarily

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Speaker 1: going to work next year or in ten years time.

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Speaker 1: You have to be open to making changes, tweaking things,

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Speaker 1: altering things, sometimes going aggressively, sometimes pulling back, or sometimes

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Speaker 1: just making peace with plateauing. But you will know what

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Speaker 1: is right for you at the time by reviewing it

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Speaker 1: on a regular basis. The next thing is is understanding

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Speaker 1: the power of borrowing to invest. As I explained, boring

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Speaker 1: to invest, when done the right way, is incredibly powerful

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Speaker 1: and adds a huge level of efficiency in wealth creation,

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Speaker 1: but only when done in a controlled, responsible and respectful way.

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Speaker 1: As Peter Thornhill always says, never borrow more than you

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Speaker 1: can afford. It's a simple rule to follow that will

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Speaker 1: often keep you in safe territory when it comes to

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Speaker 1: building wealth and investing. The other thing you've got to

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Speaker 1: remember from this and me sharing with you what I'm doing,

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Speaker 1: is it's about the cash flow At heart, cash flow

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Speaker 1: matters far more than your gross worth or your net worth.

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Speaker 1: Having a million dollar or a multimillion dollar investment portfolio

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Speaker 1: means nothing if it doesn't actually pay you anything. Ask

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Speaker 1: yourself this question. Would you like to have ten million

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Speaker 1: dollars investment portfolio that pays you ten thousand dollars a year?

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Speaker 1: Or would you like to have a million dollar investment

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Speaker 1: portfolio that pays you fifty thousand dollars a year? Which

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Speaker 1: of those two portfolios is more efficient? Which of those

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Speaker 1: two portfolios is going to give you the financial freedom

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Speaker 1: that you crave. Of course, it's the million dollar one

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Speaker 1: because it's paying you a passive income of fifty thousand

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Speaker 1: dollars a year. So don't get sucked into, particularly on

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Speaker 1: social media, where people are just focused about building their

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Speaker 1: net worth or their gross worth. At the end of

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Speaker 1: the day, it's passive income is what's going to give

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Speaker 1: you that freedom, and it doesn't involve you ever having

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Speaker 1: to sell anything down. The fourth key point to this

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Speaker 1: particular episode is to remind you of the importance of

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Speaker 1: growing passive income. Whatever passive income stream you choose to build,

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Speaker 1: please make sure that it is growing. It should be

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Speaker 1: keeping up with inflation as a minimum or exceeding inflation.

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Speaker 1: Otherwise you will watch your wealth erode away, it will

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Speaker 1: be eaten up by inflation, and you'll watch your financial

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Speaker 1: freedom quickly evaporate. So if you're someone who has, say

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Speaker 1: a property portfolio, you might want to have a look

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Speaker 1: at your rents. Have your rents been steadily increasing over

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Speaker 1: time with the market value, or for example, have your

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Speaker 1: dividends been exceeding and growing each year with growing passive

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Speaker 1: income streams. Have a look at those key components. If

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Speaker 1: they're not, you may want to get some advice from

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Speaker 1: your financial planner as well as an accountant to look

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Speaker 1: at what changes you need to make to your underlying

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Speaker 1: investments so that you have that growing, sustainable financial freedom

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Speaker 1: in your life through passive income that grows and then

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Speaker 1: finally knowing your priorities. For me, it is a balancing act,

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Speaker 1: balancing debt reduction, balancing making new investments, balancing replacing potential investments,

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Speaker 1: balancing my family's needs, and of course taking into consideration

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Speaker 1: our lifestyle needs, goals and dreams. So right now, most importantly,

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Speaker 1: I want to make sure that this episode really inspires

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Speaker 1: you to take a really good fresh look at your

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Speaker 1: fire strategy, asking yourself, where are your investments serving your

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Speaker 1: long term goals? Are your passive income streams growing? Are

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Speaker 1: they exceeding inflation? What changes do I need to make

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Speaker 1: If the answer is no, and am I making decisions

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Speaker 1: that give me real financial freedom? If not, you need

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Speaker 1: to make an appointment to go and get some personal

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Speaker 1: financial advice. Now, as I get closer to hitting that

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Speaker 1: magical two hundred thousand dollars a year passive income and

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Speaker 1: prioritizing turning that passive income into one hundred percent cash

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Speaker 1: flow positive income, I need to also take into consideration

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Speaker 1: building up my sleep well at night strategy. So this

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Speaker 1: is the final layer to my fire strategy. If you

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Speaker 1: have read my book Mindful Money, you'll know exactly what

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Speaker 1: I'm talking about. But it is where I have two

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Speaker 1: years worth of living expenses set aside, and this is

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Speaker 1: an emergency money. This is completely separate, but set aside

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Speaker 1: in a savings account for natural market corrections and pullbacks,

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Speaker 1: or if there's a situation where dividends are cut or paused.

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Speaker 1: This will mean that I have two years worth of

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Speaker 1: living expenses always set aside that I can use so

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Speaker 1: I can leave my portfolio untouched to rebuild replenish, which

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Speaker 1: history shows takes typically eight a months, so that I

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Speaker 1: am never forced into a situation where I need to

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Speaker 1: sell any of my investments at a fire sale price.

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Speaker 1: So there you have it. My fire strategy. It's been

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Speaker 1: about building and buying long term, growing passive income streams

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Speaker 1: through borrowed money. It's been about managing that overall debt

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Speaker 1: in a wise responsible way where I understand my risks,

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Speaker 1: my limitations, my boundaries, and I keep my eye on

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Speaker 1: the prize, which is the passive income stream, and ensuring

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Speaker 1: that over time and as quickly as possible, I turn

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Speaker 1: that entire portfolio into a one hundred percent cash flow

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Speaker 1: positive income stream, giving my family two hundred thousand dollars

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Speaker 1: a year to spend as we wish, and of course

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Speaker 1: have that added sleep well at night safety net in

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Speaker 1: place at all times, with two years worth of living

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Speaker 1: expenses set aside in cash. So now that I have

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Speaker 1: pretty much opened up a bank accounts and my share

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Speaker 1: port followers and my investment portfollowers and shared this with you,

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Speaker 1: I really hope that this episode has given you some

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Speaker 1: really great insight as to how I have built my

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Speaker 1: passive income and how I continue to refine my strategy

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Speaker 1: all the time. If this particular episode resonates with you,

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Speaker 1: I would really love it if you could share this

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Speaker 1: with a friend, leave a review, send me a DM

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Speaker 1: on Instagram, at sugar Mama tv or even Canacample Official

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Speaker 1: because I love hearing from you and I love hearing

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Speaker 1: your feedback. And if you haven't already, please make sure

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Speaker 1: you are following Sugar Mamma's fireplace. You never miss an

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Speaker 1: episode because I publish a fresh episode every Monday morning, rain,

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Speaker 1: hail or shine at five am. So until next time,

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Speaker 1: stay focused, stay inspired, and keep building the financial freedom

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Speaker 1: that you deserve, are more than worthy of and will

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Speaker 1: fight for. And as I always like to say, keep

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Speaker 1: that financial fire burning right within. This is the Supermom's

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Speaker 1: fire