Straw Poll: How much do you need to live on?

[geoffw]

I'm with you Marc.

I want to have a very comfortable retirement. I want to travel whenever and wherev er I feel like it- not just a 1 week trip every three years. I want time with the family, and I want my own time.

I'm not after a fancy house or a flash car. But I want enough not to be really worried about where the next pay is coming from.

 

[beech]

Agrred Marc.
30k pa probably just enough to sit at home and watch tv.
Nothing left to enjoy the fruits of what we are all here trying to achieve.
Independence,free to do as we please which im sure will be continued investment and continued lifestyle choices.
Wouldnt be many here looking to retire on 30k me thinks.

 

[qaz]

Im aiming for $35k per year net income, but once I get there, I will probably aim higher and go for $50k per year net income and maybe higher again. But I dont wanna tempt fate by going for $100k a year in 10 years Peter Spann style when im far from sure I can acheive it.

 

[handyandy]

Hi All


I would hope that everybody who has invested and had to delay 'gratification' can retire on more than they are earning from their regular employment at that time.

My rational for sayng this is that at that point in time you will potentially have 40 hours or more of time on your hands and to do a lot of things you need money (even when on a budget) thus I see that I would need more than I currently draw as a wage to ensure that I can do whatever I want.

My current spend (or should I say my wife's) is about $70k excluding the fringe benefits cost, the cost of running 3 cars or any mortgage payments, nor does it include the frequent business trips we need to make.

All up I figure I will need about $150k of investment income (in equivalent future value ) to match our current spending level.

Cheers

 

[astroboy]

Hmm, interesting, I guess it depends on what you are doing. We are soon (well we need lots of planning so we are aiming on 18 mths max.) to head off on a circumnavigation. Plan to be gone for at least 5 years and the upper end is anyone’s guess, we know of couples that have been cruising for the last 30 years!! We have figured that about 50K p.a. will do us very comfortably; this includes a generous maintenance schedule for the yacht.
That obviously does not include reinvesting or portfolio building during that time, building for the future is a great thing but difficult when you are crossing oceans. Often here people talk of delayed gratification, i.e. work your ass off now so the future will be rosy. This is a great idea. But what if the future holds a very different story to the one you had planned?
Our decision was spurred on by a discussion with a retired judge who had done everything right in regards to retirement, invested well, large super (max RBL), a significant property portfolio. 6 months after retiring spent a long time in hospital, been in and out ever since. His advice to us was, enjoy it while you can, if you wait too long then it may just be that you waited too long.
So we are off while we can enjoy it.
PS we will post photos, just so those can say ……….we could do that.
astroboy

 

[geoffw]

But I dont wanna tempt fate by going for $100k a year in 10 years Peter Spann style when im far from sure I can acheive it.

If you don't believe you will, you probably won 't.

Part of what Peter Spann did in his seminar was giving the vision and the belief- not just the techniques.

 

[np2003]

I am aiming for $500,000 per year when I retire, that is my goal.

yearly: $500K //yearly before tax
sub-retirement age: 45
final-ertirement age: 55

sub = still working but perhaps just 10hrs week
final = no more work, go around the world, carry out good deeds.

 

[kissfan]

Hi all. In reference to this thread, I was wondering how everyone was actually going to fund their retirement regardless of what sort of income they want/require. By that I mean in what way will you be getting your cashflow? Will it be from X amount of positive cashflow I.P's, meaning you need a fair few, or do you intend on selling a property or two from your neg geared portfolio and reduce/payout debt and live from the rents and just pay tax and other associated costs. I intend (at this stage) to sell my PPOR, reduce debt,and move into one of the I.P's. This is a few years away yet and in the mean time hope to both reduce some of the debt I have and also keep adding to my portfolio ( if and when possible). I have always thought that by the time I'm ready to actually go ahead with my plan, that $1000 a week (approx) should be sufficient, but not so sure anymore. But thats my starting point. Love to hear what others think.

Regards
Marty

 

[nutsa.1]

Hi all,
I love these type of threads.

Don't know how to copy other's text, but Kissfan I used to do all types of spread sheets on our portfolio (ha, 2 IP, 1 PPOR) to see how many we'd need to be in front enough to stop leveraging for the Boss. Discovery of this forum has change the line of thinking.

Our net equity estimation is 40K short of the 1st mill. I try to be conservative (it's hard for me) and I got a pleasant surprise yesterday when the house accross the road listed for 100K more than my estimated value.

My equity forecast for next year (using 8% for two & 5% for one) adds another 62k to the equity and then the following year (same % used) 90k. So, it could be growing by 100K + in the next 2 years.

Now I'm not sure if this is considerd gung ho or not, but an extra 100K in equity (increasing each year) is OK with me. We wouldn't go any where near spending that. (Unless! something unforseen happened? But we are early 40s and pretty healthy.) Our budget each year is $35,428 with 6k holiday fund incl.

So this brings up another issue for me, the delayed gratification part (which I do believe in and practise). Our goal, sort of, was 2008. Now that could be sooner so how long should I delay the gratification. hmm

I'm getting a plan together to set a realistic goal, proper valuations, talking to our bank guy, oh and my wife (he he). See, now thats another thing to consider. We have a brand new 3 month old baby daughter who takes all my wife's energy and a lot of mine so we find it hard to find the time to speak rationally about this subject. (the baby says agoo in the morning and we say ga ga ga ga ga at night when we really mean to say what will we have for dinner (tired)). Actually I think this is a form of delayed gratification (in more ways than one) and I'm learning patience as well.

Anyway we believe 50K is enough for us to stop going to work for somebody else, still live a life that we a happy with and get to Asia every couple of years and have the time to make some dosh for us.

gotta go

go get em

Steve

 

[geoffw]

My ideal income?

I reckon about 10% to 20% more than I'm getting now. That should be about enough.

Funny though. I've been thinking that since I got my first job in 1976 at $6K pa.

 

[marc1]

np203, that's the way!
500k a year seems to be just the nice round figure.
For whoever thinks that such is scary, well that is just the ticket to never get there.

 

[likewow]

Hi all,
I love these type of threads.

Don't know how to copy other's text, but Kissfan I used to do all types of spread sheets on our portfolio (ha, 2 IP, 1 PPOR) to see how many we'd need to be in front enough to stop leveraging for the Boss. Discovery of this forum has change the line of thinking.

Our net equity estimation is 40K short of the 1st mill. I try to be conservative (it's hard for me) and I got a pleasant surprise yesterday when the house accross the road listed for 100K more than my estimated value.

My equity forecast for next year (using 8% for two & 5% for one) adds another 62k to the equity and then the following year (same % used) 90k. So, it could be growing by 100K + in the next 2 years.

Now I'm not sure if this is considerd gung ho or not, but an extra 100K in equity (increasing each year) is OK with me. We wouldn't go any where near spending that. (Unless! something unforseen happened? But we are early 40s and pretty healthy.) Our budget each year is $35,428 with 6k holiday fund incl.

So this brings up another issue for me, the delayed gratification part (which I do believe in and practise). Our goal, sort of, was 2008. Now that could be sooner so how long should I delay the gratification. hmm

I'm getting a plan together to set a realistic goal, proper valuations, talking to our bank guy, oh and my wife (he he). See, now thats another thing to consider. We have a brand new 3 month old baby daughter who takes all my wife's energy and a lot of mine so we find it hard to find the time to speak rationally about this subject. (the baby says agoo in the morning and we say ga ga ga ga ga at night when we really mean to say what will we have for dinner (tired)). Actually I think this is a form of delayed gratification (in more ways than one) and I'm learning patience as well.

Anyway we believe 50K is enough for us to stop going to work for somebody else, still live a life that we a happy with and get to Asia every couple of years and have the time to make some dosh for us.

gotta go

go get em

Steve

Good post Nutsa,

What strategies do you have to turn that equity into income to live?

 

[likewow]

np203, that's the way!
500k a year seems to be just the nice round figure.
For whoever thinks that such is scary, well that is just the ticket to never get there.

Its not scary Marc, just unrealistic. And making unrealistic goals is almost the same as not making goals. $500k pa is about $9600 per week. Only the absolute 0.1% of top operators could acheive this with passive income. The only othe way is with businesss. For the benefit of forum members, can you guys please broadly outline the steps needed to acieve $500k pa. Ta.

 

[Twitch]

can you guys please broadly outline the steps needed to acieve $500k pa. Ta.

marry royalty

 

[TomL]

I dont reckon 500K p/a is unrealistic. Its a good goal - bite off more than you can chew, then chew like crazy eh?

I Know that in 20yrs time I will comfortably be making 200K p/a passive no problemo. If I continued the same strategy i'm using now, and extrapolate that a further 15yrs i KNOW that it could well become 500K pa. (All indexed of course)

Do I want this? meh. We already live really well off a quarter of that amount, enjoying many hobbies and past-times.

I suspect i have a suspicion that I think that when the time comes we may be living it up a little more, re-investing a little less. Just a sneaky suspicion.

I never ever want to or will live frugally. Theres no fun in it for what I need out of my life.

 

[likewow]

I dont reckon 500K p/a is unrealistic. Its a good goal - bite off more than you can chew, then chew like crazy eh?

I Know that in 20yrs time I will comfortably be making 200K p/a passive no problemo. If I continued the same strategy i'm using now, and extrapolate that a further 15yrs i KNOW that it could well become 500K pa. (All indexed of course)

Do I want this? meh. We already live really well off a quarter of that amount, enjoying many hobbies and past-times.

I suspect i have a suspicion that I think that when the time comes we may be living it up a little more, re-investing a little less. Just a sneaky suspicion.

I never ever want to or will live frugally. Theres no fun in it for what I need out of my life.

For $500k passive income you will need unencumbered assets valued at $10 million returning 5% nett. How do you propose to pay down the loan on $10 million of assets?

 

[Jamie]

For $500k passive income you will need unencumbered assets valued at $10 million returning 5% nett. How do you propose to pay down the loan on $10 million of assets?

Hi likewow,

I think you've answered your own question. If the assets are unencumbered, then by definition there is no loan securing them - hence no need to allow for loan repayments from the net return each year.

Jamie.

 

[JoannaK]

Its not scary Marc, just unrealistic. And making unrealistic goals is almost the same as not making goals. $500k pa is about $9600 per week. Only the absolute 0.1% of top operators could acheive this with passive income. The only othe way is with businesss. For the benefit of forum members, can you guys please broadly outline the steps needed to acieve $500k pa. Ta.

It's not an unrealistic goal at all. It comes down to your risk profile and how you're prepared to invest in order to achieve it. For us, we don't buy properties, we build them and keep some of them (both residential and commercial). My husband and I have have a current target of $400k pa passive income and based on our current plans and business we'll achieve that by December 2008 (and our properties will be completely debt free). And when we reach that target we'll set another target and keep on going.

You still need to practice a little delayed gratification; I was driving around in a clapped out ford laser for years until the beginning of this year.

I have to disagree when you say that making unrealistic goals is almost the same as making no goals at all. No goals equals no goals. A goal of $500k is a goal of $500k and you dont have to kill yourself to try and reach it, but it is something you can look at and say "I really want that".

You may not get it, you may reach $300k....but I doubt you would have reached that $300k without your initial goal of $500k. Goals are what keeps you motivated and invigorated, and there is certainly no harm at all in wanting to reach something such as $500k a year.

 

[likewow]

Hi likewow,

I think you've answered your own question. If the assets are unencumbered, then by definition there is no loan securing them - hence no need to allow for loan repayments from the net return each year.

Jamie.

Gday Jamie,

Thats my point, to get to the unencumbered stage you have to pay down the loans. My question was how would TomL pay out the $10 million in loans to get to the unencumbered stage?

 

[WillG]

Great post,

Setting goals is a great way to help you achieve them but life seldomly works that way.

I intend to use passive income in 3 to 5 years to help free up time (working part time) to concentrate more on investment (this may sound to some like semi-retirement).

The extra time I put into the portfolio will hopefuly add more passive income $$'s. Who knows where I will end up. $500k per year ....