So who has managed to give up work fulltime through IP

[pompey11]

Me again,

As per the title, one of the reasons why I want to get into IP is to one day soon, ie. 10 years time, retire early (I'm currently 34) and enjoy a better quality of life, so that I don't have to work 40+++ hours a week earning money for someone else.

So how many of you have given up fulltime work through IP and how many properties, how long did it take, etc.

Cheers

Pompey11

 

[The Y-man]

....or give up full time if we wanted to?

I guess in theory we could have, about 5 years (2003) into the IP journey - thanks to the price spike in Melbourne

It depends on many things though - it obviously helps if you are DINK's, both with above average salaries (or working multiple jobs).

Cheers,

The Y-man

 

[sailor]

Yep....that's my plan too. I have a 5-year goal to semi-retire and work when I feel like it. So far I'm on target.

 

[tobe]

Its an intereesting question, being able to give up work through investment property. I think this comes back to the capital growth and cashflow question. While many who have negatively geared may have made some substantial gains recently in capital growth, their net rental income after expences is still not enough to retire on. They either need to supliment income from diversified investments, or continue subsidising a shortfall in the rental cashflow through working. I suggest that the race to retire, as opposed to the race to the highest net wealth, will be won by those who buy cashflow positive property. Im not there yet by the way, but I have a little more choice in the amount of time I spend at work, and what I do for work.

 

[TheAnalyst]

Me again,

As per the title, one of the reasons why I want to get into IP is to one day soon, ie. 10 years time, retire early (I'm currently 34) and enjoy a better quality of life, so that I don't have to work 40+++ hours a week earning money for someone else.

So how many of you have given up fulltime work through IP and how many properties, how long did it take, etc.

Cheers

Pompey11

I gave up my permanent governmetn gob few years ago. By accident, I started investing and riding well on Perth market. I am managing few constructions and renovations now, also writing of my dream book --- I have long planned but did not have time before.

 

[BoatBoy]

I am retired as in haven't had a paying job in 10 year's, Bloss will retire in 3 year's. Me 41 Bloss 43.

There are a few stories in this link that may interest you.

http://www.somersoft.com/forums/showthread.php?t=30237

BB

 

[WillG]

I am not retired but my wife is enjoying looking after the kids full time and keeping things running smoothly at home. IP's and good savings habits have allowed us to maintain this way of life.

Future IP growth and other investments will all me to work 'Part Time'.

It will be some time before I get my hands on the Holy Grail "living 100% of passive IP income" but I am comfortable to wind down over the next 10 - 15 years

 

[The Y-man]

10 years time, retire early (I'm currently 34) and enjoy a better quality of life, so that I don't have to work 40+++ hours a week earning money for someone else.

One interesting thing you might find when you get there pompey (and yes, the grass is much greener on this side of the fence), is that you suddenly don't feel the need to retire in order to get a better quality of life.

You may find that by then, that your "work" (whatever your calling - and possibly completely unrelated to your current occupation) contributes to your quality of life (go figure that one out! eg. social contact, motivation, financial growth etc). You may even find ironically that you spend even more time at your "work" (scary thougth huh?)

Because whether it's hunting down bargian industrial blocks, building boats, trading shares, real estate developing, constructions, renos, whatever - it's not a case of the classic "retirement" vision - sitting back, looking at the grass grow in your front lawn. I believe many of those who could "retire" on this forum, probably never will - because they love what they are doing now - their dream "occupation" so much.


Cheers,

The Y-man

 

[Norwester]

Must be the odd one out I guess.........

I actually like (more like bloody love) my job.

I'm just aiming for a better level of financial independence when I do eventually retire from the PAYE field...........


ciao

Nor

 

[keithj]

So how many of you have given up fulltime work through IP and how many properties, how long did it take, etc.

I gave up work a few years ago. I started investing in Bris in 2001 (100% borrowed using PPOR equity), made $1M+ within 3 yrs, drew down the equity, put it all into shares, got a conservative margin loan against them, have since made another $1M+.

Remaining IPs are roughly c/f neutral. Shares are v. c/f +ve. I also use a bit of LOE.

If I relied on IP yields to retire I'd be working for at least another 2 economic cycles (15 yrs?). Shares are currently yielding roughly double rental yields.

I did intend to use solely LOE when I stopped the job, and to reduce volatility I invested in shares. However, dividends from those shares have increased so much over the past 4 years that I have to much dividend income and only use a tiny fraction of the portfolio growth for LOE. NB. I was still 30-something, so I was young enough to go back to work if it all went pear shaped.

I'd suggest you put a spreadsheet together & see how long it takes to retire on rental income alone, even if you sell enough IP to make yourself debt free. Then do a spreadsheet using LPTs or shares - they can both yield more than IP AND the dividend growth can be significantly higher. The growth rate in the yield is significant - rents usually grow at a little above CPI, dividends usually grow a lot faster.

I'm a firm believer in being v. overweight in the right asset class at the right time. IP will be the right asset class in a couple of years. Quality shares are currently still a good value asset class.

One interesting thing you might find when you get there pompey (and yes, the grass is much greener on this side of the fence), is that you suddenly don't feel the need to retire in order to get a better quality of life.

I'd agree partly. I stopped turning up to my job, but I doubt if I'll ever stop working. Someone who is motivated enough to be able to retire early will always need challenges. The difference is that I get to decide what the challenges are.

 

[Les]

G'day Tobe,

or continue subsidising a shortfall in the rental cashflow through working

Umm, it ain't necessarily so ..... A wee bit of spare equity invested into ANY growth classes will help (doesn't have to be "work", or even +ve resi property).

But then, like Norwester, I'm in a situation where I CHOOSE to continue working - 'cos I like what I do. It doesn't have to happen forever though - any time now I could choose to pull the pin - and that is a VERY liberating feeling,

Regards,

 

[Simon]

I gave up work a few years ago. I started investing in Bris in 2001 (100% borrowed using PPOR equity), made $1M+ within 3 yrs, drew down the equity, put it all into shares, got a conservative margin loan against them, have since made another $1M+.

Remaining IPs are roughly c/f neutral. Shares are v. c/f +ve. I also use a bit of LOE.

Keith, I am sure many of us would enjoy reading a detailed step by step of your decisions and reasons for then which led you from having to borrow 100% to being $2M better off since 2001.

Is an impressive achievement and I am sure that courage of convictions is the only thing holding many of us back.

Thanks

 

[sue78]

I've been at home for a few mths now but I probably won't retire yet. I plan to go back into the workforce within the next year or two after baby 2. I am worried that's too long as long absences don't look good on resumes.

But during this time, I'll be super active in PI.

 

[landlubber]

Quit the 9 to 5 last year at age 55 ( that was the goal). Took about 10 years since we bought our first IPs. Started just with equity in PPOR which we bought 20 years ago, so all IPs done with OPM. All residential. Mostly buy, renovate, hold. Haven't sold any. Now LOE ... but heaps of it . Retirement means different things for different people . For us it is just "doing" property ...when we feel like it. Just bought another two reno's in Melbourne. Can't wait to get into them.

Have fun.
LL

 

[Altitude]

I am worried that's too long as long absences don't look good on resumes.

Try some contract/flexi hour part time job if babysitting arrangement allows.

Not sure what field of work you are in, some people I know told the employment agency they are only available for x days (in their case 1, 2 days) per week. They have never been short of work.

 

[deanthomas]

I gave up full time work in the middle of last year at age 42. We started in our investment journey in 2001 by buying a small 3 bed unit and then added another 5 property's along the way. Have sold a couple after reaping good capital gains and from that managed to pay off the mortgage on our house. Though we still need a cashflow to live off, my current work allows me to meet our needs with about 5 days work per month.

Cheers Dean

 

[kegger]

getting there

I am still working full time but my wife has co-oncided her retirement with the looming birth of child number 3 (she is 28 and I am 30). That is if all goes to plan ! We only started investing 2 years ago and now have an IP portfolio worth just over $1m. I think we have been lucky in a way, as we have bought in regional areas for +ve CF and have experienced substantial capital growth in all of the places we have bought (I guess that comes down to doing some homework !). One IP has just been revalued 45% higher than 7 months ago !

Current cash flow is pretty tight but we will sell one of the properties in about 12 months (that's when we expect the growth in that area to peak) to pay off our mortgage. In the meantime the trick is to keep buying as many IPs as possible. For example, a PF worth $1m is making $100k in equity every year and what do we do ? Nothing ! (assuming 10% capital growth rate.

Ultimate goal is 10 properties owned outright returning an average of $200 week rent each - that will be enough for us.

Cheers

 

[alexlee]

Current cash flow is pretty tight but we will sell one of the properties in about 12 months (that's when we expect the growth in that area to peak) to pay off our mortgage. In the meantime the trick is to keep buying as many IPs as possible. For example, a PF worth $1m is making $100k in equity every year and what do we do ? Nothing ! (assuming 10% capital growth rate.

Ultimate goal is 10 properties owned outright returning an average of $200 week rent each - that will be enough for us.

Cheers

Is Age 30 really a good time to be thinking about selling? With 3 kids wouldn't you need a lot more money (not that I have to tell you that since you already have kids). I'd aim higher first, and then as you meet goals on the way and decide you don't need that much money, you can always scale back.

Once you sell, it's harder to get back into it.
Alex