The Rocking Chair Test

Hi Barefoot,

My wife and I are both 30 and we are lucky enough to earn a combined $350k per annum. Our living costs are $40k a year now, though kids may happen. Last year we paid off our mortgage, and we have a combined $200k in savings and $130k in super. We grudgingly admit that some risk is necessary, but find investing stressful and confusing, so we want minimal involvement. What is the best low-stress, set-and-forget strategy to retire on our own timeline (not when the government lets us access super)?

Max

Hi Max,

At the tender age of 30 you’re basically at the financial finish line, while most of your mates are still on the starting blocks. Respect. Also, your living expenses are very low for your income, which is a sign that you’re not wankers. More respect.

Here’s my practical advice: set up a family trust and invest a set amount into low-cost listed investment companies (LICs) or direct shares every single month. That’s how you take the confusion and stress out of it. Keep it simple, and it’s likely you’ll be multimillionaires by the time you hit your 40s.

From that point on, your life won’t materially change -- regardless of how many millions you eventually pile up. So I’d encourage you to do a little exercise: imagine you’re sitting side by side in rocking chairs 40 years from now, looking back at your lives. What did you devote yourself to? Who did you help? What change did you make? What are you proud of? Then do it.

Scott